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Cloud Computing Analysts encouraged by Microsoft’s ‘cloud’ progress
Jul 31st
Cloud Computing Analysts encouraged by Microsoft’s ‘cloud’ progress
SEATTLE (MarketWatch) — Wall Street analysts came away from Microsoft Corp.’s annual gathering encouraged by the company’s progress in adapting to a market in which software applications are increasingly delivered online, according to research reports published Friday.
Microsoft increasingly has been moving into so-called cloud computing, where software is accessed through an Internet connection, rather than installed in a user’s computer.
Younger rivals including Google Inc. (GOOG 484.85, -0.14, -0.03%) , Amazon.com Inc. (AMZN 117.89, +1.03, +0.88%) and Salesforce.com Inc. (CRM 98.95, +1.16, +1.19%) have sought to expand the cloud-computing market, while Microsoft has endeavored to alter its own approach to keep pace.
Jefferies & Co. analyst Katherine Egbert pointed out that investors are shifting money out of Microsoft shares, based on concerns about how the company will develop new ways of making money.
Shares of Microsoft have fallen roughly 15% in the past three months, compared with a roughly 8% decline for the Nasdaq Composite Index (COMP 2,255, +3.01, +0.13%) over the same period. The stock closed Friday down slightly, at $25.81.
But Egbert wrote in a research note that concerns about Microsoft may be exaggerated, as the company has a history of adopting “technologies, mostly invented by others, to the mass market.”
Cloud evolution
“We’re going to lead with the cloud,” Microsoft Chief Operating Officer Kevin Turner said at the company’s annual analyst meeting Thursday, while noting successes in vying for cloud-computing contracts against Google and International Business Machines Corp.
Microsoft “appears to be holding their own competitively” in cloud computing, Deutsche Bank analyst Todd Raker told clients in a note. “The bottom line is we believe the cloud is evolving from a secular threat to an opportunity” for the company.
However, Raker also acknowledged that the timing of any significant economic benefit from Microsoft’s cloud-computing effort remains “unclear,” noting that “we get significant pushback from investors on near-term reasons to own the stock.”
Some analysts argued that investors may not yet fully appreciate Microsoft’s Windows Azure platform service, which includes cloud computing and storage for customers hosted at the company’s data centers.
“While the buzz has picked up around Azure over the past 12 months, we do not believe the company gets enough credit,” Oppenheimer analyst Brad Reback told clients in his own research note.
“Azure should be a net revenue and profit creator” as more corporate customers snap up the service, he said.
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IBM buys cloud computing software firm Cast Iron
May 3rd
IBM said it bought privately held software company Cast Iron Systems to bolster its expertise in cloud computing, an increasingly popular technology that helps companies cut costs by enabling access to software online.
Terms of the deal were not disclosed, but Monday’s announcement underscores International Business Machines Corp’s continued effort to expand in software and services while retreating from sales of commoditized hardware.
IBM said the deal will help customers integrate various cloud applications from providers like Salesforce.com Inc, Amazon.com Inc, NetSuite Inc and SAP.
IBM said it expects global cloud computing market, including “software as a service,” to grow to $126 billion by 2012 from $47 billion in 2008.
Analysts said they expect deals in cloud computing by IBM and such other technology vendors such as Hewlett-Packard Co, Cisco Systems Inc and EMC Corp.
Targets could include similar small companies specializing in cloud computing, like Boomi, Hubspan and informatica, they said.
“I think software as a service will continue to undergo a shakeout, absolutely,” said Forrester Research analyst Liz Herbert. “There are lots of these small providers in spaces like integration and billing and provisioning … We are seeing and we expect to see more acquisitions activity from major providers.”
IBM does not always announce terms of individual deals but has said it spent a gross $1 billion on acquisitions in the first quarter. For all of 2009, it spent $1.5 billion, including $1.2 billion cash to buy business analytics company SPSS Inc.
Cast Iron, whose approximately 75 employees will join IBM, said the deal will help it gain broader customer reach. Its current clients include Time Warner Inc and ShoreTel Inc.
Source: Reuters
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Obama’s $79 Billion Tech Plan May Favor Web Programs (Update1)
Mar 12th
March 11 (Bloomberg) — Vivek Kundra, the Obama official with $79 billion to spend on technology, said the government can be more efficient by putting programs on the Web, paving the way for companies like Microsoft Corp. and Google Inc. to win business.
The government wants to put data such as health-care pricing information on Internet-based systems as they grow more secure, the U.S. chief information officer said in an interview this week. The U.S. can cut costs by outsourcing that work, said Kundra, who has overseen the federal technology budget since President Barack Obama appointed him last year.
Microsoft, Google and Amazon.com Inc. are all offering more databases and programs online, allowing customers to curb storage costs. Sharing software and data that way would shrink U.S. storage needs, helping to cut expenses after previous governments spent more than $500 billion on data centers and other technology initiatives in the past decade, Kundra said.
