Microsoft on Wednesday released a statement aimed at convincing global IT leaders, and particularly those in Europe, that it can still be trusted, but analysts in Europe said its statement was not persuasive. Much of the European nervousness comes from American tariffs and the inevitable responding tariffs from the European Union (EU). But the fears go beyond that, with some European IT and cybersecurity executives worried about what American technology firms might be forced to do by the Trump administration. Those fears are fueled by the recent politicization of security clearances.  Microsoft’s detailed statement, attributed to vice-chair and president Brad Smith, spent a lot of words recapping all of what Microsoft has done in Europe over the years. “Our economic reliance on Europe has always run deep. We recognize that our business is critically dependent on sustaining the trust of customers, countries, and governments across Europe,” Smith wrote. “We respect European values, comply with European laws, and actively defend Europe’s cybersecurity. Our support for Europe has always been — and always will be — steadfast. In a time of geopolitical volatility, we are committed to providing digital stability.” Increasing European capacity “Today, we are announcing plans to increase our European datacenter capacity by 40% over the next two years,” the statement said. “We are expanding datacenter operations in 16 European countries. When combined with our recent construction, the plans we’re announcing today will more than double our European datacenter capacity between 2023 and 2027. It will result in cloud operations in more than 200 data centers across the continent.” It added, “this expansion will play an important role in boosting Europe’s economic growth and competitiveness. We believe that broad AI diffusion will be one of the most important drivers of innovation and productivity growth over the next decade. Like electricity and other general-purpose technologies in the past, AI and cloud datacenters represent the next stage of industrialization.” However, the closest Smith got to addressing the core concerns within the European IT community was a promise to legally fight to continue to maintain its European relationships.  “In the unlikely event we are ever ordered by any government anywhere in the world to suspend or cease cloud operations in Europe, we are committing that Microsoft will promptly and vigorously contest such a measure using all legal avenues available, including by pursuing litigation in court,” his statement said. “By including a new European Digital Resilience Commitment in all of our contracts with European national governments and the European Commission, we will make this commitment legally binding on Microsoft Corporation and all its subsidiaries.” It continued: “Microsoft has a demonstrated history of pursuing litigation when that has been needed to protect the rights of our customers and other stakeholders. This includes four lawsuits we filed against the US Executive Branch during President Obama’s tenure, including to protect the privacy of our customers’ data in the United States and Europe. It also included, during President Trump’s first term, a successful decision before the US Supreme Court to uphold the rights of employees who are immigrants. When necessary, we’re prepared to go to court.” Must decide ‘where loyalty lies’ Analysts felt the promises didn’t deliver much. Michela Menting, digital security research director at ABI Research, said that even Microsoft can only fight for so long. “Microsoft can say everything they want on their record of litigation and promising to defend European interests, but ultimately they cannot guarantee that they can continue to do so,” Menting said. “They can fight for it, but that is not the same thing as winning that fight.” “It is not possible for them to guarantee that, under this administration, that they can uphold those rights,” Menting said.  When pushed for an example, Menting said if the Trump administration wants Microsoft “to siphon all kinds of customer data from European companies, or whatever crazy idea comes into his head, they might well have to do Trump’s bidding.” “These lists of what they have done in the past, it stands for nothing today,” Menting said. “If the rule of law changes in the US, they will have to adapt.” Menting dismissed the Microsoft statement as “marketing fluff. It’s not soothing anyone. Indeed, it does the opposite. The fact that they are putting out that statement probably means that they are already receiving threats on their end. Microsoft is clearly worried, and this statement shows it.” Forrester VP/research director Pascal Matzke was even more blunt, suggesting that European IT leaders are worried about what Microsoft, and other tech giants including Google, ServiceNow, and Salesforce, will do when the pressure is turned on. “Microsoft has to decide where its loyalty lies — [with] the Trump administration or with its clients?” Matzke said. “There is a concern that they will ultimately be listening more to Trump.” Anxiety is ‘huge’ Matze said the key fear is that the European tech infrastructure has allowed itself to be far too intertwined with various American tech giants, including Microsoft. European government officials are likely to fight the tariffs with their own, “and the whole thing will spiral out of control. Can we continue then to work in the same collaborative manner?” Matze’s argument is that European IT “anxiety is huge” and that some are starting to fear trusting American companies in the same way that they now fear working with Chinese companies. But because of the deep, years-long reliance on American tech players, he fears that a pullback would “kill innovation,” if it was even possible. “I don’t see a way back. We are now in this global state,” Matze said, adding that those who think they can separate are wrong. “That’s an illusion. There is just no way. The boat has sailed, that train has left the station.” Another analyst, Phil Brunkard, executive counselor at Info-Tech Research Group, said, “Microsoft’s new pledges look like they’re designed to calm three groups at once. EU policymakers pressing for digital sovereignty; big European firms drowning in DORA/NIS 2/CRA [regulations]; and global enterprises fearing the next geopolitical shock that could knock out a US hyperscaler.” Brunkard said he was impressed by Microsoft’s promise for increased capacity. “The capacity promise is pretty eye-catching: 40% more compute within 2 years, more than double by 2027 across 16 countries and roughly 200 facilities,” Brunkard said. “But the Digital Resilience Commitment is the real headline here. Microsoft is saying that it will fight in court against any foreign order to pull the plug on its EU cloud and, if forced offline, will hand Swiss-escrowed source code to local partners. Add in EU-only data center boards and a Deputy CISO for Europe, and Redmond is telling Brussels ‘OK, we’ll play by your rules now.’” Is it enough? But is that enough? Brunkard is not certain. “Does this make Microsoft less toxic? Partly. Sovereignty optics do improve a bit, but antitrust and licensing complaints are still there, and the CRA will be judging on audited technical controls, not blog posts,” Brunkard said. “Respect for European law is a start and a bold statement, but until auditors and eventually regulators can confirm the new safeguards, the jury’s still out.” ABI’s Menting said there is yet another problem lurking behind these arguments.  “Despite all that blinding compliance speak, it’s hard to ignore the elephant in the room: the EU’s Anti-Coercion Instrument (ACI). If it comes into play, and the current climate is totally amenable to such a state, this could cripple Microsoft’s ability to operate successfully and lucratively in Europe,” Menting said. “The current US tariff imposition on Europe can most certainly be seen as economic coercion, and the EU would be within its rights to trigger the ACI and hit back against US digital services.” And if that doesn’t work, Microsoft can leverage its power in controlling how and where it pays taxes. Its statement doesn’t discuss how the company will pay its taxes in Europe. “How will they be reporting their revenues derived in the European territory? It’s all too common for US digital service providers to route those revenues through their various regional subsidiaries — hello Ireland — and then back to the US, effectively gaming the European tax system,” Menting said. “If things become dire, it can still play its tax card. At best, it could totally divest its European business, with completely separate and independent companies operating in Europe. But that is not the American way of doing business and Microsoft is very much an American company.”