SiliconANGLE » Convergence Point

Intel’s Jim Blakley Looks to the Future of Private Cloud and IT Growth

Kit Dotson — Thu, 12 Apr 2012 21:13:35 +0000

Dave Vellante and John Furrier in theCUBE at EMCVSPEX in San Francisco, CA brought in Jim Blakley, Director of Intel Architecture Systems Integration Division, to speak about the trends in IT towards cloud and big data. They asked questions relating to how the IT industry may approach the costs of going into the cloud, how that’s affecting data centers, and how the convergence and disruption to traditional infrastructure will drive future trends.

According to Blakley the datacenter is now the system, “and we’re seeing that happening a lot more lately with cloud computing and cloud storage,” the second part is in distributed clients and virtualization, as more industries take advantage of lower price points for edge computing and innovating around letting devices open windows into the datacenter, or in this case the cloud. It used to be about making devices more powerful, but now it’s about making them better connected.

The important thing that Blakley believes is that the cost of computing is dropping and the next horizon involved in cloud and big data all surrounds the hardware and implementation continuing to become easier and cheaper. What triggered the trend for cloud is the cost reduction on core infrastructure such as central computing, external and networked storage—then there’s also broadband infrastructure “has opened up the opportunity to do things in a way that we haven’t done it before.”

On the subject of current cloud-based providers versus traditional IT, Blakey believes that there’s still a lot to learn from the cloud trend, even if it differs.

Today most of the cloud service providers have the luxury of being single application servers, but this means that they have a less complex application set to follow. However, this doesn’t mean that the lessons that they’ve learned aren’t applicable to the rest of the IT industry, which sees a lot more complex issues. He uses the example of security, where having holistic control on a datacenter (or a cloud) will always be the ideal case; but most IT departments have to worry about their own users who are behind the DMZ and inside the secure areas.

Blakley sees a trend towards automation because the new horizon will be more about virtual machines than server hardware. It’s no longer an issue so much of how many servers you have, but now more about how many virtual machines you have. Each VM represents a different instance and its own creature that requires its own support, infrastructure, and specialized technician and this means there’s a scalability problem oncoming for the virtualization industry. As a result, we’ll probably see a boom in data visualization and the ability to allow one person to maintain and control a bank of VMs rather than requiring each one their own specialized worker.

EMC and the Private Cloud Blazing a Trail for the IT Industry

EMC has been long on pressing their way into the private cloud, so the discussion with Intel’s Blakely in theCUBE provides some powerful insights into why they’re going where the industry needs to go. As we saw from EMC Word 2011, their journey into the private cloud in 2010 is beginning to draw the strings of the industry into looking at the cloud as a manageable and efficient datacenter approach.

Cloud-computing, -streaming, and -storage has come along by leaps and bounds even as EMC marches into 2012 with VSPEX and earlier in February with the release of virtualization and software-as-a-service paradigms such as Atos. Between these ventures, virtualization, and further reduction in costs for storage itself, higher bandwidth, and the introduction of VMware generating the capability to make virtual machines almost anywhere more IT departments will be looking into the cost effectiveness of virtualizing their datacenters.

Intel has been pushing for research into cloud computing with a $30M plan and we expect them to be there alongside EMC, VMware, and every other cloud-based computing and storage firm as the future begins to resolve.

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What Facebook’s Instagram Buy Means for its Mobile Strategy: Data, Search

Kristen Nicole — Mon, 09 Apr 2012 18:17:58 +0000

Facebook’s taken the proactive measure of acquiring Instagram, the mobile photo-sharing network regularly referred to as Facebook’s biggest competition. What’s most notable about the deal is the price tag – $1 billion for the startup that, just last week, was going after a $50 million funding round with a valuation of $500 million. Instagram’s certainly cashed in, making for what could be the exit strategy of the century, taking an early acquisition offer that Facebook itself refused to do.

The question now is, what’s Facebook planning to do with Instagram? The company says Instagram will remain a separate project, but we all know that story could change. Photo-sharing is something near and dear to Facebook, and this could be a great in-move for Facebook’s long term mobile strategy. As we saw with Facebook’s earlier acquisitions like Gowalla, Facebook’s clearly interested in developing mobile tools around social-local networks, and for Instagram, it’s all about the data.

It’s all about the data

Instagram, which only recently expanded its iPhone app to the Android platform, has its own limitations in terms of social capabilities, access (not even an iPad app), but showed the promise of scale, along with a nice search function for hashtags and a burgeoning ecosystem. Combining the best of Facebook and Twitter (within the confines of a mobile photo-sharing app), Instagram virtualized the photo experience with artistic touches around filters, some of which are premium [update: Instagram has shifted away from premium filters]. This adds a great deal of value to the photos themselves, generating metadata based on tags, comments, location and sharing behavior.

