Connect with us

Tech

Silicon Valley Takes on the 'Valley of Death' – National Defense Magazine

Avatar photo

Published

on

National Defense provides authoritative, non-partisan coverage of business and technology trends in defense and homeland security. A highly regarded news source for defense professionals in government and industry, National Defense offers insight and analysis on defense programs, policy, business, science and technology. Special reports by expert journalists focus on defense budgets, military tactics, doctrine and strategy.
SEARCH
DEFENSE DEPARTMENT
iStock photo-illustration
SIMI VALLEY, Calif. — The commercial technology sector wants to help the U.S. military acquire new capabilities. But if the Pentagon doesn’t change the way it does business soon and help innovators bring their products across the “Valley of Death,” they will go belly up or walk away, industry and military leaders are warning.
The Defense Department has launched a slew of initiatives in recent years aimed at expanding its innovation base and bringing startups and nontraditional companies based in Silicon Valley and elsewhere into the fold. But there’s a problem — promising technologies still often fail to move beyond the research-and-development phase and into large-scale procurement. The phenomenon is known in defense acquisition circles as the Valley of Death.
The problem — and the need to fix it — was front and center at the recent Reagan National Defense Forum, the annual confab of national security elites in Simi Valley, California.
“Let’s face it. For far too long, it’s been far too hard for innovators and entrepreneurs to work with the department, and the barriers for entry into this effort to work with us in national security are often too steep — far too steep,” Secretary of Defense Lloyd Austin III said during his keynote address.
“Let’s say some great California startup develops a dazzling way to better integrate our capabilities. All too often, that company is going to struggle to take its idea from inception to prototype to adoption by the department,” he added. “We call this syndrome the Valley of Death, and I know that many of you in this room are painfully familiar with it.”
The phenomenon deters some innovators from ever trying to do business with the Pentagon, he noted.
Undersecretary of Defense for Research and Engineering Heidi Shyu said there isn’t a dearth of high-tech firms that want to work with the military.
“Looking around in terms of number of companies, I don’t see a shortage of innovation. Where I see the problem is they get seed money to develop designs and prototypes, and they die on the vine, because our acquisition system is too rigid,” she said during a panel at the forum.
As an example, Shyu noted her recent visit to a small business in Santa Monica, California, working on what she dubbed a “superb product.”
“They said, ‘We’re running out of money,’” Shyu recounted without identifying the company. “I said, ‘Hello, you’re just telling me today?
You think I have a bank account I can open up and give it to you tomorrow?’”
“That’s the problem,” she continued. “They have venture capitalists that are interested in putting funding in them [but only] if they have production contracts. So, it’s the Valley of Death. They have a design, the prototype won’t be ready for another year and a half, right? So I’m … trying to figure out how I can find them some money to bridge them over.”
There are two key metrics for assessing the Pentagon’s relationship with the national security innovation base, said Air Force Chief of Staff Gen. Charles “CQ” Brown Jr. One is access to innovators, and the other is the ability to transition desirable capabilities into large-scale production.
“The access is actually pretty decent and pretty good. So, a lot of dialogue and discussion. But the transition is where we fail and fall really short,” he said.
There’s a lot of excellent innovation on one side of the Valley of Death. “We just can’t get it to the other side of the valley and scale it,” he added.
In recent years, the Pentagon has ramped up its use of other transaction authority agreements after Congress passed legislation in 2015 and 2016 encouraging their use. OTAs are intended to cut through bureaucratic red tape associated with the Defense Department’s more traditional acquisition processes and facilitate rapid prototyping and follow-on production. The total value of OTAs awarded in 2020 topped $16 billion, according to decision science company Govini.
However, production OTAs account for just a tiny fraction of total OTAs awarded, according to the Center for Strategic and International Studies. The vast majority are for R&D and prototyping.
Additionally, projects initiated under the Small Business Innovation Research program, which Austin said the Pentagon is “doubling down” on to help small companies work with the department, often struggle to find funding after they reach the end of their SBIR Phase 2 contracts because they are not connected to a program office, officials have noted.
Nevertheless, the Pentagon has had some successes in helping nontraditional firms get their technologies across the Valley of Death. For example, in 2020 the Defense Innovation Unit — which is based in Silicon Valley and has outposts in other commercial tech hubs around the country — facilitated the transition of 11 successful commercial prototypes to other Defense Department agencies for large-volume procurement. From its inception in 2015 to 2020, the organization successfully transitioned a total of 26 commercial solutions, according to DIU.
But much more needs to be done, industry insiders say.
“Time is running out with Silicon Valley,” warned Katherine Boyle, general partner at venture capital firm Andreessen Horowitz, also known as a16z, which is based in the region.
