Welcome!

Weblogic Authors: Yeshim Deniz, Elizabeth White, Michael Meiner, Michael Bushong, Avi Rosenthal

Related Topics: @CloudExpo

@CloudExpo: Article

Will the Bean Counters Control Cloud Computing in China?

There Are Reasons to Get Excited by China, But be Careful What You Wish For

I'm going to Shanghai this week, to speak to a group of people about Cloud Computing. I plan to listen at least as much as I talk, with the goal of perhaps learning something.

I've been getting a different perspective of the world, literally, as I sit in Southeast Asia observing and writing.

From here, the United States seems to be a distant power that continues to pay far more attention to Europe and the Middle East than to a region that holds more than half of the world's population.

Considering that China owns between $750 to $800 billion-how do you like that number, Dr. Evil?-in US debt, it would behoove the US to engage even more fully than it is with what is now the world's second biggest economy.

Although that's a discussion for another day, the sheer size and scope of what is happening in China made me think a bit about Cloud Computing and its future in the country.

I am not an engineer. I've made a living trying to bridge the yawning communications gap that exist between the technical and business side of companies, whether they develop and/or use that technology.

The imperative to close that gap has never been stronger than it is with Cloud Computing. Already, the term has been thrown about to talk about everything from abstruse virtualization to plain old email. I doubt there is a technology vendor today lacking some sort of Cloud Computing "strategy."

This communications gap exists in China as well-not only between techies and business types, but between China and the rest of the world. So that is what I'll talk about later this week.

Before vendors can jump down various technical rat holes in an effort to win business in China, let's take a very high-level view.

First of all, how big is Cloud Computing and how big will it get in the next few years?

IBM says 28% annual growth, reaching $128 billion in 2012.

Merrill Lynch is even more aggressive, seeing $160 billion in 2011.

Well, how far can we trust a Wall St. company these days? Besides, Merrill is counting ordinary email, and online advertising, as huge components of this. IBM is counting a lot of old wine in new bottles, ie, products and services it's been offering for years (eg, Lotus Notes).

IDC sees an annual growth rate of 27% in Cloud Computing services, reaching $42 billion 2012. Gartner sees continued 21% annual growth, after Cloud Computing revenues reached $56 billion last year.

Lesson: It's not a dreaded zero-billion-dollar market. It's not going away, no matter how you measure it.

The second high-level view is that of global economies. China famously surpassed Japan in the total size of its economy in nominal terms (that is, not adjusted for the local cost of living). Last year's global economic disaster was also "bad" for China, as it racked up a growth of only 8.7%. This year, it's shown annualized growth of 11.9% and 10.3% in the last two quarters.

By contrast, the US grew only 0.25% last year, after negative growth in 2008. This year, the US is on course for an anemic growth rate of 2.6%. The Sick Man of Europe is now all of wealthy Europe-the EU economy is looking to be absolutely flat this year, after declining 2.9% last year.

Yet the US economy is still 2.9X that of China, and the EU economy is 14% larger than the US. Taken together, the US and EU total about one billion souls with an economy that is more than six times the size of China's.

As a side note, India continues to grow rapidly as well, although more slowly than China. Even with 6.8% growth in 2009, and a projected 8.3% this year, the Indian economy totals about 25% that of China, and there is a red shift going on.

Meanwhile, China continues to transform itself. In recent years, the country has gained enough self-confidence to bring in (and pay for) world-class assistance, whether hiring famed Chicago architect Adrian Smith (of Skidmore, Owens, and Merrill at the time) to design its showcase Jin Mao tower in Shanghai, or working with the Germans to develop its maglev train, or joining forces with the European Galileo satellite project.

The country has also proudly showcased itself to the world, whether through the 2008 Beijing Olympics or the Expo 2010 in Shanghai.

The country is poised to become a high-end exporter, whether of cars, satellites, or airplanes. It is already the world's leading steel producer. And perhaps most important, it is simultaneously poised to become a major importer, given its new-found wealth, pressures exerted by a new and striving middle class, and pressures on its currency.

Lesson: It's not the size of the Cloud market that matters to China, it's the size of China that matters to Cloud.

So, what's not to like? Many things, clearly.

Heading the list: Major US vendors have been frustrated with China, whether Microsoft's past efforts to stop the use of stolen software, to Google's current efforts to dance to the government's tune. Another hindrance to outside vendors is IBM's dominance; Blue was in there early and often, and has set a sort of benchmark that Chinese technology buyers don't want to abandon. Third, Chinese technology buyers use a variant of that old real-estate slogan and focus on three things: price, price, and price.

Lesson: The "two billion armpits" slogan of consumer companies trying to break into china in the 80s proved untenable. The "2.6 billion eyeballs" mantra of today may meet the same fate.

So, what's to like? Many things, too.

