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Cloud Computing in China

Data privacy and state secret laws don’t have to thwart widespread adoption

By David Canellos
PerspecSys President and CEO

Driven by large-scale government initiatives as well as private investment, cloud computing has become a hot growth area in China. Named a ‘Strategic Emerging Industry' in the government's 12th Five Year Plan (2011 - 2015), cloud computing is slated to become a primary force in the Chinese IT industry and overall economy in the next 3-5 years. In fact, according to IDC Asia-Pacific, China spent $286 million on cloud-computing infrastructure last year, and the amount will increase to more than $1 billion in 2016. The Asia Cloud Computing Association reports that total investment in cloud computing projects in China is expected to reach $154 billion over the coming few years.

So with all the internal focus on building a suitable infrastructure and nurturing cloud innovation, what factors will companies need to consider when deploying applications to the cloud in China? Key among the issues will be Chinese data privacy and state secrecy laws. Still nascent in comparison to similar laws in other part of the world, national Chinese data privacy regulations are considered quite vague (although they are currently undergoing broad revisions). And the sweeping state secrecy laws permit national security to be used as the rationale for almost any measure pertaining to data privacy and the Internet/cloud.

These ambiguities, combined with more than 200 local and provincial laws regarding use of personal information, have led to a legal framework for cloud services that is flexible to the point of being unpredictable - an understandably daunting environment for cloud innovation.

The question is - how can companies take advantage of the Chinese government's zealous embrace of cloud technology and the enormous Chinese market potential while staying out of trouble with data privacy enforcers? Fortunately, a technical solution exists. Cloud providers and cloud users will benefit from using a cloud data security and cloud data tokenization system that can be configured to keep sensitive information out of the cloud. By replacing real data values with undecipherable token values when data is outside an organization's firewall, enterprises can achieve compliance with strict data privacy laws and residency requirements. Importantly, this approach to cloud data security allows organizations to take advantage of cloud computing benefits, without sacrificing functionality or the user experience of the cloud application.

These solutions from companies like PerspecSys create a win-win situation in China as the government seeks to leverage cloud technology to drive future economic growth, and cloud service providers (and users) want to jump on board to realize the benefits.

Read the original blog entry...


PerspecSys Inc. is a leading provider of cloud data security and SaaS security solutions that remove the technical, legal and financial risks of placing sensitive company data in the cloud. PerspecSys accomplishes this for many large, heavily regulated companies who rely on cloud compliance by never allowing sensitive data to leave a customer's network, while maintaining the functionality of cloud applications. Based in Toronto, PerspecSys Inc. is a privately held company backed by investors that include Intel Capital and GrowthWorks.

More Stories By David Canellos

David Canellos is a security veteran who is now President and CEO of PerspecSys. An entrepreneur specializing in bringing innovative security and privacy solutions to market, he has been instrumental in establishing PerspecSys as the leader in the Cloud data Protection Gateway market.

Before joining PerspecSys, David held executive positions at Irdeto Worldwide, which acquired the company he led, Cloakware, which was a pioneer in encryption and digital rights management. Before joining Cloakware, he was the General Manager and Vice President of Sales for Cramer Systems (now Amdocs), a UK-based company, where he was responsible for the company’s revenue and operations in the Americas. Prior to his work with Cramer, David held a variety of executive, sales management and business development positions with the Oracle Corporation, Versatility and SAIC.

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