What is the future of cloud technology in Asia amid data sovereignty challenges?

• Cloud tech provides business agility in Asia.
• Oracle’s EU Sovereign Cloud ensures EU compliance.

What is the key feature of cloud technology in the rapidly evolving Asian landscape? The answer is agility. This asset, highly sought by businesses, serves as a conduit for flexibility, scalability, and quick responses. It empowers organizations to adapt promptly to shifting business needs and scale operations in sync with demand, contrasting starkly with the constraints of traditional IT infrastructure.

In traditional settings, accommodating a surge in demand tends to be expensive and time-consuming. It necessitates initial investments in hardware and software, often including physical expansion of server capacities, over an extended period. In contrast, the cloud technology paradigm revolutionizes this process. It enables organizations to seamlessly adjust their service usage to meet fluctuating demand, thus bolstering prompt responses. Furthermore, it encourages the rapid deployment of applications or services, sidestepping the delays in acquiring and setting up infrastructure.

The agility of cloud technology

Successful cloud adoption requires identifying priority workloads, considering multiple providers, and thorough pre-adoption assessment.

The agility of cloud technology extends beyond mere response times, fostering innovation. It allows organizations to experiment with novel ideas and solutions without the risk of substantial initial investments. This flexibility propels digital transformation and equips businesses to thrive amidst rapid market evolution.

Equally critical to the cloud technology conversation are data control and sovereignty. Control in the context of cloud computing encapsulates the comprehension of data storage, access, and management protocols. Amid the rise of global data privacy regulations, such as the GDPR in Europe, businesses are growing increasingly aware of the necessity to comply with data sovereignty laws that demand data remain within the country of its collection or processing.

Strategic cloud planning can alleviate these concerns. With options like regional data centers and dedicated cloud instances, businesses can ensure their data stays within the necessary jurisdictions, thereby preserving data sovereignty. Advanced encryption techniques for data at rest and in transit and strict access controls ensure data security. This gives businesses the reassurance they need to protect their sensitive information.

In a recent conversation with Tech Wire Asia, Leo Leung, Vice President of Products and Strategy at Oracle, underscored Oracle’s comprehensive portfolio designed to address data control, flexibility, and sovereignty, including the EU Sovereign Cloud.

Oracle distinguishes itself with a holistic vision of the cloud that goes beyond just infrastructure and platform services like other hyperscalers, to also include application services. Leung pointed out, “Our customer base increasingly uses our infrastructure and platform to move applications to our cloud.” He mentioned Singapore Pools as an example of organizations migrating applications to Oracle’s infrastructure and database services. Other customers are leveraging Oracle’s software as a service for financial or industry-specific capabilities. As such, customers are using the full spectrum of Oracle’s services for various use cases and business segments.

Oracle’s EU Sovereign Cloud: What it means for the APAC region

The recent introduction of Oracle’s EU Sovereign Cloud represents a significant step towards meeting European data privacy and sovereignty needs. However, what does this mean for the APAC region?

Leung explained that the EU Sovereign Cloud primarily serves the 27 member states of the EU, but it also caters to international businesses and multinationals operating within the EU. With rising concerns over protecting and controlling data from intrusion by foreign governments or organizations, the EU Sovereign Cloud is a strategic solution.

The central goal of this strategy is to ensure compliance and EU sovereignty for businesses operating within the region. The dynamic nature of EU regulations has been a matter of ongoing debate for many years, leading to a stalemate among customers and providers due to the absence of a clear, finalized regulatory framework.

Leung stressed, “We recognized the importance of taking the lead and aligning with current regulations like GDPR, and to continue adapting as the rules evolve. There’s a vast market waiting, with many customers seeking this exact kind of protection.”

The video below discusses the EU Sovereign Cloud:

Leung went on to outline three unique features of the EU Sovereign Cloud. Firstly, it’s the only solution offering physical and logical segregation designed explicitly for the EU. This is facilitated through two new regions, separate from Oracle’s other European regions and specifically constructed for this task. Compared to other hyperscalers who may logically segregate customers while mixing them with other types of clients and workloads, Oracle deemed this approach insufficient.

