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Telecom Italia builds bid for national cloud hub

Telecom Italia and three partners are preparing a bid to create a national cloud hub in Italy.

The bid, which also involves the defense and aerospace group Leonardo, state-owned IT firm Sogei and the investment bank Cassa Depositi e Prestiti, is a response to the government's announcement that it plans to spend €900 million ($1.07 billion) to create the cloud hub.

Funded by the European Union, this cloud hub represents an attempt to spur economic recovery after the pandemic. Italy included the cloud hub project in its national Recovery Plan it submitted to Brussels in April.

It is also part of a worldwide move towards national clouds, in this case making the EU less dependent on global tech companies for data storage.

There has been particular disquiet after US's Cloud Act of 2018, which said Washington can require US-based tech firms to send the US government data even if it is stored overseas.

Those four partners are likely to create a company for the joint venture, said Telecom Italia's CEO Luigi Gubitosi.

Italy's Innovation Minister, Vittorio Colao, has said the government expects to receive bids for the national hub, to be named the Polo Strategico Nazionale, by the end of September.

Going large

Colao meanwhile has said he wants to see Italy use cloud technology developed by major overseas tech companies, while ensuring data is stored locally.

So Amazon, Google and Microsoft could provide cloud technology for the hub if it is licensed to the companies taking part in the project.

This echoes France's openness to using technology from Big Tech, licensed to national operators.

Others in Europe who had called for more homegrown solutions appear currently to have been sidelined.


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For Telecom Italia, which has been moving into cloud in a big way after its purchase of Google Cloud's Italian partner Noovle, the timing really couldn't be better.

Noovle, which has grown into Telecom Italia's home for cloud and edge computing services, is now one of the Italian telco's fastest-growing parts.

Now operating 17 data centers around Italy and working on six more, Noovle is targeting €1 billion in revenue by 2024.

Former Google executive Carlo d'Asaro Biondo moved over to the post of Noovle CEO in January.

With Telecom Italia's total revenues falling in every quarter in 2020 (by 2.1%, 5.0%, 10.1% and 6.6% respectively), it's an increasingly important part of Gubitosi's company.

Against the bleak backdrop of last year's coronavirus-hit third quarter, cloud services boosted Telecom Italy's business segment revenue by a yearly 18%.

This is all the more significant now that European competition authorities have reportedly blocked Telecom Italia's plan to take control of government-owned Open Fiber and create a single national broadband network.

Prime Minister Mario Draghi, fearing Italy would lose out on EU coronavirus recovery funds, has apparently intervened to stop Gubitosi's efforts to set up the national broadband system.

There has been a flurry of dealmaking ahead of this bid, with the nearly €1 billion ($1.2 billion) prize in sight.

In addition to its already established strategic partnership with Google, Noovle signed an additional partnership deal with Cisco in June to develop cloud services together for companies and public administrations.

And Leonardo, meanwhile, had signed a deal with Microsoft to offer cloud services to Italy's public administration.

Nothing like a bit of EU dosh, it seems, to bring all the Italian companies to the yard.

Related reports:

— Pádraig Belton, contributing editor, special to Light Reading

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