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How can Ukrainian data centers (DCs) transform from their traditional colocation and IaaS models into competitive public cloud providers in the European market?
Ukrainian Data Center Landscape
The Ukrainian data center market today is undergoing gradual transformation: on one hand, it relies on a solid traditional infrastructure base, while on the other, it is taking its first steps toward transitioning to more service-oriented models.
Most Ukrainian commercial data centers focus on providing classic colocation services and server rentals. Companies like GigaCenter, United DC, and Kyivstar emphasize the physical characteristics of their facilities: reliable power supply, cooling, physical security, and high-speed internet connectivity.
These services allow businesses to host their own equipment in protected environments, which is a basic but necessary component of digital infrastructure. However, the model itself remains limited in creating added value: it focuses on operating “hardware” and does not encompass strategic, software-defined solutions.
Some Ukrainian providers are already beginning to offer public cloud services. For example, GigaCloud is developing a public cloud based on VMware and OpenStack, as well as GPU clouds for artificial intelligence tasks. However, the range of managed services often remains limited: even the GigaCloud Admin service is mostly perceived as extended technical support rather than a full managed services package that includes managing the client’s entire IT infrastructure.
This indicates that the Ukrainian market is still in a transitional phase: physical infrastructure exists, but the movement toward a full-fledged cloud service model is only taking shape.
Challenges and Barriers to Development. Despite having basic infrastructure, Ukrainian data centers face a number of strategic challenges:
Governments and businesses are increasingly oriented toward their own infrastructure, responding to geopolitical instability and the need to control data. Here, Ukrainian providers have a significant competitive advantage: resilience proven under wartime conditions. Infrastructure that has withstood shelling, outages, and cyberattacks has powerful symbolic and practical capital in discussions about business continuity.
This creates a unique narrative: Ukraine is not just a “risk zone” but a country with unique experience in supporting business during crisis.
There is significant and targeted international support for Ukraine’s digital transformation that can be used to finance the transition to public cloud. For example, the European Investment Bank (EIB) and the European Bank for Reconstruction and Development (EBRD) allocate funds for digital infrastructure and innovation in Ukraine. The EBRD, as the largest institutional investor in Ukraine, actively supports the IT sector and telecommunications, helping to enhance cybersecurity and modernise infrastructure.
Programs such as Horizon Europe and Digital Europe support projects related to critical infrastructure, cybersecurity, and artificial intelligence applications. Ukrainian organisations can participate in these programs on equal terms with EU partners.
Regulatory Factor: GDPR, DORA, NIS2
The EU sets very strict rules regarding data processing: more than 80% of companies feel significant impact of regulation on their operations. GDPR, NIS2, and DORA require complete transparency and localisation.
For Ukrainian providers, this is not only a challenge but also an opportunity: having certifications like PCI DSS, ISO 27001, and others, they can prove they are capable of meeting European requirements and sometimes even exceeding them. This positions Ukrainian players as an alternative to hyperscalers, which cannot always meet digital sovereignty requirements.
Technical Roadmap for Public Cloud
The first step in development for Ukrainian DCs is transformation into software-defined data centers (SDDC). This is an architecture where traditional resources—compute, storage, networks—are abstracted into software services and managed centrally.
This model allows deploying new resources in minutes rather than weeks, optimises infrastructure utilisation, and reduces operational costs. For Ukraine, this is a chance to transform existing physical infrastructure into a flexible cloud platform capable of scaling for various workloads and offering ITaaS (IT as a Service).
To establish themselves in external markets, Ukrainian providers need technologies that reduce time to market while providing control and scalability. Various solutions can be used here:
These products can become the technological foundation for Ukrainian DCs, helping create competitive services and enter the European market not just with “hardware” but with a ready-made product.
Ukrainian providers have a real chance to combine economic attractiveness with modern architecture. Using open-source software and standardised equipment allows offering services at competitive prices—similar to how European players like Hetzner operate.
The key task is to create a hybrid environment that will include IaaS, PaaS, and managed services. This will allow offering clients not just infrastructure but ready-made business solutions that meet European market expectations: security, scalability, regulatory compliance.
Managed Services as the Key to the European Market
Despite a strong infrastructure base, the key challenge for Ukrainian data centers remains the limited development of managed services. The vast majority of providers focus on infrastructure (colocation, server rental), while advanced solutions are presented more as technical support than as comprehensive management of the client’s IT environment. For example, GigaCloud offers “GigaCloud Admin,” but this service is often viewed only as extended support rather than a full MSP approach.
In this model, Ukrainian providers find themselves at a disadvantage compared to European competitors who have long moved away from the “utility approach” (equipment supply) to the status of strategic business partners. Managed services allow clients to focus on development by delegating operational risks to experts. This becomes a decisive factor for successful entry into the European market.
What Constitutes a Comprehensive Managed Services Portfolio
The experience of European MSPs shows that success is ensured precisely by a diverse and deep set of services. A typical portfolio includes:
These services build trust with European clients: the provider takes on part of the risks that directly affect security and business continuity. This is no longer an “infrastructure add-on” but a key part of the value proposition.
Cases from European and American providers (Cloudworks, OVHcloud, US Cloud) prove that managed services can transform clients’ business models. For example, US Cloud helped Caltrol achieve over 99% uptime, and the Catawba Valley medical system reduced critical incident resolution time from months to days by abandoning Microsoft Unified Support in favor of an MSP model.
These examples confirm: to be competitive, you don’t have to be a hyperscaler. Medium and even small providers can win through flexibility, personalised service, and transparency. For Ukrainian companies, this is a chance to combine already proven resilience and reliability of their infrastructure with high-quality, niche managed services for European clients.
Open Question: How to Create Added Value?
The Ukrainian data center market has not yet reached the maturity level of European competitors. However, right now a window of opportunity is forming: sovereign clouds, new regulations, and the need for resilience create a niche where Ukrainian providers can offer unique value.
The question lies in forming a value proposition that includes:
Otherwise, Ukrainian data centers will remain primarily an internal market for companies that already invest in Ukraine, while international players will choose more mature European infrastructures.
