Business
Why marketers can’t ignore the cloud computing revolution
Mar 11th
What’s the difference between a television and a movie theater? Are they the same thing? What about a television with broadcast and a television with cable? What about with TiVo? What about watching TV on Hulu? Are they the same thing? I could describe all these experiences at a high enough level and make them sound like the same thing. But they are not.
From a consumer standpoint, you might not care if you’re getting your TV over an IPTV connection or a cable connection as long as the video quality is good — just like you don’t care about DSL verses cable broadband as long as it’s fast enough. But there are definitely business values to these varying technologies that matter a lot.
Recently in a conversation with two of the smartest guys I know in the online ad industry, there were some rather disparaging comments made about cloud computing — essentially calling the whole thing marketing hype. After all, “isn’t the internet defined as many connected servers facing user clients with no single, central server? That makes the cloud simply a whole mess more of them, no?”
Well, actually — no. Think of the internet as infrastructure. You can do lots of different things with that infrastructure, including cloud services. And there are really significant implications for online advertising — and for the evolution of marketing in general.
Let’s say you owned an internet ad startup that was building a new ad serving system.
Approach A: The old-fashioned way — without using cloud services
Write your software and prototype it in a small lab environment “on premise.” Build out a data center with dozens of servers, multiple databases, and massive amounts of storage for the log files. Let’s say the load of the impressions is expected to be around 30 billion a month.
Now let’s say the peak load for delivering those ads requires 200 servers, but the average load is 50 servers, and the lowest load requires five servers. That means you would need to have 200 servers to handle the peak load — but that peak load only represents a small amount of time. That’s quite expensive, and a bit frustrating to only have a tiny bit of utilization of your server infrastructure — and to have the financial obligations and tax implications of the investment. And on top of that, the servers are moving closer to obsolescence every day. Keeping the whole thing up to date on newest versions of hardware, server software, and database software is complex and requires a lot of people to manage the systems.
Approach B: Building out on cloud services
Now let’s say you went down route B, in which you build your technology on a cloud services platform like Windows Azure or the Amazon Elastic Cloud 2.0 (EC2). You build your software so that the cloud platform can dynamically balance the number of servers dedicated to the service based on the load experienced at that moment in time. The overall cost of starting the company is dramatically lower, and the total cost of ownership of software and services is dramatically lower.
Now let’s say you’re an enterprise with a huge internal IT data center that you use for managing your ERP, CRM, and other enterprise capabilities. And now you want to integrate your online marketing data into the marketing business intelligence systems your analysts use to figure out how to spend their budgets. But in this world — as opposed to the volumes of data you deal with offline, where you’re dealing with a gigabyte or two of data a month — you’re dealing with terabytes or even petabytes of data a month. And you’ve never handled anything on that scale with your corporate IT resources. No problem — put the data onto a cloud storage system, then build your analytics capabilities in the cloud. You can operate your business just like before, but without having to suddenly build out a huge new datacenter and develop new capabilities for dealing with massive amounts of data.
Once you have your online marketing data in an environment that enables you to merge it with data from other sources — say, the U.S. Census or health statistics or mapping data or location data — you can start doing analysis in much more valuable ways. The same goes for applications.
Cloud services may not sound super sexy — it may sound like a techie kind of discussion for marketers. But you should know that cloud services are powering many of the new technologies in the online advertising space. I haven’t talked to a single startup that was started in the last couple of years that isn’t using cloud services for a big chunk of its infrastructure. And these platforms will become even more powerful and compelling over time.
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Negotiating Cloud Computing Agreements
Mar 11th
Cloud computing has been characterized as a paradigm-shifting phenomenon that will change how we purchase IT resources. Though given different names, cloud computing has been around for some time, and the legal lessons learned from experience with traditional software licensing and outsourcing agreements can and should be applied to cloud agreements, but there are new issues which will need new solutions.
