Ng: Storm in the ‘cloud’-A A +A
Thursday, October 31, 2013
IN LAST week’s Canalys forum, there was a lot of talk about cloud computing and how it is the next generation great opportunity. It has been estimated that the market is going to be over $200 billion in one or two years. It is a foregone conclusion that more and more people will not buy servers, but will just use their computers, tablets or smartphones in conjunction with servers that are hosted elsewhere. There will be a myriad of opportunities for companies who host games, emails, communications, applications and everything else on the web.
This is like electric power. A hundred years ago, many companies had to generate their own electricity. Now, most people just plug into the electric grid and pay for the electricity that they use.
Obviously, the companies that have a huge advantage here are American. Google, Amazon, Microsoft, Apple, HP and IBM are all making big bets to insure that they lead the next generation of cloud hosting and computing. Virtually almost all the applications we have, whether it be Facebook or Twitter or Dropbox, are in the United States. They enjoy a huge advantage because they not only have excellent internet infrastructure and mature programmers but also enjoy economies of scale as well as low electrical generation cost.
Of course, many of the data centers are put in the northern United States and in Canada, places where it is cold the whole year around. This helps save a lot of cost, because electrical cost is much lower (it is put beside a geothermal source or a waterfall). It also saves on power because half of the data center’s cost is for cooling and with the facilities located in a cold place, they don’t have to spend much on cooling anymore.
However, a series of recent revelations have sent chills to many companies and individuals. Revelations from leaker and NSA contractor Edward Snowden, and subsequent leaks, show that the National Securities Administration of the United States has been hacking into data centers to gather information about Americans and foreign citizens and companies. They have also been eavesdropping on cell phone conversations and there are allegations the United States have been listening to phone conversations of many government leaders. They have reportedly been hacking into their accounts.
Now we begin to see the wisdom of China’s security. China basically disallows their citizens to go to YouTube, Facebook, Twitter and disallow many people to have emails or applications hosted in the United States. It would have been too easy for the United States to get what their citizens are saying and gauge public opinion as well as shape it.
US banks have to follow US laws. If half of Russian people are in Facebook and have their emails and accounts hosted in US banks, these cond be frozen in case of conflict or war. I guess today, it could be possible that the US can easily then get into emails and Facebook accounts of Russian citizens, gather data and go over them. It can even send them propaganda mail.
Can you imagine if our president goes to negotiate with the united States and the Americans know exactly what our government thinks and is doing, because more than 80 percent of our government officials are active on Facebook or have their emails hosted on Yahoo, Hotmail and Google?
These revelations of NSA snooping have sent a huge chill to foreign companies now.
Brazil, China, India and Russia are now talking of creating an infrastructure that will not pass the US. Some German companies have tried to create an infrastructure so that email from a German to another German will not have to pass the United States.
They say this opportunity will cost more than $35 billion for US cloud companies in the next two years alone as more companies reevaluate their options.
Published in the Sun.Star Cebu newspaper on November 01, 2013.