For better or worse, their Competition and Markets Authority is a watchdog that inspires global peer agencies to take preemptive action
In the ongoing investigations by the UK’s Competition and Markets Authority (CMA) into suspected anti-competitive practices by Amazon Web Services (AWS) business units there, evidence provided by the latter group has indicated that “building a data center requires significant effort, so the fact that customers are doing it highlights the level of flexibility that they have, and the attractiveness of moving back to on-premises.”
The public cloud platform also listed reasons why customers may want to switch back to on-premises infrastructure, including: “to reallocate their own internal finances”, to “adjust their access to technology and increase the ownership of their resources, data and security”.
This type of ‘cloud repatriation’ often involves cloud hosting bills that end up being too much to justify. According to a story by The Register, one project management developer had decided to go back to on-premises infrastructure after being presented with a US$3.2million cloud bill, and was already saving US$1m after a year of cloud repatriation.
Other firms with the same problem could consider switching to competitors to iron-out more favorable billing terms, embrace multi-cloud architectures, and/or switch to more-affordable turnkey private-cloud infrastructure solutions.
The availability of such alternatives and solutions could be construed as low barriers of exit for AWS customers, as far as the investigation proceedings are to be understood. Still, AWS had defended its use of Committed Spend Agreements (CSAs) that compels customers to agree in advance to commit to a certain level of use — a mechanism which the CMA sees as discouraging customers from switching.
However, AWS has tried to justify this potentially anti-competitive CSA as a business strategy, claiming that it conferred to more predictability on its own revenue stream, which would likely motivate investments to keep improving its services.
Already, the CMA has indicated signs of taking Microsoft to task for licensing practices that may “influence customer choice of cloud providers”. The UK’s decisions against the two Big Tech firms’ customer lock-in and other disputed marketing practices can set the tone for fairer competition worldwide in future.
