The UK Competition and Markets Authority is taking a look at the business of cloud service providers in general, and Microsoft's cloud business in particular. The CMA has just announced it will launch an investigation into this industry, to "consider whether there are competition concerns."
The investigation was started after a report from another UK regulatory body, Ofcom, was submitted to the CMA. Microsoft and Amazon Web Services were named by Ofcom as the leading cloud service providers in the UK with a combined market share of between 70 to 80 percent. Google was a distant third with a share of between 5 and 10 percent of the cloud market.
The Ofcom study claims that there are a number of barriers that businesses have to deal with currently if they want to use more than one cloud provider, or to switch providers. They include extra fees for moving data from one cloud service to another, special discounts that could keep businesses from switching, and certain technical issues.
The Ofcom study stated:
Looking ahead, if customers have difficulty switching and using multiple providers, it could make it harder for competitors to gain scale and challenge AWS and Microsoft effectively for the business of new and existing customers. There could be long lasting impacts if this leads the market to become more concentrated, with barriers to switching and multi-cloud allowing the market leaders to entrench their positions and avoid competing vigorously. This could have implications for ISVs, especially where they become more dependent on the market leaders for access to customers.
The study also states concerns about some of the "software licensing practices of some cloud providers, in particular Microsoft."
The CMA will now conduct an investigation into these cloud providers "to determine whether competition in this market is working well and if not, what action should be taken to address any issues it finds." The CMA says it will provide the findings of the investigation by April 2025.
The CMA is in the final days of its investigation into Microsoft's planned acquisition of Activision Blizzard. It has given provisional approval for the deal after Microsoft said all current and future Activision Blizzard games will be published in the cloud by Ubisoft for at least 15 years. The final decision is expected sometime before October 18.
