Ask HN: Why are there no big cloud vendors based in Europe?
Due to gdpr, the patriot act and such laws there should really be a demand for an eu based cloud vendor. Does it exist? And by that I mean a vendor with competitive solutions to for instance AWS.
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Most important, is the nature of Europe - it is densely populated, and all largest countries are separated by mountains or big water.
Because of this natural divide, Europe has not unified culture, non unified business regulations, and much less space to grow.
You could consider, US is 300 millions unified culture, and EU 500 millions, but divided to 3-4 most powerful cultures and tens smaller.
So when in US could be one very large company, in EU will be at least 4 different sub-companies for each large culture.
And unfortunately, Internet is business of largest possible scale, need large unified environment.
Example, how made films in EU in 1960s. Typically, films where made by international companies, and very normal was, when in one scene heroes speak on three languages, and than made dubbing to each country, where film exported.
- Hollywood that time already made direct sound tracks, without dubbing. And this was cheaper an faster.
And many languages is not only such difference, there are lot others, each add some costs.
Second important difference, most interest European countries are very densely populated, and land prices are high, but in least interest is not easy to make big data-center, because uncomfortable regulations.
Mean, not easy to find customers in for example, France, but place dc with their data in for example, Hungary.
So in Europe exists large gap for companies want to grow from small, like google at start, to big cloud, like current cloud companies.
Azure and GCP still bleed billions of $ despite all manner of accounting tricks (google includes Gmail in their cloud revenue!, Microsoft does something similar)
So far as I know AWS is the only profitable large scale cloud service. Probably because of their first mover advantage giving them scale (customers and products offered)
Note the cost of electricity Germany is the most in the world [0] compared with US prices [1].
https://www.electricrate.com/data-center/electricity-prices-... [0]
https://www.electricchoice.com/electricity-prices-by-state/ [1]
"Europe witnessed the birth of 85 new tech companies with a valuation of $1 billion or more in 2021, taking the total unicorns in Europe to 132, and registering a unicorn growth rate more than twice that of the US.
However, it should be noted that this does not mean that more startups became unicorns in Europe than in the US (there were 340 new unicorns in the US last year), but that the US growth rate was 124% from 2020 versus the EU growth rate of 400%, i.e. 17 new ones in 2020 and 85 in 2021. "
They have API-driven spinup and management of VMs, and that's just about the most modern thing they do.
Why, for instance, you would have to pay 60+% of your faang engineer salary as taxes in some countries?
Do you feel any freedom to choose where your money goes (as in “free market”?)
Or what would it take to fire an employee in France in comparison to US?
Would you as a startup founder at this moment feel the “invisible hand” or rather some politicians’ hands who decided everything for you?
With a FAANG salary the tax rate is pretty similar in California to the UK, Norway and Germany, working out between 42-46% on a $500k income. France is somewhat higher at 57%.
Silicon Valley FAANG engineers are paying almost 10% more in income tax than those in states like Washington or Texas without an income tax. So why did Silicon Valley grow up here rather than in those other states? At least in part it was the enormous public investment by the Department of Defense during the Cold War.
This is only taxes (income tax + employee share of all social taxes) visible to the employee. If you factor in employer share (which really really does not belong to the employer, it's really the "socialized" fraction of the employee's salary... yet it's not reported that way in France), then taxation in France is much higher (only second to Denmark, I believe).
So income tax is not what we should be looking at, but all mandatory withholding (even those that aren't named "taxes", though it is what they are!). The net effect is that 100K salary in the US costs 125K to the employer, whereas 100K cost more like 180K in France (use https://entreprise.pole-emploi.fr/cout-salarie/ to see this).. and of course the fraction retained by government goes higher if salary goes higher.
Not saying this is a bad thing, just pointing out that the comparison of income between US and France as shown in the media is really biased and underestimates the French situation.
Prior to the 2018 Trump tax changes, state income tax was deductable on federal taxes, with the only limit being AMT, so the effective tax rate was significantly smaller than federal bracket + state bracket. Now, the limit of deductability is so low, it's almost meaningless. I don't know that silicon valley is tax averse enough to move away though.
Im just pointing out why there’s no big hitech market there hence no demand for own local AWS.
I think, European slow mostly because what I said in another ans - too much competition between governments, and they must made much noticeable differences, for which could spend more taxpayers money.