The takeover of the originally Dutch cloud company Solvinity by an American company has led to unrest among Dutch governments. The system with which Dutch citizens log in to the government, DigiD, runs on Solvinity servers. This also applies to the digital mailbox MijnOverheid and the secure system for communication within the Ministry of Justice and Security.
Solvinity announced last week that the much larger American company Kyndryl, a spin-off from IBM with a market value of six billion dollars, is buying the company. Solvinity (turnover 70 million euros, 275 employees) is now owned by the British private equity company Vitruvian Partners. The Dutch founders own a minority of the shares. The acquisition price has not been disclosed. The takeover is still subject to approval by the competition authority ACM.
The great dependence of the Dutch government on American tech companies in particular has been seen as a problem by many political parties since the re-election of Donald Trump. The House of Representatives demands that the government look for alternatives to Microsoft, among others.
The announced takeover of government partner Solvinity by Americans is therefore not going down well with civil servants and IT experts, as is evident from discussions on social media such as LinkedIn. There is mainly disappointment about the disappearance of what was seen as a Dutch company.
‘Tilted’ to the ICT infrastructure
“Solvinity was one of the parties where the Dutch government felt at home. They have a good sales team that understands what a government is looking for,” says ICT expert and activist Bert Hubert. Hubert has been campaigning for less digital dependence on companies from abroad for years.
That does not mean that the experiences were entirely positive. In 2023 it was IT assessment advisory colleague extremely critical. It wrote at the time, among other things, that the government agency Logius, the supplier (Solvinity) and the Ministry of the Interior have ‘committed’ to the ICT infrastructure for digital services to citizens and companies.
Separate servers have been rented from Solvinity for DigiD and the government’s Message Box (so-called private cloud). The government service that all Dutch citizens deal with has deliberately not been placed on servers that are shared with other customers by the agency involved, Logius, says Hubert. “But government services are now unintentionally ending up in an American environment.”
Dutch investors made an unsuccessful attempt last year to get Solvinity back into Dutch hands
Member of Parliament Barbara Kathmann of GroenLinks-PvdA has asked parliamentary questions about the issue. She wants to know from the outgoing minister and the State Secretary for Digitalization whether they find it acceptable that more government ICT ‘will come under American surveillance legislation’ as a result of the takeover. And whether a resolutive condition has been included in the current contracts with a view to this scenario.
The Ministry of the Interior, responsible for DigiD and MijnOverheid, says it is in discussions with Solvinity to map out the consequences. The Ministry of Justice and Security is also ‘investigating the possible consequences of the proposed takeover for the cooperation’.
Contract with Amsterdam
In Amsterdam, the responsible councilor was asked questions about the takeover in the city council on Wednesday. Amsterdam recently signed a contract with Solvinity, while the municipal government has the ambition to quickly reduce its dependence on American tech companies. GroenLinks municipal councilor Elisabeth IJmker wants to know whether a takeover has been taken into account in the contracts.
That shouldn’t be a surprise. Solvinity had been in the shop window for some time. The British private equity firm Vitruvian Partners bought a majority stake in 2014. As a rule, these types of companies want to resell their shares at a profit after about seven years. That took longer, partly because the profit margins were small.
Dutch investors made an attempt last year to put the company back into Dutch hands, one of them confirmed when asked, on condition of anonymity. These attempts were not taken seriously by Vitruvian. “As a rule, Americans pay twice as much per share as European investors,” says Bert Hubert.
The acquisition of Solvinity therefore fits into a pattern in which smaller IT parties are being swallowed up by larger American peers that are more financially powerful. A few months ago, Zivver, the Dutch company used for secure communication with courts and the Public Prosecution Service, was also taken over by an American party. Solvinity did not respond to questions from Wednesday NRC.
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