Why there’s a case for European cloud alternatives

Europe is emerging as a strong contender in the global cloud market.
3 July 2020 | 1 Shares
  • US and Chinese tech giants are dominating the cloud scene
  • Europe is adamant in establishing homegrown cloud technologies and setting new data policies 

In 2017, Gartner predicted that the domination of Amazon Web Services (AWS) and Microsoft’s Azure cloud would see the public cloud market remain a two-horse race. 

The global research firm stated: “By 2019, 90% of native cloud IaaS providers will be forced out of this market by the AWS-Microsoft duopoly.”

While the intense competition between the vendors would mean competitive prices and services, Gartner said, the benefits are short-lived in the absence of other competition. 

Today, in the US, while the cloud computing ecosystem has become richer, AWS and Azure remain towering central figures, while Google Cloud remains a strong third, and the Red Hat-fueled IBM also contends. 

On a global level, China’s Alibaba Cloud nips into third position ahead of Google. Other players high in the world ranks include VMWare, Oracle and SAP, and while the latter is German-born, homegrown European firms don’t feature heavily in the tables. That’s despite the continent’s commitment to driving massive digital transformation projects for its economy in the next decade for which cloud and artificial intelligence will play a massive role.

It’s cloudy in Europe

With Europe’s growing appetite for cloud strategies and data infrastructure, deployments of 5G networks, and advances in edge computing, there is both a need and opportunity for more homegrown cloud alternatives. 

The GAIA-X, for example, is a collaborative project by Germany and France with the goal of gaining cloud independence from US and Chinese tech giants. The project will ensure member companies play by set rules, including data sovereignty, data availability, interoperability, portability, transparency, and fair participation. Several documents that explain the project’s purpose and architectural design have been published and can be found on its official webpage. 

The project currently has more than 300 participants from various countries, and it’s also possible for “market participants outside Europe” to join, but they would need to commit to GAIA-X’s principles. 

Tech giant Microsoft has expressed support for the European cloud project. 

European cloud players are increasingly building a strong ecosystem of cloud solutions based upon respect for data regulations, transparency, security, and openness to uphold emerging cloud-inspired initiatives, such as the introduction of “cloud tax” in France and Italy. 

What it means for the global market

Developed based on the values of GDPR (known as one of the strongest data protection laws in the world), European cloud companies could become an attractive alternative for APAC businesses in the pendulum swing between US and Chinese cloud solutions. 

The APAC cloud market is set to grow 117% from US$133 billion to US$288 billion between 2019 and 2024, according to a new report by GlobalData. The APAC region is, without a doubt, fertile for digital transformation projects and ripe for cloud-based solutions.

As an example, Mark Smith, Managing Director, Asia Pacific for Digital Realty, expressed that “Hong Kong is a regional leader in cloud readiness and has significant potential for further cloud adoption along with a strong base of customers with an appetite for digital technologies.”

Besides that, APAC telcos are preparing for the roll-out of 5G networks with edge infrastructure, ready to empower the next-gen wireless applications such as the internet of things (IoT). 

Naturally, the exponential growth and deployment of IoT devices will see more companies enlisting cloud infrastructure to support the highly-connected ecosystem. 

Speculating on the rapid growth of cloud in APAC, European cloud alternatives developed under the wings of GDPR are in a strong position to help global companies navigate the varied compliance and regulations in the vast APAC region.