Podcast #154 Data Sovereignty

Ken: Good day, and welcome to episode 154 of our Momenta Digital Thread Podcast series. Today, it's my great pleasure to welcome Francesco Bonfiglio, the Chief executive officer of Gaia-X, a digital ecosystem initiative working to create an environment in which data can be shared and stored under the control of data owners. Francesco has been at the forefront of digital innovation for over 30 years, working across high technology, military, and commercial software leaders across Europe. Before joining Gaia-X this year, he was CEO of Engineering D.HUB, a leading technology in Italy. Living in Italy, in the countryside, in Milan, married and father of three sons. He loves music and played in several independent lives and record production since the eighties. Francesca believes in the power of collective intelligence, lateral thinking, and teamwork as a propeller for transformation in the business and the whole life. So Francesco, especially with that last bit of lateral thinking, absolutely love, welcome to our Digital Thread Podcast.

[00:01:45]

Francesco: Thank you very much for having me today. It's an absolute pleasure to be here. I'm talking from my home office out of Milan, and as you just said, welcome to our Digital Thread Podcast audience.

[00:01:58]

Ken: Yeah. Thank you for taking the time today. So you and I were having a prior conversation, and I should just give a quick call out to Gaddy Lenz, who was one of our podcast guests here later last year; I should just say and focused very much on mobility applications in Germany at this point. And he mentioned Gaia-X as an interesting standard that he thought was going to make a difference, and that placed in my mind the spark that we ought to get a little deeper on understanding what Gaia-X is. So I'm so glad we were able to put this together. I always like to start this by talking about one's digital thread early, the one or more thematic threads that define their industry journey.
What would you consider to be your digital thread, Francesco?

[00:02:43]

Francesco: Well, to make a long story short and to make it interesting, I believe as well, my digital thread is a real bottom-up kind of career. I started working in the early eighties when software did not even exist per se, but it was mainly firmware, i.e., the binary logic built into chips. So I saw the move from firmware to object-oriented programming languages from real-time embedded software to cloud systems. And also the move, and I keep saying this, from tangible technology, which is, I mean, the one that was used to instrument machines and make them automated then human uncontrolled; from moving a motto to the, now controlling the trajectory of a satellite into intangible technology, which is that one that is so independent today, so intelligent if you want and autonomous that you are no more sure about what it's doing for you.

My background is in electronics, software engineering, system analysis, project management, team management, business unit management, and technical executive roles as CTO for HPE or business executive and board members for several large organizations. But I believe that what makes the difference to me is the capability to understand all the value chains of IT and what we today call digital, having started really from the bottom line and having understood all the nuances of technology, from moving your money from a bank account to analyzing your email and telling you daily what you have to do or what others have been exposed to do through artificial intelligence.

[00:04:33]

Ken: I would summarize your career path as full-stack, and that's how we like to hire and how we want to create interesting companies in terms of the founders. Usually, they have a very similar, early trajectory, i.e., they've started at the, you know, maybe at a hardware level, a mechatronics level, and then work their way up because we find it gives, especially in the industrial IoT, you know, a broad and very deep perspective. With that, let's jump right into this concept of data sovereignty. What does that term, data sovereignty, mean to you?

[00:05:05]

Francesco: Having control of your data. So, where they are stored, who can access them, what they can be used for. And sovereignty is a necessary, but not sufficient element for the ethical use of data, which implies a respectful use of data, compliance to the rules and the laws, but also a fair distribution of the value produced through your data, which is yet far from being a reality, but believe me, this is going to become one of the real revolutions of the future world.

Sovereignty is necessary to transition from a traditional economy, product production, and services into a new world. Anything from our lives to our businesses, products, and services offers an added value related to data. Data is a unique raw material different from any other raw material. Anyone can produce it regardless of the richness of their countries or their geographical location. Data can be reproduced forever; that is why we need to have sovereign data platforms. We also need to have ethical use of the data guaranteed. And we need to have also a fair share of the revenues that will be produced more and more through our data. And when I say our, I mean our business, our company, our enterprises, as well as our private data, of course.

[00:06:03]

Ken: The control aspect is probably what most of us would associate with the word sovereignty, but I like this idea of bringing in both the ethical use of it and then the fair distribution of value. I think those three bring some interesting dimensions to this as well. Let's just jump right into Gaia-X. Tell us a little bit about the origin story of this company and this initiative.

