Summary
DOWNLOAD PDFUnprecedented Opportunity for Public Service Modernisation
EU governments have an unprecedented opportunity to unlock up to EUR 450 billion in annual fiscal savings by modernising public services through advanced multi-cloud solutions, cloud-based AI, and other deep tech innovations. As estimated in this study, this figure highlights the transformative impact of digitised government services – not only in improving service quality and operational efficiency but also in generating substantial fiscal gains that would enhance Europe’s economic competitiveness.
Multi-cloud adoption is not merely an infrastructure choice but a strategic enabler of modern, agile, and citizen-focused public services. To fully capitalise on cloud adoption, EU governments should embrace a multi-cloud strategy that integrates different public cloud providers and, where necessary, also incorporates sovereign or private cloud environments.
Cloud services come in many forms, including Infrastructure-as-a-Service (IaaS), Platform-as-a-Service (PaaS), and Software-as-a-Service (SaaS). Each model offers unique value propositions such as ease of use, rapid security updates, scalability, and the capacity to integrate novel technological features, such as AI applications, seamlessly.
Recent reports on European competitiveness, by Enrico Letta and Mario Draghi, underscore the critical need for swift action and substantial investment from both public and private sectors in high speed/capacity broadband networks, computing and AI, and semiconductors. According to the Draghi Report, there is an absolute need to “incentivise the deployment of new infrastructures by defining cut-off dates for older technologies to enhance the return profiles of investments in new technologies.”
By fully committing to a European Cloud-First strategy, EU governments stand to unlock up to EUR 450 billion annually in fiscal savings and productivity gains. The adoption of advanced cloud computing and AI technologies will not only enhance public service delivery and bolster security but also free up significant fiscal resources for vital sectors such as healthcare, decarbonisation, education, and infrastructure development. These savings and productivity gains can help fill the gap of the approximately EUR 800 billion needed to invest in strengthening Europe’s competitiveness, ensuring that digitalisation directly supports Europe’s economic and strategic goals.
A Leap towards Efficiency and Innovation
By making public services more agile and efficient, governments can position Europe as a global leader in digital innovation and technological progress. While the private sector has swiftly embraced the advantages of cloud technology, public institutions in the EU have been much slower to adapt. This has left governments reliant on outdated legacy (on-premise) systems, which limit efficiency, innovation, and satisfactory services delivery.
Critical Need for Modernisation in the Public Sector
The need for modernisation is pressing, especially as public sector investment plays a crucial role in supporting the EU’s green and digital transitions – both key priorities for the EU and its Member States – alongside enhancing EU defence capabilities. However, a significant portion of public funds is currently tied up in maintaining traditional and often fragmented ICT systems, limiting the resources available for investment in these critical areas.
The Transformative Power of AI in Public Services
AI is already transforming public services by increasing efficiency and the reliability of services. However, AI applications demand substantial CPU and GPU power, which traditional on-premise IT systems lack. To achieve optimal performance and scalability, AI relies on cloud infrastructure making cloud adoption essential for unlocking AI’s full potential in public services. Cloud-based AI tools enable public authorities and agencies to analyse large data sets and optimise resource allocation and automate routine tasks to improve productivity. Since governments typically lack the resources to develop advanced AI models and applications in-house, cloud services provide the necessary computing power and ready-to-use AI solutions to accelerate cloud-AI adoption.
Overcoming Political Barriers to Cloud Adoption
Political resistance, often driven by concerns over data sovereignty, security, and vendor lock-in, has slowed progress in several Member States. However, these concerns are frequently overstated and used as “excuses” to maintain the status quo. Compared to the private sector, the main barrier to government cloud adoption is not technological in nature, but political, rooted in governments’ reluctance to fully embrace modernisation. For this reason, it is essential that EU governments and policymakers prioritise a “Cloud-First Multi-Cloud” strategy in updating their ICT infrastructure.
The challenge is not the EU’s desire for sovereignty but a misconception of what it entails. Sovereignty does not require rigid, isolated infrastructure, instead a multi-cloud approach can protect EU data ownership while leveraging modern cloud technologies. True sovereignty ensures security, compliance, and control without sacrificing innovation. By focusing on practical solutions over symbolic restrictions, the EU can drive unprecedented government modernisation while maintaining adaptability and competitiveness in the global cloud ecosystem.
Key Policy Recommendations:
- An EU-led approach to cloud procurement: For effective cloud adoption in the EU public sector, the EU and Member States should implement a centre-led procurement model that balances strategic oversight with local flexibility. This approach would enable consistent, scalable cloud adoption while allowing departments to meet specific needs. Updated procurement policies that support both capital and operational expenditure would remove financial and procedural barriers. Frameworks to prevent vendor lock-in and support multi-cloud strategies would further enhance security, interoperability, and adaptability. Achieving these goals requires strong political leadership at both EU and Member State levels to align cloud adoption with digital transformation goals and drive cost efficiency and innovation across public services.
- Cloud-First, Multi-Cloud Strategy: Public sector organisations should adopt cloud-first policies to modernise IT infrastructure. A multi-cloud strategy ensures flexibility, mitigates vendor dependency, and provides access to the cutting-edge cloud solutions while balancing efficiency with data sovereignty.
- Non-discriminatory Standards for Sovereign Cloud Solutions: Harmonised security standards should ensure strong protection while fostering innovation. Cybersecurity certification policies must remain adaptable to prevent stifling innovation and enable Member States to take advantage of cloud opportunities. These policies should also be non-discriminatory, ensuring that both EU and non-EU vendors can participate equally in providing cloud services.
- A cloud-agnostic approach: Allowing the use of multiple vendors offers the flexibility to drive growth. By focusing on adaptability rather than rigid sovereignty requirements, the EU can stay competitive and leverage global cloud innovations without delay.
- Training and Awareness: A cultural shift is essential for successful cloud adoption. Comprehensive training, informed by industry expertise, will equip public institutions to implement cloud technologies effectively and align best practices with operational needs.