2012 Cloud Readiness Index

Welcome to the 2012 Cloud Readiness Index created by the Asia Cloud Computing Association
The Index is designed to look at the state of readiness for cloud computing in markets across the Asia Pacific region - especially how we see regulation and policy work by governments - to help advance cloud computing in Asia. It measures key attributes and conditions that will help companies and individuals determine which markets are currently best placed for wide adoption of cloud computing services.
Download: Cloud Readiness Index 2012 White Paper
Welcome to the Asia Cloud Computing Association's 2012 Cloud Readiness Index (CRI). The Index has been designed to track the development of the necessary infrastructure and enabling environment for cloud computing across leading Asian economies.
Cloud computing has become a very important part of the knowledge economy and is certain to become one of the biggest drivers of economic growth over the next decade. Gartner forecasts public cloud services to be worth $109 billion this year, while the EU expects the cloud to add as much as E160 billion ($206 billion) to annual GDP between now and 2020, representing more than 2% of GDP growth.
By mapping the conditions required for successful implementation, the Asia Cloud Computing Association (ACCA) aims to identify potential bottlenecks that could slow adoption and limit the ability of Asian economies to take advantage of the cloud computing future. The Index also serves to help identify critical gaps to be addressed in the form of policy, legal and commercial cloud drivers.
In this version of the CRI, the ACCA has been able to illustrate not only how countries rate relative to one another, but also how their paths are progressing, including which factors are not improving relative to neighbours and peers.
The ACCA believes that the CRI provides a powerful illustrative tool for policy-makers and to assist government-led training programmes. By identifying core components required
to support cloud computing take-up, the CRI will aid in focusing resources productively to address some of these deficiencies. Industry development can be spurred along with broad- based economic growth.
The ACCA invites governments around the region to join in a discussion on areas of particular interest and demand, and to help identify programmes aimed at bringing improvements based on best industry practice and peer benchmarks
The Future
This Index will be published on an annual basis. The purpose of it is to track the development of critical fundamentals for cloud-based services, and in so doing to stimulate discussion between cloud industry stakeholders across the region.
Asia-Pacific governments and businesses recognise the rapidly-growing importance of the cloud economy. The Association has established relationships with these stakeholders and is growing these further through events and outreach activities with all sections of the cloud community.
We welcome all feedback and wider involvement in these activities.
Download: Cloud Readiness Index 2012 White Paper
Since the CRI was first published, we have had extensive input from external stakeholders, including regional governments, on how it can be improved. For the most part our engagements with stakeholders have been very positive and constructive. The CRI has also been presented at numerous platforms – formally at conferences and meetings, as well as through informal channels to interested stakeholders. All suggestions were taken into account and put to the Association's CRI Working Group, and all who contributed to the discussion have added to development of a much more robust index.
The Index is our way to help prompt a conversation within industry, within governments, and hopefully between countries in Asia, to help drive economic and social outcomes through the harmonization of policies and laws that allows the cloud to meet its full potential.
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The Attributes
The Index analyses 10 key attributes critical to the deployment and use of cloud computing technology across 14 different countries.