[00:07:01]

Francesco: Sure. Well, Gaia-X, first of all, let me explain the name because that's possibly the first question everybody asks. Gaia is the goddess of fertility, and the objective of this project is to develop, flourish the digital economy for Europe and beyond. X is the letter of transition, the letter of the change. So Gaia-X is a real big transition project to build the new digital economy of Europe. It was born as a governmental project to build a German sovereign cloud by the German Ministry of Economy and Energy, Mr. Peter Altmaier. So it was initially founded by Angela Merkel and the minister, Altmaier, through the ministry.
And then, suddenly, France aggregated because they wanted to implement their national service cloud. So it became a Franco-German cloud project. But the reality is that everybody in Europe has the same need, so Italy came around and then many other countries.

And so in 2020, after just less than one year from the initial project start in Germany, Gaia-X became an international nonprofit association with now more than 300 members from 25 countries, not only European ones. Everyone is working together to build this new infrastructure, this new data infrastructure platform that I will briefly describe. So we decided to move from an association, which was constituted in September 2020, and it is an AISBL. So, association international sans but lucrative, and all these members are grouped in many working groups. We have more than 20 international working groups working on the several aspects of this new data infrastructure that we are building. And we are developing three main deliverables.

One is the specification of Gaia-X. So we are describing the architecture of Gaia-X, we are describing the standards applicable to Gaia-X, and we are also describing the rules. These policies apply to any Gaia-X service. So we are making sure that would be one contract, one set of rules, and one common architectural framework implemented by anyone who wants to deliver a Gaia-X compliance service.

Second, we are developing a huge open-source project to implement Gaia-X as an open-source, free usage. So it would be for those companies, in particular, you can imagine small and medium enterprises that cannot afford the development of the specification, even though a fantastic specification. So we decided to specify it and build it, but not only that.

The third key deliverable is the so-called labels. We have developed the concept of labeling that is extremely normative. We will deliver together with the Gaia-X architecture services embedded in the technology that will verify the compliance of the service runtime and ensure that it is precisely as declared. So, in other words, Gaia-X is a large beta operating system. It is like the internet connecting several nodes that will constitute a network of computing nodes, where data can be shared, and they will be an extremely powerful computing engine. It is a model completely different from the actual and traditional cloud model, which is instead of vertical. So, in other words, data cannot be grouped in one place, either, even though huge, and this is the hyper-scaler model. The data is growing geographically distributed and in an uncontrolled and tropic way. That's why we need to move from the current model, which is verticalized, into a new model of the cloud, which is distributed and decentralized. This is what Gaia-X is doing, and it's doing it from Europe, for Europe, and beyond.

[00:11:17]

Ken: Some of the key use cases and the early wins that you've seen leveraging the Gaia-X model at this point, and I understand it's still very early in the path, but I imagine you guys have already done a fair amount. I'll call it the proof of concepts.

[00:11:33]

Francesco: Yes, sure. And to go back to the project's name, so Gaia-X, the X letter represents this transition, this transformation. And you can imagine the X as the upper part of the X. The lower part of the X, the lower part of the X is the so-called infrastructure ecosystem, which collects all the existing infrastructure, the existing cloud, private, public, hybrid, edge, and all the IoT platform, anything where let me say data resides. The upper part of the X is the so-called data space. So the data spaces are the numerical representation of analog or physical spaces like a city, as a school, like a street, like a car so that anything can be represented and become a data space. And the objective of Gaia-X is to build European data spaces where data can be shared across actors, and through the data sharing, new value can be created for all the participants of this Federation. And the Federation is built federating, so putting together different types of technology and architecture in an open way and creating this network through the so-called Federation services.

On the data space and infrastructure side, we have specific working groups. On the data space side, we have now more than 14, perhaps working in as many countries as you can imagine. Germany, France, Italy, Spain, Portugal, Finland, Belgium, and Greece. And I can always forget someone. Each one is working on defining some specific and common data spaces for their country or across multiple countries—for example, the work of these enormous amounts of people as produced nowadays. A document published contains more than 70 use cases built in more than nine data spaces. You can imagine the automotive industry for zero public sector healthcare, etc.

So some of these 70 use cases are more mature than others and have already become projects. We have some of the most prominent players working with some startups—Germans, French or Italian, and possible permutations. We have, as you can imagine, several models of sharing the data and creating value. In automotive, we have some of the most prominent players, i.e., Volkswagen, Daimler, and BMW, to name only a few. Siemens, Bosch, and hundreds of other OEM and suppliers have decided to get together to share their data. The supplier must build additional value, quality, and sustainability because this is the only way to implement ESG or sustainability.

