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Japan's Government Cloud: New Opportunities for Local Providers

Photo by Rafael Garcin / Unsplash

Tokyo, Japan - Japan's digital agency has launched a review of the government's cloud provider selection process, according to the Yomiuri report.

Why it matters:

The move could pave the way for Japanese companies to enter a space largely controlled by American companies such as Amazon, Microsoft, Google, and Oracle.

The move aligns with Japan's broader efforts to promote domestic cloud services and increase economic security.

The practical implications of this decision remain to be seen.

Still, it signals Japan's intent to promote homegrown capabilities in the global cloud business landscape without threatening the existing presence of established giants like AWS.

The Key Points

  • Selection Criteria: Previously, government cloud providers had to meet about 330 requirements related to security measures and data storage. These requirements were largely met only by U.S. companies with global operations.
  • Revised process: The revised process, announced in late August, is expected to allow domestic companies to provide cloud services, with applications accepted for the fiscal year 2023.
  • Data storage and archiving:  The government insists that encrypted data must be stored in Japan, in line with national interests. The "government cloud" is a shared IT infrastructure that stores personal information, including names, personal numbers (my number), family registers, national pensions, and resident taxes. Local governments are expected to migrate resident data to the government cloud by fiscal 2025.

The Big Picture:

The Digital Agency's decision to revise the selection process comes in response to growing calls from Japanese companies to consider domestic vendors for government cloud services.

The change could allow companies such as Sakura Internet and Internet Initiative Japan (IIJ) to enter the market.

However, local governments retain the right to choose their providers, leaving some uncertainty about the potential traction of Japanese cloud computing.

Tokyo Institute of Technology sociologist Ryosuke Nishida expressed concern about the timing, suggesting that the move may come too late for some sectors.

IT journalist Kenta Yamaguchi added that the decision could create space for domestic cloud providers if they work with other companies to meet the requirements.