In this iteration of the CRI, we have refined a number of attributes in order to better score certain metrics. For example, two additional information regulatory metrics have been added. Broadband parameters have been shifted to emphasise speed and coverage rather than quality. These are discussed in more detail in the white paper. While the changes limit the direct comparisons we can make with the 2011 Index, we believe these revised measures make for a better insight into market readiness and are unlikely to need further revision.
Download: Cloud Readiness Index 2012 White Paper
9.1
6.1
7.9
6.3
8.4
8.8
5.9
5.5
9.5
8.2
5.7
8.2
7.8
5.5
Government Online Services & Prioritization
Measures the government’s commitment to the cloud, tracking government applications of cloud computing for its IT services and support and promotion of ICT across the economy.
Source: UN e-government 2012 survey and WEF’s 2012 Network Readiness Index.
6.9
6.2
8.4
6.4
7.1
7.5
5.3
5.9
7.3
7.1
6.0
6.7
6.6
6.0
Business Sophistication
Maps the quality of a country’s overall business networks and the operations of individual firms of individual firms.
Source: WEF’s Global Competitiveness Report 2012 for a comparison of Asia markets.
7.4
5.1
6.0
3.1
8.0
6.5
5.4
3.6
6.4
6.2
3.1
5.6
7.1
3.6
Data Centre Risk
Risks related to successful operation of cloud infrastructure, including data centre-related costs, political stability, natural disasters, water availability and energy security.
Source: The primary source the 2012 Data Centre Risk Index from The hurleypalmerflatt and Cushman & Wakefield and the Maplecroft 2012 Global Risk Index.
7.1
4.5
7.8
3.3
5.7
7.1
3.8
5.8
5.7
6.2
4.9
7.5
8.3
4.8
Power Quality and Green Policy
Looks as how power can be sustained in the long run, what countries are doing to ensure renewable energy usage, whether multiple power sources are tapped and whether the grid has redundancy built-in.
Source: WEF’s 2012 Energy Architecture Performance Index scores, supplemented by ACCA research.
9.0
3.5
7.6
2.4
7.6
6.1
2.2
2.3
6.3
3.7
2.2
6.0
5.4
5.9
Broadband Speed and Coverage
One of the essential characteristics of cloud computing is access via broadband. Governments need a policy that encourages the deployment of high-speed broadband to the largest fraction of their population.
Source: The Akamai State of the Internet for Q4 2011.
8.0
5.0
10.0
8.4
7.4
7.5
3.2
4.6
9.2
4.6
4.8
2.7
1.3
2.8
International Connectivity
Ranks each country’s international fibre connectivity.
Source: Two scores have been combined: one for submarine cables that are operating only within Asia (intra-Asia) and those that are operating outside (e.g. Asia-USA, Asia-Europe, Asia- Africa-Europe).
5.9
5.7
7.6
5.0
7.9
7.1
3.6
4.0
8.7
7.0
5.1
7.6
8.3
4.4
IP Protection
This metric measures a government’s IP protection regulations and their enforcement.
Source: WEF 2012 Network Readiness Index, using the
sixth parameter from the 1st pillar.
7.7
7.1
9.0
7.6
8.7
8.9
6.6
7.5
7.1
6.9
7.2
8.6
8.9
7.4
Freedom of Information Access
Combines two indicators to assess a country’s ability to access information: (1) freedom of the press, and (2) the accessibility of digital content via multiple platforms.
Source: Networked Readiness Index published in the WEF Global Information Technology Report 2010-2011.
9.0
4.0
9.0
6.0
7.5
7.0
5.0
2.5
4.5
7.5
6.0
7.5
9.0
3.0
Data Privacy
Looks at quality of law, predictability, smart applicability, quality of enforcement, clear scope of protected data, cloud-friendly storage requirements, and efficient cross-border data flows.
Source: ACCA Security Working Group research.
6.2
5.6
5.6
4.7
7.6
5.9
3.9
4.3
8.1
5.6
2.1
7.3
8.1
1.5
Data Sovereignty
Looks at quality of law, predictability, smart applicability, quality of enforcement, clear scope of protected data, cloud-friendly storage requirements, and efficient cross-border data flows.
Source: ACCA Security Working Group research.
The Countries
The 14 countries analyzed include China, Australia, Hong Kong, India, Indonesia, Japan, Korea, Malaysia, New Zealand, the Philippines, Singapore, Taiwan, Thailand, and Vietnam.
- 8.2Government Online
Services & Prioritization
- 6.7Businessl
Sophistication
- 5.6Data Centre
Risk
- 7.5Power Quality
and Green Policy
- 6.0Broadband Speed
and Coverage
- 67.7Total
Score
- 2.7International
Connectivity
- 7.6IP
Protection
- 8.6Freedom of
Information Access
- 7.5Data
Privacy
- 7.3Data
Sovereignty

