Europe fights America to protect cloud technology

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European Governments, determined not to lose another technology battle to the US, are giving domestic companies a leg-up in the cloud.

France set up a venture in November with companies including France Telecom SA and Thales SA to offer on-demand rental of hardware, software and applications that are "made in France".

The German Government is working on stricter data-protection rules that would include as a criterion the location of servers that host often confidential and sensitive user data.

State intervention has picked up since Microsoft said last June that, as an American company, it must hand data to US authorities under the Patriot Act if asked, even if its files are stored in Europe.

At stake is a market valued at $47 billion in western Europe alone by 2015, says technology research firm Gartner. France Telecom, Deutsche Telekom AG and Atos Origin are bidding against US suppliers Hewlett-Packard and International Business Machines (IBM).

"It's the beginning of a fight between two giants," said Jean-Francois Audenard, France Telecom's cloud-security adviser. "It's extremely important to have the Governments of Europe take care of this issue because if all the data of enterprises were going to be under the control of the US, it's not really good for the future of the European people."

Europe's technology companies have fallen behind Google, Facebook and Apple in internet search, social-media and consumer electronics. Henning Kagermann, a former chief executive officer of Walldorf, Germany-based SAP AG (SAP), the largest maker of management-business software, said Europe needed to avoid the same fate in cloud computing.

"I can't imagine that Europe can afford to leave this field to the US," Kagermann, now president of Germany's National Academy of Science and Engineering, said in an interview in Berlin yesterday. "This year will show whether we're serious about this."

SAP, its arch rival Oracle, and companies such as IBM, Hewlett-Packard, Salesforce.com, Amazon and Microsoft are promoting cloud computing as a secure way to outsource services and reduce the need for pricey servers.

In Europe, Deutsche Telekom's T-Systems unit and France Telecom are wooing clients with the vow to protect data from the US Government.

The European Commission will this month present tighter data-protection rules to shield individuals from data loss on the web while at the same time create a "level playing field for companies" by smoothing out differences across European countries. EU Justice Commissioner Viviane Reding said last month that the reforms should inspire the US to also strengthen its privacy regime.

THE BIG GUNS

* SAP, Oracle and companies such as IBM, Hewlett-Packard, Salesforce.com, Amazon and Microsoft are promoting cloud computing as a secure way to outsource services and reduce the need for pricey servers.

* In Europe, Deutsche Telekom's T-Systems unit and France Telecom are wooing clients with the vow to protect data from the US Government.

- Bloomberg