UK interactions regulator Ofcom has released an interim report that proposes the cloud facilities market be referred to the UK’s Competitors and Markets Authority (CMA) due to issues around a decline in competition.The report stated that existing cloud consumers in the UK are paying more than they need to be for their cloud facilities or having to opt for low-quality services, which the regulator had actually heard concerns from some customers about their ability to change or use numerous providers.As a result, Ofcom stated it was referring the cloud infrastructure market to the CMA for a market examination that would allow the regulator to even more take a look at if there are interventions that might deal with the barriers determined in the report and enhance the market for customers.The news comes 3 months after Ofcom raised “considerable issues”about Amazon Web Provider(AWS)and Microsoft, alleging that they were hurting competitors in cloud facilities services and abusing their market positions with practices that make interoperability difficult.Ofcom defines cloud infrastructure services as those which are constructed on physical servers and virtual makers hosted in data centers and including infrastructure as a service(IaaS)items, such as storage, computing and networking, and platform as a service(PaaS
), that includes the software tools needed to construct and run applications.When the preliminary investigation was launched, Ofcom said that AWS and Microsoft Azure had a combined UK market share of between 60%and 70 %, while the next nearby competitor, Alphabet-owned Google, has a 5% to 10%share. As a result, between 2018 and 2021, the portion of cloud suppliers that were not AWS, Microsoft, or Google fell from 30%to 19%, triggering Ofcom to note that such levels of market supremacy might potentially make it harder for smaller sized cloud companies to take on the market leaders
, further consolidating the big companies’revenue and market share.Ofcom approximates that in 2021, the marketplace for cloud facilities in the UK was worth between$4.9 billion (₤ 4.5 billion )and$5.5 billion. In its report released on Friday, Ofcom restated its view from April, which is that it is tough for UK clients to change between numerous suppliers due to three factors: egress costs (charges that customers pay to move their information out of a cloud )technical constraints on interoperability, and committed costs discounts that can incentivize clients to use a single cloud service provider for all or most of their needs.”As an outcome, we are worried that a considerable variety of consumers, especially those with more complex requirements, may face material barriers to changing and multi-cloud,”the report read.” This might leave some consumers’ locked in’ to one of the leading providers … We are most worried in relation to AWS and Microsoft, provided their market position and the truth they show some form of all the above behaviours that limit competition. “The CMA said it is welcoming views on the findings in its report which it plans to finish its research study and release the last report by October 5. Microsoft and AWS did not immediately respond to requests for remark. Copyright © 2023 IDG Communications, Inc. Source
