European organizations have already won a gold medal when it comes to implementing cloud. They’re poised in pole position, with about four out of 10 workloads in the cloud, overtaking their US peers who stand at three out of 10.
Nick Taylor is Cloud First lead for Accenture in the UK and Ireland.
Whilst they certainly take gold for getting onto cloud, getting value out of cloud is a different story. Our recent research found that, at the current pace of investment, it will take European companies three years to catch up with their US peers when it comes to achieving bigger business goals with the cloud. Their focus is on reducing operating costs, rather than launching new services or improving areas such as sustainability. That could mean lower revenues in the long term due to a lack of innovation and outdated services, and a worse experience for customers.
It might not sound like it adds up – how can companies have more workloads in the cloud, but be achieving less with it? That’s because in Europe we face a unique set of challenges – the biggest of all being data sovereignty.
Trust issues
Data sovereignty essentially means that data is subject to the laws and regulations of the country where the data is located. Although the EU is largely regulated with a common set of regulatory requirements on data sovereignty, such as Schrems 2; there can be nuances with additional requirements like data residency in some of the countries. This is a challenge faced by enterprises globally. Even just one region with complex legislation needs to be addressed carefully. However, for European organizations this doesn’t necessarily match up with how operations are run, particularly in large enterprises. For example, many organizations have UK and Ireland operations managed as one. However, both have nuanced differences when it comes to the rules around data. Organizations ensure that they address the legal requirements of both countries even if operations are managed as a single entity.
With regulations to navigate, European companies are falling back on data silos to comply. In fact, our research shows nine out of 10 European organizations resort to creating data silos for sensitive data, which is affecting their interoperability and impeding growth.
Only a small subset of European companies—just one out of 10—are using the cloud for more strategic business objectives. To the others, cloud is still a cheaper, public data center to house the data they have piling up. There is much more value to be had from the technology.
Cue edge computing
Advances in edge computing are changing the conversation. It tackles data sovereignty issues by putting controls in place that never even allow sensitive data to leave the device. Combined with privacy-preserving techniques such as federated learning – which allows algorithms to be trained across multiple local data pools without having to move data – organizations can train and deploy artificial intelligence solutions. With this additional control in place enterprises can experiment more freely with services, whilst preserving privacy. Processing and analysis of biometric data is a good example, as it is extremely sensitive personal data which needs to be tightly controlled. Edge computing isn’t exactly shiny and new. It has its origins in the 90s, before cloud was even established. So why hasn’t it had as big of an impact already?
Several other technologies are maturing to make edge computing more feasible and reliable. Developments in 5G infrastructure, for instance, make edge deployments seamless with ultra-reliable, low-latency connections. There have also been advances in hardware and IoT, which means data can be processed faster whilst using less power.
Even where privacy is not a factor, this means that edge computing is finding wider use cases. Manufacturers, for example, are using it within factories to monitor production lines and machinery in real-time to ensure operations are optimized as efficiently as possible.
Up to a third of European companies already invest in emerging technologies such as privacy-preserving architectures with edge computing. As these emerging technologies converge, others are also starting to take notice – up to 35% more European companies are planning to invest in it over the next three years.
The future of cloud
The growth in edge computing by no means spells the demise of cloud. In fact, it’s quite the opposite. The cloud is essential to orchestrate edge environments, analyze data at scale and centrally manage applications. The two working in harmony demonstrates what’s possible and will help European organizations get out of the ‘lift and shift’ mindset, realizing the possibilities of continuous innovation.
As European organizations look to see how much further can cloud can take them, they will need to balance trust with resilience and compliance. Thanks to the developments at the edge, a new path is being chalked out and European organizations have the chance to climb back up to the top of the table.
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