The GrowTh ofCloud Computingin EmErgingAsiAn MArket

2The GrowTh of Cloud Computing in EmErging AsiAn MArket

Table of Content

ABSTRACT

Table of Content

Introduction

Evolution of Cloud Computing in Asia: An Overview

1. India

2. China

3. Indonesia

4. Singapore

5. Vietnam

Key Obstacles to Cloud Adoption in Emerging Asian Markets

Impact of Shifting Government Regulations

Impact of Government Monitoring on Development of Cloud Computing in Asia

Conclusion

References

3The GrowTh of Cloud Computing in EmErging AsiAn MArket

ABSTRACTThe report highlights evolution of cloud computing solutions in emerging Asian markets. The report provides an in depth

information about evolution of cloud computing in five emerging Asian nations that include India, China, Indonesia, Singapore, and

Vietnam.

In this report, you would find out about the progress made by the emerging Asian economies in its march towards adopting cloud-

computing technology. You would also find out about the obstacles and barriers that are hindering cloud adoption in these countries.

Finally, you would find out about the impact of government regulations and monitoring on development of cloud computing

technology in Asia.

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IntroductionCloud Computing is the real buzzword these days among corporate entities - both big and small. No, cloud computing does not have to do anything with taking your computers or servers in the skies. The cloud here refers to the internet. And, cloud computing simply refers to storing and accessing applications and files over the internet.

There are three types of cloud computing technologies - public, private and hybrid clouds. Private clouds are owned or leased by the enterprise, public cloud is sold to the public, while hybrid cloud is composed of public and private clouds.

Many experts see cloud computing as the next wave of technological revolution. Cloud computing have become the basis for new business models and radical business innovations. Apart from reducing overall operational costs, cloud computing offers significant improvements over the traditional way of using application and resources. It results in increased productivity, improved accessibility, enhanced flexibility, and smoother operations.

Cloud computing is a global phenomena. The global trend for cloud computing is expected to grow at a remarkable rate at about 30% of CAGR (Compound Annual Growth rate) in the next five years reaching $270 billion in 20201.

1 Market Research Media, Retrieved January 12, 2015: “Global Cloud Computing Market Forecast 2015-2020”

private cloud-enterprise owned

or leasedHybrid cloud

-Composition of Public and Private

clouds

public cloud-Sold to the public,

shared infrastructure

pRiVAtE puBliC

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However, in this report we will focus on cloud adaptation in emerging markets in Asia in general. We will reveal how cloud-based solutions have evolved in emerging Asian economies; key barriers to its adoption; and the regulatory implications of adopting cloud based solutions.

Evolution of Cloud Computing in Asia: An OverviewCloud computing has great implications for emerging economies in Asia including China, India, Korea, Singapore and Hong-Kong. The next frontier in digital revolution has allowed these countries to leapfrog outdated IT infrastructure facilities; bulldoze all kind of technology barriers; and take advantage of enterprise-quality hardware that drastically increases productivity and agility of the business concerns.

Cloud adaptation is quite fragmented across Asia. Countries like Singapore, Taiwan, Singapore, and Australia have comparatively higher rates for adaptation of cloud technology as compared to China, India, Indonesia, Philippines, Thailand, and Vietnam.

That being said, the rate for cloud adaptation is growing at a remarkable pace in Asia. In India alone, about 99% of SMEs in the country feel that cloud computing is essential for innovation and faster, smarter and more sustainably execution of business processes2. Indian companies are looking for cloud solutions to streamline their processes and become more efficient in operations.

2 Economic Times. (2014). Retrieved January 12, 2015: “Most Indian SMEs wish to adopt cloud computing, says report”

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Business concerns in Asia Pacific regions have also made similar intent in embracing cloud technologies. According to a survey report by Springboard Research in 2011, the development of cloud computing in Singapore reached 20% in Indonesia, 27% in Malaysia, 29% in Singapore and 55% in Korea3.

