Though cloud providers Google, Microsoft and Amazon provide the lion's share of cloud computing services worldwide, competition in cloud computing isn't ringing regulators' alarm bells right now, despite Google raising its own concerns.
Google filed a complaint with the European Commission in September accusing Microsoft of anticompetitive cloud licensing practices that could lock customers into a single cloud services provider. Google warned that Microsoft's legacy licensing practices force customers into vendor lock-in, pointing to Microsoft's bundling of its Office 365 and Teams products as an example. Microsoft later unbundled the products to address the European Commission's concerns about competition.
While competition in cloud computing might eventually become an issue, it's likely not something European regulators are worried about now, Forrester Research analyst Dario Maisto said. It's also not a priority for the U.S. Federal Trade Commission (FTC), which submitted a request for information (RFI) on cloud computing practices in March 2023. After receiving only 102 public comments on the RFI, the agency released its findings in November 2023. Though it highlighted competition as one of the greatest areas of concern, the FTC took no further action aside from noting multiple areas of "ongoing interest and inquiry" around market competition for cloud computing.
"The public cloud platforms market in Europe is more vibrant than ever, so any anticompetitive practices may have consequences in the long run, while for short-term, European firms may not be too concerned," Maisto said.
While European companies are rarely locked into a single cloud vendor, Maisto said, it's still a concern for business leaders as they plan their organizations' cloud strategies.
Competition among cloud providers
Maisto said competition does exist among cloud providers, particularly in the European Union. Outside of large global cloud vendors, there are a number of European cloud providers supplying more niche use cases to enterprise businesses.
These European vendors focus on digital sovereignty, cloud sustainability and have a strong presence in their country of origin.
Dario MaistoAnalyst, Forrester Research
"These European vendors focus on digital sovereignty, cloud sustainability and have a strong presence in their country of origin," he said. "European firms do have plenty of choice right now."
Alan Pelz-Sharpe, founder of market research firm Deep Analysis, said Google's complaint against Microsoft highlights the risk of vendor lock-in.
While the use of open source software and even cloud computing have attempted to free businesses from their dependence on specific hardware to run particular applications, Pelz-Sharpe said, it has resulted in little success and is still a risk that enterprise business leaders need to be aware of.
"In theory, at least, anyone can move anything from one cloud to another, and many vendors tout 'cloud portability' as a key component of their offerings," he said. "What Microsoft is doing here, assuming Google's claims to be correct, is to make it financially impossible or at least highly punitive to move off Azure."
Pelz-Sharpe said the risk of lock-in would primarily affect smaller cloud providers.
"Rather than this being a genuine hindrance to Google's business, it would appear that the real victims, or potential victims, are those that provide local, EU country-specific managed and private cloud services," he said.
Makenzie Holland is a senior news writer covering big tech and federal regulation. Prior to joining TechTarget Editorial, she was a general assignment reporter for the Wilmington StarNews and a crime and education reporter at the Wabash Plain Dealer.
