Cloud computings rise is a success story under scrutiny. It has been nothing short of transformative, enabling businesses to scale operations, innovate rapidly, and optimise costs. It has become an essential pillar of modern enterprise IT, supporting mission-critical workloads across industries. From finance and healthcare to artificial intelligence (AI) and retail, the cloud is now the undisputed underlying infrastructure for digital transformation.Yet, as public cloud hyperscalers, such as Amazon Web Services (AWS), Microsoft Azure, and Google Cloud Platform solidify their dominance, concerns over market competition, licensing restrictions, and barriers to switching are gaining momentum. The UKs Competition and Markets Authority (CMA) is taking a closer look at whether the UK cloud market is functioning fairly or whether customers are being locked into specific ecosystems with limited flexibility.These regulatory discussions are unfolding at a pivotal moment for the cloud market. There is a growing number of IT providers with hybrid and multi-cloud subscription-based services. Broadcom, for instance, with its acquisition of VMware, has a streamlined portfolio focused on private, public, and/or hybrid cloud flexibility. Given VMware's footprint in enterprise IT, Broadcom is positioning itself as a viable alternative (see VMware Cloud Foundation box) for end users seeking to escape cloud hyperscaler lock-in, as well as a useful partner for cloud service providers seeking to compete with the hyperscalers. The question is whether regulatory oversight alone can truly open the market, or if market forces can further help reduce hyperscaler dominance and end their deep ecosystem entrenchments.The cloud computing industry has reached a point where a few major providers dictate the market. The CMAs concerns are not unfounded the three major cloud hyperscalers AWS, Microsoft, and Google together control a sizable share of the UKs cloud infrastructure market, benefiting from deep enterprise relationships, extensive service ecosystems, and economies of scale that are difficult to match. And this is true not just in the UK, but in other major markets, ranging from the European Union to the United States. These advantages create structural challenges for organisations seeking to diversify their cloud strategy, whether they are end-users that rely on cloud service providers or other cloud service providers seeking to compete with the hyperscalers.One of the most significant barriers to competition is the cost of switching providers. Many organisations that initially embraced public cloud find themselves facing egress fees, technical dependencies, and licensing restrictions from hyperscalers that make hybrid-cloud adoption by end users more complex and costly than expected. For example, Microsofts licensing practices have come under scrutiny, with the argument that it unfairly raises the cost of running Windows workloads on competing platforms. If hyperscalers can no longer rely on egress fees and licensing constraints to retain customers, they may need to rethink service deprecation policies, reduce redundant offerings, and provide clearer pricing structures Bola Rotibi, chief of enterprise research, CCS InsightYes, hyperscaler dominance isnt purely a result of anti-competitive behaviour. These companies have earned their positions in part through innovation and strategic investment. AWS revolutionised developer and infrastructure-focused cloud services, making them easily accessible and aligned to their specific operational needs. Microsoft, on the other hand, has leveraged its strong enterprise footprint to make Azure a seamless extension of its software stack. Its offerings are widely deployed and deeply embedded into corporate IT infrastructures.The challenge regulators face is determining whether these advantages give hyperscalers the ability to lock-in customers and create an unfair playing field, or if they simply reflect the natural evolution of an industry where scale and efficiency drive competitive success.The banking industry offers a compelling case study in regulatory-driven competition. Open banking policiesforced large financial institutions to provide API access to fintech companies, enabling new players to compete with established banks. The result was a surge in innovation, improved customer services, and increased choice, benefiting both startups and traditional financial institutions.Could a similar pro-competition model be applied to cloud computing? If regulators push for greater data portability, reduced egress fees, and fairer licensing models, hyperscalers could be forced to compete more on service quality rather than continue to benefit from vendor lock-in mechanisms. This would encourage a more diverse cloud ecosystem, allowing alternative cloud service providers to expand the overall market, while potentially providing end users with more cloud-based options to better utilise their data and applications. Yet, there are important differences between banking and cloud computing. Unlike financial institutions, which can adapt through open application programming interface (APIs) and partnership models, cloud providers operate at a scale that requires enormous capital investment in infrastructure, networking, and security. Regulators must be careful not to create unintended consequences for example, excessive restrictions could reduce the incentive for hyperscalers to invest in next-generation cloud technologies.One similarity that does exist between banking and cloud computing is the presence of emerging