After meetings and calls, I was finally able to slip into a conference session – just in time to catch uber-smart analysts Rachel Chalmers (The 451 Group) and Dan Golding (Tier1 Research) engage in a lively and not-so-mock debate on “Hosting Meets the Cloud”.

Now this doesn’t cover the entire debate – and part II is coming tomorrow. But what it does cover is the most interesting questions (to me) and paraphrase the points made by the analysts. I thought they both had very interesting points and more similarities than differences in the end; the real difference is how they thought about the issues and through what lens – for Rachel it was the enterprise and for Dan it was managed hosting providers. (image from inmagine)

Question: What is a cloud and why?

Dan: Shared infrastructure leveraged/run by third parties for the benefit of enterprises, developers, etc. This is not a new idea – just recently “rebranded.” Given all the discussion and disagreement over this now, what will the cloud end up looking like?

Rachel: The cloud is “IT infrastructure as a service” down to the level of a server operating system. Take the example of Amazon web services – in this case it’s not just the infrastructure but also the internal processes built around service delivery, e.g., provisioning, that are being exposed as a commodity to external customers.

Dan’s Question for Rachel: In your opinion, how much is the cloud a fad versus CIOs really trying to solve a problem?

Rachel: For the practical, roll-up-your-sleeves types of CIOs – those coming up from the engineering ranks – that I talk to, the cloud is real, as opposed to SOA and middleware.

What about “internal” cloud computing – built and maintained by an enterprise versus a third-party provider?

Dan: Cloud computing is done by providers for customers. Certainly there are enterprises that have made internal computing investments, e.g., for publishing, large-scale phone systems, etc - but they were stupid ideas made by companies that have too much money. A better question here is does it make any sense for an enterprise to create their own cloud? While an enterprise can play at it, they can’t do it cost-effectively, not in a way that a third party provider can do it.

Rachel: Many CIOs have “managed-hoster” envy – for things like chargeback and billing that hosters understand a do better. Of course there has been a rise in automation and virtualization tools in the enterprise which may not be as efficient and built for scalability as a hoster can achieve, but what is important is that they are customized/specialized for that business.

Dan: Can you give a specific example of optimization to make it worthwhile for enterprises to do it themselves?

Rachel: One example is sovereignty. The privacy laws around financial and healthcare information are not the same everywhere. Clouds and their geographically-dispersed data centers don’t necessarily have “national” borders. This is definitely a concern for the CIO that has to comply with regulations in their industry around privacy protection, for instance. Another example is security. Dow Chemical does a lot of work via joint ventures and has a need to provide but lock down desktops given to contractors as corporate workspaces. For their level of security, they need to “own” their computing resources.

Dan: But why can’t someone like SunGard provide that as they do for many other large companies?

Rachel: It comes down to a question of trust.

Do people trust their hosting providers?

Dan: Yes. Whether it’s for a content delivery network or collocation, hosting the customers of hosting providers are some of the largest companies in the world in industries like energy and financial services. Give me a case when there was a major security issue with a hosting company. In fact, managed hosting providers usually provide better security than enterprises are capable of.

And a question provided by an attendee from EMC: A few years ago, this would have been a grid discussion. How is the cloud different?

Rachel: Grid computing ended up being applicable only for niches – which I predicted. The real opportunity for everyone else with the cloud only comes up when you combine the kinds of automation tools (originally developed for grid computing) with x86 virtualization.

Dan: I agree. Grid was a niche play. There were very few orgs that needed it and that the economics worked for. There were very few enterprises for whom it made sense to build their own for. The cloud is shared/leveraged versus grid computing. It economically makes sense in a way grid never did.

[Q] I have been collecting accounts of your meeting with David Petraeus in Baghdad. And you had [inaudible] after he had made a really strong pitch [inaudible] for maximum flexibility. A lot of politicians at that moment would have said [inaudible] but from what I hear, you pushed back.

[BO] I did. I remember the conversation, pretty precisely. He made the case for maximum flexibility and I said you know what if I were in your shoes I would be making the exact same argument because your job right now is to succeed in Iraq on as favorable terms as we can get. My job as a potential commander in chief is to view your counsel and your interests through the prism of our overall national security which includes what is happening in Afghanistan, which includes the costs to our image in the middle east, to the continued occupation, which includes the financial costs of our occupation, which includes what it is doing to our military. So I said look, I described in my mind at list an analogous situation where I am sure he has to deal with situations where the commanding officer in [inaudible] says I need more troops here now because I really think I can make progress doing x y and z. That commanding officer is doing his job in Ramadi, but Petraeus's job is to step back and see how does it impact Iraq as a whole. My argument was I have got to do the same thing here. And based on my strong assessment particularly having just come from Afghanistan were going to have to make a different decision. But the point is that hopefully I communicated to the press my complete respect and gratitude to him and Proder who was in the meeting for their outstanding work. Our differences don't necessarily derive from differences in sort of, or my differences with him don't derive from tactical objections to his approach. But rather from a strategic framework that is trying to take into account the challenges to our national security and the fact that we've got finite resources.

