Europe’s Gaia-X looks to challenge Big Tech’s cloud dominance

A European collaboration aimed at challenging the cloud dominance of US Big Tech groups is gathering pace, in a move that its advocates hope will give companies on the continent more control over their data.

The proposed network of cloud computing and data services, dubbed Gaia-X, will be protected by EU laws and offer an alternative to US providers.

The impetus behind the development of Gaia-X was concern among lawmakers — notably Peter Altmaier, Germany’s economy minister, and his French counterpart Bruno Le Maire — that Europe’s automotive, healthcare and finance industries were handing over valuable cloud contracts and data to US companies.

“Organising the sharing of data [via the Gaia-X cloud] is of the essence to the future of the European industry,” says Hubert Tardieu, Gaia-X chairman. Siemens, Bosch, Deutsche Telekom and SAP are among the project’s corporate participants.

Rather than being a cloud platform, Gaia-X, which is still in the prototype phase, will function as a federated system: letting companies harness cloud computing and collaborate with partners, without being locked into single vendors.

Yet Gaia-X faces challenges — including the risk of creating a perception of European bias, and worries that the US cloud giants are too far ahead in the quality of their offering to be displaced.

Only 21 per cent of European companies have a broad adoption of cloud services, compared with 33 per cent in North America, according to data from IDC, the market intelligence group. Tardieu attributes this low uptake by European companies partly to fears over matters such as interoperability, portability and data control.

He believes a European-based platform could help financial institutions share data efficiently, which would aid their compliance with anti-money laundering regulations, allow healthcare organisations to share images and data, and improve communication between car manufacturers and suppliers to identify the origin of technical faults.

This is not a European versus a US issue. This is about having a freer and more open internet

“Organising data sharing is essential for the future of European industry,” Tardieu says. “No one is willing to go to the cloud if they cannot keep fundamental elements like portability of infrastructure, data and applications. They do not want to reproduce, 30 years after mainframe computers, being locked into US companies [again],” he says.

Tardieu stresses that Gaia-X is not about protectionism by highlighting the involvement of a number of international companies in the initiative — including Amazon Web Services of the US.

The initiative could also enable European companies to harness “edge” computing, which involves the processing of data close to its source, and can have applications in autonomous transport systems, or smart city infrastructures.

“The vast majority of data is now created at the ‘edge’, like stadiums, cars, retail outlets or factories,” says Johannes Koch, head of Hewlett-Packard in Germany, Austria and Switzerland. “It is not efficient to be sending it back and forth [between jurisdictions] and there can be regulatory compliance issues.”

Koch believes data produced locally should also be controlled and capitalised on by the company. “If you are in the shop floor or a factory, that data belongs to the manufacturer or the retailer, but can they use it? Who is monetising all that data?” Koch says that US tech giants “controlled the internet and collected all the data. Who is going to monetise all the new data [from the cloud]?”

Gaia-X could, through the rules and protocols it develops, strengthen Europe’s ability to shape digital regulation trends in cloud computing — much as it has in data privacy through the General Data Protection Regulation (GDPR).

But it must also offer compelling use cases to gain traction, especially for companies already working with cloud giants.

“As a developer using a cloud platform, it is very much about the ecosystem — the tools, the development environment and the stack of technologies that sit on top of something like [cloud service] Microsoft Azure,” says Chris Sainsbury, managing director of UX Connections, a UK-based consultancy. “Gaia-X will have to get the user offering right.”

Sainsbury says the offerings from US cloud giants are so compelling that Gaia-X may struggle to displace them. “The entrenchment of the existing tools is a challenge. It will come down to the toolset Gaia-X can offer — and the pricing,” he says.

Others believe European companies have an opportunity to shape the cloud era to be more user-controlled than the internet age.

“What is the alternative? The internet is controlled by maybe five companies and 20 or so data platforms. It is an oligopoly,” says Hewlett-Packard’s Koch. “This is not a European versus a US issue. This is about having a freer and more open internet.”