A while back, I wrote a post recapping the work of the CLOUD2 advisory group, chartered with giving the US government a useful perspective on areas where US public policy can help -- or hurt -- in helping to capitalize on cloud models.
As a reasonably developed economy, the US example is illustrative, but what about developing economies? How should they look at the potential opportunity from their perspective?
Having just returned from Dubai in the UAE, this was the one topic that seemed to bubble up in most of my conversations with the press, local analysts and many of the larger customers and partners --
how can public policy create new opportunities in the face of a shift to an information economy powered by clouds?
And I think my Dubai experience might be a useful model for other aggressively developing economies.
As a reasonably developed economy, the US example is illustrative, but what about developing economies? How should they look at the potential opportunity from their perspective?
Having just returned from Dubai in the UAE, this was the one topic that seemed to bubble up in most of my conversations with the press, local analysts and many of the larger customers and partners --
how can public policy create new opportunities in the face of a shift to an information economy powered by clouds?
And I think my Dubai experience might be a useful model for other aggressively developing economies.
A Bit About Dubai I had heard stories, but I had never been. I'm glad I made the trip, it was eye-opening on multiple levels.
From the desert, an economic miracle has been born, driven largely by progressive government leadership in key areas. In a nutshell, it's an open, multicultural economic capital for the greater Middle East, and most of Africa.
I think of Dubai much as I do Hong Kong for China, London for Europe, Miami for Latin America, and so on - a hub for commerce. EMC, for example, covers the region from Dubai with 450 employees.
I was in town for GITEX event: keynotes, customer and partner meetings, and so on. GITEX itself covers the range of technology from consumer to large-scale enterprise -- it was big, diverse and vibrant. If you remember the old COMDEX shows from the 1980s, you'll get a sense for the size and scope.
And, yes, they had a "cloud" track much as you'd expect :)
I had fully expected to see a thriving service provider market serving not only the UAE, but the broader region. It really wasn't there. I was surprised.
From an outsider's perspective, conditions for an SP-focused IT market seemed perfect: regional hub, thriving economy, critical shortages in key IT talent, stable and progressive government, and so on.
Yes, there were a few SPs poking around in the shadows, but it wasn't the same as say, ANZ or the Nordics or Canada or the UK or other places where there's a wholesale transition to an SP-centric IT consumption model.
What was the missing ingredient?
Turns out that I was not the only one wondering about that question -- it was on a lot of people's minds. How can Dubai position itself to be a regional hub in IT services, much the way it has become a regional hub for finance, commerce, etc.? And what role should public policy play?
So I had to give it some thought ...
The Opportunity
Dubai's economic roots started by being a free-trade zone. If you wanted to move goods from here to there in the region, the port of Dubai was the place to do it. Over time, that open philosophy carried through to financial flows -- money moving in and out -- and talent flows as well. It's relatively rare to meet someone originally from the UAE; just about everyone seems to be from somewhere else.
Carry that "open" thought through to the new economy: global information flows and the clouds that power them. Organizations in the region want to use IT services, and not necessarily own them. Whether that customer is a local company, a regional player, or perhaps a multinational doing business in the Middle East -- there's a clear incentive to rent IT services vs. investing in building your own.
The technology is there. The opportunity is there. The customers are there. The passion and vision is there.
So, what's missing?
The Potential Role Of Public Policy In Developing Economies
Assume, for the moment, that a progressive government sees the cloud opportunity forming, and wants to do the right thing to move things along without too much meddling. What should the thinking be?
First question: does the government respect data rights the same way it respects property rights, financial rights, and so forth?
Organizations need clear and unfettered rights to their data. For example, in Europe the US Patriot act causes justifiable concern that a US government agency can force a US-based cloud provider to hand over personal and corporate data with scant protections for the owner.
Clearly, government policy can help here. Crisp statements on information ownership rights, and transparency around judicial processes involved can go a long way. You wouldn't do business in a country where your financial assets could be arbitrarily seized without due process; the same concerns apply to corporate information.
Second question: are the required good pipes in place?
Previous models of economic development focused on transportation infrastructure: highways, ports, airports and the like. In the information economy, it's all about the network.
Long-haul internet connections are always important, but if you accept the notion that most of the opportunity is in providing regional support, the connectivity between geographically adjacent markets becomes more important. And network performance should be predictable, and not impacted by filtering or monitoring activities.
Third question: is local education investing in the new generation of required skills?
At the end of the day, IT leadership boils down to talent, and -- in a cloud-based world, the required skills are scarce. There's a sharp contrast in the educational profile between traditional IT and the new forms. An opportunity to differentiate, if there ever was one.
EMC contiues to invest heavily in forming partnerships with academic institutions, but you'd be surprised how much organizational resistance we can encounter trying to convince academic leaders to invest in cutting-edge IT curriculae.
A gentle but firm push from governmental authorities would certainly be helpful :)
Fourth question: are government agencies strongly encouraged to use external service providers for their IT?
Governments spend a lot on IT, and their clear willingness to direct that spend to external service providers would inevitably draw the investment dollars need to bootstrap more than a few regional service providers. It doesn't have to be the uber-critical, super-sensitive stuff -- even the more routine administrative workloads generated by a government are substantial when considered in their entirety.
A "service provider first" policy for IT procurement makes sense in this context.
There's More ...
I'm sure there's a role for tax incentives and investment credits, but governments know how do those sorts of things. A few developing economies have expressed their interest in creating a "government cloud" for local businesses, but the idea of government employees (supervised by politicians!) trying to run a competitive IT service strikes me as impractical as best.
Better to create the incentives for private organizations, vs. trying to behave like a private organization.
Governments can also create tax incentives for local businesses to use external services vs. trying to do things themselves. For example, a tax on IT infrastructure products not being used by service providers might be an interesting avenue.
The Opportunity?
When big transitions occur, there's challenge, and there's opportunity. I strongly believe the next wave of economic development and growth will be information-based, powered by clouds, and delivered by service providers.
I think there's a clear case that can be made that a progressive government can do much to help capitalize on this mega-trend.
Wise policy-makers will hopefully realize that a handful of timely forward-looking actions will make all the difference between being a regional leader, and being a laggard.
By: Chuck Hollis