Cloud computing is a loose term that describes a variety of data storage, processing, and application services, normally provided by a third party using equipment not located on the customer’s site. These services include providing raw processing power on demand, special purpose applications on a subscription basis, and remote data storage. An early form of cloud computing was Application Service Provider or ASP services, and another is currently known as software as a service or SaaS. Cloud services are normally provided using internet technology, where the customer uses inexpensive hardware and an internet browser to access the service and/or remotely stored data.
The ease of access and simplicity of using cloud applications are part of its attraction. Unfortunately, the same cannot be said for the legal issues related to cloud computing. While traditional software licensing and IT outsourcing agreements can be used as a model for cloud computing, there are new risks and business practices not addressed in those older agreements that must be considered.
OUTSOURCING AGREEMENTS AS A MODEL FOR CLOUD AGREEMENTS
Cloud computing agreements are basically services agreements, as are outsourcing agreements. Many of the provisions included in outsourcing agreements have direct applicability in cloud service agreements. For example, the basic warranty that services will be performed in a good and workmanlike manner is a good starting point for warranty language.
Normally, outsourcing agreements will explicitly provide that a customer’s data belongs to the customer, and that the vendor will give the customer a copy of its data at anytime. The customer is normally only charged for media and the vendor’s time spent in providing those copies. Cloud agreements should contain similar provisions, but frequently don’t. In fact, some agreements allow the vendor to hold the customer’s data hostage if there is a dispute. Similarly, outsourcing agreements will frequently prohibit the vendor from suspending or terminating services abruptly. That prohibition prevents the vendor from exercising undue leverage in a dispute with the customer. Finally, outsourcing agreements normally require the vendor to provide termination assistance to the customer when the contract ends. This is normally provided at an hourly rate negotiated before services commence. Cloud customers will want to avoid agreements without similar protections, especially if the vendor is holding sensitive data or providing mission-critical services.
Similarly, outsourcing agreements frequently contain caps on fee increases. This prevents fees from rapidly escalating after a customer has made a long-term contractual or technological commitments to a vendor. Customers will want to include similar price protection clauses in their cloud agreements.
Outsourcing agreements also frequently contain a “litigation cooperation” clause which requires the vendor to preserve data and cooperate with discovery requests if the customer is involved in litigation. Those clauses allow the customer to fulfill its obligations in the event a litigation hold is required or it is served with discovery requests. The same issue arises under cloud agreements. If those cooperation clauses cannot be included in a cloud agreement, the customer should implement appropriate data backup plans to allow it to comply with its document preservation obligations in the event of litigation. Continue Reading at Law.com
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Private, not proprietary, cloud computing
Mar 10th
Amid rising costs, a challenging economy and an explosion in Web-based data, IT experts expect continued high growth in cloud computing.
Cloud computing saves energy and operating costs by pooling information-technology (IT) resources, scaling up or down as needed, and putting computer power to use, rather than leaving it idle while it still draws energy.
Over the next decade, cloud computing is expected to transform the way in which IT is purchased, sourced and provisioned.
Companies can use the advanced technologies that cloud computing offers to exchange digital information around the world and across a variety of devices. They can quickly deploy new applications and meet peak workloads without adding to existing infrastructure. The autonomic features of cloud computing can be applied to predict harmful events, such as overheating or unbalanced workloads, and take corrective action. These are all advantages enabling companies under pressure to save time and money and to maintain a complex IT infrastructure while keeping their primary focus on the business.
Public or external cloud-based services, which receive most of the media attention, are available from a third-party service provider, via the Internet. On the other hand, cloud-computing platforms can also be private, and hybrid architectures also integrate both private and public platforms.
For IT users, cloud computing offers fast access to diverse types of information regardless of the type of device they are using, including laptops, smart phones, or PDAs. Technology users, including workers, partners and customers, want access to sophisticated applications that are as simple to use as self-service ATMs.
Where security is concerned, all companies need to maintain the security of their data. Some data may not be permitted to leave an enterprise or a specific geographic location. Therefore, it is essential to evaluate which workloads can be sourced through public clouds and which need to be kept in-house and delivered through private clouds. A strategy working for some companies is to begin with private cloud-computing solutions in order to evaluate the results in a controlled environment.
