21st Oct 2016

Cloud computing a "game-changer" for EU economy, Kroes says

  • Digital Agenda Commissioner Neelie Kroes launched the EU's cloud computing strategy Thursday (Photo: European Commission)

Digital agenda commissioner Neelie Kroes unveiled the EU's long awaited cloud computing strategy on Thursday (27 September), describing it as a "game-changer" for the European economy.

The commission says that a €45 billion investment in cloud technology could generate just under €1 trillion in GDP in addition to 3.8 million jobs by 2020.

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Cloud computing uses an online network of servers, storage applications and computer services which can be accessed on-demand via the Internet.

As a result, users do not need to invest in their own IT infrastructures or be constrained by the physical location of their computer resources.

Speaking at a press conference to launch the strategy, Kroes said that "the single market is our crown jewel, cutting costs and boosting business: a European cloud strategy gives our single market a new, digital home."

She said the commission will not develop its own "European super cloud" but will focus instead on developing a common EU rulebook for cloud services. It wants to establish an EU-wide certification and model contract scheme for cloud providers and a single set of technical standards.

The global cloud computing market is the fasted growing sector of the IT industry and will rise from $21.5 billion in 2010 to $73 billion in 2015 according to research by the International Data Corporation.

Software giant Microsoft says cloud computing will create 11.3 million jobs in the world economy by 2014.

Software industry representatives have welcomed the EU strategy.

Stephen Collins, vice-president of Microsoft, called it a "significant milestone for cloud computing in Europe."

Jonathan Zuck, the chief of the Association for Competitive Technology, a Washington-based lobby group with an office in Brussels, told EUobserver that small businesses stand to make the most gains from cloud services due to potential 80 percent reduction in IT costs.

Urging the commission to focus on harmonising its digital single market, he added that Brussels should "break down political barriers to cloud services."

One of the main potential savings for businesses is that computing is to become an operating cost rather than capital expenditure in terms of accountancy rules.

The commission suggests that organisations using cloud technology would save 20-50 percent in IT spending.

Over 60 percent firms in Europe already use cloud technology, but have tended to use it for non-business services due to a lack of knowledge and trust in the network.

The main business and consumer concerns with cloud services centre on the security and location of data, the applicable law and legal jurisdiction, as well as portability between services for firms that already use cloud in one or more areas.

One of the first legislative tests for EU cloud services will be the plans to re-write the bloc's data protection rules.

So far, the EU has made little cash investment in cloud computing. The €10.5 million Optimis project became the first EU-funded piece of cloud software when it was launched in June

Despite Kroes efforts, Europe's IT industry still harbours concerns that delays in breaking down barriers to a European cloud network could see them fall further behind the US.

Thomas Boue of the Business Software Alliance, a Brussels-based lobby group, said the EU should "align privacy and security rules so that data can flow across international borders."

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