Is Private Cloud the Next Frontier

Business Models

Looking at the state of Cloud Computing from 2006 to 2012, it is interesting to see how different companies modified their postures in the ecosystem.

Amazon has leveraged its data center operational know-how and turned it into a new line of business that is expected to generate north of $1.5 billion in revenue. This is one of the few instances where a big-bang approach for a brand new market that had worked.

Take Salesforce.com, on the other hand, it has focused on creating user stickiness by creating platforms where other vendors can participate in its ecosystem. Instead of jumping into an unrelated business, like Amazon, it has stayed closed with what it knows. And, I can only speculate that the fact that Oracle is breathing down its neck is helping them focus.

For those more "conventional" players, Rackspace had probably done the most in reinventing itself. It not only cobbled together a Cloud OS that is meant to offer Amazon like capabilities, gave it up as an open source project, then wanted to turn its business into managing other companies' data centers (running OpenStack). This is interesting in two respects. One is that it seems to acknowledge Amazon's dominance in public cloud. At the same time, by offering operational management services, Rackspace seems to be betting on its ability to offer differentiated solution that cannot be easily copied by Amazon (who by definition will focus on standardizing their offerings to maximize operational efficiency.)

As for the VCE crowd, with the large data center operators - Amazon, Google, Facebook, etc. - all opting to buy directly from the component makers given their massive scale, the combined VMWare, Cisco, and EMC offer is impressive. With a single stroke, it allows these companies to tap into each other's install base while minimize the complexity and overhead of creating customized solution for each deployment.

Private Cloud

Taking a step back, however. The industry dynamics also seem to be shifting. Amazon has effectively dominated the Public Cloud arena. Amazon will continue to improve its service and coverage along with the bevy of new companies that rely on its infrastructure, like DropBox. Similar to utility, it is unlikely that anyone can take on Amazon at this point.

At the same time, the implicit strategies for companies like Rackspace and VCE is to shift their focus to private cloud. Private Cloud has two advantage from those offered by Amazon. One is that it is (somewhat) customized to each deployment which increases its switching cost. The other is that private cloud users, by the fact that they wanted their own cloud and can pay for it, are less price sensitive and are willing to pay for value-added services.

Cloud Computing circa 2012

Fast forward five (5) years

At the beginning of 2012, things have changed in the Cloud land. Amazon's strategy of offering Cloud Computing for a rental fee turns into a viable business. More importantly, being offered as an utility, it has become the dominant and de facto public Cloud of today.

MSP Players (Newbies)

Of the Cloud MSP companies, Google and Salesforce.com are worth noting.

For Google, it is interesting to note that while it attempted to offer an alternate solution to Amazon through Google Engine, it never quite caught on. Some have cited Google's insistence on using Python and other tools that are already supported by its infrastructure whereas Amazon let's install whatever you want for a fee. I do think there is also the fear that Google being seen as an engineering house as oppose to Amazon as a retail outfit is likely to be "inspired" and offer a similar product when a Cloud solution has turned out to be successful on the Google platform.

Salesforce.com, on the other hand, stayed focused on what they do. And, in the spirit of MSP, open up a set of API and created platforms for other vendors to participate in their eco-system.

Incumbents

I can only assume that Rackspace was shocked to find one of the biggest online retailer has decided to invade its business. On the other hand, one also has to give Rackspace credit for coming up with its OpenStack solution that has garnered quite a bit of marketing momentum.

For VMware, Cisco, and EMC, the answer is VCE where an integrated solution with VM, servers, switches, and storage from these companies are ready for the users.

Cloud Computing circa 2006

The newbies

In the beginning, there are data centers run by Amazon who need the capacity to handle the rush of Cyber Monday. Google, Salesforce.com, Netflix, and Facebook too are busy tuning their data centers to their own needs.

Dropbox, who will build on Amazon's Cloud infrastructure, is but a glimmer in the founder's eye and won't get started until 2007

The incumbents

VMWare, Cisco, and EMC are busy minding their enterprise business. Rackspace too focuses on providing fanatical support to enterprise users.

Blame it on EC2

Then, somebody at Amazon come to the idea that maybe it would be nice to monetize the "excess" data center capacity for most of the year outside of the Cyber Monday rush. So, the experiment, aka beta, of renting out computing resources from existing data center through services like EC2 and S3 were born.

