Ukraine, and especially its government, needs to get its head in the clouds, and embrace new computing technology that promises to improve both the economy and the sharing of knowledge at a dizzying pace.
That was the overriding message from the discussion on “Regulation of Cloud Computing,” the theme of the 2nd Kyiv Post CEO Dinner, which took place at the Hilton Kyiv Hotel on July 5. The two-hour event was sponsored by Stober, Poltavets & Associates and Kinstellar law firms.
The dinner attendees agreed that the nation needs to move faster into the so-called Fourth Industrial Revolution, the digital one, and needs a well-developed strategy to do so.
The discussion came as parliament considers a bill on government regulations on cloud computing — the practice of using a network of remote servers hosted on the internet to store, manage and process data, rather than using more cumbersome and costly isolated, local servers.
Ukraine’s regulation of cloud data could go one of two ways: that of Germany, where privacy is so strongly valued that it could be stifling technological advancement, or that of Estonia, which is on the cutting edge in using cloud technologies.
The country should also sidestep the alternatives favored by authoritarian regimes or dictatorships, dinner attendees agreed: Russia, for instance, requires its data to be stored on its territory, while the international payment system PayPal is leaving Turkey because of government attempts to bring the technology business under local control.
The cloud-first strategy of the United States was also touted, including the guiding principle that what is not forbidden is permitted, which all too often is the exact opposite of the practice in Ukraine.
Paradoxically, one participant noted, Ukraine is both overregulated by stifling rules, and under- regulated due to the lack of, or selective, enforcement of rules.
The bill on the regulation of cloud data working its way through parliament is supported by Dmytro Shymkiv, the tech-savvy deputy head of the Presidential Administration and a participant in the discussion.
Stober, Poltavets & Associates partner Marcus Stober (L), Kinstellar partner Kostiantyn Likarchuk (C), Kinstellar managing associate Olena Kuchynska. (Volodymyr Petrov)
The legislation would free the government to shift to cloud storage more easily, and gain all the advantages this entails for working with and analyzing data, rather than continuing to use cumbersome and expensive local servers.
Greater government use of cloud storage will allow the public sector to provide better services much more cheaply in a number of ways, event participants agreed. Tax evasion could be reduced for example, by linking Ukraine’s customs and tax data stores.
Some governments, however, still have security concerns about their data being stored abroad, but this should apply only information classified as state secrets, which is a tiny percentage of all government information. Most data can be stored even more safely using cloud technologies outside of Ukraine.
For instance, everyone who used smartphones stores information in global servers.
At the moment, Ukraine’s government can use cloud storage, but it must be located in Ukraine and it must have undergone special certification.
As usual, private companies are ahead of government in adopting such practices in Ukraine.
But Ukraine’s government, when it uploads videos of its meetings to YouTube, sends bills by e-mail, or posting something on Facebook, is already using the cloud. It’s just that some in Ukraine are afraid of accepting this reality, Shymkiv said.
General manager at Microsoft Ukraine Nadiia Vasilyeva makes a point. Also pictured: Co-founder and CEO of Innovecs Alex Lutskiy (L), chairman of the board at Parkovyy Datacenter Petr Yatsuk (2nd L) and Stober, Poltavets & Associates managing partner Ivan Poltavets (R). (Volodymyr Petrov)
In fact, digital services enabled by cloud technologies — from 3G mobile to payment systems — have been the most popular innovations in Ukraine in recent years.
And some see Ukraine’s new legislation as a chance to create a more open market than the European Union, which is still trying to harmonizing its digital market.
Some argued over whether Ukraine should adopt the UK model, which favored domestic cloud providers for the first two years, or whether Ukraine should be open from the start to all providers, foreign and domestic, and not limit the market. The hope is that the development of technology solutions will be spurred by eliminating protectionism and creating equal opportunities on the market.
A shining example of a cloud-based solution in Ukraine is ProZorro, the online platform that has brought transparency and competition to public purchases, eliminating the multibillion-dollar corruption that plagued government purchases.
The greater use by the government of cloud technologies could also be a boon to the domestic data storage industry, which is under-developed. The telecoms and banking sectors are seen as major potential customers.
Representatives of two of the six big cloud computing multinationals were at the dinner – those of Microsoft and Oracle. The other four are IBM, Google, Amazon and Facebook. Concerns were expressed about whether local firms would be about to compete against the industry giants.
Some dismissed as a myth the idea that isolated, domestically based servers were safer than cloud technology, noting that some of the worst computer viruses have been spread by flash drives. Another concern, dismissed as more of a red herring, was the danger posed from famous data breaches such as those of WikiLeaks, the Edward Snowden case, and the Panama Papers offshore company scandal. In these cases, experts said it was the people who were involved, not the technology, that was to blame.
Among the guests in the Hilton Kyiv Hotel:
Dmytro Shymkiv, deputy head of the Presidential Administration; Lena Minitch, director of the Department of Innovations and Intellectual Property for the Economy Ministry; Maksim Ageev, CEO, De Novo; Nadiia Vasilyeva, general manager of Microsoft Ukraine; Valentina Hriazeva, chief financial officers of .IO; Yuriy Kurmaz, general manager of Ukrtelecom; Sergey Yanchyshyn, managing director of Oracle; Vera Platonova, country manager of MasterCard; Petr Yatsuk, chairman of the board, Parkovyy Datacenter; Alex Lutskiy, co-founder and CEO, Innovecs; Gyorgy Zsembery, CEO of Volia; Marcus Stober, partner, Stober, Poltavets & Associates; Ivan Poltavets, managing partner – Stober, Poltavets & Associates; Olena Kuchynska, managing associate of Kinstellar; Kostiantyn Likarchuk, partner of Kinstellar.
