Imagine a world where your choice of cloud provider is as simple as choosing between chocolate or vanilla ice cream at your favorite gelato shop. No guilty upcharges. No complicated fine print. Just pure, unbridled freedom—a world, in other words, the UK’s Competition & Markets Authority seems intent on conjuring with its ongoing investigation into the cloud computing giants that loom over Britain’s digital landscape like weather patterns you’d need a supercomputer to model. Yet the drama swirling between these digital titans—Amazon AWS, Microsoft Azure, and the ever-persistent Google Cloud—has all the flavor of a late-stage reality show, with accusations, counterclaims, and more than a whiff of desperation from those squeezed in the middle: the customers.
While “Cloud Wars” might sound more like the next big Netflix sci-fi hit, in the UK’s lucrative £7-7.5 billion cloud market, it’s a very real contest centered on complex licensing, pricing structures, and the strategic hoarding of competitive advantage. As of 2022, Microsoft and AWS controlled a gobsmacking 70-80% of this market. Google, forever the scrappy underdog, trailed with a modest 5-10%. These are not startups bootstrapping over kitchen tables; these are billion-dollar behemoths with empires to protect—and customers to lock in.
Ofcom, the UK’s communications regulator, didn’t mince words when, back in October 2023, it flagged “market features that might restrict competition.” Translation? If you’ve ever tried to move workloads between cloud providers and felt your wallet weeping, you already know: The system seems almost designed to make switching as laborious—and costly—as relocating Buckingham Palace by bicycle.
So what’s the stickiest sticking point? Licensing terms for Microsoft software—chiefly Windows Server—make running their software on any non-Azure cloud up to four times more expensive than, well, just settling in at Camp Azure. Want to run Windows Server on AWS, Google Cloud, or Alibaba? Prepare to feed the licensing beast until your IT budget is but a memory.
“AWS said it has to offset the additional costs imposed by Microsoft’s licensing restrictions including on…the cost of licences that need to be repurchased and the additional monetary impact of non-pricing features,” reads the CMA’s summary of AWS’s complaints. Translation: Sure, we can cushion some of those fees for you, but don’t expect us to run a charity. Not even AWS can absorb all those costs “in a profitable way.”
Yet the numbers speak volumes. Even with the removal of certain fees, Azure and AWS remain the gravitational centers of the UK cloud universe, pulling in the vast majority of enterprise workloads. Is this pure, unadulterated customer satisfaction at play…or a sign that technical and contractual quicksand underfoot makes every leap perilous?
Google insists it isn’t just a faint echo of Amazon and Microsoft dominance. “A challenger cloud provider and a distant third in size to the two market leaders,” it says—fairly, if a bit plaintively. But Google’s warnings aren’t idle: If left unchecked, Microsoft could monopolize the UK market within five years, a timeline that would make any opposition strategist break out in hives.
Want to migrate from Azure to AWS? Or maybe you’re eyeing up an agile, trans-Atlantic multi-cloud strategy, deftly shifting workloads like a chess master? Hope you like paying for Windows licenses again…and again. For many organizations, particularly those who built their IT empires atop Windows and SQL Server, the licensing cost spike is enough to end the multi-cloud fantasy before it starts—unless you’re willing to torch that year’s IT budget, and maybe next year’s too.
This isn’t mere corporate feuding. These costs can roll into the tens or hundreds of thousands annually for large enterprises. Smaller firms, meanwhile, face equally chilling choices: climb aboard Azure, or risk being priced out of the game entirely. So the alleged “freedom” to choose a provider is really more like the “freedom” to pay twice.
AWS and Google, united by grievance if not by strategy, are gunning for reforms. Microsoft, master of its proprietary universe, is playing defense, sometimes magnificently evasive, sometimes unrepentantly direct. The potential outcomes are as uncertain as a British summer, but everyone agrees on one thing: for the health of the UK’s cloud market, something must change.
When licensing roadblocks stack the deck, innovation stalls. Costs rise. Procurement teams everywhere develop nervous tics as they try to unpick whether their “cloud-agnostic” strategy is even feasible. And the UK’s ambition to be a global tech powerhouse? That risks being stifled, one licensing contract at a time.
AWS and Google would argue “no.” The true barrier isn’t exit charges; it’s what comes next. The sheer cost of re-buying Windows (or SQL Server) licenses on a new platform can dwarf the data transfer bill. It’s as if the fare for leaving the theme park is less frightening than discovering you’ve got to re-buy tickets to enter another one—even though you’ve already paid once.
Microsoft, of course, does not have a monopoly on this kind of stickiness—AWS and Google each have their own forms of architectural quicksand. But none can match the reach of Microsoft’s ubiquitous enterprise software estates or its licensing wiles.
