A recent report has labeled the cloud computing market in Canada as “broken” and cautioned that relying on domestic alternatives to major U.S. tech companies may still lead Canadians to be stuck in “maplewashed dependencies” unless providers are mandated to be interoperable.
The latest report from the Canadian Anti-Monopoly Project highlights cloud computing as essential infrastructure and points out the lack of competition in Canada, with Amazon, Google’s parent company Alphabet, and Microsoft collectively holding an 85% market share, according to estimates.
Cloud computing involves leasing software, processing capabilities, and storage from a provider and accessing the services via the internet, supporting various functions from government operations to online streaming services.
Joel Blit, an economics professor at the University of Waterloo and a senior fellow at the Centre for International Governance Innovation, expressed concern over the significant concentration of Canadian cloud computing in the hands of just three companies, warning about potential market power abuses.
Curtis McCord, a policy analyst with the Canadian Anti-Monopoly Project and report co-author, emphasized that merely introducing Canadian “sovereign” providers would not address the issue if customers face high costs when switching between providers.
The report underlines the importance of enforcing compatibility rules among cloud providers to prevent customers from getting locked into a single provider, leading to potential “maplewashed dependency” even with domestic alternatives.
The report advocates for adopting international standards to promote compatibility among cloud companies, which could foster competition and reduce reliance on a few dominant U.S. firms.
Both Google and Amazon have eliminated transfer fees, while Microsoft Azure offers credits for customers in specific regions. However, concerns persist about the ease of transitioning data between different cloud systems.
The Canadian Anti-Monopoly Project’s research discourages developing new standards and instead recommends leveraging existing widely adopted technologies. Blit and McCord underscore the critical role of cloud computing as AI gains more prominence, emphasizing the impact of concentrated cloud control on AI accessibility.
The report also suggests that while compatibility could enhance competition, it might limit companies’ ability to innovate and offer unique products in the market.