European cloud players losing share to AWS, Microsoft, Google

European cloud providers rode the revenue wave in Q2 2022, as the market grew 29% year on year, but continued to lose market share to U.S. titans Amazon, Microsoft and Google, new data from Synergy Research Group showed.

The analyst firm noted back in July that Amazon gained almost a full percentage point of global market share to reach nearly 34%  in Q2, while Google topped the 10% mark. It said at the time the combined global market share for Amazon, Google and Microsoft rose year on year from 61% to 65%. Before, it wasn’t entirely clear where those gains were coming from, but it now appears European competitors were key contributors to their market share growth.

Synergy Research Group data indicated that since early 2017, the collective market share of European cloud players including SAP, Deutsche Telekom, OVHcloud, Telecom Italia, Orange has dropped from 27% to just 13% in their home territory. In the past year alone, their share has dropped around two percentage points. In contrast, Amazon, Google and Microsoft now account for 72% of the regional market. 

“The cloud market is a game of scale where aspiring leaders have to place huge financial bets, must have a long-term view of investments and profitability, must maintain a focused determination to succeed, and must consistently achieve operational excellence,” John Dinsdale, Chief Analyst at Synergy Research Group, said in a statement. “No European companies have come close to that set of criteria and the result is a market where the six leaders are all U.S. companies.”

That said, European cloud providers are still growing their revenues at a hearty pace. Over the past year, European cloud infrastructure service revenues jumped 41% to 27 billion Euros. Synergy flagged Infrastructure-as-a-service and Platform-as-a-service as among the fastest growing, noting they now account for over 80% of the European cloud market.

Dinsdale said some European players have found a niche serving local customers. He concluded these “will continue to grow but they are unlikely to move the needle much in terms of overall European market share.”