“It’s mind-boggling,” said Kundra, a New Delhi native who previously managed information technology for the District of Columbia. “It costs a fortune, it’s duplicative and it’s an energy hog.”
The model Kundra is looking at is known as cloud computing, where users go through the Web to access computers, applications and data instead of through their own servers. He declined to say which companies are best fit to operate government clouds. He noted that Google and Redmond, Washington-based Microsoft have introduced government-focused clouds in the past few months.
‘Darwinian Pressure’
“Let the free markets decide which company is best,” he said. “We want lots of companies with lots of great ideas competing with a Darwinian pressure.”
Global spending on cloud computing may top $44 billion in 2013, according to research firm IDC in Framingham, Massachusetts.
‘“We are excited to see the U.S. federal government embrace the cloud and expect it will further boost confidence among businesses of all sizes to do the same,” Ron Markezich, vice president of Microsoft Online, said in an e-mailed statement.
Cloud computing can give the government “dramatically reduced costs,” said David Mihalchik, who heads federal business development for Mountain View, California-based Google. “All of these things help government employees to collaborate together, be more productive, and the government saves money,” Mihalchik said.
Government Work
Kundra, 35, traveled last week to the West Coast, where he met with companies such as Google and Apple Inc. in California, as well as Microsoft and Amazon.com in Washington, on a 48-hour tour of technology businesses. He said he was impressed by how they created online platforms that allowed third-party software developers to collaborate.
Last year, Kundra created Data.gov, which lets federal agencies post information for the public online and now supports more than 169,000 databases. Other projects, such as those that deal with public safety or health care, also could be put on a cloud, creating a way to share ideas and data at lower costs, he said.
Companies including Microsoft, Google and Seattle-based Amazon.com are seeking federal security certification so they can compete for work within the federal government, he said.
When he managed D.C.’s technology, Kundra moved more than 35,000 municipal employees to Google Enterprise Apps, which provides e-mail, spreadsheet and word-processing programs via the Internet. He said he’s willing to move federal employees to a similar program, if security is proven.
“As long as these companies address security, we’re going to be shifting our resources toward cloud computing,” Kundra said. The government would still own and operate some of its own secure cloud-computing systems. Full Source
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‘Cloud Computing’: What Exactly Is It, Anyway?
Feb 8th
For a lot of small-business owners, “cloud computing” is the latest IT buzzword to leave them scratching their heads. To demystify things, here’s a primer for companies looking to wade into cloud services for the first time.
What are cloud services?
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Broadly speaking, any service or program sent over an Internet connection can be considered a cloud service. An outside vendor runs the servers and software, so the buyer doesn’t have to worry about the technical issues in-house—and can focus on its own business.
The services come in a number of forms. Many businesses are already familiar with one aspect of cloud computing: software delivered over the Web. Along with email services like Google Inc.’s Gmail, there are programs that help salespeople keep track of customer information, such as Salesforce.com Inc.’s software, and backup data-storage services from providers such as Amazon.com Inc.
Some businesses don’t just use software services, they buy computing power from vendors such as Verizon Communications Inc.—much like buying power from a utility. Let’s say a retailer expects lots of additional business during the holidays, and its in-house servers can’t handle the load of customer orders. The company might pay a vendor for the use of its servers, to shoulder part of the computing work as the need arises.
Other companies, meanwhile, might buy computing power on a regular basis. They might drop one or more in-house servers entirely—or not buy the hardware in the first place—and let a vendor run their vital programs on its machines. Once again, the buyer would pay a fee based on how much computing power it used.
How much will they cost?
Unlike traditional applications, which require hardware such as servers and IT staff for maintenance, cloud services don’t carry many upfront costs.
A Cloudy Outlook
- About 3.2% of U.S. small businesses, or about 230,000 businesses, use cloud services.
- Another 3.6%, or 260,000, plan to add cloud services in the next 12 months.
- Small-business spending on cloud services will increase by 36.2% in 2010 over a year ago, to $2.4 billion from $1.7 billion.
Source: IDC
Consider software. Salesforce.com’s offering for businesses costs between $5 and $25 per user each month. Google offers a host of programs including email, a word processor, video and a hosted Web site for an annual fee of $50 per user. For small businesses that have more-extensive computing needs, such as drug laboratories with extensive software, cloud services could cost more than $1,000 a month.
As for buying computing power, some providers charge for a certain amount of memory and computing configuration. Terremark Worldwide Inc., for example, charges six cents an hour for one gigabyte of RAM and the equivalent of one processor.
One caveat that might bump up costs a bit: If you’re going to rely on the Internet for your services, you will need a solid connection. While some believe a business-class DSL connection is sufficient, many industry observers and consultants recommend getting a faster line, such as a T1.
Continue Reading at WSJ
