Achieving a competitive edge in the cloud: a guide for software companies

Software businesses in Europe falling behind on cloud adoption risk losing out to faster-moving competitors. Here’s how they can catch up fast.

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Despite being home to some of the world’s most innovative software firms, Europe continues to lag behind the US in cloud adoption. This persistent gap is often attributed to North America’s larger domestic markets, deeper capital pools, and a tech culture that’s more tolerant of risk. To keep themselves in the running, European software companies must sharpen their competitive edge. Embracing the cloud can help significantly by providing a scalable platform for innovation, helping local software firms match the pace of their faster-moving rivals.

Migrate and modernize

The first step is to migrate your workloads to the cloud and modernize applications. Here, the right cloud partner makes all the difference. With AWS, businesses benefit from the largest, most secure, and reliable global cloud footprint that supports performance, compliance, and scalability across markets and geographies. AWS also offers a deep catalog of services tailored to software businesses, from automated DevOps tools to services that streamline SaaS operations. These services enable faster development, simplified deployment, and better life cycle management. AWS also supports software companies with flexible pricing models, access to third-party solutions through the AWS Partner Network, and built-in tools for tracking, forecasting, and managing costs. Lucanet for example transformed its 25-year legacy solution through AWS.

It’s like having a digital assistant who gets smarter every day and never sleeps, and because it all happens locally, it’s fast, secure and tailored to you.4 Steve Long, senior VP of Lenovo’s Intelligent Device group.

SaaS is central to the growth strategies of modern software companies. To succeed, businesses need a full transformation strategy. Start with a clear vision and business case, grounded in customer insight and market data. Align your structure, teams, and culture around SaaS principles such as continuous delivery, customer-centricity, and service agility. Next, build your product strategy, defining features, target personas, and pricing models. From there, move into launch mode with a go-to-market plan that drives acquisition, retention, and customer growth. Finally, focus on optimization. Use analytics to improve efficiency, measure usage, and fine-tune your offering. Partnering with AWS helps across these processes, providing access to a broad set of tools that help manage costs, enhance development, and integrate genAI for innovation at scale.

Grow with SaaS

Once your SaaS foundation is in place, it’s time to scale. AWS offers powerful go-to-market resources and routes to market that help software companies reach new customers and drive demand. Companies can also join the AWS Partner Network to access technical expertise, GTM support, and partner programs that are specifically tailored for software businesses. Meanwhile, through the AWS Marketplace, software firms can simplify procurement for customers while opening up a powerful new channel for sales and visibility. Finally, to boost marketing efforts at pace, organizations can take advantage of AWS Partner Marketing Central, a self-service platform offering ready-made campaign templates, customizable assets, and demand generation resources.

Scale your business

AWS, “Competitive Index Market Report for ISVs,” 2025 https://pages.awscloud.com/isvcompetitiveindex McKinsey, “The state of cloud computing in Europe: Increasing adoption, low returns, huge potential,” 2024 https://www.mckinsey.com/capabilities/mckinsey-digital/our-insights/the-state-of-cloud-computing-in-europe-increasing-adoption-low-returns-huge-potential AWS, “Competitive Index Market Report for ISVs,” 2025 https://pages.awscloud.com/isvcompetitiveindex AWS, “Competitive Index Market Report for ISVs,” 2025 https://pages.awscloud.com/isvcompetitiveindex AWS, “Competitive Index Market Report for ISVs,” 2025 https://pages.awscloud.com/isvcompetitiveindex AWS, “Competitive Index Market Report for ISVs,” 2025 https://pages.awscloud.com/isvcompetitiveindex AWS, “Forrester Study: Mining the generative AI gold rush,” 2025 https://aws.amazon.com/isv/forrester-genai-growth-strategy-study/ AWS, “Forrester Study: Mining the generative AI gold rush,” 2025 https://aws.amazon.com/isv/forrester-genai-growth-strategy-study/ AWS, “Competitive Index Market Report for ISVs,” 2025 https://pages.awscloud.com/isvcompetitiveindex AWS, “Competitive Index Market Report for ISVs,” 2025 https://pages.awscloud.com/isvcompetitiveindex AWS, “Competitive Index Market Report for ISVs,” 2025 https://pages.awscloud.com/isvcompetitiveindex AWS, “Competitive Index Market Report for ISVs,” 2025 https://pages.awscloud.com/isvcompetitiveindex AWS, “Competitive Index Market Report for ISVs,” 2025 https://pages.awscloud.com/isvcompetitiveindex Statista, “Leading software as a service (SaaS) countries worldwide in 2024, by number of companies,” 2024 https://www.statista.com/statistics/1239046/top-saas-countries-list/

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Accelerating to the cloud on AWS

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of software companies are still largely on premises

26%

of European businesses are not receiving the full benefits of cloud adoption

Source: McKinsey, “The state of cloud computing in Europe: Increasing adoption, low returns, huge potential,” 2024

82%

Source: AWS, “Competitive Index Market Report for ISVs,” 2025

In recent years, cloud computing has become a core driver of competitive advantage for software companies worldwide. According to AWS’s Software Company Competitiveness Index 2025, firms with higher cloud maturity report stronger business outcomes, such as higher valuations, faster growth, and greater customer satisfaction. Software companies aspiring to become industry leaders should therefore see rapid and wide-ranging cloud adoption as a critical business imperative.

