The cloud is no longer optional for most businesses; it's the engine driving innovation, scalability, and efficiency. But as an EU-based organization, have you considered where your cloud provider is actually based? While US tech giants dominate the global market, choosing a European cloud provider offers significant advantages, particularly concerning data privacy, sovereignty, and compliance. Let's explore why switching over to your ‘local’ EU cloud might be the smartest move for your IT services or even your business in general, if only for compliance reasons and long-term peace of mind.

Many of our clients have built their data and AI infrastructures on the leading world cloud, and coincidentally, US cloud platforms: Amazon Web Services (AWS), Microsoft Azure, and Google Cloud (GCP). These platforms offer a wide range of services and have become the conventional choice. However, given today's evolving geopolitical landscape, it's crucial to ask: is relying on US-based cloud providers the most strategic and secure path forward for European organizations?

Our clients are increasingly asking about potential alternatives. Concerns regarding data privacy and the influence of US laws are increasingly prominent, underscored by recent tech news and events. Even when data resides on servers within the EU, these US cloud companies still are governed by US laws. This potentially allows US authorities to access data of your clients and your own organisation. Furthermore, there's a risk that governments could impose sanctions that prevent you from essentially keep using essential services from US-based providers, possibly disrupting your business.

We believe it's time for European organizations to seriously explore the viable and increasingly competitive landscape of European cloud providers. This aligns with the broader EU initiative for digital sovereignty. True digital control means more than just having servers in Europe; it also means that the cloud provider is based and operates within the European Union, following EU laws and protecting against foreign interference.

• Enhanced data privacy: EU-based cloud providers operate under the strict data protection regulations of the European Union, including the General Data Protection Regulation (GDPR). This provides a stronger legal framework for protecting your data and ensuring your data remains under European jurisdiction.
• Reduced geopolitical risks: By partnering with EU cloud providers, you lower the risks associated with geopolitical tensions and the potential for non-EU government interference. The Dutch parliament has approved motions urging the government to decrease dependence on U.S. software companies due to autonomy and cybersecurity concerns. This aligns with the goals outlined in the Dutch Digitalisation Strategy (NDS) and recent government announcements regarding updates to this strategy.
• Potentially lower costs: Market observations and our internal analysis suggest that European alternatives can offer lower prices. A detailed cost comparison requires consideration of factors like managed services and API efficiency. However, our own internal deployment of a GenAI chatbot on Hetzner Cloud shows an easy potential for cost savings. The underlying technology, such as Kubernetes deployments, can be comparable in specifications and cheaper also based on our experiences. 
• European Digital Economy Support: Opting for a European provider helps foster the growth of the EU's own tech ecosystem, reducing reliance on non-EU companies and strengthening digital autonomy within the EU.

• Focus on open standards: Some EU providers, like Cyso Cloud and Open Telekom Cloud, are based on OpenStack, an open-source platform, which can reduce vendor lock-in, as discussed in the ACM's public market study on cloud services[1]. This commitment to open standards can foster greater transparency and control for users.

• Understanding Service Level Agreements (SLA’s) is crucial when evaluating cloud providers. A recent study by the ACM provides a comparative look at reported SLA’s [1].

  Some general conclusions as extracted from that study for only two cloud services we selected:

  • Managed SQL Databases: The three US cloud providers generally promise higher availability numbers on this subject regarding SLA's.
  • Dedicated Cloud compute/VM: The EU cloud providers are on par with the main three US cloud providers.
  It's crucial to review the specific, current SLAs offered by each provider for the services you intend to use, as they vary significantly across providers and might change over time. If really high availability needs to be guaranteed, there is always the option to architect the solution you need with special focus on this aspect.
  
  In an upcoming blog we will share our conclusions on the information we gathered from the EU cloud providers we selected for our research.

While some studies, like the ACM Cloud Market Study[1], indicated potentially lower SLA’s for certain services as offered by some EU providers, they might still offer more than enough reliability for those services. Always verify current SLA’s because they might change. And if needed you are free to design for supplemental higher availability in the systems that you need.

Regarding lock-in, developing cloud-agnostic solutions using tools like Docker and Kubernetes is a key best practice. The European Commission's Data Act and Digital Markets Act (DMA) aim to improve data portability and interoperability, further reducing switching barriers, as analyzed in the ACM study. You decide on which level you are comfortable buying into cloud provider services, and you are also free to implement cloud-agnostic deployments as much as possible.

However, lock-in remains a significant concern in the cloud market generally, and high egress fees charged by major cloud providers contribute to financial switching barriers, according to the same study. It notes that smaller providers like Oracle and OVHcloud often have significantly lower egress fees. Again, if egress fees are a substantial factor in your use cases, closely read and compare the SLA's that are offered.

The time to seriously consider European cloud alternatives is now. Prioritizing data control and reducing geopolitical risks can build a more resilient digital future. Exploring these options can also lead to cheaper solutions.

We are here to guide you. We offer expertise in assessing your current cloud infrastructure, identifying suitable European alternatives based on your specific needs, and developing a seamless migration strategy. We can also help you build cloud-agnostic solutions that provide flexibility and control over your data and applications.

Contact us today for a consultation and let's explore how we can help you transition to a European cloud provider that aligns with your strategic objectives and values.

In an upcoming blog we will dive deeper into a comparison of EU cloud providers where we will describe which cloud providers are worth considering and which are less suited for deploying data and analytics solutions on.

Reference: 

1. Market Study Cloud services, 05-09-2022, ACM, https://www.acm.nl/system/files/documents/public-market-study-cloud-services.pdf

Richard Kooijman

EU cloud topic lead & solutions architect at Xomnia