BSA & Galexia Global Coud Computing Scorecard (2018) - Galexia Analytics Release

3. Executive Summary and Overall Findings (from the BSA Report)

Five years is an extremely long time in today’s technology-driven era, and the global cloud computing market has grown exponentially in the five innovation-filled years since BSA | The Software Alliance launched the initial Global Cloud Computing Scorecard.

Consider just a few changes: In 2013 when BSA released the first Scorecard, the demand for cloud computing came largely from start-ups and other small companies. In 2018, though, analysts predict that more than half of enterprises will have adopted cloud computing worldwide and that cloud applications, platforms, and services will continue to radically change the way enterprises compete for customers.[1]Governments, recognizing the cost-effective and far-reaching power of the technology, are increasingly adopting cloud-based tools as well. According to market experts, between 2012 and 2015 the demand for cloud computing accounted for 70 percent of related IT market growth — and it is expected to represent 60 percent of growth through 2020.[2]

In light of that growth — and changes in markets around the world — BSA opted to update the way
it ranks countries’ preparedness for the adoption and growth of digital services. The result of that re- examination is the 2018 BSA Global Cloud Computing Scorecard, the newest and most comprehensive version of the only report to regularly track change in the international policy landscape for cloud computing.

These new rankings put additional emphasis on the policy areas that matter most to cloud computing, such as privacy laws that protect data without unnecessarily restricting its movement across borders and cybersecurity regimes that promote the proper protection of consumer and business data without freezing into place out-dated and unneeded regimes. In addition, questions to assess intellectual property protections have been extensively revised to focus on cloud-relevant issues, including new questions on trade secrets and patents.

Using the Scorecard, BSA has tracked the evolution of the legal and regulatory environment for cloud computing in 24 countries around the world. This year’s results clearly demonstrate several important points. The new methodology reveals a similar overall pattern. The rankings fall into three general categories with a group of top-performing countries (e.g., the EU nations, Japan, the United States, Australia, Singapore, and Canada) being pursued by countries like Korea, Mexico, Malaysia, and South Africa. Bringing up the rear are a small group of nations that have failed to embrace the international approach: Russia, China, Indonesia, and Vietnam.


	Countries continue to update and refine their data protection regimes — most often in a way that ensures important cross-border data transfers.

Among the other key findings of the 2018 Scorecard:

Advanced privacy and security policies set leading countries apart from lagging markets
- Countries continue to update and refine their data protection regimes — most often in a way that ensures important cross-border data transfers. Canada again scored highest in the privacy category based on its comprehensive legal regime that avoids onerous registration requirements.
- Japannow has a new central regulator in place to accompany its recently adopted comprehensive privacy legislation, and those elements are complemented by effective enforcement provisions.
- Turkey adopted its new Law on Personal Data Protection in 2016 (in addition to signing the Convention on Cybercrime, which came into force in Turkey in 2015). These developments help to create a positive environment for building consumer trust in cloud services.
- Several countries, however, still have not adopted adequate privacy laws. Brazil and Thailand do not have comprehensive laws, and the laws in China, India, Indonesia, and Vietnam remain very limited.
Emerging markets continue to lag in the adoption of cloud-friendly policies, hindering their growth
- Indonesia continues to update and reform laws and regulations in the information technology (IT) sector, but the result has not been positive for cloud computing. Regulations impose significant barriers for cloud service providers, including requirements for providers to register their services with a central authority and rules that force some providers to establish local data centers and hire local staff.
- Russia’s laws on both privacy and cybercrime do not follow recognized international standards. Russia requires data operators to store the personal data of Russian citizens on servers based in Russia. This data localization requirement has a significant negative impact on the digital economy.
- Vietnam falls short in several key policy categories, scoring just one point for security (with no national cybersecurity strategy in place) and just half a point in efforts to promote free trade.
Deviations from widely adopted regimes and international agreements hold back key markets
- Japanwhich has finished atop the rankings in every previous version of the Scorecard, scores strongly in most policy categories but its scores slip sharply in Support for Industry-Led Standards and International Harmonization of Rules. It is the only leading market to not have a general law on e-commerce.
- The Budapest Convention on Cybercrime is the first international treaty that aimed to harmonize national laws, improve investigative techniques, and increase cooperation among nations in order to fight Internet and computer crime. The convention has been widely adopted or mirrored through national regimes. Only two countries have failed to follow their lead: China and Korea.
- Internationally accepted standards, certification, and testing help improve the security environment for cloud computing, but not every country recognizes such best practices as meeting local standards. The holdouts include countries that might be expected to have protectionist policies (e.g., China, Indonesia, Russia, and Vietnam), but they also include countries like Argentina, India, Mexico, and South Africa.


