European Union: European Commission's Cloud Computing Strategy For Europe To Be Released Shortly

Background

Neelie Kroes, Vice-President of the European Commission's "Digital Agenda"¹, has over the past couple of years consistently emphasised the importance of cloud computing and the major role it will play in the future of Europe's economy, creating jobs and economic growth, as well as facilitating innovation and cross-jurisdictional collaboration.  To illustrate the significance of the cloud computing industry, the World Economic Forum has estimated that the worldwide revenue from public IT cloud services² will reach $55 billion by 2014, and that 2.3 million new jobs will be created between the period 2010 to 2015 in the top 5 EU economies³.  It is for these reasons that Kroes believes the European Commission must help to shape this potentially vast new service industry, and ensure that significant opportunities are developed and exploited for European-based technology and telecoms companies. 

European Cloud Computing Strategy

Consistent with the commitments made by the European Commission in its Digital Agenda for Europe document⁴, and following extensive consultation with cloud providers, industry experts, users and consumers, Kroes has been working on the European Commission's Cloud Computing Strategy for Europe which she claims will make Europe not just "cloud-friendly" but "cloud-active".  The EU strategy is expected to be released in the second half of 2012⁵ and will focus primarily on three key areas⁶:

1.       The Legal Framework – reviewing the current data protection and data privacy regime, as well as other laws which may affect the deployment of cloud computing in public and private organisations.  The European Commission recognises that the current regulatory framework has resulted in fragmentation in the way personal data legislation has been implemented across the EU, legal uncertainty, and a widespread public perception that there are significant risks associated with online activity⁷.  These factors contribute to a lack of trust and uptake in cloud computing services.  As a result, the European Commission has committed to building "a stronger and more coherent data protection framework in the EU, backed by strong enforcement that will allow the digital economy to develop across the internal market, put individuals in control of their own data and reinforce legal and practical certainty for economic operators and public authorities"⁸.  The European Commission has already suggested a Proposal for a General Data Protection Regulation which revises Directive 95/46/EC⁹ in order to harmonise relevant national legislation¹⁰, and should work with other jurisdictions and regions on a global level to facilitate the free flow of data between countries¹¹.   

2.       Technical and Commercial Fundamentals – one of the biggest concerns for cloud users is data security and availability:  they need to be confident that their services and data are stored, accessed and processed securely in the cloud, and available at all times.  Despite security frameworks, such as ISO security standards, already existing, they are not consistently implemented across Europe and the European Commission has identified this lack of trust in information security as another significant obstacle in users' take up of cloud computing.   Consequently, the European Commission believes that, in order to help foster trust and confidence, there should be greater transparency into cloud providers' practices and cloud providers should ensure that their IT infrastructure is highly resilient.  The European Commission also acknowledges that it should play a stronger role in the development of technical standards of APIs, open platforms and data formats to facilitate interoperability and data portability between IT systems both in Europe and at a global level, as well as promoting competition between cloud providers.  It is also keen to develop cloud related template contracts and clear service level and service credit regimes (relating, for example, to uptime availability, support response times, reliability, and so on) to make cloud computing a more attractive proposition for businesses and users alike.  Commonly, the type of service level agreement users receive from their traditional on-site IT providers is not matched (or exceeded) by cloud service providers, and, in some instances, users consider the service level regime offered by cloud providers' to be inadequate particularly in light of the business critical nature of some of the software applications that may be hosted in the cloud environment.

3.       The Market – Kroes has confirmed that the European Commission should, in conjunction with industry, SMEs and relevant trade associations, raise awareness, support education and provide training on cloud computing, generally.  In addition, she has acknowledged the progress that has been made in the public IT sector across Europe on initiatives such as G-Cloud, and wants to ensure that the European Commission leverages the key learnings from these existing and fairly well progressed public procurement projects to produce a coherent public sector cloud strategy for Europe.  To achieve this aim, Kroes has created the European Cloud Partnership which brings together public authorities, industry, and cloud computing buyers and vendors.  It has been launched with initial EU funding of €10 million to harmonize the purchase of cloud services by public authorities in Europe. 

