activecarbon

Year 2010 is the year of Tiger accordig to the Chinese zodiac. It is special for many reasons. One for me is that the Chinese New Year and Valentine’s Day meets on the same day – February 14th, 2010. Last time it happened, it was 1953, when Korean war was not over yet. It won’t happen again for many years. It is almost as rare as Halley’s comet, which comes very close to our solar system once every 76 years.

When I was little, living in a mid size city in Northern China, I enjoyed the Chinese New Year gift of 1,500 round of fire crackers. With a string of incense, somewhat fragrant, I would be happily occupied most of Chinese New Year’s eve and Chinese New Year day. Those were a lot of fire crackers. If you set off one by one it would last a long time. The maker of the firecrackers braid them together so that if you really do not have time to play it one by one, you may set it off all together in a matter of a couple of minutes. The children will come and cheer, jump up and down if one of us could quickly empty our rounds like that. Noisy but fun.

In the run up to the Chinese New Year, the principle parties in world’s most important bi-lateral relationship (someone dubbed G2) set off a few fire crackers on their own. In January 2010, China appeared to be non-cooperative to the U.S. when it came to the inspection of the reduction of carbon intensity/emission. A few days later, the U.S. declared they would sell $6.4 billion dollars worthy of arms to Taiwan, which is regarded by China their renegade province. To make the matter spicier, President Obama informed China that he would meet Dalai Lama, whom China labeled as “separationist”. Even Google joined the foray, accusing China’s censorship and hacking, which prompted Hillary Clinton lecturing China about Internet freedom. China immediately rejected Clinton’s claim and labeled the U.S. “information imperialism”. It then slapped tariff on American chicken parts and threatened to sanction those corporations involved in the Taiwan arms sale. A few days later, Chinese foreign minister lectured the American and Western counterparts that Iran had the right to “peaceful use of nuclear energy” and the “diplomacy is the only way”. All of a sudden, it feels like fire crackers setting off in a noisy venue to the Chinese New Year. Where was the fun?

As noisy as it is, it does not blur the fact that the two most important countries in the world can no longer live without each other. They are essentially joined together at the hip. It has gone a long way since the late 1970s when they finally normalized their relationship. China is now the largest creditor to the U.S. while U.S. is China’s largest export market. Their economies are regarded as complimentary. Each year, the U.S. government and consumers gain hundreds of billions of dollars through the trade with China. The export to the U.S. created and sustained tens of millions jobs in China. When one of the two has a hiccup, the other will feel it. The extent of the deepening relationship will someday make people realize the most of these firecracker events are too trivial to stay in the way. The U.S. will come to its senses to end so called “Taiwan Relationship Act”, which is more than 30 years old and no longer makes sense. Regardless how attractive $6.4 billions are, the arms sale is just a chomp change that should not be on anyone’s agenda. After all, China is lending close to $1.8 trillions to the U.S. government and U.S. economy. The protection fee that the U.S. collects from Taiwan is no longer worth all the arm twisting between the G2. Rather than wasting scarce air time between the G2 on such issue as the non-existent “Internet freedom”, it can be better spent on the cooperation for nuclear non-proliferation and climate change.

Compared with the enemies engaging in daily ideology debate 30+ years ago, the G2 nowadays are more like partners in the same boat. The quarrels are temporary. Besides all those noises, the Chinese New Year will come, and the politicians will get tired. Life goes on. The year of tiger will be filled with events such as the Winter Olympics at Vancouver and the World Expo at Shanghai. The U.S. has to export in the future to sustain its jobs domestically. They needs China as its export market. China needs the U.S. technology and know-how and the access to the U.S. market even though it has to expand its domestic consumption. In the end, the folks will remember the vastly more important and improved collaboration than the a few firecrackers in the past two months.

On January 28th, 2010, New York State successfully organized its first Request For Information (RFI) on Cloud Computing. It was delivered via a fairly successful multimedia syndication to over 200 leaders from the state agencies and vendor community and countless people online. The response was warm and insightful. At the end of the session the question is not if we should go with Cloud Computing, it is when and how.

To help an Enterprise as vast as the New York State government to reap the benefits of Cloud Computing, a comprehensive and prudent plan is needed. The risks should be carefully managed. Every CIO should look at the Cloud implementation through the following five prisms: finance, services, governance, risks, and processes. We should carefully address the following five questions:

1. Does the business model of cloud computing address the immediate financial bottom line?

Moving to cloud computing should also subscribe to the desired performance based budgeting. The return on investment (ROI) and economic impact of Cloud Computing needs to be carefully looked at. Cloud computing will reduce capital expenditure (CapEx) but it may keep pace or even increase operating expenditure (OpEx) for IT. It will alter the pictures of the cash flow and the balance sheet for an enterprise. Whether this is advantageous to do depends on the current situation of the enterprise. If an enterprise is having a current cash flow problem, the desire of asset consolidation and relocation simply cannot triumph if the marching towards cloud computing incurs large migration cost.

Moving to cloud computing brings both tangible and intangible benefits and costs. Computing on demand is usually perceived more cost effective than maintaining private data centers whose capacities are engineered for peak activities rather than actual usage. In the government settings, the overcapacity and waste also stem from the fact that we usually build permanent infrastructure for temporary programs.

