techuk Cloud 2020 Vision Keeping the UK at the forefront of cloud adoption

techuk Cloud 2020 Vision Keeping the UK at the forefront of cloud adoption

Introduction Cloud computing is fundamental to the UK s digital future. The next wave of the digital revolution is being powered by the Internet of Things (IoT), advanced mobile applications, big data analytics and artificial intelligence (AI). But it is cloud computing that underpins all of these developments. It provides the capability to store, process and manage the vast volumes of real-time data being created through digital innovation. The volume of data now being created on a daily basis means that cloud is fast becoming the only solution for organisations and consumers to store and manage information. But cloud computing is also a key driver of increased organisational agility and efficiency. It gives businesses the ability to access computing platforms and resources on an on-demand basis, driving organisational efficiency and cost savings. This flexibility drives innovation, productivity and business competitiveness. It is a fundamental building block of the UK s digital future. Cloud is by nature a global phenomenon. Cloud computing is estimated to be worth an additional 449 billion¹ to the European economy alone by 2020. But the UK has amazing strengths in every part of the cloud ecosystem. From chip design to world leading capabilities in artificial intelligence. London s data centre capacity is globally significant and is second only in size to North Virginia. The UK has a vibrant, fast moving and constantly evolving cloud computing market with multiple cloud providers offering innovative cloud services at the infrastructure, platform and software level. This combination of cloud providers means UK businesses and consumers are able to access a range of and technologically advanced, free to use, and paid cloud services. The UK benefits from driving innovation in cloud based technologies and driving the use and exploitation of cloud. We can maintain world leading supply-side expertise and world beating demand-side exploitation, accelerating innovation and productivity. But to do all of this we have to keep the UK at the forefront of cloud adoption, techuk has identified six key issues that need to be addressed to ensure this happens. 1. Enabling data portability and system interoperability within the cloud computing ecosystem 2. Building trust in the security of cloud computing services 3. Embracing the change required to optimise the use of cloud 4. Building a coherent regulatory framework for cloud 5. Ensuring effective public sector adoption and usage of cloud 6. Having a communications infrastructure that keeps pace with mass cloud adoption. 2 techuk Cloud 2020 Vision Keeping the UK at the forefront of cloud adoption

Enabling data portability and system interoperability within the cloud computing ecosystem The UK has a thriving and competitive cloud computing market with many cloud providers offering innovative services at the infrastructure, platform and software level. The range and choice of cloud providers and services is continuing to increase which is good news for customers, whether they are government departments, businesses or consumers, as they benefit from more choice, lower costs and rapid innovation. However, for a competitive market to work, customers need to be able to switch between providers as their needs and requirements change or as new more compelling services come to market. Today consumers storing data in the cloud who want to change providers have to download data, for example to a specific device or hard drive, before uploading it again to another cloud provider. As the size of data being created continues to increase it will soon no longer be possible to use a traditional hard drive to move data between cloud providers. Customers need to be able to move between cloud providers as easily and simply as possible, potentially at the click of a button. For that to happen services need to be interoperable so that data sets can flow between cloud providers. Cloud applications and platforms need to work seamlessly together and integrate easily with existing cloud and legal IT systems. In 2011 the World Economic Forum highlighted the importance of making data portability quicker, easier and cheaper and facilitating interoperability to accelerating cloud adoption and the development of a competitive cloud market.² However, the standards needed for infrastructures and applications to move between cloud providers are only in the early stages of development and implementation. The Open Group³ has identified areas where data, application and platform portability and interoperability standards and industry good practice guides are needed if cloud interoperability is to be achieved. With the European Commission expected to explore interoperability issues as part of the European Digital Single Market strategy, now is the time for the cloud computing market to consider what needs to happen, and perhaps what needs to change, to finally realise data portability and system interoperability within the cloud computing ecosystem. Recommendation techuk will work with members to develop a set of cloud interoperability principles that can provide a strong coherent UK voice to European and international discussions on the approach needed to balance industry led work on interoperability and portability with innovation and competition. The European Commission should work closely with cloud computing providers step by step through the process to ensure any necessary policy proposals are identified and based upon a thorough and complete understanding of the technical, commercial and legal practicalities of how different cloud solutions work together. techuk Cloud 2020 Vision Keeping the UK at the forefront of cloud adoption 3

