Amazon criticizes Microsoft’s business practices in UK cloud market investigation -Gudstory

Amazon has joined Google in criticizing Microsoft over licensing agreements that restrict competition in the UK cloud computing market, claiming that Microsoft’s business practices have created incentives for customers to switch to alternative cloud providers or stay with Azure. It has made it difficult to run competitive services. The Competition and Markets Authority (CMA) is currently investigating the UK cloud computing industry which is dominated by Amazon and Microsoft.

“Some IT providers, such as Microsoft, use licensing practices that restrict customer choice and make it more difficult to switch. For example, Microsoft changed its licensing terms in 2019 and again in 2022, making it more difficult for customers to run some of its popular software offerings on Google Cloud, AWS, and Alibaba. To use many of Microsoft’s software products with these other cloud service providers, the customer must purchase a separate license, even if they already own the software. This often makes it financially unfeasible for the customer to choose a provider other than Microsoft.

The CMA recently launched a formal investigation into the UK cloud computing industry on October 5 after the country’s telecoms regulator Ofcom raised concerns about the market dominance of Amazon and Microsoft. According to Ofcom research that prompted the referral, Amazon Web Services (AWS) and Microsoft had a combined market share of 70 to 80 percent in 2022, while Google sat at 5 to 10 percent as their nearest rival. “This is a £7.5 billion market that underpins a whole range of online services – from social media to AI foundation models,” said CMA CEO Sarah Cardell. “Many businesses are now completely dependent on cloud services, making effective competition in this market essential.”

Amazon’s concerns regarding Microsoft follow similar criticisms made by Google to the CMA in October. In the letter published Tuesday, Google claims Microsoft’s licensing practices were harmful to UK customers because they leave them “no economically reasonable option other than using Azure as their cloud service provider, “Whether they like prices, quality, safety, innovation.” and characteristics of competitors. Google said that these licensing practices were the biggest issue preventing competition in the UK cloud-computing market.

Microsoft updated its cloud licensing agreements in August last year to address regulatory complaints related to market competition and to make it easier for European customers to transfer their existing software to rival networks. But Google Cloud vice president Amit Zaveri said the company’s competitors are still not convinced. reuters Microsoft’s updated licensing resulted in higher costs for customers who wanted to use Google or AWS instead of Azure. Zaveri said that despite having a larger cloud market share, AWS does not pose the same anti-competitive risks as Microsoft because AWS customers do not face the same licensing restrictions.

The CMA’s investigation is aimed at promoting cloud competition, so that smaller providers are not forced out of the industry. For Google, in third place, there is an opportunity to weaken its main competition. It is a similar situation for Amazon, which currently stands as the top cloud provider. It will be up to the CMA to fully investigate all concerns and get to the bottom of what needs to be done to ensure fair competition in the key market.