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Speeches and Statements

"Living with Our Heads in the Cloud"

March 21, 2012

Remarks by William E. Kennard, United States Ambassador to the European Union at the 2012 European Cloud Computing Conference


Introduction
We are here today to talk about how to use the advent of cloud computing to jumpstart innovation and growth in our economies. But cloud computing is already having a real impact on businesses and consumers. Listen, if you will, to the true life example of one of my own staff, who, like many of the younger people in this room, has already adapted to this new technology.

  • In the morning, alarm that wakes him is the one on his smartphone. Connected to the cloud, it will automatically change the hour for Daylight Savings next week – which means he will have no excuse to sleep in.
  • That buzzing a few minutes later is on his Blackberry, sending the first of the day’s emails through a cloud server.
  • His smartphone’s weather app brings up the day’s forecast. More often than not -- and apropos to this conference -- it is cloudy.
  • While he eats breakfast, one of his children snatches the phone to play a quick game of Angry Birds, new levels downloaded through the cloud.
  • On the way to work, a transport app tells him, in real time, where the next bus is, and when it is expected to arrive.
  • He switches over iTunes to stream a podcast for the morning commute.
  • When the podcast gives a positive review for a new book, he switches over to the Kindle app to order it and download it instantly.
  • At work, he is still very much in the cloud; downloading official government forms from a central server, setting up a dropbox to send a high definition video interview to someone back in the United States, and editing a cloud-stored collaborative document for an upcoming event.
  • Later, he receives a birthday card in the mail from his grandmother with a check in it, but he doesn’t go to the bank. Instead, he takes a picture of the check and uploads it as an instant deposit.
  • Back at work, his wife sends him a link to a Youtube video she just uploaded of the children playing dress-up.
  • The video also reaches the grandparents, which prompts an impromptu video chat.
  • Later that night, after the kids are in bed, he sits down with his wife to watch a film, streamed through the computer and projected into the television screen.

Benefits of cloud computing
As you can see, the benefits of cloud computing for individual consumers are overwhelming. Few of these opportunities existed just a few years ago and we have only seen the tip of the iceberg as to what this revolution has to offer.

For companies, SMEs in particular, the cloud means dramatic increases in flexibility, scalability, and efficiency. For public authorities, cloud services allow them to do more with fewer resources.

  • A report by the Centre for Economics and Business Research (CEBR 2011) estimated that cloud computing will provide €736 billion of cumulative benefits to Europe’s five largest economies between 2010 and 2015, creating 2.3 million net new jobs.
  • A report by the London-based Carbon Disclosure Project estimated that blue-chip companies could achieve a 50 percent reduction of their carbon emissions by 2020 if they migrated their data storage operations to the cloud.
  • By 2014, according to a study by the Gartner group (2009), the cloud industry will reach almost $149 billion in revenues worldwide.

In short, cloud computing can give a powerful boost to smart and green growth throughout Europe. While creating cloud sever facilities may be a small part of this growth, the real potential is in the innovative usage of this new platform, wherever the servers actually are.  

Take, for example, Finland’s Rovio, which produces Angry Birds. Cloud computing enabled this company with a relatively small domestic market, a platform to distribute its games worldwide. Now it has gone global and has a $100 million turnover.


Government Initiatives
The Obama Administration is acutely aware of the promise of cloud computing.

  • The Administration’s Federal Cloud Computing Strategy (February 2011) requires agencies to default to cloud-based solutions whenever a secure, reliable and cost-effective cloud option exists.
  • An estimated $20 billion of the Federal Government’s $80 billion in IT spending is a potential target for migration to cloud computing solutions.
  • The Cloud-first Initiative will help the government in its efforts to consolidate and reduce our stable of 2,100 data centers by 40 percent.


Europe is on the same path.  As Carl-Christian Buhr just outlined, Vice President Kroes is actively pursuing a strategy to make Europe “cloud active” and she will soon present her vision of a European Cloud Computing Strategy.