Building trust in the security of cloud computing services The cost savings and operational efficiencies offered by the cloud are very clear. Unfortunately, too often customers hold back from harnessing these benefits due to concerns about the security of cloud computing services. In the UK 61% of SMEs say they are worried that data might get lost, stolen or damaged in the cloud⁴. However, the reality is that cloud services actually offer much greater levels of security and resilience. Security is a core competence of every reputable cloud business. As soon as a customer starts to make use of a cloud service they benefit from the investment made by cloud providers in state-of-the-art security network defences that are updated automatically in response to changes in the online threat environment. This means that busy customers, whether they are consumers or businesses, no longer have to manually download security updates, install patches or run back-ups to ensure their data remains secure. However, despite many years of awareness raising efforts to highlight these security benefits and increase cloud confidence concerns continue to prevail, holding back cloud adoption, innovation, competitiveness and economic growth. Looking at the security concerns being raised by cloud users today it seems to suggest that security concerns are evolving as the cloud computing market continues to develop and mature. The Cloud Security Alliance s latest list of cloud security threats⁵ include long standing concerns such as the risk of data breaches, data loss and denial of service attack. But there are also additional security concerns being raised including the weakness of APIs, the risk of cloud account hijacking, the impact of advanced persistent threats and the implication of insufficient access management to cloud services. A recent survey of industry leaders⁶ also highlighted concerns over the increased exposure to security vulnerabilities from using a shared computing infrastructure and the lack of control over data location. Given the importance of cloud computing to the UK s digital future, and the need to persuade cloud users of the security benefits provided by the cloud, it is vital that the cloud security messages and advice being delivered today are relevant to how cloud services have evolved and address the concerns being raised by cloud users. Recommendations We need to bring together business leaders, cloud computing and cyber security experts along with government officials from BIS, DCMS, Home Office and other key stakeholders to update the cloud security messaging being used today. techuk will look to hold an event to identify possible future trust and security concerns, and misconceptions, that may arise from the evolution of cloud services and explore possible solutions to build greater long term trust and confidence in the cloud. 4 techuk Cloud 2020 Vision Keeping the UK at the forefront of cloud adoption

Embracing the change required to optimise the use of cloud An organisation s decision to move to the cloud will mean organisational change. The move away from internally built and serviced IT to computing delivered as a service will automate core IT functions, displacing and changing many traditional IT roles. Questions may be raised by employees particularly IT professionals about how a move to the cloud will change roles and responsibilities. Others may be anxious about how the cloud will impact the way they work. This level of change will for many be a significant step change and cultural shift in how IT services are consumed. If not properly managed organisations could struggle to fully optimise the full potential of cloud. But by understanding how cloud services can enable employees to be more mobile and agile this cultural shift can be overcome. Embracing new working practices that are seen as positive by employees, such as home working and providing tools that can fire their imagination and creativity, can create a cloud enabled workforce that will be vital for the UK s digital future. However, to achieve this a different perspective is needed on what the move to the cloud will mean particularly for IT staff. How the cloud presents opportunities for staff providing business support functions to become digital leaders and enablers of organisational change. IT professionals can be released to become developers of innovative, creative and revenue generating digital products and services. By raising greater awareness of the opportunities the cloud offers employees can become important advocates of cloud that can support the business through the process of change. Recommendations techuk s Cloud Champions campaign will be launched in summer 2016 to showcase employees that have played a key role in supporting organisation s move to the cloud and are using cloud services to drive the development of innovative and creative digital products and service, demonstrating how people can develop their skills and potential in cloud based data driven organisations. techuk Cloud 2020 Vision Keeping the UK at the forefront of cloud adoption 5

