Public Cloud for Private Data: When it Does Not Work and How to Fix it

Public cloud storage spending is accelerating in the U.S. and Asia, but European businesses still hesitate moving their data in the global providers’ clouds because of data protection regulations. Software-defined storage technology can help European IT companies put their customers’ data into smaller local clouds while delivering the cost efficiency and reliability available only to global players.

Gartner estimates that the public cloud services market will grow above $130 billion by 2017. That is huge growth, and everyone knows it. But when it comes to such numbers it’s not the bulk amount or growth rate that really deserves attention. Instead, let’s take a look at the underlying patterns. Gartner provides some insightful and intriguing numbers for the curious. We’ll pick up what make sense for the data storage and data protection industry.

Gartner points out a huge difference between spending in North America and Europe (59 percent vs. 24 percent) – with market dynamics varying substantially across regions. And according to another analysis, Europe will drag at 0.8 percent growth rate while the U.S. will flourish with above 7 percent YOY growth in IT spend in 2013.

Since cloud is one of the major drivers of growth, does it mean that Europe is failing to jump on the cloud bandwagon in order to revitalize its IT market? It could be so.

Those who are familiar with the complexities of European data protection legislation know that little has been done so far to prevent it from slowing down adoption of cloud technologies, in particular in the area of private data storage that has to be controllable, deletable, auditable and subject to versatile local requirements in many of EU’s member countries. Though European Commission has some work in progress to remove obstacles, it’s clearly in the hands of the IT community to lead the way to a faster resolution. But public cloud is an economy of scale and you need to be at least a U.S.-sized business to compete with the likes of Google and Amazon on scalability and pricing. Clearly, Europeans need not only a quick fix, but a strategic secret weapon. What can it be? Look for a big game changer.

When deployed in the datacenter, cloud storage cost of servers, cooling and power can attribute to 80 percent of the overall expenses. A storage solution that reduces server cost and energy consumption, while at the same time provides smooth scalability from terabytes to petabytes would make a difference. Such a disruptive innovation made its appearance in the market not long ago in the form of software-defined storage – a software implementation of the new generation of scale-out storage architecture. It runs on even the most inexpensive commodity hardware due to built-in features that provide better-than-RAID reliability and high availability on the petabyte scale. Scaling down is also provided by use of commodity hardware. So if the recession continues, you can at least repurpose the servers, saving your initial investment (which will not be high anyway, since you can start with just a few servers).

Equipped with this approach, one can build a cost-efficient cloud storage business within the boundaries of a country as small as Monaco. And scale it to cover all of Europe, when hopefully, legislation barriers are removed entirely - but in that case you would be better off operating cloud storage from Finland so that you could also save on cooling . In any case, the reality is: software-defined storage technology now eliminates the cost barrier of entry and allows you to stay in compliance with regulations.

A call for European cloud service providers:  Consider the astonishing 47.3 percent growth in 2013 alone for public cloud IaaS including cloud storage. With software-defined storage for cloud you can leverage the momentum and build small, inexpensive local datacenters in compliance with today’s legal requirements, yet take tremendous advantage of scale, available only to amazons of the world.

Are you ready to help European businesses embrace cloud? Share now!