New Franco-German cloud computing project to set standards – and challenge US market leaders

France and Germany are launching a new cloud computing platform intended to set joint European standards for cloud computing - and indirectly challenge the dominant American cloud providers.

“We [will] establish a set of rules and standards that will give a huge boost for the data sovereignty of the European cloud and edge users,” said German Economy Minister Peter Altmaier, at a 4 June launch of the project, called GAIA-X.

The system, starting early 2021, is intended to let Europeans use cloud resources from any supplier in the ecosystem and easily switch between providers without losing data, while offering complete transparency on who has access to the data. The difficulty of switching from one cloud provider to another has been a major factor locking in the dominance of the three main US cloud providers: Amazon, Microsoft and Google.

“This gives European users a freedom of choice, and it gives European service providers a huge amount of visibility and market opportunities,” said Altmaier.

However, with almost 70 per cent of the European market dominated by US big tech companies, this is easier said than done, analysts said. “If you look at the cloud market from a business point of view, it would be very difficult to exclude non-EU cloud actors,” said Candice Tran Dai, expert at the Global Foundation for Cyber Studies & Research. 

For now, the creation of the new European platform will be managed by 22 cloud providers and users from Germany and France, including ATOS, Bosch, and Siemens, through a non-profit soon to be set up in Brussels. The group will come up with clear regulations and engineering requirements for the platform, and then invite other companies from Europe and elsewhere to join the initiative.

“These founding members have volunteered to create and establish this association and its bylaws and other policies as a service for the future community of members,” said Gerd Hoppe, member of the executive board at Beckhoff Automation, on behalf of the group.

Tough competition

The project is the latest in a series of European efforts to challenge the dominance of US tech giants in the marketplace – for instance, through French proposals to impose a digital tax on US tech platforms. That sentiment has been reinforced by the COVID-19 crisis, which disrupted global supply chains and, to many European politicians, suggested their industries had become too dependent on companies outside their control. As a result, the German and French governments in particular are now pushing the notion of “tech sovereignty”.

“We are not China, we are not the United States, we are European countries with our own values and with our own economic interests that we want to defend,” said French Economy Minister Bruno Le Maire, speaking at the launch event.

Despite the fighting words, the creators of the project are not excluding the American companies from the effort – indeed, analysts say, it would be technically difficult to proceed entirely without them.  Both Amazon, the biggest cloud services provider in Europe, and Google have participated in GAIA-X technical working groups. And both are happy to continue to do so, their spokespersons said.

Microsoft, the second biggest provider in Europe, may also join. “We are in discussions about our participation and are convinced that we can ensure the appropriate technological architecture and meet the necessary operational principles and are looking forward to the opportunity to help strengthen Europe’s digital sovereignty through our contribution,” a Microsoft spokesperson said.

At its core, Tran Dai of the Asia Centre believes, the programme’s priorities are not to frontally challenge foreign competitors but to create a common technical framework for cloud services in Europe in line with European data protection rules and values. “It’s about standardisation and harmonisation,” said Tran Dai. But, other analysts said, that could also make it easier for new or small entrants in the European cloud market to get a better foothold.

Beyond Franco-German cooperation

The idea to establish a European cloud computing platform first came up in July last year following a conversation between Altmaier and German Chancellor Angela Merkel. In August, France joined the initiative. Almost a year later, GAIA-X is finally taking shape, and the two countries are calling it the first step towards establishing a European data ecosystem.

GAIA-X is “nothing less than a European moonshot in digital policy,” said Altmaier. Even the name suggests so, he added, alluding to Greek goddess Gaia, worshipped as the mother of life.

To make it truly European, France and Germany hope other European countries will join the initiative once the platform is fully set up. This will allow GAIA-X to expand and give way to EU countries establishing a joint data ecosystem.

“What we want to create is a federated data infrastructure that makes sure that European values… like openness, interoperability, transparency about the use of the data, and trust are ensured at all times,” said Boris Otto, executive director of the Fraunhofer Institute for Software and Systems Technology, and one of the people behind GAIA-X.  He believes these values are appealing to companies beyond Europe, suggesting that just like the GDPR was exported across the globe, “similar things will happen with Gaia X.”