This is an area Facebook’s been working on for some time, with auto-tagging options for its in-network images, and it’s likely only a matter of time before these additional features get layered into Instagram’s mobile app. We’re certainly curious what this buy means for Instagram’s Service Level Agreement, privacy and end user experience, and it’s something worth monitoring.

Timeline integration is a no-brainer here–Facebook’s latest profile revamp has been a goldmine for app incorporation on a large scale, reformatting user interaction and activity beyond Facebook’s actual website. Tying Instagram’s mobile reach even tighter to Facebook’s Timeline is something we can expect regardless of Facebook’s true intentions with the Instagram buy.

Where’s this leave Google, Twitter?

While we can speculate on Facebook-Instagram integration all we want, we know it’s a good idea. Facebook beat its competitors to the punch with this acquisition, building up its search and recommendations capabilities to say the least. Perhaps Google could take a cue from this and find a way to better incorporate its own photo features through Google+. From a multimedia standpoint, Google has all the pieces necessary to build its own Facebook-Instagram combo killer, injecting search at an even higher level.

But that still leaves Twitter, the “other” primary platform in Instagram’s success. Like Facebook, Twitter’s made its own proactive acquisitions for purported rivals, squashing or incorporating the technology into their own platform. But will Twitter need an Instagram to call its own? Possibly. Facebook, Google+ and Twitter have all sought to include more features around photo-sharing, largely based on mobile context like location and social tags like user identification and searchable hashtags. But Twitter is still dwarfed by Facebook as a photo repository, and has minimal functions around photo-specific actions within its site or mobile app.

The race is on for the mobile-photo showdown, as image, location and social data drive interactions across the social space. Only time will tell if Facebook made a smart move in spending $1 billion on a mobile app, and what its ulterior motives are moving forward.

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In the same vein:

Is Ambient Discovery the Radical Transparency We Need? The #SXSW Petri Dish

Kristen Nicole — Wed, 14 Mar 2012 13:40:59 +0000

Is ambient discovery the “radical transparency” the social world needs? There’s been a few conversations cropping up at SXSW this year around ambient social discovery and the future of social media, which is becoming a very data-centric motif. As we share more on the web, we drop nuggets of information about ourselves that’s being swept up by aggregators looking to make a compilation on your interests and intentions. It all started with social media, where user-generated content was a crowdsourcing dream, but now that the information’s out there for the world to see, it’s time to put all that disparate data to work.

The result is a certain increase in the transparency around web users as individuals, as collective data can be leveraged to determine certain expectations about you based on whatever information you have provided. Its implications lie in retail marketing, purchase recommendations, display advertising, financial planning and dietary outlines, to name a few. And as the onslaught of data overloads our Twitter streams and Facebook feeds, there’s plenty of data-scrubbing to be had.

The unimaginable amount of data the average user faces on a daily basis has led to a rather uncontrollable distribution channel, begging the need for more end user accountability. It’s something I’ve expected for some time, given the nature of Facebook and a digital recreation of pre-industrial communities where everyone was far more privy to everyone else’s information. It seems easy enough to hide in the crowded metropolis Facebook has become, but the ability to readily associate content with the user in fact increases that user’s accountability for their posts, photos, videos and purchases. There’s a certain permanence to social media, tracking our evolving preferences on friends, products and brands. And with the rise of big data analytics, machine-learning will be able to do more with our transparent online behavior, for better or worse.

Is data helping or hurting?

Microsoft researcher Danah Boyd thinks the trend towards more transparency can induce fear, not defeat it, with negative circumstances standing out in our minds far more than the positive posts. With social media outlets like Twitter, Google+ and Facebook reconsidering their user validation processes, transparency takes on a new meaning when it comes to social behavior, and Boyd identifies its limitations in actually encouraging online activity.

But in some ways ambient social discovery hopes to temper that fear with knowledge. Contextualizing our social data can bring a level of relevance to our interactions that’s valuable and productive. A string of ambient discovery apps like Highlight were the darlings of SXSW this year, ushering in a new era of prevalent social sharing that facilitates interactions both online and off.

“I think [ambient social discovery] is a really profound, meaningful thing,” says Paul Davison, founder of Highlight. “So much of this is about reducing friction…If I want to learn about the people around me, how do I do that? It can be scary. To make an app that adds control in the physical world as large implications for reducing friction. It’s literally like having a sixth sense. We’re going to look back on this and say ‘I can’t believe we didn’t always have this. I can’t believe we used to walk around blind.’”

