Author: Barb Darrow

If Michael Dell and his cohorts at Silverlake Partners thought their $24 billion buyout plan for Dell announced a month ago would be a slam dunk, they have another think coming.

Several other interested parties have surfaced, including billionaire Carl Icahn, and when Icahn gets involved things definitely get more complicated. In a letter to Dell’s board Icahn said the existing offer substantially undervalues Dell’s worth.  Icahn put forward his own suggestion that  the company remain public and issue a $9 per share special dividend, as reported in Bloomberg. Blackstone Group LP has also reportedly expressed interest in Dell.

If Dell’s board does not agree to his proposal, Icahn vowed “years of litigation.”  He is not the only disgruntled shareholder. Southeastern Asset Management, which owns about 8.4 percent of Dell shares, maintains that the “take-private” price of $13.65 per share is not enough and reiterated its “demand that the Board of Directors pursue proposals that are more favorable to shareholders,” according to a note from Wells Fargo analyst Maynard Um. As of Thursday Dell shares were trading at $14.27, well above the offer price.

DELL data by YCharts

Dell hardware rivals Hewlett-Packard and Lenovo have also taken an interest in Dell, although whether they’re doing so more to get a chance to gather competitive intelligence from Dell’s books or if they’re genuinely interested in an offer is a huge question. The thought of HP buying Dell after its recent travails is mind boggling, but then again it’s done a lot of mind-boggling things over the past few years.

One former Dell executive, speaking on condition of anonymity, has been critical of the buyout from day one. In his view, this deal was done solely to benefit the new owners at the expense of shareholders. “The management team will trim the fat and resell [what’s left] in a better operating margin scenario … Dell is playing out the buy low, sell high scheme,” he noted. However, he also maintained that the risk is high for the buyers. Things are changing fast, and the market may be cleverer than they are, he added.

It is somewhat astonishing that Dell, once the world’s largest PC company, finds itself in these straits. But then again, legacy players from the last IT era — HP, Cisco, Microsoft, Oracle and IBM — are all in the same boat. The technology world has shifted under their feet to a world of low-priced scale-out hardware and open source software with substantially lower margins. The advent, first of virtualization and then cloud computing, means that individual companies no longer have to buy nearly as much hardware gear as they used to and  it’s by no means clear that all of these legacy powers will survive, let alone prosper.

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Joi Ito is a busy guy.  The director of the prestigious MIT Media Lab writes and speaks on myriad subjects from emerging democracy to internet freedom. He invested early in lots of interesting startups –including Flickr, Last.fm, Kickstarter and Twitter.

And now he’s backing a new project that would let corporate Media Lab sponsors fund students’ startups after they graduate, according to this Scott Kirsner story in The Boston Globe.  That means big name companies including Samsung, Panasonic, AOL etc. could pony up money to fund a stipend for MIT graduates to build the company or technology of their dreams.

This is still early stage. Asked to comment on the report, an MIT spokeswoman said “the program has not yet been approved or funded, so the Boston.com story was a bit premature.”

Industry-funded academic research projects are problematic. Critics say that private companies use universities, which often are publicly funded,  as petri dishes for their own R&D purposes. Company-funded college research can also lead to squabbles over  who owns intellectual property rights of work done at the school but partially or wholly underwritten by private industry.

Here’s the crux of the issue from Kirsner:

“One key purpose of the new fund, Ito explained to me recently, will be to encourage students to finish their degrees before they start companies. “We want students to stay focused while they’re here,” he said. But once they’re done, the fund will provide a six-month stipend to lay the groundwork for their company, and help make sure that the new venture has clear rights to the intellectual property they developed while at the Lab. (In the past, there has been a somewhat vague non-exclusive right granted to students to commercialize technologies that they worked on while at the Lab, Ito said.)”

The idea of encouraging college researchers to stick around for their diplomas is actually of note. Obviously MIT has a vested interest in its students completing their coursework, but some in tech say this is a waste of time and resources. These skeptics include early Facebook investor Peter Thiel who has funded two classes of Thiel Fellows. These young technologists get money to leave school and pursue their work. His argument is that it’s better for promising talent  just to get to it rather than put in their time at college, running up huge student loan debt.

That’s a premise that Upstart, founded by Google veteran David Girouard, for example, finds troubling. Upstart invests in promising graduates of specified schools in return for a percentage of their future earnings. Again, you have to graduate to get that Upstart money.

Whatever happens with Ito’s new project, it’ll be interesting to see how this plays out.

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Oracle execs love to talk about their aspirations for the company’s server business. Only they shy away from the “s word”– they prefer to use term “engineered systems” to describe the honking big Exadatas, Exalogics, Exa-whatevers stuffed with CPUs, storage, Infiniband connectivity, oh, and lots of Oracle software.

