How European Service Providers Differentiate from Global Cloud Platforms
By: Jelle Frank van der Zwet
Competition in the European hosting and cloud market is intensifying, and as the global cloud providers locate their platforms in Europe, local and regional service providers are adopting various strategies to differentiate and protect market share.
Global cloud providers are increasingly considered as the main competition in the eyes of local and regional service providers in Europe. According to our annual research of the European hosting and cloud market, 37 percent of respondents view global providers as their main competition, which represents a significant spike from last year’s response of only 13 percent.
Local and regional clouds have just as big of a role in the market to play as hyperscale platforms do, and by adopting strategies to differentiate, they are staying very relevant. As global providers continue to locate their platforms in Europe, local service providers choose not to compete with them head-on, but are improving upon their own offerings. In particular, they are focusing on customer service and product diversification to boost their appeal.
Focus on customer service
According to our survey, customer service came out as the most important method of differentiating from the competition, with 86 percent of respondents choosing it as an important strategy. This is where both ends of the spectrum agree – achieving excellence in customer service requires both time and effort. Local providers’ unique value-ads are investing in personnel who are able to understand customers’ needs and put in the face time to ensure customers are satisfied.
Diversification of the portfolio suite is also an important differentiating factor. Compared to last year, service providers are increasingly offering value-added services. Data sovereignty services in particular have risen sharply in prominence as governments impose stricter regulations. In Germany and Switzerland it is actually the number one differentiation strategy, chosen by more than 80 percent of respondents.
From our survey results, we see that the cloud and hosting market is evolving, with European cloud service providers feeling the pressure to compete with global leaders for business. However, rather than going head-to-head with them on price, they are strategically delivering more value through diversification of services. By doing so, these regional service providers are putting themselves in a healthy position for ongoing success.