Battle in the Clouds: How Amazon and Google's Allegations Might Reshape Microsoft's Strategy

Amazon.Com, Inc AMZN has blamed Microsoft Corp MSFT for engaging in restrictive business practices in the cloud computing market, informing Britain's Competition and Markets Authority (CMA) about these concerns. 

The claim follows the CMA's investigation into the U.K.'s cloud computing industry, initiated in October after Ofcom highlighted the market dominance of Amazon and Microsoft, Reuters reports.

In its letter to the CMA, Amazon argued that Microsoft's terms of service changes hinder customers from switching to other cloud providers or using rival services. 

Specifically, Amazon criticized Microsoft for requiring separate licenses for using its software products with other cloud services, even if customers already own the software. 

According to Amazon, this practice financially discourages customers from choosing providers other than Microsoft.

Recently, Alphabet Inc GOOG GOOGL Google also submitted a complaint to the CMA, alleging that Microsoft's practices put competitors at an unfair disadvantage. 

Google's suggestions included urging Microsoft to enhance interoperability with its Azure service and other cloud programs and to refrain from withholding security updates from customers who switch providers.

Amazon's AWS and Microsoft Azure collectively command 60% - 70% of the cloud expenditure.

In response, Microsoft maintained that the UK's cloud computing market is competitive, citing the presence of numerous players like Google, Oracle Corp ORCL, and International Business Machines Corp IBM, who are investing heavily in cloud infrastructure and vying for customers.

Interestingly, in November, Microsoft announced a $3.2 billion investment for strengthening the UK's AI infrastructure and training. The investment will bring over 20,000 of the most advanced GPUs to the UK by 2026.