A nice primer on cloud computing and its relationship to SOA

SPECIAL REPORT: “Let it rise: A special report on corporate IT,” by Ludwig Siegele, The Economist, 25 October 2008.

A nice special report with lotsa good analogies and explanations for the layman. This is stuff that Steve and I spend a lot of time talking about with people, so fun to see it packaged so nicely here. As always, simpler renditions infuriate specialists, but I can live with that.

“Let it rise”

A short history of computing, which I thought was funny, opens the first piece:

The beginning computers were human. Then they took the shape of metal boxes, filling entire rooms before becoming ever smaller and more widespread. Now they are evaporating altogether and becoming accessible from anywhere.

There. Saved you from reading some long history book.

The gist:

Now, this special report will argue, computing is taking on yet another new shape. It is becoming more centralized again as some of the activity moves into data centres. But more importantly, it is turning into what has come to be called a “cloud,” or collection of clouds. Computing power will become more and more disembodied and will be consumed where and when it is needed.

A string:

… data centres are becoming factories for computing services on an industrial scale; software is increasingly being delivered as an online service; and wireless networks connect more and more devices to such offerings.

All this allows computing to be disaggregated [perhaps my favorite word, as the grand strategist can only synthesize world views if he is exceptional at disaggregating complexity] into components—or “services”, in IT parlance . . .

The best example is Google, the biggest online search company by far, which now offers a plethora of web-based applications, such as word-processing or online spread sheets.

Learning to float

Companies too, have been moving into the cloud, albeit much more cautiously. Financial institutions in particular have for some time been building “computing grids.” Firms that provide enterprise software as a service (SAAS) over the internet, such as Salesforce.com and NetSuite, have been growing steadily.

Now, some sense of the actual hardware involved:

“Where the cloud meets the ground: Data centres are quickly evolving into service factories”

Listen to this description of a data centre in a box. It speaks to why Enterra is so excited to be working with Microsoft International re: Development-in-a-Box‚Ñ¢:

It is almost as easy as plugging in a laser printer. Up to 2,500 servers—in essence, souped-up personal computers—are crammed into a 40-foot (13-metre) shipping container. A truck places the containers inside a bare steel-and-concrete building. Workers quickly connect it to the electric grid, the computing network and a water supply for cooling. The necessary software is downloaded automatically. Within four hours all the servers are ready to dish up videos, send e-mails or crunch a firm’s customer data .

MS senior in charge says, “We’re building a global information utility.”

On goes the article to say:

Engineers must have spoken with similar passion when the first moving assembly lines were installed in car factories almost a century ago, and Microsoft’s data centre in Northlake [IL], just like Henry Ford’s first large factory in Highland Park, Michigan, may one day be seen as a symbol of a new industrial era.

Now the relating to SOA (service oriented architecture):

“Creating the cumulus: Software will be transformed into a combination of services”

Another good string:

To understand this new way of building applications [online], known as “service-oriented architecture” (SOA), think of a culinary analogy. Whereas the old chunk of software resembles a precooked meal that just has to be popped into the oven, the new architecture is more like a restaurant. It is a service in itself but also a combination of sub-services. There is a waiter who takes the order and conveys it to the kitchen. There is the cook who prepares the food. And there are the cleaners who keep the place tidy. Together they create the “application”: a restaurant . . .

Just as for the industrialization of data centres, there is a historic precedent for this shift in architecture: the invention of movable type in the 15th century . . .

Similarly, the concept of modularity has been around since the early days of computing. “Everything in computer science is just write less code. What is the technique for writing less code? It’s called subroutines,” said Bill Gates, Microsoft’s founder, in a recent interview. A subroutine is a part of a program that can be reused, just like movable type. The idea, says Mr Gates, has always been to apply this principle of a subroutine more broadly . . .

Now, thanks to plenty of cheap bandwidth and more and more wireless connectivity, computing is able to regroup into specialized services, or Mr Gates’ subroutines: “We now live in a world where [a] subroutine can exist on another computer across the internet.”

The explanation of SOA and algorithms that I offer in Great Powers is more user-centric, but I like this one just as much.

