European Hosted Hybrid IaaS Cloud

The KuppingerCole Market Compass evaluates hosted hybrid cloud services (private IaaS) delivered from within Europe, focusing on the trends shaping demand, required capabilities, and how vendors compare across security, deployment, interoperability, usability, and market standing. The segment targets organizations pursuing digital transformation while struggling with security, compliance, and the complexity of hybrid IT; despite strong market growth forecasts, estimates indicate only about 4% of enterprise workloads have moved to public cloud, largely due to regulatory and risk concerns.

Hosted hybrid cloud is positioned between traditional hosting and public IaaS: it provides standardized, portal-managed infrastructure (compute, storage, network) often on tenant-dedicated resources, with guaranteed geographic location and jurisdiction for data and processing inside a European provider’s data centre. A defining requirement is integration: tenants need documented, standardized management and connectivity to on-premises environments and one or more hyperscale clouds to enable hybrid operations while keeping sensitive or regulated workloads in controlled environments.

Major use cases include regulatory compliance, hybrid workloads, datacentre right sizing, low-latency workloads via co-location, and disaster recovery. Essential capabilities span access management (including MFA and privileged access), encryption and backup, vulnerability and network protection (e.g., anti-DDoS), compliance assurances (certifications, staff location/nationality, breach/legal request disclosure), and clear shared-responsibility models.

Vendor assessments highlight strong overall performers (e.g., OVHcloud, Rackspace Technology, Telefónica) and capability leaders: OVHcloud for EU privacy compliance, Telefónica for VMware-based hybrid deployments, Rackspace for right sizing and managed private cloud options, T-Systems for low-latency/edge integration, and City Network for “compliant innovation” backed by extensive certifications. The report also notes market shifts toward VMware-based common environments, limited OpenStack traction, multi-cloud management tooling, and emerging hardware “as-a-service” HCI/SDDC models.

• Only around 4% of enterprise workloads have currently been moved to the public cloud according to some estimates.
• Hosted hybrid cloud services covered are provided from within Europe and run in providers’ data centres in a European country.
• Inclusion requires EU/EEA/UK-based infrastructure availability, EU/EEA/UK-based support staff, and European-language documentation/support.
• Hyperscale cloud providers are excluded from the evaluated market segment.
• OVHcloud operates 30 datacentres globally, including 19 in Europe.
• Open Telekom Cloud handled more than 500 PB of storage and nearly half a million vCPUs in 2020.
• Open Telekom Cloud supports more than 100 million end users.
• Telefónica reported annual revenues of over 48 billion euros in the year ending December 2020.
• Claranet reports £440M annualised revenues, 10,000 business customers, and 2,500 staff.
• City Network’s public cloud spans 7 regions: Stockholm, Karlskrona, Frankfurt, Dubai, Buffalo (NY), and Tokyo.

• “Hybrid cloud hosting provides a cloud enabled infrastructure platform which consists of a pool of compute, storage, and network capabilities that tenants can manage through a self-service portal.”
• “Future growth is being limited by the need for compliance with local regulations and laws.”
• “These concerns have led to an intermediate form of service ‘Hybrid Cloud Hosting’.”
• “This provides greater flexibility than traditional hosting but greater assurance of regulatory compliance.”
• “The combination of hosted private cloud and public cloud can provide both flexibility and control where they are needed.”
• “An ideal solution would be a common management platform that covers all the cloud and on premises services and components.”
• “All customers of the CloudSigma platform are entitled to perform security, operations, and processes auditing in relation to the services provided.”
• “RackConnect® Global enables tenants to establish uniform network connectivity between multiple clouds and reduce transit and data-access costs.”
• “Open Telekom Cloud provides an important solution for customers requiring a European provider and conformance with European privacy and data processing regulations including those stemming from the Schrems II judgement.”
• “Cloud computing is essential for digital transformation and innovation, but that is not enough.”