The cloud services market has ballooned in Europe, like just about everywhere else, but the big American public cloud companies are getting most of the new market share.
Among the European cloud providers, Deutsche Telekom is the leader accounting for 2% of the European market, followed by OVHcloud, SAP, Orange and a long list of national and regional players, according to Synergy Research Group.
Synergy says that since the beginning of 2017 the European cloud market has grown almost fourfold, reaching $8.8 billion in the second quarter of 2021. Over that same period, European providers have more than doubled their cloud revenues, but their market share has declined from 27% to under 16% as their growth rate lagged.
The main beneficiaries of the cloud market growth in Europe have been Amazon Web Services, Microsoft Azure and Google Cloud. These three leading global cloud providers now account for 69% of the regional market, and their share continues to rise.
Over the last four quarters European cloud infrastructure service revenues (including IaaS, PaaS and hosted private cloud services) have grown with IaaS and PaaS services accounting for over 80% of the market and they are also growing more rapidly than the smaller hosted or managed private cloud segment. Some of the highest growth is seen in PaaS with database, IoT and analytics services.
“European cloud providers could be quietly satisfied that they have more than doubled their revenues in a four-year period,” said Synergy Research Chief Analyst John Dinsdale, in a statement. “While they have missed out on the higher-growth opportunities afforded by mainstream public cloud services, some have carved out sustainable positions for themselves as national champions or strong niche players.”
Dinsdale added, “It is almost impossible to imagine the current market dynamics changing much in the next five years. This is a game of scale, and the big three U.S. cloud providers have plowed over EUR 14 billion into European capex in just the last four quarters, much of this spent on a continued drive to upgrade and expand their regional network of hyperscale data centers.
RELATED: Germany is getting a sovereign cloud
He said the European cloud providers can still continue to grow if they stay focused on use cases that have stricter data sovereignty and privacy requirements and on customer segments that require a strong local support network.
In Germany, Deutsche Telekom’s T-Systems is teaming with Google Cloud to build and deliver sovereign cloud services to German enterprises, healthcare firms and the public. The two companies say that the goal of this sovereign cloud is to allow customers to host their sensitive workloads while still being able to leverage all the benefits of the public cloud, such as scalability and reliability.