The “International Telecoms Week” annual meeting brings together 5,000 delegates from over 1,700 companies. Held this year from 14-16 May in Chicago, it is THE principle event for the wholesale telecommunications community. Why is it important for TERALINK and P&TLuxembourg that I attend? The number one reason is that I will meet with many of our current partners who enable us to provide voice and data connectivity to over 250 countries and territories. I’ll reinforce our relationships and, in some cases, renegotiate contracts. I’ll also look for new partners who may provide additional services or offer more competitive prices. This way, I can be sure that our clients will be served with highly reliable redundant connections to anywhere they want to go – at a very competitive price.

The ITW event is also the place to find out everything I need to know about emerging technologies and industry trends. My goal is to maintain our position as a technology leader that provides state-of-the-art services for the Cloud, Ethernet transport, video broadcasting, and layer 2 or layer 3 VPN connectivity – an essential service for our financial sector clients. We currently have important advantages when it comes to security, availability, real-time traffic, low latency and more. And at ITW, I’ll learn what I need to know to be sure we remain at the forefront.

This event also gives P&TLuxembourg an opportunity to build the awareness within other telecoms that we provide 100% coverage for Luxembourg. We will also be able to highlight the strengths of the TERALINK network, with its 4000km trans-European fiber optic network and13 PoPs in 6 EU countries that are connected by redundant routes on different paths. We’ll also feature TERALINK’s leading technology, which includes reconfigurable optical add-drop multiplexers (ROADM) and a network that is 40 Gbit/s ready (4.4 Tbit/s).

It will be a whirlwind couple of days, but I’ll come back energized to put into action the new agreements and information I’ve gathered. If you have any comments, I’d enjoy hearing from you.

I lead the team that designed, implemented and currently maintains a video transport solution for the European Commission that serves as an excellent example. The commission runs an audio-visual service that covers all EU institutions. They have 2 channels that broadcast summits, conferences and more in 32 languages throughout Europe and North Africa. Much of it is live TV. The video content is aggregated from many feeds and edited in a studio in Brussels.

Our role is to provide one direct, live connection from Luxembourg to Brussels, then transport the final signal to a teleport in Rembouillet, France where Eutelsat provides the satellite uplink. To ensure continuous capability, each link is redundant, and we even provide back-up satellite service through the P&TLuxembourg teleport.

The Commission put out an RFP to find one IP transit provider that would be responsible for the entire project. It stated simply that the vendor was to receive video signal on one end to deliver video output on the other side. They didn’t specify how it was to be transported or what technology should be used.

So we engineered a comprehensive, redundant, one-stop-shop solution that met these criteria. We now get the video signal, encode it, transform it, transport it through our network or at the IP level, decode it and then enable the uplink and broadcast. It starts in Luxembourg, where we use EMPEG4 technology to encode the 16-channel video feed. After decoding it in Brussels, the audio
is added and it becomes a 32-channel feed that is encoded and transported to Rembouillet, where it is decoded and configured for satellite uplink.

I believe we won this contract for several reasons. First, thanks TERALINK, we kept transport costs low because it is accomplished primarily within our own high speed broadband network. Second, our engineering team did an outstanding job in designing a technical solution that uses best-of-breed components to maintain quality and minimize bandwidth requirements. And finally,
we have an excellent relationship with our sub-contractor Eutelsat that makes service integration proceed smoothly and quickly.

We also built an interface in Brussels so we can monitor system performance in real-time. We installed a monitoring screen that shows both the video feed and audio matrix. We designed it, chose the equipment, installed and configured the interface, and perform monitoring services.

The time pressure to implement the system was intense, and we were able to get it up and running in 6 weeks. It is now operating flawlessly.

It is a pleasure working with the European Commission. I hope this example has given you some ideas of how you can simplify data transport and reduce costs.


Before SeeZam.com launched in April 2010, we had to consider a few major factors when deciding whether to rely on Cloud technologies: cost, security, and the provider’s technical expertise and support. We concluded that Cloud Services would enable us to conduct our business in the best way possible.


