"I wish I could tell you the issue is overblown but that's not the case," says Pat Peterson, Cisco fellow and chief security researcher.
Conficker.C, now under the microscope in labs, reveals "an insane amount of effort in engineering this," Peterson says.
Network World Article Link:
http://www.networkworld.com/news/2009/033009-conficker-april-1.html
Tuesday, March 31, 2009
The Conficker Worm is in the News
I was listening to the radio on the way to work yesterday to a technical guru explaining the conficker worm to the radio host and it was very comical! There seems to be confusion on this virus - of course the mystery around the worm “It is waiting for instructions” brings it extra attention. We had an experience with it at one client and this variant was somewhat difficult to clean up and was causing some pain by locking users out of the system. Overall conficker (AKA downadup) is not a paticularly distructive virus. Anyway here is a a link to a segment from 60 minutes – it is well done and you can see how this may have helped grab the publics attention. I have also posted the information on conficker worm from Symantec’s web site.
http://www.cbsnews.com/stories/2009/03/27/60minutes/main4897053.shtml
The Conficker Worm
From Symantec Website
Worried about the Conficker worm striking on April 1st? A few simple steps can protect you.
Target: All users of Windows XP and Windows Vista.
If you’re worried about the Conficker worm striking on April 1st, don’t be.
On April 1st the Conficker worm will simply start taking more steps to protect itself. After that date, machines infected with the “C” variant of the worm may not be able to get security updates or patches from Microsoft and from many other vendors. The creators of the worm will also start using a communications system that is more difficult for security researchers to interrupt.
The Conficker worm, sometimes called Downadup or Kido has managed to infect a large number of computers. Specifics are hard to come by, but some researchers estimate that millions of computers have been infected with this threat since January. Current users of Symantec’s Norton security products are protected. Users who lack protection are invited to download a trial version of Norton AntiVirus 2009,Norton Internet Security 2009 or Norton 360. All of these products will detect and remove this worm.
Symantec has a detailed technical analysis of the threat here.
What does the Conficker worm do?
We don’t know the purpose of the Conficker worm. Today the worm has created an infrastructure that the creators of the worm can use to remotely install software on infected machines. What will that software do? We don’t know. Most likely the worm will be used to create a botnet that will be rented out to criminals who want to send SPAM, steal IDs and direct users to online scams and phishing sites.
The Conficker worm mostly spreads across networks. If it finds a vulnerable computer, it turns off the automatic backup service, deletes previous restore points, disables many security services, blocks access to a number of security web sites and opens infected machines to receive additional programs from the malware’s creator. The worm then tries to spread itself to other computers on the same network.
How does the worm infect a computer?
The Downadup worm tries to take advantage of a problem with Windows (a vulnerability) called MS08-067 to quietly install itself. Users who automatically receive updates from Microsoft are already protected from this. The worm also tries to spread by copying itself into shared folders on networks and by infecting USB devices such as memory sticks.
Who is at risk?
Users whose computers are not configured to receive patches and updates from Microsoft and who are not running an up to date antivirus product are most at risk. Users who do not have a genuine version of Windows from Microsoft are most at risk since pirated system usually cannot get Microsoft updates and patches.
What to do if you are infected
1. Use your Norton product to identify which variant of the worm is on your computer.
2. Follow the detailed removal instructions for the specific version of the of the worm. These can be found here:
W32.Downadup.A writeup
W32.Downadup.B writeup
W32.Downadup.C writeup
Advice to Stay Safe from the Downadup Worm:
1. Run a good security suite (we are partial to Norton Internet Security and Norton 360).
2. Keep your computer updated with the latest patches. If you don’t know how to do this, have someone help you set your system to update itself.
3. Don’t use “free” security scans that pop up on many web sites. All too often these are fake, using scare tactics to try to get you to purchase their “full” service. In many cases these are actually infecting you while they run. There is reason to believe that the creators of the Conficker worm are associated with some of these fake security products.
4. Turn off the “autorun” feature that will automatically run programs found on memory sticks and other USB devices.
5. Be smart with your passwords. This includes
A. Change your passwords periodically
B. Use complex passwords – no simple names or words, use special characters and numbers
C. Using a separate, longer password for each site that has sensitive personal information or access to your bank accounts or credit cards.
6. Use a passwords management system such as Identity Safe (included in Norton Internet Security and Norton 360) to track your passwords and to fill out forms automatically.
7. Run Norton Internet Security, Norton AntiVirus or Norton 360. You can also try Norton Security Scan.
FAQ
Q: Am I safe if I don’t go to questionable web sites?
A: No. The Conficker worm seeks out computers on the same network. You can be in a coffee shop, an airport or in the office and the worm will quietly try to attach to your computer and run itself.
Q: How do I know if I am infected?
A: The best way to know if you are infected is to run a good antivirus product. One symptom that may indicate you are infected is finding that your computer is blocked from accessing the web sites of most security companies.
Q: Can’t I just run free antivirus software?
A: Yes, but free products often aren’t thorough or comprehensive. Worse, the internet is overflowing with fake free security scanners that actually infect your computer. Fake scanners such as “Antivirus 2008” are difficult to identify and have plagued hundreds of thousands of users around the world.
Norton Recommends
Run Norton Internet Security, Norton AntiVirus or Norton 360. All of these products will detect and remove the Downadup worm. You can also exchange ideas and developments on Downadup at the Norton Forums. Detailed blogs on Downadup and other malicious programs can be found on Symantec’s Malware Blog.
http://www.cbsnews.com/stories/2009/03/27/60minutes/main4897053.shtml
The Conficker Worm
From Symantec Website
Worried about the Conficker worm striking on April 1st? A few simple steps can protect you.
Target: All users of Windows XP and Windows Vista.
If you’re worried about the Conficker worm striking on April 1st, don’t be.
On April 1st the Conficker worm will simply start taking more steps to protect itself. After that date, machines infected with the “C” variant of the worm may not be able to get security updates or patches from Microsoft and from many other vendors. The creators of the worm will also start using a communications system that is more difficult for security researchers to interrupt.
The Conficker worm, sometimes called Downadup or Kido has managed to infect a large number of computers. Specifics are hard to come by, but some researchers estimate that millions of computers have been infected with this threat since January. Current users of Symantec’s Norton security products are protected. Users who lack protection are invited to download a trial version of Norton AntiVirus 2009,Norton Internet Security 2009 or Norton 360. All of these products will detect and remove this worm.
Symantec has a detailed technical analysis of the threat here.
What does the Conficker worm do?
We don’t know the purpose of the Conficker worm. Today the worm has created an infrastructure that the creators of the worm can use to remotely install software on infected machines. What will that software do? We don’t know. Most likely the worm will be used to create a botnet that will be rented out to criminals who want to send SPAM, steal IDs and direct users to online scams and phishing sites.
The Conficker worm mostly spreads across networks. If it finds a vulnerable computer, it turns off the automatic backup service, deletes previous restore points, disables many security services, blocks access to a number of security web sites and opens infected machines to receive additional programs from the malware’s creator. The worm then tries to spread itself to other computers on the same network.
How does the worm infect a computer?
The Downadup worm tries to take advantage of a problem with Windows (a vulnerability) called MS08-067 to quietly install itself. Users who automatically receive updates from Microsoft are already protected from this. The worm also tries to spread by copying itself into shared folders on networks and by infecting USB devices such as memory sticks.
Who is at risk?
Users whose computers are not configured to receive patches and updates from Microsoft and who are not running an up to date antivirus product are most at risk. Users who do not have a genuine version of Windows from Microsoft are most at risk since pirated system usually cannot get Microsoft updates and patches.
What to do if you are infected
1. Use your Norton product to identify which variant of the worm is on your computer.
2. Follow the detailed removal instructions for the specific version of the of the worm. These can be found here:
W32.Downadup.A writeup
W32.Downadup.B writeup
W32.Downadup.C writeup
Advice to Stay Safe from the Downadup Worm:
1. Run a good security suite (we are partial to Norton Internet Security and Norton 360).
2. Keep your computer updated with the latest patches. If you don’t know how to do this, have someone help you set your system to update itself.
3. Don’t use “free” security scans that pop up on many web sites. All too often these are fake, using scare tactics to try to get you to purchase their “full” service. In many cases these are actually infecting you while they run. There is reason to believe that the creators of the Conficker worm are associated with some of these fake security products.
4. Turn off the “autorun” feature that will automatically run programs found on memory sticks and other USB devices.
5. Be smart with your passwords. This includes
A. Change your passwords periodically
B. Use complex passwords – no simple names or words, use special characters and numbers
C. Using a separate, longer password for each site that has sensitive personal information or access to your bank accounts or credit cards.
6. Use a passwords management system such as Identity Safe (included in Norton Internet Security and Norton 360) to track your passwords and to fill out forms automatically.
7. Run Norton Internet Security, Norton AntiVirus or Norton 360. You can also try Norton Security Scan.
FAQ
Q: Am I safe if I don’t go to questionable web sites?
A: No. The Conficker worm seeks out computers on the same network. You can be in a coffee shop, an airport or in the office and the worm will quietly try to attach to your computer and run itself.
Q: How do I know if I am infected?
A: The best way to know if you are infected is to run a good antivirus product. One symptom that may indicate you are infected is finding that your computer is blocked from accessing the web sites of most security companies.
Q: Can’t I just run free antivirus software?
A: Yes, but free products often aren’t thorough or comprehensive. Worse, the internet is overflowing with fake free security scanners that actually infect your computer. Fake scanners such as “Antivirus 2008” are difficult to identify and have plagued hundreds of thousands of users around the world.
Norton Recommends
Run Norton Internet Security, Norton AntiVirus or Norton 360. All of these products will detect and remove the Downadup worm. You can also exchange ideas and developments on Downadup at the Norton Forums. Detailed blogs on Downadup and other malicious programs can be found on Symantec’s Malware Blog.
Monday, March 30, 2009
Cloud Computing is the Buzz
Gartner recently released that the world cloud computing market would reach over 56 Billion this year and 150 Billion by 2013. IBM and others are creating the “Open Cloud Manifesto – Dedicated to the belief that the cloud should be open”. Oh, there is a buzz.
man⋅i⋅fes⋅to // Pronunciation [man-uh-fes-toh]
–noun, plural -toes.
a public declaration of intentions, opinions, objectives, or motives, as one issued by a government, sovereign, or organization
Dictionary.com UnabridgedBased on the Random House Dictionary, © Random House, Inc. 2009. Cite This Source
It’s diabolical – the Open Cloud Manifesto sounds almost sinister! Well it’s not. I read it this morning and it is pretty benign! There are no standards in it just the commitment to open standards. I am not sure why Microsoft and Amazon are not on board except that they may not feel they are leading it I suppose. Anyway, the manifesto was released sometime last night!