Australia slipped three positions, primarily because of its limited international bandwidth, where it ranked second last. In other areas Australia continues to post scores in the middle or top tier. Its high scores in data privacy and data sovereignty should continue to improve since it has recently announced an initiative to re-examine these policies. The score for Broadband Quality does not yet reflect the rollout of the NBN, which is still underway.
Recommendation: Because of the limited availability of offshore capacity, we recommend the government consider subsidies, tax credits or other incentives to increase connectivity to the rest of the region.
- 6.3Government Online
Services & Prioritization
- 6.1Businessl
Sophistication
- 3.1Data Centre
Risk
- 3.3Power Quality
and Green Policy
- 2.4Broadband Speed
and Coverage
- 51.2Total
Score
- 8.4International
Connectivity
- 5.0IP
Protection
- 7.6Freedom of
Information Access
- 6.0Data
Privacy
- 4.7Data
Sovereignty

China’s investment in cloud computing is fairly advanced, with a number of cloud-ready townships and government-supported initiatives being announced in various provinces. Cloud computing pilots, backed by state funds, are already underway.
However, many potential constraints on growth remain, including the application of China’s own technical standards, incentives that favour local firms, investment rules that may limit foreign participation in infrastructure, and opaque information regarding security and cross- border data laws.
Recommendation: We strongly recommend the application of international standards for cloud-related technologies and for clarity around security, cross-border data laws and the role of foreign investors in cloud hardware and services.
- 8.4Government Online
Services & Prioritization
- 7.1Businessl
Sophistication
- 8.0Data Centre
Risk
- 5.7Power Quality
and Green Policy
- 7.6Broadband Speed
and Coverage
- 75.9Total
Score
- 7.4International
Connectivity
- 7.9IP
Protection
- 8.7Freedom of
Information Access
- 7.5Data
Privacy
- 7.6Data
Sovereignty

Hong Kong fell one position but still ranked as one of the region’s cloud leaders, achieving
top score for data centre risk, equal 2nd for broadband quality and 3rd for data sovereignty
and IP protection. Its lowest score was in power grid and green policy: it has excellent energy infrastructure but has neither targets nor policies for more sustainable power consumption. However, the HK government has actively supported cloud computing and has driven the use of cloud in the public sector as a means of cutting costs and improving efficiency.
Recommendation: Take a much more aggressive approach to IT power consumption and the use of renewable energy sources by setting specific targets and encouraging the use of world-best practice for data centre energy efficiency.
- 6.3Government Online
Services & Prioritization
- 6.1Businessl
Sophistication
- 3.1Data Centre
Risk
- 3.3Power Quality
and Green Policy
- 2.4Broadband Speed
and Coverage
- 52.7Total
Score
- 8.4International
Connectivity
- 5.0IP
Protection
- 7.6Freedom of
Information Access
- 6.0Data
Privacy
- 4.7Data
Sovereignty

India is making some progress in its readiness for cloud services. It scores relatively well in international connectivity because of the number of subsea cables that connect it to the rest of the world, but its broadband and electricity infrastructure polled poorly. Broadband access is available to just 1% of the population. The government has promised to massively expand this but has provided little detail on how.
Recommendation: India must remove the uncertainty around its mobile licensing, where 2G licenses have been cancelled and 3G license coverage rights are poorly defined. A second recommendation is to improve the quality and sustainability of electricity power generation.
- 5.7Government Online
Services & Prioritization
- 6.0Businessl
Sophistication
- 3.1Data Centre
Risk
- 4.9Power Quality
and Green Policy
- 2.2Broadband Speed
and Coverage
- 47.1Total
Score
- 4.8International
Connectivity
- 5.1IP
Protection
- 7.2Freedom of
Information Access
- 6.0Data
Privacy
- 2.1Data
Sovereignty

