Why European Cloud Adoption Rates Are About To Increase Significantly

4 Min Read

European cloud adoption rates vary according to what source they come from and what criteria each source uses to rate cloud adoption. However, by looking at factors such as policy environments and skills availability, there’s little doubt European cloud adoption rates are about to increase significantly.

Earlier this year, an industry report claimed that Europe now led the world in cloud adoption. Quoting European cloud adoption rates of 84%, the report attributed the high rates to the number of businesses using Office365 but warned that, due to the low percentage of respondents using single sign-on tools, many businesses lacked the security mechanisms to protect data.

The high European cloud adoption rates listed in that report are in stark contrast to those that appear in Eurostat’s latest figures (Eurostat is the Directorate General European Statistical Office with the responsibility to provide statistical information to EU institutions). According to Eurostat, European cloud adoption rates are a more modest 21%. So why the wide margin?

In each study, different criteria were applied to what was considered “cloud adoption”. The industry report included the use of any cloud-based application, while Eurostat figures relate to the percentage of businesses using cloud computing services as a replacement for their own infrastructures.

Neither statistic represents true European cloud adoption rates

The two European cloud adoption rates mentioned above are extreme opposites. The first includes the use of any cloud-based application (Office365, Dropbox, WordPress, etc.), while the second only reflects the percentage of businesses who are exclusively operating in the cloud. True European cloud adoption rates lay somewhere between the two extreme opposites, but are difficult to quantify. 

Possibly the best way to identify the pace at which European businesses are adopting the cloud is to break down the use of cloud computing services and applications by purpose. Due to the way in which Eurostat reports its figures, it’s not only possible to list European cloud adoption rates by purpose and by member state, but also to compare them against adoption rates from two years previously in order to identify leading areas of cloud adoption:

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The increase in European cloud adoption rates is being driven by Germany and the UK—both of whom recorded a 45% increase in the number of businesses exclusively using cloud computing services between 2014 and 2016.

How policy environments are key to cloud adoption

The term “policy environment” relates to areas of national policy that matter most to cloud computing. These can include data privacy laws, national cybersecurity strategies, and intellectual property rights. But in respect to Germany’s and the UK’s high rankings on the scorecard, their positions are heavily influenced by net neutrality laws, national broadband plans, and average mobile data speeds.

Germany is in the process of creating the ideal environment for cloud computing—having recently announced $15 billion of digital infrastructure improvements which include gigabit broadband Internet connection speeds and 5G mobile connectivity throughout the country. Internet costs in Germany are among the lowest in Europe (about half those of the U.S.) and the country has the second fastest mobile broadband speeds in the EU at 24 MB/s.

The UK completed its national broadband plan ahead of schedule earlier this year and has announced a rollout of 5G mobile connectivity to sixteen major cities by the end of 2019. Other EU member states are also creating cloud-friendly environments. National broadband plans are being rolled out in stages across France, Spain, and Italy, while major digital infrastructure improvements are also underway across much of Eastern Europe. 

Why European cloud adoption rates are about to increase significantly

Based on Eurostat’s European cloud adoption rates of 21%, it’s likely there will be a significant increase in the number of European businesses moving exclusively to the cloud within the next five years. Not only due to improvements in digital infrastructure, but also because competition for European cloud business is increasing (reducing cloud computing costs) and businesses in the EU aren’t experiencing the same skills shortages as businesses in the U.S.

Amazon, Microsoft, Google, and IBM have recently poured billions of dollars into expanding their European data centers to cope with the anticipated increase in demand, while Alibaba just opened two new data centers in the U.K. The cloud service providers are also looking towards Eastern Europe because land is cheap and many skilled IT professionals live there. The supply of skilled IT professionals is a key factor in future European cloud adoption rates. Businesses regard skills shortages as a major obstacle to expanding their operations in the cloud and, whereas certified IT professionals from Eastern Europe are often outsourced, some multinational companies are setting up physical Eastern European operations due to the ease of management and an operational culture closely matched to that of Germany and the UK.

Consequently, even if the cloud computing markets in Germany and the UK stagnate, and improvements to the digital infrastructures of France, Spain, and Italy fail to attract businesses to the cloud, it’s still likely there will be a significant increase in European cloud adoption rates due to the evolving market in Eastern Europe. It might be difficult to quantify by exactly how much adoption rates increase, but the indications are that Europe could one day be leading the world in cloud adoption.

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CloudHealth Tech Staff, Cloud Tech Journalist

The CloudHealth Tech Staff team is made up of industry experts who report on trending cloud news, offer cloud management best practices, and compare products and services across the major cloud providers. As a part of CloudHealth, the CloudHealth Tech Staff come from all different backgrounds making them unique leaders in this industry.

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