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

Jobs is Dead, Long Live Jobs

In Memoriam

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

A Device that Loves You

Hi! I am Still Here!!

With the accolades piling on after Steve Jobs announced his retirement from his active role as Apple's CEO, I could not help but feel that I have been reading eulogies. But, to state the obvious and to paraphrase Mark Twain, Jobs' earthly departure has been greatly exaggerated.

More platitude

Jobs is known, today, for a string of i(Stuff) after he took back the rein as head of Apple. To that point, I think the most insightful comment is AEI's observation that his success is built on a series of spectacular failures. For old timers in Silicon Valley, Jobs' original notoriety was for supposedly "being inspired/borrowed/stole" the GUI (graphic user interface) and mouse design after visiting Xerox PARC to create the original Mac. On that score, one cannot help but wonder if we would still be using command line interface today without him.

On Jobs-ness

I was watching two kids playing with an iPad recently. Predictably, I marveled at the ease in which these kids, with an average age of 3, interacted with the device. What is the magic sauce? Design is important, but there are plenty of studios with world class designers. Interface is important, but it is actually a well analyzed science with its own conferences. Technology is important, but nobody buys Apple for its CPU speed or new interface cards. All of these seem to be necessary but insufficient conditions. Then, it struck me that what makes a Steve Jobs device compelling is its laser-like narrow focus on the actual user at the risk of excluding everyone else. It does not try to play nice with your corporate IT support team. It does not like talking with your friend's Android device. It actually does not do a lot of stuff that most technology types would consider important. On the other hand, I have noticed in conversations with Apple users that it often sound a bit like a love-affair.

Maybe that is the point. Steve Jobs builds a device that loves you and expects nothing less in return.


* NY Times on Steve Jobs: http://topics.nytimes.com/top/reference/timestopics/people/j/steven_p_jobs/index.html

* Steve Jobs: America's Greatest Failure http://www.aei.org/article/104051

* Jobs the innovator (not inventor): http://www.fiercetelecom.com/story/apples-jobs-should-be-remembered-product-innovator-not-inventor/2011-08-29?utm_medium=nl&utm_source=internal

* Working with Jobs: http://venturebeat.com/2011/08/25/michael-dhuey-apple-engineer/

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

Emerging Issues for Cloud Comnputing

Attacking Mobile Computing Platforms

One benefit of using the Cloud is that computing is no longer tied to a physical location and machine. In this untethered environment, if you have a sufficiently robust device, i.e. a smartphone, you can have an office wherever you are.

Of course, this also means that these smartphones are the new targets of virus and other malware. In a recent report, malware creators seem to favor Android. The assumption is that Android app is not a tightly curated platform whereas iPhone's is.

On the business front, what is interesting to ponder is what is the best curation strategy for a given stage of a platform's growth. On the technical front, does the combination of Cloud and Smart device allow a new way of protecting again and recovering from malware?

When Geography Defines the Boundary

Export control allows a government to restrict the export of items, information, and software it deems sensitive. In the old days of physical shipping, there is a form and approval process if an item is on the export control list.

Cloud computing, on the other hand, removes the geographic boundary that defines the where and how export control can be enforced. This is a brand new territory for both policy makers and technologists.

On the face of it, any particular use case may not be difficult to address. But, a robust universal framework that will encourage the innovative and commercial motivation on one hand and the imperatives of national security and foreign policy on the other will require an in-depth discussion.

Virus for smartphones: https://www.mylookout.com/mobile-threat-report
Export Control in the Age of Cloud Computing: http://www.brookings.edu/papers/2011/0725_cloud_computing_villasenor.aspx

Office Redefined in the Age of Cloud and Mobile Computing

Not your Daddy's WordStar

Office productivity tools have come a long way from the days of the Wang Labs (assuming you even know what that is in reference to.) MIT's Tech Review has a series of articles on what constitutes an office in today's mobile and cloud computing world. A global and flattening global nature of interaction, ubiquitous and instantanious accessibility, and how to better define and protect data are some of the oft-heard observations.

These observations also lead to some interesting questions.

