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Amazon Web Services (AWS), Microsoft and Google now control nearly three quarters (72%) of the European enterprise cloud storage market, according to a new study.
Synergy Research Group found that while local cloud hosting providers in the region have seen revenues grow by 167% since 2017, they have also taken a huge hit in their market share – that has fallen from 27% to just 13% within the same period. period, as the giant US carriers have caught up with them.
Synergy claims that of all European cloud providers, SAP and Deutsche Telekom lead the pack – but only represent 2% of the European market, suggesting that smaller local providers are simply being overpowered.
“Big Three” Cloud Monopoly
US companies entering the region is probably why Europe remains a very profitable region for the cloud industry. Synergy found that European cloud infrastructure services revenue was nearly €27 billion this year, up 41% from the previous four quarters.
Synergy attributed the stunning success of major US companies in the European cloud space to their ability to invest heavily in areas such as infrastructure and quality of service, using their unbeatable resources to outperform European competitors by a huge margin.
“The cloud market is a scaling game that requires aspiring leaders to place huge financial bets, take a long-term view on investment and profitability, maintain a focused determination to succeed, and consistently achieve operational excellence,” said John Dinsdale, a principal analyst at Synergy Research. group.
He added: “No European company has come close to that set of criteria and the result is a market where the six leaders are all American companies.”
European cloud providers fight back
Not everyone is equally happy with the success of American tech giants in the European cloud market.
French cloud computing company OVHcloud has filed an antitrust complaint against Microsoft, alleging that Microsoft licenses its office software in a way that makes alternative products more expensive for companies using cloud services other than Azure.
The power of the major cloud providers is also heading for major scrutiny in the UK, where media regulator Ofcom will launch an investigation into the state of the local cloud computing market.
The study will formally assess how well this market is working and examine the strength of competition among cloud service providers.