Day: October 4, 2012

Europe Gets Behind the Cloud

European businesses have generally not been as eager as their American counterparts to adopt cloud-based IT infrastructures and solutions. Their reluctance has been variously blamed on the greater demand of European consumers for the privacy of their data; restrictive and complicated regulations; public skepticism about the benefits of cloud computing; and the more fragmented marketplace of the 27-nation European Union. However, the EU recently attempted to negate many of these objections by announcing a plan to 1) educate the public on the financial benefits of cloud computing; 2) demonstrate its confidence in the technology by supplying €45 billion ($60 billion) in government money for new cloud computing ventures; and 3) simplify and standardize the data security regulations of its members. The technology-cautious and privacy-conscious EU’s endorsement of cloud computing is a further vindication of the cloud’s security, reliability, and business value.

The EU predicts that its cloud computing initiatives will raise Europe’s GDP by €160 billion ($210 billion) and create 2.5 million jobs. Its data shows that 1/5 of businesses that have switched to the cloud have lowered their IT costs by greater than 30% and that the remaining 4/5 have lowered their costs by at least 10-20%. Sizable percentages of European companies also reported that their mobility (46%), their productivity (41%), and their ability to expand to new locations (32%) were increased by their adoption of cloud-based solutions.

According to 451 Research, Europeans are responsible for about 31% of the world’s total expenditures on cloud computing, only a little over half of the percentage (57%) spent by people and organizations in the United States. In a greater imbalance, 93% of spending on cloud-based Infrastructure as a Service (IaaS) occurs in the US, but only 6% happens in Europe. And, even though 64% of European companies utilize some form of cloud computing, their expenditures on public cloud services amount to only 1.6% of their total IT spending.

Harsh, complex, and inconsistent data protection laws are perhaps the main reason that Europe lags behind the United States in cloud computing. Companies in the Eurozone are required to:

-Promptly notify the government of any serious data breach

-Get explicit consent before collecting data on anyone

-Give everyone unlimited access to data owned by them, about them, or concerning them

-Delete all of a person’s data and records if he or she requests it (“the right to be forgotten”)

Businesses that fail to obey these laws have to pay a penalty of up to €1 million per violation. In addition, the separate data privacy laws of each nation complicate the regulatory situation even further. For example, several countries prohibit companies from hosting or transferring data about its citizens to servers located outside their borders. And, while these laws can make things difficult for European cloud hosting companies, they also make it nearly impossible for American hosting firms to expand their operations overseas. This is because US companies have to comply with both the American Patriot Act, which requires them to hand over the data of the their customers to the US government at any time and for any reason, and European privacy laws, which require the prior consent or notification of customers when transferring their data to a third party.

The EU’s new plan will attempt to soften and consolidate some of these data protection laws. It will also introduce more standardization into the processes of initiating contracts (Service Level Agreement or SLAs) with cloud hosting providers and of migrating data between the infrastructures of different hosting firms. As the head of EU Telecom Neelie Kroes put it, “You shouldn’t have to have a law degree to use the cloud.”

At the same time, it would be incorrect for anyone conclude that the EU had to lower its data protection standards in order to embrace cloud computing. The EU’s plan calls not for declawing but for clarifying and consolidating the 27 different data privacy laws of its members. The security and privacy of cloud computing technology is not the issue. In fact, the EU’s focus on regulating IT hosting providers rather than the technology correlates with what we have argued in prior blog posts: that poorly managed and maintained clouds are insecure, not “the Cloud” itself.

Finally, regarding the business value of the cloud: has there ever been a surer indication of the business value of a technology than the sight of a supremely cautious and pragmatic governing body practically begging  its citizens to convert to a more cost-efficient, mobile, and dynamic form of IT?

Aside from the EU, there is also another large group of people that fully appreciate the ability of cloud computing to galvanize, improve, and enlarge businesses: IronOrbit users. And who could blame them, when with their patented Atomic Speed Technology and Orbital Security Systems IronOrbit Hosted Desktops are some of the fastest, securest, and most reliable cloud-based solutions in the world? In addition, all of IronOrbit’s Private Clouds come packaged with 24x7x365 technical support and full data backups. Companies that select our Cloud-Based Solutions will eliminate their up-front hardware costs and replace their unpredictable IT budget with a low, fixed monthly rate. Join the EU and get behind Cloud Computing today!