Friday, April 19, 2024
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How Evroc plans to build sovereign, hyperscale data centers in Europe

While cloud computing has transformed just about every industry on Earth, a burgeoning backlash has led some businesses to seek alternatives to the Big Tech-dominated public cloud. Vendor lock-in, spiralling costs, security concerns, and a lack of control over how their data is processed are just some of the reasons companies might retreat from cloud-first strategies.

For European companies specifically, a growing digital sovereignty agenda has led the likes of AWS, Microsoft, and Google to focus their efforts on bringing granular data controls and storage closer to their customers, while consumer juggernauts such as TikTok have had to invest significant resources in localizing their infrastructure.

But for many, such measures don’t go far enough — a data center might well be located in Europe, but it’s still controlled by a company headquartered thousands of miles away. And that is why a new Nordic startup is launching out of stealth today with €15 million ($16 million) in funding as it looks to build fully localized, hyperscale data centers across Europe.

Founded in 2022 by serial entrepreneur Mattias Åström, Evroc is aiming to establish an inaugural pilot data center in the Stockholm region next year, with plans for eight data centers — and three software development hubs — by 2028. The ultimate mission, according to the company, is to create Europe’s “first secure, sovereign, and sustainable hyperscale cloud,” and end the “foreign dominance of the European cloud market.”

The company’s €15 million cash injection, with backers including EQT Ventures and Norrsken VC, will go some way toward helping Evroc achieve its lofty mission — but building data centers from scratch is a fairly capital intensive endeavor. This is why Åström says Evroc is planning to raise an additional €3 billion in equity, debt and “various sources of public funding” to get its first two data centers off the ground. “The first one will be established in 2025,” Åström told TechCrunch.

In terms of locations, details are not yet set in stone, but the first two will be split across Northern and Southern Europe, with the next six likely to be anywhere in the European Union.

“The location will be determined though a site-selection process that we will initiate in the coming year,” Åström explained. “The decision will be based on a number of factors including access to renewable energy, engineering talent, capital and support from public authorities. We have not excluded the U.K., but initially we are looking at the EU as our primary market.”

Of course, data centers also require a significant amount of power, something that Åström says they plan to address with “next-generation energy-efficient technologies,” namely something known in industry parlance as “eco load balancing” which it will offer to customers on an opt-in basis.

“Data and workloads will flow seamlessly between Evroc’s data centers to where renewable energy is most readily available and affordable,” Åström continued. “This, in combination with other investments in energy efficiency, will allow us to build the world’s cleanest cloud from day one.”

Scrutiny

The timing of Evroc’s launch is notable, coming amid heightened scrutiny of the European cloud market. In mainland Europe, Microsoft has faced criticism from rivals (including AWS and smaller European competitors) for using its dominance in business software to tether customers to its Azure cloud platform, though settlement discussions are currently underway to avert formal antitrust procedures. And the U.K. is currently mulling anti-competition manoeuvres over how AWS and Microsoft make it difficult for companies to switch cloud providers.

All this serves to highlight the growing tensions between Europe and U.S. Big Tech. And, coupled with the “digital sovereignty” push underway in Europe, this could position a young cloud upstart favorably. On top of that, Evroc is pitching its local development and R&D efforts as a major differentiator to its deep-pocketed rivals, arguing that this will help create significant jobs across the continent.

“If you look at the major cloud companies today active in Europe, their data centers themselves do not create many jobs, but their development and R&D do — in other parts of the world,” Åström said. “We think this is a core skill for Europe to have in Europe, and we want to enable a European ecosystem for cloud development.”

Indeed, physical data centers are only one facet of Evroc’s plans — the company’s product development and R&D hubs will serve as the foundation to its network of servers, and is where it hopes to hire some 3,000 people in the coming years.

“This is where the majority of our employees will sit, and it is something that Europe has been missing out on to a large extent, given that most of the development connected to cloud takes place in other parts of the world,” Åström added.

This all sounds great in principle, but there’s no escaping the herculean undertaking involved in building a cloud infrastructure business from scratch, and taking on the trillion-dollar behemoths from the other side of the Atlantic. But Åström is convinced the opportunity, will and regulatory support exists to do just that.

“Given the uncertainty surrounding U.S. authorities having access to European data, there are a lot of European companies, such as banks, hospitals and tax authorities, that cannot put their data in the cloud,” he said. “Instead, their only option is to put their data in their own, very inefficient and unsustainable, on-premise server halls. We want to provide them with an alternative to that. We also think we have an advantage in starting without any legacy compared to the established cloud companies.”

It’s worth noting that there are already some home-grown cloud computing options already, including France’s OVHcloud, but Åström is quick to stress that his company is tackling the problem completely afresh — with “hyperscale” at the root of its business. This basically means at least 100,000 servers in a single data center, and a combination of hardware and software to store and manage data at scale.

“The traditional European providers come from a different type of legacy and business strategy, offering web hosting, domains, bare metal, etc, and have not really had the same scale as the global cloud providers,” Åström said. “We want to build Europe’s first truly hyperscale cloud.”

How Evroc plans to build sovereign, hyperscale data centers in Europe by Paul Sawers originally published on TechCrunch

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