The mad scramble for Cloud Computing thus have begun.

Cloud Computing Ecosystem - Follow the Money

For those who are studying Cloud Computing as an economic system, a more meaningful stratification is probably through its value chain. In particular, I parse them into four (4) categories: Hardware, Software (Operating Systems), Operations, and Services.

Hardware: Admittedly a major allure of Cloud Computing is to render hardware a secondary consideration as commodities. On the other hand, as its fundamental building block, there is no Cloud Computing without hardware. And, given the relative youth of Cloud Computing as an industry, it is hubris to say that hardware is no longer matters. As a matter of a fact, this is one of the competitive advantages if you know what you are doing.

An example of the hardware player is EMC who provides enterprise-class storage solutions.

Software (Operating Systems): I often get asked what is meant by Cloud OS, is it like Windows or Linux? If you think of a Cloud Computing data center as a macro-computer – a warehouse-size computer with a lot of computing, storage, and network/communication capabilities – the ability to orchestrate this macro-computer is indeed an OS (operating system).

An example of the software player is VMWare who provides virtualization software which is a key aspect of multiplexing using Cloud Computing.

Operation: Tedious it may seem, but feeding and caring of the Cloud Computing data centers is as much of an art as it is science. This is an area of tremendous innovation as different operators are competing on different dimensions to meet Cloud consumers's myriad needs.

Amazon is the undisputed operator today. Also worth watching would be Rackspace who has argued that its focus is to provide on-going operator know-how.

Services: this is probably the most visible manifestation of Cloud Computing. From the early success of Salesforce.com to the many Cloud firms that Oracle is snapping up, these are the end-user facing public-face of this eco-systems.

Beyond Salesforce.com, both Netflix and Dropbox are good example of companies that are "pure" Cloud player where they could not exist without the underlying Cloud operator, software, and hardware.

IaaS, PaaS, SaaS be Gone - Cloud Computing at Cocktail Parties

Given my current focus on Cloud Computing, I often get asked to give a 15 second description of Cloud Computing. This got me thinking, why is Cloud Computing so confusing to many a intelligent persons lay and pros alike?

Are the terms IaaS (Infrastructure as a Service), PaaS (Platform as a Service), and SaaS (Software as a Service) familiar? If you are reading this, I suspect that you have an inkling and may even have a specific take on this Cloud Computing stack. But, how useful are the descriptors IaaS, PaaS, and SaaS if you are not building/selling one of these XaaS?

This is what I say to people over cocktails on Cloud Computing. It is a way to do IT at lower cost with the same or better features. It is sort of like when PC unlocks computing to the mere business analysts or internet unlocks electronic communication to mom and dad. It is a big deal precisely because it "could" be pervasive.

Chin-Chin!

Infrastructure is still Where It is at Today

Amazon's "Other" revenue

The official number is not available. But, as the biggest public Cloud infrastructure
provider, it is a topic of intense speculation. Here is a credible analysis: AWS is worth approximately $1 billion with a 100% compound annual growth rate (CAGR).

Step 1 in Rackspace's OpenStack masterplan: Private Edition

As described by Rackspace's CTO, OpenStack is a way for it to offer its Cloud management services. So, it is not a surprise to see Rackspace Cloud: Private Edition being offers through partners such as Equinix, OpsCode, RightScale, Cisco and Dell.

What would be equally interesting to find out is how would be the revenue and workload be shared.

SME is the game

I often have to remind myself that technology too is its own bubble. As compelling as Cloud Cloud could be, it is important to see if the rest of the world sees the same value.

So, it is a good thing to see that BestBuy is responding to competitive pressure by bulking up on the Cloud front. Its plan, according to the report, is to provide a richer offer to its SME customers because its showroom has become a retail extension for retail buyers looking to buy at Amazon. (Gulp! That really sucks for BestBuy.)

New biz-model through the Cloud

Instead of the time honored perpetual seat license of the package software, Cloud promises on-going recurring revenue through subscription to vendors. That is the good news, potentially larger total revenue over time. What is not obvious to me as claimed by the Wharton analysis is that Cloud would enable a more diverse ecosystem with many more smaller players.

It is true that, at its current stage of development, most of the Cloud players are small relative to its on-premise peer and most of them compete by collaborating with other smaller vendors. But, this feels like a transition than a new state of things. After all, there is nothing particularly anti-monopolistic about a subscription biz-model. If anything, it would probably enhances the winner takes all model.


