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Clouds condensing on government ICT policy radar

Steve Hodgkinson | Aug. 4, 2009
Cloud computing paints a vision of a seamless, free market, global computing services nirvana but what does this mean for the vitality of an individual countrys ICT industry?

Cloud computing paints a vision of a seamless, free market, global computing services nirvana but what does this mean for the vitality of an individual countrys ICT industry? Policymakers need to pay attention and consider the risks of their country missing out on the magical cloud merry-go-round.

Cloud computing may lead to invisible offshoring

Ovum logoAfter recent discussions with a range of public sector ICT policy executives across the Asia-Pacific region, it is apparent that cloud computing is on their radar and that it is viewed by many as more of a threat than an opportunity. What does it mean that the major, and many of the minor, cloud players are all based in North America? Amazon, Cisco, Google, HP, IBM, Microsoft, Netsuite, Oracle, Salesforce, Sun, Zoho etc.

In the past, governments have benefited symbiotically from the growth of the global ICT companies, driving e-government innovations and establishing vibrant domestic ICT industries of channel and services partners. However, cloud computing creates the potential for more complete encapsulation and offshoring of ICT software, platforms and infrastructure than has previously been possible. This could encourage an unprecedented vortex of ICT services into North American-based global cloud providers.

Cloud computing must become part of each countrys ICT industry policy

Cloud computing is a scale game big is better, and first movers become biggest first. Scale is required to provide the cloud value proposition of ubiquitous access, seamless elastic capacity, competitive pricing and continuous investment in service quality, functionality and security.

The cloud is also a build it and they will come gamble similar to a motorway. You need to have built excess capacity in the infrastructure up front to offer scalable and pay-as-you-go cloud services. The capacity to fund this up-front investment is a prerequisite for cloud leadership.

This is a challenging policy conundrum for governments. Leave it to the free market and perhaps watch local-market ICT jobs get sucked offshore into a global cloud, or take some proactive policy action? It wont be possible to close the borders or put import tariffs on the cloud, so what should governments do?

National clouds may be a necessary self-defence

ICT policy executives should be considering the risks, and the opportunities, that cloud computing presents to their countrys ICT industry. Cloud computing may lead to undesirable offshoring of data as well as jobs. The fact that the cloud is global while legal systems are national creates unavoidable data security and privacy tensions.

The creation of national cloud computing entities can address both of these issues. National clouds will provide onshore opportunities for the local ICT industry and promote the trustworthiness of cloud computing by enabling data to stay within governance arrangements that are compliant with national legislation. However, who in a small or medium-sized country can compete with the likes of Amazon, Google, IBM or Microsoft to establish nationally-based cloud computing entities?

 

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