“Ukrainian databases, including state confidential information, will go beyond the territory of Ukraine and settle in data centers under the jurisdiction of other states.” Interview with Gigacloud co-founder

During the blitz interview, Maksym shared one interesting topic, which he is to some extent involved in. This is the protection of Ukraine’s digital sovereignty. After all, world leaders in the cloud market and digital infrastructure are already actively working in Ukraine: Microsoft, Amazon, Google, Oracle. And although their services are used by key EU and US institutions, including the Pentagon and the European Commission, all these companies are American, that is, their activities are governed by US laws. And thus, according to the lawyer, the principle of «digital sovereignty» of Ukraine is actually violated .

What kind of digital sovereignty is this and how can it be protected — without banning Microsoft, Amazon, and Google in the country — we’ll talk about that later in our interview.

— I’m interested to know what’s new in your cloud business. Maybe you’re launching new projects or planning something interesting?

— One of our focuses is the public sector. Gigacloud is a critical IT infrastructure company, and we service important government registries and platforms. Since the start of the full-scale war, the stack of our government clients has significantly increased and continues to grow. We provide all the necessary backups and reserves through our data centers in Warsaw.

— Who are your main competitors?

— We are the market leader in Ukraine in the field of cloud services. Our company, GigaCloud, ranks first in classic IaaS (infrastructure as a service). In general, we see four main players in the Ukrainian market: Gigacloud, De Novo, Parkovy and Ucloud.

— As a co-owner of a cloud business and a professional lawyer, what processes are you currently directly involved in?

— I am involved in all the processes to some extent, and one of the key tasks now is to promote and protect Ukraine’s digital sovereignty. After all, hyperscalers are already actively operating in Ukraine. And these are the world leaders of the cloud market and digital infrastructure: Microsoft, Amazon, Google, Oracle. And although their services are used by key EU and US institutions, including the Pentagon and the European Commission, all these companies are American, that is, their activities are governed by US laws. Thus, the principle of «digital sovereignty» is actually violated, that is, the ability of the cloud service customer to 100% control the process of collecting, storing and using critical data.

On February 11, the Cabinet of Ministers adopted a resolution (Some Issues of Provision and Use of Cloud Services and/or Data Center Services). Currently, this document defines the rules for using cloud services for government agencies.

Imagine that in Ukraine they build an oil pipeline, pump out raw materials from it cheaply, and then use this raw material to make gasoline and sell it to Ukraine. Only three times more expensive. Data is the oil of our time, and whoever owns the data dictates the rules of the game.

We want the state, market players, and citizens to be aware of these risks, and therefore we have planned many events and activities dedicated to the topic of digital sovereignty of Ukraine in the near future.

We believe that our state should become a technological hub of Europe, not a raw material appendage — and we have all the necessary resources for such growth: a powerful Ukrainian IT sector, talented developers, and a national cloud ecosystem. Therefore, it is important to understand that today the sovereignty of a state is not only control over its own territories, but also over its own digital resources.

— What can be demanded from hyperscalers?

— We want to see Microsoft, Google, Amazon in Ukraine — these are cool technology companies. It is definitely beneficial for Ukraine for them to open their data centers on our territory, create jobs for Ukrainians, and boost the economy of Ukraine. But none of them are planning to do this at the moment. They only want to provide cloud services at their foreign facilities. That is, Ukrainian databases, including state confidential information, will go beyond the borders of Ukraine and settle in data centers under the jurisdiction of other states.

Another important issue is the unequal competition between hyperscalers and national operators. The latter cannot compete with hyperscalers in the same coordinate system and with the same metrics. Hyperscalers work through a large number of partners and have the opportunity to attract grants.

— Are there any other hidden gems in ordering cloud services from technology TNCs?

— A company that agrees to a cheap infrastructure project can easily find itself in a situation called vendor lock-in. In simple words, it is a tie to a supplier, when you cannot switch to an alternative supplier without significant losses. When you get into such vendor lock-in, the service provider can impose additional services or even bills on you, and you will have to pay for them — because the switch will cost more anyway. I have repeatedly heard this from potential clients and emphasized this danger in meetings with the Ministry of Digital Economy.

— Another question: do Ukrainian government agencies purchase cloud services in principle?

— A new strategy for the development of the cloud market in Ukraine is currently being developed. As you know, since 2022, the Law «On Cloud Services» has been in effect in Ukraine.

By the way, I, along with other participants, am a co-author of this law, which the Verkhovna Rada adopted a week before the start of a full-scale war. So: it still has not worked. We cannot implement what the Americans did back in 2011, namely, implement in Ukraine the Cloud First Strategy, which is so important for state interests.

That is, in Ukraine, the public sector still does not prioritize the use of cloud services to provide their IT infrastructures as opposed to purchasing expensive server equipment. After all, they do not have the appropriate regulatory framework for this, nor the necessary personnel — enough qualified specialists.

— By the way, we learned that this year alone they want to allocate 2.9 billion hryvnias for the purchase of servers, computers, and other equipment for various government agencies.

— From the point of view of Cloud First Strategy, these are very irrational expenses. This is how it usually happens. Some central executive body, regional military administration, for example, purchases equipment. This equipment arrives in a package, it is unpacked…

And then they suddenly realize that to maintain and service this equipment, specialists are needed, whose market salary starts at 3-5 thousand dollars. Undoubtedly, the staffing list of the central body does not provide for such expenses.

You don’t need to buy expensive equipment and then run around data centers with it and ask who will take it to colocation, where to place it and what to do. You don’t need to think about its depreciation, updates, IT staff, etc. You simply sign a contract with a national cloud operator, pay a fixed monthly price and forget about all the worries. Everything else is done by highly qualified IT specialists according to the latest technological solutions and international standards.

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