We first weighed the cost-efficiency of Cloud technologies. We knew we didn’t want to buy our own servers or pay for a place for them. We also wanted to be able to expand as needed. This made Cloud Computing ideal for us.  We didn’t have to use our capital for hardware. Also, SeeZam actually uses less storage space than you would think. Because our virtual safe deposit box only locks up your most sensitive information (e.g., passwords, insurance documents) and not large files containing multimedia or all the family photos, we don’t require much volume. With the Virtual Private Cloud, we didn’t have to worry about getting too much storage space we wouldn’t need. However, we also need to allow our customers the opportunity to quickly and easily increase their capacity. Cloud Computing gives us flexibility and scalability unmatched by any other technology. 

Because security is at the heart of our business, we could not move forward without knowing any information that went into the Virtual Private Cloud remained safe.  SeeZam developed the application server, integrated the user authentication systems, and created database elements that we then deployed on a P&TLuxembourg platform.  They then helped secure the entry points. Whatever the customer account, not even SeeZam can decrypt the information stored in the e-vault.

We located SeeZam in Luxembourg because it alone within Europe has key attributes that allow us to provide the highest level of security available. First, Luxembourg law states that there is no limit on the level of encryption. This way we are able to provide military level encryption without government approval. Second, we have no obligation to keep the client encryption key. This gives our clients absolute confidence that our administrators can never view their data. And finally, by working with P&T Luxembourg, our Cloud service remains entirely in Luxembourg within the control of one provider. There are no sub-contractors, which means the Cloud is not dispersed.

It is important that our customers know that the Virtual Private Cloud is completely secure. And because the data is stored with only one government-backed trusted provider, P&TLuxembourg, continuity of service is guaranteed over time.

Also, the Virtual Private Cloud infrastructure is redundant. Mohamed Ourdane, the CTO for Cloud Computing at P&TLuxembourg, explained to us, “The systems and data can be found on more than one site and can migrate from one site to another transparently. This optimizes business disaster recovery plans.”


Finally, we had to be able to have faith that P&TLuxembourg would be able to provide the promised services. They’ve proven we can rely on their support should any problems arise, we also have a strong SLA with operational guarantees and finally we consider that P&TLuxembourg’s long history is a guarantee for their reliability and for their stability.


As a new company, Cloud Computing made sense in every aspect. We only pay for the hardware and storage we need. Our virtual safe cannot be breached. We can rely on P&TLuxembourg’s technical support. From our experience, their Virtual Private Cloud is an effective solution for e-business hosting in Europe, and we plan to stay with this model as our business grows.

I’ll start by giving you an example that came to light during the event. Volkswagen is now using the RMB as their currency for conducting all Chinese transactions and for holding profits generated by their operations in Mainland China. This implies partnership. This shift means that traditional safe havens like the Dollar and the Euro are no longer the only option.

In the opinion of Mr. Patrick Casters, Head of Private Banking International for BIL, “this will mean a diminishing of importance to the Dollar and Euro over time – but that is to be seen as a natural thing and not necessarily negative.”

When doing business with China, using China’s currency means less hassle and headaches when dealing with transaction costs. When 85% of all transactions in China are now being settled with the RMB, it will become increasingly important for a European company or fund to be comfortable conducting business in the Chinese currency. And it is here that Luxembourg’s currency expertise is very important.

It will also be of vital concern to European-based business that it has banking, financial services and telecom providers that are comfortable advising and working within the Chinese system. That’s why the Luxembourg financial community has developed close ties with China’s banks and markets, and why TERALINK has essential partnerships with China Telecom and local business
leaders. Our overriding goal is to enable effective, profitable European-Chinese business.

In a statement that is reassuring for European businesses, Mr. Jian Xue, Bank of China’s Corporate Banking Manager in Luxembourg, stressed that the rule of law and anti-money laundering regulatory commissions are as effective in China as they are here. This ensures a transparent and healthy financial system that is easily understood by vastly different cultures.

One of the conference’s most interesting discussions was about how Europe can remain competitive and vital in this changing landscape. “Europe has an enormous amount to offer,” Mr. Casters explained. ‘We have an extraordinary culture to exchange with the Chinese. We are the visionaries, engineers and owners behind such world class brands as Porsche, Channel and Burberry – just to name a few.” I would, of course add, that it has Internet technology, datacenter experience and cloud services that are world class.

