European Cloud Providers Continue to Grow but Still Lose Market Share

RENO, NV, September 27, 2022

New data from Synergy Research Group shows that the European cloud market is now over five times as big as it was in early 2017, reaching EUR 10.4 billion (US$10.9 billion) in the second quarter of 2022. Over that same period, European service providers have grown their cloud revenues by 167%, but their market share has declined from 27% to 13% as their growth rate lagged well behind the overall cloud market growth. The main beneficiaries of the market growth have been Amazon, Microsoft and Google. These three leading global cloud providers now account for 72% of the regional market and their share continues to steadily rise. Among the European cloud providers, SAP and Deutsche Telekom are the leaders, each accounting for 2% of the European market. They are followed by OVHcloud, Telecom Italia, Orange and a long list of national and regional players. The balance of the European market is accounted for by smaller US and Asian cloud providers, who are steadily losing share. Over the last four quarters European cloud infrastructure service revenues (including IaaS, PaaS and hosted private cloud services) totaled over EUR 27 billion, up 41% from the preceding four quarters. IaaS and PaaS services account 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.

“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,” said John Dinsdale, a Chief Analyst at Synergy Research Group. “As US cloud providers continue to invest over EUR 4 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. Consequently European cloud providers have mostly settled into positions of serving local groups of customers that have some specific local needs, sometimes working as partners to the big US cloud providers. Some of those European cloud providers will continue to grow but they are unlikely to move the needle much in terms of overall European market share.”