The article goes on to say that SOA, despite lotsa selling and PR, hasn’t really taken off in people’s minds, even as the pioneers on the web keep giving us more stuff that more and more people use routinely.

Does this mean software goes away? Not any time soon. It will be a software-plus-services world. New technologies build but rarely supplant existing ones in whole.

Now, for the final bit:

“Computers without borders: The cloud may be the ultimate form of globalisation”

Starts off with a description of data banking (like banking, but of data that is treated like currency), using Iceland as an emblematic example: a place to store archives.

The trick becomes the banking of data by country legal rule set. As one technologist puts it: “If we wanted to be on the safe side in terms of regulation, we probably would need 95 individual data centres.”

Point being, as cloud computing makes data flows and storage even more borderless, states will go to great lengths to keep borders relevant.

Then again, you’ll see “free-trade zones” for data centres where “common rules would apply.”

Overall, a very cool collection of articles that flows into my future world vision very nicely.

In God—and America—we trust

FINANCE AND ECONOMICS: “Trust: The faith that moves Mammon; Only rarely does the glue that binds the financial system come unstuck,” The Economist, 18 October 2008.

Neat piece on trust.

Credere, or credit, comes from the Latin for “trust.”

A cool bit:

That raises a question: what makes people who might not even lend to their neighbours happy to lend their life savings to unknown borrowers whom they will never meet? Put it like that, and the surprise is not that there are sometimes periodic panics, but that there are so few of them.

The key for business? A rep for honest dealings.

In the last pass on GP, I included a bit on this with regard to Development-in-a-Box™ at Steve’s request. It’s the biggest part of Enterra’s work in Kurdish Iraq—being trusted on all sides. The US Government wants boundary risks defined honestly—as in, this is where our work ends and that of the private sector steps up. Multinationals want ethical risk bounded: “You guys go be our intermediaries in this frontier setting and make clear that we cannot abide corruption.” The sovereign wealth funds want their investment risk bounded: “If we’re going in big with our money, we need to see the right sorts of controls in place.”

In short, everyone wants trust badly, especially the host nation—as in, the perception that it can deliver a reasonably trusted biz/investment climate. So what DiB provides more than anything else is trusted transaction processing.

You want as much trust in your system as possible. The IMF says that when panics and downturns occur, they are typically much worse in places with arms-length lending, because the money dries up much faster and much more profoundly.

Thus the Economist argues:

The solution may not be a retreat to old-style banking, but better mechanisms to foster trust in the new finance.

Wise thought.

Growing network connectivity—literally!—in Africa

BUSINESS: “Logistics in Africa: Newtwork effects; Connectivity and commitment pay dividends in African transport,” The Economist, 18 October 2008.

Piece starts out by noting that, except for cut flowers, the logistical nets that connect Africa to the global economy aren’t much different today from what they were during the colonial period. And the trade is basically the same: unprocessed raw materials go out and finished goods come back in. It’s so unbalanced still that Asian companies have to send ships to collect all the empty containers.

Then there’s the bad infrastructure: creaky old railroads here and there and nothing close to an interstate freeway system. So moving stuff inside Africa costs a lot more than getting it there from just about anywhere in the world.

Who works the situation today?

Companies cited include DHL, Dubai World and Maersk, plus a slew of Chinese companies, mostly working to supply oil projects in the Congo and Angola.

The acknowledged leader is a French company, Bollore Africa Logistics, which hopes to gin up a 26,000-km net of existing infrastructure to move a lot of consumer goods and commodities, which means—for now—relying on a lot of barges and river systems—very 1820s America.

The best upside is the one I always preach: connectivity breeds rules.

The biggest impact of improved logistics in Africa may be on good governance. Prompt payment of customs dues by logistics companies on behalf of their clients and paperless transit have increased tax revenues and reduced government corruption. It is harder for a customs official to hold out for a bribe when the system is computerized and tracked by a logistics company’s bar code—although not impossible: in grubbier ports, officials sometimes hold cargo to ransom by refusing to press the return key on the keyboard.

Ah well, piece by piece.