I firmly believe that ideas happen before trade happens. Currency is the major idea behind international cooperation in matters relating to trade. Once both sides utilize the currency, trade will inevitably follow.

There are a lot of reasons to follow the development of the ebooks market in Europe. First, let´s look at the consumers. Almost overnight, the ebook option has captured the attention of consumers in Europe. But it is not yet possible to speak of a “European” e.book trend as reading habits differ from country to country (as does tax policy with regard to the VAT treatment of books – more on that later). Ebooks may put pressure on these differences as commercial platforms to market and sell books across Europe are emerging quickly. Take Germany, for example, where I have been a consumer in the retail book market for many years. According to a recent issue of Der Spiegel, ebooks account for “only” 2% of the market of new book sales. This is compared to recent figures which put ebooks at 20% of the US market and, as everyone knows, growing quickly.

Is the German market resistant to ebooks? Only temporarily, if at all. Recently, I had the opportunity to visit Berlin, Munich and Hamburg. I had the chance to use public transportation in each city during normal working hours. In all three cities I noticed a not insignificant number of passengers reading physical books. Few riders were using multimedia devices and from my vantage point, those that did were not using them to read an ebook.

In Munich, I went to my favorite retail bookstore on the Marienplatz with no less than 5 floors of books (I still prefer the conventional book store experience of browsing, in particular, thick and expensive reference books on subjects like EU treaty law). It was 11.00 on a Friday morning and the store´s reading corners and café were full of customers.

In Germany there is still a very strong physical book culture. RTL reported last December that (physical) books were the most popular Christmas gift – by the givers. The retail and second hand bookstores I have visited over the years in towns like Hamburg, Würzburg, Speyer, and Bremen are still there. Bookstores have embraced the internet as a wonderful source of sales of physical books, new and second hand. But the question is not whether the German ebook consumer market will catch up to the US benchmark of 20%, but when. As ebooks sales accelerate, the pressure on conventional bookstores will increase, also in Germany, just as it has in the US.

If Germany is my idea of a paradise on earth for bibliophiles, then Luxembourg may be considered as the paradise for e.book suppliers. This year, it decided to grant its 3% VAT rate for sales of physical books to sales of ebooks, wherever the retail consumer is located in the EU, provided of course that the seller´s business is established in Luxembourg. Notwithstanding the inconsistent positions on this issue in other Member States (France being the only other Member State to date applying its 7% rate to ebooks sold from France), Luxembourg businesses can rely on this favorable taxation when managing their pricing models and VAT obligations. The parameters for ebook retail prices are still in flux but at least Luxembourg suppliers will not have to worry about any volatility in VAT rates on their sales for now, as there will be no pressure in Luxembourg to increase the 3% rate. Interested suppliers will merely need to be well-versed in EU law on what constitutes a business for VAT purposes and that should include, in Luxembourg, the necessary “human and technical resources” which are needed to run such a business. Given the virtual nature of the purchase and supply of ebooks, a local data center presence can be a very nice element of those local resources. That is indeed only one of the strengths of Luxembourg as a leader in Europe in the internet economies, as validated this week in a study from the Boston Consulting Group (a topic for a future blog).

I spoke with Mr. Xue at a conference sponsored by the Chinese Luxembourg Chamber of Commerce (ChinaLux) entitled: “RMB: A New Opportunity for Luxembourg.”

‘What this means,’ Mr. Xue went on to say, ‘Is that China is opening up its capital, in its own currency, mind you, to overseas markets for the first time.’ And as of recently, not just a select group of approved, largely government-owned Chinese companies can send money abroad. All Chinese companies can.

Why is that significant? ‘It means we are not using the Dollar or the Euro, anymore, as our sole currency for global trade. And that we are offering that money up, also, as capital for others to invest in world capital markets,’ Mr. Xue explained. And lending money equates to exerting influence.

To give you an idea of what’s at stake, this is what I’ve learned: China’s investments into European companies grew five times since 2009, totaling 6.7 Billion USD by the close of 2011. Furthermore, that figure is set to triple by 2015. It also means that countries other than China will be using Chinese currency – called the Renmimbi (RMB) – in their financial centers.