Private clouds remain behind firewalls in order to maintain privacy and security. Companies are able to establish security protocols, carefully monitoring the levels of access to information that is available for exchange. Access can be limited to internal networks, such as employees, then evaluated before being expanded to other limited networks, for example, business partners. Private clouds can be managed without network-bandwidth restrictions, security exposure and the regulatory-compliance issues of public clouds. Customizing cloud services and determining best practices is a smart way to increase the productivity of sales teams and off-site employees.
No matter whether the clouds are private or public, companies need to begin with trusted; secure foundations in order to build the most secure, efficient, and resilient cloud-services platform. Some companies may be tempted to begin with the user interface. However, beginning with the underlying infrastructure is a better strategy for long-term success, especially if there may be a future need to integrate public and private clouds.
Industry standards are still developing, but they will solidify as the technologies mature and more enterprises use cloud services. Right now, companies may find the best strategy is to opt for cloud services that are interoperable and based on open technologies.
Whether public, private or hybrid, a major driver of cloud computing is the need for companies to get new ideas, products and services to market faster, and continually innovate to meet global competition.
Cloud computing delivers more advanced technology within a simpler, cost-effective infrastructure. It creates a flexible, robust infrastructure to serve the needs of today’s economy, where knowledge flows to countries and regions wherever IT infrastructures are reliable and responsive.
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Google App Marketplace Could Revolutionize Cloud Computing
Mar 10th
You must have noticed that Google has been slowly inching towards a culture of Online cloud computing, and most companies, individuals and businesses have adapted to the culture of cloud computing because of its obvious advantages. Cloud computing allows users to manage data, applications and information in a way that traditional software or hardware don’t allow and the most important advantage is that you could access your data, application and software from any computer in the world, provided you have the ID and password.
However, cloud computing itself is not without disadvantages, and the most unpleasant one is the lack of applications directly integrated into Google. Hence, users copy and paste data, use different applications time and again in order to get everything into the cloud. Google itself has admitted that it does not have the expertise to integrate the hundreds of business applications out there into the cloud.
Thus Google has now announced that Google Apps Marketplace is now open for business. Developers and software providers can now join the new Online store for integrated business applications. These cloud applications will allow Google Apps customers to discover newer applications without having to manage each one of them separately.
At the moment, there are already more than 50 companies who are selling their applications. Some of the apps already available are
Intuit Online Payroll: It allows users to run payroll, pay taxes and check paystubs within an integrated online office environment.
Manymoon: It helps in organizing and sharing information with co-workers and partners, including tasks, projects, documents, status updates and links.
Professional Services Connect (PS Connect): This provides contextually relevant information about people, projects, customers and transactions so that one could make better decisions.
JIRA Studio: This app helps to track and manage project issues and workflow, especially in design and development of tools.
What the Google Apps Marketplace Is
It works similar to the Apple App Store, but is only cheaper. Google is asking the developers and businesses a onetime fee of $100 and 20% of the revenue in exchange to the access to 25 million Google users. Apps would be authenticated using OpenID and would be secured through oAuth. The applications would be accessible through a universal Google Apps navigation system.
How It Could Help Businesses
Businesses and companies could stop using multiple applications and get rid of the burden of having to remember multiple passwords for each applications. Whether you are an employee or a proprietor, you could use your Google account to access all these applications, and edit/use based on the permissions you have.
How It Could Help Individuals
Google Apps are used by not just companies and businesses but also students, freelance workers, and independent professionals. There are several account management apps, data related apps and other applications that could help the end user to make use of Google cloud computing and the Google App Marketplace makes it easy for everyone.
How Cool Is It Anyway?
Like I mentioned earlier, cloud computing has already become popular and most of us have been using Google Docs, and other apps successfully. The marketplace would allow us to access more applications which are not developed by Google but have been authenticated nevertheless. This allows for a streamlined system of working and managing data, software, accounts and information.
Companies and individuals could make use of payroll, data entry, management, and an office suite for instance and integrate them to the Google account. It would also help in terms of social media, data management and communication. Google App Marketplace could thus be a great beginning and a step in the direction!