On the company’s second quarter earnings call in December, Oracle CEO Larry Ellison said Oracle’s $7.4 billion acquisition of Sun Microsystems made it “a leader in the highly profitable Engineered Systems segment of the hardware business.”  In his view, that’s a better, more lucrative place to be than in “low-margin undifferentiated products like commodity X86 servers.” Leave that race to the bottom to the Dells of the world, he seems to say. (In fact at one point during Oracle’s Sun acquisition, he actually did say that.

Here’s the problem, since it entered the hardware business, Oracle hasn’t sold enough engineered systems to make up for lost sales of lower-end machines, according to third-party researchers. Its hardware revenue and unit share is headed south.

For the fourth calendar quarter of 2012,  Oracle server revenue  was down 18 percent year over year according to both Gartner and IDC. Meanwhile, as GigaOM’s Jordan Novet reported last week, the “other” server vendors — companies like Quanta and Wistron – saw their aggregate revenue rise nearly 22 percent in the fourth quarter compared to the year-ago period.

In units, the “other” category saw 35 percent growth. These are the types of servers that sell into huge web-scale data centers run by Facebook and Amazon. Oracle’s own figures reinforce this narrative. In its third quarter, ending in November 30,  2012, Oracle hardware systems revenue fell 23 percent to $734 million from $953 million for the year-ago period.

The IDC findings are below. Obviously, Oracle sees huge potential in these high-end boxes — Nomura Securities’ analyst Rick Sherlund said “the Exaseries of servers are growing about 100 percent, but that has not been enough to offset the loss of the other business yet.” The question is how patient Oracle is prepared to be. I’ve reached out for comment and will update this if one is forthcoming. Here’s the thing, while Oracle regroups and repositions its server business, the trajectory for “other” servers is way up and Oracle keeps heading in the other direction. It’ll be interesting to see if there’s any indication of a change on Oracle’s third quarter earnings call March 20.

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Another day, another OpenStack announcement. Rackspace on Wednesday unveiled an update to its OpenStack-based private cloud with a new single dashboard for deploying, configuring and running those clouds in a company’s data center.

OpenCenter aims to make it easier for enterprises to automate rollout of updates and deploy their cloud in the first place.  ”Deploying high-availability used to take a lot of manual steps but we can now point and click to do that in OpenCenter,” said Scott Sanchez, director of strategy for Rackspace. OpenCenter, he said, is part of an overall operations “fabric” that will let us roll things out faster, provide continuous deployment and updates right into the private cloud.

The OpenCenter code is free and available under the Apache 2 license.

More host operating systems to choose from

The new private cloud option utilizes OpenStack’s Folsom code base and will be updated to the newer Grizzly release when it comes out next month. Rackspace said its public cloud already uses Grizzly. Also with this private cloud release, customers can choose between Ubuntu, Red Hat Enterprise Linux or CentOS as their host operating system. In the previous private cloud, Ubuntu was the default host OS.

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Actifio, which says it helps companies simplify and streamline operations by consolidating multiple copies of content that proliferate across applications, now has $50 million in Series D funding led by Technology Crossover Ventures (TCV) to push that vision. That brings its total venture backing to more than $105 million.

Waltham, Mass.-based Actifio wants companies to adopt its copy data store technology to reduce extra copies of the data they generate and collect to, ideally, a single “golden” copy.

Existing investors Andreessen Horowitz, ATV, Greylock Israel, and North Bridge Partners also participated in this D round, which comes more than a year after a $33.5 million C round. Prior to that Actifio received $8 million in a July 2010 Series A round and $16 million just two months later in a Series B round.

CEO Ash Ashotush told me a few months ago that companies spend too much making and managing lots of copies of data. “If we employ virtualization technology, one copy of that data can be reused and reconstituted for any use—sharing and analysis,” he said.

At an Actifio users conference a few months ago, Keith Bucknall, lead technical architect  for the U.K.’s Equity Insurance Group, said Actifio is a key part of his company’s unified storage and backup platform that makes it easier to perform backup, data protection and recovery, as well as data migration and management.

TCV general partner, Rick Kimball, joins Actifio’s board which already includes Andreessen Horowitz’s Peter Levine, North Bridge Venture Partners’ Jamie Goldstein, ATV’s Bob Hower, Greylock Partners’ Erez Ofer, and Netezza founding CEO Jit Saxena.

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Here are two certainties about big data. One is that companies need good data scientists. The other is that identifying good data scientists ain’t easy. That’s why Kaggle, the data science competition platform, is launching Kaggle Connect to link proven data science performers with companies willing to pay for their expertise.

Everyone calls himself a data scientist now — and there’s a reason for that. The title “gets you 40 percent more money,” says Kaggle CEO Anthony Goldbloom. ”The problem is that it’s hard to know how good someone really is until six months down the road when you realize they haven’t done anything.”

