„I firmly believe in an upturn in Germany“
Mr Holz, you only joined Databricks at the end of April, having previously worked for technology giants such as Google and Oracle. How has your view of the artificial intelligence boom changed in the first few weeks?
For me, it has confirmed that artificial intelligence is the future of the enterprise software business and that companies like Databricks will play a central role in how we deal with data. In the future, I see us not only as participants, but also as drivers of a paradigm shift in which data lying dormant in various sources will become much more usable for companies in order to create new applications and generate added value.
What role does the German market for cloud-based data solutions play from Databricks' perspective?
Germany and Central Europe as a whole are extremely important for us. I've only been with Databricks for a short time, but I've been responsible for the region and the Nordic countries in Google's cloud business for years. Germany is a market with great potential for all cloud and data service providers - if only because of its status as still the largest economy in the European Union. The automotive sector and the manufacturing industry still play a key role in this economy and this is where we see the greatest need and the greatest potential for the storage, management and processing of large data streams, for which we have a growing range of products in our portfolio. In Germany, we still have a market share in the single-digit percentage range and are in growth mode.
However, Germany's status as a leading economy has suffered considerable damage in recent years. How do the gloomy growth prospects for Germany as a whole affect your business outlook?
Although the German economy is going through a weak phase, I firmly believe in an upturn in the coming years. We very much hope that Federal Chancellor Friedrich Merz and the newly created Ministry of Digital Affairs as well as the Federal Office for Information Security (BSI) under President Claudia Plattner will provide the right impetus to unleash enormous growth in the technology sector. Countries like Germany need to overhaul the digitalisation of the entire public sector, as there are only a few employees left who can even handle the outdated systems. So there is great potential there too. We are seeing great interest in the German economy in using Databricks solutions as a lever to utilise data more effectively.
About the person
Daniel Holz has travelled far and wide in his career. The German manager, who has been responsible for the Central European business as Vice President of the cloud service provider Databricks since the end of April, worked as Sales Director for Russia in Moscow and Head of the Turkey division in Istanbul during his twelve years at SAP from 2008. The graduate of Goethe University Frankfurt and the MIT Sloan School of Management, who holds a doctorate in Business Administration from the Vienna University of Economics and Business Administration, was then promoted to Managing Director for Germany at the Walldorf-based company. After almost four years in this top job, he moved on to Google's cloud division and finally to Oracle. He only stayed there for a short time - since Holz wants to push ahead with ambitious growth plans with Databricks.
You mention the Ministry of Digitalisation - does it really make sense to centrally control the economy's ability to innovate?
There needs to be an institution that clearly takes the lead and has authority at a federal level. In my career at other companies, such as in Google's cloud business, I have seen too often that some federal states wanted to promote innovation and others blocked the corresponding decisions due to political power struggles. Whether it has to be a ministry or not, a standard setter that other authorities and companies can refer to and that creates a reference architecture, for example for cloud solutions at the interface between the public and private sectors, is necessary. This can really open the floodgates to innovation.
However, the key drivers of cloud and AI growth to date have been the hyperscalers, in other words the large cloud service providers centred around Amazon, Alphabet and Microsoft. Doubts about the sustainability of their investment spending have grown, not least due to the rise of the Chinese start-up Deepseek. How will it affect the market if the tech giants have to question their capital expenditure?
The hyperscalers have good reason to keep up the pace of investment in artificial intelligence. If one of them achieves breakthroughs with a new generation of large language models, the others cannot afford not to be there. The race will probably continue until there are clear signs that the cost of inference - the ability of AI models to recognise patterns from the data fed in through machine learning and thus draw conclusions from unknown information - is falling. This is not yet apparent.
So Databricks and other companies in the tech sector remain dependent on the commitment of a small group of leading corporations?
No, we can definitely see that the AI trend is spreading. For my part, I am glad that I am no longer working for a hyperscaler, but with Databricks for a fast-growing software-as-a-service company. We use the infrastructure that large technology groups build for companies like ours and pay according to usage. This puts us in the fortunate position of not having to invest large sums in graphics processors and data centres every quarter, but being able to achieve multiplier effects on the basis of existing technology. We also have a choice of different providers, and this competition between technology giants also enables us to limit costs. Meanwhile, customers in the enterprise software business are also looking for solutions to reconcile multiple artificial intelligence applications and large language models within their enterprise architecture and are finding solutions for this with us.
Databricks itself competes with Snowflake in some applications for storing and managing structured and unstructured data, but otherwise has few direct competitors. To what extent is your company itself already acting in the style of a tech giant, crushing smaller developers with its market power?
We give start-ups a lot of room to develop complementary applications based on our platforms. Our CEO Ali Ghodsi is very clear that he wants to create an open source framework through which additional services can be created. This is very important for us because it allows us to scale our professional services business globally much more strongly with a comparatively small team of just over 11,000 employees than on our own. I don't see us damaging the business of other partners with our model so far.
The crypto market has received a new boost with the inauguration of US President Donald Trump. Do you see a possible increase in demand for decentralised data solutions based on blockchain technology as a threat to your business model?
We ourselves are not far removed from a distributed ledger system and combine many of its advantages in our own architecture. Our concept of making data from different sources shareable and virtually transferable while keeping it within the source systems is already a very decentralised approach. Companies from practically all sectors are moving away from classic online transaction processing databases (OLTP), which transfer data in real time, towards data lakehouses, in which all kinds of data can be stored and made usable for advanced analyses. We, on the other hand, see crypto more as a special market segment in the financial services sector.
How important is cooperation with financial service providers? J.P. Morgan CEO Jamie Dimon was a star guest at Databricks' most recent technology summit in San Francisco and expressed his conviction about his bank's investments in artificial intelligence.
We love working with financial service providers because they are already well versed in data management and have a strong need to reduce their risk exposure. They are pioneers in utilising new technologies to gain competitive advantage and increase productivity as they are in a particularly tough competition for customer money. Banks, insurers and other financial service providers are investing more and more in data systems and are increasingly looking for ways to get more out of AI solutions. This customer segment is therefore very important to us.
To what extent are regulatory developments in the United States and Europe influencing the adoption of AI solutions by financial service providers?
In the USA, the discussion is currently centred more on capital requirements. In the European Union, on the other hand, we currently have to deal with the Digital Operational Resilience Act (Dora), which creates a standardised framework for dealing with information and communication technology risks in the financial sector. This contains stringent requirements and has created some additional work for our legal department when concluding contracts in the financial sector. But we are in a position to fulfil the requirements, and that is an advantage for us. That is why we have active agreements with the five largest financial service providers and institutions in Germany. Of course, as technology advances, the requirements for data protection will also increase, but I believe that we are well equipped thanks to our brilliant technological architecture.
What specific goal do you want to achieve in your first year in charge of the German and Central European business?
We have high double-digit growth rates in Central Europe and naturally want to continue this. In Germany, we have already acquired major customers such as Deutsche Börse and Fraport, but there is still room for expansion. After allocating resources, Germany is definitely the most important market for us in the region - but that doesn't mean that we won't also invest significantly in Switzerland, Austria and Eastern Europe. We want to reach the next level there in the next two to three years.
What role will acquisitions play in the region?
Our focus is certainly not on acquisitions. Instead, we want to leverage effects from our ecosystem. For example, if we don't have a presence in a particular Eastern European market, we work with system integrators from our base of now over 15,000 customers who may already be represented there. We train them and then they automatically position Databricks solutions in the market. In my opinion, we can best utilise our potential organically.
