European Cloud Providers: 50-80% Cheaper Than Azure with GDPR Built-In
European clouds (Hetzner, Scaleway, OVH) offer 50-80% savings over Azure. UK data centres available. Full GDPR compliance included.
European Cloud Providers: 50-80% Cheaper Than Azure with GDPR Built-In
US hyperscalers dominate the cloud market, but European alternatives have matured significantly. Our research found Hetzner, OVHcloud, and Scaleway offer 50-80% cost savings compared to Azure - with comparable features and built-in GDPR compliance.
For UK businesses, these European providers offer an interesting proposition: lower costs, data sovereignty options, and freedom from US data governance concerns. Here's what you need to know.
Why European providers are cheaper
The cost difference between European and US cloud providers isn't a quality gap - it's a business model difference.
European provider economics
1. Own infrastructure
Hetzner, OVHcloud, and Scaleway own their data centres and hardware. There's no markup chain:
- US hyperscalers: Hardware vendor → Cloud provider margin → Customer
- European providers: Direct ownership → Customer
2. Lower operating costs
European data centre locations (Germany, France, Finland) have lower real estate and labour costs than Silicon Valley or major US tech hubs.
3. Simpler service offerings
European providers focus on core compute, storage, and networking. Fewer services means:
- Less R&D overhead
- Simpler support requirements
- Lower documentation and training costs
4. Developer community focus
Marketing budgets are minimal. Hetzner, in particular, grows almost entirely through word-of-mouth in developer communities like Hacker News and Reddit.
5. No shareholder pressure for hyperscaler margins
AWS, Azure, and GCP are expected to deliver cloud profit margins of 25-35%. European providers operate on thinner margins, passing savings to customers.
Provider deep dives
Hetzner Cloud: the cost leader (£14-31/month)
Headquarters: Germany
Data centres: Falkenstein (Germany), Nuremberg (Germany), Helsinki (Finland)
UK data centre: No
Hetzner is the cost leader in our research - 82% cheaper than Azure for comparable configurations.
What you get for £14-19/month:
| Component | Specification | Monthly cost |
|---|---|---|
| Compute | CX21 (2 vCPU, 4GB RAM) | £4.68 |
| Database VM | CX21 for PostgreSQL | £4.68 |
| Block Storage | 100GB | £4.18 |
| Total | Self-managed stack | £13.54 |
Add Ubicloud managed PostgreSQL (+£9.48) or Syself managed Kubernetes (+£25) for a semi-managed experience.
Why Hetzner is exceptional:
- AMD EPYC processors: Latest generation server CPUs
- NVMe storage: Fast SSD performance included
- All-inclusive pricing: Traffic, IPs, and DDoS protection included at no extra cost
- 100% green energy: All data centres run on renewable power
- Transparent pricing: No hidden fees, no egress charges
Hardware comparison:
For £33/month, Hetzner's dedicated server (AX41-NVMe) provides:
- AMD Ryzen 5 3600 (6-core)
- 64GB ECC RAM
- 2x512GB NVMe SSD
- Unlimited traffic (1Gbps)
The equivalent Azure VM would cost £400+/month.
Trade-offs:
- No managed Kubernetes (k3s self-install or third-party Syself)
- No managed PostgreSQL (self-host or Ubicloud)
- Requires strong DevOps skills
- No UK data centres (Germany and Finland only)
Best for: DevOps-capable teams prioritising cost over managed services
OVHcloud: European leader with UK presence (£34/month)
Headquarters: France
Data centres: France, Germany, UK (London), Poland, and more
UK data centre: Yes (London and Gravelines)
OVHcloud is the largest European cloud provider and uniquely offers both European ownership and UK data centres.
What you get for £34/month:
| Component | Specification | Monthly cost |
|---|---|---|
| Kubernetes (MKS) | Free control plane + B2-7 worker (2 vCPU, 7GB) | £18.33 |
| PostgreSQL | Essential plan (1 node, 2GB) | £12.56 |
| Object Storage | 100GB | £0.84 |
| Container Registry | Integrated | ~£2.00 |
| Total | Managed stack | £33.73 |
Why OVHcloud stands out:
- UK data centre available: London presence for UK data residency requirements
- European ownership: French company - no US CLOUD Act concerns
- Free Kubernetes control plane: Save £58/month vs Azure AKS
- Strong open source commitment: Kubernetes, OpenStack, and other open platforms
- £175 free credit: Generous trial for new users
Post-Brexit considerations:
OVHcloud is well-positioned for UK businesses:
- UK data centres for strict UK data residency needs
- EU data centres for EU customer data
- Same provider, same tooling, different geographic options
Trade-offs:
- Interface can be complex (legacy portal alongside new UI)
- Documentation not as polished as US providers
- Support quality varies by tier
Best for: UK businesses wanting European data sovereignty without sacrificing UK data residency option
Scaleway: sustainable European innovation (£32/month)
Headquarters: France (part of Iliad Group)
Data centres: Paris, Amsterdam, Warsaw
UK data centre: No
Scaleway has carved out a niche as the sustainable, developer-friendly European option with innovative services.
