Amazon, Microsoft and Google take the spotlight as Ofcom launches cloud probe with US tech giants
- The UK cloud services market is now worth £15bn after continued growth
- Ofcom intends to assess how well competition is working in the market
The UK’s communications regulator is investigating tech giants Amazon, Microsoft and Google for their position in the UK’s £15 billion cloud services market.
Together, the three “hyperscalers” generate about 81 percent of the revenue in the UK market for public cloud infrastructure services, and Ofcom said on Thursday it intends to study whether the market is “working well” for the country’s consumers and businesses.
The regulator said it would launch a market study of the sector “in the coming weeks,” assessing the strength of competition, “the position” of hyperscalers in the market, and factors “that could limit innovation and growth.” will.
Amazon Web Services or AWS is by far the largest player in the global cloud services market
Cloud offerings can include a number of different services and products
While Ofcom also plans to look into other digital service providers such as WhatsApp and Zoom, it warned that competition concerns in the investigation “could lead to further action”.
The “cloud” refers to servers that can be accessed remotely via the internet – when you store or access something in the cloud, it means it is stored on those remote servers and not directly on your computer’s hard drive .
“Cloud Services” simply refers to the services provided to businesses and customers over the Internet, designed to provide easy and cost-effective access to applications or resources without the need for any internal infrastructure.
The need for these services has increased significantly in recent years.
According to Ofcom figures, global corporate IT spending has risen from 10 percent in 2018 to 17 percent in 2021, largely driven by the need to work remotely. Some analysts believe that number could reach 45 percent by 2026.
Ofcom, which is working closely with the competition regulator on the investigation, is asking for opinions on the market and plans to publish its findings within 12 months.
The results report any concerns or proposed recommendations that could involve enforcement action or making policy recommendations to the government.
Ofcom said: “Cloud computing is a huge and fast-growing market that uses remote servers to offer services such as software, storage and computing power.
“The user, who can be an individual or a company, uses these services but does not directly manage them.
“The cloud has become an essential part of delivering products to telecom users and viewers and listeners of TV, radio and audio content.
“When we find that a market is not performing well, it can negatively impact businesses and ultimately consumers through higher prices, lower quality of service and less innovation.”
The “hyperscalers” have further expanded their market share