Microsoft Broadens Patent Protection for Cloud Customers

Microsoft corp. on Wednesday broadened the patent-law-suit protection it offers its cloud-computing customers, aiming to keep intellectual-property litigation from curtailing adoption of its Azure service.

The program, called Microsoft Azure IP Advantage, provides uncapped indemnification coverage – payment for legal costs – to customers that develop cloud applications using open-source technologies such as Hadoop, a tool used to analyse large amounts of data.

Microsoft already provides such a service for Azure customers developing apps using Microsoft technology. In its most recent quarter, revenue for Microsoft’s Intelligent cloud segment, which includes Azure, rose 8% to $6.9 billion, about 28% of the company’s overall sales.

The offering is the first of its kind, according to Forrester Research Inc. analyst Jeffrey Hammond. While intellectual-property suits targeting open-source tech use in the cloud aren’t common, the service could still lure customers, particularly those averse to risk, he said.

“if you’re one of those 25 to 30 companies that it’s happened to, it really matters to you,” Mr. Hammond said.

IP Advantage is free for customers spending $1,000 or more a month using the web-based, on-demand computing offering – the vast majority of Azure customers, Microsoft said.

Microsoft will make 10,000 of its patents available to Azure customers who qualify for IP Advantage, a move aimed at helping defend against intellectual-property litigation. The offering broadly represents Microsoft’s roughly 65,000 patents held worldwide, the company said.

A common defense for companies accused of patent infringement is to find one of its own patents the accusing company has infringed upon and propose cross-licensing deals that keep both companies out of court. in an interview, Microsoft President and Cheif Legal Officer Brad Smith said he expects these types of patent suits to increase as cloud computing grows.

Tech research firm International Data Corp. forecasts spending on cloud infrastructure will hit $60.8 billion in 2020, pulling even with traditional infrastructure.