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When Amazon boss Jeff Bezos revolutionized data processing on the Internet, all he needed was a management meeting in his private home in Seattle.

The idea of ​​standardized hourly renting out servers and services brought about the boom in the cloud.

Without long-term contracts or expensive hardware purchases, companies could leave the processing of their digital business data to Amazon.

That was in 2006. The cloud division AWS became the world market leader and now accounts for over half of the group's profits.

A decade and a half later, the governments of Germany and France are trying to work together to counterbalance AWS for Europe, because cloud-related services are becoming a fundamental foundation of modern economies.

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For the establishment of the umbrella company alone, no less than 22 companies, the cooperation of the EU Commission, the help of various management consultancies and large law firms are required - as well as almost two years and the signature of a king.

European bureaucracy is slowing down Europe's most important digital project.

The companies involved are now warning of failure.

There was no shortage of advance praise

It was 17 months ago: At the federal government's digital summit in October 2019, Federal Economics Minister Peter Altmaier (CDU) presented the idea of ​​a European cloud platform called Gaia-X.

European corporations such as Telekom and the French data specialist Atos should work with start-ups to create a standard for data processing in Europe's data centers, with binding specifications for data protection and data exchange based on open software.

The idea was good.

If it succeeds, Europe could establish a global standard for open cloud offerings.

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There was no shortage of advance praise: Gaia-X was "central to Germany, France and Europe when it comes to economic strength and sovereignty," said Altmaier at the time.

On top of that, the project should meet the data protection guidelines of the GDPR, promote the exchange between European companies, and even set the "gold standard for energy and resource efficiency" at the request of the Federal Environment Agency.

As early as the end of 2020, that was the plan in 2019, the first Gaia-X-compatible services should run "live", i.e. in operation with customer data.

To date, not a single line of program code has been written

But then it took more than a year alone until on December 17th, 2020 King Philippe of Belgium signed the decree establishing the “Gaia-X Association internationale sans but lucratif” in Brussels as an international non-profit organization on Belgian soil.

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Gaia-X AISBL was entered in the Belgian commercial register on February 1, 2021.

This at least lays the legal foundation.

But then came Corona, "a lot of talk" in various planning committees, jealousies from France about the German leadership role, bureaucracy in Belgium, as one of the medium-sized companies involved said.

According to information from the leading Internet business association ECO, not a single line of program code has yet been written for the so-called "Federation Services", the technical basis for the prestige project.

Not even the development of these basics is advertised, the exact specifications are still missing.

But without the "Federation Services", no specific products for data processing according to the Gaia-X standard can be programmed.

"We manage many particular interests"

So the specifications are only to be published now, planned for the end of March.

“Then the individual trades have to be put out to tender,” explains the responsible ECO division manager Andreas Weiss WELT AM SONNTAG.

"The tender runs until mid-May, then the tender winners have to be selected, and a first version should run at the end of the year."

According to Weiss, this process should be “fast and agile”.

However, in a debate among experts initiated by the Dresden cloud technology provider “Cloud & Heat” in mid-February, Weiss spoke of a “difficult multi-stakeholder process”, in the course of which he “had to experience all moods from desperation to euphoria”.

Companies involved tried to anchor their own patents in the foundations of Gaia-X in order to gain an advantage, says Weiss.

“We manage a lot of particular interests.” Maybe even too many?

The project has great potential.

If it succeeds, Europe could build an ecosystem used worldwide, Gaia-X would be a seal of quality that can also work in the USA.

No demand from the public sector yet

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However, in view of the bureaucracy, Deutsche Telekom is now doubting its economic viability: Gaia-X is politically driven, there are many good intentions - but so far there has been no impetus, said Telekom manager Andreas Rickmann in a podcast.

There is a threat of economic failure, similar to DE-Mail, which was once celebrated as a communication standard.

"As of today, there can be no Gaia services at all - because the specifications have not yet been published," says Maximilian Ahrens, the technical director responsible for the Telecommunications subsidiary T-Systems responsible for Gaia.

