European Cloud-Computing Initiative Limits U.S. Companies’ Role

A European cloud-computing initiative to create services allowing the continent’s companies to share and host data securely has allowed U.S. tech firms to join, but limited their involvement in managing and setting rules for the organization.

European Cloud-Computing Initiative Limits U.S. Companies’ Role

By Catherine Stupp

European Cloud-Computing Initiative Limits U.S. Companies’ Role : More than 180 companies joined the cloud initiative, called Gaia-X, in recent months, including Inc.’s Amazon Web Services, Alphabet Inc.’s Google, Microsoft Corp. and International Business Machines Corp.

Those companies, like others based outside of Europe, are barred from sitting on Gaia-X’s board of directors, leaving them out of voting on organizational changes, appointing management executives and naming members to sit on committees that set policies and technical details of the project.

The German and French governments announced plans to start the joint effort last year as a bid to create cloud services for European corporate clients that guarantee certain security and transparency provisions and allow them to share data with other firms, even if they use a different Cloud-Computing supplier.

The initiative expanded over the summer to draw companies from countries across Europe, the U.S. and Asia. Members are still drawing up policies that will be binding for companies involved.

Gaia-X joins other efforts by European companies and governments to set technology standards that aim to be more secure and private than how firms in other countries frequently treat data.

European lawmakers have focused on promoting the continent’s technology companies in the past year in an attempt to help them compete with large suppliers from the U.S. and other countries.

Privacy regulators and courts also have scrutinized companies’ data transfers to the U.S. because of several legal complaints about whether personal data can be protected from American government surveillance.

Gaia-X aims to double European companies’ use of Cloud-Computing services in the next four or five years, but also to make sure that growth isn’t only “at the benefit of the hyperscalers,” Hubert Tardieu, the initiative’s interim CEO, told reporters last week, referring to AWS and other dominant cloud companies.

Industrial companies such as BMW AG , engineering company Robert Bosch GmbH and health-care firm Koninklijke Philips NV are developing applications that they plan to use with Gaia-X services.

Philips plans to share data securely with other health-care companies that may use different cloud providers, and health regulators will want to see proof that that won’t expose data, a Philips representative said at a conference last week.

Only one American company said it would like to join Gaia-X’s board of directors, which appoints executives and assigns individuals to committees that determine policy rules, said Alban Schmutz, a board member and senior vice president of business development and public affairs at France’s OVHcloud. Mr. Schmutz declined to name the company, which isn’t allowed to sit on the board.

Representatives from Google, Amazon Web Services, Microsoft and IBM said at a conference organized by Gaia-X founders last week that they are committed to participating in the initiative.

“ The big players seem to be interested in what Europe and European companies are saying. ”Petri Räsänen, development director at the Finnish Ministry of Economic Affairs and Employment

The restriction on non-European technology firms’ ability to help set terms for the group could diminish the quality of Gaia-X services, critics say.

Large U.S. cloud companies “have the expertise and the ear of lots of senior customers in lots of very large successful European corporations,” said Paul McKay, senior analyst at Forrester Research Inc. “They have just as much, if not more, of an insight into what customers are really looking for.”

If Gaia-X sets strict policies requiring participants to significantly change their cloud services for Europe, that could result in suppliers offering products that differ between regions, making it harder to expand globally, said Guido Lobrano, vice president of policy and director general for Europe at the Industry Technology Industry Council, a lobby group based in Washington.

Some European companies might be interested in using cloud services through Gaia-X because they are worried that sensitive data could be exposed if it is handled inappropriately or moved abroad, Mr. McKay said.

A decision from the EU’s top court in July curtailed how companies transfer data to the U.S., saying American government surveillance threatens Europeans’ privacy. Uncertainty since that decision “raises the anxiety levels a bit,” he said.

Google said Thursday it would partner with OVHcloud on a new cloud service that will comply with Gaia-X rules.

Also Thursday, Microsoft introduced guarantees for companies, promising it would challenge all government requests for customers’ data if there is a legal way to do so.

The company also said it would compensate customers if it must disclose data in violation of Europe’s 2018 General Data Protection Regulation because of such a request from a non-European government.

Some supporters of Gaia-X said the involvement of major U.S. cloud providers is a selling point for European businesses. In Finland, many companies that inquired about the initiative wanted to know if U.S. cloud providers would join, said Petri Räsänen, development director at the Finnish Ministry of Economic Affairs and Employment.

“It adds to the credibility of the whole Cloud-Computing initiative that current market leaders think this is a good idea,” he said. “The big players seem to be interested in what Europe and European companies are saying.”

Originally published at Wsj