While scoring on the lower tier of the Index, Indonesia’s economy is still recording healthy growth and the government continues to prioritise the knowledge economy. ICT is one of 22 areas targeted for economic growth under the MP3EI Master Plan. But Indonesia ranks equal last for broadband quality and second last for data sovereignty. The legal framework for cloud services is also unclear; current regulations require any company providing a ‘public service’ to establish an onshore data centre.
Recommendation: Key priorities need to be a substantial improvement in broadband quality and the strengthening of laws and regulations concerning data sovereignty and data centre risk.
- 7.9Government Online
Services & Prioritization
- 8.4Businessl
Sophistication
- 6.0Data Centre
Risk
- 7.8Power Quality
and Green Policy
- 7.6Broadband Speed
and Coverage
- 78.8Total
Score
- 10.0International
Connectivity
- 7.6IP
Protection
- 8.9Freedom of
Information Access
- 9.0Data
Privacy
- 5.6Data
Sovereignty

Japan once again tops the Index, ranking 1st in connectivity and business sophistication and equal 1st in data privacy and freedom of information. Its lowest scores were in data sovereignty and data centre risk, coming in 7th in both parameters.
In aggregate Japan is well-prepared for cloud computing. Even the power shortages that have followed since the March 2011 earthquake have been managed well by the data centre industry. We believe Japan has the optimum mix of policies, business and infrastructure to continue and drive growth and adoption of cloud computing.
Recommendation: Japan could improve its rating further by providing clearer direction around data sovereignty.
- 8.2Government Online
Services & Prioritization
- 7.1Businessl
Sophistication
- 6.2Data Centre
Risk
- 3.7Power Quality
and Green Policy
- 4.6Broadband Speed
and Coverage
- 63.0Total
Score
- 7.0International
Connectivity
- 6.9IP
Protection
- 7.5Freedom of
Information Access
- 8.8Data
Privacy
- 7.6Data
Sovereignty

Malaysia maintained its position in the middle tier of the Index. While it made progress
in some areas, such as its nationwide Cloud On-boarding Programme for SMEs, it ranked well behind the leaders in broadband and international connectivity, despite achieving the targeted penetration rate set in the National Broadband Initiative and extending regional connectivity with new cables to Indonesia and Japan.
Recommendation: Malaysia’s priorities should be in IP protection and data centre risk, both areas where it scored poorly. It also needs to introduce the Personal Data Protection Act 2010, which has not yet been brought into force.
- 7.9Government Online
Services & Prioritization
- 6.6Businessl
Sophistication
- 7.1Data Centre
Risk
- 8.3Power Quality
and Green Policy
- 5.4Broadband Speed
and Coverage
- 70.8Total
Score
- 1.3International
Connectivity
- 8.3IP
Protection
- 8.9Freedom of
Information Access
- 9.0Data
Privacy
- 8.1Data
Sovereignty

Despite its relatively small size, New Zealand continues to offer an attractive environment for cloud computing. It ranks not far behind the region’s heavyweights, held back mainly by the low offshore bandwidth score, where it is placed last. Cloud investments are going into Auckland, Wellington and Hamilton and, in what appears to be a world first, the industry is developing a voluntary code of practice.
Recommendation: No.1 priority is to expand the available international bandwidth. A number of new trans-Pacific cables are being proposed – the government and the cloud industry can help by lending support to at least one of these.
- 5.5Government Online
Services & Prioritization
- 5.9Businessl
Sophistication
- 3.6Data Centre
Risk
- 5.8Power Quality
and Green Policy
- 2.3Broadband Speed
and Coverage
- 46.0Total
Score
- 4.6International
Connectivity
- 4.0IP
Protection
- 7.5Freedom of
Information Access
- 2.5Data
Privacy
- 4.3Data
Sovereignty

