Proposal to Regulate Cloud Computing by European Commission

Speech of Ms. Neelie Kroes - EC VP for Digital Agenda during WEF Conference at Davos, Switzerland, 26 January 2012:

Ladies and Gentlemen,

Cloud Computing will change our economy. It can bring significant productivity benefits to all, right through to the smallest companies, and also to individuals. It promises scalable, secure services for greater efficiency, greater flexibility, and lower cost.

Our flagging economies need us to make the best out of this. We cannot afford anything less. We need to act to support speedy uptake of Cloud Computing in Europe.

This time last year I announced my plan to launch a Cloud Computing Strategy that would make Europe not just Cloud-friendly but Cloud-active.

Since then, consultations with Cloud providers, users and consumers have been extensive. Much work has also been done by interested parties in Europe and with major trading partners to identify the main issues that need to be addressed.

The results are clear: many still hesitate before the Cloud. They worry: how do I know what service I am buying? Will my data be protected? Which providers can I trust? If I don't like what I am getting, can I switch providers easily? Or, if I really don't like what I'm getting, can I easily enforce the contract through legal action?

All these issues – standards, certification, data protection, interoperability, lock-in, legal certainty and others – are particularly troublesome for smaller companies. They are the ones who stand to benefit the most from the Cloud – but who don't have a lot of spending power, nor resources for individual negotiations with Cloud suppliers.

Where these barriers exist, I am determined to overcome them.

We have already made a start on the regulatory side: the Commission has proposed new rules for data protection in the twenty-first century, including for data in the Cloud.

But we can do more. Look at the public sector. Public IT procurement is large, about twenty percent of the market, but today it is fragmented with limited impact. We can harness this buying power through more harmonisation and integration. And, yes, ultimately also through joint public procurement across borders. Why is this important? Because the Cloud sector will listen and adapt, creating benefits for Cloud adoption throughout our economy. For example: more standardised services, new and better offers, cheaper prices. And it is a true win-win: the Cloud market will grow, bringing opportunities for existing suppliers and new entrants. And Cloud buyers, including the public sector, will buy more with less and become more efficient.

How do we get there? Today I am inviting public authorities and industry, Cloud buyers and suppliers, to come together in a European Cloud Partnership.

In the first phase, the Partnership will come up with common requirements for Cloud procurement. For this it will look at standards; it will look at security; it will look at ensuring competition, not lock-in.

In the second phase the Partnership will deliver proof of concept solutions for the common requirements.

In the third phase reference implementations will be built.

The Commission will launch the Partnership with an initial investment of 10 million euros. I expect good progress in setting it up in 2012 and first results in 2013.

The Partnership's initial work will create a strong common basis for Cloud procurement by public authorities. In the beginning, Cloud procurement might still be conducted separately. However, even in that form, the benefits of a common approach will begin to accrue – to Cloud buyers and suppliers. And by the way, there is no reason why procurement by private businesses and organisations would not adapt in this direction as well. Later on, public bodies, whether local, regional or at Member State level, may find it useful to develop the Partnership further so that it can play a role in a move towards increased pooling of resources and ultimately joint procurement.

Will it work? Something similar has been done for the federal administration in the United States. 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.

There is and I want to be clear about it: The Cloud Partnership, and indeed our overall Cloud Computing strategy, is not about building a European super-Cloud, neither outright nor by forcing the integration of existing public Cloud infrastructures. Cloud business models, and the set-up of Cloud suppliers' and publicly-run data centres, should be determined by efficiency considerations on the market.

We are already talking to potential partners and working on setting up this European Cloud Partnership. No doubt the concept will evolve as more details are fixed. These will be set out, together with other elements, in the European Cloud Computing Strategy later this year. A strategy as a whole to ensure Europe becomes not just Cloud-friendly, but Cloud-active.

I am looking forward to the discussions.

Thank you very much for your attention.

International Call Traffic Growth Slows as Skype’s Volumes Soar

International long distance traffic growth is slowing rapidly. According to new data from TeleGeography, international long distance traffic grew four percent in 2011, to 438 billion minutes. This growth rate was less than one-third of the industry’s long-run historical average of 13 percent annual growth. Because telcos must rely on strong volume growth to offset inevitable price declines, slowing traffic growth is making life ever more difficult for international service providers.

International Long Distance Traffic Growth, Carriers vs. Skype

Source: TeleGeography
In contrast to international phone traffic, Skype’s cross-border traffic has continued to soar. TeleGeography estimates that cross-border Skype-to-Skype calls (including video calls) grew 48 percent in 2011, to 145 billion minutes. Although the volume of international traffic routed via telephone companies remains more than three times greater than Skype’s cross-border volumes, their growth rates differ dramatically. TeleGeography estimates that Skype added 47 billion minutes of international traffic in 2011—more than twice as much as all the telephone companies in the world, combined.
“Given Skype’s enormous traffic volumes, it’s difficult not to conclude that at least some of Skype’s growth is coming at the expense of traditional carriers,” said TeleGeography analyst Stephan Beckert. “If all of Skype’s on-net traffic had been routed via phone companies, global cross-border telephone traffic would have grown 13 percent in 2011, remaining in line with historical growth rates.”
The TeleGeography Report has been a vital source of statistics and analysis for the international long distance market for 20 years. To find out more and to download the executive summary, please visit http://www.telegeography.com/product-info/tg/index.php.
(Source: telegeography.com)