Roll Up a Flattened World

In a flat and global world, while it is true that people from different corners of the world can be part of the same virtual team, it is also true that virtual team is difficult to manage. Although cloud and mobile computing have made life easier. From a business perspective, how to get a team to perform at a high productivity level remains an art.

In other words, now that people are collaborate across oceans, does mobile and cloud computing offer new opportunities to close the physical distance?

Going Off the Grid

The convergence of mobile and cloud is accidental. For the early cloud folks, the emergence of a touch based device was not expected. Similarly, mobile designers only considered tapping the vast processing and storage power of Cloud as an after-thought. As users become more comfortable using smart mobile devices as the primary "office computer", how to address the productivity needs while offline will become an issue.

Adding more processing and storage on the mobile device can only get you so far. What is not clear is what are the buseinss policy tools. For example, what data can you take offline to protect privacy and security. What if several people are working on the same document, can you take it offline and work on it?

The Rise of the Virtual Office: http://www.technologyreview.com/business/38169/page1/
Tiny, Cloud-Powered Desktops: http://www.technologyreview.com/business/38171/?nlid=nldly&nld=2011-08-04
How to Secure the Virtual Office: http://www.technologyreview.com/business/38170/page1/

A Familiar Path for Mobile OS?

What used to be the Boring End of Software

Who knew?! Operating Systems (OS) used to be the most boring part of the software world that mainly divided into the PC/Wintel camp and the Unix derivatives (server, Mac) camps.

Vital, yes. Sexy, no.

Alibaba's Aliyun

While Apple's iOS and Google's Android are duking it out on both install base growth and patent infringement skirmishes around the world in a "proxy war", Alibaba's Aliyun mobile OS is almost a breath of fresh air. Not to suggest that Alibaba of China is not an 800 pound gorilla in its own right, but I, for one, am thankful for a new twist in the development.

It is still too early to know what impact Aliyun would have on the global stage. But, one can be fairly certain that China market alone will make it a player to contend with.

Mobile Computing Ecosystem

It is also interesting to see the recent media blitz on mobile computing in Asia by Eric Schmidt of Google which he dubbed the "Mobile Revolution." Given the pressure that HTC and Samsung are getting from Apple for their Android phone, it sure is good to have a very high level and publicly visible support from Google.

What I find interesting in the Schmidt piece, however, is his suggestion that Android, as an open platform, should be the preferred choice for the rest of world because of its low cost and inter-operability. I cannot help but wonder if this is implicitly suggesting that, like the PC world, the future will consists of the cool people on iPhone (like designers wearing only black and using Mac) and a much larger user base on Android Phones (i.e. the rest of us folks on PC).

I suspect, a good deal of this potential outcome depends on what the local telco around the world have to say about it.

* Alibaba's Aliyun: http://allthingsd.com/20110728/look-out-android-and-ios-here-comes-alibabas-aliyun/?mod=mailchimp
* Schmidt's Mobile Revolution (in Chinese): http://www.businesstoday.com.tw/v1/content.aspx?a=W20110701225&p=1
* Schmidt's Mobile Revolution (in English): http://asiancorrespondent.com/60334/googles-schmidt-hails-the-real-mobile-revolution-in-asia/

A Proxy War

First out of the Gate

With Nortel's auction barely over, Google and Apple are rumored to be circling InterDigital's IP assets in mobile handsets.

Second out of the Gate

Carl Icahn is pushing Motorola Mobility to monetize its own IP portfolio given the current hot market in smart phone. Specifically, he has valued Motorola's IP to be worth around $4bn. Given Nortel's final price of $4.5bn and the fact that Motorola invented the mobile phone industry, it does not seem like an aggressive number.

The Real Question

As strange as it seems to the casual observers, the real issue is the Google Android operating system for mobile handsets. It is the most viable alternative to iPhone today with shipped products. To use a cold war analogy, handset makers such as HTC of Taiwan and Samsung of Korea are the clients who have been fighting a proxy war for Google over their use of Android and Android's potential infringement of existing patents owned by the likes of Apple and Microsoft.