What you get for £32/month:
| Component | Specification | Monthly cost |
|---|---|---|
| Kubernetes (Kapsule) | Free control plane + DEV1-M worker (3GB, 2 cores) | £11.00 |
| PostgreSQL | Production instance | £20.00 |
| Object Storage | 100GB | £0.84 |
| Total | Managed stack | £31.84 |
Why Scaleway is innovative:
- Sustainability commitment: 100% renewable energy, adiabatic cooling reduces power usage
- ARM instances: Cost-effective Ampere-based compute options
- Serverless containers: Run containers without managing clusters
- Edge computing: Serverless functions at the edge
- Transparent pricing: No hidden costs, 75GB free egress monthly
Developer experience:
Scaleway's API and CLI are well-designed. Terraform support is excellent. The console is modern and intuitive - a notable contrast to some European providers with legacy interfaces.
Trade-offs:
- No UK data centres (Paris is ~20ms from London)
- Smaller ecosystem than hyperscalers
- Fewer enterprise certifications than Azure/AWS
Best for: Environmentally conscious organisations comfortable with EU data residency
UK data centre availability
For businesses with strict UK data residency requirements:
| Provider | UK data centre | Nearest alternative | Latency to London |
|---|---|---|---|
| Azure | Yes (London, Cardiff) | N/A | <5ms |
| AWS | Yes (London) | N/A | <5ms |
| OVHcloud | Yes (London) | N/A | <5ms |
| DigitalOcean | Yes (London) | N/A | <5ms |
| Vultr | Yes (London) | N/A | <5ms |
| Hetzner | No | Frankfurt (Germany) | 20-30ms |
| Scaleway | No | Paris (France) | 15-25ms |
Important: 15-30ms latency is imperceptible for web applications. Unless you have specific compliance requirements mandating UK data residency, EU data centres are perfectly acceptable for most use cases.
Data sovereignty considerations
UK GDPR vs EU GDPR post-Brexit
Since Brexit, the UK has its own GDPR implementation (UK GDPR). The key questions:
When do you need UK data residency?
- Handling UK government data with specific residency requirements
- Contracts explicitly requiring UK-only hosting
- Certain regulated industries (though most accept EU adequacy)
When is EU data residency acceptable?
- Most commercial applications (EU has adequacy decision for UK)
- Personal data of UK citizens (EU GDPR provides equivalent protection)
- B2B applications without specific contractual restrictions
The EU adequacy decision:
The UK has an EU adequacy decision, meaning data can flow freely between UK and EU. EU hosting is legally equivalent to UK hosting for most purposes.
US cloud act concerns
The US CLOUD Act allows US government agencies to request data from US companies regardless of where that data is stored. This affects:
- Azure (Microsoft)
- AWS (Amazon)
- Google Cloud
If data sovereignty is a genuine concern for your organisation, European providers offer an alternative:
| Provider | Ownership | CLOUD Act exposure |
|---|---|---|
| Azure | US (Microsoft) | Yes |
| AWS | US (Amazon) | Yes |
| Hetzner | German | No |
| OVHcloud | French | No |
| Scaleway | French | No |
Note: For most UK businesses, US CLOUD Act exposure is theoretical rather than practical. Evaluate based on your actual regulatory and contractual requirements.
Migration path from Azure
Moving from Azure to a European provider is straightforward if you're using containerised applications.
What migrates easily
Container images: Work identically. Push to the new registry and update your deployment configurations.
