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August 15, 2011
Volume XXXVI, Issue 3

Cloud Computing Is Here and Expanding 

Excerpted from Financial Times Report by Eduardo Alvarez & Mike Cooke

Not since the dotcom boom has an information technology (IT) advance been as vigorously marketed as cloud computing. But hype breeds confusion, delusion, jaundiced perceptions, and even outright dismissal. 

So when it comes to the cloud, with its seemingly infinite definitions and its promise to deliver IT services without the IT, it is no wonder that all of these responses are commonplace among executives. It is far easier for them to ignore the cloud, assuming that all it contains are the heads of its advocates, than it is to sift through myriad claims to identify the strategic opportunities it presents.

In fact, it is far more important for most executives to understand the implications of the cloud than to parse its definitions and technical details. We can clarify those implications by projecting ourselves into the future and examining the effect the cloud is likely to have on tomorrow's business world, IT industry, and national economies.

Five or ten years from now, the cloud will not be an element in the IT sky - it will be the sky itself, and few of us will spend much time thinking about it. By then most people in the developed world will be connected to the cloud in some fashion, unlocking a tremendous amount of opportunity and wealth.

The cloud will enable companies to deploy new capabilities in radically new ways. It will change the way businesses operate by eliminating many cost-related barriers to market entry, enabling the assembly of new business processes and data "on demand," and facilitating unequaled flexibility and growth - all of this at a scale and pace not seen before. The result will be more new business models, products, and services to be quickly developed, tested, and grown or discarded as necessary.

Animoto, a company that enables anyone to produce videos online, is a good example. In April 2008, after launching its Facebook application, Animoto was able to grow its user base from 5,000 to 750,000 in just three days, thanks to Amazon's cloud services. Companies that are agile enough to quickly leverage the cloud in strategically competitive ways will be the leaders of the future.

The corporate IT organization will also change radically. It is not a stretch to say that employees will not need personal computers. Data centers may not exist in many companies, and they will be much smaller in companies that must manage proprietary data. 

A tablet or mobile phone will be all that is required to connect to applications and data, which will reside in the cloud. This change will accelerate as more and more enterprise systems, such as enterprise resource planning (ERP) and customer relationship management (CRM), move to the cloud.

Simultaneously, networks in the work environment, and everywhere else, will expand. They will need to be much more robust and manageable to handle the greatly increased bandwidth required for cloud computing.

As the IT organization changes, the CIO's focus will shift away from the technology needed to deliver information to the information itself. And as corporate executives realize that data and analytics are increasingly critical to their companies' futures, they will expect their CIOs to develop and manage the capabilities required to deliver insight.

Cloud computing is likely to drive big changes in the IT industry at large. As the valuations of firms in the cloud sector increase, leading IT companies will use acquisitions to increase the scope and scale of the cloud services they offer, and the sector will consolidate. Some of today's niche cloud players will develop more holistic offerings and assume leadership positions in the industry, much as Amazon.com transformed itself from an online bookstore to a powerful online mall selling a wide variety of products and services.

Does this mean that niche companies are dead? Hardly. As the cloud sector consolidates, the need for new specialized services will emerge and smart entrepreneurs will race to fill the voids.

IT outsourcers and systems integrators - primary players in today's IT industry - will undergo a massive change as the cloud expands. As the corporate need for infrastructure shrinks and software as a service becomes prevalent, the traditional, labor-intensive infrastructure outsourcing contracts will become rare, and there will be fewer large proprietary systems development projects. This represents a major strategic dilemma for the incumbents in this sector.

Further, cloud services will require only a small fraction (as little as 10%) of the labor currently employed in these pursuits. With about 1.5 million people working in IT delivery and support in the US alone according to the Bureau of Labor Statistics, this means that hundreds of thousands of highly paid employees globally could be displaced and require fundamental retraining.

As the IT industry shifts toward the cloud, governments will begin to play an active role in growing their domestic cloud sectors in order to protect their economies. Certainly, India will not stand idly by as its massive IT outsourcing industry is placed in jeopardy. The national economies that stand to gain the most from the cloud are the ones whose governments move the quickest. 

Governments that are unable to resolve cloud-related issues - such as privacy, data regulation, and the social and labor conflicts that arise as traditional IT companies find themselves unable to sustain their business models - will lag behind. In an industry in which even a few months can make all the difference, their tardiness will translate into the loss of billions of dollars.

The cloud is here to stay, and it is expanding. Forget for a moment about how to define it. The real story is the changes it will create in the way we work and live. If you focus on those changes, the huge wealth creation opportunities in the cloud will become clear, and the action and investment decisions needed to capture them will naturally follow.

Report from CEO Marty Lafferty

Photo of CEO Marty LaffertyBritish Prime Minister David Cameron remarked in the UK's Parliament this week that lawmakers should consider legislation that would allow authorities to ban individuals from accessing social media networks based on their alleged intent to incite violence.

