Top 10 cloud stories of 2024

Any doubts anyone may have had that Amazon’s hold on purse strings of government IT buyers might be weakening would have been put to rest with the news in early 2024 that the public cloud giant had secured three contracts valued at £894m on a single day in December 2023.

To put those figures into context that is more money that the company had previously amassed during its decade-long involvement in the UK government’s G-Cloud procurement framework.

The contracts were all 36 months in length and went live on 1 December 2023. They included a £350m deal with HM Revenue & Customs (HMRC), a £94m one with the Department for Work and Pensions (DWP) and £450m contract with the Home Office.

Given that one of the founding principles of the G-Cloud procurement framework was to make it easier for smaller cloud suppliers to secure public sector IT contracts, the fact that AWS is the purchasing agreement’s top-selling provider has not gone unnoticed.

However, Crown Commercial Service (CCS) found itself in the crosshairs of SME suppliers back in February 2024 after declaring that all suppliers would need to increase the amount of insurance cover they have to participate in G-Cloud by £20m.

The change prompted accusations that CCS was trying to price SMEs out of the framework completely, and resulted in the government’s procurement arm initially putting the requirement “under review” before backtracking on the change entirely by early March 2024.

It was not just Amazon’s hold on public sector IT that came in for close scrutiny this year, as central government’s heavy reliance on the Microsoft 365 online productivity suite of products also came under the microscope.

This was on the back of Computer Weekly exclusively revealing that Microsoft had disclosed to Scottish policing bodies that it cannot guarantee the sovereignty of any data hosted on M365 or in the Microsoft Azure public cloud.

The past 12 months has seen all of the hyperscalers talk about the transformative impact that the enterprise demand for AI technologies are having on their bottom line. But, as revealed in Google and Microsoft’s annual environmental sustainability reports, the demand for AI is also derailing their carbon reduction commitments.

To this point, both firms disclosed surprisingly sizeable gains in their greenhouse gas emissions this year, with both citing the need to expand their datacentres to accommodate the demand for AI workloads as the cause.

While AI was getting the hyperscaler cloud giants all hot under the collar in 2024, enterprise adoption of hybrid cloud deployments also became a growing topic of conversation.

With hybrid setups previously considered to be a stopping off point for enterprises that were in the midst of a wholesale move to the public cloud, this year the conversation around hybrid cloud changed markedly. With enterprises increasingly considering it to be their preferred way of consuming IT resources.

Particularly as more and more enterprises are looking to move workloads and applications out of the public cloud and back on-premise for cost, regulatory and performance reasons.

With enterprise appetites for on-premise workloads on the grow, it was perhaps inevitable that the hyberscale cloud giants might suffer some negative impacts from this trend.

In April 2024, reports began to circulate that AWS was planning to cut several hundred tech and sales roles in the interests of “streamlining” its operations in response to customers looking to optimise, rather than increase, the size of their cloud estates.

This year has also seen a regular trickle of stories emerge from the Competition and Markets Authority’s (CMA) ongoing investigation into the inner workings of the UK cloud infrastructure services market, which have repeatedly seen Microsoft, AWS and Google take shots at each other.

The investigation is focused on whether AWS and Microsoft have unfairly benefited from the use of committed spend discounts to win customers, and whether interoperability issues and the charging of data egress fees lock users into their platforms.

Another area of focus for the CMA investigation is Microsoft’s cloud licensing practices, and its habit of charging customers more for wanting to run its software in its competitors’ clouds.

Trade association The Cloud Infrastructure Service Providers in Europe (CISPE) has previously filed a complaint about Microsoft and its behaviour on this front with the European Commission, and published damning figures about the negative financial impact the company’s cloud licensing habits are having on enterprise customers.

In July 2024, however, the trade body stood accused of selling its members down the river after it emerged it had reached a $22m deal with Microsoft to withdraw its complaint.

As one compliant about Microsoft’s cloud licensing practices disappeared, another one got filed – in September 2024 – with the European Commission by Google.

According to Google, filing the complaint was the “only way to end Microsoft vendor lock-in and for customers to have a choice and create a level playing field for customers”.

In response, Microsoft said that it expected Google’s complaint with the European Commission to fall on deaf ears.

As the UK cloud market awaits the outcome of the CMA’s probe, news emerged in December 2024 that Microsoft has found itself on the receiving end of a £1bn legal action, filed with the UK’s Competition Appeal Tribunal, over its cloud licensing practices.

The action, filed by competition lawyer Maria Luisa Stasi and her legal team at complex disputes resolution firm Scott+Scott, is being pursued on behalf of thousands of UK businesses it is claimed have been financially disadvantaged by Microsoft’s actions.

In a a statement, Stasi said the lawsuit aims to “challenge Microsoft’s anti-competitive behaviour” for the benefit of all UK business and organisations who have found themselves paying more to access the same software just because they choose to run it in someone else’s cloud.