Cloud computing is at a pivotal crossroads in the United Kingdom, as organizations increasingly reject single-provider strategies in favor of multi-cloud architectures—a movement driven by both technological need and regulatory scrutiny. Recent findings, underpinned by research from cloud provider Civo, reveal that a significant 60% of UK organisations have shifted away from depending on a single cloud vendor. This evolution is coinciding with mounting pressure from the UK’s Competition and Markets Authority (CMA), which is preparing to deliver its final verdict on whether market dominance by hyperscale providers is stifling competition in the country’s £9 billion cloud sector.
The landscape of enterprise IT in the UK has undergone rapid transformation in recent years. The days when organizations would entrust the entirety of their digital infrastructure to a single cloud service provider—a practice which simplified management but courted risk—are waning. Civo’s research, surveying over 1,000 UK IT leaders, provides robust evidence of a paradigm shift: a clear majority is now distributing workloads across multiple clouds. This is not merely a technical evolution; it is also a strategic maneuver, intended to mitigate the operational and supply-chain risks that accompany vendor lock-in.
Beyond regulatory compliance and data governance, organizations are seeking greater flexibility, cost optimization, and leverage in commercial negotiations. As one senior IT architect at a UK financial services firm explained in a recent industry webinar: “The power to pivot between providers is essential for our risk management. We cannot afford to be locked into a single ecosystem, especially in uncertain times.”
The dominance is not simply a result of better services or competitive pricing, the CMA argues. Rather, technical barriers such as data egress fees (charges applied when customers move their data out of a provider's cloud) and interoperability challenges act as "friction points," raising switching costs and inhibiting customers from moving freely between providers. This reinforces long-term lock-in and blunts the impact of smaller challengers.
The CMA also dissected committed spend discounts—substantial price reductions awarded in exchange for customers committing to a certain level of expenditure—finding, for now, no conclusive evidence that these discounts inflict direct harm on competitive dynamics, as rivals “can profitably compete against them.” However, the picture remains fluid; antitrust experts caution that changes in discount structures or market consolidation could quickly alter this assessment.
For industries like finance, healthcare, and government, these capabilities are often essential for regulatory compliance. British banks, for example, operate under stringent Prudential Regulation Authority (PRA) guidance that mandates robust contingency plans for critical third-party IT services. Relying on a sole cloud provider could represent a significant breach—not in terms of technology, but risk governance.
Source: Technology Magazine UK Firms ‘Abandoning Single Cloud’ as CMA Scrutiny Mounts
The Rise of Multi-Cloud in the UK
The landscape of enterprise IT in the UK has undergone rapid transformation in recent years. The days when organizations would entrust the entirety of their digital infrastructure to a single cloud service provider—a practice which simplified management but courted risk—are waning. Civo’s research, surveying over 1,000 UK IT leaders, provides robust evidence of a paradigm shift: a clear majority is now distributing workloads across multiple clouds. This is not merely a technical evolution; it is also a strategic maneuver, intended to mitigate the operational and supply-chain risks that accompany vendor lock-in.Drivers Behind Multi-Cloud Adoption
Several compelling motivations underpin this trend. First among them is digital sovereignty, with 78% of survey respondents stating that sovereignty—control over where their data resides and how it is managed—increasingly influences their choice of technology partners. Spike in geopolitical tensions, new international data regulations, and high-profile cloud outages have underscored the hazards of overreliance on any one global provider.Beyond regulatory compliance and data governance, organizations are seeking greater flexibility, cost optimization, and leverage in commercial negotiations. As one senior IT architect at a UK financial services firm explained in a recent industry webinar: “The power to pivot between providers is essential for our risk management. We cannot afford to be locked into a single ecosystem, especially in uncertain times.”
CMA Investigation: Scrutiny and Consequences
These strategic choices are unfolding against the backdrop of a landmark regulatory review. The CMA’s investigation, launched after a 2023 reference from telecoms regulator Ofcom, is probing whether AWS and Microsoft—each estimated to control 30-40% of UK cloud spend—are putting up barriers to competition. Compared to Google, which lags far behind in market share, AWS and Microsoft’s dominance raises acute questions about the vibrancy and fairness of the UK’s cloud sector.Market Concentration: The Numbers Behind the Concerns
According to the CMA’s provisional findings published in January, AWS and Microsoft’s combined grip on the market has led to a “duopoly,” fueling the agency’s contention that competition is being unacceptably constrained. The UK cloud infrastructure services market is worth approximately £9bn annually, making it a crucial pillar of British business.The dominance is not simply a result of better services or competitive pricing, the CMA argues. Rather, technical barriers such as data egress fees (charges applied when customers move their data out of a provider's cloud) and interoperability challenges act as "friction points," raising switching costs and inhibiting customers from moving freely between providers. This reinforces long-term lock-in and blunts the impact of smaller challengers.
The CMA also dissected committed spend discounts—substantial price reductions awarded in exchange for customers committing to a certain level of expenditure—finding, for now, no conclusive evidence that these discounts inflict direct harm on competitive dynamics, as rivals “can profitably compete against them.” However, the picture remains fluid; antitrust experts caution that changes in discount structures or market consolidation could quickly alter this assessment.
‘Cloud Sovereignty’ Surges in Importance
With sovereignty surging to the forefront of enterprise decision-making, UK organizations are demanding guarantees on data locality and resilience. Multi-cloud not only addresses compliance mandates for data separation and redundancy, but also empowers IT leaders to architect solutions that avoid any one provider’s weaknesses, geopolitical vulnerabilities, or unplanned downtime.For industries like finance, healthcare, and government, these capabilities are often essential for regulatory compliance. British banks, for example, operate under stringent Prudential Regulation Authority (PRA) guidance that mandates robust contingency plans for critical third-party IT services. Relying on a sole cloud provider could represent a significant breach—not in terms of technology, but risk governance.
Key Benefits and Strengths of the Multi-Cloud Model
The advantages that multi-cloud strategies bring to UK enterprises are not just theoretical. They translate into real operational gains, providing organizations with:- Resilience and Redundancy: By distributing workloads, organizations build defenses against outages, service disruptions, and even bankruptcy or sanctions against a particular cloud provider.
- Enhanced Negotiating Power: Moving workloads between providers incentivizes hyperscalers to offer better pricing, support, and innovation. The risk of switching—or the actual act of switching—keeps cloud giants responsive to customer demands.
- Compliance and Data Governance: Multi-cloud strategies support obligations under GDPR and UK-specific regulations, letting organizations specify data residency, jurisdiction, and retention in granular detail.
- Best-of-Breed Integration: Rather than accepting a single provider’s “walled garden,” IT teams can deploy the best tool for each job, combining strengths of different vendors (for example, using AWS for compute but Azure for machine learning).
Notable Challenges, Weaknesses, and Unintended
Source: Technology Magazine UK Firms ‘Abandoning Single Cloud’ as CMA Scrutiny Mounts
