CloudingSMEs Deliverable D5.5.1 Policy Development Guidelines
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1 CloudingSMEs FP7- No WP2 SMEs Vision and Road mapping for Cloud Development Deliverable D2.2.1 SMEs Requirements for Cloud Development, Adoption and Evolution CloudingSMEs PROPRIETARY RIGHTS STATEMENT This document contains information, which is proprietary to the CloudingSMEs Consortium. Neither this document nor the information contained herein shall be used, duplicated or communicated by any means to any third party, in whole or in parts, except with prior written consent of the consortium
2 Document Details Project Acronym CloudingSMEs Grant Agreement No Project Title Deliverable Reference Number Deliverable Title Accelerating the adoption, deployment and use of Cloud Computing by SMEs CloudingSMEs--D5.5.1 Revision Number V0.25 Deliverable Editor(s) Authors / Contributors EuroCloud Andreas Weiss (EuroCloud) Fotis Stamatelopoulos (EBS) Luc Hendrickx (UEAPME) Project co-funded by the European Commission within the FP7 Framework Programme Dissemination Level PU Public Statement of originality: This deliverable contains original unpublished work except where clearly indicated otherwise. Acknowledgement of previously published material and of the work of others has been made through appropriate citation, quotation or both. Date: 1/9/2015 2/23 CloudingSMEs
3 Revision History Rev. Author(s) Organization(s) Date Changes V0.1 Christine Neubauer EuroCloud 15/10/2014 Draft V0.15 Fotis Stamatelopulos, Makis Magdalinos EBS 31/10/2014 Inputs to Sections 1,2,3, and to policy discussion/recommendationsss (Section 6) V0.2 Luc Hendrickx UEAPME 15/11/2014 UEAPME inputs V0.25 Andreas Weiss EuroCloud 28/11/2014 Commenting open questions V1.0 Lorenzo Accardo UEAPME 05/12/2014 Consolidation of Final Version Date: 1/9/2015 3/23 CloudingSMEs
4 Abstract This document shows Policies and Strategies for SMEs Solution Providers and for SME End-Users. The first objective is to help SMEs as end-users of cloud technologies to understand, adopt and fully leverage cloud computing paradigms. The relevant policies are focused on promoting education and awareness about cloud computing within SMEs, while also easing the adoption of cloud solutions even for very small SMEs that are nowadays not offered any solution that addresses their needs. Policies and Strategies deal with targets such as increased awareness of the benefits of cloud for SMEs and the promotion of user confidence and security. The second objective is to support SMEs solution providers, notably providers of cloud-related solutions and facilitate solution provider to innovate, create new products and services and compete with other companies in the cloud computing markets. Guidelines and strategies will foster entrepreneurship and establishment of new businesses in niche markets, include the development of common standards and regulations, the alleviation of the market fragmentation, the instigation of more demand for solutions offered by ICT SMEs. Date: 1/9/2015 4/23 CloudingSMEs
5 Table of Contents Document Details... 2 Revision History... 3 Abstract... 4 Table of Contents... 5 Table of Figures... 6 Executive Summary Introduction Initial SME statements SMEs in the Cloud-Eco-System Chances and Barriers in the Cloud-Eco-System Surrounding Conditions Provider Attitude SMEs Barrier SMEs Requirements to support SMEs in the Cloud-Eco-System Surrounding Conditions Provider Attitude SMEs Needs SMEs Activities to support SMEs in the Cloud-Eco-System Surrounding Conditions For Providers For SMEs Key areas to address Infrastructure Compliance Manageability Recheck and Details from deliverable End-user SME requirements ICT SME requirements Attraction: Important pre-requisite for all following activities References Date: 1/9/2015 5/23 CloudingSMEs
6 Table of Figures Figure 1: Positioning of SMEs in the Cloud Ecosystem Date: 1/9/2015 6/23 CloudingSMEs
7 Executive Summary This deliverable attempts to develop Strategies and Policies for end-user SMEs (i.e. SMEs interested in adopting the cloud as users) and of ICT SMEs (i.e. notably cloud vendors and solution providers). The deliverable is based on analysis of basic prerequisites of end-user SMEs and ICT SMEs within their market situation and will show through different perspectives the first needs to initiate a change in different areas. The correlation of SMEs within their cloud eco-systems is very important, which means surrounding conditions, provider attitude and SMEs barrier have to be changed as well as prerequisite for SMEs cloud adoption. Initial SME statements SMEs in the Cloud-Eco-System Chances and Barriers in the Cloud-Eco-System Requirements to support SMEs in the Cloud-Eco-System Activities to support SMEs in the Cloud-Eco-System Key areas to address Additionally we will recheck the results towards 4. SME Requirements for Cloud Development, Adoption and Evolution of Deliverable Date: 1/9/2015 7/23 CloudingSMEs
