In a striking analysis, TechMonitor reviews the UK's governmental spending in cloud computing, highlighting a pattern that heavily favors large-scale providers, or hyperscalers. The report draws attention to the substantial £3bn allocated through the G-Cloud framework, two-thirds of which has been absorbed by companies like Amazon Web Services. AWS, in particular, stood out with £238m in contracts, supporting a wide array of digital services in government agencies.
This dominant position of hyperscalers has not gone without criticism. Industry voices suggest that this tilt towards hyperscalers is marginalizing smaller, local cloud providers, potentially stifling innovation and competition within the sector.
Furthering this narrative, TechMonitor points to a significant Ofcom report that delves into the competitive practices of these hyperscalers. The report unveils tactics such as the offering of free credits to new customers, who are then encumbered with high egress fees and complex technical setups, effectively locking them into services. This 254-page report has led Ofcom to propose that the Competition and Markets Authority (CMA) conduct an in-depth review of these practices to determine necessary regulatory actions.
Mark Boost, CEO of Civo, adds a resonant voice to the chorus calling for market reform.
"I particularly welcome the review’s focus on making the cloud an affordable route to access compute resources," he says. "For too long, hyperscalers have over-promised and under-delivered for users, offering an unreliable service with ballooning prices that raises the bar for access,"
Boost remarks, emphasizing the review as a much-needed stimulus for the UK's compute space. He believes the market desperately needs recalibration for the sake of national growth and economic advancement.
The article underscores the potential risks that unchecked hyperscalers dominance poses, advocating for substantial investments and collaborative efforts to restore a balanced and competitive market.
For those interested in learning more about this topic, check out the Tech Monitor article and words from our team, here.