What’s clear is that the cloud market’s competitive health is now more a matter of regulatory resolve than technology alone. Unless the CMA delivers real muscle—clear, enforceable rules and the political will to monitor compliance—the UK cloud landscape may remain stuck in its current weather pattern: two superpowers and a distant third.
Industry groups have called for more transparency in cloud pricing and the end of “shadow lock-in”—the sneaky technical and contractual snags that turn cloud contracts into virtual bear traps. Some larger players have invested in multi-cloud management tools, aiming to reclaim at least a smidgen of bargaining power. Yet for many, the ultimate solution remains tantalizingly out of reach: true supplier portability, with no punitive costs for exercising choice.
The licensing headaches detailed above are only the start. Every cloud provider touts its own APIs, managed database engines, security services, monitoring dashboards, and billing portals. Juggling these isn’t impossible—but it does require complexity-taming tools, specialist staff, and the patience of a saint.
Microsoft’s unique power lies in the fact that for millions of organizations, Windows workloads are the linchpin. If you can only afford to run those at rational prices on Azure, multi-cloud means little more than “Azure… and also some Google or AWS where we can afford it.” That’s not the open market the cloud promised.
For these customers, even the whiff of anti-competitive behavior stings twice as hard. They can’t afford armies of consultants to re-architect for another cloud. The dream of cloud as an “easy button” for agility becomes, instead, a bureaucratic riddle wrapped in a spaghetti of contracts.
Amazon and Google, for their part, stand ready to pounce—just as soon as the licensing moat dries out. For now, they are pitching themselves as the champions of customer choice and flexibility. But let’s not kid ourselves: whichever cloud prevails, customers will need ever-more savvy negotiation, specialist tools, and regulatory support to secure fair treatment.
As the UK’s cloud giants joust in front of the CMA and global regulators, the real question for customers isn’t just “which cloud is best?” It’s “who’s holding the keys to my digital freedom—and how much will it cost me to get them back?”
So next time the vendor sweet-talks you about seamless migration, ask for a breakdown of those licensing terms. And maybe tuck a £10 note under your IT director’s monitor—the next time they have to explain Azure’s licensing to the board, they’ll need both caffeine… and sympathy.
Source: TechRadar AWS says half of Microsoft Azure customers would shift to them if not for licensing costs
The Cloud Market: A British Battle Royale
While “Cloud Wars” might sound more like the next big Netflix sci-fi hit, in the UK’s lucrative £7-7.5 billion cloud market, it’s a very real contest centered on complex licensing, pricing structures, and the strategic hoarding of competitive advantage. As of 2022, Microsoft and AWS controlled a gobsmacking 70-80% of this market. Google, forever the scrappy underdog, trailed with a modest 5-10%. These are not startups bootstrapping over kitchen tables; these are billion-dollar behemoths with empires to protect—and customers to lock in.Ofcom, the UK’s communications regulator, didn’t mince words when, back in October 2023, it flagged “market features that might restrict competition.” Translation? If you’ve ever tried to move workloads between cloud providers and felt your wallet weeping, you already know: The system seems almost designed to make switching as laborious—and costly—as relocating Buckingham Palace by bicycle.
AWS: “Let My Workloads Go!”
Amazon Web Services, not known for subtlety, took its shot at Azure. In testimony to the CMA, AWS dropped a bombshell: “Perhaps 50% of those workloads currently running on Azure would move elsewhere if it was economically feasible.” The implication is stark. Azure’s customers, AWS alleges, are hostages of licensing restrictions—bankrolled not by allegiance, but by the frightful expense associated with escape.So what’s the stickiest sticking point? Licensing terms for Microsoft software—chiefly Windows Server—make running their software on any non-Azure cloud up to four times more expensive than, well, just settling in at Camp Azure. Want to run Windows Server on AWS, Google Cloud, or Alibaba? Prepare to feed the licensing beast until your IT budget is but a memory.
“AWS said it has to offset the additional costs imposed by Microsoft’s licensing restrictions including on…the cost of licences that need to be repurchased and the additional monetary impact of non-pricing features,” reads the CMA’s summary of AWS’s complaints. Translation: Sure, we can cushion some of those fees for you, but don’t expect us to run a charity. Not even AWS can absorb all those costs “in a profitable way.”
Azure: Spotlight on the Market Leader
For its part, Microsoft isn’t letting the mud stick quietly. With the practiced poise of an Olympic gymnast, it pirouetted away from accusations about “egress fees”—the infamous charges for extracting your data from one cloud to another—insisting that after dropping those under the EU Data Act, the avalanche of switching customers many predicted simply never materialized. If no one is leaving Azure, Microsoft’s argument runs, perhaps licensing isn’t the ball-and-chain AWS claims.Yet the numbers speak volumes. Even with the removal of certain fees, Azure and AWS remain the gravitational centers of the UK cloud universe, pulling in the vast majority of enterprise workloads. Is this pure, unadulterated customer satisfaction at play…or a sign that technical and contractual quicksand underfoot makes every leap perilous?
