Despite the launch, to great fanfare, of the G-Cloud project a couple of years ago, awareness among public servants seems pretty low still and sales not exactly setting the world alight – G-Cloud vendors brought in £217m in July, rising to just under £250m the month after.
That said, we’re a small country, and things are looking up. The technology is mature enough and use cases are starting to spring up all over the place, which will speed adoption. However, long term outsourcing contracts are still impeding the development of cloud projects, according to Nigel Beighton, international VP of technology at Rackspace – a G-Cloud vendor.
“The public sector’s move to the cloud is still in its infancy, and I applaud what Liam Maxwell and the whole G-Cloud team are trying to do. But it will take time,” he told me via email.
“Over the past few years the cloud has matured and grown, and is now able to do just about everything you need it to do. For public sector agencies that are yet to make the move to the cloud, one of the main benefits is that it offers great flexibility and that they won’t be locked into one provider. There are also many parts of the sector that are hit with large peaks in their service at certain times of the year, and they could really benefit from a pay as you go, or utility, cloud-model.”
Over in China there is no such reticence, mainly because many public sector bodies have no existing legacy contracts/infrastructure to encumber them. I remember EMC’s Greater China boss saying as much a couple of years ago in Hong Kong and it’s still true, according to Frost & Sullivan’s Danni Xu.
She said the central government threw RMB 1.5bn (£150m) at public sector cloud development in the five major Chinese cities in 2011. Then local governments – many with more money than some countries – followed suit: witness Guangzhou Sky Cloud Project, Chongqing Cloud Project, Harbin Cloud Valley Project and Xian Twin Cloud Strategic Cloud Town Project. An ecosystem similar to that which has grown up in the UK, US and elsewhere, has developed around this new investment, she told me.
“The formation of a more complete cloud ecosystem has benefited local enterprises and local government in many ways. With plenty of cloud offerings available in the market, the public sector itself has also emerged as an important spender for cloud services, among the various vertical sectors,” Xu said.
“For instance, the Ningxia municipal government works with AWS on building a large-scale data center in the region. Meanwhile, it will also leverage Amazon’s platform to deliver e-government services in the future.”
Forrester analyst Charlie Dai counselled that most public sector projects in China are still private cloud based, at least when it comes to SoEs.
“The government is also trying to strengthen the control and regulate the market,” he added.
“The China Academy of Telecommunications Research of the Ministry of Industry and Information Technology (MIIT) launched official authorisation on trusted cloud services (TRUCS) for public cloud early this year.”
What is obvious, in China as in the UK and elsewhere, however, is that we’re only at the beginning of a very long journey. Whether it takes 10 or 50 years, the cloud is ultimately where governments around the world will look to in order to work more productively and deliver public services more efficiently.
That may come as something of a surprise given the heritage of the open source cloud computing project – NASA and US hosting/cloud giant Rackspace.
However, it’s certainly not a one-off, with several other cities in the PRC also boasting significant numbers of acolytes, including Shanghai which also ranks in the global top ten.
I learnt this and rather a lot more about the project at the OpenStack Summit in Hong Kong this week. It was a conference heavy in symbolism for the OpenStack Foundation – its first ever outside the US and the first since the release of Havana – its eighth major release for building public, private and hybrid clouds.
Having slogged my way around IT conferences for more years than is healthy for a person of my age, the summit was a first for me in many ways.
First up the new announcements from vendors were kept very much in the background – barely mentioned at all in the keynotes and not publicised heavily elsewhere at the event.
Now that could be the fault of the event PR team but I’d like to think it’s because the Foundation are trying to send a message of inclusivity to the community – that no one vendor should be allowed to use the platform to market its wares so blatantly to a captive audience of over 3,000 enthusiasts.
That’s not to say there was no news, of course, or that the major vendors weren’t using the show to meet customers, get their message out, etc, but it was certainly toned down from the all-guns-blazing razzmatazz of some industry events I’ve been to.
Part of that no doubt lies in the fact OpenStack Summit is really about bringing the community together to share ideas and best practices on implementations and, quite literally, to sit down and draw up a roadmap for where it is headed next.
It is still very early days for OpenStack versus, say, Amazon Web Services, and there is a certain amount of tension still in the community about whether it should be seeking to emulate the cloud leader or take a separate path of innovation – “letting a thousand flowers bloom”, according to Canonical founder Mark Shuttleworth.
The Rackspace private cloud VP Jim Curry and CTO John Engates I chatted to admitted feature parity isn’t at the same level as AWS yet, but also claimed that itself is a bit of a red herring as few people use all the features in Amazon anyway.
