Cloud Expo in New York in April

It's tough to remain focused on cool tech stuff in a hot country that still has tens of millions mired in the depths of poverty. But really, it's place like the Philippines that hold the key to the future of cloud computing and enterprise IT.

It's too hot here to host server farms, at least as I understand it. If a typical server farm needs half again the electricity to cool it as it does to power it, then what is the ratio between power and cooling here in the tropics? Maybe they could work up in the mountains near Baguio, which is located at about 5,000 feet altitude and is about 20 degrees cooler than the rest of the country. But Bagiuo became notoriously inaccessible when the roads went out during the worst of last year's typhoons.

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The Philippines is classified as a developing country these days, with an economy that typically ranks somewhere in the 40s on a global scale. Its economy lags Thailand, Indonesia, and especially Malaysia in this region, and is currently sweating out a burgeoning challenge from Vietnam. Its very slow economic progress since the overthrow of the dictator Marcos in 1986 causes no end of criticism and hand-wringing among the small army of commentators here.

To the American eye, the Philippines can remind one a lot of Mexico, except without oil and without the devastating drug-related climate of violence.

Physical and Verbal Violence
But to be sure, the Philippines has its own abhorrent violence, notoriously so in the recent slaughter of 57 people--about half of them journalists and the others the women and children of a political family. The crime was carried out in a remote part of a remote region that has had autonomous status for many years. In a sentence, the crime was a family feud writ large.

The major criticism of the administration of the recently and dearly departed Corazon Aquino was that she was unable (and perhaps unwilling) to enact any sort of serious reform to this country's ownership of, and control by, a small number of very wealthy, landowning families. A legacy of Spanish colonial rule, the landowners still lord over a very feudal society that, again, reminds one of Mexico and other parts of Latin America, including modern-day California.

Thus, in Manila, a few families continue to dominate business and politics. Their control reaches out and down through the numerous provinces that form the three major regions of the country--Luzon, the Visayas, and Mindanao. In the more remote, autonomous parts of Mindinao, the ruling families seem to exert almost complete control, with the consequent feuds that erupt into violence.

Tension in the Philippines is hardly limited to the remote regions, however. Corazan Aquino was subjected to various conspiracies and mini-putsches, the most notorious of which was at a five-star hotel in Makati, the city within Metro Manila best-known to global business visitors. In fact, Makati may be the only place in the Philippines experienced by the majority of non-Filipino visitors, whether businesspeople or tourists.

Meanwhile, the twin insurgencies of Muslim groups (mostly in Mindanao) and Communists (elsewhere) continues at a low-grade level.

The real violence here is matched by verbal violence in Manila's daily newspapers. The country has a vibrant, opinionated press, which to me is an amazingly refreshing facet of a culture situated in a part of the world that has everything from completely repressive regimes (Myanmar/Burma), rigorously repressed opinion (Singapore), cautiously represeed multi-culturalism (Malaysia), Communist regimes (Vietnam and Laos), not to mention the less-than-free journalistic environments of economic powerhouses Japan and Korea to the north.

The Coming, Critical Election
As the election approaches, two leading candidates have emerged: "Noynoy" Aquino, a senator and the son of Philippine icons Benigno and Cory Aquino; and Manny Villar, a poort shantytown boy who through sheer hard work has made himself one of the richest people in the country. Both seem honest and earnest. The choice of the ruling party is current defense minister "Gibo" Teodero, a very smart and affable guy who is tainted by the daily, furious rants against current president Gloria Macapagal-Arroyo. Former president (and movie star) "Erap" Estrada, who was thrown out in a bloodless revolution and replaced by Arroyo almost a decade ago, is in the race as well. Several other candidates are given little to no chance.

In the run-up to the 2008 presidential election in the US, conspiracy theories abounded about the potential of George W. Bush's administration to declare a terrorist-related national emergency and subvert the election and constitution. Similar theories abound here in the Philippines, the difference being that this is a nation with precedent in this area.

The last few months have seen a resurgence of the "People Power" revolution that swept Cory Aquino into power in 1986.

The machinations are too complex for my simple American mind to comprehend. But again, a key is that power in this country is the province of a very few families, for the most part. Manila's international airport is named after Noynoy Aquino's father, the metro area's second airport at Clark is named after Arroyo's father. Gibo is a second cousin to Noynoy. Villar's chief-of-staff is half-sister to Gloria. And on it goes.

GMA’s administration has inarguably benefitted the growth of the IT (called ICT) business here during her nine years in power. A fiber-optic spine is being built to span the length of the country, encompassing several cities and provinces along the way.

There is certainly more to the Philippines than Manila and Makati. Many businesspeople and tourists are now familiar with the country’s “second city,” Cebu City in the Visayas region. In the coming years, perhaps the names Davao City, Iloilo, Bocolod, and others will become better known as global brands as well.

The government’s efforts to develop and promote these areas has spurred the growth of a business process outsourcing (BPO) industry that now adds $7 billion in revenue to the country’s GDP. The technology industry, while not on a par with neighboring Malaysia, let alone the Asian giant China, has been sufficient to the challenge of producing part of Apple’s iPhone, among other wunder-products.

Cloud Computing to the Rescue?
And it is here that I have hope for Cloud Computing in the Philippines and other developing nations. The key promise of Cloud Computing it is flexibility, ie, its ability to provide IT as a utilitarian service. The implication is that cost-of-entry barriers will drop, as the enormous capital expenditures required for anything that can be fairly called “enterprise IT” will be borne by suppliers, not by customers.

Electric power concerns are a big deal here, as they are throughout the developing world. My experience over the past year has been that electric power is reliable in the city and on the outskirts of the “Mega Manila” area. Yet there are still thousands of villages in this country that do not have electric service—yes, it’s a pre-TVA era in many places here, for those of you who know your American history.

But, just as pay-as-you-go cellphones have enabled millions here and elsewhere to be completely current with the world, skipping the necessity of building a reliable landline infrastructure, I think that Cloud Computing will enable the Philippines and elsewhere to become world-competitive on the IT front, skipping the necessity of building traditional IT infrastructures.

Now, from where to deliver the computing services? What are the latency problems associated with server farms located hundreds, or maybe thousands, of miles away?

The Philippines will never be big enough on its own to become enormously influential on a world scale in its use of IT power. A local economist has outlined a plan to double the middle class here to 45 million people within the next decade or so. The number seems small compared to the numbers encountered in China and India. Yet 45 million people is more than there are in all of California or Canada, and is comparable to the total population of Spain.

And collectively, there are 600 million people in Southeast Asia, each of them yearning for marginally easier lives, with a few of the nice trappings, such as refrigerators, microwaves, and maybe a little air conditioning.

The Philippine election will go a long way in determining if the hard-won democracy in this country can endure. It will either spur new rounds of economic investment and development, or drive it away. My fondest hope is that the military does not feel the need to intrude, that the country can continue to play a strong regional role in technology development, that its press freedoms hold, and that Cloud Computing can thereby play a role in bringing the folks here to the adult’s table.

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