Data Islandia, a local company, is trying to establish the island as a vault for a growing pile of data that firms must retain in order to comply with all kinds of regulations. It has a compelling pitch. With its cool climate, abundant geothermal energy and secure remoteness, Iceland appears to be a prime location for data archives.As often, however, truth is stranger than fiction. In a way, Data Islandia is erecting borders in the cloud: it intends to store European data according to European regulation and American bits according to American rules. What is more, to keep the data safe during transport, they are picked up with a data scooter (in essence a container filled with disk drives) and taken to Iceland by aeroplane as though fibre-optic links had never been invented.
This illustrates the political tensions that will arise with the cloud. In one way it is the ultimate form of globalisation: vast virtualised computer systems and electronic services know no borders. Yet governments are likely to go to great lengths to avoid losing even more control.