EU outlines plans to create 2.5m new jobs in the cloud

The European Commission has announced a new strategy to speed up and increase the use of cloud computing, with the aim of creating 2.5 million new jobs and boosting GDP by €160 billion (£127bn) by 2020.

The EC states that benefits of the cloud come from its economies of scale. Eighty percent of organisations adopting cloud computing achieve cost savings of at least 10-20%, and wide adoption across all sectors of the economy can result in significant productivity gains.

However, the absence of common standards and clear contracts is deterring many potential users from adopting cloud solutions, according to the EC. The new strategy therefore aims to establish clearer rules when it comes to the delivery of cloud services.

Recommendations include:

  • Identifying a single set of technical standards that enable interoperability, data portability and reversibility in the cloud;
  • Establishing EU-wide certification schemes for trustworthy cloud providers;
  • Developing model clauses for cloud computing contracts (including Service Level Agreements);
  • Establishing a European Cloud Partnership with member states and industry to harness the public sector's buying power (20% of all IT spending).

The European Cloud Partnership (ECP) will bring together high level procurement officers from European public bodies and key players from IT and telecom industry, with the aim of implementing pre-commercial procurement actions.

This will allow them to identify public sector cloud computing requirements, to develop specifications for IT procurement, and to procure reference implementations. Thereby it will help advance towards common and even joint procurement of cloud computing services by public bodies on the basis of common user requirements.

The EC claims that these measures will boost the chances for European cloud providers to grow to achieve a competitive scale.

“Cloud computing is a game-changer for our economy. Without EU action, we will stay stuck in national fortresses and miss out on billions in economic gains,” said EC vice-president Neelie Kroes.

“We must achieve critical mass and a single set of rules across Europe. We must tackle the perceived risks of cloud computing head-on.”

However, TechMarketView analyst Anthony Miller questions where the predicted growth in revenues and jobs (based on figures from IDC) are going to come from, given that cloud technologies are – almost by their very definition – deflationary.

“Our own forecasts for the UK market suggest that spending on software and IT services will decline in real terms (i.e. excluding inflation) until 2015 and then will remain pretty much flat (plus or minus) till the end of the decade,” he said.

He argues that, while cloud computing will help start-ups and SMEs grow, this is unlikely to deliver the predicted boost to GDP, and the journey of large enterprises to the cloud will be long and drawn out, and will be more likely to reduce headcount than increase it.

“It looks like the EC rather needs to keep its feet firmly on the ground as it heads for the cloud," he said.

The EC is also keen to realise the green benefits of cloud computing, claiming that pooling resources is the best way to increase the carbon efficiency of computing use.

It is therefore funding a research project – the Eurocloud server project – whose first results show that it could be possible to cut cloud data centre energy use by 90%.

“Today's power-hungry cloud data centres are not sustainable in the long run,” said Kroes, adding that research in this area should boost the position of European businesses in a sector currently dominated by non-Europeans.

The EC's report, “Unleashing the Potential of Cloud Computing in Europe,” is available in full here.

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