For companies cutting IT costs, the cloud is the place to be

Story first appeared on USA Today -

Data storage shift helps companies' bottom line

Cloud computing is exploding and growing faster than a swirling funnel crossing the Oklahoma plains. The next generation of computing lowers information technology costs while increasing corporate profits at the same time. And what's not to like about that?

That one-two punch was revealed in a study obtained by USA TODAY conducted by England's Manchester Business School. The study, which was commissioned by San Antonio-based hosting company Rackspace, is expected to be released Wednesday.

The Manchester study indicates that cloud computing allows U.S. businesses to slash information technology costs by about 26%. What's more, 62% of those same American companies say that deploying in the cloud improved their bottom lines.

"The results are finally showing what we've known all along," says Rackspace Chief Technology Officer John Engates. "It's not just about moving workloads from your data center to our data center."

The rise of cloud computing has much bigger ramifications. It's a tectonic shift in how we work, live and play. iTunes is in the cloud. Ford's cars are connected to the cloud. Google's Gmail is based in the cloud. But those are largely consumer examples; now corporate computing is also shifting to the cloud.

"The move to the cloud can't happen fast enough for some companies," says Engates, who has been on the ground floor of the cloud computing movement.

Cloud computing has myriad definitions, but in the most general sense it means devices linked to data centers located just about anywhere over a combination of wireless and wired networks. There are "private clouds," where companies own and control the data centers, which are usually centrally located in lower-cost geographies. And then there are "public clouds," in which companies use computing power delivered from servers they don't own, which are usually shared with other corporate customers.

Big companies tend to use a combination of private and public clouds, reserving their high-security functions and digital record keeping for the data centers they control. But the growing acceptance of public clouds foreshadows a trend in which computing power will be delivered similarly to the way electricity is distributed by utility companies. In fact, tech geeks refer to the long-term public cloud concept as "utility computing."

We are a long way from when most companies no longer own servers, or operate so-called on-premise data centers, and rely solely on public clouds. There are a number of reasons, including security concerns, control and reliability. But the Manchester survey suggests that enterprise computer customers are embracing the shift enthusiastically.

In addition to the cost-efficiency of cloud computing, the study found that 68% of U.S. firms are plowing the cash they saved back into their businesses. They are using the cost savings to improve and expand product lines, services and other offerings. More than 60% of the companies surveyed say they are using the money to hire new employees, give raises and offer bonuses. Employment at the American companies surveyed increased 28%.

While existing companies are transitioning to cloud computing at their own pace, start-ups unsurprisingly are totally embracing the change -- especially software and social-media concerns and online retail outfits.

More than half of the start-ups surveyed said they wouldn't have been able to afford on-premise data centers at the time of their launch.

Of course, it is self-serving for a cloud-service provider to hire a study that supports its case, but the numbers are the numbers, and Manchester interviewed some 1,300 companies in both the U.S. and the United Kingdom.

Intel's general manager of cloud computing, Jason Waxman, isn't surprised by the findings. Server, storage and networking sales have been booming at the chip giant in recent years. Intel pegs the compounded growth rate for servers at about 25% to 30% a year based largely on expansion of private and public clouds.

"The more companies can save on computer infrastructure, the more they can spend on infrastructure," Waxman says. "All of these new opportunities represent a huge build-out."

Waxman thinks that public cloud providers, including Rackspace, Seattle-based Amazon.com (yes, that Amazon) and San Francisco-based GoGrid, could grow as much as 70% a year.

Gartner, the industry research consultant, predicts that the total public cloud market could swell to more than $206 billion in 2016, roughly double what it is now.

Says Intel's Waxman, "It's an astronomical opportunity."

New Google Cloud-based Computers Pros/Cons

Story first appeared in USA Today.

Google is mum on how many Chromebooks have been sold since launching the cloud-based computers with laptop-makers Acer and Samsung nearly a year ago. But the machines haven't exactly gone mainstream, with fewer than 220,000 Chromebooks have shipped so far, a modest sum.

Indeed, much of the noise in the portable computing space these days surrounds the "Ultrabook" class laptops evangelized by Intel. When it comes to operating systems, the chatter focuses on Microsoft's upcoming Windows 8 or Apple's Mac OS X Mountain Lion.

