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As we go to press, news that Ofcom has referred the public cloud infrastructure services market to the Competition and Markets Authority (CMA) for further investigation is likely to be welcomed by rivals of Amazon (AWS) and Microsoft, the two biggest hyperscalers with a combined market share of 70-80% in 2022.

Ofcom highlights features of the market that it believes could be limiting competition, such as high fees for transferring data out, committed spend discounts and technical restrictions that it says are making it difficult for business customers to switch or use multiple cloud providers. It is concerned that these weaknesses could make it harder for competitors to grow and compete effectively.

Mark Boost, CEO of Civo, was quick to respond with the following: “I applaud this bold action from Ofcom. A referral to the Competition and Markets Authority (CMA) is an unprecedented opportunity to make the cloud market a truly competitive space. This means empowering any company to develop and grow cutting-edge cloud services, and ensuring customers can readily move around to find the best solution to match their needs.

“The CMA’s broad enforcement powers open the door to wide-ranging remedies. Action will need to be a balancing act. It will be particularly important to tackle egress fees, either through significant price controls or the most ambitious choice: abolishing them entirely. The price point charged on egress by hyperscalers is out of control and creates huge practical and financial obstacles for customers to move to another cloud provider. Urgent changes are also needed to how hyperscalers structure their services to enable customers to reap the benefits of simultaneously accessing multiple different providers, as well as a review of the fairness of incentives for loyal customers.”

He adds: “This is only the beginning of an 18-month journey before we know the decision made by the CMA. In the meantime, this investigation can also be a spur for immediate action from industry. Emerging cloud providers are rapidly stepping up to offer an alternative way forward to the hyperscalers. This vision is founded on putting the needs of the user back at the heart of cloud computing: transparent, predictable pricing; a streamlined experience; and super-fast, reliable services across the board.”

For many of the hyperscalers’ competitors and customers experiencing big increases in cloud costs, a decision can not come soon enough.

James Goulding – Editor, Jamesg@binfo.co.uk