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16 Jun 2022

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European CIO associations sound the alarm over the cloud market

CIO associations and several business networks in Europe advocate for a more balanced cloud market. They have developed a number of 'fair principles' (in French) for the relationship between business users and their cloud service providers. These fair principles have been forwarded to national and European legislators.

Some of the organisations sounding the alarm are CIO associations in Germany, Belgium, and the Netherlands, and Cigref, a large network of public and private companies in France.

According to associations, companies, hospitals, public institutions, and universities rely heavily on their cloud environments. Anyone who attempts to improve their platform encounters an imbalance with their cloud providers. The associations speak of 'unfair practices'. New European regulations should help improve the situation.

“One of the most important promises of the cloud is transparency and simplicity. Budgeting would be easy. The reality, however, is very different", writes Bernard Duverneuil of Cigref, a French network for companies.

Vendor lock-in

The associations state that software is strongly intertwined with business processes. “There is a vendor lock-in: it is so complex and expensive to switch to another provider that organizations are often locked into their supplier. Business users have no bargaining power vis-à-vis the major software vendors. Cloud providers can unilaterally change subscription prices and the metrics on which the prices are based.” The dominant position applies not only to large software and cloud providers, but also to niche players.

Reduced competition

Additionally, software vendors copy solutions from smaller competitors and integrate them into their products. According to the European organizations, this would reduce competition and increase customer dependence.

In response, the European associations have outlined 11 principles for bringing the cloud market back into balance. In order for cloud suppliers to comply with existing regulatory obligations, they must stop creating technical or commercial lock-ins. Customers must retain control over their own data at all times.

Contract conditions

There should also be more clarity about contract conditions, which cannot be changed unilaterally. Also, contractual terms should not restrict the choice of cloud providers, outsourcing partners, or hardware platforms for the customer.

Photo credit: Martin Adams

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