Europe’s cloud service providers are overcoming market and regulatory hurdles through strategic partnerships with hyperscalers, ISG Provider Lens™ report says

Enterprises in Europe are experiencing faster, more secure and reliable cloud services through single-source providers—the direct result of partnerships between Europe’s cloud platform providers and global hyperscalers, according to a new research report published today by Information Services Group (ISG) (Nasdaq: III), a leading global technology research and advisory firm.

The 2024 ISG Provider Lens™ Multi Public Cloud Services report for Europe finds alliances between Europe’s cloud platform providers and the world’s hyperscale data center operators have quickly given rise to a seamless, scalable and stable cloud ecosystem using open-source infrastructure technologies, meeting the EU’s tightening standards for security and interoperability.

Ironically, that current ecosystem is being made possible by the same U.S.-based hyperscalers whose power and influence the EU’s Gaia-X regulatory framework was supposed to have tempered. Gaia-X was launched in 2019 to regulate data sovereignty for information considered confidential by EU member states.

“The idea behind the Gaia-X initiative was to drive European ownership of cloud and data center infrastructure,” said Matthias Paletta, ISG director, technology modernization, in Europe. “Instead, the EU’s strict requirements for data privacy and sovereignty have ended up constraining organizations purchasing Gaia-X platforms and services with respect to scalability and accessibility.”

Despite the legal and operational hurdles caused by the EU’s strict data sovereignty regulations, the region’s nascent sovereign cloud market is poised for growth, the report says. Prioritizing regulatory compliance, Europe’s enterprises continue to seek relationships with Gaia-X Association members, which share a privacy-by-design approach that fosters collaborative trust.

But institutions already accustomed to the agility and scalability offered by Google Cloud, AWS and Microsoft Azure are finding it difficult to discover a Gaia-X alternative that measures up. Google led the way in 2021 by forging separate partnerships with EU-based hyperscale providers T-Systems (a subsidiary of Deutsche Telekom) and Paris-based Thales. A year-and-a-half later, Google followed up with a partnership with Brussels-based Proximus, which serves both Belgium and Luxembourg.

Those partnerships led to competitive, single-source sovereign cloud services that offer the flexibility and adaptability Europe’s enterprises have come to expect, while adhering to EU regulations that now prohibit sovereign data from being hosted on public cloud infrastructure.

Migrating to these new sovereign cloud platforms remains fraught with difficulty for enterprises, says ISG. Compatibility issues with existing cloud and data center infrastructure require significant investments in new resources for integration, testing and interoperability. Additional requirements for localized data storage and processing may increase operational costs, and further limit flexibility for enterprises’ utilization strategies.

“Gaia-X has set new standards for data security and interoperability, thanks to the Association’s many members coming together around open-source technologies,” said Jan Erik Aase, partner and global leader, ISG Provider Lens Research. “Sovereign cloud providers will work with big public cloud managed service providers, navigating around Gaia-X to offer services at the level European customers have already come to rely on.”

For more insights into how international partnerships have remade Europe’s cloud services market in the wake of Gaia-X, see the ISG Provider Lens™ Focal Points briefing here.

The 2024 ISG Provider Lens™ Multi Public Cloud Services report for Europe evaluates the capabilities of 19 providers in the Sovereign Cloud Infrastructure Services quadrant. The report names AWS, Google, Microsoft, Oracle, Orange Business, OVHcloud, and T-Systems as Leaders in this quadrant.

In the area of customer experience, Persistent Systems is named the global ISG CX Star Performer for 2024 among multi public cloud service providers. Persistent Systems earned the highest customer satisfaction scores in ISG's Voice of the Customer survey, part of the ISG Star of Excellence™ program, the premier quality recognition for the technology and business services industry.

A customized version of the report is available from Amazon Web Services.

The 2024 ISG Provider Lens™ Multi Public Cloud Services report for Europe is available to subscribers or for one-time purchase on this webpage.

About ISG Provider Lens™ Research

The ISG Provider Lens™ Quadrant research series is the only service provider evaluation of its kind to combine empirical, data-driven research and market analysis with the real-world experience and observations of ISG's global advisory team. Enterprises will find a wealth of detailed data and market analysis to help guide their selection of appropriate sourcing partners, while ISG advisors use the reports to validate their own market knowledge and make recommendations to ISG's enterprise clients. The research currently covers providers offering their services globally, across Europe, as well as in the U.S., Canada, Mexico, Brazil, the U.K., France, Benelux, Germany, Switzerland, the Nordics, Australia and Singapore/Malaysia, with additional markets to be added in the future. For more information about ISG Provider Lens research, please visit this webpage.

About ISG

ISG (Information Services Group) (Nasdaq: III) is a leading global technology research and advisory firm. A trusted business partner to more than 900 clients, including more than 75 of the world’s top 100 enterprises, ISG is committed to helping corporations, public sector organizations, and service and technology providers achieve operational excellence and faster growth. The firm specializes in digital transformation services, including AI, cloud and data analytics; sourcing advisory; managed governance and risk services; network carrier services; strategy and operations design; change management; market intelligence and technology research and analysis. Founded in 2006, and based in Stamford, Conn., ISG employs more than 1,600 digital-ready professionals operating in more than 20 countries—a global team known for its innovative thinking, market influence, deep industry and technology expertise, and world-class research and analytical capabilities based on the industry’s most comprehensive marketplace data. For more information, visit www.isg-one.com.

Press Contacts:

Will Thoretz, ISG +1 203 517 3119 will.thoretz@isg-one.com

Philipp Jaensch, ISG +49 151 730 365 76 philipp.jaensch@isg-one.com

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