Ofcom instigated CMA inquiry long overdue says CIF

A UK cloud market study undertaken by Ofcom concluded that it’s high time the Competition and Markets Authority (CMA) stepped in to conduct a root and branch investigation into the state of competition in this space.

It’s a move that Cloud Industry Forum (CIF) CEO David Terrar believes should have happened long before now, not just on the basis of establishing a level playing field, but also to unleash greater innovation as a driver for growth.

“I’m surprised it’s happening now rather than five years ago, but the objective of a fair marketplace that encourages innovation, rather than stifles it, has to be supported,” he stated.

Terrar cited the CMA’s statement on the scope of its market investigation, in which Kip Meek, Chair of its inquiry group, noted, ‘Cloud services are an essential part of how businesses in the UK operate and they underpin many aspects of our daily activities, from banking to communications. This is why effective competition in this market is so important’.

In its official statement on the matter, Ofcom highlighted egress fees, technical barriers to interoperability and portability, plus discounting as key areas for the CMA to look at. “These issues certainly exist,” added Terrar. “Hopefully the investigation will uncover the scope and impact of any unfair practices.

"As we have always advised, the key is both transparency on the part of the vendor and education and awareness on the part of the customer. Only then can businesses go into a contract fully informed of all the ingredients, potential barriers, benefits and risks.”

As a trade body the Cloud Industry Forum is technology agnostic, but it ‘fiercely supports’ the solutions its members deliver. “We have members who use Microsoft, AWS and Google infrastructure, members who partner with them, and members who compete with them,” stated Terrar.

“We need open competition for a healthy market, and for the agility, scalability and innovation that cloud provides businesses. We support any interventions that promote fair practices and a more level playing field. And I look forward to the CMA’s report when it’s published in April 2025.”

Terrar has worked in the cloud space for longer than most and witnessed waves of new technology approaches – all united by a common factor. “In all of these waves there has always been one, two or three dominant players,” he commented. “I don’t see today’s competition as any different. So much of this is business as usual.

“However, I’d argue that the technology market is at the start of a new inflection point with the explosion of generative AI, mixed reality metaverse-like experiences, the rise of FinOps... those practitioners of cloud financial management – and more – all coming at us and all supported by cloud as an enabler.

"Much will depend not only on the findings of the investigation, but also on business expectations, needs and demands, and the providers’ ability to meet them in a fair, efficient and effective way.”

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