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UK To Probe Amazon, Google, Microsoft’s Cloud Dominance

Mark Haranas

“We will also consider any market features that might limit innovation and growth in this sector by making it difficult for other companies to enter the market and expand their share,” said U.K. regulator Ofcom in regards to its investigation into Amazon, Microsoft and Google.

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The U.K.’s communications regulator is investigating the world’s three largest cloud companies’ stranglehold on the massive cloud computing market, as Amazon, Microsoft and Google combine for more than 80 percent of total revenues in the U.K. public cloud infrastructure services market.

If the investigation leads to cloud competitive concerns, Ofcom—the British regulator conducting the study—could make recommendations to the British government to change regulations or policy, as well as take competitive or consumer enforcement actions.

“Ofcom is to examine the position of Amazon, Microsoft and Google in cloud services, as part of a new programme of work to ensure that digital communications markets are working well for people and businesses in the UK,” said Ofcom in a statement today. “If competition concerns are identified it could lead to further action.”

[Related: 5 Biggest AWS Executive Departures In 2022]

Amazon, Microsoft, Google Cloud Dominance In U.K.

The U.K.’s roughly $17 billion cloud services market is dominated by Amazon, Google and Microsoft, which combined owns 81 percent market share in the region.

Amazon leads with its cloud business Amazon Web Services (AWS), Microsoft’s cloud strategy is led by Azure, while Google Cloud is Google’s fast-growing cloud arm.

Ofcom will launch a study in the coming weeks to explore the position of these three technology giants’ cloud market stranglehold in the U.K. and whether it poses any competitive barriers.

“We will examine the strength of competition in cloud services generally and the position the three hyperscalers hold in the market. We will also consider any market features that might limit innovation and growth in this sector by making it difficult for other companies to enter the market and expand their share,” said Ofcom.

The agency will look at how the cloud market is running today and how it will develop in the future, “aiming to identify any potential competition concerns early to prevent them becoming embedded as the market matures,” Ofcom said.

Overall, Ofcom plans to take action if it discovers that Amazon, Microsoft or Google is harming cloud competition in the region.

CRN has reached out to Amazon, Microsoft and Google for comment.

Big Three Own 65% Of $200 Billion Cloud Market

Amazon, Microsoft and Google combined for approximately 65 percent of more than $200 billion worldwide cloud services market share as of the second quarter 2022, up from 61 percent year over year.

AWS owns 34 percent global market share, followed by Microsoft Azure at 21 percent share, then Google Cloud at 10 percent share, according to second quarter 2022 data from IT research firm Synergy Research Group.

The global cloud infrastructure services market hit $54.7 billion in Q2 2022, with 12-month revenues reaching $205 billion, according to Synergy Research Group data.

These cloud services market figures consists of Platform as-a-service (PaaS), Infrastructure as-a-Service (IaaS) and hosted private cloud services.

Ofcom Final Cloud Report

Ofcom expects to finish its review of the three companies and publish a final report, which will include recommendations and any concerns, within the next 12 months.

When we launch the market study, we will invite initial views on the UK cloud market from interested or affected parties,” said Ofcom.

Ofcom said it will lead the market study, drawing on its expertise in communications markets and reflecting that cloud is increasingly becoming an important element of the infrastructure of the internet.

Mark Haranas

Mark Haranas is an assistant news editor and longtime journalist now covering cloud, multicloud, software, SaaS and channel partners at CRN. He speaks with world-renown CEOs and IT experts as well as covering breaking news and live events while also managing several CRN reporters. He can be reached at mharanas@thechannelcompany.com.

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