In the end one of the more eloquent and passionate speeches on the open source project came from Red Hat consulting engineer Mark McLoughlin – one of the top OpenStack contributors in the world if rumours are to be believed
“Does anyone think we’re just going to add a handful of new projects in 2014 and then stop? I really don’t think that’s realistic,” he said. “I think it’s going to continue to expand and become a broad umbrella of projects. We need to embrace the collaboration that’s happening under this OpenStack umbrella.”
“Entrepreneurship is the solution to all the world’s problems,” according to Google executive chairman Eric Schmidt, who was in Hong Kong today to launch a new program to foster greater start-up talent within the Chinese SAR.
Schmidt’s visit was something of an anti-climax in the end. Media were not invited to ask any questions and what we finally got from the Google man after a half hour delay was less than insightful.
He trotted out the usual argument that more innovation and technical invention will likely gravitate to this part of the world because there is a “numerical advantage” in terms of graduates with degrees in STEM subjects.
Several times he also repeated the notion that “the native underlying Chinese culture is entrepreneurial”.
“We all know this, it’s been true for 1000 years. It’s a great asset of Chinese history,” he said.
The inference here is that the region and its people should be more inclined than most to producing innovative technology start-ups.
However, we heard very little about why that’s simply not happened thus far, in Hong Kong at least, although Schmidt did acknowledge that there wasn’t enough of a VC industry here and that, although entrepreneurial, the locals are also culturally afraid of being “different”.
Google’s announcement today – a program of mentorship and incubation with the Chinese University of Hong Kong – is surely yet another indication that the SAR government has singularly failed to foster the kind of innovation that can start local and grow internationally.
It’s a view I’ve heard time and again – even from successful international technology companies who came to Hong Kong with an impression of a hi-tech city and found instead something much less mature to work with.
The conversations at most local tech conferences I’ve been to are still at a “what is the cloud?” stage. It’s difficult to believe sometimes.
When asked whether Google was thinking of founding a formal incubator project even Schmidt had to admit: “You don’t have a big enough software industry. Your lack of software … will hurt you in terms of your global ambitions.”
The one year project announced today is unlikely to change that much.
We don’t know exactly how much access to Silicon Valley “mentors” and help with start-up costs local entrepreneurs will get as part of the initiative, but at first glance it seems like a pretty good way for Google to cream off some of the best of that limited Hong Kong talent.
OpenStack cloud vendor and Amazon–agitator Rackspace Hosting is launching its first public cloud offering for Asia in Hong Kong today, so I caught up with APAC MD Ajit Melarkode to talk all things Hong Kong, cloud and Rackspace.
I covered the news over at The Reg. Given that not many businesses rely solely on the public cloud, the announcement can be seen more in context of Rackspace’s Hybrid Cloud offering – which allows users to mix and match between public and private cloud and dedicated server hosting.
As such, I’m sure IT managers in the region will be keen to have another option for their cloudy needs.
They should also be assured that Rackspace is certainly investing significantly in the region, and Hong Kong, Melarkode told me. “We’ve sent a lot of Rackers out to set up here,” he said. “We’re not treating it as a satellite office – Hong Kong has really come into its own this year.”
Testament to this is Melarkode himself, who has experience of running operations on the ground in the region, and the fact that the firm is setting up dedicated finance, HR and marketing departments, as well as hiring a regional CTO, lead engineers, SMB and enterprise support staff, and ensuring that there is a good spread of local language speakers.
So who is Rackspace hoping to target with its new offering? Well, according to Melarkode, the growth of the Hong Kong office and APAC hub can be seen in parallel with the expansion of Rackspace customers into Asia: “as our customers expand we expand with them – we’re driven in a major part by client requirements”.
Another market he mentioned was that of the smaller innovative local companies in industries like retail and technology which are unencumbered by legacy infrastructure and are “leapfrogging onto new technologies like mobile and cloud”.
Melarkode was unsurprisingly quick to leap to the defence of Asian firms, which are often branded as copy cats and accused of lacking the ability to truly innovate.
He argued that creating services on top of “building blocks” already developed in the West does not necessarily amount to copying – and pointed out that firms from the region are contributing code to OpenStack, which he claimed is certainly not the behaviour of a technology laggard.
The region in general, while perhaps slightly behind the West, is certainly catching up in terms of the maturity of its IT services industry.
“I’ve seen how the region has developed right from the time Indian outsourcing started blooming in 1993, to the more hardware and infrastructure focus in China and the BPO success taking hold in the Philippines,” he explained.
“What I see is lagging behind here but the pace is still fantastic. Look at how it’s catching up. Lots of clients used cloud just for back-up and storage but now they’re starting to use it for app testing and development. The catch-up rate is astonishing.”
