Taiwan has built a reputation as a world leader in producing chips, desktop and laptop systems, and peripherals over the past quarter century.

Now the country is mobilizing its resources to become a leader in Cloud Computing. The government recently reported a commitment of $24 billion Taiwan dollars (USD $730 million) to Cloud Computing, and has also described it as a "trillion-dollar opportunity" in local dollars.

So it seemed a good time to track someone down there and talk about all this.

We contacted George Wang, EVP of the country's Institute for Information Industry (III) and one of the Cloud Computing leaders in Taiwan. The III is working closely with the well-known Industrial Technology Research Institute (ITRI) and the government's Ministry of Economic Affairs (MOEA) to deliver tangible results within the country's Cloud strategy.

As EVP Wang noted at the start of our interview, "Cloud Computing is a new computing model and a new business model. It represents a major paradigm shift for the ICT industry, and I'm pleased to report that Taiwan is ready for this disruptive innovation." He called Cloud Computing "a golden opportunity for Taiwan to accelerate our transformation from hardware to software, solutions and services."

Here are some of the other things he had to say...

NOW: Let's talk a little bit about the III first.

George Wang: Sure. It's been in existence for 30 years, and is funded primarily by the government. We have a relatively large R&D team 500-600 people, and we also have other functions, such as industry promotion, such as the "eTaiwan", and the "M(obile) Taiwan" project in the past.   In addition, III also provides education/training, application promotions.

And we also play the role of a government think tank.

NOW: When did you kick things off for Cloud Computing in Taiwan?

GW: Last September (2009), the III, together with ITRI, helped the MOEA hold a Cloud Computing Strategy Forum, with major Taiwanese ICT vendors participating. We also had other worldwide Cloud Computing leaders.

NOW: And you came up with the strategy then?

GW: Yes. On one hand, we will leverage our ongoing strength and leadership in ICT hardware to make Taiwan the major worldwide supplier for Cloud Computing datacenter solutions, as well as Cloud client devices.

On the other hand, we will focus on developing innovative Cloud services and leverage the new Cloud Computing paradigm to provide Cloud-delivered services to worldwide users.

In addition, the strategy also calls for making Taiwan a major Cloud Computing show case for the world.

NOW: And the government has now endorsed this strategy. I think I saw five priorities in a recent announcement.

GW: Yes, This plan was considered to be a very high priority by Premier Wu Den-Yih, and he selected Cloud Computing as one of the key emerging intelligent industries for us to focus on and develop. The initial plan consists of 15 projects with a target five-year funding of roughly 24 billion Taiwan dollars.

NOW: The country is known for its strengths in hardware. But you've said you're moving away from that.

GW: Well, the major theme is to develop innovative Cloud services, and key Cloud Computing technologies to enable the Cloud Computing ecosystem. Our goal is to make Taiwan the world leader for Cloud services, to accelerate the transformation of our IT industry into high-valued Cloud datacenter solutions and Cloud services.

NOW: What is the "C-4" marketing strategy that I've read about?

GW: The four "Cs" are Client, Connectivity, Commerce, and Cloud.

We will develop Cloud datacenter solutions, leveraging our world leadership server hardware.

We will develop Commerce on the cloud, i.e., Cloud services using various kinds of thin clients that leverage our Client device leadership.

And we will continue our development of Connectivity, leveraging our significant investment in broadband infrastructure.  Overall, this creates our "C-4" strategy; we are building our Cloud Computing industry with explosive growth in mind.

NOW: You mentioned "Mobile Taiwan" earlier. How does that fit in?

GW: Mobile Taiwan, or "mTaiwan," relates to the very strong WiMAX infrastructure the country has spent a lot of money developing. We've invested a lot in WiMAX/4G, so we want to leverage it, of course. It represents the connectivity "C" in our "C-4" strategy.

NOW: Who in Taiwan is aggressively moving toward Cloud Computing?

GW: Well, Taiwan is not fundamentally different from other parts of the world when it comes to Cloud Computing, so all the IT major vendors, as well as telecommunication services providers are moving towards it.

I will mention just a few examples here.

Trend Micro, the most successful software vendor from Taiwan, spun off  T-Cloud Computing earlier this year. They will offer SI (systems integration) services for Cloud datacenters, leveraging their cloud security technology and cloud management experience to deliver security services over the cloud. Trend Micro also recently announced a partnership with CHT (Chunghwa Telecom) on Cloud Computing.

CHT itself has announced a number of cloud services, including a "Cloud bookstore" for eBook publishers. CHT started to offer IaaS (Infrastructure as a Service.) in April. CHT is also building a Cloud Computing Center, to be completed by 2012, with a investment of 13 billion Taiwan dollars (USD $400 million).

Then there is Quanta, which has been engaging in Cloud R&D jointly with the MIT Media Lab (in Cambridge, Mass.) for many years. Quanta has started a Cloud Computing business unit, focusing on e2e (end-to-end) Cloud solutions from infrastructure, platform, as well as building a large portfolio of Cloud services.

In addition, Foxconn, Inventec, Wistron and other key ICT vendors in Taiwan all have major initiatives in Cloud Computing.

NOW: How does that tie back to what you are doing at III?

GW: Our R&D strategy is centered around "Device and Services." We think Cloud services is the area with the largest business potential.

NOW: How so?

GW: Because Cloud services allow software vendors to develop networked services and deliver them to the world, without worrying about the complex IT and datacenter infrastructures underneath.

NOW: What kinds of devices do you see coming out of Taiwan in the Cloud Computing era?

GW: We can start with PCs and notebooks, of course, and smart phones. Right now, the Apple iPod, iPhone, and iPad are great examples. But we can also create TVs, cameras, digital frames, and projectors, which will all be connected, and will be Cloud clients. We are best positioned to build the optimum devices with many varieties.

We can also leverage our past investment in broadband to provide the ideal networking infrastructure for the Cloud. When applications and data are being moved to the Cloud, it will trigger a lot more bandwidth demand, driving us to continue our investment in broadband.

But as I said earlier, the more exciting aspect of Cloud Computing is that it provides us a golden opportunity to enter into the Cloud services market, speeding up Taiwan's transformation as a global leader in software and services.

NOW: I make a big distinction between the Consumer Cloud and the Enterprise Cloud. What do you make of this distinction?

GW: We know the Consumer cloud is already very successful: google in particular is doing really well, everyone's using search, everyone's using email on the internet, and there's Facebook and Farmville.

This success means it's also clear that the space for consumer services is rather crowded. We want focus more on the enterprise side.

NOW: What is your strategy on the enterprise side?

GW: Our government also has a strategy to focus in specific areas. One of them is "cultural" or educational, where we are thinking of doing some educational Cloud services to be used by our K-12 students. Hopefully, these services can also be exported to mainland China and other places.

Another key area is health care. We manufacture a lot of medical devices in Taiwan, so we have a traditional strength there.

Third, we're thinking about building Cloud services for SMEs. These companies have the least IT capability, and Cloud services can really help them.

NOW: So the battle begins anew...

GW: Yes, and we are ready to face this challenge.

In Taiwan, we need to continue to transform ourselves, and in my personal opinion, Taiwan is not transforming itself fast enough. We've been in the hardware industry for too long.

NOW: With great success, though.

GW: Yes, so sometimes it's not easy to understand the urgency. We're doing really well, and that's why we  were not doing the transformation fast enough. But Cloud Computing is allowing us to accelerate  our transformation.

In the business world, if you can't transform, you will not survive.