Dusseldorf For a few weeks now, the Schwarz Group has been offering products that you would not expect from a retail company: the parent company of Lidl and Kaufland has developed a cloud platform called Stackit. Since the end of the test phase, customers have access to storage space and computing power, databases and analysis tools in two data centers.
Now the group wants to invest massively in marketing. “In the next three to six months we will run a nationwide campaign,” announced digital boss Rolf Schumann in an interview with the Handelsblatt. The costs are likely to amount to several million euros – the family business, which is known for its secrecy, does not give exact figures.
Advertising is indeed necessary. American companies such as Amazon Web Services (AWS), Microsoft and Google, which are investing heavily in expanding their offerings, dominate the market for IT infrastructure from the cloud. Nevertheless, the Schwarz Group sees an opportunity: Many small and medium-sized companies fear dependencies. “We want to ensure our technical sovereignty,” says Schumann. “There are many companies that have the same needs.”
The digital boss of the Schwarz Group wants to ensure the technical sovereignty of the group with its own cloud.
(Photo: Black)
The Schwarz Group has been working on the technology for years: in 2018 the family business decided to develop its own cloud platform – with the consent of the owner Dieter Schwarz. The core business with retail is no longer conceivable without digitization, says Christian Müller, who as Chief Information Officer (CIO) heads the IT department with 4,000 employees.
Top jobs of the day
Find the best jobs now and
be notified by email.
“We want to be independent and have the know-how in-house,” says Müller. It’s not just about controlling data processing, but also the technology. This is not possible if you only use the large cloud services, known in industry jargon as hyperscalers.
Lidl online shop runs in its own cloud
The development was made possible by changes in the management structure. Gerd Chrzanowski has been the general partner of the group since the beginning of December and thus holds the top management position in the company. Previously, Klaus Gehrig, who was rather skeptical about IT projects, had been at the helm for decades. But Gehrig had to leave the company last year after a dispute with owner Dieter Schwarz.
“We got the freedom and trust from Gerd Chrzanowski to work on new topics,” says IT boss Müller. “We had to earn our trust in digitization using numbers. Now we have a freedom that I don’t know from DAX companies,” says Schumann, who worked for SAP for many years.
The Schwarz Group is thus expanding into another business area outside of retail. With Prezero, the group already owns a waste disposal company, which is intended to facilitate the circular economy. Schwarz is also active in food production. Lidl is also planning to put several container ships into service.
>> Read here: Digitization and sustainability: How the new head of the Schwarz Group is reinventing the discount principle
Within the last 18 months, the Schwarz Group has completely converted the Lidl online shop from various systems to its own cloud platform, including its own payment system Lidl Pay. Kaufland’s online marketplace and customer card systems with a three-digit million number of members also use the technology.
As is usual in the Group, the calculations are very precise. “We don’t convert every system blindly, we couldn’t afford that in our business model,” says IT boss Müller. “We only touch what makes economic sense.” The rule of thumb: Anything that is newly developed anyway and helps in the competition runs in the company’s own cloud.
The head of IT has already converted many internal processes to its own cloud.
Black also takes a pragmatic approach to the platform. The manufacturer-neutral and open software Openstack serves as the technical basis – companies can use and modify it freely according to the open source principle.
It contains components such as computing power, storage space and network management, as well as services such as an identity service, virtual machines or an environment for software development.
“Hidden champions want to protect their secret recipe”
Years ago, many corporations began to move their IT to the cloud – when Volkswagen networks the car plants or Deutsche Bank uses algorithms to fight money laundering, the large service providers from the USA have become important partners.
“We are not competing against the hyperscalers,” emphasizes Digital boss Schumann. In the case of the corporations, one can at most be considered for individual scenarios, as a supplement to the existing installations. Experts speak of multi-cloud scenarios that exist in many large organizations.
However, the Schwarz Group sees a niche in small and medium-sized companies. “Many medium-sized companies started the digital transformation later and are now asking themselves the same questions about digital sovereignty that we asked ourselves,” says Schumann. “Most hidden champions have a secret recipe that they want to protect.”
Stackit aims to cover the most important part of the need, and with great reliability. “As a large company, we use all the services that we develop ourselves – we already have a lot,” emphasizes IT boss Müller. If a service does not exist, a multi-cloud strategy is recommended to customers.
However, other companies are also vying for medium-sized customers. Ionos from the United Internet Group describes itself as a “European cloud alternative”, while Deutsche Telekom emphasizes the “highly secure European data centers” in its Open Telekom Cloud. Both companies also use Openstack as the technical basis.
“If the Schwarz Group does something, it does it right”
Experts see potential. “The market is so big that it also offers small providers opportunities to grow quickly,” says Karsten Leclerque, an analyst at market researcher PAC. SMEs in particular have opportunities for European providers who process data in the EU: “Handling the cloud is legally complex, so smaller companies may take the easy route.” However, the location alone is not enough, competitive technology is also needed a good service.
The Schwarz Group believes in their chance. The company does not name targets for sales or market share. But it is an important initiative, emphasizes Digital boss Schumann: “When the Schwarz Group does something, then it does it right.” Internal use has already shown that the product can be developed economically – “that’s why we’re going with it now to the market”.
More: Difficult ascent: why many existing customers hesitate when it comes to the SAP cloud