Why Europe Doesn’t Trust The Cloud

By Sebastian Nikoloff

Investments in European cloud infrastructure will fail to reach even 12% in the next five years, say the business consultants at BearingPoint. The reason boils down to one thing: a basic lack of trust.

 (Photo: istockphoto)

(Photo: istockphoto)

In theory, everyone agrees. Analysts, IT services providers, consumers and, in principle, many businesses recognize the immense potential to be exploited by bringing services to the cloud. But there is still widespread skepticism in the business world. Accordingly, Gartner anticipates growth of just 11.8% in cloud expenditure in Europe between 2011 and 2016! That’s slightly more than the economic growth rate predicted by the Organisation for Economic Co-operation and Development for the same period and significantly less than the predicted global cloud growth figure of 17.7%.

Yet almost everyone who tries out the cloud is enthusiastic. For example, a study conducted by KPMG and Pierre Audoin Consultants (PAC) on behalf of Germany’s Federal Association for Information Technology, Telecommunications and New Media, found that 81% of all public cloud users rated their experiences as thoroughly or mostly positive. This figure was just under 60% among private cloud users.

No trust in the cloud, but why?

Here’s the paradox: The cloud is generally agreed to offer significant potential. And, given the chance, it is more than capable of demonstrating it. Yet there is still no sign of a boom in cloud computing. Why is that? And what is it that’s making Europeans reluctant to invest?

Business consultants BearingPoint investigated and documented the reasons in a study. “Many businesses are failing to tap into the huge opportunities offered by cloud computing. The main sticking point is trust. If there’s so much as a whiff of doubt, companies will not transfer their mission-critical data to the cloud,” says Stefan Pechardscheck, a partner at BearingPoint and co-author of the study.

Cloud_EU_Data_Protection_2

(Source: BearingPoint)

One of the contributing factors to this mood of uncertainty is the issue of differing national data-protection regulations. The stricter the regulations, the more stringent the requirements for cross-border data transfer – and the more unsure companies are about how to comply with them in the cloud. If in doubt, they tend to play it safe and operate their own data center rather than use the cloud. At least, they argue, they know where they are with a data center.

Consequently, in locations where legal regulations are strict, cloud growth is sluggish. That’s why, compared with the global adoption rate, the European Union is well off the pace when it comes to embracing cloud computing. And Germany, which has some of the world’s most stringent data-protection rules, is currently bringing up the rear.

Sticking points: Privacy, intellectual property, migration

There’s uncertainty in other areas too: intellectual property, security, and compliance. How, if push comes to shove, do companies access data that they have stored in the cloud? Questions like these require convincing answers if businesses are to make the switch to the cloud.

Yet the concept of cloud computing is a recipe for success – BearingPoint has no doubts on that score. After all, mobility, Big Data, and green IT are all developments that clearly fit this trend. Precisely how the cloud develops in the future will depend largely on how quickly trust-inspiring tools can be put in place.

How rapidly can industry-wide standards be established? How open are IT providers to the idea of intensifying collaboration to make the market more transparent? And what about regulation at the national and – more importantly – international level?

Ultimately, businesses are interested in the bottom line. Here, at least, the forecasts are as distinctly positive as early experiences with the cloud. That’s surely an important first step toward establishing trust.