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Comment by foolswisdom | Hacker News Reader

They want to create competing to US cloud companies in Europe. If I understand the business strategy as presented they initially will target companies that can't use US cloud for legal reasons, so US clouds can't even compete (so the competition while they get off the ground is small scale cloud providers in Europe), which will then give them a base from which to fight the big clouds for clients.

Quick googling says that AWS, Azure and GCP have 69% of the European cloud market. I wonder how big Europe is for their overall profits, and if this could potentially be a big problem for then in the future.

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EU is pouring huge amounts of money into development grants, because they want to decrease their dependency on the global markets.

Expect GAaaS startups (grant applications as a service) to pop up left and right, offering extremely slick pitch decks, founders in well-fitting suits and ridiculous pie-in-the-sky business ideas.

It’s some version of ”build it and they will come”. Granting millions in free money to anyone who promises to create an EU alternative to AWS / Intel / Facebook gets you a lot of said promises.

> Over the next two years, it plans to raise €3bn — that averages out as €125m a month for everyone keeping score at home

The EU pledged €2bn so it's mostly government funding. Imagine burning €125m in public money every month.

The 2bn from the EU is not earmarked for Evroc, I understood that it was a general allocation (though perhaps they expect to get a lot of it).

The EC wants to invest 2b€ in the sector in general, not in the company specifically

It was never entirely clear to me how I actually get this money except by making friends and rubbing backs with the people in Brussels.

It certainly doesn’t seem to be based on likelyhood of success.

Seems like you already answered yourself. Crony capitalism and nepotism are the traditional EU way of doing business. That’s why our companies tend to lose on the global market, when faced with a level playing field and real competition

Pretty much yes, that's why all EU funded tech projects are half-assed. As soon as the EU public money dries up, all investors pull out as well because they know nothing they do is meant to be competitive on the free market, they're just there to suck on the teat of easy EU money and take off when it's dry.

The sad part is, without EU money, nothing in tech would happen in the EU. We have no VC investors willing to put their money in something as risky as tech when they can put their money in much safer places with surer returns like real estate which sacred in the EU compared to let's say the US.

The EU start-up I was working for was looking for VC investors and we found some German guy who was like "yeah I can invest 100k in your company" at which point our boss was like "bruh, that will barely cover scientist, dev wages and infra for 3-5 months". Then came and American guy with an initial investment of 2 million. Nuff said.

How would an investor pull out prior to an exit? Since they can't why would they invest in something they don't expect to be competitive. How could they suck on the EU teat? This makes no sense.

As you point out, the real issue appears to be a lack of VC risk appetite for investing in early-stage startups in the EU vs the US.

You misunderstood. As soon as the EU pulls out, so do the private investors. They're only along for the ride as long as the EU puts in most of the money and the risk.

We must know different investors. What ride would they be on except to bankruptcy if they can't profit from their investment?

It should be embarrassing for Europeans that the only way they can compete with Americans in IT is by literally banning US products. I don't think that will work out very well for them in the long run. Europe is otherwise usually a fierce competitor in high tech, but when it comes to IT it seems they didn't really got going strong. Just out of sheer patriotism, European companies could snatch back a lot of customers from their foreign competitors by just offering an equal or slightly worse product.

The big problem is IT in Europe just doesn’t pay very well. It beats a blue collar job, but anyone truly good has the option to emigrate for 2-3x more money.

Moving away from your established life, friends, family to a country where you will (at least initially) be foreign, where the lifestyle is different are burdens that should not be underestimated.

I'm sure everybody in the EU would like US level salaries, but most wouldn't move for the money alone

America is the ~only country where you may truly be "local" in the eye of the locals.

In all other countries you'll always be a foreigner (your kids will be local though).

UK as well, it's very welcoming to foreign workers compared to most of continental Europe where even if you learn the language you're still a a foreigner with glass ceilings.

And 10x for healthcare elsewhere.

Health care costs shouldn't be of too much concern for young professionals (those more likely to move). Eating well and exercise should come first, because even if healthcare is free or cheap - who wants to be sick in the first place?

Your well being doesn't always depend on your diet and exercise. Viruses like Coivd or other bugs you can get from a simple surgical procedure like a root canal, preexisting and congenital conditions that hit you later in life, accidents, are a thing for many people despite balanced lifestyles.

Certainly. But if we compare how much Americans are happily paying for health insurance and Europeans are happily paying in taxes, with the cost and effort of a healthy life style, the healthy life style is much cheaper. And accessible all over the world.

I'm kidding about the "happily" of course.

The US food is terrible, GMO everywhere with artificial, sugary taste that ‘deactivates’ the natural senses of your mouth, so everything needs sugar to taste “okay-ish”. It is more cognitively and economically expensive to be healthy in the US than in Europe.

Leaving aside edge cases (e.g preexisting chronic illness). This is mostly irrelevant for software engineers even for the ones without top of the market compensation.

-10x for love then.

The question is: Why won't the companies pay well? Good quality IT gives massive savings/profit, there should certainly be enough left over to pay the people who actually did the work. I think there is an attitude in Europe of workers not deserving high compensation, by the virtue of them dirtying themselves with work and not belonging to the owner class. If you lose talented employees, so be it, they simply don't deserve getting paid better no matter how much money they bring in to you.

Yeah, I get this impression as well. Only way to have it better is to be one of the owners.

Isn't it similar to what the USA did when many companies started replacing cisco network equipment, Dell/HP servers and SANs for the cheaper Huawei offering?

Sounds very similar. Didn't Huawei stuff get banned as well?

The market share of these services in the EU might end up being affected by the passage of the Digital Services Act and its sister bill the Digital Markets Act

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