Picking up your breadcrumbs to make a meal

Ambient social discovery tools like Highlight are the aggregators sweeping up the assorted data you’ve spread across the web, characterizing your physical surroundings in a perspective that’s in accordance with your own. See nearby friends or new people that share similar interests, have been to the same places and like the same food. It’s a conversation starter, a relationship enhancer and a tool to overcome some of our most basic fears when it comes to social networking.

Did SXSW kick-start ambient discovery?

SXSW was the perfect breeding ground for ambient discovery tools, especially as Interactive grew to a reported 30k attendees this year. It’s difficult to cut through the noise when there’s so many people, places and promotions packed into a single city, and there’s only so much you can do with Twitter. Putting data to work, ambient discovery tools glean the value from your social graph as a collective, gathering a population’s bread crumbs and personalizing the end user experience on their behalf.

But the ambient trend is also a competitive one, and leading in this space will require a well-planned execution. Forecast, a tool for marking your future location intention, has already learned from the SXSW experiment.

“We’ve seen all week how having your phone buzz every 5 minutes from ambient notifications is simply untenable, and we believe strongly there is a right way and wrong way of taking advantage of geolocation for social connections, check-ins, or events, says Eric Katerman, co-founder and CTO of Forecast.

“So, for example, with the new Forecast app, you can opt to have it automatically check you in to the places and events you forecasted when you arrive there. There is that layer of intent, which we feel is really important to add to the ambient experience – plus it doesn’t drain your battery! With Forecast, since you’re estimating when you’re going to be somewhere, the app can intelligently check you in rather than ‘spraying and praying.’”

Albeit a still fresh trend, ambient discovery emerges at the junction of big data and social sharing. It’s more than real-time, more than recommendations, and more than shared intent. As thousands of SXSW attendees take this technology back to their hometowns, we’ll see how well ambient tools can adapt to the world beyond SXSW, and how data can make us a less fearful people.

Is Ambient Discovery the Radical Transparency We Need? The #SXSW Petri Dish is a post from: SiliconANGLE
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Embracing Change to Become the IT Champion

Brian Curry — Thu, 26 Jan 2012 20:02:48 +0000

“No one ever got fired for buying IBM,” was the adage of enterprise IT decision-makers in the 1990s. Banking on the IT giant was the safest bet you could make, and if a new IT product came to market that was outside of IBM’s portfolio, administrators would simply wait for IBM to develop it…in IBM we trust. Then the “four horsemen” of IT emerged in the form of Microsoft, Intel, Dell and Cisco, which roamed from company to company, dominating everything IT.

Today, however, as has happened in so many areas of society and business, technology and IT have become democratized. Since the introduction of the Internet browser and then the rapid growth of social media, a new breed of tech-savvy worker has emerged. The end of the 9-5 workday has led to employees working around the clock and on the move. To make their lives easier, end users have blurred the distinction between work tools and personal tools, using personal smartphones and tablets on the job.

The Consumerization of IT

In the age of postconsumerization, individuals are making their own choices as to which business applications to use. A perfect example of this trend is the use of email in business. If email is not fully supported across devices by the internal IT department, then individuals will find ways to access work email on personal devices. The consumerization of IT (CoIT) revolution began when consumer brands such as Apple developed products that were easy to use, making purchasers’ business and personal lives more productive. True, Microsoft still dominates the overall enterprise IT pie and is often the primary option when it comes to email and desktop operating systems. However, Apple has nabbed a dominant share of the tablet market and is increasingly growing its share of the smartphone market. In short, there is no longer one principal technology vendor across the board.

End users today want tools that enhance their experience. If workers are not comfortable with the technology approved by IT, they can easily find many different options online for the devices already available to them. So the time has come for IT to make a decision. Do I fight the battle against personal products? Or do I embrace what people are already using and become their IT champion? Now, where consumerization has raised a number of IT security and compliance issues that are of great concern to IT, new tools that are both easy to use and “enterprise ready” are spreading like wildfire.

Beyond the CoIT Paradigm

At YouSendIt, we go beyond the CoIT paradigm: We develop our business-content collaboration tools with a laser focus on making the end-user experience easy, meeting the demands of where and how people work. Workers are collaborating all the time and they are often away from the office, so in response we developed a user-friendly interface that integrates seamlessly across mobile devices. However, we also give IT administrators the features they need to maintain security and compliance, thus satisfying both parties.

