Amazon, Microsoft and Google dominate European cloud market

Amazon, Microsoft and Google dominate European cloud market

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The European cloud market has grown more than threefold since the start of 2017, reaching €5.9 billion ($6.9 billion) in the third quarter of 2020.

These latest figures come from Synergy Research Group which found that over that same period European service providers have increased their cloud revenues but their market share has declined from 26% to under 16%, driven down by the rise of American cloud players like Amazon, Microsoft and Google. All three global cloud providers have grown rapidly and now account for 66% of the European market.

“European cloud providers are trying to gain more traction in the market by focusing on customer segments and use cases that have stricter data sovereignty and privacy requirements. This has led to the Gaia-X initiative which represents an attempt to reverse the fortunes of the European cloud industry,” said John Dinsdale, a chief analyst at Synergy Research Group.

“Their efforts are laudable but the trouble is that this is a bit like King Canute attempting to stop an incoming tide. The big three US cloud providers now have 67 hyperscale data centres in Europe and over 150 additional local points of presence, while the tier two US providers have another 36 major data centres. In total their European capex over the last four quarters has totalled €12 billion, up 20% from the previous four quarters. European firms are facing a huge challenge if they want to break out of their niche-like positions – the revenue growth opportunities are massive but so too is the funding and willpower required to tap into those opportunities.”

The European market is also comprised of smaller US and Asian cloud providers, who are also steadily losing market share to the larger global players. As for specific European cloud providers, Deutsche Telekom leads with a market share of 2%, followed by OVHcloud, Orange and a number of national telcos and regional cloud and hosting specialists.

Synergy predicts that full-year 2020 European cloud infrastructure service revenues - including IaaS, PaaS and hosted private cloud services as well as forecast Q4 business, will be over €23 billion, up 31% from 2019.

IaaS and PaaS services make up almost 80% of the market and they are also growing faster than the smaller hosted or managed private cloud segment. PaaS in particular has experiences some of the highest growth in database, IoT and analytics services.

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