Microsoft’s $1bn Cloud Giveaway Is More Than Just Philanthropy

January 20, 2016, 11:27 AM UTC
Microsoft Holds Annual Shareholder Meeting
BELLEVUE, WA - DECEMBER 3: Microsoft CEO Satya Nadella addresses shareholders during Microsoft Shareholders Meeting December 3, 2014 in Bellevue, Washington. The meeting was the first for Nadella as CEO. (Photo by Stephen Brashear/Getty Images)
Photograph by Stephen Brashear — Getty Images

Microsoft has pledged to donate $1 billion worth of public cloud resources to university researchers and nonprofits over the next three years.

The resources will be doled out via the Microsoft Philanthropies wing of the firm, which launched last month. They will include tools for letting users develop and run applications in Microsoft’s Azure cloud and use its storage and computing facilities, as well as managing their devices and even their relationships with donors and beneficiaries.

As company chief Satya Nadella explained in an op-ed for Wednesday’s edition of the Financial Times, the purpose of the donation is to ensure there is no “digital divide” when it comes to the cloud, making worthy but cash-strapped causes as able to reap the benefits as those with deeper pockets.

“If we are not to be left facing a digital divide between those with access to rich data intelligence and those without, we must find ways to spread the benefits of cloud computing to all,” he wrote.

Public-mindedness aside, part of this is probably about getting more people using Microsoft’s systems as opposed to those of its rivals.

Get Data Sheet, Fortune’s technology newsletter.

“It’s not surprising to see Microsoft doing that given that competitors such as Google have been very active in the nonprofit and education sector for some time now and their often free services challenge Microsoft to convince such organizations to buy/consume into its services,” said IDC research manager George Mironescu via email.

“With this move, it’s a way for Microsoft to be re-discovered by entities in these sectors and to get such organizations to test its public cloud capabilities and to potentially keep them away from competitors such as Google and Salesforce.”

However, this philanthropic gesture is also clearly a lobbying tactic that’s designed to shape government opinion in multiple ways. Firstly, as Nadella’s article made clear, Microsoft wants to get governments to “lead by example” by themselves using the cloud.

The firm also wants to preserve the potential of global-minded cloud services by encouraging lawmakers and regulators to keep data flowing across borders. Nadella specifically raised the negotiations between the U.S. and EU over a replacement for the “safe harbor” agreement that was struck down by the EU’s highest court last year.

At the end of this month, if there is no new deal, companies that were relying on safe harbor to send Europeans’ personal data to the U.S. for processing may find themselves in the crosshairs of European data protection authorities. Even the other mechanisms used by larger companies (such as Microsoft) to provide a legal basis for their transatlantic data transfers could be on shaky ground, due to the European Court of Justice’s skepticism about privacy protections in the U.S.

Hence Nadella’s call for a new U.S.-EU deal, as well as “additional agreements, that enable privacy rights to follow data around the world,” and this push to get governments using the services they’re legislating and negotiating about.

None of this is to say that the resources will not be valuable to their recipients, who will likely make good use of them to crunch data and solve local problems. Microsoft’s cloud could well play some part in helping countries meet UN sustainable development goals, as Nadella suggested in the FT piece and a separate blog post.

It’s just that, as ever, there’s a bit more to it than that.

Read More

Artificial IntelligenceCryptocurrencyMetaverseCybersecurityTech Forward