Today Paul Miller, Tracy Woo, and I released our report that examines the market impact of the GAIA-X project. France and Germany announced an initiative in 2019, which was formalized as the GAIA-X Foundation in early October 2020. For our report, we spoke with several of the GAIA-X founders and studied its potential impact for our CIO clients across Europe.

The initiative stems from years-long concerns regarding data sovereignty and transparency for non-European-headquartered public clouds. So far, attempts by European groups to tackle the issue have had little impact on the commanding market share of non-European hyperscale public cloud providers, as only 12% of European enterprises chose a European-based public cloud provider. Although GAIA-X claims to be different, there are issues the foundation needs to overcome to avoid the fate of earlier failed attempts. Key pitfalls GAIA-X must avoid are:

  • Becoming another “European sovereign” infrastructure provider. Europeans are already spoiled for choice, with a wide range of public cloud providers and hosted private cloud options to choose from. Creating yet another Amazon Web Services (AWS), Azure, or Google Cloud Platform (GCP) imitator that does nothing more than stick a “Made in Europe” badge on a new sovereign infrastructure provider helps nobody. It’s important that GAIA-X is executed well, lest it miss the real opportunity to address genuine concerns about data sovereignty, transparency, and greater use of open standards.
  • Delaying release of true value-added production services. Cloud services are a fast and rapidly evolving market for the non-European hyperscalers. Hyperscalers are constantly releasing new capabilities in their platforms to meet rapidly evolving customer demands. So far, GAIA-X has no active services in the market; its initial services aren’t projected to be available until Q1 or Q2 2021. The foundation needs to meet this timetable to avoid irrelevance. Also, what is released must work without serious errors or deployment bugs or else risk losing credibility or market opportunities. It’s a challenging ask that we appreciate, but the window of opportunity is narrowing.
  • Creating perceptions of bias against non-European companies. The foundation will succeed by being open and inclusive to all companies involved in defining the technical standards and governance of the foundation. Early moves such as restricting membership of the management board of the foundation to Europeans don’t help with market perception, while also making it harder to deliver the services prospective customers demand. Furthermore, as services go live, it’s important that GAIA-X wins business on merit alone by having the best technical solution to meet client needs at the right price point.

The real opportunity for GAIA-X is defining public cloud services that improve clarity around data sovereignty, data residency, and that enhance the transparency of how data is managed and governed. If additional security services, such as federated identity services or open source technology stacks, can help reduce the real or perceived risk of lock-in, this would be a genuine win for CIOs — not just in Europe, but in other markets as well. To learn more about the implications of GAIA-X for CIOs, please read our report here.

For CIOs interested in the GAIA-X Foundation and its work, we recommend attending the GAIA-X Summit on November 18 and 19, 2020, (registration here) to get further insight into how the project is evolving. We will continue to update and refine our published research as the foundation continues its work.

To find out about some of our related research looking at the rise of the concept of a digitally sovereign Europe, read this research from my colleague Thomas Husson.