Related entries:

* An estimates on how much revenue AWS is taking in this year http://cloudscaling.com/blog/cloud-computing/amzn-other-revenue-in-2011

* Rackspace Cloud: Private Edition: http://www.datacenterknowledge.com/archives/2011/11/10/rackspace-launches-openstack-private-cloud/

* BestBuy's $167 million Cloud strategy: http://www.fiercetelecom.com/story/cloud-service-acquisitions-gain-momentum-and-everyones-jumping-board/2011-11-09?utm_medium=nl&utm_source=internal

* Cloud's new pricing model: http://knowledge.wharton.upenn.edu/article.cfm?articleid=2872

Giving a Talk at a Cloud Seminar

Cloud Seminar

I will give a talk on Cloud Computing at a Cloud Seminar. I aim to provide perspectives on both technical and business needs in an Asian context. The idea is to talk about Cloud Computing beyond what is being discussed in North America and the potential paths and shapes that it could take in Asia.

Details

Taipei Regent Hotel (台北晶華酒店三樓宴會廳)
Nov. 22, 2011 (Tue.)

This is an invitation-only forum. Please let me know if you are interested in attending.

SAP vs NetSuite - Enterprise SaaS Players Face Off

SAP

This is what SAP is making the argument for these days. Although these relate more to buseinss needs, Cloud Computing plays an important role as a technology platform.

HANA, the high performance application appliance, aggregates all the information in main memory and creates a platform where SAP users can apply BI (business intelligence) techniques to come up with answer that goes across different functions. For example, what impact does higher petro price has on my earning as my large vs small car mix shifts.

SAP Cloud include Business ByDesign which has 1,000 installs this year. Business ByDesign aims to provide the on-promise SAP capabilities for small- and mid-sized companies through the cloud. SAP is also launching Sales OnDemand which is similar to Facebook which helps the Sales process.

NetSuite

NetSuite is a pure-play Cloud player who competes against the likes of SAP. The basic argument that NetSuite makes is that its customers have gotten bigger and bigger because they want to run their expensive enterprise resource planning (ERP) software cheaper in the cloud than in their own data centers and do it better.

SuiteCloud is NetSuite's platform that allows other vendors to participate in its ecosystem. For example, Box.net provides file storage and collaboration and SuccessFactors provides human capital management solutions for NetSuite customers.

The trouble is that on-premise software costs about 2 percent of revenue getting it running and keeping it running in the filed. At a business model level, it becomes a competitive disadvantage. While improving the cost model gets you that 2 percent back, but the real payoff comes from the productivity gains because you can do things differently.

My take

SAP's Business byDesign was launched a while back and withdrawn. It is not clear from the reporting that if there is any meaningful change to its new Cloud incarnation. More importantly, the potential for cannibalization was not addressed in light of the fact that the enterprise world is getting more comfortable with Cloud Computing.

It is interesting to contemplate NetSuite's platform. It clearly needs to build a robust ecosystem so that it provides a full suite of solutions to its install base without overstretch its resources in different directions. On the other hand, it is also not obvious to me that the role of integrating these services cannot be better fulfilled by SI (system integrator) who has more vertical/customer insight.

The overall new is good. Enterprises are, if implicitly, endorsing the push toward Cloud solutions despite the initial misgivings on issues such as security. It would be most interesting to monitor what Cloud "synergy" is possible as claimed by NetSuite.

Related entries:

* Bill McDermott, SAP Co-CEO, on Cloud http://allthingsd.com/20111031/seven-questions-for-sap-co-ceo-bill-mcdermott/?mod=mailchimp

* Zach Nelson, NetSuite CEO, on Cloud and SAP's Cloud http://allthingsd.com/20111103/netsuite-sales-surge-making-for-a-good-day-in-the-cloud/?mod=mailchimp

First Operational OpenStack Computing Cloud

Open Public Cloud by Internap

A status check on the rush to set up Clouds based on OpenStack. Below are some highlights as reported

• Internap built Open Public Cloud Internap based on "Cactus"
• Open Public Cloud is based on Compute of OpenStack
• Additional efforts beyond OpenStack focused on integrating with other Internap products and custom features such as billing and security
• Internap's has three cloud services: Open Public Cloud, Custom Public Cloud and XIPCloud Storage
• Custom Public Cloud is a VMware-based environment for enterprise users
• XIPCloud Storage is a storage environment using the OpenStack ObjectStorage (Swift) - launched as beta in January and was made generally available over the summer.
• Internap's Storage was the first storage deployment using ObjectStorage outside of hosting provider Rackspace.
• Other vendors launching OpenStack-based cloud include Rackspace, Hewlett-Packard, Dell and DreamHost
• HP's OpenStack offering is currently in private beta.

