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Cloud computing: Four reasons why it isn't taking off in Europe

Cloud computing adoption in Europe will lag behind the US by at least two years, thanks to these four big issues.

Complex privacy rules, local business needs, the ongoing Euro crisis and a meandering political decision-making process will mean European organisations will be much slower to adopt cloud computing than those in the US.

Analyst group Gartner said while interest in cloud is high in Europe, local complications will mean adoption will be much slower than in the US, lagging by two years or more.

The analyst group highlights four main inhibitors to adoption of cloud computing in Europe:

Data Privacy

Privacy laws are a major headache for organisations in Europe that want to use cloud computing.

According to Gartner, European companies worry that the US Patriot Act makes it undesirable - or even illegal - for them to use US-based cloud service providers, because the law allows US authorities to look at their data in certain circumstances. As most cloud providers are located or incorporated in the US this is slowing down take-up.

But Gartner said because agreements like these are in place in several countries (for example, the UK's Regulatory of Investigatory Powers Act) rather than just the US, and any legal entity will have to abide by them. “The bottom line for European companies is that in spite of a great deal of inaccurate information, and single countries pushing nationalistic cloud agendas, there are ways of using cloud more safely,” it said.

Local regulations and processes

Regulations and business practices vary from country to country across Europe. Until now European enterprise software providers have turned this complexity into a business opportunity, by offering country specific versions of accounting software, for example.

But these bespoke requirements don’t suit the one-size-fits-all business model which has made cloud computing a success, or as Gartner puts it: "Diversity makes achieving the required critical mass more difficult and significantly slows down the execution of players wanting to offer cloud services throughout Europe."

European policy delays

European Union policy making can take a long time, and is easily derailed if the member states don't want to play nicely, which means regulation around cloud computing could take a long time to resolve.

For example, the EU sets policies and regulations which are worked into the legislation of each member state. But each member state has the sovereign power to add local legislation to whatever policy or regulation is agreed at EU level.

Gartner analysts said there are plenty of examples of this sort of delay: e-invoicing being one of the most recent, and the use of cloud likely to be the next.

Euro crisis investment delays

The continuing Euro crisis is causing major investments to be put on hold, slowing down strategic decision making, with fewer organisations willing to make major new technology investments until they understand the implications of the financial crisis better.

Gartner vice president David Mitchell Smith said interest in cloud is as high in Europe as it is elsewhere in the world. “While these inhibitors will certainly slow down cloud adoption in Europe, they will not stop it — the potential benefits of cloud are too attractive and the interest in its efficiency and agility are too strong to stall it for long," he said in a statement.

Separate research by Alcatel-Lucent found that performance concerns, in the form of stability, response time and availability are the biggest inhibitors to adoption of cloud services by enterprises.

Its survey of tech decision makers in the US, UK, France, India, South Korea, Taiwan and Hong Kong found that two thirds don’t use the cloud for their essential business applications for fear of service outages. Two out of five IT decision makers reported either frequent or lengthy service outages and one in four complained that there’s no simple resolution path when service level agreements are not met.

The reluctance to embrace the cloud was highest in finance, insurance, healthcare and government sectors, the survey found.

About

Steve Ranger is the UK editor of TechRepublic, and has been writing about the impact of technology on people, business and culture for more than a decade. Before joining TechRepublic he was the editor of silicon.com.

20 comments
fahadrafiq
fahadrafiq

Its a Risk of Data Privacy. Is there any cloud service providers which located in Europe region. It will completely solve the issue for European

Cloudreviews Support.

cloudcomputing11
cloudcomputing11

Very nice blog.It is Very sad to know that cloud computing in Europe is not anymore emerging.As cloud computing now a days as a growing technology trend,it should be geographically well popularized in the world.cloud computing service models should be put on for marketing in Europe, so that best cloud computing can be established in whole Europe.

christian.verstraete
christian.verstraete

Europeans have always been very pragmatic and less eager to jump on new technologies than the US. That's not new. So, is there any difference as far as cloud is concerned? Let me however first make a comment. I assume that Gartner talks about Public Cloud Adoption, because there are a lot of private cloud adoptions in Europe at the moment. At least as much as in the US. And many SMBs rely on their Telco's for cloud services. So, is the point gartner makes rather associated with the fact the adoption of AWS, Google and Microsoft Azure is lower? There is one thing that slows cloud usage, but frankly this has nothing to do with cloud, it's the cross-border data transfer costs. Yes, there are legislations. Actually the EU is doing a great effort at the moment to standardize legislation across the 27 countries. But it will not be the US legislation, and I believe that's what Gartner may not like.

