Report finds global patchwork of laws could hinder growth of cloud businesses

A patchwork of international laws governing cloud computing services could hinder the expansion and growth of the technology, according to a report released Thursday by BSA | The Software Alliance.

The software trade group says that while countries are improving the legal environment for cloud services, it's happening at an uneven rate.

“Mismatched privacy and security rules are making it hard for data to flow across borders. Too many countries are chopping off pieces of the cloud for themselves," said BSA President Robert Holleyman in a statement. "This undercuts economies of scale that can benefit everyone."

The BSA report analyzes 24 countries' laws and regulations governing cloud computing policies, scoring the countries' rules across seven categories, including data privacy, security, cyber crime and intellectual property rights. The trade group says these 24 countries account for 80 percent of the information and communications technologies market.

The report found that some countries "continue to propose geographic restrictions on data and limits on the outsourcing or work or data." It notes that Indonesia rolled out new regulations that require cloud service providers to register their services with a central authority, and also force them to set up local data centers and hire local staff. As a result, the country is ranked lower on the trade group's scorecard.

A case study in the scorecard warns against prescriptive rules in a proposed privacy framework in the European Union, saying that heavy-handed regulation "will undermine Europe's privacy goals."

"National privacy regimes should be predictable and transparent and should avoid unnecessarily burdensome restrictions on cloud service providers such as registration requirements for data controllers and cross-border data transfers," the report reads.

However, BSA notes that some countries have enacted new rules that will help the cloud computing market grow. For example, Singapore moved up from last year's rankings after the country adopted a new privacy law that BSA says strikes the right balance between protecting people's information and encouraging new innovation.

Japan ranked first on the scorecard for having the top policy environment for cloud businesses.

BSA represents major software companies in Washington, including those that offer cloud storage services such as Apple, IBM and Microsoft. The trade group keeps a close watch on new tech rules enacted by other countries because they impact its member companies' ability to growth their cloud businesses.