Written by Anna Rasgauski, Software Developer at BusinessCode.
Technology evolves at a breakneck pace, and while artificial intelligence continues to dominate headlines, another important trend is gaining momentum: the shift toward European-made technologies. In Germany, this conversation has taken on a more focused dimension with the growing push to establish a so-called “Deutschland Stack” – a standardised set of technologies aimed at harmonising digital infrastructure across the country’s 16 federal states, each of which currently follows its own approach. Alongside this move, there is increasing interest in adopting open-source software as a way to enhance transparency, security and digital sovereignty.
What Even is Open-Source Software?
Let’s start with a definition about what open-source software even is. “Open-source software is source code developed and maintained through collaboration. Anyone can use, examine, alter and redistribute open-source software as they see fit, typically at no cost.” Examples of open-source software are LibreOffice, Mozilla Firefox and NextCloud. Through a simple web search, it is easy to find the code for these applications. Open-source doesn’t just include applications, but also programming languages, databases, operating systems and frameworks.
So now on to the next question – where is the monetary incentive to make open-source software? Clearly producers of open-source code don’t make money through licensing costs, such as producers of closed-source software like Microsoft Word or Adobe Illustrator do. But there are a variety of services which open-source developers and companies can offer, including Support and Consulting, Software-as-a-Service (SaaS), where the software is run and maintained for a customer, and paid feature requests i.e. the open-source developers are paid to develop a particular feature as required.
What Advantages Can Open-Source Software Provide?
In a recent article, Nextcloud CEO Frank Karlitschek explains why he thinks we should be using open-source software. He notes that one of the worries about being dependent on software outside of Europe is the dependency on updates and security patches from these companies, i.e. it would be possible to sanction the IT-services we use, if these companies so wanted to or had an incentive to do so. Open-source software on the other hand, can be transparently examined and when necessary, independently developed away from the original developers.
Furthermore, Karlitschek notes that some governments are aiming for complete technological autonomy and are developing their own software-stack. He goes on to say that it is difficult for the public sector to finance such long-term projects – after all this doesn’t just involve developing software, but also the manufacturing of chips and storage media and the extraction of raw materials, including rare earth elements – a topic of particular interest of a particular government in recent times. Finding personnel with the required skills and experience is difficult in the current market, and the public sector must then also compete with the open market. This leads to the public sector employing external companies to complete the task. This in turn can result in the intrinsic motivation often being lost and may lead to short-term and non-scalable solutions, according to Karlitschek.
He goes on to explain that open-source software protects against vendor lock-in. Vendor lock-in occurs when customers become so dependent on a product or service that switching to another provider is no longer economically viable. However, since open-source licences are designed to protect the interests of users rather than providers, he argues that this kind of dependency doesn’t arise at all.
Why Don’t We Just Adopt the US Approach?
As of May 2025, the seven largest US tech companies Alphabet (Google), Amazon, Apple, Broadcom, Meta, Microsoft, Nvidia and Tesla, had a combined market capitalisation of $16.3 trillion. In comparison, Europe’s top seven tech firms (Adyen, Arm Holdings, ASML, Infineon, SAP, Schneider Electric, and Spotify) collectively reached just $1.2 trillion, roughly 14 times less. Notably, the top seven US companies by market capitalisation all come from the tech sector, while in Europe, only SAP and ASML appear among the continent’s top seven overall companies. This highlights Europe’s relative dependence on US tech products and reflects a less concentrated tech sector. Factors contributing to this include stricter regulations and labour laws in Europe, which, while safeguarding workers’ rights and supporting inclusive economic growth, can make rapid market shifts more challenging. By April 2025, for example, over 60,000 layoffs had occurred across 254 US tech companies – a heavy cost for workers to pay.
Another factor is that European entrepreneurs tend to be more risk-averse than their US-counterparts. US companies are on a whole less shy to accrue large amounts of debt to obtain a large market share. As Bill Gates once said: “To win big, you sometimes have to take big risks” – this is a far cry from Germany’s, until recently, long-standing focus on the “schwarze Null” or “black zero” where there should be no increase in public debt – a general view which is shared through much of the population.
So What Next?
Clearly, the existing solutions we use in Europe have gotten us to the dissatisfying point we are now and if we in Europe want to become technologically sovereign, then we need to become more technologically innovative and create products which can compete with the top 7 US tech companies. We should explore different methods to find solutions and not just focus on the result, even worse a quick result, if we want to find a real long-term fix. Environmental, inequality and life expectancy metrics typically perform better in Europe than in the US and if we want to maintain this, then the solution is not to try to recreate the US model through deregulation and reduction of the social safety net.
Open-source code is really nothing new – the term open-source has existed since 1999, but open-source software allows developers to delve freely into the world of large applications and learn and bounce ideas off each other, thus opening the door for mutual learning, development and competition of new ideas and solutions, whilst still maintaining high regulatory standards. Now may be the time to give open-source products new energy and incorporate it in the German approach to the Deutschland-Stack and the general move to European technologies for a long-term, secure and transparent solution.
Blog post photo by Artem Beliaikin (@belart84) on Unsplash.