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Why Cloud Deployment is high but Adoption Rate is Slow in Europe

cloud computing in europeClouds are the present and the future for everyone, from individual entrepreneurs to medium and large scale enterprises as well as governments. The market for cloud enabling technologies is estimated to grow to USD 22 billion in 2016 from $ 10 billion in 2012, a jump of 21 percent. The European markets could account for 20% of the global cloud market worth about $ 40 billion in 2014. A survey by Aberdeen group shows that European companies have more experience of public clouds and related services such as Saas, IaaS, storage and hybrid as compared to North American companies where a majority preferred cloud recovery services.

Europe has diversity with economically advanced countries such as Germany and Europe on the one hand, where costs are high, and countries like Slovenia, where labour costs are low. The economic conditions differ in Europe compared to America and Asia, influencing cloud deployment and usage. The European C omission adopted a strategy in 2012 to unleash the potential of cloud computing in Europe that would serve to create 2.5 million European jobs and boost the EU GDP by 160 billion by 2020, by increasing use of cloud computing in industry, business and government. Understandably cloud computing service providers in Europe are upbeat and are deploying cloud services at a high rate.

The dark lining on the cloud, however, is that adoption is hampered by several factors, chiefly security and privacy concerns and regulations. Though data may be encrypted, it is still vulnerable to snooping and access.

Revelations that the National Security Agency has been spying led to the European Parliament taking measures on regulations for data privacy. The European Union aims to regulate cloud and data transfers. An amendment proposes that data transfers from cloud services in the EU to clouds in the States should be accompanied with a notification of such transfer and the implied legal ramifications. Another amendment seeks to stop such transfers unless some conditions are complied with. The data owner must be notified of data being stored on US servers that could possibly be vulnerable to surveillance by authorities there. Another amendment proposes that cloud service providers must inform supervisory authorities in case they are required to provide data to authorities. The Commission seeks to impose sanctions on companies that hand over data to American law agencies in the event such an action contravenes European privacy laws. In general the Commission wants robust regulations in place clearly defining how data is managed and used in the case these are stored on American servers. Some Commission members want European clouds to be certified to strict standards. Complicating the issue is that American cloud service providers may have servers located across Europe and other countries, with data dynamically shifted in between such servers, making compliance difficult. In the same way, European cloud services may have servers located in the US. Members of the Commission want rules put in place that would make it mandatory for cloud operators in Europe to store data only in servers to which EU data protection laws and European jurisdictions apply. This could give relatively more freedom to data servers in the European Union but restrict data flow to servers located outside such jurisdiction. These proposals are not meant as protectionist policies but for the sake of customers who can be assured that their data is secure and protected in Europe. However, there are fears that such policies could create artificial walls and barriers to free flow of information. The digital privacy legislation is an ongoing process and the Commission has also created the European Cloud Partnership in a bid to boost single market cloud computing in the Union.

Laws in the US make it mandatory for cloud service providers to give access to data if required and understandably, users in Europe are concerned about privacy, security and sovereignty of their data. Another hurdle to widespread adoption is that users are still unclear about the cost benefits. It is for European cloud service providers to prove that they have the necessary safeguards in place to assure data sovereignty and demonstrate not just cost benefits but also operational benefits in migrating to the cloud. Cloud vendors also need to have more knowledge on local market conditions across Europe to develop and deploy a better strategy that will convince people to migrate. The general trend is for European users to want to be in control of data and applications, an issue that cloud deploying vendors need to address.

Once these constraints are resolved, Europe could lead in cloud deployment and adoption.

Image courtesy of ddpavumba at FreeDigitalPhotos.net

 

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