British competition and Markets Authority have published a survey on all cloud service providers in the country, according to concerns raised by the telecommunications regulatory agency.
The current cloud service market is that the cloud service market is “not possible” because it is difficult to convert cloud providers or use multiple clouds. Lack of competition can increase costs, reduce choices, reduce innovation, and lower service quality.
The CMA said in a press release: “The ability to put a healthy pressure to provide a better deal for the UK business to provide a better deal to cloud providers is important for unlocking good results and unlocking the potential benefits of cloud services.
Four major interests in the UK cloud service market
In the survey, the CMA’s independent survey group found four major interests.
- Cloud customers face limited suppliers and do not know that multiple suppliers can provide the same service.
- Due to technology and commercial barriers, it is difficult to convert cloud providers or use multiple clouds to use the supplier lock.
- It is difficult for new providers to enter and compete due to the very large capital investment necessary to supply cloud services.
- Microsoft is becoming more difficult to compete for customers who want to use Microsoft software in the cloud, such as Google and Amazon Web Services.
Microsoft and AWS dominate the market with up to 40%of British customer spending on cloud services, respectively. The third largest supplier, Google, is much less. According to the CMA, even if the dominant player charges only 5%, it can take £ 440 million for British companies.
The survey is about the heels of the 2023 report published by OFCOM, and we have confirmed the various issues of harassing the cloud service market that regulators affect business and consumers. The CMA investigated EGRESS fees, technical barriers and committed spending.
The decision on whether to finalize these tentative results and recommendations will be made by August 4, 2025.
AWS and Microsoft can be subject to new digital markets, competition and consumer behaviors.
The inquiry group behind the survey recommends that the CMA will provide AWS and Microsoft “Strategic Market Status” in accordance with the new digital market, competition and consumer law, which came into force on January 1, 2025.This law is designed to be specifically regulated. It was. In the UK, major digital companies with significant market power
The CMA conducts an investigation into a company that is expected to have a strategic market. Given the name of the company, it will prepare customized behavioral requirements for regulators to prevent competition in fierce competition. The survey group said that according to the DMCCA, regulating AWS and Microsoft can take “a targeted and flexible approach to remedy” and “better provisions for ongoing monitoring and supervision.”
Requirements for dominant cloud service providers can encourage technical standardization, reduce data transfer charges generated by switching suppliers or using multiple clouds, and guarantee process licenses for software.
Investigations on whether Google and Apple should be designated as SMS. Both companies are looking at the mobile ecosystem. Google is also being investigated by search and search advertising services.
UK Regulator see Apple’s mobile browser dominance.
Industrial reaction to CMA’s investigation
Daniel Tremayne-Pitter, the chief executive of DARK Matter, a British technology research firm in response to the CMA’s movement for the UK cloud service market research, emphasized the need to democratize the cloud computing market.
He said: That is because of elasticity. Academia, sustainability experts, cloud architects, and even regulators around the world are recognized that the power and intelligence of a small number of suppliers are related. ”
Microsoft and Amazon responded to OFCOM surveys.
In response to OFCOM’s cloud market research, Amazon and Microsoft presented a long response. The following is a simple excerpt from these responses.
Amazon provided the opposite perspective. “We do not agree with the concerns raised in the temporary report that ‘committed expenditure discounts’ can be used to weaken competition by encouraging customers to use most or all suppliers of cloud demands. “We make a spending on the renegotiation of the contract.” “AWS prices are publicly listed on our website, and all customers can use the service at a small price as needed.”
The response from Microsoft is read as follows: “Azure does not exploit ‘submerged’ to customers at a price, and this dichotomy is false, so competing with new ones. In addition, there is no realism that Microsoft or other cloud suppliers can slow rapid innovation as a result of the IT lock effect. ”
But Tremayne-Pitter had a different opinion, claiming that almost all technicians describe ‘lock’ as a very real risk factor.
He said: “The exit costs needed to move data from the cloud are usually unbalanced to the ‘free’ characteristics that first put it in the beginning. In a serious amount, considering moving it can be expensive. The exclusive tooling of the cloud provider is easily consumed by ambitious and innovative organizations. However, if this monopoly tooling provides an application or business critical workload, it will not move anywhere unless you can save time and money to re -develop your application in other environments. ”
The investigation of the CMA can have a significant impact.
The UK’s cloud service market has experienced tremendous growth over the past few years and is expected to reach $ 82.7 billion by 2029. However, the CMA is the following when digging into the activities of the UK public cloud market. It has an important impact on various stakeholders, including business owners, cloud service providers, and a wide range of UK business environments.
If a CMA investigation occurs to promote fair competition, a company can make a decision on information about cloud service providers, reducing unexpected costs or risks of unlocked suppliers. The more competitive cloud service market can lead to a wider option, and the provider encourages you to provide customized services that meet a variety of business needs.
As a result of the survey, the cloud providers can coordinate the price model, license contract, and data migration processes and force new players to create opportunities to enter the market, but there are many concerns. One is that the cost of compliance can be increased in relation to the cloud service providers’ compliance with new regulations and adjusting the business model. These additional costs can potentially be delivered to customers.
Similarly, in the Cloud Services market, regulatory changes and competitions can cause business owners to migrate data, applications, and processes to new price structures to other cloud providers. Such costs can affect budgets and resources.
Another concern is that the government auxiliary fair competition measures can compress the profit margin of existing cloud providers. As a result, these cloud providers may need to maintain a balance between business costs and profits to take into account the cost reduction or adjustment of the price strategy and to lower the service quality.
Depending on how the investigation proceeds, the UK’s business environment can be recognized as more economic growth or hostile. CMA offers measures to guarantee more competitive prices and flexible license models to reduce business costs and encourage more business to accelerate digital innovation efforts.
However, rapid changes in regulations and execution measures can create uncertainty of companies operating in the UK, which can affect long -term plans and investment decisions. The British reputation as a technology -friendly and innovative hub can be challenged and affects the charm of technology companies and investors.
Franklin OKEKE has contributed to this article.
