UK Cloud Providers Sound Alarm, Demand Swift CMA Action Against Microsoft and AWS Dominance
LONDON – A clear majority of UK-based cloud service providers are calling for immediate regulatory measures to curb the growing market power of tech giants Microsoft and Amazon Web Services (AWS), according to a survey commissioned by the Open Cloud Coalition (OCC). The findings land as the UK's Competition and Markets Authority (CMA) weighs whether to designate the two companies with Strategic Market Status (SMS), a move that could impose strict conduct rules.
The research, conducted by Censuswide, shows that 71.2% of participating cloud providers view regulatory action as "urgent" or "extremely urgent." A striking 74% warn that without swift intervention, dominant providers will further solidify their market positions, stifling competition.
"The market is at an inflection point," said Nicky Stewart, senior adviser to the OCC. "Every month of delay allows the dominant players to deepen customer lock-in through technical and commercial barriers, which ultimately harms innovation and the UK's digital resilience."
Providers report significant hurdles when competing with AWS and Microsoft, with 82% citing restrictive software licensing, product bundling, interoperability issues, and deep discounting tied to long-term commitments as key obstacles. These practices, they argue, make it prohibitively expensive and complex for customers to switch providers or adopt multi-cloud strategies.
Cloud customers echo these concerns. Nearly two-thirds (65%) stated that rapid regulatory action to boost competition and reduce vendor lock-in is "very important" for their organisations, with a further 33% deeming it "somewhat important." Buyers fear the consequences of inaction: 68% predict increased costs, and 63% anticipate reduced operational flexibility if regulation is delayed.
The CMA's own Cloud Services Market Investigation, concluded in July 2025, identified similar anti-competitive risks, highlighting restrictive licensing and technical barriers to switching. The authority is now expected to decide imminently on launching formal SMS investigations into AWS and Microsoft. An SMS designation would empower the CMA to set tailored rules to ensure fair competition.
"As a British infrastructure leader, we support any action that fosters genuine choice," said Mike Hoy, Chief Technology Officer at OCC founding member Pulsant. "A fair, open market isn't just about price; it's about giving businesses the freedom to innovate with the best tools, free from artificial constraints."
The CMA's previous analysis pointed to high capital costs and massive economies of scale that favour incumbents, particularly in the Infrastructure-as-a-Service (IaaS) segment. It also noted that Microsoft's licensing practices can disadvantage competitors like AWS and Google Cloud, exacerbating market concentration.
Industry Voices: A Divided Landscape
Sarah Chen, CTO at a fintech startup: "This isn't about punishing success. It's about ensuring the plumbing of our digital economy remains open. When switching costs become a strategic moat, everyone downstream pays the price in higher fees and less innovation."
David Reeves, veteran IT consultant: "While concerns are valid, heavy-handed regulation risks stifling the very investment that made UK cloud services robust. The focus should be on enabling interoperability standards, not on crafting punitive rules that could backfire."
Anya Petrova, founder of cloud analytics firm DataFlow: "It's outrageous. We're competing not on the quality of our service, but against a wall of licensing terms and punitive egress fees designed to trap customers. The CMA has the data—now it needs the courage to act before the market calcifies completely."
Michael Briggs, enterprise procurement manager: "Our board is demanding a multi-cloud strategy for resilience, but the financial and technical penalties for distributing workloads make it almost theoretical. Stronger regulation could finally make that strategy a practical reality."
The CMA Board is reviewing its priorities for SMS investigations and is expected to make a final decision in early 2026.
This report is based on original reporting by Verdict, a GlobalData brand.
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