On the transportation side, our members are thinking about the future of mobility with multimodality across means, end to end, the interfaces across booking systems, transportation systems, passport, and control systems. In healthcare, our members are designing how to share the healthcare medical records between hospitals, research institutions, pharmaceutical institutions, and patients to create an efficient prevention and precision medicine ecosystem. And to put the basis of the future of genomics researches. In the research data, we are creating a common platform to connect several research institutions and universities to share data algorithms, analysis, and reports to accelerate the development of new products, new therapies, new materials, and so on, so forth.

For each of these few examples I made, you can imagine tens, sometimes hundreds of companies, large, small users, providers, or academics working together to define the use case. They create a consortium, which then can become an actual company. There is a business case, and all of them are building these use cases of data sharing on top of Gaia-X's architecture.

There are countless examples where the creation of typical European data space can be the current business of companies and the citizen's life. More importantly, create an entirely new industry and completely new opportunities for our future, of which Gaia-X is part. We want to create new opportunities for all of our countries and beyond Europe as well.

[00:16:21]

Ken: This might seem like a bit of a simplistic question, but given your full-stack background and decades of experience in the IT space, you've no doubt seen the centralization decentralization of data and compute. Now, of course, we're calling that rough cloud and edge in some sense. How does Gaia-X work within leverage of both the original cloud architecture, but now becoming more and more this distributed edge architecture?

[00:16:49]

Francesco: Yeah, this is funny because you're right. I mean, I've seen so many times history repeating. So when I explained cloud, I keep saying that I see the cloud in three phases. The first one was the age of public cloud-only. It failed miserably more than ten years ago because everybody realized you could not move application portfolios, which are 80% legacy and no cloud-native, into the public cloud. For the second one, we immediately moved from the hybrid cloud to hybrid multi-cloud because everybody realized that moving to the cloud was also a risk in terms of lock-in. Now we are in this hybrid multi-cloud age, but the new generation has already started, and it is the age of distributed cloud distributed computing.

If we look back, let's say that the cloud we have today is no much different from the old-time mainframe. So it's an enormous concentration of data and computing power. The more you concentrate, the more efficiency you have. It's a factory model like in any manufacturing factory. Now, the problem is that the robots [inaudible][00:17:54], the data is no more controllable, like I said before. So you need to have a different model. You need to be close to the data like you need to be close to the crops to build high-quality food. And I believe the Gaia-X has the necessary but so far missing cloud operating system to operate the transition from the well-known vertical model of the cloud, the so-called hyper-scaler or governmental model, to the horizontal model based on federations of trusted nodes.

So this is a necessary shift when data by definition is distributed uncontrollably and cannot simply be collected in only one place like in the past. Therefore, data, intelligence, security, or networking are physiologically distributed and growing entropically. The deterministic model of a central cloud, like, a central mainframe, does not fulfill the power up the data anymore. The two models will survive, of course, but the distributed model will prevail, I think, in the medium to long run. I mean, in five to 10 years, most of the data will be distributed in federated, decentralized cloud infrastructure instead of being centralized into big data centers, so the hyper-scalers.

[00:19:22]

Ken: We would entirely agree, our focus of the course is operational technology, and on the OT side, given your own experience, you realize a lot of the data is still sitting there, and a lot of the computing is still sitting at the edge as it's never been centralized in. We had some excellent discussions at a conference last week, an online forum, with an edge technology provider who sees this, of course, as an opportunity for what they're providing but sees it as what they call the continuous cloud—so going from your true cloud out to the edge. Interestingly, we've seen several predictions as of late, and I know one even tied in with the next generation internet initiative at the EU about where that processing will happen in the future, it's an 80/20 chance if you will, 80% of the cloud today, 20% the edge and effectively swapping by 2025, and that will have exciting impacts across everything. So, I think the most interesting architectural changes Francesco are still ahead of us.

[00:20:22]

Francesco: Oh, yeah.

[00:20:24]

Ken: It's not client-server. It's not a mainframe PC.

[00:20:27]

Francesco: Absolutely.

[00:20:28]

Ken: It's getting interesting. Gaia-X is a decidedly European initiative, and it's not surprising because Europe, of course, has been a leader in such governance initiatives, such as GDPR, which truly is a global initiative these days. Is Gaia-X truly a global initiative?

[00:20:44]

Francesco: Yes, it is. Gaia-X is not building new regulations, no new standards. We are translating the word trust, which everybody talks about, into technology. And God knows how much we need that today because everybody talks about technology and trusted technology and trusted cloud, but translate it into something tangible is not being done yet.

