uk cloud computing

UK Cloud Computing overwhelmed by Amazon and Microsoft

The UK cloud computing sector is set to undergo a competition investigation due to concerns of its dominance by Amazon and Microsoft. Ofcom, the media regulator, has revealed that these two giants account for 70-80% of the UK cloud computing market, with Google, the closest competitor, holding a mere 5-10% share. Consequently, Ofcom has referred this matter to the UK’s Competition and Markets Authority (CMA) for a comprehensive examination.

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Both Amazon and Microsoft have expressed their willingness to cooperate with the CMA during UK cloud computing investigation. Amazon, however, indicated that it had reservations about Ofcom’s concerns.

Definition of Cloud Computing

Cloud computing, in broad terms, involves the storage of data online, accessible from anywhere and at any time. It has become a fundamental component of infrastructure for both businesses and individuals, serving as the primary platform for storing vast amounts of data, utilizing remote software, streaming media content, and playing online games.

This technology is often described as the utilization of “other people’s computers,” which refers to the extensive networks of powerful machines housed in colossal data centers worldwide, a significant proportion of which are owned by Amazon and Microsoft.

UK Cloud Computing Value 2022

These cloud computing services are widely adopted by businesses across the UK, and according to Ofcom’s estimations, the UK’s cloud services market was valued at up to £7.5 billion in 2022.

CMA’s Chief Executive, Sarah Cardell, emphasized the importance of competition in this market, stating, “Many businesses now completely rely on cloud services, making effective competition in this market essential.”

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Sarah Cardell

She emphasized that robust competition ensures a level playing field and prevents excessive market power from consolidating within the hands of a few major players. This approach aims to unlock the full potential of rapidly evolving digital markets, benefiting individuals, businesses, and the UK economy.

The CMA has assembled an independent inquiry group to conduct a thorough investigation into whether the competition in the UK cloud computing market is functioning optimally. If any issues are identified, the CMA will determine the necessary actions to address them.

The CMA expects to conclude its investigation by April 2025, wielding the authority to compel companies to alter their practices, block acquisitions, or even divest parts of their businesses if deemed necessary to safeguard market competition.

Nicky Stewart, former Head of ICT at the Cabinet Office, commended Ofcom for addressing anti-competitive concerns, such as data egress fees, technical and commercial lock-ins, which have detrimentally impacted the UK’s burgeoning cloud infrastructure market. He stressed the importance of the CMA’s thorough investigation into the deeper issues affecting this critical market of UK cloud computing, including anti-competitive licensing practices.

Frequently Asked Question

  • What is cloud in simple words?

The definition for the cloud can seem murky, but essentially, it’s a term used to describe a global network of servers, each with a unique function. The cloud is not a physical entity, but instead is a vast network of remote servers around the globe which are hooked together and meant to operate as a single ecosystem.

  • What is cloud computing example?

Emails, calendars, Skype, and WhatsApp are cloud computing examples that we use every single day. They make use of the cloud feature of remote accessibility of data to support our data in the cloud infrastructure, helping us access them thru the Internet anytime, anywhere.

  • What is Amazon Web Services in cloud computing?

AWS (Amazon Web Services) is a comprehensive, evolving cloud computing platform provided by Amazon that includes a mixture of infrastructure-as-a-service (IaaS), platform-as-a-service (PaaS) and packaged-software-as-a-service (SaaS) offerings.

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