8 1 Introduction Among the main objectives of the CloudingSMEs project is to provide a set of guidelines for policies that could facilitate SMEs to adopt, use and fully leverage the benefits of cloud computing. These policy guidelines will be disseminated to policy making bodies and stakeholders, as the project s contribution to the relevant dialogue. The purpose of this deliverable is to provide an initial set of such guidelines. Furthermore, the document outlines wider issues that should be addressed by policy makers, while also highlighting the overall environment in which SMEs are expected to adopt cloud solutions and benefit from cloud computing. The project s methodology for documenting and discussing policy making guidelines includes a thorough consideration of positioning of the SMEs in the cloud computing eco-system, as well as an analysis of key requirements for adopting the cloud. Furthermore, an analysis of the main challenges and barriers to cloud adoption is provided, along with policy-related actions that could facilitate the lowering of these barriers. The analysis considers the need of both end-user SMEs, and of SMEs that are cloud solution providers. Note that the CloudingSMEs policy related input addresses different issues associated with cloud adoption with particular emphasis on infrastructure issues, issues associated with compliance and issues associated with the management and governance of cloud services. The policy discussion of this deliverable is also linked to other results of the project, such as the SME requirements already identified as part of WP2 of the project. In particular, the present deliverable presents policy actions that could address requirements identified in WP2 (e.g., as part of deliverable D2.2.1), while also alleviating relevant concerns. In this context, the second and final release of the present deliverable will consider updates to the WP2 requirements, as part of on-going interactions with SMEs and other stakeholders in WP2. The structure of the deliverable is as follows: Section 2 following this introduction provides a set of statements for positioning the SMEs in the emerging ICT landscape, with particular emphasis on their attitude against edge technologies. Section 3 highlights the role of SMEs in the cloud computing ecosystem. Section 4 analyzes the main challenges and roles associated with SMEs presence in the ecosystem. Date: 1/9/2015 8/23 CloudingSMEs
9 Section 5 discusses requirements for appropriately positioning SMEs in the cloud ecosystem i.e. in a way that allows and encourages them to leverage opportunities stemming from the cloud. Section 6 discusses activities (including policy) actions for supporting the SMEs in the cloud eco-system. Section 7 highlights policy recommendations towards addressing requirements already idenfitied in WP2 of the project. Section 8 outlines... Date: 1/9/2015 9/23 CloudingSMEs
10 2 Initial SME statements The production of policies that could support and encourage SMEs to benefit from existing and emerging cloud computing solutions should consider the wider SMEs needs, their differences from larger companies, as well as their specific attitude against emerging technologies. In particular, the following (general, but very relevant) statements should be considered 1 : The majority of SMEs (44%) believes that they operate in an overregulated environment. Emphasis on simplicity and avoidance of over-regulation about cloud should be therefore considered. 90% of all enterprises are micro enterprises, meaning enterprises with less than 10 employees. 50% of all European enterprises are one-person enterprises. It means that in these enterprises the owner manager has a crucial role as he is the end-responsible for all the different functions in the enterprise. As these enterprises have, in general, no in house ITC expertise or a person dealing with these issues is it in general the owner manager dealing with this. The uptake of ICT or cloud solutions will depend on the person and the attitude of the owner manager. Except the younger generations, SME owner have limited ITC knowledge. As the term cloud is quite unknown, it make no sense to approach SME owners with this concept. They are result and solution oriented. They need to be approached with practical solutions which have a proven added value. SMEs see the advantage of cost reduction. This is a direct consequence of the fact that most SMEs perceive that they are facing increased competition and economic pressures in their sectors. Cost reduction can be also realized in terms of IT costs, though this is more applicable for some types (of high IT spending) SME rather than on others. Nevertheless, due to their limited