UK cloud market dominance under fire

The UK cloud market is facing increased scrutiny as regulators raise concerns about the dominance of AWS and Microsoft. The Competition and Markets Authority (CMA) claims the market is becoming increasingly uncompetitive, with the two tech giants holding roughly 30–40% each. Businesses looking for cloud services in the UK are reportedly struggling with vendor lock-in, high egress fees, and limited multicloud options. This debate has sparked a wider conversation about whether the UK cloud industry needs tighter regulations to ensure fair competition.

UK cloud market dominance and its challenges

According to the CMA, hyperscaler concentration is particularly high in infrastructure-as-a-service (IaaS). Most UK businesses rely heavily on AWS or Microsoft Azure, with fewer than 1% of customers switching providers annually. Small and medium-sized enterprises (SMEs) face the biggest hurdles because of high costs, complex interfaces, and a lack of technical skills for managing multicloud environments. This limited flexibility has raised concerns that innovation and competition could be stifled if the market remains dominated by two players.

Why AWS and Microsoft are pushing back

AWS and Microsoft have rejected the CMA’s claims, arguing that the UK cloud market remains competitive and that businesses have the freedom to choose. The tech giants highlight their ongoing investments in new services, global infrastructure, and AI-driven cloud tools that support innovation. They also stress that multicloud adoption is growing, though the CMA’s findings suggest it remains rare for UK organizations to fully diversify providers. This standoff reflects the tension between regulatory oversight and the rapid growth of cloud computing.

What this means for UK businesses and cloud users

For UK businesses, the CMA’s intervention could pave the way for new cloud market rules aimed at reducing vendor lock-in and making multicloud strategies more feasible. Companies frustrated by high egress fees or restrictive contracts may soon benefit from more competitive offerings. On the other hand, stricter regulations could challenge AWS and Microsoft to adapt their business models while encouraging new cloud players to enter the market. For now, UK cloud users should closely monitor regulatory changes that could reshape the landscape.