European Clouds should be set up within the next five years to encourage small business take-up of on-demand IT services and to stop US dominance of the Cloud market. That was the message from the European Commissioner for telecoms and media, Viviane Reding on Thursday as she unveiled the Commission's Digital Europe strategy.
"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 also rattled the European sabre, noting that nearly all Cloud services are US-owned and US-based. “Once again, the US has started to exploit a business model before Europe has managed to do so,” she complained. “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,” she said. "A recent study estimated that online business services could add 0.2% 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?"
Stepping up to the digital mark
Reding said that Europe needed to step up to the mark to create a digital economy. “Europe promises to become even more digital in the years to come,” she said. “A demographic analysis tells us that today, only 35% of the total population in the EU have used advanced internet services in the last 3 months. This is markedly different for people between 16 and 24: 73% of them have recently used the internet for advanced data transmission, in particular for uploads and downloads of content and for social networking. This figure rises to 89% in Denmark, Europe's most competitive telecoms market.
“With these young, regular and intensive internet users, there is a whole generation of "digital natives" ready to apply innovations like web 2.0 to business and public life, whether as podcasters, bloggers, social networkers or website owners. It is in this new generation that there is real growth potential for Europe. Very soon, these digital natives will be turning into consumers with important purchasing power. This is one of the reasons why the European Commission believes that the roll out and development of high speed broadband internet – whether via fixed or via wireless connections – could create around one million jobs in Europe, and spur broadband-related growth in economic activity to the tune of €850 billion. Let us not forget that each 10% of additional broadband penetration yields 1.3% extra growth, according to a new World Bank study.
“To seize this potential in our digital economy, Europe will need to create the right framework for ensuring effective competition and sound regulatory conditions in a well-functioning single market as well as incentives for innovation. In view of the commitment to the social market economy, we also need to make sure that, in the end, consumers benefit from the digital economy. This is particularly important if we want to convince the digital natives to become the drivers of our digital economy.”
Cloud Computing also fits in with plans to make “better use of innovative ICT solutions to meet our objectives of a low-carbon economy”, noted Reding. “ Just consider the following: If businesses in Europe were to replace only 20% of all business trips by video conferencing, we could save more than 22 million tons of CO 2 per year,” she said. “Cloud Computing could, by helping to improve the efficiency of IT solutions, lead to electricity savings in computing activity of up to 80%. Let us also not forget what ICT could do for safer, smarter and greener cars in Europe. I firmly believe that Digital Europe cannot afford to turn a blind eye to its ecological potential, which in turn can open up new business opportunities for European ICT companies.”