Building a coherent regulatory framework for cloud Cloud services are provided within a complex legal and regulatory framework that is not always consistent or coherent and often creates additional uncertainty, risk and cost for companies that operate within the cloud ecosystem. The global nature of many cloud businesses presents additional complications as questions of jurisdiction and conflicts of law frequently emerge. Such legal complexity and fragmentation rarely works in support of innovation, investment and the adoption of new services. A number of recent events have served to increase concern about regulatory fragmentation and policy incoherence. The ruling of the European Court of Justice on the Schrems case⁷ which ended Safe Harbour arrangements with the United States created huge uncertainty and additional legal costs for businesses. It is still unclear how the new EU-US Privacy Shield⁸, will prove a robust mechanism to support lawful trans-atlantic data transfer. The new EU General Data Protection Regulation (GDPR)⁹ will introduce joint liability between data controllers and processors which will have significant operational and cost implications for cloud service providers. Data Protection Authorities across the EU are increasingly making diverse interpretations of existing data protection laws. Meanwhile, the proposed new Investigatory Powers Bill¹⁰ will introduce significant new obligations on many cloud services providers as the scope of the bill is widened. Uncertainty over the use of strong encryption could also undermine the security of, and trust in, cloud services. All too often businesses offering cloud services see policy and regulations being developed with insufficient understanding of the implications for the companies seeking to build the cloud infrastructure and services that will be so important to the wider economy s productivity growth. Crucial to this is that regulators and policy makers need to recognise and understand the differences between infrastructure, platform and software services and why a one size fits all approach cannot be applied to these different service models A regulatory framework and environment is needed that recognises cloud s importance to the UK s digital future and supports innovation and competition in the market by ensuring clear, consistent regulation that supports a dynamic competitive and innovative market. At European level the Free Flow of Data Initiative being developed by the European Commission as a key component of its Digital Single Market package could be very helpful in setting out a coherent and consistent approach across Europe to key issues such as data localisation, data sovereignty, data portability, switching and liability concerns. However, success will depend upon the willingness and openness of policy makers to engage with the industry and harness its expertise in order to get the detail right. Recommendations In the UK, the government s planned Digital Strategy should recognise the importance of cloud computing to the UK s digital future and commit to providing an enabling policy environment that supports a dynamic competitive and innovative market. Key to this is understanding the differences between infrastructure, software and platform service models and the implications of diverse regulatory initiatives. The European Commission s Free Flow of Data Initiative should take steps to create a clear and simple regulatory framework and prevent the emergence of specific data localisation requirements and obligations by individual EU Member States to ensure data can flow freely. 6 techuk Cloud 2020 Vision Keeping the UK at the forefront of cloud adoption

Ensuring effective public sector adoption and usage of cloud The UK Government has recognised and shown commitment to adopting cloud computing. Seeing cloud as key to delivering its ambition for end-to-end digital transformation. Crucial to this has been the G-Cloud framework¹¹, which originated as a joint Government and industry initiative, that now has over two thousand suppliers and over a billion pounds worth of spend. However, the public sector market as a whole is estimated to be worth between 14 and 16 billion and Government departments are not yet fully utilising the benefits of cloud computing. To reap the full benefits of cloud computing, Government must incentivise a culture which delivers change and supports continuous innovation. A techuk survey showed over one-third of Civil Servants involved in procurement of tech felt their department s capabilities in change leadership, innovative thinking and digital capability are unsatisfactory or poor.¹² Public sector leaders must enable a culture which allows the public sector commissioners and buyers to leverage cloud computing as part of its business transformation to enable user-centered service design that focuses on innovation. The benefits of cloud computing have been proved and tested in the private sector. Delivering huge efficiencies and cost savings. To move the UK Government into the next phase, and fully benefit from the opportunities provided by the cloud, Government departments and industry must work together to promote positive case studies of where cloud computing is delivering significant business transformation. Recommendations Government departments should engage with industry early in the commissioning process to better understand and maximise the full opportunities from cloud computing services. techuk has published a three point plan¹³ which provides a framework for effective engagement with Government and industry. Government departments and industry should work together to promote positive case studies of where the use of cloud computing is delivering significant business transformation. Public sector leaders should enable a culture which allows the public sector commissioners and buyers to leverage cloud computing as part of its business transformation to enable user-centered service design that focuses on innovation. techuk Cloud 2020 Vision Keeping the UK at the forefront of cloud adoption 7