He advised legislators that he had directed Home Secretary Theresa May to meet with software providers and networked-device distributors to determine how to implement a ban against the accused and how to put in place continuous network monitoring.

Cameron said, "Everyone watching these horrific actions will be struck by how they were organized via social media. So we are working with the police, the intelligence services, and industry to look at whether it would be right to stop people communicating via these websites and services when we know they are plotting violence, disorder, and criminality."

Scotland Yard reportedly has already arrested a number of people suspected of urging unrest via Facebook, Twitter, and RIM's Blackberry Messenger service.

Cameron's sentiment echoed a statement made by then Judiciary Committee Chairman Orrin Hatch at a US Senate hearing eight years ago to the effect that officials should be able to confiscate and destroy the computers of file sharers accused of downloading unlicensed pop music.

Cameron's proposal was made at a time when literally thousands of British police struggled to restore order in urban areas, while Hatch's outburst was made at a time when thousands of music rights holders were in shock over the ability of consumers to create and mass-distribute perfect digital replicas of song tracks online.

Both are right in acknowledging the enabling role of new and innovative software applications, such as social networks and file-sharing programs, to empower users with new capabilities, but are also wrong for putting forth misguided over-reactions to what are no more no less, at the end of the day, than neutral technologies.

Their advocating of authorities to ride rough-shod over individuals' civil liberties and to abandon due process with respect to law enforcement procedures are, to say the least, extremely troubling.

The real causes of civil disorder are no more the existence of Facebook and Blackberry than the real reasons for copying and sharing music were the availability of Napster or LimeWire.

And the role of social media is much more complex. Consider YouTube's value in exposing the gross inhumanity of UK rioters and looters this week who impersonated good Samaritans in order to shamelessly rob an injured youth, with their despicable behavior captured and delivered on-demand to many thousands of viewers over the Internet.

Viewer comments ranged from "it's just sick - why would you steal from a helpless kid in that situation" to "the rioters are animals and this video made me weep." The bottom line is that the riots and looting in the streets of London, Manchester, and Liverpool were not caused by the existence of social networks.

Modern history is rife with examples of civil disobedience in urban settings that predated the existence of such twenty-first century communications tools. If anything, the unrest itself represents a kind of communication from those who feel that they have no voice and are left out of mainstream society.

But before there were social networks, there were radios, telephones, loud-speakers, and even our voices, themselves, which are ultimately the source of what inspires, incentivizes, and motivates us to act - whether for good or evil purposes.

We agree with MiniMonos' Kaila Colbin on this issue: "Public communication tools do provide sunlight for the seeds of dissatisfaction, unrest, and violence within us - but make no mistake, those seeds must first be within us if they are to grow.

And if the seeds within us are caring, and compassion, and empathy, social media will provide sunlight for those instead: it will connect those who want to clean-up after the riots; it will bring together the oppressed in Egypt and the Student Volunteer Army in my home city of Christchurch, New Zealand.

Social media is neither good nor bad, but how we use it makes it so.

Prime Minister, the call before you is to distinguish between causality and correlation, between medium and content, between speech and action.

If you'll forgive a quote from a maudlin American movie, it is Michael Douglas' call for advanced citizenship in 'The American President:'

'You want free speech? Let's see you acknowledge a man whose words make your blood boil, who's standing center stage and advocating at the top of his lungs that which you would spend a lifetime opposing at the top of yours. You want to claim this land as the land of the free? Then the symbol of your country can't just be a flag; the symbol also has to be one of its citizens exercising his right to burn that flag in protest. Show me that, defend that, celebrate that in your classrooms. Then, you can stand up and sing about the land of the free.'

I wish you grace and wisdom in handling the difficulties your country faces. With respect, Kaila Colbin." Share wisely, and take care.

OnLive to Launch Cloud Games in UK in September

Excerpted from VentureBeat Report by Dean Takahashi

OnLive is launching its cloud gaming service for the United Kingdom on September 22nd. This is the first major international expansion for the company.

With OnLive, consumers can play games instantly online from various platforms. Because the games reside on servers at Internet-connected data centers, users can play high-end games on low-end computers. The games are computed at the data centers and then sent as video to the user's computer, which displays rather than processes the games.

The company will launch the service at the opening of the 2011 Eurogamer Expo in London. It will have more than 100 top-tier games available on high-definition (HD) TVs, PCs, Macs, iPads, and Android tablets. At the event, OnLive plans to hand out thousands of free OnLive game systems, which adapt the games to run on a TV.

The UK system has the same features that are available in the US, where OnLive has been available since June 2010. Users can see free instant demos of games, spectate multiplayer matches, create Brag Clips of their own exploits, and post those clips to Facebook. OnLive also offers a flat-rate PlayPack bundle with more than 70 games. Sign-ups for the UK can be done here.

