Digital Single Market
Digital Economy & Society

Let’s get the Cloud right!

EU regulators are thinking hard about the effect of the data explosion fuelled by Smartphones, tablets and video apps on radio spectrum requirements and on broadband infrastructures. But at the same time, cloud computing offers the promises of transformed business models, new economic growth and new jobs. But with the new opportunities come new challenges. Europe’s policy-makers and regulators need to think about this too!

--- Posted by by David Hendon, Senior Advisor Ofcom.

EU regulators are thinking hard about the effect of the data explosion fuelled by Smartphones, tablets and video apps on radio spectrum requirements and on broadband infrastructures.  But at the same time, cloud computing offers the promises of transformed business models, new economic growth and new jobs. But with the new opportunities come new challenges. Europe’s policy-makers and regulators need to think about this too!

A single market for cloud services is still in the making. Though widely hailed as a means to reduce start-up costs and increase flexibility for new businesses, it is my impression that there is still some hesitation to fully embrace cloud technology. However well-founded that might be, this hesitation should not be allowed to hamper the growth and job creation offered by cloud computing. Rather we should explore how to provide users and providers with conditions that allow for competition and innovation.

The framework should give confidence without impeding business innovation. Policy makers, users and providers should therefore come together and strike the right balance in establishing a functioning single market for cloud services.

Enterprises base their decision on applying cloud on many parameters, some strategic, some more practical. Enterprises are, however, challenged by the still rather opaque nature of cloud services. What do you actually get as a customer when investing in a cloud service? How can you ensure that the service lives up to your expectations and standards? Enterprises should have all the information required to make the best decision on a solid basis. We, the regulators and policy makers, must find out how best to contribute to this and reassure users of their rights.

There are other questions which I find important:

  • How can enterprises have confidence that their commercial data stored in the Cloud will be safe and accessible whenever they need?
  • Consumers need clarity that they own their own data – they should not need to worry about this. How can they be reassured?
  • How can enterprises and consumers be able to exercise choice to change provider, so that European competition policy can work, also in the Cloud?
  • And, I find the questions of what role the EU can play when data can move from one jurisdiction to another important. 

To summarise, there are plenty obvious advantages connected to cloud computing, yet there is a need to address the challenges. At the High Level Conference on 27-28 February 2012 in Copenhagen I will be moderating the sessionDoing business from the cloud - Towards a European strategy for cloud computing”. This session brings together representatives from providers, regulators, consultancy and users to what I hope will be a future-oriented discussion about these important issues.


I hope that you will give input to this debate by posting comments, questions and suggestions for solutions. Let us know what you find is important.

You can follow the discussions on twitter at #dsm12. For the full programme, please visit the conference website

