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Tuesday, February 26, 2013
For companies cutting IT costs, the cloud is the place to be
Data storage shift helps companies' bottom line
Cloud computing is exploding and growing faster than a swirling funnel crossing the Oklahoma plains. The next generation of computing lowers information technology costs while increasing corporate profits at the same time. And what's not to like about that?
That one-two punch was revealed in a study obtained by USA TODAY conducted by England's Manchester Business School. The study, which was commissioned by San Antonio-based hosting company Rackspace, is expected to be released Wednesday.
The Manchester study indicates that cloud computing allows U.S. businesses to slash information technology costs by about 26%. What's more, 62% of those same American companies say that deploying in the cloud improved their bottom lines.
"The results are finally showing what we've known all along," says Rackspace Chief Technology Officer John Engates. "It's not just about moving workloads from your data center to our data center."
The rise of cloud computing has much bigger ramifications. It's a tectonic shift in how we work, live and play. iTunes is in the cloud. Ford's cars are connected to the cloud. Google's Gmail is based in the cloud. But those are largely consumer examples; now corporate computing is also shifting to the cloud.
"The move to the cloud can't happen fast enough for some companies," says Engates, who has been on the ground floor of the cloud-computing movement.
Cloud computing has myriad definitions, but in the most general sense it means devices linked to data centers located just about anywhere over a combination of wireless and wired networks. There are "private clouds," where companies own and control the data centers, which are usually centrally located in lower-cost geographies. And then there are "public clouds," in which companies use computing power delivered from servers they don't own, which are usually shared with other corporate customers.
Big companies tend to use a combination of private and public clouds, reserving their high-security functions and digital record keeping for the data centers they control. But the growing acceptance of public clouds foreshadows a trend in which computing power will be delivered similarly to the way electricity is distributed by utility companies. In fact, tech geeks refer to the long-term public cloud concept as "utility computing."
We are a long way from when most companies no longer own servers, or operate so-called on-premise data centers, and rely solely on public clouds. There are a number of reasons, including security concerns, control and reliability. But the Manchester survey suggests that enterprise computer customers are embracing the shift enthusiastically.
In addition to the cost-efficiency of cloud computing, the study found that 68% of U.S. firms are plowing the cash they saved back into their businesses. They are using the cost savings to improve and expand product lines, services and other offerings. More than 60% of the companies surveyed say they are using the money to hire new employees, give raises and offer bonuses. Employment at the American companies surveyed increased 28%.
While existing companies are transitioning to cloud computing at their own pace, start-ups unsurprisingly are totally embracing the change -- especially software and social-media concerns and online retail outfits.
More than half of the start-ups surveyed said they wouldn't have been able to afford on-premise data centers at the time of their launch.
Of course, it is self-serving for a cloud-service provider to hire a study that supports its case, but the numbers are the numbers, and Manchester interviewed some 1,300 companies in both the U.S. and the United Kingdom.
Intel's general manager of cloud computing, Jason Waxman, isn't surprised by the findings. Server, storage and networking sales have been booming at the chip giant in recent years. Intel pegs the compounded growth rate for servers at about 25% to 30% a year based largely on expansion of private and public clouds.
"The more companies can save on computer infrastructure, the more they can spend on infrastructure," Waxman says. "All of these new opportunities represent a huge build-out."
Waxman thinks that public cloud providers, including Rackspace, Seattle-based Amazon.com (yes, that Amazon) and San Francisco-based GoGrid, could grow as much as 70% a year.
Gartner, the industry research consultant, predicts that the total public cloud market could swell to more than $206 billion in 2016, roughly double what it is now.
Says Intel's Waxman, "It's an astronomical opportunity."
Wednesday, July 1, 2009

Story from the Buffalo News
Number of data center jobs remains unclear, but annual salaries might reach $65,000
By Thomas J. Prohaska
NEWS NIAGARA REPORTER
WHEATFIELD — More details about the proposed Yahoo! data center surfaced Monday, as the Niagara County Planning Board gave its blessing to the $150 million project — although how many jobs the center would create at the Lockport Industrial Park remains unclear.
