AWS, Microsoft and Google own 72% of the European Cloud Market
Recent figures from the Synergy Research Group show that AWS, Microsoft and Google are dominating the European cloud market even as cloud adoption continues to grow
significantly. Recent findings show that the cloud market in Europe has grown 5x since 2017 to reach a revenue of €10.4 billion in calendar Q2, 2022.
Perhaps not surprising is the fact that almost three-quarters of this revenue is going to the top 3 cloud providers which as AWS, Microsoft, and Google.
"The top three really are in a league of their own," John Dinsdale, chief analyst at Synergy was quoted as saying. “They place huge financial bets, had a long-term view of investments and profitability, have maintained a focused determination to succeed, and have consistently achieved operational excellence. They have now achieved a scale that others cannot match and every quarter they continue to invest amounts that others can’t match.”
While no European company has come close to matching the 3 giants, the piece of good news is that the turnover for local service providers has grown by 167% in the same 5-year period.
IBM, Salesforce and Oracle are the three providers behind the infallible three and these are also American-based.
Dinsdale notes that US cloud providers are putting on average $4 billion every quarter into expansion efforts and that’s why it will be hard for European counterparts to challenge their market dominance.
That hasn’t stopped german-based providers, SAP and Deutsche Telekom, from trying as Synergy reports that the two companies are close behind Oracle in terms of cloud revenue.
This US domination over the cloud market has forced regulators to sit up and take action. In the UK, communications regulator Ofcom has already come out to say it will review the market to ensure businesses and consumers are getting a fair deal and competition is healthy.
However, the only hope for local service providers to get a bigger chunk of the market is if there is a bigger push for data sovereignty, something that Dinsdale notes is not really a big priority for a lot of customers.
"For the majority of customers the prime concerns are over range of cloud services, quality of service, security, flexibility, privacy, price and customer service," he said. "Customer verticals where data sovereignty can be a bigger issue include finance, government and some public sectors."
And what’s happening in these instances where data sovereignty is a big issue is that the cloud giants are partnering with local providers to offer “trusted clouds” that either meet or circumvent data sovereignty requirements.
It, therefore, seems the domination of the market by the big markets isn’t ending anytime soon.