Prepare to invest billions in the cloud, EU warns businesses

20.09.12 @ 09:29

  1. By Benjamin Fox
  2. Benjamin email

BRUSSELS - Governments and industry should invest €45 billion in cloud computing by 2020 as part of an EU strategy to generate an estimated €900 billion in GDP and an additional 3.8 million jobs by the end of the decade.

  • Cloud technology is among the fastest growing sectors of the IT industry. (Photo: Notat)

The bold claims are spelt out in a draft leaked to EUobserver of the European Commission's long-awaited cloud computing strategy set to be released next week by Digital Agenda Commissioner Neelie Kroes.

Cloud technology involves data storage and processing across a range of remotely located computers accessed over the Internet, with the IT hardware being owned by providers allowing individual users to access it via the Internet. Supporters of cloud services claim that it offers large potential savings in software and energy consumption costs to businesses and governments by allowing them to store huge amounts of data cheaply and easily accessible. Research indicates that it is one of the fastest growing sectors of the digital economy.

Although the Commission rules out the creation of a "European Super-Cloud" for public sectors across the EU it wants public authorities to work together in a cloud procurement strategy in a bid to forge "a trusted cloud environment in Europe". In January, Commissioner Kroes launched a European Cloud Partnership to bring together cloud projects already launched by member states and develop a common cloud procurement strategy. The EU also launched its first cloud software in June with its Optimis project backed by €10.5m from the EU budget.

According to the EU executive a public sector cloud could generate an additional €250bn by 2020 and an extra 2.5 million jobs.

Meanwhile, last month a paper by the International Data Corporation estimated that total revenue from public IT cloud services exceeded €17bn ($21.5 billion) in 2010 and will reach €58bn ($72.9 billion) in 2015.

The Commission regards cloud computing as a key element of its plans to establish a digital single market and acknowledged that the first step would be to task telecommunications experts to lay out EU-wide standards on security and data portability, as well as protecting personal information.

The IT industry is concerned that delay at European level could see them fall behind US rivals, a fear borne out by a report published in June by US technology research firm Gartner claiming that EU cloud computing would lag two years behind the US due to European privacy rules and the effects of the eurozone crisis.

Thomas Boué, spokesman for the Business Software Alliance, told EUobserver that "the speed of innovation will always outpace policy-makers’ ability to draft policies" adding that policy makers should ensure that "the rules are crafted in such a way as to be forward-looking and future-proof.”

However, Commissioner Kroes' spokesman Ryan Heath indicated that the Commission was anxious not to waste time.

"We are deeply committed to a European strategy because Europe is already being left behind. The benefits of the cloud come with scale and that scale can't happen through national strategies or no strategy. The situation will only get worse every day we wait." he said.