Breaking Away from the Cloud Giants: The German Movement
Cloud strategy reassessment by German businesses due to US policy changes
Berlin (dpa) - A growing concern among German businesses is their excessive reliance on foreign cloud services, particularly US-based providers like Microsoft, Amazon AWS, and Google. This unease stems from recent political developments, as identified by Germany's digital industry association, Bitkom [1].
A survey by Bitkom, conducted among 604 companies with 20 or more employees, found that half of these businesses (50%) are rethinking their cloud strategies due to the policies of the US government under President Donald Trump [1].
Cloud computing grants users access to various services such as storage, software, or processing power via the internet without the need for managing hardware or software [2]. Providers host these services in large data centers, and users can access and pay for them as needed.
Over-reliance on U.S. Cloud Providers
Almost three-quarters (78%) of German companies surveyed by Bitkom think their country is overly dependent on US providers, and over four-fifths (82%) advocate for the emergence of large, competitive German or European providers to challenge these global leaders [1].
Bitkom President Ralf Wintergerst stressed, "Germany needs to move beyond one-sided dependencies, including digital infrastructure. This will be a vital task for the new government" [1]. He suggested incorporating elements of international providers with a "Made in Germany" security layer to maintain trust and security [1].
Almost all German companies are either currently using or considering using the cloud, with 9 out of 10 companies (90%) currently using cloud applications [1]. In addition, a further 10% of companies are planning or discussing cloud adoption.
The Rising Tide of Cloud Adoption
Currently, 47% of all IT applications in the German economy are hosted in the cloud, with this number expected to reach 58% by 2030 [1]. By this time, no company will be operating less than 10% of their IT applications from the cloud [1].
Germany's ambition to lessen reliance on US cloud providers isn't new. Various initiatives are underway to promote homegrown or European providers, including:
- Establishing the Federal Ministry for Digital and Government Modernization (BMDS) [2]: Centralizing digital efforts helps advance Germany's digital transformation and reduces reliance on foreign technology providers.
- Investing in Digital Infrastructure [2]: Plans include modernizing digital infrastructure and expanding public data access through the German Administrative Cloud (DVC), fostering the development of domestic cloud services.
- Backing European Sovereign Clouds [3][4]: The AWS European Sovereign Cloud initiative will flesh out a sovereign cloud in Germany by the end of 2025, ensuring compliance with EU data residency regulations.
- Supporting the Digital Economy [4]: Focusing on technologies like AI, investments in digital skills and infrastructure aim to position Germany as a European digital leader.
Despite challenges, such as demographic issues and competing with established US cloud giants, the emphasis on digital sovereignty and infrastructure development marks a significant step towards lessening dependence on foreign cloud providers.
[1] dpa[2] Bundestag[3] AWS[4] Europäischer Wirtschaftsförderungsfonds
- In light of the unease among German businesses about their reliance on foreign cloud services, particularly US-based providers, there is a growing call for the emergence of large, competitive German or European providers in the technology sector to challenge the global cloud leaders.
- As cloud computing becomes increasingly prevalent in German businesses, with 90% of companies currently using cloud applications and the expectation that no company will be operating less than 10% of their IT applications from the cloud by 2030, there is a need to foster homegrown or European cloud services for both business and general-news interests.
- In response to the growing concern over over-reliance on US cloud providers, initiatives such as the establishment of the Federal Ministry for Digital and Government Modernization, investments in digital infrastructure, the backing of European Sovereign Clouds, and support for the digital economy are being pursued to lessen Germany's dependence on foreign technology providers in the field of finance, politics, and business.