The CoIT trend has started and will continue to grow, giving IT managers a chance to be catalysts for change. The monopoly of enterprise products is dying and now there are a myriad of players in every facet of enterprise IT. A new kind of IT champion is emerging; one who does not force technology on end users, but who listens to them and selects solutions that meet the dual needs of the enterprise and end-user. Technology companies that develop products that allow IT to be the champion for their workforce will grow side by side with their customers.

Editor’s note: this is an initial guest post from Brian Curry. See bio below:

Brian Curry, Chief Product Officer

Brian Curry is responsible for new market penetration, key partnership development, and product strategy at YouSendIt.

Brian brings 15 years of experience to the position and most recently was vice president of corporate partnerships at Yahoo!, where he oversaw the business unit that operates Tier 1 partnerships. While at Yahoo!, Curry managed partnerships with Comcast, EBay, Walmart, Turner Broadcasting and Adobe among others.

Prior to his tenure at Yahoo!, Brian was a vice president of AOL’s Premium and Subscription Services unit, where he was responsible for AOL businesses involving licensed access to the AOL network, integration of AOL services in third-party products, and development of subscription services.

He holds both Bachelors and Masters Degrees in Design and Technology from the University of Illinois.

Embracing Change to Become the IT Champion is a post from: SiliconANGLE
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In the same vein:

Amazon Cuts Out the Middleman: Launches its Own Cloud Storage Gateway

John Furrier — Wed, 25 Jan 2012 17:29:13 +0000

In a move that was expected by some and feared by others, Amazon today announced its own AWS Storage Gateway, which immediately calls into question the long-term validity of the business models for standalone cloud gateway vendors.

Following the implosion of Cirtas in April of last year, cloud gateway vendors have basically positioned themselves as “on ramps” from a customer data center to the actual cloud providers like Amazon, Azure, Nirvanix and Rackspace. With Amazon now offering its own cloud gateway, this calls into question the need for the middlemen who have been pushing their wares as a means of getting access to the Amazon cloud.

By cutting out the middlemen, Amazon could single handedly accelerate the demise of the standalone cloud gateway market. Sure, today the standalone vendors will cry out in protest that they offer “advanced” features that Amazon doesn’t have yet and that Amazon is still in beta mode—but the looming threat is irreversible: Amazon now has a platform that it can build additional functionality on to—and it will—rapidly

While they may have snapshots, encryption and cached volumes today, look for Amazon to add incremental functionality like data deduplication, file locking, and multi-site file sharing in the coming months.

For cloud gateway startups that have made broad public claims about their products’ ability to give customers superior access to AWS, today’s news doesn’t exactly fortify their business strategies. After all, Amazon can make their gateway work better with their own cloud than anyone else can—they do own it from soup to nuts, you know.

What does this mean for startups like Ctera, Nasuni, Panzura, TwinStrata, StorSimple and Riverbed’s Whitewater group?

VCs who invested in standalone cloud gateway vendors should definitely be concerned right about now.

Amazon Cuts Out the Middleman: Launches its Own Cloud Storage Gateway is a post from: SiliconANGLE
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Siri’s Closest Competition May Come from Detroit, Not Redmond

Mark 'Rizzn' Hopkins — Mon, 05 Dec 2011 22:28:20 +0000

I make no secret of the fact that I’m a fan of AI and robotics on this blog. I have only a few dozen feeds in my collection, though, that are totally devoted to the topic of AI, semantics and robotics, unfortunately, because there are very few folks out there that totally throw themselves into coverage of that narrow subset of science and technology.

That changed last weekend, when over the Thanksgiving holiday, it seemed just about everyone suddenly became an expert on semantic analysis, artificial intelligence, and exactly what was going on in the virtual brain of one AI in particular: Apple’s Siri.

Even SiliconANGLE’s own Alex Williams posted a quick hit to his ServicesANGLE column, showing the widely viewed video comparison of Apple’s Siri versus Microsoft’s TellMe.

I spoke with many friends about the coverage, and one prominent pundit known for his Apple fandom told me privately that he found the comparison to be very inaccurate.

“Cartwright’s test was very one-sided (and I’m a Siri fan),” he told me. “For example he didn’t show that TellMe can launch any app on the phone, Siri cannot.”

The way TellMe structures it’s verbal menus is fundamentally different from Apple (and, frankly, serves a quite different purpose). Siri was meant to be a close approximation of a virtual assistant, and as such, has what’s called a “flat grammar” menu system.

TellMe, on the other hand, isn’t always a flat-grammar system (depending on the implementation, which is much different on, say, the TV than it is on the PC or the phone). It also more closely represents a desktop paradigm translated to an auditory realm than a voice-first driven system.

