Best of LinkedIn: Cloud Insights CW 45/ 46

00:00:00: This episode is provided by Thomas Allgaier and Frenis, based on the most relevant LinkedIn posts about cloud in calendar weeks, forty five and forty six.

00:00:08: Frenis enables enterprises with market technology and competitive intelligence for portfolio and strategy development.

00:00:14: This edition is brought to you by our partner Google Cloud.

00:00:17: Don't miss out on their upcoming event, Google Cloud Live, plus labs Geneva on fourth December.

00:00:22: Find the link to the event in the description.

00:00:25: Okay, let's unpack this.

00:00:26: We've been looking at the cloud strategy discussions from the last two weeks and for CIOs and CFOs, the focus is getting, well, really intense.

00:00:35: It

00:00:35: is.

00:00:35: It feels like the era of just, you know, casually adopting cloud is completely over.

00:00:40: It really does.

00:00:41: It seems to boil down to three big things.

00:00:43: Yeah.

00:00:44: What is true?

00:00:44: sovereignty?

00:00:45: How do we get a grip on the economics and how do we execute on AI right now?

00:00:49: That's absolutely right.

00:00:50: We're moving past all the philosophical debates and into really concrete choices, especially here in Europe.

00:00:55: The material we've analyzed is just packed with signals on where the money is flowing and maybe more importantly, where the legal risks are.

00:01:01: So our mission in this deep dive is to basically synthesize all of that into six core themes.

00:01:07: We'll cover everything from geopolitical control to fine ops and even the talent landscape.

00:01:12: We want to give you a shortcut to understanding where European cloud strategy is heading right now.

00:01:16: And the one topic that just dominated the conversation, the one that really framed everything else, was sovereignty and compliance.

00:01:23: Yeah.

00:01:23: And it's not just a legal problem anymore.

00:01:25: It's really become an architectural challenge.

00:01:28: Here's where it gets really interesting.

00:01:29: For so long, the debate was just about geography, right?

00:01:34: Is my data stored in Europe?

00:01:36: But as your impeterate pointed out, sovereignty is fundamentally about architecture, not just location.

00:01:41: He makes the argument that a European HQ alone doesn't protect you because laws like the US Cloud Act can reach across borders.

00:01:49: And this raises that critical question of who actually controls the management layer, the control plane.

00:01:54: Exactly.

00:01:54: Frode Nielsen posted a really dramatic real world example of this.

00:01:58: He talked about an AWS US East One DNS failure.

00:02:02: Oh, I remember that one.

00:02:03: So a lot of European customers, they pay for EU regions.

00:02:06: But key infrastructure, we're talking UK banks, French telecoms, it all went down.

00:02:12: And why?

00:02:12: Because even if your data is physically in Frankfurt, the fundamental control API is the identity and access management.

00:02:20: it all often relies on that central U.S.

00:02:22: control plane.

00:02:23: So regional presence, as Nielsen put it, does not equal operational sovereignty.

00:02:27: Not at all.

00:02:28: And that's the core structural weakness.

00:02:30: It forces companies into what Kaye Hartung called the sovereign trilemma.

00:02:34: Okay.

00:02:34: He was talking about the Deutsche Forschungsgemeinschaft having to repatriate data because the conflict between GDPR and the cloud act was just too risky.

00:02:43: So what were their choices?

00:02:44: Well,

00:02:45: three tough ones.

00:02:46: One, use a pure but awesome technically immature European stack.

00:02:50: Two, take a pragmatic but legally risky hyperscale or compromise.

00:02:54: Or three, go for a radical and very complex, self-hosted stack.

00:02:58: Yeah, none of those are easy options.

00:02:59: And the regulators are trying to fix this.

00:03:02: Davidi Maniscalco outlined the EU's cloud sovereignty framework and its eight objectives.

00:03:07: But the critique came in almost immediately.

00:03:09: Zuzana Warsaw argued that the weighted scoring system could actually, you know, dilute the core legal question.

00:03:16: She's worried it could let hyperscalers compensate for a structural problem like a U.S.

00:03:21: control plane by just getting high scores on other things, which would just reinforce their market position.

00:03:27: So if the regulations are already seen as flawed, what are CIOs doing with their money?

00:03:32: Well that's the bottom line.

00:03:34: Enrico Senioretti shared some data on this.

00:03:36: It shows that sixty-one percent of European CIOs are already shifting budgets to local cloud providers because of these geopolitical risks.

