The UK’s Competition and Markets Authority (CMA) has delayed the release of its report on the UK cloud infrastructure market by four months, moving the deadline to 4 August 2025. The regulator claimed that this extension would allow for a deeper examination of complex issues, especially around cloud providers’ licensing practices. The CMA also noted that additional time is needed to thoroughly analyse new evidence submitted after the initial deadline.
“In taking this decision, the Inquiry Group has had regard to the nature and complexity of issues raised in relation to the theories of harm investigated,” said the CMA, “in particular, the licensing practices theory of harm, which was not examined in depth in Ofcom’s market study.”
CMA cloud market investigation
The CMA began investigating competitive practices in the cloud market in October 2023, focusing on Amazon Web Services (AWS), Microsoft, and Google. It identified barriers that hinder businesses from moving workloads between cloud providers, raising concerns about vendor lock-in and anticompetitive pricing.
Cloud providers have responded by removing egress fees, which are charges incurred when moving data between cloud platforms. AWS, Microsoft, and Google aim to lower barriers to multicloud adoption by making this move.
Microsoft has also taken steps to address regulatory concerns, unbundling its Teams platform from Office 365 in response to an antitrust investigation by the European Commission. Despite this, the Commission issued a preliminary finding that Microsoft’s bundling practices violated EU antitrust rules.
Tensions remain between AWS, Microsoft, and Google. Google has accused Microsoft of leveraging its dominance in enterprise software to limit cloud competition, citing restrictive licensing practices. AWS echoed these concerns, pointing to long-standing dissatisfaction with Microsoft’s conduct. The Amazon subsidiary added that Microsoft’s extensive experience with enterprise IT customers may be used to restrict competition.
Trend toward moving more workloads on-prem
One trend picked up in responses to the investigation has been the interest of potential cloud customers in keeping some workloads running in on-premise infrastructure. AWS noted that cloud adoption currently makes up only 15% of the broader IT market, with many businesses still reliant on traditional on-prem systems for financial reasons and better control over IT resources and data.
Analysts report that most enterprises have adopted a hybrid model, combining both cloud and on-premises infrastructure. Gartner predicts that 50% of critical enterprise applications will remain outside public clouds through 2027. Synergy Research Group’s data supports this, showing that cloud providers control 41% of global data centre capacity, while 37% remain on-prem.
AWS highlighted that businesses are repatriating workloads for financial reasons and to have closer control over assets. The CMA hearings also revealed that companies see on-prem infrastructure as offering better control over sensitive data and key IT resources, compared to the potential risks and costs of cloud.
Read more: Have the hyperscalers broken the UK cloud market?
