Author: Stacey Higginbotham

The two federal agencies responsible for allocating the $7.2 billion in broadband stimulus dollars today released information about the next — and final — round of funding. For those of you who don’t recall, the first round was supposed to dispense $4.7 billion and was plagued by delays and a mystery of missing funds.

Today, we get information on the second round in which the National Telecommunications and Information Administration (NTIA) and the Rural Utilities Service (RUS) will give out more than $4.6 billion in funds.

As part of the formal paperwork that lets people know there’s money to be had, I discovered what happened to missing funds I had written about a few weeks ago. The RUS was supposed to give out $2.6 billion in the first round but only wrote checks for $300 million. I wondered what that meant for the original applicants seeking the grant money and where the rest of the money was.

Today, my questions are answered, as the RUS says it has $2.3 billion to give out during this second round of funding, and that companies and towns that applied for money the first time around can either resubmit their original application or better tailor it to the new rules for this funding round. The majority of the RUS funding will be for last mile projects and middle-mile infrastructure. The RUS will only allocate money for satellite providers for areas that remain unserved after all other Recovery Act broadband funding is awarded.

The NTIA will hand out the remaining $2.35 billion. People can send in applications between Feb. 16 and March 15, 2010, and the agencies plan to announce all awards by Sept. 30, 2010, which is the deadline by which all funds have to be allocated under the original legislation. They’re cutting it close.

Image courtesy of Flickr user AMagill

IBM said today that it will moving Panasonic employees to its LotusLive hosted email and collaboration service — delivering a potential blow to Microsoft in the process, whose Exchange server will be jettisoned by the consumer electronics giant. Panasonic Corp. will begin moving 100,000 employees in various departments to LotusLive, expanding to a total of more than 300,000 employees, external partners and suppliers of Panasonic.

The move is one of several high-profile Exchange defections, as the idea of buying email as a service hosted on the web (some, including IBM, call this the cloud) takes off in the corporate world. The result is a new round of competition among the big email providers. Microsoft in particular is fending off threats from IBM and Google, as well as smaller players like Zimbra (which was just acquired by VMware) for corporate customers (GigaOM Pro, subscription required).

Additional related GigaOM Pro research: Email: The Reports of My Death are Greatly Exaggerated

Image courtesy of Flickr user CarbonNYC

The manufacturing floor where HP assembles custom gear for data centers

Hewlett-Packard and Microsoft Corp. today said the two companies would invest $250 million over the next three years to link Microsoft software with HP gear and sell it as one. The two have committed to what they call the infrastructure-to-application model with an eye to establishing both companies as big players in cloud computing. As the cloud gains in prominence, and is increasingly seen as the next-generation computing model, hardware, software and networking companies are buddying up to create a data center that runs like a computer.

So this announcement is HP’s and Microsoft’s strategy for taking on Cisco’s servers and its alliance with VMware, but it’s also a blow to companies without such partnerships, primarily Dell (Related from GigaOM Pro, subscription req’d: With UCS And VCE, Has Cisco Bitten Off More Than It Can Chew?). As for IBM, it has tried and true services, software and hardware expertise from which to draw. So what’s under the hood in the HP-Microsoft partnership?

• Unifying and incenting a sales channel to sell HP-Microsoft gear.
• HP won’t stop offering other hypervisors but it will have a cadre of salespeople dedicated to pushing Microsoft’s Hyper-V.
• Like it did with Oracle, HP is going to build hardware specially optimized for Microsoft applications including an SQL server. HP declined to talk about what this means for its work with Oracle, but since Oracle now is selling its database appliance built on Sun hardware, my guess is that partnership was doomed when Oracle said it would acquire Sun.
• Microsoft will use HP gear in its Azure cloud.
• The two will combine R&D forces to build out the future data center, which will be built around containers and will be optimized to run efficiently depending on the application.

Some quick thoughts here that I will explore later today on a call with HP and Microsoft: Efforts such as this one and Cisco’s tie-up with VMware and EMC concern me, as they seem to indicate that the big players are using cloud computing as an excuse to partner with one another. In creating optimized systems of the type that Microsoft and HP will focus on, the danger of vendor lock-in rises. Is optimization becoming code for proprietary?

Behind these optimization efforts is the holy grail for information technology, which is creating a data center that is aware of an application and can deliver exactly the performance required for a specific task and no more. This saves on power costs and also implies that we’ve achieved some type of real-time information and automation that make data centers run like a computer, rather than like a gaggle of servers networked together with Ethernet and duct tape.

But given the concerns about openness between clouds, the optimization efforts of these large vendors seem troubling. Now, your HP gear will be optimized for Microsoft’s proprietary Hyper-V virtualization instead of open Xen. That’s not to say HP’s management software won’t be able to run in heterogeneous environments,  or that other hypervisors won’t run on its gear — HP CEO Mark Hurd was at pains to say it will — but that companies running those environments may take a performance or efficiency hit.

Regardless, the cloud is shaking up the traditional corporate IT market and Microsoft and HP are trying to figure out their own ways of putting their respective selves on top. I don’t think it’s a coincidence that the two started working together on this project back in April, which is when Cisco finally unveiled its server plans. Microsoft CEO Steve Ballmer on the call gave his definition of cloud computing, which basically brings all of this home, “The cloud means a modern architecture for how you build and deploy applications.”