“After five years of DoD saying, ‘We want to work with the best startups,’ we have, at most, two years before founders walk away and private capital dries up. And many, many startups will go out of business waiting for DoD to award real production contracts,” she said in a tweet storm when the Reagan National Defense Forum kicked off.
“Experienced founders and investors know that until you have a production contract, these [other awards] are … little door prizes,” she added.
Billions of dollars in venture capital have gone to defense-focused companies, but the Defense Department is dropping the ball, according to Boyle. That has implications for the workforce.
“Early-stage startups are waiting, and many will languish after getting OTAs and pilot contracts that felt real but weren’t,” she said. “While investors will give a handful of these companies the benefit of the doubt, you’re going to see talented, hard-working teams go bankrupt and head back to Facebook and Google.”
To address the problem, the Pentagon needs to award production contracts to “the most important startups with the teams who’ve proven they can build,” she said. “These don’t have to be big contracts. But they have to be real production contracts that show founders and investors that DoD is serious.”
The Defense Department also needs to change the “culture” of procurement, Boyle said, noting that acquisition officers face blame if they bet on a startup and it doesn’t pan out. Instead, officials should be incentivized to work with venture-backed startups that can create technologies that warfighters need, she argued.
The Pentagon can’t continue with business-as-usual as adversaries roll out new high-tech capabilities, Boyle warned.
“The future of American national security depends on us finding a way to solve this procurement crisis,” she said.
Joe Lonsdale, co-founder and managing partner at venture capital firm 8VC, said investors need to see results if they are going to keep bankrolling companies that are trying to work with the military.
“There’s a lot of money that has gone to work in the venture capital ecosystem the last three, four, five years, in part inspired by a lot of these smaller programs that have helped get things going,” he said.
Investors want to know “is this an area where people can actually make money?” he added. “A lot of people have a lot of minor work. And so far, we haven’t seen the big wins. … It is a critical moment to figure this out.”
Contributing to the problem is what Lonsdale described as a “lack of courage” in the Defense Department when it comes to picking winners and losers in the commercial tech sector.
Brown said the Pentagon needs to select some key programs and shepherd them across the Valley of Death to encourage organizations in the innovation ecosystem.
“When they get to the other side of the valley, we’ve got to continue to nurture them to show some success because if we don’t do that, then I really believe all that venture capital is just going to walk,” he said. “They’re going to find someplace else to go.”
Marine Corps Commandant Gen. David Berger said he is already hearing anecdotal stories of companies bailing.
“Two of the CEOs that I know that I talked to, I asked them, ‘How’s it going you guys?’ They said, ‘It’s bad,’” Berger told reporters at the forum. “They’re going to take their money and go do commercial stuff because they can’t see where the return on investment is going to be. … That worries me.”
Shyu said problems associated with the Pentagon’s planning, programming, budgeting and execution process, known as PPBE, is hindering the department’s ability to quickly deliver promising capabilities to warfighters.
Her office is planning to conduct a rapid joint experimentation campaign with products from innovators that combatant commanders are interested in. The hope is that they can move to rapid fielding. But in the past, that has been a challenge because “there’s no transition budget,” she said.
“Let’s say the [combatant commands] love that capability and they want it. … Well, I have to go back to the service and say, ‘Did you POM for that?’” Shyu said, referring to the program objective memorandum that lays out multi-year plans for resourcing projects.
The 2022 National Defense Authorization Act recently passed by Congress directs the establishment of a new commission tasked with comparing the PPBE process of the Defense Department with similar processes of private industry, other federal agencies and foreign nations, and making recommendations for improvement.
In the meantime, Shyu is asking for some “bridge funding” to get systems across the Valley of Death, although she didn’t disclose how much money she’s seeking.
“This is something that I’ve got to work internally within the DoD and I’ve got to work with the Hill because they want to … count every penny that we have,” she said.
Rep. Ken Calvert, R-Calif., ranking member of the House Appropriations defense subcommittee, has a plan to mitigate the Valley of Death.
“The U.S. government has been a lousy partner, quite frankly,” he said. “We get companies and we waste their time … and then we’re wondering why we’re not getting the technologies we want.”
Calvert wants to create a new “innovation fund” through the appropriations process.
“Start out, say, with about $100 million, and then we can pick a number of people that we want to succeed and get them through that Valley of Death where they can actually get to procurement,” he explained.
“I’m going to work with my friends on both sides of the aisle and the Senate” to set up the fund, he added. “I’m hoping that we can do that as soon as possible.”
Topics: Defense Department
VIEW ALL EVENTS
Jon,

