Intel marching on in China

intel logoWas in Bangkok with Intel this week to get an update on the firm’s cloud and datacentre plans – well, the two are inextricably linked I suppose.

No news as such but key themes from that part of the business included Big Data; stellar growth in China thanks to the datacentre needs of the large internet firms over there like Tencent and Alibaba; and continued security risks as pointed out by a McAfee representative.

Jason Fedder, Intel’s Asia Pacific datacentre group GM, agreed with the view of EMC and others that China is where some of the most exciting cloud projects are taking place today thanks in part to the lack of legacy infrastructure in organisations there.

But he went further to say that the PRC is really turning itself from being a technology follower to innovator – pointing to Tencent and Alibaba’s efforts to craft their own compute standards under the Project Scorpio banner, and of the state-run telcos ripping out their IBM boxes to replace them with spanking new Xeon kit.

Intel’s been in China for some time and is about as well-supported over there as any foreign company can be given the sometimes harsh business climate afforded non-local companies.

As an example of its growing influence in the country, Fedder explained how Intel is trying to broker a deal to ensure the closed Chinese crypto-standard Trusted Cryptography Module (TCM) is made interoperable with the Trusted Platform Module (TPM) hardware authentication standard its TXT technology is built on.

However, there are some aspects of doing business in China which even Intel can’t get around fully, as IT manager Liam Keating told me. The network infrastructure is still pretty bad outside the Tier 1 and 2 cities in the PRC, a fact made worse by the Great Firewall and meaning challenges in the firm’s smaller field offices and complaints from staff, he said.

To get around this Keating and his team have been forced to look at other ways to improve traffic flow, such as “in-country cacheing” using outsourced cacheing providers, and by modifying app design to reduce the amount of dynamic content.

It’s reassuring to know that even Intel has the same problems experienced by many when it comes to China’s infernal internet infrastructure.

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Decline and fall of Akihabara as a tech hub

maid cafe signHas anyone been to Akihabara lately? I know I’m probably way behind the times here, but I still had the impression it was the land of all things shiny and technology-related – where impossibly gadgetry was salivated over by Japanese otaku and envied by foreign visitors.

As my latest ramblings on The Reg explain, I was rather disappointed to see, on exit from the station, pristine pedestrian walkways, giant IT mega-stores and shopping centres. Redevelopment over the past few years has apparently made the place a lot more family and tourist friendly but definitely not much fun for those interested in tech.

Most of the small, cramped, independently owned consumer electronics stores have closed now, but don’t blame the local mayor for wanting to redevelop the place. From my conversations with Japan tech experts and analysts it was going to happen anyway.

The area was big in the 70s, when according to some estimates, 10 per cent of all household appliances sold in Japan were bought in Akihabara. Then the PC and laptop boom in the 90s and beyond took over, drawing in a more geeky crowd keen to build their own customised machines. 

But now it’s all cosplay, manga, Maid Cafes and Hobby shops. It seems the tech industry, and Japanese consumers, have moved on. They’d rather get their gadgets online now and maybe try before they buy in a megastore like Yodabashi Camera, according to an IDC analyst I spoke to.

On the other hand, it’s fascinating to see the area reinvent itself as a geek manga/anime/cosplay paradise. Japan, if nothing else, has a remarkable resilience. 

The decline of Akihabara as a tech hub is therefore unlikely to portend the collapse of the country’s once unstoppable tech industry.


China’s just like us – riddled with cyber crime

Just finished a piece detailing, for possibly the first time, exactly what’s going on in the shady world of cyber crime in China.

Researchers at California uni have gone to exhaustive lengths to document the extent of the underground and the MO of its participants.

To be honest, a lot of it is pretty similar to the underground economy operating quite nicely thank you very much elsewhere in the world. Cyber hoods buy and sell their wares online, never meeting, in a highly efficient manner.

However, there are some distinctly Chinese elements to what the researchers found. The crims in the PRC are advertising and communicating with each other in many cases via a public web platform – Baidu PostBar – and Tencent’s hugely popular QQ service.

With just a bit of effort the researchers uncovered all of this by inputting some common criminal jargon – various terms are substituted for underground slang to escape detection.

The whole underground economy is said to cost China over 5bn yuan (£500m) a year and snared around a quarter of web users in 2011.

It’s pretty obvious the government is on it – or will be, once it realises that online will be one of its few remaining growth areas when the economy really starts to slow – but it doesn’t look like the police at the moment really have their focus on breaking such trades.

