Cloud providers' size: Does it make a difference post-GDPR?
In the ever-evolving landscape of cloud services, compliance with the General Data Protection Regulation (GDPR) has become a critical determinant of success for providers operating within the European Union. According to data protection expert Kuan Hon and The Bunker, key factors that will shape the competitive landscape include compliance with GDPR regulations and robust security measures to protect personal data of European citizens.
At the heart of GDPR compliance lies the ability to demonstrate adherence to mandates such as obtaining user consent before using or deleting personal data, implementing strong data protection and privacy controls, and ensuring transparency in data handling practices. Providers who establish comprehensive Information Security Management Systems (such as ISO 27001 standards) and have effective business continuity plans (ISO 22301) to respond to data breaches and data privacy incidents will be favored under GDPR constraints.
The GDPR stipulates joint liability between controllers and processors, meaning that even those at the top of the chain could be liable if an individual raises a claim. This emphasizes the importance of proactive compliance strategies, as failure to comply could result in significant fines, up to 4% of global annual turnover in some scenarios.
While the specific views of Kuan Hon and The Bunker may differ, there is a general consensus that organizational readiness, clear governance over data, technical security protocols, and customer trust are critical success factors. Kuan Hon predicts that larger players in the cloud market, such as Amazon, Google, and Microsoft, will dominate Europe's cloud market due to their control over their supply chains. However, Phil Bindley, CTO at The Bunker, believes that the defining business attribute for success in the European market will be having a culture of information security instilled within the business.
For smaller SaaS providers, negotiating extra obligations with larger CSPs like Amazon, Google, or Microsoft may prove challenging. Yet, Bindley asserts that the size of the supplier does not matter, without a secure framework in place, people are not going to want to do business with you. If a cloud provider cannot comply with all GDPR requirements, they may struggle to do so unless they are one of the giants. However, Bindley suggests that it is not impossible for smaller CSPs to put the required conditions on larger suppliers.
Responsibility for GDPR compliance will flow down the digital supply chain, potentially burdening smaller providers. It will be the customer's choice who they want the fines paid by, and it is then up to the data processor to be refunded money from the responsible parties within the supply chain. Data protection expert Kuan Hon suggests it may be difficult for cloud computing companies to enforce terms and conditions on their suppliers unless they are as large as Amazon, Google, or Microsoft.
In conclusion, success under GDPR for cloud service providers is essentially shaped by their ability to integrate GDPR compliance requirements into their operational, technical, and governance frameworks while ensuring security and privacy of customer data. Companies must have a culture of information security ingrained within their business to effectively protect EU citizens' data and become more competitive by managing risk effectively. The herd of cloud service providers (CSPs) will thin out over the next few years as less proficient CSPs are forced out of the market, making it crucial for providers to prioritize GDPR compliance and information security.
- Incorporating data-and-cloud-computing technology that promotes GDPR compliance, robust security, and clear data governance is vital for cloud service providers to remain competitive and protect the privacy of European citizens.
- For smaller cloud service providers negotiating with larger suppliers, having a comprehensive understanding of GDPR requirements and a secure framework for data protection is essential to not only survive but thrive in the European market, regardless of supplier size.
