Challenging the cloud giants: Is a new era of competition on the horizon? | Computer Weekly

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The UK’s Competition and Markets Authority (CMA) sent shockwaves through the tech industry in October 2023 when it announced its investigation into potential anti-competitive practices in the UK cloud infrastructure services market.

The CMA is not ploughing a lonely furrow: regulators across the world – from Spain and Denmark to South Africa and (if reports are to be believed) the United States – are examining various aspects of cloud computing and its impact on competition.

This scrutiny is long overdue, and it marks a significant step forward. For too long, regulators have looked the other way as the Western world’s cloud market quietly amalgamated around just two cloud providers.

While these tech giants have undoubtedly played their part in a global digital industrial revolution, their dominance is often accepted as an inevitable and unchangeable reality – even if it may have been achieved by anti-competitive practices.

This implicit acceptance of the status quo is a false narrative because there are alternatives. Challenger cloud providers stand ready to compete, asking for nothing more than a level playing field.

For inquiries like the CMA’s to succeed, it is crucial that decision-makers do not allow the dominant cloud providers to monopolise the conversation and they need to give equal weight to the voices of those challengers.

At the beginning of next year, we will learn about the CMA’s provisional opinion on the four “theories of harm” under investigation.

These range from concerns about exploitative pricing practices to barriers that restrict customers from switching providers.

During the summer, the CMA proposed numerous remedies to combat these. While we can’t second guess the exact conclusions, one thing is clear: challenger cloud providers hold strong and united views, based on decades of cumulative experience.

These challengers offer a vital dose of reality to what can often become dry, legalistic debates.

While the industry may be guilty of using jargon like “data egress fees” and “anti-competitive licensing practices”, these terms have real-world consequences.

Ask a challenger provider to explain what these practices mean for their business, and you’ll hear stories of dominant players charging exorbitant fees to customers who try to leave their platforms or dramatically increasing the cost of widely-used software when it’s run on a competitor’s cloud. These practices have profound implications for competition.

If the CMA can create a framework that enables competition, the benefits will ripple through the market. Challenger cloud providers, with their agility and innovation, will drive down prices, expand consumer choice and spur further technological advances. They will also help to address critical concerns like cloud concentration risk and digital resilience, which become ever more pressing as our dependence on cloud services grows.

The stakes couldn’t be higher. This isn’t just about today’s challengers and consumers; it’s about future-proofing the entire cloud ecosystem. Emerging markets such as AI and quantum computing – both heavily reliant on cloud infrastructure – must not fall victim to a “winner takes all” scenario.

Such an outcome would stifle innovation and concentrate power in ways that could threaten global digital resilience and even national security.

The CMA, alongside its international counterparts, has a unique and urgent opportunity to reset the dial. This is a moment to usher in a new era of openness, competition, and fairness in the cloud market.

Challenger cloud providers will be watching closely to see how the CMA’s provisional decision translates into meaningful solutions that benefit not only the industry but also consumers, the wider economy, and the future of digital innovation.

While the last twelve months may have fired the starting gun on investigating the cloud market, the next twelve could be when we see real change begin.

https://www.computerweekly.com/opinion/Challenging-the-cloud-giants-Is-a-new-era-of-competition-on-the-horizon

A source: www.computerweekly.com/opinion/Challenging-the-cloud-giants-Is-a-new-era-of-competition-on-the-horizon