In addition, a study conducted by International Data Corporation (IDC) found that cloud sector in the Asia Pacific region is expected to grow at a phenomenal rate of 67.9% by 20184.

A number of factors are fueling the drive towards adoption of cloud solutions in Asia. Firstly, the mobile revolution is creating the demand for access to corporate services and applications from anywhere and anytime. Mobile technology has evolved rapidly over the past few years. It allows companies to

3 M. Dachyar , Machadi Dhana Prasetya. (2012). Cloud Computing Implementation in Indonesia, International Journal of Applied Science and Technology Vol. 2 No. 3.4 Data Center Dynamics.(2014). Retrieved January 12, 2015: “Asia Pacific Growth Rate to Surpass North America”

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have an unparalleled level of connectivity between suppliers, employees, and customers. Because of the interactive nature of mobile technology, sharing information through this medium allows businesses to receive immediate feedback on products and services from customers.

Cost is another factor that is fueling the demand for cloud technology. Small and medium sized businesses in Asia do not have the large budget to spend on IT infrastructure and facilities. Cloud computing offers these firms the ideal solution to benefit from costly and dedicated servers at much lower cost.

Finally, predictability is also great benefit that is attracting businesses in emerging Asian economies. The cloud service providers charge a flat monthly rate that adjusts as the business scales. This makes it easy for the business concerns to budget their expenses as the business grows allowing for more efficient use of limited resources.

In the following, we will analyze the state of cloud adaptation in five key emerging markets in Asia i.e. China, India, Indonesia, Philippines, and Vietnam.

1. IndIAIndia’s cloud market has grown immensely in the past few years. The cloud computing market will expand to $16-billion market by 20205. Indian firms are still in an early stage of transitioning to the cloud. At this point many of them are involved in assessing feasibility of implementing cloud technologies.

Over the past few years, India has been able to achieve high annual GDP growth rate. The phenomenal growth rate is mostly fueled by Small and Medium businesses (SMBs) who have become competitive enterprise outsourcers and integrator on global scale. But now, these firms find themselves in a new competitive sphere due to a number of factors. Some of the factors include,

● Rising wage rates (india has outpaced Asia pacific with the highest salary increase in the region)6

● increasing resentment in u.S. and Europe against outsourcing activities

● increase inflation rate

5 Cloud Journal. (2011). Retrieved January 26, 2015: “India’s Cloud Market Could Reach $16 Billion by 2020”6 The Economic Times. (2012). Retrieved January 21, 2015: “ 11.9% salary increase for India Inc in 2012; marginally lower than 2011: Aon Hewitt Survey”

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In order to maintain their profit position, Indian SMBs are looking for ways to cut their cost of operations. Due to their ease of use, scalability, and low cost, cloud technology is increasingly being viewed as a viable option to reduce operational costs.

Cloud services are better suited for SMBs in India. These firms do not have complex functionalities and data integrity concerns similar to large corporations. (Dubey and Wagle, 2007). They have sufficient IT budget to adopt cloud technologies and purchase the bandwidth as per their requirements.

reasons for the Drive towards Cloud technologyAccording to Associated Chambers of Commerce and Industry of India (ASSOCHAM), cloud adoption among Indian SMBs may increase by 20% by 20167. The firms are moving towards cloud technology to increase productivity and reduce their input cost. Traditional ERP solutions incur high cost that is not within the range of small firms. Cost, therefore, becomes a major constraint for these firms to attain operational efficiency.

Cloud technology services act as a substitute for traditional ERP solutions. Cloud based services help Indian SMBs cut the cost involved in on-premise ERP solutions such as software, hardware, and licensing costs. In addition, the short implementation cycle along with less maintenance cost results in less total costs as compared to traditional ERPs.

Cloud computing is helping Indian firms in developing cost effective business models. Firms can purchase only those cloud components that are relevant to their business. This results in great cost savings for the firms as they o not have to invest huge amount of money on buying the entire ERP suites. Instead they pay for only those services that they use.