	The ability of countries and companies to leverage cloud computing for growth requires that they be able to access a powerful network; the new methodology puts increased emphasis on the IT Readiness, Broadband Deployment category.

Those few countries that have embraced localization policies pay a heavy price
- After years of concerns about restrictive policies in Russia, the effect of those policies are becoming more clear. This year, for the first time in the history of the Scorecard a country finished with a zero in one of the scoring categories. Russia’s failure to embrace technology neutrality in government procurement and its cumbersome Internet filtering and censorship regulations act as a barrier to cloud computing.
- These policies are not without financial effects. Consider that in 2012 the research firm IDC found that Russia’s cloud computing market had grown more than 417 percent to nearly $60 million and was projected to continue to grow by more than 50 percent in the years ahead.[3]By 2017, though, IDC was finding growth in the Russian cloud market of just 9.9 percent — far behind the global growth of 19 percent.[4]
- Vietnam also continues to impose severe censorship and restrictions on Internet content. That fact is further complicated by the country’s failure to develop appropriate laws on government procurement and other trade barriers.
Increased emphasis on IT readiness and broadband Deployment leads to interesting results
- The ability of countries and companies to leverage cloud computing for growth requires that they be able to access a powerful network; the new methodology puts increased emphasis on the IT readiness and broadband Deployment category. Although almost all countries continue to work to improve broadband penetration, the success of those efforts remains very inconsistent.
- Singapore Japan, and Korea score highest in the category — boosted by the successful efforts to boost their national broadband plans.
- Certain countries’ high IT Readiness scores may be masking weaknesses in other areas of cloud policy. For example, when infrastructure scores are removed, Japan ranking plummets from No. 2 to No. 10. Likewise, Korea scores nearly 20 points for IT Readiness and rounds out the top tier of countries in the rankings. But it finishes much closer to middle-tier countries like Mexico and South Africa in an examination of the countries’ pure policy rankings.

[1] Predictions 2018: Cloud Computing Accelerates Enterprise Transformation Everywhere, Forrester (Nov. 7, 2017), available at: https://www.forrester.com/report/Predictions+2018+Cloud+Computing+Accelerates+Enterprise+Transformation+Everywhere/-/E-RES139611

[2] The Changing Faces of the Cloud: Technology Companies Are Adapting to Sell Cloud to the Growing Number of More-Mainstream Buyers, Bain & Company, Mark Brinda and Michael Heric (2017), available at: http://www.bain.com/Images/BAIN_BRIEF_The_Changing_Faces_of_ the_Cloud.pdf

[3] Oleg Kouzbit, Report: Russian Cloud Market to Top $460 Million by 2015 (September 25, 2012), available at: http://www.ewdn.com/2012/09/25/report-russian-cloud-market-to-top-460-million-by-2016

[4] IDC, Russia Cloud Services Market 2016-2020 Forecast and 2015 Vendor Shares, (September 2016), available at: https://www.idc.com/getdoc.jsp?containerId=CEMA40565616; Forbes, Roundup of Cloud Computing Forecasts, 2017, (April 29, 2017), available at: https://www.forbes.com/sites/louiscolumbus/2017/04/29/roundup-of-cloud-computing-forecasts-2017/#144a9d7f31e8





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