The competitive imperatives of cloud adoption

46%

Cloud native

Cloud experimenters

60%

60% of cloud-native businesses exceed expectations on customer satisfaction ratings, vs. 46% of cloud experimenters3

81%

67%

81% of cloud adopters report revenue growth over the past 12 months, compared to just 67% of cloud experimenters4

Cloud adopters

Cloud experimenters

Cloud-first companies are 2X as likely to exceed expectations on valuations than cloud experimenters5

The key battlegrounds for software companies

Most software companies today focus their competitive endeavors on five core priorities: accelerating innovation, adopting AI, enhancing customer experience, refining go-to-market strategies, and optimizing deployment and pricing models. Product innovation is top of mind, with 72% of businesses actively gathering and acting on customer feedback through surveys and user testing to shape development.6 AI adoption is also advancing rapidly, with 63% of software companies having launched at least one genAI product in the past six months,7 and over half having increased their budgets for genAI development by more than 5%.8 Customer experience is another key area of focus. A full 75% of software firms now use AI to deliver enhanced customer support,9 while 72% are implementing continuous delivery and software updates to ensure faster and more reliable experiences.10 Meanwhile, deployment strategies are evolving at pace. As go-to-market models become more cloud native, 62% of software companies are adopting software as a service (SaaS) as a core part of their long-term strategy, leveraging cloud agility to scale faster and serve customers better.11

Meeting competitive priorities with the cloud

Cloud technologies can play a crucial role in helping software companies deliver on these pressing business needs by enabling innovation, accelerating AI adoption, and unlocking new market opportunities. AWS’s research shows that companies with higher cloud maturity levels consistently outperform their peers in adopting transformative technologies such as open-source application modernization, DevOps best practices, and microservices architectures. These sophisticated technologies directly support faster innovation cycles, as well as more resilient and scalable products. More mature cloud adopters are also better positioned to implement high-impact AI use cases. This advantage is often linked to the cloud’s ability to support rapid experimentation, prototyping, and access to cutting-edge AI services, all with the flexibility to scale as required.

71%

50%

71% of cloud-first businesses deliver experiences personalized around user behavior vs. 50% of cloud experimenters13

Cloud adopters

Cloud experimenters

63%

47%

63% of cloud-first companies are launching AI-powered products vs. 47% of cloud experimenters12

Cloud first

Cloud experimenters

AWS offers a rapid path forward for software companies looking to realize the value of cloud technologies and drive differentiation:

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Source: AWS, “Competitive Index Market Report for ISVs,” 2025

GenAI is rapidly reshaping software business models, but to unlock its full potential, companies need the right foundation and strategy. Begin by establishing a strong data foundation. Break down silos and enable secure, unified access to data. Next, prioritize use cases that will deliver measurable business outcomes. The AWS AI Use Case Explorer can help, enabling businesses to explore practical applications, access success stories, and quickly align teams on high-impact initiatives. Celonis has delivered AI Agents through Bedrock in their solution, saving their customers hundreds of hours. Celonis Transforms Process Intelligence with Amazon Bedrock AI. Finally, focus on scaling AI. AWS offers tools including Amazon Bedrock and AWS AI services that provide pre-trained models and scalable infrastructure, and which help teams accelerate development while reducing overhead.

Integrate genAI

By following these four pathways—migrating to the cloud, embracing SaaS, scaling with AWS go-to-market tools, and integrating generative AI—software companies can move faster, operate smarter, and gain a lasting edge in an increasingly competitive landscape.

Cloud migration is now a strategic imperative for software companies hoping to stay ahead in an increasingly competitive market. From enabling faster innovation and AI adoption to powering modern SaaS business models, the cloud is the foundation on which future-ready software companies are being built. However, success in the cloud depends heavily on selecting the right technology partner. AWS provides a clear advantage to software companies looking to modernize, scale, and lead. AWS stands apart from other cloud providers due to its deep technical expertise and strategic business support, offering software companies with value-adding guidance, programs, and services on top of its world-leading cloud infrastructure.

Choose the right cloud partner to take the lead

Download the 2025 Software Company Competitiveness Index to learn more

With the broadest portfolio of cloud services and technologies available, AWS enables software companies to build customized, future-proof modernization roadmaps. Meanwhile, hundreds of featured services support more efficient SaaS operations, while a suite of automated development tools streamlines the entire software life cycle. And with the world’s most extensive, secure, and reliable cloud footprint, AWS ensures software companies can meet the performance, compliance, and scalability demands of any market. For software businesses looking to hone their competitive edge, accelerate growth, and lead in the cloud era, AWS is best placed to help make that happen.

The shift toward SaaS-based customer propositions further illustrates the cloud’s strategic value. SaaS is now the largest and fastest-growing segment of cloud software, projected to make up over 50% of an expected $1.4 trillion in global software supplier revenue by 2027.14 Cloud-native SaaS models enable faster go-to-market, streamlined updates, and stronger customer engagement, making them ideal for long-term software strategies.