So, here’s the lowdown: the UK’s competition regulator (that’s the CMA) just dropped a big report, and—and Microsoft and Amazon Web Services (AWS) are in the spotlight. Why? Because they’re accused of gaining too much power within the cloud space, and potentially hogging the stage in a way that isn’t great for the rest of us. Turns out, Microsoft and AWS each control about 30–40% of the UK public cloud market—and that means together they dominate up to 70% of spending.
Why This Matters
- Switching Is Harder Than It Should Be
Businesses want flexibility—maybe they want multi-cloud setups or to switch providers—but it’s a pain. High exit fees (known as “egress fees”), technical differences, and complicated pricing make switching feel like moving a mountain. As a result, most customers stick with the same provider, even if a better deal is out there. - Microsoft’s Licensing Pushes Customers Toward Azure
The CMA flagged that Microsoft’s licensing terms can make it tougher—and more expensive—for users to run Microsoft software on rivals like AWS or Google Cloud. That’s pretty much tilting the playing field in Azure’s favor. - A Market That Should Be Dynamic—Isn’t
Sure, cloud tech is booming (AI, anyone?), but even though Google is growing, it’s still only holding onto around 5–10% of market share. The CMA worries that without more competition, innovation might slow, costs may stay high, and businesses get fewer and less flexible choices.
What the CMA Wants to Do
The big ask? They’re calling on the CMA to use the Digital Markets Competition powers to deem Microsoft and AWS as having Strategic Market Status (SMS).
That designation would let regulators step in with targeted rules—maybe on pricing standards, switching costs, or licensing terms—to keep things fair. However, the CMA isn’t kicking off formal SMS investigations until 2026, since they’re busy evaluating other big tech (think Google and Apple) first.
The Pushback (Not Super Surprising)
- Microsoft fired back, saying the report “misses the mark” and ignores how competitive and innovative cloud has become, especially with AI shaking things up—plus, they argue Google should’ve been treated equally in the analysis.
- AWS also pushed back, calling the proposed intervention “unwarranted” and saying it could stifle innovation in the UK cloud market.
On the flip side, Google cheered the findings, calling them a “watershed moment” and urging swift action to unlock more competition.
Bottom Line
The CMA’s report isn’t just rhetoric—it’s a warning. With Microsoft and AWS holding such dominant positions, the regulator thinks it’s time to step in, cut down on hidden fees, ease switching, and keep innovation alive. But whether that happens or not depends on what unfolds over the next year or so. Until then, the debate around fair play in cloud space is just getting started.