OnLive is working on the launch with its major investor, British Telecommunications (BT). More details about the collaboration will be announced later. OnLive players in the UK will be able to interact with OnLive's North American customers. Rivals include GameStop, Valve's Steam, and other cloud gaming companies such as Otoy and Gaikai.

Besides BT, OnLive's investors include HTC, Warner Bros., Autodesk, Maverick Capital, AT&T and The Belgacom Group. The company was founded by entrepreneur Steve Perlman nine years ago and has more than 200 employees.

A Cloud that Can't Leak

Excerpted from MIT Technology Review by Tom Simonite

Imagine getting a friend's advice on a personal problem and being safe in the knowledge that it would be impossible for your friend to divulge the question, or even his own reply. 

Researchers at Microsoft have taken a step toward making something similar possible for cloud computing, so that data sent to an Internet server can be used without ever being revealed. Their prototype can perform statistical analyses on encrypted data despite never decrypting it. The results worked out by the software emerge fully encrypted, too, and can only be interpreted using the key in the possession of the data's owner. 

Cloud services are increasingly being used for every kind of computing, from entertainment to business software. Yet there are justifiable fears over security, as the attacks on Sony's servers that liberated personal details from 100 million accounts demonstrated.

Kristin Lauter, the Microsoft researcher who collaborated with colleagues Vinod Vaikuntanathan and Michael Naehrig on the new design, says it would ensure that data could only escape in an encrypted form that would be nearly impossible for attackers to decode without possession of a user's decryption key. "This proof of concept shows that we could build a medical service that calculates predictions or warnings based on data from a medical monitor tracking something like heart rate or blood sugar," she says. "A person's data would always remain encrypted, and that protects their privacy."

The prototype storage system is the most practical example yet of a cryptographic technique known as homomorphic encryption. "People have been talking about it for a while as the Holy Grail for cloud computing security," says Lauter. "We wanted to show that it can already be used for some types of cloud service." 

Researchers recognized the potential value of fully homomorphic encryption (in which software could perform any calculation on encrypted data and produce a result that was also encrypted) many years ago. But until recently, it wasn't known to be possible, let alone practical. Only in 2009 did Craig Gentry of IBM publish a mathematical proof showing fully homomorphic encryption was possible. 

In the relatively short time since, Gentry and other researchers have built on that initial proof to develop more working prototypes, although these remain too inefficient to use on a real cloud server, says Lauter.

Lauter and colleagues implemented only the most efficient parts of a fully homomorphic encryption system. As a result, they've produced a system dubbed "somewhat" homomorphic that can only perform some calculations, but is speedy enough to be used in real software. "I'm trying to look at this from a practical perspective and say what can we do now," she says. 

Only additions and a few multiplications can be done on a piece of encrypted data sent to the system, but that's enough for many services, says Lauter. "You can still do a lot of statistical functions and perform analysis like logistical regression, which is used to do things like predict how likely a person is to have a heart attack," she says. 

The software was tested on an ordinary laptop. It added together 100 numbers, each 128 binary digits long, in 20 milliseconds. This and other performance tests show that such a system could be used for a real cloud service today, says Lauter, without waiting for the fully homomorphic encryption designs to be made practical. 

"Those schemes are still very much in flux and evolving fast," she says. "We're hoping that people will do serious implementations of our design."

Daniele Micciancio, a professor and cryptography researcher at the University of California, San Diego, says that Lauter and colleagues have demonstrated a new avenue for work in the area. "She showed that taking a fundamental building block of the schemes for fully homomorphic encryption could be enough to build applications," he says. "It demonstrates that it is possible to work with homomorphic encryption at different levels." 

As techniques for fully homomorphic encryption evolve, it might be possible to gradually increase the complexity of calculations that can be performed practically. Today, however, performing calculations using fully homomorphic encryption often takes around 30 minutes, not a few milliseconds, says Micciancio.

Carson Sweet, founder and chief executive of Cloudpassage, which works on security for cloud services, says the technology will need considerable development to attract the interest of commercial cloud providers, but could solve significant problems. "You can push encrypted data into a cloud service today, but it can't be indexed, searched, or operated on," he says. 

Sweet says that the privacy and security issues associated with storing and processing medical records make this an area in which the technology could be deployed first. "Federal government and financial services are other areas where people are willing to accept a performance penalty to get better security," says Sweet.

Congress and the Cloud Computing Act of 2011

Excerpted from TrCB News Report by Jeffrey Rocha

After watching the US Congress argue and argue over the debt ceiling, while letting FAA employees work for free because the Fed couldn't get its act together over 16 million dollars a year (which meant losing about 20 million dollars a day in taxes), I got really a bit worried when I heard about a bi-partisan proposal for federal regulation of cloud computing.

It turns out if they don't muck it up, this looks like both parties are doing some forward thinking.

