It’s no shock that adoption of cloud computing has been on a steady rise across Europe in recent years, with 45% of companies in Europe using cloud computing services last year [1]. This trend is driven by the numerous benefits that cloud technologies offer, such as scalability, flexibility, and cost-effectiveness. However, as more European companies migrate their operations to the cloud, they face a new set of challenges, including managing complex infrastructures, ensuring security and compliance, and optimising costs.
Managing a cloud environment can be a daunting task, especially for organisations with limited IT resources and expertise. As companies adopt multi-cloud and hybrid cloud strategies, the complexity of managing these environments increases exponentially. This is where cloud orchestration comes into play. Cloud orchestration is the process of automating and managing the deployment and scaling of cloud resources and services. It enables organisations to streamline their cloud operations, improve efficiency, and reduce costs. The global cloud orchestration market has seen robust growth in recent years, expected to grow to reach $33bn in by 2028, from $16bn today, a growth rate of over 16% per year [2].
This growth can be attributed to several factors, including the rising demand for automation and optimisation of cloud resources, the need for compliance with ever more strict regulatory requirements, and the increasing complexity of cloud environments. As organisations seek to leverage the benefits of cloud computing while minimising the associated challenges, they are turning to cloud orchestration solutions to simplify and streamline their operations.
We can segment the cloud orchestration market into four key categories, each addressing specific aspects of cloud management and optimisation:
Infrastructure and Cost Optimisation
Infrastructure and cost optimisation focuses on managing and streamlining cloud resources to ensure efficient utilisation and cost-effectiveness. This involves provisioning, scaling, and monitoring cloud infrastructure to meet the changing needs of applications and workloads. By automating these processes, organisations can reduce manual intervention, minimise wastage of resources, and optimise their cloud spend. With SMEs in Europe spending 50% of their technology on cloud services [3], the savings can quickly add up.
A few notable start-ups in this category are Zesty, Cycloid and Cast, though companies are rarely pigeon-holing themselves to a single category. Zesty is a platform focused on reducing costs for cloud users while maintaining performance by dynamically allocating resources to the application most in demand. The company’s last raise of $75m has solidified its position as a leading player in the industry. Cycloid is also up and coming, which combines project development with cost control, allowing users to manage their cloud deployment optimally from the outset, who are reportedly now looking for their next round. Finally Cast, who help customers cut AWS, Azure and GCP costs by half, has just raised a $35m round.
Application and Service Orchestration
Application deployment and management is a crucial aspect of cloud orchestration, involving the deployment, management, and scaling of applications and services across various cloud environments. This category ensures seamless coordination between different components of an application stack, enabling organisations to deliver high-performance and reliable services to their customers. Two European start-ups, Garden and Cloudsmith, have made significant strides in this area. Garden, which closed a $16 million Series A in 2022, provides developers with a simplified platform for cloud-based application development. Meanwhile, Cloudsmith, which secured $12 million in funding 6 months ago, specialises in securely and cost-efficiently distributing software globally. In the US, Morpheus, who are speeding up deployment times and simplifying the workload of DevOps team globally, have raised $30m to do it.
Workflow Automation
As organisations manage an increasing number of services across the cloud, workflow automation becomes essential to streamline operations and reduce the risk of errors associated with manual processes. Automating and orchestrating complex business processes and workflows across multiple cloud services can save both time and money, ultimately improving efficiency. Camunda, a company that recently raised $98 million, is making waves in this category. Their platform offers a comprehensive solution for designing, automating, and monitoring business processes across different systems and services, simplifying the management of complex workflows in the cloud.
Security
Cloud orchestration plays a vital role in ensuring the security of data and resources across cloud environments. By implementing and managing robust security policies, access controls, and compliance requirements, organisations can maintain the confidentiality, integrity, and availability of their cloud assets. This is becoming increasingly crucial as more and more data migrates to the cloud. For instance, Link11, a company specialising in protecting IT infrastructure from DDoS attacks, has recently raised $28 million to further enhance its cloud security offerings. As the reliance on cloud services grows, the importance of comprehensive security measures in cloud orchestration cannot be overstated.
Untapped Potential in Emerging Markets
While the cloud orchestration market is thriving in Europe, these companies are overlooking the immense untapped potential in emerging markets, such as Africa. According to a report by GSMA, the adoption of cloud computing in Africa is expected to grow significantly, with the number of cloud users projected to reach 1.2 billion by 2025.
To put the opportunity into perspective, let’s compare the cloud adoption rates between North America and Africa. The North American cloud orchestration market is currently valued at $6bn [4], with more than 40,000 businesses employing over 250 employees [5], almost all of which have adopted cloud services in some form. In contrast, Africa has 6,000 companies with more than 250 employees, yet only 17% of them are fully on the cloud [6]. This represents a nearly $1bn opportunity that remains largely untouched by existing cloud orchestration players. This trend extends beyond Africa but can be applied to many other emerging markets.
Despite the size of this market, there are virtually no start-ups in Africa specifically focusing on cloud orchestration. For international cloud orchestration companies, expanding into the African market could offer several benefits including tapping into an untapped market with a rapidly growing demand for cloud services and establishing a pioneering foothold in the region.
On the other hand, native start-ups have a unique advantage in addressing the specific needs and challenges of the local market. With a deeper understanding of the cultural, economic, and regulatory landscape, they can develop tailored solutions that resonate within their regions. Moreover, by building a strong presence in their respective markets, these start-ups can position themselves as leaders in their region and potentially expand to other emerging markets in the future.
However, entering any emerging market is not without its challenges. The limited awareness and understanding of cloud technologies among many enterprises taking their first steps into the cloud can be a major hurdle. Organisations are still hesitant to migrate to the cloud due to concerns about data security, privacy, and sovereignty. Cloud orchestration companies must invest in education and awareness campaigns to help enterprises understand the benefits of cloud computing and how cloud orchestration can help them overcome the associated challenges.
Despite these challenges, the emerging markets present a significant opportunity for growth and innovation. As more enterprises embrace digital transformation and adopt cloud technologies, the demand for cloud orchestration solutions would be expected to rise. Cloud orchestration companies that can navigate the challenges and tap into this market early on are likely to reap the benefits in the long run.
Navigating the future of Cloud Orchestration
The cloud orchestration market in Europe is experiencing rapid growth, driven by the increasing adoption of cloud technologies and the need for efficient management of complex cloud environments. However, competition is starting to heat up.
The untapped potential in emerging markets, such as in Africa, presents a significant opportunity for both international and native players to establish a strong foothold and capitalise on the latent demand for cloud orchestration solutions. While there are challenges to overcome, such as limited internet connectivity and lack of awareness, these markets offer immense potential for growth and innovation on a scale as we saw in the early adoption phases in Europe and North America.
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