With particular regard to the “Valley of Death syndrome” which so many companies/entities may indeed encounter and suffer from, one also needs to be aware of its not dissimilar parallel affliction which has the likes of a Pentagon buyer severely comprehensively disadvantaged and liable to lose all possible leading advantage, both present and future, to a similar foreign based competitor and/or a more effective and efficient alien opposition should they be more proactive and more promiscuously forward in initiating vital primary engagement with that which they, Pentagon types and their ilk, have next to zero practical or virtual knowledge of but realise is of great significant importance to them ……. for its novel stealthy/shadowy/out of the blue suppliers persist to consistently and constantly maintain renders to one, and any suitable wannabe Caesar or Calpurnia, an absolutely almighty AWEsome advantage …. aka Pioneering Lead.

The following earlier post shared elsewhere [Tue 25 Jan 15:48 GMT/The Register] explains and expounds further on the dilemma, which surely is basically universal and thus may afford some cold comfort and give one some encouragement that all may not be yet totally lost. …….

“Blissful Ignorance is No Viable Noble Base for ProACTive Novel Progress.

As long as the UKCSC, MIC* and .gov wonks stay well clear of any notion that would have them thinking to bar competent security specialists from working with any universal entity of the specialists’ choosing, they should be quite safe and secure from any resultant unpleasantness much worse than anything akin to a right royal old Etonian boys mess.

And one prime way of avoiding such a conflict is not to be so backward in coming forward to positively engage with that and/or those they may quite rightly be quite wrongly concerned about. Such does though require some of those phantom official gatekeepers to practise more competently some of their quantum leaping skills, should they have any, for they aint going anywhere special and beneficial to them without falling off/jumping over that particular fence and into right proper virgin fields of investigation and exploration/exploitation and monetisation/powerful command and almighty control.

* … Military Industrial Complexes
UKCSC ….. United Kingdom Cyber Security Council”

…….. and further on one is advised to be prepared for many new things, for such is the current nature of present running rapid future progress ….

Advertisement
Submit your 2022 Austin Neighborhood Feedback

“Forewarned is forearmed …. and the smartest freely available option is to take good heed.

There be new kids on the block who aint skiddies or anything like any other hoods in the environment. And they’re flying high, far and wide and real deep down into the nitty gritty of what everything is about. Don’t misunderestimate either them or overestimate anyone else’s ability to mitigate their facility and utility. Such would be a fabulous folly all would just love to regret and forget.”

And now that you know about all of that, and everything there can be freely shared, can no one searching for such information say it was kept secret and they be completely surprised at the strange directions that may or may not be taken by certain key future events because of the freely shared intel available.
Maybe if one of the requirements was to bribe your local representatives instead of developing products they will get some contracts!