Here's the deal. It is (as proposed right now) a concept to actually get things together with other countries on how to handle an intrusion (data theft) of data hanging out in the cloud.

It raises a good question. Think for a moment. Suppose your name and credit card data is swiped from a provider in a cloud environment? What set of laws (or lack thereof) are there for possible recourse?

Do you look to your state or country laws when the data breach occurred outside your country? Can a provider just contractually "write away" responsibility? Would that hold up in court? Which court would hear the case, and would that create "case law"?

The bill is still young. There is still plenty of time to make some good legislation - or turn this into something less effective than the Can Spam Act. There has been some criticism of the suggested fines for a data breech.

Here is to hoping that points such as what the size of a fine should be get kicked down the road for more impressive gains. I'm not expecting any garden of paradise here. Yes there are countries that have signed onto copyright law, for example, and yet do zero to enforce violations. It appears China is attempting to crack down. In Mexico blatant piracy has recently moved from street vendors into stores where it isn't just literally laying at your feet.

And maybe Congress would gain back a little respect if it could create a common rule set with the EU, Canada, and China regarding cloud hacking. Being proactive before it becomes the nightmare like spam, has got to be of some help.

Martineau Chooses Virtustream's xStream For Enterprise Cloud Computing

Virtustream, a leading provider of cloud services and next-generation infrastructure solutions, today announced that Martineau, a leading independent law firm with offices in London and Birmingham, will migrate its IT infrastructure, including all production servers, from a physical environment to Virtustream's xStream enterprise cloud platform.

"The Virtustream Advisor analysis provided visibility into our existing IT environment, outlined cloud-based compute requirements and delivered strategic and tactical recommendations to support our transition to the cloud. We expect migration to xStream to deliver the security and flexibility we need while offering significant savings."

To improve business continuity and ensure security and availability of its data, Martineau evaluated its existing IT environment and considered the advantages of moving data off-premise to a multi-tenanted private cloud. After consulting with several vendors, including IT storage specialists, Martineau commissioned Virtustream's Cloud Advisory Services group to deploy Advisor, Virtustream's infrastructure modeling and analysis toolset. The Virtustream Advisor analysis mapped infrastructure requirements to Martineau's business objectives, which included reducing technology-related total cost of ownership and capital expenditures, and improving IT resource planning, resilience and efficiency.

Virtustream Advisor also projected environmental and cost savings that could be achieved through a cloud deployment. By transitioning from a physical environment to a cloud environment, Martineau is expected to reduce carbon output by 68 percent and yield cost savings by leveraging cloud resources proportional to infrastructure needs.

"Data security is of utmost importance, as is accessibility and ensuring that appropriate Martineau employees have access to that data when it is needed," said Dean Hill-Jowett, IT director, Martineau. "The Virtustream Advisor analysis provided visibility into our existing IT environment, outlined cloud-based compute requirements and delivered strategic and tactical recommendations to support our transition to the cloud. We expect migration to xStream to deliver the security and flexibility we need while offering significant savings."

Currently, Martineau is in the process of migrating its infrastructure onto Virtustream's xStream enterprise cloud platform.

"Cloud computing has proven to deliver tangible benefits for organizations, but migrating to the cloud is a major undertaking, one that is often approached cautiously as executives need to be assured of security and reliability of a cloud platform," said Julian Lloyd, vice president, Cloud Strategy Services, Virtustream. "Virtustream was able to provide insight into potential cost savings and operational efficiencies, enabling the IT team to present a strong business case for this transition to a cloud-based solution."

Nebula Aims to Disrupt and Democratize Cloud Computing

Excerpted from Xconomy Report by Wade Roush

If you're a young Silicon Valley entrepreneur, you'd probably give your Prius and your iPad, and maybe throw in your X-Men comic collection, to hear Andy Bechtolsheim ask you the question he posed to Chris Kemp this spring: "What's the name of your company? I want to write you a check right now."

If you don't recall, Bechtolsheim is the Sun Microsystems co-founder and investor who wrote the $100,000 check that launched Google in 1998. The legend is that Sergey Brin and Larry Page had to incorporate under the name they'd picked so that they could actually cash it.

The 34-year-old Kemp, however, didn't have a name ready. In fact, he didn't even have a company - he was still a civil servant at the time of his meeting with Bechtolsheim, working as chief technology officer at NASA.

Kemp had led a project at NASA Ames Research Center in Mountain View, CA, to create open source software that would tie together the agency's computing and storage resources into a private cloud computing environment similar to Amazon's Elastic Compute Cloud (EC2) and Simple Storage Service (S3). 

The project was called Nebula, and together with other software components built by cloud hosting service Rackspace, it formed the core of an open-source software library called OpenStack.

