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Cloud Services Gain New Momentum in Europe

Across European nations, more CIOs and CTO are investing in public cloud services that become the essential foundation for the design and delivery of innovative digital transformation projects.

Public cloud computing spending in Europe will reach $113 billion in 2022 and will double to $239 billion by 2026, growing at a 22 percent 5-year CAGR, according to the latest market study by International Data Corporation (IDC).

Investments in Software-as-a-Service (SaaS) will continue to lead most of the spending in Public Cloud in Europe in 2022, but Platform-as-a-Service (PaaS) will be the fastest-growing segment. In fact, PaaS enables digital business deployment via the quick testing and production of new software applications.

Public Cloud Market Development

Professional services, banking, and discrete manufacturing will be among the top spenders in public cloud services, absorbing almost 60 percent of the overall public cloud services spend in 2022.

Human-centric industries are adjusting their work policies to normalize remote working. This means that more attention to remote employee access to information will drive spending on cloud solutions.

Implementing digital-first and cloud-based strategies will continue to be a focus and the European public cloud service spend (excluding Russia) will grow 26.4 percent this year, showing that cloud computing services will be resilient despite the ongoing war between Russia and Ukraine.

Similarly, Russian investments in cloud solutions are expected to grow by 7.7 percent year-over-year in 2022, but with many companies pulling out of the country, growth will be slower than the rest of Europe.

“European companies want to automate their processes as they are experiencing market challenges including supply chain disruption and skill shortages,” said Andrea Minonne, senior research analyst at IDC.

According to the IDC assessment, companies will more frequently adopt cloud services to create a solid real-time data analysis foundation that supports business agility and resilience.

The public cloud has allowed the organization to focus on its core competencies while delegating the complexities of owning, operating, and maintaining the actual IT infrastructure to hyperscale service providers.

As a result, there is a flurry of innovation that is driven by the ability to put efforts into the development of new products and services without the constraint of organizations’ ability to fund and deploy them.

Companies are more frequently using public cloud services to upgrade and take their operations to the next level to streamline processes and strengthen the value they deliver to customers.

Public cloud service providers are extending public cloud services to network edge locations, and this is supporting additional investments in the enabling technology and associated applications.

Outlook for Public Cloud Applications Growth

Many factors are supporting whole new sectors, such as the government, to migrate to cloud-based IT solutions for security reasons. This transition is supporting the next wave of public cloud service adoption for industries that hadn’t yet made the move.

That said, I anticipate that as more European organizations adopt flexible working models, there could be additional Digital Workspace applications growth across Western Europe in particular. Europe continues to experience significant shortages of key IT talent with skills such as security and artificial intelligence.

Global System Integrators, and other IT solution providers, will help to bridge the technical talent gap and thereby enable more organizations to attain the skills they need to further support distributed workforce initiatives within the region.

Originally published at https://blog.geoactivegroup.com on July 25, 2022.

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David H. Deans

David H. Deans

Technology, Media, Telecom analyst, consultant, columnist