Lidl owner Schwarz expands tech push with cloud growth ambitions

The technology division of German retail group Schwarz is aiming for strong growth in the coming years as it expands its cloud computing and cybersecurity business beyond its traditional supermarket operations.

"We are here to stay," Schwarz Digits chief executive Christian Müller said at the opening of a new campus in Bad Friedrichshall in south-western Germany. Müller has led the unit alone for only a few days after his long-time co-chief Rolf Schumann left the company.

Schwarz is best known as the owner of supermarket chains Lidl and Kaufland, but its technology arm is positioning itself as a European alternative to major US cloud providers such as Amazon Web Services and Microsoft Azure.

Müller did not provide specific growth targets but said he expected "very good revenue growth", pointing to strong demand for projects already in the pipeline. Schwarz Digits generated €2.2 billion ($2.5 billion) in revenue in the financial year that ended in February, up 16%, driven largely by growing demand for cloud services.

The company is focused on "digital sovereignty", a concept that aims to give companies and governments greater control over where their data is stored and who can access it, rather than relying on US or Chinese technology providers.

The idea of digital sovereignty was initially met with scepticism, Müller said. Demand has since grown to the point where the company has to prioritize customer projects, he added.

Schwarz Digits said it aims to become a "hyperscaler" - a large-scale cloud provider operating vast networks of servers to provide storage, computing power, artificial intelligence tools and other digital services.

The division began as an internal IT provider for Lidl and Kaufland but has increasingly opened its services to external customers. It is also building a multibillion-euro data centre in the German state of Brandenburg.

Schwarz Group reported total revenue of €185.6 billion last year, with Lidl and Kaufland remaining its biggest businesses.