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Published in DSM blog


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The global phenomenon Internet needs regulation like WIPO, WTO, UN, Geneva Conventions for war or humanitarian action (how war is called nowadays). All upcoming questions must find answers on a global scale. An only national or European regulation would be an active boycot and a policy against people and companies. This would be idiotic as a only national punishment of war crime. Milosvic would not habe been accused by a Serbic court (even if some countries with less standards of law do not accept the concept of the rule of law as the US, but after a long run we even convinced China to join the WTO) . On the other hand: all upcoming questions were answered the first time when we started outsourcing. There is no difference if I bring my data on the other side of my country or the other side of the world. We can recycle all regulations we made, when we brought data centers from Europe to India. And if we had none the other day then we need no new today. Keep ist simple and non-nationalistic. Take it global.  As Internet. Internet works. National legislation in the EU does not.
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you might want to have a look to the contribution the Cloud Security Alliance have provided the EC with: I hope it will be a useful input for your debate in Copenhagen.
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As cloud technology develops and an increasing number of consumer Internet services build on it, this is a very relevant topic to debate at the conference in Copenhagen. In terms of business models, there is already a shift from an "ownership" to an "access" approach. This is what Spotify are doing with songs, Netflix with movies, and Mixcloud (the startup I work on) with radio shows / Podcasts. Unfortunately licensing regulations have not caught up with technology and remain stuck in a "territory by territory" framework. My question for the session / panel would be: What are the pragmatic next steps for the EU Commission in building a single European digital market for licensing?
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Sorry Davvid, I cannot agree with your view. There is no need for an additional layer of jurisdiction for cloud computing as you suggest. Let's take your example: " This isn’t just about storing data, but also delivering service from the cloud – for example “pay per use” software rather than “pay up-front whether you use it or not” software." Ok. let's look at Microsoft Office365. You can use it in a "Pay per Use"-way global or you can get the software for your regional data center which you use for years for outsourcing your ERP-activies as it some public data service centers in Germany already do. The way you charge for usage is not a cloud-feature. So I will tell you what we get, when we continue to scale down global problems to e Europaen, national, regional, community scale. In the US they scale down 1.200 data centers to 800. The use clouds from Microsoft and Google  (take for example a look at save money and we start a large discussion on four layers and do nothing. In Germany there is discussion for a "National cloud" where the security industry again tries to avoid any progress of the free world. I spent fifteen years in the Red Cross and cannot agree that things like the Geneva conventions should start on a European level as you suggested for cloud computing. Global problems have to be solved global or you will fail (see WIPO, see WTO, see UN and look how ACTA is failing in the EU because it is not adressing global people but only the wishes of smallgroup of industry companies in a small part of the world without China, Russia, India, etc.).
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Encouraging the cloud to develop means building the necessary trust from the users to store their digital property in a remote server.  Security and Privacy are definitely key issues, but ensuring that the customers gets exactely the performances they expect from their broadband access service so to be able to access their data at any time is absolutely critical. Therefore, transparency needs to be added to the checklist of  the cloud computing strategy, and the Commission has to ensure that the regulatory framework around Europe requires consistently broadband operators (fixed and mobile)  to disclose in a clear and comparable way the actual speed they guarantee as well as latency and other features, including management policies adopted by the operators. This is critical to allow users choose exactely the broadband service that fits best with their cloud needs and, on the supply side, to push operators to differentiate and compete on quality, not only on prices.
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The use of cloud computing will increase whether or not the EU has its own set of rules ...  however it would be highly undesirable for one particular nation to "own" access to the market.  The potential economies of scale will be out of reach for Europe if we adopt a position of total protectionism.  This would result in it being difficult for European companies to win global business.  Cloud is about openness, not about putting up bigger fences.   The objective should be to provide a competitive marketplace and a level playing field.  Getting it right is important, but it will be a question of balance.
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A real Digital Single Market is a prerequisite for the emergence of competitive cloud services in Europe but there are still many obstacles to overcome in order to get there. The EU should act quickly before Member States pass legislation that could fragment further the supposed to be Single Market. An example of such national legislation can be the recent discussion in many EU countries - especially in France - about the application of private copying levies (PCL) to the cloud Can you imagine the same consumer service being priced differently in different EU Member States?  Well, currently this is what happens with all blank media supports in the EU. The same support is levied differently in each EU jurisdiction. Differences in prices due to PCL can easily exceed 100% of the retail price for the same support.  As consumers habits develop towards the use of cloud services most of the EU Countries that established PCL will “bite the cloud” with the objective of guaranteeing unchanged or improved revenue streams for copyright holders. With the Communication "A coherent framework to build trust in the Digital single market for e-commerce and online services" the European Commission has committed to deliver by 2012 the long overdue review of the key Directive on copyright in the information society which is the EU legal base for PCL. In the same Communication the Commission commits to review the PCL regime in Europe by 2013. The PCL-Cloud issue witnesses that the EU Cloud Strategy should first of all establish a mechanism under which all future proposal affecting the Digital Single Market should be evaluated taking into consideration the development of seamless cloud based consumer services and should push for the review of legislation currently hindering the Digital Single Market.
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The wide range of different issues under discussion here is amazing! This session promises to be lively. It does appear that no matter how global the internet is, there will always be 'local' parts to the underlying infrastrcture. There are instances that I have heard of where 'local clouds' are being developed precisely to avoid potential cross-border issues. I guess we don't want to go (any further?) down that route here in Europe. Discussion on licensing makes me think of the efforts the European Commission has made in Intellectual Property Rights at the European level: see this brief report for a summary of activity around and beyond the IPR strategy from May 2011.
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There is the need of regulation at a global level, probably by creating an institution for the web similar to what WTO is for trade. Thsi regulatory framework, based on treats, should rule each and every side of the cloud computing universe, so that to avoid conflict between jurysdictions or absence of regulation. The initial steps could be taken by the biggest and most internet oriented economies, who could most easily convene on some standards. Then all the other countries would join through negotiations.