The promises of multicloud are now well known. By not putting all their eggs in one cloud, a company reduces its dependence on market players. It can switch from one public cloud to another depending on the pricing policy, performance or quality of service offered, at a given time, by such and such a provider.
The providers are contractually committed to this portability. In fact, the technical or economic conditions to ensure it are more difficult to meet. While it’s easy to subscribe to a cloud service with just a few clicks, the exit is harder to find. Once your data is in a public cloud, the costs of repatriating it can be prohibitive.
With his bill on the regulation of the digital space, Jean-Noël Barrot, Minister Delegate in charge of the Digital Transition and Telecommunications, intends to reduce the dependence of companies on cloud providers and especially on American hyperscalers.
71% of the market captured by the three hyperscalers
Despite the presence of national flagships such as OVHcloud, 3D Outscale and Scaleway, Amazon Web Services (AWS), Microsoft Azure and Google Cloud monopolize 71% of the French cloud market, including 47% for AWS alone. The dominant position of this “triopoly” and their aggressive pricing policy would hinder the emergence of new players.
The text recalls that abusive practices have been observed by the regulator, in France but also in the Netherlands or the United Kingdom. Furthermore, data transfer charges act as a deterrent and “artificially block customers”. “To change cloud provider, a company must pay a fee representing 125% of its annual subscription cost,” says the government in its press kit.
To prevent companies from reliving the situation of dependence on a single supplier (“vendor lock-in”) that they experienced in the world of proprietary software and in particular ERP, the bill plans to prohibit the costs of data transfer during a change of provider. Failure to comply with this prohibition will be punished with a fine of up to one million euros, and two million euros in the event of a repeat offence.
Asked about the text, the Autorité de la concurrence shares the government’s opinion on the anti-competitive effects of these “egress fees” and the risk of customer foreclosure that it entails “by making the migration of cloud services more difficult to another supplier or to use several suppliers at the same time”.
According to her, the bill must however “ensure the proper articulation of the measures envisaged with the future European framework”, in this case the data regulation (Data Act), and provide at least “the application of ‘a transition period in the phasing out of these fees’.
Meeting the conditions for interoperability
More vague, the text of the government intends to guarantee “the interoperability of cloud services in order to concretize the right to the portability of the data of a company with another supplier or to have several suppliers to reduce its dependence. »
On this point, the Autorité de la concurrence is awaiting clarification on “the implementation of standards and open technical specifications” which will be provided by decree. At European level, the Gaia-X community project already aims to ensure the interoperability of existing cloud services on the basis of common standards.
In addition, the bill plans to limit in time “the practice of cloud credits (commercial assets) in order to reduce the economic incentives in the development phase to depend on a single supplier. A small revolution in the economic model of cloud players.
The Autorité de la concurrence recommends making a distinction “between cloud credits offered in the form of a test or free trial limited to a period of a few months and cloud credits offered in the form of business support programs, which have substantially higher value and duration. »
The Autorité evokes, on this second aspect, the poisoned trap of free credits offered by cloud giants as part of their support programs for French startups. Once these are in the cloud of AWS or Google Cloud, going back is complicated or even impossible and, in the meantime, the young shoots will have become scale-ups, able to pay for cloud services at a high price.
More than a year ago, OVHcloud filed a complaint against Microsoft with the European Commission for abuse of a dominant position on another point. As explained The Wall Street Journalthe French host criticizes the Redmond firm for its commercial practices linking the sale of cloud offers with other in-house products, in this case its Microsoft 365 collaborative suite.