The recent outage of Microsoft’s Azure platform has once again highlighted the significant influence exerted by a limited number of cloud computing providers.
The disruption, which commenced on Wednesday, ultimately resulted in various high-profile brands encountering difficulties with their online services and applications. Among those affected were airlines, gaming companies, and retail brands, while the financial services sector experienced minimal disruption, with some issues reported at NatWest, according to DownDetector, an organization that tracks service outages.
The root of the problem was linked to a DNS malfunction that impacted Azure Front Door, Microsoft’s content delivery service. This incident followed closely behind a similar occurrence with Amazon Web Services (AWS), the market leader in cloud services, which caused extensive interruptions affecting numerous online services, including banks and various government entities.
This sequence of events has sparked discussions regarding the risks associated with reliance on a small group of cloud providers. Microsoft Azure and AWS dominate the landscape, together controlling over half (55%) of the cloud computing market, with AWS holding a significant 32% share.
In response to the AWS outage, the UK government announced plans to publish a strategy for managing future disruptions. Ian Murray, the Minister for Digital Government and Data, indicated that the Department for Science, Innovation, and Technology would outline an approach to addressing cybersecurity incidents and outages, with a comprehensive plan anticipated by year’s end.
UK regulators have previously raised concerns about the vulnerabilities inherent in cloud platforms. In 2022, the Prudential Regulatory Authority initiated a review of the operational resilience of providers like Azure, AWS, and Google Cloud. Additionally, in July, the UK’s Competition and Markets Authority concluded a two-year investigation into the duopoly of Microsoft and AWS in the UK market, asserting that competition is failing.
The Open Cloud Coalition is now urging the CMA to take action. Senior adviser Nicky Stewart emphasized the critical need for a competitive and diversified cloud infrastructure in the UK, particularly in light of the disruption caused by the AWS incident. Stewart noted that such failures can incapacitate essential services like banking and government operations when resilience is not incorporated into the system.
The CMA’s findings indicate that the current structure of the UK cloud market is fundamentally flawed, costing consumers and taxpayers an estimated £500 million annually. Stakeholders are now calling for the CMA’s Digital Markets Unit to intervene decisively.