Also notably, Gaia-X is an initiative started in Europe and by European companies, but it is not a European initiative in strict terms. We are hosting all the largest non-European cloud service providers among our members. We are open to anyone regardless of their nationality or their size. And we are collaborating with countries out of Europe that want to implement precisely the same Gaia-X model of sovereignty in their country. And I can mention China more than South Korea or Japan because what we are building corresponds to them. I believe this is my view because I have questioned myself several times, and I'm not particularly scared about inclusive approaches.

If you want to do something new and valuable, you have to work with everybody. But what I genuinely believe is the differentiator is that we are building the correspondence in technology to those ethical and civil principles of Europe, like freedom of circulation, sovereignty, private property, trust, respect, but that is common and shared by any civil and democratic state and republic around the world. We are simply speaking, trying to fulfill the need of everybody and not just all of Europe. In that sense, it was an initiative started in Europe by European companies; it still is not strictly funded by the European Commission or by any European government, any European government. We are not funded; all the money we have comes from our members' subscriptions, we are open to all members. What we are building is not just for Europe, but for Europe and beyond.

[[00:23:04]

Ken: Yeah. I appreciate the clarification about the connection to the EU. Prior conversation, you had mentioned that you had just been speaking, keynoting actually at the Digital Switzerland Initiative earlier this week. It truly is inclusive, if you will standard across both European and global countries In that regard. I noted that you recently announced your first Hackathon and bringing what, you know, I liked, it was quoted non-traditional methods to support innovation and create disruption. Tell us a bit about how you're structuring this and what you're hoping to accomplish.

[00:23:38]

Francesco: Yeah. Hackathon is one way we are engaging the Gaia-X community, which are not Gaia-X's members, but the community. Some tables are restricted to members only – some tables, however, are available to new members as well. It is a way to engage the Gaia-X community, which has members from many different races. Let me say that there are large enterprises, small companies, startups, providers, users of technologies, academics. A two-speed approach is required; this is what I'm trying to achieve currently. On one side, we need a slower pace track where all the principals and the high-level decisions are made very carefully; yet this requires everyone to sit at the same table to discuss the importance and the impact of the critical topics and the decisions needed to be taken.

So, when we think about antitrust, when we think about labeling, when we think about immunity, or we think about jurisdictions and legislation. It all requires the right place, pace, and time to be addressed appropriately. On the other side, we need a faster pace with a fail-fast approach, quick prototyping, rough consensus, POC, and MVPs development. We can experiment with the most advanced technologies to implement what we are drawing in pictures or describing in words in our documents. And we need to walk the talk, which requires disruptive approaches at times, new ideas that come to mind. And I hope that will also arrive more and more by our excited and hyperactive members, so Hackathon is one of them.

[00:25:22]

Ken: You know, Momenta, investors in the digital industry space and also work with quite a few startups, both in the US and North America.

What are some of the exciting startups that you've seen that are leveraging Gaia-X at this point?

[00:25:35]

Francesco: Well, there are so, so many that will not make names, but I would like to mention the technology areas where some of the startups are deeply involved, in particular in the creation of our first MVPs minimal viable products. We have startups that first in the world developed entirely distributed and open cloud stacks. We have others that develop the most advanced computer data protocols, like the ocean protocol that allow for data and processes to be decoupled and to bring the computer to the data instead of the other way, round, which is a vital mechanism for edge computing, for edge computing and federated cloud infrastructures.

We have other stuff at the leading edge of the distributed ledger technology and blockchain and have developed extremely reliable digital contract frameworks to ensure the certification of services and products and digitally guarantee trust through verifiable claims. By the way, some of the essential experiences in the DLT and blockchain have occurred in Germany and more in general. Some of them are in Germany. Let me just say that we do not have any knowledge gap in Europe. We have possibly the best brains, and we just need to put them together.

And also, we have other startups that have already developed distributed storage solutions. , an interesting Italian startup had this idea to explore the spare disk; each of us has in our laptops to make available ample, distributed storage for almost free with the highest standards of security and adopting a very smart federated, let me say, operating system.

Others are leaders of the DAO, the distributed, decentralized autonomous organization, which is one of the core principles we are starting within Gaia-X because we want Gaia-X to be self-certified. As we keep saying, we want to implement the concept of regulation by automation. I'm fed up with big regulations, big standards, where you have to spend a lot of money, then go through massive holdings where you just read documents and put a checkmark on them. This is when technology can be self-certified, and this is possible today, but then we need to implement these regulations by automation principle and make this dream come true.

