Cloud Computing Expo Next Week

Attending the Cloud Computing Expo in Santa Clara next week. Based on the keynotes, it’s shaping up to be a hybrid and private cloud heavy conference. Not a surprise given the major sponsors (VMWare, CA, Microsoft, Oracle, Cisco, Intel, etc.).

Keynotes:

• Hazan Rizvi (Oracle Fusion) – Extreme Performance for your Cloud Platform
• Tony Bishop (Adaptivity) – The Enterprise Cloud Revolution
• Pete Malcolm (Abiquo) – The Key to Enterprise Cloud Adoption? It’s a Matter of Business Policy
• Eron Kelly (Microsoft) – The future of Productivity in the Cloud: Office 365

 

Talk Tracks:

• Enterprise-Level Cloud Computing & Virtualization
• Cloud Security, Storage & Management
• Performance & Testing
• Real-World Cloud Computing & Virtualization
• SOA in the Cloud
• Cloud Solutions
• Architecture, Standards & Compliance
  

Technorati Tags: Cloud Computing,Cloud Expo,Oracle,Microsoft,VMWare,CA,Enterprise,Private Cloud,Hybrid Cloud

NetSuite OneWorld PH Launched

NetSuite CEO Zach Nelson recently launched a localized version of OneWorld, it’s cloud-based CRM/ERP/E-Commerce suite for global businesses with multinational and multi-subsidiary operations.

Already boasting mid-to-large scale business customers like AnTech Inc, Jollibee, ABS-CBN Global, and SQL*Wizard, this month’s announcement emphasizes the growing demand for cloud solutions in the country. This makes a lot of sense for NetSuite which doubled it local operations last year and already offers its standard cloud-based business suite in the country.

Note, however, that unless you are a multinational firm with Philippine operations already using NetSuite, or a Philippine firm with a foreign subsidiary, this announcement is likely not for you. This explains why NetSuite is focusing the message in BPO and exporter-rich cities like Metro Manila and Cebu.

One thing that’s unclear is local pricing, but if in line with global rates, it will cost $399/month and $99/month per user before add-ons. Support will then cost an additional 22.5% to 37.5% of the license cost. At PHP20,000+ per month, NetSuite won’t be a viable solution for small businesses, franchisees, or start-ups. There is no question that this offering is valuable as it helps increase productivity and is priced competitively versus on-premise ERP solutions, however current pricing does not help get cloud business solutions in the hands of small businesses.

In a marketing mailer, NetSuite positions the new product with the following advantages:

• Grow faster. NetSuite gives you sales automation, marketing automation, and complete CRM – so you can sell more effectively and better satisfy customers.
• Save money. NetSuite provides the power of enterprise applications at a fraction of the cost. With a modest monthly fee and one application for all your key business processes, you save time and money.
• Make faster, better decisions. With role-based dashboards and all business data in one place, your employees have the real-time information they need to be more effective.
• Automate business processes. Streamline and systematize operations across your business.
• Eliminate IT costs and hassles. NetSuite is delivered as an on-demand service, so there is no hardware or software to manage and maintain.

The product supports the following features localized for the Philippines:

• BIR Revenue regulation No 09-2009 (Mandatory use of computerized accounting system for large taxpayers)
• VAT
  • 7 VAT codes required (Government, Export, etc.)
  • VAT declaration report
• Withholding Tax (Mandatory for top 20K businesses)
  • 79 tax codes
  • Based on income payment type (eg. C/Card vs Terms based)
  • Contractor relationship
  • Certificate of creditable tax withheld
    

Technorati Tags: Cloud Computing,NetSuite,SaaS,CRM,ERP,Philippines

Tata: Asia’s First Public Cloud IaaS TelCo

Tata Communications just became India’s first local Public Cloud Infrastructure-as-a-Service(IaaS) provider by offering compute, data transfer, and storage infrastructure services. Their new InstaCompute service delivers self-service, pay-as-you-use IT application and data center infrastructure services, accessed through the Internet. This is the first time that an Asian regional provider has established an Amazon EC2-like IaaS offering that allows users to rent general purpose servers provisioned in the cloud.

Tata’s new InstaOffice service was also announced providing Email, Calendaring, Groups, and Collaboration via Google Apps. Vinod Kumar, President and COO, Tata Communications says, “Driven by a rapidly evolving economy, Indian businesses desire flexibility and scalability of infrastructure as they pursue growth within India and overseas. Simultaneously, the competitive environment requires them to achieve their goals with low upfront investments. Tata Communications’ InstaCompute and [InstaOffice] will help our customers to quickly leverage advanced IT and networking services, without the cost and complexity associated with them.”

 
Tata’s new InstaOffice and InstaCompute services complement their existing contact center (InstaCC), customer relationship management (InstaCRM), and content management (InstaECM) services. These services, along with Tata’s $500M investment in data centers in India, Singapore, and abroad, makes Tata the early public cloud computing leader in South Asia.

