• Europe is keen to develop strong homegrown cloud companies
• But US hyperscalers dominate the market, with European players commanding only 15% of the region’s cloud infrastructure services business, according to Synergy Research Group
• The scale and power of AWS, Google and Microsoft means Europe’s cloud players are unlikely to grow their overall market share and must settle for being niche sovereign service providers

Europe is keen to develop its own digital infrastructure, such as the planned network of AI factories and construction of AI Gigafactories that the European Commission plans to support financially, and have local companies provide sovereign cloud services to the region’s enterprise community, but Europe’s cloud sector is already dominated by the US hyperscaler trio of Amazon Web Services (AWS), Google Cloud and Microsoft Azure and that status quo isn’t going to change, according to the team at Synergy Research Group. 

While European service providers have more than tripled their local cloud revenues during the period from 2017 to 2024, the European cloud infrastructure services market grew by a factor of six during those years, reaching €61bn in 2024, with AWS, Google and Microsoft commanding 70% of the market. “While European cloud providers have been growing and some will no doubt continue to grow, none come remotely close to challenging the big US cloud providers for leadership of European markets,” noted John Dinsdale, a chief analyst at Synergy Research Group. “That train left the station years ago and there were no European companies on it,” he added in email commentary shared with the media.

Due to the heavy investments by, and subsequent growth of, the US hyperscaler trio, which between them now have more than 140 hyperscale datacentres operational in Europe, local cloud providers were increasingly squeezed out of the market: According to the Synergy Research team, the market share of the European cloud providers slumped from 29% in 2017 to just 15% in 2022, and has stayed relatively constant at about that rate ever since. 

“The cloud market is a game of scale where aspiring leaders have to place huge financial bets, must have a long-term view of investments and profitability, must maintain a focused determination to succeed, and must consistently achieve operational excellence,” noted Dinsdale. “As US cloud providers continue to invest some €10bn every quarter in European capex programs, that presents an impossible hill to climb for any companies that wish to seriously challenge their market leadership. Consequently, European cloud providers have mostly settled into positions of serving local groups of customers that have some specific local needs, sometimes working as partners to the big US cloud providers. While many European cloud providers will continue to grow, they are unlikely to move the needle much in terms of overall European market share.”

Among the European cloud providers, German software giant SAP and Deutsche Telekom (which is keen to play a role in the development of Europe’s AI Gigafactory infrastructure) are the leaders, each accounting for 2% of the European market, followed by OVHcloud, Telecom Italia (TIM), Orange and “a long list of national and regional players,” noted the research firm in this analysis of the market. The balance of the European market is accounted for by smaller US and Asian cloud providers. 

According to Synergy Research, the value of Europe’s cloud infrastructure services sector (including IaaS, PaaS and hosted private cloud services) was €36bn in the first half of 2025, and is set to be worth more than €75bn for the full year, a year on year growth rate of about 24%. As is the case across the world, AI is “increasingly driving the market, with growth of 140-160% in generative AI-specific services such as GPUaaS and GenAI PaaS. 

Europe’s largest cloud markets are the UK and Germany, but the major markets with the highest growth rates are Ireland, Spain and Italy.

- Ray Le Maistre, Editorial Director, TelecomTV