… and Satyam imploded last week

While not HPC related, we live in a non-ivory tower world. Satyam is one of the large Indian outsourcing firms. Last week, the founding brothers admitted to serious irregularities and fraud. This week the Indian government is moving swiftly to try to contain the damage.

The relation to HPC comes through other Indian outsourcing providers such as Tata and Wipro, both of whom have HPC efforts underway. This scandal should not impact them, though it could partially undermine confidence in this business model.

I note, without pleasure, that fraud can occur at any size enterprise. Moreover, as seen at MCI/Worldcom, Enron, and Wall Street, it can and does take down big companies in a hurry. The impact upon HPC will be felt in the business models for outsourcing computing overseas … what do Satyam’s customers, now with their private business records exposed for investigators to pour over, think of their security now? This has been one of the major problems in any outsourced model, in that you must trust the remote organization to do the right thing by you and your data. This scandal demonstrates that this trust needs to be verifiable.

In this case, I saw early indications that the Indian government was laying the fault on PwC. I am not sure if this is the case now, but it seemed to be the case on saturday when I first read of it.

Satyam is being called the “Enron” of India. Hopefully not as bad as Enron, but real people and companies lost lots of money with them, and lots of trust of this model as a result. It won’t help HPC, it is going to hurt the nascent cloud efforts as the arguments against cloud are the sort of nightmare scenarios now being realized in fact for this situation.

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