Kroes: Unleash public-sector buying power on cloud

Cloud computing.JPG

This article is part of our special report ICT: Fuelling the economy.

European institutions and governments should throw their weight behind joint procurement of computing services to encourage the use of cloud computing, says Digital Agenda Commissioner Neelie Kroes.

In an interview with EURACTIV, which has also seen other documents spelling out Kroes’ strategy for cloud, the Commission vice president signalled she intends to enlist the EU’s collective spending power to drive a bargain with cloud computing providers.

Cloud computing enables vast amounts of data to be stored efficiently on off-site servers, enabling corporate computer systems to operate more smoothly.

More procurement strength in common approach

This month, Kroes launched a European Cloud Partnership to promote links between public authorities and industry to overcome problems faced by government institutions and the private sector in using the new technology.

The partnership aims to tackle obstacles to the use of cloud computing – standards, certification, data protection, interoperability, lock-in and legal certainty all remain troublesome for smaller companies wanting to use cloud.

But Kroes signalled that part of the initiative will involve bargaining hard with cloud providers in order to get the best deal.

Cloud computing is already being used by many in the private sector, despite the challenges, according to Kroes. “And we need to bring the public procurers into play as well in a systematic fashion. The big punch of public procurement should increase competition in cloud supply overall, to everybody's benefit,” she said.

In a separate commentary brief, seen by EURACTIV, Kroes claimed that EU member states’ individual IT procurement budgets are “too small” to make much of a difference globally.

Teaming up on taxes, welfare

“But together we pull a lot of weight. This should lead to reduced costs for governments who need to deliver efficient and interoperable online services,” Kroes argued.

In its first phase, the partnership aims to create common requirements for cloud procurement, she said. The aim was to start “formalise” the common public sector requirements for cloud across member states, regions, and different applications like e-health, tax administration, and welfare payments.

“Building on this the public sector will benefit from simpler procurement of cloud services,” Kroes added.

The Commission has launched the partnership with an initial investment of €10 million, and the first results are expected in 2013.

Click here to read the full interview.

“Will it work? Something similar has been done for the federal administration in the United States,” says Digital Agenda Commissioner Neelie Kroes.

“A group of European Scientific Institutions, lead by the European Space Agency and CERN, are advancing an analogous project among themselves. But we face a complex landscape, probably more complex than the one faced by the US or the scientific community. That means we need more commitment and initiative to get there. This is what Europe is about: doing things together where it makes sense,” Kroes added.

“Cloud vendors will welcome the opportunity to discuss with public-sector clients the type of service that they want offered to them,” an industry source told EURACTIV on condition of anonymity. “Nevertheless there is a flip side to the Commission seeking to increase its buying power. It must deliver more harmonised rules on the digital single market, because that way vendors will be able to offer the price efficiencies across borders can lower costs for the public sector.”

“The Commission also needs to be careful that in creating a series of specifications for procurement of cloud it does not have the effect of reducing competition and demanding a rigid, one-size-fits-all service,” the source said.

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 sector's turnover worldwide in 2010 was estimated at around €26.7 billion.

While businesses and governments wax lyrical about the benefits of cloud computing, EU regulators have been more wary, as further use 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.

  • 2012: European Cloud Partnership launched with a budget of €10 million
  • 2013: Commissioner Kroes expects the partnership to yield its first concrete results

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