The supporter list on the site includes: IBM, VMWare, Sun, Red Hat, Cisco, AT&T, AMD, Novell, EMC, Juniper, CSC, Rackspace and several others. I did notice Intel and Apple missing so I am not sure their position on this.
Here is a link if you would like to read the 8 page manifesto:
http://www.opencloudmanifesto.org/
man⋅i⋅fes⋅to // Pronunciation [man-uh-fes-toh]
–noun, plural -toes.
a public declaration of intentions, opinions, objectives, or motives, as one issued by a government, sovereign, or organization
Dictionary.com UnabridgedBased on the Random House Dictionary, © Random House, Inc. 2009. Cite This Source
It’s diabolical – the Open Cloud Manifesto sounds almost sinister! Well it’s not. I read it this morning and it is pretty benign! There are no standards in it just the commitment to open standards. I am not sure why Microsoft and Amazon are not on board except that they may not feel they are leading it I suppose. Anyway, the manifesto was released sometime last night!
The supporter list on the site includes: IBM, VMWare, Sun, Red Hat, Cisco, AT&T, AMD, Novell, EMC, Juniper, CSC, Rackspace and several others. I did notice Intel and Apple missing so I am not sure their position on this.
Here is a link if you would like to read the 8 page manifesto:
http://www.opencloudmanifesto.org/
Sunday, March 29, 2009
What Exactly is Cloud Computing?
I was lying in bed this morning, feeling just a little guilty for not turning out the lights last night between 8:30 and 9:30, thinking about the clouds – cloud computing that is. When I checked my email this morning I had an email from a member in a network I belong to that is stuck in Seattle because of the Ashes shot 50,000 feet into the clouds by Mount Redoubt the volcano in Alaska. He is looking to get himself and seven friends a chartered flight to Valdez! Not sure why a charter flight would go if the commercial flights are not as is implied in the email…….
Anyway, I was thinking about several articles I read about cloud computing last week that have discussed the meaning of the terms and the evolution from application service provider (ASP) to software as a service (SaaS) and hardware as a service (HaaS). There was discussion on how these models changed but I struggle with this because these are all terms to describe different parts of Cloud Computing. The models have evolved and terms like ASP have become pass̩ but the terms still essential describe the same kind of service. The term cloud computing is all encompassing Рfrom hosted email to Facebook it is all in the cloud. So I looked it up on dictionary.com:
Main Entry: cloud computing
Part of Speech: n
Definition: a type of computing based on sharing computing resources rather than having local servers or personal devices to handle applications
Part of Speech: n
Definition: a type of computing based on sharing computing resources rather than having local servers or personal devices to handle applications
Example:
Cloud computing has started to obtain mass appeal in corporate data centers as it enables the data center to operate like the Internet.
Webster's New Millennium™ Dictionary of English, Preview Edition (v 0.9.7)Copyright © 2003-2009 Dictionary.com, LLC Cite This Source
Cloud computing has started to obtain mass appeal in corporate data centers as it enables the data center to operate like the Internet.
Webster's New Millennium™ Dictionary of English, Preview Edition (v 0.9.7)Copyright © 2003-2009 Dictionary.com, LLC Cite This Source
So when I first read this I thought “no this is wrong” but on reflection this is correct! However, I think today when you discuss cloud computing we mean computing in any form over the internet not like the internet!
So I went to wikipedia:
From Wikipedia, the free encyclopedia
Cloud computing is Internet ("cloud") based development and use of computer technology ("computing").[1][2][3] It is a style of computing in which dynamically scalable and often virtualised resources are provided as a service over the Internet.[4][5][6][7] Users need not have knowledge of, expertise in, or control over the technology infrastructure "in the cloud" that supports them[8]
The concept incorporates infrastructure as a service (IaaS), platform as a service (PaaS) and software as a service (SaaS) as well as Web 2.0 and other recent (ca. 2007–2009)[9][10] technology trends which have the common theme of reliance on the Internet for satisfying the computing needs of the users. Examples of SaaS vendors include Salesforce.com and Google Apps which provide common business applications online that are accessed from a web browser, while the software and data are stored on the servers.
The term cloud is used as a metaphor for the Internet, based on how the Internet is depicted in computer network diagrams, and is an abstraction for the complex infrastructure it conceals.[11]
Well in my humble opinion Wikipedia has it right – not that Webster was wrong but not as in touch with today’s cloud computing world and I suppose the evolution of the meaning of this term!
Saturday, March 28, 2009
Friday, March 27, 2009
Alignment of Information Technology Priorities with your Business
Alignment of information technology (IT) and business is a challenge that is often discussed and written about in magazine articles and books. I read one article recently stating alignment did not cut it and that what you really need is a melding of technology and business – perhaps this concept was developed in a yoga class somewhere in California. I do not mean to make light of the challenge because it is real! It’s just that I read all these articles and they say very little beyond the theme of communications and connecting the business and technology and how hard that is!
Ok, it’s hard and the CIO or IT Director has to walk that line - now what?
Priorities, I think the challenge is priorities. The business leaders need to make sure the business priorities are aligned with technology priorities. The goals are important also but I think the priorities sometimes get lost trying to accomplish IT goals. It is important to implement technology to make the mobile worker more efficient and effective but today it is more important that the accounting system project is complete or maybe the other way around. This is the breakdown – when there is misalignment of priorities. The key to being more effective with IT is to maintain a list of goals and more importantly priorities. This list of IT project priorities should be five or less and you must be crystal clear on that number one priority. This list of five or less should be reviewed at the weekly executive management meetings. Essentially you will end up with a backlog of IT projects and initiatives and a list of the five priorities. This is very similar to the agile programming project management methodologies that are gaining popularity in the development communities like Scrum and extreme programming.
Carry your list of five information technology priorities to your next executive meeting, review it and let me know how it goes.
Ok, it’s hard and the CIO or IT Director has to walk that line - now what?
Priorities, I think the challenge is priorities. The business leaders need to make sure the business priorities are aligned with technology priorities. The goals are important also but I think the priorities sometimes get lost trying to accomplish IT goals. It is important to implement technology to make the mobile worker more efficient and effective but today it is more important that the accounting system project is complete or maybe the other way around. This is the breakdown – when there is misalignment of priorities. The key to being more effective with IT is to maintain a list of goals and more importantly priorities. This list of IT project priorities should be five or less and you must be crystal clear on that number one priority. This list of five or less should be reviewed at the weekly executive management meetings. Essentially you will end up with a backlog of IT projects and initiatives and a list of the five priorities. This is very similar to the agile programming project management methodologies that are gaining popularity in the development communities like Scrum and extreme programming.
Carry your list of five information technology priorities to your next executive meeting, review it and let me know how it goes.
Thursday, March 26, 2009
More from Microsoft SMB Survey
This gives you the general findings of the Microsoft survey on small midsize business (SMB)– Eduardo Rosini, Microsoft Corporate Vice President highlights how Microsoft fits in:
The survey found that small to midsized businesses are concentrating on reducing operating costs, improving employee productivity and acquiring and retaining customers - No surprise there!
But that might not necessarily mean putting IT projects on hold. Instead, the report said the top technology priorities for SMBs for the coming year include investing in virtualization, IT consolidation, business intelligence, software-as-a-service (SaaS) and support for remote workers.
Eduardo Rosini, Microsoft Corporate Vice-President said. "The study showed that Small Business Specialists are seeing a high demand for SharePoint, Windows servers, MS Office, Windows Mobile and SaaS applications, too -- technologies that let you access your data no matter where you're located."
Source: Lauren Simonds, Internetnews.com
The survey found that small to midsized businesses are concentrating on reducing operating costs, improving employee productivity and acquiring and retaining customers - No surprise there!
But that might not necessarily mean putting IT projects on hold. Instead, the report said the top technology priorities for SMBs for the coming year include investing in virtualization, IT consolidation, business intelligence, software-as-a-service (SaaS) and support for remote workers.
Eduardo Rosini, Microsoft Corporate Vice-President said. "The study showed that Small Business Specialists are seeing a high demand for SharePoint, Windows servers, MS Office, Windows Mobile and SaaS applications, too -- technologies that let you access your data no matter where you're located."
Source: Lauren Simonds, Internetnews.com
Microsoft will continue to own the desktop
Microsoft continues to own the desktop - What is the future? Windows 7 in case you were not sure but it does appear the desktop is becoming more and more a browser with the growth in cloud computing and virtual desktop infrastructure(VDI). Mac has seen some growth but as Steve Ballmer pointed out last week this is slowing. Red Hat CEO in this article doesn't really see a place for Linux on the desktop. Personally, I think I really like this quotation because of his hockey reference!
snydeq writes "Red Hat CEO Jim Whitehurst questioned the relevance of Linux on the desktop, citing several financial and interoperability hurdles to business adoption at a panel on end-users and Linux last night at the OSBC. 'First of all, I don't know how to make money on it,' Whitehurst said, adding that he was uncertain how relevant the desktop itself will be in five years given advances in cloud-based and smartphone computing, as well as VDI. 'The concept of a desktop is kind of ridiculous in this day and age. I'd rather think about skating to where the puck is going to be than where it is now.' Despite increasing awareness that desktop Linux is ready for widespread mainstream adoption, fellow panelists questioned the practicality of switching to Linux, noting that even some Linux developers prefer Macs to Linux. 'There's a desire [to use desktop Linux],' one panelist said, 'but practicality sets in. There are significant barriers to switching.'"
Source: slashdot.com
snydeq writes "Red Hat CEO Jim Whitehurst questioned the relevance of Linux on the desktop, citing several financial and interoperability hurdles to business adoption at a panel on end-users and Linux last night at the OSBC. 'First of all, I don't know how to make money on it,' Whitehurst said, adding that he was uncertain how relevant the desktop itself will be in five years given advances in cloud-based and smartphone computing, as well as VDI. 'The concept of a desktop is kind of ridiculous in this day and age. I'd rather think about skating to where the puck is going to be than where it is now.' Despite increasing awareness that desktop Linux is ready for widespread mainstream adoption, fellow panelists questioned the practicality of switching to Linux, noting that even some Linux developers prefer Macs to Linux. 'There's a desire [to use desktop Linux],' one panelist said, 'but practicality sets in. There are significant barriers to switching.'"
