Most organisations that submitted feedback to the Competitors and Markets Authority (CMA) – together with Google, the Lloyd’s Market Affiliation, Amnesty Worldwide and the Startup Coalition – have known as on it to designate Microsoft’s enterprise software program ecosystem as having Strategic Market Standing (SMS).
That’s in response to 32 responses revealed by the CMA – and introduced in an prolonged evaluation by Laptop Weekly – alongside the regulator’s invitation to remark that reveal an enormous ratio in favour of intervention by those who commented.
The submissions, which can inform the CMA’s nine-month investigation underneath the Digital Markets, Competitors and Shoppers Act 2024, sees opponents, enterprise customers, trade coalitions and public sector our bodies largely align on the concept that Microsoft’s integration of productiveness software program, working techniques, id administration, safety and synthetic intelligence right into a single stack constitutes a type of market energy that current competitors regulation can’t self-discipline.
The Open Cloud Coalition, a 27-member trade physique, estimates that Microsoft’s licensing practices value the UK public sector round £60m per 12 months and greater than £300m over the course of a Parliament. In the meantime, within the submissions, an nameless supplier of synthetic intelligence (AI) companies, citing Gartner knowledge, notes that Microsoft 365 holds a 77% share of software-as-a-service (SaaS) enterprise productiveness, £1.9bn was spent by the UK public sector on Microsoft software program licences within the 2024-25 monetary 12 months, and “98% of councils in England are utilising Microsoft options as the usual”.
Within the training sector, Jisc – the UK’s digital company for tertiary training – studies that 74% of establishments say shifting away from Microsoft, both wholly or partially, is just not a viable possibility. Some 53% function completely on Microsoft 365 A5 licences, whereas 62% reported elevated Microsoft spending over the earlier 12 months. Jisc argues that the CMA ought to think about whether or not alternate options to Microsoft exist, but in addition whether or not alternate options are viable as soon as Microsoft has “develop into embedded throughout a number of layers of institutional operations”.
Each month of deliberation is a month by which the market circumstances change. A treatment that arrives late arrives weakened The Startup Coalition
The function of AI emerges as a central concern. The Startup Coalition, representing greater than 4,000 UK tech startups, argues that “AI is just not a separate market sitting alongside the ecosystem; it’s being embedded into each layer of it”. The coalition warns that if Microsoft’s personal AI brokers are embedded throughout your complete stack, 1000’s of UK startups might be structurally deprived.
In the meantime, Killinghall Parish Council – 9 councillors, one clerk, 10 customers – studies paying £1,100 a 12 months for a Microsoft ecosystem it by no means deliberate to purchase, having found that full Groups performance depends upon buying Microsoft-hosted e mail accounts. The Lloyd’s Market Affiliation, representing 55 managing brokers, states that “engagement with Microsoft operates on a ‘take it or depart it’ foundation”, with regulated monetary companies corporations unable to barter bespoke phrases.
Virgin Media O2 studies concern that “bundling and pre-enabled settings” create hidden prices and self-preferencing that restrict aggressive procurement.
Three nameless enterprise respondents describe lock-in starting from proprietary codecs and pre-paid bundles forcing long-term dependence to AI integration threatening to “additional lock in clients by tying worth to proprietary workflows”.
Microsoft’s submission contests the investigation’s premises at each degree. The corporate argues that it operates in a “vigorously aggressive” setting throughout 5 distinct digital actions, pointing to Google Workspace, macOS, Linux, PostgreSQL and Okta as proof of contestability.
On AI, Microsoft contends that “AI is dramatically decreasing the obstacles to constructing high-performing enterprise software program”, citing Gemini’s 900 million month-to-month lively customers and ChatGPT’s 900 million weekly customers as proof that entrenchment claims are inconsistent with market actuality. It additionally notes that its 34,000 UK companions contribute £38bn in income to the UK financial system.
Not all respondents are satisfied the investigation needs to be a precedence. The Motion for an Open Net argues that “enterprise software program doesn’t seem like the CMA’s highest precedence digital market concern and the CMA has not defined why this has develop into a precedence”. It requires comparative assessments of Amazon Net Providers and Google Cloud if competitors issues are to be addressed.
The CMA’s statutory nine-month window locations a last determination in early 2027. Scida, an instructional consortium, recommends that the regulator provoke “conduct requirement” research in parallel with the SMS investigation to keep away from the timing hole that has characterised earlier market interventions.
The Startup Coalition distils the urgency. Its submission says: “Each month of deliberation is a month by which the market circumstances change. A treatment that arrives late arrives weakened.”
