When Microsoft's Outlook and Teams went down this week, users across Europe found themselves locked out of their inboxes and meetings. The outage, which hit 74 countries, was a stark reminder of how much the continent depends on a handful of American tech firms.
“The episode shows once again the downside of depending so heavily on a handful of large US tech companies,” said Tommaso Valletti, professor of economics at Imperial College Business School in London and the European Commission's chief competition economist from 2016 to 2019.
Microsoft said there was no sign of a cyber attack but has not yet named a root cause. Services were gradually restored by Friday. It follows similar disruptions in January and August.
Europe's cloud dependency in numbers
Amazon, Microsoft and Google together control about 70% of the European cloud market, according to Synergy Research Group. European providers account for around 15%, down from about 29% in 2017. The largest, Germany's SAP and Deutsche Telekom, hold just 2% each.
That reliance extends beyond cloud: roughly 80% of Europe's digital infrastructure and technology comes from outside the EU, as previous reporting has shown.
Public opinion is clear. Most EU citizens want European-controlled digital infrastructure, according to the latest Eurobarometer survey. Support is highest in Sweden (94%), Finland (93%) and Denmark (92%).
Brussels pushes for European procurement
On Wednesday, MEPs presented their draft report on the Commission's proposed Cloud and AI Development Act. The report calls for public authorities to buy more cloud services from European providers.
“Our critical systems run on someone else's technology, and someone else can switch it off,” warned Dutch Green MEP Reinier van Lanschot.
Fears of a so-called “kill switch” grew in June, when Anthropic suspended access to its Claude AI models to comply with US export controls. Access was restored on 1 July.
The Commission also wants to triple the EU's data centre capacity within five to seven years. Bidding for up to seven EU-backed AI “gigafactories” closed on Thursday.
Who could take on the giants?
Europe has no single rival to Microsoft, Amazon or Google. Instead, it has contenders at different layers of the technology stack.
France's Mistral AI is Europe's best-known maker of AI models. It was valued at €21 billion after a €3 billion funding round led by Samsung in September.
In cloud computing, STACKIT, owned by the Schwarz Group (parent of Lidl and Kaufland), is building an €11 billion AI data centre in Brandenburg, Germany. In April, STACKIT and France's OVHcloud, Scaleway and Mistral were among the firms that won places on the Commission's own sovereign cloud contract, worth up to €180 million.
In hardware, Germany's Infineon is a leading maker of the power chips that run AI data centres. Analysts at this week's SEMICON Europa trade fair in Munich identified power chips as Europe's strongest way into the AI boom.
Will Europeans switch?
Willingness to pay more for an EU-based provider varies widely. Danes (76%), Swedes and Croatians (both 73%) are the most willing, while Estonians (35%), Bulgarians and Czechs (both 45%) are the least, according to Eurobarometer.
Businesses are cautious too. In a survey by the German digital association Bitkom, 85% of German companies said the country was too dependent on US cloud providers, yet 71% use one. Research firm IDC found that only 4% of European organisations plan to use local providers exclusively.
US firms are also adapting. Amazon Web Services launched its European Sovereign Cloud in Brandenburg in January, run by a separate EU-based company.
Synergy's chief analyst, John Dinsdale, has told CNBC that European providers will struggle to reverse their loss of market share.
What happens next?
Parliament committees will discuss the draft report on 1 December. A committee vote is provisionally scheduled for mid-March 2027, followed by a plenary vote in April.
Microsoft has said it will publish a report on the cause of the outage once services are fully restored.
