On the 28th January, the Competition and Markets Authority (CMA) published their provisional findings after a 14-month investigation into the UK cloud services marketplace.
In this preliminary assessment of cloud competition, the CMA discovered an incredible 80% of market share is owned by just two hyperscale cloud providers – AWS and Microsoft Azure.
It’s a striking statistic. A hyperscale monoculture leaves cloud customers with limited options for their infrastructure, and much less flexibility to switch between services.
In the press release announcing these provisional findings, GOV.UK summarized that “cloud customers face a limited choice of providers and do not consider many providers are able to provide the range of services that they need”.
Healthy competition, particularly in the cloud industry, is what drives innovation. Without it, prices are free to soar - even if services and support fail to match up.
“[Cloud] competition is not working as well as it could be, which is likely leading to higher costs, less choice, less innovation and lower quality of service for businesses and organizations across the UK economy.” – GOV.UK
We are already seeing the fallout of a hyperscaler monoculture and the grasp it’s having on many businesses not just in the UK, but globally. Vendor lock-ins, high egress fees and unpredictable costs are all symptoms of the same problem: the market power AWS and Microsoft Azure currently hold.
This has led to the formation of the Open Cloud Coalition (OCC). Launched in October 2024, the OCC is made up of a diverse group of cloud providers advocating for a fairer, more competitive and open cloud market. Supporting the CMA in their Cloud Market Investigation, the OCC published a paper sharing six key concerns relating to the lack of hyperscale cloud competition, and their recommendations in helping to solve these problems.
Technical barriers to interoperability and portability
Anti-competitive licensing practices
Egress fees
Committed spend agreements
Commercial incentives
Public sector procurement
Their conclusion?
“The CMA has a unique opportunity to future-proof the cloud services market against the far-reaching impacts of this monoculture… Taking action now will ensure a healthier, more competitive and resilient cloud ecosystem for years to come.”
These provisional findings will be consulted upon before deciding if the CMA are to pursue an investigation into AWS and Microsoft Azure, using new powers given by the Digital Markets, Competition and Consumers Act (DMCCA). The deadline is 4th August 2025.
While this news is a huge step in better understanding hyperscaler market dominance, the problem isn’t new.
Cloud customers have been struggling with many of the issues highlighted in the OCC report for years. Many to the point of adopting FinOps teams to help optimize their cloud spend, others completely moving away through reverse hyperscale cloud migrations.
If you have already encountered the challenges of this monoculture and are considering a cloud migration, help is available. Vendor lock-ins, deceiving incentives and high and unpredictable fees can all be undone; if you would like to learn more about how companies are leaving the cloud to find better suited alternatives, you can find out how to craft an effective cloud exit strategy in our blog.
You can find the published provisional findings of the cloud services market investigation on the GOV.UK website.