Yet Google claims to be "very happy" with Chromebook sales to date, pointing out that the computers routinely show up on Amazon's best-seller lists and are gaining ground in education and business.

Google is about to crank up the volume for Chrome hardware and the cloud-based operating system that relies on a Chrome Web browser for practically all that you do. Today, the search giant unveils two models for Chrome, both from Samsung, both with Intel Core processors.
There's the next version of the Chromebook itself, $449 with Wi-Fi only or $549 for a version that adds built-in 3G cellular. Then there's the $329, small rectangular Chromebox that reminds you of Apple's Mac Mini in that you'll have to supply your own mouse, monitor and keyboard.

The machines incorporate the eighth significant update to Chrome software since launch. Such regular software updates are a key feature of Chrome that promises to keep the computers fresh, secure or, as Google's likes to say, "always new" without you having to manually install anti-virus software or anything else. So even folks who purchased a Chromebook last year should benefit.

Those initial Chromebooks were only peddled online. But beginning next month Google will start selling the computers in select physical Best Buy stores in the U.S. as well.

The first Chromebooks were appealing as relatively light, attractive, portable computers that are a breeze to set up and that boot up very quickly. They have good battery life. But there was also at least one critical — some would say fatal — flaw: The computers are largely crippled when you are without access to the Internet. To be sure, we're migrating to a cloud-based era of computing, but folks are still accustomed to installing software and storing stuff internally. Both the Chromebook and Chromebox have 16 gigabytes of internal SSD storage, not very much.

Of course, having gobs of internal storage is beside the point. The latest Chrome computers, like their predecessors, are built for the cloud. You pretty much rely on Web apps, though Google has tried to make the computers more usable when you're offline. In all, Google says, there are tens of thousands of apps in the Chrome Web Store, hundreds that work offline.

As before, set-up is dead simple. You choose your language and network for connecting online, enter your Google (Gmail) credentials and you're pretty much good to go. Your bookmarks and open tabs for Web pages on any other computers you have with the Chrome browser should be synced up. And this time around, though, the Chromebook experience is generally more polished.

With an active Internet connection, you can listen to all the music you have stored in the cloud through a Google Play app; watch movies on Netflix, something not possible on earlier Chromebooks; and stream YouTube videos at 1080p high-definition resolution.

Through a built-in photo viewer, you can perform simple edits (cropping, brightness). And you can do a video chat with up to nine friends using the Google+ Hangout app.

The interface has been redesigned to let you "pin" favorite apps to the launcher at the bottom of the screen — switching among them is easy. Managing all the tabs that opened simultaneously at the top of the screen, however, was somewhat messy at times.

Boot times are even zippier than before. Users arrived at the login screen for Chromebook about five seconds after pressing the power button. The new touchpad is more responsive than the first model.

Google says the latest Chromebook is about 2½ times faster than before, and Chromebox about 3½ times faster.

The Chromebox, has 6 USB 2.0 ports and two display ports and is Bluetooth compatible.

Chromebook has a decent 12.1-inch display and weighs 3.3 pounds. Google says you'll get about six hours of continuous use off the battery, which seems reasonable. Chromebook has 4 gigabytes of RAM and sports a pair of USB 2.0 ports. Also on board are slots or connectors for memory cards, bigger displays and Gigabit Ethernet.

But you can't run a cable to a printer and expect it to work. Instead, you need to take advantage of Google's "cloud print" service, if you have a compatible printer. The workaround if you don't have such a printer requires you to have Chrome installed on a Windows PC, Mac or Linux machine that is connected to the printer.

Google Drive is coming with the next software update, about six weeks away, though it's now available as a beta. You will be able to copy files from a File Manager onto Google Drive or access files from Google Drive and make them available offline on the Chromebook. For now I was able to display Word, PowerPoint, Excel and PDF files. The ability to edit Microsoft Office files offline is promised over the next several weeks as well.

Google is making available a Chrome Remote Desktop app, still in beta, that lets you access and control a remote PC or Mac desktop screen, and even display that desktop full-screen on the Chrome computer.