Orest P. Ciolko, of the Amherst architectural and engineering firm Wendel Duchscherer, put the number at 100 to 125, but David R. Kinyon, the town’s economic development coordinator, said no one had mentioned anything higher than 75 jobs to him.
Kinyon said the jobs would pay $50,000 to $65,000 a year.
Town officials announced last week that the Sunnyvale, Calif., Internet services company had submitted a site plan and a request for a property tax break.
Yahoo! officials have not confirmed the town is the only place under consideration for the data center and did not return phone calls Monday.
Last fall, the company bought land in Nebraska for new data centers and earlier this spring said it has been looking at several sites in Western New York and other states for an East Coast center.
Yahoo! hired Wendel Duchscherer to conduct the site work in Lockport, so Ciolko presented the drawings to the Planning Board. No Yahoo! official attended the meeting in the county’s Center for Economic Development.
Some of the drawings still bore the legend “Project Pilgrim,” which was the code name given to the hush-hush project before the town went public with it last week.
Amy E. Fisk, senior planner for Niagara County, reviewed the plans. “The county strongly encourages developments within industrial parks,” she told the board. “I think [the project] is excellent for Niagara County.”
Town officials still have to approve the site plan and tax breaks but are moving ahead rapidly. Approval could come as soon as early next month, and construction could start in August.
The first phase would be scheduled to open in September 2010.
From overhead, the project looks something like a xylophone, with 10 identical prefabricated metal pods laid out in a row and a central office building between pods 5 and 6.
But the pods, which Ciolko said would measure about 60 by 270 feet, would have slanted roofs. They will be connected to each other by a single central maintenance hallway.
The project also includes a 6- foot-high security fence, with a gate that Ciolko said would be opened by employees swiping key cards. The site would have no guard booth but would be equipped with surveillance cameras, he said.
The project would be built in two phases, Ciolko said. The first phase would cover about 108,000 square feet and include the office building, the five pods to its west and a 115-kilowatt power substation.
Kinyon said that’s the same power capacity as the nearby Delphi auto parts plant, although he was quick to add that Yahoo! won’t use as much electricity as Delphi.
Still, the New York Power Authority’s grant of 15 megawatts of low-cost electricity for 15 years was a major reason Yahoo! was willing to locate in Niagara County.
“We expect Phase 2 will be done by 2012 at the latest,” Kinyon told the board. “Essentially, they’ll have utilization of the data center portion of the Phase 1 project while they’re building Phase 2.”
Ciolko said 107 parking spaces would be located in front of the center and trees would be planted around the southern border of the 30-acre property on Enterprise Drive.
Ciolko said water, sewer and natural gas mains in the industrial park should be adequate for the project.
Thursday, June 11, 2009
Story from Baselinemag.com
Security and business continuity are critical issues to consider

1. Maintenance procedures should incorporate best practices. Physical security should be a big part of the site management program, says Julian Kudritzki, vice president of development and operations at Uptime Institute Professional Services, a provider of educational and consulting services for IT shops. He recommends checking on the data center’s history of outages, as well as making sure the staff is well-trained and the environment is clean.
2. Locating a data center—or choosing a colocation services provider—that is close to your operations has pluses and minuses. “Though choosing a co-location provider that’s nearby saves time for tasks, such as racking up a server, it prevents you from taking advantage of lower-cost facilities that may exist elsewhere,” Galen Schreck, an analyst at Forrester Research, wrote in a recent report. “Depending on the provider you select, you may be able to use some basic remote services to handle physical configuration tasks, while running your operations remotely.”
There’s another reason for not having your data center and co-location center too close. “Events that are likely to knock out power are often regional,” says Tom Deaderick, director of OnePartner Advanced Technology & Applications Center, a co-location site.
