'Impossible hill to climb': US clouds crush European competition on their home turf European cloud infrastructure companies make up just 15 percent of their own market, and the huge investment the US giants can wield makes their dominance "an impossible hill to climb" for any would-be challengers. Details shared by Synergy Research on regional markets show that Euro cloud operators continue to grow, but none …
It's pretty clear that EU governments and business could readily move their data to EU providers - there's precisely zero unique technology that forces them to use the US hyperscalers. In the short medium (and possibly long) term there's certainly a barrier of higher cost moving to EU providers, and that's where the determination element comes in. Even then, there's an offset benefit that US companies are hyper-tax-dodgers, and I suspect any Northern European based cloud provider would find it far more difficult to avoid national taxes, which might offset some of the higher price.
Open question, lots of talk, but how determined are EU governments? Looking at how they've rolled over to please Epstein's Orange Buddy, I'm not hopeful.
It's the same old issue.... a French company won't buy services from a German one, a German one from an Italian one, the Italian one from a Dutch one.... and this way no single comapny can grow large enough to become competitive.
Some issue are real - not al EU citizen can speak English fluently, even in IT (and then you get France that wants everything in French too) - so customers support and interfaces become an issue. Contracts too have to take into account different country rules, a company in country X may not want to have to sue someone in a court in country Y if something goes wrong.
Anywy, I wonder whyt a company like SAP didn't enter the full cloud market - and not only for its own products. Some telcos could have tried, but they preferred to sling SIMs only, and fight for new customers (in a saturated market) crippling their own business.
Maybe it's also a lack of executives who could see beyond their nose?
"It's the same old issue.... a French company won't buy services from a German one, a German one from an Italian one, the Italian one from a Dutch one.... and this way no single comapny can grow large enough to become competitive."
They could follow the "big boys" and incorporate in Luxembourg or Ireland :-)
"Anywy, I wonder whyt a company like SAP didn't enter the full cloud market - and not only for its own products."
I'm somewhat familar with SAP's Private Bare Metal Cloud and the margins for that were great as it was "reassuringly expensive".
I don't think SAP in general as a company is geared up for higher volume/lower margin service offerings.
How is this an "honest" comparison when we are just beginning to see the sovereignty awareness and policy adjustments? It has only been six months since the worry really started to become problematic. Moving is not something you do in a day or two.
Check again in one and two years and see where the trend is going.
We also have a chicken and egg situation. Aka supply and demand. A real problem is the EU cloud operator's access to capital to build the megabillion DCs is more challenging than their US competitors. Without guaranteed demand/switches - even more difficult. And those of us who use EU operated clouds know that expanding supply can be problematic at times. US clouds are less risky in the short term.
As for data sovereignty , yes, CEO/CTOs know the issue. Just that it probably won't happen during their short tenure and that's all that counts. Bit like BP management. They know better than most about CO2 emissions and global warming. Just that switching now to fossil free is bad for short term profits, even existence (just as most mainframe manufacturers went out of business because they couldn't adapt). So just keep going and cross fingers.
And if my EU cloud provider was to grow too quickly I'd be nervous their management's ability to scale. And would I end up paying for it?
It's all too easy for those in CTO roles to continue to ignore the risk created by US owned cloud infrastructure. Let's face it, that's exactly what they have done for the last decade, despite all the evidence that the data they insist we put on other people's computers is far from safe or confidential. As long as they can collect some nice fat bonus payments for that yacht before they move on to the next job, that seems to be all they're interested in.
The UK is the last country I would be looking to for any solution here. They're more likely to just take a copy of your data before passing them on to the US. I'm cheerleading for Lidl at the moment. They have the reach and the cash to actually make something.
Sadly, the only thing that will wake up the EU's sleeping CTOs is a "significant event" like the US being caught red-handed with data which could only have been obtained by stealing it from a US company's cloud service. Or maybe the EU growing a pair and telling the truth about how secure and confidential all the data that companies donate to Microsoft, Google and friends really is. Transatlantic data sharing agreements have been repeatedly shown to provide insufficient protections to be compatible with the GDPR and it should be illegal to use US cloud services in the EU on that basis.