While HTC has been acquiring patents to counter the infringement claims and Samsung has been assiduously building up its own IP portfolio, as the keeper of Android, I cannot help but wonder how Google will shape the conversation. After all, it makes little sense for Google to let a global mobile computing eco-system that will be much bigger than the desktop computing one crumble over a few billion dollar worth of patents.

On this point, a chat between Google and Carl Icahn could be an interesting option.


* InterDigital: http://www.bloomberg.com/news/2011-07-20/google-said-to-be-among-companies-considering-interdigital-bid.html
* Motorola: http://www.reuters.com/article/2011/07/22/us-motorola-idUSTRE76K54220110722

A New Platform's Geometric Growth

G+

With a breath taking growth from less than a million users in July 2 to over 10 million users 10 days later, there have been stories about how male testosterone dominated the users base is at Google+.

(For the record, my Google+ account was given to me by a female friend which I signed up on July 8th.)

A New Platform

Many people have argued that G+ is a direct challenge to Facebook's social media throne. I would disagree. A frontal assault to unseat a dominant player who has over a quarter of the available users base, i.e. FB, is not a clear winning strategy even for a company like Google.

What seems likely is a hybrid model between FB's many-to-many conversations and Twitter's one-to-many broadcasts. This would be particularly interesting for enterprise users who may be looking for a platform that combines FB's community with Twitter's broadcast. And, given Google's dominance in consumer usage vis-a-vis its enterprise penetration, an enterprise focused push is more likely to "move the needle" as the saying goes.

For example, maybe G+ will have an enterprise version including LDAP, a common corporate directory service, integration. And, given Google's existing arsenal in the productivity tools and the ability to manage circles (think of it as managing collaboration projects), maybe the conversation about G+ will be more about its challenge to Microsoft in another year's time.

But, first thing first. Build the eco-system and the rest will follow.

* Too many men in G+: http://allthingsd.com/20110716/more-women-crashing-google-sausage-party/?mod=mailchimp
* Counting G+ Users: https://plus.google.com/117388252776312694644/posts/g9Xk6khUSs8

Cloud Computing's Reality

Good News

What is not to love about Cloud Computing? It minimizes time and cost of deployment and, usually, allows users better/varied method of getting their job done.

Faster, cheaper, and easier!

Bad News

But, there is no free lunch. The fact that basic functionality can be easily accommodated using Cloud-based applications, it does not mean that there will be no customizations required for specific usages, especially in the enterprise context. Similarly, integration with legacy systems, the tried and true source of income for any and all enterprise software companies, remains a question that people are still struggling with.

SDK/API and Standards

The ability to plan, create, and use SDK (software development kit) and API (application programming interface) will becoming increasingly important as enterprise players start to consider adding Cloud capabilities into their existing technology stack.

This also means that a new era of standard bickering is about to start.

Oh, joy!

* Changing the Way We Talk About the Cloud: http://knowledge.wpcarey.asu.edu/article.cfm?articleid=2012

Smartphones and Billion Dollar Auction

Rockstar's $4.5bn

Well, it is now official. Nortel's 6,000 patent portfolio has been sold to Rockstar, a bidding consortium consisting of Apple, Microsoft, Research in Motion, Sony, Ericsson, and EMC for $4.5bn. To put this in context, the starting stalking horse bid was $900mn from Google.

It is said that the winner companies were bidding mostly for defensive purpose against Google and its Android eco-system. The most obvious targets, beyond Google, would be Samsung and HTC. Words on the street is that there is regulatory concerns on the new IP owners could inhibit the competitive nature of smartphone developments.

The saga continues.

Alcatel-Lucent's $20+bn

With Nortel's auction done, inquiring minds cannot help but wonder what comparable could be drawn in the IP world. An investment banking analyst did some number crunching and suggested that Alctel-Lucent, who owns the IP portfolio of the old (AT&T) Bell Lab, could fetch more than $20 billion alone in a similar auction.

Contrasting with ALU's market cap these days at less than $20bn. I wonder if there may be an activist investor or two who are making plans as we speak.