Source: slashdot.com
Wednesday, March 25, 2009
Microsoft Survey Shows SMB increase in SaaS
Eighty-six percent of Small and Medium Buusinesses (SMBs) said they plan to deploy software as a service (SaaS) in their organizations before the end of the year, according to the survey, called the 2009 Microsoft SMB Insight Report, which polled 600 small-business specialists in five countries -- the U.S., U.K., Canada, France and Brazil. Microsoft released the results of the survey, based on information collected in February and earlier this month, on Wednesday.
Elizabeth Montalbano
IDG News Service
NetworkWorld
Elizabeth Montalbano
IDG News Service
NetworkWorld
Tuesday, March 24, 2009
CPA Technology Spending
It appears the CPA's know exactly how much they are spending - no suprise here! It looks very in line with the 5% average from the chart on yesterdays post.
"Depending on what you categorize as “technology expense” and how much risk your firm is willing to take, technology spending in a traditional CPA firm runs from about 4.5 percent to 6.5 percent of net revenues. "
James Bourke, CPA.CITP
AICPA CPA Insider
"Depending on what you categorize as “technology expense” and how much risk your firm is willing to take, technology spending in a traditional CPA firm runs from about 4.5 percent to 6.5 percent of net revenues. "
James Bourke, CPA.CITP
AICPA CPA Insider
Monday, March 23, 2009
What is the appropriate amount to spend on information technology?
I have been in the information technology (IT) business for over twenty years and have seen most IT professionals primarily focus on what new capability and benefits from IT they can gain. They usually try to accomplish as much as possible while spending as little as possible – seems to make sense. It also, makes sense to step back occasionally and consider the overall return on investment (ROI) on information technology spending and then compare to industry benchmarks.
What is the appropriate amount to spend on information technology?
In this graph I created from itmWEB data it shows education below 2% of revenue on the low end and I have personally seen IT spending as high as 20% of revenue. I found organizations recommending 15% of revenue to be spent on IT and another study of several Colleges with spending in a narrow band of 4% - 6%. Of course, the amount of IT spending depends on an orginizations level of IT so the question can be circular! How IT intensive is your organization? As an example, the technology budget for Amazon’s book business is probably higher than Border’s but they both sell books.
I would conclude that if you are spending more than 15% of revenue on IT, you are investing for the future, running a very IT intensive organization or building an IT empire! I would think that if your IT spending is below 2% you are extremely efficient, your business is very low on IT demand or your user base is very unhappy!
2009 Technology Spending Priorities
1. Business intelligence
2. Enterprise applications (ERP, CRM and others)
3. Servers and storage technologies (virtualization)
4. Legacy application modernization
5. Collaboration technologies
6. Networking, voice and data communications
7. Technical infrastructure
8. Security technologies
9. Service-oriented applications and architecture
10. Document management
Source: Gatner, itfacts.biz
2. Enterprise applications (ERP, CRM and others)
3. Servers and storage technologies (virtualization)
4. Legacy application modernization
5. Collaboration technologies
6. Networking, voice and data communications
7. Technical infrastructure
8. Security technologies
9. Service-oriented applications and architecture
10. Document management
Source: Gatner, itfacts.biz
Sunday, March 22, 2009
Tech Spending to Decline in ‘09
So this is an article form earleir in the year projecting 3% decline in technology spending and the last article I posted from last Tuesday said 9% so I guess a good guess is 6%.....
Note the turn in 2010 - spending is projected to be up 9%!
Digits Technology News and Insights
January 13, 2009
By Ben Worthen
Finally, the prognosticators are proclaiming the bad news is official: The recession will extend to the tech sector in 2009.
Tracy O via Flickr
Spending on information-technology goods and services this year will contract 3% compared with 2008 to $1.66 trillion, according to Forrester Research. Many researchers have predicted a slowdown in spending growth, but Forrester is among the first to predict an overall decline. While the economic downturn sweeping the globe is the biggest contributor to the drop, there’s another culprit as well: a stronger dollar.
For the last several years, many tech companies have benefited from a weak dollar that boosted the value of overseas sales. Now these same companies will be hurt by a dollar that has gained on many foreign currencies. The impact of currency conversion is already being felt in Silicon Valley. For example, Oracle in December reported its first year-on-year decline in profits in three years, but said profits would have jumped 10% at constant currency levels. To illustrate the impact of currency on the industry, Forrester predicts that IT spending will grow 6% worldwide in 2009 when measured in euros, and grow 3% when measured in local currencies.
Computers and related equipment will take the biggest hit in 2009, falling 4% year-on-year, according to Forrester. Spending on telecommunications equipment and on IT services will each fall 3%. Software spending will hold steady at $388 billion.
Forrester also forecasts that the recession will be short lived, as the company’s model shows spending on technology to grow 9% in 2010. Software sales will also lead the 2010 recovery, growing 10% from 2009. Services will grow 9%; telecommunications 8%; and computer equipment 7%, according to the forecast.
Note the turn in 2010 - spending is projected to be up 9%!
Digits Technology News and Insights
January 13, 2009
By Ben Worthen
Finally, the prognosticators are proclaiming the bad news is official: The recession will extend to the tech sector in 2009.
Tracy O via Flickr
Spending on information-technology goods and services this year will contract 3% compared with 2008 to $1.66 trillion, according to Forrester Research. Many researchers have predicted a slowdown in spending growth, but Forrester is among the first to predict an overall decline. While the economic downturn sweeping the globe is the biggest contributor to the drop, there’s another culprit as well: a stronger dollar.
For the last several years, many tech companies have benefited from a weak dollar that boosted the value of overseas sales. Now these same companies will be hurt by a dollar that has gained on many foreign currencies. The impact of currency conversion is already being felt in Silicon Valley. For example, Oracle in December reported its first year-on-year decline in profits in three years, but said profits would have jumped 10% at constant currency levels. To illustrate the impact of currency on the industry, Forrester predicts that IT spending will grow 6% worldwide in 2009 when measured in euros, and grow 3% when measured in local currencies.
Computers and related equipment will take the biggest hit in 2009, falling 4% year-on-year, according to Forrester. Spending on telecommunications equipment and on IT services will each fall 3%. Software spending will hold steady at $388 billion.
Forrester also forecasts that the recession will be short lived, as the company’s model shows spending on technology to grow 9% in 2010. Software sales will also lead the 2010 recovery, growing 10% from 2009. Services will grow 9%; telecommunications 8%; and computer equipment 7%, according to the forecast.
Goldman cuts global IT spending estimate for 2009
NEW YORK (AP) -- Goldman Sachs cut its global IT spending forecast for 2009 on Tuesday, citing bleak trends in key economic indicators and a sharp focus on cost-cutting among business managers.
In a research note Tuesday, Goldman analyst Sarah Friar estimated information technology spending will drop 9 percent in 2009, based on figures for gross domestic product, capital spending and corporate profits as well as a recent survey of chief information officers. That's down from a previously estimated decline of 4 percent.
The picture looks worse in developed countries, where New York-based Goldman's estimate calls for a 12 percent decline. Emerging markets are expected to see a less severe decline of 3 percent.
Goldman's survey of CIOs found cost-cutting topped their list of priorities. Almost 80 percent of respondents said it was a high priority for them, up from 40 percent in a mid-2008 survey.
The report adds to a raft of gloomy indicators for the tech industry. Closely watched forecasts from research firms IDC and Gartner Inc. projected last week that global personal computer shipments and unit sales will fall in 2009 after years of steady growth.
Source: Yahoo Finance
Related: Gartner Inc
In a research note Tuesday, Goldman analyst Sarah Friar estimated information technology spending will drop 9 percent in 2009, based on figures for gross domestic product, capital spending and corporate profits as well as a recent survey of chief information officers. That's down from a previously estimated decline of 4 percent.
The picture looks worse in developed countries, where New York-based Goldman's estimate calls for a 12 percent decline. Emerging markets are expected to see a less severe decline of 3 percent.
Goldman's survey of CIOs found cost-cutting topped their list of priorities. Almost 80 percent of respondents said it was a high priority for them, up from 40 percent in a mid-2008 survey.
The report adds to a raft of gloomy indicators for the tech industry. Closely watched forecasts from research firms IDC and Gartner Inc. projected last week that global personal computer shipments and unit sales will fall in 2009 after years of steady growth.
Source: Yahoo Finance
Related: Gartner Inc
Internet Explorer 8 released, progress unmistakable
ars technica
By Emil Protalinski
Microsoft has announced that Internet Explorer 8 has been released and can be downloaded now for Windows XP, Windows Server 2003, Windows Vista, and Windows Server 2008.,
The final build of Internet Explorer 8 has been released in 25 languages. You can also grab the download directly from these links: Windows XP 32-bit (16.1 MB), Windows XP 64-bit (32.3 MB), Windows Server 2003 32-bit (16.0 MB), Windows Server 2003 64-bit (32.3 MB), Windows Vista 32-bit (13.2 MB), Windows Vista 64-bit (24.3 MB), Windows Server 2008 32-bit (13.2 MB), and Windows Server 2008 64-bit (24.3 MB). The final build number is 8.0.6001.18702.
The public Windows 7 beta is not being updated, and although Microsoft released an update for IE8 for Windows 7 in February, the next update is not likely to arrive until the Windows 7 Release Candidate next month. For everyone else, in the coming weeks Microsoft will put IE8 out as an optional download on Windows Update and then later roll it out to users via Automatic Updates. A quick note to all the IT administrators out there reading this post: the IE8 blocker toolkit is already available, so make sure you get acquainted with it if you're planning on avoiding IE8 when it's released via Microsoft's update channels.
Dean Hachamovitch, general manager of Internet Explorer, will be announcing the release of IE8 to the masses at MIX09 today. You can watch his one-hour keynote live right now over at live.visitmix.com but it will also be available on demand later in the day on the same site. Ars had a chance to talk to Dean yesterday about IE8's release, and he touted the fact that IE8 uses fewer resources than earlier versions and said he was "excited about how people will respond to IE8." Hachamovitch also laid to rest any speculation that IE8 would be the final version of the browser or that IE9 would switch to WebKit.
The news about IE8's resource usage is promising: despite all the new features and tweaks to the browser, Microsoft still kept performance of the actual program under scrutiny during development.
