Would you outsource your data center to Baghdad?

As I am writing this, US Marines and Iraqi troops are engaged in pacification operations (the nice word for "blowing the snot out of any resistance") in the Iraqi town of Falluja. Perhaps by the time you read this Iraq will be a peaceful, stable democracy that offers a great climate for business, so this editorial might go out of date fairly quickly. Somehow, unfortunately, I doubt it. I suspect the climate for business in Iraq is going to be poor for the next few years, at least. So, mister CTO - would you outsource your data center to Baghdad?

I'm joking, of course. No CTO in their right mind would outsource mission critical services to an area that's politically unstable, and that's under the constant threat of political, religious, or ethnic violence. I wouldn't want to be the executive that disclosed under "Risk Factors" that the core of my business was located in an area where it might just get blown up - the shareholders would ask some pointed questions. So what about outsourcing to India? I have absolutely no grudge against the citizens of that fine distant land, but it's important to point out that India has been in a nuclear stand-off with Pakistan for the last decade. In 2002, India and Pakistan were at the brink of war twice; they had the missiles fuelled and the crews standing by the launch buttons. They were not clowning around. In 2003, thousands of people were killed in muslim / hindu riots in northwest India. Riots in which thousands of people are killed are not small riots; to get casualty figures like that you need to have tens or hundreds of thousands of people participating in the disturbance. This is not your casual bar-room brawl; it would make Belfast in the 80's look like a cotillion by comparison. Over 30,000 lives are known to have been lost in cross-border fighting over Kashmir. Actual losses are probably much higher, but nobody counts the Kashmiris. Kashmir's a beautiful mountainous region that's claimed by both Pakistan and India, where both parties periodically exchange heavy artillery fire. Obviously, the data centers are not located in the path of the 105mm high explosive rounds - they're about 600 miles southeast where it's a whole lot safer. But, depending on whose casualty figures you prefer to believe, parts of India in the last 5 years have been much more dangerous than Iraq. Iraq, at this time, has nobody targeting nuclear weapons at it.

Data centers don't hold up very well to the Electro-Magnetic Pulse (EMP) of nuclear weapons. Or, at least, that's the current thinking. During the cold war, many DOD systems were "hardened" against the projected pulse of electricity that results from a nuclear burst. We never got to find out if it was necessary or worked, but maybe we will if India and Pakistan decide to take their argument to a higher court. According to declassified estimates, India has between 40 and 70 warheads while Pakistan has between 35 and 60 warheads. Pakistani medium-range ballistic missiles are capable of reaching any area within India - including the large population centers where all the data centers are located. Gujarat, where many call centers are located, has almost certainly got its name on a warhead. So, Mr CTO, will your data/call center be disintegrated in the fireball, flattened by the overpressure, or just EMP'd into slag? At a certain point, it doesn't really matter: downtime is downtime, right?

Pakistan's conventional army is not as large or as professional as India's; most scenarios involving an escalated conflict don't show the Pakistanis lasting very long against a significant offensive. The Pakistani regime, a slightly-sanitized military dictatorship, has made it clear that their nuclear arsenal was desirable because of its deterrent value in the event they were going to lose a war with India. In response, India has developed an impressive first-strike capability to pre-empt a Pakistani nuclear venture. Growing up during the cold war, as I did, I was always interested in the dynamics of mutual assured destruction and the problem of maintaining a nuclear standoff; I've spent a lot of time studying how you achieve a stable balance of terror. It's actually a hard problem - both sides need to be convinced that they cannot win an exchange and that the other side knows it. Destabilizing technologies need to be carefully factored in, and you need to worry that at any time one party or the other might believe they have enough of an edge that they can try something. Cold war threats of mutual destruction became a carefully choreographed dance in which balance was everything and a scared kind of stability was the result. The situation between India and Pakistan, however, is nowhere near as stable as Europe in the 1970's. India has contingency plans they believe would allow a successful unilateral strike - and Pakistan knows they'd have to strike first to survive. In 2002, a few diplomatic mis-steps would have been sufficient to make South Africa the new world hub of outsourcing.

India has been, until recently, the largest target of terrorism on earth. Our friends, the Pakistanis (motto: "Now we're on the side of the good guys!") were one of the primary instigators/funders of many of the terrorist groups in India. A cynic might say that one of the greatest successes in the war on terrorism was getting the Pakistanis to stop (or at least be more circumspect).

Some numbers help us understand better:

Year # of Incidents Killed
1988 390 31
1989 2,154 92
1990 3,905 1,177
1991 3,122 1,393
1992 4,971 1,909
1993 4,457 2,567
1994 4,584 2,899
1995 4,479 2,796
1996 4,224 3,122
1997 3,004 2,477
1998 2,993 2,327
1999 2,938 2,632

(source: Ministry of Home Affairs, Government of India, Goverment of Jammu and Kashmir
as referenced in "Combating Terrorism, Strategies of Ten Countries" by Yonah Alexander, editor, 2002)

Note the statistics above are people killed - wounded and other casualties are much higher, but are not reliably reported.

This is one of those cases where I really hope I'm just being a crazy paranoid. It's entirely possible that the central/east asian land mass will remain peaceful, and that globalization will build economic ties that make warfare such bad business that it goes out of style. But - speaking of bad business - what kind of lousy businessman would relocate mission critical business processes into the one area on Earth (including the Korean peninsula) that is most likely to explode into warfare? What kind of morons do they turn out in business schools, anyway?

Marriott Hotel, Albuquerque, NM. Nov 11, 2004