Clouded Judgment: The Risks of Lock-In and Single-Vendor Dependence

This new report from Aiden Buzzetti of the Bull Moose Project and Evan Swarztrauber of CorePoint Strategies highlights the concerning concentration of power Microsoft has accumulated over the cloud computing market — and what it means for American businesses, federal agencies, and the future of AI. The U.S. cloud market is nearly a $300 billion industry projected to exceed $620 billion by 2031, and it is increasingly controlled by a handful of players with Microsoft sitting atop them all.

Microsoft's dominance is striking in both its breadth and depth:

• Used by 95% of the Fortune 500 via Azure

• Used by 75% of the Fortune 500 via Microsoft 365

• Commands an estimated 85% of federal productivity software

• Captures 31% of all federal software spending — approximately $2.4 billion in FY2021 alone

This concentration has hardened into a "lock-in" — a condition where customers are effectively trapped, not merely by the cost of migrating data, but by a web of restrictive licensing terms, egress fees, and bundling practices that make switching providers up to 400% more expensive.

Lock-in drives up costs for enterprises and governments alike, costs that ultimately flow through to consumers, patients, and taxpayers.

To address these challenges, the report calls for a three-pronged response: stronger antitrust enforcement targeting licensing and bundling practices, robust interoperability and data-portability standards modeled on frameworks like the ACCESS Act, and federal procurement reform — including passage of the SAMOSA Act and renewed investment in the Technology Modernization Fund — to build genuine multi-vendor competition into how the government buys cloud and AI services.