“And without services, there are still no products based on Gaia-X services”.

But without this, the willingness of public clients to spend money on development would also be lacking.

Only such a demand from the public sector gives the project the necessary acceleration.

"This commitment by the public sector has so far been lacking - but it is a condition for Gaia-X to work."

Companies are withdrawing

In the meantime, the first companies that were enthusiastically involved in the Gaia-X committees are hesitant to invest further resources in the project: "We have been closely involved in 2020 for over six months," says Henrik Hasenkamp, ​​head of the Cologne cloud provider gridscale.

"In the meantime we have taken a step back because we did not see the aspect of customer benefit sufficiently in the foreground."

In other words: If cloud software should be able to do everything at the same time, then the development for small companies like gridscale will be too expensive.

"Which products can you buy from Gaia-X today?" Asks Hasenkamp.

“Nada, that's still the problem at the moment.” Gridscale is now concentrating on the SCS sub-project for secure data exchange.

Potential customers could benefit from this in a timely manner.

In 2020, the Ministry of Economic Affairs also realized that companies had too little incentive to invest money in development.

Therefore, the Federal Network Agency is now issuing a development competition.

They want to fund ten to 15 lighthouse projects with up to 15 million euros per project.

The competition runs strictly according to regulations

Altmaier has fished the necessary 186.8 million euros from the federal government's economic stimulus package "Fighting the consequences of corona, ensuring prosperity".

The competition runs strictly according to regulations: companies should first form groups, at least three, at most ten, at least one start-up.

Together they should submit a project outline by May.

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Selected companies should then apply for funding - individually, not as a group.

You can only start to write a program code after submitting the application.

If they started too early, it would be a violation of European funding guidelines.

The funding runs for three years.

It sounds like mega bureaucracy.

Amazon, on the other hand, invested a good $ 26 billion in the further development of AWS in 2020 alone, according to a Bloomberg analysis.

AWS had a good 100 different data services on offer when Peter Altmaier first thought out loud about Gaia-X.

According to the analysis site Cloudpegboard, there are now more than 280. Microsoft's Azure cloud offers a good 260 services, Google's offer just under 120.

"This egg-laying woolly milk sow Gaia-X comes too slowly and too late, I'm afraid," comments German Silicon Valley founder Florian Leibert.

"You cannot economically replicate what is already available on Google and Amazon."

The US competition divides the market

In addition, says Leibert, the development is going in a different direction anyway: “There are now enough offers for so-called hybrid clouds on the market for open source software.

Companies could build their own solutions without being tied to a single provider. ”But that removes a core argument for Gaia-X.

Meanwhile, the US competition is gradually dividing the lucrative German market: At the end of last year, Deutsche Bahn relocated its entire IT to Amazon and Microsoft.

In December 2020, Deutsche Bank signed a ten-year contract with Google to develop new cloud financial services.

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Volkswagen has been developing cloud technology for the supply chain with AWS since 2019, as has BMW.

Lufthansa has been an AWS customer for so long that the IT subsidiary Industry Solutions has partner status.

All of the companies mentioned had enthusiastically welcomed the development of Gaia-X and are also involved in the development of the concept.

According to Paul McKay, an analyst at Forrester, the fact that they have now signed with the Americans could be due to a special volte of the US giants.

Amazon, Google and Microsoft have all submitted membership applications to the Gaia-X umbrella company, they are involved in the development.

If they are accepted, the Americans can sell Gaia-X services according to European standards themselves.

"It will be a challenge to communicate that not all offers from Gaia-X partner companies are also Gaia-X-compatible," fears Telekom technical director Ahrens.

Amazon knows that too: "AWS has been involved in multiple technical working groups from the start and is pleased to continue doing so."

For Amazon, the costs of getting involved with Gaia-X are just small change.

In return, they will in future receive the “Gaia-X” quality seal for their services.

How much market share the European competitors will have will become clear in three years.

But only if everything goes as planned.