Regulations and Security Concerns Hinder Asia's Move to Cloud Computing

The research firm IDC estimates that the market for cloud computing in Asia outside Japan will grow to about $1.3 billion this year and will continue expanding at a rate of about 40 percent a year until 2014. That figure is just a splash in the estimated $68.3 billion that cloud computing will bring in globally in 2010, according to the research firm Gartner. And for every case of avid adoption, as in Singapore, there are other countries where acceptance is hindered by regulations, concerns about data security and poor Internet connections.

"What will drive adoption is broadband penetration," said Emilio Umeoka, president of Microsoft's Asian operations in Singapore. "If you don't have the pipe, you can't get onto the cloud." For potential customers, the savings from cloud computing are enticing. Like equipment leasing before it, cloud computing turns what once was a big-ticket capital expenditure into an operating expense for companies -- one that can be tuned up or down, depending on business conditions. What is giving Asian customers pause, though, is the same concern being voiced elsewhere: that a company's precious financial and customer data could be lost, stolen or even rendered temporarily inaccessible through no fault of its own. To many, the threat posed by hackers, possible government interference and even power failures justifies keeping their data housed on their own premises, in their own countries.