Can Europe’s tech champions out-partner the hyperscalers?

As digital sovereignty climbs the political and commercial agenda, Europe’s software vendors are betting on partners, expertise and AI services to challenge US tech giants

For the past two decades, Europe’s tech scene has struggled to produce enterprise software companies capable of matching the global reach of some of the US tech giants.

But with governments and enterprises now placing greater emphasis on digital sovereignty, resilience and reducing dependence on a handful of global tech providers, the conversation is evolving. With Europe’s software sector receiving renewed attention, the question for the channel is, can Europe can build the kind of partner ecosystems needed to compete globally?

CRN speaks with execs from top European software vendors, who all believe Europe’s strengths lie in industrial expertise, trusted relationships and deep sector knowledge.

The challenge, however, has been turning those strengths into global ecosystems capable of competing with much larger US rivals.

“Europe has the talent and strong startups, but we’re not yet producing enough global software champions,” says Karl Fahrbach, chief partner officer at SAP.

“The issue isn’t innovation – it’s scale. Fragmented markets make it harder for companies to grow into global platforms and build ecosystems.”

That challenge is shaping the strategies of many of Europe’s fastest-growing software firms.

As an example, rather than trying to replicate the breadth of larger competitors, industrial software specialist IFS believes differentiation comes from depth.

“Our differentiation is deep industry expertise in sectors where a more horizontal approach can leave customers underserved,” says Michelle Buckingham, global head of GSI and strategic partners.

“The strongest signal of ecosystem maturity is when customers choose IFS because of the partner community available to them. That is the standard we are building towards.”

The focus on specialist expertise rather than breadth also shapes the thinking at cloud communications platform Infobip, whose international expansion has deliberately avoided imposing a single operating model across every geography.

“We understand that every market has its own specifics, on data governance, customer requirements and procurement,” says Miguel Turnbull, senior director of global partnerships at Infobip.

“In short, having a global expertise, but a local presence.”

The channel is moving up the value chain

If there was an area where every interviewee agreed, it was that the traditional reseller model is disappearing. Customers still need software implementation

They also need guidance on AI strategy, governance, organisational change and measurable business outcomes.

“The conversation has shifted,” says Gretchen O'Hara, EVP of strategic partnerships and business development at Sage.

“Customers aren't just asking ‘can you implement this?’ anymore, they’re asking ‘where should we start, what will this actually change, and how do we do it responsibly?’”

Rather than delivering one-off implementation projects, many Sage partners are building practices around governance, industry consulting, managed services and long-term optimisation.

That evolution is also reshaping the priorities of digital workplace technology company TeamViewer.

“Five years ago, most conversations with partners were focused on remote support and licence sales,” says Alfredo Patron, EVP of global partner ecosystem and channels.

“Today, those conversations are much broader. Partners are moving beyond one-off software sales and becoming trusted advisers that customers rely on over the long term.”

Patron says the partners seeing the strongest growth are those taking a consultative approach and remaining involved well beyond the initial deployment.

“MSPS, systems integrators and strategic consulting partners are helping customers get more value from their technology over time,” he says.

“Their success is increasingly built on long-term relationships and specialist expertise, rather than individual software transactions.”

AI creates new opportunities for partners

For an industry currently consumed by discussion around automation, the vendors aren’t concerned that AI will diminish the role of the channel. Instead, they see it accelerating the shift towards higher-value services.

Fahrbach believes AI is pushing partners further into business transformation, moving beyond implementation towards designing industry-specific AI applications and integrating increasingly complex technology environments.

Infobip’s Turnbull believes AI creates entirely new revenue opportunities through agentic services.

“The opportunity has never been greater,” he says.

“Our ecosystem of partners can work with our AgentOS product to build horizontal or vertical agentic solutions and in that way generate new revenue streams.”

Elsewhere, channel-only UCaaS provider Wildix argues that AI should strengthen - not weaken - the role of the partner.

“Our approach is deliberately different: we embed AI into the workflows that partners design and manage, rather than selling AI as a separate, direct-to-customer product,” says Jason Uslan, chief commercial officer.

Rather than disintermediating the channel, he says, AI gives partners an opportunity to move into governance, compliance and the continuous optimisation of AI-driven business processes.

Sovereignty becomes a commercial conversation

Digital sovereignty is often framed as a political issue, but it is increasingly influencing technology buying decisions, says Turnbull.

“Partners are telling us that demand for European technology alternatives is no longer a niche discussion. It is becoming a real consideration in procurement, particularly where customers are evaluating sovereignty, compliance, and dependency on large non-European platforms.

“That’s reflected in Infobip’s participation in the EU’s Important Project of Common European Interest on Next Generation Cloud Infrastructure and Services (IPCEI-CIS), where it’s working alongside telecom operators, tech providers and research organisations to help develop next-generation communications capabilities.”

Turnbull says that innovation only creates value when it is developed and delivered through an ecosystem rather than in isolation.

At the same time, Wildix believes the growing recognition of unified communications platforms as critical infrastructure has changed the conversation around cloud software.

“For many years, the idea of a European alternative in cloud communications could sound like a political statement more than an operational one,” says Uslan. “That has changed.”

However, he says that sovereignty alone won’t win contracts.

“Sovereignty on its own is not enough to win deals. Buyers still have to deliver services, meet SLAs, and justify budgets.

“In the end, customers care about outcomes and economics first, but in an era of privacy anxiety and digital-sovereignty strategies, the ability to achieve those outcomes with a European provider is an increasingly powerful advantage.”

Ecosystems becoming the product

Perhaps the biggest shift is that vendors are no longer talking about products and partner programmes separately. Instead, the partner ecosystem has become part of the value proposition itself.

SAP points to more than 175,000 cloud-certified consultants across its ecosystem, with 80 per cent of new customers now coming through partners.

IFS said partners contribute to 85 per cent of net new business, underlining how closely ecosystem growth is tied to its commercial strategy, while Wildix said its 100 per cent channel-only strategy works because it eliminates vendor conflict.

All the conversations point to the fact that Europe’s challenge has never been a lack of innovation.

It is one of scale. But scale doesn’t necessarily mean creating another hyperscaler.

Europe already has world-class software companies.

What it needs - arguably - are more vendors capable of building global partner ecosystems around them. And in an AI era where customers increasingly need guidance as much as technology, that may prove to be a far more valuable proposition.