Tech startups in Europe embrace AI
A new report from Cloudvisor (an Advanced Tier AWS Partner), in conjunction with PWC, found that over two-thirds of tech startups in Europe are already enjoying the benefits of implementing artificial intelligence (AI) in their software and practices, while another 58% intend to invest in AI in the near future.
Other insights from the report, Tech Trends: Current and Future Landscape of European Tech Startups, include:
- Adoption rate of emerging technology: 91% of startups surveyed state that they use one or more emerging technologies, with a priority on AI and Generative AI.
- Tech spending: 47% of tech startups have indicated no intention to change their investment in technology, while 11% have plans to increase budgets.
- Technology adoption drivers: Of those seeking to implement emerging technologies, 54% cited cost-effectiveness as a cause and 38% noted they were seeking a competitive edge.
- Web hosting landscape: AWS remained the preferred choice for web hosting according to 50% of startups.
The survey polled over 700 European tech startups in an effort to gauge future tech trends and investments in emerging technologies, such as generative AI, cloud hosting and advanced data analytics. A highlight of the findings centred around the use of AI for data analysis, with 67% already incorporating it and 53% planning to.
Additional findings can be found below, in more detail.
Adoption of emerging tech
Of the 91% of startups using at least one emerging technology, the majority placed an emphasis on AI – and in particular generative AI. And they weren’t only using it to generate text, images and videos: data, data analytics, big data, machine learning and 5G technology were also important areas.
Tech spending outlook
While funding in the tech startup ecosystem appears to have slowed, most of those surveyed remain steadfast in their technology investment plans. Of those polled, 47% indicate no change in their plans to invest (notably no plans to reduce investment), and 11% have raised spending caps.
Speaking about the findings in the report, Julius Gregorausaks of Cloudvisor said:
“It’s inspiring to see how resilient European tech startups are in the face of economic uncertainty. Even with the current challenges, 47% of startups have kept their technology investment plans steady, and 33% have even increased their budgets. This strong commitment to using technology for growth and innovation shows the unwavering determination of our startup community to keep pushing forward and seizing new opportunities.”
What drives technology adoption?
When asked what drove their desire to adopt emerging technologies, 54% of companies highlighted cost-effectiveness as their reason. 38% pointed to competitive advantage, with a nod to improved efficiency and market positioning. In general, organisations noted a desire to maximise the ROI of their tech spending and differentiate themselves from the competition.
Web hosting landscape
Of the surveyed, 50% of startups rely on AWS for their web and app hosting. Other options included Cloudflare Hosting with 27% of market share, Google Cloud with 12%, DigitalOcean at 6% and Microsoft Azure trailing the pack with 3%.
Speaking about the state of web hosting in Europe, Julius Gregorauskas, CEO of Cloudvisor stated: “The European startup landscape is complex and dynamic, focusing increasingly on emerging technologies like AI, ML and data analytics. Despite economic uncertainties, our report shows that many startups continue to invest strategically in technology to gain competitive advantages and drive efficiency.”
Adding to this, Linas Stankevicius, Senior Consultant of PwC Lithuania noted: “From web hosting to AI, big data and beyond, the findings of this report underscore the pivotal role of digital infrastructure and emerging technologies in steering startups towards digital excellence and success. Serving as a helpful resource for stakeholders across the startup ecosystem, this report empowers informed decision-making and could foster sustainable growth.”
Other, notable insights garnered from the report include the following details about the European startup ecosystem as it pertains to digital infrastructure:
- CMS provider: WordPress remains the content management system (CMS) of choice for startups, with 67% of market share. Webflow and Wix capture 24% and 5%, respectively, of the audience.
- Analytics and tracking: Google Analytics dominates with 45% of the market, with Hotjar trailing at a respectable 26%.
- CRM platform: 76% of startups rely on HubSpot for their customer relationship management (CRM). Salesforce comes in second place with 18% of the share.
- Support and feedback management: Zendesk commands 46% of the market for support and feedback management software, and Intercom follows close behind with 37%.
Worth a read
James Payne
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