EU-based cloud providers have seen their local revenues triple in recent years, new research shows, but there’s still a long way to go until they can break the dominance of US tech giants.
Analysis from Synergy Research Group shows US providers - including Amazon, Microsoft, and Google Cloud - command a 70% share of the European market compared to just 15% for regional firms.
Compounding the situation for European firms is the fact the market has grown by a factor of six over the last eight years, meaning the market share for local providers has fallen from 29% in 2017.
There is light on the horizon, however. Synergy noted that this 15% share has held steady since 2022, suggesting no further inroads from US giants.
The figures come amid a period of renewed demands for local cloud infrastructure and concerns over data sovereignty, with regional IT leaders reportedly ‘skittish’ over the influence of US cloud companies.
Despite calls for a more localized approach to cloud computing, the reality is that cloud is a market where size really does matter, according to John Dinsdale, chief analyst at Synergy.
"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," he said.
"No European companies have come close to that set of criteria and the result is a market where the five leaders are all US companies."
US cloud providers are investing heavily
The big American players have set aside whopping sums for capital expenditure programs with AI sparking new infrastructure demands and capacity.
Earlier this year, Microsoft detailed plans to spend around $80 billion on infrastructure expansion while Google recently announced an additional $10 billion, taking its total to $85 billion for the year.
A significant portion of this investment is flowing into Europe, with Microsoft spending $400 million to expand its Swiss data centers and $2.1 billion for cloud and AI infrastructure in Spain.
AWS, meanwhile, plans to spend £8 billion in the UK over the next five years.
"As US cloud providers continue to invest some €10 billion every quarter in European capex programs, that presents an impossible hill to climb for any companies who wish to seriously challenge their market leadership," Dinsdale added.
Some of that investment has been driven by efforts by American cloud providers to build sufficient local infrastructure to hold European data in Europe - and protect that from external pressure.
Both Google and Microsoft have pledged to protect local data via their sovereign cloud services. Last year, AWS revealed a €7.8 billion investment into AWS European Sovereign Cloud over the next 15 years.
American cloud providers have been hit by regulatory action in Europe, with Microsoft recently settling with Cloud Infrastructure Services Providers in Europe (CISPE) over a long-running licensing disagreement.
European cloud growth
That American dominance has left local providers battling it out for a small handful of customers, Dinsdale noted, creating an incredibly strained and competitive marketplace.
SAP and Deutsche Telekom each hold 2% of the European market, for example, followed by OVHcloud, Telecom Italia, and Orange.
Other regional players and smaller American and Asian cloud providers are also in the mix.
"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," Dinsdale added.
"While many European cloud providers will continue to grow, they are unlikely to move the needle much in terms of overall European market share.”
Synergy said European cloud infrastructure service revenues were €36 billion in the first half of 2025, predicting annual spend would grow by a quarter versus last year.
Public IaaS and PaaS services make up the bulk of the market, the report added, with AI driving the market with up to 160% growth in relevant services.
The UK and Germany remain the biggest markets for cloud, but Ireland, Spain, and Italy are seeing the highest growth rates.
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