Amazon Web Services (AWS) has claimed that nearly *half of Microsoft’s enterprise cloud customers would consider switching providers—if only licensing costs allowed them to do so. The statement was made in new documents submitted to the *UK’s Competition and Markets Authority (CMA) as part of its ongoing investigation into the competitiveness of the cloud services market.
The CMA, which launched the investigation in *October 2023, is assessing whether practices by major cloud providers like Microsoft, AWS, and Google are creating *adverse effects on competition (AEC). The regulator has since conducted “response hearings” with all three cloud giants.
AWS Calls Out Microsoft’s Licensing Tactics
In its submission, AWS argued that Microsoft’s software licensing practices are making it economically unfeasible for customers to run Microsoft workloads outside of Microsoft Azure.
“Perhaps 50 percent of those workloads currently running on Azure would move elsewhere if it was economically feasible,” AWS claimed.
The company stated that while many of its customers want to use Microsoft products on AWS, Microsoft’s pricing strategy creates a cost barrier that discourages them from doing so. These constraints, AWS added, lack credible justification and are directly harming competitors and limiting customer choice.
AWS went further, urging the CMA to compel Microsoft to make contractual changes that prevent discriminatory pricing based on which cloud platform customers use.
AWS Pushes Back Against Market Dominance Concerns
Despite its own significant market presence, AWS argued that *competition in the cloud market is robust, with its market share actually **declining. The company highlighted growing adoption of *on-premises solutions as an alternative to cloud migration and stated that it faces competition not just from other hyperscalers, but also from in-house infrastructure.
On the topic of *artificial intelligence (AI), AWS claimed that there is no separate market for AI compute services, arguing that AI fundamentally depends on compute, storage, and networking—the same foundation of any cloud workload. The company suggested that AI innovation could *lower the cost of switching providers and increase competition.
AWS also maintained that it does not impose technical restrictions on customers who want to use multi-cloud environments or switch providers, citing its investment in interoperability tools and migration support.
Microsoft Defends Its Position
In response, Microsoft denied that its licensing practices restrict competition and warned that regulatory intervention could undermine innovation in a market that remains *dynamic and evolving. It insisted that *AWS and Google are well-positioned to compete, especially as customer demand for AI solutions continues to grow.
Microsoft criticized the CMA’s provisional findings as *vague, arguing that there is no clarity on which workloads are affected or why competitors supposedly can’t match Microsoft’s offering. It also pointed out that *Amazon and Google have healthy margins and have made comparable capital investments in cloud infrastructure.
Furthermore, Microsoft questioned why the CMA had not extended its “strategic market status” designation inquiry to Google, stating that Google’s role in the UK cloud infrastructure market is more significant than market share numbers suggest, particularly given its AI leadership.
Google Aligns with AWS in Criticism of Microsoft
*Google, for its part, supported many of the CMA’s provisional conclusions and echoed AWS’s stance, asserting that *Microsoft’s licensing practices are anti-competitive. It accused Microsoft of leveraging its dominance in enterprise software to expand its cloud share unfairly.
Google emphasized that data center capacity is the most reliable indicator of future market control—and by that measure, Microsoft is on track to dominate the cloud sector in Europe within five years unless meaningful changes are made.
In terms of remedies, Google supported licensing reforms and limited egress fee reductions targeting AWS and Microsoft, warning that a full industry-wide ban could distort the market for smaller providers.
What Comes Next?
The CMA’s cloud market investigation is one of several global regulatory efforts scrutinizing how major tech companies influence competition in the digital infrastructure space. As cloud adoption accelerates and AI becomes increasingly central to enterprise operations, the stakes are high for ensuring fair access and preventing monopolistic behavior.
The CMA’s final decision could reshape how software is licensed across cloud environments—and determine whether major players like Microsoft will be compelled to offer more flexibility to customers and competitors alike.
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