The cloud infrastructure market should be referred to the UK’s Competition and Markets Authority for investigation, says telecoms regulator Ofcom in a freshly filed interim report., Ofcom says there are clear indications the local cloud infrastructure market isn't working as well as it should, and is concerned that unless interventions are made, there may be a further decline in competition in what it identifies as a critical market for digital services and the UK economy.
According to Ofcom, its study has found active competition in cloud infrastructure services, especially where providers are competing to attract new customers who may be moving to the cloud for the first time. When it comes to technical restrictions, Ofcom said it had noted the level of effort required by customers to set-up for a preferred cloud architecture and tailor applications so they can run on it, as well as the time and costs required to develop the skills needed to use different clouds.
In particular, it claims market research found that 52 percent of customers cited a lack of interoperability between services from different IaaS/PaaS providers as a key concern, and at least half of IaaS/PaaS users in the market only made use of a single cloud provider because of these concerns. Such discounts can be seen as beneficial to customers by helping to reduce their costs, but the way these discounts are structured can incentivise customers to use a single provider for all or most of their cloud needs, Ofcom said.
It claims there are indications that some cloud customers are paying more or settling for lower quality services, as well as facing significant price increases when they come to renew contracts.
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