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€264 Billion Annually: Asterès Report Quantifies Europe's Digital Dependency – It’s Time for the EuroStack Concept to Take Flight

2025-05-01

The numbers are in, and they are staggering. A landmark report by the economic analysis firm Asterès, titled (translated to English) "Technological Dependency on American Software & Cloud Services," has put additional concrete figures on what many in the EuroStack Project have long understood: Europe's reliance on non-European, primarily US-based, software and cloud services comes at a monumental economic cost.

The Asterès report estimates that European businesses funnel €264 billion annually to the US economy through their purchases of cloud and software services. Let that sink in. This "digital bill" rivals Europe's entire energy import bill (€360bn) and represents roughly 1.5% of the EU's GDP – 1.5 times the total EU budget.

This isn't an abstract number; it represents a massive drain of value, jobs, and ultimately, strategic control. The report confirms the urgency and validates the core tenets of the EuroStack Project's mission: we must build a sovereign, open, and resilient digital future for Europe, based on our own values and capabilities.

The Stark Reality: Dependency Measured

The Asterès findings paint a stark picture of our current digital dependency:

  1. Dominance and Value Drain: An estimated 83% of European large enterprise spending on cloud/software flows to US providers. Crucially, around 80% of the value added from these services sold to European companies is created in the United States. This €264 billion isn't just a payment; it's an engine driving economic activity elsewhere.
  2. Jobs Shifted Across the Atlantic: This spending directly supports nearly 1.95 million jobs and generates $323 billion in value added within the US economy. While we value our transatlantic partnerships, it's undeniable that European spending is currently creating significant employment and economic growth outside of Europe. This directly contradicts our goal of fostering European prosperity.
  3. Market Failures: Lock-in and "Techflation": The report highlights the reality of vendor lock-in and significant price hikes (averaging 10% annually, sometimes far higher) reported by CIOs. This "techflation" erodes European business competitiveness and underscores the dangers of relying on closed ecosystems where switching is difficult and costly.
  4. Lack of Transparency: Asterès notes the difficulty in accurately tracking these financial flows using standard macroeconomic data, often distorted by factors like Ireland's role. This lack of transparency hinders effective policymaking and market analysis.

These findings directly echo the warnings embedded within the EuroStack Doctrine. Our core belief that current dependence is a critical risk is now quantified in billions of euros and millions of jobs. The report confirms our critique that Europe risks becoming a "digital colony", economically subservient in the critical digital domain.

The Opportunity: Reclaiming Our Digital Future

But the Asterès also quantifies the immense opportunity if Europe chooses a different path – the path advocated by EuroStack:

  1. Massive Job Creation Potential in Europe: Reorienting even a fraction of this spending yields significant results. Capturing just 5% could create 178,000 jobs in Europe. Capturing 15% by 2035 could create 463,000 jobs. This isn't wishful thinking; it's achievable potential based on reclaiming market share.
  2. Boosting European Competitiveness: Shifting 15% of spending could improve the EU's current account balance by €100 billion over 10 years. Furthermore, strengthening our domestic digital sector to match US relative productivity levels could yield an overall 1.2% EU productivity gain.
  3. Leveraging Existing Strengths: As the EuroStack Doctrine states, "Everything already exists in Europe" (Belief #6). We have the talent, the SMEs, and the foundational open-source technologies. The challenge is implementation, support, and strategic direction.

EuroStack: The Path to Sovereignty and Prosperity

The Asterès report powerfully underscores why the EuroStack approach is not just desirable, but essential. The solution to the problems identified lies directly within our core principles and policy recommendations:

  • Combatting Lock-in with Openness: The report's findings on "techflation" and lock-in validate EuroStack's unwavering commitment to Open Source and enforceable Interoperability based on strict, open standards. Openness breaks down walled gardens, fosters competition, and gives back control to businesses, administrations and citizens
  • Achieving Digital Sovereignty: The €264bn drain highlights the need for genuine Digital Sovereignty & Autonomy. We must control our critical digital infrastructure to ensure our economic and strategic independence.
  • Investing in Europe ("Buy European Tech Act"): The job creation potential reinforces the need for policies like an "Open Source First" approach and a "Buy European Tech Act", directing public and private investment towards existing European solutions and SMEs. "Public Money, Public Code" ensures public investment delivers public value.
  • Building the EuroStack: Our core strategy of building a modular, scalable, interoperable, Open Source-based "EuroStack", leveraging existing European solutions identified via the EuroStack Directory Project (ESDP) , provides the concrete pathway to capture this opportunity. This bottom-up approach avoids the pitfalls of past bureaucratic initiatives like Gaia-X.

