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The Director and Co-founder of Hyve Managed Hosting, Jake Madders, has released a commentary on the Competition and Market Authority's (CMA) scrutiny of the UK's cloud market. He has said that despite progress in examining competitiveness, the inquiries have been going on for too long and have not managed to address long-standing issues voiced by the expanded European cloud community.
He continues that, annually, less than 1% of cloud customers switch providers, illustrating entrenched commercial and contractual lock-ins. This stagnation hampers competition and stifles innovation, particularly affecting small and medium-sized enterprises (SMEs). Dominance by industry giants like AWS and Microsoft, who collectively control 70-80% of the Infrastructure as a Service (IaaS) market, leads to increased costs and dependency.
While AWS and Microsoft face criticism for their monopoly, the omission of Google from scrutiny neglects to acknowledge its significant global influence. The report's limited focus on smaller providers further hinders efforts to cultivate a secure and diverse cloud ecosystem that can bolster UK resilience. Moreover, frequent acquisitions by hyperscalers and private equity erode diversity and condense market control.
A truly competitive cloud market should empower smaller, local providers to compete globally. Designating AWS and Microsoft with Strategic Market Status (SMS) under the Digital Markets, Competition and Consumers Act could address some industry concerns. However, in Mr Madder's opinion, the designation lacks urgency in promoting a sovereign and inclusive market.
For independent providers such as Hyve, SMS risks perpetuating AWS and Microsoft's dominance without offering tangible solutions grounded in the realities faced by businesses on the ground. Enabling smaller companies to thrive within a landscape dominated by hyperscalers means implementing practical support that reflects their daily challenges, offering more than high-level regulatory frameworks.
These concerns were previously raised by Ofcom nearly three years ago, signalling that the period for dialogue has expired. Immediate and effective action is required to address existing inequalities and support the UK’s technological ambitions. Continued inactivity could entrench existing disadvantages, stalling potential growth in the tech sector.
