Comments to the FTC on the Business Practices of Cloud Computing Providers
ITIF is writing with regards to the Federal Trade Commission’s request for public comments on the practices of cloud services providers. We believe that the U.S. cloud service market is competitive. The cloud infrastructure market (IaaS) requires high levels of capital expenditure, R&D and technical sophistication, combined with massive scale. As such, regulators should neither expect, nor seek, a highly dispersed market with a low HHI. Even with requirements for investment and scale, the IaaS industry shows rapid innovation, falling prices, competitive behavior, and new entry.
Further, there is a dynamic and competitive platform (PaaS) and applications (SaaS) market, enabled by the underlying scale of the IaaS market. A large ($112 B) PaaS sector is increasingly a robust competitor to the vertically integrated IaaS providers. And of course, cloud competes with on-prem IT solutions. Customers also have multiple options to create workload portability, often greater than exists today in many on-premises IT environments. This enables customers to choose a level switching costs in order to gain access to the latest innovation.
