Understanding Gaia-X and The Rise of Sovereign Clouds

Political leaders are not renowned for their ability to agree. This is the case at a national level, let alone an international one. So, the fact that heads of state and policy makers across Europe see a need to build a pan-national capability for digital infrastructure and resilience means they must be onto something.

Political leaders in both France and Germany have recently spoken about the need for 'European champions' as an alternative to U.S. cloud providers. In September, French President Emmanuel Macron said, "The battle we're fighting is one of sovereignty … If we don't build our own champions in all areas — digital, artificial intelligence — our choices will be dictated by others." Similarly, German Chancellor Angela Merkel has previously expressed concerns about "digital dependencies" on the U.S. These are just two examples.

It is clear that, as the data economy becomes a vital interest globally, sovereign states need a digital capability that prevents them from becoming dependent on foreign organizations and operators for processing their own data. At its core, cloud sovereignty is about the emerging data economy and protecting and unlocking the value of national, corporate and personal data. It is a specific response to the realities of the growing importance of data privacy — from the citizen level, up. And there's a ton of market data that supports this. According to IDC, the European Cloud market is expected to grow from 53B€ in 2020 to 560 B€ in 2030 with more than 25% growth per year.

What's driving the need for sovereign clouds?

There are many reasons for the rising interest in Sovereign Clouds. First, you have the increasing dominance of hyperscaler cloud providers such as Google and AWS and the increasing reliance on these U.S.-based entities to hold valuable information. The Cloud Act is another, which permits the U.S. government to obtain this data. The increasing prevalence of sophisticated cyberattacks is also an issue. According to the FBI Internet Crime Complaint Center, in 2020, there was a 400% increase in reported cyberattacks. Apart from the stick, there is the carrot too. The economic stakes are massive (jobs, investment, value) due to strong demand for cloud services in Europe. So, while the concept of sovereign clouds is not new, it has taken on new meaning and importance recently.

Who owns the data?

Of course, the concept of who owns the data and how it is best used isn't necessarily straightforward. Take U.K. car registrations for instance. On the surface this data has value around people movement, automotive spend, carbon output and the like. But if this information is exploited to its potential through machine-learning tools it can inform a huge amount of decision making in both the public and private sectors. This is the point around sovereignty: It is the desire to create value from baseline data that flows back to the people for whom it will provide the most benefit.

But in a world of borderless commerce, the lines, regulations and requirements can blur. France, for example, has a national agenda where it requires data to be stored in the European Union. Germany requires localization either in Germany or the EU depending on the level of sovereignty in the background check of the data. But whatever the data, it's no longer just bytes on a hard drive but the lifeblood of future economic value that needs to be managed, protected and shared in a sovereign manner for Europe to exploit.

A name to remember: Gaia-X

From this complexity of data governance and data sovereignty has emerged the Gaia-X project. The Gaia-X project goes way beyond sovereign cloud but, as a concept, it is creating frameworks where different industries and groups can come together and share data. This is done not only in a structured fashion but in a way that actually aligns under clear guidelines that ultimately bring the value back into Europe. Both Gaia-X and sovereign cloud stand alone, each in its own right, but there is overlap when it comes to creating a trust ecosystem for the region based on gold-standard practices.

Gaia-X is facilitating new data spaces in which data can be shared within and between industries and could advance science, society and economies. Yet there is recognition of the importance of enabling market players to see the impact, too. The challenges of data portability, interoperability and common commercial and legal frameworks have different implications for different industries. That is where Gaia-X is helping participants come together to define use cases for their industries and to share information that can make industry data spaces possible. This is because they each have a responsibility to think about how that data is going to be used, where it sits, who can exploit it and how it can be combined to deliver a real economic opportunity for many years.

Investing in a data economy

Gaia-X and the sovereign cloud movement is at the doorstep. Just as policy leaders have invested resources for many years in developing national highway infrastructure or airports or port facilities to foster economic growth, they must now invest in building a data economy. We have the capabilities in terms of both diverse and capable cloud providers and underlying technology infrastructure to enable any nation-state around the world to have their own sovereign cloud. Europe will lead the way in enabling digital sovereignty through the Gaia-X framework, but there's no reason these efforts, if proven successful, won't spread beyond the walls of Europe.