Retail: Amazon 2.0? - How the Lidl mother became an IT company

When you think of Lidl and Kaufland, you usually don't think of secret cyber security rooms, Israeli agents or American tech giants.

Retail: Amazon 2.0? - How the Lidl mother became an IT company

When you think of Lidl and Kaufland, you usually don't think of secret cyber security rooms, Israeli agents or American tech giants. But the parent company of the two supermarket chains, the Schwarz Group, is also positioning itself as an IT service provider. Similar to the retail giant Amazon, the empire of Lidl founder Dieter Schwarz is investing in the profitable cloud business and, according to industry experts, is already one of the largest German providers. But it is a long way to the three global heavyweights Amazon, Google and Microsoft.

An educational campus, a programming school, several institutes - and soon a large research park for artificial intelligence (AI): Supported by Schwarz's foundation, more and more research and educational institutions are springing up in the city. The next major project is to be the AI ​​park, for which the state of Baden-Württemberg was looking for a location - and for which Heilbronn, supported by the foundation, was awarded the contract.

"We want to build an ecosystem here and bring the best minds in the cyber sector to Heilbronn," says Rolf Schumann, Digital Head of the Schwarz Group. IT experts can now choose their jobs - the environment has to be right. Around 7,000 people already work at Schwarz IT and Schwarz Digital.

Like in the science fiction movie

When Schumann leads into the heart of his security architecture, it looks a bit like something out of a science fiction movie. Rooms that appear sterile, access only via a scanner that records the vein pattern on the hand - and suddenly a huge screen full of numbers and graphs appears behind a previously opaque pane of glass. In front of it, a few people sit at PCs and work through the open points. Or rather: the vulnerabilities that hackers could use as possible gateways into the Schwarz Group's systems.

"The systems have become so complex that they can no longer be controlled," says Schumann. "The only chance is to simulate your own system in real time and prioritize vulnerabilities hard." Responsible for this is software from the Israeli security specialist XM Cyber, which Schwarz bought at the end of 2021. According to the company website, one of the founders is the former head of the Mossad secret service, Tamir Pardo.

Above all, Schumann wanted to use the technology to protect his company from attacks. But in times when a number of medium-sized companies are falling victim to criminals who encrypt data and demand ransom, the former manager of the software giant SAP, which is barely an hour's drive away, also sees a business model. Schwarz has therefore been offering the services of XM Cyber ​​to other companies since mid-2022. "We're constantly getting new inquiries," says Schumann. He does not reveal how many customers have jumped up so far. But he is very happy with the growth. Most recently, Transport Minister Volker Wissing and the Ukrainian ex-boxer Wladimir Klitschko attended a cyber security conference in Heilbronn.

Also in the cloud business

The topic is just one of the new pillars that the Schwarz Group is building up. Schwarz is also making a name for itself as a cloud provider with its own data centers in Germany. Stackit is the name of the cloud platform that the company originally built for itself - the online systems of Lidl and Kaufland, for example, run on it. For a year now, the storage facilities have also been open to companies and administrations. Schwarz does not reveal how many customers jumped up.

The procedure is a bit reminiscent of Amazon, which first looked for a solution for itself and whose cloud service AWS is now one of the most used services worldwide, says cloud expert Lukas Klingholz from the IT industry association Bitkom. A system that was initially only developed for itself is offered to the outside world. "Cloud is not only a relevant market with a high margin, but also a market that initially requires high investments. You don't just get in as a start-up with three people. The costs of entering the market are high."

There are still limits

In addition to providers such as Deutsche Telekom and Ionos, Stackit is already one of the largest German companies in this area. There are also a number of smaller providers. Providers are hoping for potential above all for administrations, for regulated industries, but also for small and medium-sized companies. However, the concept reaches its limits when it comes to making data globally accessible abroad - this is where global providers have advantages due to the global availability of data centers.

The head of Schwarz-IT, Christian Müller, is therefore still exercising restraint. "Our goal is not to become the next Amazon or Google. If it happens, it will happen. But we're not aiming for that." Many medium-sized customers are already using Stackit. The group does not give specific figures here either.

Digitization is also on the agenda at the supermarket group Rewe. In autumn, two units there merged to form "Rewe digital" with around 2,200 employees. The aim is to continue the retail IT within the Rewe Group, it said. The company does not say whether IT services are also offered outside the group. Aldi Süd is covered on the subject: one does not want to comment for reasons of competition law.