Improvements
Putting browser standings aside though, why is Hachamovitch excited for the public response to IE8? Well, the lengthy feature list is one thing, but what really needs to be emphasized here is that IE8 puts Microsoft back in the game. IE7 was a catch-up release, there's no question about that. However, with IE8, which is bigger leap from IE7 than IE7 was from IE6, Microsoft is pulling out the big guns and offering features which other browsers have yet to adopt. It's good to see Microsoft fight back with a vengeance, but the company has more competition than ever before, from the likes of Firefox, Safari, Chrome, and Opera.
There are three areas of improvement that are worth underlining with Internet Explorer 8: speed, security, and improved standards support.
Speed
IE8 feels significantly faster than IE7; no surprises there, given the focus on speed. In terms of actual rendering, Microsoft made a bold move last week when it announced performance tests that showed IE8 trumping Firefox 3.05 and Chrome 1.0. This wasn't your typical synthetic JavaScript speed test though; Microsoft trumpeted real-world usage of websites and demonstrated how IE loaded the most (out of the top 25) websites faster.
At the same time, Microsoft is also pushing features like Accelerators, Web Slices, and visual search suggestions, which improve how quickly users can get typical browsing tasks done. Accelerators allows users to get—or pass on—information like a map or a definition by right clicking a word on a website and choosing a service from the drop down menu, without ever leaving the page. That means getting directions to the party, figuring out what your friend means when he says he's an "aficionado," or even sending something on the page to a friend via e-mail, all from the right click menu.
A Web Slice grabs specific information from a website (like the top stories from Digg or the weather forecast) and puts it in a drop-down menu, eliminating the need to browse to the actual website. "It's about making it as easy for sites to extend and blur into the browser," Hachamovitch told Ars. This is a brilliant feature but it is completely lost if developers ignore it. So far, few sites actually do, but Microsoft is hoping that with IE8 going final, that will all begin to change.
The third one is an improvement to the search box in the top right: users can get their answers without ever hitting enter, thanks to the drop-down menu that grabs information from the search engine without ever going to the site. The address bar also looks through favorites and history, and opening a new tab shows you a list of tabs you've closed recently, making it easier to find the site you visited earlier.
There are currently about 1,200 add-ons available for IE8, and while Microsoft emphasizes that they are very easy to develop and that it made sure the developer tools are not a separate download, that number is nowhere near as close as the number of extensions for Firefox. Again, enough users have to adopt IE8 before these add-ons have a chance of taking off.
Security
Security in IE8 is very different from its predecessors. Internet Explorer is still by far the most targeted browser for security exploits. Microsoft has again made improvements to reduce the attack surface for ActiveX controls, added ClickJacking prevention, and made sure that Data Execution Prevention (a security feature that can help prevent damage to computers from malware by preventing certain types of code from writing to executable memory space) is on by default in Windows Vista SP1.
InPrivate Browsing (aka, porn mode) ensures that history, temporary Internet files, and cookies are not recorded on a PC after browsing. Further, InPrivate Filtering allows the user to filter content coming from third parties that are in a position to track and aggregate their online behavior. At the same time, the domain of the current website is now highlighted in bold text to help clue users in as to what site they are visiting. There's also a SmartScreen Filter which takes IE7's Phishing Filter to a new level by taking the user to a page that warns them the page they were trying to get to is a confirmed badware site.
Standards
In terms of improved standards support, IE8 now passes the Acid 2 test completely, although it still fails Acid 3 miserably. Microsoft is brushing that aside for now though, touting that out of the 7,200 CSS 2.1 tests that are on the w3.org, IE8 passes more of them than any other browser.
That said, Microsoft still has to deal with the realities of IE6 and IE7, which are significantly less standards-compliant. Even if the company could get all of its users to move to version 8, there would still be the problem of websites detecting Internet Explorer and trying to use hacks that are no longer needed—and often detrimental to correct rendering in IE8. Microsoft's solution is a compatibility button that users can press to make IE8 render the page similarly to how IE7 would.
During IE8's development, Microsoft compiled data for the button and made up a list of sites that genuinely looked and performed better in compatibility-mode (IE7-like) as opposed to the standards mode in IE8. Hachamovitch told Ars that there are a couple of thousand sites on the list today (which you can download now) and that Microsoft is in discussion with these sites so that once they make the changes necessary to no longer require the compatibility button, Microsoft can take them off the list.
While this is an annoying process both for end-users and website authors, it's a necessary evil if Internet Explorer is ever going to make a comeback in standards-support. It's one thing to support standards, and it's a completely different thing to support standards after having neglected them for years.
It's a different game now
As we mentioned earlier, IE7 was a catch-up release, adding tabs and filing in holes that were left open for years as Microsoft ignored the browser landscape. In the 30 months since IE7's October 2006 release, the browser landscape has undergone a seismic shift. Firefox isn't just a small threat anymore, it's a competitor that Microsoft acknowledges and supports in most of its services and online offerings. Google has entered the market with Chrome, and the search giant not only has the obvious advantage of plastering links to its browser via Google.com and its online services, it also had the benefit of writing its browser completely from the ground up. Even Apple is competing against IE, releasing the solid Safari for Windows last year.
All of that adds up to a browser market in which Microsoft no longer sets the standard; the company might still have the largest market share, but it's no longer Redmond's way or the highway. Microsoft is still only starting to get a grip on this new market, so it's little surprise that company isn't confident that it will be able to regain lost market share. As if that wasn't enough, the mobile browser space is still completely up for grabs, and Microsoft's position there is even more mournful.
Microsoft's has tethered Internet Explorer to long development cycles with huge changes. This strategy is driven in part by the fact that it has businesses to keep in mind; the company does not want to overwhelm them with frequent minor releases. The leaps Microsoft has taken between IE6 and IE7, as well as between IE7 and IE8, are arguably larger than those any other browser maker has made in its major versions. Now that it is back in the game though, Microsoft needs to step it up and start delivering more quickly. The progress that Microsoft's competitors are making—both in terms of features and standards—is still outpacing Redmond's development effort. To truly compete with Opera, Safari, Chrome, and Firefox, the software giant is going to have to match their release cycles—early and often instead of slow and steady.
By Emil Protalinski
Microsoft has announced that Internet Explorer 8 has been released and can be downloaded now for Windows XP, Windows Server 2003, Windows Vista, and Windows Server 2008.,
The final build of Internet Explorer 8 has been released in 25 languages. You can also grab the download directly from these links: Windows XP 32-bit (16.1 MB), Windows XP 64-bit (32.3 MB), Windows Server 2003 32-bit (16.0 MB), Windows Server 2003 64-bit (32.3 MB), Windows Vista 32-bit (13.2 MB), Windows Vista 64-bit (24.3 MB), Windows Server 2008 32-bit (13.2 MB), and Windows Server 2008 64-bit (24.3 MB). The final build number is 8.0.6001.18702.
The public Windows 7 beta is not being updated, and although Microsoft released an update for IE8 for Windows 7 in February, the next update is not likely to arrive until the Windows 7 Release Candidate next month. For everyone else, in the coming weeks Microsoft will put IE8 out as an optional download on Windows Update and then later roll it out to users via Automatic Updates. A quick note to all the IT administrators out there reading this post: the IE8 blocker toolkit is already available, so make sure you get acquainted with it if you're planning on avoiding IE8 when it's released via Microsoft's update channels.
Dean Hachamovitch, general manager of Internet Explorer, will be announcing the release of IE8 to the masses at MIX09 today. You can watch his one-hour keynote live right now over at live.visitmix.com but it will also be available on demand later in the day on the same site. Ars had a chance to talk to Dean yesterday about IE8's release, and he touted the fact that IE8 uses fewer resources than earlier versions and said he was "excited about how people will respond to IE8." Hachamovitch also laid to rest any speculation that IE8 would be the final version of the browser or that IE9 would switch to WebKit.
The news about IE8's resource usage is promising: despite all the new features and tweaks to the browser, Microsoft still kept performance of the actual program under scrutiny during development.
Improvements
Putting browser standings aside though, why is Hachamovitch excited for the public response to IE8? Well, the lengthy feature list is one thing, but what really needs to be emphasized here is that IE8 puts Microsoft back in the game. IE7 was a catch-up release, there's no question about that. However, with IE8, which is bigger leap from IE7 than IE7 was from IE6, Microsoft is pulling out the big guns and offering features which other browsers have yet to adopt. It's good to see Microsoft fight back with a vengeance, but the company has more competition than ever before, from the likes of Firefox, Safari, Chrome, and Opera.
There are three areas of improvement that are worth underlining with Internet Explorer 8: speed, security, and improved standards support.
Speed
IE8 feels significantly faster than IE7; no surprises there, given the focus on speed. In terms of actual rendering, Microsoft made a bold move last week when it announced performance tests that showed IE8 trumping Firefox 3.05 and Chrome 1.0. This wasn't your typical synthetic JavaScript speed test though; Microsoft trumpeted real-world usage of websites and demonstrated how IE loaded the most (out of the top 25) websites faster.
At the same time, Microsoft is also pushing features like Accelerators, Web Slices, and visual search suggestions, which improve how quickly users can get typical browsing tasks done. Accelerators allows users to get—or pass on—information like a map or a definition by right clicking a word on a website and choosing a service from the drop down menu, without ever leaving the page. That means getting directions to the party, figuring out what your friend means when he says he's an "aficionado," or even sending something on the page to a friend via e-mail, all from the right click menu.
A Web Slice grabs specific information from a website (like the top stories from Digg or the weather forecast) and puts it in a drop-down menu, eliminating the need to browse to the actual website. "It's about making it as easy for sites to extend and blur into the browser," Hachamovitch told Ars. This is a brilliant feature but it is completely lost if developers ignore it. So far, few sites actually do, but Microsoft is hoping that with IE8 going final, that will all begin to change.
The third one is an improvement to the search box in the top right: users can get their answers without ever hitting enter, thanks to the drop-down menu that grabs information from the search engine without ever going to the site. The address bar also looks through favorites and history, and opening a new tab shows you a list of tabs you've closed recently, making it easier to find the site you visited earlier.
There are currently about 1,200 add-ons available for IE8, and while Microsoft emphasizes that they are very easy to develop and that it made sure the developer tools are not a separate download, that number is nowhere near as close as the number of extensions for Firefox. Again, enough users have to adopt IE8 before these add-ons have a chance of taking off.
