How should resellers react to the decision from the Competition and Market Authority to investigate Microsoft?
The UK’s Competition and Markets Authority (CMA) is investigating Microsoft’s potential cloud monopoly, focusing on licensing practices that create structural dependency and lock customers into the Azure ecosystem. Critics warn that excluding AWS from similar scrutiny creates a regulatory imbalance and an uneven playing field. Furthermore, this market concentration harms resellers and MSPs by squeezing margins and limiting their ability to differentiate. Experts urge the CMA to mandate structural reforms, fair licensing, and enforceable interoperability standards.
As of the last quarter of 2025, according to Synergy Research Group, Azure, AWS, and Google Cloud accounted for nigh-on two-thirds of the worldwide cloud infrastructure market.
Now, obviously, if you hold shares in Amazon, Microsoft, or Alphabet, you’d be pretty happy with this situation. Hell, even if you tied up some of your money in the S&P 500 or top tech stocks or bonds, you’d be asking why I care. You could certainly make an argument, for example, that the fact that we are talking about three companies is proof that the cloud market is competitive.
Whether you agree with this sentiment or not, on the 31st of March, the Competition and Markets Authority in the UK announced a “strategic initiative” to investigate the cloud market and specifically whether Microsoft has a monopoly.
“The CMA’s focus reflects growing concern that licensing practices and commercial models may make it harder or more expensive to run Microsoft software on competing platforms,” Rob Arnold, Chief Digital Officer of The Bunker, part of the Cyberfort Group.
“That risks limiting flexibility at a time when organisations are trying to build more resilient and adaptable IT strategies.
“This means that the issue is not dominance alone. It is dependency. When customers are too closely tied to any single provider, it can reduce visibility, increase risk and restrict innovation.”
That dependency that Aronld describes comes from the influence Microsoft has across the entire enterprise world, not just in the Cloud. As Raphael Auphan, chief operating officer at Proton, says, it’s no surprise Microsoft has a dominance in cloud.
“Our own research found that 88% of publicly listed UK companies use US-owned email providers, and email is rarely a standalone choice. It’s the gateway to the whole tech stack: cloud storage, collaboration tools, identity management.
“That number tells you everything you need to know about the structural dependency we’re dealing with. Microsoft’s licensing practices have been deliberately structured to make it look cheaper and easier to stay within the Azure ecosystem than to choose an alternative. That’s not competition but lock-in dressed up as convenience.
“The CMA is right to investigate, and the question shouldn’t be whether Microsoft has too much influence. It clearly does. The question is what we’re going to do about it.”
Partners in Crime?
While the announcement of an investigation doesn’t declare that Microsoft has a monopoly, the fact that there is an investigation at all shows that Azure has significant influence in the cloud marketplace.
But while Microsoft is being investigated, AWS seems to be getting away with a lot less scrutiny despite also holding a significant portion of the market.
“The decision made by CMA to investigate Microsoft is encouraging,” said Mark Boost, CEO, Civo. “But the decision to exclude AWS raises practical concerns with both providers being structured in the same way from a structural lock-in perspective, which could create a regulatory imbalance between the two parties that would keep one side unchallenged.
“Regulatory credibility depends on consistency,” added Auphan. “The CMA’s own cloud investigation found that both Microsoft and Amazon hold significant unilateral market power. Accepting voluntary commitments from AWS while launching a formal investigation into Microsoft creates an uneven playing field that neither protects UK businesses nor restores genuine competition.
“We’ve seen what voluntary commitments look like in practice: they’re slow, hard to enforce, and easy to roll back. If the CMA is serious about a fair cloud market, it needs to apply the same scrutiny to both dominant players. Anything less risks fixing half the problem while leaving the structural issues intact.”
“The actions proposed in Point 33 provide evidence of the desire to address such market imbalances; however, it is important that ambition is met by additional, enforceable measures being implemented,” continued Boost.
“Voluntary arrangements made with parties outside of the SMS framework will not provide real impact, and by delaying its final decision regarding Microsoft and excluding AWS altogether, there is a risk for the CMA to unnecessarily prolong uncertainty and miss an opportunity to future-proof the UK’s digital infrastructure.
“The current announcement does not provide adequate solutions to solve the serious issues surrounding the dominance of these key foreign-based hyperscalers. There needs to be a fair digital market in which domestic innovation is encouraged, alongside continuing to help build opportunities for international collaboration and trade.”
Feeling the Pinch
In the context of resellers and MSPs, the “issue” that arises from a monopoly or duopoly is that there is less differentiation and innovation within a marketplace that is so crucial for almost any organisation to operate.
As Arnold explains, this then has a knock-on impact on a reseller’s ability to make money. “In a duopoly environment, resellers and MSP’s often become more reliant on the commercial models, pricing structures and partner programmes of a handful of providers. That can limit their ability to differentiate, as many are effectively working within the same frameworks and selling similar services built on the same platforms.
“Margins can also come under pressure. As hyperscalers continue to expand their direct relationships with customers, particularly at the enterprise level, resellers and MSPs can find themselves pushed further down the value chain, focusing more on implementation and support rather than strategic advisory.
“There is also less flexibility when it comes to offering alternative solutions. If customers are already heavily invested in one ecosystem, resellers and MSP’s may have limited scope to recommend different providers, even where it might be beneficial.”
“Resellers are caught in the middle of a market that was never designed with their interests in mind,” added Auphan. “When two companies control the majority of cloud infrastructure, resellers have very little negotiating power on pricing, very little flexibility on licensing terms, and very little ability to differentiate their offering.
“Through 2025 and now into 2026, we’re seeing massive portions of the internet go offline because of outages at a single hyperscaler. That’s not just a reliability problem; it’s a warning about what over-concentration does to an entire ecosystem. Resellers need a genuinely competitive market to build sustainable businesses. Right now, they’re building on over-concentrated foundations they don’t control.”
BSP
With margins, reliability, and the ability to stand out from the pack at stake, the MSPs and resellers who rely on these services will be keeping an eye out for the finding of the CMA’s investigation.
With that being said, according to Arnold, the Best Solution Possible is one that “delivers genuine choice, transparency and flexibility for customers.
“That means addressing the barriers that make it difficult to switch providers or run workloads across multiple platforms. Licensing models should be fair and consistent, without penalising organisations for choosing alternative clouds. Pricing should be clearer, particularly around areas such as data egress, so businesses can make informed decisions without unexpected costs.
“Crucially, the outcome should not restrict growth or investment from the major players. Hyperscalers play a critical role in advancing cloud capabilities. The aim is to ensure that scale does not come at the expense of customer control.”
“The ideal outcome isn’t just a fine or a set of recommendations that gather dust,” said Auphan. “Real change means structural reform to Microsoft’s licensing practices so that running Windows Server or SQL Server on a non-Microsoft cloud provider doesn’t cost five times more than running it on Azure.
“It means enforceable interoperability standards, not voluntary commitments that can be quietly walked back. And it means creating the conditions for European and UK-based alternatives to compete on merit, not to be structurally disadvantaged before they even start.
“When users, and businesses, can freely choose privacy-focused, independent alternatives without artificial barriers, everyone benefits. That’s not an anti-Microsoft argument. That’s an argument for a market that actually works. The CMA has the tools under the DMCCA to deliver real change. The question is whether it will use them with the urgency this moment demands.”
