The State of Cloud Computing Around the World: Canada

Cloud Computing is taking off in various parts of the globe, partly because companies are now realizing the great potential of cloud computing technology when it comes to cost efficiency, productivity, agility, and operational flexibility. However, Canadian companies seem to be lagging behind the rest of the world when it comes to the adoption of this newly matured technology.

Canada’s Slow Adoption of the Cloud

The chief reasons why Canadian companies are slow to adopt cloud technology despite its maturity is due to security and privacy concerns. Canada has extremely stringent data privacy laws, and many Canadian companies are still waiting for the provincial and federal governments to standardize and update the policies in order to accommodate the cloud. With the Canadian government’s lack of clear policies on data privacy and their effects on the cloud, companies will not be willing to risk possible legal troubles regarding cloud use.

Essentially, Canadian companies are concerned that the ownership of the information they keep in their own data centres could be called into question, as the existing privacy laws still have conflicts regarding which data belongs to whom based on the physical location of the server, as well as the location of the person accessing the files.

It’s also the main reason why many Canadian users choose to go with foreign providers, such as Microsoft and Amazon, as the two companies have the most stringent security mechanisms in place, and have deep enough pockets to fight drawn out court battles if they run into legal trouble.

Canada’s Privacy Laws

As mentioned above, many Canadian organizations are on the fence when it comes to adopting cloud technology due to fears that they could run into legal issues when transfer of data across borders happens. This is because under Canada’s current federal and provincial private sector privacy laws state that the organization that collects and uses personal information will be solely responsible for its maintenance and security throughout its lifecycle.

This puts many organizations in a risky position as they become automatically locked in a contractual obligation with individuals whose data pass through their servers. Organizations that want to operate in the cloud would have to meet with their legal advisors in order to assess if cloud service transfers of personal information will have an effect on their existing legal commitments, and if it is necessary for them to provide special notice to individuals concerned, as well as provide opt-out or termination opportunities to users.

Canadian Companies Using Foreign Clouds

Canadian companies are allowed to use US-based cloud services provided that they are only operating in the private sector. The current Canadian legislation allows transfer of personal information to another country with its own jurisdiction for storing and processing of files, as long as

  1. The transfer will not entitle the recipient organization to use the data for purposes other than those approved or consented upon by all parties involved
  2. The transferring organization will still be held accountable for the protection of the personal information that has been transferred,
  3. The recipient organization will be providing a level of data security that is comparable to the transferring organization’s capabilities, and on par with the minimum requirements of Canadian law.
  4. The is full disclosure for all parties involved, and individuals should get a notice that their personal information will be transferred outside of Canada for processing and storage and will be subject to the laws of the country it will be stored in.

The Future of Cloud in Canada

While Canadian organizations are still on the fence and waiting on their government to iron out the kinks in their data privacy-related policies, they are not blind to the advantages provided by cloud computing technology to their businesses via cost efficiency, manpower reduction, and the ability to scale up and down anytime they need in order to meet with sudden changes in the market.

The Canadian companies are slow to adopt the cloud, and have been lagging behind other developing countries like China and India, but that doesn’t mean they aren’t taking steps to catch up the rest of the world. In fact, the most recent data from Canadian analyst firm IDC Canada indicates that the businesses are slowly but surely starting to prepare for migration, and some have already managed to do so.

The most growth is exhibited by Software As A Service (SaaS) models, which posted a growth of 27 percent in revenue in 2011, with the market expected to be worth as much as $1.39 billion by 2016 if the trends stay the course.

Cloud applications in Canada make up only five per cent of the software market last 2010, but IDC’s findings show that the figure will balloon to 15 per cent in as little as 3 years, making it the fastest growth in the collaboration software market.

How Can Canada Catch Up with the Rest of the World?

Technically, the chips are against Canada because cloud technology gives its adopters speed, agility, and operational cost advantages. Which means those who are late to the party tend to be left in the dust. Ultimately, what Canada needs is for organizations, corporations, and government partners need to accept that change is needed as soon as possible.

Help can also come from foreign giants such as Microsoft, Amazon, and IBM. These multinationals have enough capital and clout to set up shop locally and give Canadian companies the option of storing data domestically, thereby avoiding any conflicts regarding local data privacy laws and policies. This way, Canadian corporations and institutions can start migrating to the cloud without waiting for their government to standardize and update their outmoded legislation. This initial push will allow the country’s small population and its relatively large number of SMEs to join the cloud and drive adoption further. Once all of these pieces fall into place, moving to true Canadian cloud will be straightforward and will end up forcing the hand of their government.


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