The Future of Compute – Making cloud a force for good in the UK?

“To get at the matter of the Cloud we must unravel the coils of coaxial cables, fiber optic tubes, cellular towers, air conditioners, power distribution units, transformers, water pipes, computer servers, and more undefined. We must attend to its material flows of electricity, water, air, heat, metals, minerals, and rare earth elements that undergird our digital lives. In this way, the Cloud is not only material, but is also an ecological force”

So said Steven Gonzales Monserrate in his paper “The Cloud Is Material: On the Environmental Impacts of Computation and Data Storage”. I’d go further: cloud is in every market vertical in the UK and is the core infrastructure on which the UK’s digital economy is run.

As such, we should no longer think of cloud as a base commodity. It’s an ecological and economic force with the potential to create economic growth and wealth through a secure, resilient and sovereign digital infrastructure. Cloud should be a force for good in the UK.

The DCMS “Future of Compute Review” is asking some very pertinent questions. This blog is a brief summary of my response.

As our experience and understanding of cloud grows, so our language is changing. Today’s cloud users have much to consider:
The right deployment model: “one size fits all” public cloud has proven to be not always right for every workload;
Digital autonomy and sovereignty is becoming far more important for many nations throughout the world, as the global geopolitical landscape destabilises;
Economic and societal impacts: how can cloud support the UK’s aspirations for social value, net zero, public good and the growth of British businesses?
• Environmental impacts: cloud is now thought to have a larger carbon footprint than the airline industry;
Concentration risk and lock-in: only last month, the Bank of International Settlements report published “Big tech interdependencies – a key policy blind spot” noted that growing reliance by financial institutions on cloud supplied by a handful of providers could have “systemic implications for the financial system”. The same could be said for every other vertical market that relies on cloud.

This is a new narrative which many cloud providers will struggle to address. Change is achievable if users have a choice. But genuine choice is becoming less achievable, when the ever-growing market is continuing to consolidate on just a few cloud providers.

In June this year the Treasury issued a policy paper proposing a new regulatory framework to provide the Bank of England and the Financial Conduct Authority with new powers to oversee technology firms that provide critical services to the financial industry.

This was driven by concern about the growing dependence of banks on cloud, and the lack of supplier diversity. According to the Treasury, in 2020, over 65% of banks used the same four cloud providers (the irony is not lost on those of us who see UK public sector concentrated on just one cloud provider).

To put this into perspective, Lloyd’s calculated in 2018 that a cyber incident impacting the operations of one of the top public cloud providers in the US for three to six days, could result in losses of up to US$19 billion to the US economy. If we assume that the cost to the UK would be approximately 10% it would amount to a near £2 billion loss (in 2018).

Last year the US think-tank the Information Technology and Innovation Foundation (ITIF) described data localism as “data protectionism” – authoritarianism that facilitates domestic surveillance – glossing over the fact that many data localisation initiatives were driven by Snowden’s revelations about US surveillance of its own citizens.

The ITIF described Europe as one of the worst culprits (unsurprising given that Europe is a very valuable market for US cloud providers but one with a high opportunity cost given the regulatory landscape), calling it out for the GDPR and GAIA-X. It singled out France for declaring that data produced by public administrations is an archive and therefore should be stored domestically and also for the creation of a trusted sovereign cloud – ”Bleu” – by two French tech giants under the auspice of GAIA-X.

But the ITIF is missing the point. Its fundamental opposition to Europe achieving any level of digital autonomy and sovereignty makes data location a zero-sum game: data autonomy and sovereignty versus US data colonialism.

The real argument is not about whether the US should be inconvenienced and put out of pocket by cloud users in the UK wishing to keep their workloads in the UK. We should have the vision to grow the UK’s own autonomous, sovereign national digital capability, with the cloud market in the UK transformed from today’s hyperscale Hobson’s choice to a vibrant, competitive market where local cloud providers compete on a level playing field, providing genuinely sovereign alternatives that add real value to local economies and to society.

Government has pushed forward with an Innovation Strategy, a National Cyber Strategy, and a National Data Strategy – all of which are underpinned by cloud. However, despite its importance to the economy, society and the environment, government is not yet talking about a National Cloud Strategy.

I’m calling on government to develop a National Cloud Strategy that sets a positive direction of travel, gives a strong signal to the UK digital industry and in due course drives private sector investment. I’ve already said this to the DCMS in response to the current Future of Compute Review, but I’d also love to hear your views!

A National Cloud Strategy:

Through a joint government/industry partnership, the UK should invest in its cloud industry so we can compete globally in the 21st Century.
Reform public procurement practices: government must reorient its approach to cloud procurement and the Procurement Bill provides the perfect opportunity to support UK businesses and introduce competition.
Establish a legal and regulatory environment that keeps the British people’s data in the UK.
Government should supercharge STEM by investing in the high-tech skills base across our regional economies and create a National Cloud Centre of Excellence.
Government should ensure that its environmental and corporate responsibility aspirations are baked into all public sector contracting, by increasing ‘social value’ or ‘public good’ criteria to a 20% weighting.