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Amazon has launched an attack on Microsoft’s cloud computing practices, as part of the UK’s investigation into cloud computing services.
The Competition and Markets Authority (CMA) is currently undertaking an investigation into anti-competitive practices in the cloud market, with a particular focus on the big beasts of the industry, including Amazon’s AWS and Microsoft’s Azure.
In its submission to the CMA’s probe, Amazon (naturally) denies any charges of anti-competitive behaviour, accusing regulator Ofcom several times of misunderstanding how the cloud market works. However, Amazon isn’t shy of pointing the finger at rival Microsoft, accusing it of changing licensing terms to prevent customers from using Microsoft software on rival cloud services.
“Some IT providers, such as Microsoft, use licensing practices that restrict customer choice and make switching more difficult,” Amazon claims in its submission.
“For example, Microsoft changed its licensing terms in 2019 and again in 2022 to make it more difficult for customers to run some of its popular software offerings on Google Cloud, AWS, and Alibaba. To use many of Microsoft’s software products with these other cloud service providers, a customer must purchase a separate license even if they already own the software. This often makes it financially unviable for a customer to choose a provider other than Microsoft.”
Amazon cites a study that claims this makes it 80-100% more expensive to use Microsoft software on rival cloud services than on its own. “Microsoft has acknowledged the concerns of customers, but rather than fix its policy so all customers can run Microsoft’s software on the cloud services provider of their choice, it has prevented IT customers from being able to run Microsoft’s software on specific workloads or specific cloud services providers’ infrastructure,” Amazon claims.
Not afraid to partake in a bit of finger-pointing of its own, Microsoft is equally dismissive of the CMA’s probe and claims that it’s merely playing catch-up with the entrenched market leader – AWS.
Whilst acknowledging that any potential competitor would need huge resources to build a competitive cloud infrastructure, Microsoft insists “this is not a market in which AWS and Microsoft, as the two early cloud leaders, are insulated from competition”.
“Microsoft has not and will not enjoy the same incumbent market advantage as AWS,” Microsoft’s submission adds. “There are many sources of competition in the cloud market in the UK. Google, Oracle, IBM and many other cloud players (e.g. Alibaba, Tencent) are also investing billions of pounds in cloud infrastructure globally to satisfy demand and are competing strongly for each customer workload where they operate.”
There’s no danger of this dispute being settled anytime soon. The CMA isn’t expected to deliver its final verdict on the cloud market until the spring of 2025.