For instance, with TellMe, a query on TellMe sounds like “Bing: Dallas Italian Restaurants,” if you’re looking for a place to eat in town. In Siri, it would sound more like “I’m hungry for Italian.”

Nuances of interface aside, I had to wonder whether or not the general tech punditry hadn’t been the victim of an epic head fake.

Apple’s Siri versus Ford’s Sync

I started thinking about Ford Sync being a more valid comparison point to the Siri product than TellMe shortly after I viewed the video and started polling for the best person to talk to at Ford about the angle, but before I got very far with that, I learned that Ford Motor Company CTO Paul Mascarenas, serendipitous enough, would be dropping by the SiliconANGLE Dallas office to meet with Cali Lewis and the Livid Lobster team.

He was gracious enough to take some time out of his schedule to sit with me and discuss the angle I had come up with: that it was more of a comparable product to Siri than perhaps Microsoft’s TellMe product.

There are a number of surface similarities he and I discussed. Siri and Sync both use Nuance as for the voice recognition end of the product. Both Siri and Sync use natural language processing (otherwise known as semantic processing) techniques to derive the users’ intents. Both, as I mentioned before, use a “flat grammar” system, rather than a hierarchical system. Siri and Sync contain a comparable number of commands; the permutations and combinations can produce a nigh-infinite number of commands, and Sync boasts 10,000 commands after the “Gen 2″ release.

Beyond the surface similarities, the two systems diverge a bit. As with anything concerning artificial intelligence, context is everything, and while Siri may be used in a car (or at the office, or in the restroom, or anywhere else), Sync must be used in the car. This allows Sync’s developers to be more focused on the range of commands and utility of the product than Siri’s developers, and perhaps deliver a more polished user experience. In other words, since Sync is geared towards a driver-centric experience, limiting the range of utility to driver-focused queries rather than the limitless queries faced by TellMe and Siri allows them to excel at what they attempt.

Not sure you agree with that sentiment? For proof, you need to look no further than the hub-bub generated by last week’s discovery that Siri had a hard time finding abortion clinics (which, as it turned out, wasn’t because of inherent sexism built into the AI, but because most abortion clinics prefer to go by the more politically correct moniker “family planning clinics”).

BeyondAI: What the Connect Car Means for Mechanical Engineering

In the time we had to speak, Paul and I moved on from the topic of AI into the further reaching implications of what the Sync innovations mean for the future of automotive engineering.

“It’s an shift in thinking for us,” said Mascarenas. “Our customers are used to us shipping a vehicle that’s perfect as soon as it comes out, and will last for 100,000 miles and ten years.”

The shift now, of course, being that Ford is shifting to the mode of development more familiar to us in the tech industry of shipping and iterating. It’s a bit reminiscent of an anecdote (often falsely attributed as direct confrontation between the CEOs of GM and Microsoft) that first surfaced for me in the very early days of the web:

There’s word in business circles that the computer industry likes to measure itself against the Big Three auto-makers. The comparison goes this way: If automotive technology had kept pace with Silicon Valley, motorists could buy a V-32 engine that goes 10,000 m.p.h. or a 30-pound car that gets 1,000 miles to the gallon — either one at a sticker price of less than $ 50.Detroit’s response: “OK. But who would want a car that crashes twice a day?”

Obviously, Ford intends to avoid living up to the “crash early and often” issues that early versions of GUI operating systems saw, but it does open up a world of new possibilities.

Perhaps the most interesting illustration of what the future may bring came when I described to Mascarenas the type of technology coverage we engage in at SiliconANGLE, where I mentioned we attended trade shows like SAPphire and Oracle Open World as well as Hadoop World and Strata.

I knew those weren’t conferences exactly in their wheelhouses, but I encouraged him to drop by our broadcast booth should he be in attendance at one of those shows.

“Those aren’t in our wheelhouse yet, but they very soon will be,” Mascarenas told me. “One of the more interesting possibilities of having an always on connection in our vehicles is the prospect of opt-in data collection. Sure, there are diagnostic and early problem detection possibilities that happen when you look at the data in aggregate, but there’s also an opportunity for us to create a more personal connection between drivers and their vehicles.”

He envisioned a future where the technology in the vehicle helps to create an almost palpable relationship between the car and driver.

“The technology story on the Evos [Ford's concept car debuted at IFA this year] is really all about a car that’s connected to the cloud,” said Mascarenas. “By connecting the car to the cloud we can use all kinds of data that to make a car that really adapts to your personal lifestyle. This includes data ranging from where you like to drive to what your driving style is, all the way down to your musical preferences and situation awareness of traffic and environment.”