Patni Computer Systems, for instance, spends around $ 31 million dollars (Rs. 1.9 billon) annually on meeting its IT needs like servers, network, software etc. By transitioning to the cloud, it would be able to save around 30% cost in maintaining the IT infrastructure expenditures and another 30% on hosting its files in large data centers.

7 Business Standard. (2014). “SMEs may increase cloud adoption at 20% by 2016: EY, Assocham”

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Cloud Computing Opening World of Opportunities for it firms in indiaSensing great demand for cloud technology in India, IBM India launched a cloud computing center in India at Bangalore in 2008. The center caters to increasing demand of online infrastructure sharing services. The company has also collaborated with Indian Institute of Technology Kanpur (IITK) to come up with new developments in cloud computing through academic research in the field.

A number of local firms have also launched cloud-computing services in India. Bharti Airtel provides cloud-computing services with their Net PC Plus, a plug and play device that connects to the net without the need of an operating system8. Other local firms that are making the mark in cloud computing include Reliance communication, Novatium, TCS, HCL Technologies, Wipro, Net, Verizon Data services and Netmagic.

Wipro, a software company in India, had built a “private cloud” for its internal use. However, now it offers its expertise in cloud implementation to other local firms. Wipro plans to build an “enterprise cloud” system that would be offered to clients who plan to outsource their infrastructure management activities with the company.

Zenith, a local IT company in India has launched its private cloud service called Proud. The cloud service provides a centralized computing system that allows firms to run their entire IT infrastructure - servers, desktops, storage, networking, and ERP applications - on the cloud thereby resulting in great cost savings for the companies.

implementation of Cloud Computing technologyIn India, cloud computing is being adopted by companies that have low IT penetration and have limited budget. Large corporations, however, are not that eager in adopting cloud technology due to concerns on data security, compliance, and reliability of the service. According to a research by Saltmarch Intelligence - which surveyed survey of over 1,100 Indian Business Technology professionals - data audit ability and confidentiality was the prime concern for these organization.

Still, there are certain segments of cloud technology like hosted email service and back-up storage services where large corporations might be willing to employ the cloud.

8 AirTel. (2009). Retrieved on January 26, 2015: Airtel launches cloud computing service on broadband,

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2. ChInACloud computing technology has grown phenomenally in China thanks to heavy government expenditure and support. Analysts predict that the overall cloud computing value in China would amount to $122 billion by the end of 20159.

The fast expanding cloud-computing sector in China is being fueled by the same factors that are driving cloud technology in other emerging markets in Asia i.e. data storage flexibility and low maintenance cost.

The Chinese government is supporting much of the growth of cloud computing technology in the country. The State Council has accepted the National Cloud Computing Industry Development Plan that provided a roadmap for development of cloud computation in the country. Dubbed as “China Cloud”, the plan covers a wide range of cloud strategies, key tasks and technology roadmap to support cloud computing industry in China.

Development of cloud computing was declared as the top priority in the government’s 12th Five Year Plan (2011-2015). China’s Ministry of Industry and Information Technology has supported various initiative to push cloud technology services in mainland China. The government has also passed a National Financial Support Program for Cloud Computing that would award a maximum of $240 million to Chinese cities for starting cloud related projects.

At the moment, around 40 public cloud projects are ongoing in China with Beijing alone receiving more than $8 billion to support development of cloud infrastructure and other facilities in the region. The cloud industry in China is still in its infancy. There is great need for cooperation with foreign cloud companies to provide their expertise in implementation of cloud services and technology in China.

role of Local Firms in Promotion of Cloud technologyChina’s telecommunication companies are also playing their part in promoting cloud technology in the country. China Mobile, China Telecom, and China Unicorn are the three biggest state owned telecom companies have all undertaken various projects for development of cloud computing technologies in the country. Due to their huge data centers and customer base, these telecom firms would benefit the most from implementation of cloud technology in China.

