Public Cloud - Europe

Europe

Revenue in the Public Cloud market is projected to reach €168.20bn in 2024.
Software as a Service dominates the market with a projected market volume of €76.26bn in 2024.
Revenue is expected to show an annual growth rate (CAGR 2024-2029) of 18.15%, resulting in a market volume of €387.20bn by 2029.
The average spend per employee in the Public Cloud market is projected to reach €402.50 in 2024.
In global comparison, most revenue will be generated in the United States (€360.20bn in 2024).

Key regions: United States, Germany, China, Japan, United Kingdom

Definition:

A public cloud is defined as the digital infrastructure and computing resources that are managed by a service provider. Examples of public cloud computing resources include virtual machines, storage, and services, all of which are available for purchase with flexible (e.g., pay as you go and subscription) business models. Such payment options make it possible for customers to access, scale, and utilize resources as needed. Public cloud solutions make it possible for users to save on IT costs, increase their efficiency, and take advantage of advanced technologies without having to invest in long-term IT solutions. Public cloud service providers own and maintain the physical infrastructure, hardware, and software. Users only need to pay for the computing resources that they require. The Public Cloud market refers to the companies that provide these cloud computing resources and services to individuals, businesses, and organizations.

Structure:

The Public Cloud market is structured into five markets based on the type of service models provided by the companies.

The Infrastructure as a Service (IaaS) market covers the resources and services related to the data center infrastructure.
The Platform as a Service (PaaS) market covers the resources and services related to the virtual environments used for software development.
The Software as a Service market (SaaS) market covers the resources and services related to software applications that can be accessed via a web browser.
The Business Process as a Service (BPaaS) market covers the resources and services related to the various business processes such as finance and accounting, human resources, customer service, and supply chain management, all delivered through the cloud.
The Desktop as a Service (DaaS) market covers the resources and services related to virtual desktop environments, which are accessible from any device with an internet connection.

Additional Information:

The public cloud market comprises revenue, revenue change, average spend per employee, and key player market shares as key performance indicators. Only revenues that are generated by primary vendors at the manufacturer price level either directly or through distribution channels (excluding value-added tax) are included, and revenues generated by resellers are excluded. Revenues are generated through both online and offline sales channels and include spending by consumers (B2C), enterprises (B2B) as well as governments (B2G). Detailed definitions of each market can be found on the respective page where the market data is displayed.

Key players of the public cloud market include companies such as Amazon (Amazon web services), Microsoft (Azure), Google (Cloud), and IBM (Cloud).

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Analyst Opinion

The Public Cloud market in Europe is experiencing significant growth, driven by customer preferences for flexible and scalable IT solutions, as well as the increasing adoption of digital transformation strategies by businesses.

Customer preferences: Customers in Europe are increasingly looking for cloud-based solutions to meet their IT needs. The flexibility and scalability offered by public cloud services allow businesses to easily adjust their computing resources based on demand, without the need for large upfront investments in hardware and infrastructure. This is particularly appealing for small and medium-sized enterprises (SMEs) that may have limited IT budgets and resources. Additionally, the ability to access data and applications from anywhere, at any time, is becoming increasingly important in today's digital age.

Trends in the market: One of the key trends in the European public cloud market is the increasing adoption of Software-as-a-Service (SaaS) solutions. SaaS allows businesses to access software applications over the internet, eliminating the need for on-premises installations and maintenance. This trend is driven by the growing demand for productivity and collaboration tools, such as customer relationship management (CRM) and enterprise resource planning (ERP) systems. Another trend in the market is the rising popularity of hybrid cloud solutions. Hybrid cloud combines public and private cloud environments, allowing businesses to take advantage of the scalability and cost-effectiveness of public cloud services, while also maintaining control over sensitive data through private cloud infrastructure. This trend is driven by the need for organizations to balance the benefits of public cloud with data security and compliance requirements.

Local special circumstances: Europe is a diverse region with varying levels of cloud adoption across different countries. While some countries, such as the United Kingdom and Germany, have embraced cloud technologies and have a mature market, others are still in the early stages of adoption. This can be attributed to factors such as regulatory environments, data protection laws, and cultural differences.

Underlying macroeconomic factors: The growth of the public cloud market in Europe is also influenced by macroeconomic factors. The increasing digitization of businesses and the push towards digital transformation strategies are driving the demand for cloud services. Additionally, the COVID-19 pandemic has accelerated the adoption of cloud technologies, as businesses seek to enable remote work and ensure business continuity. In conclusion, the Public Cloud market in Europe is experiencing significant growth due to customer preferences for flexible and scalable IT solutions, the increasing adoption of digital transformation strategies, and the diverse market landscape across different countries. The trends in the market include the rising popularity of SaaS solutions and hybrid cloud environments. The underlying macroeconomic factors, such as the push towards digitization and the impact of the COVID-19 pandemic, are also driving the growth of the market.

Methodology

Data coverage:

The data encompasses B2B, B2G, and B2C enterprises. Figures are based on the money spent at manufacturer price level (excluding VAT).

Modeling approach / Market size:

Market sizes are determined through a top-down approach with a bottom-up validation, building on a specific rationale for each market segment. As a basis for evaluating markets, we use annual financial reports of the market-leading companies and reports from our primary research. In addition, we use relevant key market indicators and data from country-specific associations, such as GDP and level of telecommunications infrastructure. This data helps us estimate the market size for each country individually.

Forecasts:

In our forecasts, we apply diverse forecasting techniques. The selection of forecasting techniques is based on the behavior of the relevant market. The main drivers are the GDP and the level of digitization.

Additional notes:

The data is modeled using current exchange rates. The market is updated twice a year in case market dynamics change. The impact of the COVID-19 pandemic is considered at a country-specific level.