Gmail, Macquarie, and US regulation

Google continues to successfully push Gmail into higher education, in an Australian deal with Macquarie University. (Microsoft is its primary competitor in this market, but for Microsoft, most such Live@edu represent cannibalization of their higher ed Exchange base.)

That, by itself, isn’t a particularly interesting announcement. Email SaaS is a huge trend, and the low-cost .edu offerings have been gaining particular momentum. What caught my eye was this:

The university was hesitant to move staff members on to Gmail due to regulatory and cost factors. They were concerned that their email messages would be subject to draconian US law. In particular, they were worried about protecting their intellectual property under the Patriot Act and Digital Millennium Copyright Act, Mr. Bailey said. “In the end, Google agreed to store that data under EU jurisdiction, which we accepted,” he said.

That tells us that Google can divide their data storage into zones if need be, as one would expect, but it also tells us that they can do so for particular customers (presumably, given Google’s approach to the world, as a configurable, automated thing, and not as a one-off).

However, the remark about the Patriot Act and DMCA is what really caught my attention. DMCA is a worry for universities (due to the high likelihood of pirated media), but USA PATRIOT is a significant worry for a lot of the non-US clients that I talk to about cloud computing, especially those in Europe — to the point where I speak with clients who won’t use US-based vendors, even if the infrastructure itself is in Europe. (Australian clients are more likely to end up with a vendor that has somewhat local infrastructure to begin with, due to the latency issues.)

Cross-border issues are a serious barrier to cloud adoption in Europe in general, often due to regulatory requirements to keep data within-country (or sometimes less stringently, within the EU). That will make it more difficult for European cloud computing vendors to gain significant operational scale. (Whether this will also be the case in Asia remains to be seen.)

But if you’re in the US, it’s worth thinking about how the Patriot Act is perceived outside the US, and how it and any similar measures will limit the desire to use US-based cloud vendors. A lot of US-based folks tell me that they don’t understand why anyone would worry about it, but the “you should just trust that the US government won’t abuse it” story plays considerably less well elsewhere in the world.

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Posted on January 12, 2010, in Industry and tagged , . Bookmark the permalink. Leave a comment.

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