Google dropped a bomb yesterday, not merely for the technorati, but also for the world at large, by exposing Chinese attempts to hack into the networks of major U.S. companies as well as the email accounts of human rights activists. Google subsequently said it would no longer censor its web page in China, and would reevaluate its business operations in the country. So far, everyone from Om to Hillary Clinton has had something to say about the move, but in order to understand how the world beyond Silicon Valley sees it, we turned up some sources you might not go to on an everyday basis.

From China Daily (from the official Chinese newswire Xinhua):

Google’s possible retreat from China has prompted the company’s 700 China staff to fear for their jobs. “We were told that Google might quit China at a general meeting on Wednesday morning, and all of us feel very sad,” said an employee with Google’s Beijing office on condition of anonymity.

According to ChinaYouren:

The way the message has been drafted, chances for Google.cn to remain are slim. It will be very difficult for Google to step back from this, the whole tech World is going nuts about it. On the other hand, it is even more difficult for the Chinese authorities: even if they were willing to accept Google’s conditions (which they are not) they could never allow a Western company to publicly force their policies. Unless there is some kind of recanting, Google.cn is doomed.

China Digital Times has collected and translated tweets about the decision, including this one:

– @hecaitou: After Google leaves China, the world’s top three websites on Alexa —Google, Facebook and Youtube are all blocked in China. This is not an issue of Google abandoning China, but one of China abandoning the world. #googlecn

And from RCoversation:

On the other hand, a short Chinese-language report in Sina.com’s tech section is generating a long thread of comments from people who are unhappy about Google’s announcement because they don’t want to lose access to Google. Somebody has set up a website, http://www.googlebacktochina.com/ with a Chinese header that translates approximately as “Give me back my Google.” Famous tech blogger Keso mourns that Google’s retreat brings the Chinese Internet one step closer to being an Intranet.

And from Ars Technica (I know I said I wouldn’t use the usual tech suspects but the image they present of the history of Chinese hacking is first-rate):

As to goals, one of the biggest is ripping off research breakthroughs in order to save time. The report notes that “Chinese industrial espionage is providing a source of new technology without the necessity of investing time or money to perform research… Chinese espionage in the United States, which now comprises the single greatest threat to US technology, according to US counterintelligence officials, is straining the US capacity to respond. This illicit activity both from traditional techniques and computer-based activity are possibly contributing to China’s military modernization and its acquisition of new technical capabilities.”

And finally, this from The Atlantic:

But there are also reasons to think that a difficult and unpleasant stage of China-U.S. and China-world relations lies ahead. This is so on the economic front, as warned about here nearly a year ago with later evidence here. It may prove to be so on the environmental front — that is what the argument over China’s role in Copenhagen is about. It is increasingly so on the political-liberties front, as witness Vaclav Havel’s denunciation of the recent 11-year prison sentence for the man who is in many ways his Chinese counterpart, Liu Xiaobo. And if a major U.S. company — indeed, Google has been ranked the #1 brand in the world — has concluded that, in effect, it must break diplomatic relations with China because its policies are too repressive and intrusive to make peace with, that is a significant judgment.

Thumbnail image courtesy of Flickr user permanently scatterbrained

My husband once calculated that $131 of our taxes will go toward the $7.2 billion in broadband stimulus money. As far as I’m concerned that would be money well spent on our part, because as a telecommuter and as someone whose work is dependent on the Internet, I am a devout believer in the power of broadband. The Public Policy Institute of California put out some research today that attempts to calculate some of the benefits of broadband — not on the part of people or companies, but the economic development of communities.

The report sought to answer the following questions:

1. Does employment grow faster in areas with greater broadband expansion?
2. Does the relationship between broadband and employment differ by industry or geography? For example, is it stronger for industries that are more reliant on technology or that use workers who are more technically knowledgeable? Is it stronger in places that are more isolated or in those with more amenities?
3. Is there a positive relationship between broadband and employment growth? Does broadband expansion cause employment growth?
4. If broadband does boost employment, who benefits? Is employment growth accompanied by a greater likelihood of employment, higher pay, increased income, or greater flexibility to be able to work from home?

The respective answers it offered up were:

1. Moving from zero broadband providers to as many as three is associated with employment growth of about 6.4 percentage points over the 1999-2006 period.
2. Industries that rely more on technology inputs and on workers in computer specialist occupations are those in which broadband expansion is most associated with employment growth.
3. The research generally points in the direction of a causal relationship between broadband expansion and a large increase in local employment growth in certain sectors.
4. There is no relationship between broadband expansion and either the employment rate or average pay per employee. Whatever positive effects broadband may have on employment growth, it did not result in either higher employment rates (some workers leading to employment growth came from outside the municipality so overall rates didn’t change) or higher pay for residents in areas where broadband expanded in the 1999–2006 period. It also doesn’t boost telecommuting.

Summed up, broadband is good for people who you would expect to benefit, but isn’t going to change lives. However, I think as we increasingly tie our health care and education with network access, those things will change. And then the economic development angle is just another reason that broadband will be a basic necessity.

Thumbnail image courtesy of Flickr user dvs