In essence, what Mascarenas described to me was the contextual equivalent to what Siri does, but the difference being the function that same data served. Siri serves as a personal assistant, whereas the data collected from many of the same data sources serves to create a more comfortable and personal driving experience, and communicating the information non-verbally.

Of course, most of this new-fangled technology is available only in the Evos concept car, but Cali Lewis reported from IFA this year that some of this technology will be implemented in production vehicles as soon as January 2012.

Does This Mean Ford’s Going After Apple?

I’d doubt it seriously, though if were cut of the same jib as some of my peers in the blogosphere, I might set this up as “Ford’s gunning for Apple” for the extra pageviews. The truth is that Ford seems to have some very prescient technologists in their employ who spotted the trend of “Cloud Convergence” far earlier than any of their competitors. Simply because Ford and Apple are the only two organizations trying to create consumer facing machine intelligence in their respective products.

Mascarenas did tell me though that competing feature for feature with Siri or any other smartphone entrant isn’t in the cards.

“It’s a safety issue,” he told me. “When you’re driving, often with other passengers and a myriad of other distractions, we must keep interactions with our software as safety oriented and transparent as possible.”

Will Ford be the last entrant in this market? I think not. Certainly Microsoft will evolve TellMe to the point where it may have an identifiable personality trait, but I don’t expect to see it on the phone. The place where TellMe is most used is on the XBox Kinect, a market that is certain to only solidify in the coming weeks and months as the new Metro interface rolls out with live TV built in; a market that Apple can’t begin to hope to put a dent in.

Siri’s Closest Competition May Come from Detroit, Not Redmond is a post from: SiliconANGLE
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In the same vein:

Cisco: Undervalued and on the Move Again on the Strength of the Core Data Center Business

John Furrier — Fri, 02 Dec 2011 16:42:35 +0000

At the peak of the dot.com boom Cisco became the world’s most valuable company at roughly $550B. Investors couldn’t get enough Cisco and drove its market cap skyward to 5X where it is today– just under $100B as of this writing.

Subsequent to that bubble bursting, enterprise tech has been a mixed bag with stalwarts such as Microsoft, Intel and Cisco trading in a disappointing range for investors. Consider that Intel and Microsoft are trading at roughly 80% of their respective values relative to ten years ago while Cisco is down around 10% in that timeframe. Meanwhile, the Nasdaq composite is up more than 30% in that same period with Oracle up more than 100% and EMC up around 40%.

Cisco went on an enormous buying spree in the mid-2000’s, trying to diversify into video and consumer markets to expand its total available market (TAM) and accelerate growth. The firm picked up Linksys for $500M and then followed that up with a giant $7B acquisition of Scientific Atlanta, a consumer video and data services company. Then there was Webex for $3.2B, which is driving the company’s collaboration business. In 2009, Cisco bought Pure Digital for nearly $600M. In a sign the company got too far out over its skis, earlier this year it killed the Flip camera business enabled by the Pure Digital acquisition.

Cisco was used to 40% growth rates in the 90’s and the acquisition strategy was designed to keep the company growing at a 15% clip. Despite the fact that some of these acquisitions (e.g. Webex) are now $1B+ businesses, major parts of Cisco’s diversification strategy failed, particularly in the consumer video space. As such, CEO John Chambers was forced to cut back and re-focus on its current main businesses including switching and data center products, collaboration, video and services.

I’ve been critical of Cisco in the past (as has many), but they have been responding with product upgrades and reorganizations. Juniper has had an opportunity to pull close to Cisco but has been squandering that chance. If Juniper’s software approach and mobile pans out maybe they might have a chance. Now it’s clear that the the negative sentiment has bottomed and Cisco is poised to rebound. The changes in the converged networking market are clearly lining up in favor of Cisco and HP.

What’s impressive is the Cisco turnaround. Cisco has moved from their “GE-like” organization structure to more decentralized decision making. This is helping them get back on track. The company has begun to execute on CEO John Chambers’ three-year plan. In its most recent quarter, Cisco posted record revenues, had double-digit product growth and grew gross margins in a very competitive pricing environment. Cisco has a very strong balance sheet and extremely good relationships with the channel. The heart of Cisco’s business is core switching and it’s from this point of strength where the company is mounting a counter attack to companies such as HP and Huawei.

Cisco is a leader and a giant player and in that sense it views the market through big picture trends. The data center is evolving from physical hardware to virtualized systems to cloud and IT-as-a-Service. To that end the company made a major pivot in 2009 diving into the server business and severing tight relationships with HP, IBM and Dell, forcing those three to make networking acquisitions to counter Cisco’s move.

