Shift in German Companies' Cloud Strategies due to US Political Climate
Cloud strategy reevaluation by German firms in response to US policy change - Cloud Strategy Under Review by German Companies Due to US Policies
German firms have growing apprehensions about excessive reliance on foreign cloud services following developments in the US, according to the digital industry association, Bitkom. This includes major players like Microsoft, Amazon AWS, and Google, raising questions about their reliability.
A survey by Bitkom reports that half (50%) of German companies using cloud computing services are revising their cloud strategy due to US government policies under President Donald Trump. The study was conducted from mid-March to mid-May, surveying 604 companies with 20 or more employees.
Cloud computing enables users to access virtual services such as storage, software, or processing power via the internet without the requirement for owning or operating the necessary hardware or software. Providers offer these services from massive data centers that clients can utilize and pay for on demand.
Stranded Without Cloud Services
Alarmingly, nearly two-thirds (62%) of German companies would stop functioning without cloud services, as per the Bitkom survey. Additionally, 78% believe Germany is overly reliant on US cloud providers, and 82% advocate for more large-scale German or European cloud providers to compete with leading international players.
Bitkom President, Ralf Wintergerst, voiced, "Germany needs to break free from one-sided dependencies, including in digital infrastructure. This will be a key task for the new federal government." He recommended implementing a mix of international provider features with a "Made in Germany" security layer.
As per the Bitkom study, almost all German firms (90%) are already employed or exploring cloud services. The number using cloud applications has increased from 81% a year ago, with an additional 10% in discussion about adopting this technology.
Cloud Service Use on the Rise
Currently, 47% of all IT applications in the German economy are run from the cloud, up from 38% a year ago. By 2030, this share is anticipated to reach 58%. Moreover, the number of firms using less than 10% of their IT applications from the cloud will drop to zero within five years.
Additional Insights:
- German Cloud Strategy Evolution: To safeguard data sovereignty, Germany is actively promoting sovereign cloud initiatives. Companies are adopting hybrid strategies, incorporating German/European cloud solutions alongside international providers, to maintain control over data and operations while adhering to local regulations [3][4].
- Fostering Innovation: German companies, along with international partners, are aggressively investing in AI and cloud infrastructure, as observed in the collaboration between Deutsche Telekom and Nvidia on an industrial AI cloud for supporting manufacturers [5].
- Struggling with Strategic Risks: Dependence on US-based cloud providers can bring about strategic risks for European companies, as their technology and services might fall under US jurisdiction and political influences [2][3].
- The growing apprehension among German companies about relying excessively on foreign cloud services, notably those provided by Microsoft, Amazon AWS, and Google, is leading to a shift in their cloud strategies, as suggested by the digital industry association, Bitkom.
- The Bitkom survey found that 82% of German companies believe Germany is overly reliant on US cloud providers and advocate for more large-scale German or European cloud providers to compete with these international giants.
- The Bitkom study also reveals that Germany's dependence on US-based cloud providers can pose strategic risks for European companies, as their technology and services might fall under US jurisdiction and political influences.