At $15 per Smartphone

Valuing IP is a tricky business. And, the Nortel's auction, in no small part, is impacted by the recent explosive growth of smartphone eco-systems. To give it a more concrete context, MSFT is rumored to be asking for $15 licensing fee per phone that Samsung ships that uses Android. And, at 19mn phones for the last three months and continuing growth in the foreseeable future, this is real money that even MSFT cannot ignore.


* Nortel's $4.5bn: http://www.bloomberg.com/news/2011-07-01/nortel-sells-patent-portfolio-for-4-5-billion-to-group.html
* Bell Lab's $20bn: http://www.lightreading.com/document.asp?doc_id=209655&f_src=lightreading_gnews
* $15 per for MSFT: http://www.reuters.com/article/2011/07/06/us-samsung-microsoft-idUSTRE7651DB20110706

Google Health and MySpace

Google Health and MySpace

One of the more underappreciated aspect of the Silicon Valley ecosystem is that it is equally good at winnowing ideas that are no longer viable as it is at creating exciting new things. Therefore, I was reminded of the fanfare surrounding the prior glories of these two endeavors.

MySpace is sold off for $35mn to an advertising firm. And, Google Health + Google PowerMeter are retiring.

It would be interesting to see what these alum networks will spawn next.

* MySpace's $35mn deal: http://www.zdnet.com/blog/btl/myspace-sold-to-advertising-firm-for-35-million/51623
* Google Health+PowerMeter: http://googleblog.blogspot.com/2011/06/update-on-google-health-and-google.html

WDP Free Download (until June 28th)

The Leader's Checklist

Wharton Digital Press (WDP) first book is out. It is a collection of principles to help leaders do the right things by Wharton management professor Michael Useem. This book will be available as a free download until June 28, 2011, see the link below. (I don't think there is a POD, Print on Demand, option for this eBook)

Mission Critical: 15 Principles to Help Leaders Meet Their Toughest Challenges: http://knowledge.wharton.upenn.edu/article.cfm?articleid=2799

Digital Insight

It is good to see that WDP is able to leverage assets like Knowledge@Wharton, which I am a faithful reader since inception, as a way to promote the book. On the other hand, it would be nicer for WDP to offer an "one-click" download process to make things simple. But, these are details.

What I really love to know more about is how has this digital publishing process impacted the data collection and analysis given the new level of interactivity. WDP could potentially be a new value-add data broker.

Talent War 2011

The Siren Sound

As I have noted on the ever shifting employee networks of Silicon Valley given its "at-will" employment contract. The first public salvo came from Google who offered an across the board salary increase in 2011. There are a analyses on the latest winners and losers of the latest "Talent Wars."

Not surprisingly, Apple, Facebook, and Google are all doing well, relatively speaking. The major casualty of the current phase is Yahoo who is losing a bit of its luster lately. The interesting winner is Twitter who, despite the persistent criticism of its lack of business model, is getting a lot of people to join.


* List of winners and losers of the talent war vintage 2011: http://www.blogger.com/post-edit.g?blogID=1501275766337378089&postID=7523281652592663360
* A graphical analysis the current talent war: http://www.focus.com/images/view/42092/

Cloud and Mobile Smart Devices

A Blurring Line

I concluded my 2008 Cloud analysis by arguing that Cloud and Smart Devices were coming together. On one hand, smart devices as epitomized by iPhone are breaking the traditional separation between corporate and personal devices today. Namely, users are demanding and IT support are ceding to the desire to commingle private and corporate usage in the same personal device.

Furthermore, since Cloud Computing offers ubiquitous access, providing Cloud-based apps through the smart devices becomes a compelling value-add service to both mobile users and their IT support team.

Securing Corporate Assets

A potential hazard of mixing Cloud apps, smart devices, confidential data, and private usage is how to effectively secure the corporate assets without disturbing personal needs and habits.

Traditionally desktop solutions such as firewall, anti-virus, and VPN capabilities will need to be available on the smart devices. Equally important would be the ability for enterprises to secure corporate data and apps from workers' personal devices without compromising usability and remove information on the devices easily when the user is no longer part of the company.

