Ofcom released a statement earlier this month, announcing that halfway into its exploration of UK cloud services, it plans to refer the market to the CMA (Competition and Markets Authority) for investigation.

The news, while major, is actually unsurprising when you think about the make-up of the industry, believes Vapour’s CEO Tim Mercer.

“The UK’s two lead cloud players - Microsoft and AWS (Amazon Web Services) - hold up to 70% of market share, which definitely feels like a monopoly. There are other hyperscalers competing for customers’ business of course, including Google, but their presence is comparatively dwarfed by the other two giants.

“So we have to ask ourselves, do they have too much control? I would argue they do, but it’s hard to see how anything will change if the Government uses both.”

The dominance of Microsoft and AWS does make it harder for emerging cloud providers to gain traction, adds Tim.

“These providers have traditionally offered seemingly ultra-affordable options for customers - undoubtedly one of the reasons they’re the ‘go to’ cloud of choice for the public sector particularly. But big doesn’t necessarily mean best,” he said.

Ofcom’s article expressed apparent concern surrounding interoperability restrictions and significant price increases at the point of renewal, for example, no doubt just some of the factors that will be further examined by the CMA, if it goes ahead.

We’re told a final decision on the proposed investigation will be made by 5 October 2023.

“I hope it’s not merely an industry rumbling,” concluded Tim. “If there are ways to improve how the market works for all, then surely an investigation makes sense.“In the meantime though, I think the theme of this conversation reminds us of the importance of cloud agnostic conversations. After all, multi-cloud providers exist, who are able to advise organisations on the cloud infrastructure that is truly right for them - it might be Microsoft or AWS, it might be Google, or it might be something else entirely. That’s when things get really exciting.”