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According to industry players , a regional cloud strategy used in the wake of the Ofcom review could better support home-grown industries, as well as data sovereignty and rebalancing power over coming market development.
One or two players, like Amazon Web Services ( AWS ) and Microsoft Azure, can have” too much dominance,” according to Bill McLuggage, managing director of IT consultancy Laganview Associates.
This point of view is influenced in part by his experience working as a company director, deputy CIO for the UK government, and former chief executive of the Irish government.
Negative effects include costs associated with data egress, transition, and architectural migration from one cloud provider to another. Part of this is due to the absence of an open-standard foundation for infrastructure as a service ( IaaS ) or platform as anIaAS. Additionally, McLuggage notes that less competition can result in slower progress on important issues like emissions reduction.
He claims that despite the UK’s financial growth brought on by the cloud, organizations, CIOs, and IT directors are also a little reticent, including when it comes to handing over control to hyperscalers.
The anti-competitive nature of large cloud service providers is” the negative, dirty bit.” Look at how AWS pulled off a cunning move about ten years back, bringing top government influencers into the UK to work in sales and pre-sales.
Open standards: a component of the solution?
More support for available standards is advised by McLuggage. This is about paying closer attention to interfaces where data is transferred rather than controlling the technology that people create on their own.
Smaller cloud providers would be able to thrive with better government policy and strategy because, according to McLuggage, it is “questionable” whether such organizations can survive and be cost-effective in the recent hyperscale-driven market.
The Competition and Markets Authority ( CMA ) threatened fines to force change with open banking, and the Online Safety Act has mandated requirements on social media platforms. Could equivalent strategies aid in reducing hyperscaler dominance?
” Other providers” must be supported and a part of the ecosystem. That entails exerting some control over the great boys, according to McLuggage. And having an impressive ecosystem in the UK that goes beyond what they already want to do is fine business for hyperscale.
He claims that companies like AWS wo n’t just leave the UK market because they are committed to entering the nation after fighting “hard and long” to gain access to their datacenter availability zones.
Nicky Stewart, a former director of UKCloud and head of the Cabinet Office’s ICT strategy delivery, concurs that “rebalancing” should be done with an eye toward available standards. She worries that the CMA response will just “tinker around the edges” rather than examining the bigger picture, which inevitably includes whether the extremely important cloud sector actually supports national adaptability and resilience, never to mention data sovereignty.
It might be time to reevaluate cloud given that excellent minister Rishi Sunak is introducing unnatural intelligence to help healthcare and the entire government. She emphasizes that “every single role I’ve examined in that [A I launch ] is a technical role that requires AWS literacy.”
For Stewart, it almost seems like” a kind of group- think” is taking place, which is somewhat at odds with much of the other world, including France, Germany, and Australia. The UK has” sleeped” into this situation as a country, primarily with two significant cloud providers with proprietary platforms.
However, there is a conflict between the US and China over electric sovereignty. And people will wake up and smell the coffee in ten years.
The few remaining providers frequently do not want to put their heads over the parapet to complain, rather relying on value-add resales, she adds, with local cloud “pretty many destroyed”- UKCloud itself entered mandatory liquidation in October 2022.
The CMA, according to Stewart, “needs to be daring.”
Maybe consider things that it does n’t consider to be within its purview, she says. The best they could hope for is to make switching a little simpler, which would simply shift market share between three hyperscalers.” If they just look at, say, the four points or so referred to them.”
She claims that the industry needs to “find its voice.” The inertia of some existing trade and business associations, as well as the loud voices of those with the deepest pockets, could be countered by remaining cloud providers and possibly cloud buyers working together to speak out and lobby for more political support.
United kingdom Cloud strategy
She claims that” Largely, it’s the nature of cloud to be an angry bedfellow with either procurement regulations or competition laws that are administrative, long-winded, and so on.” ” We need a sincere, thoughtful discussion about potential governance structures that can maintain adaptability and scalability.”
The complimentary credit situation is in Mark Boost’s sights as CEO and co-founder of cloud-native UK services provider Civo. With the knock-on effect of a near-monopoly on price and diversity, he claims that hydrocarboners dish out credits worth “hundreds of thousands” that” the smaller challengers just ca n’t do.” This puts the overall economy at risk when problems arise.
Although many proprietary technology normally sits outside, each cloud provider offers a Kubernetes platform, with each offering it in their own unique way. He explains that the ability to quickly pull permissions and roles into another cloud may be restricted by the Kubernetes component versus a firewall or load balancer service that is specifically configured and set up to that cloud provider.
As much as the consumer continues to receive the benefits that motivate them to choose the hyperscale solution, a model of shared ownership or native partnership of some kind may be worthwhile considering. They are, after all, effective solutions with distinct selling points. And is business always absolutely and utterly fair to all players?
However, put some sort of pressure on businesses to adhere to empty standards, not least for the benefit of consumers. Boost asserts that people should be free to relocate to another location. However, I do n’t like having too much regulation. Businesses should be able to compete against one another to some extent.
They wo n’t be able to solve this by regulation, says Ian Moyse, a fellow of the Institute of Sales Management and an industry veteran with numerous cloud and IT channel partner roles.
” Ofcom is concentrating on AWS, Azure, and hosting providers, but if you look at the cloud sector, many systems have the same problems,” he continues. If you take a look at Salesforce, for instance, you can simply turn it on and enter your data, but as soon as you start down the path you must configure it and receive third-party add-ons and plug-ins.
As a result, he notes that this may be less about ingress and egress data and additional costs and more about how to make the most of any of these packages given the numerous professional and technological issues that surround them.
It’s difficult to move, but you must make choices, advises Moyse. ” Depending on usage and other factors, you must start considering how you abstract yourself from the commitment of that layer if you want to use multiple cloud platforms.”
After all, he contends, Red Hat provides a level of abstraction from various cloud stacks that allows for the location of compute on the desired platform, which is part of the reason IBM spent so much money on it. Thus, of course, Kubernetes containerization and the like.
The amazing vendor has a vested interest in you digesting as much of their compute as you can, so” that’s the goal, but you’re never going to get it, in my opinion,” says Moyse.
According to Ofcom’s report, some cloud market characteristics limit multicloud and switching, which hurts competition in the UK. AWS and Microsoft claimed that in a market worth £7 billion to £7.5 billion in 2022, they accounted for between 70 % and 80 % of UK IaaS and PAAS revenue.
According to our research, the primary goal of competition between cloud providers is to draw in new clients when they first enter the cloud.
To level the playing field, the report suggested that potential intervention levers include addressing data egress fees, price controls, technological interoperability and portability, integrations, transparency, standardization and interconnectivity, service access,” committed spend” or” comparable enquivalence” requirements.