It is ‘what we call the Dim Sum effect,’ Mr. Xue said. ‘This is a financial instrument from Hong Kong that is part of a steady flow of smaller investments that eventually add up to quite a feast.’

This ChinaLux event was hosted at the Banque Internationale à Luxembourg’s (BIL) headquarters. The speakers were introduced by Mr. Michel Maricau, Vice-Chairman of ChinaLux, and the Chinese Ambassador to Luxembourg, His Excellency, Xianqi Zeng, who reminded us to ‘pay attention’. And everyone did, since China’s economy is the second largest globally and is now everyone’s ‘growth locomotive’.

Though primarily finance industry related, I thought the night would have big ramifications for Luxembourg business as a whole. As I hope you will see, it does. Accompanying Mr. Xue from the Bank of China, local experts Mr. Fernand Grulms, CEO of Luxembourg for Finance, and Mr. Patrick Casters, Head of Private Banking International for BIL, also spoke and participated in a rigorous Q&A about the significance of the RMB as an international trade currency.

One of the key points they discussed was that Chinese companies could now trade in international markets. And significantly, Luxembourg is one of only two places in Europe where a Chinese entrepreneur can list stocks in the RMB, establish a holding company in a foreign currency and remain tax efficient. This makes Luxembourg very attractive for Chinese businesses that want to enter the European marketplace. For online businesses there is the added advantage that they can utilize P&Ts outstanding datacenters, global Internet connectivity and cloud computing services.

This combination is particularly advantageous for companies in domains such as online gaming, media, e-commerce, communications and IT.

I’ve grown to appreciate Ambassador Zengs’s speaking engagements. I’ve noticed the Ambassador likes to emphasize a larger point through a humorous remark or subtle anecdote. To highlight this, in talking about the significance of the RMB’s arrival to world stature and what this will mean to Luxembourg as one of the first places to work with the Chinese currency, he said ‘If you are holding any Yuan issued in the years 1948 or 1987 (original years of issue), I would like to buy them back from you.’

While the money flow has been, primarily, one directional in the past three years, that is quickly set to change. This is a good thing for Luxembourg business. I’ll explain. Two days before the event, the Chinese Government radically altered its regulatory framework for companies looking to invest in offshore markets and expand their market share to attain a foreign presence. This means that Chinese entrepreneurs – and not just the government owned consortiums (cash-rich, state-owned industry) – will be able to invest in the wider global economy.

‘Majority shareholders in these wealthy Chinese companies have traditionally been government owned, but this is changing. Many of these companies are now publicly traded and anyone can invest in them,’ Mr. Xue told me. It also means that European funds can invest into mainland China and that regulatory bodies will have added muscle to ensure that transparency and fair play accompany this cross border growth.

This led Mr. Grulms from Luxembourg for Finance to say directly “there has never been a better time to plead the Luxembourg case.” He went on to say that already, nearly half of China’s investments in Europe are made through Luxembourg. But how are these financial regulations of importance to Luxembourg and Chinese companies?

Luxembourg is one of the few countries in the world in which a foreign company can set up a holding company in a foreign currency. Not only can Chinese companies invest in their own currency in Luxembourg, their entire system of business is compatible with our infrastructure. We have banks such as BIL, which is one of the first to trade in the RMB. We have excellent and long established tie-ups with traditional Chinese financial centers like Hong Kong and Singapore, not to mention awareness of the emerging players in Kyoto and Malaysia. As well, a Chinese entrepreneur based in Luxembourg can retain his profits in Luxembourg, which is tax efficient.

As Mr. Casters succinctly put: ‘What you can accomplish in Luxembourg in one day would take months in a major city like Paris.’

So, if you are, for example, the owner of a major Chinese online gaming company and are looking to diversify into Europe, Luxembourg is your ideal partner for reasons that include:

· Work in your own currency

· Find an offshore setting where exchange rates are priced differently than onshore banking

· Profit from the favorable Luxembourg tax, legal and regulatory advantages

·  Get complete high-bandwidth connectivity through TERALINK and a full range of data storage and telecom solutions from P&TLuxembourg.

