By Craig McLellan, Founder and CEO, ThinkOn
This is Part 1 of a 2-part blog series on anticompetition in cloud computing.
I’ve always been an entrepreneur. As a kid, a Commodore 64 sparked my love of technology and started me down the path to digital discovery. Today, I’m as fascinated with the possibilities of computing as that curious kid exploring a new invention.
As I gained expertise in technology, however, I became concerned about the monopolistic behavior of the major providers. With the advent of cloud services, my concern turned to alarm as the “big three” hyperscalers moved in on more markets, stifling the chance for domestic tech innovation, and imperiling data sovereignty with foreign-based practices and regulations.
Leveling the digital playing field
In 2013, I launched ThinkOn to level the playing field, protect data sovereignty, and deliver more options, fairness, and transparency to the computing industry.
No one likes a bully. At ThinkOn, inclusion and the power of many voices is a strongly held belief. Speaking as that wide-eyed kid with a love of technology, there’s room for everyone to play in the sandbox, and as CEO of a company dedicated to openness and fair play, I uphold the right of our public service customers and channel partners to deploy different clouds for different workloads and change providers as their needs change—without penalty.
Big ideas can be smashed by big companies who would rather keep the pie to themselves than welcome the contributions of others—contributions that would serve both customers and society as a whole. Unfortunately, that’s just the kind of behavior that’s being demonstrated—and questioned—in computing today.
Challenging the bullies
Anti-competitive practices in the cloud-computing market aren’t new. The big-three hyperscalers—Microsoft, Google, and AWS—dominate the industry, and I’ve seen the impact of some of their unfair practices on more agile players like ThinkOn, whose new ideas threaten their stranglehold on global organizations.
Even more concerning is the impact their policies have on resellers, partners, and end-users, who find themselves locked into one vendor’s ecosystem. A “cloud-first” strategy, where foreign-owned hyperscalers pack their offerings with cloud applications, exposes customers to escalating costs, restrictive licensing terms, exorbitant egress fees, and complex agreements that can—and do—hurt their customers’ businesses.
Paul Sawer of TechCrunch warns of the perils of this cloud-first approach, noting that the big-three hyperscalers are growing their global market share at the expense of smaller, often domestic technology providers. “These market features can make it difficult for some existing customers to bargain for a good deal with their provider,” says Sawer. “There are indications this is already causing harm, with evidence of cloud customers facing significant price increases when they come to renew their contracts.”[1]
Lock-in means locked out
There’s a reason why countries enforce anti-competition laws. Healthy competition catalyzes growth and progress. As organizations expand their digital footprint, the need grows for stringent data sovereignty and security, and there is strength in using multiple cloud providers for various use cases.
Europe and other regions are revising laws and sanctioning or investigating Microsoft, Google, and AWS for anti-competition violations. Their regulators are concerned that domestic companies—like British cloud provider UKCloud, which recently went into liquidation—are suffering as foreign-owned cloud providers dominate the market and force domestic innovators out of business.
The U.K. communications regulatory body, Ofcom, recently investigated fair business practices in global cloud computing and raised the alarm about the impacts of vendor lock-in.
“Ofcom said that it has ‘provisionally identified’ practices that make it more difficult for businesses to switch between cloud providers, or even use multiple providers, which is why it is ‘proposing’ to refer the U.K. cloud services market to the Competition and Markets Authority (CMA) for a formal investigation,” notes Sawer.[2]
A global solution is a multicloud solution
Anti-competitive practices suppress innovation, restrict operations, break budgets, and impede an organization’s ability to deliver the best and most consistent services and solutions to its customers.
This is a concern for ThinkOn. We want to deliver the best, customized solutions to each customer according to their needs, and that often means working with multiple providers, including the big three. By locking into one provider with exorbitant fees, customers lose out on the opportunity to expand business, control budgets, and safeguard data by using hybrid or multicloud solutions.
This fear is backed by Ofcom. In a recent press release, they expressed concern that competition could deteriorate even more in a digital market where multicloud solutions are rapidly becoming key to digital security and transformation. “Ofcom points to issues around interoperability, whereby the big cloud firms create their products so that they don’t play nicely with competing providers—this can put a considerable resource-drain on companies looking to adopt a hybrid cloud approach.”[3]
Even tech giant Google, one of the big three, has fired a shot across the bow of their competitors, recently filing complaints with U.S. and U.K. regulators, citing Microsoft’s vendor lock-in policies as unfair business practices.[4]
It’s a big sandbox: Let’s all play nicely
If we have our customers’ best interests at heart, why would we lock them into contracts that don’t serve them, stifling growth, blocking free trade, suppressing innovation, and creating security issues?
As a Canadian with a global outlook, who respects fair play and creative collaboration, I believe that good leaders don’t behave in a manner that disadvantages our neighbors—especially when those neighbors are also our customers.
Competition is good when it results in a better outcome for partners, customers, and the common good, but when companies work to exclude others from contributing ideas and innovation, forcing us into less desirable solutions, we all lose.
Let’s build a future where fair competition and innovation thrive hand in hand. See how we play fair.
[1] Paul Sawers. 2023. TechCrunch. “AWS and Microsoft in UK crosshairs as Ofcom mulls cloud market investigation.” https://techcrunch.com/2023/04/05/aws-and-microsoft-in-uk-crosshairs-as-ofcom-mulls-cloud-services-market-investigation/
[2] Ibid.
[3] Ofcom. 2023. “Ofcom proposes to refer UK cloud market for investigation.” https://www.ofcom.org.uk/news-centre/2023/ofcom-proposes-to-refer-uk-cloud-market-for-investigation
[4] Thomas Claburn. 2023. The Register. “Google formally accuses monopolist Microsoft of trapping people in its cloud.” https://www.theregister.com/2023/06/21/google_ftc_microsoft_anticompetitive_cloud