Europe falling behind US in cloud, says Reding

Europe falling behind US in cloud, says Reding

Summary: Small European businesses need Europe-hosted cloud-computing services within five years, according to telecoms and media commissioner Viviane Reding

TOPICS: Tech Industry

European clouds should be set up within the next five years to encourage small business take-up of on-demand IT services, the European commissioner for telecoms and media has said.

Viviane Reding, speaking at the unveiling of the Commission's Digital Europe strategy on Thursday, said 99 percent of EU firms are small to medium-sized enterprises (SMEs), but only nine percent of them use electronic invoices and only 11 percent have IT-based human resource management.

"If SMEs could access computing power over the web, they would no longer need to buy and maintain technologies or IT applications and services," Reding said. "Such web-based services — called cloud computing — are the medicine needed for our credit-squeezed economy: they can make businesses more productive by shifting from fixed costs (for example, hiring staff or buying PCs) to variable costs (for instance, you only pay for what you use)."

Reding pointed out that nearly all cloud services are US-owned and US-based, and complained that "once again, the US has started to exploit a business model before Europe has managed to do so".

"We cannot let this continue. In my view, we need a major effort to set up Europe-hosted clouds to give European SMEs access to fast, open and productivity-enhancing services," Reding said. "A recent study estimated that online business services could add 0.2 percent to annual GDP growth, create a million new jobs and allow hundreds of thousands of new SMEs to take off in Europe over the next five years. So what are we waiting for?"

Reding said the efficiencies brought about by cloud computing could "lead to electricity savings in computing activity of up to 80 percent". She also called on European businesses to use more video-conferencing services, so as to cut down on business travel and the resulting carbon emissions.

The commissioner also said it needed to be "easier and more attractive to access digital content, wherever produced in Europe". She repeated her call for pan-European intellectual property rights licensing, and also called for new rules to encourage the digitisation of books — to achieve this latter goal, she said, the creation of a Europe-wide public registry for out-of-print and orphan works could encourage private investment in digitisation.

"This would also help to end the present, rather ideological debate about 'Google books'," Reding said. "I do understand the fears of many publishers and libraries facing the market power of Google. But I also share the frustrations of many internet companies that would like to offer interesting business models in this field, but cannot do so because of the fragmented regulatory system in Europe."

Reding warned that a failure to reform European copyright laws on orphan works and libraries would see Europe falling behind the US in the digitisation of content.

Common European rules and standards must also be set up to encourage the take-up of mobile payments, Reding said.

She identified some short-term goals, calling again for the Telecoms Package to be passed into law — the bundle of reformed rules is being held up by the debate over a net-neutrality clause — and for solid rules on fibre-based broadband deployment and next-generation mobile network deployment. Reding also urged EU governments to speed up the switchover from analogue to digital broadcast services.

Topic: Tech Industry

David Meyer

About David Meyer

David Meyer is a freelance technology journalist. He fell into journalism when he realised his musical career wouldn't pay the bills. David's main focus is on communications, as well as internet technologies, regulation and mobile devices.

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  • Bigger is better, biggest is bestest

    I love the implicit assumption that this whole cloud idea is a good plan. Mind you, given the "Biggest is bestest, centralise absolutely everything as much as physically possible" mantra of the EU, this is a genetically encoded assumption for anyone working there. How about the approach of pushing the storage and data serving functions out to the home and business, making the whole system more resilient and proof against failures in the "Least cost is best option" Cloud service providers. Distributed functionality and self reliance is part of the core design of the internet as a whole and it has proved to be a good one.

    For my part, I wouldn't touch them with yours and Ms. Reding can just go take a flying leap. If the Murricans want to head off pell mell down the Cloud Computing dead end, that's good for us. It gives us a head start.
    Andrew Meredith
  • Coulds gathering over Europe, but the outlook's gloomy

    It should come as no surprise that Europe is not able to match the US in development of cloud services. Unlike the US where there is one unified single market and a positively reinforced entrepreneurial culture, Europe is a collection of cultures and markets dominated by multiple national (or regional) champions which inevitably slow any cross border collaboration. There is plenty of innovation in cross border services for cloud computing from true European independents like Interoute and COLT, but the EU and the national governments have the interests of their national carriers foremost in their minds. At Interoute, we have seen phenomenal growth in cloud services across Europe and to the US, but it's very clear to us that as the national champions unshackle themselves from legacy businesses they are not focused on pushing the cloud debate forward aggressively which inevitably slows the development of services which given the global nature of competition and the pace of change in the US seems a little short sighted.

    Matthew Finnie
  • Ever heard of the global market?

    I wish these unelected EU civil servants would get over all this us versus them, EU versus US nonsense. I live in England and get my web services from where ever fits my business model - currently this is California, tomorrow it might be England, or China, etc.

    For local businesses to thrive we need to be innovators in the market not just waste time and money trying to catch up with anything that's happening in the US.

    EU commissioners would be better value for money (and in the case of UK contributions to the EU this is a lot of money) if they focused on removing barriers to business growth such as inappropriate one size fits all employment legislation.