To sum up, the Chinese Yuan (RMB) is the most under-valued currency in world trade and its stature is about to change. And that is the bigger point: It wasn’t just money that crossed borders that July 2009, it was currency.

China is cash-rich and reaching out from the core of its own financial system to our system. And this creates great opportunities for both China and Luxembourg. In a future blog, I’ll talk about what this means for Luxembourg companies that involved in doing business in China. As always, I welcome your comments!

So it is no wonder that Luxembourg Trade Offices are very active in countries where there is vibrant ICT activity, and where there is a mindset of entrepreneurial innovation. Israel certainly fits this description. That, and the highly skilled workforce, is why companies like HP, Microsoft and IBM have R&D operations there.

Recently, I travelled to Israel as part of an economic mission sponsored by the Luxembourg Ministry of the Economy. The Luxembourg Trade Office organized a well-attended conference that featured presentation by government officials and private sector companies Skype, IEE and Inverto TV. Not only was the content very relevant, but Luxembourg’s Minister of the Economy, Mr. Jeannot Krecké, also created quite a stir by announcing that 2 funds were being created to invest in innovative companies that set up their European headquarters in Luxembourg (see my previous blog about Israel).

The conference provided an excellent networking opportunity where I met many people who were particularly interested in learning more about TERALINK’s solutions related to cloud services and datacenters. And the next day, the Trade Office organized a “matchmaking” event that introduced me to many companies interested in the full range of telecom solutions we provide. I was also able to identify several companies with leading edge technologies that could interest our customers and augment TERALINK’s service offering. It was definitely a win/win event in ways I didn’t expect.

Of course, while there I set up a series of meetings with people I met in previous trips. I’m committed to maintaining an active presence in Israel, as there is a strong synergy between the Israeli spirit of innovation and Luxembourg’s business advantages as the “Gateway to Europe.”

Since the beginning of the year, virtually all of the major US e.commerce companies have announced changes to their respective privacy policies. A coincidence? Perhaps. One thing is for sure, with similar but far from identical public policy initiatives emanating from the EU and the US at about the same time, there is going to be even more focused debate on both sides of the Atlantic ocean on business and individual responsibility for managing personal data which is processed through the internet. In that respect, the initiatives are to be welcomed. In both jurisdictions, greater clarity, transparency and uniformity are needed for businesses and individuals regarding the legal status and processing of personal data online. These are the standards by which the legislative initiatives should be analyzed.

One major distinction is that the EU has introduced detailed legislation which could be approved in amended form by EU parliament before the end of this year. The EU legislation has been in the works for several years now and is an upgrade of data protection legislation which has been in place since 1995. The Obama initiative has been in the works for two years and follows chronologically the consumer privacy bill of rights act Congress introduced in 2011 but which has not yet been passed.

It is not known – yet – the extent to which the EU and US government experts consulted each other on these respective initiatives. If they have not been consulting, they should begin now. Certainly, the major US e.commerce companies are following closely the legislative developments on both sides of the Atlantic as the resulting laws will have a significant impact on how data is dealt with and the relationships between the data controllers, data subjects and the supervising governmental authorities.

The Obama administration´s Bill of Rights refers to “globally accepted privacy principles originally developed in the United States.” The reality is that the privacy rules in the US and the EU legislation may be similar in principle but will largely develop parallel within the respective EU and US legal frameworks (individual rulings, administrative guidance, case law and evolving legislation). This is not a bad thing as it reflects differences in the culture of privacy between societies, in this case the US and the EU, which should be respected. There will likely always be some differences which reflect the local history, culture and experience. However, harmonization of legal principles should be embraced where possible and this can only be achieved through greater interaction between the government decisionmakers in the US and the EU. Here the private sector can also play a valuable role in educating the decsionmakers, especially as to the practical impact of the various legislative proposals. For the private sector it can be a good investment of resources as the privacy revolution is just beginning but some of the major legislative initiatives on the table are on the verge of being enacted.

The US and EU can agree on at least one thing regarding data protection and that is the designation of January 28 as national/international privacy day. It´s a start. Why January 28? Well, that is the date of the first EU data protection convention (in 1981). Is it not appropriate for the EU Commission, 30 years on, to maintain the legislative initiative in this area?

