According to consultancy IDC, the investment in cloud services in the public cloud in Europe will reach the 148,000 million dollars in 2023and 258,000 million in 2026. This indicates an annual growth rate of 22% in the period between 2021 and 2026. The cloud sector that will register the most notable growth in investment in the area will be SaaS (Software as a Service). ).
This is due, above all, to the general economic situation, which means that companies have to adjust their budgets to the maximum. In addition, many are looking for tools that reduce time-to-market for products and allow them to speed up app creation. Therefore, despite the increase in investment in SaaS, it will be PaaS (Platform as a Service) cloud services that continue to register the strongest growth in the cloud.
The sectors that are going to invest the most in public cloud services continue to be those dedicated to professional services, banking and discrete manufacturing. Between the three of them, they will concentrate 36% of cloud services in the public cloud in 2023. Of course, the situation in Europe for the cloud market is complicated, since it is immersed in the effects of the war between Russia and Ukraine. This leads to, on the one hand, having high inflation, cost crises, growth in energy prices. This, coupled with geopolitical tensions in Eastern Europe, will increase the volatility of budgets, and changes in plans in companies and IT departments.
On the plus side, an increasing focus on more cost-effective IT solutions, hybrid working, and accelerating digital transformation will drive cloud investments, which will continue to grow.
Another change in the increase in investment in the cloud and its services is the explosion of data, and also of consumption, that many sectors are experiencing. Large-scale data raises concerns about data protection, security, and regulatory compliance. That is why European companies will continue to invest in the cloud.
They will also invest more in improving governance and security to comply with data privacy laws, among others, as well as with the digital laws of each country, and the region. This is leading to more companies and entities towards what is known as sovereign cloudwhich allows companies to be better placed to comply with European regulations.
Andrea Minonne, IDC UK Research Manageralso points out that “as the direct effects of the pandemic have dissipated, its indirect effects have evolved. Now these effects include skills shortages, high inflation, and potential recessionary scenarios. All of them will influence investments in technology. Despite everything, the focus on the cloud will continue, with companies using the cloud to lower IT costs. European companies will shift their efforts more frequently towards cloud solutions, which require lower capital expenditure than traditional IT solutions«.