As a sign of Tata’s aspirations in the region, they recently opened a 66,000 sq. ft. Tata Communications Exchange (TCX) data center in Singapore. Vinod Kumar further states "Our substantial investment in TCX, coupled with our submarine cable build-out, ensures scalability and global reach while delivering on our commitment to meet customer requirements. We will continue to lead the industry in offering superior data center and connectivity services into emerging markets. This is where we see high growth potential."

What does this mean for the Philippines?

This announcement has different implications for the Philippine Telco, Business, and Government sectors:

• Government – This serves as a wake-up call for policy-makers to craft data geo-location policies applicable to not just US-based IaaS providers, but also those based regionally. CICT, NEDA and DOST need to also pay attention as this allows the massive base of Indian developers and SI’s to more easily create innovative solutions for the Asian market with minimal up-front costs. The question then becomes whether we are resigning the Philippines to become a net consumer of these emerging regional solutions. Hopefully not…
  
• TelCos – Prudent for PLDT and Globe to closely monitor Tata’s forays into IaaS and SingTel’s announced alliance with Cisco and VMWare to set it up as a regional cloud computing hub. Our local carriers will need to decide whether to invest millions in CapEx or cede the local and regional Infrastructure-as-a-Service (IaaS) market.
  
• Businesses – Tata now joins the ranks of established IaaS providers (Amazon, Rackspace, etc.) and can be considered as a regional cloud alternative. Tata’s InstaCompute service is priced competitively compared to Amazon’s EC2 Std service and Rackspace’s default offering (see table).
  
  
  

Back to http://cloudphilippines.blogspot.com

Philippine Development Forum in San Jose, CA

A group of concerned Microsoft Filipinos, Tina, and I made the trip from Seattle to San Jose (California) for the first ever Philippine Development Forum on Sep. 24. The event format was based on the World Economic Forum where relevant statistics were shared to help ground moderated discussions. At this year’s inaugural event, the push was for “Practical and Implementable approaches to help spur Philippine Development”. The goal was to synthesize the resulting ideas into a paper that will be presented to President Noynoy Aquino.

Pres. Noynoy Aquino, Dado Banatao, Mario Montejo (DOST), Ivan Uy (CICT), Fernando Zobel Ayala, Winston Damarillo, Felipe Medalla, Paco Sandejas, Sen. Chiz Escudero, and a host of other concerned  Filipinos graced the occasion.

Philippine Competitiveness Lagging our Asian Neighbors

The World Economic Forum recently released its 2010 country rankings. At face value, some would focus on the Philippines’ 2 point improvement (from 87th to 85th). However, what this doesn’t show is that the Philippines is still in the bottom 1/3rd of the 139 countries in the report. More concerning is that we are 7th among our ASEAN neighbors and now 26 spots behind Vietnam which has surged 16 places forward.

Dissecting the numbers shows that though we are ranked 35 for market size, the following 4 pillars drag us lower in the country rankings:

• Institutions (125 of 139) – Primarily a measure of Graft and Corruption.
• Innovation (111 of 139) – Due to inadequate R&D, scientists, engineers, and intellectual property protection.
• Labor Market Efficiency (Rank 111) – As a reflection of hiring/firing practices and general business/labor relations.
• Infrastructure (104 of 139) – Due to the quality of our transport, energy, and telephony infrastructure.
  

Other statistics mentioned:

• $8.9B trade deficit in goods. This is not immediately apparent in GDP reports as the goods deficit is hidden by growth in remittances.
• Only 3% of the Philippines’ GDP spent on education
• Each classroom-full of new students (40) born every 12 minutes will cost an additional P1M to educate
• Only 7% of students choose science and engineering
• 50% Graduation rate in Science and Engineering
• Every time 1 Masters student graduates in the Philippines, Vietnam produces 6 MS graduates and Thailand produces 25
• To get on par with our Asian neighbors, we need 7,000 PhD’s, we only have 1,300.

 

What can be done?

While recognizing corruption as a key issue that the government needs to resolve, the forum focused on what was actionable today. In this case, the main thrust was on promoting world-class innovation through science and technology research, education, investment, and entrepreneurship. Often mentioned was how we could create a silicon-valley like ecosystem of investors and technology leaders to start-up globally competitive businesses around high-value IP developed in the Philippines.

