This document outlines the vision for a sustainable and accessible European cloud—one that will be open-source, fair, and create economic opportunities for all.
Despite existing challenges, it is possible and may soon become a reality.
Such digital infrastructure will reflect European values and provide a blueprint that others around the world can draw inspiration from to further develop their own digital economies.
1: Context: Europe in the Cloud Age
At present, Europe and its ecosystems have all the necessary resources at their disposal to become leaders in the ever-growing global digital economy. This would benefit individuals and societies by providing greater opportunities, as well as the environment thanks to the European Union's (EU) high sustainability standards. Likewise, it offers the potential to enhance businesses' competitive edge.
Digital Infrastructure Overview
Digital infrastructure includes data centers, fiber and mobile networks, and the equipment within those facilities. This infrastructure is fundamental in transporting data, delivering applications, computing complex problems, deriving insight, and decision-making. Without this infrastructure, the promise of the digital revolution cannot be realized, and tech giants will continue to determine the pace and direction of the digital economy's growth.
Key Challenges and Opportunities
As digital infrastructure becomes increasingly critical for the proper function of modern society, the primary question is how to make digitalization accessible, sustainable, and secure for all.
While it is certainly a technical challenge to create equal and universal access to digital power, it is also not a totally unfamiliar challenge. Electrification was once inconceivable, and yet today the majority of the world's population has inexpensive and virtually unlimited access to electricity. Europe's current digital infrastructure has the capacity to provide everyone with affordable access to available digital resources.
The Path Forward
What is lacking is a unified and open interface for the computation, storage, and network capacity that would unlock access to available digital resources, namely through regional digital marketplaces.
Such marketplaces would liberate access, create transparency, provide redundancy, and enable fair pricing.
Vision for European Cloud Infrastructure
Benefits of a European Cloud Platform
Such a platform naturally embodies and reflects European values of collaboration, transparency, and inclusivity. By bringing Europe's existing infrastructure together to make it accessible, sustainable, and competitive, it would create a region-wide platform that supports digital businesses' and applications' growth and innovation.
Furthermore, a rigorous, locally-owned and distributed digital infrastructure would also hedge against political instability, acting as a bulwark against both local corporate takeovers and geopolitical threats from overseas.
Long-term Vision
With the ongoing process of digitalization affecting almost every aspect of our lives, Europe needs to have quality digital infrastructure that will last for decades. Digital power — the commodity that combines all digital resources produced by such digital infrastructure — is the key ingredient for new emerging digital technologies, and this will also contribute significantly to the growth of Europe's digital economy over the coming years.
Implementation Strategy
Designed as a set of regional marketplaces, a European cloud platform will enable sustainable and competitive digital power procurement. This will both provide support for emerging digital technologies as well as attract global technology companies to build their digital business on Europe's backbone.
At the same time, a European cloud platform needs to provide the same level of convenience that consumers have become accustomed to, while leveraging existing European infrastructure and creating inclusive growth opportunities for the pan-European community. The resulting operating model of a sustainable cloud platform can then act as a blueprint for other nations or regions to follow. Using open values, the technologies and business models that drive this sustainable digital economy can be made available to everyone.
2. Current Challenges of the Existing Cloud Infrastructure
2.1. Environmental Impact
Many enterprise data centers across Europe are significantly underutilized, operating on average at less than 30% capacity. This results in unnecessary energy consumption, wasted resources, and heat generation as well as a large carbon footprint. In fact, the Information and Communication Technology (ICT) sector is singularly responsible for "5–9% of the world's total electricity use and more than 2% of all emissions" (European Commission, 2020, p. 6). Meanwhile, companies across Europe continue to install servers rather than utilizing existing infrastructure to access cloud technologies that could be provided by existing infrastructure, often more securely. There are green data centers powered by renewable energy, particularly in the Nordic region; however, these sustainable practices are not sufficiently rewarded in the cloud market at present.
2.2. Market Dominance Issues
The current market structure of cloud computing is oligopolistic, with big tech firms in the United States dominating market share. This creates significant barriers preventing many European providers from entering the market, raising concerns about fair access and competition (or the lack thereof). On the demand side, an increasing number of companies in Europe, particularly small and medium-sized enterprises (SMEs) and start-ups, are moving business operations to the cloud, invariably through a large US provider. As a result, the European business ecosystem is missing out on potential revenue from public cloud usage, widening the digital power provision gap. By paying foreign cloud providers, European businesses are financing their expansion and strengthening their market dominance.
