Moving across the pond? Top 3 things to consider when executing a land and expand strategy in Europe

27 October 2018

Last year, the European economy saw its strongest growth in a decade. A recent World Economic Forum list of 2018’s ten biggest economies includes four European countries; in fourth was Germany, with a $4.2 trillion economy, in fifth was the United Kingdom with $2.94 trillion, in sixth was France with $2.93 trillion, and at eighth was Italy with $1.18 trillion. As a result, Europe is seeing an influx of US organisations who are keen to ‘land and expand’ on the continent.

We were curious about the challenges these organisations face whilst they seek a passage into and across Europe, so we partnered up with 451 Research to survey 250 US- based IT decision makers whose organisations are investing in Europe.

As the findings of our study reveal, Europe is a popular choice for a myriad of different reasons.

For 30% of respondents, the main driver for a new or additional data centre in the European market is proximity to customers for improved performance and latency. We also found that macro affairs such as Brexit and GDPR were reasons for moving across the pond. Another 30% of organisations claimed that the GDPR drives their need for new floor space in Europe, while 22% said they need an additional site on the continent to overcome concerns around Brexit.

But beyond the reasons for investing in Europe, we found that many US companies face similar challenges when entering or expanding into Europe.

Based on this, here are three top learnings to help your business understand what it needs to consider before making the big move.

1. Give yourself enough time to identify suitable local partners

US companies entering Europe are taking part in a new competitive environment where cultures, laws and languages are often different and varied. For these companies, the technology journey typically starts with finding the right partners or service providers to collaborate with.

The problem is that this is not always easy and it can take longer than you might expect. Our study revealed that one of the main challenges organisations face is identifying suitable colocation providers. In fact, it was listed as the top concern for the companies about to deploy IT operations into Europe.

Before selecting a partner, leave enough time to consider the requirements your business will have for connectivity, security and cloud. Once you have done that and you’re ready, the best way to find partners is to seek recommendations for local providers. It’s important to take the time to sit down face-to-face to discuss everything and decipher their understanding of your business vertical’s requirements. As part of the face-to-face, it is also vital to understand the providers own technology roadmap and current partnerships and services.

2. Put a cloud management team in place

The word ‘cloud’ should be on top of your to-do list if your business is looking to expand into Europe. Even if it’s not on the agenda today, it will be in the near future thanks to its ability to enable fast entry into a market and fast replication of services -- if done with the right connectivity, security and provider in place.

The majority of organisations entering Europe for the first time tend to start by focusing on just one cloud platform to make life easier for themselves. However, there are other things to think about, like the company’s multi-cloud future and future requirements for seamless connectivity across platforms. You should look into what exactly you can and want to put in the cloud way before you actually do it.

There are many other reasons why cloud should be a top consideration and as one of our study respondents said: a move to cloud means that your business’ architecture and requirements “will be evolving forever”. That’s why we recommend that you prepare for having a proper cloud management team in place who can look after European requirements.

3. Security & regulatory compliance is different in Europe and should be handled wisely

Overwhelmingly, our research showed that nearly 72% of organisations find that security is either critically important (their first consideration) or very important (necessary). This is for good reason, as the way a business handles security and regulatory compliance will influence the success of its expansion project.

In Europe, just as in any other region, security is a never-ending concern that applies to all parts of the business. This means that organisations must carefully consider if they have the right functions in-house to properly manage security requirements, or if they are better suited to handing some security functions over to a third party, from the data centre to the network.

One of the best ways to tackle this is by seeking legal guidance early on in order to understand what data regulations and security issues you should worry about as a priority, and what others you can put in place once you’ve made the move.

In conclusion, these three considerations are meant to help you understand what your business can expect, so that you can prepare for a successful expansion into Europe. Many of the challenges we mentioned can be easily overcome by hiring a local team or working with partners with ingrained local know-how.

In the meantime, you can read our full report here to learn more about steps you can take to win in Europe, or just get in touch with us today to talk.