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Microsoft Aims To Alleviate Health IT Cloud Concerns

Information Week

 

Many healthcare providers have questions and doubts about adopting cloud computing for administration and hosting of their healthcare information. Steve Aylward, Microsoft's general manager for U.S. health and life sciences, has encouraged healthcare IT decision makers to embrace the technology, which he said could help them improve patient care and provide new delivery models that can increase efficiency and reduce costs.

"Just about everyone I know in healthcare is asking the same question: "What can cloud computing do for me?" Aylward writes in a June 28 blog post.

"Plenty," Aylward answers. "The cloud can allow providers to focus less on managing IT and more on delivering better care: It can, for instance, be used to migrate e-mail, collaboration, and other traditional applications into the web. It can also be used to share information seamlessly and in near-real-time across devices and other organizations," Aylward explains.

Generally defined as anything that involves delivering hosted services over the internet, a cloud computing model that offers a software-as-a-service platform is increasingly being offered to healthcare delivery organizations, especially small and medium-size physician practices that are budget constrained and have few technical administrators on staff.

What has helped information technology managers at health delivery organizations take a closer look at cloud computing, however, is the Obama administration's objective to move medical practices and hospitals away from paper-based systems and onto digitized records. Primarily through the Health Information Technology for Economic and Clinical Health (HITECH) Act, the government has established programs under Medicare and Medicaid to provide incentive payments for the "meaningful use" of certified electronic medical record (EMR) technology.

The government's drive to have every American provided with an EMR by 2014 will mean that digitized clinical data is expected to grow exponentially. However, several doctors contacted by InformationWeek say that, even with those considerations, they are in no rush to outsource the maintenance of their important records and they have delayed their decisions to put sensitive information, such as their EMR systems, onto a cloud-based computing model.

Dr. Michael Lee, a pediatrician and director of clinical informatics for Atrius Health, an alliance of five nonprofit multi-specialty medical groups with practice sites throughout eastern Massachusetts, said that while he recognizes that cloud computing can be a cheaper and more practical model, especially for non-mission-critical applications, he is waiting to see what improvements in security will take place over the next five to 10 years before supporting a decision to put high-level data on cloud computing technology.

"The only cloud computing that we would contemplate at the moment is in the personal health record space, so that patients would own the dimension in the cloud in terms of where they want to store or access information," Lee said.

However, putting more mission-critical information like EMRs on a cloud computing model is not something Lee is considering.

"At the moment I'm not convinced that there's a secure enough place in the cloud or that the functionality exists for us to do everything that we need to do in the cloud. The cloud allows for a tremendous amount of interconnectivity between computers because it's using data storage that's free amongst different networks and I wouldn't want healthcare information being scattered in a way that I couldn't protect it appropriately," Lee said.
Dr. Richard U. Levine, president of ColumbiaDoctors, the faculty practice organization of Columbia University Medical Center, expressed similar concerns, noting that while he thinks there will be a drive toward greater adoption of cloud computing, "security is a big issue and is one of our biggest concerns with cloud computing."

That sentiment seems to be a consideration Microsoft's Aylward is all too aware of.

"To be sure, concerns about data security and [Health Insurance Portability and Accountability Act] regulations remain deterrents to widespread cloud adoption in our industry. The notion of moving most or all of a healthcare providers' IT resources, including patient data storage, to a cloud service still is cause for concern among providers large and small," Aylward said in his blog.

The Microsoft executive also said, "The value of the cloud can be leveraged by any sized healthcare organization, and in any combination that they want at a comfort level that is right for them at this time. For example, a multi-site provider organization can use SharePoint Online -- an intranet portal -- within a private, secure online network to facilitate collaboration and information sharing amongst hospital staff."

Mark Bowker, analyst at Enterprise Strategy Group, believes the best use of cloud computing in healthcare will be to maintain data that is non-transactional and isn't needed on a regular basis.

"There's certain data, for example, notes on a person who broke their leg 15 years ago, that a doctor needs to access only at the time of the patient's visit and only if that patient is having trouble with the leg. Up until the time of the patient's visit, the doctor doesn't need that data so it needs to be stored, secured, and maintained for regulation and compliance purposes somewhere else. Why not leverage the cloud to do that?" Bowker asks. "The cloud is great for non-transactional data, which is the majority of capacity," Bowker adds.