China pulls the trigger on rural land reform

ASIA: “Land reform in China: Promises, promises; A ‘breakthrough in land reform? Or a damp squib?” The Economist, 18 October 2008.

ARTICLE: “China Enacts Major Land-Use Reform for Farmers: An effort to raise countryside incomes and reduce the sharp rural-urban divide,” by Jim Yardley, New York Times, 20 October 2008.

EDITORIAL: “Land reform in China: Still not to the tiller: A timid approach to an issue of burning concern to one-eigth of the world’s people,” The Economist, 25 October 2008.

WORLD: “Chinese cash in on new land opportunities: Government aims to boost rural incomes by allowing farmers to rent land or form cooperatives,” by Calum MacLeod, USA Today, 7 November 2008.

The Economist is a bit down on the recent Chinese land reform act, saying that it doesn’t really get at the problem of government officials grabbing land regularly at no compensation and then pursuing development.

For now, the land will remain collectively owned, leased to peasants on 30-year deals. But because there is no true ownership, it cannot be mortgaged or sold.

So where is the upside?

As Yardley notes, the current system assigns peasants small plots. Now they’ll be able to subcontract, lease or swap them in a market set up for this purpose, so now the renters can become rentiers. The hope is that larger, more efficient farms will naturally arise, but I can’t say how optimistic that hope is. We will just have to see.

Deng’s innovation (copied from locals experimenting) was to break up the collective’s employment of the land, but not its ownership.

So a couple of steps forward from that but hardly the “landmark” breakthrough touted by the regime.

In the USA Today piece, two good additional points.

First comes from Li Peng of the Rural Development Institute:

China is the opposite of the USA, which has an abundance of capital and land. In China, labor is abundant, but it is short of land and rural capital.

The Party orders more rural banks be set up to help deal with the lack of capital and, if bigger farms end up being the norm, labor will be displaced toward the cities. The problem will be, they won’t be coming with money in hand from sales.

An Australian expert on Chinese ag says not to expect big U.S.-style ag biz any time soon, because (this is not a quote) “for people in the countryside, land is their safety net, unlike residents in big cities who have access to government programs and payouts.

As the Economist editorial ends up:

It is a shame that such a reform [making collective leadership a competitive job not reserved for the party] is not on the cards [must be a British version of “in the cards”]; and that, even without it, the party’s approach to land reform is so timid. But, recalling those epochal reforms of 30 years ago, it is worth remembering that they too tended to come in baby steps rather than great leaps, and often were formulated retrospectively. In tiptoeing gingerly around one of the last Maoist shibboleths—collective landownership—the party may yet be sowing the seeds of the rural transformation it promises.

So optimism tempered by recent history.

How much can China step up in this global financial crisis?

BRIEFING: “China’s economy: Reflating the dragon; Can the world’s fastest-growing economy avoid a sharp downturn?” The Economist, 15 November 2008.

WORLD NEWS: “China’s Stimulus Will Lift Oil Demand: Rebound in Nation’s Consumption Could Bolster Prices, Though Impact Could Take Months,” by Shai Oster and Neil King, Jr., Wall Street Journal, 11 November 2008.

The odd claim now from some experts that “only China can save capitalism.”

Oh, those running dogs better run pretty fast!

A $600B stimulus package is most welcome, or basically the same path Beijing undertook during the Asian flu (build, build, build!). I mean, the country can’t sell what others won’t buy.

The slack in the system—dare I say it—is the lack of gross public debt held by China.

Chart makes it clear: Japan’s public debt as a % of GDP is about 170, the Euro area is about 70%, the US is about 60%, and China is only about 20% (indeed, all the New Core pillars have low debt percentages).

So bring on the New Deals!

Already, experts are saying the stimulus package, being focused as it is on infrastructure and transportation, will lift global oil demand (and presumably, prices).

So fear not, Mr. Friedman, your green revolution has only been slightly delayed where it counts.

More upside on the crash: falling commodity prices temper inflation

FINANCE AND ECONOMICS: “Debt and deflation: Depressing times; Are rich economies heading merely for a bout of falling prices, or for a 1930-style deflationary spiral?” The Economist, 15 November 2008.

