recent DISCUSSION

• Ajit Jaokar says:

  thanks Stacy. I agree. Data will be the biggest challenge for the Cloud from a govt/regulatory perspective. rgds Ajit
• Stacy Baird says:

  Andre: I don’t think we are disagreeing in principle. I am merely arguing that there must be a fairly high bar for intervention given the nature of the particular industry. To take your example, I would argue that the outcome was as it should have been with Open XML. There are now two standards. But I would ask, what is the over-arching public interest in the setting of a standard for document formats? If, as I would argue, it was not critical public interest, or even an important public interest along with a market failure to produce a standard, than there is really no need for intervention. Many industries and markets thrive without direct government regulation. With regard to the IT industry, you argue that there need be interoperability laws. I would argue that if you look at the state of IT, there are remarkable efforts at interoperability simply to meet user requirements and the needs of an increasingly networked world — without government intervention.
• Rebentisch says:

  While technical specifications are subject to change fundamental principles stay and ought to be defended. “Governments should be reticent to set rules for IT markets.” Why? Rule setting to make markets work, that is exactly their job! Do IT markets function without intervention? We may doubt so. Governments should maximize the opportunities for market access and that includes of course interoperability enforcement policies. In Europe the OpenXML disaster clearly demonstrated that you cannot rely on a laissez-faire approach in standardisation matters and expect reasonable conduct but have to strengthen the rules and defend the national interest in open markets.
• Stacy Baird says:

  Ajit: This is going to be the biggest challenge of cloud. Given the truly global nature of the technology, a company using cloud could have data stored in several different jurisdictions. For every country that wants to benefit from either the use of cloud computing, or the direct benefits to the economy (such as what Singapore has chosen to do – creating the infrastructure and market for global cloud providers), governments are going to have to both make sure they have the laws appropriate to cloud computing, and also harmonize the relevant laws and policies globally. This is a huge challenge given some of the most ‘sophisticated’ legal systems don’t do even step 1; and given the social and philosophical differences we will have to bridge to get to step 2. But like never before, the imperative is there: To participate in global trade, governments will have to tackle the big legal challenges.
• Ajit Jaokar says:

  Hi Helen
  In my view, re Cloud computing – most govt intervention is in the space of managing Data. In that sense it is not a technological intervention but privacy/data protection led intervention. Do you agree? Because to some extent different principles apply. Govts(expecially ours) blunders on data protection very often! ex today’s headline shows Tax credit details revealed by Revenue’s mistake http://news.bbc.co.uk/1/hi/business/10174577.stm – but they can claim to some extent that they are protecting the rights of their citizens if they protect data. Hence the difference. Do you agree? rgds Ajit
• Stacy Baird says:

  Hi Mattias: It is certainly understandable in the particular market, given the national fragmentation. But I would argue that it is not a technology problem, or even a traditional market problem, so much as a political one. It’s unfortunate, because companies that could very effectively compete are foreclosed from that opportunity.
• Mattias Ganslandt says:

  Stacy, the idea that governments can (and should) intervene in ICT standardization has unfortunately had quite strong support in Europe ever since GSM was developed. The idea being that governments need to coordinate industry efforts to generate sufficient network externalities for the technology to take off. /Mattias
• Peter Gray says:

  Stacy, thanks for such a thought out reply. I think the distinction between more intervention and smarter intervention is key and further suspect that perhaps such protectionist/regulatory elements may be focused away from cloud computing. Either way I think a government threshold is important and as you stated in the article should absolutely be founded in critical public interested.
• Stacy Baird says:

  It’s not so much a matter of trust. There is a lot of pressure on governments to get smarter about economic development. I’ve seen governments take on corruption and cronyism to address some of the challenges they face. This is a big shift from only a year or two ago. There certainly will be more government engagement in certain markets, and I am not suggesting there is no place for government regulation – but with regard to standards and technology, there has to be some threshhold questions answered before a government jumps in. I would not, for example, suggest that there is no place for government regulation in the financial markets – there is a history of market failure absent regulation, and we certainly saw one in this most recent crisis.

  With regard to globalization and IT, the case has to be made to those that are inclined to intervene in the market that economic success depends on participation in the global market, not isolation through protectionist measures.
• Peter Gray says:

  Stacy, interesting proposal. Do you think that governments can be trusted not to tamper particularly in the the aftermath of the recent economic crisis which has seen governments worldwide taking a more active role in markets?