Modified August 14, 2013

Cloud Computing

“Cloud computing” describes how computer-related services and software increasingly have been provided over the Internet and other networks since the late 1990s. Each user can access many types of applications and services on demand, regardless of the physical location of his computer. Cloud computing is a model for enabling 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, accessed and updated with minimal management effort or service provider interaction. Examples of common cloud uses are e-mail, e-commerce, and mobile phone apps. The National Institute of Standards and Technology offers a detailed outline of cloud computing, and the office of the U.S. Federal Government Chief Information Officer has a video explaining cloud computing.


These issues arise in discussions of cloud computing:
  • Increasingly, governments and businesses are looking at moving their internal systems to the cloud to save money and simplify staying up-to-date on technology. The City of Los Angeles and the State of Minnesota have moved to cloud platforms, however, Los Angeles backed away from utilizing the email cloud for their law enforcement agencies after the technology was not able to meet their strict security guidelines. The former U.S. CIO, Vivek Kundra pushed the federal government towards utilizing the cloud with the launch of apps.gov, an aggregator of cloud services for federal agencies.

  • The infrastructure needed to provide adequate cloud service is large. Since the major companies that offer “platforms” serving many firms and individual users – Google, Microsoft, and Amazon – have all stated they are moving to the cloud, there are questions about how many other companies will be able to compete in the infrastructure space. However, most agree that barriers to platform and software as a service entry are relatively low.

  • As with any new technology, there is debate on the economic impact of the cloud: will this truly be a source of cost savings? What kind of new innovations and businesses will be created?

  • As data is increasingly held in a central network location rather than at the user’s premises, there is a growing debate about whether the current regulatory framework is adequate. This is particularly the case for privacy, security, and data ownership; also, as data crosses national borders in the course of traveling the cloud’s network, jurisdictional issues arise.

  • As more information flows over the Internet, there is a focus on encouraging the growth and use of broadband services, and on issues of “net neutrality” – that is, whether providers should be allowed to limit high-bandwidth uses in order to ensure reliable Internet access to all subscribers.
TAP Academics researching cloud computing include:
Jacques Cremer of Toulouse University, writing on the impact of the Internet on economic growth and business.

Randall Picker of the University of Chicago School of Law, looking at competition, privacy, and intellectual property in the cloud.

Neil Gandal of Tel Aviv University, writing on computer security, labor, and immigration issues.

Daniel Spulber of the Kellogg School of Management, writing on consumers, electronic commerce, and broadband competition.

Christopher Yoo at the University of Pennsylvania Law School is one of the nation’s leading authorities on law and technology.

Jonathan Zittrain of Harvard Law School, looking at the Internet’s effect on privacy, security and free speech issues.

"Invoking the current mania around cloud computing, where things your computer used to do now happen online, a new class of companies are promoting cloud labor. It could create efficiencies and opportunities that economists hitherto could only dream of. It could also usher in a new era of digital sweatshops." From his article “Work the New Digital Sweatshops,” Newsweek Magazine, 12/8/2009

These sources are a good place to start in understanding cloud computing issues. Christopher Yoo offers an overview of cloud computing technology and its economic implications in “Cloud Computing: Architectural and Policy Implications.” In “Cloud Computing and Electricity: Beyond the Utility Model,” Eric Brynjolfsson and his colleagues compares services provided by cloud computing firms to those provided by electric utilities. Jonathan Zittrain’s op-ed “Lost in the Cloud” raises concerns about storing personal files on the Internet. Marco Iansiti’s paper “Six Years Later” reviews Internet-based platforms and services against antitrust decrees based on software utilized on individual systems.  Peter Klein outlines familiar economics ideas that help one understand how technology has changed the economy in “Does the New Economy Need a New Economics?” In “The Economic Consequences of the Diffusion of Cloud Computing,” Federico Etro discusses the expected effects of the spread of cloud computing on macroeconomic growth.
Recent Developments
A study by the International Data Corporation (IDC) shows that small and medium business spending on cloud solutions will grow by almost 20% over the next five years, with 3 in 10 midsize firms adopting public cloud solutions. (“Cloud Computing in the Midmarket : Assessing the Options in 2013” January 2013)

With increased use, there continues to be concerns surrounding security. A June 2013 Ponemon Institute study, which polled IT and IT security practitioners in a variety of industries, revealed that 45 percent of participants believed cloud computing posed the greatest risk to regulated data. Additionally, on the heels of the National Security Agency surveillance leaks, a July 2013 survey by the Cloud Security Alliance found 56 percent of its non-U.S. members were less likely to use a U.S. cloud provider due to fears of the U.S. government’s reach of its citizens’ data.

In May 2013, Dr. Jeff Jaffe, CEO of the World Wide Web Consortium, called for tighter control over cloud standards, saying current regulation is a “confused patchwork design.” Jaffe also said the cloud will grow in importance as the number of Internet-connected devices expands.

In June 2012, the Federal Risk and Authorization Management Program (FedRAMP), a government-wide program established to provide a cost-effective, risk-based approach for the adoption and use of cloud services, reached a key milestone of having all program services operational.
Upcoming Events
To view a calendar of events of relevance to TAP academic work, please see the TAP Events page.

Media Contact

For media inquiries on a range of TAP topics, or for assistance facilitating interviews between reporters and academics, contact TAP@techpolicy.com.

Key Legislation

  • In April 2013, the House passed the Cybersecurity Enhancement Act of 2013 (H.R. 756). In part, this Act requires continued development and implementation of a strategy for the use and adoption of cloud computing services by the federal government.

  • In January 2011, the President signed into law the America COMPETES Reauthorization Act of 2010 (H.R. 5116) which, supports national research in key areas affected by the increased use of public and private cloud computing.

PDF Download