Resource Regions: Central and Eastern Europe

From Digital Sovereignty to Data Spaces

Digital and data have transformed enterprises and changed consumer experiences and society. According to the European Political Strategy Centre, “In the 21st century, those who control digital technologies are increasingly able to influence economic, societal and political outcomes. In this context, the growing ‘geopoliticisation’ of technology implies a paradigm change for the notion of strategic autonomy … the EU’s ability to defend and promote its interests — as well as its credibility as a strong foreign policy actor — is ever more a function of its cyber resilience and technology leadership.”

The European Union has responded to the challenge with the ambitious Digital Decade plan to “pursue a human-centric, sustainable vision for digital society” and increase the EU’s “strategic autonomy in tech and develop new rules and technologies to protect citizens from counterfeit products, cybertheft and disinformation.” One of the eight objectives of the 2030 Policy Programme Path to the Digital Decade is to “ensure digital sovereignty notably by a secure and accessible digital infrastructure capable of processing vast volumes of data that enables other technological developments, supporting the competitiveness of the Union’s industry.”

The programme also proposes to establish multicountry projects to develop “European common data infrastructure and services”. In combination with regulations such as GDPR, the upcoming Digital Operational Resilience Act and Data Act, the Digital Decade programmes and projects aim to put Europe at the forefront of reshaping the global data economy along two closely intertwined axes: digital sovereignty and data spaces.

How Are Digital Sovereignty and Data Spaces Paving the Way for the Data Economy in Europe and Beyond?

IDC defines digital sovereignty as the capacity for self-determination by nations, companies and individuals. Digital sovereignty is more than just data sovereignty or data localisation. It entails cloud platforms, workload software, datacentre assets, communications infrastructure, processes, and operations used to control and manage digital infrastructure, services, and access and identity.

It underpins a digital-first Europe where governments, enterprises and individuals have genuine choice to control their data and digital destinies. But digital sovereignty alone is not enough. It’s a means to achieve outcomes, such as realising the value of data and data spaces through interoperable, innovative, easy to operate and control, secure, energy efficient, regulatory compliant and resilient next-generation infrastructure and platforms.

The European Union’s European Strategy for Data sets a bold vision “to create a single European data space — a genuine single market for data, open to data from across the world — where personal as well as non-personal data, including sensitive business data, is secure and businesses also have easy access to an almost infinite amount of high-quality industrial data, boosting growth and creating value, while minimising the human carbon and environmental footprint.” That bold vision is far from accomplished. IDC’s research shows that a unified data space for Europe, let alone the globe, will not exist in the near future. There are too many digital sovereignty, governance, semantic and technical interoperability challenges to overcome. Nonetheless Europe is setting a direction of travel that other regions and countries are watching.

Private and public sector entities understand that data sharing is a critical success factor to accelerate their success in the data-driven economy. And they understand that to realise the benefits, data sharing needs to happen not only within each organisation, but also with external partners, including beyond one’s industry.

In fact, our research on the future of industry ecosystems found that over 90% of public and private sector organisations globally share data with external partners, although around 60% do it only in a limited fashion or when strictly necessary. Europe’s strategic data spaces vision is the next stage of evolution, where data sharing can happen at a greater scale and beyond industry boundaries, thanks to:

1. Federated architectures that dynamically match data demand and supply
2. Governance policies and processes where matching of demand and supply takes place thanks to trusted rules and intermediaries that enable secure, transparent and fair participation of both data users and data providers
3. The ability to provide and use data to and from the common space, either for non-profit/altruistic purposes or for-profit purposes, or both

What Can European Public Sector Leaders do to Benefit from the Digital Sovereignty-Data Spaces Twin Transition?

As for the rest of the economy, public sector organisations are trying to figure out how to leverage data to improve policymaking, service delivery and operational efficiency. Beyond EU-wide initiatives, public sector leaders across the region have a role to play to:

• Incentivise the private sector to help achieve both for profit and non-profit outcomes, while protecting personal data, intellectual property and trade secrets
• Work with the tech industry to promote the use of semantic and technical interoperability standards
• Collaborate with the tech industry and academia to foster R&D to accelerate adoption of technologies, such as secure hardware architectures, probabilistic computing and homomorphic encryption, which in the future will enable trusted data sharing even on non-trusted systems
• Invest in digital sovereign infrastructures and services, for the data spaces where digital self-determination can accelerate value realisation
• Initiate data spaces that have immediate societal benefits, such as digital citizen wallets that ensure citizens have to provide data to public administration once only, and contribute critical data that they own, to data spaces that encompass a public-private ecosystems, such as health, mobility and the built environment

Join IDC experts and public sector leaders from around Europe at the IDC Government Summit to learn more about digital sovereignty and data spaces, and to share your experiences.

How companies are partnering with a service for true end-to-end process support that brings full cloud cost savings

48% of enterprises plan to keep spending steadily on cloud, according to IDC research, making cloud costs a focus for IT leaders. And, the majority of organizations believe they’re overspending on cloud.

Many organizations are aware that they need to improve their cloud spending habits, but the process that it takes to get there often seems exorbitant, causing them to instead disregard the changes needed to turn their cloud spending around. This blog intends to show that the time and resources involved in executing shouldn’t deter companies from making the necessary changes.

From insights to process, these two companies found that hiring a partner to guide them through the work needed to transform their cloud costs, in ways that were custom to their needs, made all the difference in ensuring that they not only followed through on executing a plan of action but giving them a successful outcome.

An international telecommunications company has migrated its entire infrastructure to the public cloud (AWS and Azure) and uses a broker towards AWS and Microsoft, performing contract management and basic security services. For both providers, a System Integrator (SI) has been contracted to provide managed services (IM and TAM) on top of the cloud providers. 

During the migration, cloud costs rose above the available budgets that had been set, based on advice by the SI’s. During migration, the SI’s focused on the project deadlines rather than optimizing and saving on what was already running in the cloud. The telecommunications company turned to IDC Metri for independent advice on cloud cost savings.

IDC Metri has helped to improve tooling, and to define processes and ways of working, for this telecommunications company to analyze and manage cloud costs themselves. IT leaders can learn from their experience that recommendations from tools, including those from cloud providers, aren’t always realistic. They tend to be opportunistic, like suggesting that all instances should be reserved for three years, and that this will save over 50% of costs for those instances. That is the same as expecting your IT landscape to remain the same within that time – this is simply not true.

PostNL has been one of the first listed companies in the Netherlands to go ‘all in’ to the public cloud, starting in 2012. Nowadays, PostNL is in the second stage transforming all of its bespoke applications from IaaS to PaaS solutions, like BI/Analytics platforms, container platforms and serverless computing. When compared to IaaS, price models for PaaS are more usage based than capacity based. Saving costs on usage-based priced services means optimizing the software, rather than the underlying infrastructure.

Unlike the anonymous international telecommunications company in our example, PostNL doesn’t have SI’s in-between them and the cloud providers that offer managed services. The application teams, mainly DevOps based, are managing the cloud infrastructure themselves. Also here, cloud costs had an upward trend, from which PostNL has asked IDC Metri to bend it.

IDC Metri has made recommendations, which were much less supported by tools, since these focus on IaaS, rather than PaaS. With the top 10 teams concerning costs, alignment has been done on savings, which has led to about 8% savings. A must know here is that large scale optimizations, such as applying savings plans, had already been done by PostNL itself. The savings IDC Metri helped to achieve were more on architecture and licenses.

In conclusion, using tools that generate recommendations is only the starting point for achieving savings. First of all, the recommendations need to be taken with a grain of salt since they tend to be rather opportunistic. Furthermore, a list of recommendations is one thing, to actually achieve savings, hereby overcoming indifference or even resistance to save costs, is another thing. IDC Metri does support the full process, from analyzing costs through setting up processes to actually achieving savings.

Can’t wait until the next blog is published to learn more about cutting cloud costs? Contact us to schedule a conversation.

We recently had our Advisory Board meeting, comprised of senior executives from European manufacturing organisations, with an objective to understand the latest topics or challenges they are dealing with. The two main challenges that were on their lists were energy prices and cybersecurity, how these two converge, and the role that technology can play to overcome the obstacles created by these threats.

Exploding Energy Prices

Unsurprisingly, the first challenge is exploding energy prices and how most manufacturers are struggling to cope with the ongoing situation here in Europe. They are in firefighting mode and find it extremely challenging to make profits from their operations.

Many companies have had to completely stop production for a few weeks, and this will continue even more in the coming months as prices rise exponentially. Some European manufacturers that have recently announced shutdowns are Arcelor Mittal (Germany), Aperam (Belgium), and CF Industries (United Kingdom).

Manufacturers tend to get energy price visibility only a week ahead and are therefore unable to plan for longer. Unless these costs can be passed on to customers, they have an impact on everything else and are pushing manufacturers beyond limits.

The cost uncertainty significantly complicates the S&OP process. For instance, frozen food requires storage in cold conditions and soaring energy prices lead to planning constraints. The bigger challenge is that this doesn’t seem to be going to stabilise anytime soon.

Are such high prices now the new normal? It is getting complex, since absorbing the costs or keeping high safety stock is making it difficult for manufacturers to even stay afloat.

Cybersecurity

There has been a shift from traditional closed systems to interconnected and open ones as part of digital transformation in manufacturing. This has made the industrial internet environment extremely complex, leaving the internet with many weaknesses and attracting more and more criminal attacks.

These cyberattacks have risen massively in the past six months. The manufacturing industry is only now waking up to the need for and importance of cyber security.

Most manufacturing organisations are increasing their investments in cybersecurity, but this is also leading to limitations in their operational technology (OT). They have mentioned how some of these cybersecurity measures had to be disabled because they impacted the performance of their equipment.

The desired output wasn’t being achieved, which required decision-making between a secure environment and the performance of the equipment.

When cyberattacks are successfully made on the systems or equipment that produce gas, it leads to a production shutdown causing an energy war. Unfortunately, this is the current reality that manufacturers are dealing with.

Producers acknowledge supply chain struggles caused by the pandemic, but these attacks on energy-producing equipment are hitting them at their core. The situation is making them rethink their IT capabilities — what to continue to do in-house vs. what to outsource/partner with and with whom.

The most important thing in such times is to be resilient, but the question is how? How to have safe energy, smarter supply chains, optimised and secure systems, visibility into what is happening and what needs to be done?

This is where technology can play a key role and manufacturers are looking for technology partners, not just to help them solve these challenges but also to build long-term resilience, especially around energy and materials. These challenges also provide an opportunity to think differently, innovate, and explore different business models, and only those manufacturers that can sail through this challenging phase will stay relevant in the market.

IDC the European Manufacturing Summit

Join us on November 15 at IDC’s European Manufacturing Digital Summit as it will be a perfect opportunity for manufacturing executives to discuss further on these challenges, share lessons learned, and network with the peer group.

Our advisory board members are keen to hear from technology providers during our summit about how they are helping solve these challenges. A summary of previous discussions with our Advisory Board can be found here. The summit also provides an opportunity for manufacturing organisations and technology providers to discuss how they can thrive in an increasingly digital and sustainable but also uncertain, volatile, and complex economy.

IT executives and senior decision makers can register here for the summit.

For more information about the summit, please contact Stefanie Naujoks or Gunjan Bassi, or head over to https://qa.idc.com/eu

Connectivity is a defining feature of the modern digital economy. The increasing ubiquity of mobile and fixed connectivity has enabled new digital economic models and these had already become part of people’s daily lives before the COVID-19 pandemic made digital interactions unavoidable.

Ubiquity and regular use have turned connectivity into a vital commodity which, paradoxically, telcos find difficult to grow revenues from. This commoditisation has steadily shrunk the value of telco shares over the past five years.

This is driving an industrywide imperative to change as Europe’s multibillion-dollar telecoms market seeks to embrace new technologies (cloud, AI, 5G), new ways of working (agile and DevOps) and new revenue opportunities (B2B and B2B2C). These trends play out against a backdrop of war in Ukraine, high inflation, a race for talent and an increasing need to show a strong commitment to climate change and social issues.

Technology, Services and Customers

Telcos are eager to reinvent themselves as technology companies that can continue to play a vital role in business and consumer communications. This transformation will need to be deep and will need to be made across dimensions such as technology, services and customers.

Technology

• Between 2021 and 2026 the amount of data created, captured, replicated or consumed in Europe will increase by over 126%, according to IDC’s latest Global Datasphere forecast. Coupled with regulatory obligations, this piles the pressure on European telcos to continue investing heavily in network capacity upgrades throughout the decade to maintain the performance of their core products.
• This includes the rollout of 5G access networks and increasing their fibre broadband footprints.
• Investing in capacity alone will only enable telcos to stand still. To improve the management, creation and experience of their services they must also invest in their core network architecture and supporting IT systems.
• In IDC’s 2022 digital transformation survey of European telcos, 58% cited BSS investment as the most impactful transformation investment to grow revenues. Other investments include modernising systems to be cloud native, converging core networks to support fixed and mobile services, and developing OSS/BSS platforms that support deeper network monetisation and better customer outcomes.

Services

• We expect FTTP to account for the majority of broadband lines by 2024 and to represent 58% of total lines by the end of 2025. On the mobile side, European operators are currently rolling out coverage of 5G, which will also require heavy investment.
• We expect 5G to account for the majority of mobile network connections by 2025, reaching 57% of all mobile connections by the end of that year.
• As telcos’ core networks and IT systems evolve, operators are also keen to explore new business models that expand their role in consumer and business value chains beyond connectivity. Many of these new business models, from private networks to 5G gaming bundles to network as a service, will require partner-driven ecosystems to supercharge and build extensive value multipliers.
• As such, 40% of large European operators identified integrating partner services into their ecosystem as a crucial impact of an API-driven strategy in IDC’s European Telco Digital Transformation Survey 2022. For these investments to pay off, telcos need to ensure that the APIs they provide are simple enough for developer partners to use and are supported across heterogenous network infrastructures.