Kemp had conceived the project mainly in order to help NASA, the White House, and other government organizations get more efficient about the way they use computing resources. With cloud computing as hot as it is, though, Kemp had already heard from a few Silicon Valley investors telling urging him to take OpenStack commercial. He'd always brushed off the idea.

But when he finally met with Bechtolsheim, he says, "Something clicked. I thought, 'if Andy Bechtolsheim is willing to slide a check across the table, perhaps I should consider leaving NASA.'"

Which he soon did. Kemp resigned from NASA in April and together with Devin Carlen, an engineer who'd worked on the Nebula project for both NASA and Rackspace, and Steve O'Hara, a telecom and semiconductor industry veteran, incorporated Fourth Paradigm Development-soon renamed Nebula

By May 1st, the company had collected seed funding from a billionaires' club that included not just Bechtolsheim but also David Cheriton and Ram Shriram, both early investors in Google alongside Bechtolsheim.

The team had also signed venture term sheets with John Doerr at Kleiner Perkins Caufield & Byers and Peter Bell at Highland Capital. (The exact amount of money the start-up raised hasn't been disclosed, but when I asked Kemp "Are we talking about a $2 million round here or a $20 million round?" he indicated that it was closer to the latter.)

Having recruited this dream team of investors, Nebula announced its existence in late July at the O'Reilly Open Source Convention, better known as OSCON, in Portland, OR. It's already hired 20 employees, about half working from its Palo Alto headquarters and the other half, all engineers, in Seattle. 

The company's plan is to sell a hardware appliance - in essence, a very smart networking switch - that, once installed inside a company's data center, will use OpenStack to automatically organize existing commodity servers and storage arrays into a private cloud infrastructure.

The attraction of the cloud model, of course, is that companies can save lots of money by spreading their big-data analytics tasks and other work flexibly across hundreds or thousands of computing nodes. The attraction of private clouds is that organizations that own them don't have to pay Amazon's rates, or risk putting their closely held financial information and other sensitive data on a public cloud. 

But while OpenStack is free, setting up and administering a private cloud is still tricky. "We're saying that for people who don't want to hire a big engineering team to administer OpenStack-if they really just want a turnkey private cloud-they can come to us," Kemp says.

Nebula and its investors are betting that the movement Amazon started, and that Rackspace and many other "Infrastructure as a Service (IaaS)" providers are pushing forward, is destined to roll through most of the corporate computing world, the way minicomputers did in the 1970s and 1980s and client-server computing did in the 1990s. 

Nebula will "disrupt and democratize cloud computing," Kleiner's Doerr predicted in a statement released on the day of Nebula's launch. He went on to say that Kemp's team "has the unique expertise" to deliver the technology in a simple, scalable, low-cost manner. That remains to be seen-the company doesn't expect to begin field trials of its appliance until the fourth quarter of this year, and there are plenty of other companies, including big ones like IBM and EMC, developing their own private-cloud appliances.

But Doerr is right about one thing-none of the competitors can count the pioneers of OpenStack as founders. More than 100 companies are already contributing to the OpenStack ecosystem, which seems likely to evolve into the open-source foundation for a broader cloud-computing movement, the same way open-source tools such as Linux and Apache undergirded the Web revolution.

But Linux probably wouldn't have spread as fast as it did unless for-profit companies like Red Hat had come along to make it safer and easier for enterprises to use. So, is Nebula to OpenStack as Red Hat is to Linux? "It's not a perfect analogy, but it's an incredibly good analogy," Kemp says.

Red Hat is in the service-and-support business, while Nebula intends to make money selling hardware. And Red Hat created many diverging versions of Linux, whereas Nebula's hardware will always run the latest standard implementation of OpenStack, according to Kemp. But the analogy holds in that Nebula, following in Red Hat's footsteps, will be able to add security, chargeback mechanisms, and other features that will make operating a private cloud feasible for companies that would never consider using a public cloud like Amazon's.

Nebula's isn't building its first enterprise cloud appliance from scratch. Kemp says it will be built around a 10-gigabit Ethernet switch made by Arista Networks, the Santa Clara, CA-based high-speed networking company founded in 2005 by none other than Bechtolsheim. Since many companies are already in the process of upgrading the networks in their data centers from 100-megabit Ethernet to 10 gigabits, Kemp reasons, they're likely to be in the market for switches already. 

"We realized that if we could take one of these top-of-rack switches that people are already upgrading anyway and attach an appliance that would auto-detect whatever was plugged in and determine if it is a supported hardware configuration, that would allow us to deliver this turnkey cloud provisioning feature," he says.

That detail about "supported hardware" is important. Kemp says Nebula isn't building a magic box that can turn any data center into a private cloud. The Nebula fabric controller-the main program that decides which computing nodes in a cloud to activate-will only work if the nodes themselves are commodity servers from companies like Dell and HP. 

"What we learned at NASA is that you can't expect performance, availability, or security if you try to support every piece of hardware ever invented," Kemp says. "The key to large-scale infrastructure is to homogenize things."

