DBCDE: Cloud Computing Update

1. DBCDE: Cloud Computing Update Keith Besgrove

2. Cloud Computing – update on recent DBCDE work • October 2009 OECD Workshop • 2010 University of Adelaide study on emerging cloud computing issues • 2010 Formation of DBCDE-Global Access Partners Taskforce on public policy challenges of Cloud Computing • June 2011 – some broader conversations with regulators and policy makers

3. GAP Taskforce • Chatham House rules group • Included public, private and research groups • Google, Microsoft, HP, Sophos, CSC, Alcatel • Queensland Treasury, Federal Attorney Generals, Privacy Commission, AGIMO • NICTA, CSIRO, Uni of Adelaide, ACCAN • And a host of others • Met four times August 2010 to February 2011 • Currently finalising a report • Some overlap with AIIA group

4. What is cloud computing • Basically it is computing as a utility • Gartner’s five criteria: • Scalable and Elastic: Services that scale on Demand • Service based: well defined service interface • Shared: Services share a pool of resources to build economies of scale • Metered by Use: Services are tracked with usage metrics to enable multiple payment models • Uses Internet Technologies: Service is delivered using internet protocols, such as HTTP, IP via web-oriented architecture.

5. Why is it so important (1) • It reduces the cost of establishing and operating computer/communications systems by at least an order of magnitude • It reduces the time to establish computer support systems for a research project, a technology start-up company, or a new government service from months to days, or even just a few hours

6. Why is it so important (2) • Cloud computing is changing how we use computing/communications systems • It will make everything about communications better, faster and MUCH cheaper than today • The cost advantages are so large that cloud is probably unstoppable • The combination of cloud computing and the NBN will be an force for transformational change of the Australian economy and society

7. What’s happening now • Rapid and escalating deployment of cloud services overseas and in Australia e.g. Fujitsu, Macquarie, HP etc • Rapid emergence of very large data centres to support rapid expansion of the market • Governments are quickly catching on the the massive savings in IT budgets that cloud computing seems likely to deliver e.g. AGIMO Commonwealth Government strategy, growing focus in states such as Queensland

8. Industry reactions in Australia • Vendors are moving quickly to establish cloud services • Banks are moving slowly because of fears of reputational risk • But many large and small firms are quickly embracing cloud services offered both here and overseas

9. Opportunities (1) • Cloud service providers are already emerging in healthcare, education, university and private sector research and government service delivery • Potential major pay-offs for quality of service to regional, remote and indigenous communities • Small business will find the value proposition irresistible • Consumers will be presented with an ever increasing array of choice (sometimes bewildering) • Laying the foundation for the Australian research and software community to become world leaders in the export of innovative cloud computing software applications

10. Opportunities for Australia (2) • Could become a cloud service provider to the region • Large and small business can leverage cloud services to reduce costs, increase flexibility and speed of deployments, and enhance customer service • Potential to streamline and coordinate all forms of government service to deliver much more citizen-centric services – particularly in regional and remote areas

11. Potential issues (1) • Constraints on international connectivity could become a significant limiting factor • The standards environment is quite unstable – taskforce identified 24 different cloud standards setting agencies at work today • Uni of London study shows significant shortcomings in cloud contractual terms and conditions • Privacy, security and identity management concerns loom large at this stage of the spread of cloud computing

12. Potential issues (2) • Regulators are already asserting the need for caution e.g. APRA • There are real dangers of vendor lock-in • Unclear what happens to my data when I end my contract or my cloud provider goes broke • Small business may lack the necessary expertise in negotiating SLAs which protect their business. • Consumers may have much stronger protections than small business • Fujitsu research suggests that Australians may be more cautious about embracing cloud services on a large scale than other countries

13. Potential Issues (3) • With the introduction of high speed broadband, the risks to consumers of overconsumption are very real • We may see the development of cost models that escalate out of control for new users and those not savvy enough to understand the link between downloading content once, and streaming, or multiple instances of use of the same application

14. What’s next? • Taskforce report is being finalised • Will be publicly available • Proposing a broader conversation with interested parties including regulators and other policy makers and advocacy groups • Need for on-going dialogue around the potential problems and their solutions.