2.3. Anti-competitive Customer Acquisition Practices
Major cloud providers flood the market with free "credits" worth €20,000–100,000 for businesses and startups. Most regional providers cannot match these offerings, as they lack the capital to build and maintain the necessary infrastructure. Even if a provider offers better, greener, or more cost-effective services, they struggle to compete against these massive incentives. This creates a distorted market where only those who can afford to offer large credits can effectively compete.
2.4. The Vertical Nature of Existing Cloud Providers
Cloud providers have evolved from basic infrastructure providers to offering comprehensive value-added services like databases and backups. The underlying infrastructure has become invisible, treating digital resources as commodities.
Using these convenient cloud services creates vendor lock-in, as all services run on the provider's infrastructure. Despite resources being commodities, customers become dependent on a single vendor. More service adoption increases both lock-in and the provider's infrastructure market share.
Separating these services from the underlying infrastructure is crucial for creating a more competitive market. This would reduce costs, improve service quality, and allow customers to choose providers based on factors like sustainability, cost-effectiveness, or regional presence.
The unprecedented growth in construction of bundled, siloed, hyperscale data centers across Europe essentially duplicates the same infrastructure for each individual cloud service provider. While this may make sense financially due to high profit margins, it is also an unnecessary and colossal waste of resources. As a society, we would not build
multiple parallel train tracks so that operating companies can compete. Instead, they should compete on the same rail infrastructure, which serves as the commodity.
The concentrated market structure and vertical integration tactics of major providers lead to limited consumer choice and vendor lock-in. While the EU's cloud infrastructure project Gaia-X aims to address this by ensuring "interoperability and portability across infrastructure, applications and data," a viable solution remains elusive.
five of the same train tracks next to each other so that train operating companies can compete. Should they not instead compete on the same rail infrastructure, which itself is the commodity?
The concentrated nature of the market, along with the vertical integration tactics of the major providers, results in restricted consumer choice and vendor lock-in. Gaia-X, the EU's current cloud infrastructure project, seeks to tackle this problem by ensuring "interoperability and portability across infrastructure, applications and data." Despite ongoing efforts, a feasible solution has not yet emerged.
3. Our Vision: A European Cloud Platform of Regional Marketplaces
Research conducted by the Sustainable Digital Infrastructure Alliance (SDIA, 2020) has found striking similarities between digital power and electricity in terms of their properties as a utility:
Both are transient and instantaneous in consumption
Digital power, like electricity, is increasingly necessary for daily life
The data center industry's M&A activity over the last decade mirrors the consolidation patterns seen in electricity suppliers before formal market creation in the 20th century
The evolution of electricity markets provides valuable lessons for building digital infrastructure. By modeling a European digital power marketplace on successful energy market principles, we can avoid historical pitfalls and create a more efficient system.
Just as Europe's single electricity market has enabled cross-border trade and fostered competition, leading to lower prices and better service for consumers, a similar approach to digital infrastructure could yield comparable benefits.
3.1 Design Criteria of a European Cloud Platform
The proposed digital infrastructure will offer technology companies what they crave: a fair and accessible market that produces a competitive and sustainable cloud platform offering affordable resources. One that is capable of delivering digital power that will help companies and enterprises participate in the digital economy, with no negative impact on the environment.
3.1.1 Fairness
A competitive European marketplace brings fairer conditions that expand the market to a greater diversity of providers. Inclusive participation of cloud infrastructure and information technology (IT) service providers, as well as small to medium-scale data center operators, stimulates infrastructure investment in regional areas. An effective platform for the exchange of digital power requires interoperability, meaning that the quality and suitability of provisions determines success, as opposed to relying largely on vendor lock-in. Unbundling the marketplace leads to greater choice and flexibility for the burgeoning number of cloud adopters across Europe.
3.1.2 Efficiency
Greater competition between digital power suppliers also promotes efficiency, increasing data center and hardware utilization rates while reducing energy waste and carbon emissions. Consumers subsequently benefit from more competitive and transparent pricing, and an ecosystem arises that encourages competitive digital-native businesses and brings Europe closer to a full digital transformation.
3.1.3 European Alignment
A European marketplace can be effectively regulated to align with European goals. For example, a key part of the work within the SDIA is to analyze the role of market tools and policies in achieving carbon neutral targets and ensuring green data centers are fully utilized. This could shift digital power production to areas with the capacity to generate renewable energy. A single marketplace could also alleviate issues raised by restrictions on the transatlantic data flow and build trust between European market participants: a centralized European cloud platform composed of diverse regional infrastructure providers, acting in Europe's best interest.
