Address to AIIA summit, 'Cloud in the Digital Economy'

Introduction

As the internet changes how we live our lives, so cloud computing changes how we can use the internet.

Cloud computing is a transformation that offers government, businesses and individuals unprecedented flexibility and efficiency.

Today’s forum reflects the importance the Australian Government places on cloud computing as a driver of the Digital Economy.

Last year Prime Minister Gillard and President Obama announced a series of initiatives to expand and deepen cooperation between our two countries.

This announcement included a partnership to address digital issues.

As part of that partnership President Obama was keen to share with us the the US experience of its Cloud First policy.

In particular President Obama was keen for us to hear directly from for his former CIO Vivek Kundra. We are privileged to have him here with us today. I also congratulate him on his recent appointment with Salesforce.com.

Mr Kundra was instrumental to the development of the Cloud First policy. Under this policy the administration has revolutionised its online service delivery and addressed many inefficiencies.

I look forward to hearing his personal experience of that policy.

Benefits of the cloud

The term “cloud computing” covers a wide range of different services and business models. They all however involve a communications link from the user to the cloud.

What is inside the cloud can be one or many machines. What the cloud offers can be software, platforms or infrastructure like storage.

There is, however, no doubt that the cloud is where much of the future of computing lies.

This future is assured because cloud computing can offer lower costs, scalability, security and availability.

Michael Harte, CBA’s CIO, has been an early adopter, citing the dramatic cost impact as one of the reasons.

He says:

We are saving tens of millions of dollars ... from buying specified services on demand, paying a unit price for them and having that flexibility.

The cloud offers significant opportunity for improved government services to be delivered more cheaply and more effectively.

We know most people prefer to engage with the government online and an increasing number do.

Forty-seven percent of Australians made their most recent contact with government online.

Local Investment in Cloud computing

The future for cloud computing in Australia has been underpinned by major investment in cloud computing through data centres.

In six months last year, Telstra, Fujitsu, Macquarie Telecom and others invested $2.1 billion in domestic data centres. Such investment will continue.

Salesforce.com chief executive Marc Benioff has indicated that for his company a data centre in Australia is a matter of when, not if.

The Australian Government welcomes such confidence and commitment by the private sector.

Our demand for data is increasing daily, and as a consequence the amount of data pouring into data centres is rising exponentially.

It is now up to Australian businesses and governments to back these investments by considering and accessing the benefits of cloud computing.

A strong domestic cloud computing sector will be an important component in the success of Australia’s Digital Economy.

Australia’s capability to respond to this further cloud-driven growth has been confirmed in Asia’s first Cloud Readiness Index.

The index, released last year, ranked Australia fourth out of 14 countries analysed.

The study examined a nation’s ten key attributes critical for the successful deployment and use of cloud-based services.

We came in behind Japan, Hong Kong and Korea and Singapore at equal third. China and India were eighth and ninth respectively.

Significantly, Australia received full marks for its regulatory conditions.

We scored more than 8 out of 10 for data protection policy, power grid quality, business efficiency and global risk.

Our weakest score came in broadband quality.

NBN and the cloud

The National Broadband Network will ensure that Australia will rise through the ranking.

The NBN’s delivery of reliable, highspeed broadband to every Australian premise will allow us to harness the cloud’s full potential.

The fact is that for an economy to gain maximum benefit from cloud computing solutions, you need superfast internet connections.

Rob Livingstone, fellow at the University of Technology in Sydney’s Faculty of Engineering and Information Technology, has made the comment:

• “The emergence of cloud computing ... will be turbo-charged with the deployment of the NBN”.

The NBN and the cloud are a natural fit, they combine to offer unprecedented opportunity.

Together, they will prove to be more than the sum of their parts in the gains they will generate.

The NBN’s fast download and, critically, upload speeds will revolutionise access to the cloud.

This superfast transfer of data will allow businesses to reconsider their costly computing requirements.

This changing face of computing is triggering innovation, and producing savings and productivity gains.

The robustness and reliability of the NBN will boost business confidence.

In his report on the potential for cloud computing services in Australia, Dr Nick Gruen wrote the NBN will:

• “...promote business and consumer confidence in cloud solutions”.

As Macquarie Telecom’s managing director for hosting, Aidan Tudehope, has said:

• “ [the NBN provides] a shot in the arm for the entire internet ecosystem [which] in turn drives data centre demand.”

In May last year I launched the National Digital Economy Strategy. That strategy highlights the role of cloud computing in government service delivery.