• Shankar Sastry from the Banatao Institute @CITRIS Berkeley discussed the following emerging technology trends to help spur the imagination of those in attendance:
  • Ubiquitous Wireless Access – He showed WiFi standards modified for long-range applications in a rural barrio setting.
  • Sensory Webs – Tiny devices able to relay real-world data will proliferate measuring energy usage, traffic patterns, weather, healthcare, etc.
  • Cyber Physical Systems
  • Telemedicine in Healthcare
• Dr. Guevarra, Chairman of the Engineering Research and Development for Technology (ERDT) mentioned projects such as Research in a Box and encouraged US-based Filipinos to put up research institutes in the Philippines
• Dr. Dayrit from Ateneo suggested the creation of a community of scientists and engineers
• Dr. Lebrilla, Chairman of UC-Davis’ Chemistry department suggested that educating scientists alone will not be sufficient as educated Filipino scientists are in demand globally and will likely just depart.
• Senator Chiz Escudero while frankly recognizing that the issue was hard, reiterated that the government is working to eradicate corruption. We need to encourage students to choose Science and Engineering over nursing and business jobs. He also mentioned how the Philippines was the #1 rice importing country and how we need scientists to improve rice production technology.
• Ms. Lilia De Lima mentioned that corruption had no place in the PEZA.
• Dr Paco Sandejas, VC and founder of the Brain Gain Network (BGN) appealed for Fil-Am scientists and engineers to get connected and to recruit each other to go back home to the Philippines where they can make a difference.
• Mario Montejo, Dep’t. of Science and Technology Secretary, reiterated the need to reverse Brain Drain by creating a culture of innovation (Human Capital, R&D, and Commercial Applications)
• Ivan Uy, CICT secretary, emphasized the push towards e-governance
• Doy Vea from PLDT SMART advocated releasing a tsunami of entrepreneurial spirit
• Dado Banatao, successful VC and Chairman of the PhilDev Foundation, was encouraged to see the frankness from government leaders when discussing the controversial issue of corruption. He also reiterated Paco’s call for Brain Gain and added that Angel Investing to support Philippine entrepreneurs with great ideas can likewise be effective. Lastly, he challenged entrepreneurs to understand the market, create unique solutions, stand out, and plan to execute properly.
  

How do PhilDev goals link to Cloud Computing in the Philippines?

The nascent shift to cloud computing feels so much like the wave that ushered the Internet’s arrival. Two decades ago, the internet wave caught the Philippines off-guard and it was not able to capitalize on the worldwide phenomena. The Philippines cannot afford to stand still this time around and is presented with a unique opportunity to catch the Cloud wave before it completely crests through home-grown innovation. We have early thought-leaders thanks to Winston Damarillo’s G2iX (Morphlabs, Exist) but need entrepreneurs, VCs, and angel-investors to further innovate in this ripe environment. We have a few ideas in mind…

Technorati Tags: PhilDev,Noynoy Aquino,Philippines,Cloud Computing,Banatao,World Economic Forum,Global Competitiveness,Innovation,Entrepreneurship,VC

Philippine Electricity Cost Implications

Cloud Computing allows businesses to save on capital expenditures by having someone else own the server infrastructure and by shifting operating expenses to a provider with better cost-economies. One of these major operating expenses is Electricity. In fact, an APC Study concluded that the electricity bill accounts for 20% of a US data center’s Total Cost of Ownership (TCO).

 

The APC study was based on US data centers where electricity is relatively cheap. The graph below compares US rates with more expensive electricity rates (US cents per KWh) in Asian countries.

Philippine Implications

It’s apparent that the Philippines has the highest electricity rate in Asia and this has three implications:

1. Larger Percentage - Electricity is a larger percentage of a Philippine data center’s lifetime TCO costs. Extrapolating the US baseline using regional rates in the table below shows that almost half of a Philippine Data Center’s TCO goes to the electricity bill.
    
   
2. Competitive Regional Disadvantage - As our electricity rates are higher than our Asian neighbors, Infrastructure-as-a-Service (IaaS) providers in the Philippines are at a competitive disadvantage. Providers from China, Thailand, and Malaysia will enjoy lower power rates that they will be able to pass to their consumers in the region. I fully expect bigger providers like Amazon (AWS), Microsoft (Azure), and Rackspace to start deploying data centers in these countries to serve the emerging Asian market for cloud computing. In fact, these providers already have beach heads in Hong Kong and Singapore.
   
   Unless electricity gets more affordable, Philippine Cloud IaaS providers will be constrained to the local market making it doubly difficult for any to achieve economies of scale.
   
3. Important Consideration – At nearly half the total Philippine data-center cost of ownership, electricity (inclusive of distribution and back-up generator costs) becomes a more important consideration when evaluating cost savings by moving to the cloud. From a purely value-maximizing perspective, it should be pretty obvious that the best cloud infrastructure compute and usage costs will come from countries where electricity is cheaper. In this regard, I advise evaluating usage costs from the largest-scale providers from China, Malaysia, Singapore, and Hong-Kong. Note, however, that additional cross-country bandwidth costs will also need to be considered.

Conclusion

Cloud computing effectively allows for electricity arbitrage where computing moves from countries with expensive power, like the Philippines, to those where the tariffs are lower. Though our expensive power limits our IaaS providers’ regional competitiveness, Philippine businesses can save relatively more in electricity costs by shifting to the global cloud. Note however that electricity is not the only consideration as bandwidth costs need to be factored in as well. Bandwidth costs will be the subject of a future post.

Technorati Tags: Philippines,Electricity,Arbitrage,TCO,Cloud Computing