00:03:44: Sixty-one percent.

00:03:45: Wow.

00:03:46: That's a huge number.

00:03:47: And as he said, it signals the era of blind hyperscaler dependencies ending.

00:03:51: But despite that risk, the big players are doing the opposite.

00:03:55: They're doubling down, which brings us to our second theme, hyperscalers and the ecosystem.

00:04:00: It's an investment race.

00:04:01: It really is.

00:04:02: It feels like Europe is sending Two signals at once.

00:04:05: Invest here or get out.

00:04:07: And the investment signals are colossal.

00:04:09: Absolutely.

00:04:10: Take AWS.

00:04:11: They announced a seven point eight billion euro investment in Brandenburg, Germany for their European sovereign cloud, the ESC.

00:04:19: And just D noted that the ESC is built and operated entirely inside the EU.

00:04:24: by EU residents.

00:04:25: Google is right there with them.

00:04:26: Michael Cullig highlighted their largest ever investment in Germany, five point five billion euros through twenty twenty nine for new data centers.

00:04:34: And what I found interesting there is the focus isn't just on cloud, it's on clean energy, like using waste heat for local households.

00:04:40: It's a way of embedding themselves deeper into the European ecosystem.

00:04:44: Microsoft is making big moves, too.

00:04:46: Daniel Akinine detailed how they're expanding the EU data boundary for things like co-pilot, but they're also setting up a European board of directors to over operations here.

00:04:54: You

00:04:54: can just feel the competitive heat.

00:04:56: Oracle is opening a third region in Spain, Revit Jain mentioned.

00:04:59: Clouder is already an AWS ESC launch partner.

00:05:02: These sovereign regions are maturing into full platforms really, really fast.

00:05:06: And all of this spending, all this AI ambition, it just sharpens the focus on cost.

00:05:12: That brings us right to theme three, cost optimization and fan ops.

00:05:16: You just can't afford waste with these AI workloads.

00:05:19: Okay, let's unpack this with a stunning example.

00:05:22: Victor Garcia shared a Fortune-Five Hundred case study that found one point two million dollars in annual waste.

00:05:28: A

00:05:28: million dollar.

00:05:29: A

00:05:29: million.

00:05:29: And this wasn't about some complex technical fix.

00:05:32: The real money was in fixing simple processes.

00:05:35: They saved over half a million a year just by turning off expensive databases that were running two hundred forty seven

00:05:40: when they were only used during business hours

00:05:43: exactly.

00:05:44: and the other big saving came from adding labels that showed actual business impact.

00:05:48: not just you know finance friendly tags.

00:05:50: it's about connecting every dollar to real value.

00:05:52: That points to a governance failure, not just a technical one.

00:05:55: It does.

00:05:56: And Nicholas Von Drini posted about this, saying cloud contracts have to evolve into financial governance tools.

00:06:01: You need binding phenops clauses in there.

00:06:03: That makes sense.

00:06:04: It reinforces what Tom Vessi said about predictability being underrated.

00:06:08: He argues private cloud gives you that long-term control that CFOs need.

00:06:13: And we saw Ian Jackson.

00:06:15: talking about the NHS, promote a sit-for-purpose approach over just a blanket cloud-first policy.

00:06:21: You have to balance everything for each workload.

00:06:23: Okay, so that leads us to our next theme, security and resilience.

00:06:27: The outages we mentioned earlier are a huge catalyst for change.

00:06:30: They are.

00:06:31: But what's fascinating is how often the failure mode is just simple human error, not some complex zero day attack.

00:06:38: It's always the low tech trap, isn't it?

00:06:40: Rami Alcafaje reported on the Truffleet cyber attack.

00:06:43: It was a massive business email compromise.

00:06:46: And the vector was compromise identities and stolen AWS credentials.

00:06:50: Stolen credentials spread across fifty seven networks and it was all preventable with basic MFA and least privilege.

00:06:56: We spend billions on AI defense and leave the front door unlocked.

00:07:00: So in In response, you see this rising demand for integrated platforms.

00:07:03: Christopher Net detailed how Microsoft Defender for Cloud is positioned as a CNETP.

00:07:08: A

00:07:08: cloud-native application protection platform.

00:07:11: Right, combining DevSecOps, posture management, and workload protection all in one place.

00:07:16: But the real experts are pushing beyond just basic protection.

