The good news: legal and regulatory impediments to the adoption of cloud computing are easing around the world, according to the 2013 Business Software Alliance (BSA) Global Cloud Computing Scorecard. Unfortunately, progress in this all-important area is proceeding at a slow and sporadic pace that still undermines the full economic potential of cloud technologies.
In fact, the BSA study found that many of the largest IT markets have stalled or slid backwards while other smaller markets are embracing laws and regulations conducive to cloud innovation. There also seems to be a disconnect between some countries’ pro-cloud policies and laws and regulations that inhibit cross-border data flows or skew international competition.
“We’re seeing patchy progress in the policy landscape for cloud computing,” said Robert Holleyman, BSA President and CEO. “Mismatched privacy and security rules are making it hard for data to flow across borders. Too many countries are chopping off pieces of the cloud for themselves. This undercuts economies of scale that can benefit everyone. To have a cohesive global marketplace, we need more bridges and fewer barriers.”
The study evaluates countries in seven policy areas critical to the market for cloud computing services: data privacy, cyber security, cyber-crime, intellectual property, technology interoperability and legal harmonization, free trade, and ICT infrastructure.
Highlights of the study include the following country-by-country trends:
- Japan continues to lead the global rankings with a comprehensive suite of laws supporting digital commerce.
- Australia remains in second place, and the US has edged into third, pushing Germany down to fourth.
- Singapore moved from tenth place to fifth place in the rankings by adopting a new privacy law that builds user trust while also promoting business innovation.
- Cloud initiatives in the largest IT markets have stalled, particularly all six European Union countries, which have lost ground in the rankings.
- Korea, Indonesia and Vietnam have especially counterproductive cloud policies that have effectively cut themselves off from the global market.
- Singapore has moved up the rankings with a new privacy law that recognizes the people’s right to protect their personal information and companies’ need to use data for reasonable purposes.
- Malaysia crossed the divide between mature and developing economies by bolstering cyber-crime and IP laws and opening itself for increased digital trade.
- Canada, Russia, and India all moved up the rankings by implementing international IP agreements.
- Europe has stalled due to the ongoing debates over privacy laws.
- Indonesia and Vietnam are tying up foreign cloud providers in red tape, imposing data-location requirements, and restricting the flow of data across borders.
“In the global economy, companies should be able to do business wherever they find a market, and customers should have access to the best the world has to offer,” said Holleyman. “Everyone’s policies affect the global cloud marketplace. We don’t need identical laws across every country, but they all should promote good data stewardship while enabling business innovation in a fast-moving marketplace.”
BSA proposes a seven-point policy blueprint for governments around the world to create an environment conducive to cloud growth and innovation:
- Ensure privacy. Users must have faith their information will be treated carefully, and providers must have freedom to move data efficiently in the cloud.
- Promote security. Effective risk management requires flexibility to implement cutting-edge security solutions.
- Battle cyber-crime. Law enforcement and cloud providers alike need effective legal mechanisms to combat illicit access to data.
- Protect Intellectual Property (IP). Laws should provide clear protection and enforcement against infringement of underlying cloud innovations.
- Ensure data portability and harmonization with global rules. Governments should work with industry to develop standards that facilitate data flows while minimizing conflicting legal obligations.
- Promote free trade. Eliminate barriers such as preferences for particular products or service providers.
- Bolster IT infrastructure. Provide incentives for investment in broadband and promote universal access.
CLO Inside Track: BSA’s study paints a clear picture of the disconnect that often is found between strategic technology objectives and the laws and regulatory framework needed to help those objectives not only flourish, but deliver on the broader promises of efficiency, lower-costs and greater functionality. One simple reason for this is that the people who best understand the real-world benefits of the cloud are seldom the same people charged with upholding compliance, privacy or security policies. Reaching out to policy makers early and often can help shape policies so that they address legitimate concerns, while not stifling cloud innovation and adoption.
The full study is available from BSA. (For additional information contact: BSA The Software Alliance, 202-872-5500, www.bsa.org; http://www.prnewswire.com/news-releases/progress-on-cloud-computing-policy-is-hit-and-miss-around-the-world-bsa-study-finds-195795471.html.)
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