SAP Rejects Call For Pan-European IT Champion

Tom Jowitt is a leading British tech freelance and long standing contributor to TechWeek Europe

German software giant SAP rejects calls for a unified European software company to challenge the US after NSA spying scandal

German enterprise software giant SAP has rejected calls for European IT players to band together and act as a bulwark against American domination of the software market.

The calls for an IT champion to rival the US companies comes amid concern at the extent of the snooping capabilities of the NSA, which included the alleged monitoring of the BlackBerry mobile phone belonging to German Chancellor Angela Merkel.

SAP Rejection

These concerns have prompted local politicians in Germany to reportedly call for European IT firms to unite under one umbrella organisation, in order to offset American domination of the software industry. The idea is to create an European conglomerate similar to Airbus, which is successfully competing against its US rival Boeing in the aerospace market.

surveillance spy security NS GCHQ © Andrea Danti ShutterstockSome other countries meanwhile have touted the idea of country-specific ‘clouds’ for companies concerned about the extent of government surveillance. And one Russian organisation even suggested replacing its computers with typewriters to offset any potential security leaks.

But the plans for a European IT equivalent of Airbus were given short shrift by Europe’s largest software developer.

“A merger between some European IT companies with the aim of drawing a line between them and the rest of the global market, does not make any sense,” SAP co-Chief Executive Jim Hagemann Snabe told Reuters via email on Wednesday.

“Such an endeavour would be doomed to fail from the outset,” he was quoted as saying. Hagemann Snabe explained that creating such a organisation would lead to less competition, less innovation and less growth in a globally-focused sector.

He suggested Europe’s IT sector should focus on increasing competition and developing young talent as the best ways to combat the American domination of the market. “This way we will create the next generation of young IT companies in Europe, thus ensuring growth and progress,” he said.

SAP also apparently believes that the NSA snooping allegations and the whole privacy debate is helping its business, but refuses to run a campaign to exploit this, over fears it will offend its US customers.

There has been an impact on the other side of the Atlantic for American companies such as Cisco. It recently released disappointing financial results and the management blamed the recent US government shutdown, as well as the NSA spying scandal for “spooking” the markets and denting business confidence.

Privacy Concerns

The issue of data protection and privacy continues to pose questions for Europe’s political elite. SAP’s Hagemann Snabe has reportedly called for international standards for data protection both in Europe and the United States.

Last month, the European Parliament’s Committee on Civil Liberties, Justice and Home Affairs voted for stricter privacy laws which include fines of up to €100 million (£85m) or more for large companies (like Google, Microsoft etc). Next, the new regime will be discussed with European member states, with a possible implementation of the new laws by May 2014.

And earlier this week, Viviane Reding, the European Commissioner for Justice, Fundamental Rights and Citizenship, warned that an important data sharing deal with the United States could be stopped unless the country’s surveillance practices are altered to comply with the European law.

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