As the reports concern, the cloud service market in Europe is expected to witness a huge rise by the year 2028.
The BDO report stated that the European cloud service is projected to witness significant growth at a compound annual growth rate (CAGR) of around 23 percent, which is expected to reach around 110 billion euros by the year 2028. So, this study is based on the sectors like infrastructure as a service (IaaS) and platform as a service (PaaS).
It is seen that the rapid growth of the European Union`s cloud services market has a great chance to witness more growth due to the ongoing migration to cloud computing, which will be beneficial to the companies in terms of cost savings and technical advancement. So, basically, the use of cloud services will reduce the huge investments of the company in IT infrastructure, and they will give more focus to the enhancement of the flexibility business.
IaaS stands for Infrastructure as a Service, and it provides businesses with key computing resources such as virtual servers and internet storage and enables all these together without any kind of physical hardware. On the other hand, PaaS means Platform as a Service, which provides an advanced form of pre-made framework to the developers for the build and deployment of the software. Its work is to simplify things with some built-in tools.
Lars Berger and Bart Receveur, members of the BDO`s M&A team in the Netherlands, have stated that the cloud global service market is anticipated to increase by sixfold by the year 2028 in comparison to the year 2020. The growth is fuelled by the changing policies of the companies, like shifting their entire system from traditional on-premises IT infrastructure to the cloud solution system to avail flexibility, reliability, performance enhancement, and efficiency, and also for dropping the IT expenses.
On the entire globe, the European Union ranks as the third biggest cloud service, followed by North America and Asia. As of the global trends concern, it is anticipated that in the future the PaaS sector might provide great results in comparison to the IaaS sector.
Acceptance of transformative technologies such as artificial intelligence, the internet, remote and hybrid work options, and virtual reality on time is the primary reason behind the significant growth in the case of companies. These allow every company to understand their own potential and explore a variety of cloud infrastructure solutions.
The Dutch tech M&A team`s leading partner, Maarten Kuil, has stated that there is a high chance that the PaaS sector is about to witness a rise of 54 percent from 44 percent of growth by the year 2028. So, basically, this growth might be influenced by the rising demand from companies that are involved in software development.
PaaS allows its users to build, test, deploy, run, update, and scale up the applications faster and in a cost-effective manner, as they had to develop and deploy their own on-premises platform, which is one of the major advantages of it.
It is seen that the dominance of American giant tech companies such as Amazon, Microsoft, and even Google in the European market is high, where they together control over 72 percent of the total EU market, while the European companies are struggling to compete even in their own region and have settled at a market share of just 13 percent.
Receveur has also stated that in spite of the growth of the cloud service revenues, European companies are behind in the tech race from the American giants as they lack resources and are unable to influence US-based vendors to make huge investments in them.
As a result, it is seen that the European cloud suppliers are now primarily focused on catering to the local customer groups with some basic needs, and they are collaborating themselves with the highly funded US-based cloud companies as partners.
As of the BDO`s report concern, the increasing cloud services market is anticipating to fuel up its interest rates from both the strategic investor and the financial sponsors, which will lead to a growth of M&A in the entire European colony, while the number of acquisitions in the European landscape and the active mergers has increased by 70 in 2023 in comparison to 21 in the year 2019.
As the small-based companies are aiming to increase their scale to compete with the large and market settlers, this matter of consolidation might be able to play a vital role in it. Berger has also stated that the European cloud service market has attracted the interests of private equity firms due to its recurring profits, which are higher than usual, and has growth potential. The private equity firms take portfolios of the cloud services companies as a base for the funding purpose; they usually use a buy and build strategy for it.
Link: https://www.consultancy.eu/news/10650/european-iaas-and-paas-cloud-market-to-double-by-2028
