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Cloud Mini-Series Part 4: The Right Message and the Right Messenger

This article concludes our mini-series on the opportunities and challenges of cloud computing in the developing world. Previous posts covered the following topics:

Having discussed the potential of cloud computing for development and the downsides of forced localisation, let’s now look at the communication strategy of the Internet industry on these issues.

For some time, the US and Western business community has warned against the dangers of local hosting requirements in international trade fora. They did so for the right reasons and they did it forcefully. However, in light of continued US dominance of the cloud and in the wake of the surveillance revelations, I would argue that their approach may, in fact, be counterproductive. The problem here may not be the message but the messenger.

On a general level, a narrow focus on forced localisation by Western industry can sound to policymakers in the developing world like a bumper sticker slogan, which fails to address legitimate policy concerns. To (ill informed) Governments it can sound like a pretext to further cement US dominance of the Internet or, worse, an attempt to circumvent local laws. Also, advising developing countries to stay away from forced localisation can come across as deceptive since many Government agencies in the West actually demand their data to be hosted locally (e.g. Google vs City of Los Angeles).

What is needed is a new focus. Framing the debate around local hosting requirements is framing it around a negative message. Instead, the discussion should focus on the overwhelming economic and social advantages of the cloud. For the reasons outlined above, cloud computing could be a true “game changer” for users, businesses and entrepreneurs in the developing world. However, in many parts of the world there is a lack of understanding of the economic potential of the cloud. So in the first instance, cloud advocates need to do more to socialise the benefits of the open Internet.

Secondly, instead of learning about the consequences of forced localisation, policymakers need to understand the economics of data centres first. This helps shift the discussion from one on harmful laws to one on economic incentives. There are a number of questions policymakers from the developing world will be interested in, e.g. is it even desirable from an economic point of view to have local data centres? If so, what are the comparative advantages of their countries to attract cloud companies? And what factors could be further developed? Some countries may not have the ideal climate for data centres but they could reform their legal regime, invest in talent and infrastructure and review their tax incentives.

Thirdly, focusing on what Governments should not do is a lost opportunity from a development perspective. In much of the developing world, Governments are seen to be doing too little, not too much. Instead of warning against forced localisation, it would be better to talk about the drivers of cloud adoption. There are a number of opportunities for policymakers to create an enabling technical and legal regime for cloud computing, including:

  • Promoting competition in the telecommunications sector;

  • Investing in broadband capacity;

  • Freeing up radio spectrum;

  • Facilitating access to the global network of Internet backbones by reducing domestic landing fees; and,

  • Promoting a legal framework that enables entrepreneurs and builds trust among consumers. This includes the protection of privacy and data security, the promotion of data and application portability and sensible intellectual property regulation.

And finally, the message would be far more compelling if it came from local industry representatives instead of Western trade associations. Entrepreneurs in countries such as India are well aware of the opportunities of the cloud and know what a balkanised Internet would mean to them. After all, it will be harder for them, and the next generation of Internet startups, to compete if they need to localise their services in an ever-increasing number of territories. A strong stance by developing world industry in favour of a globally-integrated Internet would be an effective way to counter the idea that forced localisation will only affect a few large global Internet companies.

In summary, cloud computing and the Internet can potentially transform businesses in the developing world. However, Governments are increasingly drawn towards measures that undermine the integrity of the global Internet. Preventing the Internet from becoming increasingly territorial will be one of the great challenges of our time. Educating policymakers about the benefits of the cloud, the economics behind data centres and the effects of forced localisation will be the first step towards greater awareness.

Matthias Langenegger is Deputy Geneva Representative in the Geneva office of the Computer & Communications Industry Association.

European Union

DisCo is dedicated to examining technology and policy at a global scale.  Developments in the European Union play a considerable role in shaping both European and global technology markets.  EU regulations related to copyright, competition, privacy, innovation, and trade all affect the international development of technology and tech markets.