"Everyone was laughing: Now they take us more seriously..." Europe’s biggest retailer turns cloud provider
Schwarz Group might be best known for its dominant position in the world of groceries. Now, its newly independent “STACKIT” cloud and colocation provider is eating its way into hyperscaler territory too.
The best journeys don’t always end at the original destination, a lesson Schwarz Group’s Richard Siekmann has learned both in his personal life, as a father, and his professional life as a database manager.
When he couldn’t find a local soccer team that his son could play in, Siekmann decided to set up his own. What started with one team of six children has expanded to an entire football club which allows 120 local kids across eight different teams to get out and play the sport they love.
When Siekmann’s employer Schwarz Group, Europe's largest retailer with brands including Lidl and Kaufland, struggled to find a cloud service which provided the data sovereignty it desires, it decided to build its own cloud platform, STACKIT. It was so successful that STACKIT was offered to external organisations and in 2024 it became a standalone business.
Of football, and databases...
The parallel stories of scale and expansion in Siekmann’s personal and professional life have seen him discover unexpected similarities between managing soccer teams and IT customers.
“Whether managing a youth football team or databases in a cloud, it's important to listen, to understand and to take, hopefully, the best conclusions out of those learnings,” says Siekmann.
“Have a clear and respectful discussion about what you can deliver, whether it’s new soccer balls for training, or a new feature in the cloud, and commit to making it happen in a clear timeframe! This is the most important thing I've learned. If you don’t listen and if you don't commit yourself, you can’t meet expectations with the passion that's needed.”
The journey from selling groceries to providing cloud services might appear unusual, but as Siekmann puts it, Schwarz IT, out of which STACKIT was spun, is used to working at scale for a huge number of internal customers. Think 4,000 people managing infrastructure and software for 550,000 users: “We have more than 23,000 servers across data centers in Germany and Austria, 30 petabytes of data, 1.4 million network ports, and one of the largest SAP retail systems in the world” as he explained
Offering IT services at scale to external customers started to make sense commercially for Schwarz Group – not least given how important data sovereignty has become over the last decade, especially to regulated industries, amidst advances in data protection and privacy laws in Europe.
“It's important to know who has access to our data and we want to be in complete control of that because data sovereignty is vital to keeping our business and customers safe,” Siekmann says. “Clearly we are not alone in that desire and European data laws are quite different to elsewhere.
There is also the matter of cost. While Schwarz Group does still have some instances running on other clouds like GCP and Azure, it continues to release significant workload into its own cloud which it not only sees as more “bulletproof” but also a more cost efficient cloud solution.
“We don't want to rely on other hyperscalers because at the beginning they give you cheap prices, but after you have moved significant workloads on their clouds they are able to define your prices and the way out is pretty challenging. If you have it in your own hands, you can decide which data you want to put in another cloud and which to keep within your own cloud,” Siekmann says.
Playing in the big leagues
Schwarz Group’s absolute commitment to data sovereignty influenced every part of the build when creating the STACKIT cloud platform and the portfolio of managed services it offers around it.
Central to that was the need for a NoSQL database which could not only handle an enormous volume of often complex data structures, but also could function without requiring data to reside on external third-party servers or dedicated hardware.
MongoDB was found to be the best option to meet these needs. Popular among developers for its high performance, scalability and flexibility, the cross-platform, document-oriented database management system has significantly simplified how the retail group stores and manages data.
It lets STACKIT nest data in complex hierarchies but always have it available for swift queries and indexing.
“Our developers love MongoDB because they never have any trouble with it. It’s so easy, I'm pretty sure I could teach it to my eight year old son,” says Siekmann. “Everything is flexible inside of MongoDB.
“We benefit from the performance and scalability of the cloud while also managing our costs, and most importantly we keep complete control of our data at all times.”
Supporting others with sovereign demands
STACKIT was such a success that Schwarz Group soon realised it had a unique cloud proposition which it could offer to the growing number of companies wanting a high-performing, cost-efficient alternative to hyperscalers while ensuring data residency in the EU. On 1st September 2024, STACKIT was spun out as an independent company offering companies, particularly in highly regulated industries, a cloud solution with "genuine data sovereignty".
“At the beginning, everyone was laughing at us – a retailer trying to offer IT services – but we’re growing quickly and now the market, the other hyperscalers, are taking us much more seriously,” Siekmann adds. “Customers love that they can scale up or scale down instances and they know nobody has access to their data, no one can move it from one location to another.”
In outlining the future plans for STACKIT, which recently signed Bayern Munich as a customer, Siekmann can’t resist another football analogy. “Right now we are playing good football, giving our fans what they want, but in the next couple of years we will come to the Champions League with even greater demands from our customers.
“They want a lot of technologies and features that are well known from the hyperscalers, while maintaining data sovereignty. Building things like that is challenging, but that’s what you do if you want to play in the big leagues. Big companies in Germany are already using STACKIT and we are growing, growing, growing.”
