When it comes to investment, North America and Asia are leading the global cloud computing market, according to new industry research, putting European telecom operators at risk for lagging behind.

New research from Informa’s Telecom Cloud Monitor revealed that European operators accounted for only 7 percent of the $13.5 billion that operators invested in cloud assets in 2011. North American and Asian operators accounted for 90 percent, or $12 billion.

IT analysts say that European operators are being “outgunned” in cloud infrastructure.

“Although they are working to stimulate local demand, their investment strategy remains cautious,” said Camille Mendler, principal analyst at Informa Telecoms & Media (News - Alert).

Uncertainty around European security and privacy laws, coupled with continuing economic weakness, are gating cloud investment, Mendler explained. The European Commission aims to define a common legal framework for cloud computing in 2012.

EU Justice Commissioner Viviane Reding said in November that the reforms should inspire the U.S. to also strengthen its privacy regime, TMCnet reported.

Reding said that social networks must become more open about how they operate. According to Reding’s proposals, businesses, including Internet service providers, would have additional responsibilities, including having to inform users of what data about them are being collected, for what purpose and how data are stored.

“All social network service providers active in the EU must fully comply with EU data protection laws,” Reding said. “Companies have a specific responsibility when personal data is their main economic asset.”

Europe’s technology companies have fallen behind Google (News - Alert), Facebook and Apple in Internet searches, social media and consumer electronics, according to Bloomberg. However, European governments are stepping up to diffuse the situation.

“France set up a venture in November with companies including France Telecom (News - Alert) and Thales SA to offer on-demand rental of hardware, software and applications that are made in France,” Bloomberg reported. “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.”

Nevertheless, Informa analysts said that European operators are supporting local innovation: Half of the cloud services they launched in 2011 relied on European cloud technology vendors.

In 2011, the top five telecom cloud investors were AT&T, Centurylink, NTT, Telstra, Verizon and Windstream, according to Informa. The leading European operators investing in the cloud were Deutsche Telekom (News - Alert), Orange, Portugal Telecom and Telefonica.

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