Security
Security in IE8 is very different from its predecessors. Internet Explorer is still by far the most targeted browser for security exploits. Microsoft has again made improvements to reduce the attack surface for ActiveX controls, added ClickJacking prevention, and made sure that Data Execution Prevention (a security feature that can help prevent damage to computers from malware by preventing certain types of code from writing to executable memory space) is on by default in Windows Vista SP1.
InPrivate Browsing (aka, porn mode) ensures that history, temporary Internet files, and cookies are not recorded on a PC after browsing. Further, InPrivate Filtering allows the user to filter content coming from third parties that are in a position to track and aggregate their online behavior. At the same time, the domain of the current website is now highlighted in bold text to help clue users in as to what site they are visiting. There's also a SmartScreen Filter which takes IE7's Phishing Filter to a new level by taking the user to a page that warns them the page they were trying to get to is a confirmed badware site.
Standards
In terms of improved standards support, IE8 now passes the Acid 2 test completely, although it still fails Acid 3 miserably. Microsoft is brushing that aside for now though, touting that out of the 7,200 CSS 2.1 tests that are on the w3.org, IE8 passes more of them than any other browser.
That said, Microsoft still has to deal with the realities of IE6 and IE7, which are significantly less standards-compliant. Even if the company could get all of its users to move to version 8, there would still be the problem of websites detecting Internet Explorer and trying to use hacks that are no longer needed—and often detrimental to correct rendering in IE8. Microsoft's solution is a compatibility button that users can press to make IE8 render the page similarly to how IE7 would.
During IE8's development, Microsoft compiled data for the button and made up a list of sites that genuinely looked and performed better in compatibility-mode (IE7-like) as opposed to the standards mode in IE8. Hachamovitch told Ars that there are a couple of thousand sites on the list today (which you can download now) and that Microsoft is in discussion with these sites so that once they make the changes necessary to no longer require the compatibility button, Microsoft can take them off the list.
While this is an annoying process both for end-users and website authors, it's a necessary evil if Internet Explorer is ever going to make a comeback in standards-support. It's one thing to support standards, and it's a completely different thing to support standards after having neglected them for years.
It's a different game now
As we mentioned earlier, IE7 was a catch-up release, adding tabs and filing in holes that were left open for years as Microsoft ignored the browser landscape. In the 30 months since IE7's October 2006 release, the browser landscape has undergone a seismic shift. Firefox isn't just a small threat anymore, it's a competitor that Microsoft acknowledges and supports in most of its services and online offerings. Google has entered the market with Chrome, and the search giant not only has the obvious advantage of plastering links to its browser via Google.com and its online services, it also had the benefit of writing its browser completely from the ground up. Even Apple is competing against IE, releasing the solid Safari for Windows last year.
All of that adds up to a browser market in which Microsoft no longer sets the standard; the company might still have the largest market share, but it's no longer Redmond's way or the highway. Microsoft is still only starting to get a grip on this new market, so it's little surprise that company isn't confident that it will be able to regain lost market share. As if that wasn't enough, the mobile browser space is still completely up for grabs, and Microsoft's position there is even more mournful.
Microsoft's has tethered Internet Explorer to long development cycles with huge changes. This strategy is driven in part by the fact that it has businesses to keep in mind; the company does not want to overwhelm them with frequent minor releases. The leaps Microsoft has taken between IE6 and IE7, as well as between IE7 and IE8, are arguably larger than those any other browser maker has made in its major versions. Now that it is back in the game though, Microsoft needs to step it up and start delivering more quickly. The progress that Microsoft's competitors are making—both in terms of features and standards—is still outpacing Redmond's development effort. To truly compete with Opera, Safari, Chrome, and Firefox, the software giant is going to have to match their release cycles—early and often instead of slow and steady.
Ballmer: 'Tide has really turned' against Apple in computer market
TechFlash
By Todd Bishop on March 19, 2009 at 7:22 PDT
Ballmer (Robert Sorbo / Microsoft Handout)
Speaking at a conference in New York this morning, Steve Ballmer was asked about the momentum Apple has experienced in the desktop and notebook computer market. The Microsoft CEO quickly jumped in to correct that impression, alluding to more recent data showing Apple's growth taking a hit. And then he said something that could singlehandedly refan the flames of the Mac vs. PC rivalry.
"Apple gained about one point, but now I think the tide has really turned back the other direction," Ballmer said, via webcast. "The economy is helpful. Paying an extra $500 for a computer in this environment -- same piece of hardware -- paying $500 more to get a logo on it? I think that's a more challenging proposition for the average person than it used to be."
Granted, manufacturers of Windows PCs have been stepping up their game, with Dell's Adamo being the latest example. And yes, Macs and PCs now use the same Intel architecture, so in that sense the hardware is similar. But the suggestion that the only real difference between a Mac and a Windows PC is the logo, and the price, will no doubt stir some righteous indignation among the Mac faithful.
Of course, Windows PC sales have been slumping, as well, in the face of the difficult economy.
Ballmer was speaking at The McGraw-Hill Companies’ 2009 Media Summit. The interviewer, BusinessWeek editor-in-chief Stephen Adler, followed up by asking if Ballmer owned any Apple products himself. A secret iPod, maybe?
"No, none. I don't, my sons don't, my wife doesn't," Ballmer responded, as the crowd laughed.
"You're talking to a guy, though, whose dad worked for Ford, and once Ford sold Land Rover and Jaguar, we're selling the cars to get Fords, so you may have a weird outlier in me."
By Todd Bishop on March 19, 2009 at 7:22 PDT
Ballmer (Robert Sorbo / Microsoft Handout)
Speaking at a conference in New York this morning, Steve Ballmer was asked about the momentum Apple has experienced in the desktop and notebook computer market. The Microsoft CEO quickly jumped in to correct that impression, alluding to more recent data showing Apple's growth taking a hit. And then he said something that could singlehandedly refan the flames of the Mac vs. PC rivalry.
"Apple gained about one point, but now I think the tide has really turned back the other direction," Ballmer said, via webcast. "The economy is helpful. Paying an extra $500 for a computer in this environment -- same piece of hardware -- paying $500 more to get a logo on it? I think that's a more challenging proposition for the average person than it used to be."
Granted, manufacturers of Windows PCs have been stepping up their game, with Dell's Adamo being the latest example. And yes, Macs and PCs now use the same Intel architecture, so in that sense the hardware is similar. But the suggestion that the only real difference between a Mac and a Windows PC is the logo, and the price, will no doubt stir some righteous indignation among the Mac faithful.
Of course, Windows PC sales have been slumping, as well, in the face of the difficult economy.
Ballmer was speaking at The McGraw-Hill Companies’ 2009 Media Summit. The interviewer, BusinessWeek editor-in-chief Stephen Adler, followed up by asking if Ballmer owned any Apple products himself. A secret iPod, maybe?
"No, none. I don't, my sons don't, my wife doesn't," Ballmer responded, as the crowd laughed.
"You're talking to a guy, though, whose dad worked for Ford, and once Ford sold Land Rover and Jaguar, we're selling the cars to get Fords, so you may have a weird outlier in me."
Saturday, March 21, 2009
"Is cloud computing the next big thing?"
That's the title of an article in PC Magazine.
The answer was an overwhelming yes. And PC Magazine isn't the only one taking note of this sweeping trend...
The Economist claims, "As computing moves online, the sources of power and money will increasingly be enormous 'computing clouds.'"
David Hamilton of the Financial Post says this technology "has the potential to shower billions in revenues on companies that embrace it."
And Nicholas Carr, former executive editor of the Harvard Business Review, has even written an entire book on the subject, entitled The Big Switch. In it, he asserts: "The PC age is giving way to a new era: the utility age."
He goes on to make this prediction: "Rendered obsolete, the traditional PC is replaced by a simple terminal -- a 'thin client' that's little more than a monitor hooked up to the Internet."
While that may sound far-fetched, in the corporate market, sales of these "thin clients" have been growing at over 20 percent per year -- far outpacing the sales of PCs.
According to market-research firm IDC, the U.S. is now home to more than 7,000 data centers just like the one constructed on the banks of the Columbia River in 2005.
And the number of servers operating within these massive data centers is expected to grow to nearly 16 million by 2010 -- that's three times as many as a decade ago.
"Data centers have become as vital to the functioning of society as power stations." -- The Economist
The simple truth is that cloud computing is becoming as big a part of our everyday lives as cell phones or cable television.
Excerpt from report
Kate Ward
Publisher, The Motley Fool
The answer was an overwhelming yes. And PC Magazine isn't the only one taking note of this sweeping trend...
The Economist claims, "As computing moves online, the sources of power and money will increasingly be enormous 'computing clouds.'"
David Hamilton of the Financial Post says this technology "has the potential to shower billions in revenues on companies that embrace it."
And Nicholas Carr, former executive editor of the Harvard Business Review, has even written an entire book on the subject, entitled The Big Switch. In it, he asserts: "The PC age is giving way to a new era: the utility age."
He goes on to make this prediction: "Rendered obsolete, the traditional PC is replaced by a simple terminal -- a 'thin client' that's little more than a monitor hooked up to the Internet."
While that may sound far-fetched, in the corporate market, sales of these "thin clients" have been growing at over 20 percent per year -- far outpacing the sales of PCs.
According to market-research firm IDC, the U.S. is now home to more than 7,000 data centers just like the one constructed on the banks of the Columbia River in 2005.
And the number of servers operating within these massive data centers is expected to grow to nearly 16 million by 2010 -- that's three times as many as a decade ago.
"Data centers have become as vital to the functioning of society as power stations." -- The Economist
The simple truth is that cloud computing is becoming as big a part of our everyday lives as cell phones or cable television.
Excerpt from report
Kate Ward
Publisher, The Motley Fool
Cloud Computing, An Investor’s Perspective
Santosh Sankar
Bullish Bankers
Cloud computing seems to be the buzz word in IT these days as companies are looking for the next big thing in computing. The IT folks at the leading companies are working hard to roll out these “clouds.” This emerging technology is gaining attention from major research institutions including Carnegie Mellon University. Lets not forget the likes of Google, IBM, and Microsoft who are amongst a large group of corporations investing time and money to mature this unique idea.
What is Cloud Computing?
Cloud computing is an idea that has been around for quite a while. It is the concept of spreading computing processes over several resources through a network. Servers and computers are not always utilized and tend to be inactive. The typical data center houses hundreds of servers where many will sit idle as neighboring servers take the brunt of the workload.