The Choice is Ours: Build or Surrender

The Asterès report is a wake-up call, providing hard economic data that reinforces the EuroStack message. Continuing down the path of dependency is economically unsustainable and strategically dangerous.

Europe stands at a crossroads. We can continue to pay the €264 billion annual bill (increasing annually by 10% due to "techflation") for digital dependency, exporting jobs and value, or we can choose to invest in ourselves. We can choose to build a sovereign, resilient, and prosperous digital future based on European values, Open Source, and interoperable systems.

The EuroStack Initiative offers a clear vision and a practical roadmap. The failures of past initiatives show that half-measures won't work. It's time for bold action.

What's Next? From Awareness to Action

The Asterès report, commissioned by Cigref – the association representing France's largest companies and public administrations – provides undeniable economic proof of Europe's digital dependency. But awareness, even when quantified in billions, is not enough. The crucial question is: What happens now?

Henri d'Agrain, Cigref's CEO, recently highlighted the paradox of Microsoft pledging support for European digital sovereignty while simultaneously operating within a geopolitical context of increasing US assertiveness and leveraging market dominance through significant price hikes (the "techflation" noted by Asterès). His cautious skepticism mirrors our own analysis. Pledges from dominant, non-European providers, while perhaps strategically astute on their part, cannot substitute for genuine, structural sovereignty built on European foundations. They do not negate the risks inherent in extraterritorial laws like FISA/CLOUD Act, nor do they address the core economic drain or the dangers of vendor lock-in.

This context reinforces the urgency for the EuroStack project and defines our next steps:

  1. Amplify and Disseminate: We must ensure the Asterès findings reach every corner of European policymaking and business leadership. The €264 billion figure needs to become a cornerstone of the discussion on Europe's competitiveness and strategic autonomy. We will continue to translate these findings into actionable insights for diverse audiences.

  2. Engage with Industry Leaders (like Cigref): The fact that major European companies, via Cigref, are quantifying these risks signals a potential turning point. We will seek deeper engagement with Cigref and similar organizations across Europe. While their members currently rely heavily on US providers, the economic pain identified by Asterès creates common ground for exploring viable European alternatives grounded in EuroStack principles.

  3. Counter "Sovereignty Washing": We must clearly articulate why vendor pledges, however well-intentioned or strategically timed, are insufficient. True sovereignty, as defined in the EuroStack Doctrine, requires European control, open standards, interoperability, and immunity from non-EU legal frameworks. We will actively counter narratives that suggest superficial fixes can solve this deep structural dependency, using the very data on price hikes and lock-in highlighted by Asterès and d'Agrain as evidence.

  4. Intensify Policy Advocacy: Armed with the Asterès report's economic clout, we will redouble our efforts to push for concrete policy implementation aligned with the EuroStack vision:

    • Mandating "Open Source First" and "Public Money, Public Code."
    • Implementing procurement reforms that genuinely favour European SMEs and Open Source solutions (a "Buy European Tech Act").
    • Enforcing strict, EIFv1-based interoperability standards to combat lock-in.
    • Securing sustainable funding for critical European Open Source infrastructure.

  5. Accelerate Practical EuroStack Initiatives: The time for abstract frameworks is over. We will focus on:

    • Enhancing the EuroStack Directory Project (ESDP): Making it the definitive, trusted resource for finding proven European digital solutions.
    • Showcasing Success Stories: Identifying and promoting pilot projects where European businesses and public bodies successfully implement EuroStack principles.
    • Fostering the Ecosystem: Actively connecting European technology providers, potential users, and the open source community.

  6. Deepen Analysis & Monitor: We heed the call from Asterès and Cigref to further investigate geopolitical dependencies, the precise impact of price hikes, and competitiveness effects. We will continuously monitor the market, vendor practices, and the effectiveness of policy measures.