Secondly, the EU Sovereign Cloud includes all Oracle services, mirroring its commercial regions with access to over 100 cloud services. Soon, application services will also be part of this offering. This broad service range starkly contrasts other providers, who generally only provide a subset of their services, potentially limiting customers’ ability to manage their workloads.

Lastly, the operation style of the EU Sovereign Cloud is distinctive. Although Oracle holds overall responsibility, the environments are managed by EU citizens, meeting many regulatory prerequisites. The controlling entity is also an EU body, separate from Oracle, with specific bylaws. Critically, it’s designed to prevent any data access or movement outside the EU.

Asia: A crucial market for cloud strategy

Asia remains an important market for Oracle. As such, Oracle’s comprehensive cloud strategy aligns with its broad business objectives in Asia, with a central focus on addressing various types of customer workloads.

Leung noted that while many hyperscalers in the market cater to new, “cloud-native workloads,” businesses often operate a blend of legacy and newer technologies. Companies established in the last five years might be an exception, having had the opportunity to start afresh or adopt Software as a Service (SaaS). However, established businesses usually operate technologies that aren’t strictly cloud-native.

“A key focus for us is to offer a cloud that can support these older workloads just as well as the new ones,” Leung said. He cited the example of the Nomura Research Institute (NRI) in Japan, which serves several hundred banks in Japan for equity management. These applications have been in use for several decades.

By supporting them and facilitating their transition from their facilities to Oracle’s dedicated region, they could attain the desired agility, access necessary cloud services, meet regulatory requirements, and prepare for the future.

Noticing the potential of what Oracle has to offer, governments and businesses in Asia have increasingly turned to cloud computing solutions, even within regulated spaces. While there may be unique regulatory requirements and security concerns associated with these regulated spaces, cloud providers and governments are collaborating to overcome these challenges and enable the adoption of cloud services. So, why must governments and businesses in Asia utilize cloud services within regulated spaces?

Leung emphasized the importance of addressing these issues. Citing various research, he highlighted that only 20 to 40% of workloads currently operate in the cloud, leaving a majority untouched. Oracle believes that factors such as data control, data residency, and sovereignty form one of the main obstacles.

Other hindrances include older applications and high-performance requirements that deter these customers from migrating to a public cloud or various distribution mechanisms. Another factor is the necessity for a wide range of services, which a single provider might be unable to fulfil. This is why many customers opt for multi-cloud.

In a recent survey conducted by Oracle, the company found that 97% of the over 2000 customers surveyed were using at least two or more cloud providers. Data sovereignty and residency are important considerations, and the regulations are only set to increase. Over the last decade, the number of existing standards and the number of countries implementing their standards have been on the rise. A distributed cloud is essential to meet these needs.

The initial approach of cloud service provision, which was largely centered around a few dozen regions in only the largest countries, will not be effective for the 60-80% of workloads that remain unclouded.

What is the best approach in adopting cloud technology?

With the increasing interest in cloud adoption across Asia, some countries and companies are still uncertain about the best approach. Leung shared some global best practices that Asian countries and businesses can follow to advance their progress in cloud adoption.

He said that organizations should start by identifying which workloads to prioritize for cloud migration. If IT is not their core competency, it might be worth considering moving a significant portion, or even all, of their workloads to the cloud. This step can offer numerous benefits, including automation, outsourced maintenance, and SaaS.

“Some companies might prefer a more selective approach,” said Leung. “They might consider various factors such as how close the workloads are to their facilities, the level of isolation they desire from other cloud customers, the types of regulations they need to comply with now and in the future, and their overall future IT strategy.”

Companies should also assess the range of capabilities required to excel in their specific industry or role and determine whether they will use multiple cloud providers for reasons such as reach or different types of services.

In conclusion, Leung advised that these considerations should form part of a comprehensive assessment before cloud adoption. This will aid organizations in selecting the right cloud provider or providers to support their operations and meet their specific needs.

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