European cloud providers are growing revenue but losing market share, Synergy data shows

The European cloud marketplace might have developed nearly fourfold due to the fact 2017 and is now valued at $8.8bn, but investigation shows that neighborhood assistance companies keep on to lose share to their US counterparts.

Whilst the share of the marketplace that European cloud companies keep has fallen from 27% to sixteen% due to the fact 2017, data compiled by IT marketplace watcher Synergy Investigate Group reveals that these very same organisations have managed to double their income in excess of the very same time.

“Should European cloud companies be joyful that they have far more than doubled their revenues in a 4-year period of time, even though the marketplace has developed almost fourfold? In fact, yes,” stated John Dinsdale, chief analyst at Synergy Investigate Group.

This point out of affairs can be quickly attributed, he continued, to the fact that none of the European cloud companies have managed to match the scale of the US general public cloud giants that dominate considerably of the global cloud marketplace.

“The struggle for major positions in the cloud marketplace has been fought in excess of various decades and the fact is that there was not a European contender. This is a match of significant scale and not one particular of the European cloud companies arrives near to the scale necessary,” he stated.

To this position, Synergy’s data shows that the world’s major a few cloud companies – Amazon World-wide-web Solutions (AWS), Microsoft and Google – now collectively account for 69% of the European marketplace, and their share is continuing to maximize.

“Among the European cloud companies, Deutsche Telekom is the leader, accounting for two% of the European marketplace, followed by OVHcloud, SAP, Orange and a lengthy list of national and regional gamers,” stated Synergy, in a investigation note. “The balance of the European marketplace is accounted for by more compact US and Asian cloud companies, which are steadily shedding share.”

The greatest issue that European companies can do is focus on carving out a niche for on their own and accomplishing what they can to keep on increasing their cloud income, even as their marketplace share carries on to get a hit from the US giants, advised Dinsdale.

“European cloud companies could be quietly glad that they have far more than doubled their revenues in a 4-year period”
John Dinsdale, Synergy Investigate Group

“The critical for European companies is to focus on what they can efficiently create and defend and to not worry about the broader mainstream cloud marketplace,” he stated.

“European cloud companies could be quietly glad that they have far more than doubled their revenues in a 4-year period of time. Whilst they have skipped out on the bigger-growth possibilities afforded by mainstream general public cloud expert services, some have carved out sustainable positions for on their own as national champions or potent niche gamers.”

Looking forward, Dinsdale stated it was unlikely that considerably would modify in the coming decades regarding which gamers are dominating the marketplace and that European companies need to not issue on their own with worrying about how to eat into the US cloud giants’ share.

“It is almost unachievable to visualize the current marketplace dynamics altering considerably in the next 5 decades. This is a match of scale and the big a few US cloud companies have ploughed in excess of €14bn into European capex [capital expenditure] in just the past 4 quarters, considerably of this expended on a continued push to update and increase their regional community of hyperscale datacentres,” he added.