Read more: Google App Marketplace Could Revolutionize Cloud Computing | Walyou
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Hybrid Clouds Hit Data Centers
Mar 9th
Merging public and private cloud computing infrastructures.
Charlotte Dunlap 
There was much buzz about merging public and private cloud infrastructures at last week’s RSA Security Conference in San Francisco. As enterprises use virtualization to step up the creation of private clouds around their data centers, security vendors are working to steer customers toward merging private and public clouds for a hybrid cloud approach.
Some security and infrastructure providers realize that private clouds are an important first step toward increasingly moving customer workloads to public clouds as the technology and security catches up.
Private cloud infrastructures are necessary for companies that are regulated under compliance mandates, but CIOs see the value of being able to tap public cloud services for obvious reasons: lower total cost of ownership (TCO), simplified management and access to dynamic global threat intelligence, i.e., malware alerts. Of course, enterprises are still very concerned about the security, reliability and governance issues associated with public clouds, but CIOs are going to be hearing a lot more about hybrid or internal/external cloud options in coming months as a way to appease concerns.
An example of a hybrid cloud solution is the merging of an internally built or private cloud infrastructure with a security vendor’s public network of threat intelligence. Examples of global threat intelligence delivered through public cloud services include Trend Micro’s Smart Protection Network and Cisco ( CSCO – news – people ) Ironport SenderBase Security Network.
Over the past year security vendors have focused their cloud messaging primarily around Software-as-a-Service offerings targeting specific pain points, such as secure messaging, namely anti-spam. CIOs should anticipate more vendor messaging focused around hybrid cloud computing, targeting those large enterprises–not to mention European customers–that are required under governance to keep company data within the folds of the private cloud infrastructure. Security service providers are acknowledging customers’ need to keep data in-house, but they’re also providing options to couple private with public infrastructures and allow customers to off-load more of the security burden.
Later this year Trend Micro has plans to expand its private cloud services to include new protocols, such as Web reputation. Trend Micro says it will create a private cloud within the public cloud to let customers store confidential data, a prospect which will likely be most attractive to Internet service providers. Keep Reading at Forbes
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SaaS a big winner in health stimulus
Mar 8th
One conclusion I was able to draw from last week’s HIMSS show is that Software as a Service (SaaS) is the only way clinics and small medical practices are going to get health IT in time to collect that sweet, sweet stimulus cash.
From big SaaS companies like AllScripts to smaller ones like Practice Fusion, the buzz was electric and the lesson obvious.
(Practice Fusion CEO Ryan Howard is shown at his HIMSS reception last week. He’s expecting a better year than the Phillies slugger of the same name. Which is saying something. (Then again, I’m a Braves fan.))
Most large hospitals have their solutions in place, or are in the process of implementation. This vendor relationship may be the most important thing on a hospital CEO’s plate right now.
From what I gathered on the HIMSS show floor, most of these vendors are lining their customers up to collect cash on investments made long ago.
Collecting on the 2011 meaningful use guidelines, watered down as they’re expected to be, will be fairly simple, and lobbying by both hospitals and vendors could water down the 2013 and 2015 guidelines so they don’t have to spend anything above current plans to collect on them.
Many small practices have been assuming that the hospitals will bring them their health IT. Admitting privileges are a powerful weapon. If the hospital mandates you go with McKesson, you may have no choice.
But small practices may well ask, what’s in it for me? Going with the hospital’s IT solution only ties you closer to the hospital. You have your clinic because you want to stay independent. And many hospital systems were not really designed to scale down.
Thus, SaaS. There is little up-front expense, no server in the closet. You can back up records overnight with Carbonite or a USB-linked hard drive — you can backup 2 terabytes at Costco now for under $300, including software.
SaaS vendors can scale quickly thanks to cloud computing. The biggest problem may be assuring clinics that their broadband connection won’t go down mid-day. But a lightweight version of the software, again on a nurse’s station, can handle that eventuality.
Services like SharEHR claim to require no training while others like Practice Fusion cost nothing thanks to ads. If the hospital demands your records, you can talk to them about that later.
