The Microsoft Azure disruptions in the Middle East highlight the risks of undersea internet infrastructure. On Saturday, Microsoft confirmed that fiber cuts in the Red Sea caused interruptions for Azure users across the region.
While traffic was quickly rerouted through alternate paths, the company warned of increased latency on connections that usually run through Middle Eastern routes. “Network traffic that does not traverse the Middle East is not impacted,” Microsoft said, promising daily updates until the issue is resolved.
Azure, Microsoft’s flagship cloud computing platform, is the second-largest globally after Amazon Web Services (AWS). It provides cloud services for businesses, governments, and developers, enabling management, access, and deployment of applications worldwide.
Cloud market dominance under scrutiny
The service disruption comes as regulators increase scrutiny on the cloud market. In July, the UK’s Competition and Markets Authority (CMA) reported that Microsoft and Amazon control between 70% and 80% of the UK cloud infrastructure market. The watchdog warned that this dominance restricts competition and raised the possibility of an antitrust probe under new digital market rules.
Microsoft’s financial performance
Despite regulatory challenges, Microsoft continues to post strong results. In July, the company reported $76.4 billion in quarterly revenue, an 18% year-on-year increase. Net income rose 24% to $27.2 billion, while earnings per share reached $3.65, above analyst expectations of $3.38. These results reinforce Azure’s role as a major growth driver for Microsoft.
AI growth on Azure
Microsoft is also expanding its AI footprint on Azure. In May, it added Elon Musk’s xAI Grok 3 and Grok 3 mini models to the Azure AI Foundry marketplace. The models are covered by Microsoft’s service-level agreements and are part of its effort to integrate more open AI systems into its managed compute offering.
The Microsoft Azure disruptions caused by Red Sea fiber cuts are a reminder of how critical undersea cables are to the global internet. With cloud services powering businesses worldwide, even temporary interruptions underline the fragility of digital infrastructure.
