The Roles of Government in Cloud Computing

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Government plays a huge role in web hosting and cloud computing. Not only are world governments major consumers of cloud services, but they also are involved in other areas such as providing funding, engaging in research, providing education and training, and fostering local industry.

The South Korean government has made specific strides to boost its government cloud infrastructure and native cloud industry, including earmarking about $500 million towards Korean cloud computing in late 2009. Similarly, Taiwan’s Government launched a cloud computing industry development program in 2010 designed to boost the country’s ICT competitiveness globally, involving an investment of $744 million over five years.

In less direct ways, other governments have also tried to encourage new technology entrepreneurs. For instance, the UK’s Department for Business, Innovation and Skills have helped established Enterprise Capital Funds as a way to provide venture capital to fledgling UK firms.

For governments, it’s also important to have established standards around IT and security to simplify the procurement process. Initiatives like FedRAMP in the US and G-Cloud in the UK give clear guidelines for service providers, and streamline government agencies’ decision process when it comes to cloud services. A country’s governments – including different levels of government – also need to have common information exchange and data handling standards so that different government agencies are able to communicate. Many service providers are tailoring their services to meet these demands.

Governments also provide the regulation and legal workings that foster trust in cloud services. A 2012 study (registration required) by the Cloud Security Alliance and ISACA found that government regulation was a top concern of enterprises. On one hand regulation could not be keeping pace with market changes (for instance, resulting in monopolies), but it could also be seen as placing limits on enterprises that make it more difficult to bring “bleeding-edge” innovations to market.

In 2013, lax government policy and lack of oversight led to a loss of trust in many US cloud services when the extent of the US government’s international espionage operations became known by Edward Snowden’s disclosures. Countries with more strict privacy laws, like Germany and Switzerland, have used this to their advantage by stressing that their services don’t fall under the jurisdiction of other countries and are protected by local laws.

Many argue that the Presidential Policy Directive issued by President Obama in January helped resolve some tensions between citizens, the government, and service providers, while others say it doesn’t go far enough.

Governments are playing an enormous role in shaping the cloud and hosting landscape as a consumer, an investor, and an overseer. It’s true that there’s sometimes an animosity between governments and tech companies – both having enormous power over the citizenry, and each thinking it knows better than the other. Many worldwide governments already understand the importance cloud computing and hosting industries, but having these initiatives hit their mark will require the cooperation, understanding, and occasional pushback from the tech companies involved.

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  1. How does Australian Governments compare to the US? Do they have a lax government policy?