Cloud Security
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Security Operations
Europe Tries, Tries Again Amid Transatlantic Uncertainty
European cloud users love hyperscalers – but they’re all American. Microsoft, Google and Amazon Web Services together hold 70% of the European market, with local providers mustering a mere 15% collectively.
See Also: A CISO’s Perspective on Scaling GenAI Securely
That landscape could soon change in the face of geopolitical reality, as U.S. President Donald Trump’s second term inserts doubt into the transatlantic relationship.
With Trump’s White House painting European allies as weak and threatening them with new tariffs and even NATO withdrawal, European governments are taking the potential need for technological independence more seriously than before. “We are working together towards one goal: European digital sovereignty,” said German Chancellor Friedrich Merz – one of the continent’s most avowed Atlanticists – at an urgently-convened Berlin summit on the subject last month.
Most Western European CIOs and IT leaders now believe that geopolitical concerns will restrict their organizations’ future use of global cloud providers and boost their use of local alternatives, Gartner warned in November. But European organizations shouldn’t be holding their breath for the emergence of a new titan anytime soon.
“I believe Europe will never see a brand new hyperscaler,” said Gartner senior director Rene Buest. “It is more likely that one of the existing cloud providers become one when they are making the right strategic moves.” That seems a while off as, according to recent Synergy Research Group data, today’s biggest European players – SAP and Deutsche Telekom – can each claim only around 2% of the European cloud market.
Still, the European Commission and national governments alike are scrambling to prepare the continent for the possibility of a U.S. service shutoff.
Some of this can be seen as an extension of an earlier drive for “data sovereignty” that resulted from the revelations of Edward Snowden a dozen years ago. The NSA whistleblower showed the world how foreigners’ data was vulnerable to being hoovered up by American intelligence, if it was stored on the servers of US tech firms.
With the German government reacting particularly strongly to Snowden’s leaks, the likes of Microsoft and Google set up “sovereign cloud” projects with local tech giant T-Systems, offering services under German control and isolated from the providers’ domestic operations. But that isolation limited the cloud’s utility and, with the German clouds also proving more expensive, the initiatives never took off.
Then, in 2019, the German and French governments spearheaded a sovereign-cloud scheme called Gaia-X that was supposed to bring together dozens of providers from the countries to effectively create a European hyperscaler. Gaia-X still exists, but it hasn’t managed to produce much more than a federated secure standard for data infrastructure.
As a recent Politico analysis noted, much of Gaia-X’s failure was down to differing French and German ideas of what cloud sovereignty should entail. While the Germans have been happy to see the likes of Microsoft and Amazon getting involved in Gaia-X – as long as the keys to the data remain in European hands – the French prefer to promote local champions.
Some things haven’t changed. At last month’s digital sovereignty summit, French minister delegate for digital affairs Anne Le Hénanff highlighted an opportunity to build “a stronger and more resilient economy” through a buy-local mandate. “European and French in public procurement can be a powerful tool, especially when we see how our international partners are using it to support their own industry,” she said at the event.
Buest reckons a broader buy-European movement is imminent. “We hear this in our client conversations, and also current Gartner research shows that 27% of Western European CIOs will increase their focus on engaging with technology vendors based in their region in the next six months,” he said.
But a lot needs to be built before Europe can contemplate cloud independence. There are two broad European initiatives particularly worthy of attention right now.
The first is EuroStack, a concept introduced last year by academics and civil society groups. As the name suggests, EuroStack initiatives aim to create European alternatives – to both U.S and to Chinese tech – at all levels of the tech stack, from resources and chips through networks and cloud to software and AI. The concept is now regularly discussed in government circles and can boast industrial supporters such as Airbus and the Amsterdam Internet Exchange.
A European push to onshore AI chip production largely foundered when cash-strapped Intel scrapped plans for advanced European plants. But the European Commission has also funded 19 “AI factories,” essentially supercomputing facilities for European startups and SMEs, and is now preparing to throw 20 billion euros at the creation of five “gigafactories” – huge datacenters that can be used to train large AI models.
Applicants for this funding reportedly may include the Schwarz Group, Europe’s largest retailer. Schwarz, best known for its Lidl and Kaufland supermarkets, is an increasingly significant player in Europe’s tech sovereignty movement, having recently invested 11 billion euros in a new 200-megawatt gigafactory near Berlin that could house up to 100,000 GPUs.
“Cloud environments and data centers are fundamentally important for AI gigafactories and digital services as a whole,” said Buest. “This means that the growing demand for sovereign AI and digital services will drive demand for cloud environments and thus for sovereign clouds across Europe.”
Even with much-needed infrastructure being built, challenges will remain for European companies that want to switch away from U.S. hyperscalers. Cloud migration remains especially tricky despite the interoperability requirements of the EU’s recent Digital Markets Act antitrust law. Some in the EuroStack movement argue that changes to Europe’s copyright law are also needed, so people can build their own migration tools without breaking anti-circumvention rules.
According to Buest, Europe’s supply-chain gaps make hardware sovereignty a pipe dream for the foreseeable future, but independence in other parts of the stack – cloud, AI and software – is becoming more attainable. “Europe has more hidden champions and great technologies than the public is aware of,” he said.