Cloud computing offers a great deal of possibilities that New Zealand companies would be silly to ignore.
Being able to cheaply and quickly distribute applications, data and services to worldwide customers without having to spend big on staff and infrastructure is just one of the reasons for New Zealand companies to consider cloud computing; not having to go through the pain of outsourcing to countries with cheap labour is another.
But local companies may want to consider having their applications and data hosted in New Zealand itself, rather than in the bulk server farms of the US or even Europe.
New Zealand's public internet infrastructure is designed almost entirely for moderately-sized downloads from the United States. Any better broadband service than the generally available alternatives costs more than leasing a fleet of cars, and is hard to justify, especially for start-ups.
NZ small to medium-sized enterprises wanting to upload lots of data for use in the cloud will run into this bottleneck immediately, and so will customers using data-rich applications.
Downloads aren't much better either. Essentially, the poor performance of NZ's network makes for a poor cloud computing experience for everyone — the businesses wanting to provide a service as well as those wanting to use them. As NZ decided to allow its networks to be built the way they are, the corollary is that cloud computing infrastructure is thin on the ground here.
Most of the NZ cloud computing and software-as-a-service (SaaS) poster children like Xero and PlanHQ are hosted in the US because it costs much less and there's bandwidth to burn in America, unlike in NZ. (As an aside, this is true for the entire NZ hosting industry.) New Zealand academia has gone with Google for the cloud-based web-apps too.
Jethro Carr of SaaS-based open source billing system provider AmberDMS explains that his company hosts in New Zealand because it wants full control over security of customer data. Plus, NZ hosting means substantially lower latency for NZ customers, which is important for a good user experience.
Also, hosting overseas means being subject to laws and regulations of other countries and this could lead to privacy, commercial and confidentiality issues that wouldn't arise with an NZ-based cloud.
I've talked to people who say they don't care about these things, but despite that, would never host in China. The downside for Carr's company is much higher hosting costs in NZ, but AmberDMS believes it's worth it. Besides the above reasons, what if someone wants to simply start out in NZ?
Shouldn't the option be there so that we don't end up as a nation forced to export stuff that perhaps should stay in the country?