Obscured by clouds: Time for IaaS vendors to come clean and play fair

All that stuff about resilience, choice, and control? Yeah, we'll take them now please

Opinion It had to happen. Amazon and Microsoft are under investigation for distorting the UK's public infrastructure cloud market following complaints to internet regulator Ofcom that have now been passed on to the Competition and Markets Authority (CMA).


Amazon, Microsoft under UK regulator's eye as cloud market probe confirmed


The public infrastructure cloud has grown like any new technology, largely free of regulation until it becomes too important and incumbents too badly behaved to ignore. In this case, the combination of egress fees, technological barriers, and discount pricing are being blamed for making it hard for enterprises to move between providers or run a multi-cloud strategy

It doesn't matter that this is happening in the UK. The cloud is global and regulators in all territories know it. It also doesn't matter that this time around it's Microsoft and Amazon. Both companies have extensive track records of exploiting market dominance until being told to stop, although Microsoft's decades-long lead here shows in how each company has reacted. Microsoft talks of being committed to competition, innovation, and working closely with the regulator, while Amazon says the CMA has a "fundamental misunderstanding" of the market, which is too small to matter anyway. Only one of these responses is smart.

What matters is what we want the market to look like after the CMA reaches its conclusion in 2025 – which sounds a long way away but is virtually hypersonic by regulatory standards. The first thing to note is that the concerns are valid. They don't come from fundamental misunderstandings, but from real pain felt by real customers.

Let's look at egress fees. It is true that moving data around costs cloud providers money, and that should be reflected in customer costs. Yet packets don't cost more to move one way than the other, while ingress fees are virtually unheard of. Egress fees are also rarely explicit in advance or a fixed part of a contract or service, making them hard to plan for. Especially when a customer changes region, experiences acquisition or merger, or changes cloud strategy. They're the roaming charges of cloud providers, invisible in normal use but capable of real savagery when you have little choice.

The technological incompatibilities in workflow, management, and APIs have been there for all to see for many years. The IT industry as a whole has an unbreakable addiction to incompatibility as a rope to bind its victims, using the argument that it encourages innovation by making it easier to make money. Where the barriers to entry are low enough, different systems can maintain their differences while not discouraging system-agnostic approaches. Outside cloud infrastructure, developers can easily combine platforms through frameworks, cross-compilers and even complete development systems. One game written under Unity can be deployed on iOS, Android, Windows, WebGL Xbox, PlayStation, and Linux. What could we do with Unity for Enterprise, IaaS Edition? Where is it?

Which leads us, curiously enough, into the third leg of the painful cloud – discounts. These include license fee incentives – Microsoft, take the spotlight here – where it's much cheaper to run services on the vendor's own cloud infrastructure because, er, because. You can see the asymmetry of ingress versus egress costs are another discount model, but perhaps the most insidious is inherent in the vendor-consultant-client model.

If your enterprise doesn't have the internal skill set to manage a cloud strategy, and despite the lauded simplicity of cloud versus on-prem, you won't at first, you'll go to a consultancy with an existing business relationship with an IaaS provider, including access to funding. Once you're in, you're in. It is in nobody's interest here to be platform agnostic, or to develop proper multi-cloud frameworks à la Unity, nobody's except yours.

All of these things work against the enterprise, not just because they make costs harder to manage and options more constrained, but in so doing they discourage good practice. Multi-cloud offers many more routes to resilience than any single vendor option, both through redundancy and scaling. Long-term strategies become simpler to engineer with more options at each point in the stack. If cloud is good, multi-cloud is multi-good. Only it hasn't happened that way.

Experience shows us that this is due to single entities combining infrastructure with other services, a situation that has occurred often before and attracted regulators and lawmakers to solve it. Net neutrality means your home ISP can sell you TV and telephone services, but it can't degrade or block others. Mobile roaming is a service offered by mobile networks at virtually zero cost to themselves and where no regulation or real user choice lets them charge what they like. Until the EU outlawed charging for it, when suddenly all European network operators found it perfectly possible to provide it for free.

It is unlikely that the CMA will find, let alone implement, a single set of regulatory changes that will regularize the IaaS market and make it a level playing field for vendors, customers, and innovators. It can start the work, though, and by playing Microsoft and Amazon off against each other it may make a real difference, especially in non-technical areas like making data transfer fees transparent. Oh, and Amazon? That "fundamental misunderstanding" of the market? It's not us. It's you. You'll find out. ®

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