A Cloud of two speeds: Europe vs. America

Cloud computing is gaining rapid acceptance, but not everywhere. Governments across Europe – in what many call “the old countries” –  are still remarkably conservative or even reluctant to embrace cloud computing.
 

This week President Obama organized a dinner with the CEO’s of 12 high-tech and cloud companies to stimulate job creation in North America, meanwhile – over in Europe – the Dutch Minister of the Interior replied to questions of parliament about the use of cloud computing by governments.The fact that this particular minister had to be invited three times by Dutch Employers Association to switch from his pre-war model cast iron bike to a more modern bicycle with gears and suspension, says something about the tone of this debate.

A hilarious misunderstanding was that the official government delegation kept referring to cloud computing as a new invention, while the representatives of the industry (including Google and a large international accounting firm) tried to explain that cloud computing was an established practice with many real life use cases and success stories, both inside and outside government organizations.

Remarkably the US and this European government announced almost at the same time a plan to radically reduce the number of government data centers:  by about 60 in the Netherlands, and by about 800 in the U.S. The underlying idea in the U.S. is to make greater use of “data centers as a service” a.k.a. cloud computing. On the other hand, the Dutch plan so far sounds more like a traditional consolidation approach with the objective of creating more efficiency by increasing the scale of use (an approach that has so far not proven to be very successful; in fact, we see globally that the bigger the scale of the projects, the more spectacular the reports in the public press about the outcomes).

In the meantime, the CIO of the U.S. Federal government, Vivik Kundra, published a very readable cloud strategy – at only 43 pages this is a must read for anyone involved in setting IT strategy (a shorter analysis can be found at sys-con). Kundra presented his strategy not as a way to save on IT costs, but as a way to get more value from existing IT investments. In many places, but certainly in the public sector, “protection of budgets” has become a primary survival strategy. By positioning cloud computing not as a way to cut cost but as a way to increase value he makes  IT (and of the whole civil apparatus) an ally to his plans, instead of a potential opponent.

The technology industry likely was already on his side, because the government’s ‘promised’ cloud spending in cloud services is likely to amount to about $20 billion per year, or 25% of the total budget. This annual amount is approximately equal to the total government investment required to put a man on the Moon. In my view, the U.S. government’s cloud program is also a way to create and safeguard jobs for the coming decade – in a sense, an industry stimulus program.

Due to European free trade rules and regulations, creating stimulus packages for national industries in Europe is at best complicated, and in many cases even illegal. Within the European Union, Neelie Kroes – the former free trade commissioner – has taken on the role of Commissioner for the Digital Agenda.  In a recent lecture, she indicated her ambition is to make Europe not only “Cloud-Friendly” but “Cloud-Active” (a kind of “all-in” strategy?). The plan is built around three core areas: 1) a legal framework, 2) technical and commercial fundamentals) and 3) the market. There are now more than 100 actions on her European Digital Agenda, of which more than 20 specifically addressing the European “Digital Single Market”, an online equivalent of the European single market for goods and services.

However, a fundamental problem for cloud computing in Europe is that the European Union was based on enabling free traffic of persons, goods and services, and NOT free traffic of DATA. This puts European providers of cloud services immediately at a disadvantage. American, but also Chinese, companies have a huge domestic market, which they can serve from one geographic location. Europe has, in theory, a similar large domestic market for cloud services, but the various European languages, cultures and laws make this market a lot less uniform than the American market. Some argue that this diversity has made European suppliers (or European divisions of global providers) better at providing a differentiated approach, instead of the more traditional “one size fits all” solutions. But in a fast growing new market like cloud computing, all this diversity does makes achieving the required scale more difficult.

And in addition to issues with European privacy laws as described in this NY Times article,
there are a variety of local and national laws preventing local suppliers from serving the European (government) market from one location, even if this location lies within the European Union. For example, the German Government requires that all data of local government agencies is kept within Germany. From a historical perspective this may be understandable, but it prevents the European government sector from becoming a launching force for “One European Cloud Market.”

Maybe it’s time for a European cloud of two speeds? Just like we saw smaller groups of countries signing the Schengen treaty (which enabled traveling between selected European countries without checkpoints) or for the introduction of the Euro single currency, a small leading group of countries could opt for accelerated introduction of uniform cloud legislation.

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PS for some links to the European local language sites we used automatic web translation facilities from Microsoft and Google. Thought that with #IBMwatson defeating the human trace at Jeopardy the time might be right for this. Let me know whether you felt these were useful or not.