UK CMA: Cloud Switching Is Now Free for 180 Days — but Nobody's Switching Yet

The UK's Competition and Markets Authority published its progress update on October 16 on the voluntary cloud-switching commitments from AWS and Microsoft — and it's a strange report card. The UK CMA cloud switching review says both providers have done real work: egress fees for switching are gone, and the free-switching window has doubled from 90 to 180 days. But uptake of the schemes is limited, some March commitments still aren't finished, and the regulator is openly keeping a formal investigation on the table.

What the UK CMA cloud switching update actually found

Background first: the CMA's cloud market investigation, concluded in July 2025, found AWS and Microsoft hold positions of significant market power in UK infrastructure- and platform-as-a-service — a market worth about £10.5 billion in 2024. The CMA estimated that prices just 5% above a competitive level would cost UK customers roughly £500 million extra every year. It flagged three problems: data-transfer (egress) charges that punish customers for leaving, interoperability barriers, and Microsoft's software licensing practices in the cloud.

Instead of launching a formal probe, the CMA took the voluntary route in March 2026, working directly with both companies to lower switching barriers. The October update — a 23-page document covering March to October — is the first checkup.

What's actually changed since March

Credit where due: the list of delivered changes is material.

• Data transfer fees for switching providers: eliminated. Moving your data out during a switch is now free.
• The free-switching window: expanded from 90 to 180 days, with refunds where customers run multi-cloud during the transition.
• Direct data-center interconnection: Amazon and Google launched a direct interconnect product (Amazon's has a free tier); the Amazon-Oracle interconnect is live in the US; AWS-Microsoft links in the UK are planned for the coming months.
• Formal channels for customers and competitors to request interoperability support, plus expanded cross-cloud workload management tools.
• AI-powered migration tools to automate the technical steps of moving workloads.

The CMA also logged the interconnection projects as a genuine step toward making multi-cloud operation practical rather than theoretical.

The uptake problem

Here's the awkward part: almost nobody is using the new schemes. The CMA says uptake has been limited, some measures announced in March are still outstanding, and neither company has extended interconnection beyond Google and Oracle. The AWS-Microsoft data-center links still aren't live in UK facilities. The regulator wants both providers to promote the options more aggressively and finish what they promised — and it issued a blunt technical warning: migration tools can't eliminate the need to adapt workloads and test generated code for security.

The stakes keep rising while switching stays rare. Global data-center demand doubled in 2026 — capacity is the industry's scarcest asset, which is exactly why keeping customers locked in is so lucrative, and exactly why the CMA is watching.

What's next: IAM, Kubernetes, and the probe that isn't dead

The CMA has agreed with both companies on the next two battlegrounds. First, cross-cloud identity and access management: identity federation can authenticate users across clouds, but authorisation models and policy languages differ, so customers end up translating access logic by hand. The CMA calls a fix technically challenging, with no settled solution or firm timeline. Second, Kubernetes portability: deployments still lean on cloud-specific IAM and networking services, which quietly undermines the whole "build portable, run anywhere" promise.

And the stick remains in the cupboard, not the bin. The CMA kept open a formal strategic market status investigation into cloud under the Digital Markets, Competition and Consumers Act — powers that would let it impose conduct requirements on pricing, contracts, or interoperability. The next public update lands in spring 2027. AWS argues the UK market is competitive and warns tougher intervention could chill investment; Microsoft rejects the licensing criticism. Sovereignty is the other front both are watching — see AWS's European sovereign cloud test for how that battle is shaping up.

Don't confuse this with the Microsoft SMS probe

One clarification that matters: the same October 16 announcement also proposed strategic market status designation for Microsoft's business software — Copilot AI assistants, E5 security bundling, and cloud licensing. That is a separate track from this voluntary cloud-infrastructure switching review: different problem, different legal process, different timeline (a decision is expected in February 2027). The switching update is about moving workloads between clouds. The SMS proposal is about whether Microsoft's software bundles lock customers in before they ever get to choose a cloud. Don't mix them up.

Key facts

• Published Oct 16, 2026: 23-page CMA update covering March–October
• Egress fees for switching: eliminated; free window 90 → 180 days
• Interconnects: Amazon-Google live; Amazon-Oracle live in US; AWS-Microsoft UK planned
• Next focus: cross-cloud IAM and Kubernetes portability
• Formal SMS investigation still on the table; next update spring 2027
• UK IaaS/PaaS ~£10.5bn (2024); ~£500m/yr at stake if prices ran 5% above competitive