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European cloud companies are being squeezed out by US giants

cloud
(Image credit: Shutterstock / Ekaphone maneechot)

European cloud companies are being pushed out of their own playground by US giants, a new report from Synergy Research Group (SRG) has found.

According to the report, cloud spending (opens in new tab) in the Old Continent has grown by three times since early 2017, hitting $6.9 billion in Q3 2020.

During this period, however, European cloud businesses have lost 10 percent of their market share, from 26 down to 16 percent. At the same time, the big three (Amazon Web Services, Microsoft and Google) increased their collective market share in the region to 66 percent.

"European cloud providers are trying to gain more traction in the market by focusing on customer segments and uses cases that have stricter data sovereignty and private requirements," said John Dinsdale, Chief Analyst at SRG. "This has led to the Gaia-X initiative, which represents an attempt to reverse the fortunes of the European cloud industry (opens in new tab).”

"Their efforts are laudable but the trouble is that this is a bit like King Canute attempting to stop an incoming tide," he added.

At the time of writing, the big three have 67 datacenters in Europe. Dinsdale believes there is plenty of room for European businesses to grow, but it will take both money and effort.

“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,” he added.

According to The Register, the biggest EU-based cloud provider is Deutsche Telekom with two percent market share.

Sead Fadilpašić is a freelance tech writer and journalist with more than 17 years experience writing technology-focussed news, blogs, whitepapers, reviews, and ebooks. And his work has featured in online media outlets from all over the world, including Al Jazeera Balkans (where he was a Multimedia Journalist), Crypto News, TechRadar Pro, and IT Pro Portal, where he has written news and features for over five years. Sead's experience also includes writing for inbound marketing, where he creates technology-based content for clients from London to Singapore. Sead is a HubSpot-certified content creator.