- Synergy Research Group tipped the European cloud market to grow 24% YOY in 2025
- Amazon, Google and Microsoft dominate, but local providers still hold 15% market share
- The sovereignty movement may be propping up local providers, but it's not clear how long that'll last
Europe’s cloud market could top the $85 billion (€73 billion) mark in 2025, according to a new forecast from Synergy Research Group. And hyperscalers are poised to scoop up the bulk of that growth.
The overall cloud market hit $330 billion in 2024, with Europe accounting for around $70 billion (€61 billion, or roughly 21%) of that total. Synergy tipped the European market to grow 24% year on year in 2025, which would factor out to $86.6 billion (€74.4 billion).
As in other areas of the world, hyperscalers dominate the European cloud, with Amazon, Microsoft and Google accounting for 70% of the market. That leaves only scraps for local providers like SAP, Deutsche Telekom, OVHcloud, Telecom Italia and Orange.
Between 2017 and 2020, hyperscalers cut local cloud providers’ market share nearly in half to 15%, Synergy noted. Since then, though, their market share has stabilized.
Will local providers bounce back? Synergy Research Group Chief Analyst John Dinsdale told Fierce he couldn't predict future market share fluctuations. But "the 15% market share of European cloud providers is a pretty low threshold to maintain. Given the need for some local specialization and support, and the ongoing existence of a range of market niches, there is going to be some level of opportunity for local players," he said.
Scale vs sovereignty
The cloud market has long been a game of scale. So, it makes sense that hyperscalers rapidly moved in. As Recon Analytics Founder Roger Entner told Fierce, “The larger you become, the greater the advantages and efficiencies. The European providers are just fragmented and subscale. They even struggle with being European but are often only domestically focused.”
Europe is at the leading edge of digital sovereignty efforts, which has created an opportunity for more local and neocloud players to get their foot in the door with specialized offerings, Entner said.
But sovereignty is a relatively minor driver of cloud spending, Dinsdale said
"There is a lot of noise around sovereignty, and for sure in certain circumstances or with certain types of customer it can make a difference in terms of decision criteria for selecting cloud providers," he explained. "But for the great bulk of customers the more important things are service features, quality of service, breadth of service, pricing, flexibility and ongoing customer support."
It's not like local and niche players have a monopoly on sovereign offerings either. Not only have all the hyperscalers come out with their own sovereign cloud offerings for the European market, but they also have deep, deep pockets to expand and enhance those offerings.
“As U.S. cloud providers continue to invest some €10 billion every quarter in European capex programs, that presents an impossible hill to climb for any companies who wish to seriously challenge their market leadership,” Dinsdale concluded in a press release.