Europe is looking for alternatives to US cloud providers

Europe is looking for alternatives to US cloud providers

  • 25.03.2025 13:12
  • arstechnica.com
  • Keywords: AI, Market Growth

Europe is shifting away from US cloud providers due to concerns over privacy and data access under the Trump administration. European companies like Exoscale and Elastx are seeing increased demand as organizations seek more independent solutions. While some businesses have started transitioning, large-scale shifts remain challenging and time-consuming.

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Estimated market influence

Exoscale

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Exoscale is a European cloud service company that has seen an increase in demand due to concerns about US tech companies' influence under the Trump administration. They are benefiting from organizations seeking alternatives.

Elastx

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Elastx, another European cloud provider, is experiencing growth as businesses move away from US hyperscalers due to privacy and data access concerns.

AWS

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Amazon Web Services (AWS) is facing a potential loss of customers as European organizations seek alternatives in response to political concerns.

Google Cloud

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Google Cloud, along with other US cloud providers, is losing business due to European efforts to reduce dependence on American tech companies.

Microsoft Azure

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Microsoft Azure is experiencing a decline in demand as European entities seek to minimize reliance on US-based hyperscalers.

Context

Analysis of Market Implications and Business Insights

Key Facts and Data Points

  • Date of Motion in Netherlands: March 18, 2025
  • Signatories of Call to Action: Over 100 organizations
  • European Cloud Providers Seeing Growth: Exoscale and Elastx report increased demand for their services.
  • Website Traffic Increase: A website listing alternatives to US tech services saw a significant rise in visitors, with March net recurring revenue growth surpassing previous months.

Market Trends

  • Shift Toward European Alternatives: Organizations are increasingly seeking European cloud providers due to concerns over privacy and data access under the Trump administration.
  • Data Privacy Concerns: Worries about EU-US data-sharing agreements and the potential impact of the CLOUD Act on user data retention in Europe.

Business Impact

  • Revenue Growth for European Providers: Exoscale and Elastx are benefiting from demand, with Exoscale noting explicit concerns from Danish customers about US administration policies.
  • Strategic Migrations: Small businesses like SkunkWerks are moving operations to European providers, citing both privacy and tax considerations.

Competitive Dynamics

  • Challenges for US Providers: AWS, Azure, and Google Cloud face scrutiny over data control and encryption practices, with AWS refuting claims of customer migration but emphasizing sovereignty-by-design.
  • European Provider Limitations: European cloud companies struggle to match the scale and infrastructure of US hyperscalers, potentially hindering broader adoption.

Strategic Considerations

  • Migration Complexity: Large enterprises face significant challenges in migrating systems, including data volume (e.g., hundreds of petabytes) and long transition times.
  • Investment Needs: European cloud providers may require increased investment to compete with US tech giants, emphasizing the need for a "Europe-first" approach.

Long-Term Effects

  • Potential Market Diversification: A shift toward European alternatives could reduce global reliance on US tech companies, fostering greater technological independence in Europe.
  • Regulatory Impact: Changes in EU-US data-sharing agreements and regulatory actions could further drive the adoption of local cloud services.

Conclusion

The growing backlash against US cloud providers presents a strategic opportunity for European competitors, though challenges remain in scaling and competing with established hyperscalers. The long-term implications include a more diversified global tech market and increased focus on regional technological sovereignty.