His argument is that folks who have done well in Kaggle competitions over the past two years — insurance actuaries, mathematicians, students, chemists — have proven they have what it takes.

And Kaggle bona fides are becoming currency. This job posting for a New York Times data scientist lists participation in a Kaggle competition as a key criterion.

Connecting the right data scientists with the right problems

With Kaggle Connect, the company is making its two top tiers of competitors — it’s an invitation-only list — available to companies on an individual basis. “If Pfizer comes to us with a problem that is maybe not well specified enough and needs more iteration than a competition would allow, we can provide a data scientist that suits that problem,” Goldbloom said.

The customer pays a subscription cost of somewhere between $30,000 and $100,000 per month to gain access to appropriate data science resources. Kaggle gets a cut of that money and the data scientist gets the rest — although Kaggle is not breaking out the percentages.

In the interactive chart below, click on the map to bring up the name, picture and profile of the Kaggle Connect member.

What Kaggle brings to the table is a roster of people who have performed well in its competitions. What the companies provide is a juicy problem to solve and data to use in that quest. In some ways this is an extension of what Kaggle has already done with EMC’s Greenplum division, although that project required the use of Greenplum’s Chorus toolset.

The top two of eight total tiers of 80,000 contestants will initially serve as the invitation-only talent pool for Kaggle Connect. That’s about 1,500 Kagglers (if that’s a word). Kaggle began running data science competitions in early 2012 and started publishing its leaderboard of top big data problem solvers last September.

We’ll see how this all proves out, but if Kaggle success is really a predictor of big data chops writ large, expect to see a lot more Kaggle boasts on resumes going forward.

Feature photo courtesy of Shutterstock user Dirk Ercken.

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SlideRocket, the tool that lets marketing pros build slick multi-media presentations that kill PowerPoint ennui, now has a new home with ClearSlide. VMware bought SlideRocket just under 2 years ago but signaled in December that it would offload it, along with other non-core technologies.

ClearSlide CEO Al Lieb said that SlideRocket’s content creation technology — which targets marketing departments that need to churn out eye-grabbing presentations — fits nicely with ClearSlide’s more sales-oriented technologies that sell into enterprises.

SlideRocket lets you start with either a blank template or a PowerPoint presentation and then add web animation, video and other perks, Lieb said in an interview. He said that most of the SlideRocket team will join ClearSlide — both are based in San Francisco.

SlideRocket claims 1 million individual users while ClearSlide, which sees itself as a more modern and mobile-device-friendly rival to Cisco’s Webex conferencing service,  sells at the corporate level and claims thousands of users. ClearSlide netted $28 million in Series B funding last August.

When VMware bought SlideRocket, it positioned the product as a complement to Zimbra, the email and collaboration software VMware purchased from Yahoo in early 2010. So this deal begs the question: What’s next for Zimbra?

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A couple of former Red Hat veterans think there’s an easier way to configure, deploy and manage IT across an organization and founded AnsibleWorks to attack that problem.

Systems administrators and developers want one tool for deployment, configuration and management — they don’t want to deal with agents and add-ons, said Said Siouani, CEO of Santa Barbara, Calif.-based AnsibleWorks.

No doubt Ansible’s orchestration engine will face off against popular configuration tools like Opscode Chef and Puppet Labs’ Puppet (see disclosure). Siouani characterized Ansible as a more “holistic” solution than what is on the market now in that it focuses on configuration management and actual deployment.

Ansible itself is an open-source project kicked off a year ago by Michael DeHaan, one of the Red Hat vets who also spent time at Puppet Labs (see disclosure) and was also the force behind Cobbler, a popular Linux server installation tool.

In the ensuing year, Ansible has drawn some name-brand users including Aerospike, AppDynamics, Basho Technologies, Care.com and Gawker Media. And, as of Tuesday, AnsibleWorks will provide maintenance and service subscriptions for that toolset.

“We’re coming into this fresh with an all-open source solution that is flexible enough to configure all your systems — physical, virtual and which uses a text-based language, not scripting, which makes it easy to learn to use,” said Siouani, who spent 10 years at Red Hat and was most recently executive vice president of sales at Eucalyptus.

Disclosure: Puppet Labs is backed by True Ventures, a venture capital firm that is an investor in the parent company of this blog, Giga Omni Media. Om Malik, founder of Giga Omni Media, is also a venture partner at True.

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IBM joined the OpenStack Foundation as a big-time Platinum sponsor last April. Since that time many have wondered when it would talk up its own plans to put its public and private cloud projects on the OpenStack open-source cloud platform. Well, that time has come at this week’s IBM Pulse conference on Monday.

While it’s hardly surprising that IBM woud make use of all these open source goodies it’s been working with, the news is, as All Things Digital reports, a big deal. In theory this means big cloud buyers will be able ot mix and match cloud workloads among and between various OpenStack providers including IBM competitor Hewlett-Packard, Rackspace, Red Hat and others.