The Philippines remains at the lower tier of the Index. It scores relatively well in the freedom of information access parameter but poorly in other parameters. It ranks last in data privacy (although it has since passed the Data Privacy Act), second last in IP protection and third last in broadband quality.
Recommendation: We believe the Philippines cloud sector would benefit by upgrading the ICT office of the DoST to a separate department to replace the now-defunct Commission on Information and Communications. We also recommend strengthening of intellectual property protection regulations also be treated as a priority to boost confidence of service cloud providers.
- 9.5Government Online
Services & Prioritization
- 7.3Businessl
Sophistication
- 6.4Data Centre
Risk
- 5.7Power Quality
and Green Policy
- 6.3Broadband Speed
and Coverage
- 72.8Total
Score
- 9.2International
Connectivity
- 8.7IP
Protection
- 7.1Freedom of
Information Access
- 4.5Data
Privacy
- 8.1Data
Sovereignty

Singapore topped the Index in e-government and ICT prioritisation, ICT prioritisation, and in IP protection. Infrastructure development has long been viewed as an enabler of the knowledge economy, and it is no wonder that we see Singapore ranking 2nd in international connectivity and 4th in broadband quality. The only shortcomings seem to be in the areas of data privacy and power grid/green policy.
Recommendation: Since the completion of this Index, the Singapore Parliament has passed the Personal Data Protection Act, removing one of the significant shortcomings in Singapore’s cloud policy regime. Despite this development, the law will only come into effect in 2014, and we would urge the government of Singapore to accelerate its implementation.
- 9.1Government Online
Services & Prioritization
- 6.9Businessl
Sophistication
- 7.4Data Centre
Risk
- 7.1Power Quality
and Green Policy
- 9.0Broadband Speed
and Coverage
- 76.3Total
Score
- 8.0International
Connectivity
- 5.9IP
Protection
- 7.7Freedom of
Information Access
- 9.0Data
Privacy
- 6.2Data
Sovereignty

Korea’s impressive cloud résumé includes the world fastest nationwide Internet connections (average speed 17.5 Mbps), comprehensive privacy legislation, a power grid well-protected from natural disasters, and affordable electricity rates. The government, which has also invested heavily in the cloud, is determined to ensure Korea stays at the forefront: its target is to halve IT infrastructure op-ex in the public sector by 2015 and to capture 10% of the global cloud market by 2014.
Recommendation: Korea is ranked 2nd in the Index, but if it wishes to achieve its goal of becoming an important regional centre for cloud services it will need to consider regulatory and tax regimes that can attract major providers and customers.
- 8.8Government Online
Services & Prioritization
- 7.5Businessl
Sophistication
- 6.5Data Centre
Risk
- 7.1Power Quality
and Green Policy
- 6.1Broadband Speed
and Coverage
- 72.4Total
Score
- 7.5International
Connectivity
- 7.1IP
Protection
- 8.9Freedom of
Information Access
- 7.0Data
Privacy
- 5.9Data
Sovereignty

Taiwan has maintained its 5th position in the Index. It ranked 3rd for government services and ICT leadership, and 5th for broadband quality. The new Personal Data Protection Act, which became effective on October 1, removed criminal liability for the misuse of personal data unless done so for profit – a potential threat and disincentive to cloud innovation.
However, reflecting its uncertain geopolitical status, Taiwan once again ranked relatively low in the global risk and data sovereignty categories.
Recommendation: One way to reduce political risk could be to peer clouds in Taiwan with neutral countries, ensuring that critical business systems are not threatened by sovereignty issues.
- 5.5Government Online
Services & Prioritization
- 6.0Businessl
Sophistication
- 3.6Data Centre
Risk
- 4.8Power Quality
and Green Policy
- 5.9Broadband Speed
and Coverage
- 44.9Total
Score
- 2.8International
Connectivity
- 4.4IP
Protection
- 7.4Freedom of
Information Access
- 3.0Data
Privacy
- 1.5Data
Sovereignty

