Published on the 10/05/2023 | Written by Heather Wright

Time to cut reliance on big tech providers

The Australian government has been urged to build publicly owned cloud infrastructure to free the country from reliance on private technology companies and enable it to ‘shape its own future and build a stronger democracy’.

Consumer group Digital Rights Watch says the government needs to stop spending hundreds of millions of dollars with private technology companies such as Google, Amazon and Microsoft – which it notes is ‘little more than transfer of public wealth into private hands’ – and instead build its own publicly-owned cloud infrastructure.

“Unless we act now to develop publicly owned alternatives, we risk a future where unaccountable, private companies set the rules that govern our lives.” 

AWS has garnered more than AU$712 million in Australian federal government contracts alone in the past 10 years. It pays little in terms of taxes however, and a Centre for International Corporate Tax Accountability and Research report last year slammed the company’s ‘aggressive tax avoidance’.

“Not only are critical functions of the government running on infrastructure owned and controlled by Amazon, Australian’s personal information, population level insights and other highly sensitive information are passing through Amazon servers,” Digital Rights Watch says.

Its proposal comes in a submission to the senate inquiry on the influence of international digital platforms.

It wants to see the establishment of an ‘Australian Digital Corporation’ – a digital services version of CSIRO and the ABC – which it says could start by building and administering a public cloud.

“This would be an investment in the long term technical capacity of the public sector. Both in terms of people and skills and in computing capacity,” the submission says.

“The ADC could play a role incubating new technologies which serve the public good or intervene into the digital economy anywhere from cloud computing, to payment processing, streaming and social media. The ADC could empower local communities by prioritising worker owned and cooperative digital platforms which put economic and technical power directly into the hands of the community,” the ambitious submission continues.

There is, of course, the issue of cost, something Digital Rights Watch’s submission doesn’t drill into. 

Across the ditch in New Zealand, where both AWS and Microsoft are currently building cloud data centres, AWS’ says it plans to spend NZ$7.5 billion on its Kiwi cloud data centres. Microsoft, which was granted Overseas Investment Office approval in March to purchase land to build its three data centres, says its initial investment will be around $180 million. 

But Digital Rights Watch’s submission taps into growing concerns in some quarters about the dominance of the big tech platforms.

Latest figures from Synergy Research show Amazon, Microsoft and Google hold 65 percent of the worldwide cloud infrastructure services market – a market which saw in excess of US$63 billion in enterprise spend in Q1.

Australia in particular has been going hard against digital platforms, but in New Zealand too, there have been concerns about the increasing influence of cloud giants, including their reach into policy decisions.

Both Microsoft and Amazon signed memorandum of understanding this year with the New Zealand government to collaborate on projects, as well as regulatory changes and national cybersecurity priorities.

Together with Kiwi company Catalyst Cloud, Microsoft and Amazon are the only companies with all-of-government deals to provide cloud services to New Zealand government agencies, who, under the government’s ‘cloud first’ policy, introduced in 2016, are required to favour public cloud over on-premise systems. Both companies are also currently building data centre regions in New Zealand.

AWS’ MoU notes quarterly strategic dialogue between the government chief digital officer and senior AWS leaders to help ‘ensure that industry perspectives and international best practices contribute to the delivery of improved outcomes for the Cloud First policy’, along with other key cloud topics.

Last year the Data Iwi Leaders Group challenged the New Zealand government’s offshoring of Kiwi data, saying it should instead strengthen and invest in local options for data onshoring and procurement.

The Data Iwi Leaders Group’s operational arm, Te Kāhui Raraunga released a report challenging assumptions that local services are inherently less secure and less reliable, and calling for strategic investment in locally-hosted solutions, claiming upholding the principles of Māori data sovereignty was crucial for the government to meet its responsibility to Te Tiriti.

Data Iwi Leaders Group has had an agreement with the Department of Internal Affairs and the Government Chief Digital Officer since 2021 to work together to provide a te ao Māori lens over how Māori data sovereignty can and should be considered through the government’s adoption of cloud services.  

Suggestions of more use of locally owned – or in Australia’s case the creation of a publicly owned infrastructure – come against a global backdrop of digital balkanisation as tech stacks fracture along national lines and countries seek to enforce their own control mechanisms and suppliers. 

China doesn’t allow foreign cloud service providers to own and operate their own data centres in country – the only country to take such as stance. Rather than a publicly-owned infrastructure, however, it relies on Chinese cloud service providers including Alibaba Cloud and other domestic players. AWS reportedly held a sub-five percent share of the market in 2015.

And back in 2010, the UK government launched a strategy to create its own internal cloud computing system, designed to mimic Microsoft, Google and AWS clouds and provide services for government departments and local government, in a move it claimed would save up to £3.2 billion a year.

While demand for data sovereignty and data residency restrictions, requiring information be stored and managed in-country, have prompted previous calls for greater on-shoring of data, geopolitical tensions and concerns about the dominance of the big players, are increasingly coming to the fore.

“From the original sin of privatisation in the 1980s to the massive consolidation of digital technology in the hands of the ‘big five’ multinational corporations today, our digital lives are controlled by a handful of corporate interests to boost profits and drive advertising revenues rather than being designed for and by the people who use them,” Digital Rights Watch says in its submission.

“Privately owned digital platforms are pushing into more of our lives. Unless we act now to develop publicly owned alternatives, we risk a future where unaccountable, private and often foreign companies alone set the rules that govern our lives.”