Related entries

* Internap announces its Open Public Cloud based on OpenStack: http://www.eweek.com/c/a/Cloud-Computing/Internap-Launches-First-OpenStack-Public-Cloud-Service-772113/

Cloud Computing Explained - aka Kids Don't Lie

I have not heard of better explanations.



Related entries

* Kiran rockth! http://www.xconomy.com/seattle/2011/10/21/video-what-is-cloud-computing-anyway-these-kids-get-pretty-close/

Distruptions through Cloud

From $0 to $4 billion

It is the story that makes the Silicon Valley lore. Drew Houston not only founded the ubiquitous Dropbox that every other person is using, not only just got a B Round valuation of $4bn, not only turned down a cool $800 million buy-out offer two years prior, he turned down Steve Jobs.

Makes your knees feel just a tad weak, don't it!

And, for the record, DropBox could not have happened so rapidly without a solid Cloud backbone.

The Calculation

On the heel of my recent musing on the status of OpenStack, it is interesting to see how RackSpace CTO sees RackSpace's relationship to OpenStack as its unofficial guardian.

Apparently, the master plan to dominate the world involves widely deploying OpenStack whereby RackSpace can offer its consulting/management services. Seem reasonable enough, but it also seem to require quite a number of pieces to fall into the right place. More importantly, does this mean that RackSpace will take a more assertive role with OpenStack Foundation in the style of MySQL instead of Mozilla?

And I thought Cloud Computing is all about software

A final bit of noteworthy development. Given the relatively simple computational needs of Cloud Computing and its voracity for electric power, there is an arms race to create alternative chips and architecture away from the mainstream Intel x86 design. ARM chips are a favorite right now, but there are definitely chip shops working on other solutions to be followed by the infrastructure/support for the new chips and/or architecture.

Microsoft was disrupted by the internet as embodied by Google. Now, the other half of Wintel needs to watch out for the next disruption.

Related Entries

* Dropbox gets a $4bn valuation in B Round: https://plus.google.com/u/0/104462346399481715282/posts/P4bKc7cUX6y

* RackSpace's master plan for OpenStack: https://plus.google.com/u/0/104462346399481715282/posts/ZeRHQVheEQ8

* Simpler chips for Cloud computing: https://plus.google.com/u/0/104462346399481715282/posts/DFNx4V35xdm

OpenStack and Enterprise Applications

OpenStack

There are any number of Cloud related initiatives: Eucalyptus, Scalr, you name it. But, the "it" initiative these days is OpenStack.

Backed by RackSpace and a team from NASA, it is an open source effort that aims to create a complete Cloud Computing solution that is not encumbered by the VCE cartel (VMWare, Cisco, and EMC - in case you are wondering.)

With its hybrid commercial and tech origin, it also has a duel personality. On the technical side, there are groups of dedicated architects and developers driving the core products and related extensions. On the commercial side, a lot of companies, 100+ as of my last count, have signed up with OpenStack as corporate members.

It is worth watching who will drive the development of OpenStack as a project. On one hand, it could become Mozilla/Linux like with a clear technology focus. On the other, this could become mostly a standard setting body driven by corporate sponsors.

The easy answer is that this all depends on whether OpenStack gains traction in deployment. And, preferably, large scale ones. The real question is how would RackSpace manage the process?

With the announcement of the OpenStack foundation with donated IP at its recent Boston semi-annaul meeting, the foundation's development would offer the first clue on which path OpenStack will go down.

What does Cloud mean if you are not Google, Amazon, or Facebook

On the question of traction, I cannot help but look at the enterprise side of things. Cloud Computing as a utility is likely to end up in the hand of two providers in the US (look up your economics textbook for why so few and think of the US anti-trust history for why more than one.)

