Microsoft and Amazon Web Services (AWS) have been found to be the dominant players in the UK’s cloud storage market, according to the first raft of working papers released by the country’s competition watchdog, the Competition and Markets Authority (CMA), as part of its investigation into cloud services.
The reports into the UK’s cloud market (via The Register) suggest its value doubled between 2019 and 2022, reaching £7.5 billion ($8.9-9.5 billion). Though now almost certainly an outdated figure, it’s a cause for concern when AWS and Microsoft alone seem to be the biggest drivers.
Per the report, the CMA estimates that Google, the next closest competitor, is at most a quarter of the size of AWS, and its growth rate meaning that ‘it will be a long time before it catches up’.
CMA cloud investigation and its implications
The report makes clear that, although AWS is currently dominating the market, Microsoft has a faster growing market share. The CMA has stressed that findings as part of their profitability assessments alone “are not in themselves causes of competitive harm.”
As part of its latest research, the CMA also released a qualitative survey of customers, and has been considering whether Microsoft’s software licencing practices – perhaps related to its status as a provider of perhaps the most popular office software in the world – affects customer perceptions when choosing a cloud provider.
The CMA has so far suggested that it doesn’t, though we won’t really know its complete opinion until it releases its paper on the issue next month. Other issues under scrutiny include the benefits of provider enterprise agreements that disincentivize switching, and “the effort required to disentangle [a company’s cloud infrastructure] from the Microsoft ecosystem, a discussion perhaps brought on by data egress fees.
Such fees, paid to extricate data from a cloud provider, have been quietly dropped in recent months by AWS and Google as well as Microsoft. However, the CMA isn’t trusting providers as far as it can throw them, pointing out that “both AWS and Microsoft have noted that they may make changes with respect to the free data transfer policies at any time.”
The watchdog expects responses from the providers involved by July this year, with a final decision expected as late as April 2025.