3. Don’t take a cookie-cutter approach to rating a data center. The Uptime Institute’s Tier Classification System, which rates data center availability, doesn’t use a design manual or checklist to reach a specific tier level.
It allows for multiple solutions to reach a given standard, Kudritzki says. Tier III and Tier IV data centers (the institute’s top classifications) must have uninterruptible power supplies, backup power generation, redundant and diverse connections to the power grid, a standalone building, concurrently maintainable infrastructure (redundant systems and distribution paths), and on-site staff to monitor and correct any facility issues, the Forrester report states.
Although many users of data centers realize the need for greater resiliency and are raising their data center requirements, only a small number of private companies pay for certification, says Richard Jones, vice president and service director for data center strategy at the Burton Group. Nearly all hosted companies offering data center services to businesses do get certified, he adds.
4. Test the recovery side of your backup. Determine the resiliency of your data center, how long its uninterruptible power supplies will run and whether staff can reach the data center in the event of disasters, Jones advises. “Even something simple like having a contact list of IT employees is not something companies think about beforehand,” he says. “Companies often fail to look at the whole picture. Having a full business continuity process in place will help them identify these needs.”
Wednesday, May 27, 2009
It's plunging into new markets to keep sales growth high. But the strategy could alienate key partners.
Story from Business Week

Chambers is betting big that Cisco can capitalize on such opportunities. While many companies retrench, the tech giant has strong profits and $33 billion in cash in its coffers. More important, in Chambers' eyes, is Cisco's position as the dominant provider of the networking gear that runs the Internet. Just as the tech world revolved around IBM (IBM)'s mainframe computers in the 1970s and Microsoft (MSFT)-powered personal computers in the 1980s and '90s, Chambers believes Cisco has an opportunity now to make its digital networks the platform on which new innovations are built. "There's an inflection point happening," he says. "Cisco and the network are at the center of it."
Investors certainly hope so. Cisco's stock, now $18 a share, is at the same level it hit in 1998. Although Chambers has assured shareholders that Cisco can increase revenues 12% to 17% annually, that looks increasingly difficult now that the company has grown to $39.5 billion in revenues.
To hit that growth target, Chambers is hastening efforts to move beyond the core business of selling switches and routers. This year Cisco hiked the number of new markets it is targeting to 30, so it can offer everything from digital billboards to stereos and video surveillance systems. Chambers also is using the company's cash to buy his way into other markets, as he did in March with the purchase of the Flip video recorder maker Pure Digital. Chambers tells BusinessWeek that Cisco likely will hit a total of 50 fresh markets within a year. "We're moving into new [areas] with a speed nobody has ever attempted," he says.
Such frantic expansion comes with risks, and not just the danger of losing focus. The biggest concern is that Cisco will alienate key partners that as a group deliver more than 80% of the company's sales. IBM, Dell, and Hewlett-Packard, for example, sell billions in Cisco gear each year as they help companies build tech systems. But Cisco's move this spring to sell its own servers makes it more of a rival to those three, which sell similar products. "They definitely risk relationships [with IBM, HP, and Dell]," says Greg Simpson, chief technology officer for General Electric. HP and Cisco already have begun to spar publicly.
BIG BLUE'S TURF
Tensions also appear to be rising with IBM, which resells about $3 billion in Cisco gear to clients, analysts say. The spat started when Cisco swooped in to buy Internet conferencing company Webex Communications in 2007, after IBM had thought it had sealed the deal. But the big blow came when Cisco unveiled its new servers, which are designed for the operators of so-called
data centers, a prime piece of Big Blue's business. "[Chambers] is known for trying to find a win-win," says one tech CEO. "This isn't a win-win. It's a declaration of war."

