TL;DR
- UK’s Competition and Markets Authority (CMA) faces criticism for its inaction on vendor lock-in in the cloud market.
- Smaller cloud providers allege that Committed Spend Agreements (CSAs) by AWS and Microsoft hinder competition.
- Key stakeholders, including former UKCloud executives, call for a reevaluation of CMA’s findings.
- The CMA acknowledges a lack of competition in the UK cloud market, primarily attributing issues to fees and licensing by major players.
Britain’s Competition and Markets Authority (CMA) is under fire from smaller cloud providers for failing to intervene against vendor lock-in practices prevalent in the UK cloud market. Despite acknowledging competition shortcomings, the CMA has deferred action on Committed Spend Agreements (CSAs) used by major players like Amazon Web Services (AWS) and Microsoft Azure, resulting in significant pushback from local businesses.
Concerns Over Vendor Lock-in
The criticism stems primarily from the CMA’s decision to set aside an inquiry into CSAs, which are contracts that require customers to commit to a minimum expenditure in exchange for significant discounts. Smaller cloud providers, including Civo and former UKCloud leaders, argue that these agreements create an uneven playing field, effectively shutting them out of lucrative public and private sector contracts.
Simon Hansford, the former CEO of UKCloud, cautioned that such agreements are strategically structured to favor big tech. He noted, “We are already seeing this in the UK public sector through its deals with AWS and Microsoft,” adding that the implications could extend beyond cloud services to encompass emerging public sector markets, such as artificial intelligence.
The CMA’s Current Findings
In its provisional findings, the CMA had suggested that the UK cloud market operates inefficiently, citing challenges such as egress fees and technical constraints imposed by larger firms like Microsoft. Nevertheless, it concluded that current forms of CSAs do not harm competition because rival providers could still compete profitably.
“We found that these agreements are widespread and can influence customers’ choices, but we have provisionally found that rivals can profitably compete and so in their current form they do not harm competition.” – CMA’s Provisional Decision Report
This stance has raised alarms among smaller companies, prompting calls for a reassessment of the impact these financial instruments have on competition. Civo’s CEO, Mark Boost, expressed serious concerns over the longevity and impact of such agreements, stating that smaller companies often lose substantial business to larger enterprises that can afford to provide extensive financial perks.
Potential Conflicts of Interest
Additional scrutiny is directed at the CMA itself, which reportedly has contracts with AWS, leading to questions about possible conflicts of interest as it investigates the market dynamics among major players. Critics have urged the CMA to reconsider its approach, particularly regarding the long-term consequences of cloud credits and CSAs on the competitive landscape.
Conclusion: Future Implications for the UK Cloud Market
The ongoing debate surrounding big tech’s influence and potential vendor lock-in practices highlights critical challenges facing the UK’s cloud sector. Stakeholders in the industry argue for reforms that could restore fairness and competition, especially as reliance on cloud services grows in both public and private sectors. The CMA’s final decision, expected later this year, could serve as a pivotal moment, shaping the future landscape of cloud services in the UK. As such, many await this outcome with keen interest, hoping it reflects an equitable approach towards fostering competition.
References
[^1]: Dan Robinson (2025-03-06). “Watchdog fails to stop big vendor lock-in, say UK cloud market’s smaller players“. The Register. Retrieved 2025-03-11.
[^2]: Lindsay Clark (2025-03-03). “How the collapse of local cloud provider caused biz continuity issues in UK government“. The Register. Retrieved 2025-03-11.
[^3]: Author Unknown (2025). “Watchdog fails to stop big vendor lock-in, say UK cloud market’s smaller players“. Hacker News. Retrieved 2025-03-11.
