Digital sovereignty: the dependency costs companies have not yet accounted for
Barbara Engels, a senior economist at the German Economic Institute, argued in an article for heise that when companies evaluate software procurement, they only count licensing, deployment, and training costs, but not the cost of exiting the vendor later, causing dependencies to form without anyone deciding to create them. She suggests breaking dependency costs into three separately accounted items: the bargaining power gained from switching capability, the risk of service interruption or supply cutoff, and the revenue opportunities arising from customer and public procurement requirements for sovereignty. The article cites a Bitkom survey stating that 94% of companies using non-European digital technologies have dependencies, and if they lost these technologies, they could on average sustain business for only 16 months; in AI, she recommends adding an intermediate layer between applications and models, building in-house test cases, and storing prompts, documents, and training data in exportable, self-owned systems.
Barbara Engels, a senior economist at the German Economic Institute, argued in an article for heise that when companies evaluate software procurement, they only count licensing, deployment, and training costs, but not the cost of exiting the vendor later, causing dependencies to form without anyone deciding to create them. She suggests breaking dependency costs into three separately accounted items: the bargaining power gained from switching capability, the risk of service interruption or supply
Matched fieldsBody