Coming Attractions to a Cloud Near You

Discrete and Routine Uses

Today's Cloud are used mostly for two type of scenarios. One is the "Cloud Natives" where new ventures would start their computing infrastructure in the Cloud. The other is one-off projects like the New York Times digitizing its archive using Cloud Computing. These provide real use cases with tangible benefits and help to deepen the supporting eco-system for Cloud.

Industrial Strength Applications

As more established enterprises with large customer bases start to consider Cloud Computing, abilities in these areas are likely to propel the industry forward.

Deep Monitoring Tools: As the recent Amazon outage experience shows, the ability to identify the source and scale of a problem is something that few people have had to deal with until now. While Netflix is cobbling together various services for this purpose, they have noted that no single vendor provides the level of granularity and integrated view that meet the needs at their scale today.

Cloud Bursting: enterprises have expressed a good deal of interests in Private Cloud to keep part of the data and processing in-house due to regulatory and other considerations. At the same time, the ability to tap into an external Cloud on an as-needed basis, aka Cloud Bursting, offers a rather compelling degree of flexibility and cost advantage that will likely become the norm. Eucalyptus Systems has been a forerunner on both private cloud and cloud bursting.

Verticalized Industry Value-Add: Network service providers, e.g. telco such as BT and Verizon, are exploring industry-specific services that would offer differentiated Cloud solutions from the current offerings from the likes of Amazon, Google, Rackspace, and Microsoft. Some of the potential markets that have been named include financial markets, global commerce, consumer package goods, government, and health care.

Cloud Standards and Watering Holes

Talking about Standards

It is a delicate issue. On one hand, Cloud is still evolving rapidly so participants do not want to commit to a standard in order to avoid a potential VHS vs Beta-like confrontation. On the other, without standards, it is difficult to get the enterprise-class users with the enterprise-class budget to actively engage with Cloud.

For now, a growing number of talking shops have been established each with different focuses.

• ATIS Cloud Services Forum: www.atis.org/cloud/index.asp
• Cloud Security Alliance: cloudsecurityalliance.org
• Cloud Standards Customer Council: cloudstandardscustomercouncil.org
• Distributed Management Task Force (DMTF) Cloud Management Standards: dmtf.org
• IEEE Cloud Computing Standards Study Group: www.computer.org/portal/web/sab/cloud
• Open Datacenter Alliance: www.opendatacenteralliance.org

Meeting Cloudsters

Similarly, a number of industry conferences and regional groups are creating Cloud related activities to both engage with the early adopters and to evangelize Cloud use cases.

• Carrier Cloud Forum (Interop): www.interop.com/lasvegas/conference/carrier-cloud-forum.php
• Cloud Computing World (CeBIT): www.cebit.de/en/about-the-trade-show/programme/highlights/cloud-computing-world
• Cloud Camp: www.cloudcamp.org
• Cloud Connect: www.cloudconnectevent.com
• CTIA Wireless: www.ctiawireless.com/exhibit/index.cfm/cloud-computing-pavilion
• Mobile Cloud Computing Forum: www.mobilecloudcomputingforum.com
• Silicon Valley Cloud Computing Group: www.meetup.com/cloudcomputing

In short, a new eco-system is literally taking shape before our eyes.

Cloud Computing for the Rest of Us

Use Cases

Given Cloud's nascent nature, there is a need to identify use case to help people to both understand Cloud Computing and see what are the appropriate Cloud applications to build. The Cloud Computing Use Case Discussion Group was formed to capture specific use cases as a way to describe and benchmark the emerging Cloud usage in the wild. Their most recent v4 white paper (link below) is worth a look.

At the very fundamental level, some combination of the four potentially actors - End user, Enterprise, Public Cloud, and Private Cloud - constitute a Cloud usage. There are two scenarios that I believe will become increasingly prevalent over time. One is the idea of "cloud bursting" whereby demand spike is met by accessing the public cloud. An use case was an insurance company expecting to process a large volume of claim after a natural disaster. Instead of putting the extra load onto the existing infrastructure and causing a system wide impact on other businesses and regions, it used the public cloud to handle excess traffic instead of investing in additional internal IT infrastructure that would have sat idle after the event.

