The index measures 14 Asia-Pacific countries and markets using ten different measures covering regulatory issues such as data protection, infrastructure areas such as broadband and the broader business and government environment.
Singapore scored 4.5 in data privacy, just slightly ahead of China and behind developing economies India and Indonesia.
"Since the completion of this Index, the Singapore has passed the Personal Data Protection Bill , removing one of the significant shortcomings in Singapore’s cloud policy regime. Despite this development, the law will only come into effect in 2014, and we would urge the government of Singapore to accelerate its implementation," said the report.
Hong Kong too, dropped one spot to third place due to its low score in power grid and green policy. While the country had excellent energy infrastructure, it does not have targets or policies for more sustainable power consumption.
Its government needs to take a "much more aggressive approach" to IT power consumption and the use of renewable energy sources by setting specific targets for its own IT. They can also encourage the use of best practices for data center energy efficiency across the country, the report said.
South Korea leapfrogged Hong Kong into second place. The country had led the pack in terms of data privacy with a "comprehensive privacy legislation". South Korea also had a power grid well-protected from natural disasters and affordable electricity rates.
For the second year in a row, Japan has topped the rankings leading in terms of strong connectivity and a developed business environment for cloud computing.
Japan is "well-prepared" for cloud computing and even power shortages which followed since Mar. 2011's earthquake, have been managed well by the data center industry, the report noted. The country also has the right mix of policies, business and infrastructure to continue to drive growth and adoption of cloud computing.
The country's lowest score in the index were in data sovereignity and data center risk, coming in seventh in both parameters. The report advised the country to provide clearer direction around data sovereignity in order to improve its ranking.
Data sovereignity includes having a clear scope of protected data, cloud-friendly storage requirements and efficient cross-border data flow, while data center risk are related to factors such as labor and energy costs affecting the operations of cloud infrastructure.