Every ‘crack down’ they make seems like a glorified PR exercise – the main victims seemingly porn peddlers, political dissidents and other trouble makers.

For the outside observer too, it will be interesting to see how fast things move. When the Chinese authorities want something actioned it is done pretty bloody quick – so it all depends on whether the will is there from the top.

In the meantime, it’s reassuring to see that the same cyber crime problems are felt throughout the world – but probably not reassuring if you’re a web business looking to tap the vast market that lies behind the Great Firewall.


Samsung latest to be hit by supplier labour abuse scandal

factoryAnother week, another woeful tale of big tech brands taking advantage of weakly enforced labour laws and immoral supply chain manufacturers.

This time it was Samsung that had its supplier factories investigated, and what was revealed, as always, was not pretty.

HEG Electronics’ plant in Guangdong – which apparently makes phones, MP3 players and other electrical kit for the Korean giant – was infiltrated by spies from not-for-profit China Labor Watch, yup, the same group that warned of severe irregularities in the auditing system of the tech supply chain.

The same old problems came to light as at Foxconn and VTech, of low pay, staff bullying and physical abuse, dangerous working conditions and forced and excessive overtime.

However, HEG was also accused of employing kids as young as 14 year’s old – illegal even in China –and paying them, and the huge intake of student interns it uses to man its factory, just 70 per cent of their rightful salary.

To its credit, Samsung did respond with a little more than we got from VTech and its customers:

Samsung Electronics has conducted two separate on-site inspections on HEG’s working conditions this year but found no irregularities on those occasions.

Given the report, we will conduct another field survey at the earliest possible time to ensure our previous inspections have been based on full information and to take appropriate measures to correct any problems that may surface.

Samsung Electronics is a company held to the highest standards of working conditions and we try to maintain that at our facilities and the facilities of partner companies around the world.

The issue here again goes back to the validity of the inspections. Unless they are independent – conducted for example by not-for-profits like China Labor Watch – and unannounced then they are virtually useless.

Samsung, if you remember, was highlighted as a client of Intertek, the professional auditing company that has in the past been found guilty of accepting bribes from clients in return for passing a clean bill of health.

There’s no suggestion that happened at its HEG audits, but it’s clear that the audit card should no longer be accepted as a reasonable explanation of such irregularities.


More trouble at’ mill (or Chinese sweatshop)

factoryMore news on the continuing plight of Chinese workers in tech manufacturing plants, and the apparent blind eye the major multinationals are paying to their condition, emerged this week.

Li Qiang, founder of NGO China Labor Watch, claimed to the Congressional-Executive Commission on China on Tuesday that the audits which most MNCs commission aren’t worth the paper they’re written on.

He pointed to widespread bribery of auditing firms by the big name companies – basically, they bung a few thousand dollars and the auditors agree not to expose any problems in the factories which might require lots of money to fix.

Although Li didn’t accuse any outright of corruption, Dell, HP, Samsung and Apple were all said to have “severely flawed” auditing systems. He also exposed auditing firm Intertek as having been caugt in the past for accepting bribes.

Said firm has Samsung and Siemens as clients and a lot more tech companies besides.

Now the CECC is most definitely sympathetic to the aims of Li and his counterparts in other NGOs, and one can’t help thinking the reason they’re so keen to expose malpractice in China isn’t to get the workers a better deal but to force such a public outcry that US firms decide to bring jobs back to their homeland.

In fact, it was certainly mentioned several times at the hearing that US workers couldn’t hope to compete against factories where staff are paid a pittance and over-worked to the point of exhauston.

Whatever the motives, though, this needs stuff exposing – factory audits are commonly used by tech companies whose plants are found wanting, as a handy cure-all to keep the media and customers happy.

If they fail, there is literally no point – but we kind of knew that anyway. The only way to change things long term is consumer pressure on companies to improve working conditions followed up by independent and random inspections from NGOs.

Needless to say none of the tech companies above have come back to me.

The lack of response is not just typical of local PR failure – I’ll bite my tongue on that one for the time being – but endemic of the lack of transparency at these big tech brands. If they’re really confident in the conditions at the factories – dismiss such accusations out of hand, invite random inspections etc

Hopefully, as consumers and politicians get more savvy to what’s going on and start to ask more searching questions, these multi-nationals will find it harder to fob them off with the old audit card.

There’s a long way to go yet.

(More entries on this subject can be found here, here and here.)