This document summarizes a discussion on identifying regulatory and policy needs in the era of cloud computing for the growth of domestic industry in Indonesia. It notes that cloud computing can help reduce costs and complexity through flexibility and cost efficiency. However, it also brings up policy issues like cross-border data flows, intellectual property, privacy, and competition that regulators need to address. Effective policies should be flexible, responsive, and follow industrial practices rather than impose untested solutions.

1. Rolly Rochmad Purnomo
(Puslitbang Aptika & IKP Kemkominfo)
Diskusi Identifikasi Kebutuhan Regulasi dan Kebijakan TIK di Era Komputasi Awan
untuk Pertumbuhan Industri Dalam Negeri
Bandung – Selasa 27 November 2012

2. Key Words
Identifikasi regulasi dan kebijakan
Era komputasi awan
Pertumbuhan industri dalam negeri
Industr i Dalam Neger i
Kebijakan Regulasi

3. Policy Analysis Models
 Institutionalism (policy as institutional output)
 Process (policy as political activity)
 Rationalism (policy as maximum social gain)
 Incrementalism (policy as variations on the past)
 Group/Pluralism (policy as group equilibrium)
 Elite (policy as elite preference)
 Public Choice (policy as collective decision making
by self-interested individuals)
 Game theory (policy as rational choice in
competitive situations)

4. A Note
Models are not competitive – any one of them
could not be judged best.
Each one provides a separate focus and each can
help to understand different things about public
policy.
Most policies are combination of these models
Usefulness of model: order and simplify reality,
identify what is significant, be congruent with
reality, provide meaningful communication, direct
enquiry and research, suggest explanation.

5. Policy Making Process
http://www.laits.utexas.edu/txp_media/html/bur/features/0303_01/policy.html

6. Critics on Process Model
Linear and too simplistic.
Insufficiently explicating that some phases may
occur together.
In real world, stages of policy may:
 overlap, or
 not operate sequentially, or
 never happen.

7. Cloud Computing: Definition
Cloud computing is a model for enabling
ubiquitous, convenient, on-demand network
access to a shared pool of configurable
computing resources (e.g., networks, servers,
storage, applications, and services) that can
be rapidly provisioned and released with
minimal management effort or service
provider interaction
(National Institute of Standards and Technology /
NIST)

8. Cloud Computing: IT as a service
Infrastructure as a service (IaaS)
ex. Data center, server, storage
Platform as a service (PaaS)
ex. Information system, database,
security
Software as a service (SaaS)
ex. e-learning, e-commerce, e-
banking

9. Cloud Computing: advantages
Reduce cost and complexity (efficiency gain):
Flexible  customizable services / economies of scope
Relatively reliable & safer  Risk reduction
Supporting collaboration  working together
Portable  be able to be accessed anywhere
Simpler device  do not require powerful device
Convert capex to opex  relatively low initial cost
Billed as used
Highly utilized  economies of scale

10. Cloud Computing: key success factor (Nelson 2009)
Maturity of technology
Standardization  computer & telecommunications
Investment in infrastructure  broadband, etc
Application & software development
User acceptance & need  education, trust

11. Cloud Computing: some views
‘Cloud computing is not a new technology, but
rather a new business model or new IT delivery
model”  do we just need to adapt existing
policies?
“Cloud computing is much more than simply a
new set of technologies and business model. It
is rapidly emerging as a platform that will
support the next generation of digital product
and services” do we need a new set of
policies?

12. Cloud Computing: some policy problems
Research & education
Infrastructure development
Universal access to the cloud  narrowing digital
divide
E-government & open standards
Wiretapping and electronic surveillance  cross-
border data flow, data sovereignty
Intellectual property and liability  responsible parties
Privacy and Security
Consumer protection  reliability, system malfunction,
business continuity, service level agreement, contract
Competition and anti-trust

13. Competition related issues (Kushida et. al, 2011)
Is the cloud a ‘utility’ service?
The cloud is a utility-like service because it is
provided by large companies with significant scale 
natural monopoly?
The cloud is a enhanced utility service because it
offers differentiated product.
The cloud is a dynamic utility service because it
can be configured and customized  interoperability
& portability problems?
The cloud is a dynamic configured utility because
it is a service combining scalable, always available, pay
for use, configurable, differentiated, non geographic
bound features  competitive services?

14. Competition related issues
The cloud is considered as a utility service  usually
provided by big businesses with dominant position.
Some sources of dominant position:
Economies of scale
High investment cost
Ownership of key intellectual property
First mover advantage
Consumer preference
Product differentiation & economies of scope
Innovation
Exclusivity rights

15. Competition related issues
Dominant position is not against the law but it makes
the firm under strict supervision by the authority for
possible anticompetitive behaviors.
Some strategies that adversely impacts the market such
as monopolization, collusion, and discrimination may
lead to an investigation.
Other strategies that highers switching cost or limits
choice for consumer such as lock-in and interoperability
constraint may also raise anti-trust concern.
Do we need a cloud specific competition-related
regulations (ex-ante rather than ex-post regulation)?

16. Competition related issues: UU-ITE & PP-PSTE
Nama Domain Ps. 23(2) UU-ITE
Interkonektivitas dan Kompatibilitas Perangkat
keras  Ps. 6 (1.a) PP-PSTE
Agen elektronik wajib memberikan perlakuan yang
sama terhadap penyelenggara sistem elektronik
yang menggunakan agen elektronik tersebut  Ps.
36 (3) PP-PSTE
Others? Software/application (interoperability
problem)?

17. Competition related issues: Is an
integrated provider allowed?
Providers in UU-ITE & PP-
PSTE:
Penyelenggara Sistem
Elektronik
Penyelenggara Agen
Elektronik
PenyelenggaraTransaksi
Elektronik
Penyelenggara Sertifikasi
Elektronik
Lembaga Sertifikasi
Keandalan
etc

18. Some notes for policy maker (Nelson 2009)
Public policy is critical in enforcing cloud development 
the government has an important role in shaping the
cloud.
Policy should be flexible and adaptable  responsive
policy-making process but not premature regulation.
Government need to challenge and, if required, change
existing policies  government may need to consider
fundamentally new approaches of policies.
The government should follow industrial practice rather
than mandating untried solutions.
In some circumstances, Due to its global nature, cloud
policy solutions must be cross-jurisdictional.

19. Bibliography
 CCIA, 2011.Public Policy for the Cloud: How policy maker can enable cloud
computing.
 Jaeger, P., Lin, J., Grimes, J. M., nd. Cloud Computing and Information Policy:
Computing in a policy cloud?. Forthcoming in the Journal of Information
Technology and Politics, 5(3).
 Kushida, K. E., Murray, J., and Zysman, J., 2011. Diffusing the Cloud: Cloud
computing and its implication to public policy. J Ind Compet Trade. doi:
10.1007/s10842-011-0106-5.
 Murray, J., and Zysman, J., 2011. Cloud Computing: Policy challanges for a globally
integrated innovation, production and market platform. TPN Translatic Week July
2011.
 Nelson, M. R., 2009. The Cloud, The Crowd, and Public Policy. Issues in Science
and Technology – Summer 2009- pp:71-76.
 Pous, V. A., 2012. Legal and Public Policy Aspects of Cloud Computing. Executive
up-date for the 4th China Cloud Computing Conference, may 23-25, 2012, Beijing.
 Strommen-Bakhtiar, A., and Razavi, A. R., 2011. Should the Cloud be Regulated?
An assessment. Issues in Informing Science and Information Technology Vol. 8-
2011.

20. Thank You