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Regulations & Legal Framework Challenge Asia Pacific Cloud Computing Initiatives

The Asia Pacific region is keen on cloud computing, as we earlier reported. This is one of the premises by which the Asia Cloud Computing Association (news, site) was built on. The consortium stands to face difficulties in certain markets, though, and will need to muscle up in order to attain its goal of promoting the adoption of cloud computing initiatives in the region.

Will Regulatory Environments Favor Cloud Computing?

Chief among Asia Cloud’s concerns is the disparity in the regulatory frameworks in the region’s different economies. According to market research firm Ovum, there are various regulatory and policy nuances that need to be addressed. Ovum principal analyst Mike Sapien and senior analyst Claudio Castelli cited the difficulty that service providers might face in entering certain markets.

In particular, China is likely to be a difficult area in terms of regulatory compliance. It can be noted that foreign firms cannot directly engage in business in China. Rather, these must go through joint ventures and partnerships with local firms. Businesses in various niches have previously expressed concern with this requirement, particularly those that need to protect proprietary technologies and designs.

A Change in Legal and Policy Framework Might Be Necessary

Meanwhile, other country-specific legal frameworks might also be a limiting factor. “It is still very unclear whether infrastructure or data can be shared outside China, which creates unique design challenges for cloud services or the ability to even back up services outside the country,” the Ovum analysts say.

According to IDC estimates, only 4% of businesses in China actively used cloud-based services in 2009, even with a large potential user base. Still, China still holds a certain appeal to service providers because of this untapped potential. Japan’s NEC estimates the market to grow by 30% each year, up to about US$ 2.3 billion by 2012.

Where Are the Other Major Players?

Apart from regulatory concerns, the Ovum analysts raised concerns on Asia Cloud’s ability to gather enough support to execute its plans for the region, given that major stakeholders in the region have yet to express their commitment to the cause.

Even if the group were made up of key players in the various Asia Pacific IT industries, the success of the consortium will therefore lie with its ability to attract enterprises in the region, particularly major telecommunications providers.

Because of these concerns, Asia Cloud will need to actively engage policy-makers and service providers, which will give the consortium the proverbial foot-in-the-door, in terms of achieving its goals. After all, the benefits of going to the cloud are certainly attractive, and stakeholders stand to gain with cost-savings, efficiency and scalability.

 
 
 
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