IaaS growth in Nordics and Benelux
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IaaS growth in Nordics and Benelux

Published 14/05/2020

IaaS growth in Nordics and Benelux

Getting specifics on the size of the infrastructure as a service (IaaS) market can be tricky. IaaS numbers are often bundled in with platform as a service (PaaS) figures, and the whole lot tend to be submerged with software as a service (SaaS) under the wooly, all encompassing term ‘cloud’. Confusing to say the least!

IaaS market growth

The general consensus though, is that all three segments are enjoying tremendous growth. Headline growth of the European cloud computing market is strong. The latest release of the Worldwide Semiannual Public Cloud Services Spending Guide from IDC expects revenues in 2020 to be $38.6 billion with a 20.8% five-year compound annual growth rate (CAGR). The same report notes that IaaS and PaaS revenues are forecasted to grow faster than SaaS, expanding their share of the overall market over the forecast period. IaaS (as distinct from the other two) is the supply of on-demand access to hardware resource, that can scale with enterprise needs - networking, storage and servers.

Growth in Nordic and Benelux regions

In the Nordic and Benelux regions in particular, IaaS is seeing significant traction. Forecasters expect the Nordic market to grow the quickest, in large part due to well designed government policy to support digitalization, improving internet connectivity, infrastructure, and the rising trend of IT outsourcing. The Finnish government, for example, have penned USD 451 million to support digital projects run by various state authorities between 2018 and 2022.   

The big cloud infrastructure providers are also making moves in the region. In May 2019, Google announced an investment of USD 670 million to build a cloud data center in Finland. The investment is aimed at expanding Google’s existing data center facilities in Finland for promoting the launch of its cloud gaming platform Stadia.

The Netherlands is also a standout performer in the region, where spend on cloud services as a percentage of overall IT spend, puts them in the top 4 of countries in the world[1]. One of the metrics that stands out is the adoption of cloud capacity in data centers. It has doubled year-on-year (from 10.8% at the end of 2017 to 19% by 2018 end). The market is dominated by Microsoft Azure (79.5%), with Amazon’s offering taking up 21.7% of the market. Looking at organisations with more than 50 employees though, the gap shrinks considerably, with a takeup of 15% for Microsoft Azure versus 4% for Amazon Web Services.[2] Interestingly, in hoc with their investment in Finland, Google will invest EUR 3 billion over the next two years to expand its server farms across Europe, including Denmark, the Netherlands and Belgium. 

What drives this explosive growth?

The drivers behind this explosive growth, are arguably sharpened by the impact of covid-19. CIOs and CTOs are well versed in the benefits of cloud computing underpinned by IaaS. The flexibility to rapidly increase or decrease hardware utilisation when experiencing rapid growth or seasonal capacity shifts, as well as the added security and disaster recovery benefits, all within the context of a reduced cost (pay-as-you-go) model, make the decision to shift to cloud very easy.

The new operating environment is also driving demand for IaaS in Europe across multiple vectors. Cloud-based business continuity tools and services are uniquely suited to equip enterprises navigating the current uncertainty, whether through facilitating the new found need to support remote workforces, or as part of the implementation of wider cloud transformation policies that are being expedited as a result of the crisis.[3] 

Certain sectors are also seeing spikes in demand as a side effect of European government policy directing citizens to self-isolate at home. As a result of which, spend on IaaS is expected to increase as e-commerce vendors, broadcasters and even governments (via new government gateways and portals) scale up their platforms to meet demand. 


As is evident, there is significant demand for cloud engineers across the Benelux and Nordic regions. The three big players duking it out from locality to locality tend to be either of Google (Google Cloud Platform), Microsoft (Azure) and Amazon (AWS). Cloud engineers with expertise in these technologies will be well placed to take advantage of the available opportunities as local conditions in these markets dictate. Long term demand still significantly outstrips supply in the workforce, which analysts feel could be hampering an already healthy growth rate in cloud computing across these European regions. In short, the market for top tier candidates is as fierce as ever.

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