In the United Kingdom, a significant shift is underway among businesses as they increasingly abandon reliance on a single cloud provider, driven by mounting regulatory pressures and operational concerns. Recent data reveals that 60% of UK organizations have already diversified their cloud strategies, moving toward hybrid or multicloud setups to mitigate risks associated with dominant hyperscalers like Amazon Web Services, Microsoft Azure, and Google Cloud. This trend, highlighted in a report from cloud provider Civo, comes amid an ongoing investigation by the UK’s Competition and Markets Authority (CMA) into potential anticompetitive practices in the cloud market.

The CMA’s probe, initiated following concerns raised by media regulator Ofcom, is scrutinizing whether these tech giants are stifling competition through tactics such as steep egress fees and restrictive licensing. Businesses are preemptively adapting, with many citing fears of vendor lock-in and escalating costs as key motivators. For instance, the same Civo survey found that 35% of respondents view data sovereignty as a primary driver, especially in light of geopolitical tensions that could expose data to foreign jurisdictions.

Regulatory Storm Clouds Gathering Over Hyperscalers

As the CMA’s investigation progresses—expected to conclude with potential remedies by next year—industry experts anticipate stricter rules that could force hyperscalers to enhance interoperability and reduce barriers to switching providers. This regulatory anticipation is prompting firms to act now, rather than wait for enforced changes. “The writing is on the wall,” notes Nicky Stewart, a former Ofcom official quoted in TechRadar’s recent analysis, emphasizing how UK companies are reverting to multicloud models reminiscent of pre-hyperscaler dominance.

However, this shift isn’t without hurdles. Integrating multiple cloud environments often leads to increased complexity, with 47% of organizations reporting challenges in managing costs and security across platforms, according to the Civo findings. IT leaders are grappling with the need for skilled personnel to handle these hybrid systems, which blend on-premises infrastructure with public clouds.

Geopolitical Tensions Fueling Data Sovereignty Push

Beyond regulations, broader factors like data residency requirements are accelerating the move away from U.S.-based providers. Research from Asanti, as detailed in IT Pro, shows that over half of UK IT decision-makers plan to ditch American cloud services due to sovereignty concerns, with 95% expressing worries about data being subject to U.S. laws like the Cloud Act.

This sentiment echoes initiatives across Europe, such as the EuroStack project aimed at building sovereign cloud alternatives, as explored in Computer Weekly. In the UK, similar calls for a national cloud strategy are gaining traction to counter the hyperscalers’ 70% market share.

Operational Challenges in the Multicloud Era

Despite the enthusiasm, multicloud adoption brings operational pitfalls. Firms report higher-than-expected expenses from data transfer fees and the need for advanced tools to ensure seamless integration. A Technology Magazine piece highlights how 60% of organizations have diversified, yet many struggle with visibility and governance in these setups.

Looking ahead, this pivot could foster innovation by empowering smaller providers and open-source solutions. Analysts from The Register suggest that while migrations take months or years, the long-term benefits include greater resilience and compliance. For UK businesses, navigating this transition will be crucial as they balance regulatory compliance with technological agility in an increasingly scrutinized market.