In January the European Commission (EC) announced that the EU’s current system of data protection directives that guide national laws such as the UK’s Data Protection Act, will be replaced with common EU data protection regulations across all member states by 2014. The EU data protection reform includes far-reaching proposals that will directly affect organisations that hold data on individuals, including the growing cloud storage sector. Recently the EC stated in its new strategy document, Unleashing the potential of cloud computing in Europe, that by 2020 cloud is estimated to generate 2.5 million new jobs and boost GDP by £126.8bn a year. Cloud computing will be incredibly influential in our economy in the future. Effectively the EC is identifying the need for a single set of rules to channel the power of innovative computer solutions which will encourage a digital single market in the EU.
Clearly the IT landscape is going through various transitional phases and adjustments, with the adoption of cloud growing faster among small and medium sized enterprises. The EC has asked European Telecommunications Standards to coordinate with cloud providers to pinpoint necessary standards for security, data transportation and interoperability. The EU data protection regime will bring many changes including a single, uniform set of data rules in the EU to create more cohesion across the board. In the past organisations had to follow national data protection acts which were based on data protection directives issued by the EU. Now there will be single data regulation. It will be easier for organisations to comply with data protection if they are operating in several countries within the EU.
European countries will not see the full benefits of cloud technology unless steps are taken to deal with the remaining barriers to its adoption and use. The top three challenges for business customers moving to the cloud are security, transformation and compliance. The EC has recognised the need to tackle the perceived risk which is an extremely positive development. The EC’s appeal for legal adjustments to promote more effective cloud roll-out will provide common standards and safe, fair contract terms and conditions. In the eyes of potential users this will encourage the adoption of cloud solutions.
Effectively companies will be encouraged to take better ownership of the management of the data, including the right for individuals to be ‘forgotten’, that is, have their data wholly deleted at their request. As the EU helps to push more content towards the cloud, we cannot ignore consumer protections which are even more crucial. By giving businesses the choice over to what extent they choose to protect consumer rights, several areas of risk remain exposed and consumers are left in danger of unfair contract terms.
As a provider of financial services software, I firmly believe a technology company or business cannot succeed without innovating. More than in any other sector, failure to do so means simply that one cannot compete in a marketplace populated by companies constantly looking to make their products faster, better and cheaper. However rules must be upheld and high standards should apply to all businesses in their handling of cloud data management as the EU has rightly demonstrated. The reform of data management rules on an international level will boost a competitive digital single market where Europeans feel confident in the economy.
Paul Hunt is managing director of Phoebus Software