All of these players have a strong vested interest in keeping those business workloads from going to either Amazon Web Services the leader in public cloud or to VMware which is trying to parlay its in-house server virtualization dominance in the cloud.

Details about timing and delivery are scant but I’ll update this post as I’m able later today.

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Here we go again. Amazon is offering a month-long free trial of its Trusted Advisor cloud services monitoring tool. That may seem kind of ho-hum news for rank-and-file Amazon Web Services observers, but for a half dozen or so small companies that hoped to make their living providing similar services, this freebie is a big deal.

News of an updated version of Trusted Advisor — complete with new features and its free trial (for the month of March) was unveiled on the AWS blog early Monday morning. Before now Trusted Advisor was available to customers that signed up for enterprise or business class AWS support.

According to the blog, Trusted Advisor looks over a  customers’ AWS environment and makes suggestions on how to save money, boost performance and shutter security gaps:

“Because the AWS Trusted Advisor draws upon the aggregated operational history of hundreds of thousands of AWS customers, you can be confident that the recommendations that it makes can help you to save money, bolster your security profile, improve the fault tolerance of your application, and  increase overall performance. This is a unique and powerful benefit that is only possible with cloud-based, API-enabled infrastructure.”

Meanwhile, companies like Newvem, Cloudyn, Cloud Vertical and Cloudability have to be more than a little worried about this new tool, although they’d be the first to tell you that their own respective offerings watch and measure AWS better than Amazon itself does.

A Newvem spokesman characterized the freebie as big news for AWS users and “a great value as a broken-to-fix support play  as in something is wrong with my security, I’ll use Trusted Advisor to fix it.” But, he added, Newvem provides more insights on how to improve a user’s AWS resource usage and to evaluate costs, risks and assets. Newvem started charging for its service late last year.

Amazon’s news is a no-brainer for a company that knows it needs to provide more enterprise-class support and monitoring options to placate enterprises used to having such tools, as GigaOM reported last summer.  But it also illustrates the issue that, to grow, Amazon is encroaching more and more on spaces pioneered by small members of its ecosystem.  Being an AWS technology partner is a risky proposition that is not for the faint-of-heart or the slow-of-foot.

What about the little guys?

Usually, when small companies characterize a huge company’s incursion into their territory as a validation of their strategy, it’s time to pat them on the head and offer condolences. In this case, however, there is some truth that a smaller, more nimble third party (aka Newvem, Cloudyn, et al) can offer more value.

As Forrester Research analyst Dave Bartoletti told me last month with regard to some Cloudyn news:

“Amazon’s tools will get better and better but Amazon has no desire to get you to use less of its services. It’s like in storage — You’d think EMC would be the best vendor of storage management but historically they haven’t been.”

 

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Markley Group, which made its name as a colocation, peering and data center provider in the heart of Boston, is adding business-class cloud capabilities to the mix with its new Markley Cloud Services, slated to debut on Tuesday.

The move shows that data center providers — companies like Equinix and Markley — see the need to add cloud services to their repertory. “Data center customers who buy cage space are all asking for additional services — it’s ‘bring me a cloud or I’m leaving’” said Carl Brooks, analyst at The 451 Group. One of Markley’s aces in the hole is that this Boston site sits smack dab atop the biggest telco and ISP interconnect site in the region. And, as we all now know, proximity to those fiber pipes is gold for data center customers who want the fastest possible connections to their end users and partners.

The new services take advantage of Markley’s data center know-how and its proximity to those telcos and ISPs which are colocated in this Downtown Crossing facility.

The initial Markley Cloud implementation builds on VMware technology, and Cisco Unified Compute Systems, NetApp storage, and Juniper routers but Markley is also “playing around with OpenStack,” said  Joshua Myles, product manager. “We polled 200 or so of our customers and 87 percent of them are VMware shops so we went with what they were comfortable with,” Myles said in a recent interview.

The new services mean that existing Markley business customers who want to try out a hybrid cloud model can “burst” workloads as needed from their own resources to Markley’s cloud.

The direct fiber links between Markley’s data center and the carrier hotel in the same building is a huge benefit to Markley and its customers, which include The New York Times, W.B. Mason, the Boston Red Sox, MIT, Harvard University, the Boston Internet Peering Exchange and other companies which prefer not to be named.

Initially, the new cloud services will be offered from this site, but will roll out at other Markley data centers across the country later, Myles said.  In total, Markley runs 13 data center sites in the U.S. and Europe.

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Building a new tech company from the ground up is incredibly hard. Here are some tips from founders and co-founders who have already scaled that mountain that might help ease the journey for others..

