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Cloud Expo: Opinion

Cloud Computing Rising in Southern Asia

It Reminds Me of San Francisco & Silicon Valley a Few Decades Ago

I remember, some 30 years ago, after I'd first moved to San Francisco and started to learn about what was going on in Silicon Valley, how the San Francisco 49ers snuck up on people. No, I'm not really going to use a tired football analogy to talk about business or technology. I'll use a new analogy instead.

This team had been very poor for a few years, but was suddenly looking better. The team went from 2 wins (out of 16) in consecutive seasons to 10 wins in 1980; its momentum was obvious to anyone who watched them in the Bay Area, but not so to the rest of the country.

When the great Niners dynasty of the 80s then announced itself the following season, with the most famous play in NFL history ("The Catch") in the playoffs, and a win in the 1982 Super Bowl, no one in the Bay Area was surprised, even as the rest of the football-watching world was taken aback.

The Niners arose, coincidentally, with the business reputations of San Francisco and Silicon Valley. Pioneers such as Fairchild and HP had found great success a few decades earlier, and Intel, Apple, and others were making a name for themselves in the 70s. San Francisco had a big oil company, Levi's, and some big banks.

But San Francisco was still seen as a West Coast backwater, a second-tier refuge for people with not quite enough talent or drive for New York; the Santa Clara Valley was still not considered to be the engineering equal of say, Morristown, NJ or Los Angeles. Then, as with the Niners, no one in the Bay Area was surprised when the valley ascended to the top of the global heap thereafter.

Perhaps this is what I'm seeing in southern Asia now. In particular, the ASEAN region of Southeast Asian nations has been impoverished for a long time, with only Singapore fully emerging as a developed nation (and a very small one at that). But Malaysia and Thailand have emerged a little bit, and Indonesia (by dint of its large population) has become on the world's Top 20 economies.

Flanking Southeast Asia are India to the west and China to the north, and there's no secret about their recent development.

Asia was thought to be full of economic "tigers" a couple of decades ago, a notion that was squelched with the Asian Financial Crisis in the late 90s. That was a currency crisis, however, with things pegged unrealistically to the US dollar, belying an underlying weakness. These days, ironically enough, the dollar is the weak currency; most Southeast Asian nations (as well as China and India) are struggling mightily to keep their currencies from getting too strong.

Money Is Icumen In
With investor concerns about the debt of the United States, the Eurozone, and Japan, there is new money flowing into the region.

The outsourcing phenomenon has contributed heavily to manufacturing in Thailand, Malaysia, and Indonesia - and to services in India and the Philippines. Regional demand for cars has also helped Indonesia, as well as India.

And now, there is a new focus on locally developed Cloud Computing software and locally deployed hardware.

The big news this week was the announcement of a $180-million venture fund in China, launched by former Google China chief Kai-Fu Lee. Certainly, the Chinese government has been driving numerous large-scale Cloud developments throughout the country. We'll now see if there is true potential for smaller scale, entrepreneurial start-ups there.

This announcement may obscure what's going on in southern Asia. There is other money in the region, some of it venture capital, much of it not.

Tenaya Capital from San Francisco has just sent $10 million for a fifth round of financing for a GupShup, a social networking company in India. Flipkart, a Bangalore start-up that seems similar in approach to Amazon, is being considered for as much as $150 million in funding from the US.

Hardware, Too
On the hardware side, a company in the Philippines, IP Converge, is providing hosted Cloud services and making a profit. Company president Rene Huergas has said "the Philippines is set to follow the encouraging global trend in Cloud Computing."

The same optimism was shown recently by local leader Globe Telecom, which is teaming up with VMWare and Hitachi Data Systems to offer a suite of new Cloud Computing services. The company has revenues in excess of US$1 billion, and has deep pockets, with ownership by SingTel (Singapore Telecom) and the local Ayala Corp.

These are just a few examples of the momentum I'm sensing. History has not been kind to the San Francisco 49ers in recent years, even as it appears to be smiling again on entrpreneurialism in The City and Silicon Valley. And perhaps this is southern Asia's time to emerge on the big stage, something that will surprise no one here even if it sneaks up on the rest of the world.

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More Stories By Roger Strukhoff

Roger Strukhoff (@IoT2040) is Executive Director of the Tau Institute for Global ICT Research, with offices in Illinois and Manila. He is Conference Chair of @CloudExpo & @ThingsExpo, and Editor of SYS-CON Media's CloudComputing BigData & IoT Journals. He holds a BA from Knox College & conducted MBA studies at CSU-East Bay.

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