Framing the Cloud
Individuals, companies, and public entities are already beginning to reap early benefits of using the cloud. Some are, however, reluctant to fully embrace the future and they will only fully utilize these wonderful cloud services when they can be assured:

  • Data is safeguarded;
  • With the right balance of privacy and security;
  • In an enforceable legal framework that makes responsibility and accountability clear in the event of a breach.

In Europe, and in the rest of the world, policy makers are struggling with how to best address these issues.

Data Protection
In the United States, as in Europe, we are revising our privacy legal framework to deal with the use of the Internet today.  Consumer trust is essential for the continued growth of the digital economy, and this has prompted President Obama to propose last month a Consumer Privacy Bill of Rights as part of a comprehensive blueprint to improve consumers’ privacy protections and ensure that the Internet remains an engine for innovation and economic growth.  One key element of the blueprint is its flexible, multi-stakeholder processes to develop and implement fully enforceable codes of conduct for industries; another is to improve global interoperability. The U.S. effort mirrors, in terms of its objectives, exactly what is happening here in Europe.

In Europe, the Commission put out its legislative proposal in January and we are looking at that carefully. While we have some differences in the way our regulatory systems are structured, we ultimately want the same thing: For consumers to feel confident that when they use Cloud-based services they will enjoy consumer protections and that their personal privacy will be safeguarded. Given how similar our underlying goals are, and the imperative of maintaining interoperable data protection systems to foster growth and innovation, we will be working closely with our European partners to ensure just such an outcome.


Cyber security and law enforcement access to data
As our societies go to the Cloud, so do criminals, and both our governments take the increasing cyber threats seriously. The EU-U.S. Working Group on Cyber-Security and Cyber-Crime is an effort to deepen our cooperation to address the risks to the global internet and digital networks, and the group is developing collaborative approaches to a wide range of cyber-security and cyber-crime issues.

The United States and Europe also share similar views and practices about the protection of personal information in the context of law enforcement and national security investigations. While some cloud providers here in Europe have recently made the fear of unlimited U.S. Government access to data a selling point for their services, this is an inaccurate assessment and completely ignores the facts.  As many of you know, all law enforcement and national security investigations in the United States are subject to a careful set of legal and judicial constraints to protect individual privacy.  While our systems may differ in approach, let me assure you that we have in place protections that are fundamentally similar to those in Europe. In a number of critical areas, the U.S. provides more restrictions to the access of personal data than do European Member States. 


Clouds without Borders
Those who talk about a “European cloud” or a “national cloud” do not understand how these networks work. Bits do not respect national borders.  If we are going to realize the kind of productivity gains and job growth that we want, we must ensure that data can flow seamlessly across borders.

As policy makers, we often talk about how we are going to update our laws within particular jurisdictions because that’s how governments think - that is how regulators think.  However, when you sit down with people in business, they are thinking globally.  They are building networks that are going to operate globally and that do operate globally. Consumers will moreover not accept being unable to utilize services and products offered just across the border. We need to work closely together to achieve interoperable – though not necessarily identical – regulatory regimes for our transatlantic digital market place.

Last year’s Transatlantic Economic Council (TEC) Summit formulated a joint EU-U.S. vision on data transfers and it also established an EU-U.S. expert working group on Cloud Computing to address these issues. This working group met for the first time last Friday (March 16) and will report to the EU-U.S. Information Society Dialogue in June.

Conclusion
Earlier, I talked about the importance of creating the right regulatory framework for the Cloud. Like most technological leaps, the Cloud continues to develop in unimaginable ways, and we should therefore take care to regulate carefully and flexibly to preserve and in fact maximize technological development, innovation, and growth down the road. As an example, we should try to avoid rules that limit the physical location of data and code.
The Internet is the most significant technology ever created to empower people and commerce. These benefits are being accelerated by the rapid growth of cloud computing. The role of government should be to facilitate this growth by enhancing confidence in cloud technologies, particularly with regards to privacy and security, but not in a way that could constrain evolving new business models. As the EU and the United States confront these issues, we have a window of opportunity to work together – to create a workable transatlantic model that could well become the global standard. We must not let his opportunity slip away.