Cloud gap widens between mature and emerging APAC markets: index

cloud APAC
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Mature Asia-Pacific economies continue to top the Asia Cloud Computing Association’s Cloud Readiness Index (CRI) 2018 rankings, with Singapore and Hong Kong ahead of much larger emerging APAC markets such as China, India, and Indonesia. And the gap appears to be getting wider.

The latest CRI reveals that the readiness divide observed in the 2016 index has widened slightly despite emerging markets’ efforts to leapfrog into digitally-enabled economies. If left unaddressed, this divide could lead to a pervasive unequal access to the potential socio-economic opportunities brought about by digital technologies.

Nine of 14 APAC economies did not move in the rankings, suggesting that cloud readiness is progressing at a homogenous pace across the region. Singapore, Japan, and Taiwan stood out by ascending one rank each, while Hong Kong and Australia respectively lost one and two positions.

Singapore’s renowned no-nonsense efficiency is a powerful cloud readiness enabler. It is consistently positioned among the top three economies for most segments and parameters, taking top spot in this year’s rankings.

The 2020 Tokyo Olympics are pushing the Japanese government to increase the scope and scale of its cloud readiness. With its high internet speeds, secure environment, and recent privacy reforms, Japan is well positioned to lead regional cloud adoption.

As one of the Four Asian Tigers, Taiwan has long put emerging technologies at the forefront of its economic strategies. Improvements in the cloud governance and infrastructure segments, have for instance, strengthened its ability to drive wider cloud adoption by the public and the private sectors.

Hong Kong’s tumble may be indicative of the significant advances made by other APAC economies rather than any specific shortcomings. It remains a strong performer in the cloud infrastructure and security segments, while others do much better in terms of cloud regulation and governance.

Despite falling in the rankings, Australia remains a strong regional contender. Weighed down by its relatively poor cloud infrastructure, it remains a strong performer in other key readiness areas thanks to its forward-looking ‘Cloud First’ policy.

Wider cloud adoption requires additional efforts

Singapore and Hong Kong stand out with outstanding broadband speeds and international connectivity, taking top spot in the aggregated cloud infrastructure and regulation segments. Australia and New Zealand rank highest in terms of cloud governance, well ahead of most other APAC economies. Regarding cloud security, Singapore and South Korea stand out as clear leaders. In 3rd position, Malaysia is the only emerging economy at the top of the cloud security rankings, demonstrating the effectiveness of its recent cybersecurity initiatives.

At the other end of the spectrum, Vietnam and China lag behind the rest of the region’s emerging economies in a number of fundamental parameters, including privacy, intellectual property protection, and freedom of information. Cloud infrastructure and security remain an issue for Indonesia and the Philippines, while Thailand performs poorly in the aggregated cloud regulation segment.

“The ACCA recommends that economies who do not have ‘Cloud First’ policies consider their implementation, and that economies who have them in place look into developing supporting policies,” says ACCA chairman Bernie Trudel. “These may include cloud vendor registration or accreditation approaches, providing guidance for baseline security standards to enhance cybersecurity, and developing specific data management policies.”

Inequalities may limit potential growth

The difference between economies’ CRI 2018 scores averages 2.7 points – compared to 2.6 in 2016 – which means the gap has slightly worsened over time.

The fact that the eight highest ranking economies remain unchanged between 2014 and 2018 suggests that this cloud divide may already be deeply entrenched. Without further intervention, this divide could widen despite the efforts being made by emerging markets to leverage the smart technologies that enable sustainable digital economies, says Eric Hui, vice-chair of the ACCA.

“To reduce the cloud computing divide, the ACCA recommends emerging APAC economies accelerate work to develop initiatives that boost connectivity fundamentals,” says Hui. “These could be government cloud (gCloud) schemes that improve international and domestic connectivity, as well as national digitization plans that drive short-term technological innovation in emerging fields (5G, Internet of Things, artificial intelligence) and address longer term development goals.”

Beyond readiness: unlocking digital opportunities

According to ACCA, the CRI 2018 raises questions that make it necessary to start thinking beyond simple readiness.

For example, India and China have both made significant progress in driving the region’s adoption of cloud-driven technologies, playing central roles in the region’s technological development. Yet at 12th and 13th positions respectively, they both remain at the bottom of the CRI rankings.

Meanwhile, Indonesia, Malaysia, and the Philippines have recently implemented a number of forward-looking policies that make them attractive destinations for cloud providers. But because these are policy-driven changes, it will be some time before their impact can be felt or even measured.

ACCA executive director Lim May-Ann said there is a clear need for additional metrics that measure the potential impact cloud technologies have on societies. Should metrics be available across economies, a new Cloud Impact segment could be included in the CRI, involving a number of indicators such as number of smart cities, number of locally-developed apps, FinTech presence and growth, attractiveness to tech start-ups, or IoT usage in industries.

“Moving further into the Fourth Industrial Revolution, cloud-based technologies will continue to drive intelligent innovation that connects people, products, and platforms,” adds ACCA treasurer Barbara Navarro. “In this context, APAC economies must measure new aspects of their technology policies – not only their implementation, but also their actual impact on people’s lives.”

The CRI 2018 is available for download, and as an interactive microsite.

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