Data sovereignty offers opportunities for European companies and technology providers

The greatly increased data use in our society and our heavy reliance on the US and Asia for digital infrastructure are increasingly at odds. In light of the latest geopolitical developments and the pandemic, the need for digital sovereignty is felt and seen. How can European cloud and technology providers differentiate themselves from large technology companies and develop new commercial applications and lucrative business models based on digital sovereignty?

In our digital world, we increasingly rely on digital technologies and applications to share data. These usually come from a small group of non-European tech giants who do not always prioritize data sovereignty. Recent data breaches and cyber attacks have shown our vulnerability. In addition, there are global legislative developments, such as the US Cloud Act, that raise questions about the protection of European data. In addition, from a business perspective, European companies find it difficult to compete with American and Asian ‘hyperscalers’ who often offer very user-friendly cloud and data sharing solutions. As companies place more and more data on these large technology platforms, it becomes increasingly difficult for European providers to develop competitive and differentiating alternatives.

Create commercial opportunities

In contrast to this looming winner-takes-all scenario, the recent focus on data sovereignty also offers a promising opportunity for cloud and network companies to create innovative services and business models. Matthijs Punter (on the left in the picture), researcher & consultant in data ecosystems at TNO: “Over the past few years, we have seen many initiatives around shared data spaces, including our own activities for International Data Spaces (IDS), a European standard that has already been adopted in various domains used to make data exchange more secure and efficient. It is one of the technologies we are using to launch data sharing initiatives in various domains such as manufacturing and healthcare. In these domains, we have now reached the point where we can scale. Technology providers can respond to market demand for practical technologies to exchange data according to these new European standards: easy to use, offered as a service and a platform for new innovations.”

Data sovereignty as a service

sovity is a German company that started developing this kind of commercial services. Based on the trusted IDS standard, sovity provides companies with data sovereignty as a service, enabling them to create new business models and build innovative products. Sebastian Kleff (pictured right), CEO and co-founder of sovity: “We were involved in data sovereignty and IDS initiatives from the beginning. My personal vision is that we should have complete control over our data, both private and business.” In addition to IDS, sovity works with Eclipse, Catena-X, Gaia-X and other digital sovereignty initiatives. Sebastian Kleff sees that the challenge lies primarily in the implementation of those technologies. “At the moment, data sovereignty solutions are complex and require a lot of effort and deep expertise to implement the open source software. With sovity, we are lowering the threshold for digital sovereignty solutions.”

Focus on use cases

Especially for SMEs, it is still difficult to work with secure data rooms, says Matthijs Punter: “If you want to share data and maintain full control, you must use certain standards and technologies. Within IDS, every participant needs a so-called ‘connector’ or ‘security gateway’ with which you can share your data in a controlled manner. For each specific data space (car, production, etc.) you need additional shared components, such as a ‘broker’ or ‘directory’: this is an address book in which all companies can register so that they can be found by others. We need companies that deliver these building blocks operationally. And we need to make sure that the offerings from different companies are interoperable, which reduces the risk of a lock-in.” Sovity offers these building blocks ‘as-a-service’ and keeps them updated, which is especially beneficial for smaller companies that don’t has a large IT department Sebastian Kleff: “Our solution enables organizations to focus on their core business, so they can develop new digital applications and innovative use cases for their customers much faster.”

App store for data

On the question of the future of shared data rooms, Sebastian Kleff points to the network effect on the market. “Of course, everyone sees the value of shared data rooms, but it’s a chicken-and-egg situation. Companies only participate if a lot of data is offered to create exciting new use cases. In my opinion, in the near future we will have an app store-like platform where companies can buy ‘apps’ to access all kinds of data. We can exchange these in a safe and secure way to create new digital applications. Because it is precisely by combining data that the best digital solutions are created.” Matthijs Punter shares Sebastian Kleff’s vision, but also emphasizes the importance of a user-friendly infrastructure for data sharing. “For example, if you want to take out a new mobile phone subscription, you simply choose the best offer and you can get started straight away. You have nothing to do with all the underlying technologies. We are far from sharing data. In my opinion, superior data sharing should become a simple product that you can buy from many network and cloud providers.”

Commercial applications

As the largest research and technology organization in the Netherlands and one of the largest in Europe, TNO combines its neutral position with the ability to create the right connections, shape processes and bring the right parties together in Europe. On the technological level, TNO is involved in a lot of ‘first-time engineering’ of IDS technology together with other research institutes such as Fraunhofer. By cooperating with networks of cloud providers, TNO shares this know-how with the market, for example by making components available through open source licenses. Technology companies can then use this as a starting point for their commercial offering. Matthijs Punter: “At TNO, we have extensive knowledge of data sharing technology in several areas within energy, healthcare and the manufacturing industry. For example, with the smart connected supplier network, we have established a partnership for sharing data with various suppliers of high-tech equipment. This is now getting serious and creating demand in the market. Cloud providers looking to develop commercial applications for the manufacturing industry can get started right away based on this experience.”

This article was published in BTG in Business, a publication of the ICT and Telecommunications Large Users Branch Association (BTG).

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