EU says cloud computing a 'game-changer' for economy

The European Commission has revealed a new strategy for cloud computing that it claims can give Europe's economy a €160bn annual boost and lead to the creation of more than two million new jobs. The publication was widely welcomed, with one expert saying the technology had such potential that if harnessed properly it could form a key part of a so-called "New Deal" for Europe by "underpinning a return to jobs, growth and prosperity".

Making greater use of cloud computing – storing, processing and accessing data remotely from any internet-connected device – would allow businesses to "reach out to ever larger markets",  according to the long-awaited document, called Unleashing the Potential of Cloud Computing in Europe. Meanwhile governments could "make their services more attractive and efficient even while reining in spending".

Commission vice-president Neelie Kroes, responsible for the digital agenda, said it could be a "game-changer" for the economy. "Without European Union action, we will stay stuck in national fortresses and miss out on billions in economic gain," she said. "We must achieve critical mass and a single set of rules across Europe. We must tackle the perceived risks of cloud computing head on."

Cloud computing is most visible to consumers via the data storage services offered by companies such as Google, Facebook and Amazon – as well as web-based email – but the EU executive said the "real economic benefits come through widespread use of cloud solutions by businesses and the public sector".

It said four fifths of organisations using the cloud reported cost savings of at least 10 to 20 per cent, primarily through not having to purchase certain software or buy and maintain servers and data storage. But it added that take-up could be improved by introducing common European standards and certification, as well as model contracts for services, to improve interoperability, clarity and confidence in the technology.

The strategy also proposes developing a partnership with EU member states to encourage the use of the cloud in public services – as the public sector accounts for 20 per cent of information technology spending. Taking advantage of all these opportunities could create 2.5 million jobs and increase Europe's gross domestic product by €160bn each year by 2020, the commission said.

Stephen Collins, vice-president of corporate affairs at Microsoft in Europe, the Middle East and Africa, described it as a "significant milestone", and said the strategy would "help Europe capitalise on the great potential of this technology by removing the remaining obstacles, paving the way for wide-scale uptake". 

"In times of austerity this new strategy could be part of Europe's New Deal – underpinning a return to jobs, growth and prosperity for millions," he said, adding that it would provide businesses with the "harmonisation, clarity and assurances" they needed to switch to the cloud.

The commission stopped short of proposing a so-called European Super Cloud, a dedicated hardware infrastructure for public sector cloud users across the bloc. But it nevertheless said that, because of its lack of geographical constraints, cloud computing could "raise the digital single market to a new a level". It added that it would work on the common standards and certification and publish a progress report by the end of 2013.

The strategy marked a "good starting point", according to Amalia Sartori MEP, chairwoman of the European Parliament's Industry, Research and Energy committee. "Reducing costs, boosting productivity and economic growth, increasing competitiveness, creating jobs, and saving energy are the main advantages of cloud computing. Its importance is unquestionable," she said.

The European craft and small- and medium-sized enterprises organisation, UEAPME, agreed with Kroes that SMEs would benefit from the adoption of the cloud. Its enterprise policy director Luc Hendrickx said: "Many are still reluctant to embrace this technology, as they need more information and remain concerned with the security of their data, as well as with the lack of legal certainty on the jurisdiction over files and services in the cloud.

"The strategy unveiled by the commission today rightly tackles some of these issues, but more needs to be done to accelerate the uptake of cloud computing by SMEs. To move 'en masse' to the cloud, SMEs will require tailored training and information courses, so they can be made aware of the advantages that the cloud can offer and change their mindset about it." 

But Monique Goyens, director general of the European Consumer Organisation, warned that the voluntary nature of the proposals was "extremely risky" because companies could effectively "choose whether to safeguard consumer rights". She said it showed the commission lacked the ambition to implement proper protections.