The European cloud market may have grown almost fourfold since 2017 and is now valued at $8.8 bn, but research study shows that regional company continue to lose share to their United States counterparts.
While the share of the market that European cloud companies hold has fallen from 27% to 16% considering that 2017, information assembled by IT market watcher Synergy Research study Group exposes that these very same organisations have actually managed to double their revenue over the exact same time.
“Should European cloud companies more than happy that they have more than doubled their revenues in a four-year duration, while the marketplace has grown practically fourfold? Actually, yes,” said John Dinsdale, primary analyst at Synergy Research study Group.
This state of affairs can be quickly associated, he continued, to the truth that none of the European cloud suppliers have actually handled to match the scale of the United States public cloud giants that control much of the worldwide cloud market.
“The battle for leading positions in the cloud market has been contested numerous years and the reality is that there wasn’t a European competitor. This is a video game of huge scale and not one of the European cloud companies comes close to the scale needed,” he said.
To this point, Synergy’s data shows that the world’s most significant 3 cloud firms– Amazon Web Solutions (AWS), Microsoft and Google– now collectively account for 69% of the European market, and their share is continuing to increase.
“Amongst the European cloud service providers, Deutsche Telekom is the leader, accounting for 2% of the European market, followed by OVHcloud, SAP, Orange and a long list of national and local players,” stated Synergy, in a research note. “The balance of the European market is represented by smaller sized US and Asian cloud suppliers, which are gradually losing share.”
The very best thing that European suppliers can do is focus on carving out a specific niche for themselves and doing what they can to continue growing their cloud profits, even as their market share continues to take a hit from the United States giants, recommended Dinsdale.
“European cloud suppliers might be quietly pleased that they have more than doubled their earnings in a four-year period” John Dinsdale, Synergy Research Group
“The secret for European companies is to concentrate on what they can effectively develop and defend and to not stress over the wider mainstream cloud market,” he said.
“European cloud suppliers could be quietly satisfied that they have more than doubled their profits in a four-year duration. While they have actually lost out on the higher-growth opportunities paid for by traditional public cloud services, some have carved out sustainable positions for themselves as nationwide champs or strong specific niche players.”
Looking ahead, Dinsdale stated it was not likely that much would alter in the coming years concerning which players are controling the market and that European providers should not concern themselves with fretting about how to eat into the United States cloud giants’ share.
“It is almost difficult to imagine the present market dynamics changing much in the next five years. This is a game of scale and the huge three United States cloud suppliers have tilled over EUR14bn into European capex [capital investment] in simply the last 4 quarters, much of this spent on a continued drive to update and broaden their regional network of hyperscale datacentres,” he included.
