A year and a half after taking over itself, the Competition Authority on Thursday presented its report on the cloud market in France. A “structuring” market for French companies, which are still in the adoption phase and in full swing. It should grow by 14% per year, reaching 27,000 million euros in 2025.
And the growth is already captured by the American giants: 80% in 2021. Amazon Web Services, Microsoft Azure and Google Cloud Platform together have 71% of the market share. This is enough for the Competition Authority to fear that this concentration will be strengthened in the future.
Subsidies and tariff barriers
In the first competitive risk, the Autorité sheds light on the tariff barriers, installed by the market leaders: “Suppliers distribute what is called cloud creditswhich are a kind of promotional offers or discounts that allow you to start your experience in the cloud”, explains Benoît Cœuré, president of the institution, to BFM Business. According to the report, they would amount to $200,000 in two years.
Ease of entry, before closing. The Autorité points out that, on the contrary, exit costs, called “exit fees“, are particularly high: “Many players complain that these costs are disconnected from the actual costs paid by the providers”, emphasizes Benoît Cœuré.
Overly attractive hyperscalers
In addition to exit costs, cloud-to-cloud migrations are technically complex. HE hyperscalers they also benefit from its size and financial capacity. Present in other markets, such as the provision of IT services, they can attract their customers to their cloud solutions.
Therefore, it is difficult for companies to switch providers and for small providers to emerge. Especially since Amazon, Google and Microsoft are increasing acquisitions in the sector. The Autorité de la concurrence counted between 10 and 25 each between 2018 and 2021 worldwide.
Regulator Correction
But regulators are beginning to react. The DMA (digital market regulation) will oblige hyperscalers to declare each acquisition project to the European Commission. HE exit fees it should also gradually fade away. First in France, with the law “Securing and regulating the digital space”, then in Europe thanks to the Data Law.
The Competition Authority will use its report as “a toolbox to understand potentially problematic mechanisms,” its president tells us. He intends to start the discussion with the players in the sector before his rapporteur decides if he opens investigations.
Source: BFM TV