Creating a cloud that is more cost-competitive and more sustainable in both economic and environmental terms will also help drive digital innovation across the continent.
A European cloud will align with the EU's European Green Deal sustainability goals, accelerating progress toward a green transformation. By utilizing existing infrastructure, it minimizes environmental impact - crucial given the current climate crisis.
This sustainable cloud infrastructure creates a foundation for new and existing eco-friendly software technology and digital business models, essential for reaching Europe's ambitious climate goals.
Through competitive cloud infrastructure, Europe can drive innovation in sustainable technology and digital services, improving citizens' lives while setting new climate action standards. Service providers can leverage this platform to create a unified marketplace of sustainable digital services..
A cloud that embodies European values and offers better solutions
European values—including an emphasis on security, respecting privacy and data protection, and accountability—are the compass that helps technology companies navigate the digital revolution. In this case, they will serve as tools shaping digital technologies and enabling a sustainable, thriving European economy.
Furthermore, a federated digital infrastructure highlights Europe's strengths, resilience, and diversity, offering transparency and inclusiveness via strong decentralized structures available to all European technology companies, enterprises, and communities.
An inclusive and fair ownership structure also offers its users more viable solutions by creating a shared, European utility for digital power. Existing initiatives such as GAIA-X, which seek a unified marketplace for digital services, require a common sustainable, competitive, European digital infrastructure. The European cloud outlined here is a key facilitator of that vision and is critical to achieving the EU's Europe Fit for the Digital Age strategy and its European Cloud Initiative. While GAIA-X focuses primarily on cloud services and European alternatives, our vision for a European cloud is more comprehensive. We emphasize sustainability and European identity while ensuring robust physical infrastructure. This blueprint will support GAIA-X's services while making them accessible to smaller regional providers, creating a resilient network of regional cloud infrastructure.
This open market platform enables anyone to offer or purchase digital power at competitive rates, fostering continental prosperity. The federated structure promotes efficient resource use and sustainable growth, positioning Europe as a leader in renewable energy and digital transformation.
A single European digital power market, built on open standards and fairness, can transform today's vertically integrated cloud services. Unlike current foreign-owned providers that bundle services with infrastructure, our common market ensures equal access and fair participation.
Amplifying diversity and strengthening Europe's digital economy
Our digital infrastructure celebrates European diversity through an inclusive ecosystem that amplifies participants' strengths.
The timing is crucial. While hyperscale data centers improve efficiency - keeping energy demand flat despite growing data needs - they also concentrate power and influence. This centralization risks Europe's control over crucial assets, including data protection, social value, and environmental accountability.
Currently, most data centers, especially hyperscale facilities, require continuous grid power with redundant feeds. An incentive-based marketplace could easily alleviate this issue by scaling back non-profitable facilities or moving resource production to areas rich in renewable energy. To accelerate renewable energy integration, energy systems must reduce baseload customers demanding constant power. Data centers can become prosumers and energy storage facilities if we treat digital power as a commodity in a unified European market. Fiber connectivity installation is significantly more cost-effective than high-voltage power transmission systems, making digital power production both easier and more economical.
The EU's Heating and Cooling Strategy emphasizes the need to decarbonize heating and cooling grids, which represent half of EU energy consumption. Danish analysis shows that by 2030, about 30% of hyperscaler surplus heat (2,500 GWh annually) could be utilized effectively. These strategies should be core elements of European infrastructure design.
A sustainable, federated, open, and inclusive European cloud would ensure digital economy growth without increasing non-renewable value creation. For a digitized economy to thrive, digital power must be accessible, cost-competitive, and sustainable. This infrastructure could serve as a model for developing digital economies worldwide while remaining open to learning from global innovations.
Fostering innovation and facilitating fair competition
Like electricity's role in spurring innovation (from microwaves to electric cars), affordable renewable electricity drives technology adoption. The same principle applies to digital power. With reliable, affordable, and environmentally friendly digital power access across Europe, developers could create applications that improve lives and industries while addressing climate challenges.
These benefits would help startups and enterprises achieve their innovation goals. The resulting infrastructure would focus on creating pioneering, non-discriminatory value, driving the next generation of digital ecosystems at national, regional, and European levels
What Now ?
Implementation Strategy
The timing for implementing a European cloud platform is ideal. With increased cloud adoption post-Covid-19 and growing demand for digital power, there's significant potential for cross-industry benefits. A European single market would make these benefits widely accessible.