Having a communications infrastructure that keeps pace with mass cloud adoption The cloud is fast becoming our primary means to store, process and manage the vast volumes of realtime data created through digital interactions. The ability to access and retrieve data held in the cloud on demand from anywhere regardless of the location is only possible by having a communications infrastructure that provides ubiquitous connectivity. The good news is that the UK starts from a position of strength. With 30 Mbps broadband available to 83% of homes, the UK has the highest superfast coverage in Europe. The UK has also benefited from the fastest roll out of 4G mobile broadband networks in Europe with 89.5% coverage to UK homes.¹⁴ The UK communications market is one of the most competitive in Europe. At the fixed infrastructure level there is competition covering around 50% of premises with further competition over access and retail levels. But this does not mean that the job is done given that 55% of UK SMEs are already concerned about not being able to access cloud services when and where they need them¹⁵. If users are unable to access cloud services, as and when needed, this could hold back organisations and consumers willingness to adopt and use cloud. Where there are gaps in connectivity these must be addressed urgently to avoid the emergence of a new digital divide where metropolitan areas become hubs of cloud adoption while rural areas are left without the connectivity needed to access cloud services. Having in place a reliable high speed, low latency and ubiquitous fixed and mobile communications infrastructure is therefore essential to realising mass adoption and take up of cloud computing services. Government and industry must remain focused on pushing out superfast coverage to as near 100% of homes and businesses as possible. This requires a policy framework that maximises incentives to invest in the infrastructure, regulatory structures that reduce the associated business costs and burdens and an industrial environment that generates innovative technologies and business models. Looking forward, engagement is needed between Government, industry, regulators, and cloud service providers to identify the connectivity requirements needed to support mass cloud adoption today but also the future connectivity and bandwidth requirements that will be driven by the continued evolution and adoption of cloud by 2020 and beyond. Recommendations Following the publication of Ofcom s Strategic Review of Digital Communications, Making communications work for everyone ¹⁶ techuk will seek to engage with OFCOM to enter into a dialogue with the cloud computing industry to discuss the connectivity requirements needed to support and enable mass cloud adoption across the UK and how to create a communications infrastructure is fit for 2020 and beyond. 8 techuk Cloud 2020 Vision Keeping the UK at the forefront of cloud adoption

Conclusion techuk will work with members to develop a set of cloud interoperability principles that can provide a strong coherent UK voice to European and international discussions on the approach needed to balance industry led work on interoperability and portability with innovation and competition. The European Commission should work closely with cloud computing providers step by step through the process to ensure any necessary policy proposals are identified and based upon a thorough and complete understanding of the technical, commercial and legal practicalities of how different cloud solutions work together. We need to bring together business leaders, cloud computing and cyber security experts along with government officials from BIS, DCMS, Home Office and other key stakeholders to update the cloud security messaging being used today. techuk will look to hold an event to identify possible future trust and security concerns, and misconceptions, that may arise from the evolution of cloud services and explore possible solutions to build greater long term trust and confidence in the cloud. techuk s Cloud Champions campaign will be launched in summer 2016 to showcase employees that have played a key role in supporting organisation s move to the cloud and are using cloud services to drive the development of innovative and creative digital products and service, demonstrating how people can develop their skills and potential in cloud based data driven organisations. In the UK, the government s planned Digital Strategy should recognise the importance of cloud computing to the UK s digital future and commit to providing an enabling policy environment that supports a dynamic competitive and innovative market. Key to this is understanding the differences between infrastructure, software and platform service models and the implications of diverse regulatory initiatives. The European Commission s Free Flow of Data Initiative should take steps to create a clear and simple regulatory framework and prevent the emergence of specific data localisation requirements and obligations by individual EU Member States to ensure data can flow freely. Government departments should engage with industry early in the commissioning process to better understand and maximise the full opportunities from cloud computing services. techuk has published a three point plan which provides a framework for effective engagement with Government and industry. Government departments and industry should work together to promote positive case studies of where the use of cloud computing is delivering significant business transformation. Public sector leaders should enable a culture which allows the public sector commissioners and buyers to leverage cloud computing as part of its business transformation to enable user-centered service design that focuses on innovation. Following the publication of Ofcom s Strategic Review of Digital Communications, Making communications work for everyone techuk will seek to engage with OFCOM to enter into a dialogue with the cloud computing industry to discuss the connectivity requirements needed to support and enable mass cloud adoption across the UK and how to create a communications infrastructure is fit for 2020 and beyond. techuk Cloud 2020 Vision Keeping the UK at the forefront of cloud adoption 9