alternatives in the cloud market that are poised to compete with the hyperscalers. This is where Broadcoms acquisition of VMware and the resulting business model adjustments become particularly relevant.For businesses looking to escape single-vendor cloud dependency, VMware Cloud Foundation (VCF) presents viable options, including private cloud, public cloud, or a combination of both through a hybrid cloud model. Where hyperscaler cloud platforms promote open ecosystem engagement and standards, they still pivot towards a design strategy that reinforces their own ecosystems. On the other hand, VCFs architectural principle is based on building for interoperability and offering a consistent, enterprise-grade cloud experience across private and public clouds.One of VCFs biggest advantages is its ability to support both virtual machines (VMs) and Kubernetes-based workloads on a single platform. Many enterprises are still running legacy applications that rely on Virtual Machines (VMs), yet also need to modernise with cloud-native, containerised applications. Instead of forcing businesses to choose between two separate architectures, VCF seamlessly integrates both. It is a perspective that has not escaped Broadcoms competitors in the market. A clear acknowledgment of businesses reliance on VMs and the slow transition to containerised operations is Red Hats launch of OpenShift Virtualisationa competing unified platform designed to manage both virtual machines and containers, helping accelerate the shift toward modernised, container-based workloads.Additionally, recent total cost of ownership studies have indicated that VCF delivers 40-52% cost savings compared to bare-metal or alternative cloud-native solutions. This is particularly relevant in an era where businesses are reevaluating cloud costs and looking for ways to optimise spending while maintaining operational flexibility.Security and compliance are also key considerations. Many regulated industriesincluding financial services, healthcare, and government sectorsrequire hybrid cloud models to comply with data sovereignty laws. VCF enables organisations to deploy a unified cloud infrastructure while ensuring that sensitive workloads remain under direct control.As regulatory conversations evolve, VCFs value proposition as a flexible, secure, and cost-effective option for end users and enabler for cloud service providers align well with industry needs and even CMA objectives.Regulating dominant cloud providers is a complex balancing act. If done well, it could promote a healthier, more competitive ecosystem, ensuring that businesses can choose cloud providers based on functionality rather than contractual obligations. If done poorly, it may slow down innovation, increase complexity, and create compliance burdens for all providers.It is a balancing act well understood by the CMA, the regulatory body tasked by the UK government with helping drive growth without violating its central mandate of promoting competition and protecting consumers. One potential outcome of regulation is that the hyperscalers themselves may be forced to improve. If hyperscalers can no longer rely on egress fees and licensing constraints to retain customers, they may need to rethink service deprecation policies, reduce redundant offerings, and provide clearer pricing structures. In a competitive landscape that values service quality over forced loyalty, businesses could ultimately benefit from more transparency, innovation, and choice.Yet, like in the case of financial services, regulation alone will not create more competition in the cloud marketplace. The presence of competitive options and enablers should be a factor when considering regulatory measures. In addition, businesses should take on greater responsibility for cloud architecture decisions, ensuring that vendor flexibility is a key consideration from the outset. Too often, organisations become entrenched in a single-provider cloud model not because of external constraints, but because of internal planning deficiencies. Choosing among private, public, and/or hybrid clouds requires investment in integration, governance, and skill developmentregulation can lower barriers, but companies must still take proactive steps to build adaptable, future-proof IT environments.The CMAs scrutiny of the cloud market represents a critical turning point for the cloud computing industry. If regulators successfully lower switching costs, enforce fairer licensing policies, and promote data portability, end users will have more options, and other cloud providers will be better positioned to capitalise on a more competitive market.However, success wont be determined by regulation alone. Regulation can create opportunities, but those opportunities need to be seized within the impacted market. The hyperscalers are not passive playersthey will adapt, innovate, and respond to regulatory changes in ways that could preserve their market dominance. Broadcoms opportunity lies in its ability to clearly articulate the value of various cloud models, simplify adoption, and prove the long-term benefits of its platform for both end-users and other cloud service providers. The cloud landscape is evolving, and the next 12 months will determine whether the hyperescalers maintain their stronghold, or if a more competitive and flexible cloud market grows significantly. Either way, the cloud market will not look the same a year from nowand given the enterprise footprint of VMware, Broadcom has a unique chance to shape its future.Bola Rotibi is chief of enterprise research at CCS Insight