The Asterès report removes any ambiguity. Relying on the goodwill or strategic positioning of dominant non-EU players is not a viable path to sovereignty. The only credible way forward is to build our own capacity, based on our values and strengths.

The €264 billion question is no longer if we should act, but how decisively we will embrace the EuroStack vision to build a truly sovereign digital future for Europe. Let's get to work.

What You Can Do

  • Read the Asterès report to understand the details. And share it (or this post) with your contacts.
  • Explore the EuroStack website and our open letter outlining our vision and doctrine.
  • Sign the EuroStack open letter to show your organisation's support for the EuroStack initiative (yes, it's still open for signatures!).
  • Discover European solutions via the EuroStack Directory Project (ESDP).
  • Advocate for policies that promote Open Source, enforce interoperability, and prioritize European digital solutions in public procurement.
  • Support European technology companies and Open Source projects.
  • Join the conversation and contribute to building Europe's digital future.

The cost of inaction is clear. Let us choose to build, not to surrender. Let's build the EuroStack.

Annex: Key Data Points from the Asterès Report

This analysis summarizes the key findings of the Asterès report "Technological Dependency on American Software & Cloud Services: An Estimation of the Economic Consequences in Europe". Key quantitative findings include:

  1. Quantification of Dependency Cost:

    • €264 Billion Annual Drain: The report estimates that annual purchases of cloud/software services by EU businesses that ultimately benefit the US economy amount to €264 billion. (Page 2, 18)
    • Scale Comparison: This annual "digital bill" is comparable in scale to Europe's total energy import bill (€360bn in 2024) and represents roughly 1.5% of EU GDP or 1.5 times the total EU budget. (Page 18)
    • Dominance Factor: Based on CIO interviews, an estimated 83% of European large enterprise spending on cloud/software goes to US providers. (Page 2, 18)
    • Value Creation Location: Approximately 80% of the value added from these services sold to European companies is estimated to be created in the United States. (Page 2, 18)

  2. Economic Impact Shifted to the US:

    • Significant US Job Footprint: The €264bn annual spend by European companies is estimated to support a total economic footprint of nearly 1.95 million jobs in the United States (including direct, indirect, and induced effects). This represents 1.2% of total US employment. (Page 2, 24)
    • US Value Added: This activity generates an estimated $323 billion in value added within the US economy (1.1% of US GDP). (Page 24)

  3. Quantified Potential for Europe (Supporting "Buy European"):

    • Significant Job Creation Potential: The report models scenarios where Europe reclaims parts of this market:
      • Capturing just 5% of the current spend directed to the US could create 178,000 jobs in Europe. (Page 24)
      • Capturing 10% by 2030 could create 331,000 jobs in Europe. (Page 25)
      • Capturing 15% by 2035 could create 463,000 jobs in Europe. (Page 2, 25)
    • Balance of Payments Improvement: Reorienting 15% of this spend towards European providers could improve the EU's current account balance by €100 billion over 10 years (factoring in ongoing price hikes). (Page 26)

  4. Productivity Link (Supporting Strategic Importance):

    • Potential Overall Gain: If Europe's digital services sector achieved the same relative productivity level compared to the rest of the economy as seen in the US, it could result in an overall EU productivity gain estimated at 1.2%. (Page 2, 29) This links developing a strong domestic digital sector to broader economic competitiveness goals highlighted by reports like Draghi's.

  5. Evidence of Market Issues that Need to Be Addressed:

    • Price Hikes ("techflation") & Lock-in: The report notes significant price increases (average 10% annually reported by CIOs, sometimes much higher) often linked to the difficulty of switching providers once locked in. This supports the need to focus on on open standards and interoperability to combat lock-in. (Page 23, 31)
    • Data Scarcity & Distortion: The report highlights the major difficulties in using standard macroeconomic data (trade flows, FDI) due to distortions (especially Ireland's role) and lack of granularity. This underscores the need for better transparency and potentially new methods/data collection, implicitly supporting initiatives that improve market visibility. (Page 2, 8, 11-16)

  6. Reinforces Need for Further Action:

    • The report concludes by identifying key areas needing deeper investigation: better quantification of flows, geopolitical dependencies, impact of price hikes on businesses, and consequences for competitiveness. (Page 31-32)