Cisco does appear more able to go it alone than in the past. It has increased its sales force from 13,000 in 2004 to more than 23,000. And the company is using these direct links to customers to forge a more strategic relationship with the biggest players. Filippo Passerini, Procter & Gamble (PG)'s chief information officer, says P&G "[talks with Cisco salesmen] less about when do you refresh your routers and much more about what new business models can we explore." One example: P&G plans to install more than 75 of Cisco's high-end TelePresence videoconferencing systems in 55 countries by the end of the year to lower travel costs and hold more global consumer focus groups.
Chambers says there are big advantages to entering so many new markets. If Cisco gear is used to create, process, and transmit digital content, then the company can make everything work together in new ways. For instance, Cisco plans to incorporate inexpensive videoconferencing services into the set-top boxes it sells for cable TV service. One day Dad may be able to plug a Flip camera into a set-top box while talking with Grandma and show her footage of little Sally's dance recital. "No other company touches the content, the carrier, and the consumer—and the best part is they all drive each other," says Padmasree Warrior, Cisco's chief technology officer.
Chambers says nobody has to lose for Cisco to win. "We'd vastly prefer to partner," he says, by teaming up with others to create new markets. The strategy has worked before. When Cisco persuaded companies to make the transition to office phones that use Net technology earlier this decade, it helped others sell related service contracts. That's a big business for IBM, which is currently helping France's Total (TOT) install 100,000 Internet phones.
Even if some partnerships suffer, Chambers may be able to buy what he needs. Mergers and acquisitions chief Ned Hooper says Cisco could easily afford a $10 billion deal, although it plans to stick with smaller acquisitions for now. Some analysts say that if business from IBM and HP plunges, Cisco could build up its own consulting capabilities and even seek to buy a company such as Accenture (ACN). "If push comes to shove, [Cisco] could do it," says Sam Wilson, analyst at JMP Securities. Accenture declined to comment.
In the end, Chambers says, he cares less about how Cisco reaches customers than whether they buy into its plans for the future. A year ago clients attending Cisco's annual powwow were "worried that we were spreading ourselves too thin," says Chambers. "But for the first time, they are telling us they want us to move faster." For better or worse, he plans to oblige.
Tuesday, April 21, 2009
Story from Bloomberg
Broadcom Corp., the maker of chips for wireless headsets and TVs, made an unsolicited $764 million offer for Emulex Corp. after an earlier approach was rejected by the provider of semiconductors for data centers.

Emulex is an attractive target because its technology for transporting information from data centers to storage systems is fast, reliable and hard to replicate, said Harsh Kumar, an analyst at Morgan Keegan Inc. Emulex shares rose above the offer as investors bet Broadcom may have to raise its bid. Stocks of other data center component makers also advanced on speculation such a deal will fuel consolidation. This is big news for data and colocation centers throughout the country, such as:
Atlanta Colocation
Chicago Colocation
Los Angeles Colocation
New York Colocation
“Broadcom has tried for years to get into this space,” said Kumar, who rates Emulex “outperform” and doesn’t own the shares. “Everyone wins.”
Emulex added $3.09, or 47 percent, to $9.70 at 4:01 p.m. in New York Stock Exchange composite trading. Broadcom, based in Irvine, California, fell $1.27, or 5.8 percent, to $20.52 on the Nasdaq Stock Market.
Emulex’s board is considering the offer, the company said today in a statement. It is being advised by Goldman Sachs Group Inc. and law firm Gibson, Dunn and Crutcher LLP.
Poison Pill
The deal may make QLogic Corp., an Emulex rival, attractive to bidders as well, Kumar said. Cisco Systems Inc. and Juniper Networks Inc. may want to buy the Aliso Viejo, California-based company to enhance their own products for data centers, he said.

Broadcom sued Emulex to bar the company from taking any action to defeat its bid. Broadcom said Emulex rejected an offer to hold talks in January and adopted a “poison pill” provision to thwart bids. Poison pills release a large number of shares in the event of an offer, increasing the price a buyer must pay.
