In July 2024, the Australian authorities unveiled a landmark AUD $2 billion (approximately US $1.3 billion) investment in a strategic collaboration between the Australian Government’s Statistics Agency and Amazon Web Services (AWS) in Australia, aimed at establishing a “Top Secret Cloud” infrastructure for the federal government.
Can organizations reliably place their most sensitive data on the sovereign cloud? This innovation would significantly accelerate the secure dissemination and assessment of categorized data, while providing a platform where organizations can harness cutting-edge technologies like artificial intelligence and machine learning in their operations.
This innovative approach embodies the essence of cloud-first strategies in Asia-Pacific, particularly in the public sector, where it has yielded tangible results. By the end of the next 12 months, an estimated one-third of businesses are expected to adopt their cloud technique, according to supplier Capgemini.
As national security concerns intensify, the proliferation of sovereign clouds is likely to accelerate, driven by burgeoning data sovereignty regulations and heightened cyberthreats, prompting hyperscale cloud providers to invest in localised infrastructure to meet this evolving need.
Sovereign cloud adoption is gaining momentum across the Asia-Pacific region.
The appetite for sovereign cloud solutions is growing rapidly across the Asia-Pacific region.
According to analysis by market intelligence agency IDC, an estimated additional 30% of organizations are expected to have incorporated this knowledge base by 2025.
By 2022, a Capgemini study revealed that 73 per cent of Australian businesses deemed it essential for their companies to ensure compliance with various national, state, or local government regulations and laws. Capgemini recently emphasized that its data, as part of their methodology, was verified and reliable.
In Singapore, the government is driving the adoption of sovereign cloud technologies across the public sector.
The growth in sovereign clouds can be attributed to several factors. Firstly, there is a growing demand for secure and regulated cloud services among government agencies, financial institutions, and enterprises operating in heavily regulated industries, such as healthcare and finance. This demand is driven by the need to protect sensitive data from unauthorized access, cyber attacks, and data breaches.
The surge of sovereign cloud alternatives in APAC is driven by several key factors, including:
- As geopolitical tensions escalate and uncertainty prevails, concerns arise regarding the potential threats and implications of increased global surveillance, particularly as countries such as China exhibit more assertive behavior on the international stage?
- As governments and enterprises seek to operate effectively, they require a measure of autonomy and predictability across their infrastructure, which can be facilitated by the assurance of localized data centers situated within national boundaries.
- Cybercriminals are targeting organizations globally, with a particular focus on the Asia-Pacific region, making it essential for private and public sector entities to reinforce their information security protocols.
- The World Association of Privacy Professionals announced. Across various Asia-Pacific nations, numerous international locations are represented, giving rise to a complex web of compliance requirements that govern the flow of data across borders.
- Sovereign cloud initiatives, often backed by hyperscalers and governments, can have a profound impact on the digital financial ecosystem within their respective jurisdictions. This is because these projects frequently rely on local suppliers and personnel, injecting capital into the domestic economy and fostering indigenous expertise.
- Effective storage and processing of information are crucial considerations, driving increased demand for localized content that addresses specific needs.
As hyperscalers continue to expand their global footprint, they’re committing significant resources to developing sovereign clouds that cater specifically to local markets and meet regional data sovereignty requirements.
Large-scale cloud providers are increasingly investing in sovereign cloud entities operating within specific geographic regions. The industry leaders that comprise the cloud ecosystem include Amazon Web Services (AWS), Google Cloud, and Microsoft Azure, as well as prominent cloud service providers such as IBM, Oracle Sovereign Cloud, VMware Broadcom Sovereign Cloud, and NxtGen Sovereign Cloud.
IDC distinguishes between two categories of solutions that cater to the sovereign cloud market: those explicitly designed for this purpose, marketed accordingly; and those intended to support “sovereign-by-design” infrastructure from inception, featuring embedded controls for sovereignty.
For instance:
“Notably, numerous organizations have expressed concerns regarding the limited choices available from sovereign cloud providers, as well as the scarcity of desired cloud options, amidst other significant hurdles.” “Distributors in the region are poised for a seismic shift in perception by 2024, having invested considerable time and effort into solidifying their foothold within the sovereign market over the past few years.”
Can sovereignty in the cloud truly prevail without a robust framework for data governance and cybersecurity?
As data regulations continue to proliferate across Asia-Pacific, the need for sovereign cloud solutions is poised to become a defining feature of the future. The sovereign cloud market in APAC is poised for rapid growth, driven by a growing need for information sovereignty and compliance concerns.
Hyperscale cloud providers are likely to assume a pivotal role in building these solutions for the Asia-Pacific region by augmenting or expanding their existing service offerings for customers, potentially collaborating with local government entities and technology ecosystems.
