A report by Synergy Research Group indicates that six US giants are ruling the European cloud market. Nearly three-quarters of customers’ spending is owned by Google, Microsoft and AWS.
Synergy’s numbers highlight that the European cloud market is almost five times as prominent as it was in 2017. Revenues crossed €10.4 billion in the second quarter of 2022.
European service providers mutually grew their turnover by almost 167 percent during the same period. Nevertheless, their market share dropped from 27 percent to 13 percent due to US competitors.
Giants of the European cloud market
Three US tech giants were able to acquire 72 percent of all enterprise cloud spending during the second quarter of 2022. “The top three really are in a league of their own”, Synergy chief analyst John Dinsdale told The Register. “They place huge financial bets, have a long-term view of investments and profitability, have maintained a focused determination to success, and have consistently achieved operational excellence.”
“They have now achieved a scale that others cannot match, and every quarter they continue to invest amounts that others can’t match”, he added. “No European companies have come close to that set of criteria, and the result is a market where the six leaders are all US companies.”
The US cloud providers currently invest nearly $4 billion in capital expenditure every quarter to enhance their expansion and scalability efforts. It’s nearly impossible to reach those heights and create a competitive ground for local companies. The Register noted that AWS had “first mover advantage in the infrastructure cloud space and continues to press that home”.
IBM, Oracle, and Salesforce come after the big three. The companies aren’t that far behind the titans in terms of European cloud market returns. All this has been made possible by identifying opportunities and pressing sustainable advantages.
Regulation
The supremacy of the US titans has forced authorities and regulators to take note and work towards fair and healthy competition. Brussels received various objections and complaints from cloud providers like Nextcloud and OVHCloud. Meanwhile, the US Coalition for Fair Software Licensing is working on creating a fair market for cloud software users.
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