Sadly thats partially true – another thing is that the GOV is completely backwards about software and seems unable to modernize to due to bureaucratic gridlock across the board.
I think the Valley of death has a name, “Requirement Document”
2101 Wilson Blvd, Suite 700
Arlington, VA 22201
tel: (703) 522-1820

source

Continue Reading
Advertisement
Click to comment

Latest

How a faulty CrowdStike update crashed computers around the world

Avatar photo

Published

on

How a faulty CrowdStike update crashed computers around the world

Airlines, banks, hospitals and other risk-averse organizations around the world chose cybersecurity company CrowdStrike to protect their computer systems from hackers and data breaches.

But all it took was one faulty CrowdStrike software update to cause global disruptions Friday that grounded flights, knocked banks and media outlets offline, and disrupted hospitals, retailers and other services.

“This is a function of the very homogenous technology that goes into the backbone of all of our IT infrastructure,” said Gregory Falco, an assistant professor of engineering at Cornell University. “What really causes this mess is that we rely on very few companies, and everybody uses the same folks, so everyone goes down at the same time.”

The trouble with the update issued by CrowdStrike and affecting computers running Microsoft’s Windows operating system was not a hacking incident or cyberattack, according to CrowdStrike, which apologized and said a fix was on the way.

But it wasn’t an easy fix. It required “boots on the ground” to remediate, said Gartner analyst Eric Grenier.

“The fix is working, it’s just a very manual process and there’s no magic key to unlock it,” Grenier said. “I think that is probably what companies are struggling with the most here.”

While not everyone is a client of CrowdStrike and its platform known as Falcon, it is one of the leading cybersecurity providers, particularly in transportation, healthcare, banking and other sectors that have a lot at stake in keeping their computer systems working.

“They’re usually risk-averse organizations that don’t want something that’s crazy innovative, but that can work and also cover their butts when something goes wrong. That’s what CrowdStrike is,” Falco said. “And they’re looking around at their colleagues in other sectors and saying, ‘Oh, you know, this company also uses that, so I’m gonna need them, too.’”

Advertisement
Submit your 2022 Austin Neighborhood Feedback

Worrying about the fragility of a globally connected technology ecosystem is nothing new. It’s what drove fears in the 1990s of a technical glitch that could cause chaos at the turn of the millennium.

“This is basically what we were all worried about with Y2K, except it’s actually happened this time,” wrote Australian cybersecurity consultant Troy Hunt on the social platform X.

Across the world Friday, affected computers were showing the “blue screen of death” — a sign that something went wrong with Microsoft’s Windows operating system.

But what’s different now is “that these companies are even more entrenched,” Falco said. “We like to think that we have a lot of players available. But at the end of the day, the biggest companies use all the same stuff.”

Founded in 2011 and publicly traded since 2019, CrowdStrike describes itself in its annual report to financial regulators as having “reinvented cybersecurity for the cloud era and transformed the way cybersecurity is delivered and experienced by customers.” It emphasizes its use of artificial intelligence in helping to keep pace with adversaries. It reported having 29,000 subscribing customers at the start of the year.

The Austin, Texas-based firm is one of the more visible cybersecurity companies in the world and spends heavily on marketing, including Super Bowl ads. At cybersecurity conferences, it’s known for large booths displaying massive action-figure statues representing different state-sponsored hacking groups that CrowdStrike technology promises to defend against.

CrowdStrike CEO George Kurtz is among the most highly compensated in the world, recording more than $230 million in total compensation in the last three years. Kurtz is also a driver for a CrowdStrike-sponsored car racing team.

After his initial statement about the problem was criticized for lack of contrition, Kurtz apologized in a later social media post Friday and on NBC’s “Today Show.”

“We understand the gravity of the situation and are deeply sorry for the inconvenience and disruption,” he said on X.

Advertisement
Submit your 2022 Austin Neighborhood Feedback

Richard Stiennon, a cybersecurity industry analyst, said this was a historic mistake by CrowdStrike.

