October 27, 2021


Connecting People

European cloud providers are growing revenue but losing market share, Synergy data shows

The European cloud industry may have grown practically fourfold considering that 2017 and is now valued at $eight.8bn, but research reveals that neighborhood support providers go on to eliminate share to their US counterparts.

Whilst the share of the industry that European cloud providers hold has fallen from 27% to 16% considering that 2017, knowledge compiled by IT industry watcher Synergy Exploration Team reveals that these exact organisations have managed to double their profits more than the exact time.

“Should European cloud providers be delighted that they have extra than doubled their revenues in a 4-calendar year period of time, while the industry has grown just about fourfold? Truly, yes,” mentioned John Dinsdale, main analyst at Synergy Exploration Team.

This point out of affairs can be effortlessly attributed, he continued, to the reality that none of the European cloud providers have managed to match the scale of the US public cloud giants that dominate considerably of the worldwide cloud industry.

“The fight for main positions in the cloud industry has been fought more than quite a few several years and the reality is that there was not a European contender. This is a video game of enormous scale and not one particular of the European cloud providers arrives near to the scale demanded,” he mentioned.

To this stage, Synergy’s knowledge reveals that the world’s most important a few cloud corporations – Amazon World-wide-web Providers (AWS), Microsoft and Google – now collectively account for sixty nine% of the European industry, and their share is continuing to increase.

“Among the European cloud providers, Deutsche Telekom is the chief, accounting for 2% of the European industry, adopted by OVHcloud, SAP, Orange and a long listing of nationwide and regional gamers,” mentioned Synergy, in a research note. “The stability of the European industry is accounted for by more compact US and Asian cloud providers, which are steadily dropping share.”

The very best issue that European providers can do is target on carving out a market for them selves and performing what they can to go on escalating their cloud profits, even as their industry share proceeds to take a strike from the US giants, encouraged Dinsdale.

“European cloud providers could be quietly pleased that they have extra than doubled their revenues in a 4-calendar year period”
John Dinsdale, Synergy Exploration Team

“The vital for European corporations is to target on what they can properly construct and protect and to not stress about the broader mainstream cloud industry,” he mentioned.

“European cloud providers could be quietly pleased that they have extra than doubled their revenues in a 4-calendar year period of time. Whilst they have skipped out on the increased-advancement possibilities afforded by mainstream public cloud expert services, some have carved out sustainable positions for them selves as nationwide champions or solid market gamers.”

Looking forward, Dinsdale mentioned it was not likely that considerably would alter in the coming several years with regards to which gamers are dominating the industry and that European providers should not problem them selves with worrying about how to eat into the US cloud giants’ share.

“It is just about impossible to consider the recent industry dynamics altering considerably in the following five several years. This is a video game of scale and the massive a few US cloud providers have ploughed more than €14bn into European capex [money expenditure] in just the final 4 quarters, considerably of this expended on a continued drive to upgrade and expand their regional community of hyperscale datacentres,” he additional.