The second scenario is to use the cloud for machine-to-machine process with no end user in mind. In the use case, an agency needs to conduct computing intensive processes over a growing large dataset. Instead of building up a physical infrastructure for the job, it was able to achieve the same result at 50% of the cost and without the setup time require for their own datacenter.

A Business Tool

The hot issues surrounding Cloud Computing are not technical in nature. For example, security and SLA (Service Level Agreement) speak to the nature of the user's business processes and needs. Only the business operators have the appropriate context to determine if a vendor's security and SLA are sufficient.

Newly enacted legal and professional requirements related to the location of the data and users are likely to be felt by enterprises as they expand market coverage through the Cloud. Different countries and regions have regulations on where specific data can reside physically. Similarly, contractual agreements such as digital rights management will also determine where and how a consumer can access information delivered through cloud.

http://cloudusecases.org/

Digital Publishing as a Platform

A New Platform

After talking with Steve Kobrin about Wharton Digital Press (WDP), it really got me thinking about what this could mean as a platform. More specifically, what are the areas of "experimentation" that may be worth trying.

Some Experiment Ideas

Hardware design: Since Kindle last much longer than iPad, but iPad can do the razzle-dazzle graphics, what makes for a better consumption experience and what are the trade-off's. It would be interesting to see if there are logical segmentation in terms of who would find which device "better" under what circumstances. And, most importantly, why.

Hardware business-model: since majority of cost comes from physical distribution, a national news-media firm is thinking about giving subscribers fancy tablet to cut cost over the mid/long term. A major financial firm is thinking about giving their bankers tablets as a way to eliminate the $10k average spend per year per banker in printing. With PoD, printing and distribution may not be a pain point for WDP per se, but this could be an opportunity to explore alliance with organizations who may be interested in providing subsidized hardware.

Software: interactivity is clearly one of the major benefits of going digital. It would be interesting to explore what are the key aspects that are important to readers and authors. The result could be fed into a process to create a framework/suit that makes the process easier in the creation chain.

Immersive relationship: with the hardware and content having interactivity through sensors and data trail, this is the first time that a publisher/author can have an on-going relationship with the readership. How should this work? For example, with the machines understanding what readers prefer in actual consumption, this could provide a venue for recommendation not unlike what Netflix Challenge has done but for reading.

For readers: I take a lot of notes when reading. Until now, this has been a very cumbersome process especially for retrieving specific detail and consolidating across volumes. Some sort of vault would be nice. Better yet, a way to automate cross referencing as I search for past notes would be sweet.

I could go on. This is going to be an interesting space to watch in the years to come.

What Happens when a Cloud Turns Dark

April 21st, 2011: when Amazon's East Zone went Dark

Amazon EC2 (Elastic Compute Cloud) went dark for a few days in the US East Coast on Apr 21st. The impact was wide and widely noticed. So much so that Economist, a publication that I read avidly but not for its technology coverage, noted the breakdown in an article a few days later.

The fact that one data center went offline is not a surprise per se. (Without any hint of callousness and acknowledging the real impact on the businesses involved,) it just happens. What is more interesting is to consider the famed Warren Buffett quote and find out who has NOT been swimming naked in the rising Cloud.

Chaos Monkey and other Lessons

Netflix is one of the organizations that had fared well in the outage even though, given its large customer footprint, one would reasonably expect them to suffer all sorts of problems since they have moved their infrastructure to the Amazon Cloud. In their Tech Blog (below), Netflix team talked about how they dealt with it.

Instead of just moving their datacenter onto EC2 through VM, Netflix made architectural changes to take advantage of the inherit flexibility (and instability) of Cloud Computing. Nobody is perfect though and they did not account for the possibility of an entire zone/datacenter going out. In other words, switching over to other active zones was a time consuming and error-prone manual process.

The most interesting part for me is the Lessons Learned section. In addition to build up the ability to handle failover and recover at the Zone level, Netflix will scale up random disruptions, from Chaos Monkey to Chaos Gorilla, to introduce more failure as an on-going part of its system-wide robustness design.