“This is easily the worst faux pas, technical faux pas or glitch of any security software provider ever,” said Stiennon, who has tracked the cybersecurity industry for 24 years.

While the problem is an easy technical fix, he said, it’s impact could be long-lasting for some organizations because of the hands-on work needed to fix each affected computer. “It’s really, really difficult to touch millions of machines. And people are on vacation right now, so, you know, the CEO will be coming back from his trip to the Bahamas in a couple of weeks and he won’t be able to use his computers.”

Stiennon said he did not think the outage revealed a bigger problem with the cybersecurity industry or CrowdStrike as a company.

“The markets are going to forgive them, the customers are going to forgive them, and this will blow over,” he said.

Forrester analyst Allie Mellen credited CrowdStrike for clearly telling customers what they need to do to fix the problem. But to restore trust, she said there will need to be a deeper look at what occurred and what changes can be made to prevent it from happening again.

“A lot of this is likely to come down to the testing and software development process and the work that they’ve put into testing these kinds of updates before deployment,” Mellen said. “But until we see the complete retrospective, we won’t know for sure what the failure was.”

___

Associated Press writer Alan Suderman in Richmond, Virginia, contributed to this report.

Advertisement
Submit your 2022 Austin Neighborhood Feedback

Read More

Continue Reading

Business

Worldwide IT outage: Airlines rush to get back on track

Avatar photo

Published

on

Worldwide IT outage: Airlines rush to get back on track

Transport providers, businesses and governments on Saturday are rushing to get all their systems back online after long disruptions following a widespread technology outage.

The biggest continuing effect has been on air travel. Carriers canceled thousands of flights on Friday and now have many of their planes and crews in the wrong place, while airports facing continued problems with checking in and security.

At the heart of the massive disruption is CrowdStrike, a cybersecurity firm that provides software to scores of companies worldwide. The company says the problem occurred when it deployed a faulty update to computers running Microsoft Windows, noting that the issue behind the outage was not a security incident or cyberattack.

Here’s the Latest:

Microsoft: 8.5 million devices on its Windows system were affected

Microsoft says 8.5 million devices running its Windows operating system were affected by a faulty cybersecurity update Friday that led to worldwide disruptions.

A Saturday blog post from Microsoft was the first estimate of the scope of the disruptions caused by cybersecurity firm CrowdStrike’s software update.

“We currently estimate that CrowdStrike’s update affected 8.5 million Windows devices, or less than one percent of all Windows machines,” said the blog post from Microsoft cybersecurity executive David Weston.

“While the percentage was small, the broad economic and societal impacts reflect the use of CrowdStrike by enterprises that run many critical services.”

Advertisement
Submit your 2022 Austin Neighborhood Feedback

Weston said such a significant disturbance is rare but “demonstrates the interconnected nature of our broad ecosystem.” Windows is the dominant operating system for personal computers around the world.

Austrian doctors’ group calls for better data protection for patients

In Austria, a leading doctors organization said the global IT outage exposed the vulnerability of health systems reliant on digital systems.

“Yesterday’s incidents underscore how important it is for hospitals to have analogue backups” to safeguard patient care, Harald Mayer, vice president of the Austrian Chamber of Doctors, said in a statement on the organization’s website.

The organization called on governments to impose high standards in patient data protection and security and on health providers to train staff and put systems in place to manage crises.

“Happily, where there were problems, these were kept small and short-lived and many areas of care were unaffected” in Austria, Mayer said.

Germany warns of scams after major IT outage

BERLIN — The German government’s IT security agency says numerous companies are still struggling with the consequences of a far-reaching technology outage.

“Many business processes and procedures have been disturbed by the breakdown of computer systems,” the BSI agency said on its website.

But the agency also said Saturday that many impacted areas have returned to normal.

It warned that cybercriminals were trying to take advantage of the situation through phishing, fake websites and other scams and that “unofficial” software code was in circulation.