financial capacities and their often limited profit making, every cost saving measure can be welcomed, espeiclly in the sùmallest enterpises. SME entrepreneurs are quite suspicious towards new technological evolutions: same phenomenon as with websites, web-shops, social media. There are specific sectors (such as manufacturing and construction), where SMEs are particularly conservative against new technologies such as cloud computing. SMEs are concerned about their privacy; they are not eager to keep, to save data outside the company, especially as third parties are involved. Hence, they are typically reluctant to adopt IT models such 1 Eurobarometer, European Commission, «Observatory of European SMEs», Analytical report, (Fieldwork: November-December 2006), Report: May 2007 Date: 1/9/ /23 CloudingSMEs
11 as managed services, outsourcing, utility computing and cloud computing, especially for services involving their data. Nevertheless a change is visible, SMEorganizations receive more and more questions from SMEs but only informative, not on how to implement the Cloud. A lack of essential awareness about emerging technologies (including cloud computing) is therefore observed. There is a slowly change, especially by younger people (including younger managers and directors of SMEs). These are more receptive to new concepts and technologies. Most SMEs start to experiment with a mixed cloud: accounting and office combined with mailbox hosted by an extern data center. Even such simple solutions and configurations can provide benefits to SMEs in terms of cost-cutting and flexibility. These are showcases of the cloud s potential in SMEs, which is also catalogued and presented as part of our project s success stories in WP4. Date: 1/9/ /23 CloudingSMEs
12 3 SMEs in the Cloud-Eco-System The positioning of the SMEs in the Cloud-Eco system is illustrated in Figure 1 below. In particular, the participation of SMEs in the cloud ecosytem depends on the following factors: SME Barriers: These are the factors that inhibit cloud adoption and use by SMEs. Providers (and their attitude): Cloud services providers should adapt their offerings to the needs of the SMEs, thereby rendering them appealing to them. In appropriately adapting their services to the SME needs, providers should take into account the barriers faced by SMEs in terms of cloud adoption. This adaptation should be performed in the scope of the wider political, social and economical environment where they operate (i.e. the surrounding conditions). Surrounding Conditions: Both SMEs and Cloud Services Providers (including ICT SMEs serving as such providers) have a two-way relationship to the economical and political environment where they operate. Figure 1: Positioning of SMEs in the Cloud Ecosystem This model provides a basis for analyzing the positioning of SMEs in the cloud-ecosystem, but also for discussing relevant policy guidelines. Date: 1/9/ /23 CloudingSMEs
13 4 Chances and Barriers in the Cloud-Eco-System 4.1 Surrounding Conditions Combining clouds of services with advanced network technology offers a chance for SMEs in all sectors to innovate ahead of the current commercial offers. There is a gradual emergence of initiatives that focus on the needs of SMEs for cloud adoption. CloudingSMEs is among the set of such initiatives. However, there are also other efforts such as the Small Business Working Group of the Cloud Security Alliance, which is expected to contribute on policy and findings. Such initiatives are also producing outcomes that need to be taken into account in policy development. 4.2 Provider Attitude The service contracts offered by suppliers are extremely rigid with only little room for negotiation. On the other hand SMEs need either to be able to accept simple terms, or to negotiate contracts pertaining to their needs. They often include fixed clauses that limit the liability of the provider Giant vendors provide most of the mainstream cloud services, with very little room for negotiating terms and conditions. On the other hand, regional/local service providers have more flexibility to provide customized contracts and solutions. Date: 1/9/ /23 CloudingSMEs