Nebula's business model will be pretty simple: customers will buy the appliances (for a price that's yet to be announced) and subscribe to a support contract that will entitle them to quarterly upgrades to the latest version of OpenStack. Of course, the more appliances Nebula customers buy, the more switches Nebula will have to buy from Arista-which seems like a pretty good deal for Bechtolsheim.

I wondered aloud to Kemp whether that might have been Bechtolsheim's motive for poaching him from NASA. "Andy didn't poach me from NASA," Kemp replied. "And [the Nebula appliance] is not just an OpenStack variant of an Arista switch-it's more like OpenStack with a switch bolted on. But as a company that has invested trying to make the network faster and less costly, there is certainly some strategic alignment."

Kemp says Nebula will continue to contribute to OpenStack. In fact, Carlen is leading a project called Dashboard, which will give OpenStack users a Web-based interface for monitoring and managing their private clouds. "The great thing about OpenStack is that it gives the market a way to contribute and innovate," Kemp says. "By creating a reference implementation we are able to add security features that might be of interest to folks who aren't Amazon's target customers."

Amazon itself, of course, is free to adopt all or parts of OpenStack for EC2 and S3-but even if it did, that wouldn't change the economics driving enterprise interest in private clouds, in Kemp's view. "What Facebook and Google and Microsoft have done with their own cloud systems is to say, 'We can't afford enterprise-class everything,'" he says. 

"Orders of magnitude cost savings can be achieved if the software is smart enough to take advantage of tens of thousands of commodity nodes. But Facebook and Google are the anomalies. We are trying to make it possible for the thousands of businesses that don't have the expertise to build these scale-out systems to take advantage of all the great innovation that has happened with OpenStack."

iCloud: It's Not the Cloud, But It's Good for the Cloud

Excerpted from InfoWorld Report by David Linthicum

Apple's iCloud is coming this fall, and I agree with with my InfoWorld colleague Galen Gruman that we should not be afraid of iCloud. However, this synchronization service could be delivered to an audience that has yet to understand what cloud computing is, let alone know if they should accept it into their homes and offices.

A recent survey from the NDP Group found that just 22 percent of consumers are familiar with the term "cloud computing." The survey discovered some differences between cloud-savvy versus non-savvy (NDP's categories) consumers. For example, 84 percent of respondents familiar with the concept use cloud-based e-mail, whereas 68 percent who are not familiar with the term nonetheless have their e-mail in the cloud -- they just didn't think of it as the cloud.

Moreover, Apple's iCloud is a different type of cloud computing that focuses more on keeping information synced across endpoint devices such as iPhones, iPads, Apple TVs, and Macs. The data stored at Apple's iCloud data center is essentially temporary, for managing syncing and backups. By contrast, most clouds are about moving the processing and data from local devices into Internet-based servers and resources, thus raising an additional question: Is iCloud a good representation of cloud computing?

I believe that most people who use iCloud won't understand cloud computing, even after they use it -- and that's OK. Instead, iCloud will be the typical offering from Apple: one that's so turnkey and user-friendly that consumers never see most of its underlying complexities. All they know is that their data magically syncs among devices, and they don't care whether it's via cloud computing or carrier pigeons.

For those who equate iCloud with cloud computing, that could cause confusion. But generally speaking, iCloud will provide good PR for cloud computing and drive more acceptance into enterprises through the users, as is the increasing case in today's world of consumerized IT. Apple's iCloud won't be as scary as Amazon Web Services or even Microsoft's Office 365, which are very different beasts.

Those who work the world of cloud computing have a tendency to look down their nose at iCloud and other consumer-oriented services that are beginning to emerge. Many call them "cloud with training wheels." Fine, but dismissing them is shortsighted. After all, they will become an important part of the journey toward the use of cloud computing technology.

EchoStar to Shut Down IPTV Service

Excerpted from CED Magazine Report by Brian Santo

EchoStar will begin shutting down its satellite-based Internet protocol television (IPTV) delivery service, ViP-TV, at the beginning of September.

Michael Hawkey, EchoStar's Vice President of Sales & Marketing, said the company is working with customers to help them migrate either to a different service or to a competitor on a case-by-case basis.

He did not specify what alternatives EchoStar might be offering. He said EchoStar does not have a unified product as an option, but the company is working with its customers on a company-by-company basis on alternatives.

EchoStar jumped into the business of delivering lineups of MPEG-4 IPTV channels in 2007 and got a bit of a boost helping to fill in the gap created when competitor SES Americom shut down its similar IP Prime service in the middle of 2009.

At the time, SES Americom said with only about 70 customers, mostly smaller phone companies, it was not getting enough business to justify continuing.

Hawkey declined to comment on the size of the market it had with ViP-TV. Announced customers included CT Communications (Ohio), Duncan Cable (Vermont), BTC (Oklahoma) and Canby Telcom (Oregon).