All three telecommunication companies are competing for the largest share in the cloud computing market. They are offering various cloud related services such as cloud hosting, cloud storage, and 9 Bloomberg Business Week. (2013). Retrieved on January 26, 2015: “Will Cloud Computing in China Be a Boon or Peril for Business?”

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elastic computing where resources can be scaled up and down as per the requirements.

Local IT companies has also contributed a lot in development of cloud technology in China. Baidu and Ali Cloud are two of the biggest IT companies in China that are investing in cloud computing in China. The former focuses on providing cloud storage infrastructure and technology services, while the latter focuses on providing cloud computing apps for the users.

Baidu, the Chinese search engine giant, has large data center clusters scattered all over mainland China. The main usage of these data centers is on providing data storage, data processing and high performance computing and redundant service platforms. It is the first IT company in China that provides free cloud computing service to the users. The company is member of the Ministry of Industry and Information Technology’s CCSC (Cloud Computing Standard Committee), which sets cloud computing standards in China. The company is also partnered with the Ministry of Science on various cloud R&D projects.

Ali Cloud, a large B2B internet company, is a pioneer in adoption of cloud computing technology in China. The internet company has set up their cloud computing data centers at Nanjing as early as 2009. It has launched various cloud service storage apps including one of the first cloud based email service in China.

Finally a local IT firmed, Range Technology, had collaborated with IBM in 2011 to launch a city sized cloud computing and office complex. The project, which is expected to be complete by 2016, includes mega data centers that would provide cloud storage services to IT sector in the country. The entire complex would cover 6.2 million square feet with around 646,000 square feet dedicated to hosting data center infrastructure.

China is still in the process of setting up cloud infrastructure and transitioning to the cloud technology. Chinese firms lag behind U.S. and Europe in implementation of cloud technology. But Analysts believe that the with the current pace of development of cloud technology in the country, China would quickly catch up with them as it has done in the Asia Pacific region.

Foreign investment in Development of Cloud technology in ChinaThe Chinese government’s drive to develop cloud service technology in the country has attracted attention of a number of multinational companies. In 2014, the venture capital arm of Intel had invested in three Chinese cloud service providers in to benefit from the cloud computing boom in China. Each of the three companies has different strengths when it comes to the cloud.

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Wuxi China Cloud is a large cloud infrastructure provider in China. BlueWhale deals with cloud network storage. While Yeapoo builds cloud based mobile devices. Intel intends to work closely with these IT firms and leverage their strengths in developing cloud computing software and big data solutions for local firms.

American Eucalyptus Systems, another big U.S. based IT firm had signed strategic cooperation agreement with 32nd institute of China Electronics Technology Group to establish a laboratory for research and development of cloud computing technologies in China.

Some, however, are looking at foreign company’s investment in Chinese firms with concern. A report conducted at the request of the U.S.- China Economic and Security Review Commission has uncovered some thorny issues with the government’s forays into China’s cloud market. The author of the reports state that the joint research with foreign firms may result in unintended technology transfer that may be used for intelligence collection of multinational firms operating in the region.

Due to this many foreign companies are wary of adopting cloud technology offered by local firms. Of the 10% of the multinational companies who were transitioning to the cloud in China stated that they would consider using Chinese based cloud computing solutions. The main reason given was concern about data security and increased risk of data breach to their China operations.

3. IndOnESIAIndonesia has a huge potential market for cloud computing. Cloud computing market is still at its nascent stage in the country. It is quickly gaining popularity among Indonesian firms. A report by Springboard Research, a leading online research community, found that around 50% of corporations surveyed in 2011 were using or actively planning cloud initiative.10.

Cloud computing trend is definitely on the rise in Indonesia. During the past five years cloud has grown at an compounded annual rate of 48% - much greater than the global annual growth rate of cloud computing.

Local companies are quickly embracing cloud technology to cut their cost of operations. The Indonesian government is in the forefront in development of cloud data centers and virtualization technology in the country. They aim to deploy consolidated, distributed data infrastructure with strong disaster recovery capabilities.

