Cloud computing: Leveraging the digital economy

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The migration of computing into a cloud of massive data centres spread all over the world is giving regulators a headache as they find themselves on the back foot of an industry-driven trend.

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Overview

The term 'cloud computing' describes a whole range of infrastructure, software, data or applications residing in the 'cloud' – that is to say, off your own premises and accessed via the Internet.

A study carried out by the University of Milan, published in late 2010, estimated that cloud computing has the potential to create 1.5 million new jobs in Europe over the next five years. 

The greatest commercial benefit of the cloud is that the services that use it can hone economies of scale by cutting out hardware costs and reducing their costs per unit as demand increases.

For customers, it makes tons of information potentially accessible from any device that is connected to the Internet.

While businesses and governments wax lyrical about the benefits of cloud computing, EU regulators have been more wary, as further take-up of cloud systems would mean a large swathe of public and commercial data would migrate to servers possibly located outside national borders or even on other continents.

In September 2012 the Commission published the EU strategy on cloud computing, amidst ambitious claims that the plan – which aims to move businesses into the cloud – could deliver cost savings of up to €600 billion between 2015 and 2020, and generate up to 2.5 million new jobs.

Smaller businesses stood to benefit the most, with forecasted savings of some 10-20% in ICT, due to the cheaper running costs of cloud, according to the strategy paper.

The EU’s strategy paper emphasises the potential of cloud computing to act as a driver for cost efficiencies and profit growth – particularly within the SME sector.

A number of sensitive policy issues impacting on cloud computing remain live within separate policy initiatives however, including data protection, copyright and environmental concerns surrounding energy expenditure required to cool large data centres.

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