IT professionals claim that cloud computing has already become prevalent with the rise of virtualization. Several IT companies have adopted cloud computing with the advent of online applications. A great example is GoogleApps, a free office applications suite very similar to Microsoft office. This type of application is refereed to as SaaS (Software as a Service) and has been touted by the likes of Information Week. Here users can create and manipulate various documents in real time using the resources of Google’s cloud. Cloud computing is providing people with the capability to access powerful computing resources from devices like cell phones, laptops, and smart phones. Cloud computing should revolutionize data processing and mobile computing even further. This is just an example of the power of clouds, but where can it take businesses and how can investors reap it’s benefits?
The Investor Connection
Investors should keep an eye on clouds not only because companies can start expanding their service offerings over the Internet, but also because clouds can help reduce costs. Cloud computing helps IT cut infrastructure costs while adding new features and services to grow core businesses. Clouds can help grow margins as costs are cut back but service offerings are expanded. Clouds are being used for office applications, application development, and also complex tasks like risk calculations. Often times, corporations will have technology sitting idle in a building, using up resources, clouds now can utilize the power of these machines and put it to use. This will help businesses cut technology spending (hardware wise) and invest in software to efficiently distribute the workload across networks to harness the previously wasted computing power.
So let us recap, why do investors care about clouds:
Bullish Bankers
Cloud computing seems to be the buzz word in IT these days as companies are looking for the next big thing in computing. The IT folks at the leading companies are working hard to roll out these “clouds.” This emerging technology is gaining attention from major research institutions including Carnegie Mellon University. Lets not forget the likes of Google, IBM, and Microsoft who are amongst a large group of corporations investing time and money to mature this unique idea.
What is Cloud Computing?
Cloud computing is an idea that has been around for quite a while. It is the concept of spreading computing processes over several resources through a network. Servers and computers are not always utilized and tend to be inactive. The typical data center houses hundreds of servers where many will sit idle as neighboring servers take the brunt of the workload.
IT professionals claim that cloud computing has already become prevalent with the rise of virtualization. Several IT companies have adopted cloud computing with the advent of online applications. A great example is GoogleApps, a free office applications suite very similar to Microsoft office. This type of application is refereed to as SaaS (Software as a Service) and has been touted by the likes of Information Week. Here users can create and manipulate various documents in real time using the resources of Google’s cloud. Cloud computing is providing people with the capability to access powerful computing resources from devices like cell phones, laptops, and smart phones. Cloud computing should revolutionize data processing and mobile computing even further. This is just an example of the power of clouds, but where can it take businesses and how can investors reap it’s benefits?
The Investor Connection
Investors should keep an eye on clouds not only because companies can start expanding their service offerings over the Internet, but also because clouds can help reduce costs. Cloud computing helps IT cut infrastructure costs while adding new features and services to grow core businesses. Clouds can help grow margins as costs are cut back but service offerings are expanded. Clouds are being used for office applications, application development, and also complex tasks like risk calculations. Often times, corporations will have technology sitting idle in a building, using up resources, clouds now can utilize the power of these machines and put it to use. This will help businesses cut technology spending (hardware wise) and invest in software to efficiently distribute the workload across networks to harness the previously wasted computing power.
So let us recap, why do investors care about clouds:
- Cuts infrastructure costs, which can lead to margin expansion
- A part of the green initiative in IT
- Unlock computing power for complex situations
Who Is Investing in Cloud Computing?
Although cloud computing has been around in a very crude form before, companies are stepping up to actively develop high end cloud networks to offer services to customers. There are several large IT firms who are taking part in this revolution including Google, Microsoft, IBM, Oracle, HP, Salesforce.com, Amazon , and Yahoo! Out of this elite group, Google and IBM hands down are positioned best to profit from the growth of cloud computing.
According to Bloomberg, IBM reported R&D costs at $1.6 million for the most recent quarter. I think it is safe to say that a substantial amount of the costs were devoted to further cloud related technology. Several computing processes rely on virtualization and resource sharing. In order to solidify clouds as a reliable force in data centers, IBM must develop the hardware and core software properly. Unveiling the Blue Cloud was a big step for the company as a it provides Web 2.0 services to corporations allowing networks to function like an Internet.
Google, another leader in the cloud computing space, is a direct customer of IBM’s hardware and software. Using IBM’s offerings, Google is strengthening its backend with investment in cloud technology. GoogleApps, is a great example of SaaS where the company has opened up it’s cloud to developers to author applications based on it’s infrastructure and even allows end users basic applications like spreadsheets, presentations, and word processing. CEO Eric Schmidt believes clouds are a core value to his company’s business and according to Information Week the company has spent over $2.0 billion on four data centers. Paired with IBM, Google seems to be the best software and service provider of clouds in the future.
It is important to stay on top of the trends in computing although they can often times be hard to understand. Google and IBM prove to be leaders in the software, services, and hardware aspects of this revolutionary idea. The global slowdown could affect these companies as they rely heavily on ad revenue (Google) and IBM who also relies heavily on international exposure. Just take my two cents and consider the developments in the field as the market continues to find a bottom and the bulls prepare to regain control next year.
- Santosh Sankar http://www.bullishbankers.com/
Originally posted on Bullish Bankers September 8, 2008
Disclosure: The mutual fund the author is associated with is long MSFT and GOOG. The author’s family is long IBM
Friday, March 20, 2009
Yesterday, I posted two articles on Cloud Computing trend - I should be clear that Nortec is seeing a hybrid of Nortec 24/7 monitoring and Software as a Service (SaaS) mixed with on premises systems and support services. We see a slow hybrid shift toward Cloud computing and this ZDNet article supports this:
Handicapping cloud computing: The big picture
by Larry Dignan
This was originally posted at ZDNet's Between the Lines.
Cloud computing isn't going to dominate the tech landscape but will raise a ruckus for software vendors. Google and Amazon will be cloud-computing winners, but the spoils will be relatively small. And there's a race to deliver a cloud developer stack for both consumers and enterprise customers.
Those are some of the key takeaways from a Bernstein Report dubbed The Long View: Netbooks, Wireless and Cloud Computing--Client Software's Imperfect Storm.
The report, which I mentioned in my Microsoft analysis Thursday, is notable because it maps out the cloud landscape and puts Amazon in its place. Bernstein analyst Jeffrey Lindsay notes that Amazon's much-ballyhooed cloud-computing efforts--S3, EC2 et al--are more about the "gee-whiz factor," and portraying the company as something more than an e-tailer, than really delivering revenue.
"Although Amazon was arguably a pioneer of cloud Web services, and some analysts got swept up in the 'Books to Bits' hype, we think the revenues generated by Amazon's Web services are effectively negligible," Lindsay writes in a research note.
But before we get into that discussion, let's outline the landscape. Lindsay has cooked up this helpful chart that lines up the cloud stack that various vendors are trying to build. While Lindsay forgot a few vendors, the chart provides a handy overview:
Link to Chart:
http://news.cnet.com/8301-1001_3-10122003-92.html
What's notable is how much Sun Microsystems has been a player in cloud infrastructure yet has failed to capitalize. Besides Lindsay's chart, the report doesn't mention Sun again. Much of the focus is on Amazon, Google, and Microsoft. Bottom line: Microsoft will take a hit from cloud computing and software as a service, but not as much as folks think.
Among the takeaways from the report:
Sure, SaaS is taking share in human resources and customer relationship management software, but only 10 percent of companies manage their documents online. Most prefer Word and Excel, Lindsay notes. Will that change? A bit. Lindsay expects Microsoft's Office to remain dominant.
The reasons Office will stay entrenched are interesting. Lindsay writes:
While Google Apps and Open Office from Sun have almost all of the functionality of Microsoft's Office, the conversion of documents is still not 100 percent effective, although Open Office comes very close indeed.
In a recent test, Open Office could easily open a Word version of one of our published notes with formatting that was over 98 percent accurate. Open Office could similarly open one of our financial models written in Excel--over 3Mb, and using a variety of Microsoft functions with iterative calculation.
Once again, the document opened almost perfectly, but a minor change was needed to ensure that the model converged properly. Google Docs did less well and could not handle the Excel model, but opened our Word note and preserved about 90 percent of the formatting.
Even though these programs are very nearly comparable in functionality and can offer additional functionality, in terms of allowing users to simultaneously edit documents--which the client versions of Word and Excel cannot do--we still perceive considerable reluctance on the part of users and IT departments to use them.
Our own IT department cited several compliance and security issues mitigating against the use of Open Office and Google Apps--some of them inaccurate--even though termination of our corporate contract with Microsoft would save a considerable sum of money.
The hangup: Companies don't want to rebuild templates, convert existing spreadsheets, and question future support for open-source document formats.
Cloud computing isn't everything. Lindsay writes:
We expect the software and applications environment to remain heterogeneous for the foreseeable future--more in line with Microsoft's vision than Google's. We disagree with the "computers as a utility" and "device as dumb terminal" models, where all applications run in the cloud, largely on the grounds that even today's best networks are 100 percent available and reliable, and that devices still perform vastly better when they have at least some of their own processing power--taking some of the load off the online processing and connection, and allowing processing to continue when the devices themselves are not connected."
Google Apps: Interesting but not a huge business. Lindsay notes:
Early assessments of Google's revenue potential from cloud computing were, we believe, greatly exaggerated. Some even speculated that Google's cloud-computing revenues could overtake its paid-search advertising business. While we think that Google's efforts in the cloud space, and initiatives such as Google Apps will appeal to consumers and small enterprises, we do not expect that they will displace more than 10 percent of Microsoft's Office software franchise, at best.
Even apportioning a degree of incremental Google search revenue to the increased Web traffic arising from use of Google Apps, we do not expect Google Apps revenues to exceed $1.5 billion by 2012.
What's the problem? Focus. Lindsay gives Google Apps props for the Postini purchase, and landing government and educational accounts. But "there are already signs that its product development team seems to be committing their familiar mistake of failing to improve its products sufficiently to fend off its competitors. Google lost its first trophy account, General Electric, with 400,000 seats, to start-up ZoHo in September."
And finally, Amazon Web Services has a big opportunity, but is really chump change through 2012. Lindsay writes:
Although S3 is one of approximately 20 identifiable services, including infrastructure services (e.g. Elastic Compute Cloud, or EC2, SimpleDB, Cloudfront, and Simple Queue Service); payment and billing services (Amazon Flexible Payments Service and Amazon DevPay); on-demand workforce services (e.g., Mechanical Turk); and Web Search (e.g. Alexa Web Search and Information Services), we doubt they will, as currently configured, (they) generate even $50 million per year by 2012. This compares with Amazon's retail revenues for 2008, which are expected to be $19 billion and expected to reach approximately $30 billion by 2012.
