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.