Thursday, December 7, 2017

"The coming trade war over data"

From Axios:
Technology companies are facing growing international obstacles affecting how their most valuable asset — data — flows across borders. New trade agreements and laws are affecting how companies share and store their troves of data around the world.

Why it matters: For decades, trade talks centered around tangible goods such as oil, agriculture and cars. But now that the economy is rooted in data that has to cross borders to meet the demands of global business, rules governing how data is housed and accessed are at the forefront of trade conversations.
How it works: For example, China, Russia and Vietnam require companies to store data on servers physically located within their borders. And countries including Argentina and Brazil restrict international data transfers under certain conditions.
The big picture: There are currently no international rules on how data cross borders. So a patchwork of government policies that trap data inside their countries or prevent foreign data brokers from doing business there could hamper the development of data-intensive technologies such as artificial intelligence, experts say.
Where it stands:
  • New digital obstacles threaten nearly $400 billion of annual U.S. exports, according to the Washington Post.
  • Most of the world's biggest data processors are based in the U.S., which means firms like Salesforce, Microsoft, Amazon, IBM and Google have the most on the line in these international negotiations.
Social media companies also have a lot to lose to data regulation and overseas trade barriers. Here's how many of their users are located outside of North America:
The issue becomes even more complicated and critical as major tech companies almost exclusively store data in "clouds" that can be located anywhere, rather than physical servers in a handful of domestic locations.
  • The biggest technology companies are transitioning business opportunities into cloud-based software. Amazon's Web Services business (AWS), is pushing to become the biggest enterprise business globally.. Microsoft's Cloud business is projected to bring in a whopping $20 billion in net revenue, per the company's last quarterly earnings statement.
Several dynamics are shaping the way data flows internationally....