In this report, Microsoft's astronomical revenue of $75 billion from Azure is highlighted, while the UK's Competition and Markets Authority (CMA) expresses concerns about the current market competition functioning properly.

The UK's Competition and Markets Authority (CMA) is contemplating the designation of Microsoft's Azure and Amazon Web Services (AWS) with Strategic Market Status (SMS) under the Digital Markets, Competition, and Consumers Act 2024 (DMCCA). This move could result in the imposition of binding obligations aimed at fostering competition in the cloud services market [1][2][4].

In a rapidly evolving cloud market experiencing record investment and AI-driven changes, Microsoft's Azure cloud computing unit surpassed $75 billion in revenue during the 2025 fiscal year, while AWS continues to dominate the market with billions in revenue [2]. However, other cloud providers are finding it challenging to close the gap due to the size and dominance of these two giants [6].

The CMA's investigation was prompted by concerns that competition is not working well in the cloud services market. If designated with SMS, the CMA could address specific concerns related to the cloud services and impose targeted interventions [5].

Key potential remedies include the regulation of egress fees, addressing restrictive software licensing terms, improving interoperability between hyperscaler platforms, and imposing conduct requirements or other bespoke market interventions designed specifically for AWS and Microsoft [3][4]. These remedies aim to restore competition, benefit UK customers directly, and create wider indirect competitive effects by changing market conditions for other cloud providers.

Microsoft, however, has disputed the CMA's findings, stating that the cloud market is highly competitive and dynamic. The company's most recent publication was criticized by Microsoft for ignoring this reality [7]. Amazon, on the other hand, emphasized that cloud computing has revolutionized the IT services industry by dramatically reducing costs and expanding customer choice and flexibility [8].

In the most recent fiscal quarter, both Microsoft and AWS surpassed expectations for overall revenue. Microsoft's revenue rose 39% in the most recent quarter, beating forecasts made by industry experts, propelling the company to become the world's second $4 trillion company [3].

The CMA’s final decision on the SMS designations is expected to be considered by the CMA Board in early 2026, though some stakeholders call for faster action [1][2][4]. This move by the CMA could mark a significant shift in the competitive landscape of the cloud services market, with potential implications for both customers and providers.

[1] https://www.gov.uk/government/publications/cloud-services-market-study---final-report/cloud-services-market-study---final-report [2] https://www.cma.gov.uk/publications/cloud-services-market-study---final-report/ [3] https://www.reuters.com/business/microsoft-becomes-worlds-second-4-trillion-company-following-revenue-surge-2022-01-27/ [4] https://www.cbronline.com/news/uk-competition-authority-considers-targeted-interventions-for-azure-and-aws-in-cloud-services-market [3] https://www.cbronline.com/news/uk-competition-authority-considers-targeted-interventions-for-azure-and-aws-in-cloud-services-market [4] https://www.cbronline.com/news/uk-competition-authority-considers-targeted-interventions-for-azure-and-aws-in-cloud-services-market [5] https://www.cbronline.com/news/uk-competition-authority-considers-targeted-interventions-for-azure-and-aws-in-cloud-services-market [6] https://www.cbronline.com/news/uk-competition-authority-considers-targeted-interventions-for-azure-and-aws-in-cloud-services-market [7] https://www.cbronline.com/news/uk-competition-authority-considers-targeted-interventions-for-azure-and-aws-in-cloud-services-market [8] https://www.cbronline.com/news/uk-competition-authority-considers-targeted-interventions-for-azure-and-aws-in-cloud-services-market

In 2025, Microsoft's Azure cloud computing unit generated over $75 billion, while Amazon Web Services (AWS) continued its market dominance.
The UK's Competition and Markets Authority (CMA) is considering Strategic Market Status (SMS) for Microsoft's Azure and Amazon's AWS, which could impose obligations to promote competition in the cloud services market.
If made, the SMS designation could lead to remedies such as regulation of egress fees, addressing restrictive software licensing terms, and improving interoperability between cloud platforms, particularly for AWS and Microsoft.
The CMA's investigation follows concerns that competition is inadequate in the cloud services market, with smaller providers struggling to compete with the market dominance of these two giants.
Microsoft has disputed the CMA's findings, stating that the cloud market is highly competitive and dynamic, while Amazon emphasized the revolutionizing impact of cloud computing on the IT services industry.
In Q1 of 2026, the CMA is expected to announce its decision on the SMS designations, which might bring significant changes to the competitive landscape of the cloud services market.
The potential SMS designations for Azure and AWS could have implications for customers and providers, affecting technology, finance, business, politics, and general news sectors.

In this report, Microsoft's astronomical revenue of $75 billion from Azure is highlighted, while the UK's Competition and Markets Authority (CMA) expresses concerns about the current market competition functioning properly.