EU Sees Growth Opportunities in Cloud Computing

Seeing the potential impact of cloud computing on business productivity and economic growth, the European Commission recently unveiled major plans to rev up its use of this fledging technology.

Targeted key actions for “Unleashing the potential of cloud computing in Europe,” as it's called, include:

  • Cutting through the jungle of technical standards so that cloud users get interoperability, data portability, and reversibility. Necessary standards should be identified by 2013
  • Support for EU-wide certification schemes for trustworthy cloud providers
  • Development of model 'safe and fair' contract terms for cloud computing contracts including Service Level Agreements
  • A European Cloud Partnership with Member States and industry to harness the public sector's buying power (20 percent of all IT spending), shape the European cloud market, boost the growth of European cloud providers to achieve a competitive scale, and deliver cheaper and better eGovernment

The goal is to speed up and increase the use of cloud computing across the economy, as well as remove cross-border barriers such as tax issues and conflicting data-protection rules.

And the stakes are pretty big: Investing in cloud computing could deliver a net gain of 2.5 million new European jobs, and an annual boost of €160 billion (US$207 billion) to the EU GDP (around 1 percent), by 2020. (More detailed information can be found here.)

Of course, there also are benefits from economies of scale. According to the EC, about 80 percent of organizations adopting cloud computing achieve cost savings of at least 10-20 percent. Additionally, if there is widescale adoption across all economic sectors, significant productivity gains should be expected.

However, because of an absence of common standards, many potential users are deterred from adopting cloud solutions — they're not sure what standards and certificates they should look for to meet their requirements and legal obligations, the EC noted.

“Cloud computing is a game-changer for our economy. Without EU action, we will stay stuck in national fortresses and miss out on billions in economic gains,” said Neelie Kroes, vice president of the European Commission and commissioner for Digital Agenda, in a statement. “We must achieve critical mass and a single set of rules across Europe. We must tackle the perceived risks of cloud computing head-on.”

“Cloud computing could be the answer, especially when talking about citizens and small and medium size enterprises. It is less costly. It is safe. It is indeed very efficient,” Kroes added in this video interview. “It's not that I want a European cloud. I want a clear, effective, and efficient strategy for what Europe is offering and what we are defending.”

The cloud computing strategy announcement follows the Commission's 2012 proposal to update the Data Protection rules and comes ahead of a European Strategy for Cyber Security to be proposed in the coming months. According to the announcement, these actions forge “a comprehensive effort to deliver a dynamic and trusted internet environment in Europe.”

I suppose we'll see how far the EC goes with this. Beyond straight guidelines, some people cited in a Wall Street Journal report voiced concerns about whether Europe's standard will be compatible with those being developed in the US, while others said the proposal is watered down from earlier drafts.

What's important is that the European Union is looking at how technology can help move it out of its slump, and is seeking non-traditional ways to spur the economy. It also appears that some new cloud computing milestone has been reached — when governments start talking about this, you know it has finally caught on among businesses and the masses.

3 comments on “EU Sees Growth Opportunities in Cloud Computing

  1. Barbara Jorgensen
    October 8, 2012

    Jenn: Good point about the EU moving to stimulate the economy. Not a bad move all things conidered. Sure, there are still a lot of questions about the cloud. But waiting for them to all be answered isn't going to move things along. Someone recently pointed out that the EU tends to move quickly (relative to the US) when it is motivated. Case in point; RoHS and WEEE. Sure, the standards need tweaking, but one could argue that they are better than not doing anything at all.

  2. SP
    October 9, 2012

    Yes agreed, when it comes to European Union, they are quite strict in setting deadlines and sticking to it. Lets see what growth oppurtunities they would bring in for cloud computing. Therez lot of sharing you can do in cloud computing that reduces cost and makes easy accessibility.

  3. Mr. Roques
    October 9, 2012

    What they were seeing was that the rest of the World was ahead and they can't afford to miss out. Europe has great places to create clouds, and also, many companies that can benefit from that… instead of letting that business go to a foreign company.

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