According to the latest research by Synergy Research Group, the European cloud market has grown by over five times since 2017, reaching EUR 10.4 billion (US$10.9 billion) in Q2 2022. Over these five years, European service providers have grown their cloud revenues by 167%. However, their market share declined from 27% to 13% as their growth rate was much behind the overall cloud market growth. Amazon, Microsoft, and Google have been the main beneficiaries of this market growth. These account for 72% of the regional market and their market share continues to rise steadily.
SAP and Deutsche Telekom are the leading European cloud providers, each accounting for 2% of the European market. They are followed by OVHcloud, Telecom Italia, Orange, and other national and regional players. The balance of the European market is maintained as smaller US and Asian cloud providers are steadily losing share.
Over the last four quarters, European cloud infrastructure service revenues from IaaS, PaaS, and hosted private cloud services totaled over EUR 27 billion. This is a 41% increase from the preceding four quarters. Over 80% of the market is accounted for by IaaS and PaaS services. They are growing faster than the smaller hosted or managed private cloud segment. PaaS with database, IoT, and analytics services have seen some of the highest growth.
“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. No European companies have come close to that set of criteria and the result is a market where the six leaders are all US companies,” reports Synergy Research Group.
As US cloud providers are investing over EUR 4 billion every quarter in European Capex programs, it is becoming impossible to climb for companies who wish to challenge their market leadership. As a result, European cloud providers end up in positions of serving local groups of customers having some specific local needs, at times working as partners to the bigger US cloud providers. Even though European cloud providers will continue to grow, they are less likely to do much to improve their overall European market share.
Source: Synergy Research Group