Britain’s decision to split from the European Union has already sent shock waves throughout the worldwide investment community, and although it is still too early to know what long-term impacts this will have on investments, some areas of opportunity seem obvious. One area of interest is that of cloud data, and even here there are silver-linings for investors.
Though cloud data’s name implies that the system itself is just as amorphous, cloud data is stored in various data centres around the world. These centres are regulated and bound by the laws and policies in their respective locations. This is where data sovereignty comes into play, especially when considering the impact that Brexit will have on cloud data investments.
Data sovereignty, an integral concern, can be broken down into three words: keep it local. Under current laws, the data held in EU centres belong to citizens of the EU, but in fewer than two years this could change once Britain’s departure goes into effect. Should data sovereignty still reign, UK data will need to be housed in the UK while EU data will need to be housed in the EU. What does this mean for data investors?
Well, they should prepare for massive data segregation and reallocation. Such a move would still be intimidating for corporate giants even without the 24-month deadline; mere data migration will not do. Private and public cloud providers will be required to first, in a sense, duplicate their infrastructure domestically and across the English Channel before even beginning to segregate their loads of data.
Venture capitalists and investors might be wondering where to begin. Here are three things that they should bear in mind.
One: Invest in higher-level functions. Serverless architecture could be the answer for the oncoming data storm in a post-Brexit world. In a way, serverless architecture would allow the cloud data to organize itself. Storage workloads could be built with a geographical flag, allowing the cloud to route them to the appropriate geographies for computing and storage. In a serverless system, data would not be anchored to specific computing nodes, but rather instinctively routed and rerouted based on the workload.
The necessity of change heralded by Brexit is a good for investors. Cloud computing is a decade-old business in need of serious upgrading. The focus since its conception has been on creating cloud computing infrastructure necessary for the establishment of its basic functions. However, with a firm foundation and the current climate shift, investors should be looking to funnel money into higher-level projects that will make the moving of data between jurisdictions and sovereign locations easier.
The telecommunications market is seeing a similar shift. Fifteen years ago, routers, switchers, and fibre were important when building the physical infrastructure of the industry, but many investors are now focusing on higher-end elements like APIs, software, and servers. With Brexit looming, the serverless concept is one that forward-thinking investors will consider.
Two: Don’t ignore multi-clouds. Brexit has had a ripple effect on other members of the EU, with whispers of other countries leaving after the country’s referendum. Cloud providers might find themselves in a wind storm of data reallocation if countries follow suit of Britain. Compounding the confusion of an already complex situation is a regulatory system that is in near-constant flux. Currently in a trial phase in Europe is the General Data Protection Regulation. Also in development is the EU-U.S. Privacy Shield, created to replace the U.S.-EU Safe Harbour agreement, which was phased out in 2015.
With the need to move data, large cloud providers will most likely build multiple centres in various areas; however, it would be impractical to build centres in every country. For this there is an answer: multi-cloud technologies. Large cloud providers will need to connect and work together to survive in a post-Brexit world.
Three: Smaller is better. In the past, the size of a company has been indicative of its potential for success. This was due to the factors like the ability for redundancy, but now data sovereignty has taken centre-stage. Since the turnout of Brexit was unexpected, so too is the now necessary expenditures to build more centres in different areas. Investors should focus on a company’s depth in a few areas as opposed to its superficial, widespread reach. Again, focus less on the physical infrastructure and more on the higher-level services.
No matter what your views are on Brexit, we can all agree: it is certainly bringing about some big changes.