A few weeks back there was a NY Times article on South Korea's concept of the Ubiquitous City, where an area called New Songdo would arguably become the most networked place in the world.  Following the crash of the Asian markets a few years back, Seoul made a concerted effort to move from an industrial economy to that of one based on IT.  In this vein, they've created the concept for the Ubiquitous City.  For example, recycling bins could use RFID to credit you with recycling a glass bottle, if you need a birth certificate you could get one printed from a city government kiosk on the sidewalk, there's even talk of pressure sensitive floors to detect a fall in an elderly persons home...  Naturally, storing and processing all this data would be ideally suited for the Cloud and it seems that Korean government feels the same.

To develop their Cloud infrastructure, the government just announced that they will be devoting $172 million dollars over the next year to help the private sector promote, develop and deploy Cloud based systems.   While that might not be considered a lot of money in some circles (especially when it comes to government funding) the fact that the Seoul is putting any money towards this nascent industry is a sign of forward thinking and can only bode well for SaaS vendors worldwide.  Kudos to South Korea for putting its money where its mouth is...

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Why weren’t greater details offered? Perhaps because last May, President Obama announced a series of steps aimed at overhauling the U.S. tax code to detect and pursue U.S. tax evaders and go after their offshore tax shelters.

It is clearly known that many companies in U.S. are offshoring information technology services to India, not only to seek out cheaper labor, but also to avoid the taxes that they are bound to pay in their Country.

In the other hand, the U.S. wants to implement a new law that would set a number of restrictions on overseas firms that need H-1B visas to deliver their services. India´s IT Industry is anxious of the solution that U.S. Congress will give.

Less well known are the benefits that a nearshore location, such as Canada or Mexico has to application development. The India-based providers, such as Tata and Infosys recognize the benefits of working in the same time zone. That´s the reason, that Indian companies are moving operations near to U.S. or even in the U.S.

Now, with new tax policies and visa restrictions it looks that India-based firms may have greater difficulty to deliver their IT services. Companies like Infosys Technologies Ltd. (which on March 31 employed 8,900 people in the U.S. with H-1B visas, and 1,400 with L-1 visas, according to U.S. Securities and Exchange Commission filings) has to face this complicated problem. It is estimated that other Indian companies will suffer a huge negative impact as well. It is recognized that some companies are paying less to people with H-B1 visas than what they would have paid to locally hired US employees. Now with the decrease of visas they would need to hire U.S. workers who earn more and require more benefits. The benefits of offshoring could disappear with this new model.

Companies will continue move services offshore, but with the new tax code announcement of U.S. President, it won´t be so easy. Even while the cost of manpower in India rises (find stats and link), the total cost of engagement including taxes will increase the cost of an application software or IT service.

In light of these new restrictions, outsourcing to Latin America, specifically Mexico, looks even more appealing. NAFTA (North American Free Trade Agreement) protect and ensures the safe treaties and relationships between U.S. and Mexico including protection to Intellectual Property and simplifies trade.

Why are large companies challenging convention and turning to external service providers?

Many Cloud Computing pundits have predicted that the early adopters will be largely comprised of small and mid-sized businesses.

Some new data from Forrester suggests that won't be the case.  

According to Forrester's Frank E. Gillett in Conventional Wisdom Is Wrong About Cloud IaaS, one out of four large companies plan to use an external provider soon, or have already employed one. Furthermore, we learn that 33 per cent of large companies plan to use a service provider for Infrastructure-as-a-Service, while just 24 per cent want to run their own "private" clouds.

Here is an interesting article released today from InfoWorld on the Three avoidable mistakes that companies make when moving to the cloud or SaaS model.

Interest around the movement and of cloud computing and SaaS has increased in dramatically in the last months. However, many of those moving to cloud computing are making some of the following critical and avoidable errors:

Error No. 1: Looking at cloud computing as a mere platform change and not architecture.

SaaSFan.com wrote a blog post today that covers some really good points about SaaS providers that clearly do not see the benefits of multi-tenant architecture.

Key Takeaways from the article:

• Multi-Tenancy allows for the aggregation of data
• Helps data be presented in a meaningful way
• Provides real-time data
• Advertising in the cloud

Read the article here: http://bit.ly/4WqMH

Today Forrester Researched released a report that suggests enterprises and other cost-conscious business are looking for ways to modernize key legacy applications.

 Key Points from article:  

• 64% of enterprises say they are focused on updating key applications
• 55% of small businesses are also focused on updating key software
• Survey found that software budgets will remain the same for key software tools for the rest of 2009
• The survey also suggests that concerns and barriers around saas adoption have diminished
• 34% of enterprises site security concerns as main barrier to purchasing saas solutions

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