Cloud council comes together in Canberra

Four large players in the Australian cloud market, Macquarie Telecom, Fujitsu, Infoplex and VMware, have formed a national cloud council (OzHub), backed by the Federal Government and the Greens. The council will be dedicated to promoting cloud computing for the enterprise, small business, consumers and governments, while attempting to combat potential barriers to cloud (including data sovereignty concerns).

Federal Innovation Minister Kim Carr speaking at yesterday's OzHub launch in Canberra
(Credit: Macquarie Telecom)

The OzHub cloud council "seeks to establish a regulation framework to promote good business practices and greater transparency to consumers about crucial issues such as where their data is held".

Federal Innovation Minister, Kim Carr, yesterday applauded the establishment of the cloud council, saying that such a partnership could fuel the adoption of, and investment in, cloud computing in Australia.

Carr added that cloud computing isn't just for businesses, it presents an opportunity for ordinary consumers while passing on benefits to the Australian economy.

"Given the growth in Gmail and Dropbox, and with Apple introducing iCloud, consumers have a keen interest in this technology. The world-class National Broadband Network, for example, presents us with a huge opportunity to service demand, now and into the future. We can build jobs and skills at home and we can ensure that local consumers get access to quality local cloud services," Carr said.

The Greens heralded the cloud coalition as a positive move towards highlighting some of the issues with cloud, including privacy and data sovereignty.

"End users and businesses should have a transparent choice to host data domestically where they have some avenues of complaint and redress that don't exist elsewhere," Greens Communications Spokesperson Scott Ludlam said in a statement.

Issues of data sovereignty and data privacy in light of legislation like the US Patriot Act have plagued the reputation of cloud for some time. Microsoft recently admitted in the UK that it couldn't provide a guarantee that information stored in a European Union-based cloud wouldn't leave the region if requested under the Patriot Act. The new cloud coalition aims to work with government to establish privacy foundations to ensure transparency when dealing with sensitive user data.

The formation of the cloud coalition has also brought with it a new report from Lateral Economics (PDF), authored by Nicholas Gruen. Gruen's report, commissioned by Macquarie Telecom, said that there is "reason for confidence" in the Australian market becoming a regional hub for cloud computing, thanks in part to large-scale investments from telcos and enterprise players.

The report also urges government to take an active interest in investing in and legislating around the Australian cloud computing industry, making it similar to a "Swiss bank" — a locale recognised by the international community as a first-class cloud market, even if that means importing cloud service providers from other countries.

"Just as Swiss banks are attractive to global depositors, in substantial part because of supportive Swiss regulation, so the Australian government should regulate the cloud so that we're a preferred provider for firms, governments and other users offshore. Indeed Australian governments should be prepared to import cloud services from any country that gives them similar confidence and that will mutually recognise our own offerings to them," the report read.

The Australian Government Information Management Office (AGIMO) has a strong push towards the local cloud for agencies, with a firm cloud migration strategy now in place for non-sensitive data.

Meanwhile, the report extols the benefits of industry self-regulation when it comes to data sovereignty, security and privacy issues, teamed with mandated government privacy frameworks in place. So long as the individual cloud providers and cloud coalitions like OzHub remained transparent to users about where data is stored, Gruen wrote, regulation needn't be the concern it is today.

"The optimal outcome for regulation is probably a combination of government legislation and industry self-management with government setting the ground rules on issues such as privacy and industry handling things like standardisation of contract terms and security practices. This should be done in a way that is cognisant of the differences between its obligations to its domestic citizens and the needs of users in other countries who do not rely on Australian authorities to protect their interests (but who may wish, at a cost, to avail themselves of some such services)," the report said.

The report provided a long list of industry collaboration recommendations to government. Recommendations include a need to:

• Collaborate with industry to define a code for industry self-regulation that addresses issues such as standard terms in contracts and obligation to notify of security breaches.
• Collaborate with industry to develop export-oriented legislative and self-regulatory settings for cloud computing. In particular, where they are servicing export customers, Australian cloud service providers should be able to opt out of certain regulatory strictures designed to protect Australian resident people and corporations.
• Collaborate with industry to ensure its policy and regulatory framework promote Australia as a datacentre hub in the same way that the Singapore government is proposing a general data protection law to strengthen Singapore's position as a trusted hub for data processing industries such as cloud computing.
• Investigate the state of competitiveness and pricing in domestic backhaul communication links and international links with a view to optimising public expenditure on communications infrastructure.

The Australian Information Industry Association (AIIA) has also welcomed the new report.

"It is extremely valuable to see studies into these issues provide credible support for consistent policies and approaches to technology-driven business models in Australia," said Suzanne Campbell, CEO of the AIIA.

"We face strong international competition and our own unique challenges in this marketplace, which is why we must capitalise on our strengths and work intelligently towards positioning ourselves in a market that will be very significant into the future," she added.

OzHub has said it will look to add more members to its ranks in the future.