EchoStar will completely shut down ViP-TV at the end of September.

Along with several companies that can provide channels through terrestrial networks, EchoStar's shutdown of ViP-TV will leave two notable companies able to provide satellite delivery: Avail-TVN and the Comcast Media Center.

Avail-TVN's COO Jon Romm said his company has already transitioned three former EchoStar customers and is working with others. "There's no need to panic," Romm said.

He noted that in many cases, EchoStar clients have all the capabilities they need in place for Avail-TVN to accomplish a migration remotely.

Avail-TVN will host a Webinar on Monday in which it will explain the options available to any EchoStar customers looking to make the switch.

Small Telcos Can Get Cloud Boost

Excerpted from Light Reading Report by Carol Wilson

The service provider rush to cloud services has largely focused on larger companies like Verizon Communications and CenturyLink and their cloud expertise acquisitions. But smaller telcos are also getting into the cloud services business and without making massive upfront investments.

Companies such as CHR Solutions, Parallels, NeoNova Network Services, and AppDirect are developing cloud services that can be white-labeled by smaller service providers who want to bundle outsourced IT applications with data services for their business customers.

"We are seeing a lot of activity relative to cloud in that area," says Bernie Arnason, Managing Partner, Pivot Media and a consultant to Tier 2 and smaller telcos. Many of these companies don't have a large enough base of business customers to justify investing in their own data centers or the staffing required. But they do see the need among their customers, ranging from anchor institutions such as hospitals and school districts to SMBs, for outsourced IT applications, he says.

Arnason is hosting the Cloud Services Summit at Light Reading's TelcoTV event in New Orleans, LA this October.

There is a sense of urgency here. Smaller telcos are even more vulnerable to declining core wireline revenues because most of them can't make up the losses with wireless income, and they also see threats to other sources of funding, including Universal Service Fund money and Intercarrier Compensation.

"The over-arching theme driving all of this activity is revenue diversification," Arnason says.

CHR Solutions is a leading provider in this area, building on the products it has been selling the independent telco industry for 60 years. Traditionally, those included financing and help with regulatory issues, but more recently, CHR added a portfolio of Business Process Outsourcing Services that include operating a telco's network operations center and managing its IT services as well.

"Part of what we are doing is educating smaller telcos about what the outsourcing business model looks like, both internally and externally," said Kevin Kutcher, Senior Director of Corporate Marketing. "We can show them how to improve their operational efficiency, which is important in this time of declining revenues. But we can also give them the ability to brand IT services in their community and provide those to hospitals, schools, government units, under their own brand, based on our back end, housed in our five data centers around the country."

The CHR cloud services come packaged in three flavors - consumer, SOHO/SMB, and enterprise - ready to be white-labeled and sold.

Parallels isn't focused on smaller telcos, in fact it serves some of the largest carriers, such as KPM and Charter Communications, but it packages the most common business applications so that even the smallest telcos can sell them as cloud offerings, particularly targeting the SMB community.

"SMBs are looking for enterprise-class software, but they like the pay-as-you-go model that comes with a cloud-based IT service, and they like not having to invest heavily upfront or add staff to support these applications," says John Zanni, VP of Service Provider Marketing and Alliances for Parallels.

Buying the cloud service through the local telecom service provider also offers a level of comfort for a small business just venturing into cloud services; the service is supported by a company they trust and already deal with for other services.

AppDirect also is not exclusively small telco focused - it sells business apps through its Business Applications Network and through companies as big as Bell Canada, where it supports a value-added services portfolio.

But the company also partners with any size telco, down to the smallest, to create an applications marketplace for that service provider which enables basic business apps to be delivered on a software-as-a-service basis and can be integrated into the carriers' OSS/BSS system.

Like CHR, NeoNova is primarily focused on the smaller telco market, delivering GoogleApps to those companies and their customers.

One other distinct possibility for some rural telcos is earning a piece of the cloud services pie through state or regional consortia to which they belong, Arnason says.

"These consortia are a channel to the very small telco," he says. "So even if they are not selling the services themselves, as a condition of their ownership in the consortium, they are participating."

Cloudera Recruits Channel Partners for Hadoop 

Excerpted from Channel Insider Report by Chris Talbot

Cloudera is turning to the channel to build out its business around Apache Hadoop. A new partner program will also introduce what Cloudera is calling the industry's first Hadoop certification program.

According to Ed Albanese, head of business development at Cloudera, the installed base for the open source Apache Hadoop is growing, and that's driving opportunities for the channel.

As a strong supporter of Hadoop with developers regularly working on applications for the Hadoop platform, Cloudera is launching the Cloudera Connect Partner Program, which is open to resellers, system integrators, ISVs, and independent hardware vendors (IHVs).

