The cloud market in Switzerland

The past two years have created a new reality: to succeed in business, it is now more critical than ever to be in a position to respond quickly to change. Before the pandemic, the IT focus was primarily on cost savings and efficiency gains, but suddenly the challenge has been to enable new ways of working, concentrate on the digital user experience and maintain high availability of operations. On top of that, the numerous initiatives have had to be implemented with the already scarce number of ICT professionals. The new normal in the world of work and the demands of the market are influencing the strategic priorities of many companies. What does this mean for the cloud market?

The Swiss cloud market in 2022

Swiss companies, including those in highly regulated industries with particularly sensitive data, have accelerated their digitalization and cloudification. For example, the canton of Zurich recently announced that it would obtain Microsoft 365 from the cloud and thus gradually replace its existing on-premises services. Hyperscalers now have customers in the financial and pharmaceutical sectors as well, while the Federal Chancellery has been working since March 2022 on contracts for the procurement of public cloud services from five evaluated providers. 

Estimates by MSM Research indicate that cloud expenditure in Switzerland was already CHF 4.93 billion in 2021. According to the 2022 Swiss IT Study, only 5% of companies are not yet using any cloud services. Cloudification is also clearly noticeable among data center providers.

«High demand for cloud solutions and the increasing outsourcing of in-house data centers are driving our growth.»

 Roger Süess, CEO Green 
 

This has resulted in Green doubling its data center capacity in the last three years and constructing a new high-performance data center campus near Zurich. 

Drivers of the cloud boom

Companies have recognized the value of data as a resource and are consistently pursuing their digital strategy along the entire value chain, putting data and customers at the center and driving innovation. The cloud is creating the conditions for this – by fueling the speed and frequency of innovation, it is playing a key role in business success. Through fast, flexible service provision, for example, the cloud is ensuring the rapid development of new markets and a convincing user experience at all points of contact. It’s also serving as a catalyst and business enabler for new technologies such as AI, which can be easily integrated via public cloud provider marketplaces.  

The cost model is also impressive: the change from CAPEX-intensive in-house operation with high capital expenditure to a predictable monthly cost (OPEX) reduces the level of investment required. This, in turn, is consistent with an increasing number of IT strategies that no longer envisage the operation and maintenance of IT infrastructures within their own organization. With its as-a-service approach, the cloud is the right choice in this context, too.

The hybrid cloud is a reality; data location is a deciding factor 

The hybrid cloud architecture model is now in widespread use. A European IDC study showed that 81% of companies are already deploying a hybrid cloud architecture. This combines public and private clouds with in-house infrastructure – and usually colocation services from data center providers. Currently, 1% of companies are only using the public cloud, while the proportion opting for a hybrid mix is increasing. 

The leading hyperscalers, namely AWS, Google and Microsoft, now have a presence in Switzerland. Since 2019, they have been investing intensively in developing their Swiss cloud regions and attracting new customers. 

A Swiss data location remains an important criterion when choosing a provider. The 2022 Swiss IT Study showed that high data center security and data protection are crucial for 70.1% of companies. A Swiss data location plays a key role for 59.4% of those surveyed.
 
Companies are well advised to choose their data location with regard to availability and connection to public cloud providers. In addition to direct connections to leading cloud providers such as AWS, Google and Microsoft, Green also offers cloud solutions with AWS Outpost, Google Anthos and Microsoft Azure. 

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