European cloud providers are struggling to regain market share that has been lost to the rise of Amazon Web Services, Microsoft and Google, according to new data from Synergy Research.
The European cloud market has tripled since the beginning of 2017, hitting €5.9bn in Q3 of 2020.
However, European cloud providers have seen their market share decline from 26 per cent to 16 per cent in that same period, as their hyperscaler rivals increase in popularity. AWS, Google and Micrsofot now account for two-thirds of the regional market, with the remainder of the market made up of smaller US and Asian providers, who are also losing market share.
Deutsche Telekom is the European leader with two per cent of the market, followed by OVHcloud and Orange.
Synergy also estimated that the full-year European cloud infrastructure services revenue for 2020 will be over €23bn, a 31 per cent increase on the previous year. IaaS and PaaS services make up nearly 80 per cent of that market and are growing much faster than the smaller hosted or managed private cloud segment, it revealed.
"European cloud providers are trying to gain more traction in the market by focusing on customer segments and use cases that have stricter data sovereignty and privacy requirements. This has led to the Gaia-X initiative which represents an attempt to reverse the fortunes of the European cloud industry," said John Dinsdale, a chief analyst at Synergy Research Group.
"Their efforts are laudable but the trouble is that this is a bit like King Canute attempting to stop an incoming tide. The big three US cloud providers now have 67 hyperscale datacentres in Europe and over 150 additional local points of presence, while the tier two US providers have another 36 major datacentres.
"In total their European capex over the last four quarters has totalled €12bn, up 20 per cent from the previous four quarters. 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."
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