The cloud computing industry has become a vital aspect of many businesses across the UK. It has transformed how companies deliver their services and enabled remote access to software, storage, and networking. However, Ofcom’s recent study into the UK cloud services market has raised concerns about the practices of the two leading cloud providers, Amazon Web Services (AWS) and Microsoft Azure, and their impact on sustainable competition and innovation.
Ofcom’s study found that the hyperscalers’ dominance in the market, with a combined market share of 60-70%, has led to several practices that make it difficult for customers to switch and use multiple cloud suppliers. These practices include high egress fees, technical restrictions on interoperability, and committed spend discounts that incentivise customers to use a single hyperscaler for all or most of their cloud needs.
These market features can create barriers to entry for smaller cloud providers, limit competition, and ultimately harm customers. Ofcom’s concern is that the UK cloud infrastructure market could become too concentrated towards the market leaders, AWS, and Microsoft Azure, making it harder for smaller providers to win business.
With this information in mind, let’s explore the reasons to promote UK-based cloud providers and how doing so can benefit the country’s digital landscape.
Why support UK-based cloud providers for a sustainable future
- Boosting the local economy: Encouraging and investing in UK-based cloud providers will ultimately contribute to the growth of the local economy. The digital sector has proven to be a significant driver of economic development, and supporting home-grown businesses will create jobs, foster innovation, and stimulate economic growth. This, in turn, will help the UK to become a global leader in the cloud services industry.
- Enhancing data sovereignty and privacy: Data privacy and sovereignty have become critical concerns in the digital age. Supporting UK-based cloud providers can help address these issues by ensuring that data remains within the country’s jurisdiction, making it easier to comply with the UK’s data protection laws. This will ultimately increase trust and confidence among businesses and individuals using cloud services.
- Encouraging competition: Promoting UK-based cloud providers will create a more competitive market, ultimately benefiting consumers and businesses. Competition drives innovation and ensures that companies continue to improve their offerings to maintain their market share. This, in turn, leads to better services, lower prices, and increased choice for end-users.
- Strengthening national infrastructure: Investing in UK-based cloud providers will contribute to developing a robust national digital infrastructure. This is crucial for ensuring the country’s resilience in the face of cyber threats and other potential disruptions. Additionally, a strong domestic cloud services industry will enable the UK to better respond to and recover from crises, ensuring a more secure digital future for all.
- A step towards a more sustainable future: UK-based cloud providers are subject to local regulations, ensuring they comply with the country’s environmental laws and adhere to ethical standards. By supporting these providers, the UK can promote a more sustainable and ethical digital landscape, one that fosters innovation and competition while supporting its long-term environmental and economic goals.
How Centerprise can help
The Ofcom Cloud Services Market Study Interim Report highlights that while international giants like AWS, Microsoft Azure, and Google Cloud currently dominate the market, compelling reasons exist to encourage and support UK-based cloud providers. Local providers such as Centerprise International can offer businesses access to local expertise and support, compliance with UK data protection regulations, and flexibility in their cloud solutions.
Choosing a UK-based cloud provider can also help businesses avoid the high egress fees, technical restrictions on interoperability, and committed spend discounts often associated with the larger hyperscale providers. This approach can provide businesses with the flexibility to mix and match the best quality services across different providers, ultimately saving them money and improving their services’ quality.
The UK government, industry stakeholders, and the wider community must collaborate to implement strategies supporting local cloud providers to achieve this goal. With concerted efforts, the UK can become a global leader in the cloud services industry, benefiting businesses and individuals while ensuring a more secure and prosperous digital future.
As a UK-based cloud provider, Centerprise Cloud understand the unique challenges faced by businesses in the UK and are committed to providing cost-effective, reliable, and secure cloud services that meet your specific needs.
Contact us today to take the first step towards a more sustainable UK-based digital landscape.
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