Kubernetes manifests: Standard YAML works across all Kubernetes providers. You'll update:
- Storage class names
- Load balancer annotations
- Ingress controller configurations
Terraform configurations: All three providers have official Terraform providers. The migration involves:
- Writing new provider-specific resources
- Import existing state or recreate
- Test in parallel before cutover
What needs attention
Azure-specific services:
| Azure service | Migration approach |
|---|---|
| Azure SQL | PostgreSQL on new provider (or managed migration) |
| Azure Blob Storage | S3-compatible storage (all three providers support S3 API) |
| Azure Key Vault | HashiCorp Vault (self-hosted) or provider secrets |
| Azure CDN | Cloudflare (free tier) or provider CDN |
| Azure DevOps | GitHub Actions, GitLab CI, or provider CI/CD |
Active Directory integration:
If you're using Azure AD for authentication, you'll need alternatives:
- Auth0 or Okta (managed identity)
- Keycloak (self-hosted)
- Application-level authentication
Recommended migration approach
Phase 1: Assessment (1 week)
- Document all Azure service dependencies
- Identify compliance requirements
- Calculate target costs
Phase 2: Non-production migration (2-4 weeks)
- Migrate development environment first
- Validate functionality
- Refine Terraform configurations
Phase 3: Staging migration (1-2 weeks)
- Mirror production data
- Load testing
- Failover testing
Phase 4: Production cutover (1 day - 1 week)
- Blue-green deployment or DNS cutover
- Keep Azure running for rollback
- Monitor closely for issues
Phase 5: Decommission (after 2-4 weeks stable)
- Remove Azure resources
- Cancel reserved capacity
- Document lessons learned
Cost comparison: 3-year total
| Provider | Monthly | 3-year total | vs Azure |
|---|---|---|---|
| Hetzner (self-managed) | £14 | £504 | -84% |
| Hetzner (with managed services) | £31 | £1,116 | -66% |
| Scaleway | £32 | £1,152 | -65% |
| OVHcloud | £34 | £1,224 | -62% |
| Azure | £93 | £3,348 | - |
Over three years, switching to a European provider saves £2,000-2,800 for a single small application. For organisations running multiple applications, savings multiply accordingly.
Decision framework
Choose Hetzner when:
- Lowest cost is the absolute priority
- Your team has strong DevOps and Linux skills
- You can self-manage Kubernetes and databases
- EU data residency is acceptable
- You want the best hardware for the price
Choose OVHcloud when:
- You need UK data centre availability
- European company ownership matters
- You want managed services (K8s, PostgreSQL)
- Free Kubernetes control plane is attractive
- You're comfortable with a less polished UI
Choose Scaleway when:
- Environmental sustainability is important
- You want modern, developer-friendly tooling
- Innovative services (ARM, serverless) are appealing
- EU data residency is acceptable
- You value transparent, simple pricing
Stay with Azure when:
- Deep Microsoft ecosystem integration is required
- Specific compliance certifications are mandatory
- Your team has Azure expertise and certifications
- Enterprise agreements provide significant discounts
- Azure-specific services (Cosmos DB, Cognitive Services) are critical
Getting started
Hetzner Cloud
- Create account at hetzner.com/cloud
- Spin up a CX21 instance (£4.68/month)
- Install k3s for lightweight Kubernetes
- Deploy your containerised application
- Add Ubicloud PostgreSQL if needed
OVHcloud
- Create account at ovhcloud.com
- Claim £175 free credit
- Create Managed Kubernetes cluster
- Add Managed PostgreSQL database
- Deploy with Helm or kubectl
Scaleway
- Create account at scaleway.com
- Create Kubernetes Kapsule cluster
- Add Managed PostgreSQL database
- Deploy your application
- Configure object storage for media
Summary
European cloud providers offer a genuine alternative to US hyperscalers:
| Provider | Cost vs Azure | UK data centre | Best for |
|---|---|---|---|
| Hetzner | 82% cheaper | No (Germany) | Cost-focused DevOps teams |
| OVHcloud | 64% cheaper | Yes (London) | UK + EU data sovereignty |
| Scaleway | 66% cheaper | No (France) | Sustainability-focused orgs |
The 50-80% savings are real. The trade-offs - fewer managed services, less polished tooling, EU data centres - are manageable for many organisations.
If data sovereignty concerns you, European ownership eliminates US CLOUD Act exposure. If UK data residency is required, OVHcloud provides that option while maintaining European ownership.
The cloud market is no longer US-only. European providers have matured to offer production-ready alternatives at significantly lower costs.
Need help evaluating European cloud options?
We help UK businesses assess their hosting requirements and plan migrations to cost-effective alternatives. Schedule a consultation to discuss your infrastructure needs.
Related articles:
- Azure Alternatives: UK Cloud Hosting Comparison for .NET Applications
- Stop Paying for Kubernetes: 5 Providers with Free Control Planes
- On-Premises Hosting in 2026: Why It's 7x More Expensive Than Cloud
Last updated: January 2026
Cloud pricing changes frequently. We recommend verifying current prices on provider websites before making decisions.