1:  Haste makes waste.  It’s natural to be in a hurry to get product out the door, but take a breath first and really gauge where you are. Slow down when it comes to key decisions, said Dan Belcher, co-founder of Boston-based Stackdriver, a startup focused on monitoring and managing cloud workloads. “Doing things too early is as dangerous as — or even worse than — doing them too late. Think hard about when you start to invest in sales and marketing and when you start forecasting, you need to implement roles and controls.”

Matthew Bellows, co-founder of Yesware, an email provider for salespeople, agreed. “Don’t sell your product too soon. [That’s a] hard lesson for a salesperson like me to learn but our board was very clear that I shouldn’t start selling the product before the product was getting tons of in-bound interest.”

2: Do everything. This is easy because you’ll have to, but embrace this opportunity to get outside your comfort zone. ”Founders should do every role first before hiring someone to take it over. This helps me understand who I’m hiring, what they should be good at, what they should be doing and how to measure their success,” said David Mytton, founder of Server Density, a London-based provider of server monitoring services

Karl Wirth, co-founder of Apptegic, which helps companies tailor content shown to website users based on who they are and their activities, agrees. “For the first year and a half, I was our only salesperson.” This meant he learned how to cold calling prospects, find buyers. And to assess that person’s problem then work overtime to close the deal.”I knew sales would be important — I didn’t expect it to also shape and refine us so profoundly,” he said.

Hardi Meybaum, co-founder and CEO of GrabCAD, an online marketplace for mechanical engineers, is all over this notion. “You are engineer, then product manager, then sales manager, then you’re raising money, then you hire smarter people than yourself to run product, engineering, sales, and marketing and then you need to lead by trust and great communication,” Meybaum said.

3: People are your biggest asset. Hire carefully. Mytton feels founders need to hold off on any new hires until things start hurting. “Hiring ahead of demand is the fastest way to burn through money,” he said. But, conversely, founders always need to look for new talent — perhaps for hiring down the road. “You should always be interviewing and always be hiring regardless of your headcount plan,” says Stackdriver co-founder Izzy Azeri. “It’s so hard to find good people and the founder is always the best recruiter.”

4: It’s all about the user, stupid. Ok, that’s harsh. But any startup or older company that loses its focus on the customer and solving a customer problem is toast.

“If you are genuinely helping people work more effectively, you will get pulled into companies,” said Yesware’s Bellows. “The days of selling to the IT department and the office of CIO are coming to an end. Frankly, the days of sales-and-markeing-driven companies are coming to an end.” So, talk to your users and perhaps more importantly, listen to your users.

5: Be prepared to fail. Expect it; it’s part of the gig. Dan Foody, co-founder of Cloze, the maker of an iOS app that consolidates a user’s mail and social media messages, said anyone in that line of work should heed Path CEO Dave Morin’s adage that the first version of any mobile app will fail.

Morin’s right, says Foody. ”The real reason is that Apple restricts developers to at most 100 beta test devices for any app. In today’s world that’s not nearly a large enough audience to refine an app (especially a consumer-focused one),” he said.

“You need hundreds to thousands of beta testers. How can you avoid this pitfall?  Build a web app first so you can learn the hard lessons up front with a wide audience without being restricted by platform and store limitations.”

That’s a good micro example, but generally speaking, failure is how we learn. So founders: be prepared to fail. It can be a badge of honor, especially if you learn from the experience.

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CloudFlare’s web security service went down for about an hour starting at 2:47 PDT Sunday morning, taking its customers down with it. The service was back up at 3:49 PDT, according to a post-mortem. CloudFlare attributed the outage to a system-wide failure of its Juniper edge routers that started after the company tried to prevent a DDoS attack on one of its customers.

Affected sites include Wikileaks, 4chan and others according to this Techcrunch report.

One reason CloudFlare opts for Juniper is the latter’s support for the Flowspec protocol which enables customers to propagate router rules across a large number of routers fast, according to the company post. This comes in handy because CloudFlare is always updating rules to combat ever-changing attacks and to re-route traffic as needed to optimize performance.

This morning CloudFlare detected a DDoS attack on one of its customers and its attack profiler ascertained the offending packets were  between 99,971 and 99,985 bytes.

That attack profile was sent out to Flowspec to stop the spread of attacks. From the post mortem:

“Flowspec accepted the rule and relayed it to our edge network. What should have happened is that no packet should have matched that rule because no packet was actually that large. What happened instead is that the routers encountered the rule and then proceeded to consume all their RAM until they crashed.”

Service was restored after about an hour, although CloudFlare said it continues to examine the issue and has contacted Juniper to see if there is a known bug involved or the problem is unique to CloudFlare’s implementation.

Given that the number of DDoS attacks is on the rise, web sites had better gird themselves and hope their security vendors are taking proactive steps to keep ahead of the problem.