Still, for David Kempson, VP and CIO at Phoenix-based Maricopa Integrated Health System, cloud computing is a technology that's not an immediate consideration at this time.

"Talking about shared services for EMR, I don't know that that's really on our radar screen right now. We have had some discussion around aligning with a vendor like Google for e-mail services, or e-mail archiving services, and I think the value proposition of the cost benefit of doing that is certainly intriguing, but we haven't made any final decisions to move in the direction of a cloud computing model at this point," Kempson said.

A recently published study conducted by Ipsos Research on behalf of Microsoft highlighted the security concerns swirling around cloud computing among business decision-makers (BDMs) in healthcare.

Among the findings are:
-- More than 2 in 5 BDMs in healthcare say they know at least a fair amount about cloud computing.

-- Nearly half of BDMs in healthcare (49%) say their company has used cloud computing.

-- Concerns about data security and privacy are the greatest potential deterrents of cloud adoption among BDMs in healthcare.

-- Eight in 10 BDMs in the healthcare sector (79%) would be more favorable towards cloud computing if the platform was private and not shared, more than in any other sector.

Nevertheless, last month two major announcements may have been the clearest indication yet that vendors believe there is promise in offering cloud computing to healthcare delivery organizations, especially among small and medium-size physician practices. In June, GE Healthcare introduced Centricity Advance, a new Web-based, SaaS platform that offers a combination of EMR, practice management, and patient portal solutions for small, independent physician practices. Last month also saw Dell announce a partnership with SaaS provider Practice Fusion to offer an electronic medical record package for small and medium-size medical practices.

According to Aylward, the healthcare industry and technology vendors are working toward developing a more secure cloud computing environment that meets regulations of the HITECH Act in the way data is stored and distributed in the cloud.

"As those assurances emerge, we expect that over the next three to five years, we'll see more providers embracing the benefits of cloud computing. We'll see an increase in the use of online services for business applications, such as e-mail, CRM, and file-sharing," Aylward predicts. "We expect to see an increased adoption and mixture of private and public cloud deployment, with some larger organizations even experimenting with the cloud to create and sell custom applications. The possibilities of the cloud are endless for health organizations," Aylward added in his blog post.

HP, Microsoft Team Up To Tackle The Cloud

Business Week

Some of the biggest companies in computing are forging new alliances in hopes that together they'll benefit from a rebound in technology spending. A big area of demand is the emerging field of cloud computing, the delivery of software and other computing tasks via the Internet rather than on in-house machines.

The latest pairing came Jan. 13 when Hewlett-Packard (HPQ) and Microsoft (MSFT) said they will spend $250 million over three years to combine some research and development efforts and deliver prepackaged servers, storage, software, and networking gear. "These are two great companies that are lined up to make great things happen," HP CEO Mark V. Hurd told reporters on a conference call.

By 2011, businesses may spend $95 billion on cloud computing, or about 60% of the total, according to Merrill Lynch estimates. "The cloud is the driving force behind this deal," Microsoft CEO Steve Ballmer said on the conference call with Hurd. The rest of the $160 billion is expected to come from consumer-focused applications, including e-mail and entertainment services offered by companies including Google (GOOG), Yahoo (YHOO), and Apple (AAPL).

HP, Dell (DELL), IBM (IBM), and other computer companies are turning to advanced services to make up for falling margins and slowing rates of growth in PCs. Worldwide IT spending is expected to expand by 3.2%, to $1.5 trillion, in 2010, after declining in 2009, according to market researcher IDC.

Cloud Competition

Microsoft's Windows operating system is on more than 90% of the computers sold. Now it wants to provide software for the data centers that house much of the gear that delivers cloud services. But it's facing competition from challengers including Oracle (ORCL), VMware (VMW), and companies that use versions of the Linux open-source operating system.

By strengthening their technical and sales relationship, Microsoft and HP hope to develop products that can compete more effectively with any Oracle-Sun offerings as well as those from IBM and Cisco Systems. Oracle is expected to get a leg up in its cloud offensive through the $7.4 billion acquisition of server maker Sun Microsystems (JAVA).Cisco on Nov.3 announced a partnership with storage vendor EMC (EMC) and software vendor VMware to create packages of servers, networking equipment, storage, and virtualization software.

