UK to challenge AWS and Microsoft’s cloud domination

UK to challenge AWS and Microsoft’s cloud domination

Ofcom HQ.jpg

The UK telecoms regulator is to refer the cloud business, particularly Amazon Web Services (AWS) and Microsoft, to the markets regulator.

Ofcom (pictured) said this morning that AWS and Microsoft, with a combined market share of 60-70%, to the Competition and Markets Authority (CMA). Google is their closest competitor with a share of 5-10%, noted Ofcom.

Smaller cloud companies gave the move a cautious welcome. Mark Boost, CEO of Civo, a cloud-native service provider, said: “This report is a wake-up call for hyperscalers. For too long, the major incumbents have over-promised and under-delivered for users. It is welcome to see Ofcom not hold back in its criticism of the pricing and services offered by the major cloud providers.”

Francisco Mingorance, secretary general at Cloud Infrastructure Services Providers in Europe (CISPE), said: “It is clear that Ofcom recognises the potential for Microsoft’s unfair software licensing practices to distort competition in the cloud market.”

It is notable that Mingorance did not mention AWS, one of the 26 members of CISPE, and focused instead on just Microsoft.

He said: “More and more customers, competitors and regulators are waking up to the ways in which Microsoft continues to distort fair competition in the cloud. Private deals are unlikely to solve these sector-wide issues.”

Ofcom said: “Competitive market forces are delivering benefits to customers – especially where providers are competing to attract new customers – in the form of innovative products and discounts. However, other features of the market give cause for concern, such as egress fees; technical restrictions on interoperability; and committed spend discounts.”

A referral “would allow the CMA to further examine the nature and extent of barriers and consider if there are interventions that could improve how the market works for customers and ultimately UK consumers”, said Ofcom.

Boost said: “Our own research found that 37% of public cloud users have been stung by unexpected costs in the last 12 months. Many users of the hyperscalers face persistent problems with opaque pricing and unpredictable billing, leaving users struggling to stay on top of their cloud usage.”

This is an interim report from Ofcom (PDF), which is looking for more input from the industry by 17:00 UK time on 17 May.

Gift this article