I'd also love to see Microsoft kicked out of Sweden. They get tax breaks to put their data centres here, whereas local Swedish companies get nothing. It's not as if Microsoft's data centres provide any significant benefits for Sweden - maybe 20 jobs are needed to oversee a data centre, but still the government thinks that depriving the Swedish tax payer of the money Microsoft should pay to run a business here is somehow a good deal.
And as for all these "analysts" telling us "it's too hard to switch" and that "AI is the future", I trust their advice less than I trust Microsoft's promises about the privacy of data harvested by their ad-slinging, user profiling "operating systems".
"The UK is the last country I would be looking to for any solution here. They're more likely to just take a copy of your data before passing them on to the US. "
I'd agree that the UK can offer no solutions, but you over estimate the competence, intent and organisation of the British authorities; The fundamental challenge is simply that land in the UK is too expensive, power is too expensive, planning too restrictive, and construction too slow. But what's it got to do with the UK? As things stand, much of EU hyperscaler demand is already served from an EU country (Ireland), and that country's data regulator turns a blind eye to anything the hyperscalers are doing by way of open dooring it all to the US.
Just pull a trump. 100% tariff on foreign cloud providers. Not enough, make it 200% then. And still not enough, get a dartboard with 200-20000% labels and throw darts until you hit a number that works. You don't really believe trump uses any sort of real analysis to the tariff number do you?
If the EU really wanted it, they could provide funding, subsidies, and require that foreign companies operating in the EU offer a local option with the same feature set as the US option.
They could, but right now they're trying to stop the orange manbaby from throwing a tantrum just because we want American tech companies to follow our laws rather than blithely ignore them.
Just waiting for France to get fed up enough to tell them to bugger off, because the EU doesn't have the balls.
@heyrick
"Just waiting for France to get fed up enough to tell them to bugger off, because the EU doesn't have the balls."
The EU cant afford it. They are already facing member countries rejecting them, by damaging economies further they risk greater rejection. The EU is already desperately overruling and interfering in elections while political figures and parties are being clamped down on for being popular.
codeberg.org is way better than GitHub, hosting in Germany, run by a non-profit organisation on their own servers. What's not to like ?
It's already far too late to undo the damage caused by transatlantic data theft, but I think there's a far more worrying side to the domination of cloud services in the EU by US companies.
A huge number of EU companies use Microsoft's Azure services to authorise and authenticate both people and devices on their networks. If you turn off Azure for the EU, it would bring the continent to a screeching, grinding halt with no simple way out. We now face the spectre of a US administration which refers to the EU as annoying parasites and which has proven itself to be capricious in its decision making and bullying in its relationships with the countries it once called allies.
We have set ourselves up to be blackmailed by an increasingly irrational superpower.
Ridding ourselves of this dependency will be painful, but it HAS to be done.
We are facing unwanted sweeping changes from all fronts, and the EU is not presenting any proof that they won’t just fall in line when the pressure is on. My understanding is that the EU just signed a non-free trade deal with the “leader of the free world” and that every year, EU representatives keep trying to implement privacy invasive directives requiring encryption-breaking client-side scanning dubbed “chat control” which we are all repeatedly having to fight off through the EU Parliament. There’s no sign of the EU offering any better privacy to the average business than what the US will, and there’s even less of an indication that the EU will respect the rights of individuals using cloud-powered services either. Besides that, there will never be any future free trade deal which doesn’t include letting US cloud providers run roughshod over any EU competition.
Those who really care will not want to use any cloud, and those who don’t… won’t want to pay extra to some EU-based cloud provider as long as there’s safe harbour agreements which tick regulatory boxes. Knowing all this, the EU should lean in more on returning to better computing models, leveraging the huge body of talent available throughout Europe to make that happen. More jobs for Europeans, more internal trade, less brain drain and no need to risk investing any funds on uncompetitive business ideas.
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