Thank you so much for joining us for this very interesting talk. I really look forward to it. We've been discussing technological sovereignty here at the forum in cyber for quite a while now. But perhaps why has it become so urgent in the current geopolitical context?
Okay, maybe I can start with that one. I think it's not something that is new. People think tech sovereignty is something that only became a topic in January because Trump wanted Greenland, right? And yes, that made the issue apparent to many people in Europe, but the systematic process of American tech companies really colonizing our economies here in Europe has been going on for more than 20 years. It happened before Trump, under Biden. It was already happening even under Obama. Mhm. It's been long-term US policy through economic coercion actually to take over a significant portion of our market when it comes to digital goods. And I think Trump made very clear the risk that this poses, but it's not a new phenomena. It's been going on for a long time and we've sort of been sleepwalking into this crisis. I would say.
Maybe aware perhaps Democrats were not as vocal about it.
As Trump is today. Yes. But they had the exact same policies and the policy was always how do we take over the dominant share of the digital markets here in Europe.
You know I didn't believe that we can build this one world that everybody will be just happy working together and this is why from the beginning when I created OVH, I just take the assumption that we need to segregate data and customers in a different way because even if we lived these 20 years of globalization, it will not be forever. And now what happened last two years, there were two events: the first is VMware, we broadcast, and the second is Trump of course, and these two events created a big frustration and a lot of issues in the perception of European companies of having all this freedom of choice for the future. Do they have everything in their hands? Can they make all the choices? And a lot of companies just realize that no, they don't. They don't. Um but actually it was there, but they didn't want to see that. And now it's actually on the table. You cannot just say it's not the elephant in the room.
So, we're definitely sleepwalking then. But there's another thing that's not new, but sovereignty, this word, it's being used everywhere now. We were saying that earlier also with the founder of the incyber forum. It's being diluted now. How do you make the distinction between what is actually sovereignty? Because we're seeing lots of solutions coming out to tackle this issue of sovereignty. But how do you make the difference between sovereignty and what we call sovereignty washing?
Yeah, I think the previous speaker actually alluded a bit to this issue. Well today there are some very large companies in Europe, in France actually as well but also in Germany, and their business model for a long time has been we're going to resell American tech, put a little bit of a spin on it for a small margin. We're going to collect that small margin even though most of the value capture still goes to the US, and that's going to be our business model. And these companies have done very well on this model for many years, many of them have become very large. But look, maybe I will give a German example so no one in France gets offended, but the classic example is SAP. SAP said we're going to build sovereign cloud, it's going to be hosted in data centers in Germany, but then you go a bit deeper and you understand that the sovereign cloud is actually running on Azure and the AI is provided by OpenAI. Okay, sure, maybe you have it in Germany, maybe the contract is with SAP, but software isn't just contracts and location. Imagine if you have software that stops getting updated, stops getting new patches, security flaws come in. So software is not like buying a good that will last forever. It's something that over time degrades. And if the ability to maintain that software, to update it, to patch it, is all being controlled from the US where there's Cloud Act and executive orders, and they're under the control of the government, this is not actually sovereignty. This is a fake sovereignty, and that's actually really dangerous because that branding of sovereign German cloud is tricking public institutions and companies into buying solutions that they think mitigate against certain risk but in the end don't do that. So the only thing actually that's worse than insecurity is the perception of security, and that's actually even worse.
You let down your guard too thinking that it's sovereignty.
On our side we see three different kinds of sovereignty. The first is sovereignty for data. You do data sovereignty, and this is what we've done for 15 years. What does it mean? I download the software that exists on the market, Exchange, VMware, SAP, Oracle, and then I run that in my own data center and I deliver the product for our customers that I can control that nobody can have access to the data. So this is the first level of sovereignty. This is actually what we did 15 years ago, and this is what some blue... they are just do hybrid clouds. Yeah, so they started just to do that. The second level is technological sovereignty: you own and you control the technology, you develop this technology, and you have people that write software, but not only software, hardware, all the data centers, all the connections, and you control in the full way what is happening on the product. And this is what we started to do five or six years ago, invested a lot of money, hired additional people, and developed public cloud 40 products, going to the different levels of the public cloud. And then you have the third one, operational sovereignty: you give the choice for the customer that he will choose where this cloud has to run. It's not only in our data centers. He can choose to use this cloud wherever he wants, at edge, in his own data center, data warehouses, ports, shops, whatever. And this is also very interesting from the latency perspective, to have something that is close to the workloads, and it's really useful in the factories, but also really interesting for very sensitive data that cannot go to the cloud, they are too sensitive. So this is the third level of sovereignty we deliver.
Right, how dependent have we become here in Europe and what are perhaps the technological dependencies that you see as being the most problematic?
Well, if you look at cloud, and this includes hyperscalers, the statistics on this vary but the low range of the estimate of the dominance of US companies in the European cloud sector is something around 70%. That's a mind-bogglingly large number, and this is despite the fact that there are many European companies like OVH and Proton that are providing services that are similar to what the Americans are providing. That's a level of dominance that you hardly ever see in any other industry. And I always tell people, imagine the reverse of the situation. Can you imagine the Americans waking up one day and figuring out that 70% of their Department of Defense and their government runs on European tech? What would they do? They would start building. Can you imagine being in China and not having a Chinese preference on procurement? Of course there's a clear Chinese preference. Now I'm from Taiwan next door, I know how they work. And so when I look at what we do here in Europe, to be completely honest, we're stupid. We are literally letting them take advantage of us and trying to play fair in a world that is inherently unfair. So I think that's a really big problem, and we need to wake up to that. I also give the example of what kicked it off was Greenland. There was a big panic, everybody went to Davos that week. We're from Switzerland so we remember that very well. Trump flew in on his big jet and then Trump says 'I promise I won't use force.' And everybody says 'Oh, okay, we're saved.' But if Trump wants to take Greenland, he doesn't have to use force. All he has to say is 'Tomorrow, Google, Apple, Microsoft, and Amazon will stop working in your country. If you don't sign me a contract, you give me Greenland.' And if that happens, they will sign within the hour.
And it's probably the next step, right?
Yeah, yeah, yeah. It's around the corner. It's a very obvious next step. And so what that really means is today there is no actual sovereignty without tech sovereignty. It's in fact the same thing.
I want you to answer that question, but I also want to go a little bit deeper. How do you explain that European mentality? Is it a post-World War II mentality that we gave our security, our defense to the United States and hence we just won't create for ourselves anymore? I mean, how do you explain it?