10 Jakarta Post, (2011), “ Clouds and their silver linings behind Asia”

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Previously, companies hosted all the data in their data centre. However, operating the data centers incurred huge costs. Private data centers required annual maintenance, software updates, and large amount of power to maintain the enterprise data center. By migrating to the cloud firms are able to save the costs associated with operating private data centers.

In terms of segments, the manufacturing sector has contributed the most to the cloud market. Various SMBs and large business concerns operating in the country have also adopted cloud computing to cut their operational costs.

Cloud Computing Landscape in indonesiaSensing the rising demand of cloud technology among organizations in Indonesia, a number of local and foreign IT companies has started offering cloud computing solutions to business concerns in the country.

Microsoft is a major player in cloud computing in Indonesia. Most Indonesian companies are powered by cloud computing solutions provided by Microsoft. According to Microsoft Indonesia, the company has also collaborated with around 20 schools in the country for greater access to education through the cloud. Moreover, it has also supported Surabaya-based Airlangga University in Indonesia to

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transform its administrative portal into a learning management system that would benefit 30,000 students and 1,000 faculty members.

Amazon Web Services is another foreign IT company that is making the wave in cloud computing in Indonesia. The company provides a collection of remote computing services including scalable virtual private servers, database management programs, remote storage and various other cloud storage solutions.

Joyent Cloud, an IT company based in San Francisco, has partnered with a Malaysian firm, Anise Asia, to provide

cloud computing solutions to business concern in Indonesia. The company is a pioneer in cloud computing and their services are utilized by several major firms including LinkedIn.

Companies such as AGIT, Oracle and VMWare are also offering cloud computing consulting and development in Indonesia. These foreign companies compete with a number of local IT firms in grabbing cloud computing market share in Indonesia.

Telkom Cloud, a subsidiary of Telkom Indonesia, is one of the largest ICT companies in Asian region that offers cloud-computing solutions to government and the businesses.

Infinys System Indonesia is another local IT company that provides similar cloud computing solutions to Telkom Cloud. The company offers cloud communication, cloud collaboration, cloud storage solutions to business concerns operating in the country.

PT Cyberindo Mega Persada (CBN Cloud) is a pioneer in providing cloud computing solutions in Indonesia. The innovative cloud solutions offered by the company meets the needs of different types and sizes of business concerns. The company offers several cloud services including Computing as a

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Service (CAS), Software as a Service (SAS), Cloud Contact Center (CCC) and Cloud Managed Service (CMS).

Indonesian IT firms are also offering advance courses related to cloud computing. Purwadhika Nusantara, a large local IT firm, has opened up a campus in Indonesia providing cloud computing programs.

Indonesian Cloud Forum (ICF) is another IT firm that offers educational programs related to cloud computing. These programs provide the required knowledge about cloud computing that entrepreneurs can use to set up a cloud computing business in the country.

4. SIngApORESingapore appears to be perfectly positioned to take cloud computing to the next level. IBM, HP, Google, and and Microsoft have invested in technologies that would set the foundation for IaaS (Infrastructure as a Service) platform in the country.

According the 2013 BSA Global Cloud Computing Scorecard, Singapore has been placed in fifth position - up from tenth position in 2012 - in terms of annual changes in the international policy landscape for cloud computing.

Still, Singapore firms are not that eager to adopt cloud technology as compared to other emerging markets in the region. The application of cloud technology in Singapore is limited at the government level at the moment.

G-Cloud (Government Cloud) is a secured and resilient ICT cloud service set up by the Singapore government. The service allows government agencies to purchase computing resources according to their requirements.

The government launched G-cloud model to provide flexible computing resources for federal agencies that complies with governance and security requirements. Government agencies can subscribe to G-cloud’s full range of services for hosting web content and various other e-services.

For instance, the Ministry of Education has implemented an iConnect system for teachers and students. iConnect is built on a public cloud that allows collaboration between various academicians located anywhere in the country.