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VMware has gone to the mattresses —  telling its reseller and systems integration partners that if corporate workloads go to the Amazon cloud, everyone else is dead.

I’m exaggerating, but not much. Accounts out of VMware’s partner conference in Las Vegas this week really lay it out: CRN’s Steve Burke quotes VMware CEO Pat Gelsinger telling VMware partners that “if a workload goes to Amazon [Web Services], you lose, and we have lost forever.”

Gelsinger continued:

“We want to own corporate workload … We all lose if they end up in these commodity public clouds. We want to extend our franchise from the private cloud into the public cloud and uniquely enable our customers with the benefits of both. Own the corporate workload now and forever.”

So who loses or wins here? Would it really be everyone or would it be VMware? No one is blind to the fact that Amazon Web Services’ growing power is of huge concern to legacy IT vendors and even to some of AWS’ own partners, but VMware hasn’t exactly covered itself in glory when it comes to partner relationships. Long-time VMware partners always complain about having to compete with VMware sales in the field. And, Gelsinger’s verbiage sounds very much like Microsoft whining a few years ago that Microsoft partners lose when customers go to Google Apps.

It’s a never-ending story; vendors love their VAR and integration partners until the vendor hits critical mass and business matures. Then those partners — and the margin they take from vendors — become an albatross and it’s time to go direct or to cut partner margin. Guess who loses then.

Conflating your own vendor-specific interests with those of your partners (and  users) is tricky stuff, as Matt Asay writes in ReadWrite.

CRN also quoted VMware President and COO  Carl Eschenbach saying: “I look at this audience, and I look at VMware and the brand reputation we have in the enterprise, and I find it really hard to believe that we cannot collectively beat a company that sells books.”

To which, Amazon CTO Werner Vogels responded on Twitter:

@beaker as long as people see us as a bookstore, we are fine 🙂

— Werner Vogels (@Werner) February 28, 2013

The problem VMware has is that many of its own partners don’t see huge value in selling vCloud Director: Many will provide it but they often offer other options — OpenStack etc.– as well.

VMware’s advantage is that nearly every company of any size runs vSphere in-house, but parlaying that virtualization dominance into the public cloud has proven difficult. Fair or not, VMware is seen as the expensive, proprietary option while AWS has become the go-to plan, at least for  test and development environments. Now Amazon is pushing hard  to win production workloads as evidenced by its big AWS: Reinvent show last November.

Here’s the thing: Gelsinger’s a smart guy. If he really wants VMware partners to fight its battles, it has to start being better to its partners and stop competing with them in the field. Oh, and it has to offer a public cloud strategy that people want to buy into.

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Salesforce.com, which hasn’t exactly been shy and retiring on the acquisition front over the years, plans to keep right on buying companies and technologies it needs to bolster its marketing and support services push.

“We need to buy more marketing companies. We want to be the company you turn to for sales, service, marketing and the platform,” CEO Marc Benioff told analysts on the company’s fourth quarter earnings call Thursday afternoon. “We want to grow organically and via acquisition.”

For its fourth quarter, the company reported a loss of $20.8 million, compared to a loss of $4.1 million for the same period last year.

Marketing technology has become a hot spot over the past few years. Salesforce.com ponied up $326 million for Radian6 (social media monitoring) in 2011 and then $800 million for Buddy Media (social marketing) to buy both mind share and market share. But rivals have also spent big — Oracle bought Eloqua a few months ago for $871 million. The working theory behind this activity, as Benioff said on the call, is the believe that at some point in the near future chief marketing officers (CMOs) will have more IT buying power than CIOs.

Asked what Salesforce should do to counter Oracle/Eloqua, Benioff returned to the acquisition trail: “I think we’ll buy small and big. We’re going to be aggressive and look at everything.”

Salesforce.com, which started out as a customer relationship management (CRM) or sales-force automation (SFA) company, now also focuses on three other businesses: marketing; help desk type services (desk.com) and “the platform.” The latter is presumably both Force.com, the company’s internal development platform and Heroku, the Platform as a Service it bought three years ago.

But it’s difficult to get any feel for how those newer businesses are faring. Asked about traction for its “non-SFA businesses” CFO Graham Smith didn’t get specific, referring to comments made at the company’s Dreamforce show last fall. “It’s been a pretty gradual shift. I suspect it’s close to what we said then with 55 percent [of business] SFA and 45 percent non-SFA … As our more recently acquired businesses grow at a faster rate than sales cloud we’d expect a shift away from SFA but hopefully not too fast.”

Benioff did say that social advertising — in the marketing group — is probably the company’s fastest growing business. But it would be really nice to hear what sort of new, non SFA accounts are coming buying these new services and how much overlap there is between its CRM customers and consumers of these other services.

Your guess is as good as mine, because Salesforce.com ain’t sharing.

