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1. Boosting Efficiency and Quality in EU Public Services: The Need for a European Multi-Cloud-First Strategy

Author:
Matthias Bauer, Andrea Dugo, Dyuti Pandya, Vanika Sharma, and Elena Sito
Publication Date:
03-2025
Content Type:
Working Paper
Institution:
European Centre for International Political Economy (ECIPE)
Abstract:
EU governments have an unprecedented opportunity to unlock up to EUR 450 billion in annual fiscal savings by modernising public services through advanced multi-cloud solutions, cloud-based AI, and other deep tech innovations. As estimated in this study, this figure highlights the transformative impact of digitised government services – not only in improving service quality and operational efficiency but also in generating substantial fiscal gains that would enhance Europe’s economic competitiveness. Multi-cloud adoption is not merely an infrastructure choice but a strategic enabler of modern, agile, and citizen-focused public services. To fully capitalise on cloud adoption, EU governments should embrace a multi-cloud strategy that integrates different public cloud providers and, where necessary, also incorporates sovereign or private cloud environments. Cloud services come in many forms, including Infrastructure-as-a-Service (IaaS), Platform-as-a-Service (PaaS), and Software-as-a-Service (SaaS). Each model offers unique value propositions such as ease of use, rapid security updates, scalability, and the capacity to integrate novel technological features, such as AI applications, seamlessly.
Topic:
European Union, Digital Economy, and Cloud Computing
Political Geography:
Europe

2. The EU’s Trillion Dollar Gap in ICT and Cloud Computing Capacities: The Case for a New Approach to Cloud Policy

Author:
Matthias Bauer, Fredrik Erixon, and Dyuti Pandya
Publication Date:
05-2024
Content Type:
Working Paper
Institution:
European Centre for International Political Economy (ECIPE)
Abstract:
An inward-looking EU approach to cloud computing and data policies risks stifling innovation and competitiveness by promoting domestic champions at the expense of accessing global cloud capabilities. Limiting market diversity and access to best-in-breed solutions could hinder digital transformation across sectors, raising costs and constraining growth opportunities. By contrast, a free trade approach to cloud offer guardrails and security but champions non-discriminatory cross-border and regulatory policies, yielding economic advantages by stimulating investments, fostering innovation, and enhancing competition. Unfortunately, some EU policymakers envision Europe building an independent ICT infrastructure, exemplified by initiatives like the European Alliance on Industrial Data, Edge and Cloud. This approach prioritises technological sovereignty, aiming not just to maintain European control over critical infrastructure and data but favouring localisation policies, including in AI and quantum computing. However, the approach is simply not going to work because the amount of resources that are needed for “pure-EU firms” to rise up as significant competitors to global leaders is so large that it would drain other sectors of investments and human capital. The investment gap between the EU and the US in ICT and cloud-related sectors, totalling some USD 1.36 trillion, presents a significant challenge for native European companies. To catch up by 2030, 2040, and 2050, European technology companies would need to substantially increase annual investments, ranging from approximately USD 157 billion to USD 1.2 trillion annually, representing 0.8 percent to 6.4 percent of the EU’s GDP. This would – hypothetically – require a significant commitment of resources. Despite recent efforts such as state aid for R&D in cloud and edge computing, the scale of investment needed far exceeds the current levels, underscoring the urgency for an open and non-discriminatory EU policy approach to bolster Europe’s position in the rapidly growing and technologically changing digital landscape. There are different components to a successful cloud policy, including policies to spur adoption and cross-border cloud integration in the EU, and more investment in R&D. EU policymakers should adopt a dynamic perspective rather than fixating on static market shares, and pursue policies that prioritise innovation and technological advancement over merely seeking to catch up on current technologies. The cloud market and the broader Internet market are going through rapid changes, leading to new services and new competition. A future-oriented approach to cloud policy advocates for policies that foster competition, drive technological progress, and enable interoperability, all of which align with the dynamic nature of cloud services and global markets.
Topic:
Communications, European Union, Digital Economy, Cloud Computing, and Information Technology
Political Geography:
Europe

3. Digital Sovereignty: European Policies, American Dilemmas

Author:
Mathilde Velliet
Publication Date:
01-2023
Content Type:
Working Paper
Institution:
Institut français des relations internationales (IFRI)
Abstract:
European digital sovereignty has been made a priority by Ursula von der Leyen’s European Commission. Due to the privileged position of American companies in the European market, Brussels’ efforts towards digital sovereignty (on privacy, antitrust, data sovereignty, etc.) are closely scrutinized by American policymakers. They often view European initiatives as “protectionist” and unfairly targeting U.S. companies. However, the American vision of European digital sovereignty has evolved in recent years under the influence of two main factors. On the one hand, awareness of the problematic effects and practices of platforms has led to a consensus on the need for reform in the digital sector. On the other hand, technological competition with China has been elevated to a priority. This vision remains fraught with contradictions, along inter-party, intra-party, inter-agency, state-federal, and issue-based fault lines. Washington’s position on anti-monopolistic practices is an illuminating example, characterized by a double discourse between a desire to reform the U.S. digital sector domestically and active diplomacy to dilute these efforts at the European level. Nonetheless, several American actors – particularly in the legislative branch – are seeking to learn from the successes and flaws of European regulations for American reform projects, such as on platform regulation or privacy. The China factor reinforces the ambiguity of the U.S.’ position. It creates new opportunities for cooperation in the face of perceived common vulnerabilities (infrastructure security, inbound investments, etc.) and autocratic definitions of digital sovereignty. However, it also raises tension and misunderstanding on the American side towards European reforms that often target American companies more than Chinese ones. Lastly, while American and European companies have adapted to the need for digital sovereignty through a range of technical and commercial solutions, the temptation of a maximalist definition of European sovereignty continues to create major stumbling blocks, particularly on the cloud.
Topic:
European Union, Regulation, Cloud Computing, Digital Sovereignty, and Data Governance
Political Geography:
China, Europe, Asia, North America, and United States of America

4. The competitive relationship between cloud computing and generative AI

Author:
Christophe Carugati
Publication Date:
12-2023
Content Type:
Working Paper
Institution:
Bruegel
Abstract:
Cloud computing providers and generative artificial intelligence (GenAI) providers nurture a close, interdependent relationship: GenAI providers need cloud providers to train, run and deploy their GenAI solutions, while cloud providers see GenAI providers as a business driver to grow their market shares in cloud and related markets, such as productivity software or search engines. The cloud/GenAI relationship takes various forms, including exclusive and strategic partnerships, especially between large cloud providers and GenAI providers across all parts of the cloud market, including infrastructure, platforms and software. Competition benefits and risks are likely to result from the relationships. Competition benefits arise from increased competition and innovation in the cloud and GenAI sectors. Risks relate to potential concentrations arising from the partnerships between cloud and GenAI providers, and from anticompetitive practices, including discrimination in the supply of IT equipment by dominant IT providers, interoperability obstacles to switching, use of business-user data, self-preferencing of cloud services over third parties, tying and pure bundling. Merger control and antitrust laws can address some of the competition risks, while laws, including the European Union’s Digital Markets Act and Data Act, can deal with competition issues in digital markets and the cloud sector. Nevertheless there are gaps. The European Commission should amend existing EU instruments, including by changing the definition of a concentration under merger control, and should specify interoperability requirements for cloud providers under the Data Act. The Commission should also closely monitor developments in and outside Europe through market investigations, including with international counterparts, and should intervene to tackle imminent competition risks using fast procedural tools, such as interim measures.
Topic:
European Union, Antitrust Law, Artificial Intelligence, Cloud Computing, and Competition
Political Geography:
Europe and Global Focus