Welcome!

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

Related Topics: @CloudExpo, Agile Computing

@CloudExpo: Article

Legacy IT v Cloud Computing in China

The Mindset Must Move from the Mantra of "Price, Price, Price"

"How are we supposed to rip out millions of dollars of legacy IT and replace it with Cloud?"

This question came from a petrochemical industry executive in China, during a get-together of a few hundred IT managers in Beijing in late March.

He was speaking in Mandarin, so I'm reporting the spirit of what I heard in translation. You can ask Rosie O'Donnell, Shaquille O'Neal, or that young ex-UCLA student how it sounded in the original.

Send in the Clouds
China has included Cloud Computing in its 12th Five-Year Plan, which starts this year. (I had forgotten they still had these.) But its Ministry of Indusrty and Information Technology (MIIT) has not yet offered a Cloud Computing definition. It promises to do so this year.

To an American observer, the oil exec's question seems easily answered: you're not supposed to do this. Instead, virtualize resources, start metering them, and deliver them as services within the context of a self-contained, on-site private Cloud.

But this answer doesn't fly in China. I've already heard some rumbling that Chinese executives are hearing pitches about "cloud solutions" as one-sided affairs that will transfer money to the vendors, but offer no real performance benefits. They're also suspicious of "Vendor Lock-in 2.0."

The other side of this coin is China's appalling reputation for ignoring and violating American copyrights and purloining intellectual property. And then there is the unceasing refrain about price.

The Price is Trite
I've grown weary of hearing businesspeople in Taiwan and China-dating back to my first visits to the region in 1987-emphasize price, price, and price. An attendee at the Beijing get-together noted that technology looks expensive in China when compared to still-low human labor costs. "It may look inexpensive in North America, where employee costs are very high, but it is a different story here," he said.

A speaker from a company exhibiting in Beijing told the audience, "if the price is too high, then just say 'no,' and wait for it to come down. It is the vendor's responsibility to meet your needs." But listening between the lines, it was clear that he wasn't going to waste a lot of time on people who simply don't want to pay for something at any price.

China is now sitting at the adult's table-in fact, it owns a big section of the adult's table-and its government leaders and businesspeople must start thinking like real IT executives in the developing world.

Do You Believe in Miracles?
China's leaders have wrought an economic miracle since the reforms of Deng Xiaoping in 1980 that rivals those of Germany, Japan, and South Korea. If you adjust its economy for local pricing, its gross domestic product (GDP) is now two-thirds of that of the United States.

At present growth rates-8.9% for China, 2.8% for the US-China could possess the world's largest economy in local terms as early as 2018, and in real terms as early as 2028.

I don't think this will happen. China's momentum will slow if it doesn't start transforming itself more aggressively from a massive exporter to more of an importer, and stimulate the world's developed nations in the process by importing from them. And I don't think it will make this transition quickly enough to sustain its rapid growth.

US consumers, for example, still control 17% of the entire global economy-if their unemployment rates stay sky high much longer, they won't have money to buy anything more from China.

Additionally, China has not been an aggressive IT deployer. It does rank #3 in the world, behind only the US and Japan, in total IT expenditures (according to World Bank figures). But it doesn't make the top 25 in terms of what it spends on IT as a percentage of its overall economy.

China needs to step up its game when it comes to IT, and its leaders need to get off the schneid to talk about something other than price. If this were to happen, the US economy will benefit by selling Cloud technology into China. If not, we can only hope that the US economy finds other customers for its stuff, as we watch China rapidly lose steam.

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.

IoT & Smart Cities Stories
The challenges of aggregating data from consumer-oriented devices, such as wearable technologies and smart thermostats, are fairly well-understood. However, there are a new set of challenges for IoT devices that generate megabytes or gigabytes of data per second. Certainly, the infrastructure will have to change, as those volumes of data will likely overwhelm the available bandwidth for aggregating the data into a central repository. Ochandarena discusses a whole new way to think about your next...
CloudEXPO | DevOpsSUMMIT | DXWorldEXPO are the world's most influential, independent events where Cloud Computing was coined and where technology buyers and vendors meet to experience and discuss the big picture of Digital Transformation and all of the strategies, tactics, and tools they need to realize their goals. Sponsors of DXWorldEXPO | CloudEXPO benefit from unmatched branding, profile building and lead generation opportunities.
All in Mobile is a place where we continually maximize their impact by fostering understanding, empathy, insights, creativity and joy. They believe that a truly useful and desirable mobile app doesn't need the brightest idea or the most advanced technology. A great product begins with understanding people. It's easy to think that customers will love your app, but can you justify it? They make sure your final app is something that users truly want and need. The only way to do this is by ...
Digital Transformation and Disruption, Amazon Style - What You Can Learn. Chris Kocher is a co-founder of Grey Heron, a management and strategic marketing consulting firm. He has 25+ years in both strategic and hands-on operating experience helping executives and investors build revenues and shareholder value. He has consulted with over 130 companies on innovating with new business models, product strategies and monetization. Chris has held management positions at HP and Symantec in addition to ...
Dynatrace is an application performance management software company with products for the information technology departments and digital business owners of medium and large businesses. Building the Future of Monitoring with Artificial Intelligence. Today we can collect lots and lots of performance data. We build beautiful dashboards and even have fancy query languages to access and transform the data. Still performance data is a secret language only a couple of people understand. The more busine...
DXWorldEXPO LLC announced today that Big Data Federation to Exhibit at the 22nd International CloudEXPO, colocated with DevOpsSUMMIT and DXWorldEXPO, November 12-13, 2018 in New York City. Big Data Federation, Inc. develops and applies artificial intelligence to predict financial and economic events that matter. The company uncovers patterns and precise drivers of performance and outcomes with the aid of machine-learning algorithms, big data, and fundamental analysis. Their products are deployed...
Cell networks have the advantage of long-range communications, reaching an estimated 90% of the world. But cell networks such as 2G, 3G and LTE consume lots of power and were designed for connecting people. They are not optimized for low- or battery-powered devices or for IoT applications with infrequently transmitted data. Cell IoT modules that support narrow-band IoT and 4G cell networks will enable cell connectivity, device management, and app enablement for low-power wide-area network IoT. B...
The hierarchical architecture that distributes "compute" within the network specially at the edge can enable new services by harnessing emerging technologies. But Edge-Compute comes at increased cost that needs to be managed and potentially augmented by creative architecture solutions as there will always a catching-up with the capacity demands. Processing power in smartphones has enhanced YoY and there is increasingly spare compute capacity that can be potentially pooled. Uber has successfully ...
SYS-CON Events announced today that CrowdReviews.com has been named “Media Sponsor” of SYS-CON's 22nd International Cloud Expo, which will take place on June 5–7, 2018, at the Javits Center in New York City, NY. CrowdReviews.com is a transparent online platform for determining which products and services are the best based on the opinion of the crowd. The crowd consists of Internet users that have experienced products and services first-hand and have an interest in letting other potential buye...
When talking IoT we often focus on the devices, the sensors, the hardware itself. The new smart appliances, the new smart or self-driving cars (which are amalgamations of many ‘things'). When we are looking at the world of IoT, we should take a step back, look at the big picture. What value are these devices providing. IoT is not about the devices, its about the data consumed and generated. The devices are tools, mechanisms, conduits. This paper discusses the considerations when dealing with the...