Here is a look at Lindsay's guesstimates for S3 revenue, which is lumped into the "other" category, which includes Web services, Kindle, and other stuff, on Amazon's earnings statement.
Instead of a hard return, Lindsay surmises that Amazon is following the Web services path for more soft benefits.
In summary, we think Amazon's Web Services are not a major growth or revenue generator for the company. Instead, they provide benefits such as PR positioning of Amazon as a "technology" company rather than simply (as) an online retailer. They also provide interesting projects for Amazon's developers, who otherwise would be primarily confined to developing the shopping platform. This, we think, enables Amazon to attract a higher caliber of engineers and developers than (can) its competitors, such as eBay.
That final point is very interesting--especially for someone like me, who is firmly entrenched on the Amazon Web Services bandwagon. Makes you go "hmmm," as you ponder Amazon's motives with its Web services foray.
Larry Dignan is editor in chief of ZDNet and editorial director of CNET's TechRepublic. He has covered the technology and financial-services industries since 1995.
Handicapping cloud computing: The big picture
by Larry Dignan
This was originally posted at ZDNet's Between the Lines.
Cloud computing isn't going to dominate the tech landscape but will raise a ruckus for software vendors. Google and Amazon will be cloud-computing winners, but the spoils will be relatively small. And there's a race to deliver a cloud developer stack for both consumers and enterprise customers.
Those are some of the key takeaways from a Bernstein Report dubbed The Long View: Netbooks, Wireless and Cloud Computing--Client Software's Imperfect Storm.
The report, which I mentioned in my Microsoft analysis Thursday, is notable because it maps out the cloud landscape and puts Amazon in its place. Bernstein analyst Jeffrey Lindsay notes that Amazon's much-ballyhooed cloud-computing efforts--S3, EC2 et al--are more about the "gee-whiz factor," and portraying the company as something more than an e-tailer, than really delivering revenue.
"Although Amazon was arguably a pioneer of cloud Web services, and some analysts got swept up in the 'Books to Bits' hype, we think the revenues generated by Amazon's Web services are effectively negligible," Lindsay writes in a research note.
But before we get into that discussion, let's outline the landscape. Lindsay has cooked up this helpful chart that lines up the cloud stack that various vendors are trying to build. While Lindsay forgot a few vendors, the chart provides a handy overview:
Link to Chart:
http://news.cnet.com/8301-1001_3-10122003-92.html
What's notable is how much Sun Microsystems has been a player in cloud infrastructure yet has failed to capitalize. Besides Lindsay's chart, the report doesn't mention Sun again. Much of the focus is on Amazon, Google, and Microsoft. Bottom line: Microsoft will take a hit from cloud computing and software as a service, but not as much as folks think.
Among the takeaways from the report:
Sure, SaaS is taking share in human resources and customer relationship management software, but only 10 percent of companies manage their documents online. Most prefer Word and Excel, Lindsay notes. Will that change? A bit. Lindsay expects Microsoft's Office to remain dominant.
The reasons Office will stay entrenched are interesting. Lindsay writes:
While Google Apps and Open Office from Sun have almost all of the functionality of Microsoft's Office, the conversion of documents is still not 100 percent effective, although Open Office comes very close indeed.
In a recent test, Open Office could easily open a Word version of one of our published notes with formatting that was over 98 percent accurate. Open Office could similarly open one of our financial models written in Excel--over 3Mb, and using a variety of Microsoft functions with iterative calculation.
Once again, the document opened almost perfectly, but a minor change was needed to ensure that the model converged properly. Google Docs did less well and could not handle the Excel model, but opened our Word note and preserved about 90 percent of the formatting.
Even though these programs are very nearly comparable in functionality and can offer additional functionality, in terms of allowing users to simultaneously edit documents--which the client versions of Word and Excel cannot do--we still perceive considerable reluctance on the part of users and IT departments to use them.
Our own IT department cited several compliance and security issues mitigating against the use of Open Office and Google Apps--some of them inaccurate--even though termination of our corporate contract with Microsoft would save a considerable sum of money.
The hangup: Companies don't want to rebuild templates, convert existing spreadsheets, and question future support for open-source document formats.
Cloud computing isn't everything. Lindsay writes:
We expect the software and applications environment to remain heterogeneous for the foreseeable future--more in line with Microsoft's vision than Google's. We disagree with the "computers as a utility" and "device as dumb terminal" models, where all applications run in the cloud, largely on the grounds that even today's best networks are 100 percent available and reliable, and that devices still perform vastly better when they have at least some of their own processing power--taking some of the load off the online processing and connection, and allowing processing to continue when the devices themselves are not connected."
Google Apps: Interesting but not a huge business. Lindsay notes:
Early assessments of Google's revenue potential from cloud computing were, we believe, greatly exaggerated. Some even speculated that Google's cloud-computing revenues could overtake its paid-search advertising business. While we think that Google's efforts in the cloud space, and initiatives such as Google Apps will appeal to consumers and small enterprises, we do not expect that they will displace more than 10 percent of Microsoft's Office software franchise, at best.
Even apportioning a degree of incremental Google search revenue to the increased Web traffic arising from use of Google Apps, we do not expect Google Apps revenues to exceed $1.5 billion by 2012.
What's the problem? Focus. Lindsay gives Google Apps props for the Postini purchase, and landing government and educational accounts. But "there are already signs that its product development team seems to be committing their familiar mistake of failing to improve its products sufficiently to fend off its competitors. Google lost its first trophy account, General Electric, with 400,000 seats, to start-up ZoHo in September."
And finally, Amazon Web Services has a big opportunity, but is really chump change through 2012. Lindsay writes:
Although S3 is one of approximately 20 identifiable services, including infrastructure services (e.g. Elastic Compute Cloud, or EC2, SimpleDB, Cloudfront, and Simple Queue Service); payment and billing services (Amazon Flexible Payments Service and Amazon DevPay); on-demand workforce services (e.g., Mechanical Turk); and Web Search (e.g. Alexa Web Search and Information Services), we doubt they will, as currently configured, (they) generate even $50 million per year by 2012. This compares with Amazon's retail revenues for 2008, which are expected to be $19 billion and expected to reach approximately $30 billion by 2012.
Here is a look at Lindsay's guesstimates for S3 revenue, which is lumped into the "other" category, which includes Web services, Kindle, and other stuff, on Amazon's earnings statement.
Instead of a hard return, Lindsay surmises that Amazon is following the Web services path for more soft benefits.
In summary, we think Amazon's Web Services are not a major growth or revenue generator for the company. Instead, they provide benefits such as PR positioning of Amazon as a "technology" company rather than simply (as) an online retailer. They also provide interesting projects for Amazon's developers, who otherwise would be primarily confined to developing the shopping platform. This, we think, enables Amazon to attract a higher caliber of engineers and developers than (can) its competitors, such as eBay.
That final point is very interesting--especially for someone like me, who is firmly entrenched on the Amazon Web Services bandwagon. Makes you go "hmmm," as you ponder Amazon's motives with its Web services foray.
Larry Dignan is editor in chief of ZDNet and editorial director of CNET's TechRepublic. He has covered the technology and financial-services industries since 1995.
Thursday, March 19, 2009
Nortec has made investment over the last three years in Nortec 24/7 and we are adding clients on a regular basis. We continue to refine the service, notifications, reporting and breadth of Cloud and SaaS offerings to provide more value. It appears this is a trend that will continue as explained in Network World and in Information Week:
Major shift to cloud IT services inevitable, IDC says
Cloud computing a bright spot in midst of recession, speakers say
By Jon Brodkin , Network World , 03/17/2009
IT infrastructure and services delivered over the cloud will be ubiquitous within five years, and vendors that ignore the shift from on-premises software to Internet-delivered technology will be left in the dust, IDC analyst Frank Gens predicted at the IDC Directions conference in Boston Tuesday.
"If you are not thinking about and acting on delivering your own offerings through the cloud [within five years], you won't be in the mainstream anymore," Gens said. Avoiding the cloud "won't really be an option."
Gens defined cloud computing as "consumer and business products, services and solutions delivered and consumed in real time over the Internet."
Cloud services break down into six main categories, according to Gens -- applications, collaboration tools, storage, servers and processing, IT management, and platforms.
IDC surveys show 26% of businesses using the cloud for IT management, 15% to bolster server and storage capacity, a quarter for collaboration and business applications, and 17% for application development and deployment.
A common perception is that most customers embrace cloud services because of the cost. While that is certainly true, Gens said IDC surveys show the No. 1 attribute driving people toward cloud services is the ease and speed of deployment.Users are telling CIOs they want faster delivery of services, and the cloud helps achieve that goal.
"That alone guarantees that over the next several years the cloud model will be very important for CIOs," Gens said.Other big selling points identified in user surveys include lessening the need for in-house IT staff, paying only for what you use and when you use it, the standardization of IT systems, and access to the latest functionality.
Microsoft: A Few Companies Buy 20% Of Servers
Posted by John Foley @ 07:28:AM Mar,10, 2009
Microsoft senior VP of research Rick Rashid remarked the other day that 20% of all servers are being bought by a handful of large Internet companies, including Amazon, Google, Microsoft, and Yahoo. It's evidence that, behind all the talk about cloud computing, there are huge investments in server infrastructure.
The anecdote was shared by Financial Times' Richard Waters in a blog post titled "How many computers does the world need?" Waters writes that Rashid made the comment during "a small dinner in San Francisco," making it difficult to verify. He refers to the 20% figure as an "amazing statistic." Nicholas Carr, in commenting on Waters' post, refers to it as "an incredible, and telling, data point."
Amazing? Yes. Telling? Yes. Surprising? No.
I was told something similar by Sun CTO Greg Papadopoulos a couple years ago in explaining his "red shift" theory, in which a few companies account for a disproportionate amount of IT infrastructure and consumption. As it happens, that conversation took place over dinner in New York, and InformationWeek followed up with a story, "The Red Shift Theory." I don't recall if Papadopoulos was as specific as Rashid in assigning a percentage to his observation about heavy-duty IT consumers, but InformationWeek explained it this way at the time: "an elite group of companies are acquiring inordinate amounts of IT infrastructure, well beyond most other businesses, and their demand is growing exponentially."
