The UK's Competition and Markets Authority (CMA) is approaching the deadline for its Cloud Services Market Investigation, and while it is too soon to say what the outcome of that investigation will be, the hope remains that maybe - just maybe - it will make real change in the industry.

Naturally, the main targets of the investigation - the 'Big Three' of Amazon's AWS, Microsoft Azure, and Google Cloud - have differing feelings on the investigation. The most recent responses from AWS, Microsoft, and Google were submitted back in April, a few months after the CMA announced it had decided to conduct further investigations into both AWS and Microsoft to see if the companies held "strategic market status" (SMS).

AWS, quite boldly, said that around half of Microsoft enterprise customers would migrate away from the provider if licensing costs enabled thjs. The company also argued against a lack of competition in the market, stating that its own market share has "fallen significantly and continues to decline," and reiterated its previous stance that its competition is also with on-premises solutions, giving the CMA "examples of customers switching to on-premises from cloud."

Microsoft, meanwhile, disputed any competition issue and defended its software licensing, describing the CMA's provisional findings as "vague" because they did not explain which workloads are impacted and why Google and Amazon are supposedly unable to compete, adding that "looking at breadth of margins and the revenues, Amazon and Google are doing well. Both companies have made significant capital investments, comparable to Microsoft’s."

Unsurprisingly, neither AWS nor Microsoft was delighted about the deeper investigation.

Google, meanwhile, was overall pretty content that both AWS and Microsoft were facing greater scrutiny, though it warned against the CMA removing egress fees entirely.

SMS: strategic market status, or "scrutinized more stringently"

The SMS designation seems to be the way the CMA plans to really dig into the problem. If the August report finds AWS and Microsoft to be "SMS," the two companies will face further investigation, along with potential conduct and reporting requirements.

Interestingly, while AWS is obviously against itself being designated as SMS, it also warned against awarding Microsoft with the label, arguing that customers do not want to wait for that designation for Microsoft's licensing practices to be changed.

This stance was reiterated in a recent academic whitepaper by Professor Peter Whelan of the University of Leeds. The whitepaper focuses on the issue of software licensing practices - and therefore targets Microsoft primarily. Whelan notes that, thus far, the CMA has only proposed an "indirect remedy" with the SMS investigation, thus effectively just postponing any actual change.

Whelan writes: "Effectively, then, what the PDR (provisional decision report) proposes is that, instead of completing the market investigation with a direct remedy that targets the identified harmful software licensing practices, the CMA will recommend that remedial action should be taken later under a different legal regime entirely (provided that the conditions underpinning action in that regime are met)."

He later adds: "Such an approach inherently suffers from three crucial drawbacks. These drawbacks relate to the long timescale at issue, uncertainty about the nature of the final remedy under the DMCCA, and the conducting of untested, complicated legal processes that presumably will be heavily contested by Microsoft."

We can more or less sum this up as "the current approach has just lengthened and complicated the process, delaying any actual change in conduct."

Remembering what really matters

Against the background of the ongoing CMA investigation, I have been conducting my own - and admittedly far less expansive - look at the matter of competition within the cloud computing sector as a whole.

In the latest DCD Magazine, I spoke to a variety of players - from European cloud providers association CISPE and the Open Cloud Coalition - to cloud providers operating in Europe, the UK, and globally (at "hyperscale").

The focus of the CMA investigation, from an outside perspective, seems to have become an exercise in finger-pointing - with AWS, Google, and Microsoft all fighting their own corner and blaming one another, meanwhile lamenting how their business is getting hurt in the process.

But, with all three seeing annual revenues in the many multi-billions, it is hard, nay impossible, to take those claims seriously.

In the case of the CMA investigation, it is important to remember who is actually impacted by a lack of competition. At one layer, it is the UK's home-grown cloud companies that are struggling to gain market share and are suffering. At another, it is the customers of hyperscalers who are locked into costly contracts with their provider.

At a final, and perhaps overlooked level, it is the taxpayers of the UK who are bearing the cost of the UK government's massive cloud computing bills that predominantly benefit the US hyperscalers. These bills are only set to increase as the years go by.

With the deadline nigh, one can only hope that the CMA implements genuine change in policy to help empower those being impacted by the status quo.

This, unfortunately, feels unlikely.

After all, a similar competition complaint was previously attempted in mainland Europe by CISPE, specifically targeting, in this case, Microsoft.

That ultimately ended with CISPE striking a deal with Microsoft, which has failed consistently to meet its side of the agreement in developing a product to satisfy issues with software licensing practice.

For now, only time will tell whether real change is imminent or likely to be shrouded in yet another layer of bureaucracy.