Under a cloud: Do AWS and Azure have too much control?

It’s a story the tech community has seen before. Take your pick from Meta, Google, IBM or Apple - the tech landscape is dominated by large and successful companies that drive innovation, offer convenience and corner the market.

This time however, dark clouds appear to be gathering over Amazon and Microsoft, as Ofcom launches an investigation into the dominant presence of the tech giants in the UK’s cloud services market. It’s not unusual for tech providers to build their own proprietary services in a bid to ensure users continue using their products and platforms. The situation is similar to when networking first emerged, and Cisco introduced rooted protocols that couldn’t talk to non-Cisco devices or more recently, when Apple brought out its lightning charger. If this can carry on unchallenged, why would companies with a large market share make it easy to move your business somewhere else?

The rise of Amazon Web Services (AWS) and Azure has been steep, as the biggest providers in the marketplace they have a combined share of 70 percent. While AWS was first on scene, Azure’s complimentary products such as Office 365 and productivity platform Teams, provide an easy migratory path for existing customers. Yet, what consumers fail to realise is their bargaining power is at the start of the cloud selection process, when they first migrate. That’s when they have the choice and time to evaluate, shop around and talk to a range of suppliers. Once you’ve signed on the dotted line with a big supplier like AWS or Azure, that’s when the balance appears to shift in their favour – it’s also where Ofcom points to concerns around it being too difficult to switch or mix and match providers.

Closer Collaboration

According to Ofcom, one of the biggest issues organisations currently face is interoperability between providers. Not only do the big cloud providers prevent some of their services from interoperating with services from other providers, but they also charge customers to transfer their data out of the cloud. It places a financial burden on businesses and leaves customers with the job of reconfiguring their data and applications, so they can work across different clouds. Overall, there is a concern that these practices reduce competition and discourage companies from using multiple cloud services for maximum benefit.

Hopefully, the Competition and Markets Authority (CMA) investigation will bring AWS and Azure closer, encouraging them to work together for the benefit of the consumer. Potentially, the CMA could intervene and order cloud providers to be more transparent about the interoperability of their services. This could enforce a greater degree of standardisation between competing cloud platforms to make sure that services can easily work in conjunction with one another.

Another possible solution could be the standardisation and creation of a common set of tools for businesses to use when deploying workloads into different cloud environments. For the consumer this would mean using the same code regardless of whether they are using AWS or Azure. The code would essentially talk to both environments, making the barrier to entry for multi-cloud (running the same workload over two different clouds) a lot easier. Taking this approach would help users to understand the basic capabilities they can expect from any cloud service and help them to compare and evaluate cloud offerings.

Promoting choice and change

The reality is that the bigger clouds aren’t always suitable for every business or every job. Supplier dominance not only suppresses competition and innovation, but it also hinders the growth of local UK-based cloud service providers. Ofcom’s report and the subsequent CMA investigation provides an opportunity to redefine the market, promote competition and ensure that companies have the power to engage with a wide and diverse range of suppliers, to meet their needs both now and into the future.