Microsoft Proposes Cloud Computing Regulation

Microsoft’s long awaited cloud computing platform, Azure, opened for business this week.  Now available in 21 countries, the platform comes with a flexible and transparent payment schedule.  This might not sound as nifty as the iPad, but startups with small budgets are sure to take notice, particularly with the free trial options Microsoft is offering.  Azure represents a major step in the development and dissemination of cloud computing, as Microsoft associates its stable, business-oriented brand appeal with the cloud.

In December, MTTLR reported on the regulatory problems posed by cloud computing.  Weighing in on this ongoing debate two weeks ago at the Brookings Institution, Microsoft’s General Counsel Brad Smith suggested the role the United States government should take in regulating cloud computing.  A recent survey, commissioned by Microsoft, concluded a majority of Americans use cloud computing services despite being unfamiliar or only vaguely familiar with the concept of cloud computing.  These survey results could be misleading, as even industry leaders seem to disagree on the proper definition for cloud computing, but the survey does highlight the significant knowledge gap that presents one of cloud computing’s biggest challenges:  What happens when most Americans store their emails, financial files, photographs, and other personal information in something as nebulous as (appropriately) the cloud?

Several indicators point strongly toward regulation:  Transaction costs of public action on this matter are extremely high, the knowledge gap between users and providers is severe, and the chance of getting caught misusing information obtained over the internet is… well, certainly not a sufficient deterrent.  Microsoft suggests a federal regulatory scheme that takes a three pronged approach, addressing issues of privacy, security, and international sovereignty. 

Microsoft’s statement about the privacy and security of consumers and businesses is obviously well-timed and serves to strengthen reliance on Azure.  It also raises questions about whether or not it is desirable to impose comprehensive regulation on the internet.  Nonetheless, their proposal for regulation is persuasive, and contributes significantly to an ongoing debate that is sure to ramp up in 2010.

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  1. STLR Link Roundup – February 19, 2010 - [...] As it launches its cloud computing platform, Azure, Microsoft calls for federal regulation to clarify many of the open …

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