danielsteeves
danielsteeves

Can???t say that these issues are entirely to blame: we have a more pragmatic, ???look before you leap??? attitude in UK and EU business (I have spent plenty of time embedded in both and have experienced both sides of leading edge) a couple of additional comments and a good collection of my blog and some reblogs of some real cloud and computing expertise, for your pleasure! My blog on this post: http://danielsteeves.wordpress.com/2012/06/08/1-more-reason-pragmatism-cloud-computing-four-reasons-why-it-isnt-taking-off-in-europe/ Feel free to find me on twitter @danielsteeves

BillGates_z
BillGates_z

I'll keep my data to myself thanks. Non essential duplicate backup- maybe.

Shaydow
Shaydow

Clouding, brings with it benefits, no doubt but do these benefits negate the negatives such as: Where is my data? Who else has access to it? Who's law does it come under, the housing location or the Owners? How can someone demonstrate or make you comfortable about physical security and redundancy if you can't get to see it? Oh yes and who's data is it when the Cloud dissipates?

janemorez
janemorez

This is really interesting and fantastic to read.

Dr_Zinj
Dr_Zinj

1. It's less secure than a system owned and managed by your company. 2. You no longer have control of your data, or your apps. 3. If you wake up later and realize you made a big mistake, you can't guarrantee you'll be able to recover your data in a usable form, if at all. 4. It undoes all the reasons why we had a PC revolution in the first place.

smckenna
smckenna

Maybe we should all move to Europe so our privacy can be protected by a government that cares about that? Oh, yes, Hong Kong was part of the British Empire for 100s of years, but never part of Europe, also India, but SK never was... :) And on Windows - it;s weekly reboots now. Monthly and bi-monthly 're-images'....

Tony Hopkinson
Tony Hopkinson

Aside from failing basic geography and a whole series of unjustifiable prejudices. Cloud take up, was, is and will be held up for one simple reason. 99% of the benefits are to providers not consumers. Try again this was embarassing.

drleos
drleos

I would say that European ITC professionals prefer using much reliable platform than MS can offer. While you must to restart MS Windows "every other week" or it fails itself, other platforms can run for years without any human touch.

neil.postlethwaite
neil.postlethwaite

India, South Korea, Taiwan and Hong Kong aren;t in Europe, if you didn't know

neil.postlethwaite
neil.postlethwaite

Funny how none of these rules matter a damn when outsourcing jobs to cheap IT/Customer Service sheds in India. The author's are clearly out of touch in Cloud initiatives outside the US with many examples of Healthcare and Goverment moving this way - Try looking up 'UK Government G cloud' in Google. Here -saved you the effort http://gcloud.civilservice.gov.uk/

dogknees
dogknees

"single countries pushing nationalistic cloud agendas" Like the USA? It is only one country after all, just like France, Greece,...

info
info

Realistically speaking, 'The Cloud' will never dissipate. The Internet as a whole has come a lot farther over the last few years, although there's still a LOT of room for improvement before I'll totally trust it's 'invincibility'. What COULD happen is the hosting company goes belly up, and THEN your data goes to whoever scoops it up. (Legally, I'm sure it's still yours, but is that any consolation as whoever else is mining your sensitive data?) When Cloud providers start 'sharing' the data amongst themselves for backup, that'll be a big step forward towards the Utopia they're envisioning...

Deadly Ernest
Deadly Ernest

as the laws apply to businesses operating in Europe so the hosting services have to comply with the European laws for all their clients.

Deadly Ernest
Deadly Ernest

I know of a case where a whole city was off the Internet for four days as their only physical link to the main communications trunk was destroyed when a bridge carrying the line collapsed. About half a kilometre of major trunk cables had to replaced before anyone had any communications out of the city and that took four days to do due to the issues involved with getting the cable across the two hundred metres of water safely in a way that was long term safe. Can your business afford to be down for four days with no one being able to do their basic computing activities? I don't know of any that can, apart from the US Congress or the Australian Parliament.

info
info

"We want to charge you a lot of money on a monthly basis to do what you're doing already. And it costs more than 'Remote Hosted Servers' because 'Cloud' has a nicer ring to it..."