Advertisement
Submit your 2022 Austin Neighborhood Feedback

The agency said it was not yet clear how faulty code ended up in the CrowdStrike software update blamed for triggering the outage.

European airports appear to be close to normal

LONDON — Europe’s busiest airport, Heathrow, said it is busy but operating normally on Saturday. The airport said in a statement that “all systems are back up and running and passengers are getting on with their journeys smoothly.“

Some 167 flights scheduled to depart from U.K. airports on Friday were canceled, while 171 flights due to land were axed.

Meanwhile, flights at Berlin Airport were departing on or close to schedule, German news agency dpa reported, citing an airport spokesman.

Nineteen flights took off in the early hours of Saturday after authorities exempted them from the usual ban on night flights.

On Friday, 150 of the 552 scheduled inbound and outbound flights at the airport were canceled over the IT outage, disrupting the plans of thousands of passengers at the start of the summer vacation season in the German capital.

German hospital slowly restoring its systems after widespread cancellations

BERLIN — The Schleswig-Holstein University Hospital in northern Germany, which on Friday canceled all elective surgery because of the global IT outage, said Saturday that it was gradually restoring its systems.

In a statement on its website, it forecast that operations at its two branches in Kiel and Luebeck would return to normal by Monday and that “elective surgery can take place as planned and our ambulances can return to service.”

Britain’s transport system still trying to get back on track

LONDON — Britain’s travel and transport industries are struggling to get back on schedule after the global security outage with airline passengers facing cancellations and delays on the first day of summer holidays for many school pupils.

Advertisement
Submit your 2022 Austin Neighborhood Feedback

Gatwick Airport said “a majority” of scheduled flights were expected to take off. Manchester Airport said passengers were being checked in manually and there could be last-minute cancellations.

The Port of Dover said it was seeing an influx of displaced air passengers, with hourlong waits to enter the port to catch ferries to France.

Meanwhile, Britain’s National Cyber Security Center warned people and businesses to be on the lookout for phishing attempts as “opportunistic malicious actors” try to take advantage of the outage.

The National Cyber Security Center’s former head, Ciaran Martin, said the worst of the crisis was over, “because the nature of the crisis is that it went very wrong very quickly. It was spotted quite quickly and essentially it was turned off.”

He told Sky News that some businesses would be able to get back to normal very quickly, but for sectors such as aviation it would take longer.

“If you’re in aviation, you’ve got people, planes and staffs all stranded in the wrong place… So we are looking at days. I’d be surprised if we’re looking at weeks.”

Germany airline expects most of its flights to run normally

BERLIN — Eurowings, a budget subsidiary of Lufthansa, said it expected to return to “largely scheduled” flight operations on Saturday.

On Friday, the global IT outage had forced the airline to cancel about 20% of its flights, mostly on domestic routes. Passengers were asked to take trains instead.

“Online check-in, check-in at the airport, boarding processes, booking and rebooking flights are all possible again,” the airline said Saturday on X. “However, due to the considerable extent of the global IT disruption there may still be isolated disruptions” for passengers, it said.

Advertisement
Submit your 2022 Austin Neighborhood Feedback

Delta Air Lines and its regional affiliates have canceled hundreds of flights

DALLAS — Delta Air Lines and its regional affiliates canceled more than a quarter of their schedule on the East Coast by midafternoon Friday, aviation data provider Cirium said.

More than 1,100 flights for Delta and its affiliates have been canceled.

United and United Express had canceled more than 500 flights, or 12% of their schedule, and American Airlines’ network had canceled 450 flights, 7.5% of its schedule.

Southwest and Alaska do not use the CrowdStrike software that led to the global internet outages and had canceled fewer than a half-dozen flights each.

Portland, Oregon, mayor declares an emergency over the outage

PORTLAND, Ore. — Mayor Ted Wheeler declared an emergency Friday after more than half of the city’s computer systems were affected by the global internet outage.

