US cloud firms should get off the soap box

US cloud firms should get off the soap box

Summary: A recent US report on trade barriers has revealed a hissy fit by US companies about the Australian government's caution on cloud.


A recent US report on trade barriers has revealed a hissy fit by US companies about the Australian government's caution on cloud.

The report (PDF), released last month by the Office of the United States Trade Representative, says that US companies have voiced concerns that various Australian government departments are "sending negative messages about cloud computing services to potential Australian customers in both the public and private sectors, implying that hosting data overseas, including in the United States, by definition entails greater risk and unduly exposes consumers to their data being scrutinised by foreign governments".

Departments that the report singled out as being the bad eggs included the Department of Defence, the National Archives of Australia, the Department of Finance and Deregulation, the Australian Government Information Management Office (AGIMO) and the Office of the Victoria Privacy Commissioner.

The report goes on to say that many of these concerns, when directed at US firms, "appear based on a misinterpretation of applicable US law, including the US Patriot Act and regulatory requirements".

In its report, the Office of the US Trade Representative pointed to the fact that e-health legislation — which was introduced to parliament last year, before being worked over by a Senate committee — had set out that Australian e-health records should be kept under the government's planned Personally Controlled Electronic Health Record (PCEHR) scheme, couldn't be stored overseas.

The report said that this would "pose a significant trade barrier for US information technology companies with datacentres located in the US or anywhere else outside of Australia". US companies are trying to influence this Bill in a direction that would see the location of the data based on risk, not on geography.

When I finished reading this report, I had to concentrate on not laughing.

Yes, I'll concede that there's likely misunderstanding around the Patriot Act. Microsoft spoke to me last year on this issue, saying that in reality, the Patriot Act isn't behind the US government's ability to request data from US-based companies. Rather, it is due to court precedents, which exist in Australia, too, so it isn't just the US that could force companies to provide data from their datacentres. The company also said that such requests are as rare as hen's teeth.

Still, a certain amount of caution is a good thing. Especially when we're talking about sensitive data. The example of e-health records was chosen by the report to illustrate its trade barrier point, as these encompass one of the most sensitive types of data. There has been so much debate about whether we should even be creating a universally accessible electronic health record, so it's no surprise to me at all that consumer advocates want to keep this data close to home.

It is also exceedingly hypocritical for the US government to lambast the Australian Government for its caution in this area, when it has been paranoid in a similar way about not using equipment from Huawei for certain government roll-outs. If speculation is correct, the US was key to the Australian Government excluding Huawei from National Broadband Network (NBN) tenders.

It seems as though what's good for the goose is not good for the gander.

Putting all of that aside, it doesn't even seem like this excessive caution is having any effect on the Australian adoption of US cloud providers. A recent Telsyte survey found that two thirds of Australian enterprises are adopting foreign clouds.

Taking all of this into account, I would suggest that the Australian Government ignores this childish US temper tantrum.

Topics: CXO, Cloud, Government, Government AU

Suzanne Tindal

About Suzanne Tindal

Suzanne Tindal cut her teeth at as the site's telecommunications reporter, a role that saw her break some of the biggest stories associated with the National Broadband Network process. She then turned her attention to all matters in government and corporate ICT circles. Now she's taking on the whole gamut as news editor for the site.

Kick off your day with ZDNet's daily email newsletter. It's the freshest tech news and opinion, served hot. Get it.


Log in or register to join the discussion
  • It amuses me no end that so many companies and individuals are HAPPY about cloud based computing. Somewhere in the world there HAS to exist a computer or computers that have the programs and data on them to do your cloud based work. If you centralise all your data somewhere else in the world no matter WHAT business you are in:

    1) You are sitting on a knife's edge hoping that your internet connection doesnt go down. If it does, you dont do your work in a cloud based environment. How much will THAT cost you?
    2) You are trusting that the machinery on the other end where the cloud based server is has adequate redundancy. If it is located on L.A. and some major earthquake hits, what level of redundancy is there to cover that excepting possibly redundant locations that are being mirrored real time? Oh wait did I mention Internet connection? Most of Australia's internet comes through connections to the West Coast of USA. Sorry about that but even IF your cloud based server in L.A. gets quaked, the redundant location would be hard to use at best.
    3) You are trusting that every single employee is "above board" honest and wont ever sell your data. OK maybe that "la la land" idea is true. Maybe they are ALL honest people and wont sell your data but wait.....there's more!
    4) You are ALSO trusting that their servers arent able to be hacked. You are putting a lot of VERY expensive data from all sorts of businesses in all parts of the business community in countries all around the world in this spot. That wouldnt POSSIBLY make it an attractive hacker target, now would it? I mean, they wouldnt POSSIBLY be able to hack in and get and sell your data or even just DOS the cloud out of the air, right?

    It is cheaper to have all the programs you need to do your business running on the cloud more than likely (depends on your particular business). Remember, though, what happened last time your own computer hardware pre-cloud had a major disaster. It made life unbearably difficult until fixed and restored. All you had to worry about, back then, was your data on your machines, your machines and your internet connection. With the cloud you now have to worry about a whole lot more....

    ....but wait......there is even MORE......

    Your precious data is sitting on a cloud based server in a FOREIGN COUNTRY and is subject to THAT country's laws! Do you even have a CLUE what their laws are like and how it could affect you?

    Worry about the cloud before the lightning zaps you!
  • +1 gregwh

    Australians rejected a similar cloud based service way back in the 70's when GE tried to sell their MarkIII data time sharing service.
    They tried to sell customers, including multi-nationals, on the idea of number crunching & storing their data on mainframes in the cloud, ..(OS on disk drives via international links in the USA & Europe. It's not all that new!).

    ..It eventually failed...miserably!