EuroStack has published a new paper on how to unlock demand for European technology and gets lots of things right. This article analyses the demand idea of EuroStack and explores how we can an additional layer of action.
What is EuroStack and what does the new paper propose?
EuroStack is an initiative of more than 600 mostly small and medium-sized European technology companies, led by competition economist Cristina Caffarra and supported by selected industrial players such as Airbus. Its core logic is demand-driven: European tech providers don't lack talent or innovation — they lack demand to scale.
The new paper tackles exactly this problem, framing it as a coordination challenge. Individual companies hesitate to move because they fear a “first-mover disadvantage”: whoever switches first bears the cost and risk of migration, while others can wait. To overcome this, the paper advocates for coordinated procurement through buyer alliances, inspired by models such as the Open Compute Project and the O-RAN Alliance. The idea is that aggregated demand can reduce individual risk, create scale, and make European alternatives commercially viable.
Demand aggregation will take time
EuroStack’s core challenge now is to aggregate demand. In principle, there are several groups it could target: consumers, traditional small and medium-sized enterprises, tech start- and scaleups, and traditional large enterprises.
Consumers and traditional SMEs are unlikely targets, as reaching them typically requires substantial marketing budgets—resources that EuroStack may not have. Tech startups are also an improbable focus group. Many of them already pursue a clear open-source strategy due to their in-house technical expertise (as seen with Basecamp under David Heinemeier-Hansson), or they consciously accept dependencies in favor of rapid growth, given their short time horizons (e.g. Contentful, Parloa).
The most likely target group for demand aggregation, therefore, consists of large European enterprises—particularly in sectors such as banking, energy, automotive, and public.
A key characteristics of this segment is, that they have not much adopted the cloud, yet. As Benedict Evans keeps repeating in his keynotes, they have been stuck at roughly 20–30% cloud transformation—even after nearly two decades since the emergence of Amazon Web Services in 2006.
Using the language of the Everett Rogers "Technology Diffusion Model", EuroStack's success seems to rely on the late majority and laggards of technology adoption.
We need to empathize with our target group
To avoid losing too much time while demand is being aggregated at the level of top leadership, a complementary bottom-up strategy might be helpful to move the needle. Such an approach could accelerate progress by working with the late adopters as they are, but would require genuine empathy for their way they deal with technological neuland.
1: Technology evolves in cycles
Innovation comes in waves. New entrants challenge incumbents (Creative Destruction, Joseph Schumpeter, 1942), incumbents defend their models (Innovator’s Dilemma, Clayton Christensen, 1997), and adoption follows distinct patterns (Diffusion of Innovation, Everett Rogers, 1962). But each is only truely helpful, if it brings its own infrastructure, operating model, and economics. The BBC explained this pattern beautifully using the example of the transition from steam engines to electric motors.
2: Total cost reduction is what counts
Companies make these change decisions based on their own constraints: limited resources, acceptable risk exposure, and opportunity costs. They evaluate trade-offs with a bias for short-term profitability. Demand moves when managers conclude that the business case justifies the changes in infrastructure, operating model, and economics including migration and opportunity costs.
These companies usually don’t replace old technology; they build around the new without touching the old. That is why Mastercard still operates on mainframes, while at the same time experimenting with emerging paradigms like agentic commerce.
How can we sell technology to late adopters?
There are four entry points for new technology vendors in companies:
1: New Capability (early cycle)
This is the innovation phase. A small group of experts within the organization adopts new technology before the business case is fully understood. This is what we see today with AI tools like Cursor, Claude, or n8n. The key is accessibility: adoption must be free to try because financial controllers don’t fund “crazy ideas” of experts. They just don’t get what all these new acronyms are about. That’s why Claude subsidized a $200 plan with compute ressources worth $27.000.
2: Capability Consolidation (mid cycle)
Once a capability becomes essential, organizations move to standardize it. What started as scattered tools—Claude, Cursor, ChatGPT, Copilot—gets consolidated. Now even finance accepts that these tools are necessary. Budgets get formalized, and vendor reduction becomes a priority. At this stage, bundles often win. Companies will accept an inferior tool like Microsoft Teams over Zoom & Slack if it reduces complexity and supplier management.
3: Cost Reduction (late cycle)
In mature phases, the focus shifts to efficiency. Companies systematically review cost structures and look for savings. This creates opportunities for cheaper alternatives—but only if they win on total cost, not just component price. This includes migration costs, operational risk, and opportunity costs. If these constraints support a case, even German companies get rid of Fax and landline phones on office tables.
4: External Constraints (late cycle, irregular)
Sometimes change is forced by external shocks: GDPR, lack of gas supply, or rare earths. These can trigger movement but still change is only driven at minimal necessary effort. Companies do this only, when there is no other way out.
If we look at the 4 entry points from a sales perspective, EuroStack's arguments are an awesome opportunity to create attention and get into the room.
Let's bundle up
The four entry points suggest exactly two strategies.
I. New Capability Bundle
We could coordinate EuroStack signatories to build a new capability bundle. Right now, that’s agentic workflows. There is IONOS and STACKIT with enterprise reach, lots of high-tech niche players, and a broad base of European consultancies. Such a bundle could be a concrete offer and EuroStack would be the sales enabler. If we succeed, we can even control the next layer, where productivity gains and budgets sit.
II. Total Cost Reduction Bundles
Hyperscalers aren’t cheap at the component level: Hetzner outperforms many US clouds on price, Oracle databases are far more expensive than open source. We could compete exactly here, building full migration bundles, not components: “We untangle your Oracle stack including stored procedures with AI, move it to PostgreSQL, run it on STACKIT—one contract, one bill, minimal disruption, ROI after 18 months.”
EuroStack could pull strategic AND operative levers
EuroStack has successfully reframed Europe’s tech challenge as a demand problem and created real momentum around coordinated action. It now has the opportunity to translate this momentum into execution.
Key is to use the existing top-level access to open doors and anchor the conversation. Now, the conversation could be split into a strategic and an operational path. The first would be aligning CEOs on strategic measures such as coordinated procurement, long-term sourcing commitments, and shared investment frameworks. The latter would aim to convince IT organizations along with their current thinking to move into a European build mode. This would mean offering concrete entry points: agentic capability bundles to supply enterprises with new capabilities, and cost-reduction bundles targeting the most expensive dependencies in enterprises—such as Oracle, VMware, and Microsoft 365.