The fulcrum on which the country rests, in which it now wishes to transform from a mammoth supplier of low-end goods to a big supplier and mammoth importer of high-end goods, means Western technology vendors should be doing everything they can to sell to China. The two billion armpits of the 80s had no money; today's billions of eyeballs do.

To get Chinese buyers off of price, it's time to say exactly what your product will do. Will it scale? How quickly? What unique security concerns does this very secured state need to address? How much will you be competing with local vendors? What's the joint-venture climate like (assuming you are selling widgets instead of Web searches)?

Who wants to have applications come to them from the ether? This approach eliminates fraud, but how many buyers see the capabilities of SaaS as a trade-off for paying a fair price for it? What's the landscape for server farms in China? What opportunities, if any, are there for outside vendors? And is IaaS-The Big Switch-really an option in this country today or anytime soon?

Finally, the discussion may turn into one of accounting. China has recently made a move from its own Chinese Accounting System (CAS) rules to the International Financial Reporting Standards (IFRS) approach, to bring it into alignment with most of the rest of the world.

However, the US remains stuck to its own Generally Accepted Accounting Principles (GAAP), which has significant differences from IFRS, particularly in the way it values assets.

Longtime Silicon Valley watchers know that many companies are loathe even to report GAAP numbers (which they're required to do if they're public companies), preferring to "forget" about pesky things such as acquisition costs and report "more important" non-GAAP numbers as well.

My oh my, who wants to talk about accounting? The reality is, that strip away all the hype, all the claims and counterclaims, phony benchmarks, "totally unique" approaches, and realize that in China, you might be best served to bring your CFO and a hired-gun CPA if you are serious about doing business there.

Lesson: It's a bean counters' world. We just live in it.

 

More Stories By Roger Strukhoff

Roger Strukhoff (@IoT2040) is Executive Director of the Tau Institute for Global ICT Research, with offices in Illinois and Manila. He is Conference Chair of @CloudExpo & @ThingsExpo, and Editor of SYS-CON Media's CloudComputing BigData & IoT Journals. He holds a BA from Knox College & conducted MBA studies at CSU-East Bay.

