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Ofcom turns its attention to the hyperscalers

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Ofcom has expanded its powers under the Corporations Act 2002 to investigate the public cloud communications market and the Internet. As part of this drive, the regulator plans to launch a market study to examine Amazon, Microsoft and Google’s position in the £15 billion UK cloud services market.

In response to the way digital markets operate and increasingly important to the outcomes consumers experience across the sectors it regulates, Ofcom said it needs to move beyond the cables, masts and satellites it has previously focused on, and expand its remit to cover how companies do it. Providing consumer-facing services that use digital infrastructure and services.

She said the first area of ​​work is a market study, under the Enterprise Act 2002, which looks at cloud services in the UK. “We will assess the strength of competition in cloud services and the position of the major players in the market,” Ofcom said.

Despite the deteriorating economic climate, public cloud revenue continues to grow rapidly. “Cloud usage continues to grow at really impressive rates. This has resulted in a distinct acceleration in both the launch of new ultra-wideband data centers and the level of spending on data center hardware and software,” said John Dinsdale, Senior Analyst at Synergy Research Group. All major cloud market metrics.”

Synergy recently reported that quarterly revenue for cloud infrastructure services — including infrastructure as a service (IaaS), platform as a service (PaaS), and hosted private cloud services — from major providers totaled $54.7 billion. The analyst firm noted that the dominance of major cloud service providers was most evident in the public cloud, with the top three – Amazon Web Services (AWS), Microsoft Azure and Google Cloud – controlling 72% of the market. Geographically, the cloud market continues to grow strongly in all regions of the world.

Looking at the UK, Ofcom said that AWS, Azure and Google Cloud collectively generate about 81% of revenue in the UK public cloud infrastructure services market.

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Earlier this year Ofcom commissioned Analysys Mason to conduct research into the digital communications value chain. The result digital communication value chains The research paper, published in April, found that enterprise connectivity services are in the transition from traditional services to more software and cloud-based alternatives, a market that the superstars are dealing directly with through infrastructure and cloud services.

As part of its role in regulating the telecom market to ensure it works well for consumers and businesses, Ofcom said it needs to keep pace with disruptive developments in the telecom sectors. These include new and emerging technologies, and changes in business models and supply chains.

For example, services such as WhatsApp or Zoom, offered by Internet-based companies that operate across the value chain, compete with traditional communication services. Smart TVs and smart speakers now play a major role in how content is distributed and discovered.

The way we live, work, play and do business has changed through digital services. “As the number of platforms, devices and networks serving content continues to grow, so do the technological and economic issues facing regulators,” said Selena Chada, Director of Communications at Ofcom.

“That’s why we are launching a program of work to examine these digital markets, identify any competition concerns and ensure that they work well for the people and businesses that depend on them.”

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