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Cloud services that are available through the Government’s G-Cloud service include storage, computational, network, operating systems, security, database and middleware.

The government is also planning to offer SaaS (Software-as-a-Service) for business concerns in the near future. The cloud service would be made available to the business concerns through the Governments’ G-cloud portal.

Infocomm Development Authority of Singapore (IDA) in collaboration with various government agencies had launched SaaS Call-for-Collaboration in June 2013. The multi agency effort was undertaken to promote adoption of cloud technology by private firms operating in the country. This is in line with Singapore’s iN2015 Masterplan, which sees cloud computing as a main driver for promoting economic growth and enhance competitiveness of local firms.

The government has also encouraged local IT companies to offer innovative high growth SaaS cloud solutions and promote user confidence in the areas of data security, integrity, recovery, privacy and portability. It has also initiated an iSPRINT initiative to promote adoption of cloud based solutions by local companies to improve their business operations. iSPRINT program offers 41 SaaS packages for SMEs.

IDA Singapore has also collaborated with various public and private agencies in setting up an R&D technology evaluation program for IT companies to develop cloud computing solutions. In addition, the Critical Infocomm Technology Resource Programme (CITREP) provides funding for cloud computing courses with the aim of deepening the capability of IT manpower to ensure that they remain up to date with cloud computing developments in the global industry.

IDA has also collaborated with Singapore’s Information Technology Standards Committee to set up cloud computing standards taskforce in the country. The taskforce has developed two technical reference guidelines. One provides guidelines on cloud security and service for public cloud service users. The other offers advice best practices for enhancing cloud server security.

The demand for moving to the cloud comes from cost efficiencies that result from adopting cloud technology. The country possesses needed infrastructure and facilities in telecommunication to establish cloud technology. Cloud adoption in Singapore has grown significantly over the past few years. The country not hosts more than ten cloud centers of international cloud service providers11.

11 Egov Singapore. (2013). “Orcale Cloudworld Event”, on January 28, 2015

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5. VIETnAmCloud computing technology has surged among business concerns in Vietnam. The country is becoming a significant cloud market in the Asia Pacific region. Both small and big enterprises are increasingly embracing cloud-computing technology as a viable alternative to traditional IT solutions. According to VMware Cloud Index 2013, around 83 % of Vietnams’ enterprises say that cloud technology would have significant impact on their operations12.

Business concerns and government organizations in Vietnam have realized the cost saving potential of cloud computing solutions. In 2010, Vietnamese Corporation of Financing and Promoting Technologies (FPT) had reached an agreement with Microsoft to research and provide cloud-computing technology on trial basis in Vietnam.

Telehouse, a pioneer in the data center industry with more than 43 data centers in 13 countries/regions around the world, provides cloud service solutions for local firms out of its data center in Vietnam. The company provides dedicated virtual servers that can be custom configured for the end users according to the data storage requirement.

A number of local telecom companies are also planing to offer computing technology-based services in Vietnam. The telecom firms are in talks with global cloud service firms to provide cloud-computing technologies in Vietnam. Most of them have 3G technologies that they can utilize to provide cloud based solutions to organizations over the internet.

The Vietnam Data Communication (VDC) is one of the few local IT companies that provide cloud solutions to business firms in the country. The company offers Cloud VNN service that allows clients to establish virtual server infrastructure. They can manage and monitor the storage system from anywhere in the world. Local banks and enterprises are using the cloud storage solution to store vital company information due to increased data security and reliability of the system.

Vietnamese government has undertaken many initiatives to support the development of cloud-computing technology in the country. It has awarded a contract to IBM to provide cloud-computing platform for government agencies. Moreover, the MOET (Ministry of Education and Training) has instructed educational institutes to make use of the cloud computing applications to reduce their cost of operations.

12 VIETNAMNET Bridge. (2013), “Cloud computing market warms up” on January 26th, 2015

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Along similar lines, the MORE (Ministry of Natural Resources and the Environment) has started using IBM CloudBurst technology to integrate data relating to Vietnam’s resources and environment. It has claimed that it has realized 20% cost saving by virtualizing their IT infrastructure.