Okay, I’m abusing the logic of the piece here a bit.

The spiral in question here is “I can’t sell because prices drop so much and because I can’t sell I can’t cover my debts and because I can’t cover my debts, I can’t buy, which means fewer buyers for what I can’t sell, and if I can’t sell . . .” and so on.

Thus the importance of China’s rapid recovery, as the EU and Japan dropped officially into recession right away, faster than America will eventually move into that category (on an official basis).

This is why Mr. and Mrs. M.C. Chindia are the most important people on the planet (my piece in Good magazine’s next issue).

That excellent Friedman column on Detroit

OP-ED: “How to Fix a Flat,” by Thomas L. Friedman, New York Times, 12 November 2008.

This column reminds me of the scene in “Toy Story II” when Mrs. Potato Head tells her husband that she’s going to pack his “angry eyes” for the great adventure ahead—just in case he needs them.

Friedman put on his angry eyes for this one, and it works.

He’s super-pissed at Michigan’s congressional delegation for shielding Detroit’s automakers from the realities of a changing market for so long, so he approvingly quotes the WSJ op-ed by Paul Ingrassia that says entire boards of directors and senior management should be fired and replaced in return for any bailout.

Friedman gets even more amped: demanding we turn GM over to Steve Jobs for a few years.

Good stuff. Keep your angry eyes in, Tom.

China steps up, India gets scared

ARTICLE: “China Bets Highways Will Drive Its Growth,” by Andrew Batson, Wall Street Journal, 11 November 2008.

WORLD NEWS: “India Reins In Ambitioius Building Plans,” by Eric Bellman, Wall Street Journal, 12 November 2008.

Much of China’s $600B stimulus will focus on roads and other forms of transportation connectivity (airports and railroads). This is a “tried and true” engine for China’s growth these past 30 years—true economic frontier integration.

India, meanwhile, may be cutting back on plans due to the credit crunch, say economic observers, although Indian government officials blow off such predictions.

We hope the latter are correct in their confidence, because numbers are down across the infrastructure industries.

Just a reminder: we’re #1 on competitiveness

REPORT: “Global Competitiveness Report 2008-2009,” World Economic Forum

From World Economic Forum 2008: US was number one in 2007 and remains there in 2008.

As for the post-American leaders?

China is 30, India is 50, Russia is 51 and Brazil is 64. Super-entrepreneurial—according to Baumol et al.—Taiwan (17) and Israel (23) don’t even come close.

Keep the faith!

Hard times breed more comprehensive trade deals

THE AMERICAS: “The Caribbean: Trade winds; Finally, a deal with Europe,” The Economist, 18 October 2008.

The EU continues to ply an aggressive trade pact course in Latin America.

Good competition for us and a reminder that tough times breed compromise on big trade pacts—assuming your leadership is visionary enough for the task.

'Expeditionary banking' and DIB

ARTICLE: 'How Jesse James, the Telegraph, and the Federal Reserve Act of 1913 Can Help the Army Win the War on Terrorism: The Unrealized Strategic Effects of a Cashless Battlefield,' By Peter E. Kunkel, Military Review, November-December 2008

Naturally, I love historical analogies like this one.

I see a natural seam here between "expeditionary banking" and Development-in-a-Box‚Ñ¢--as in, the former segueing into the latter as security improves.

Very cool stuff. No surprise here, as it comes from Leavenworth's "combined arms center."

(Thanks: Lexington Green)

G-20 emergence

BRIEF: Global Economy: G-20 Ready To Boost Growth, Stratfor, November 9, 2008

It will be interesting to see how the G-20 gels on this crisis.

(Thanks: Dan Hare)

Why video loses out to the game

While working out recently on my elliptical, I've taken to watching my older son play videogames on Xbox Live and I've come to realize why, while he still loves movies, he spends more time on the game: It's just the movie where you get to be the star.

Watching him play "Left 4 Dead" with a pickup team of three online compadres, the zombie movie of my youth seems a bit dull. I mean, it's cooler if you get to blow them away and decide where to head next on your group's search for sanctuary and whatnot.

