European Cloud Providers Struggle to Reverse Market Share Losses

RENO, NV, January 14, 2021

New data from Synergy Research Group shows that since the beginning of 2017 the European cloud market has grown more than threefold, reaching EUR 5.9 billion (or $6.9 billion) in the third quarter of 2020. Over that same period European service providers have grown their cloud revenues but their market share has declined from 26% to under 16%, driven down by the rise of Amazon, Microsoft and Google. These three leading global cloud providers have grown aggressively and now account for 66% of the regional market. The balance of the European market is accounted for by smaller US and Asian cloud providers, who are also steadily losing market share. Among the European cloud providers, Deutsche Telekom is the leader accounting for 2% of the market, followed by OVHcloud, Orange and a long list of national telcos and regional cloud and hosting specialists.Euro Cloud Q320 Including forecast fourth quarter business, Synergy estimates that full-year 2020 European cloud infrastructure service revenues (including IaaS, PaaS and hosted private cloud services) will be over EUR 23 billion, up 31% from 2019. IaaS and PaaS services account for almost 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 are trying to gain more traction in the market by focusing on customer segments and use cases that have stricter data sovereignty and privacy requirements. This has led to the Gaia-X initiative which represents an attempt to reverse the fortunes of the European cloud industry,” said John Dinsdale, a Chief Analyst at Synergy Research Group. “Their efforts are laudable but the trouble is that this is a bit like King Canute attempting to stop an incoming tide. The big three US cloud providers now have 67 hyperscale data centers in Europe and over 150 additional local points of presence, while the tier two US providers have another 36 major data centers. In total their European capex over the last four quarters has totaled EUR 12 billion, up 20% from the previous four quarters. European firms are facing a huge challenge if they want to break out of their niche-like positions – the revenue growth opportunities are massive but so too is the funding and willpower required to tap into those opportunities.”

About Synergy Research Group

Synergy provides quarterly market tracking and segmentation data on IT and Cloud related markets, including vendor revenues by segment and by region. Market shares and forecasts are provided via Synergy’s uniquely designed online database SIA ™, which enables easy access to complex data sets. Synergy’s CustomView ™ takes this research capability one step further, enabling our clients to receive on-going quantitative market research that matches their internal, executive view of the market segments they compete in.

Synergy Research Group helps marketing and strategic decision makers around the world via its syndicated market research programs and custom consulting projects. For nearly two decades, Synergy has been a trusted source for quantitative research and market intelligence. Synergy is a strategic partner of TeleGeography.

To speak to an analyst or to find out how to receive a copy of a Synergy report, please contact sales@srgresearch.com or 775-852-3330 extension 101.