Précis - Recent reports suggest that UK businesses are more cautious in their adoption of cloud computing technologies than their US counterparts.

What?

According to a recent report by Redwood Software, just 35% of UK businesses are using cloud services to store private data compared with 58% of US businesses. The report also found that US businesses are most positive about the benefits of cloud computing than UK businesses, citing improved agility in supporting business needs as the main benefit.

The report found that one of the reasons for the lack of up-take of cloud computing in the UK was the perceived lack of control over data, whereas in the US the main reason was found to be lack of resources.

The slower adoption of cloud computing in the UK is in contrast to a reportedly better understanding of the “cloud” in the UK than the US. A new poll by European cloud supplier Webfusion surveying 1,000 US and UK citizens respectively found that understanding of cloud computing in the UK is far higher than that in the US. Webfusion found that 34% of UK citizens surveyed had a clear understanding of the term “cloud” compared to less than 25% of US respondents.

Cloud computing is a relatively new technology that is still evolving. This of course raises questions about its security, reliability and long-term use. However, this is equally the case in the UK and the US. The question is, why is there such an apparent difference of opinion between two equally tech savvy countries.

So what?

Despite an apparently better general awareness and understanding of cloud computing in the UK, it seems that UK businesses do not yet share the same confidence in the cloud as their US counterparts.

The UK has complex privacy rules that strictly regulate the processing of personal data. There have been questions raised as to ownership and control of data in the cloud and this will cause concern for UK businesses subject to stricter regulations than the US equivalent. This may arguably cause UK businesses to be more risk averse because of the potentially significant consequences for a business if a cloud solution fails. In particular some regulations in the financial industry may be so restrictive as to prevent the use of cloud computing by UK businesses in that industry.

There are a large number of cloud providers in the US. The nature of cloud computing of course means that businesses are not restricted to cloud providers in their own country. However, it has been suggested that given the concerns over security and the tighter privacy controls and restrictions in the UK, UK businesses would prefer cloud computing to be provided by European companies subject to the same or similar legal requirements. There are few European providers of cloud computing. US cloud providers would potentially have to customise their services for UK customers to deal with their concerns around European regulations. Some providers will be unable or unwilling to do so, at least not without charging potentially far higher prices.

It has even been suggested that the US Patriot Act may cause concerns for UK businesses as this may allow the US government access to data stored in the cloud in certain circumstances, potentially in breach of European regulations.

More practical issues such as implementation costs, integration with legacy systems and long-term uptake in the supply chain also cause concern, although these are not unique to the UK.

Despite initial caution, UK businesses recognise the advantages of cloud computing. As knowledge and experience of cloud computing is gained, confidence is growing and adoption of cloud computing in the UK is increasing. According to a report by KPMG (for more detail see “Cloud of Uncertainty: Cost and Security Under the Cloud”) UK business spend on cloud services is set to double in 2013. There is no doubt that cloud computing will continue to grow on a global scale and become a necessity for UK businesses wishing to compete at the forefront of their industry.