In a media release issued by Fujitsu, IDC chief analyst Frank Gens was quoted saying that; 'Our research shows public sector organisations in most countries are concerned about data security. Providing options to meet this concern could open up a much larger market for public cloud services and in our opinion is definitely a trend to watch."
Just this week Roze Frost, general manager of IT for TransACT, now the subject of a takeover bid by iiNet, said that although the company had opted for a cloud based back office set of applications to manage project accounting, inventory management, payroll, HR and fixed assets - it's not using NetSuite's US based cloud to store any customer data because of data sovereignty issues.
She said that she had been trying to convince NetSuite to open a local data centre, but had started off using the US based cloud to host just a 'safe set of data.'
It seems likely that over time cloud providers which want to sell to companies or government which need to comply with legislative or regulatory requirements regarding the location of their data will have to either open multiple data centres to operate their clouds internationally, or strike hybrid cloud arrangements such as that announced by Fujitsu and Microsoft.
Telstra has for example been angling for something similar. It provides access to Microsoft's Office 365 service, and handles all the billing and access to that cloud based service - but the application and data is run out of Microsoft's Singapore data centre.