Rackspace will certainly need that maturity to expand beyond the handful of early movers in APAC if it’s to recoup some of its growing investment here.
Things are moving pretty fast, though, with the firm doubling headcount and its datacentre space in Hong Kong to meet expected demand and with plans to do so again in the coming year, Melarkode said.
Last week I popped over to the Quarry Bay HQ of Verizon Business in Hong Kong to hear more about the annual Data Breach Investigations Report.
The report’s really come on since I covered it way back in 2008, and this year pulled data from an unprecedented 19 reputable sources including Scotland Yard, the US Department of Homeland Security and many more.
The Register covered the main news from the report when it was launched the week before – that China was responsible for a whopping 96 per cent of state-affiliated attacks – so I was keen to get some other APAC-relevant insight from the team.
Unfortunately there wasn’t much to be had, in fact the report itself only mentions Asia Pacific once as a break-out region, to illustrate the top 20 threat types across the whopping 47,000 security “incidents” recorded over 2012.
What this probably tells us is that methods of collecting the data at the moment are pretty non-standardised across the globe, which makes drawing any clear comparisons difficult between regions.
Another thought that occurred: it’s fairly obvious that organisations across the globe suffer from the same kinds of information security risk – whether hacktivist, financially motivated criminal or state sponsored espionage-related.
As Verizon’s HK VP Francis Yip said: “No one is immune from cyber crime. As long as you have an IP address, you are a target, no matter how long you spend online.”
In this respect, there were no startling new trends as such to pull out of the report, aside from China’s consistent and persistent appearance as number one source of state-sponsored shenanigans.
This is probably good news for under fire CISOs, now tasked not only with deflecting financially motivated cyber crime and attempts from hacktivists to take down their sites and steal credentials, but also under-the-radar information theft from APT-style attacks.
What’s also good news, is Verizon’s assertion that the cloud is no less safe than any other form of computing system, as long as IT teams make sure they carry out due diligence on providers.
“Cloud can actually be more secure, because these providers are doing it on an industrial scale with staff who know what they are doing,” argued Verizon’s APAC head of identity and privacy services, Ian Christofis.
While all this is certainly true I definitely got the impression from the briefing that many firms are still failing on the security basics.
“Could try harder” is probably a suitable report card take-away for businesses from 2012.
Asia’s unique combination of large numbers of entrepreneurs and software developers offers tremendous opportunities for dynamic cloud growth, while European and Australian companies continue to lag in the shadow of the US.
That’s the view of Nigel Beighton, VP of technology and product, for managed hosting-cum-open cloud company Rackspace, who was in Hong Kong this week to discuss how the “sleeping software giant” of Asia will soon awake.
He argued that European and Australian firms are 18 months to 2 years behind their US rivals and suffer from the same issues around legacy infrastructure.
“Asia is fascinating because it doesn’t track what happens in the US. It has its own culture and personality and if you think about software development in Asia it’s different. Even the code they write looks different. The way people think about mathematics and structure and architecture is different,” he said.
“Cloud enables business to be agile and Asia is very good at that – at being entrepreneurial. At the same time it’s cool to be a software developer here and cloud is enabling software developers to do what they want to do immediately.”
The US market, while it still has a “degree of creativity”, is very much in a phase of consolidation at the moment, dealing with legacy infrastructure and looking at changing business models, Beighton argued.
To an extent, Europe and Australian firms are in a similar boat – held back by a large legacy application estate going back 10-15 years which makes it difficult to scale vertically in the cloud, he added.
However, there aren’t many examples of cutting edge cloud innovation in the region – he gave China’s indigenous search engine companies led by Baidu as one – because it’s still early days. As a result, education remains an important part of the cloud provider’s role.
It’s worth bearing in mind here that even though it now has a successful enterprise business, Rackspace began life serving entrepreneurial SMB-type companies, which is why the firm is always keen to enthuse about this end of the market. It’s also part of the reason why it located a regional datacentre in Hong Kong rather than rival IT hub of Singapore which is geared more towards servicing larger financial organisations, according to Beighton.
“For us the entrepreneurial aspect of Hong Kong was really interesting, and how that would work in conjunction with China,” he said, adding that public cloud capabilities from the datacentre would be available in Q4 this year.
Rackspace is not the only cloud provider waxing lyrical about the huge potential in the Asia region. EMC Greater China president Denis Yip argued at a conference in Hong Kong last summer that China is actually trumping the US and the rest of the world at the cutting edge of cloud computing deployments.
However, despite huge building projects by local government in China, there is a real risk datacentre capacity will lie idle because not enough thought has gone into working out what to use it all for and how to generate profits once the infrastructure is completed.