14 4.3 SMEs Barrier Change happens slowly, some are starting to experiment. In general the pace of cloud developments, is in several cases much faster than the pace SMEs can review and start leveraging cloud solutions. Several SMEs are unwilling to look seriously at cloud solutions. As already outlined, this is particularly true for SMEs in sectors that are conservative against technological development. SME owners have a limited IT knowledge, are wary of the loss of control and potential data security issue. Several cloud solutions are secure and reliable, but this may not be understanable by SMEs. Hence, they have to be facilitated to understand what is being offered and what are the practical implications from cloud adoption. Not have time or skills to investigate & implement thoroughly There are too many unanswered questions, which makes several SMEs reluctant to adopt new technologies that they typically do not understand. SMEs lack neutral and objective information on cloud solutions. They are often unable to judge what their needs are or to evaluate the providers offers (e.g. the availability % of the service). 4.4 SMEs As customers, SMEs are in a highly disadvantageous position when dealing with service providers & have little market power. In most casesthey will have to accept terms & conditions associated with cloud services as is, without opportunity for negotiating them. Software-based services on a global scale greatly reduced requirements for capital expenditure lower operating costs (including energy costs). For SMEs this can be an element of their competitiveness (since it allows them to operate based on a reduced IT budget and with higher efficiencies). Date: 1/9/ /23 CloudingSMEs
15 5 Requirements to support SMEs in the Cloud-Eco-System 5.1 Surrounding Conditions Prerequisite for the effective functioning of cloud solutions are availability and access of high-speed broadband Harmonized EU law concerning data protection and privacy EU legislation on unfair clauses in cloud contracts 5.2 Provider Attitude Operate within a set regulatory framework Fair agreements are necessary e.g.: undertakings re safety security, reliability, privacy Good relations of service providers and SMEs 5.3 SMEs Needs Support & Compensation of SMEs resources to evaluate Business needs, possibilities & important Issues Priorities of what has to be checked: Control and Security, Cost Benefits, Legal Issues Have a toolbox, guidelines, model contracts, training courses. These should facilitate SMEs in their cloud related decisions. A first set of such tools have been already provided as part of WP3 of our project. Other tools and education materials are also provided by individual Date: 1/9/ /23 CloudingSMEs
16 organizations and standards-initiatives such as Eurocloud and the CSA.(Cloud Security Alliance) SMEs need to be able to understand cloud SLAs and contracts, as well as their implications on their business. In turn this requires: o An agreed understandable (by SMEs) and uniform/homogeneous list of terms to be used within Cloud Contracts and SLAs (Service Level Agreements to describe the functional and quality aspects). o Insight on applicable laws and regulations (i.e. the wider environment), especially in case of globally-scope services that may transcend national boundarieswhich might be in conflict with legal constraints for the users, especially the geo location of customer data. 5.4 SMEs SMEs have to assert their voice before the market becomes too mature Towards the big global players a European approach is necessary Change of mindset to make the step towards cloud computing Be able to assess the costs, benefits & make balanced choice Date: 1/9/ /23 CloudingSMEs
17 6 Activities to support SMEs in the Cloud-Eco-System 6.1 Surrounding Conditions EU Support availability and access of high-speed broadband EU law concerning data protection and privacy EU & Public authorities help to reform the market EU Policy Initiatives about cloud computing, in particular: (A) European Cloud Computing Strategy: The European Cloud Partnership (ECP) brings together industry and the public sector to work on common procurement requirements for cloud computing in an open and fully transparent way. Part of the ECP is the Cloud-for- Europe (C4E) initiative, aiming at helping Europe's public authorities procure cloud products and services, so as to build trust in European cloud computing; (B) Cloud Service Level Agreement Standardisation Guidelines, which is an effort to establish common terminology and guidelines about cloud SLAs. This group is complemented by work conducted in the scope of the Cloud Select Industry Group on Service Level Agreements; (C)Expert Group on Cloud Computing Contracts, which is studying the terms and condition of cloud contracts. These policy initiatives target areas of primary industry for SMEs (e.g., contracts and SMEs), but are not always explicitly focused on producing results applicable to SMEs. Date: 1/9/ /23 CloudingSMEs
