Across the globe, cloud computing service applications are maturing and evolving as more C-level executives guide enterprise digital transformation strategies with their industry-specific business requirements. Moreover, the expectation is that cloud services will also comply with region-specific regulations.
IT infrastructure spending for public and private cloud computing in Europe, the Middle East, and Africa (EMEA) grew 19.5 percent year-over-year to reach $1.5 billion in revenue in the third quarter of 2016, according to the latest market study by International Data Corporation (IDC).
Cloud Market Development Trends
"IDC expects this market to reach a value of $10.9 billion by 2020, from the five-year forecast, or 35.4 percent of the total market expenditure. Fueled by increasing maturity and adoption rates of many new cloud-dependent technologies such as the Internet of Things (IoT), cloud continues to represent an area of tremendous growth for the European infrastructure sector," said Kamil Gregor, research analyst at IDC.
"In Western Europe, we are beginning to see not only specific solutions based on 3rd Platform and Innovation Accelerator technologies, but increasingly often innovative solutions that combine multiple technologies to harness unique value that none of the technologies could unlock alone," said Gregor.
For example, several emerging industry specific clouds in the region combine data from the IoT edge devices with real-time and Big Data analytics in sub-verticals -- such as advanced building automation, manufacturing asset management, and predictive maintenance.
Regulatory compliance is becoming an increasingly important inhibitor of cloud adoption in the region, mainly due to political volatility in the EU, both in 2016 and potentially continuing throughout 2017 -- partly influenced by issues related to the EU's General Data Protection Regulation.
Meanwhile. enterprises are looking into ways of mitigating these issues -- for example by taking blockchain technology from the world of financial transactions and applying it to automation of policy compliance in complex cloud environments.
Regional Outlook for Cloud Investment
Central and Eastern Europe, the Middle East, and Africa (CEMA) cloud infrastructure revenue grew by 17.8 percent year over year to $214.14 million in 3Q16, driven by investment in networking functionalities as Ethernet switch recorded the fastest growth.
The Middle East and Africa (MEA) region saw the strongest growth in EMEA, with many organizations investing in private cloud to consolidate and optimize their resources as IT budgets come under pressure due to challenging economic conditions in the region.
IDC analysts believe that private cloud deployments have been driving growth in the CEMA region as organizations that are consolidating their IT infrastructure seek greater flexibility, lower capex, and faster implementation over traditional IT infrastructure.