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Cloudy with a Chance of Competition

Cloudy with a Chance of Competition

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  • On Wednesday, UK regulators accused Microsoft (MSFT) and Amazon (AMZN) of impeding competition in the cloud services sector, which could result in an antitrust investigation into their business practices.
  • The two tech giants, along with Google, dominate the market and are sometimes referred to as "hyper scalers." According to the regulator, Microsoft and Amazon Web Services command a 60% to 70% share of the market, with Google accounting for 5% to 10%. The cloud infrastructure market is estimated to be worth £4.5 billion ($5.6 billion) to £5 billion in 2021.

Why it matters

Ofcom's preliminary results deal a setback to Amazon and Microsoft, both technology giants that benefited during the pandemic as demand for digital connectivity rose. However, as pandemic restrictions ease and interest rates increase, these companies have encountered challenges. In the fourth quarter of 2022, Amazon, Microsoft, and Alphabet all reported a slowdown in their cloud businesses.


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