“A lot of times, that’s a tactic to get a higher offer price, so it may be related to that rather than to prevent the takeover entirely,” Steve Smigie, an analyst at Raymond James & Associates, said in an interview on Bloomberg TV. Also, “Emulex can argue they are coming off a severe trough.”
Emulex shares lost almost half their value in the past year before today as the recession ate into sales, leading to three straight quarters of declines.
‘Always Other Options’
“There’s every opportunity for this to be a friendly transaction,” Broadcom Chief Executive Officer Scott McGregor said in an interview. “There are always other options. Our priority is to close with Emulex.”
Katherine Lane, an Emulex spokeswoman, said the company doesn’t comment beyond its statement. Sonal Dave, a spokeswoman for QLogic, said the company didn’t immediately have a comment.
Banc of America Securities is providing financial advice to Broadcom, while Skadden, Arps, Slate, Meagher & Flom LLP is the legal adviser.
Broadcom aims to expand its range of products to lure customers as the recession forces other clients to cancel or delay orders. Emulex’s products would make Broadcom’s offerings more complete, cutting the number of suppliers clients buy from.
Slumping Sales
Broadcom posted its second straight loss today after sales fell and it spent more trying to break into the mobile-phone market. The loss for the quarter ended March 31 was $91.9 million, or 19 cents a share, after profit of $74.3 million, or 14 cents, a year ago. Sales slid 17 percent to $853.4 million.
Analysts predicted a loss of 24 cents on sales of $848.3 million, according to a Bloomberg survey. The company said sales will continue to decline this quarter, falling to as much as $975 million from $1.2 billion a year earlier.
Demand for chips is tumbling as electronics makers cut orders to draw down stockpiles of unused parts. Chipmakers say that while companies have now stopped reducing inventory and order declines have slowed, the economy remains sluggish.
Emulex’s profit fell 40 percent to $10.5 million in the quarter ended Dec. 28, with the company citing the recession and a “deteriorated sales environment.” Revenue slid 17 percent to $108.7 million.
Thursday, April 9, 2009
New Software, Services Offerings Mark Effort to Match Rivals IBM and HP
Story from the Wall Street Journal
Dell Inc. on Wednesday is expected to become the latest technology giant to introduce new hardware and services in an intensifying battle to control corporate computer rooms.

Dell has long sold what the industry calls "industry-standard" servers, machines that use microprocessor chips from Intel Corp. or Advanced Micro Devices Inc. and sell in high volumes. But the company is not a major software provider, unlike rivals International Business Machines Corp. and Hewlett-Packard Co., nor has it developed a services organization on the scale of those companies. The announcement follows a series of moves by rivals. Networking giant Cisco Systems Inc. last week said it will start making servers in an effort to broaden its penetration of data centers, and H-P has been increasing its investment in networking gear. The Wall Street Journal last week reported that IBM is in talks to buy server maker Sun Microsystems Inc., a move that would bolster IBM's
Roger Kay, an analyst with Endpoint Technologies, said Dell's broader attack on data centers represents the company's "first major pass" at moving from a provider of low-end servers to more complete data-center systems.
It's an important move for Dell, which ranks third in world-wide server revenue after IBM and H-P, according to market-research firm IDC. Competitors are angling to become one-stop providers of technology and services to data centers. In a report this week, UBS analyst Nikos Theodosopoulos wrote that the "battle for the data center" may lead to ongoing consolidation in the field.
Dell is two years into a corporate turnaround effort spearheaded by founder and Chief Executive Michael Dell, who returned to the company in 2007 after it lost the No. 1 position in world-wide personal-computer sales to H-P. Mr. Dell has tried to spark new growth by moving more deeply into consumer PCs and by increasing Dell's corporate offerings.
