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

The European cloud market may have grown almost fourfold because 2017 and is now valued at $eight.8bn, but exploration demonstrates that local service providers continue to reduce share to their US counterparts.

When the share of the market that European cloud providers keep has fallen from 27% to sixteen% because 2017, info compiled by IT market watcher Synergy Study Team reveals that these exact organisations have managed to double their profits over the exact time.

“Should European cloud providers be delighted that they have additional than doubled their revenues in a 4-calendar year interval, though the market has grown pretty much fourfold? Basically, certainly,” stated John Dinsdale, main analyst at Synergy Study Team.

This point out of affairs can be quickly attributed, he continued, to the actuality that none of the European cloud providers have managed to match the scale of the US general public cloud giants that dominate substantially of the international cloud market.

“The battle for major positions in the cloud market has been fought over numerous decades and the actuality is that there was not a European contender. This is a match of huge scale and not one particular of the European cloud providers comes near to the scale required,” he stated.

To this position, Synergy’s info demonstrates that the world’s major three cloud firms – Amazon Net Services (AWS), Microsoft and Google – now collectively account for 69% of the European market, and their share is continuing to raise.

“Among the European cloud providers, Deutsche Telekom is the chief, accounting for 2% of the European market, adopted by OVHcloud, SAP, Orange and a long record of countrywide and regional gamers,” stated Synergy, in a exploration be aware. “The harmony of the European market is accounted for by smaller US and Asian cloud providers, which are steadily shedding share.”

The finest issue that European providers can do is target on carving out a specialized niche for themselves and performing what they can to continue rising their cloud profits, even as their market share continues to consider a strike from the US giants, encouraged Dinsdale.

“European cloud providers could be quietly pleased that they have additional than doubled their revenues in a 4-calendar year period”
John Dinsdale, Synergy Study Team

“The key for European firms is to target on what they can properly build and defend and to not be concerned about the broader mainstream cloud market,” he stated.

“European cloud providers could be quietly pleased that they have additional than doubled their revenues in a 4-calendar year interval. When they have missed out on the greater-development possibilities afforded by mainstream general public cloud expert services, some have carved out sustainable positions for themselves as countrywide champions or solid specialized niche gamers.”

Searching in advance, Dinsdale stated it was unlikely that substantially would alter in the coming decades about which gamers are dominating the market and that European providers should not issue themselves with worrying about how to try to eat into the US cloud giants’ share.

“It is pretty much extremely hard to visualize the current market dynamics altering substantially in the subsequent five decades. This is a match of scale and the massive three US cloud providers have ploughed over €14bn into European capex [funds expenditure] in just the previous 4 quarters, substantially of this invested on a continued push to upgrade and grow their regional community of hyperscale datacentres,” he added.