Should be doing much better. The political situation may have settled somewhat, but the Index has shown up its deficiencies in infrastructure, in particular international connectivity, broadband quality and power grid stability. While it scored relatively well in business sophistication and freedom of access to information, it ranked last in data sovereignty.
Recommendation: Apart from the urgent need to improve the infrastructure, we also recommend the re-examination of data privacy and sovereignty laws, two of its lowest- scoring indices.
- 5.9Government Online
Services & Prioritization
- 5.3Businessl
Sophistication
- 5.4Data Centre
Risk
- 3.8Power Quality
and Green Policy
- 2.2Broadband Speed
and Coverage
- 44.9Total
Score
- 3.2International
Connectivity
- 3.6IP
Protection
- 6.6Freedom of
Information Access
- 5.0Data
Privacy
- 3.9Data
Sovereignty

Vietnam’s rapidly-growing economy needs a good deal of focus to reap the benefits of the cloud. It ranks second last in power grid and fourth last in international connectivity. While its telecom policies emphasise universal access it is equal last in broadband quality. On the governance side, it is last in intellectual property protection and freedom of information access.
Recommendation: The key priorities for Vietnam should be to: 1) build faster and better broadband access and expanded offshore connectivity, and 2) implement effective protection of intellectual property.
Press Release
November 13, 2012 - Japan leads Asia in building the cloud economy
Japan has once again topped the rankings in the Cloud Readiness Index (CRI), an annual study of Asia-Pacific economies' preparedness for cloud computing by the Asia Cloud Computing Association (ACCA).
In this the second Index, Japan ranked ahead of Korea, Hong Kong and Singapore, scoring highest in the categories of International Connectivity and Business Sophistication, and equal highest in Data Privacy and Freedom of Information Access.
Taiwan finished fifth, just behind Singapore, mainland China ranked tenth, Australia finished in the middle of the table and Thailand and Vietnam tied at the bottom.
The Index tracks the development of the required underlying infrastructure, data regulations, and the business and government environment for cloud computing across leading Asian economies.
In a few short years, cloud computing has become an important part of the knowledge economy and is certain to become one of the biggest drivers of economic growth over the next decade.
Research firm Gartner has predicted public cloud services to be worth US$109 billion this year, while IDC estimates that by 2015 the cloud will create 14 million jobs worldwide and US$1.1 trillion a year in new business revenues. The EU expects the cloud to add as much as €160 billion (US$206 billion) to annual GDP between now and 2020, which represents more than 2% of GDP growth.
Cloud services have become enabled by the widespread deployment of fixed and mobile broadband networks and the mass availability of smartphones and tablets. Using the cloud, businesses, governments and other organizations can deliver content, databases and applications in a more cost-effective and flexible way.
"There is wide recognition among Asian governments and business leaders about the importance of the cloud in driving innovation, cutting costs and boosting productivity," said Bernie Trudel, Chairman of the ACCA.
"This Index aims at marking the progress of the region's economies towards reaching their cloud objectives.
"As well as providing an annual report card, we have also identified potential bottlenecks that are slowing take-up and limiting the ability of Asian businesses and consumers to enjoy the benefits of the cloud economy."
Mr Trudel said issues such as reliability of access, security, government access, privacy and intellectual property protection had emerged as constraints on the adoption of cloud services.
Cloud providers and customers have also expressed concerns about data portability, vendor lock-in and interoperability, he added.
ACCA CEO Per Dahlberg said the Index could become an important tool for governments.
"The Index can measure their own progress and also their ability to attract foreign investment in cloud services and platforms," he said.
The Index examines 14 countries and markets using ten different measures, covering regulatory issues such as data protection, infrastructure areas such as broadband and the broader business and government environment.
In preparing the Index, the ACCA primarily relied on published sources, supplemented by our own research.
"We believe the Index can play an important role in fostering an informed debate about the future of cloud computing and the development of a best-practice environment that supports cloud services in Asian economies," Mr Dahlberg said.
To download the 2012 Index, please go to: Cloud Readiness Index 2012
For further information, please contact
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