The Cloud Decision Looks Different in Europe
Your US-based SaaS vendor tells you to “just use AWS.” Your compliance officer says the data has to stay in the EU. Your CFO saw the Azure bill and wants an explanation for what “egress charges” means.
Welcome to cloud migration in Europe. It’s not harder than anywhere else. It’s just different.
Multi-cloud and hybrid strategies are now the dominant approach, with organizations distributing workloads across providers to avoid lock-in. But for SMBs, the real question is simpler: where do you put your stuff, and how much will it cost?
The Hyperscaler Pitch (And What They Don’t Tell You)
AWS and Azure offer everything. Machine learning services, managed databases, serverless functions, container orchestration, and hundreds of other services you’ll never use. The ecosystem is massive. The documentation is extensive.
The pricing is also deliberately opaque.
Azure’s pricing complexity causes unexpected bills from hidden costs like data egress and support tiers. AWS isn’t much better. A client came to us after their first AWS bill was 3x what they’d estimated. The culprit? Data transfer between availability zones. Nobody warned them.
Google Cloud Platform is the third hyperscaler. Generally better on pricing transparency but a smaller enterprise footprint in Europe.
If you need the hyperscaler ecosystem (ML services, IoT platforms, global CDN), the cost is worth it. If you’re running web applications, databases, and basic infrastructure, you’re overpaying for services you don’t use.
The European Alternatives: Cheaper, Simpler, Sovereign
Data sovereignty is no longer just for government agencies. Finance, healthcare, and retail companies are actively prioritizing cloud providers that keep data under EU jurisdiction, operated by entities accountable to EU law.
Here’s what the European options look like.
Hetzner
German company, data centers in Nuremberg, Falkenstein, Helsinki, and Ashburn. Bare-metal and cloud servers at prices that make AWS look like highway robbery. A comparable cloud server costs 60-70% less than AWS EC2.
No managed Kubernetes (they offer a basic one), no machine learning services, limited managed databases. But for compute, storage, and network, it’s hard to beat.
Best for: web applications, databases, development environments, anything that doesn’t need managed ML services.
OVHcloud
French-owned, EU-hosted, with data centers across Europe. More services than Hetzner, including managed Kubernetes and a broader IaaS portfolio. Pricing is competitive and predictable.
Best for: companies that want more than Hetzner offers but don’t need the full hyperscaler stack.
Scaleway
Also French, operating entirely within EU jurisdiction. Strong on developer experience and modern infrastructure. Good Kubernetes offering, object storage, and serverless functions.
Best for: developer-friendly teams that want a European provider with a modern feature set.
The Hybrid Approach (Usually the Right Answer)
You don’t have to pick one provider. Most smart setups use a combination.
Run your sensitive customer data on a European provider where you control the jurisdiction. Use AWS or Azure’s AI/ML services through their APIs when you need capabilities that European providers don’t offer. Keep your development and staging environments on the cheapest provider that meets your needs.
One e-commerce client runs their storefront and customer database on Hetzner. They use AWS S3 for static assets (CDN distribution) and Azure’s cognitive services for product image analysis.
Monthly infrastructure cost: EUR 1,200. The same setup on AWS alone? Roughly EUR 3,500.
The key is keeping your architecture portable. Containerize your applications with Docker. Use Terraform for infrastructure-as-code. Avoid proprietary services where open-source alternatives exist.
That said, don’t over-engineer the portability. If you’re using AWS Lambda extensively, you’ve made a vendor commitment. Own it and optimize for that platform instead of building elaborate abstraction layers.
GDPR and Data Residency: What Actually Matters
The GDPR doesn’t require your data to be stored in the EU. It requires adequate protection wherever it’s stored.
But practically, hosting in the EU is the simplest way to comply. You avoid the complexity of Standard Contractual Clauses, transfer impact assessments, and the ongoing legal uncertainty around transatlantic data flows.
AWS and Azure both have EU regions. Using eu-central-1 (Frankfurt) or West Europe (Netherlands) keeps your data physically in the EU. That’s usually sufficient for GDPR purposes.
Where it gets tricky: US-headquartered cloud providers are subject to the CLOUD Act, which can compel them to hand over data regardless of where it’s stored. For highly sensitive data (health records, financial data), a European-owned provider eliminates this concern entirely.
For most SMBs running standard business applications, an EU region on any provider is fine. For regulated industries, talk to your data protection officer first.
Migration Strategy: Don’t Boil the Ocean
The worst cloud migration strategy is “move everything at once.” The second worst is “re-architect everything for cloud-native before migrating.”
Start with lift-and-shift for your first workloads. Get them running in the cloud. Prove the infrastructure works. Then optimize.
A practical sequence:
Start with development and staging environments. Low risk, immediate benefit (no more maintaining local servers). If something breaks, nobody’s production is affected.
Then move non-critical production workloads. Marketing website, internal tools, documentation. These are easy wins that build team confidence.
Then tackle the core systems. By now your team understands the target environment. Your monitoring is in place. Your deployment pipelines work.
Leave the hardest migrations for last. The legacy database with 15 years of data. The tightly coupled system that talks to everything.
These need the most planning and the most experience, which you’ll have by the time you get there.
For the full context on modernization strategy, including how cloud fits into the bigger picture, read our digital transformation playbook. And for the specific patterns of moving off legacy systems, see our legacy modernization guide.
Cost Control: The Bills Always Surprise People
Set up billing alerts from day one. Every provider offers them. Configure alerts at 50%, 75%, and 100% of your expected monthly spend.
Tag everything. Every resource gets a project tag, an environment tag, and an owner tag. When the bill comes, you can see exactly what costs what.
Turn off what you’re not using. Development servers running 24/7 when your team works 8 hours? That’s 16 hours of waste per day. Use auto-scaling or scheduled shutdowns.
Reserve capacity for predictable workloads. AWS Reserved Instances, Azure Reserved VMs, and similar programs offer 30-60% discounts for 1-3 year commitments. If you know you’ll need it, commit.
Monitor your infrastructure with proper observability. Cost anomalies show up in the metrics before they show up in the bill.
One final note: don’t optimize costs before you’ve migrated. Get to the cloud first. Run for a month. Understand your actual usage patterns.
Then optimize. Premature optimization of cloud costs is just as wasteful as premature optimization of code.
Planning a cloud migration? Let’s figure out the right setup for your business. We’ll compare providers, estimate costs, and build a migration plan that doesn’t blow your budget or your timeline.
