Most of what we hear about cloud computing in Europe tends to fixate on the notion that cloud adoption there lags that in the US by one to three years.
That may be generally true, but it’s still a simplistic analysis. Despite the economic mess over there, IDC predicts a 30 percent compound annual growth rate for cloud deployments between 2011 and 2016 compared to an 18.5 percent CAGR for the US during that period. Not too shabby. (The researcher said it is monitoring economic developments in Western Europe and could adjust its predictions as needed.)
Here’s some of what you need to know about how cloud is rolling out in Europe, gleaned from researchers, vendor executives, and other experts. But stay tuned: we’ll be talking about these trends and more at GigaOM’s upcoming Structure Europe event in Amsterdam next month.
1: Seems obvious, but Europe isn’t the US
With the European Union and Eurozone, North Americans tend to see Europe as a more monolithic market than it really is. Europe is still a collection of many, smaller countries, lots of languages, lots of governments, and thus, represents a much smaller, more fragmented market than the US.
Then, it’s important to realize that cloud takeup is very different country to country, according to Chris Weitz, director of Deloitte Consulting LLP. The US has the benefit of being a large, rather homogeneous market so monster providers like Amazon can take off. Not true in Europe.
“There are not many ‘pure’ cloud tech providers in Europe. You have the work being done by the telcos [like] BT, FT, Telefonica…); the large and smaller integrators; and hosting providers,” said Ignacio Llorente, director of OpenNebula, a European provider of open-source cloud technology used at CERN and other sites.
And, depending on your definition of cloud, adoption rates vary. A lot. While tons of Europeans use Software as a Service (SaaS) offerings like Salesforce.com, adoption of Infrastructure as a Service (IaaS) is slow, in his view because there aren’t many big suppliers. There is no Amazon of Europe, except for, well Amazon itself, which runs its Western Europe zone out of Dublin.
2: Cloud adoption is not following previous tech patterns
In the past, early tech adopters in Europe tended to cluster in the UK and the Scandinavian countries (cell phone take up is an example, where the Finns led the pack.) But that migration trend is not necessarily holding true in cloud. “Normally the path leads from the UK to the Nordic countries and then goes south to the Mediterranean countries,” said IDC Research Director Mette Ahorlu. “That’s not clear in cloud. Southern Europe is struggling economically but we see some indication that they see cloud as a way to catch up,” she said.
Robert Jenkins, co-founder of Cloud Sigma, a Zurich-based IaaS provider, said he sees quite a few new customers from Greece, which has been rocked by bad financial news for the past year. “Maybe it’s just that their hardware is coming up for renewal or they’re sick of paying VMware fees. Maybe austerity makes public cloud look better,” he said.
3: Data protection FUD is overblown
One of the discussion threads around European cloud is that data protection laws in Germany and other countries are hindering adoption. The perception is that these countries require that data about their citizens be stored locally. The US Patriot Act is one commonly sited as a reason: These sovereign countries do not want to put data in American jurisdiction. Deloitte’s Weitz and others call this perception both wrong and frustrating. “It stops people from progressing, and really the legislation is very clear about what can and can’t happen if people just take the time to understand it,” he said.
If companies understand the nature of private clouds — which keep key data in-house but can connect to public cloud for some tasks, then there really is no issue, he said.
4: Interest in private cloud is hot, hot, hot
In the last year, IDC’s Ahorlu has noted a substantial shift among Europeans who she says are “mad about” private cloud. A healthy 73 percent of companies surveyed in 2012 indicated that are “moving to a cloud” of some sort, up from 67 percent last year. But 55 percent of those 2012 respondents said they’re moving to private cloud, up from 36 percent last year.
Once that concept of private cloud and the European Community rationalizes its data protection laws, the path to cloud will get a lot easier.
5: Cloud sweeping vs. cloud washing
What may shock Americans who are weary of the eternal “cloud washing” that happens in this market, the exact opposite is the case in Europe. Here, any new tech product inevitably gets painted as a cloud product whether there is any truth to that claim or not. In Europe, if you want to sell something, you’d better use the “C word” sparingly, says Nigel Beighton, the international VP of Technology for Rackspace, the San Antonio, Texas-based provider of managed hosting and cloud services worldwide.
“The term cloud makes people nervous,” he said. In other words, if you want to sell cloud services, go ahead, but call them something else.