SAP & Arvato want to build a platform for the government

SAP & Arvato want to build a platform for the government

Dusseldorf In ancient Greece, the island of Delos was known for its treasuries, lavishly stocked and well secured. 2,500 years later, the rock in the Aegean Sea is the inspiration for a project that should one day meet similar requirements – but it’s not about gold and silver, it’s about data.

SAP and Arvato Systems are building a cloud platform for ministries and authorities, which is expected to be available from 2024. The consortium promises that privacy well protected against unauthorized access, including by handling all processes in Germany. The name of the new entity: Delos Cloud.

The management around Georges Welz is pursuing great ambitions. Although is Microsoft close partner of Delos Cloud, the infrastructure is based on the technology of the US group. But: The aim is that “all standard software can be used without specific adjustments” via the platform.

Other software manufacturers and IT providers should also be able to sell their products to the state, which is planning several large digital projects over the next few years to modernize administration.

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However, must SAP and Arvato to make advance payments. The companies are not quantifying the investments, but industry insiders are assuming a three-digit million sum in view of the scope. The project is therefore “associated with a very high risk,” says René Büst, an analyst at the market research and consulting firm Gartner.

“The fact that two German companies offer a sovereign solution for the German government makes sense,” the cloud expert is convinced. However, it is not certain to what extent the state will use the new platform, especially since there is some competition. “The public sector is not known as a model customer for IT solutions.”

New strategy against old dependencies

For the digitalization of the public sector, the cloud is considered central. However, the business is dominated by American companies, namely Amazon Web Services (AWS), Microsoft and Google.

This is doubly problematic. On the one hand, the dependency on a few providers remains. On the other hand, there are serious concerns about data protection, since the European Court of Justice, following Edward Snowden’s revelations, laid important legal foundations for data transfer from Europe to the United States United States declared invalid.

The federal government’s digital strategy therefore envisages avoiding dependencies on individual companies with a “multi-cloud structure”. In other words, the government and authorities should be able to choose from a variety of providers who must comply with strict IT security and data protection requirements.

In principle, the goals are the same as for the projects Gaia-X and Catena-X, which are intended to promote secure data exchange in business: greater digital sovereignty for Europe, relatively openly combined with economic development for the local IT industry.

The market is attractive. The consulting firm PAC estimates that external spending on software and IT services – including cloud services – will total around ten billion euros this year.

“As a relatively crisis-resistant industry with a great need for modernization, the public sector has been one of the growth drivers for the IT industry over the past two years,” says analyst Karsten Leclerque. Cloud services are particularly in demand, as well as special solutions such as “sovereign clouds” in regulated areas.

Strictly separate from Microsoft

In order to meet the criteria set by the Federal Office for Information Security (BSI) for cloud platforms in public administration, Delos Cloud works closely with the authority, says Welz. In essence, it is about preventing any dependence on non-European providers.

The new platform should offer sovereignty in three dimensions. Firstly, the technology is designed to run independently of the partner Microsoft. Second, the new company has two German owners who are subject to local jurisdiction. And thirdly, operation and thus control of the data centers and software lies solely with the joint venture.

What sounds simple in principle is complex in detail: On the one hand, new functions that Microsoft is developing for the cloud should be available quickly. On the other hand, an examination is necessary. On the one hand, secrets should be protected from the US group. On the other hand, its employees should be able to connect quickly if there are problems.

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However, Delos Cloud boss Welz sees an opportunity in this complex procedure. So far, the state has had to check every software and cloud product to see whether it meets data protection and IT security requirements. “The aim of the project is to put individual decisions before the brackets.”

Delos Cloud could therefore not only offer products from Microsoft and SAP, but also from other software developers. “Our target group are IT service providers in the public sector who can make their customers a complementary offer on the platform,” says Welz. The manager also wants to attract start-ups.

Competition from T-Systems and Google

The project is not a sure-fire success, the competition is considerable. T-Systems is working with Google on a sovereign cloud, and German providers such as Ionos are also hoping to do business with the state. “AWS, Microsoft and Google are also trying to get government contracts,” emphasizes Gartner analyst Büst. At least where the highest data protection standard does not apply.

So far, Delos Cloud has not had any orders or funding commitments from politicians, says Welz. If the platform passes the test, the offer will be fully released for use by the federal authorities. “There is an interest in making cloud use possible,” he knows. “The fundamental formation of political will has taken place.”

Co-owner SAP should try to use the close contacts in politics. Spokesman of the board Christian Klein exchanges ideas with Chancellor Olaf Scholz (SPD) and Economics Minister Robert Habeck (Greens), can be heard in corporate circles.

“As the largest software manufacturer, we not only have a commercial interest, but also a social responsibility to support the digital strategy of the federal government,” says Nik Hagl, who heads sales in the public sector in the German national company of the group.

The technical and organizational details are also treacherous, especially in a three-way relationship such as that which arose at Delos Cloud. Arvato Systems therefore wanted to withdraw from the prestigious project in the meantime, but was able to come to an agreement with SAP.

So now the work is in progress. The platform should be ready to go in two years, an interim solution for tests, for example, possibly earlier. Only then will it become clear whether Delos Cloud will be just as lavishly filled as the treasury of the Greeks once was.

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