The Commoditized Stack

Over the past year or so I’ve been developing an argument around confronting concentration and dependency at the cloud level of the technology stack: that at best digital sovereignty is a poor frame for this conversation, at worst it suggests pathways that are neither sustainable nor desirable. As Mike Bracken and I outlined in The Service Gap, the real goal should be agency, not sovereignty (Mike expanded on this in this excellent piece). Owning every layer of the technology stack isn’t possible, even for America. And creating a “sovereign stack” carries real short and long-term costs. We should be focused on reshaping the cloud market — storage, compute, and platform services — to behave like a utility: interoperable, substitutable, and something every country, state, company, or individual can draw on. The path to agency, or sovereignty, or whatever term you prefer, is via commoditization.

It’s worth being clear why this matters so much. Cloud is now an input into almost all economic activity and nearly every government service. Like water in the 18th century, rail in the 19th, electricity and telecommunications in the 20th, compute is the utility of the 21st century: the substrate everything runs on. That’s part of what makes it so sovereignty-sensitive. But it’s also why getting it wrong is so costly: a cloud layer that’s less efficient, more expensive, and cannot scale or interoperate internationally doesn’t raise one bill, it quietly taxes the whole economy, for decades.

Much of the energy in capitals right now goes into ownership — national champions, sovereign clouds, public money to build domestic capacity. This is certainly the focus of the Commission’s recent tech sovereignty strategy (the more they say it isn’t about buying European, the less I believe them). I’m not opposed to this. Europe, Brazil, Canada — pretty much everyone — may have very good reasons to build capacity. My point is only about priority: building domestic capacity is a legitimate choice, but building a utility rather than a new “stack” is the more important one. A domestic champion that’s just as hard to switch away from may protect you from a kill switch, but it won’t help your businesses scale internationally and will serve as a tax on your domestic market.

I’ve made versions of this case in a few places lately. Most recently, Curtis McCord and I wrote Parting Clouds: Creating a Competitive Marketplace for Compute for the Canadian Anti-Monopoly Project. It found that three US firms hold 85% of Canada’s cloud market, and warned that standing up domestic providers risks trapping Canadians in “maplewashed dependencies” unless those providers are required to be interoperable. This built on an earlier piece I wrote in Tech Policy Press – The Path to a Sovereign Tech Stack is Via a Commodified Tech Stack – which laid out the underlying logic and historical parallels. And last week I made the case in a piece in Foreign Policy magazine that this strategy is particularly effective for a group like NATO (more on that later).

Visiting the Eurogroup

Most exciting is that last week I had the chance to put this argument to the Eurogroup — where finance ministers of the euro area meet to coordinate and debate policy — directly. During their meeting I ran a session with the ministers on digital sovereignty, with a short memo I’d written to frame the discussion. You can read the memo here. I left impressed by the questions, the curiosity, and the engagement I received from the ministers. The one thing I wanted to impress upon the ministers was that despite its “digital” label, the issue of digital infrastructure is core to discussions of economic growth and efficiency. It deserves their attention. On this, I think I got their attention.

I was then lucky enough to be able to join the group for dinner, which centered around some Q&A with Jean-Claude Juncker, the former President of the European Commission and the Eurogroup’s first permanent president.

A Thank You

My thanks to Kyriakos Pierrakakis for the invitation. I’ve been lucky to know him through the significant role he’s played in Greece’s digital transformation journey and his amazing work as Digital Minister. I’m grateful he thought this argument worth a hearing.

P.S. A small thing I’m also proud of: all the pieces I’ve written and linked to above can now be found by clicking the “publications” link in the menu above. It takes you to the newly built library.eaves.ca.