References 1 EU SMART 2013 report on Uptake of Cloud in Europe: https://ec.europa.eu/digital-single-market/en/ news/final-report-study-smart-20130043-uptake-cloud-europe 2 Advancing Cloud Computing: What to Do Now? World Economic Forum In partnership with Accenture http://www3.weforum.org/docs/wef_it_advancedcloudcomputing_report_2011.pdf 3 Cloud Computing Portability and Interoperability: http://www.opengroup.org/cloud/cloud/cloud_iop/ cloud_port.htm 4 Federation of Small Businesses (FSB) Cloud Computing Survey 2015 http://www.fsb.org.uk/mediacentre/press-releases/security-fears-stop-firms-using-cloud-computing-services-says-fsb-pr-2015-05 5 Cloud Security Alliance - The Treacherous Twelve: Cloud Computing Top Threats in 2016 https:// cloudsecurityalliance.org/group/top-threats/ 6 http://www.informationweek.com/strategic-cio/security-and-risk-strategy/security-concerns-continueamid-cloud-adoption/d/d-id/1324413 7 http://www.techuk.org/insights/news/item/5938-techuk-comments-on-cjeu-ruling-on-safe-harbour 8 http://www.techuk.org/insights/news/item/7363-techuk-comments-on-new-eu-us-privacy-sheild 9 http://www.techuk.org/insights/news/item/6830-techuk-responds-to-agreement-on-new-eu-dataprotection-rules 10 http://www.techuk.org/images/detailed_reponse_to_investigatory_powers_bill.pdf 11 G Cloud Framework allows public sector organisations to buy cloud services listed on the Digital Marketplace without going through a full tender process. 12 techuk s Civil Servants Survey Findings, May 2015: http://www.techuk.org/insights/news/item/4430- civil-servants-uncertainty-over-sme-suppliers-risks-delaying-it-adoption 13 techuk s Three Point Plan for Transforming Public Services, October 2014: http://www.techuk.org/ insights/news/item/2266-techuk-3-point-plan-to-transform-delivery-of-public-services 14 Outdoor coverage (May 2015) from at least one mobile network representing a 17.7 % increase over 12 months 15 Federation of Small Businesses (FSB) Cloud Computing Survey 2015 http://www.fsb.org.uk/mediacentre/press-releases/security-fears-stop-firms-using-cloud-computing-services-says-fsb-pr-2015-05 16 OFCOM Strategic Review of Digital Communications, Making communications work for everyone : http://stakeholders.ofcom.org.uk/telecoms/policy/digital-comms-review/dcr-feb-16/ 10 techuk Cloud 2020 Vision Keeping the UK at the forefront of cloud adoption

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techuk represents the companies and technologies that are defining today the world that we will live in tomorrow. More than 900 companies are members of techuk. Collectively they employ more than 800,000 people, over half of all tech sector jobs in the UK. These companies range from leading FTSE 100 companies to new innovative start-ups. The majority of our members are small and medium sized businesses. techuk.org @techuk #techuk techuk 10 St Bride Street, London EC4A 4AD T 020 7331 2000 E communications@techuk.org techuk March 2016 The information in this paper is for use and dissemination on the condition that techuk is referenced accordingly.