Main content

Lobbying government? Be careful what you wish for

Phil Wainewright Profile picture for user pwainewright October 24, 2013
Cloud industry players have been lobbying policy makers to take them seriously. Now that they have their attention, they are complaining.

Council of Europe, seats of the members 06
Ever wondered why the EU has become so keen on regulating the cloud? It's all too easy to accuse policy makers of interfering in the growth of a young industry. Yet in what appears to be a sorry tale of the dangers of unintended consequences, it turns out much of the blame may lie with the industry itself.

Take the current furore over this week's proposals for a single European data privacy law. For many years, the industry has decried the fragmented state of data protection legislation across Europe as a huge barrier to operating cross-border. This is especially detrimental to cloud providers, making it more difficult to offer their services in multiple countries, which in turn limits choice and competition for would-be buyers of those services.

Finally this week, the European Parliament signed off plans to converge those 28 different national laws into a single EU-wide regulation. It's the result many technology and Internet companies have lobbied so hard to secure. You'd think they'd be grateful, but not a bit of it. Instead of thanking the policy makers for all their efforts to cut through this mishmash of national regulatory red tape, they accuse them of bureaucratic centralization.

Unfortunately for the industry lobbyists, the European Parliament has gone further than they had intended — mainly due to the untimely revelation of previously covert snooping by the US government's security services, which came at just the right moment to bolster hardline positions.

Of course the industry would prefer no rules at all, but if there do have to be rules, it's far better to have one set of rules for the entire EU rather than today's patchwork quilt of national regulation. To demonize much-needed harmonization as bureaucratic centralization is unhelpful rhetoric at a time when getting everyone to sign up to the converged rules may yet be a challenge.

Yet the data protection regulations are just the beginning of this sorry tale of 'be careful what you wish for.' They form part of a much wider EU strategy for cloud computing that is coming to a head in the run-up to next year's change of guard at the EU, when a new set of Commissioners and MEPs take office.

Justifying cloud policy

A raft of measures are being justified on the basis of a predicted €940-billion boost to the EU economy — a figure that originates in a report prepared for the Commission last year by tech industry research firm IDC: Quantitative Estimates of the Demand for Cloud Computing in Europe and the Likely Barriers to Uptake (PDF).

The report's findings are extrapolated from surveys of the views of European business IT buyers and consumers, together with in-depth interviews with unnamed "members of the cloud ecosystem and selected market experts." From a detailed reading of the report, it seems its prediction of a €940 billion cumulative boost to EU GDP in the years 2015-2020 is the product of a number of "best effort estimates" based on three key assumptions:

  • Multiple concerns over data security and protection, legal jurisdiction, data access and portability will increasingly outweigh positive influences on cloud adoption, such as provider trust and business utility.
  • Relieving these concerns by defining EU-wide rules and certifications on matters such as data protection, portability and cloud provider security, accountability and liability would double the demand for public cloud solutions by 2020.
  • More widespread cloud adoption will have a 'multiplier effect' on the wider economy, such that a doubling of cloud spending would result in a tripling of the wider economic impact, even after taking into effect the negative impact on non-cloud IT spending.

It's a fascinating catalog of assumptions, each of which might be challenged on a number of counts. But that hasn't stopped the European Commission rolling out an entire strategy for cloud computing that it largely built around regulation, certification and standardization. All justified by those "best effort estimates" that add up to a putative €940 billion boost to EU GDP.

The cloud industry has long wanted to attract the attention of policy makers. A report by Boston Consulting Group, co-presented with Google at last year's World Economic Forum in Davos, sized the Internet economy of the G-20 nations as growing to be worth $4.2 trillion by 2016.

It was intended to get world leaders to take the Internet players seriously as positive contributors to the global economy, and there's no doubt that has happened. The Internet economy and cloud computing are now see as key contributors to every major economy. But having won the attention of policy makers, the industry should not be surprised that not all of that attention is what it would wish for. It's an inevitable consequence of success.

Photo credit: © Ingo Bartussek -

A grey colored placeholder image