Adrian De Luca

Are you ready for the TPP? Laying the groundwork for trans-regional business in Asia Pacific

Blog Post created by Adrian De Luca Employee on Mar 2, 2016

It is, by all accounts, a humungous trade agreement. On 4 February 2016, 12 Pacific Rim countries signed the Trans-Pacific Partnership (TPP) agreement after seven years of negotiations. As noted in a BBC report, the countries have between them a population of about 800 million - almost double that of the European Union – and collectively, they are already responsible for 40 per cent of world trade.


The agreement, which is expected to be ratified over the next two years, promises to bring significant benefits to economies in the Asia Pacific. As I mentioned in my Predictions for Asia Pacific in 2016, the TPP will usher in new and exciting opportunities for companies to expand across the Asia Pacific region and if implemented properly, lower barriers to consuming intercontinental cloud services.


But to realize this potential, budding enterprises have to start preparing for a multi-cloud strategy today. Not only is it important to be aware of the dynamics that are shaping the cloud landscape in the region, but understanding how to a technology stack that provides universal deployment, overcomes bandwidth limitations and ease of mobilising workloads are key.


Firstly, its important to understand the cloud environment in the Asia Pacific has been evolving quite differently from that in United States and Europe. Here, there are relatively more instances of private cloud than public cloud as many Asian enterprises continue to want to own and control their IT assets. The sovereign nature of the geography also means there is unlikely to be just a handful of dominant cloud providers so although choice will drive cost benefits, it can provide technology risks.  These are just some of the reasons the cloud landscape in the region is also likely to be more fragmented than it is anywhere else in the world.


Another important dynamic is the regulatory landscape, which varies with different industries and different countries across Asia. Take the financial services industry (FSI) for example. In Hong Kong, the government shies away from the banking sector to operate anything in public cloud, whereas in Australia, there is no specific mandate around the use of public or private clouds. Instead, the regulatory focus is more around addressing privacy protection concerns and requires that the service provider can demonstrate that it meets the required level of governance.


A third dimension is infrastructure. Infrastructure development across the region is uneven. In India, for example, there are not many cities with well developed, high bandwidth networks that make it feasible for data center operators to offer cloud facilities.


So how do these factors come into play as enterprises work out their cloud strategy in anticipation of TPP?tpp-overview.jpg

First and foremost, there has to be a cultural change within many organizations before they can fully capitalize on intercontinental cloud services for trans-regional business. Re-examine your IT priorities and be prepared to relinquish some degree of control as you move more of their workloads out into the public cloud.


Develop a technology and cloud management stack that will not lock your applications in at all layers, building services on open source frameworks and platforms will ensure you to integrate into multiple cloud IaaS and PaaS environments and will give you the ability to deploy workloads seamlessly from one location to another and from one CSP to another.


Be aware of “proprietary” clouds. Some CSPs are claiming to be open becuse they are using open source technologies like OpenStack, but their services may not be replicable somewhere else because they are closed APIs or lack the data center ecosystems. Enterprises could find themselves locked in by the cloud vendor, making it difficult for them to expand into certain countries.


To manage the different regulatory approaches to the cloud across the region, enterprises have to ensure that their CSP abides by a firm code of conduct with respect to issues such as data privacy and disclosure of data breaches. In a report on FSI Regulations Impacting Cloud in Asia Pacific Markets, the Asia Cloud Computing Association noted that financial services institutions can maximise the benefits on offer from the use of cloud services by ensuring that they are familiar with the regulatory landscape, and able to assess the degree to which the CSP’s offering fits into the regulatory landscape.


Another consideration in developing a cloud strategy is the infrastructure development of the country where the CSP operates. Several IT providers like SubPartners and Megaport are already laying the groundwork by investing in cross-continental high-speed connectivity to create direct routes between key economies in South East Asia, Australia and the United States of America.


It is also a positive sign if the city or country is investing in data centers. We saw this happening in Australia about five years ago when customers began to realize that it made little economic sense to build and operate their own data centers. First they outsourced parts of their IT with co-location, next we saw the rise of cloud providers which gave rise to a massive data center buildout in 2012. We are now seeing same thing is now happening in countries like Singapore, Hong Kong, Taiwan and Malaysia.


Yet another factor that enterprises should consider is the availability of skillsets to support their multi-cloud strategy. Countries like Singapore and India, for example, provide a very good skills base for the development of the cloud ecosystem.


The TPP holds immense promise for business opportunities that if it can get the right political support, will unlock across this region.  However it will take an evolution in cultural thinking, level of governance and investment in physical infrastructure to make trans-regional business a reality. Organizations have to start building their applications, systems and cloud strategies today in anticipation of these developments.