According to Papadopoulos, the red shift phenomenon threatened to exceed the ability of Moore's Law to keep up. The answer? Utility computing, or the cloud.
I'm not suggesting that Rashid is mimicking Papadopoulos's idea. Rather, even casual observers could come to the same conclusion as these two respected computer scientists simply by following the money. The locals in the middle of Iowa know that Microsoft and Google are building new data centers there at $600 million a pop, construction delays notwithstanding.
The tens of thousands of servers going into these new and existing data centers underlie the Web traffic and content of not just the companies running them, but millions of consumers and thousands of business customers. Increasingly, through virtualization and multitenant architectures, they're being used in support of cloud offerings such as Amazon Web Services, Google Apps Engine, Microsoft's Azure services, and Salesforce's software-as-a-service and Force.com offerings.
Major shift to cloud IT services inevitable, IDC says
Cloud computing a bright spot in midst of recession, speakers say
By Jon Brodkin , Network World , 03/17/2009
IT infrastructure and services delivered over the cloud will be ubiquitous within five years, and vendors that ignore the shift from on-premises software to Internet-delivered technology will be left in the dust, IDC analyst Frank Gens predicted at the IDC Directions conference in Boston Tuesday.
"If you are not thinking about and acting on delivering your own offerings through the cloud [within five years], you won't be in the mainstream anymore," Gens said. Avoiding the cloud "won't really be an option."
Gens defined cloud computing as "consumer and business products, services and solutions delivered and consumed in real time over the Internet."
Cloud services break down into six main categories, according to Gens -- applications, collaboration tools, storage, servers and processing, IT management, and platforms.
IDC surveys show 26% of businesses using the cloud for IT management, 15% to bolster server and storage capacity, a quarter for collaboration and business applications, and 17% for application development and deployment.
A common perception is that most customers embrace cloud services because of the cost. While that is certainly true, Gens said IDC surveys show the No. 1 attribute driving people toward cloud services is the ease and speed of deployment.Users are telling CIOs they want faster delivery of services, and the cloud helps achieve that goal.
"That alone guarantees that over the next several years the cloud model will be very important for CIOs," Gens said.Other big selling points identified in user surveys include lessening the need for in-house IT staff, paying only for what you use and when you use it, the standardization of IT systems, and access to the latest functionality.
Microsoft: A Few Companies Buy 20% Of Servers
Posted by John Foley @ 07:28:AM Mar,10, 2009
Microsoft senior VP of research Rick Rashid remarked the other day that 20% of all servers are being bought by a handful of large Internet companies, including Amazon, Google, Microsoft, and Yahoo. It's evidence that, behind all the talk about cloud computing, there are huge investments in server infrastructure.
The anecdote was shared by Financial Times' Richard Waters in a blog post titled "How many computers does the world need?" Waters writes that Rashid made the comment during "a small dinner in San Francisco," making it difficult to verify. He refers to the 20% figure as an "amazing statistic." Nicholas Carr, in commenting on Waters' post, refers to it as "an incredible, and telling, data point."
Amazing? Yes. Telling? Yes. Surprising? No.
I was told something similar by Sun CTO Greg Papadopoulos a couple years ago in explaining his "red shift" theory, in which a few companies account for a disproportionate amount of IT infrastructure and consumption. As it happens, that conversation took place over dinner in New York, and InformationWeek followed up with a story, "The Red Shift Theory." I don't recall if Papadopoulos was as specific as Rashid in assigning a percentage to his observation about heavy-duty IT consumers, but InformationWeek explained it this way at the time: "an elite group of companies are acquiring inordinate amounts of IT infrastructure, well beyond most other businesses, and their demand is growing exponentially."
According to Papadopoulos, the red shift phenomenon threatened to exceed the ability of Moore's Law to keep up. The answer? Utility computing, or the cloud.
I'm not suggesting that Rashid is mimicking Papadopoulos's idea. Rather, even casual observers could come to the same conclusion as these two respected computer scientists simply by following the money. The locals in the middle of Iowa know that Microsoft and Google are building new data centers there at $600 million a pop, construction delays notwithstanding.
The tens of thousands of servers going into these new and existing data centers underlie the Web traffic and content of not just the companies running them, but millions of consumers and thousands of business customers. Increasingly, through virtualization and multitenant architectures, they're being used in support of cloud offerings such as Amazon Web Services, Google Apps Engine, Microsoft's Azure services, and Salesforce's software-as-a-service and Force.com offerings.
Wednesday, March 18, 2009
Looks like Windows is getting a boost from the reccession - here is an article from CIO Magazine:
Tue, Mar 17, 2009 18:36 EDT
Windows PCs Getting Life from Recession While Macs Gasp for Air
Posted by: Shane ONeill in News
Topic: Infrastructure
Blog: Eye on Microsoft
Current Rating: Comments: 0
Recession-weary consumers and Apple played another game of chicken last month, and once again consumers didn't budge and Apple swerved off the road. Mac sales fell 16 percent year over year in February, according to research firm The NPD Group.
The Mac sales drops in February were a 10 percent decrease from the month before. Sales of Windows PCs, however, increased 22 percent in February year over year, helped along by surging sales of lightweight, inexpensive netbooks, according to NPD.
At this point, I'm going to stop asking when Apple will acknowledge these dark days we live in because I think the answer is never. Maybe Apple should just be a bull market company. When times are lean, it should pack up like a traveling carnival or disappear like a baseball team in winter and not come back until everybody's rich and happy again.
Last month, I wrote that Mac sales decreases by no means liberate Windows from the deeply troubled PC market. That, of course, still stands and will for awhile. Research firm Gartner has forecasted that worldwide PC unit sales in 2009 will decline to historic lows. So Mac or PC, it's going to cloudy for the long haul. It's just a little less cloudy on the PC side of the street.
It didn't help that Apple had little new to offer in February. Its new $2,800 17-inch MacBook Pro didn't ship until mid-month and updates to the Mac Pro desktop, Mac Mini and iMac were not announced until early March.
It's hard to say how much of the sales numbers are solely a result of frugal consumers buying cheaper PCs or whether Microsoft's "Windows. Life Without Walls" ad campaign has actually paid off. Either way, Microsoft's ad agency must be happy today.
Obviously, much of this comes down to consumer spending. Those people struggling with the Mac or PC choice are now going with the PC, and those feisty little netbooks are increasing Windows sales even as they force laptop prices down.
But I also have to give kudos to Microsoft's well-timed TV ads, which I think are helping consumers feel more comfortable buying a PC. Showing cute little kids learning and having fun with Windows software in frequent national TV spots made us feel all warm and fuzzy inside (C'mon, admit it).
Microsoft is not known for connecting emotionally (with anyone or anything) but the "Life Without Walls" ads with Kylie, Alexa and Adam, as well as the original "I'm a PC" ads from last fall, made a connection. They evoke family love, creativity, connecting with the world and remembering the good things in life. Smart kids using computers to be creative is a good thing.
In any case, Mac revenue has pretty much plummeted from when it was breaking revenue records in the last three months of 2008. In October, Apple CEO Steve Jobs said that Apple's customers are more likely to postpone their purchases instead of going for a cheaper alternative.
The way the economy looks, they could be postponing for the rest of the year, and much like "selling the condo" and "dining at a five-star restaurant", "buying a Mac" has become something to do after the recession.
Keywords:
Apple, gartner, iMac, Mac, Mac Mini, MacBook Pro, microsoft, recession, revenue, The NPD Group, windows
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All Comments Comments
Tue, Mar 17, 2009 18:36 EDT
Windows PCs Getting Life from Recession While Macs Gasp for Air
Posted by: Shane ONeill in News
Topic: Infrastructure
Blog: Eye on Microsoft
Current Rating: Comments: 0
Recession-weary consumers and Apple played another game of chicken last month, and once again consumers didn't budge and Apple swerved off the road. Mac sales fell 16 percent year over year in February, according to research firm The NPD Group.
The Mac sales drops in February were a 10 percent decrease from the month before. Sales of Windows PCs, however, increased 22 percent in February year over year, helped along by surging sales of lightweight, inexpensive netbooks, according to NPD.
At this point, I'm going to stop asking when Apple will acknowledge these dark days we live in because I think the answer is never. Maybe Apple should just be a bull market company. When times are lean, it should pack up like a traveling carnival or disappear like a baseball team in winter and not come back until everybody's rich and happy again.
Last month, I wrote that Mac sales decreases by no means liberate Windows from the deeply troubled PC market. That, of course, still stands and will for awhile. Research firm Gartner has forecasted that worldwide PC unit sales in 2009 will decline to historic lows. So Mac or PC, it's going to cloudy for the long haul. It's just a little less cloudy on the PC side of the street.
It didn't help that Apple had little new to offer in February. Its new $2,800 17-inch MacBook Pro didn't ship until mid-month and updates to the Mac Pro desktop, Mac Mini and iMac were not announced until early March.
It's hard to say how much of the sales numbers are solely a result of frugal consumers buying cheaper PCs or whether Microsoft's "Windows. Life Without Walls" ad campaign has actually paid off. Either way, Microsoft's ad agency must be happy today.
Obviously, much of this comes down to consumer spending. Those people struggling with the Mac or PC choice are now going with the PC, and those feisty little netbooks are increasing Windows sales even as they force laptop prices down.
But I also have to give kudos to Microsoft's well-timed TV ads, which I think are helping consumers feel more comfortable buying a PC. Showing cute little kids learning and having fun with Windows software in frequent national TV spots made us feel all warm and fuzzy inside (C'mon, admit it).
Microsoft is not known for connecting emotionally (with anyone or anything) but the "Life Without Walls" ads with Kylie, Alexa and Adam, as well as the original "I'm a PC" ads from last fall, made a connection. They evoke family love, creativity, connecting with the world and remembering the good things in life. Smart kids using computers to be creative is a good thing.
In any case, Mac revenue has pretty much plummeted from when it was breaking revenue records in the last three months of 2008. In October, Apple CEO Steve Jobs said that Apple's customers are more likely to postpone their purchases instead of going for a cheaper alternative.
The way the economy looks, they could be postponing for the rest of the year, and much like "selling the condo" and "dining at a five-star restaurant", "buying a Mac" has become something to do after the recession.
Keywords:
Apple, gartner, iMac, Mac, Mac Mini, MacBook Pro, microsoft, recession, revenue, The NPD Group, windows
Reply Digg this Slashdot Reddit LinkedIn
All Comments Comments
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