Here’s what was going on there. Applications drive hardware sales. An application head decides to buy, say, Microsoft Exchange and that sets off a chain reaction of infrastructure capital expenditures for servers, which drags storage and networking along with it. Cisco for years had very tight relationships with server vendors and their joint channels of distribution. Cisco saw the chance to make a channel play and capture more value by bundling servers and networking into a single package (Cisco UCS which includes Intel blade servers). That also set up a virtualization and cloud play through a partnership with VMware (and EMC) called VCE, which bundles VMware, networking and storage together in a package. Think of it as cloud-in-a-box.

By targeting a servers and networking as a single block of infrastructure Cisco is now selling an attractive package to the channel, doing a reach around on HP, IBM and Dell. Its server business is 100% focused on x/86 blades, which is the highest growth market. Cisco and HP have been at war about server market shares but the bottom line is in two years Cisco has captured 10% of the worldwide x/86 blade market and is now in a dead heat with IBM in the U.S. for market share in this segment. While still behind HP in servers, Cisco is redefining the category by bundling in networking. This forced HP to purchase 3Com in late 2009. Nonetheless, it’s driving growth and margin expansion for Cisco’s core data center business.

Here are John Chambers’ comments regarding Cisco’s Data Center line of business from Cisco’s most recent financial conference call (Fiscal Q1):

Results in this area have been particularly outstanding, given that we are taking on the big competitors in the data center. As we focus on this market transition with the convergence of server, processing capabilities, networking and storage into the cloud, the UCS in the data center grew year-over-year at 122% in terms of orders and 116% in terms of revenues, and is now at a $1 billion annualized revenue run rate.

Even though the Nexus 2000 and 5000 are included in our switching product summary, not the data center, they are obviously tied very tightly to the UCS. Again, you saw the Nexus 2000 through the 5000 combination orders growth of approximately 120%, and revenue growth of approximately 80%. These 2 product lines together now have an annualized run rate of approximately $1 billion.

We are focusing all aspects of Cisco on gross margins. With our aggressive focus, you saw the UCS and Nexus 2000 through 5000 combined margin increase in Q1 by 3 points from Q4. We added 1,572 new UCS customers in Q1, bringing the total to 8,983.

The basic premise for Cisco fundamental detractors in 2010 and 2011 was that Juniper, HP, and Huawei would take share from Cisco and eat into the company’s margins. It appeared this was happening based on financial results over that time period. However Cisco’s investments in UCS, its strong channel and renewed focus on gross margin improvement seem to be paying off. While one good quarter does not make a turnaround it appears that Cisco is starting to figure out how to deal with the threat from lower priced competitors. At the heart of this strategy is UCS and Cisco’s Nexus business within the data center line of business at the company. It is the linchpin of Cisco and with a $1B run rate and a 100%+ growth rate it appears that the company is poised for a rebound.

Cisco is back on track and clearly not going to yield any ground. Can they continue that trend. We’ll be watching.

Cisco: Undervalued and on the Move Again on the Strength of the Core Data Center Business is a post from: SiliconANGLE
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Thoughts On Google Atmosphere – CIO ANGLE – SalesForce.com Should Be Scared Not Facebook

John Furrier — Tue, 15 Nov 2011 16:31:53 +0000

Thoughts from Atmosphere at Google – +SiliconANGLE

Google Atmosphere event at the Googleplex in Mountain View, California is the company’s big enterprise CIO event. This is the event where Google parades out their top executives and promotes that they indeed know what they are talking about in the enterprise.

Google is a growing enterprise vendor and compared to the likes of IBM, EMC, and HP they are still in kindergarten. That being said Google is making big strides specifically the opportunity with the cloud and mobile. Google has all the elements to compete on value with services.

Google hitting all the “table stakes” marks on enterprise with their 99.9% uptime messaging plus their customer satisfaction ratings are increasing. Both metrics are critical for to compete in the enterprise. One glaring hole in the program is the absence of big data. Google is one of the shinning examples of a company that is a “big data” company. Real time analytics is a big mega trend and in big time demand from enteprises. Last week at Hadoop World we saw the big push of big data going mainstream.

Google Positioned Well – Very Good Management Team

+Dave Girouard and +Bradley Horowitz both used to work together and watching them sit next to each other yesterday reminded me on how young Google is in the enterprise relative to the likes of HP, IBM, and EMC etc.. Dave and Bradley are smart and young and make up a great team. In addition, Google has added a slew of other smart people from across the company including newly hired social media and enterprise guru Louis Gray to drive Google +.

