More than 70% of UK cloud providers support urgent regulatory intervention in the cloud market, according to new research conducted by Censuswide for the Open Cloud Coalition (OCC).

The findings come as the Competition and Markets Authority (CMA) prepares to decide whether to designate Microsoft and Amazon Web Services (AWS) with Strategic Market Status (SMS), amid concerns about competition in the sector.

The survey indicates that 71.2% of participating cloud providers consider regulatory action to be urgent or extremely urgent. Nearly three-quarters of respondents believe that without swift intervention, dominant cloud providers are likely to strengthen their market positions further.

Additionally, 82% of cloud providers have encountered barriers when competing with larger players, citing restrictive software licensing, bundling, interoperability challenges, and committed-spend discounts as significant obstacles.

Cloud customers expressed similar concerns, with nearly 65% stating that rapid regulatory measures to enhance competition and reduce vendor lock-in are very important for their organisations.

A further 33% labeled such action as somewhat important. When asked about the potential impact of delayed regulation, 68% of buyers predicted increased costs, and nearly two-thirds anticipated reduced organisational flexibility.

Surveyed providers point to significant switching costs and limited interoperability as major factors making it difficult for customers to transfer workloads or adopt multi-cloud strategies. These conditions reinforce reliance on AWS and Microsoft while raising barriers for competitors.

Industry representatives warn that delays in CMA intervention may lead to greater market concentration, making future regulatory action less effective and more costly.

The Open Cloud Coalition, which commissioned the survey, consists of 24 cloud service providers and users advocating for a diverse and competitive industry across the UK, EU, and global markets. The group supports principles such as openness, competition, security, and reliability within the sector.

Open Cloud Coalition senior adviser Nicky Stewart said: “The cloud market is no longer working as it should. Without urgent and effective intervention, dominant providers will continue to lock customers in and consolidate their power, to the detriment of competition, innovation and the UK’s digital economy.”

The CMA concluded its Cloud Services Market Investigation in July 2025, identifying issues such as restrictive software licensing and technical barriers to switching providers as detrimental to competition.

The authority is expected to announce soon whether it will pursue SMS investigations into AWS and Microsoft. If designated with SMS, these firms could face specific conduct requirements aimed at preventing anti-competitive practices.

Following its Phase 2 probe last year, the CMA recommended prioritising SMS investigations into Microsoft and AWS after it provisionally found competition concerns in public cloud infrastructure services. The CMA board is reviewing options for further SMS designation investigations and expects to make a decision regarding its priorities in the first quarter of 2026.

The CMA’s investigation highlighted significant barriers to entry and expansion in the UK cloud services market, particularly in Infrastructure as a Service (IaaS). These barriers include substantial capital investment requirements and economies of scale that favour larger providers like Microsoft and AWS.

Additionally, Microsoft’s software licensing practices have been found to adversely impact the competitiveness of AWS and Google, further entrenching market concentration.

The CMA recommends using its digital markets powers to address these issues, aiming to foster a more competitive environment that benefits consumers through improved choice and innovation.

Pulsant chief technology officer Mike Hoy said: “As a founder member of the OCC and a British digital infrastructure and data centre leader, we firmly support action that strengthens choice in the cloud market. An open, fair and competitive market gives businesses the power to choose what works best for them, boosting innovation.”