IDC: Removing cloud ‘barriers’ could give EU €940 billion GDP boost

Removing ‘barriers’ to cloud adoption in the European Union could increase GDP growth by €940 billion by the end of the decade, according to an IDC report.

The report, commissioned by the EU, shows that yearly spending on public cloud services could increase from €35.2 billion to €77 billion by 2020.

According to IDC this could in return generate large amounts of GDP growth in the region, as well as lining the pockets of the big name cloud providers.

“The migration to a new IT paradigm enabling greater innovation and productivity – the roll out of cloud computing – will generate substantial direct and indirect impacts on economic and employment growth in the EU,” Gabriella Cattaneo, associate vice president, European Government Consulting IDC EMEA, said.

However, a number of barriers to swift cloud adoption are noted.  These include uncertainty about legal jurisdiction and location of data in the cloud, ongoing concerns around security and trustworthiness of suppliers, not to mention worries about slow internet connections or fear of lock in to proprietary systems.

The analyst group put together two scenarios to attempt to determine how the EU’s approach to the cloud industry remove these barriers. Firstly, by adopting a ‘no intervention’ policy to cloud adoption, IDC thinks that this could generate up to €88 billion in contribution to EU GDP by 2020.

However, under another scenario, in which the EU adopts a ‘policy driven’ approach, it would potentially generate €250 billion over the same period.

“We estimate that the cumulative impact for the period 2015-2020 will be €940 billion in the “policy-driven” scenario, compared to €357 billion in the “no intervention” one,” Giuliana said.

Key policy actions would involve regulatory action “at the EU level” as well as efforts to increase the accountability of cloud vendors.

According to IDC, the policy actions which could create a “cloud proactive” environment in the EU include:

• Harmonising data protection and privacy protection regulation across the EU, so that cloud service providers and users are sure that the same regulations are respected, no matter where the data is
• Clarifying data jurisdiction regulation and providing EU-wide guidelines about which laws apply to data stored in the EU MS
• Promoting common standards and interoperability of cloud systems, so that portability of data and processes between cloud vendors is possible and lock-in in proprietary systems is prevented
• Establishing clear and harmonised principles around cloud service providers’ accountability and liability for security breaches, no matter which country they are from
• Developing EU-wide certification of cloud service vendors on their security and data protection arrangements and compliance with main regulations, to build trust in the offerings; this is specifically requested by the public sector, where ensuring compliance is a priority.

European Commision vice president Neelie Kroes recently outlined the EC’s cloud strategy, involving a certification programme for cloud providers, as well as getting rid of a “jungle” of technical standards.

“Cloud computing is a game-changer for our economy,” Kroes commented at the time. “Without EU action, we will stay stuck in national fortresses and miss out on billions in economic gains.”

Under the vision set forth by the EC, Kroes claimed up to 2.5 million jobs could be created as a result of the cloud industry.

It could also create a €160 billion boost to EU GDP by the end of the decade, some way short of what IDC claims could be achieved.