Ofcom said it received evidence showing Microsoft makes it less attractive for patrons to run its Office productivity apps on cloud infrastructure apart from Microsoft Azure.
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Britain’s anti-competition regulators have been tasked with investigating Microsoft and Amazon‘s dominance of the cloud computing market.
Media watchdog Ofcom on Thursday referred its inquiry for further investigation, kickstarting the method.
Ofcom said that it had identified features which make it tougher for U.K. businesses to modify cloud providers, or use multiple cloud services, and that it’s “particularly concerned” concerning the position of market leaders Amazon and Microsoft.
“Some UK businesses have told us they’re concerned about it being too difficult to modify or mix and match cloud provider, and it is not clear that competition is working well,” Fergal Farragher, Ofcom’s director liable for the market study, said in a press release Thursday.
“So, we’re referring the market to the CMA for further scrutiny, to be certain business customers proceed to learn from cloud services.”
Ofcom is anxious that so-called “hyperscalers” like Amazon Web Services and Microsoft Azure are limiting competition within the cloud computing market. These are corporations that allow businesses of all stripes to perform critical computing tasks — like storage and management of knowledge, delivery of content, analytics and intelligence — over the web, somewhat than through servers stored on site, or “on premise.”
AWS and Microsoft Azure are the most important players available in the market. AWS’ cloud solution is primarily targeted at startups, while Microsoft prioritizes big enterprises. AWS and Microsoft Azure account for roughly 60% to 70% of cloud spend, in accordance with an Ofcom estimate. Combined, Amazon, Microsoft and Google generate roughly 81% of revenues within the U.K.’s cloud infrastructure services market, in accordance with Ofcom, which estimates the market to be price £15 billion ($18.2 billion).
Ofcom, the agency responsible regulating technology, broadcast and telecom operations within the U.K., said that it identified numerous practices within the cloud industry that were of particular concern.
The regulator said that so-called “egress fees” charged by cloud vendors like Amazon and Microsoft make it tougher for businesses to maneuver their data between providers, or to “multi-cloud” by utilizing multiple cloud providers. Egress fees are charges for cloud corporations to remove the info of firms from a cloud environment.
Ofcom also said that cloud corporations have introduced “technical barriers” to interoperability — the power of various cloud platforms and services to work together and exchange data with none barriers or disruptions. The authority said that this “makes it tougher [for firms] to mix different services across cloud providers or to alter provider.”
Lastly, Ofcom raised alarm bells over committed spend discounts, or incentives to present customers a reduction in the event that they spend a certain quantity of cash. While this will reduce customer costs, it also encourages corporations to make use of a single cloud provider for all or most of their cloud needs, even when a less expensive alternative is accessible.
Competing cloud firms including Google, in addition to regulators, have flagged up concerns with Microsoft Azure, particularly — namely, allegedly unfair licensing terms that serve to “lock in clients,” keeping them attached to only Microsoft’s technology, making it harder to modify to other providers.
Microsoft’s cloud licensing terms are the topic of a separate inquiry from the European Union. The EU is not formally investigating Microsoft’s Azure cloud computing platform but it surely has been assessing complaints from corporations including France’s OVHCloud about Microsoft’s licensing terms.