We want to implement the first and most reliable autonomous decentralized architecture on planet earth - this will be my challenge.

[00:28:13]

Ken: It sounds like an admirable goal, and I'm sure there'll be several companies excited to participate in this Hackathon coming up. I guess on that note, how can someone learn more about Gaia-X, perhaps even become a member or joining this Hackathon?

[00:28:27]

Francesco: Yeah, well, like any hackathon is published on our social channels, and anybody can read it on LinkedIn, Twitter and apply. We already have hundreds of applications, but more in general, we have a website with lots of information. You can find the information on becoming a member of the Gaia-X association on our website, Linked In, or even Twitter. We also have a program of events and summits. Our next conference will take place on the 18th and 19th of November. It will be in Milan, but online, of course. Make sure not to miss it. Becoming a member is pretty easy and cheap. You can go to the site, and you will find the link. You can fill a form, and you will receive all the information and support you need to understand how you can join, where you can participate and the subscription fee. Subscription fees are annual and proportional to the size of your company in terms of revenues turnaround, and they start from 2500 US dollars per year. We have many nonprofit organizations and small companies that can afford that, and I'm very proud of that.

We are a private organization like I said, and we are proud to be the voice of the market. And this is the reason why we are possibly seen as influential and reliable by the European Commission and by the local governments because we represent the needs of the users of technology, the capabilities of the providers across Europe. We are implementing all together, as I said, an unprecedented set of features that are not existing now in the market offering. Becoming a member, I think it's a mission for most of our members. It's just a privilege to be part of this team and contribute to creating the future of technology and not just of Europe but for sure the future of our European digital economy.

[00:30:20]
Ken: Excellent. So, I guess in closing, when you're not creating the future for the rest of us, how do you find your inspiration?

[00:30:30]

Francesco: I think out of the box; one of the lessons I've learned over the years working in technology is that you can only drive fundamental transformation, real digital transformation, if you look at the world differently. Hence, if you look at the real world and don't translate it into the world, you know. I talk to ordinary people. I talk to my old friends that do a completely different job and don't care, or even don't understand what I'm doing in this job, I mean. We drink a beer with people who might ask me what my job is, and I will try to describe it to them. When I saw their face, I realized that I could not explain them well enough as I'm not achieving the impact I would like. I explain to young people. I participated in podcasts.

So young people who are curious want to understand more about the other people they can hear that they're driving big projects, what that means for them. I talk to my sons and what I'm doing and trying to answer their tough questions like, so that why should I use Gaia-X instead of Google? So, that makes me, puts me in trouble, that makes me spin my mind's wheels to try to look for the correct answer. I try to understand what exactly it is we need to do and communicate to the outside world. I think the biggest challenge; you didn't ask the question; nevertheless, I will tell you the answer.

The biggest challenge I have is what they call digital advocacy, in other words, most of the things we have been discussing in this podcast. Most of the things I talk about in conferences, and whenever I talk about my job, like a given for most of us, we tend to believe that everybody understands what digital economy is, what the power of data is, what our data space is is can produce. But the reality is that most people do not know this. It is still very blurry, so we need to talk about it. Without a data platform, we need to explain that we wouldn't have survived in the last year and a half because we could not send kids to school, buy the grocery, and go to work. We need to tell the people that the world needs a new generation of data infrastructure because it is no longer something for IT people and nerds. It is the backbone of our future life, and we need to get control of it.

[00:33:04]

Ken: And if that is the backbone of our future life, then certainly data and, more importantly, unrestricted sovereignty of data is the blood of life. And as we come back to Gaia-X, the transformational life, I love the name.

Francesco, thank you for sharing these wonderful insights with us today.

[00:33:22]

Francesco: Thank you, it was my pleasure. And I look forward to being your guest again, Ken, it was an absolute pleasure, and I hope your audience enjoyed it.

[00:33:31:]

Ken: I think it was very insightful, and I do believe you left some great hooks in terms of future podcasts. I think we just scratched the surface of the real potential of this, and you and I before, we're talking about use cases and agriculture as an example, and industry for and other areas. We will undoubtedly have other podcasts in the future where we can deep dive into some of those.

So this has been Francesco Bonfiglio, the chief executive officer of Gaia-X, and, if I can say, creating the future of data sovereignty. Thank you for listening, and please join us next week for the next Momenta Digital Thread Podcast. Thank you, and have a great day.

[The End]