18 6.2 For Providers Support in understanding how to compete with large cloud vendors Support in identifying possible product areas and markets Facilitate a dialogue of cloud providers on the important market issues 6.3 For SMEs Provide background knowledge about cloud computing for Beginners, Informed and Experienced Users and address relevant information according to this segmentation. Engage Experts on regional level with know-how of sector specific requirements with the various industries and special offering for SMEs. Establish Tools and Services with guidance for key areas like Security, Law, Compliance, Integration, Migration and Portability. Provide Best practices and integration samples to build an individual cloud strategy. Establish criteria for quality assessment and cloud vendor choice procurement and create a list of services with appropriate transparency and compliance according to EU requirements. Establish policies for one-stop-shop cloud services, thereby alleviating SMEs from the concern of multiple providers, multiple tools (and leaning curves), as well as multiple procurements and SLAs. Date: 1/9/ /23 CloudingSMEs
19 7 Key areas to address 7.1 Infrastructure Broad Band Access Resilience of communication, network infrastructure and services Data Location 7.2 Compliance Data Privacy Data Security Contracts 7.3 Manageability Monitoring Portability Data Access As a result these are the key areas to develop Strategies and Policies to provide tailored support during this state. Chapter 6 and the following tables of Chapter 8 provide detailed content and criteria. Terms which are marked in red whithin Chapter 8 serve as indication to fit into the key areas above. Date: 1/9/ /23 CloudingSMEs
20 8 Recheck and Details from deliverable End-user SME requirements Consolidated List of End-User SME Requirements SMEs are in need of better understanding the benefits of cloud computing for their business activities Awareness Raising in SMEs should be customized and tailored to the profile and needs of the SMEs as defined by their size and business activities. SMEs need information and tools to evaluate and judge their ITC needs (e.g; again the issue of availability of the service) Cloud Computing Services should be presented to SMEs in terms of their business benefits rather than technical characteristics SMEs need support in understanding and negotiating Service Level Agreements (SLAs) SMEs need support in understanding security, privacy and data protection risks in cloud computing along with related solutions SMEs need support in the migration and management of change associated with cloud computing Cloud Computing Services should be registered to services catalogues/directories so that SMEs could locate/identify them SMEs need support in understanding and scoring criteria for selecting cloud vendors and offerings 9 SMEs would benefit from referrals to certified cloud providers 10 SMEs need support in the adoption of IaaS and SaaS, which is relatively more appealing than PaaS. Date: 1/9/ /23 CloudingSMEs
21 8.2 ICT SME requirements Consolidated List of SME Cloud Solution Providers Requirements SME Cloud Vendors need support in understanding the areas where they could develop competitive Cloud Products and Services SMEs need support in understanding how to compete large cloud vendors, including support in identifying possible product areas and markets SMEs need to identify and adhere to appropriate standards (ETSI CC standards, CC Certification) Cloud SMEs need to market their products and services in a business-friendly way SME cloud vendors need partnerships with entities that provide business advice (e.g., financial services) and consulting to SMEs, given that these services providers are very close to their clients/customers. SMEs that are cloud vendors and/or solution providers need support in focusing on niche products, services and solutions rather than competing with giant vendors. SMEs need support in identifying cloud solutions that needs to be adapted/localized to national or regional needs. Date: 1/9/ /23 CloudingSMEs
22 9 Attraction: Important pre-requisite for all following activities End-user SMEs have a practical or hands-on point of view and judge all information and offerings by the following question: How does this help directly or pretty soon in my daily work process? Arguments which are too far away from their real business may not be accepted. This is not an attitude SMEs because the direct impact is a key factor of success or downfall of their business. As smaller they are as more important it is for their success. Scenarios of different business sectors: So we have to illustrate different scenarios of change in different business sectors by success stories or examples. These examples should be short clear and transferable to the particular mainstream of the most important SMEs business sectors. So they can identify and work with a model to follow, modify or expand. Date: 1/9/ /23 CloudingSMEs
23 References «Cloud Service Level Agreement Standardisation Guidelines», Brussels 24/06/2014 «16 point Action Plan for Cloud Computing in Europe», EuroCloud 2010 Cloud Security Alliance, Small Business Working Group, Cloud Computing Hearing with SMEs, Meeting Note, 14 November 2011, Date: 1/9/ /23 CloudingSMEs
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