As day two of the Gaia-X Summit 2024 drew to a close, I was struck by the fact that I had some misconceptions about the organization.

Attending the summit, I - and, it seems, many others - were very much under the impression that Gaia-X aimed to create a kind of shared cloud platform by combining the offerings of European providers so as to pool their resources and present a challenge US hyperscaler dominance in the market.

When I asked the current CEO Ulrich Ahle whether this was the case, he explained that I was, in fact, misinformed.

“There was maybe the impression that we wanted to create a competitor to the hyperscalers and create our own European cloud," Ahle said. "But the real intention in what we are doing is to define policies and rules for Europe based on European values, and these services can also be fulfilled by hyperscalers."

Ahle went on to note that the hyperscalers are, in many ways, already meeting compliance requirements, with the big three making respective announcements for sovereign cloud offerings across the continent over recent years.

“So they are all creating infrastructures, and also the legal structure that will help sovereignty," he explained. "We don't need to create, we will have access to this infrastructure when it is created.

“It is also an opportunity for the European cloud service providers because they can provide it based on their standard services. They are, by definition, European cloud service providers, and it is much easier for them as they have a market advantage to provide sovereign services. It is the non-Europeans that need to adapt their business models in their departments and in their organizations.”

If we accept this to be the case, then Gaia-X has indeed progressed toward its goals.

Much of the progress seems to have been made in the last year or so, with the release of a compliance document that defines the standards as set by Gaia-X. Companies can get certified and awarded a “label” dictating the standard to which they comply with those standards, and this opens the doors for the development of so-called data spaces in different verticals across Europe which enable shared access to trusted data.

It is this “data sharing” that the summit has really emphasized the importance of.

Consistently, the panels and talks have reiterated that Gaia-X aims to serve the end users, and that data sharing ultimately benefits all those involved in the data spaces. A notable example can be found in Airbus which is developing an aerospace data space that will enable it to exchange data with its many thousands of suppliers, contractors, and OEMs.

The complex part of the process, as noted by Catherine Jestin, executive vice president of digital at Airbus and chairperson of the board at Gaia-X, is not in the establishment of the data space but “the onboarding of the 10,000 suppliers.”

“How do we demonstrate to the SMEs that they will benefit from joining the data space," Jestin told delegates. "It's about spending time with each and every data space member because it has to be a win-win relationship, it can’t just be for the 'big guys'."

The Gaia-X mission has also received support from the likes of Cloud Infrastructure Service Providers in Europe (CISPE), with the organization calling for Gaia-X to seize a critical opportunity to secure its relevance in the European cloud market."

According to CISPE, the organization must "actively advocate for customers across the private and public sectors to demand Gaia-X compliance as a cornerstone of trusted, federated and distributed cloud infrastructures."

It estimates that if 10 percent of cloud procurement tenders specified Gaia-X labels, it could create a €20 billion ($21bn) annual opportunity for European cloud providers.

Francisco Mingorance, secretary-general of CISPE, said: "These are exciting times. By leveraging conformity monitoring technologies and federating cloud services that meet the Gaia-X Trust Framework requirements, including Level 2 and Level 3, Europe can transform its fragmented cloud landscape into a strength and create a competitive alternative to centralized offerings. This new paradigm of distributed, federated infrastructure will be a key requirement to fulfill market expectations towards control, sovereignty, and transparency.”

So, strides have been made towards the goal of “defining policies and rules for Europe based on European values,” and extending even further geographically speaking, with the launch of a Gaia-X Digital Clearing House in Japan.

Interestingly, a brief mention was made of Gaia-X’s “Fulcrum” project towards the end of a panel on day one.

Fulcrum seems far more in line with the 'incorrect' understanding I previously had of Gaia-X’s goal. Fulcrum’s website, notably, does not mention Gaia-X at all, but I confirmed with Gaia-X that it was indeed involved.

Introduced by Leonardo Camiciotti, executive director of TOP-IX Consortium, Fulcrum was previously a “proof of concept” but is now being transformed into a “concrete market proposal.”

Fulcrum aims to bring together the small and medium-sized cloud providers in Europe and to “exploit the wide geographic distribution that is typical of European cloud providers,” explains Camiciotti.

Fulcrum is a two-part project, one of which is a computing exchange market meaning that users can exchange cloud and computational resources ‘aligned with the European Trust Framework’, and then the InterCloud Exchange Foundation which acts as a consensus room to define the open source framework that enables this.

Effectively, customers can use the resources of any members of the Fulcrum project - say you want to bring your data closer to customers, you can move it from where it is currently to another data center even if the data centers were not operated by the same company.

The project is still very early days, and maybe does not yet have legs but has ankles. It is also somewhat similar, on the surface, to Dynamo, a company formed by former Gaia-X CEO Francesco Bonfiglio which offers a catalog of cloud products. Any cloud vendor that is signed up to Dynamo can deliver their customer's services from this catalog alongside their core offering, and these services will need to be compliant with Gaia-X standards to prove their trustworthiness.

Upon asking Bonfiglio to explain the differing roles of Fulcrum and Dynamo, he explained: “They are similar in the sense that they both try to synergize on multiple resources and multiple suppliers. But what Fulcrum is doing is acting on the very low level of the technology, implementing basically a virtualization layer and orchestration that allows, in particular, the creation of multiple Kubernetes clusters and orchestrating them across multiple physical nodes belonging to different physical suppliers.

“What Dynamo does is a real commercial federation of multiple suppliers that can sell anything and to do that, you need to have a commercial, legal, contractual agreement. You have to have a common platform, which is the Dynamo platform, that automates all the processes that you normally have inside a company in order to make the operations between the participants of Dynamo seamless. Dynamo is creating a sort of virtual hyperscaler. It goes down to the interoperability of the platforms layer.”

Bonfiglio added that Dynamo is actually “in discussion” with Fulcrum to find a way to work together.

Bonfiglio was CEO of Gaia-X for two years, leaving the organization in October 2023. While his current project Dynamo does turn to Gaia-X’s standards and labeling system for its virtual cloud platform, and he also notes the complexity behind developing the data spaces that are Gaia-X’s current main focus, he was emphatic that it is not enough.

“You cannot just create data spaces if you don’t have cloud spaces to run them, it's like building electric cars without having built a power grid," he argues. "We need to create that common cloud space that is very much missing, and is not being realized by Gaia-X, even though this was one of the major expectations of Gaia-X members.”

He points to the continuing downward trend of European cloud provider market share. “We have three years. In 2017 we had 26 percent of the market share, now we are at 10 percent. We can’t turn that back, so in three years it will be zero. Meanwhile, you have American providers buying data centers and gigawatts of energy.

“My question is, what’s the value in having digital regulation if there is no digital market to regulate? What is the value of having the highest scheme of labeling, if there will be no services utilized?”

“Gaia-X has preached in the federative direction, I think it has advocated very well in the data space side. Now it is also time to do it on the cloud side of the business.”

My main takeaway from the event was that Gaia-X has found its role, and is fulfilling that by successfully creating an interoperable, trusted, data economy.

But as Bonfiglio sees it, some of the obstacles to developing this further can only be solved from within the market itself.