Summary: Germany and France plan to jointly develop a ‘secure and trustworthy data infrastructure for Europe’, with the hope that other European countries will join. The proposal comes from the German Federal Ministry for Economic Affairs and Energy and the French Ministry for the Economy and Finance.
Details: The project, codenamed Gaia-X, has been spearheaded by the German ministry, which has worked on it with representatives from local firms including Deutsche Bank, Deutsche Telekom and SAP. France has come on board having recently called on local tech companies Dassault Systems and OVH to come up with plans to break the dominance of US cloud providers.
Next steps: The proposal outlines steps to get the project underway quickly:
- Business Workshop, November 2019: to inform and get input from interested companies from both countries.
- Joint Working Group on Organisation and Governance: experts from both governments will meet before the end of 2019 to set up an organisational structure and governance for the project’s development, including determining potential uses for the infrastructure.
- Joint Working Group on Technology: experts from both governments will meet before the end of 2019 to set up a structure for discussing and developing the technological framework for the infrastructure.
- Joint Communication and Liaison: liaison with other EU members wanting to take part in the project and with the European Commission.
- Presentation: An event in Brussels in early 2020 to present the technical and organisational concept to the governments of other EU members.
Data protection: Germany’s data protection laws are already among the most stringent in Europe, if not the world, but it seems that may not be enough. The major cloud providers (AWS, Microsoft and Google) are all US companies, and the adoption of the US Cloud Act last year means they can be required to provide authorities with information they hold no matter where the data is stored physically. While there are some independent European cloud providers (such as France’s OVH and Spain’s Gigas), the biggest competition is coming from China (Alibaba, Tencent), where a similar law has been in place since 2017. The thinking is that physical infrastructure in Europe will ensure data sovereignty.
Broader aims: The concept is about more than data protection. The proposed infrastructure will include data warehouses and data pooling plus development of data interoperability. The aim is to create a ‘digital ecosystem’ that will enable European companies to easily and securely share data. Access to a wide pool of data should help companies of all sizes develop new products and services and improve existing ones, thereby boosting their competitiveness. And there may be another angle: Germany’s central bank has already issued a warning that moving data to the cloud will make it harder to monitor the financial industry. The early participation of Deutsche Bank in the project indicates the potential broad reach of a European infrastructure.
Angle: The project is in the very early stages and it is too soon to speculate whether other countries will be interested and whether an Europe-wide digital infrastructure can ever get off the ground. AWS has been quick to dismiss saying that a national cloud will lack scale and therefore weakens the benefits of cloud computing. It is not entirely wrong at least from the perspective of economics. But this appears to be a well thought out proposal that comes from the highest levels of government in two of Europe’s largest economies and with a concrete plan and rapid timetable in place. And it comes at time when concern about data privacy is mounting and the economic importance of data is becoming apparent. Add the significant geopolitical tensions globally and Europe’s other moves to try to break the dominance of US tech firms (although efforts to introduce an EU-wide digital tax have foundered, France has imposed its own, and Germany and the UK have indicated they could follow suit), and it may not seem so far fetched. It has at least a chance of becoming reality, even if just for the two countries proposing it. An interesting development that we’ll be keeping a close eye on. Even as this is developing, there has already been a push from cloud providers in France, for example, and some have taken up meaningful capacity in the Paris data centre market. It is not at a hyperscale level, but it will also be interesting to see to what extent a national cloud could impact hyperscale growth should it get momentum.
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