Deutsche Telekom promotes its cloud as a “sovereign” offering, but the infrastructure relies on both Huawei and US technologies. T-Systems, long considered the struggling arm of Deutsche Telekom, has faced declining demand for its legacy products and has struggled to compete with public cloud giants like AWS, Google, and Microsoft. Over the past eight years, the IT services division has cut its workforce by 12,600 employees—about a third of its total—and annual sales have dropped from nearly €7 billion ($8.2 billion) to roughly €4 billion ($4.7 billion).

Figure 1. Deutsche Telekom Continues Using Huawei in Europe

Interestingly, Huawei benefits from this situation, as Deutsche Telekom remains one of its largest European 5G customers despite geopolitical tensions. What has been less apparent is Huawei’s significant role within Deutsche Telekom’s T-Systems division as well. Figure 1 shows Deutsche Telekom Continues Using Huawei in Europe.

Since a 2015 agreement, Huawei has supplied both hardware and software for Open Telekom Cloud (OTC), T-Systems’ platform for European cloud customers. While the EU has raised security concerns over Huawei’s 5G equipment as a potential channel for Chinese state interference, its involvement in T-Systems’ cloud operations has largely gone unnoticed.

Hidden Behind the Cloud

Huawei’s role in Deutsche Telekom’s cloud may have been overlooked or downplayed. In 2018, the company openly acknowledged Huawei as a cloud partner, but by 2024, Huawei is mentioned only in the context of removing 5G core network products. Emphasizing Huawei’s ongoing involvement in sensitive cloud operations, where data privacy and critical system access are concerns, is likely considered politically risky.

T-Systems CEO Ferri Abolhassan has stressed that Open Telekom Cloud (OTC) is operated independently of Huawei and cannot be tampered with by third parties. However, whether this assurance satisfies regulators is uncertain, echoing debates over Huawei in 5G networks—telcos acknowledge Huawei provides hardware and software but claim it has no operational control or access to customer data.

Although OTC software is built on the open-source OpenStack platform, which is accessible and auditable, a significant portion comes from Huawei, a major OpenStack contributor. Reliance on open-source code does not necessarily alleviate security concerns about Huawei’s involvement.

Deutsche Telekom is not alone in relying on Huawei for cloud services; France’s Orange has a similar arrangement with the company for its Flexible Engine platform, which, like OTC, is built on Huawei’s OpenStack distribution and has received less scrutiny than Orange’s 5G infrastructure.

T-Systems CEO Ferri Abolhassan noted that back in 2015, European alternatives were often immature or not market-ready, while Huawei offered superior price-performance and innovation speed. He added that Europe still lacks domestic suppliers, stating, “Absolute sovereignty does not exist,” highlighting the shortage of autonomous hardware and chip manufacturers.

These developments raise questions about how truly “sovereign” Europe’s cloud infrastructure can be. Regulators initially tried to address cloud privacy by requiring data to stay within Europe, and more recently by favoring local data center owners over foreign giants like AWS, Google, or Microsoft. Yet Orange and Capgemini’s Bleu cloud relies entirely on Microsoft technology, which may undermine confidence in European control, especially given Microsoft’s backup plans involving secure Swiss data in case of government intervention.

At T-Systems’ Magdeburg and Biere data centers, Huawei infrastructure may soon operate alongside Nvidia chips. Deutsche Telekom recently announced it will acquire 10,000 Nvidia GPUs for “sovereign” AI in Germany, with some already available for rent via OTC [1]. With no clear European or alternative semiconductor supplier to Nvidia—the main beneficiary of the AI boom—and U.S. export controls affecting its availability in China, Europe’s reliance on foreign providers underscores that these clouds are far from fully sovereign.

References:

1. https://www.lightreading.com/cloud/huawei-meets-us-tech-in-deutsche-telekom-s-sovereign-cloud

Cite this article:

Janani R (2025), Huawei Joins US Tech in Deutsche Telekom’s ‘Sovereign’ Cloud, AnaTechMaz, pp. 161