Historically, US companies have been early adopters of new technologies, while European companies have generally lagged behind. The adoption of cloud computing technologies has not been an exception, although the situation has changed considerably in recent years.
According to him EMEA Evolve Data Study According to a report published by Cloudera, 92% of organizations in the region plan to increase the amount of data they move to the public cloud in the next three years.
Coming first does not guarantee success
The cloud has become a fundamental pillar of digital transformation projects promoted by both American and European companies, in practically any vertical.
Why did the United States manage to position itself at the forefront in the race for cloud adoption? Well, basically, because the main hyperscalers are American companies, so they installed their first data centers there. As a result, they first offered their solutions locally, achieving a certain penetration in the national market, before expanding abroad. For example, AWS launched its object storage service (S3) in the USA back in 2006, 4 years before landing in Europe.
Companies like AWS, Microsoft Azure, and Google Cloud were fortunate to have a large domestic market in which to grow. Back then, data sovereignty was not an issue, as data centers were located in the same jurisdiction as the companies’ headquarters. This was in contrast to Europe, where legal concerns about transatlantic data transfers arose and are still in focus today.
Europe begins the comeback
Despite this initial situation, there has been a notable change in recent years. Eurostat data reveals that in 2023, 45% of EU companies purchased cloud computing services, compared to 48% in the United States. This represents an increase of 4.2 percentage points compared to 2021.
But what has been the reason for this growth? Factors such as the slowdown in cloud adoption in the US or market saturation have led hyperscalers to opt for Europe. Announcements such as that of AWS and its sovereign cloud in Europe (AWS Sovereign Cloud) have allayed concerns about data transfers and privacy. In this regard, the European Commission has proposed that 75% of organisations in the territory use “cloud-edge” technologies by 2030.
Thus, it can be said that European companies and public administrations are benefiting from the maturity of the market, with vendors offering optimized products at lower prices, and fewer migration hurdles. These are certainly advantages of arriving a little later and learning from the mistakes of the previous ones. “early adopters”.
In the case of Spain, the trend is similar to the rest of European countries. Until a few years ago, none of the large hyperscalers had opened Cloud regions in Spain, but during the last two years we have been experiencing a real boom, where AWS, Azure, GCP and Oracle Cloud already have several Data Centers operating in national territory. Of course, these investments are in line with the business opportunity that is presented to these large companies. players cloud computing, with a technologically mature Spanish market and sufficient talent available to meet the challenges that arise.
But without a doubt, the most striking thing is the investment plans that the different hyperscalers have announced for Spain in the coming years, which will turn the country into the digital hub of Southern Europe. AWS is at the forefront in this regard, as they have announced the progressive investment of up to 15.7 billion euros over the next few years, with an estimated job creation of more than 17,000 positions (direct and indirect), and an impact on the GDP of 21.6 million euros. For its part, Microsoft plans to quadruple its investments in Spain in 2023, reaching 2.1 billion dollars by the end of 2025. Likewise, Oracle plans to invest 930 million until 2034 in a new large ‘cloud region’ in Madrid, with a focus on becoming the first “Sovereign Cloud” in national territory.
While migrating workloads to the public cloud can offer significant benefits in cost, agility and scalability, every organization is unique and in many cases some data needs to remain on-premise or in private clouds for compliance reasons, especially in highly regulated industries such as banking.
According to the aforementioned Cloudera study, 68% of organisations store data in a hybrid environment and 72% have a multicloud model, in which they work with two or more hyperscalers. It is clear that the complexity of systems and architectures in the European business fabric requires hybrid platforms for data management, so that organisations can get the most value from their data regardless of where the information is stored.
The race continues
The future of business is undoubtedly digital and therefore cloud computing will play an essential role, where we see how Europe in general and Spain in particular are significantly accelerating in this race for cloud adoption.
We are facing a crucial moment for European organisations to realise their full potential, with technological innovations ranging from generative AI, quantum computing or all that remains to be achieved with the Internet of Things (IoT). In this new space, the ability to take advantage of the transformative potential of these technologies will depend, to a large extent, on the agility with which organisations can manage data in these hybrid cloud environments.