On the other hand, there are plenty of enterprises who need Cloud Computing in a meaningful scale. The most interesting one that I have heard so far is how DreamWorks, the animation film producer, is using Cloud for 50% of its rendering work. Here is an example of mission critical work where Cloud makes a lot of sense for.

Similarly, it is gratifying to note that corporate IT chiefs are thinking about what strategic advantages Cloud could offer beyond cost reduction through consolidation. We are likely to see a new batch of Cloud ideas in the next two years.


Related entries

* What's in it for corporate memebers, modular Cloud through OpenStack: https://plus.google.com/u/0/104462346399481715282/posts/GXPX1m5KDHD

* OpenStack Foundation annoucned: https://plus.google.com/u/0/104462346399481715282/posts/Tfig9mTkr59

* DreamWorks offload 50% of its computer processing to Cloud in 2011: https://plus.google.com/u/0/104462346399481715282/posts/9SnKr2q5DLy

* Shifting corporate view on what Cloud is for: https://plus.google.com/u/0/104462346399481715282/posts/8CgTJNQ8zme

Reality Check - Cloud is but a Tool

Can you touch Cloud Computing?

No. (This is not a trick question.)

Just like rail tracks, Cloud computing is more of a resource/tool that lets you do stuff. And, just like the rail tracks, back when it was invented, there was a bonanza to build tracks.

Without boring you with a history lesson, suffices to say that while rail tracks perform a vital function in any economy today, the real money for the long haul is to be made somewhere else.

What can you do with the Cloud?

It is therefore interesting to see the most dominant Cloud Computing provider, Amazon, coming out with its own tablet, Kindle Fire. Admittedly, tablet is hot these days with the success of Apple iPad. But, a reasonable question is what does Amazon have to offer that would beat iPad?

Turns out that Amazon probably is not looking to beat Apple in the game of desirous tablets. For Amazon, it is about content and Fire is really more of a delivery channel. Through the Cloud, no less.

This plays to Amazon's strength. It already runs a world class physical content delivery operations with all the rights and access to these content. It already operates one of the most respected Cloud computing platform with a proven record in doing and sending "stuff" on a massive global scale. And, guess what, given what Amazon can do, instead of charging a premium for its design, it could go to the other extreme and sell Fire as a loss-leader.

Now the tablet game begins!


Related entries

* Amazon's tablet biz-model: https://plus.google.com/u/0/104462346399481715282/posts/5QFL4aEtV9n

* Amazon's CDN play: https://plus.google.com/u/0/104462346399481715282/posts/Vo2vLVQyDjW

* Amazon Silk could be the face of Cloud Computing to users: https://plus.google.com/u/0/104462346399481715282/posts/aVmBsW1BoPB

Looking for More Distractions?

Google Plus

I am fairly agnostic when it comes to social media. I have tried a good number of them and found most of them wanting in one way or another. Typically, small things that imposes a time tax which, after some good-intention'd efforts, my usage starts to drift.

Hoopla over its growth and its demise (how time flies in the social media scale), aside. I like Google Plus for its open environment instead of being a walled garden. I also like the Twitter like capabilities.

Prometheus Reconsidered on G+

Prometheus Reconsidered now has an open curated stream on G+. It is updated almost daily but features articles that are related to technology, innovation, and business.

Please join the fun: Prometheus Reconsidered on Google Plus.

Cloud Computing with Chinese Characteristics

Rapid enterprise cloud deployments

In a recent interview with GigaOm, Marten Mickos noted that there is a lot of installations in China. On the face of it, it does not seem particularly remarkable since China seems to have a veracious appetite for just about everything else.

The obvious benefit of public cloud

In a recent conversation with a VAR in China, I was told the challenges of deploying new IT systems. Money, everything else being equal, is rarely the problem. Buyers understand the importance of ERP, CRM, and other enterprise solutions as their growth accelerates both domestically and internally. However, over the deployment phase, the physical installation of things like fiber optic lines and configurations for routers, VM, etc. suck up time and attention of highly skilled engineers which are difficult to find and retain.

My question to the VAR was why not use a public Cloud architecture and solve all these problem with a single stroke? After all, this is exactly how SalesForce.com has become a multi-billion dollar company by solving exactly these type of problems.

The subtle problem of public cloud

It turns out that many business owners in China are reluctant to let any of these data go into any public network for fear of being sniff'ed. (Interestingly, this is not a uniquely Chinese concerns, given DT's attempt at fencing its Cloud operation from the prying eyes of the US.)

