Japan is easing the selection requirements to pave the way for local companies to better engage in the domestic cloud services sector, currently dominated by U.S. tech giants such as Amazon, Microsoft, Google, and Oracle. This goes in line with Japan’s emphasis on emerging technologies to help fuel economic growth as well as resolve security issues when storing data.
Japan’s Digital Agency said it’s reviewing the government’s high level of requirements placed on cloud providers. This primarily involves the management of personal information, including names, family registers, national pensions, and resident taxes.
The revised provisions, which are expected to be announced by the end of August, will require cloud providers to store encrypted data in Japan, managed by local government agencies. The selected cloud providers are expected to be decided in late October.
This comes amid growing calls from Japanese companies to review the selection criteria for storing and providing government cloud. It’s highly likely companies such as Sakura Internet and Internet Initiative Japan will grab the new opportunity to enter the domestic cloud market.
Despite these revisions, the Digital Agency said municipal governments will still retain the right to choose their providers, meaning the changes brought by the revision to the actual selection may be limited. Municipal governments are slated to fully migrate resident data to the cloud by fiscal 2025.
According to a recent report by Technavio, the cloud computing market in Japan has the presence of limited key vendors but the competition is to intensify due to high storage demands, big data analytics, and fast connectivity. The market is expected to grow at a CAGR of 12.54% to reach US$ 13,492.21 million from 2022 to 2027.
