Where do European SMEs start when it comes to conquering the world?

The answer is in Denmark

Sponsored Feature Small businesses are the bedrock of Europe's economy, accounting for over 99 per cent of all companies across the region and employing half the private sector workforce.

But it's clear that those small businesses are not thriving as they should, and this is particularly true when it comes to technology.

The EU's own figures bear this out, showing that growth of digital skills, and take-up of cloud, are behind what is needed to achieve its "Digital Decade" targets by 2030. At the top level, only 64 percent of businesses are set to be using the cloud by 2030, with just half using big data, and 17 percent using AI. If even the biggest firms are struggling to exploit the gamut of technology, we can assume the challenge is even stiffer for smaller firms and startups. Looking at SMEs, barely two thirds are operating at a basic level of "digital intensity", well short of the 90 percent the EU is targeting.

For Europe to compete, the EU says, "It is paramount to incentivise the take-up of innovative digital tools by SMEs, in particular cloud and AI, as well as mobilize further private investments in high-growth startups."

This gap is perplexing. The cloud should be a boon for SMEs and startups, offering not just a platform to reach businesses and consumers around the world, but scalable and elastic infrastructure to underpin their businesses and enable software and product development that can grow in line with their needs. So, what's gone wrong?

The fact is European SMEs and startups face the same problems as their counterparts worldwide when it comes to exploiting the potential of the cloud. Hyperscalers such as AWS and Azure might set the standard when it comes to building out the cloud, while specialist providers like Digital Ocean or cPanel might explicitly target smaller outfits. But ease of use is not always their forte. The myriad of technologies and services they offer can quickly become hard to navigate for smaller firms.

It's complex

And if the services menu is complex, the same applies to providers' price lists. What looks like a low sticker price for provisioning a service – say, a database – can quickly mount up as developers realize they must add in other services (fast storage for example) to get it up and running.

Moreover, it's not in the cloud providers' interest for companies to shop around. Despite the "open-ness" of cloud native technologies, it can be challenging to unweave your infrastructure from a hyperscaler once it's up and running and companies may balk at the data egress fees involved in switching. All these challenges have been further amplified by the AI revolution, where scale of the data and compute, and the complexity involved in managing it, escalates to a whole other level.

European firms also face some unique regulatory challenges. If Europe is not punching its weight in terms of technology innovation, it's certainly seen as a leader in tech legislation, steering a middle path between the stifling state control seen in some countries, and the laissez faire approach taken in the US. But this focus on regulation and consumer protection creates compliance burdens for European companies, particularly when it comes to data sovereignty and data protection requirements.

The major US providers might be obliged to comply with European requirements and provide tooling and services to enable European companies to ensure they meet their obligations. But implementing compliance policies – whether for GDPR or to comply with NIS2, DORA or incoming legislation such as the AI Act – means more complexity and, depending on what services customers must use, more cost. And the ultimate responsibility for ensuring compliance still lies with the customer.

It's clear then that European companies – particularly startups and SMEs – face additional challenges in getting hosting infrastructure up and running compared to their counterparts in other geographies. That can slow them in the incubation stage and present them with additional challenges when it's time to expand beyond their home turf.

As Arni Johannesson, CEO and founder of Webdock, says, "These challenges delay the launch of services, increase costs, and make scalability difficult, which hampers growth and innovation. For example, businesses might overspend on inadequate or non-scalable solutions, leading to inefficiency or even failure."

Alternatively, he says, businesses might attempt to follow a low-cost path and go for shared-hosting environments where hundreds of sites are lumped together on a single system behind a single IP address. But he warns, "This will inevitably lead to outages as individual sites get hacked, resource usage gets out of control, or the shared IP address is blacklisted - causing a mass outage."

Perhaps no wonder then that Europe's SME and startup sectors are struggling to meet the EU's own targets and to compete on the broader world stage. So, what would a cloud solution targeted at European SMEs and startups actually look like? That was the question Johannesson sought to answer when he began developing Webdock. The aim, he says, was "To deliver a transparent, predictable, everything-included, and user-friendly virtual private server (VPS) service while ensuring GDPR compliance and a focus on green technology."

Simple by design

Datacenters are sometimes thought of as hotels for servers. And as with hotels, location is everything. So, from the outset Webdock knew it had to build its infrastructure in the EU, specifically Denmark, to ensure full control over the infrastructure, while ensuing GDPR compliance.

"This EU-based location ensures data sovereignty and lower latency for European clients as well as an ability for Webdock to constantly innovate and find new and novel ways to challenge established norms and practices in the industry which are not always to the benefit of clients," says Johannesson.

It also means it can leverage the abundant green energy resources available in the country, particularly in the form of wind power. Access to "green" energy, and using as little of it as possible, has become critical given the compute and associated cooling demands of AI. By siting Webdock in Denmark, Johannesson can guarantee 100 percent renewable energy.

But it's what's inside the box that matters, as well as where it's placed. So, Webdock positions its offering as a "No-Nonsense VPS service" providing "user-friendly management with flat pricing and built-in GDPR compliance." The aim is to provide simple server provisioning and a feature-rich control panel out of the box without paying extra for third-party tools. Webdock built its own control panel inhouse and doesn't require customers to carry out any installation. Rather, says Johannesson, "It integrates features for web development, server monitoring, and resource management directly in the panel."

Other built-in features include free services such as Transactional Emailing, free SSL certs, bot protection, and full server snapshots. While the aim is to be no-nonsense, the platform is robust enough to support a full range of online business models, Johannesson adds, including web development on the likes of WordPress, PHP, and Laravel, to underpinning e-commerce, and up to supporting full scale SaaS applications

But there's only so much that smaller operations can do on their own, so the firm pledges to provide support tailored to their needs – rather than to the needs of the biggest, noisiest customers.

As Johannesson says, "Webdock's experience as a bootstrapped startup positions it to understand and meet the needs of fellow startups, focusing on scalability, affordability, and rapid support."

None of this guarantees a given company will turn into the sort of digital champion European policy planners want to nurture. But if a firm's founders have an idea that resonates with their customers, taking the Webdock approach might give them a headstart when it comes to scaling it across the continent, or even the world.

You can learn more about Webdock's services and pricing by clicking this link.

Sponsored by Webdock.