An effective, albeit brutal, solution that could not be fathomed before Cloud Computing.

Lessons Netflix Learned from the AWS Outage

Wharton Publishing Gone Digital

Wharton Digital Press (WDP)

I learnt the rudimentary of the publishing business from Dr. Steve Kobrin, Wharton Professor and Publisher of Wharton Press, when I was exploring the possibility of creating an Imprint. Having also worked with technologists and social scientists on ubiquitous computing's role in morphing the contemporary content consumption process, I was particularly intrigued when Wharton announced that Wharton School Publishing is now Wharton Digital Press in the London Book Fair on April 11.

Wharton Digital Press: http://wdp.wharton.upenn.edu/

Publishing as an innovation platform

With PoD, Print on Demand solutions, in the US, UK, and EU, being digital does not mean that you cannot touch a physical copy anymore. As a matter of a fact, with both physical and digital copies available, the distribution model and global reach is significantly enhanced as a result.

Beyond innovation on the distribution front, potential authors may like to find out the rates arrangement which would be different from the traditional "advance + running royalty" structure.

Basically, after talking with Steve about WDP. This looks like a really exciting platform for publishing innovation in distribution, content creation, technology, and who knows what else.

Very cool!

Why go to Cloud and How

Why Cloud Computing

These seem to be the characteristics that everyone agrees on.

For Vendors:

• Resource pooling - more efficient use of hardware resources by pooling usages together
• Self-provisioning - minimizes the amount of human-to-human hand-holding that adds to the management overhead

For Buyers:

• Highly responsive to usage demand - crank up or tone down usage in near real-time instead of month
• Measured pricing - only pay for what you use

The unique Cloud advantage that has hitherto been illusive for organizations is to have a nimble infrastructure at a lower cost at the same time. This is why new companies today are jumping on the Cloud because you no longer need to spend the first two million dollars in venture funding to build out a server farm for a demand that may or may not materialize.

Why Cloud Computing

But, what if you are a large established enterprise with millions of active users everyday. Does this automatically relegate you to the dinosaur status in the Cloud world?

Not according to Netflix.

In this (below) and other presentations by Adrian Cockcroft, Cloud Architect of Netflix, he pointed to several reasons for going to the Cloud.

1. Its subscribers and usage is growing faster than its own organic data center growth can support
2. It is planning international expansions
3. It was launching an iPhone app, a gated process which only allows for one shot in getting it right.

In short, for a 20 million active user enterprise like Netflix, Cloud offers a practical (support rapid growth in existing market), strategic (new market penetration), and technical (robust development and deployment) solution for its needs.

Migrating to Public Cloud

View more presentations from Adrian Cockcroft

A Cloudy Future

Cloud Yesterday

In late 2008, I prepared an analysis on Cloud Computing. Richard Stallman thought it was a dumb idea. Larry Ellison quipped that it was just a new phrase for Grid Computing. Marten Mickos was telling me that Cloud Computing is looking compelling. And, it was about to reach the top of the Hype Cycle according to Gartner.

Two years, many conferences, conversations, and self-branded Cloud-ification by all sorts of products and companies later...

Cloud Today

A good proxy on if a technology has staying power is the extent of enterprise adoption since that is where the real money is. Looking at some of these Cloud announcements by global telco players serving enterprise users, Cloud is here to stay.

• Alcatel-Lucent: launched solution for Applications as a Service (AaaS)
• Cisco: announced Unified Fabric, Unified Computing, and Unified Network Services for Cloud
• Fujitsu: announced Private Cloud Services
• Juniper: added focus on security for Cloud
• NEC: launched Cloud Tablet
• NTT America: launched Private Cloud service
• Orange: announced Cloud push
• SK Telecom: launched Cloud data center
• Verizon + SAP: announced SAP CRM via Verizon Cloud

Google, Nortel, and What is a Software Patent Worth

Nortel's Patents

Google has just announced that it is bidding for Notel's patent portfolio. It was reported that Google's $900 million bid for Notel's 4,000 patents is the stalking-horse bid. Equally interesting is that ZTE, Apple, and Huawei are said to be bidding for the same portfolio.

