Europe’s public cloud services sector is set for remarkable growth, with projections indicating spending will hit $221 billion by 2025 and skyrocket to $373 billion by 2028. This surge is being driven by the increasing adoption of Platform-as-a-Service , a key cloud model that offers businesses the flexibility and scalability needed to support evolving technology needs. As digital transformation accelerates across industries, organisations are increasingly turning to the cloud to optimise operations, enhance customer experience, and stay competitive in a fast-changing market.
The rapid shift to the cloud in Europe reflects broader global trends, but the continent’s unique regulatory environment and digital infrastructure make it a distinct market. The European Union’s strong data protection regulations, coupled with the region’s robust tech ecosystem, are fostering a growing demand for cloud services that prioritise security and compliance. Many businesses are particularly interested in PaaS offerings, which provide essential tools for building, deploying, and managing applications without the complexities of maintaining the underlying hardware infrastructure.
PaaS is expected to be a significant contributor to this growth, as companies increasingly favour flexible, scalable platforms that streamline the development process and reduce operational costs. IDC’s forecast suggests that PaaS spending will be one of the fastest-growing segments within the European cloud services market. The convenience and cost efficiency of PaaS are driving its adoption across various sectors, including finance, healthcare, manufacturing, and retail. As more organisations embrace cloud-native applications, the demand for these platforms is set to escalate.
Key players in the cloud industry, including AWS, Microsoft Azure, and Google Cloud, are already capitalising on this shift, expanding their offerings in Europe to meet rising demand. These providers are not only enhancing their PaaS capabilities but also focusing on providing tailored solutions that address the specific regulatory and data residency concerns of European customers. By establishing local data centres and offering greater control over data privacy, cloud providers are aligning their strategies with the increasing regulatory scrutiny across the region.
Beyond the big three, smaller regional players are also gaining traction, offering more specialised cloud services with a focus on compliance and sustainability. This competition is pushing larger companies to innovate, improving service offerings and driving down prices. European businesses are benefiting from this dynamic market, gaining access to cutting-edge cloud technologies while benefiting from increased vendor choice and competition.
Another driving factor in Europe’s cloud growth is the increasing focus on artificial intelligence and machine learning . PaaS providers are embedding AI and ML capabilities into their platforms, allowing organisations to leverage advanced analytics, automate processes, and enhance decision-making. This integration of AI into cloud platforms is transforming industries, providing businesses with powerful tools to optimise operations and stay ahead of the competition.
The shift to hybrid cloud models is becoming more prevalent across Europe. Many organisations are seeking solutions that combine the benefits of both public and private clouds, allowing them to balance the scalability and flexibility of public cloud services with the security and control of private infrastructures. This hybrid approach is especially popular among industries with strict compliance requirements, such as finance and healthcare, where data sensitivity is a top concern. As hybrid cloud adoption grows, the demand for PaaS solutions that support such models is expected to rise.
The European cloud services market’s rapid growth is not just a result of technological advances but also the strategic investments being made across the region. Governments and businesses alike are recognising the importance of cloud infrastructure for economic growth and competitiveness. Public and private sector partnerships are emerging to further enhance cloud adoption, particularly in sectors like education, public administration, and healthcare. These collaborations are enabling the development of cloud infrastructure that supports both innovation and security.