The Ho Chi Minh government has put in place various standards and policies to pave way for deployment of cloud technology in Vietnam. Implementation of cloud technology is still at it its initial stages in Vietnam. According to Business Monitor International the cloud market in Vietnam is predicted to grow at a remarkable rate of 300% -400% from 2013 to 201713.

Key Obstacles to Cloud Adoption in Emerging AsianmarketsDespite unprecedented growth of cloud computing trend in emerging markets, business continue to stay apprehensive about taking their operations to the cloud. The rates of cloud adoption in Asia are lower than expected.

According to a recent IDC survey of Asian companies, only 32% of the respondents acknowledge that implementing cloud technology would result in reduction of IT cost14. Moreover, only 19% of vendors across market in Asia are thinking of providing cloud computing services for local business firms.

13 Business Monitor International, Vietnam IT Forecast Report Q2-201314 Cloud Times. (2012). “ Cloud Adoption in APAC is Gaining Momentum – IDC Report”, Retrieved on January 28, 2015

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The biggest barrier to cloud adoption is data privacy issues, security, and compliance15. Other factors that are cited as significant obstacles for cloud implementation in the region include vendor lock-in and compliance issues.

The concerns for adoption of cloud technology in Asia vary by stakeholders as well. Government, IT vendors, and business corporations in Asia had different concerns regarding implementation of cloud technology.

Data privacy and security were the biggest concern of business firms in Asia. They were wary of putting private records into public cloud system that increases the risk of unauthorized parties from gaining access to sensitive business information.

The losses incurred by financial institution through hacking are well publicized - even though most of the hacking instances occurred on non-cloud computers. Business firms are fearful that putting their sensitive information on the cloud would increase the risk of theft by competitor firms. Lack of global security standard regarding cloud servers makes it difficult to dissipate security concerns of business firms.

Another obstacle that is hindering cloud implementation in emerging Asian economies is lack of standards to certify data. There is no standard set in place to verify that the stored data is the same as that originally put in the cloud. Unless policies are set regarding verification of data at each site in the cloud, the risk of manipulation of data is great.

Apart from data security and integrity issue, business firms in Asia are also concerned about vendor lock-in. They are concerned that unique data models and proprietary architecture of the cloud system would make it difficult to switch vendors. However, a number of large cloud providers are assuring their customers that exiting the cloud would be easier.

Lack of connectivity and mobile access were also cited as key concerns of business firms that are hindering implementation of cloud technology in emerging Asian markets.

15 Cloud Computing Survey, 2009, World Economic Forum and Accounting

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Local cloud service providers have certain concerns as well despite the fact that they are to profit the most from implementation of cloud services in Asia. Three key concerns of cloud service provider includes:

● outdated rules regarding privacy requirements,

● data governance, and

● user’s lack of information about cloud computing

Most of them stated their concern over regulations regarding cross country and continental data transfers. This limitation forces the cloud service provider to build more data centers thereby making it less economical to provide cloud services.

Government regulations regarding cloud data is also complex and outdated. For instance, regulator in some country do not believe that data privacy rules should be updated for cloud computing.

Finally, cloud service providers also cited lack of information about cloud services on users end as a major concern. Most users are not aware about implications of storing their data over the cloud. They do not aware about the risks of storing their data on the cloud and the precautions they should take on their part to ensure safety and security of stored data.

Impact of Shifting government RegulationsThe regulatory framework affecting cloud computing in Asia is still in its early stages of development. Governments in emerging Asian markets use regulatory restrictions as a protectionist measure to shield local firms from foreign competition. The regulatory framework is set in place to prevent foreign markets from gaining foothold in the domestic market.

However, the same regulatory restrictions hinder adoption of cloud computation in the emerging Asian markets. Regulatory restrictions and laws regarding cross border data transfer, taxation of cloud service providers, and ownership of cloud data are hindering full implementation of cloud technology.

