US Exports: “The Cloud”?

An Economist special report in last week's print edition talks about how the US will need focus more on savings and exports:

A special report on America's economy: Time to rebalance

I've been thinking about that for a while too, especially after the dollar's recent weakness, although it has been strengthening some, lately, apparently due to the state of Greece's finances…

I think that the computing industry is, in general, well poised to take advantage of that.  For instance, what could be easier to export than computing power or "Software as a Service"?  All it takes is a few minutes for someone in Europe to sign up to a US-based service with a credit card.

For instance, compare Linode's prices and good service with most of their European competitors (gandi.net for instance, who are good people, and you have to love that they put "no bullshit" right on their front page).  Not that they don't have good service in Europe, but it's very difficult to compete on price with the dollar being significantly cheaper.  With the dollar where it is right now, gandi is almost, but not quite, competitive with Linode.  If you don't include taxes.  If the dollar weakens again, though, things could easily tilt far in Linode's favor.

Besides a weak dollar, I think it will be important for companies in a position to do so in the US to focus on "the rest of the world".  The US is a big, populous country where it's very easy to forget about far-off lands.  Compare my home town of Eugene, Oregon to where I live in Padova.  Google Maps says that it takes 7+ hours to drive to Vancouver, Canada (which, to tell the truth, isn't all that foreign in that they speak English with an accent much closer to mine than say, Alabama or Maine).  Going south, Google says it's 15+ hours just to San Diego, although I think that's optimistic myself, given traffic in California.  From Padova, I can be in France in 5 hours, according to Google, 3 hours to Switzerland, 4 to Innsbruck, in Austria, less than 3 hours to the capital of Slovenia, Ljubljana, and around 3 hours to Croatia, too.  And if you wanted to throw in another country, the Republic of San Marino is also less than 3 hours away, according to Google's driving time estimates.   You could probably live your entire life in a place like Eugene and never really deal much with foreigners, whereas here, nearby borders are both a historic and an ever-present fact.

The outcome of this is that, to some degree, people in the US have traditionally focused their businesses "inwards" until they got to a certain size.  Which is, of course, a natural thing to do when you have such a big, homogenous market to deal with before you even start thinking about foreign languages, different laws, exchange rates and all the hassle those things entail.

However, if exchange rates hold steady or favor the US further, and internal spending remains weaker, it appears as if it may be sensible for companies to invest some time and energy to attract clients in "the rest of the world".

"Cloud" (anyone got a better term? this one's awfully vague, but I want to encompass both "computing power" like Linode or Amazon's EC2, as well as "software as a service") companies likely will have a much easier time of things: for many services, it's easy to just keep running things in the US for a while, and worry about having physical or legal infrastructure abroad later.  Your service might not be quite as snappy as it may be with a local server, but it'll do, if it performs a useful function.  Compare that with a more traditional business where you might have to do something like open a factory abroad, or at the very least figure out the details of how to ship physical products abroad and sell them, and do so in a way that you're somewhat insured against the large array of things that could go wrong between sending your products on their merry way, and someone buying them in Oslo, Lisbon or Prague.

Since this barrier to entry is lower, it makes more sense to climb over it earlier on.  As an example, Linode recently did a deal to provide VPS services from a London data center, to make their service more attractive to European customers. 

However, they still don't appear have marketing materials translated into various languages, and presumably they don't have support staff capable of speaking languages like Chinese, German or Russian either (well, at least not in an official capacity).  This isn't to pick on them; they may have considered those things and found them too much of an expense/distraction/hassle for the time being – they certainly know their business better than I do – and that they simply are content to make do with English.  Other businesses, however, may decide that a local touch is important to attracting clients.

What do you need to look at to make your service more attractive to people in other countries?  In no particular order:

  • Internationalization and localization.  Most computer people can "get by" in English, but perhaps their boss doing the purchasing doesn't.  If research shows that you are in a market where people value being able to obtain information in their own language, or interact with a site or service in it, make an effort to equip your code with the ability to handle languages other than English, and then pay to have your content translated.  Good, professional translations are not easy: for instance, when I translate to English from Italian (you always translate from the foreign language to your native language – anyone who doesn't isn't doing quality work) I read the Italian text, digest it, and then spit out an English version.  This doesn't mean just filling in English words for Italian, but looking at sentence length and structure, as well as translating idioms and cultural references into something that makes sense.  Basically, you read and understand the concepts and then rewrite the text, rather than simply taking each sentence and translating it.  Also, knowledge of the domain in question is important, so that you don't translate "mouse" to "topo", but leave it as "mouse" as is proper in Italian.
  • Part of internationalization is considering problems like time zones, currency, and names, which can vary a great deal from culture to culture.
  • Going a step further, you might consider hiring, or outsourcing, staff that is fluent in other languages to provide first-level support.  Reading English is one thing for many people; they can take the time to work out what one or two unfamiliar words mean.  However, if you have a problem with your server over the weekend, and you don't feel comfortable writing or calling someone to deal with a problem in English, you might consider purchasing a local service even if it's more expensive, because you can deal with people in your own language if the need should arise.  These people might either be local or remote, depending on what their role is.  For instance, Silicon Valley is 9 hours behind Central European Time, so when it's 9 AM here, and the business day is just getting started, everyone but the late-night coders in California is headed for bed, which means that it would be difficult to provide timely support unless you have someone working the late shift.  It may be easier to hire someone in Poland to support your Polish users than finding a Polish speaker in Silicon Valley who is willing to work from midnight to 9 AM.
  • Legal issues are not something I can give much advice on, but things like the privacy of people's data certainly bear considering.   If you don't actually have offices abroad, though, it's less likely that anything untoward will likely happen to you if users understand that they're using the service in question according to the laws and regulations of the jurisdiction your business resides in.  Once again though: I'm not a lawyer.
  • Even something as basic as your name needs to be carefully thought through.  "Sega" for instance, has a potentially rude meaning in Italian.  These guys are visible from a major road near Treviso: http://www.fartneongroup.com/ – doubtless the company was founded locally and subsequently grew to the point where they then learned of their unfortunate name in English (admittedly though, it does make them potentially more memorable than their competitors).

There's certainly no lack of work there, but on the other hand, it's possible to do almost all of it from wherever you happen to be located, rather than spending lots of money and time flying around to remote corners of the globe, as is still common practice in many industries.

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