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Building a sustainable European cloud, region-by-region
16 Sept 2021

Building a sustainable European cloud, region-by-region

Max Schulze
Max Schulze

A sustainable European cloud that can be open-source, fair, and create economic opportunities for all is possible – and it will soon become a reality. Such digital infrastructure will reflect European values, and provide a blueprint that others around the world can draw inspiration from to further develop their own digital economies. This is the third part in our three-part blog series exploring how to achieve this vision, which focuses on how to make a European cloud sustainable and who it will benefit. Read part one here, part two here, and a summary of all three on RIPE Labs here.

Our previous post introduced our blueprint for a sustainable, inclusive, and equitable European cloud. How should we go about realizing this vision, however? To begin, we cannot stress enough that building a cloud platform for Europe cannot be created in a top-down manner. It has to manifest in a bottom-up way from its individual regions and generate prosperity for local businesses. The digital transformation of businesses, governments, and society at large will require local ecosystems of knowledge and infrastructure.

What is needed to facilitate this vision, however, is a shared blueprint of how to enable local infrastructure and a path to interconnect these regions. We strongly believe that such a blueprint will consequently lead to an integrated European cloud platform that uplifts local economies and enables local digital transformation and innovation.

The blueprint is an opportunity to establish an infrastructure that is long-term oriented, with little-to-no environmental impact, with competitive pricing, and in balance with society. It is an opportunity to create a sustainable infrastructure for the digital age.

The blueprint is based on existing infrastructure and technology

As SDIA and its members and partners endeavor to develop this blueprint for regional cloud infrastructure, a key principle prevails: to build upon what is already there.

Across Europe lies sufficient data center facilities and sufficient real estate that can provide additional space. Some will need to be retrofitted to remove their environmental impact, but most can serve as the foundation. In other cases, existing real-estate can be utilized, integrating digital infrastructure with other development projects. Fiber-optic networks remain critical; since they are a choke point in many regions, governments need to invest in them and take action to close the gap between areas with robust and reliable fiber networks and those without.

Refurbishment and lifetime extension are the paramount principles of the blueprint for IT equipment and servers. Accepting that IT servers are commodities and that performance is more likely to be gained from virtualization and software-based scaling means that existing equipment can be used. It also requires a different pricing scheme, which takes into account the age and performance of the equipment. The main objective again is to reuse as much of what is already there.

Being able to connect regions together also requires a decision on the cloud platform technology that will be used across all regions. The software technology chosen for the blueprint must be open-source and license- and patent-free. The choice fell to Kubernetes, an open-source software technology that is already changing the way developers are building cloud-based applications today (for more information, check out this post on our blog explaining how it is the key to the second cloud revolution). By implementing Kubernetes in each region, ensuring the interoperability of the IT workloads and application becomes possible, and thus, the trading of infrastructure capacity as well.

A business model based on regional collaboration

The practical challenge of building a regional cloud is the one of upfront investment costs. Building a cloud platform from scratch requires large investments in facilities, IT equipment, fiber-optic networks, software development, and so on.

Based on the principle of building upon what is already there, however, we developed an alternative way of looking at the business model through the lens of SDIA’s strategy and our Roadmap: by getting companies across industry boundaries to collaborate.

A single data center operator, IT service company, IT hardware distributor, or fiber-optic operator will not be able to deliver a regional cloud platform – at least not without great expense. Therefore, if each of those actors would be willing to provide their service or infrastructure based on a profit-sharing model instead of an upfront investment, a cloud platform could be launched quickly.

A key bottleneck remains, though, and that is equipment. As most IT equipment, including network or server equipment, is not produced locally, either a regional refurbishment company should become part of the group or an international manufacturer should be included to provide access to refurbished IT equipment.

Operating, monitoring, and providing support is the role of the local IT service companies who are already trusted advisors to local, micro-, small-, and medium-sized businesses. They provide the applications and the management that is required by business and government customers.

These groups of companies collaborating to deliver a regional cloud platform would be the ones utilizing the blueprint provided by SDIA. Along with this blueprint, the group may develop its own differentiators and value propositions. Utilizing the blueprint, however, ensures interoperability and the implementation of sustainability principles from the get-go.

Government support to create a competitive regional market

Now, the true challenge for many IT hosting and managed service providers in the current market are the practices that are being deployed to gain customers. Most of them are only feasible with a significant amount of capital and the ability to sacrifice cash flow on a customer for up to one or two years. Take the example of startup credits – some cloud providers offer €100,000 of free cloud usage for a year, totaling more than €8,000 a month's worth of infrastructure. How does a small IT service provider compete? Even with better price, service, or overall proposition, it is difficult to compete with an essentially free service.

Here is where the government should play a key role: creating a competitive market, by either creating rules on the kind of incentives employed to gain customers or by enabling local, micro-, small-, and medium-sized businesses to match those incentives (e.g., through a government subsidy program). Such a subsidy can be aimed effectively, not at the cloud provider itself, but at companies undertaking a digital transformation or startups, giving them the freedom to choose any local provider and receiving cloud credits from their regional government. These credits are then spent locally, lifting and strengthening the local IT and digital ecosystem.

Ensuring that the regional market is competitive and that there are incentives for companies to buy local cloud infrastructure is a role that only government actors can fulfill. Moreover, it is a responsibility that is clearly within their mandate. Not coincidentally, such an approach clearly aligns with the European Commission’s and some European Union member state governments’ laudable competition and antitrust strategies, echoing attempts to safeguard the European market and uphold strong values throughout the EU.

Supporting a doughnut economy and startup valley

Given everything we have outlined above, where will we see the first regional cloud platforms emerge?

At the moment, SDIA is forming consortia within the cities of Berlin and Amsterdam to develop the first regional cloud platforms. They will be the first to implement the blueprints being developed by SDIA, including business models, software, and a go-to-market strategy. They will do so with the support of local governments as well.

Why Berlin and Amsterdam? Berlin has established itself as the startup hub for continental Europe, and it is a place where new technology is being developed as well as digital products, all being built on the cloud. Amsterdam is not far behind when it comes to startups. With its strategy to create a doughnut economy, meaning that most of what the city needs to run should be produced locally and sustainability, a regional cloud platform fits its vision perfectly.

What’s next?

We cannot meaningfully wrap-up this three-part series without outlining the next steps we plan to take. The main next steps include:

  • Further developing the blueprint
  • Setting up and piloting consortia within Berlin and Amsterdam
  • Identifying and reaching out to new partners in more European cities
  • Engaging with governments to develop the right policy support
  • Communicating the vision of sustainable local and regional cloud platforms

How you can collaborate with us

  • Join our Steering Groups, especially our Building a Sustainable European Cloud Steering Group
  • Join the SDIA and become part of a consortium
  • Build your own local group and utilize SDIA’s blueprint
  • Create awareness for local Cloud platforms

Contact us to learn more about it, get involved in our dedicated cloud Steering Group, and work on developing this blueprint with us together for a better, more sustainable European cloud.

This article was written and edited by SDIA. It is the third of a three-part series introducing our manifesto for a sustainable European cloud. You can read part one here, part two here, and a summary of all three on RIPE Labs here.

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