Cloud computing’s big question: Who controls the data? Kohler

Cloud computing is undoubtedly in idea whose time has come, and as the speed and capacity of broadband increases it will come even more.

The term refers to internet-based computing, either for data storage or software as a service (SaaS), and it is one of the fastest growth businesses in the world of technology, if not the fastest. Businesses everywhere are finding it cheaper and more convenient to not own their own servers, and instead to just buy what they need from the vast server farms of Amazon, Microsoft, Google or Salesforce.

Which is great, and represents a true paradigm shift, but the trend also throws up some important regulation issues.

It’s a bit like the paradigm shift that occurred in Renaissance Italy with the development of banking. In 1397 the Medici family was the Amazon of its day, setting up not the first bank, but certainly the largest and most respected.

It took rather a while for banks to be regulated properly, and even longer for the Basel Committee on Banking Accords to begin establishing global banking rules in 1974, leading to the Basel Accords.

Now we’re moving into ‘Basel III’, a new set of banking rules in response to the problems uncovered during the global financial crisis.

An essay in Tech News World last week, headed ‘The Data Liberation Movement’ has raised some important questions around the portability and regulation of data in a cloud-computing world, where businesses, and perhaps eventually, individuals, use private firms to house all of their information.

These firms are in a pitched battle for business and don’t want to lose customers, so they tend to make it hard to withdraw data in order to prevent churn.

As the article in Tech News World points out: “Think of the uproar that would occur if banks suddenly required consumers to jump through hoops in order to get their money.”

The internet is a wonderfully open, unregulated environment and the last thing anyone wants is for it to be clagged up and filtered by regulation, but data is like money and in the absence of regulation big companies seeking to maximise profit will take control.

It’s not just data withdrawal standards, but also privacy and security. As with early bank regulation, each country is introducing its own regulations and directives, and the suppliers themselves each have very high-level security and privacy protocols. But with server farms located all over the world there will clearly be a need for some sort of global regulation of data.

The data liberation movement is apparently gaining momentum. Google even has a unit called the Data Liberation Front, an engineering team with the task of making it easier for users to move data in and out of Google products because, according to its website, “Users should be able to control the data they store in any of Google’s products.”

As cloud computing grows it’s likely that standardisation is going to become more and important. So it’s off to Basel then.

This article first appeared on Business Spectator.