Competition authority to examine UK cloud services
OCTOBER 5, 2023 11.39 EUROPE/LONDON BY JULIAN CLOVER

Ofcom has referred the public cloud infrastructure services market to the Competition and Markets Authority for further investigation.

It follows a study into the market earlier this year, which identified features that make it more difficult for UK businesses to switch and use multiple cloud suppliers.

Ofcom says it is “particularly concerned” about market leaders Amazon and Microsoft that between them hold a 70% share of the market.

As an evolving market, Ofcom has looked at how the market is working today and how it might develop in the future to head off any future competition concerns.

Adrian Bradley, Head of Cloud Transformation at KPMG UK, said because the public cloud runs as a utility model, that lets users pay by the hour, it’s opened cost-effective access to technology capabilities which have fuelled the digital revolution. “There are commercial trade-offs to secure access to these capabilities, just as there are with non-public cloud alternatives to the hyperscalers, such as identifying the right combinations of cloud and non-cloud consumption to deliver best value for any given enterprise. Whatever the outcome of the CMA inquiry, organisations need to better understand and manage the costs of cloud to secure value from their investments.”

CMA will now conduct an independent investigation to decide whether there is an adverse effect on competition, and if so, whether it should take action or recommend others to take action.