Given the mix of patents (fiber optic, long-haul switch, etc.) I can only assume that other telco players are not bidding because they already have similar patent or, at least, enough to force cross licensing. Of the four known bidders, they are all new entrants into this space. I cannot help but wonder if there would be a consortium whose plan is to break up the portfolio amongst its members if the consortium was successful.

Tellingly, in Google's announcement, it lamented the problems with software patents and confirmed its intention to play and are buying chips for a seat to the table.

Speaking of Software Patents

Traditional legal assumption has been that software cannot be patented because it is not a physical machine nor can a specific transformation be seen. But, over the years, software patents have been applied and granted. The most famous one is probably the case involving Single-Click Check Out patent by Amazon.

Given the traditional assumption and the advent of software patents litigation, all eyes were on the US Supreme Court to give guidance on if software is indeed patentable.

Bilski 2010

The US Supreme Court took up the Bilski case and decided that the physical and/or transformation tests are not the sole criteria for issuing a patent. These tests merely offer "useful and important clues". This sort of makes sense since it is not any less difficult to come up with software innovation than hardware. But, how this is applied in practice in the US will still take years of litigation in the court to establish the case law.

What is a Software Patent Worth

One thing is for sure, however. This means the software big boys have a new tool in managing their eco-systems. And, not to suggest Nortel's portfolio is not worth the money otherwise, I suspect this partly explained Google's willingness to fork out nearly one billion dollar for the portfolio.

Patents as Part of the Innovation Eco-system

Apple vs Nokia, Round One

With the recent news that Apple has won the initial ruling by ITC on the Nokia's patent infringement complaint, I am reminded of how innovation strategists often do not spend enough time on how legal maneuvers can hinder or enhance the innovation process.

A Hindrance

Looking form an incumbent's perspective, it is understandable that every tool at its disposal should be used to create an orderly market. (Without violating any anti-trust regulation, of course.)

Usually it involves a set of patents that are core to a particular application. On one hand, these patents can be used to prevent new entrants into the space and limit the number of players. Moreover, it allows incumbent firms to work with each other to maintain an orderly market in terms of technology evolution. In other words, because patent litigation can be very costly in time and billable hours, not to mentioned management attention, there is incentive to play nice and cross license each other's patents.

Basically, evil big companies trying to monopolize its industry through an army of lawyers.

An Enhancer

Although not emotionally satisfying as a question, but is cross-licensing such a terrible thing? It is hard to say. Around 2004, Applied Materials (AMAT) and Novellus (NVLS) announced a settlement to that effect. With this "cease fire", the respective technology teams at AMAT and NVLS could focus on creating better solutions for the semiconductor capital equipment industry instead of scrubbing their design for potential infringement.

Format Wars

For everyday consumers, this is often not a bad thing. The periodic format wars, such as the recent Blu-Ray vs HD DVD fight, are partly driven by the patent management consideration. However, once the winner has been declared, the relevant patents are cross licensed so that Toshiba, who championed HD DVD format, would also be able to produce Blu-Ray players under the RAND (reasonable and non-discriminatory) principles.

For technical participants in the format war, there are additional interesting dynamics. Initially, the contributors are focused on advocacy and performance to get its format accepted. Then, there is the incentive to contribute as many applicable patents as possible in order to receive the highest royalty payment under the RAND structure.

Looking Beyond Patents

I cannot tell you how the Apple vs Nokia case will resolve itself. What is clear, however, is that Apple's iPhone business model is much more than selling smartphones. As I have argued in Making a good platform, the success of Apple iPhone does not even rest on its Apple/Jobs touch in design.

Let's say that Nokia does indeed win its case and can demand royalty payment from Apple, a very big if. As long Apple continues to effectively engage its eco-system through its multi-sided platform business model, Apple a options in terms of minimizing the impact.

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* Special thanks to Mr. Martin Grönberg who shared his insight for this piece.