Cloud computing is the latest significant technological advance to face industry, regulators and consumers.

The term refers to locating data and software in centres around the world, to which access is gained via the internet (“in the cloud”), instead of storing the information on the user’s own computer.

While the technology sector is pushing the case for cloud computing, regulators – who realise that it will mean huge amounts of data being kept on servers located in different countries – are once again finding themselves trailing behind the technology. However, the European Commission has reacted, with the start of work on a strategy that it hopes to publish next year.

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Neelie Kroes, the European commissioner for the digital agenda, told the World Economic Forum in Davos on 27 January that the EU needed to help cloud computing develop “smoother and faster”.

“Here are great opportunities for strong European telecoms and hi-tech small and medium-sized enterprises,” she said. “And as cloud users, including public-sector organisations, look for better value for money, we can expect productivity gains across Europe’s economy as a whole. A clear role for governments is also to ensure that European achievements, such as effective data protection and the EU’s single market, do not clash with cloud computing.” Kroes is to hold a series of consultations with cloud computing providers and users in the coming months.

Time pressure

The Commission knows that legislation on the protection and storage of data is being made obsolete by cloud computing. Questions of responsibility remain unanswered for data that might be owned by a user in one country, processed in another, stored in another, and transmitted via another. But policymakers know that they need to act before cloud computing becomes more widespread.

Microsoft is one company that sees the future in the cloud and is busy stating the case for how it can drive economic growth. In 2009, the firm opened a €341 million centre in Dublin, the first such facility outside the US, to store data for its cloud computing services. The company believes that smaller firms will benefit the most because by storing data away from their own premises, and only paying for what they use, they can cut costs.

John Vassallo, vice-president of EU affairs at Microsoft, says that cost advantages mean that cloud computing will be one of the drivers of the economy over the next five-to-ten years.

“Cloud for us is central and for Europe it is central,” he says. “The politicians’ task now is to put in the infrastructure.”

He says that the EU needs to create a “friendly legal framework for companies, governments and new SMEs to move to the cloud”.

“Consumers have been in the cloud longer than anyone else because they’ve been using [cloud] email services,” he says. “Now they need to get a bit more information and feel more secure. We are working hard to create that trust.”

Ian Wishart