Recent concerns about international data flows, particularly EU scrutiny of transatlantic transfers, create an opportunity for European digital power producers to establish themselves in a dedicated marketplace.
With no other region currently developing a single marketplace for digital power, SDIA has a unique opportunity to lead this initiative.
4.1 Regional and National Starting Points
Implementation begins at local and regional levels. SDIA is already collaborating with infrastructure and service providers in the Netherlands and Germany to demonstrate the feasibility of regional cloud infrastructure.
Organizations like the Green Web Foundation are promoting informed choices in cloud infrastructure. The necessary tools largely exist today, including:
Open-source infrastructure tools (OpenStack, Kubernetes)
Environmental footprint tracking tools (Scaphandre, Cloud Carbon Footprint)
Missing components can be developed through SDIA's collaboration platform.
Current pilot projects show how to transform existing infrastructure while minimizing environmental impact. This includes using refurbished equipment and adapting existing buildings according to SDIA's Roadmap to Sustainable Digital Infrastructure by 2030.
These regional initiatives demonstrate the viability of a sustainable three-pronged approach: cost-competitive, environmentally friendly, and fostering inclusive prosperity. Each region can develop its cloud platform based on local expertise and needs.
A trust platform and digital marketplaces will connect regional cloud hubs, ensuring resilience and healthy competition in digital power trading. This unified European market will provide equal access to digital resources for all European businesses and individuals.
The UK's Open Energy Platform demonstrates effective governance for regional energy markets. Members gain accreditation and agree to common rules, enabling streamlined data sharing without individual contracts.
Regional and National Integration
Regions can develop their own infrastructure while participating in national marketplaces, serving both government and private sector needs. These national systems connect to the broader European and global markets, creating a competitive ecosystem for digital power - similar to how the Internet operates today.
Flexible Implementation
Markets can be customized based on specific requirements. For example:
Call to Action
We must act now to:
4.2 Bringing Together Europe's Existing Infrastructure
Much like the unnecessary duplication of newly built cloud infrastructure discussed earlier, Europe can avoid a similar situation by making use of existing digital infrastructure, namely data centers. Some of these facilities are outdated and will require retrofitting. From a resource consumption standpoint, though, and especially in light of our climate ambitions, it makes more sense to focus on upgrading, retrofitting, and renovating existing resources rather than starting from scratch.
Information technology (IT) hardware needs to be continuously renewed regardless of the age of the facility. Upgrading fiber-optic cables, adding interconnections and
Installing new equipment can take place within the European Commission's Renovation Wave programme, as data centers are similar to other buildings when it comes to efficiency retrofitting.
While larger facilities traditionally offered cost advantages (similar to electrical power stations), digital infrastructure is evolving toward decentralized solutions, much like electricity did.
As IT hardware improvements plateau, applications now require horizontal scaling - spreading across more infrastructure rather than upgrading to faster equipment. This creates opportunities to utilize existing data centers across Europe.
Current infrastructure is often underutilized due to redundancies and peak capacity design. A European cloud platform could create an efficient marketplace for digital power supply and demand.
Commoditization and Standardization
For a European cloud platform to succeed, infrastructure operators must embrace commoditization while maintaining differentiation in quality, availability, security, and resilience. This requires a common framework for measuring digital power.
Major cloud providers recognized early that while digital power enables digital products, it offers low margins long-term. They focused on standardizing hardware and infrastructure software to maximize profits from cloud services.
While some competitors still advocate for custom infrastructure solutions, which have been profitable, increasing commoditization is changing the landscape. The market now favors standardized digital power offerings, and cloud providers' direct-to-consumer value-added services are creating fierce competition.
Conclusion
Europe's current digital infrastructure lacks a unified and open interface for computation, storage, and network capacity that would unlock access to available digital resources through regional digital marketplaces. A large carbon footprint, lack of European geopolitical presence, anti-competitive customer acquisition practices, and the vertical nature of existing cloud providers are the current challenges that the existing cloud infrastructure faces.
We envision a European cloud platform of regional marketplaces. This platform should be designed fairly and efficiently, and should be aligned with European goals. We can create this by starting regionally and nationally, using Europe's existing digital infrastructure.
About SDIA
The Sustainable Digital Infrastructure Alliance e.V. (SDIA), established in 2019, is a nonprofit network operating in Germany and the Netherlands. With over 65 members and partners, SDIA works to enable a sustainable digital economy through:
Cross-industry collaboration between public and private stakeholders
Implementation of the Roadmap to Sustainable Digital Infrastructure by 2030
A holistic approach to ICT sustainability, addressing: