The discount retailer Lidl recently found its way into the news as its parent company began offering cloud services to outside organisations. That got us thinking about Node4’s UK-based cloud services, and how, sometimes, a local cloud is exactly the solution that’s required to meet clients’ needs.

The rise of self-service cloud services

Its well-known that Amazon Web Services (AWS) began when Amazon realised the value of its own IT systems and the investment it had made in shared services. Amazon had created a shared IT platform so its engineering organisations, which were previously spending a high proportion of their time on IT infrastructure problems, could instead focus on customer-facing innovation. As the shared services provided value for amazon.com, Amazon saw the potential in providing web services to other organisations and AWS was born. Through AWS, Amazon began providing external customers access to an on-demand cloud computing platform on a pay-as-you-go basis.

Since then, we’ve seen Microsoft (Azure) and Google Cloud Platform (GCP) launch and compete with AWS. In the US, Europe and elsewhere, these three “hyperscale platforms” dominate cloud computing services.

Unexpected item in bagging area

With the rise of the hyperscalers, the major systems integrators suddenly had new competition. Companies didn’t have to invest in their own infrastructure – they could consume services according to demand. And if they weren’t running their own infrastructure, then they didn’t need someone to host and manage it for them.

Some of the major SIs launched their own clouds, but they have never had the scale or the traction of the hyperscalers. So, the SIs partnered with one or more of the hyperscalers, albeit reluctantly, to respond to customer demand.

Germany is particularly well-known for its stringent privacy and data protection laws but it’s not unique. In response to this, the hyperscalers began placing datacentres in specific regions to address data sovereignty concerns. Here in the UK, Microsoft opened the UK South and UK West regions in Azure. AWS and GCP made similar investments. And let’s not forget that markets like China are so large that they have their own hyperscale providers!

In the middle at Lidl

Recently, the German discount retailer Lidl made the news as its parent company Schwarz Group started to offer cloud computing and cybersecurity services to corporate customers.

In a remarkable parallel with AWS’ history, the Irish Times reported that Schwarz started with a system built for internal use in 2021. Schwarz Digits, an IT unit that initially served only the group’s internal needs branched out to serve external clients in 2022. Now there’s an independent company

within the Schwarz Group, StackIT, existing alongside XM Cyber and the group’s minority investment in a German AI startup called Aleph Alpha.

Marketed as “the German business cloud”, StackIT’s main selling point is that all client data is processed and stored exclusively in Germany and Austria. It offers a suite of cloud services, focused on the German retail (unsurprisingly), health and public sectors.

The case for local cloud

So why am I writing on the Node4 blog about a German retailer’s entry in to cloud services? Surely they are a competitor? Well, yes and no. StackIT is all about the German market – it’s their USP. Node4 is expert in the UK mid-market. We don’t compete, but there are some parallels. Whilst Node4 hasn’t grown out of a retailer (we were born into data centre hosting and connectivity), we do have a local cloud for UK-based clients.

So why might you want a local cloud?

· The most obvious reason is data sovereignty. Depending on the service that your company provides to its customers, you might be required to keep data in-country. This may be for regulatory purposes or simply to meet a contractual requirement.

· Whilst public cloud can be made secure, some organisations may have heightened security requirements that necessitate keeping data within national borders to mitigate risks associated with transferring data outside the local jurisdiction.

· If performance is a concern, running services locally can reduce latency and improve performance, especially for applications that require real-time processing or have high bandwidth needs. And sometimes it’s just about keeping application layers close to one another.

· From a corporate social responsibility perspective, it’s good to support the local economy. And other economic and political factors may mean that avoiding the potential geopolitical risks associated with relying on foreign cloud providers is prudent. If the war in Ukraine has made us question our energy and food sources, for some organisations the source of their IT services is critical too.

· And sometimes, particularly if your application workload is to be “lifted and shifted”, with limited or no transformation, then a local cloud can be more cost-effective than the hyperscale platforms.

Node4’s Virtual Datacentre (VDC) is designed to address the needs of clients who need a local, UK-based cloud. We can offer a geo-resilient UK-based self-service cloud platform, with full automation, predictable consumption billing and 24×7 support. As a bonus, if you’re currently struggling with Broadcom price increases, it’s simple to migrate into our cloud too!

The pragmatic cloud

At Node4, we talk about the “Pragmatic Cloud”. We are open and transparent about the reasons for the recommendations that we make to our clients about their cloud investments. We can do this because Node4 is in a reasonably unusual position within mid-market managed services providers. We partner with Microsoft to provide hyperscale capabilities in the public cloud, but we also have our own hosting and connectivity options, including hybrid and edge capabilities. We can offer something for everyone.

So, whether it’s hosting/co-location services for the servers that you run (whether as a private cloud or simply using traditional management methods), self-service infrastructure as a service (IaaS) on our VDC platform, or expert advice on adopting Microsoft Azure to modernise your applications, we can help.

Feel free to get in touch using the contact details below – and let’s have a conversation.