Cloud Computing

Roel Castelein (Europe) - Cloud Shopping in Europe

When shopping on a fruits and vegetables market, we take many things for granted; like all stall holders speak the same language, we can pay for the goods with the same currency for a fixed price by a standardized measurement and ordering what we want is straight forward. But what would happen if all these conventions were absent? Like when asking for an apple with one stall holder, we need sign language, to point out apples with a stick (sold only by crate), pay in bags of salt. His neighboring stall holder offers apples only by piece, measured by weight, and payable by copper coins, and ordered by crayon drawings. This would be confusing for the consumer, and market growth would be hindered by a lack of standardization and transparency. This is what the Cloud Services Industry resembles at the moment.

Fair enough, the cloud industry is in its infancy. But it is difficult making informed choices, and comparing cloud offerings is complicated. For instance, giving your data to a cloud provider, does that specify where the (virtualized) data is physically stored, what legal framework applies to the data, and how to retrieve or delete data, or switch from provider when the service is no longer up to par? And how are you sure all data will be deleted once switched from provider? It took a long time, and government enforcement, for changing your mobile subscription from one provider to another one. So when you run several applications with hundreds of terabytes of data with one cloud vendor, against a certain Service Level Agreement, with a specific legal framework for data protection, against a variable price by transaction, how easy is it to switch to another Cloud Service Provider? Difficult to impossible, would be my guess.

This is where the European Commission wants to intervene. In July 2012, IDC published a report ( for the European Commission. In this report IDC argues that Cloud Computing is more efficient than regular IT (80% of business owners report 10-20% lower cost, 20% report savings of +30%), and that Cloud Computing in Europe will grow by 21,6% CAGR to €35,2B in 2020. But if the EC implements barrier removing policies, this Cloud Services market is predicted to grow by 38,3% CAGR, to €77,7B in 2020. The difference would be a staggering €42,5 Billion extra in market opportunity. Just by implementing good policies.

So what are the barriers the EC wants to tackle, and how? The top 5 concerns, voiced by customers in IDC's survey were ‘data deletion when switching provider', ‘ensuring data protection', ‘correct deletion of data', ‘control of data privacy' and ‘being informed of security breaches and consequent actions'. In essence giving sensitive applications and data to an external provider is still considered a high risk.
To mitigate this risk, the EC wants to drive policy to harmonize Cloud Providers' accountability and liability for security breaches. Also on the EC's drawing table is standardizing Service Level Agreements and contract terms to facilitate comparing offers. To prevent ‘lock in' by a Cloud Provider the EC wants to create pre-conditions to safeguard data access and portability. This should promote interoperability, meaning switching from one provider to another, is safe and easy. Also under wraps are arrangements for security and data protection, meaning the EC will oblige Cloud Providers to store data physically in a country where the same data privacy laws apply as in an EC country. In an increasingly virtualized environment this would be no luxury. Providers could host data physically in countries where there are less stringent data protection laws. More EC market stimulating initiatives are mentioned in the report, like a one-stop portal for complaints and problems on Cloud Service Providers.

But the essence of this EC policy makes sense. By design or by accident many things could go wrong in this newly-born European Cloud Industry. And as any parent knows, providing a safe and comfortable environment to grow new life is important for future success. In this case, the EC is motivated by the potential GDP impact (+1% to EC countries by 2020) and the estimated job creation of 2,5M new jobs by 2020. All this growth from the policies above would make shopping for Clouds a breeze. In the present tough economic climate this would be European tax payers' money well spent.


By Roel Castelein, GTM Strategy for EMEA, EMC



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