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February 27, 2012

US Ranks Fourth in Global Study of Cloud-Friendliness

Tiffany Trader

A first-of-its-kind report from the Business Software Alliance warns that “a patchwork of conflicting laws and regulations threatens to undercut the full promise of the global cloud computing market.” The study, which was made public last week, ranks 24 countries, which together make up 80 percent of the global IT market. The takeaway: governments need to enact wise policy decisions to ensure a smooth flow of data across borders.

The 24 nations are ranked for cloud-readiness according to seven policy categories: data privacy, security, cybercrime, intellectual property rights, support for industry-led standards, free trade and IT infrastructure.

The resulting scorecard issues assigns a numeric value for cloud readiness. Japan topped the list, owing to “privacy protections that don’t inhibit commerce, a full range of criminal and IP protections, and robust IT infrastructure.” The next four, in order, are Australia, Germany, the United States, and France. The five countries with the lowest rankings (lowest first) are Brazil, Vietnam, Thailand, China and Indonesia.

Notably, the research found a sharp divide in cloud readiness between advanced and developing economies. Countries with the most stable infrastructure, such as Japan, the United States, and the EU, are able to support strong cloud computing growth, while developing nations, such as China, India, and Brazil, were cited as having the most work to do to reach parity on the global cloud market. The US, which came in fourth place, was praised for its standard-setting work, especially the role of the National Institute for Standards and Technology in creating a widely-accepted definition of cloud computing.

In a formal statement, BSA President and CEO Robert Holleyman noted, “The true benefits of cloud computing come with scale. In a global economy, you should be able to get the technology you need for personal or business use from cloud providers located anywhere in the world. But that requires laws and regulations that let data flow easily across borders. Right now, too many countries have too many different rules standing in the way of the kind of trade in digital services we really need.”

The BSA has outlined a seven-point policy blueprint based on the seven categories used in the ranking process:

  1. Protect users’ privacy while enabling the free flow of data and commerce.
  2. Promote cutting-edge cybersecurity practices without requiring the use of specific technologies.
  3. Battle cybercrime with meaningful deterrence and clear causes of action against criminals.
  4. Provide robust protection and vigorous enforcement against misappropriation and infringement of cloud technologies.
  5. Encourage openness and interoperability between cloud providers and solutions.
  6. Promote free trade by lowering barriers and eliminating preferences for particular products or companies.
  7. Provide incentives for the private sector to invest in broadband infrastructure, and promote universal access to it among citizens.

According to the report, “the full benefits of a global cloud computing environment require a broad network of effective laws and regulations.” To achieve a successful cloud policy requires a balanced approach with attention to privacy, security and standards, but also to openness and compatibility. Countries must be careful not to wall themselves in with policies that are incompatible with trading partners.

“To have a global cloud market, we don’t need every country’s laws to be identical. But we do need them to be compatible,” said Holleyman. “Privacy and security rules are especially important. They should promote good data stewardship while also encouraging international commerce.”

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