“Cloud computing” is much more than simply a new set of technologies and business models. It is rapidly emerging as the platform that will underpin the next generation of digital products and services. Cloud Computing is transforming how consumers, companies, and governments store information, how they process and exchange that information, and how they utilize computing power. Consequently, it opens a new set of policy discussions while at the same time underlining the importance of old debates.
The World Needs Eyes And Ears on Syria
The growing slaughter of innocent civilians by the Syrian regime under Bashar al-Assad – and his brother Maher Assad – is posing quite a challenge for the international community which risks a re-run of the impotence demonstrated during the Balkan crisis. The situation in Syria is different however and opens doors to more creative approaches at intervention. Its time to deploy the high-tech tools of information warfare.
Chemical Reaction Dynamics as a Model for Technology Platform Competition
In various corporate meeting rooms at Samsung, Microsoft, HP, RIM and Google eager teams of engineers, marketing folks and freshly minted MBAs are trying to figure out the magic formula which will deliver a product to compete with Apple’s iPad. Hopefully they were all paying attention in high-school because the first steps to understanding the dynamics of this type of platform competition were almost certainly covered in chemistry class.Continue reading →
Greece’s “Argentina” Moment
Watching the news coming out of Greece over the weekend reminded me of the economic crisis in Argentina in 2001. Growing public unrest, a history of military intervention and an seemingly irresolvable economic crisis are all common factors but Argentina stands as a defining example of why it doesn’t always pay to follow the advice of the IMF.
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When Apple Became “The Man”
This weekends pranking of the future Apple store in Hamburg shows just how far perceptions of Apple and Microsoft have changed. This puts Microsoft in the position of being the scrappy competitor fighting against all the encompassing dominance of ‘The Man”. If we’re not careful the act of putting a little Windows logo in the rear window of your car may become the very definition of geek counter-culturalism 🙂
Microsoft’s Nokia Nightmare
Last week saw a lot of speculation regarding Microsoft’s possible acquisition of Nokia’s mobile devices business. The rumor was quashed by Stephen Elop speaking at the All Things D conference who denied there had been any discussion with Microsoft regarding an acquisition. Case closed then? Maybe not.
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Intel’s ARMageddon
In ten years we’re going to recognize this week as the moment Intel ceded its leadership position in the global chip business. Microsoft’s decision to embrace ARM signaled more than a desire to take on Apple’s iPad – we are witnessing the end of the ‘WinTel’ era and the emergence of ‘ARMDows’ – a seismic shift in the IT industry is about to take place.Continue reading →
Sinofsky’s Power Play
At CES yesterday we may just have witnessed the first public exposure of an internal power play for the future leadership of Microsoft.Continue reading →
Why Sarah Friar is Wrong About Microsoft’s 2011 Growth Prospects
Goldman Sachs’ analyst Sara Friar is at it again. Continue reading →
Five Things Politicians Need to Understand About Data Centers
The Office of Governor Bob McDonnell of Virginia issued a press release today trumpetting their success in convincing Microsoft to build its latest Gen4 Data Center in the state. Given huge gulf between the real long-term local economic benefit of a data center like this and the content of the press release I am left to conclude that either A) The Governor really does not understand the economics of these things or B) He really does understand the true economic impact and the press release is a cynical attempt to fool the voters.
For other politicians who might be tempted to spend tax payers money to secure the locations of a data center here are some things you really do need to understand:
- Today’s modern global data centers do not create any meaningful number of jobs. Modern global data centers are remotely operated which means that even the few jobs that are created are not high skilled software or computer engineering roles. The type of jobs created tend to be in the building maintenance, HVAC, electrical engineering and security domains.
- There’s a high price to be paid for securing relatively few jobs. The fifty number touted by Virginia sounds about right. However, from the Governor’s press release, it sounds like at least $6.9 Million of direct incentives and probably an unspecified amount of long-term commercial property tax exemptions were used to secure those 50 jobs. Is that a good rate of return?
- When a technology company says they will invest $499 Million in building a new data center that does not mean they are investing $499 Million in your state. Far from it. Most of that cost will be in the computing infrastructure, communications, and other electrical machinery. That equipment is by and large not built in the state where the data center will be located. In fact a lot of it will be sourced from outside the country creating jobs and employment elsewhere, but not in your state.
- Modern data centers are ‘Shells’ of a building. Microsoft’s Gen 4 data centers employ pre-assembled container ‘Lego Blocks’ which are rolled onto a concrete slab and plugged into power, cooling and data pipes. If they could get away without building anything other than the concrete slab and HVAC containment buildings they would and in years to come they will. This all means that very few construction jobs will be created and certainly not any that require significant new up-skilling of your labor force.
- On a positive note a modern global data center is one of the most dense power consumption facilities around. That is why many sites are selected based on access to hydro-power where the cost of energy and distribution challenges can be kept to a minimum. It is possible that the location of a major global data center in Virginia will create the downstream need to upgrade the state’s electricity distribution and generation infrastructure. Being forced to do this obviously creates ancillary benefits for other company’s but again at what price?
Politicians really do need to understand the reality of these things. It is far too easy to give away the tax payers money today on the assumption of major downstream economic benefits tomorrow. In the case of data centers those benefits are likely to be few and far between.