@ThingsExpo Stories
Leading companies, from the Global Fortune 500 to the smallest companies, are adopting hybrid cloud as the path to business advantage. Hybrid cloud depends on cloud services and on-premises infrastructure working in unison. Successful implementations require new levels of data mobility, enabled by an automated and seamless flow across on-premises and cloud resources. In his general session at 21st Cloud Expo, Greg Tevis, an IBM Storage Software Technical Strategist and Customer Solution Architec...
Nordstrom is transforming the way that they do business and the cloud is the key to enabling speed and hyper personalized customer experiences. In his session at 21st Cloud Expo, Ken Schow, VP of Engineering at Nordstrom, discussed some of the key learnings and common pitfalls of large enterprises moving to the cloud. This includes strategies around choosing a cloud provider(s), architecture, and lessons learned. In addition, he covered some of the best practices for structured team migration an...
Product connectivity goes hand and hand these days with increased use of personal data. New IoT devices are becoming more personalized than ever before. In his session at 22nd Cloud Expo | DXWorld Expo, Nicolas Fierro, CEO of MIMIR Blockchain Solutions, will discuss how in order to protect your data and privacy, IoT applications need to embrace Blockchain technology for a new level of product security never before seen - or needed.
Imagine if you will, a retail floor so densely packed with sensors that they can pick up the movements of insects scurrying across a store aisle. Or a component of a piece of factory equipment so well-instrumented that its digital twin provides resolution down to the micrometer.
In his keynote at 18th Cloud Expo, Andrew Keys, Co-Founder of ConsenSys Enterprise, provided an overview of the evolution of the Internet and the Database and the future of their combination – the Blockchain. Andrew Keys is Co-Founder of ConsenSys Enterprise. He comes to ConsenSys Enterprise with capital markets, technology and entrepreneurial experience. Previously, he worked for UBS investment bank in equities analysis. Later, he was responsible for the creation and distribution of life settle...
BnkToTheFuture.com is the largest online investment platform for investing in FinTech, Bitcoin and Blockchain companies. We believe the future of finance looks very different from the past and we aim to invest and provide trading opportunities for qualifying investors that want to build a portfolio in the sector in compliance with international financial regulations.
No hype cycles or predictions of a gazillion things here. IoT is here. You get it. You know your business and have great ideas for a business transformation strategy. What comes next? Time to make it happen. In his session at @ThingsExpo, Jay Mason, an Associate Partner of Analytics, IoT & Cybersecurity at M&S Consulting, presented a step-by-step plan to develop your technology implementation strategy. He also discussed the evaluation of communication standards and IoT messaging protocols, data...
Coca-Cola’s Google powered digital signage system lays the groundwork for a more valuable connection between Coke and its customers. Digital signs pair software with high-resolution displays so that a message can be changed instantly based on what the operator wants to communicate or sell. In their Day 3 Keynote at 21st Cloud Expo, Greg Chambers, Global Group Director, Digital Innovation, Coca-Cola, and Vidya Nagarajan, a Senior Product Manager at Google, discussed how from store operations and ...
In his session at 21st Cloud Expo, Raju Shreewastava, founder of Big Data Trunk, provided a fun and simple way to introduce Machine Leaning to anyone and everyone. He solved a machine learning problem and demonstrated an easy way to be able to do machine learning without even coding. Raju Shreewastava is the founder of Big Data Trunk (www.BigDataTrunk.com), a Big Data Training and consulting firm with offices in the United States. He previously led the data warehouse/business intelligence and B...
"IBM is really all in on blockchain. We take a look at sort of the history of blockchain ledger technologies. It started out with bitcoin, Ethereum, and IBM evaluated these particular blockchain technologies and found they were anonymous and permissionless and that many companies were looking for permissioned blockchain," stated René Bostic, Technical VP of the IBM Cloud Unit in North America, in this SYS-CON.tv interview at 21st Cloud Expo, held Oct 31 – Nov 2, 2017, at the Santa Clara Conventi...
A strange thing is happening along the way to the Internet of Things, namely far too many devices to work with and manage. It has become clear that we'll need much higher efficiency user experiences that can allow us to more easily and scalably work with the thousands of devices that will soon be in each of our lives. Enter the conversational interface revolution, combining bots we can literally talk with, gesture to, and even direct with our thoughts, with embedded artificial intelligence, whic...
When shopping for a new data processing platform for IoT solutions, many development teams want to be able to test-drive options before making a choice. Yet when evaluating an IoT solution, it’s simply not feasible to do so at scale with physical devices. Building a sensor simulator is the next best choice; however, generating a realistic simulation at very high TPS with ease of configurability is a formidable challenge. When dealing with multiple application or transport protocols, you would be...
Smart cities have the potential to change our lives at so many levels for citizens: less pollution, reduced parking obstacles, better health, education and more energy savings. Real-time data streaming and the Internet of Things (IoT) possess the power to turn this vision into a reality. However, most organizations today are building their data infrastructure to focus solely on addressing immediate business needs vs. a platform capable of quickly adapting emerging technologies to address future ...
We are given a desktop platform with Java 8 or Java 9 installed and seek to find a way to deploy high-performance Java applications that use Java 3D and/or Jogl without having to run an installer. We are subject to the constraint that the applications be signed and deployed so that they can be run in a trusted environment (i.e., outside of the sandbox). Further, we seek to do this in a way that does not depend on bundling a JRE with our applications, as this makes downloads and installations rat...
Widespread fragmentation is stalling the growth of the IIoT and making it difficult for partners to work together. The number of software platforms, apps, hardware and connectivity standards is creating paralysis among businesses that are afraid of being locked into a solution. EdgeX Foundry is unifying the community around a common IoT edge framework and an ecosystem of interoperable components.
DX World EXPO, LLC, a Lighthouse Point, Florida-based startup trade show producer and the creator of "DXWorldEXPO® - Digital Transformation Conference & Expo" has announced its executive management team. The team is headed by Levent Selamoglu, who has been named CEO. "Now is the time for a truly global DX event, to bring together the leading minds from the technology world in a conversation about Digital Transformation," he said in making the announcement.
In this strange new world where more and more power is drawn from business technology, companies are effectively straddling two paths on the road to innovation and transformation into digital enterprises. The first path is the heritage trail – with “legacy” technology forming the background. Here, extant technologies are transformed by core IT teams to provide more API-driven approaches. Legacy systems can restrict companies that are transitioning into digital enterprises. To truly become a lead...
Digital Transformation (DX) is not a "one-size-fits all" strategy. Each organization needs to develop its own unique, long-term DX plan. It must do so by realizing that we now live in a data-driven age, and that technologies such as Cloud Computing, Big Data, the IoT, Cognitive Computing, and Blockchain are only tools. In her general session at 21st Cloud Expo, Rebecca Wanta explained how the strategy must focus on DX and include a commitment from top management to create great IT jobs, monitor ...
"Cloud Academy is an enterprise training platform for the cloud, specifically public clouds. We offer guided learning experiences on AWS, Azure, Google Cloud and all the surrounding methodologies and technologies that you need to know and your teams need to know in order to leverage the full benefits of the cloud," explained Alex Brower, VP of Marketing at Cloud Academy, in this SYS-CON.tv interview at 21st Cloud Expo, held Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clar...
The IoT Will Grow: In what might be the most obvious prediction of the decade, the IoT will continue to expand next year, with more and more devices coming online every single day. What isn’t so obvious about this prediction: where that growth will occur. The retail, healthcare, and industrial/supply chain industries will likely see the greatest growth. Forrester Research has predicted the IoT will become “the backbone” of customer value as it continues to grow. It is no surprise that retail is ...