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The public cloud giants are coming but data residency is not data sovereignty

The public cloud giants are coming but data residency is not data sovereignty

"Free and open source software creating public good through sovereign, trustworthy and transparent digital solutions".

This is Catalyst's vision. 

When we're asked by Tech Blog to give our take on Amazon Web Services' (AWS) announcement that it will be opening an outpost in Tāmaki Makaurau in 2024 and what that might mean for the likes of Spark, Datacom, Catalyst and others, the first thing we do is go back to this vision.

Does this announcement, like the one Microsoft made a year or so ago, mean that our vision has been achieved? Should we announce "job done" and head to the beach?

"Sovereign, trustworthy and transparent". None of these words come to mind when one thinks of the company, Amazon, which took around $160 million from the New Zealand tax-payer, shot a few scenes of Lord of the Rings and swiftly left these shores. Imagine what will happen when this plays out with our critical digital infrastructure and data on their platforms.

That said, one has to be pleased that Amazon and Microsoft are fast-ish followers. It surely gives those New Zealand companies that have spent millions on local cloud and datacentre facilities, for over a decade, confidence that we backed the right horse. 

Not everyone has understood this over time, to our national cost.

For example, around six years ago we sat in front of economists from the Productivity Commission to discuss a report they had written for the then Minister of Finance, Bill English, urging the uptake of overseas cloud platforms. They explained in great detail how cloud computing only worked at scale and how New Zealand lacked the scale from a business capability and compute perspective to justify onshore cloud.

What will change? Not a lot

We showed them our cloud services catalogue and very competitive pricing model and explained how New Zealand scale, open-source cloud, was extremely cost-effective and efficient. But they simply smiled and stuck to their guns and their obviously incorrect conclusions. Worse, they propagated this myth into the heart of the government's digital strategy. But now AWS and Microsoft have backed up our contention, in spades, and given further justification for the need for local, competitive and sovereign cloud solutions.

What will change when Microsoft, and now Amazon, land our shores? Not a lot. For customers that use their New Zealand regions, they will finally be able to process and store data in New Zealand. Everything else will be the same.

Data residency is not data sovereignty. For as long as control over cloud services - both legally and technically - is rooted in foreign companies, security agencies and governments, there is no sovereignty. If anyone has questions about that they should look at the US "Clarifying Lawful Overseas Use of Data Act" (CLOUD Act) of 2018 and Australia's evolving encryption laws. 

While we welcome international investment in Aotearoa's digital economy, it is vital that we have our own sovereign cloud computing infrastructure. Kiwi business leaders already know that Amazon's commitment to our country goes as far as their business interests go, and no further.

Aoteroa's future will be defined not just by the digital economy, but by the digital governance. It matters who we trust with our systems and data.

Don Christie is managing director of Catalyst IT. Doug Dixon is CEO of Catalyst Cloud.



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David Lane 30 September 2021, 4:55 pm

Well said Don. There aren't many digital decision makers in our gov't in whom we can have any confidence. We need better people in those roles - this is too important to get so completely wrong for so long.

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