The advent of Cloud computing as the new underlying global infrastructure of computing presents distinctive new opportunities and challenges for Europe. Cloud computing is transforming computing resources from a scarce to an abundant resource, driving a wave of commoditization in previously high-end software and hardware. For Europe to gain independence from US-based global scale Cloud providers, our view is that it needs to move towards a distributed model of computing with federated governance. Distributed Cloud means the distribution of computation close to the geographic location of the data and the users, as opposed to the centralized model of today. Our research and innovation strategy recommendations reflect this view.