European data in the cloud, a question of “how,” not “if” or even “when.”
European cloud adoption grew 50% from 2018 to 2020. It’s getting cloudier.
Later this week, I will be participating in a conference session entitled, Cloud and data: innovating in an uncertain environment. As a new member of the Snowflake family, I’m thrilled for the opportunity. First of all, it’s my first business trip in over a year! And, I get to talk about the advantages of the cloud, particularly for breaking down data silos and barriers to sharing across companies.
Not everyone shares my enthusiasm. But does the polemic in the press represent the word on the street? No. This is not a case of modern day Luddites. Technology adoption has never been immediate.
Back around the turn of the century, factory owners dragged their feet in adopting power from central sources. Historically, factories had independent sources. Then, innovation changed everything. In 1882, Thomas Edison built a full-scale central power station with a system of conductors to distribute electricity to end-users in the high-profile business district in New York City. In the same year, in the UK, the first large scale central distribution supply plant was opened at Holborn Viaduct in London. By 1900 less than 5% of mechanical drive power in American factories came from electric motors. Yet within a few decades most had given up “on-premise” power generation.
Electrification — and any technology adoption — requires more than “lift and shift.” Factory owners need to be convinced of the advantages of centralized sources. Factories needed to be reorganized. And, employees needed to be retrained. Fast forward to 2021 and there are few businesses using their own power sources. Yet some still question the use of centralized, cloud-based compute and storage capabilities.
The premise of the upcoming panel is a tension between the need to innovate in the cloud in spite of cyber threats, lack of cloud sovereignty in Europe and data transfers through external systems.
First of all, let’s clear up one thing. The cloud ship has sailed — more slowly in some countries but the ship has left the port in most. According to EuroStat, overall cloud adoption in Europe grew from 24% to 36% of companies between 2018 and 2020. However, the averages are skewed by some distinct laggards like Bulgaria and Romania. The Nordics have the highest cloud adoption with 75% of Finnish firms and 70% of Swedish firms reporting use of cloud services. Italy marked the highest growth during the period from 23% to 59%, while Germany grew from 22% to 33% and France grew from only 19% to 27%.
But how are European firms using the cloud, you ask? Email is by far the most cloudy business app, with 76% of cloud-using European firms adopting cloud-based email services, followed by file storage at 67%. Other office software comes in at 58%. But what about data in the cloud, the bugaboo of cloud luddites? Turns out, 47% of cloud-using European firms have enterprise databases hosted in the cloud.
Differences across countries are again significant. In the Netherlands, 76% of cloud-using firms host data in the cloud; 70% of firms in Denmark and Spain do; 63% in France. But only 37% in Germany and 36% in Italy.
A term that often appears among concerns is the lack of cloud sovereignty, or the fact that the major cloud providers are not European. That is certainly true. In fact, according to Forrester Research, US cloud providers account for 68% of European cloud adoption and Chinese providers account for 11%. Only 2 of the top 10 cloud providers are European.
Several EU initiatives, like GAIA-X, address the issues of cloud sovereignty with the goal of balancing data use and control. Objectives include clear and fair rules on data access and use; next generation standards for storing and processing data; and European cloud capacity. But does this require Europe to re-invent the proverbial wheel to rival the existing players?
The jury seems to be still out on that. In the meantime, raising the bar on data governance, expanding data literacy and developing greater awareness not only for the protection of data but for its use and value. When data is understood and valued, it will be used and protected. These are the topics we’ll discuss later this week. Join us at the session on Cloud and data: innovating in an uncertain environment.