I have made this general point again and again -- about airline security, about terrorism, about a lot of things -- that the person in charge of the security system can't be the person who decides what resources to devote to that security system. The analogy I like to use is a company: the VP of marketing wants all the money for marketing, the VP of engineering wants all the money for engineering, and so on; and the CEO has to balance all of those needs and do what's right for the company. So of course the TSA wants to spend all this money on new airplane security systems; that's their job. Someone above the TSA has to balance the risks to airlines with the other risks our country faces and allocate budget accordingly. Security is a trade-off, and that trade-off has to be made by someone with responsibility over all aspects of that trade-off.

I don't think I've ever heard a politician make this point so explicitly.

Someone on the IE security team forwarded me a document that had additional details. So here, for your enjoyment, is a chart listing the default settings for each security level. To answer the newsgroup poster, "medium" and "medium-high" aren't the same.

About the formatting: to get it to fit within the width of the blog's text section, I've made some abbreviations.

In a few cases, the table shows a number rather than D or E or P; below the table is a description of each such entry.

At the very bottom of this post I've included the settings from the privacy tab, too.

Note: these settings reflect those for Internet Explorer 7 on Vista SP1. Please see the MDSN link above for differences between IE 6 and IE 7.

.NET Framework

.NET Framework-reliant components

     1 = High safety

ActiveX controls and plug-ins

Downloads

Enable .NET Framework setup

Miscellaneous

     1 = Prohibit downloads from software update channels
     2 = Cache content downloaded from software update channels
     3 = Automatically install software updates

Scripting

User authentication

     1 = Prompt the user for name and password
     2 = Automatic logon only in intranet zone
     3 = Automatic logon with current user name and password

Privacy settings (on the "Privacy" tab)

First of all, I learned the Thai alphabet nearly 20 years ago, so I have have a pretty good foundation for the Thai language.   I can read (slowly) and speak better than 99.99+ percent of all foreigners in Thailand; so, I thought it was time to redirect my career to a “new challenge” in the business climate of Thailand.   

This was no small decision.  Your career changes dramatically when you give up a successful consulting practice in the US and dive into business in a foreign land for a new challenge.  I can frankly tell you that often the challenge is sometimes overwhelming.    It is quite difficult as a foreigner to do business in Thailand.

First of all, it is not legal for foreigners to own land in Thailand.  Foreigners can ”own” land using a variety of legal loopholes, proxy owners and shell companies; but all of this is risky and not advised.  Foreigners lose a lot of money coming to Thailand and attempting to buy land.  Some get lucky, but the entire process of foreigners buying and selling land is quite risky.

Foreigners can own condos, under certain conditions, but this results in  inflated prices for condos in Thailand that are traded in an artificial market place.   Condos that are up-to-par with condos in the US can easily cost more than condos in major cities in the US.  Hence, the cost of living is not as cheap as some might believe.

Business can best be described as “protectism” where the government has placed many barriers to entry to foreigners working in Thailand.     Every foreigner must have a work permit and these work permits are expensive and time consuming to maintain.   If you own a business you must pay high professional service fees for auditors to perform annual and semiannual audits even if your business has no income yet.   Firms in Thailand charge thousands of dollars for these ”audits”.      

In addition, if you operate a business, you must have a place of business, so you are forced to lease office space.   Foreigners from the US must be paid a minimum of 50,000 Thai Baht per month, so the government will take 10 percent of that each month as their share of tax withholdings.   Therefore, to start a company, you will pay a lot of money in startup fees, permits, tax, leases, visas, etc.  The entire system is designed to secure money from you, even if you do not have a penny of incoming revenue.

Of course, generating incoming revenue can be quite difficult in a climate of protectionism.   In Thailand, it is easy when you are spending money.  When you are trying to generate income from Thailand, as a foreigner the challenge can seem overwhelming at times.   Many foreigners here give up because the barriers to business here are very high.

On top of all these challenges, which I have not described in detail, is the overall global business slowdown combined with a climate of political instability, which I am sure you have seen in the news.  

Most people I know say it is better to be a tourist here.   Being a tourist is completely different.  Money flows from you, so life in Thailand is fun and friendly, complimentary to the “Land of Smiles” you have heard about.     However, when you are working to have money flow the other direction, flow to you versus away from you, you don’t see the “Land of Smiles” as tourists experience.

Without getting into too many details, I can simply say that a foreigner doing business in Thailand experiences protectionism and, to a certain degree, discrimination, and sometimes I wonder if coming here for a “business challenge” was a good idea.    I was seeking a “new challenge” and I got more than I bargained for!

In a future post on business in Thailand I will discuss issues regarding how little value is placed in intellectual property in Thailand and how this adversely impacts professional services.    I will also touch on how this lack of regard for intellectual property impacts a consulting practice.   Also, I will touch on some cultural differences in how Thais appear to view teamwork, which is very different than in the US.