Large cloud providers are opposing changes in the British cloud services market, which have been initiated by an investigation by the Competition and Markets Authority (CMA). Google, Microsoft, and Amazon Web Services (AWS) participated in hearings where issues related to licensing and contracts for the use of cloud services were discussed. However, all three companies are rejecting the need for any changes proposed by the CMA.
Google states that in the British cloud services market, Microsoft and Google dominate with a market share ranging from 60% to 70%, while Google holds less than 10% of the market. Google is particularly concerned about Microsoft’s licensing practices, which restrict customer choice by allowing the use of software licenses only on Microsoft’s Azure cloud platform, necessitating the purchase of new licenses for use on other platforms.
Google also expresses apprehension about the potential repercussions of alterations to Committed Spend Agreements (CSA), which provide discounts to customers based on their cloud usage. The company believes that changes in this area could have unforeseen effects on the market.
On the other hand, Microsoft takes a more assertive stance, affirming that the cloud services market is evolving rapidly, and competition among providers is driving down prices while enhancing customer satisfaction levels. Microsoft acknowledges AWS’s early market lead in cloud services but highlights Google’s unique competitive strengths such as advertising credits, which the company utilizes to secure deals.
Microsoft disputes claims regarding licensing costs, arguing that competitors cannot substantiate their grievances about high license expenses given their growth and profitability. The company also opposes changes to CSA, asserting that such agreements are essential for fostering long-term customer relationships.
AWS stands in support of Google regarding licensing issues and points out a longstanding problem with Microsoft’s conduct in the market that could be rectified. Regardless, AWS insists that market competition is functioning effectively, enabling customers to freely switch between cloud providers. AWS also underscores competition from local data centers, noting that some customers are reverting to traditional IT solutions.
All three companies vehemently oppose changes to CSA, advocating against any restrictions on the duration of such agreements, as they argue that income predictability is vital for future investments. Furthermore, AWS believes that modifications to outbound data traffic charges (Data Transfer Out, DTO) could adversely impact the company’s network investment.