On second thought, this is not just the year of internet privacy regulation, this will be the decade of internet privacy regulation. Depending on the level of interest, there may be future blogs devoted to specific sections of the US and EU initiatives. There is no lack of topics to debate.

——

Rick Minor is a lawyer with multi-jurisdictional, multi-disciplinary business strategic expertise. From 2002 to 2010, he was the General Manager of AOL Europe Services in Luxembourg, for a time the largest internet access services provider in Europe (based on number of paid subscribers). Currently he is Principal of Spitze Consulting, a digital policy think-tank and business consultancy for the public and private sectors. He created the concept of “EBT services”© (for electronic, broadcasting and telecommunications) to describe the services sector which has become so important to the Luxembourg economy and, indeed, for those companies doing business in the European Union.

This cost-effective model is made possible by “virtualisation” and “mutualisation.” Virtualisation implies simply that your data and assets reside in a server or servers that you do not own. It is not an objective in itself, but is a means to create flexibility and agility. Networks and storage are shared in a trusted, secure, segmented way. In addition, other assets and processes are shared, as are the people who manage the entire environment. I call this “mutualisation.” By sharing the IT infrastructure and resources, great cost saving is achieved. CAPEX is essentially eliminated. And, even though this may be counter-intuitive, it is often more secure than having servers in your basement. In current jargon, this is also known as “Infrastructure as a Service.”

Naturally, it follows that cloud services should include software as well. In a virtual environment, operating systems, security software and much more can be shared, offered or implemented upon request by a cloud service provider. This is “Software as a Service.”

The latest trend is to provide an eco-systemic approach, where trusted partners work with the cloud service provider to deliver complete systems, from ERP to CRM to email. For example, P&TLuxembourg has a network of trusted partners, and can offer “Infrastructure as a Service” and “Software as a Service” solutions in a layered approach, with service levels that fit the maturity and the needs of our customers.

When trusted partners provide Software as a Service – they inevitably go beyond just providing software. They do the consulting and implementation. This highlights a great advantage of the cloud: multiple vendors are managed, integrated and synchonised by one responsible entity, the cloud service provider. There is one contract, one service provider responsible for project management and the final outcome – and a company receives a comprehensive solution for less money with much less hassle. P&T provides what can be emphasized as a “Glocal solution”: a global answer for local needs and a local solution for global requirements.

At P&TLuxembourg, we call this “Business as a Service.” We evaluate a company’s needs and make recommendations for complete solutions. Then we take end-to-end responsibility. At the end of the day, our goal is to provide cloud services that add real business value.

WorldHostingDays 2012 takes place from 20-23 March. Along with the exhibition, each day there will be speeches from well-known people in the “main.FORUM.” . Over the noon hour, you’ll find “speed.SESSIONs,” where companies have 10 minutes to introduce their new solutions and products. Then, later in the afternoon, you can attend “hosting.SESSIONS,” choosing from a variety of tracks that cover everything from the next generation storage platform to hosting automation. Don’t miss the session hosted by ebrc, our subsidiary, on their tailor-made, personalized and locally based hosting solutions. If you are part of the “Clouderati,” on Thursday 22 March you can attend “Cloud Camp,” an insider’s conference with a fluid agenda that features open discussions and then turns into a networking event with no hard stop.

Now the best part of what I have to tell you: TERALINK would like to invite you to be our guest!

Register now for free entry (save €349) by going to this link and entering this special code: M914JG89. http://www.worldhostingdays.com/eng/visitors-registration.php

I’d also like to point out a presentation of special interest. Luxembourg for Business Senior Advisor Peter Sodermans will talk about “Hosting & Online Gaming: the do’s and don’ts.” TERALINK and Luxembourg offer many services and advantages, from world-class datacenters to high-speed fibre networks, that make the country the best choice for online gaming companies that want to penetrate the European market. You’ll certainly find me at this presentation, which starts on Tuesday 20 March at 14:10.

I hope you take advantage of our invitation! And if you go, be sure to stop by the P&TLuxembourg booth and learn more about our Virtual Private Cloud. We’ll show you how our cloud services can add real value to your business.

Click here to visit the WHD website.