New Zealand cloud provider challenges Google’s data control claims for the region

A cloud service provider in Wellington says Google’s claim that it will give New Zealanders full control over their own data is false.

Google announced yesterday that it would be setting up a cloud region in Aotearoa, New Zealand. (File Image)
Photo: 123RF

The US giant is setting up a cloud region in Aotearoa, New Zealand, to expand its $10 billion global cloud business, as huge rivals like Amazon build data centers here.

Catalyst Cloud wonders why the government has been so quick to lend its weight behind the global giant when so much more could be done by locals.

Catalyst Cloud chief executive Doug Dixon was due to meet with digital minister David Clark on Aug. 10 to talk about national cloud capabilities for the first time, the same day Google made its announcement.

“The New Zealand cloud region will give Kiwi businesses the choice to keep their data on land and retain data sovereignty and drive their digital transformation efforts locally,” Google said.

A region is a geographic area that offers a set of high-speed IT services and avoids the compliance hurdles of transmitting data between different jurisdictions.

Google cited a few local companies, including Trade Me, saying its cloud services had been “essential to ensuring the stability and resilience of our infrastructure.”

Clark quickly chimed in with a statement applauding the investment: “The onshore cloud facilities give us greater control over New Zealand’s data because it’s held here, where our laws and protections apply.”

David Clark

David Clark, Minister of Digital
Photo: RNZ / Samuel Rillstone

But Dixon pushed back.

Catalyst Cloud sits on the opposite end of the size spectrum of so-called “hyper scalers” and has only just gained approval to manage government data.

“It shouldn’t just be allowed to pass. It’s such a huge claim. And it’s really, really not true,” he said.

“Foreign tech companies are governed and influenced by the laws of their home country.”

The responsible minister should also be challenged, Dixon said.

“There is an attempt at total dominance here.

“Global hyperscalers should recognize the limits of what they can offer, and they cannot offer sovereignty anywhere other than their home country.”

Instead, they should work with local cloud providers, he said.

Lawyers say global connectivity, which now depended on the cloud, was a big help for businesses, but posed privacy, privacy and data ownership issues.

And being down is not a hurdle.

George Sadlier worked for 15 years in cloud technology for Google and Microsoft, until earlier this year.

George Sadlier worked for 15 years in cloud technology for Google and Microsoft.

George Sadlier says people can seek assurances from companies offering cloud services, but company leadership and policies can change over time.
Photo: Provided

“As soon as you put your data in a cloud provider… which is based overseas, even if they store the data in New Zealand, people overseas are going to have some level of access to it. “Sadlier said.

This access was very tightly controlled and security was very tight in mega-corporations. Also, it hadn’t yet been really tested legally whether they should let American courts or law enforcement access their servers because they belong to the United States, he said.

The alternative, true data sovereignty, comes at a price.

“It’s about building a self-sustaining environment that’s entirely run by people living in the jurisdiction,” Sadlier said.

The US military poured over $15 billion into its Joint Enterprise Defense Infrastructure (JEDI) system – and it failed.

It is again attempting full control of the cloud as part of the Joint Warfighter Cloud Capability initiative, with Google, Amazon, Microsoft and Oracle vying.

Sadlier said it would depend on how New Zealanders value their different types of data and how much trust they have.

“You can look at these vendors’ disclosures and ask them for safeguards. But…ownership changes, policies change, companies can be acquired, they can become insolvent.

“Things change over time – data is forever.”

Dixon suggested that full control should extend to health data and national identity data, as part of a hybrid global and local approach.

Instead, a piecemeal government approach undervalued what local ingenuity could offer, he said.

“We have this digital strategy for Aotearoa, and it talks about moving pretty much everything to the cloud.

“And the cloud doesn’t belong to the Kiwis. It belongs to American companies.”

Control is one issue: powering new data centers – whoever owns them – is another.

They consume so much electricity that Singapore and Ireland have imposed or considered moratoriums on new data centers.

Megan Woods

Energy Minister Megan Woods says she is well aware of the power needs of data centers.
Photo: RNZ / Samuel Rillstone

Energy Minister Megan Woods said there was no specific strategy for data centres, although they are part of the sustainable energy work to ensure the electrical system can support high levels of renewable energy.

“I am well aware of the power needs of data centers,” she said in a statement.

“I’m really excited for these companies to come here and use our renewable energy, instead of Australia’s, which is coal-fired.”

Dixon said New Zealand should ask if it wanted its power to be used to process data primarily for offshore users, and have those profits flow back overseas.

The Sustainability Council’s executive director, Simon Terry, warned the country must get it right.

“New Zealand needs to add a lot more power generation over the next 20 years just to replace fossil fuels, and we need to make sure all of those bases are covered before we consider additional data center loads. “Terry said.

In a statement to RNZ, David Clark said various local and overseas cloud providers complement each other and the government is willing to work with each of them in a fair and open manner.

Google did not respond to an interview request.

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