The Competition Authority says the UK Cloud Services Market “cannot work.

Following concerns raised by the Telecom regulator, the UK competition and the market authority has published the provisional conclusions of the investigation of all the cloud service providers in the country.

The current conclusion is that the cloud is the service market “Can’t work, as well as it,” Since it is difficult for customers to switch cloud providers or use several clouds. The possibility of a lack of competition is leading to high cost, low option, low innovation and low quality of services.

“The ability of the UK businesses is important to ensure good results to offer better deals to put healthy pressure on cloud providers and unlock the potential benefits of cloud services,” CMA said in a press release,

4 main concerns about UK Cloud Services Market

In its investigation, the CMA’s independent investigation group found four primary concerns:

1. Clouds face a limited choice of customers and do not know that many providers can offer the same services.
2. Technical and commercial barriers make it difficult to switch cloud providers or use several clouds, making the seller lock-in.
3. It is difficult for new providers to enter the market and compete due to very large capital investment required to supply cloud services.
4. Microsoft is making hard for rivals, such as Google and Amazon web service, to compete for customers who want to use Microsoft software on clouds.

Microsoft and AWS each has 40% of the UK customer spending on cloud services, which is quite dominating the market; The third largest provider, Google, is a very small part. Even if major players are overcharged up to 5%, it can be £ 430 million per year in the UK business according to the CMA.

Investigation came on the heels of A Report released by 2023 report In which the regulator, beating the Cloud Services Market, identified several issues that presents implications for businesses and consumers. CMA spent the Egress fees, technical barriers, and commitment on recommendations, but provided that only the previous two disadvantages competition.

A decision regarding the finals of these provisional conclusions and recommendations will be made by August 4, 2025.

AWS and Microsoft may be subject to new digital markets, competition and consumer acts

The investigation group has recommended the investigation that CMA consider giving AWS and Microsoft “strategic market status” under the new digital markets, competition and consumer act, which came into force on 1 January 2025. The Act was specially designed to regulate. Major digital firms behavior with important market power in UK

The CMA examines companies that expect this strategic market situation. If the companies are given that designation, then the regulatory will draft Bispok conduct requirements to follow the anti -regulatory competitive practices. The investigation group stated that by regulating AWS and Microsoft under DMCCA, it would allow it to “target and flexible for treatment” and “Better provisions for the ongoing monitoring and oversight”.

Operations of requirements for major cloud service providers can encourage technical standardization, reduce the data transfer fee made in switching providers or using several clouds, and can ensure proper licensing of software.

Google and Apple should get SMS designations whether this is under investigation. Both companies are seen in relation to their mobile ecosystem. Google is also being investigated in the discovery and search advertising services.

See: UK regulator checks Apple’s mobile browser dominance

Industry response to CMA check

Reacting to the step of CMA to check the UK Cloud Services Market, Daniel Tramen-Pitter, Chief Executive Officer of Dark Matter, a UK Technology Research Company, emphasized the need to make the cloud computing market democratic.

He said: “Even without the identity of anti -competitive practices, I believe that there is a significant need to democracy the cloud computing scenario. Due to flexibility. Educationists, stability experts, cloud architects and now, even regulators worldwide are accepting that there are a small number of providers in a small number of power and intelligence. ,

Microsoft and Amazon com response to the survey

In response to COMCOM’s Cloud Market Survey, Amazon and Microsoft published long reactions. Here are brief parts of those reactions.

Amazon offered a counter-perpetrator“We do not agree with the concerns raised in the interim report that ‘committed expenses’ can reduce competition by encouraging customers to use a single provider for the most or all cloud needs, or increase the amount of customers to us Need to be spent on the Renaissance of its agreements, ”the company said. “AWS prices are publicly listed on our website, and any customer can use our services at these listed prices, as much as they need.”

Read Microsoft’s response: “Ejure at the Ezor Price” does not stop in customers, while it competes for new people, not at least because this dicotomy is incorrect. Nor is there any realistic possibility that microsoft or any other cloud vendor lock-in effects As a result of the innovation, it can slow down its rapid pace.

But Tramen-Pitter had a different opinion, arguing that “almost every technologist describes ‘lock-in’ as a very real risk factor.”

He commented: “The exhaust cost to exclude data from the cloud is usually inconsistent to the ‘free’ nature of putting it in the first place. In severe amounts, it can make cost-disinfected to consider transferring it. Cloud providers owned tooling is easily consumed by ambitious and innovative organizations; However, if your application or business-mating charge is distributed through this ownership tooling-you are not going anywhere until you are going to develop your application in another environment again and spend time and spends Can not leave ,

CMA investigation may have a profound effect

The UK’s Cloud Service Market has experienced a tremendous growth in the last few years and is It is estimated to reach $ 82.87 billion by 2029However, the CMA prepared a deep excavation in the ongoing activities in the UK Public Cloud Market, the result can come up with a significant implication for various stakeholders, including business owners, cloud service providers, and wide UK business environment.

If the CMA’s investigation is the result in regulatory changes that promotes proper competition, businesses can take more informed about their cloud service providers, unpredictable costs or sellers reduce the risk of lock-in. A more competitive cloud service market can also give rise to a broad array of options, encouraging providers to offer services to meet the needs of various services.

While the result of the investigation can force cloud providers to accommodate their pricing models, licensing agreements and data migration processes, there are many concerns for new players to enter the market to enter the market. One is that cloud service providers can withstand an increase in compliance costs associated with following new rules and adopting their business models. These additional expenses can be potentially passed to customers.

Similarly, in regulatory changes and increased competition in the cloud service market, business owners may need to migrate various cloud providers to migrate various cloud providers or increase transition costs to migrate or adjust new pricing structures. These costs can affect budget and resources.

Another concern is that measures for impartial competition aided by the government can compress the profit margin for installed cloud providers. In response, these cloud providers may need to consider cost cut measures or adjustment in their pricing strategies and resort to reduce the quality of their services to balance between commercial costs and profits. Can

It depends on how the investigation goes out, the UK business atmosphere may experience more economic development or considered hostile. If CMA comes with measures that will ensure more competitive pricing and flexible licensing models, it can reduce IT spending for businesses and at the same time encourage more businesses to accelerate their digital change efforts Can

However, rapid changes in rules and enforcement operations can create uncertainty for companies working in the UK, affecting their long -term plan and investment decisions. The UK’s reputation as a technical-friendly and innovative hub can also be challenged, affecting its attraction for technical companies and investors.

Franklin OKK contributed to this article.