"I think what's going to catch both partner and customer interest is the fact that we have the industry's first certification program for Hadoop," Albanese said.

The core tenet of the program is "zero to Hadoop," so the company is looking to work with partners of all experience levels in Hadoop, including those that are looking through the eyes of someone fresh to the open source platform. Through the program, Cloudera will provide training and marketing resources through a partner portal, a staff and technology certification program for Hadoop, deal registration for Cloudera Enterprise, and various pieces of sales and marketing collateral.

One major feature that Cloudera expects will be of interest to its partners is the ability to not only certify staff on Hadoop, but also technology. Hadoop is a distributed computing infrastructure, so it is no small feat to certify Hadoop interoperability on a partner's technology, Albanese said.

"We're allowing them to take their existing technology and then, through access to all of our resources, be able to get their technology to work with Apache Hadoop," he said.

Cloudera will be offering its comprehensive Hadoop knowledge base to partners - a knowledge base it currently only provides to customers. Free technical training and standard discounts on technology certification training will also be available. Partners will also have access to a developer portal.

"This certification program is a great step to enable customers and partners to tell their stories," Albanese said.

The announcement of the Connect Partner Program follows closely on the heels of the announcement that Cloudera and Dell had jointly released a complete Apache Hadoop solution. Dell has joined the program as an IHV. Likewise, several other vendors are on board as IHVs or ISV, including Cisco, Fujitsu, SGI, and IBM.

With a mix of vendors, IHVs, ISVs, systems integrators, and resellers in the program, Albanese said he's not concerned about creating channel conflict. Not everyone in the program will be authorized to resell Cloudera products. Instead, the company will be selecting resellers from the program based on the geographies and verticals they serve, he said.

Cloudera plans to expand its coverage areas, and resellers will be chosen based on the regions they serve. He described the interest from the community as "huge."

"We get inquiries on a daily basis from partners," he said.

File Sharing Continues to Grow, Not Shrink

Excerpted from Techdirt Report by Mike Masnick

The entertainment industry always seems to think that the next thing they do will suddenly kill off piracy. They file lawsuits, they shut down sites, they change laws, they, finally (kicking and screaming), agree to license innovative new services... and then they declare victory over "piracy." To hear industry folks talk about things these days, between the LimeWire shut down, the new six strikes plan and the impending approval of PROTECT IP, piracy is somehow on its very last legs. There's definitely a sense of mission accomplished coming from them.

There's just one problem with this. None of the actions taken by the industry appear to have slowed down infringement online. Instead, it appears that it just keeps growing. Yes, some legal services have been growing faster, but in typical fashion, the industry seems to want to make those services worse, not realizing that there's still a viable (if illegal) alternative for many users. 

At what point will the industry finally realize that maybe there's a better strategy, one which doesn't treat fans who use file sharing as the enemy, but as a potential opportunity?

Coming Events of Interest

TransmitCHINA Talks - September 14th-16th at the Great Wall of China. International leaders, thinkers, innovators, and creators will have an exclusive opportunity to hear a cross-section of preeminent thought leaders from some of the world's most innovative organizations in the digital and creative content ecosystem.

NY Games Conference - September 21st-22nd in New York, NY. The most influential decision-makers in the digital media industry gather at this event, now in its third year, to network, do deals, and share ideas about the future of games and connected entertainment. Lively debate on timely cutting-edge business topics.

Digital Music Forum West - October 5th-6th in Los Angeles. CA. Top music, technology, and policy leaders come together for high-level discussions and debate, intimate meetings, and unrivaled networking about the future of digital music. Digital Music Forum is known worldwide.

Digital Hollywood Fall - October 17th-20th in Marina del Rey, CA. Digital Hollywood (DH), the premier entertainment and technology conference in the country, once again welcomes the Variety Summit, which has been co-located with its past three DH events.

Future of Film Summit - November 7th-8th in Los Angeles, CA. An exclusive group of industry thought-leaders discuss the current state of the industry, and how film and transmedia deals will be struck in the coming years. This is a unique opportunity for creatives, producers, buyers, and film financiers.

Streaming Media West - November 8th-9th in Los Angeles, CA. Attended by more than 2,500 executives last year, SMW covers the entire online video ecosystem from content creation and management, to monetization and distribution. The number-one place to come see, learn, and discuss what is taking place with all forms of online video business models and technology.

World Telecom Summit 2011 - November 9th-11th in Singapore. The 2011 program will focus on topics that demonstrate innovation across the telecommunications industry, both on a commercial and technical level, to improve profitability and quality of next generation technologies and customer experiences.

Future of Television - November 17th-18th in New York, NY. Top television and digital media industry executives discuss the increasing importance digital media for the future of the television industry. Topics include viewer trends; programming for non-traditional platforms including online video, VoD, HD, IPTV, broadband and mobile.

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This page last updated August 21, 2011
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