The perception that cloud computing is a hugely important shift in both business and consumer IT is growing fast, with many people predicting that the next 10 years will turn out to be the “decade of cloud.”

The evidence for that is everywhere. A recent study by the Pew Research Center in the US, “The Future of Cloud Computing,” asked both IT and non-IT people how they saw cloud evolving. Most of the respondents said they believe that, by 2020, the majority of the software they use will be delivered as a service over the Internet.

Most also think they are going to store very little information locally, on their client device; rather, devices will simply be the means of accessing information that is held somewhere in the cloud. Moreover, they feel that business processes, not just IT, are going to move to the cloud as well.

But while there is clearly a lot of excitement surrounding cloud, we don’t hear — at least in these kinds of studies — many skeptical voices. Two recent surveys commissioned by Fujitsu added more perspective by trying to understand what end users think about one hotly debated area of cloud: data privacy. The research asked 6,000 people across 12 countries how they felt about their private data being stored in the cloud, and discovered that users had a lot of reservations.

In some countries, concern about private data is prompting users to look to their governments to create a framework in which their data privacy is somehow guaranteed — but, of course, without the government itself being able to make use of that data.

This encourages a temptation to establish “national clouds,” with many people thinking their particular national cloud is going to be better engineered — and therefore more secure — than those in other countries. The problem with such ideas is that they go against the original notion of the cloud as a set of utility-type infrastructures deployed on a global scale and available to everybody in any country.

Legal implications

This potential for geographical fragmentation is seen in Europe, where the often-antiquated legal systems of different countries will struggle to deal with the cloud model.

With different legal jurisdictions treating data privacy and compliance in very diverse ways, it’s going to be a tough task 
to put up any kind of pan-European cloud that will serve everybody’s needs equally well.

Access by authorities is also a critical area. Some want direct access to information, such as corporate or individual tax records, without having to wait for a neighboring country’s bureaucracy to decide whether a request is valid or not.

As history shows, the IT service industry has not developed as broadly in Europe as it has in the US, and that relates to the separate regulations governing the way different European societies are organized. This might mean a cloud computing service will simply be forced to stop at the borders of one country because of legislative issues.

There are some initiatives underway that are trying to resolve that. At Fujitsu, we are researching technologies such as encryption and key management that could be used in such instances. If a country insists that certain types of data should not leave the country, then it may be possible to re-interpret or re-write the relevant laws to say that while the “information” should not leave the country, the encrypted bits can. Without the key to that data, those bits are certainly not the information.

It is clear we need change — this or next year, not in 10 years’ time — or cloud service vendors and customers will find themselves at a disadvantage.

Of course, Europe is not the only place where regulations might get in the way of cloud. In America, companies are governed by laws such as the Patriot Act and HIPAA (The Health Insurance Portability and Accountability Act), which can have an impact on whether you can guarantee the absolute security of data held in the US.

Potential models

So alongside the excitement are some unanswered questions. Leaving aside the fact that there is no industry-wide definition of cloud computing, questions remain about what kind of consumption models for cloud will be most popular.

Observers can’t even decide whether public clouds are the best idea, with their enormous scale and a backbone that can deliver very high levels of efficiency, albeit with potential security problems; or whether private clouds are the best approach, where we apply the technologies developed for a public cloud in hosted or customer data centers to ensure total operational control but without the economies of scale.

Cloud computing represents an enormous business opportunity. Even though estimates of the size of the market in coming years vary widely — contradicting each other by a factor of three to four — analysts have reached a consensus on one thing: that demand for cloud products and services will see a compound annual growth rate of around 35%.

Given that the average annual growth rate of the IT industry over the last couple of decades has been running at 4% to 5%, that is a huge opportunity, and one that vendors are bound to get excited about.

We’re entering new territory, but from where I stand there is no doubt: cloud computing will become a key part of our lives.

Dr. Joseph Reger is chief technology officer of Fujitsu Technology Solutions and Fujitsu Continental Europe, Middle East, Africa and India. He is responsible for understanding and predicting the IT trends that will benefit customers most, and for implementing them as part of the company’s strategy.