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The lines are blurring in the Platform-as-a-Service world. It used to be that if you developed in a given PaaS, you probably deployed in that PaaS. But that’s changing. For example,  CloudBees, the self-proclaimed Java-specific PaaS will now let developers that build applications on its DEV@cloud to deploy their work on Cloud Foundry, as well as on its own platform.

The goal is to make it easy for developers to develop what they want using CloudBees — taking advantage of its Jenkins-based continuous integration capabilities –  to deploy what they build where they want.

CloudBees CEO Sacha Labourey said his company focuses on the whole application life cycle, not just development, not just deployment. In October, the company announced a similar deal that lets its users deploy on Google App Engine.

“If you’re a GAE user you can subscribe to our services… it’ s not that we’re moving to Cloud Foundry as a company, it’s just that customers have freedom of choice. If you prefer GAE or Cloud Foundry to us for deployment, that’s fine,” he said.

CloudBees users wanting to deploy to Cloud foundry can sign up here. 

Here’s the thing about PaaS: Many developers love them because of the freedom and flexibility they offer when it comes to actual development. Moves like this one mean that deployment options for their finished code (if there is such a thing) are opening up as well.

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Trying to assess the size of any or all of the cloud computing market is like tacking Jello to the wall so thank God someone — Gartner — attempts it.

In a new report, the big researcher estimates that the public cloud market overall will grow 18.5 percent, to $131 billion, in 2017 from $111 billion in 2012. Under this broad umbrella term for public cloud services, Gartner includes the usual suspects — Infrastructure as a Service (IaaS) a la Amazon and the growing crowd of OpenStack-based public cloud providers.

The public cloud IaaS and file and storage represents the fastest growing part of public cloud services, growing 42.4 percent in 2012 alone to $6.1 billion. With growth accelerating to 47.3 percent, it’s expected to hit $9 billion in 2013. Gartner research director Ed Anderson said that’s happening as more companies go beyond the usual development and test scenarios to more for-real production deployments — a topic we’ll doubtless touch on at GigaOM’s Structure: Data event in New York March 20-21.

Gartner also includes “cloud-based advertising services” as another hot sub-category. I assume this includes such offerings as Akamai’s new ad integration service plus, perhaps, SaaS based ad and marketing tools a la Salesforce.com. I’ve asked Gartner for some clarification on this so stay tuned. Update: Gartner defines Cloud advertising as “processes that support the selection, transaction, and delivery of advertising and ad-related data where content and price are determined at the time of end-user access, usually by an auction mechanism that matches bidders with impressions as they become available.” Relevant vendors include AOL, Apple, AppNexus, Baidu, Facebook, Google, Microsoft, OpenX and Yahoo.

The report also shows geographic differences persisting. According to Anderson:

“Although forecast growth is generally high across all regions, the adoption of cloud services varies significantly by country. Providers should not assume that a generic strategy applied to specific countries or regions of the world will produce the same outcome when applied to other countries, even countries with similar market characteristics … Local economic factors, regulatory issues, the local political climate, the diverse landscape of global and local providers, including noncloud providers, and other country-specific factors ensure a unique marketplace in each country and region.”

North America is the most enthusiastic adopter of public cloud services, with Gartner expecting it to account for 59 percent of all new spending in the overall category from now until 2016. Despite local challenges, Western Europe is projected to remain number 2, with public cloud expected to account for 24 percent of spending in the category. But, as expected, the highest growth rates will be seen in emerging markets in Asia (especially in Indonesia and India), China and Latin America.

So now comes the hard part: Remembering to come back and re-check this prediction in three or four years.

This story was updated at 5:05 a.m. PDT to include Gartner’s definition of cloud-based advertising services.

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The rumblings have been around for weeks but now they’re breaking the surface: Cloud Foundry, the open source platform-as-a-service framework faces a bit of an insurrection. Several vendors, such as AppFog, ActiveState, Tier 3, Uhuru, etc. — have built PaaSes atop the framework and some have quietly been mulling forking the Cloud Foundry code, citing lack of clarity about the project’s future.

The attraction of the multi-vendor Cloud Foundry effort is that, in theory, it would provide customers an array of compatible PaaSes from different vendors. If they don’t like their experience with one, they can move their code elsewhere. But now the prospect of a “fork” looms with some other vendors thinking of splitting off and doing their own iterations. Worst case scenario: that could negate any promise of compatibility. And that raises the old bugaboo of vendor lock-in which even PaaS providers say has restricted business demand for PaaSes.

Some background: late last year, VMware turned over the Cloud Foundry effort and related projects to the Pivotal Initiative spinoff. Since then some of the third-party Cloud Foundry crowd have complained that they have not gotten information  they need from Pivotal. And, they worry that Pivotal or VMware will push its own commercial, competitive version of Cloud Foundry. And so they privately discussed forking the Cloud Foundry code. Any fork or forks raises the specter of a fractured standard.

