Competition in the Cloud: Unleashing Investment and Innovation Within and Across Platforms

Innovation in the cloud is challenging Europe's telecoms industry and its regulatory system. The shift from 'desktop to data centre' and the provision of computing in the form of a service means that cloud offerings are increasingly dependent on the quality of the underlying communications infrastructure. Critical parts of the infrastructure are regulated, and the role that regulation plays may limit services innovation and in turn may mean that communications infrastructure could become the 'weakest link' in a cloud offering. This article presents an argument that draws on law, economics, and business platforms strategy to expose the incentives and impediments to innovation in cloud computing. It assesses how European policy goals, the Lisbon Treaty and regulatory action interact, and proposes a change in the EU regulatory regime to reflect a duty to promote innovation as a stated goal. This change would encourage new business models to emerge, allowing the incumbent EU telecom network providers the opportunity to contribute to innovation in the cloud. Such innovation would help spur investment and wider competition across platforms which would help realise Europe's objective to drive growth and competitiveness.