Cloud delivers €160 billion boost to European Union economy

Cloud computing is expected to add around €160billion to the EU’s GDP in 2020. By the end of 2015 around 70 per cent of all businesses will use cloud computing, while some 925,500 direct and indirect jobs will be created by the adoption of public and private cloud by 2016.

€160bn boost

The cloud is giving private users, businesses, organisations and the public sector access to highly sophisticated IT systems and applications that would otherwise be out of reach to them. Neelie Kroes, vice-president of the European Commission, tells Business Technology: “The cloud is enabling a wave of new business creation – particularly relevant in the SMB market.

“The most recent estimates indicate that, in 2016, the availability and adoption of cloud-based computing will result in the creation of 180,000 new businesses and this figure will likely grow to close to 303,000 in 2020 across the EU.”

The cloud is helping SMBs because it can be quite difficult for them to finance in-house ICT infrastructure. Kroes says: “Cloud-based services give SMBs a chance to overcome this barrier by offering on-demand access to almost unlimited computing resources that are flexible – businesses pay only for what they need – and cost-effective – no substantial upfront investment is necessary.”

Belgium EU Net NeutralityBut there is still some work to do for Europe in the cloud space for it to really take off.  Kroes says: “In order for Europe to truly benefit, the adoption of cloud computing through all sectors of the European economy has to pick up – especially in sectors where Europe has a major interest and leadership, such as health, manufacturing and the financial sector. We also need to look further, towards a single market for cloud computing within Europe and beyond. I’m convinced cloud computing is a global development that doesn’t benefit from national solutions.”

Kroes believes cloud computing requires sufficient scale and data needs to be able to flow freely across borders, while preserving important public values, such as relating to data protection. Earlier this year, the European Cloud Partnership Steering Board released a Trusted Cloud Europe report, where it recommended that industry, EU member states and the European Commission work towards a common understanding of cloud computing best practice in Europe – for example, on security and data protection.

Kroes says: “Such a common understanding will raise confidence and create trust that is necessary for cloud computing adoption by customers, businesses and public sector organisations, throughout all sectors of the economy.

“A common understanding of what trusted cloud computing means in Europe can also bring a competitive advantage for the European cloud computing industry, building upon our tradition of strong security and high standards of data protection.”

Kroes believes the risks in cloud computing are mostly similar to the threats other internet-related technologies face, and can usually be mitigated with suitable measures – for example, by choosing and managing stronger passwords and using proper encryption techniques.

“The use of appropriate risk-management approaches and security controls by both users and cloud service providers is indispensable and should not be neglected,” Kroes says. “Security incidents can have a serious impact on businesses and also on our society, especially when critical infrastructures are affected, such as relating to the energy, transport, communications or the financial sector.

“Due to the scale of their operations, cloud service providers often have more expertise and have better capabilities to address IT security risks.”

In February 2014 the Commission’s Cloud Computing Communication and the European Union Network and Information Security Agency (ENISA) published a list of existing cloud computing security certification schemes that will help potential customers to better compare cloud computing offerings from a security point of view.