Taiwan Sees Clouds in Its Forecast

The nation plans to invest hundreds of millions to seed cloud-computing efforts

Think Taiwan and you think manufacturing, not services. But the island's government wants to change that. Taiwan plans to invest NT $24 billion (US $744 million) in the development of cloud-computing technology and services over the next five years. The government predicts that the cloud-computing sector will be worth US $31 billion globally by 2014 and wants its industry to get involved now in order to get a piece of it. Cloud computing uses the Internet and remote servers to store data and run applications for devices such as computers and smartphones.

"We should take advantage of Taiwan's strong information and communications technology industry, further upgrading it in order to seize business opportunities involving cloud-computing technology," Premier Den-yih Wu told reporters in April. Officials said that the development of the technology would help push integration among the hardware, software, and service industries, so that eventually Taiwan would be able to export cloud services.

According to Wu's administration, the government's five-year investment is expected to be matched by NT $112.7 billion in investments from the private sector, including NT $12.7 billion for R&D. The government estimates the efforts will create 50 000 new jobs.

To speed things along, Wu ordered the establishment of a cabinet-level advisory task force, to help government agencies choose projects to fund and find ways to remove barriers to investment in private sector cloud efforts.

Ming-ji Wu, director general of the Department of Industrial Technology under the Ministry of Economic Affairs, told reporters that the government cash will go to help with supply, demand, and governance of cloud-computing services. On the supply side, it will go toward the integration of cloud-computing systems, data centers, application software, new products, broadband networks, and testing mechanisms. On the demand side, the government is building its own cloud to combine the information systems in over 4000 government agencies nationwide into two or three cloud-computing centers to be located at the country's science-based industrial parks.

The government push follows some investment by foreign firms. Last November, Microsoft signed a deal with the Taiwanese government to jointly establish a cloud-computing research center. Microsoft inked a separate agreement with Taiwan's largest phone company, Chunghwa Telecom, allowing the carrier to deploy the Windows Azure operating system for its cloud-technology applications.

Though its hopes for the cloud-computing initiative are high, Taiwan's track record with government science and technology programs is spotty. Just weeks after the plan was announced, the Control Yuan, the highest supervisory organ of the central government, censured the National Science Council for poorly designing seven ongoing national science and technology programs. According to the Control Yuan, by the end of 2008, NT $84.15 billion had been invested in those programs, but little of industrial use had been gained.

Many other large, cross-agency programs besides those censured by the Control Yuan are also failing, says Chih-cheng Lo, an associate professor of political science at Soochow University in Taipei. "The policymaking process deserves improvement," he says.

This article was updated on 4 August 2010.

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