The Ofcom finds that “hyperscalers” like AWS and Microsoft Azure are limiting competition in UK's cloud market by making it difficult for businesses to switch
- Ofcom is concerned that so-called “hyperscalers” like Amazon Web Services and Microsoft Azure are limiting competition in the cloud computing market.
Context & Ripple Effects
Ofcom’s concern follows its decision to examine cloud-market competition in 2022 and an April 2023 assessment that named AWS, Azure and Google as potential constraints on competition. The later finding sharpens the issue from market concentration to the practical difficulty customers face when changing providers.
The coverage establishes a regulatory arc rather than a one-off complaint: Ofcom’s earlier referral of cloud competition concerns to the CMA put the UK’s largest cloud platforms under a more formal spotlight.
First-order effects
- AWS and Microsoft Azure face intensified UK scrutiny over whether their commercial and technical arrangements impede customer switching.
- UK cloud customers gain an official competition finding to cite when evaluating contract terms and migration options, while switching friction remains an immediate constraint.
Second-order effects
- Smaller cloud providers and Google can use the finding to differentiate on portability and lower migration friction when competing for UK workloads.
- The scrutiny raises pressure on the leading platforms to demonstrate that their pricing, contracts and interoperability practices do not lock in customers.
Third-order effects
- If competition authorities sustain this focus, cloud portability and multi-provider deployment could become more important competitive dimensions alongside infrastructure scale.
- The case signals that hyperscaler market power may increasingly be assessed through customers’ ability to move workloads, not simply through provider market share.
The trend: Cloud competition oversight is shifting toward the switching costs and dependency mechanisms that can entrench hyperscaler positions.