What was refreshing was the coolness of Google. CIOs that were in attendance were visibly excited by the Google message. When I got home it hit me. Google is cool because they are a tech powerhouse at least on the consumer side. Combine their technical chops with a very strong brand, the Google message is translating to large enterprise buyers not just small medium sized business and education buyers.

Case in point on the Google coolness. CIOs were taking turns getting photos on the street view bike. It was like watching kids at the boardwalk – pure fascination. Oh yeah, I’m writing this post on Google + on my new Chromebook that they gave away for free. Turned it on with no setup it’s up and running. That’s cool as far as I’m concerned. Disclosure: this is a evaluation unit

Although Google’s messaging is not as advanced as the big boys their position is solid as a new player on the enterprise block. Putting it all together has been Google strategy for this year’s atmosphere and it is about collaboration and video. The keys for Google enterprise has been a series of product upgrades and launch of Google +. I expect Google + to be a big part of the enterprise strategy anchoring the “Cloud Mobile Social” direction.

While the mainstream press talks about Google + as a Facebook wantabee, Google is rolling it out hard to all consumers – including business and education. Forget Facebook Salesforce.com is scared out of their minds.

Google + is a Salesforce.com killer.

Overall quite impressive and it will be intereseting to see if +Amit Singh has what it takes to lead Google Enterprise. I like the Girouard Horowitz combo.

Good luck Google we’ll cover all the angles.

Thoughts On Google Atmosphere – CIO ANGLE – SalesForce.com Should Be Scared Not Facebook is a post from: SiliconANGLE
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Convergence: People, Processes, Polices and Products

Greg Schulz — Thu, 29 Sep 2011 18:26:56 +0000

Converged and dynamic infrastructures, cloud and virtual environments are popular themes and industry trends with different levels of adoption and deployment occurring. Although are you focusing on products, or the other Ps, that is people, processes and polices (or more here).

The reason I bring this up is quite often I hear discussions that are centered around the products (or services) providing various benefits, return on investment or cost saving opportunities.

Very little discussions are heard around whats being done or enabled by vendors and service providers, or what is being adopted by customers to tie in people, process and policy convergence.

Put another way, the discussions focus around the new technology or service while forgetting or assuming that the people, process and policies will naturally fall into place.

Will customer policies, process or procedures along with internal organizational (e.g. politics) issues with how people leverage those converged products also evolve?

I assert that while there are benefits that can be obtained from leveraging new enabling technologies (hardware, software, networks, services) their full potential will not be realized until policies, process, people skill sets and even more important, organizational or intradepartmental turf wars and boundaries are also addressed.

This does not mean consolidating different groups, rather it can mean thawing out relations between groups if there are challenges, establishing an abstraction or virtual layer, a virtual team to cut across different technology domains combing various skill sets, new best practices, policies and procedures in order to streamline management of physical and virtual resources.

Chuck Hollis (aka twitter @ChuckHollis) of EMC has an interesting blog post (here) that ties in the themes of different IT groups working or not having situational awareness that is worth a read. You can also read this Industry Trends and Perspective solution brief that I did earlier this year on the topic of Removing Organizational Barriers for Leveraging Technology Convergence.

Here are some additional related posts:

What is your organization doing (or have done) to enable convergence factoring in people, processes, policies and products or is it a non issue for you?

[Cross-posted at StorageIO Blog]

Convergence: People, Processes, Polices and Products is a post from: SiliconANGLE
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In the same vein:

VMware Storage Direction May Put Parent EMC’s Needs Before Users, Says Wikibon CTO

Bert Latamore — Fri, 02 Sep 2011 21:20:26 +0000

Everybody seems to agree that storage is a big problem with virtualization, and at this week’s VMworld 2011, VMware and its parent, storage vendor EMC, spelled out their plan for fixing this problem. But, as Wikibon CTO David Floyer in a new Alert titled “VMware Storage Innovation, says, this direction may be tailored to defending EMC’s technology at the expense of innovation that can create better solutions.

The new approach, which involves creating storage “containers” holding the data, metadata, and policy data, has some good ideas, Floyer says, but its implementation could stifle innovation. VMware has announced that it will work with Dell, EMC, Hitachi, IBM, and NetApp, but will exclude the more innovative storage startups and particularly the flash storage companies, to develop the new approach.

“Wikibon believes this business model is driven by EMC to slow down storage innovation and preserve it’s current products for as long as possible,” Floyer writes. He says that shareholders and customers should tell VMware that they expect it to use the best storage technology and ideas in its architecture rather than “baking in” old technologies.

VMware Storage Direction May Put Parent EMC’s Needs Before Users, Says Wikibon CTO is a post from: SiliconANGLE
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