Customers

• While the bulk of telco revenues has traditionally come from consumer services, the commoditisation of connectivity has made it harder to grow revenues by just selling minutes, texts and data volumes. In 5G, operators are looking to grow their place in the enterprise value chain.
• This means chasing opportunities such as the 83% of European enterprises that use or plan to use IoT technologies in their operations within the next two years. This shift in customer target cannot be successful without fundamental shifts in how telcos operate and strong insights from trusted partners that understand the B2B and B2B2C customer bases operators intend to create value for.
• As operators look to acquire new segments, they are also fighting across the board to retain the customers they do have. Over 95% of European telcos are investing in AI/ML, and their main use case is improving customer insight.
• Building deeper customer insights has a dual purpose — keeping customers happier for longer and helping telcos to identify, develop and productise the new value they offer. Those telcos with the deepest insights will be the most successful in the long term.

What’s Next for European Telcos

Success across all aspects of technology, services and customers requires careful balancing of many transformation initiatives. The competition for the financial and talent investment to succeed across the breadth of initiatives is further complicated by the macroeconomic and geopolitical headwinds blowing through Europe.

The underlying message is that Europe’s telcos can no longer afford to stand still. They must invest and improve across all aspects of their network, operations and organisation if they are to revitalise their space in the broader technology landscape.

IDC’s Telco Digital Summit, on November 22, will look at these themes in more detail. The summit will feature Europe’s leading telco analysts and senior telco executives, and will include keynotes from industry leaders to help attendees chart a path through the storms in the European telco market.

Enterprise medical imaging (EMI) is not just a technology. It’s a set of strategies, initiatives, workflows and solutions implemented enterprisewide to consistently and optimally capture, index, manage, store, distribute, view, exchange, analyse and govern all medical imaging data and content across different settings. It’s there to eliminate traditional imaging silos by aligning imaging technology and infrastructure essentials with universal image availability (without silos).

According to an IDC Health Insights survey in February 2022, 38% of European healthcare providers will invest in a new EMI solution in the next two years and 57% will enhance their current solution. These solutions are likely to be:

• Cloud based. To support enterprise imaging, healthcare systems are opting for secure, always-on cloud storage to improve the continuum of care and respond to patients’ needs:
  • Easier integration with large hospital electronic healthcare records (EHRs)
  • Faster access to images, reports, results and other vital patient information; a cloud-native image management system can be accessible via a web browser or zero footprint viewer, enabling a single source of patient information; clinicians can also follow patient progress regardless of their location
  • Disaster recovery, with cloud solutions automatically replicating data and enabling complete redundancy and access to information 24 x 7
  • High level of security with data encrypted end-to-end to address patient privacy concerns and limit access to personally identifiable information
• Supported by intelligent automation technologies. Leaders in the EMI space are focusing on scaling and deepening the use of advanced analytics and AI to support new diagnostic imaging techniques, workflow orchestration, pathway management, rule-based automation of repetitive tasks, reporting, etc., to cater to the specific needs of different clinical use cases, driving evidence-based and precision medicine.
• Paired with fully managed services. Vendors that provide strategic advice, implementation and support services, tailored to customers and to their business and clinical strategic objectives, are more successful and have better customer retention and customer share. EMI platforms provide a unified environment for data and diagnostic capabilities, but to effectively deploy it, healthcare organisations need to partner with vendors that understand how their medical imaging capabilities are maturing within the organisation’s broader digital strategy. Healthcare providers are also looking for vendors to provide predictive support services to ensure business continuity and dynamically optimise systems.

What’s Driving the EMI Market?

Simply put, it’s the need to navigate away from siloed care and move towards a more integrated care delivery model. In the past few years, healthcare organisations have increasingly relied on their ability to gather, store and analyse massive amounts of data to provide better quality care and operational efficiency. The pandemic has increased the need for imaging and, more importantly, shown that managing complex on-premises infrastructures drastically reduces the agility of already strained IT departments.

As value-based care becomes the norm, healthcare providers are focusing on a data integration strategy to take full advantage of their data. However, this happens only when data, including images, follows the patient throughout the care journey and is easily consumed at the point of care. As healthcare imaging data continues to expand, organisations need technologies that connect data silos and support the entire enterprise.

The Way Forward

To maximise the value of their investments in enterprise imaging, healthcare providers should:

• Develop an imaging strategy that fits with a “care anywhere” model to ensure the continuum of care to patients
• Involve healthcare professionals early on and continue to keep them engaged in the implementation and governance of the platform
• Select an imaging IT vendor that works as a partner to align its value proposition to customers’ goals, as well as constraints, with products and services that offer value for money

To learn more about the EMI market in Europe, please read IDC MarketScape: European Enterprise Medical Imaging 2022 Vendor Assessment or contact Adriana Allocato and Silvia Piai at IDC Health Insights.