If your data is on a European server, and you’re in the US, which country's laws does your data and activities fall under? The Economist addressed these and other questions in a Fall 2008 report on cloud computing, which it described as “the ultimate form of globalization.”

Here is an extract from the report, which was written and edited by Ludwig Siegele:

"When the Internet went mainstream in the late 1990s, libertarian thinkers argued that cyberspace was a distinct place calling for laws and legal institutions of its own. After all, they said, it was built in such a way “that it interprets censorship as damage and routes around it”. But many governments quickly found ways to block content they deemed offensive. Just look at China and its “great firewall”.

Controlling where data are stored and how they are treated is harder, though, because information can float freely in the cloud. And it is not just undemocratic governments that want to control their citizens’ and companies’ data: indeed there are nearly as many sets of data regulation as there are countries. “If we wanted to be on the safe side in terms of regulation, we probably would need 95 individual data centres,” says Chuck Hollis, a technologist at EMC, the leading maker of storage gear, which owns Mozy, a cloud service that allows users to back up their data."

Siegele started his journalistic career in 1990 as the Paris Business and Political Correspondent of Die Zeit. In 1995, he moved from France to California to write about the Internet revolution, first for Die Zeit and then for The Economist. In 1998 he became the US Technology Correspondent for The Economist, based near Silicon Valley. In 2003 Ludwig moved to Berlin as Germany correspondent. In 2007 he became technology correspondent.

The article also quoted Irving Wladawsky-Berger, a technology visionary at IBM, who compares cloud computing to the Cambrian explosion some 500 million years ago when the rate of evolution speeded up, in part because the cell had been perfected and standardized, allowing evolution to build more complex organisms.

Similarly, argued Wladawsky-Berger, the IT industry spent much of its first few decades developing the basic components of computing. Now that these are essentially standardised, bigger and more diverse systems can emerge.

“For computing to reach a higher level”, Wladawsky-Berger said, “its cells had to be commoditized.”