Dell has been the laggard in trying to bolster its data center credentials. The Round Rock (Tex.) company has struck partnerships with several services companies, software makers, and storage giants such as EMC, but it has moved more gingerly than rivals in creating a tightly woven suite of cloud computing offerings. A Dell spokesman declined to comment.

"Smart Bundles"

HP says its partnership with Microsoft is more than just an effort to bundle services the companies already offer. Hurd said the companies will dedicate 11,000 service reps who will be responsible for testing, loading, and providing services for products sold under the partnership, which will also have its own dedicated sales force.

HP says the resulting "smart bundles" of products will be configured to help lower energy consumption and be designed so they can be managed remotely.

Even so, Microsoft and HP suggested that while they may be giving their collaboration preferred treatment, they're not willing to close the door on other partnerships. With such a fat purse at stake, after two years of lean business spending on computing technology, they can't afford to.

Forecast for 2010: The Coming Cloud 'Catastrophe'

Business Week

Mark Anderson predicts a big remote-computing service disaster, lost momentum for Microsoft, and growth in consumer payments for online news content

Cloud computing enthusiasts be warned. Next year, computing services handled remotely and delivered via the Internet may undergo some kind of "catastrophe" that alerts companies and consumers to the risks of relying on the so-called cloud, says Mark Anderson, chief executive of Strategic News Service, an industry newsletter circulated to senior executives at technology companies including Intel, Dell and Microsoft.

A growing number of businesses and individuals are handing storage and various other tasks to outside providers, from photographers archiving pictures with Yahoo!'s Flickr to companies turning over complicated computing operations to Amazon. Tech prognosticator Anderson suggests that the tendency could backfire in some high-profile way in the coming year. "It could either be a service-outage-type catastrophe or a security-based catastrophe," he says. "In either case, it will be big enough. It will be the kind of disaster that makes you say, if you're a [Chief Information Officer]: 'That's why I didn't get involved with the cloud.'"

The warning on cloud computing is one of a handful of predictions from Anderson, who in December makes forecasts for the coming year. He also says computing wars will intensify in hardware and operating systems, especially in the mobile arena. Growth in netbooks and smartphones and increased reliance on cloud computing will continue to transform personal computing from the market dominated by Microsoft's Windows and to a lesser extent Apple's Mac. "The desktop will seem like a calm island that is surrounded by chaos, where all these opportunities are with no clear winners," he says.

Anderson is particularly bearish when it comes to the cloud. "My hunch is that there will never really be a secure cloud," he says. Businesses will view cloud services more suspiciously and consumers will refuse to use them for anything important, he says.

Securosis: cloud will keep growing

Cloud computing experts note that high-profile security breaches have already occurred. "Clouds don't make applications fail-safe," says Chris Hoff, director of cloud and virtualization services at Cisco Systems (CSCO). He points to Magnolia, the social bookmarking service that crashed and lost all its data earlier this year. "There will be other events like these in 2010, as there were in 2009 and 2008," Hoff says.

Still, many companies will conclude that the benefits of network-delivered outweigh the risks. "Even if there is an outage, it won't affect adoptions," says Rich Mogull, an analyst at Securosis, a security research firm. "Providers who compete with the vendor [that] goes down will come around and tell everyone how they're different. There will be some pullback but no dramatic change in adoption of the cloud."

Also on the horizon for the coming year, Microsoft will face multiple operating system challenges, including competition from a resurgent Mac OS, Google's Chrome OS, mobile operating systems from Android, Nokia's Symbian mobile OS, and others. "Two years ago it would have seemed like Windows had this all locked up forever, and now tell me who will win on all those hardware platforms," Anderson says.

Netbooks will gain in popularity and within a couple years will become the biggest segment of the personal computing market, Anderson contends. As netbooks and smartphones and Web tablets take hold, content in all forms will continue to break free from long-held restrictions, becoming substantially more mobile-friendly than ever. First-run TV shows and movies will be as readily available on handheld phones as they have been elsewhere—for a price.