Wheeler said during a news conference that while emergency services calls weren’t interrupted, dispatchers were having to manually track 911 calls with pen and paper for a few hours. He said 266 of the city’s 487 computer systems were affected.

Border crossings into the US are delayed

SAN DIEGO — People seeking to enter the U.S. from both the north and the south found that the border crossings were delayed by the internet outage.

The San Ysidro Port of Entry was gridlocked Friday morning with pedestrians waiting three hours to cross, according to the San Diego Union-Tribune.

Even cars with people approved for a U.S. Customers and Border Protection “Trusted Traveler” program for low-risk passengers waited up to 90 minutes. The program, known as SENTRI, moves passengers more quickly through customs and passport control if they make an appointment for an interview and submit to a background check to travel through customs and passport control more quickly when they arrive in the U.S.

Advertisement
Submit your 2022 Austin Neighborhood Feedback

Meanwhile, at the U.S.-Canada border, Windsor Police reported long delays at the crossings at the Ambassador Bridge and the Detroit-Windsor tunnel.

Read More

Continue Reading

Latest

European Union accuses Microsoft of breaching antitrust rules by bundling Teams with office software

Avatar photo

Published

on

European Union accuses Microsoft of breaching antitrust rules by bundling Teams with office software

LONDON (AP) — Microsoft violated European Union antitrust rules with “possibly abusive” practices by tying its Teams messaging and videoconferencing app to its widely used business software, the bloc said.

The European Commission said Monday it informed Microsoft of its preliminary view that the U.S. tech giant has been “restricting competition” by bundling Teams with core office productivity applications such as Office 365 and Microsoft 365.

The commission, the 27-nation bloc’s top antitrust enforcer, said it suspects Microsoft might have granted Teams a “distribution advantage” by not giving customers a choice on whether to have Teams when they purchased the software. The advantage might have been widened by limits on the ability of rival messaging apps to work with Microsoft software, it said.

“We are concerned that Microsoft may be giving its own communication product Teams an undue advantage over competitors, by tying it to its popular productivity suites for businesses,” Margrethe Vestager, the commission’s executive vice-president for competition policy, said in a statement.

“And preserving competition for remote communication and collaboration tools is essential as it also fosters innovation on these markets.”

The commission took aim at Microsoft a day after accusing Apple of breaching the bloc’s new digital competition rulebook, in a flurry of regulatory action underlining Brussels’ leading role as a watchdog for Big Tech companies.

Microsoft made some changes last year in an effort to head off an penalty, including offering the software packages without Teams for European customers. But the commission said Tuesday the changes are not enough to address its concerns and that it needs to do more to “restore competition.”

“Having unbundled Teams and taken initial interoperability steps, we appreciate the additional clarity provided today and will work to find solutions to address the Commission‘s remaining concerns.” Microsoft President Brad Smith said in a prepared statement.

Advertisement
Submit your 2022 Austin Neighborhood Feedback

In April, the company also gave customers worldwide the option to get Microsoft 365 and Office 365 without Teams. The two software suites include programs like Word, Excel and Outlook.

Microsoft now has a chance to respond to the accusations, formally known as a statement of objections, before the commission makes its final decision. The company could face a fine worth up to 10% of its annual global revenue, or be forced to carry out “remedies” to satisfy the competition concerns.

The commission opened its investigation in July 2023 after rival Slack Technologies, which makes popular workplace messaging software, filed a complaint with Brussels. Alfaview, which makes videoconferencing software, also filed a separate complaint.

Slack, owned by business software maker Salesforce, had alleged that Microsoft abused its market dominance to eliminate competition — in violation of EU laws.

“The Statement of Objections issued today by the European Commission is a win for customer choice and an affirmation that Microsoft’s practices with Teams have harmed competition,” Salesforce President Sabastian Niles said. “We appreciate the Commission’s thorough investigation of Slack’s complaint and urge the Commission to move towards a swift, binding, and effective remedy that restores free and fair choice and promotes competition, interoperability, and innovation in the digital ecosystem.”

Read More

Continue Reading