00:07:19: Sebastian Schiele argued Europe has to prioritize confidential computing to win digital autonomy.

00:07:25: And

00:07:25: that's about protecting data while it's in use.

00:07:28: Exactly.

00:07:29: trusting a provider to using verifiable math.

00:07:33: Isabel Martin also noted that these outages should be learning opportunities.

00:07:37: For critical workloads like SAP Cloud ERP, you need to be thinking multi-cloud or hybrid to stay resilient.

00:07:43: And that resilience is just so urgent now because cloud adoption is completely tied to AI ambition, which is our fifth theme, AI cloud and data platforms.

00:07:53: The urgency is... You can feel it.

00:07:56: Jennifer Jones shared insights from the Google Cloud Summit suggesting Europe might only have four or five years to leverage GNAI to stay competitive.

00:08:03: And enterprises are responding.

00:08:05: Yannick Peter Schmidt described SAP Cloud EIP integrating the Juul co-pilot.

00:08:10: Gaurav Jain's work on Salesforce data cloud certification also shows how AI is unlocking customer intelligence.

00:08:17: It's not just in IT systems either.

00:08:19: Dr.

00:08:19: Ferry Abelhassen described T systems working with NVIDIA and SAP to build Europe's most modern AI factory.

00:08:26: An industrial AI cloud.

00:08:28: Yeah.

00:08:29: And he emphasized this isn't just for huge corporations.

00:08:32: He gave an example of a mid-sized company using it for predictive maintenance on air conditioning systems.

00:08:36: So they're basically renting supercomputing power.

00:08:39: On subscription.

00:08:40: Okay, finally, let's look at the foundation for all of this.

00:08:42: Theme six, market structure and talent.

00:08:45: We're seeing a lot of consolidation.

00:08:47: Kindrel buying solvenity, Vodafone acquiring scalink.

00:08:52: It's all concentrating around regional cloud and managed services.

00:08:56: But the biggest structural change is about price.

00:08:58: Michael Rebnan pointed this out.

00:09:00: With vSphere eight support ending in twenty twenty seven and predicted price hikes of nearly fifty percent.

00:09:06: Fifty-six percent of organizations using VMware plan to decrease their usage within a year.

00:09:11: That's a massive shift in the market's foundation.

00:09:14: So that raises a huge question.

00:09:16: What fills that gap?

00:09:17: Well, Ahmed Omni highlighted that platforms designed for service providers, like Virtuoso, are enabling much higher margins, like Thirty to forty percent plus.

00:09:26: Compared to enterprise platforms that are often below fifteen percent.

00:09:30: Right.

00:09:31: It shows a clear financial incentive for regional providers to pivot to business models actually built for them.

00:09:37: And of course, none of this works without the right people.

00:09:40: Lefteris Cara Gorgino, after hundreds of cloud interviews, had a great point on talent.

00:09:46: He said that technical skills get you in the door.

00:09:49: But the star method situation, task action result.

00:09:53: is what gets you the offer.

00:09:54: And he advises candidates to spend sixty percent of their answer on the action part.

00:09:58: Yeah, that's what separates the doers from the talkers.

00:10:02: A key insight for anyone trying to hire people who can actually connect the tech to business impact.

00:10:07: So we've covered a huge amount of ground here.

00:10:09: We've seen that sovereignty is driving billions in investment, but it's also being redefined as an architectural challenge.

00:10:16: One that protects data in use and demands operational independence.

00:10:20: And at the same time, FinOps has become a contractual requirement, and enterprises are in a dead sprint to adopt cloud-based AI.

00:10:29: So for you, the listener, here's a final thought to take away from all this.

00:10:32: The EU's hundred and eighty million euro sovereign cloud tender is live, and it's focusing on things like supply chain control.

00:10:39: Considering the massive financial commitments from the hyperscalers in Europe, how will you measure true digital autonomy in your own organization?

00:10:48: Will it be by the dollars invested in local data centers?

00:10:51: Or by the verifiable architecture and the keys that you actually hold?

00:10:55: That balance is going to define success for the rest of this decade.

00:10:59: If you enjoyed this deep dive, new episodes drop every two weeks.

00:11:02: Also check out our other editions on ICT and tech, digital products and services, artificial intelligence, sustainability and green ICT, defense tech and health.

00:11:11: Thank you for joining us and remember to subscribe for more strategic insights.