Cloud computing "yet to go mainstream", but statistics show increasing use by EU firms

Out-Law News | 10 Dec 2014 | 10:04 am | 2 min. read

The use of cloud computing by EU businesses for email, file storage and software applications is steadily increasing, although there are significant differences in adoption levels between different member states, according to official statistics.

Although nearly every EU business with 10 employees or more had internet access in 2014, only 19% said that they had used cloud computing services over the same period, according to Eurostat, which is the European Commission's statistics directorate. Most firms used cloud computing to host their email systems and for electronic document storage, although 46% reported that they also used "advanced" cloud services for financial and accounting software, business applications or customer relationship management.

The figures emerged as UK industry body the Cloud Industry Forum (CIF) said that cloud computing could see a significant boost in the first half of 2015 ahead of Microsoft discontinuing support for its Windows Server 2003 product in July. According to CIF, 61% of UK businesses are still running some form of the product, making the change "the most significant IT refresh of the 21st century to date".

"These products have not only underpinned the IT server market for the last decade, they have been the basis upon which many local IT providers have built their businesses," said Alex Hilton, chief executive of CIF. "In the UK alone, an average of 1,000 servers per day are likely to need to be transitioned in the final year of support."

"Some customers will take the opportunity to move the server workloads to cloud services, some will undertake a rudimentary incremental upgrade and others will take the opportunity to refine their IT strategy. The next 12 months represent a great opportunity for customers to make a cloud migration and adopt the latest enterprise-ready technology at a fraction of the price," he said.

Setting out its predictions for the coming year, CIF said that 90% of UK firms would have "formally adopted" at least one cloud-based service by the end of 2015. The CIF did not specify a source for its figures, while the Eurostat figures are taken from official national surveys of firms with 10 employees or more.

According to Eurostat, firms in Finland, Iceland, Italy, Sweden and Denmark were most likely to have adopted cloud computing, with between 51% and 38% of firms reporting some use. However, fewer than 10% of firms in Hungary, Bulgaria, Greece, Poland, Latvia and Romania were using cloud services in 2014. According to the Eurostat figures, 24% of UK firms reported using cloud computing. Of the 19% EU-wide average, 12% reported using public cloud servers while 7% reported using private cloud servers.

Of those firms that reported using cloud computing, 66% said that they used a cloud solution for their email while 53% said that they used the cloud to store files in electronic form. Other common uses included database hosting, which 39% of those firms reporting using; and word processing or other office software, used by 34% of those firms. According to Eurostat, firms tended to opt for a cloud solution based on per-user operating costs when compared to the cost of hosting the same services on their own servers.

Firms already using cloud computing services highlighted the risk of a security breach as the biggest factor limiting their usage of the cloud. Other limiting factors included uncertainty about the location of their data and potential legal jurisdiction issues. Smaller firms also said that lack of knowledge and expertise discouraged them from transferring more services to the cloud, as did the high cost of cloud computing services.

Of the majority of firms that did not purchase cloud computing services, again most reported insufficient knowledge of cloud computing as their main reason for not doing so. Professional services, IT and communications, utilities and real estate firms also highlighted the risk of a security breach, according to the Eurostat figures.