This is the third part of our three-part blog series. Read part one here, part two here, and a summary of all three parts on RIPE Labs here.

A cloud platform for Europe cannot be created from the top down. It must emerge from the regions and create prosperity for local businesses. The digital transformation of businesses, governments, and society as a whole will require local ecosystems of knowledge and infrastructure.

What is needed to realize this vision is a shared blueprint that shows how to build local infrastructure and connect these regions. Such a blueprint will lead to an integrated European cloud platform, strengthening local economic areas and enabling digital transformation and innovation locally.

The blueprint is an opportunity to establish infrastructure that is long-term oriented, has little or no environmental impact, offers competitive pricing, and balances with society. It is the chance to create sustainable infrastructure for the digital age.

The Blueprint is Based on Existing Infrastructure and Technology

As SDIA, together with members and partners, develops this blueprint for regional cloud infrastructure, one core principle applies: build on what already exists.

Across Europe, there is sufficient data center capacity and real estate that can provide additional space. Some need modernization to eliminate their environmental impact, but most can serve as a foundation. In other cases, existing properties can be utilized by combining digital infrastructure with other development projects. Fiber-optic networks remain crucial; as they represent a bottleneck in many regions, governments must invest in them.

Refurbishment and life extension are the key principles of the blueprint for IT equipment and servers. By accepting that IT servers are standard goods and that performance improvements are achieved through virtualization and software-based scaling, existing equipment can continue to be used.

To connect regions, a decision on the cloud platform technology is also required. The chosen software technology for the blueprint must be open source and license and patent-free. The choice fell on Kubernetes, an open-source software technology that is already changing how developers create cloud-based applications (for more information, see this post in our blog, explaining how Kubernetes is the key to the second cloud revolution). By implementing Kubernetes in each region, interoperability of IT workloads and applications becomes possible — and with it, the trade of infrastructure capacities.

A Business Model Based on Regional Collaboration

The practical challenge in building a regional cloud is the upfront investment costs. A single data center operator, IT service provider, IT hardware distributor, or fiber optic operator will not be able to provide a regional cloud platform alone — at least not without significant costs. However, if each of these actors is willing to provide their service or infrastructure based on a profit-sharing model instead of an upfront investment, a cloud platform could be launched quickly.

A central bottleneck remains the equipment. Since most IT equipment is not produced locally, either a regional refurbishment company should become part of the group or an international manufacturer should be involved to provide access to refurbished IT equipment.

Operation, monitoring, and support are the tasks of local IT service providers, who already act as trusted advisers for local micro, small, and medium-sized enterprises.

Government Support for a Competitive Regional Market

The real challenge for many IT hosting and managed service providers is the practices used to acquire customers. Take the example of startup credits: some cloud providers offer €100,000 in free cloud usage for a year. How can a small IT service provider compete with that?

Here, the government should play a key role: create a competitive market, either through regulations on the type of incentives used for customer acquisition or by enabling local businesses through a state subsidy program to match these incentives. Such a subsidy could target businesses undergoing digital transformation or startups — they receive the freedom to choose any local provider and get cloud credits from their regional government. These credits are then spent locally, strengthening the local IT and digital ecosystem.

Ensuring that the regional market is competitive and that there are incentives for companies to use local cloud infrastructure is a task that only governmental actors can fulfill.

Supporting a Doughnut Economy and a Startup Valley

At that time, SDIA was forming consortia in Berlin and Amsterdam to develop the first regional cloud platforms. Berlin had established itself as a startup hub for continental Europe. Amsterdam was pursuing a strategy to create a doughnut economy — meaning that most of what the city needs to function should be produced locally and sustainably. A regional cloud platform fits perfectly into this vision.