U.K. cloud market under scrutiny for competition concerns

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The U.K.’s communications regulator Ofcom has referred the public cloud infrastructure market to the Competition and Markets Authority (CMA) for further investigation, following a yearlong study.

In a report, Ofcom said it found evidence of “features that could limit competition” among the major cloud providers, particularly Amazon and Microsoft.

The report identified several common features that make it difficult for businesses to switch providers or deploy in multiple clouds, including ata egress fees, the charges customers pay to transfer their data out of the cloud.

It also found committed spend discounts, evictions are incentives offered to customers who commit to spending a certain amount of money with a single provider. In addition it found technical specifications that limit interoperability

Ofcom also found that the hyperscalers, as the major cloud providers are known, use policies that can lead to vendor lock-in. This is when customers become so reliant on a single provider that it becomes difficult and costly to switch.

For example, Ofcom found that AWS and Microsoft sometimes make the functionality of their cloud infrastructure services available when combined with their own services, but not with those of competitors.

The report estimates that AWS and Microsoft combined captured 70% to 80% of the U.K. cloud market last year, with Google Cloud a distant third with a 5% to 10% share.

Ofcom said that while competition between the hyperscalers has driven beneficial innovation, it has also stifled multicloud adoption. Multicloud is the practice of using multiple cloud providers, which can give businesses greater flexibility and resilience.

The sources for this piece include an article in CIODIVE.


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