Keven O'Brien, of the New York Times, published an interesting article (See Cloud Computing Hits Snag in Europe) on September 19th. He pointed out that Europe represents a significant challenge that the suppliers of cloud computing products and services have yet to overcome. The challenge is the patchwork quilt of regulations controlling cross-border data flow and privacy. My colleagues at the 451 Group have been commenting on this issue for quite some time.
Often it is not permissible for personal data from customers or employees to cross country borders or to leave Europe. This creates challenges for companies doing business in the area. They can't store European data in their North American datacenters. In some cases, it would be necessary for these companies to set up multiple datacenters in Europe for this data.
If we look at the adoption of Cloud computing, that is where organizations are purchasing access on a pay-as-you-go basis to computational or storage services that are located out on the Web somewhere can create situations in which they and the supplier of the service are technically breaking the law. For example, if a company placed some of its workloads in a datacenter in the U.S. or Canada and had them process retail point of sale data coming from Europe, the transfer of credit card data would be illegal.
Suppliers of cloud products and services are working to get the laws in Europe normalized to allow the continued growth of Cloud computing. We'll all have to wait and see if this effort will produce results.