Looks like private cloud will proliferate in China for a while yet.

Links

* Eucalyptus refreshes IaaS platform: http://gigaom.com/cloud/eucalyptus-refreshes-iaas-platform-isnt-dead-yet/

Cloud Power - Operator, Vendor, and Buyer

Operator Power

It is well know that Data Centers can suck up a lot of electric energy. Being one of the largest operators, the revelation of Google's power consumption is closely scrutinized. Google uses 260 million watts continuously across the globe.

To give it more context, this is approximately the equivalent of powering 200,000 homes in the US. Alternatively, this is about a quarter of the output of a standard nuclear power plant.

Keep your hand off my Cloud

German telco, Deutsche Telekom, has recently requested a waiver for their data centers so that the US government cannot access DT (and European Cloud operators in general) client's information through the US Patriot (anti-terrorism) Act.

This will be a development worth monitoring as the Public Cloud as originally imagined may splinter into different flavors. On one hand, this is bad for growth, think what internet would have been like if it cannot operate across the globe. On the other hand, it could be an interesting commercial opportunities as markets outside of the US try to leapfrog both the technological and business innovation through separate clouds.

Where is the beef

Adrian Cockcroft's entry on "I come to use clouds, not to build them" is worth a quick read for two reasons.

One is his lucid example of what the SaaS providers really care about. Don't tell me how the component works, tell me what are the things I can do with your Cloud. This is a topic well worth remmeber for those us involved with Cloud, or any emerging technology in general. In otehr words, don't get side tracked by the "sexy" technical stuff.

Second is his observation on OpenStack. His view is exactly what it is, his view. And, I consider the negative tone on OpenStack is really a "roadmap" on what would make OpenStack a viable solution for SaaS vendors like Netflix. And, that, to echo observation #1 above, is precisely the point.

Links

What It Takes to Power Google: http://www.technologyreview.com/computing/38556/?nlid=nldly&nld=2011-09-12

Deutsche Telekom Wants `German Cloud’ to Shield Data From U.S.: http://www.bloomberg.com/news/2011-09-13/deutsche-telekom-wants-german-cloud-to-shield-data-from-u-s-.html

I come to use clouds, not to build them...: http://perfcap.blogspot.com/2011/08/i-come-to-use-clouds-not-to-build-them.html

The Nebulous Enterprise Cloud Computing

Defining Cloud Computing for enterprises

With any emerging market place, there are different reference points depending on who you are. Today, Cloud Computing is probably more commonly associated with the offerings of Amazon as a commodity. On the other hand, telecommunication firms from Verizon to BT are the natural players for enterprise class Cloud Computing because they have the custmer relationiship and the network. Nevertheless, when a buyer is thinking about a no-frill commodity service, a la Amazon Cloud, it can be an uphill battle to sell highly sercure, available, full service solutions.

Where experiments are taking place

While the conventional telco sales channels may be somewhat stymied in getting enterprise adoption, a good deal of experimentation are happening with (relatively) smaller players.

Cincinnati Bell, a ILEC, is building up its data center footprint in the US, Asia (Singapore), and Europe (UK) to supports its clients. Integra Telecom, a CLEC, is offering a new Cloud suite targetting SME and regional enterprises. And, even Facebook is opening up its data center as a way to encourage conversations with equipment makers and software providers. These are the kinds of places where emerging buseinss models are likely to emerge and are well worth watching.

A little (ITIL) SPIT in your Cloud?

Of course, the major international telco players are not sitting on their hands. A pressing issue in Cloud today is how to talk about it. It has hardware and software like the traditional IT world. It has service elements like consulting and BPO. Then, the whole thing has the extra dimension of operating on top of telecom networks. Thus far, we have not yet taken into account industry requirements such as medical or national regulations such as export control. Nor have we touched on what the consumers of Cloud care about.

With that degree of complexity in mind, it would be interesting to see if the development of ITIL (Information Technology Infrastructure Library) and SPIT (Service Provider IT) could bring some sanity into Cloud conversation for enterprise users.