To that end, our strategy includes a number of initiatives to harness cloud computing.

These include the Digital Local Government Program to co-fund digital projects with local governments.

This program assists local governments deliver innovative online services to homes and businesses and helps them improve their online engagement.

Importantly, it encourages the development of online services that are replicable and scalable.

The idea is other local governments across Australia can then adapt them for their own purposes.

We are expecting cloud computing solutions and services to feature prominently in the program.

The scalability, and cost-effectiveness, advantages of the cloud are very important considerations for all local government.

The Digital Local Governments Program aims to take a collaborative approach to improve the delivery of key services to Australians.

In support of online engagement the National Digital Economy Strategy supported the introduction of data.gov.au. This is a data catalogue of government information. The site provides an easy way to find, access and reuse public datasets from the federal and state and territory governments

The US has established an enviable record in providing access to government data. Their data.gov website is powered by Cloud First. Its extensive data and myriad associated apps sets the standard for access to Government data.

Challenges

Clearly there are also going to be some ongoing challenges with cloud computing we are going to need to address.

Chief among them, I think, are consumers’ valid concerns about the privacy of their hosted information.

Security is going to be a real issue for government, along with cross-jurisdictional uncertainties.

Service level agreements and contractual terms and conditions from trailblazing vendors are challenging consumers.

What we know is that the demand for cloud products and services will grow rapidly.

Rising to the challenges of the surge in demand is something we need to do across government, industry and business.

Partnering with the private sector will be key to ensuring the cloud’s full potential is met.

I particularly welcome the co-operative efforts of industry through OzHub and the Asia Pacific Cloud Alliance. These organisations are building self-regulatory frameworks and operating standards to build the cloud services industry.

Ongoing events such as this one will also be critical to that.

My department is engaging with industry and other experts more broadly to explore the issues we face.

Last year my department -- in conjunction with Global Access Partners (GAP) -- held a cloud computing workshop in Sydney.

It was attended by 100 senior public and private sector stakeholders.

The GAP workshop’s final report included a number of recommendations for government.

One of those recommendations led to the establishment of the National Standing Committee on Cloud Computing.

This group of industry, consumer and government representative is chaired by my department.

It provides the leadership to encourage the adoption of cloud computing solutions in Australia.

My department is working closely with a range of industry stakeholders, particularly the Australian Information Industry Association (AIIA) Cloud Taskforce.

Together, they are examining the use of cloud computing within specific industry sectors to identify and promote industry best practice.

My department is liaising with the Australian Communications Consumer Action Network to explore research opportunities to ensure positive consumer outcomes.

I think it’s fair to say there is a high level of uncertainty among consumers and providers around cloud services.

Unless overcome, this uncertainty will pose a barrier that will impede us from fully realising the benefits of the cloud.

We are working with Standards Australia to coordinate and engage with international standards-making, particularly the JTC1 Strategic Advisory Committee.

That’s the committee that contributes to the development group where experts come together to develop worldwide ICT standards.

Historically, Australia has been on the receiving end of international standards.

Now, with a seat at the JTC1 table, the Australian perspective can influence international standard development on cloud computing.

Obviously standards are also helpful for producing good outcomes for consumers.

Strong standards will ensure that cloud consumers have confidence in their providers to deliver satisfactory service.

As with any emerging technology, hiccups and bumps for cloud adopters are going to be almost inevitable.

The Government is developing an early-response network of government agencies to monitor, identify and respond to consumer cloud issues.

This network includes my department, the ACCC and the ACMA.

The Cloud Information Community – that’s public officers investigating governmental cloud use -- have released a set of better-practice guides.

They provide advice to government agencies adopting cloud solutions but they are equally helpful for private businesses.

Let me stress...

I am keen to continue working with industry, consumers and government agencies to discuss cloud-associated policy challenges.

It is important no one gets left behind in this new cloud-based future, which is not just for the big players.

It is a fundamental shift with enormous benefits across the digital landscape.

It is really important we do not lose sight of the needs of consumers and small business as well here.

Conclusion

The cloud really is a new frontier.

It is an opening that can lead us to new ground in terms of capability and flexibility.

It has the potential to deliver so much benefit to so many businesses and consumers.

That said, many, I know, still do not grasp it.

It is a concept to struggle with rather than a productive reality for many people.

Those of you, who are here today, though, do fathom the potential and have come to share, and to learn.

I hope you have many a robust discussion and debate today. May the ideas and experiences flow.

Your interest, and government’s response to that interest, will help deliver the full benefits of cloud computing to all Australians.

Thank you