New Zealand government urged to look offshore for cloud services

Profile picture for user slauchlan By Stuart Lauchlan June 4, 2014
Summary:
While those of us outside of the US are being encouraged to be as nationalistic as possible when selecting our cloud services providers, an interesting reversal down under in New Zealand where the government is being urged to look overseas for its providers.

At a time when post-PRISM those of us outside of the US are being encouraged to be as nationalistic as possible when selecting our cloud services providers, an interesting reversal down under in New Zealand where the government is being urged to look overseas for its providers.

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That’s not to say that the New Zealand Productivity Commission, which has made the call as part of a wider series of recommendations, is seeking to undermine indigenous providers. Rather it argues that there aren’t enough of them to ramp up cloud adoption levels fast enough.

In its report on the New Zealand services industry, the Commission argues:

By favouring domestic cloud services, which are significantly more expensive than similar overseas services, the government has missed opportunities for cost savings and technology demonstrations.

The government should address any data sovereignty, security and privacy risks associated with offshore cloud computing through international negotiations, with Australia in the first instance.

To create a level playing field when data is hosted on servers around the globe, the government should pursue "free-trade-in-data agreements" with other countries to ensure that the rights and responsibilities of data owners do not vary with the physical location of their data:

Cloud computing…undermines assumptions about who owns data, and about the location of its production, transport routes, storage and consumption.

In particular, cloud computing has made questions about data location harder to answer. In a real sense, data in the cloud is stored “everywhere and nowhere”. Flexibility over where data is stored and processed allows cloud computing service providers to be more efficient, and ultimately to provide services at lower prices for their customers.

The Government should pursue free-trade-in-data agreements with other countries. A reasonable aim of such agreements should be that the rights and responsibilities of data owners do not vary with the physical location of their data. Bilateral negotiations with Australia could be resolved quickly, so should be pursued as a first step. Resolving such issues will help New Zealand firms adopt cloud computing.

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Looking beyond the Shire

For those of us who’ve spent months looking on in despair at the increasingly naked protectionism of some outgoing officials at the European Commission, dropping heavy hints to European customers not to use US providers on security grounds, the NZPC recommendations come as a breath of pragmatic fresh air.

That said, the Commission does take New Zealand’s government cloud program to task on the basis that it is too risk averse and as such gives out poor messages to private overseas firms who, for example, may find the cost of complying with the country’s data transfer restrictions prohibitive compared to the potential size of market opportunity for a small nation. It warns:

Government advice to its agencies on cloud computing is unduly risk-focused. The Government should review how well it is communicating its cloud computing policies and guidance, and seek to provide balanced advice and constructive support to its agencies.

The Government should assess how it can support and facilitate a balanced approach to adoption. Legal or privacy issues associated with cloud computing should be dealt with through international negotiations. Resolving such issues will help New Zealand firms make more productive use of cloud computing services.

All that said, New Zealand’s progress in cloud computing has been impressive, as recognized in the  Asia Cloud Computing Associations (ACCA) Cloud Readiness Index 2014 where it it now ranked second only to Japan in the region.

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The Index report notes that government policy towards the cloud and cloud adoption has a strong influence on the overall national take-up. It states:

Leading countries all share the ability to arrive at a coherent “cloud first” strategy in both government and business development, to manage the new dimensional demands of data and cloud.

Having a cohesive all-of-government approach towards gCloud and other public sector cloud initiatives, supporting computerization efforts of small and medium businesses, ensuring the political will behind broadband rollout continues unabated – these are some examples of how an integrated approach towards cloud computing issues can raise local capacities for the future.

Verdict

Sound advice from the New Zealand Productivity Commission.