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Germany: Schwarz Gruppe will start a cloud platform in early 2021

The Schwarz Gruppe (owner of discount retail chain Lidl and supermarket chain Kaufland) is developing a cloud platform called Stackit for internal use. This infrastructure should also be able to use external customers, fitting within the Schwarz Gruppe profit center strategy.

Internal use will begin in January, and there will also be test access for selected companies, as the group told Handelsblatt. “Productive use on the external market”, that is, marketing, should begin in mid-2021. Until then, the development of new services will be driven forward and the stability of the infrastructure will be “further hardened”.

In competition with AWS, Microsoft and the other large providers, known as hyperscaler in technical jargon, the Schwarz Group wants to distinguish itself through high standards of data protection and security. In a press release, the group promises to use data centers in Europe and wants, for example, to do without components from the controversial Chinese network supplier Huawei.

"In particular, medium-sized companies that value high European security standards," they want to address. On the one hand as an alternative to the existing providers, on the other hand as a supplement to a so-called multi-cloud strategy in which several platforms are used in parallel.

The project represents a great opportunity for a German start-up: Cloud & Heat, which is based in Dresden, is working closely with the Schwarz Group to develop the architecture for Stackit. The company, which specializes in energy-efficient data centers, is to contribute its expertise in the development of cloud infrastructure.

Own platform with open source

"We are very happy about the cooperation and are convinced that we can jointly set up a high-performance and future-proof infrastructure", explained Marius Feldmann, Chief Operating Officer (COO) of Cloud & Heat. An expansion of the cooperation to adjacent business areas, for example in the area of ​​sustainable data centers, is being examined.

The cooperation is intended to show that German medium-sized companies now have a place where they can safely store their data, ”said Feldmann. "There is also the issue of sustainability, which is in our DNA and which is also very important to the Schwarz Group."

The structure of Stackit is about the use of the manufacturer-neutral and open software Openstack - this serves as the technical basis. It contains several components for cloud platforms, for example computing power, storage and network management. Additional services are also being developed in the project, such as an identity service, virtual machines or an environment for software development.

It is one of the largest open source projects in the world. Many companies from the IT and telecommunications industry are members of the foundation, IBM, Hewlett-Packard and VMWare, for example, in Germany SAP, Telekom and Volkswagen. A community of more than 8000 programmers works on the system. "Openstack is the Linux of the cloud world," says René Büst from the Gartner analysts, making a comparison, a kind of operating system for the IT infrastructure in the network.

Stackit and Cloud & Heat want to develop their own version of Openstack, in technical jargon they speak of a distribution. "OpenStack is a kit with various components that you have to put together yourself," says Cloud & Heat Manager Marius Feldmann.

Essentially, it is about making it easier to update the software during operation. Other developers should also be able to participate: "We hope that others will join in and support the distribution."

The Schwarz Group is developing the cloud platform for its own companies with its subsidiary Schwarz IT. The goal is to transform IT in order to be ready for new business models, said IT director Christian Müller to the Handelsblatt in May. The group wants to turn this cost center into a profit center by opening it up to external customers.

Tough competition with US corporations

Schwarz IT and Cloud & Heat are positioning their cloud platform as an alternative to American providers such as AWS, Microsoft and Google. In a direct comparison, however, there should be clear differences: US corporations are continuously developing new functions in addition to their infrastructure.

This applies, for example, to the networking of machines and artificial intelligence. Customers can also incorporate the technology behind the Alexa voice recognition system into their own products. According to industry experts, the big providers AWS, Microsoft and Google are several years ahead of their small competitors: There is a “clear functional gap,” said Christa Koenen, IT manager at Deutsche Bahn recently.

Many German corporations therefore work intensively with American providers. For example, Volkswagen is building an “Industrial Cloud” with AWS to increase productivity in the factories. BMW, in turn, is cooperating with Microsoft in setting up a platform.

It is currently unclear which functions the Schwarz Group intends to offer. On the website, the Group only names a few exemplary services that should be available "soon". One thing is clear: if you want to compete against the hyperscalers, you have to develop such functions yourself, as Gartner analyst Büst emphasizes. “The infrastructure is just the basis for further applications.” So the work for Stackit has only just begun.

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