Europe's Cloud Datacenter Ambition 'completely Crazy' Says SAP CEO

The leader of Europe's most valuable company says there is no point in the continent building datacenters to try to compete with US cloud hyperscalers which have already invested in the region.

A year ago [we] would not have thought about these kind of geopolitical conflicts we are having now

Speaking at an investment conference last week, SAP CEO Christian Klein said the business application company had struck deals with French AI company Mistral and business services company Capgemini to support customer concerned about data sovereignty in Europe, but saw no point in replicating the effort at cloud-infrastructure level.

"A year ago [we] would not have thought about these kind of geopolitical conflicts we are having now," he said.

With AI and its data storage, SAP offers concerned customers "complete sovereignty from the top to the bottom," he said.

However, he warned about attempts to replicate the services of the large US cloud providers, which claim to offer data sovereignty in Europe. In recent weeks, Microsoft, Google and most recently AWS have all made similar noises about being safe data havens for European customers worried about the policies and rhetoric coming out of the White House.

"The only thing I would caution against in Europe is this: the competitiveness of Europe's car industry or chemical industry will not be by building 20 different datacenters in France and try[ing] to compete against the US hyperscalers. It's completely crazy, and that is sovereignty completely done in the wrong way. We need the best here in Europe to apply AI, to apply intelligent software to do be the best to produce much better, much faster, better cars, and be way more efficient running our supply chains," he said.

Klein said there was huge pressure on energy prices in Europe, so building more datacenters was not a good solution. SAP could give customers different levels of data security and data sovereignty but was "super agnostic on the infrastructure layer," he told a conference hosted by investment bank BNP Paribas.

Against a backdrop of increasingly hostile US rhetoric against European politics and norms of governance, European leaders yesterday announced an International Digital Strategy designed to help the bloc address technological change at a time of global political realignment.

• European pols wave their hands about digital sovereignty with broad but vague plan
• 'Close to impossible' for Europe to escape clutches of US hyperscalers
• AWS forms EU-based cloud unit as customers fret about Trump 2.0
• Under Trump 2.0, Europe's dependence on US clouds back under the spotlight

While US cloud hyperscalers AWS, Google, and Microsoft try to calm concerns about data sovereignty, some European politicians remain concerned about the US administration's willingness to ignore court orders.

SAP is not alone in questioning whether it is wise to seek separation at cloud infrastructure level. Experts told The Register last month that it was "in practice close to impossible" for European organizations to replicate the infrastructure established by the big US cloud vendors in Europe.

SAP became Europe's highest valued company in March, amassing a market capitalization of around $342.4 billion.