Managing Geopolitical Risks with Enterprise Architecture

Challenges with US Cloud Services

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Data Protection

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US cloud services have consistently raised concerns for European companies regarding data protection. Agreements like Safe Harbor, Privacy Shield, and the current Data Privacy Framework have temporarily provided legal foundations – but have faced regular legal challenges. With the upcoming change in US administration in early 2025, the current agreement stands on uncertain ground. The access of US authorities to European users' data remains particularly problematic.

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Competition Law

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The EU regularly imposes substantial penalties on US corporations such as Meta, Apple, Microsoft, and Google for competition violations. These companies now seek political support from the US government – potentially further straining trade relations and affecting service pricing or availability.

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Four Realistic Scenarios of Geopolitical Impact

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Before examining specific effects on European companies, let’s consider possible scenarios.

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Scenario 1: Collapse of the Data Privacy Framework

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A legal termination of the agreement is plausible, though not immediately anticipated.

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While penalties during any transition period seem unlikely, the legal instability suggests companies should question and document how US services access personal data.

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Scenario 2: Price Increases

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Price increases by US providers are highly probable – whether resulting from penalties, political pressure, or strategic customer retention. To mitigate price increases and maintain options, companies should identify alternatives for their current services early.

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Scenario 3: Discontinuation of Services

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This scenario is unlikely, as major US providers will likely prioritize their business interests. Nevertheless, it remains conceivable in case of severe escalation.

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If a service is discontinued, having an established exit strategy with alternative providers becomes crucial.

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Scenario 4: No Changes

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This represents the most stable scenario, where services continue uninterrupted and prices develop predictably – but this isn’t grounds for complacency. Strategic architecture work should ensure change remains possible and prevent excessive dependencies.

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Risks and Necessary Measures

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The current geopolitical landscape poses significant risks – particularly financial and regulatory. Companies should act proactively by identifying existing dependencies on US cloud services, evaluating alternatives, and preparing robust exit strategies.

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Excessive dependency can constrain options and increase costs. Enterprise architecture methods provide the key to creating necessary transparency and developing well-founded action plans.

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Role of Enterprise Architecture

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Enterprise Architecture (EA) serves as a critical tool to address identified risks of US cloud services systematically and develop appropriate measures. As the link between IT, business processes, and corporate strategy, EA is ideally positioned to create transparency about dependencies and develop

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‍Central Questions:

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1. Which US services are used for what purposes and what alternatives exist? Including assessment of switching costs and migration effort.
2. What personal data is processed by US services? Crucial for GDPR compliance, especially if the Data Privacy Framework becomes invalid.

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Architecture Assessment in Context

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If EA tools like LeanIX or ardoq are already implemented and processes for tracking external dependencies are established, a good portion of information can be captured and visualized automatically. However, these approaches are often complemented by manual or semi-automated methods:

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• Structured surveys and interviews with business and IT departments
• Review of existing documentation and interfaces
• Contract analyses to identify external software
• Use of SaaS discovery tools
• Code reviews and API gateway monitoring

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Crucially, services must be recorded granularly (e.g., not just "AWS," but "AWS EKS," "IAM," "S3," etc.) and linked to:

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• Data objects with GDPR classification
• Business capabilities (e.g., CRM, HR, Supply Chain)

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A technical or manual mapping of this interconnected information enables visualizations such as service-to-capability or risk matrices. This comprehensive foundation supports subsequent prioritization of critical dependencies and development of action plans.

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Prioritization and Evaluation

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With a complete overview, key questions and criteria can be assessed:

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• What is the probability of a specific risk occurring (e.g., service discontinuation or price increase)?
• Which business capability is affected?
• Are viable European alternatives available?
• What is the migration effort required?

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Assessment results can inform roadmaps or target architectures to plan targeted changes – prioritized by criticality and focused on core processes.

A well integrated tool can incorporate process models and corporate goals, enabling evaluation of dependencies at both technical and strategic levels. A central strategic question becomes: Which organizational goals are jeopardized by current dependencies?

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