We also need to be cognizant of the intangible impact and figure out how to account for it. The agility and flexibility that cloud computing bring to us will advance the innovation in our enterprise. Many new ideas were simply too expensive and too tedious to try. A traditional proof of concept will have to go through the normal procurement process and require outright capital expenditure, leaving the innovators steaming and frustrated. After moving to Cloud Computing, the enterprise IT workforce can be shifted from infrastructure centric to business process centric. The impact may be profound as our operation is increasingly (business) knowledge driven. On the other hand, shifting the computing to the cloud will incur some new cost that is associated with dealing with the shifting legal responsibility, more complex knowledge management, and required governance.

2. Have we clearly articulated in business terms the impact of cloud computing on our business processes?

All IT systems impact business processes to a certain degree. The moving to the Cloud is not a march by IT alone. Business users are coming with us. To assess and articulate the impact on our business activities is one of the hinges for success. Moreover, migration towards Cloud computing will compete for resources. Certain business processes may be slowed down. As CIOs, we need to make sure there are gains in business processes due to cloud computing that can more than offset other delays. Many enterprise processes are complex requiring sophisticated integration and process management. Cloud computing may simplify such processes if we know how to coordinate and consolidate. Many users already have the desires to use readily available computing resources outside of the enterprise to advance their goals. A fragmented approach may cool the enthusiasm if the business processes are not improved.

3. Are we prepared to operate and govern a multi-host multi-tenancy computing ecosystem?

Multi-tenancy has the potential to lower the infrastructure cost for individual participants. However the shared environment will cause a shift of responsibilities. How does the accountability precipitate and how do we govern in the shared Cloud? Among the top concerns for moving to the Cloud are security and privacy. It is not only the complexity associated with securing the shared infrastructure but also the shift of regulatory compliance responsibilities, whether it is Sarbanes Oxley or HIPAA. Legal counsels need to be involved before the enterprise can plant solid footing in potential quick sand.

Information governance has paramount importance for security and privacy in cloud computing. A good information classification program is one of the precursors for moving to cloud computing. It will shed light on how an enterprise chooses its pilot cloud services. Salesforce.com has been a successful business case of cloud computing for small and medium businesses because the data and information stored in the cloud are less burdensome in terms of regulatory compliance. A strong information governance in the Cloud is the critical path for the enterprise to prevent itself from being locked in a single vendor solution.

4. Are we clear what the risks and performance metrics are?

Security, privacy, performance, vendor lock-in, service level are the top concerns of Cloud Computing. The ability to gauge and mitigate risks in relation to our current business practice is a required IT competence for cloud computing. For example, in order to ensure the cloud services to be portable among vendors, adoption and enforcement of standards may not be straightforward given the myriad of interoperability standards out there. The performance for business computing over the Network can be a real bottleneck for the adoption of cloud computing. The success of cloud computing have to come with high-bandwidth and highly available Network. The ability to decouple the tightly built private systems to be Cloud-ready is another challenge. A well documented risk management plan and a set of key performance indicators for cloud computing should be in place sooner rather than later.

5 What IT services do we select as the first wave of Cloud Services?

Picking up a rock of the right size is part of the success. We want to avoid taking too big a bite than what we can chew. Starting to review the enterprise IT service catalog was timely recommended by one of the attendees in the New York State Cloud Computing RFI session. Like any technological advancement, Cloud Computing is still climbing the ladder of IT services. As the technology community starts cataloging cloud services such as Communication as a Service (CaaS), Infrastructure as a Service (IaaS), Platform as a Service (PaaS), and Software as a Service (SaaS), Cloud computing comes with various levels of maturity and is associated with different degree of risks. For example, CaaS is more mature than SaaS in many cases while application development environment is less risky than production environment. Choosing the right Cloud Computing pilots that has manageable business complexity and controlled risk will help the movement along more smoothly.

When we talk about climate change, a new concept has been coined a few months back, which is Carbon Intensity.  It is defined as carbon emission per unit of Gross Domestic Product (GDP).  Why is it created?  Why not go straight to reduction of carbon emission?

The concept ties to the economic development disparity and perceived equality.  Developing nations have not been the major contributors to the carbon emission in the past centuries.  When clean energy is too expensive or simply unavailable, the only way to develop their economy is to use traditional energy which unavoidably will leads to increased carbon emission.  Having Carbon Intensity will tie the carbon emission and climate change to right of development.

For example, China’s current carbon emission is slightly larger than that of U.S..  However their economic development status is much poorer.  Per capita energy consumption is only about one sixth of that of U.S..  If China subscribes the notion of absolute reduction of carbon emission, the energy consumption per capita will be even smaller than that of U.S..  Economic development will be halted and the standard of living will be frozen to less than one tenth of that of U.S., measured by GDP.

Cloud computing is not using your laptop in an airplane at 50,000 feet. Cloud is the metaphor of Internet. Cloud computing delivers computing services to users via a Network. It relieves users from managing or even knowing the infrastructure. Sometimes, Cloud Computing can be linked to utility computing, computing on demand, etc.

When it comes to Cloud Computing, three S’s come to one’s mind – Security, Speed, and Standard. Security make our mind at ease. After all someone else is managing our systems and data. Are they doing a good job? Is our privacy at risk? Speed makes everything enjoyable. Delivering computation over the Network, which could be Internet or private network, adds additional latency. Poor performance will turn users off. Standard insures user’s ability to avoid vendor lock in.

What does Cloud Computing mean to business and government? What is the economy impact to us?

It relieves business and government from operating private data centers on their own. As a result, the capital expenditure is reduced. Ongoing energy consumption is contained. As private data centers are often engineered for peak activities, the shared multitenacy Cloud Computing reduced unused capacity and resources.