During the European Council Symposium on Cloud Computing held at the end of June this year, the Commissioner stressed the importance of tackling the evolution of cloud computing at an EU and global level and stressed that a European approach to cloud computing is better than a national one because of the greater potential for economies of scales.  She added that "If we take a national approach, content with small clouds stuck in small markets, if we lock data within old borders, then we are limiting our cloud ambition"¹². 

Europe on a Back Foot

Despite the efforts of the European Commission to drive forward its cloud strategy apace, Gartner recently predicted that adoption of cloud computing in Europe will be at least two years behind that of the United States¹³.  Gartner's Vice President, Paolo Malinverno, considers that the potential risks and costs inherent in cloud computing anywhere in the world are even more exacerbated in Europe, and identified four "inhibitors" to cloud adoption across Europe in the next few years.  These European-specific inhibitors include the current and on-going Eurozone crisis which Gartner believes has caused major investments to be put on hold; ever evolving and changing data protection regulations; the nature of Europe's unique multi-country set up; and pan-European policy-making and slow legislative processes from the European Commission¹⁴.

That said, Gartner nevertheless acknowledges that "while these inhibitors will certainly slow down cloud adoption in Europe, they will not stop it — the potential benefits of cloud are too attractive and the interest in its efficiency and agility are too strong to stall it for long..."¹⁵, and confirmed that interest in cloud computing is as high in Europe as it is elsewhere in the world.

Conclusion

It may well be the case that Europe has more hurdles to overcome than other countries or regions in the world as far as the uptake of cloud computing is concerned.  However, Europe's ability to overcome these obstacles is dependent, at least in part, on the European Commission putting in place appropriate measures to stimulate, amplify and reinforce appropriate cloud computing initiatives having listened carefully to the concerns of key stakeholders, and we await with interest the release of the European Commission's Cloud Computing Strategy for Europe later this year.  It is imperative that the European Commission nurtures and promotes this evolving and innovative industry and helps to spur the economic growth of cloud computing for the benefit of Europe as a whole.

Footnotes

1 The Digital Agenda is Europe's strategy for a prosperous digital economy by 2020.

2 A public cloud is the mainstream provision of cloud services from an IT supplier's data centre to the general public/business community.  In a public cloud, the IT supplier's hardware is not dedicated to serving the needs of any individual customer, rather multiple customers who are using a proportion of powerful pooled IT resources.

3 Advancing Cloud Computing: What to do Now? Priorities for Industry and Governments, World Economic Forum, In partnership with Accenture, 2011.

4 Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions: A Digital Agenda for Europe - http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2010:0245:REV1:EN:HTML.

5 At the time of writing this KL Bytes, it is estimated that the strategy will be released in September 2012.

6 http://europa.eu/rapid/pressReleasesAction.do?reference=SPEECH/11/50.

7 Last paragraph of Section 1 (Context of the Proposal), Proposal for a Regulation of the European Parliament and of the Council on the protection of individuals with regard to the processing of personal data and on the free movement of such data (General Data Protection Regulation).

8 Ibid.

9 Full text available at:

http://ec.europa.eu/justice/data-protection/document/review2012/com_2012_11_en.pdf.

10 Please see our KL Bytes entitled "Online Privacy article and the new Data Protection Regulation" for further information: http://www.kemplittle.com/Publications/item.aspx?List=77D08281-399F-4C65-8BCE-6E39B9E941E4&ID=54.

11 In addition, the Article 29 Data Protection Working Party ("WP29") has recently published its Opinion on Cloud Computing (1 July 2012) which identifies a number of data protection risks arising from cloud computing solutions and includes a series of recommendations which WP29 describes as "a checklist for data protection compliance by cloud clients and cloud providers".

12 A European Cloud Strategy Economic Council Symposium "Cloud-Computing – Between growth opportunities and privacy", Brussels 25 June 2012.

13 Gartner Press Release: "Gartner Says Cloud Adoption in Europe Will Trail U.S. by At Least Two Years", May 2012.

14 Ibid.

15 David Mitchell Smith, Vice President and Gartner Fellow, quoted in the Gartner Press Release referred to in Footnote 8.

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