Data sovereignty has been a persistent concern for Australian companies that think their data has less protection when it's hosted overseas, but datacentre provider Digital Realty, among other global companies, doesn't believe that concern is legitimate.
The US Patriot Act has become the bogeyman for when it comes to why Australian companies should be keeping their data onshore. There is a perception — which some claim is a misconception — that the Act gives the US government unfettered access to data hosted in the US or by a US company, a view that Australian cloud providers have used to market their own services.
US-based provider Microsoft is more dismissive of this perception, even claiming that Australia's data-protection laws are just as bad, if not worse, compared with the US. The Commonwealth Bank, which is a client of Amazon Web Services (AWS), has come out to rubbish the data sovereignty issue as well.
In terms of the Patriot Act fears, if a company isn't doing anything nefarious, then they shouldn't have to worry about the US government gaining access to their information, Digital Realty's senior vice-president and regional head for Asia Pacific Kris Kumar told ZDNet.
"Unless you're doing something wrong or against the law, you have nothing to worry about," he said. "Any act that exists need warrants to access that data — the government can't clamp down and access the data willy-nilly."
According to Kumar, data sovereignty shouldn't be much of a concern for Australian businesses.
"I think data sovereignty is a partially made up issue," he said. "There is no regulatory impact to hosting data offshore other than taxation issues, and tax offices globally are working to pin down the tax provisions under some of the business offerings from the global cloud providers — but that's a whole separate issue."
Cloud providers that host data in datacentres overseas are aware of the importance of keeping customer data safe, and are smart enough to know they cannot compromise on this matter, Kumar said.
He fears that the data sovereignty concerns in Australia will stifle the growth of the country's cloud industry.
"There is a lot of hype around this issue, and some protectionism going on in terms of the current domestic environment in Australia," Kumar said. "Cloud is pretty much an organism that multiplies, grows, connects, and does various things. If you start to create a situation where you believe everything has to be hosted onshore, you will create a data desert rather than a data oasis.
"Having your data disconnected from the rest of the world will do no good for anybody from a business perspective."
It pays to be part of a globally connected cloud, according to Kumar, though he acknowledged that it made sense to host business critical data and applications that are latency and time-sensitive locally.
"But the productivity applications such as Microsoft 365 and AWS services for computing are not customer data sensitive and can be done from anywhere," he said. "There is a place in the world for both onshore and offshore hosting."
Australia's "analysis paralysis"
In terms of the legal and regulatory side of things, Digital Realty found that it was easy doing business in Australia's mature market. There are plenty of opportunities for the datacentre company, as enterprise organisations look to shift their inefficient server rooms into larger third-party datacentres, according to Kumar.
But he finds Australian businesses are very slow at making decisions, which is a hurdle for Digital Realty.
"I think Australia suffers a bit too much from 'analysis paralysis' in terms of its business environment, and that could be slowing it down," Kumar said. "There's also too much focus on commodity and resource-based businesses, as opposed to service-based businesses, and I think the future of this country really is service-based economies."
Digital Realty has found sales cycles to be longer in Australia, compared with the US, and to overcome this, businesses need teams that are able to analyse technology needs quickly and make faster decisions in terms of procuring services, according to Kumar.
"In the US, our sales cycles are much shorter, and people make decisions quickly — good or bad," he said. "They make decisions and move on, and you can see the benefits that the economy gets from that.
"I think Australia needs to be a lot more competitive in the global sense, in terms of decision-making. The country generally sticks to what it knows, and is not very adventurous compared to the rest of the world."