* Cloud |= telco enterprise services: http://www.lightreading.com/document.asp?doc_id=211716&f_src=lrdailynewsletter

* CLEC getting into Cloud: http://www.fiercetelecom.com/story/integra-telecom-adds-palo-alto-networks-platform-its-cloud-services-suite/2011-08-29?utm_medium=nl&utm_source=internal

* Small ILEC getting into Cloud: http://www.bizjournals.com/cincinnati/blog/2011/08/cincinnati-bell-banking-on-big-growth.html?page=all

* FaceBook's (Cloud) data center: http://www.economist.com/node/21525583

* ITIL (Information Technology Infrastructure Library) for telco operators: http://www.lightreading.com/document.asp?doc_id=211702&site=lreurope&f_src=lrdailynewsletter

* SPIT (Service Provider IT) for telco operators: http://www.lightreading.com/document.asp?doc_id=187395

Unleash Tow Trucks on the Cloud Computing Super Highway

Defining ownership

With the migration of content into the cloud, what defines ownership is different from what we have traditionally understood. Take the recent brouhaha around Amazon's "seemingly" unilateral decision to remove an improperly licensed e-book on its Kindle reader, this could not have happened had you bought a physical copy.

While some have argued that there is a distinction between enterprise usage which focuses on value-creation and consumer usage which focuses on consumption, it feels artificial to me. After all, without consumption, there is no value to be created.

Possession vs Processing

If we look at the decades long battle between music industry and music pirates around the world, a reasonable conclusion is to say the (physical) possession-oriented way of looking at the world is no longer a viable option. Instead, the key value-creation is based on processes.

If this observation feels familiar, it is because the real world for most of us in the developed and late-stage developing countries is already there where service is a much more important part of the economy. In other words, it is nice to own assets, but it is what you do with your assets, tangible or otherwise, that really counts.

Can you drive a tow truck?

The emergence of Cloud Computing is making it easier for services to be added to the assets owned by enterprises and individuals. So, instead of trying to reconcile between Amazon zapping an e-book vs. physical ownership of the same, a more apt parallel could be the interaction with a tow-truck when your car is inoperative on the road where both sides follow a specific set of rules to obtain the desired service.

Does this mean that we should all aspire to be tow-truck drivers as vital service providers on the Cloud Computing Super Highway? Lest we forget that the real money is made by the auto insurance company who brokers the interaction between you and the tow-truck driver.

* A Cloud over Ownership: http://www.technologyreview.com/web/38391/?nlid=nldly&nld=2011-08-24

Googorola and Smartphone Ecosystem 2.0

Google + Motorola Mobility

Okay. Unless you have been kipnaped and gone off the grid in the last week, you have heard about what likely will be considered the deal of the year, Google buying Motorola Mobility (MMI) for $12.5bn.

The most obvious reason is that Google is in serious need of strong patents and in great multitude in order to protect the Android ecosystem that it has built in the past few years after failing to secure the Nortel IP portfolio.

Fear, aspiration, and other reactions

Having the patents from the granddaddy of the mobile handset, Motorola, puts Google in a much better/equal footing with the likes of Apple and Microsoft/Nokia as far as the on-going proxy war in Smartphones are concerned. On one hand, this could potentially re-enforce the alligance of Android makers such as HTC and Samsung to the eco-ystem by minimizing uncertainties for the long term (the existing legal actions between Apple and these markers still need to be played out, but the outcome is likely to be more favorable to Android makers if Google gets involved in a multi-party licensing arrangement.)

On the other hand, by becoming the owner of a handset maker, Google has to maintain the tricky balancing act of ensuring that there is no hint of favorism with Motorola. For now, Android handset makers have expressed support for the acquisition, although, as the saying goes, the proof is in the pudding - we shall see what happens in the next 6-12 months. There has also been alternative scenario proposed suggesting that given the proliferation of Android handsets (300+ as of latest count), Google could be in a position to use Motorola to create reference designs for the whole eco-system so that the end user can get the maximum benefit of Android phone through streamlined design/production. Honestly though, it is hard to see how Google can do this with Motorola in its present form unless it plans to trim MMI down to an expensive hardware lab.

An area that is worth thinking about is how do the telco think about this. While iPhone has been a boom for the likes of AT&T, the consensus is that Apple is capturing most of the profit and accolade while the operators are stuck with footing the bills for massive capital expenditure and handling user complaints. So, what does the creation of another Apple-like 800 pound gorilla in GOOG/MMI mean? So far, the reaction has been very muted.

