00:00Now, it's been a week since the major Amazon Web Services, or AWS, shut down.
00:06Across Europe, policymakers and analysts have raised concerns over the growing dominance of US cloud providers.
00:13Well, let's take a closer look now at the impact and what it means for Europe's digital future.
00:19Well, the outage lasted around seven to eight hours, but the disruption was severe.
00:25More than 1,000 companies worldwide were affected, with six and a half million incidents reported across key sectors,
00:33including banking, aviation, finance, communications, gaming and retail.
00:39Well, in Europe, Amazon, Microsoft and Google control nearly 70% of the cloud services market.
00:49By contrast, European providers hold only 15% of their home market.
00:54But the European Union has set ambitious goals for cloud tech in its digital transformation plan.
01:02By 2030, it aims for 75% of EU businesses to use cloud services
01:09and has also planned to build over 10,000 highly secure and clean energy-powered cloud nodes across the region.
01:17Well, Rob Kiniaz is a founding partner of H-Tree Capital, a London-based technology venture capital firm.
01:27Rob, thank you very much for joining me.
01:29So, we're hearing then about the big three, Amazon, Microsoft, Google, controlling around 70% of the market.
01:36What do you think that tells us about the continent's digital resilience?
01:40I think it's not very resilient.
01:43It's the same question as before.
01:45Why don't we have a Google in Europe?
01:47Why don't we have a Facebook in Europe?
01:48And all these things are just structural weaknesses that Europe has had for a long time.
01:52And you don't have the ability to build these companies,
01:54then you don't get the benefits of the infrastructure like the data centers.
01:57I mean, whoever owns the clouds owns so much data.
02:01They have the power, don't they?
02:03What are the sort of political, geopolitical and economic issues, do you think, around this?
02:10Huge issues.
02:11I mean, you're basically at the subject of another jurisdiction.
02:16So, if one area decides that the U.S. decides they want to do something or shut off a particular customer,
02:21they can do that under U.S. law.
02:22So, it puts the EU, in a way, under mostly U.S. law or wherever the cloud provider comes from.
02:27And that's a big sovereignty question.
02:28Thank you very much.
02:58It says, we're shutting everything down for a year or two.
03:00You simply can't have that.
03:01You can't have both things to win.
03:04Of course, the EU has launched initiatives like Gaia X,
03:08and it's also planning a cloud and AI development act, isn't it,
03:12which they're hoping will trip a data center capacity.
03:16Are those steps ambitious enough, do you feel?
03:20Probably not.
03:21I mean, at the end of the day, the customers will decide,
03:23based on a series of questions around cost and benefit,
03:26so, frankly, you have to dump a lot of money in to be cost competitive with the Americans.
03:30So, unless there's a regulatory environment that forces local customers to use local data centers,
03:35you're always going to have a price parity difference with the U.S. providers,
03:39and especially with the U.S. providers setting up local locations in places like Ireland and Netherlands,
03:44even if the data center is physically in the Netherlands,
03:46it's still subject to U.S. law and U.S. reach.
03:48So, it doesn't really solve the problem.
03:52So, what do you think would solve the problem?
03:53What do you think European governments should be doing now?
03:57I think there are major structural problems in terms of, A, just capital,
04:00making sure that these infrastructure pieces are well capitalized.
04:04They can't be afterthoughts, and it requires a lot of synergy between the countries.
04:07I think we're still too fragmented in Europe that we have a population together.
04:11It may be bigger than the U.S., but the amount of fragmentation is just too high.
04:14And then you apply local regulation like in the Netherlands,
04:17and you don't have the ability to make these things turnkey like you would in the U.S.
04:21So, I think it's a combination of political willpower to push things through,
04:24and then simply capital.
04:25It takes a lot of capital to build this out, and, you know, it's a big investment.
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