Europe Sets Course for Cloud

Logo_enThere's a perception that cloud computing has become a “mature” technology, a perception shared by few but anticipated by most everyone else with the exception of those trying to preserve their self-interests. I don’t blame them – each person inherently protects self-interests.

They're wrong though. Cloud is not mature. It is evolving.  The paradox is simple -- if something begins to appear as an evolution people bucket it as slow moving and look for faster moving "shinier" objects. It's almost like discounting the earth for the sake of studying meteorites.

But there is some truth - while cloud has gained acceptance despite some murky areas around the definitions, the path for competitive  innovation has moved to other areas, particularly around mobile and social. This is true even in the traditionally slower adopting public sector, independent of geography.

Any time new technologies command intelligent and perhaps occasionally combative discourse, one realizes not that a shift is happening, but it has already happened. No matter how fast real-time networks are, there has to be some fomenting underlying substrate of a trend in order for the intelligent discourse to happen. In chemistry, a catalyst by itself for example does nothing without the agent and reagent. In physics, kinetic or potential energy requires some kind of mass.

With technology, the quantum shift that has already been happening is cloud. However, the shift that many are already moving past is now situated deep in the hands of technologists, who are carefully and quickly articulating their needs to move to the cloud. That is why today, one question I am asked less frequently than in previous years is how cloud computing impacts the public sector. The question also now spans into areas that impact the government, specifically the economic impetus behind private sector adoption and efficiencies. In other words – two years ago, the question was what is cloud? And now it is how fast is it permeating the public sector and what kind of efficiencies can we expect?

Now before I am labeled as someone who says bureaucracy kills innovation, I want to be totally clear. It does. But that’s not the issue with the public sector – it is simply that the public sector is not a “sector” at all. It is hundreds of self-interested parties forced to work together in each nation. In other words – it’s just like any corporation but potentially on a larger scale.

Today -- January 30th -- Neelie Kroes - who was the head of the European Commission for Competition and now is the European Commissioner for the Digital Agenda spoke at the World Economic Forum on cloud computing. Her thoughts are here:


Building a European Cloud Partnership by NeelieKroesEU 

In the United States, much has changed in the public sector, the vast majority of cabinet level agencies use the public cloud. They also probably use MS-DOS and Lotus 1-2-3. But the innovation path is something that is now being addressed.

The US government, however, is highly scrutinized, particularly in election years. I wanted to get a pulse on the European market, and while I was there last week, I had the opportunity to talk to David Bradshaw, program director for IDC, a major analyst firm and one well known for analyzing trends, market drivers, and market share. He presented last week to the European Commission – some of the specifics are in this very specific and articulate video:

 

The EC-ommissioned research is monumental and focused on cloud computing adoption. The European Commission’s main role is to improve the regulatory environment in the European Union. The commission references cutting through red tape, making better laws for consumers and businesses, and re-examining existing provisions to foster a better business environment. In other words, they are looking at this very seriously.

The EC has four goals:

  1. systematically assesses new initiatives for their potential economic, social and environmental impact
  2. consults stakeholders and interested parties on all major initiatives
  3. works to simplify the existing legislation
  4. measures and reduces administrative costs of regulation.

It therefore is studying the impact of cloud computing specifically to do those things. It is early in the process but the EC hired IDC to analyze the state of the industry and measure cloud adoption. What was surprising to David Bradshaw, who is leading the study, which is not published at this time, is not the growth in cloud computing in the public sector, but the major increase in the growth and how much adoption of cloud in the public sector there is.

The United States, meanwhile, has its own studies. When the White House in 2009 announced its cloud computing policy spearheaded by the first US government CIO Vivek Kundra (now the head of emerging markets at Salesforce.com), there was a focus on cost reduction of infrastructure. At the time, Kundra said that the government had an IT budget of $76 Billion of which $19 Billion was spent on infrastructure alone. That’s a whopping 25 percent of the budget just to keep the lights on. There was also a need to increase the efficiency and speed of deployment of programs, such as those at the Department of Energy and Federal forms for student aid. The announcement was covered in this CNET post.

Factoids – The Harper’s Style Index of Government IT

Total US Government IT Budget

$76 Billion

Amount Spent on Infrastructure

$19 Billion

% Spent on Infrastructure

25%

Year Government Cloud Initiative Started

2009

USA.gov site cost expectation

$2.5 Million

USA.gov site time to first benefit

6 Months

USA.gov site cost w/Cloud

$800,000

USA.gov site time to first benefit

1 Day

Number of Federal sites eyed for cloud implementation

79

# of Federal IT services migrated to cloud in 2011

40

IDC initial estimate of governmentpublic cloud market size in 2014

$56B

Top issue cited in public and private sector

Business agility

Where

 

Satisfaction with cloud services

94 percent

% of UK companies using cloud services

48 percent

Lead decision maker in UK on moving to the cloud

IT (65 %)

Average # of EC cloud-based applications in use

5 (with business applications leading forefront)

Date IDC data will be published

2012 (est. 2Q)

Suffice it say that some things don’t move that quickly in the government and there are policies to work through. No one is naïve to think that any technology provides a panacea for all things that have gone wrong in the past, including spaghetti code, case tools, client/server, and the like. There is no nirvana. However, there are major trends. Public cloud solutions are creating efficiencies, helping to make users more agile, and therefore competitive, and it is has been and is increasing in adoption in the private and the public sector.

I anxiously await The Bradshaw report – otherwise known as the European Commission on Cloud Computing Adoption. It’s a quantum shift in technology, and when implemented strategically, provides a foundation for competitive benefit across the board.