Google Cloud: The Challenger’s Dilemma
Enter Google Cloud, playing the part of the underdog with almost Shakespearean verve. In its own testimony, Google broadly aligns with AWS, lamenting lost deals where customers picked Azure “solely for licensing/commercial reasons”—not because it offered more bells, whistles, or radiant Google logos, but because the cost to leave Microsoft’s orbit was simply too high.Google insists it isn’t just a faint echo of Amazon and Microsoft dominance. “A challenger cloud provider and a distant third in size to the two market leaders,” it says—fairly, if a bit plaintively. But Google’s warnings aren’t idle: If left unchecked, Microsoft could monopolize the UK market within five years, a timeline that would make any opposition strategist break out in hives.
Licensing: The Ultimate Lock-In Mechanism
If the UK cloud market is a high-stakes game of musical chairs, Microsoft’s licensing is the fat thumb holding Azure’s chair glued to the floor. The 2019 licensing changes are the villain of the piece here: by re-writing the rules for running Microsoft software on non-Azure platforms, Redmond gave itself a critical, sticky advantage.Want to migrate from Azure to AWS? Or maybe you’re eyeing up an agile, trans-Atlantic multi-cloud strategy, deftly shifting workloads like a chess master? Hope you like paying for Windows licenses again…and again. For many organizations, particularly those who built their IT empires atop Windows and SQL Server, the licensing cost spike is enough to end the multi-cloud fantasy before it starts—unless you’re willing to torch that year’s IT budget, and maybe next year’s too.
This isn’t mere corporate feuding. These costs can roll into the tens or hundreds of thousands annually for large enterprises. Smaller firms, meanwhile, face equally chilling choices: climb aboard Azure, or risk being priced out of the game entirely. So the alleged “freedom” to choose a provider is really more like the “freedom” to pay twice.
The CMA: Referee, Therapist, or Both?
The UK’s Competition & Markets Authority, better known for investigating supermarkets and telecom mergers than the intricacies of AWS billing, now finds itself at the helm of one of tech’s most consequential market reviews. How did we get here? With Ofcom raising the red flag last year, the CMA is now sifting through reams of testimony, legal arguments, and perhaps polite but pointed British sarcasm about just whose practices are “fair” or “anti-competitive.”AWS and Google, united by grievance if not by strategy, are gunning for reforms. Microsoft, master of its proprietary universe, is playing defense, sometimes magnificently evasive, sometimes unrepentantly direct. The potential outcomes are as uncertain as a British summer, but everyone agrees on one thing: for the health of the UK’s cloud market, something must change.
Why This Matters: Beyond the Tech Giants
Let’s step back for a moment. All this may seem like a spat between billionaire companies—the sort of thing that’s mildly entertaining from afar, like royal soap opera. But underneath these boardroom maneuvers, British businesses of all sizes are caught in the crossfire. The NHS, financial institutions, fintech unicorns, scrappy startups, and government agencies—they all depend on the cloud’s promise of flexibility, scalability, and, ideally, fair competition.When licensing roadblocks stack the deck, innovation stalls. Costs rise. Procurement teams everywhere develop nervous tics as they try to unpick whether their “cloud-agnostic” strategy is even feasible. And the UK’s ambition to be a global tech powerhouse? That risks being stifled, one licensing contract at a time.
Egress Fees: A Distraction from the Main Battle?
It’s tempting to fixate on the infamous egress fees—the charges for moving data out of a provider’s ecosystem. These costs raised hackles across Europe and became fodder for regulatory debate. In fairness to Microsoft, after dropping egress fees under the EU Data Act, there wasn’t an exodus reminiscent of a supermarket sweep. So are these costs really the heart of the problem?AWS and Google would argue “no.” The true barrier isn’t exit charges; it’s what comes next. The sheer cost of re-buying Windows (or SQL Server) licenses on a new platform can dwarf the data transfer bill. It’s as if the fare for leaving the theme park is less frightening than discovering you’ve got to re-buy tickets to enter another one—even though you’ve already paid once.
Technical Lock-In: The Hidden Handcuffs
There’s another layer of entrapment: the subtle, technical kind. Over years of Azure usage, companies may have built their infrastructure with proprietary Azure tools, APIs, and managed services. The muscle memory of architects and sysadmins is Azure-shaped. Even if licensing were magically leveled overnight, just the retraining costs and migration headaches would make some CIOs reach for the aspirin.Microsoft, of course, does not have a monopoly on this kind of stickiness—AWS and Google each have their own forms of architectural quicksand. But none can match the reach of Microsoft’s ubiquitous enterprise software estates or its licensing wiles.
