The CMA has published roadmaps for Big Tech before, just not for Microsoft. With £400 billion in annual public sector procurement and millions flowing to Microsoft’s cloud, the CMA can’t wait until February 2027 to act.
The topic of public procurement is becoming a major issue for UK economic policy. Sarah Cardell, the CMA’s Chief Executive, delivered a speech at a Parliamentary event at the House of Commons on 8 September, introducing two reports by the CMA published that day: Public Procurement in the National Interest and Rigged Bids, Real Costs.
The headline conclusion is, perhaps unsurprisingly, that UK public procurement could be leveraged far more effectively to shape markets and improve outcomes for citizens, businesses and taxpayers alike. But a more nuanced point, and arguably the most important one, is that the biggest risks arise when short-term cost savings are prioritized at the expense of long-term value and competition.
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Cloud computing is one of the starkest illustrations of this trade-off in practice. Buying Microsoft is, in the immediate term, the path of least resistance: it is already embedded in most public-sector IT estates, integration is straightforward, and the near-term cost of switching or diversifying looks far higher than the cost of simply renewing. That short-term logic is precisely why Microsoft has wound itself so tightly around the machinery of UK public-sector cloud infrastructure.
Each individual procurement decision may look like sensible, low-risk value for money at the time it is taken but cumulatively, those decisions have entrenched a single supplier so deeply into public-sector data, identity and security architecture that it now poses a very real threat to competitive procurement in public-sector AI. The apparent saving today is a major liability for tomorrow, once every AI rollout has to be built on top of infrastructure only one vendor fully controls.
A market out of balance
The CMA’s cloud market investigation reached a clear verdict in July 2025: competition wasn’t working well. Microsoft and AWS each hold 30–40% market share with Microsoft’s share still growing, and barriers to entry including data-center costs, economies of scale, incumbent product breadth. have been deemed likely to keep it that way.
Apparently, fewer than 1 per cent of customers switch cloud providers annually, held back by egress fees and technical friction. Most tellingly, the CMA found Microsoft withholds certain licensed products from AWS and Google that directly weaken those rivals; a problem with clear implications for public-sector buyers seeking competitive procurement.
A new AI market, losing balance
However, as Microsoft rapidly rolls out new AI tools across UK enterprises and the public sector, the fundamental issue of cloud infrastructure lock-in is being overlooked. The true barrier to a competitive AI market isn’t just the stickiness of new daily workflows, but the interconnected stack comprising software, data, identity, security and the foundational grip Microsoft maintains through its legacy enterprise software, specifically Windows Server and SQL Server.
Once organizations are penalized for running these essential core workloads on rival clouds, their entire data gravity shifts permanently into Microsoft’s ecosystem. Building subsequent AI processes and agents around these locked-in data structures makes opting for competing, innovative AI solutions financially and technically unviable.
The CMA has already diagnosed how Microsoft uses these core licensed products to weaken rivals; they must urgently address this foundational lock-in before it permanently closes off public procurement for enterprise AI as well.
Progress, but is it too cautious?
The CMA hasn’t been idle. On 31 March 2026, the CMA accepted voluntary commitments from Microsoft and AWS rather than the binding designations recommended by its own investigators. These commitments included extending Microsoft’s free egress-switch window from 60 to 180 days and a new cloud interoperability request mechanism, with a six-month review promised.
It simultaneously opened a strategic market status (SMS) investigation into Microsoft’s entire business-software ecosystem including Windows, Office, Teams, and Copilot, encompassing over 15 million UK users with a decision due around February 2027.
That’s a fair, if cautious, step, and critics such as the Open Cloud Coalition have welcomed it while pressing for swift action if commitments aren’t met. Microsoft can reasonably argue these were offered in good faith to head off heavier intervention, but we need to start seeing these promises come into fruition quickly before further entrenchment occurs. Compare an AI rollout announced in June and largely complete by October against a regulatory clock that’s usually measured in years.
A roadmap for competition and social value
The CMA is now dealing with two closely connected issues: how public procurement can deliver greater value for taxpayers and society, and how Microsoft’s market position can limit competition and choice. An interim roadmap could help address both at once. It would give public bodies clearer guidance on what to consider when procuring cloud and AI services, while setting out how the CMA intends to tackle the underlying lock-in that can narrow those choices.
This would support Andy Burnham’s wider focus on delivering social value in public procurement. A more competitive and open cloud market would not just benefit businesses. It could give public bodies greater flexibility, reduce the risk that short-term savings lead to expensive, irreversible dependence on one supplier, and deliver better taxpayer value at the same time.
Certainty helps everyone
The roadmap should cover non-discriminatory licensing on rival clouds; interoperability extending to identity, permissions and agent portability; public-sector contracts with built-in exit plans; and independently verifiable evidence, not just documentation, that voluntary commitments are producing real switching and multi-cloud adoption. It should also provide broader transparency about how the CMA will assess whether these measures are working in practice.
Microsoft, its customers and its competitors all have an interest in predictable rules. Microsoft would know which integration practices remain legitimate; public bodies could invest in procuring AI at scale knowing it will not close off tomorrow’s choices, and rival cloud and AI suppliers would know if building interoperable products for the UK market is commercially worthwhile.
The CMA has diagnosed the problem, taken a first cautious step, and opened the right investigation. It should now set out the destination, the milestones and the tests for success before another year of AI adoption makes Britain’s cloud and workplace-software markets harder to reopen. Without a clear roadmap or tests for success, we risk anti-competitive behavior leaking from the cloud market into deeply embedded AI work environments, at a far higher cost for the UK public sector to rewind.
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Bill McCluggage