How about consumers? There was a fun naming competition at WSJ for the rest of us where the readers get to vote for a name for the transaction. The winner is Googorola - the people have spoken. Beyond the thrill of instant veiwer particilation, there was a suggestion that Google will offer free smartphone as an extension of its multi-side platform business model. Since, unlike software which is virtually free once written, hardware comes with a BOM (bill of materials) for each unit, not sure if that would ever happen with the current ecosystem. On the other hand, if you extend the scenario to the model of fab-less IC design houses, it may be a good time to think about who will be, or indeed think about starting, the next TSMC for handsets.

Did you know - a few loose ends

Finally, on the patent front, given Apple's aggressive legal actions, it is interesting to note that Palm (HP, for now) is the only company that Apple has not gone after. Both Apple and Microsoft are siting on a big pile of cash right now. (I am just saying.)

On the smartphone technology front, it is probably worth noting that Mozilla is starting a project to build a smartphone browser that aims to do to smartphone ecosystem what its FireFox (internet browser) has done to the PC ecosystem by rendering Microsoft's operating system playing second fiddle as users migrate to Cloud Computing. Given the success of Mozilla and Firefox, this is a highly credible project. However, with the on-going battle between iOS and Android instead of a dominant platform like Microsoft Windows, this vision may take a while.

* Google buying MMI: http://googleblog.blogspot.com/2011/08/supercharging-android-google-to-acquire.html
* Android Partner quotes: http://www.google.com/press/motorola/quotes/
* Google taking charge of Android Ecosystems: http://www.lightreading.com/blog.asp?blog_sectionid=217&doc_id=211132&f_src=lrdailynewsletter
* Telco and other poentail losers of the GOOG/MMI deal: http://www.fiercewireless.com/story/who-are-losers-googles-125b-acquisition-motorola/2011-08-16?utm_medium=nl&utm_source=internal
* France Telecom "Like" GOOG/MMI: http://allthingsd.com/20110815/u-s-carriers-silent-on-motoroogle-but-france-telecom-gives-it-a-thumbs-up/?mod=mailchimp
* Verizon hoping for peace on the patent war front: http://www.fiercewireless.com/story/verizon-hopes-google-motorola-deal-will-cool-patent-wars/2011-08-17?utm_medium=nl&utm_source=internal
* Does this mean I can get a smartphone for free from Google now? http://www.xconomy.com/san-francisco/2011/08/17/are-free-motorola-phones-in-our-future-a-vc%E2%80%99s-take-on-why-google-is-buying-motorola/
* Readers have spoken, Googorola it is: http://allthingsd.com/20110817/googorola-triumphs-in-snarky-nickname-poll-over-12-5b-bid/?mod=mailchimp
* Apple may fear Palm's (HP) patents the most: http://allthingsd.com/20110819/could-hp-turn-a-profit-on-palms-patents/?mod=mailchimp
* Mozilla/Firefox's Plan B: http://www.technologyreview.com/web/38308/?nlid=nldly&nld=2011-08-15

Check your Cloud Computing SLA

It happens

It is not fair to pick on Amazon who runs, by all account, a first rate operation for their cloud computing service. But, being the best also means any glitch is highly visible as was the case in Ireland and Virginia. I am reminded of the incident, about 10 years ago, where one of our site in the east coast was down because some gas work around the datacenter severed the connection physically. (And, what is it with East Coast locations that would go down?)

Thinking about SLA

In light the Cloud outage, it is worth reminding oneself the idea behind SLA, service level agreement. It is NOT mainly a technical document that specifies how the hardware are used. It is NOT mainly a legal document that aims to put fear of god into the operators. It is FIRST and Foremost, a document that articulates your business requirement and how this (cloud computing) service can support your objects. What this also means is that you have to articulate a plan B that would support the business goals.

Then, you are ready to talk SLA and make intelligent trade-off's.

* Lightning strike zaps EC2 Ireland: http://www.zdnet.com/blog/saas/lightning-strike-zaps-ec2-ireland/1382
* Short-Lived Amazon Cloud Outage Takes Down Several Sites: http://allthingsd.com/20110808/short-lived-amazon-cloud-outage-takes-down-several-sites/?mod=mailchimp
* Were Amazon's Outages Inevitable? http://www.technologyreview.com/blog/editors/27072/?nlid=nldly&nld=2011-08-11