As a result, governments across the region have introduced many new regulations regarding cloud computation and more is expected to come in the next few years. The shifting government regulations has created multiple impact on adoption of cloud technology.

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Firstly, it has created uncertainty among potential cloud users regarding what is allowed (and not allowed) by the new regulations. Secondly, most Asian countries have introduced the new regulations without considering full consequences on cloud adoption. This may create unintended consequences and prevent firms from fully benefiting from transferring their operations to the cloud.

Finally, the regulations relating to cloud computation in Asia were adopted haphazardly without considering global nature of cloud technology. Due to this there may be little consistency among the nations about jurisdiction, cross border transfer, data ownership and other aspects of adopting cloud technology.

Impact of government monitoring on development of CloudComputing in AsiaIn most countries, a warrant is required to access electronic data and records stored over the cloud. However, during the past few years a number of whistleblowers have revealed shocking facts about the extent of U.S. government’s involvement in access of confidential electronic data for national security reasons16. China was also implicated in espionage and access of electronic data17.

The possibility that data stored on servers of cloud companies like Microsoft, Google, and Amazon is being monitored have created deep suspicion among both public firms and private organizations. This has greatly affected procurement decisions of cloud services as the nature and scope of government involvement in monitoring cloud data is still not clear and understood by the corporations in emerging Asian markets.

According to a findings of Tata Consultancy Services, the use of cloud computing solutions as a percentage of total corporate solutions among Asian countries is larger than in the U.S.18 The revelation made by Edward Snowden about U.S. government’s PRISM program had grave implications for American cloud service providers. These companies would have to reestablish trust if it wants to leverage from high growth prospects of cloud computing in the emerging Asian market.

U.S. cloud companies whose names were leaked in the Edward Snowden report were suffering from reputational harm all over the world. Although only a few firms have been implicated in court-order compliance with U.S. government’s surveillance activities, almost the entire U.S. cloud industry is

16 CXO Media Inc. (2013). “U.S. Cloud Firms Suffer From NSA PRISM Program “, on January 29, 201517 Security Week. (2013). “Unit In China’s PLA Behind Massive Cyber Espionage Operation: Report”18 Tata Consultancy Services. (n.d.) “ The State of Adoption of Cloud Applications”, on January 29, 2015

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facing increased backlash from global customers19. Most of them are either reverting to private data centers or transferring to local cloud providers to keep their data safe from government surveillance.

In order to clear the cloud of confusion and mistrust that have developed regarding American companies, the government has to clarify the full scope and procedural safeguards regarding the PRISM surveillance program. Once the local Asian firms realizes the limits of the PRISM program they would again flock to availing services of U.S. cloud service providers. The American cloud providers should also be transparent about their activities apropos cooperation with the U.S. government in their surveillance program. The government also need to balance the economic interest with the national security interests. Failure to do so would not only put American cloud companies at a disadvantage against local cloud provides, but it would also stymie cloud computation development in the emerging Asian nations.

ConclusionCloud computing is an emerging trend in emerging Asian markets. Cloud computation has greatly benefited business firms, industries and the entire economy of the emerging Asian Nations. Due to the job growth potential and economic imperatives, it has become even more important for emerging economies in Asia to embrace cloud technology.

That being said, there exists certain obstacles that are hindering full adoption of cloud computing in Asia. The local governments should create effective cloud computing policies to reduce the barriers and promote its implementation among local business concerns.

The governments of emerging Asian economies should collaborate with the IT industry and come up with innovative methods to improve cloud data integrity and security. They should certify cloud providers after ensuring integrity of their cloud infrastructure and systems. Finally, they need to support cloud service providers in extending their reach across various market segments. This would help the local firms in reducing their operational cost and make them competitive in the international market.

19 The Hill. (2013). “ Digital trade in a post-PRISM world”, Retrieved on January 29, 2015

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24The GrowTh of Cloud Computing in EmErging AsiAn MArket

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