Mike Manos writes a long post on his blog driven by Microsoft’s recent decision to move Windows Azure out of Washington State.
The Cloud Politic – How Regulation, Taxes, and National Borders are shaping the infrastructure of the cloud
August 6, 2009 by mmanos
Most people think of ‘the cloud’ as a technical place defined by technology, the innovation of software leveraged across a scale of immense proportions and ultimately a belief that its decisions are guided by some kind of altruistic technical meritocracy. At some levels that is true on others one needs to remember that the ‘cloud’ is ultimately a business. Whether you are talking about the Google cloud, the Microsoft cloud, Amazon Cloud, or Tom and Harry’s Cloud Emporium, each is a business that ultimately wants to make money. It never ceases to amaze me that in a perfectly solid technical or business conversation around the cloud people will begin to wax romantic and lose sight of common sense. These are very smart technical or business savvy people but for some reason the concept of the cloud has been romanticized into something almost philosophical, a belief system, something that actually takes on the wispy characteristics that the term actually conjures up.
When you try to bring them down to the reality the cloud is essentially large industrial buildings full of computers, running applications that have achieved regional or even global geo-diversity and redundancy you place yourself in a tricky place that at best labels you a kill-joy and at worst a Blasphemer.
I have been reminded of late of a topic that I have been meaning to write about. As defined by my introduction above, some may find it profane, others will choose to ignore it as it will cause them to come crashing to the ground. I am talking about the unseemly and terribly disjointed intersection of Government regulation, Taxes, and the Cloud. This also loops in “the privacy debate” which is a separate conversation almost all to itself. I hope to touch on privacy but only as it touches these other aspects.
Mike ends his post with a blasphemy.
Ultimately the large cloud providers should care less and less about the data centers they live in. These will be software layer attributes to program against. Business level modifiers on code distribution. Data Centers should be immaterial components for the Cloud providers. Nothing more than containers or folders in which to drop their operational code. Today they are burning through tremendous amounts of capital believing that these facilities will ultimately give them strategic advantage. Ultimately these advantages will be fleeting and short-lived. They will soon find themselves in a place where these facilities themselves will become a drag on their balance sheets or cause them to invest more in these aging assets.
Please don’t get me wrong, the cloud providers have been instrumental in pushing this lethargic industry into thinking differently and evolving. For that you need give them appropriate accolades. At some point however, this is bound to turn into a losing proposition for them.
How’s that for Blasphemy?
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Most will ignore or be unable to react to Mike’s points as they are building their data centers as if they are fortresses. The mistake in building a fortress is the buildings don’t adapt easily to changes in social, political and technology environment.
Mike makes this point regarding Canada law.
So far we have looked at this mostly from a taxation perspective. But there are other regulatory forces in play. I will use the example of Canada. The friendly frosty neighbors to the great white north of the United States. Its safe to say that Canada and US have had historically wonderful relations with one another. However when one looks through the ‘Cloud’ colored looking glass there are some things that jump out to the fore.
In response to the Patriot Act legislation after 9-11, the Canadian government became concerned with the rights given to the US government with regards to the seizure of online information. They in turn passed a series of Safe-Harbor-like laws that stated that no personally identifiable information of Canadian citizens could be housed outside of the Canadian borders. Other countries have done, or are in process with similar laws. This means that at least some aspects of the cloud will need to be anchored regionally or within specific countries. A boat can drift even if its anchored and so must components of the cloud, its infrastructure and design will need to accommodate for this. This touches on the privacy issue I talked about before. I don’t want to get into the more esoteric conversations of Information and where its allowed to live and not live, I try to stay grounded in the fact that whether my romantic friends like it or not, this type of thing is going to happen and the cloud will need to adapt.
I agree totally with Mike’s points on the site selection, but this can be adapted to if you change the type of data center you are building. The smart data center builders are adapting their designs to leverage site characteristics and increase flexibility. Google has patented floating data centers. Microsoft has container data centers. Mobility changes the game.
How adaptable is your data center infrastructure? An adaptable infrastructure is a competitive advantage.
