Strategic importance of cloud services for the digital sovereignty of SMEs © Photo Credit: lassedesignen - stock.adobe.com

Strategic importance of cloud services for the digital sovereignty of SMEs

The WIK study commissioned by the German Federal Network Agency (BNetzA) examines the importance of cloud services (offered in particular by internationally active hyperscalers) and the digital sovereignty of SMEs (small and medium-sized enterprises).

Based on desk research, expert interviews and an SME survey with 500 telephone interviews, the following core results were developed with regard to the market and the use of SMEs:

  • The market for cloud services is considered by experts to be dynamic and high annual growth rates are expected.
  • The market is divided into three service models (Infrastructure-as-a-Service (IaaS), Platform-as-a-Service (PaaS) and Software-as-a-Service):
  1. The Software-as-a-Service (SaaS) model is the most commonly used by SME. The SaaS model with "ready-made" applications offers SMEs easier access to digitization and requires less know-how compared to the other service models.
  2. The competitive situation in the SaaS market differs greatly compared to the IaaS and PaaS markets. While in the IaaS market and the PaaS market only a few companies cover almost the entire market, there are more and smaller providers in the SaaS market.
  • The most common uses by SMEs are data storage/data backup as well as office and collaboration applications. These are followed by security applications, software applications in finance and accounting as well as data management systems. SaaS providers are mostly used for these services, as they enable particularly simple data management for companies.
  • Particularly relevant for SMEs when choosing a cloud provider are reliability, data and information security, guaranteed data protection, performance (high availability, low latency, etc.), functionality, complete data deletion options and user-friendliness. Price is only one of many decision criteria.

The concept of digital sovereignty is multifaceted and is relevant for SMEs, among other things, because of the GDPR, the US Cloud Act and the technological dependence on non-European cloud providers. So far, however, digital sovereignty has played only a limited role for SMEs decision making:

  • The term digital sovereignty is only known among a few SMEs. Those that are already familiar with the term tend not to see their digital sovereignty threatened by cloud services.
  • The SMEs that see their digital sovereignty at risk from cloud services express concerns about compliance with data protection and data security when using non-European cloud providers. Nevertheless, they are often used.