Apple's iTunes, which sells not only music and TV shows, but also mobile applications, has proven that people are willing to pay for content on their phones, Anderson says. "They'll pay a small amount of money, but they'll happily pay," he says. "Some things will be free, but increasingly they won't be."
online content will finally earn cash

The willingness to pay for mobile content, in turn, will drive adoption of small payments, or micropayments, for content, Anderson says. Those over 35 who perceive value to content will be willing to pay. Those under 35, who are accustomed to getting content for free, won't, he believes. As consumers age, Anderson predicts their attitudes will change.

News media will also become increasingly willing to charge for content online. In recent months, News Corp. (NWS) CEO Rupert Murdoch has said the company will start charging for content on its newspaper sites. "I hate to say it, but Rupert is right," Anderson says. "People who have things of value in the media business damn well better charge for them."

And while software giant Microsoft will continue to dominate on the desktop, Anderson believes the company will lose relevance in the consumer electronics and mobile markets—except in the gaming arena. "It's time to say it: Microsoft has lost its play for consumers," Anderson says. "This is mostly about the phone."

The most important mobile players will be Apple, Nokia's Symbian, and Google's Android. Microsoft is going to have difficulty finding new revenue streams, Anderson holds. "It doesn't mean its going to stop growing, but it does mean that its growth is going to be pretty moderate and then it may taper off," Anderson says.

How accurate are Anderson's prognostications? Last year he predicted that voice-activated applications would come to smart phones, harnessing computing in the cloud. He forecast that the wireless industry would settle on a technology standard known as LTE, or Long-Term Evolution, for its next-generation technology. And mobile applications such as those on Apple's iPhone, he said, would catch on like wildfire.

Cloud, Mobile To Drive IT Growth For 2010

Information Week

Mobile devices supplanting the PC as the primary client for accessing the Internet and the emergence of "enterprise-grade" cloud services are among the transformative technologies expected to rock the IT industry next year, a research firm says.

After a year of recession-ravaged sales, the IT industry is poised to return to pre-downturn revenue levels and to see evolutionary changes in the way people and businesses interact with technology, IDC said in releasing its 2010 predictions.

"In last year's predictions, we talked about how a slow global economy would act like a pressure cooker on the IT market, speeding the development and adoption of new technologies and business models," IDC analyst Frank Gens said in a statement. "What's different about 2010 is that the economic recovery will release some of the pressure on spending, enabling a number of transformational tipping points to be reached in a year of economic upswing."

IDC's latest numbers on IT spending are encouraging. The analyst firm believes consumers and businesses worldwide will spend 3.2% more on telecommunications, hardware, software and services than in 2009, returning the industry to 2008 revenue levels of about $1.5 trillion.

Emerging markets will drive more than half of new IT industry growth, with spending up 8-13% in the BRIC countries of Brazil, Russia, India, and China, IDC said.

Looking at the IT industry in broad terms, spending on hardware, software, and services will grow in the 2-4% range, while telecommunications spending will rise 3%, the research firm predicted. The latter growth will be driven by a rebound in the Internet and data segments in mature markets and strong growth in mobile communications in emerging economies.

Among transformative technologies, the most important force in the IT market next year will be the continuing build-out and maturing of the cloud services and consumption model, IDC said. "The emergence of enterprise-grade cloud services will be a unifying theme in this area, with a battle unfolding in cloud application platforms -- the most strategic real estate in the cloud for the next 20 years."

Mobile devices will also be a powerful transformational force next year, challenging the PC as the primary Internet-enabled client platform for developers and users alike. The popularity of smartphones and the anticipated arrival of Apple's "iPad" tablet computer will help boost the number of mobile devices accessing the Internet to 1 billion by year's end, IDC predicted.

With so many devices in the hands of consumers, developers are expected to embark on an application building frenzy. The number of iPhone apps will triple to 300,000 and Android apps will surge by a factor of five or more, IDC said.

The same application bonanza is expected to occur in the netbook market, where new software ecosystems will emerge around the popular mini-laptops. Indeed, Intel on Wednesday released a beta version of a software development kit for building netbook applications. Most of the devices are powered by Intel's Atom processor.

Other IDC 2010 predictions include the emergence of a new, mashed-up generation of business applications that tap social and collaborative networks and derives analytics from them. "These 'socialytic' apps will not only bring new capabilities to customers and new growth to suppliers, but also new competition and threats to traditional leaders," IDC said.