Among the key areas identified by the European Commission to stimulate growth and create jobs in the region is cloud computing. But Europe needs a single cloud market, and easy-to-understand policies and cloud standards to unleash the technology’s potential in the region, according to the Commission.
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“We see cloud as an engine of change and a central ingredient for innovation in Europe,” Francisco Medeiros, deputy head of unit, software and services, cloud computing at European Commission told the Datacentres Europe 2014 audience. “Cloud is one of the fastest-growing markets in Europe.”In 2013, worldwide hardware products registered a 4.2% growth to €401bn while software and services registered a 4.5% growth to €877bn, signifying the importance of software services, said Medeiros.
Cloud computing has the potential to employ millions in the region by 2020.
But Europe needs a Europe-specific cloud strategy to encourage its uptake of cloud computing by enterprises, he said.
“Cloud will create 1.3 million jobs without policy intervention, but it will create more than double – 3.8 million – jobs if appropriate policies are applied,” Medeiros said.
But that’s not all. European Commission’s forecast of cloud expenditure and its impact on the IT sector in the region also demonstrate the importance of having a single digital market and cloud standards.
For instance, the Commission forecasts that EU enterprises will spend €35bn on public cloud services without policy intervention but will spend €78bn if appropriate policy interventions are applied, Medeiros said.
Cloud computing is also likely to have an €88bn impact in the enterprise sector if the market takes its own course and there are no policy initiatives in the segment. “But with a policy framework in place, the impact is a massive €250bn,” he said.
As many as 70% of CIOs in Europe have cited faster implementation speed and scalability as the main reasons for using cloud services. “Cloud also helps users to take faster decisions and save IT costs in the long run.
“But CIOs cite lack of standards – technological, regulatory and management – as the main challenges in cloud adoption,” Medeiros said.
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“Without these standards, service provisioning and governance is not possible,” he warned.
So what is the Commission doing to encourage the uptake of cloud and moving towards a single market strategy? Understanding the economic impact of cloud and the opportunity it creates, the EC devised a European Cloud Strategy in 2012. The strategy outlines actions to deliver a net gain of 2.5 million new European jobs, and an annual boost of €160bn to the European Union GDP (around 1%), by 2020. The strategy also aims to speed up and increase the use of cloud computing across all economic sectors.
It also aims to cut through the jungle of existing complicated technology standards around cloud use and promote EU-wide voluntary certification scheme, Medeiros told the delegates at DCE 2014.
The Commission has tasked standards and code of conduct institutions in Europe such as the ETSI, ENISA and EuroCloud Europe to coordinate with Member States’ stakeholders to develop simple, user-friendly cloud policies and an EU-wide code of conduct for cloud adoption.
It has also tasked an expert group to identify safe contract terms. The expert group will develop model contract terms that would regulate data-related issues on the cloud not covered by the Common European Sales Law.
“We are also identifying public sector departments’ requirements from cloud services and simplifying data regulations in the region,” he said.
“We need to establish Europe as a trusted region for cloud computing provision but it is not possible without rapid political agreement on a fully harmonious EU data protection regulation,” he warned.
The Commission is also actively working towards creating a Digital Single Market for cloud in Europe.
The EU Digital Single Market is a regulatory framework that will help the region to remove national barriers to online transactions. It builds on the concept of the common market, intended to eliminate trade barriers between member states.
“Cloud, by nature, is a cross-border technology,” Medeiros told Computer Weekly. “Having a Digital Single Market for cloud computing in Europe is extremely important to give cloud users the assurance about security and data protection.”
Loss of trust because of issues such as the Prism revelations results in fragmentation of the cloud market into separate national market segments, according to the Commission. This is where the regulatory framework will be useful.
The single cloud market is also important to help Europe compete effectively with North American cloud providers.
At the conference, Tobias Hollwarth, a board member of EuroCloud Europe, said the EU is lagging behind the US in cloud computing. “We need to do something soon – if all manufacturing takes place in Asia and all IT services are led by the US, what happens to Europe? Europe cannot be left behind,” he said.
“Lack of standardisation is a big problem in the cloud segment,” Hollwarth added.
“Without proper technology standards, integrating cloud services is very difficult,” he said. This, in turn, will hinder its fast adoption in Europe.
“Existing cloud contracts are horrible. Even the vocabulary is varied and difficult to understand,” Hollwarth added.
“It is one thing to open a Facebook account on the cloud, but with the existing cloud standards, it is not easy for an enterprise to take 7000 email addresses, mix it with tools such as Active Directory and integrate it with other critical business apps and migrate workloads from on-premises to cloud,” he added.
A Digital Single Market will enable better public procurement of cloud services in Europe, based on common definitions of requirements and possibly eventually going as far as joint procurement across borders, Medeiros said.
The Commission is “strongly against a ‘Fortress Europe’ approach to cloud computing,” Neelie Kroes, the Commission’s vice-president said earlier while outlining the single market strategy. “Separate initiatives or a Fortress Europe approach will not work,” she warned.
“We are making progress every day towards establishing the Digital Single Market in Europe for cloud,” said Medeiros.
“We are now assessing the feedback from cloud users, CIOs and cloud providers in the Europe to see how we can create EU-wide standards and policies to foster cloud innovation in the region.”