Contrast that with the cost of putting in servers, wiring your office, training your staff, and learning it yourself, which is what many EHR vendors were offering clinics just a few years ago. The horror stories from that are many.
Personally I am still waiting for the glorious tech revolution to strike the doctors I use most often. My pediatrician has a PC on his desk to help with billing, but the kids’ records are still on paper. My internist is also paper driven. My dentist is a computer hobbyist but still brings out a file folder each time I visit. Last time I got new prescriptions I still drove them to the pharmacist.
This tells me there is still an enormous opportunity to automate small practices, but 2011 will be here before you know it and the only way I can see them going is to buy it as a service, stimulus cash or no stimulus cash.
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RightNow Tries to Change SaaS Contract, Pricing Game
Mar 5th
CRM vendor RightNow announced a new SaaS (software as a service) pricing and licensing model on Thursday that it says provides customers with fairer, clearer deals. The company also issued a “Cloud Challenge” to competitors, urging them to adopt similar principles.
RightNow contends that while SaaS has changed the way companies use IT, providing benefits like faster implementations and quicker innovation, contractual engagements are wracked by the same problems as on-premises software, such as underutilized or excess user seats, hidden fees and restrictive contractual terms.
Under RightNow’s Cloud Services Agreement (CSA), which is now standard for all new business conducted by the vendor, customers receive fixed pricing for three years. They also have the ability to renew for another three years at a cost determined at the time the initial contract is signed.
Users who sign multiyear agreements can cancel on an annual basis for any reason, said CEO Greg Gianforte .
Another key aspect of the CSA sees customers buy a pool of “seat months” that are consumed on an as-needed basis, Gianforte said.
Customers can adjust the number of seat months each year. This will help put an end to shelfware, and particularly benefit customers with seasonal spikes in business, such as an online retailer, Gianforte said.
RightNow is also pledging to give back part of customer’s subscription fees if it fails to meet service-level agreements. The company is also offering 90-day pilot programs with unlimited capacity.
“It’s time for a change. The best thing that could happen is that the industry responds and everyone adopts the Cloud Challenge,” he said. “These are reasonable expectations and if you’re not getting them, you’re being taken advantage of.”
The announcement is “absolutely the right step and right direction from the point of view of SaaS and SaaS vendors,” said Ken Harris , CIO of natural nutrition products company Shaklee, a RightNow customer for more than five years.
Shaklee has a current contract with RightNow and therefore can’t immediately take advantage of the CSA, but the new terms reflect a number of provisions the company negotiated for in past years, he said.
The CSA’s use of “seat months” will be a big help, as Shaklee’s business is somewhat seasonal and underutilized seats do present “a real problem,” he said. “With any software that’s seat-based, you have to build the church for Easter Sunday but the rest of the days it doesn’t fill up, as the old saying goes.”
RightNow is just one of nine SaaS applications Shaklee currently uses, Harris said. The CSA “is going to give us a lot of leverage. A number of things that are in here, we’ve been trying to negotiate in all of our deals, not always successfully.”
Analysts also praised RightNow’s announcement.
“RightNow does go some way to address likely user pain points around adopting cloud apps, particularly in relation to guaranteed pricing over a multi-year period,” said 451 Group analyst China Martens via e-mail. “Having to pay over the odds for both compute power and storage for some versions of vendors’ CRM software have given some customers some nasty surprises.”
“There’s a lot to like in this announcement,” said Frank Scavo , managing partner of the IT consulting firm Strativa, in an e-mail. “For example, the cash level credits. With many providers, SLAs are weakly written or only offer token concessions. RightNow’s terms and conditions look like they put real teeth into RightNow’s SLAs.”
The announcement speaks to a new front in the software industry’s pricing wars, he added.
“Vendors have been discounting for years to win specific deals. The price competition is now moving to long-term maintenance and support, where the real money is,” Scavo said .”We’ve already started to see it with on-premise vendors such as Infor and Microsoft Dynamics, who seem to be emphasizing their maintenance and support programs these days as a way of differentiating themselves from SAP and Oracle. Now we’re starting to see it in the cloud.”