The Regulatory Dilemma: Is Any Solution Good Enough?
Even if the CMA requires Microsoft to “equalize” its licensing terms or offer fairer pathways for running its software elsewhere, how vigorously will these rules be enforced? And how creative will providers be in finding new ways to tilt the chessboard?What’s clear is that the cloud market’s competitive health is now more a matter of regulatory resolve than technology alone. Unless the CMA delivers real muscle—clear, enforceable rules and the political will to monitor compliance—the UK cloud landscape may remain stuck in its current weather pattern: two superpowers and a distant third.
Cloud Customer Voices: Anxious, Strategic, Savvy
Amid this maelstrom, British cloud customers are learning to navigate rough seas. Some are lobbying for direct intervention, arguing the status quo stifles innovation and raises costs. Others, more world-weary, are hedging their bets: adopting a hybrid cloud approach, spreading workloads between on-premises data centers, and cautiously exploring open-source solutions to reduce dependency on any one mega-provider.Industry groups have called for more transparency in cloud pricing and the end of “shadow lock-in”—the sneaky technical and contractual snags that turn cloud contracts into virtual bear traps. Some larger players have invested in multi-cloud management tools, aiming to reclaim at least a smidgen of bargaining power. Yet for many, the ultimate solution remains tantalizingly out of reach: true supplier portability, with no punitive costs for exercising choice.
Why Multi-Cloud Still Isn’t the Panacea
For years, multi-cloud strategies have been hyped as the “get-out-of-jail-free card” for enterprises worried about lock-in. In theory, running workloads across AWS, Azure, and Google provides both leverage and the freedom to shift, as needed, in response to pricing or innovation. In practice? It’s more like herding cats with a migraine.The licensing headaches detailed above are only the start. Every cloud provider touts its own APIs, managed database engines, security services, monitoring dashboards, and billing portals. Juggling these isn’t impossible—but it does require complexity-taming tools, specialist staff, and the patience of a saint.
Microsoft’s unique power lies in the fact that for millions of organizations, Windows workloads are the linchpin. If you can only afford to run those at rational prices on Azure, multi-cloud means little more than “Azure… and also some Google or AWS where we can afford it.” That’s not the open market the cloud promised.
The Small Business Squeeze
Let’s not forget the SMEs—small and midsize enterprises—who face the brunt of these battles. With fewer resources and less negotiating clout, they’re the most likely to be boxed in by restrictive licensing terms. A brand-new fintech in Manchester might find its innovation agenda stymied by the grim math of license stacking. A public-sector CIO, desperate to fulfill government mandates for cloud adoption, has to explain to a skeptical board why “cloud” doesn’t actually mean “cheaper” or “more flexible” in practice.For these customers, even the whiff of anti-competitive behavior stings twice as hard. They can’t afford armies of consultants to re-architect for another cloud. The dream of cloud as an “easy button” for agility becomes, instead, a bureaucratic riddle wrapped in a spaghetti of contracts.
Looking Ahead: Will the UK Cloud Get Its Sunshine?
So what next for the UK’s embattled cloud market? The CMA’s findings, due later this year, could chart a new course for not only British cloud customers, but global markets watching closely. Will the UK demand that cloud providers untangle their licensing practices? Will Microsoft cede its licensing fortress and finally level the field—or will it find new, clever ways to pull up the drawbridge?Amazon and Google, for their part, stand ready to pounce—just as soon as the licensing moat dries out. For now, they are pitching themselves as the champions of customer choice and flexibility. But let’s not kid ourselves: whichever cloud prevails, customers will need ever-more savvy negotiation, specialist tools, and regulatory support to secure fair treatment.
The Bottom Line: Choose Your Prison Wisely
Cloud migration is supposed to be like stepping free from the gravity of legacy IT—liberating, flexible, affordable. But for now, it often still resembles moving into a gilded cage—with Azure’s particularly well-fortified cell reserved for those running Microsoft workloads. AWS and Google would dearly love to offer you a better deal, but licensing “taxes” keep many from ever reaching the negotiating table.As the UK’s cloud giants joust in front of the CMA and global regulators, the real question for customers isn’t just “which cloud is best?” It’s “who’s holding the keys to my digital freedom—and how much will it cost me to get them back?”
So next time the vendor sweet-talks you about seamless migration, ask for a breakdown of those licensing terms. And maybe tuck a £10 note under your IT director’s monitor—the next time they have to explain Azure’s licensing to the board, they’ll need both caffeine… and sympathy.
Source: TechRadar AWS says half of Microsoft Azure customers would shift to them if not for licensing costs
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