Dell has often considered expanding their service offerings relating to data centers and colocation in major markets across the United States. Currently, many Top Ranked Tier 1, Tier 2, and carrier-neutral colocation providers actually compete in the colocation sector, including these key markets:Combining hardware with software and services is key to expanding its offerings to big companies, said Endpoint's Mr. Kay. To help achieve that goal, Dell earlier this year gave its services chief, Steve Schuckenbrock, responsibility for corporate computing products as part of a larger reorganization plan. Mr. Schuckenbrock has spent nearly two years building up largely automated services like data-center monitoring.
In 2007, Dell spent $1.4 billion to buy EqualLogic, a maker of data-storage systems. Its new offerings will involve EqualLogic hardware, people familiar with the matter said, as well as software from Symantec Corp. and BMC Software Inc.
Asked to comment Tuesday, a Dell spokeswoman referred to an email that characterized Dell's coming announcement as a "new strategy and enterprise portfolio designed to free customers from the restraints of costly and proprietary business technology."
Saturday, March 7, 2009
(WEB HOST INDUSTRY REVIEW) -- Gathering more than 700 data center professionals, the Data Center World 2009 conference, organized by data center industry organization AFCOM, officially opens this Sunday, March 8 in Las Vegas and runs until March 12.
According to AFCOM's Friday announcement, the DCW09 conference at the Paris Hotel and Convention Center will feature more than 75 educational sessions on a variety of topics including greening the data center, security, virtualization, cloud computing, and cost savings, which seems especially pertinent during the current economic malaise. A full schedule of sessions is available on the DCW09 website. The event will also feature more than 225 exhibitors, virtual data center tours, and a keynote by Sun Microsystems chief technology officer Greg Papadopoulos.
"We've strived to make this year's bi-annual Data Center World in Las Vegas a worthwhile networking and educational event for attendees, exhibitors, the media and industry analysts alike," AFCOM chief executive officer Jill Eckhaus said in a statement. "We were focused in our efforts to bring together the very top industry leaders, to provide data center professionals (who manage the lifeline of their companies) with the most current networking, training and educational programs available. Ultimately, our mission is to arm these professionals with the knowledge and tools to run the most efficient data centers at their companies."
Tuesday, September 30, 2008
2008 Technology Innovation Awards: Computing Systems

The suite, called Force.com, provides the building blocks for payroll, accounts-receivables and expense-reporting systems and other common applications, and it requires minimal programming skills. Introduced in 2007, Force.com has about 47,000 users.
Other companies are developing similar "cloud computing" services, in which companies access computing power as needed, the way they buy electricity, without the need to run their own servers and software. Along with Amazon.com Inc. and Google Inc., "Salesforce is one of the leaders in this trend," says Asheem Chandna, a partner at venture-capital firm Greylock Partners and one of the Innovation Awards judges. "It's certainly a key direction where computing is heading."
Wall Street Journal; September 29, 2008
Wednesday, April 2, 2008
Dollars From Data Centers
In a sign that the market for cutting data center costs is hot, MC Software is buying data center automation specialist BladeLogic for about $800 million, while Hewlett-Packard is starting a data center consulting business.
BladeLogic offers software that automates the management of colocation and control of configuration changes to servers and other data center hardware. BladeLogic's revenue rose 105% last year to $62.7 million, with a $174,000 loss. BMC's paying a pricey eight times next year's estimated revenue. Last year, it acquired RealOps, a developer of software for automating IT processes, for an undisclosed sum.
HP likewise sees money to be made in the data center. Last year, it acquired Opsware, maker of data center management software, for $1.6 billion. And last month, it bought EYP Mission Critical Facilities, which specializes in building energy- and space-conscious data centers for corporate buyers.
Now HP's using that EYP know-how to launch data center consulting for companies trying to revamp their data centers. HP says its research finds that one-third of CIOs say they won't be able to afford the electricity, cooling, space, or budgets they need to continue expanding their data centers.
Most companies aren't Google or Microsoft, so they can't build a
By: Charles Babcock & Paul McDougall
Information Week;