Sinclair Schuller, CEO of Apprenda, a non-Cloud Foundry PaaS, raised a ruckus last week when he posted his take on the impact of any fork or forks on Cloud Foundry. (Long story short: it will be bad for customers, Schuller wrote.) That caused a kerfuffle which Redmonk analyst Stephen O’Grady addressed in his  blog post. O’Grady tried to downplay the negative impact of forks, writing:

“We reject the notion that forking is an undesirable outcome. Forking is, to the contrary, provably beneficial to modern open source projects – at least from a developmental perspective.”

But O’Grady also conceded that, because Cloud Foundry is not licensed under the General Public License (GPL) — as Linux was — it faces different issues;

“Compatibility, ultimately, is the key to determining whether the forks which are so beneficial to development are a problem for customers. Java, for example, had multiple distinct implementations, which ensured competition and thus continued innovation to benefit customers.”

In his own blog post, cloud pundit Ben Kepes cites “tensions in the Cloud Foundry world, ” and maintains the possibility of a fork should concern customers.

“Quite simply a fork, or even worse multiple forks, too early in a project is a sign of bad governance and questions the validity of the entire initiative. Let me reiterate – these are very early days and any doubt that factions in the community sow in end users minds are wildly damaging to the community. This is especially the case since, from what I’m hearing, some of the conversation around forking is happening for all the wrong reasons – it comes down to vendors making the right decisions for the right reasons.”

I’ve asked Cloud Foundry and some of the third-party PaaS providers for comment and will update this when they get back to me.

Photo courtesy of  Flickr user Marshall Astor – Food Fetishist

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Apprenda is a bit of anomaly. It’s a tech company based not in Silicon Valley or Redmond or Cambridge but outside Albany, N.Y. While rivals tout the appeal of public Platform as a Service (PaaS),  Apprenda holds that private PaaS is the way to go — at least if you want paying customers. And, it eschewed the multi-language goal of many rivals to focus on .NET applications only. Until now that is.

As of now, Apprenda will also support Java, says CEO Sinclair Schuller. It’s not really a huge surprise, even though Schuller was a vocal proponent of single-langauge PaaSes . Last May, he told GigaOM if he were forced to choose a second language to support, Java would be it.

Well the time has come. “Our thesis has been we want to be the enterprise PaaS and for that we’ll tackle the two languages that make up 80 percent of the [corporate] application portfolio,” Schuller said in a recent interview. “Some companies are 60 percent/40 percent Java, some 60 percent/40 percent .NET but Java and .Net are always in there.”

Apprenda counts Honeywell and Diebold as reference customers and now adds JP MorganChase to the list. The country’s largest bank has decided to develop, deploy and maintain all its custom .NET and Java applications on Apprenda. At a time when many of the multi-language public PaaSes have a hard time naming real customers, this is something of a coup.

These customers use Apprenda for applications for handling  patient relationship management, oncology treatment, mortgage management, inventory management and predictive analytics for retail and other verticals, Schuller said.

 

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Rackspace is buying its way into the hot MongoDB database market with its acquisition of ObjectRocket, a year-old provider of cloud-based MongoDB services.

The deal, the terms were not disclosed, shows that major cloud infrastructure providers need to offer an array of database options — Rackspace already offers MySQL but Amazon Web Services offers a full slate of databases and managed databases. In December, Softlayer launched hosted MongoDB as a service it developed with 10gen.

“Mongo is breaking away from the pack and our customers are asking for it,” said Pat Matthews, SVP of corporate development for Rackspace, San Antonio, Texas. He said the company could have built its own version of the open-source database or partnered with a MongoDB provider — but was impressed with the expertise of the ObjectRocket co-founders Chris Lalonde, Erik Beebe and Kenny Gorman who between them spent years at Ebay, Paypal, Shutterfly and AOL.

ObjectRocket characterizes its offering as MongoDB as a service, meaning that users don’t have to sweat a lot of the set-up nitty gritty. It competes with rivals like MongoHQ and MongoLab.

“The primary difference between us and other database-as-a-service companies is we built out our cloud rather than layer on top of general platforms,” Lalonde said in an interview. “We built a cloud platform from the ground up specifically for MongoDB, we went to Equinix and did our own hardware platform and tuned the OS and the rest of the stack for Mongo in a way that enables us to get great performance and also have a more highly available system.”

Of course that means integrating it into the Rackspace platform will take time, which is fine with Rackspace, according to Matthews. “The offering as it stands will exist for a while till we can figure out the best ways to integrate it. We will maintain or improve performance and we won’t rush to integrate it at the expense of what we have now.”

Critics could argue that Rackspace is late to this party given the database options Amazon Web Services has, but then again, we’re still pretty early in the cloud deployment game.

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