The expectation for interactive control is simply different with this generation.

The funniest Colbert line of late re: Obama vetting proces

Paraphrasing: Now it turns out it does matter who you pal'd around with!

The perfect front page for this day and age

ARTICLE: “Democrats Seek Emergency Help For Automakers,” by David M. Herszenhorn and Carl Hulse, New York Times, 12 November 2008.

ARTICLE: “Lobbyists Swarm the Treasury For a Helping of the Bailout Pie,” by Mark Landler.

ARTICLE: “Buying Binge Slams to Halt: Crisis of Confidence For U.S. Consumers,” by David Leonhardt.

ARTICLE: “After U.S. Breakthrough, Europe Looks in Mirror,” by Steven Erlanger.

ARTICLE: “Veterans’ Families Seek Aid for Caregiver Role,” by Leslie Kaufman.

ARTICLE: “Aches, a Sneeze, A Google Search: Data on Web May Warn of Outbreaks of Flu,” by Miguel Helft.

I dunno. The front page of the NYT on the 12th just struck me as a perfect amalgam of everything going on right now: the huge industrial adjustment in Detroit, the usual feeding frenzy on the bailout; the slowdown in spending as American consumers confront their over-leveraged position; the profound impact of the Obama election globally; the way our military has been taken to the breaking point by Bush-Cheney’s mismanagement; and the never-ending technological byproducts of this amazing age of innovation.

One for the time capsule.

If you want to think horizontally, this is the kind of front page you can’t put down.

Good news on the vets issue: NYT story two days later (“Military Families Get Time Off for Care”) suggests some relief happening.

The long war’s shift into Africa—on schedule

INTERNATIONAL: “C.I.A. Chief Says Qaeda Is Extending Its Reach,” by Mark Mazzetti, New York Times, 14 November 2008.

Detailing the slow but steady shifting of capacity southward into Africa.

Hayden:

He drew a contrast between what he described as growing Islamic radicalism in places like Somalia and what he said had been the ‘strategic defeat’ of Al Qaeda in Mesopotamia—the network’s affiliate group in Iraq.

Yes, for now, the center of gravity has sucked back into NW Pakistan, but as I have long predicted, there’s just too many interested local great powers who will work to squash that regional problem over time, making Africa the more inviting target for long-term expansion.

The resistance will, as always, correspond in its geographic expressions with globalization’s advance and deep embrace of regions.

3 generals survive 800lb Bomb in MRAP with EFP protection

'Close Call: Senior Leaders' MRAP is Destroyed by Suicide Bomb, but They Survive,' By Sean D. Naylor, Army Times, November 24, 2008

Having spent time with BAE Systems top execs last week in Florida, I can tell you how proud they are of this technology.

(Thanks: Thaddeus Jankowski)

Looking for another upside target with the financial crisis

UNITED STATES: “Health care: In need of desperate remedies; Could the financial crisis speed efforts to reform America’s troubled health system?” The Economist, 18 October 2008.

You see the wrenching ads on TV about people going bankrupt over medical catastrophes.

Vonne and I would have suffered that fate with Em’s cancer many years ago. I have no illusions about that.

More dust-settled perspective on Russia-v-Georgia

BRIEFING: “The Caucasus: After the war; An edgy neighbourhood has become both more dangerous and more important,” The Economist, 18 October 2008.

Nice summary of where things stand and don’t stand in the Caucasus after the dust-up.

Another upside for Russia with global warming: maritime connectivity

MAP: “Sea Change: The Transformation of the Arctic,” by Scott Borgerson, map by Bryan Christie, The Atlantic, November 2008.

Cool map showing how Russia will soon enough have its fill of useful “warm water” ports.

Russia will have plenty of logistical hubs to sell, if it plays its game right.

We can only hope that Putin gets over himself and does not return to the presidency. Russia’s economic future is bright enough to overcome the profoundly disastrous legacies of the socialist era, but not if Moscow remains delusional about the true nature of that power: it supplies some useful things, but its demand power is still small.