November 29, 2010
Volume XXXIII, Issue 2
Cloud Computing Is an Idea Whose Time Has Come
The recent Frost & Sullivan end-user study results reveal that although there is much speculation around cloud computing as yet another "vaporware" most of the companies surveyed, have either initiated discussions or have already started using the technology.
Arun Chandrasekaran, Research Manager at Frost & Sullivan says that, "There is a growing awareness among consumers and enterprises to access their information technology (IT) resources extensively through a 'utility' model, a development broadly called 'cloud computing.' Cloud represents the next wave in the computing industry, as it strives to eliminate inherent inefficiencies in the existing IT architecture and deliver 'IT as a service' to the end-users."
Some of the up-front benefits of cloud computing are cost-savings, on-demand usage, ubiquitous access, and resource pooling along with, pay-per-use - like the utility based consumption model. The existing infrastructure in most enterprises is ridden with inefficiencies due to the low utilization rate of resources such as computing and storage. Customers have invested in excess capacity keeping peak demand in mind and are now plagued with higher spends than their usage levels.
Frost & Sullivan survey conducted across Asia Pacific (with senior IT decision makers) indicates that close to 1 in 4 enterprises use some form of cloud computing. More than 50% of the survey respondents believe that cloud computing technology in any delivery form can help businesses reduce their infrastructure cost and lowers capital expenditure investment compared with traditional IT management.
23% of the respondents indicated using some form of cloud computing while 61% of the respondents are likely to increase their cloud computing spending in 2011. The IT department is the key decision maker when it comes to cloud initiatives, followed by the CXO's. Some of the key factors determining the selection of cloud provider are security & privacy standards, quality of service level agreements (SLAs) and pricing. IBM, Google, and Microsoft had the highest mindshare in the public cloud computing space while IBM, HP, and EMC/VMware were the top mindshare garners in the private cloud space.
The adoption rate of cloud has improved from previous years, though there still are many businesses that are concerned about this technological investment or perceive it as yet another technology fad.
"Challenges for adopting cloud computing are regulatory compliance, invisibility over data storage and access, SLAs, reliability of clouds, and ownership of legal liability. However, there is no such thing as 'zero' risk. Businesses need to realize that with proper planning, risks can be mitigated," comments Chandrasekaran.
Frost & Sullivan analysis from the survey concludes that in order to fully understand cloud computing, vendors and service providers need to understand that the solution is first built for the customer's business needs and it is always about the business rather than the technology. In order to drive adoption of cloud by business owners, vendors also need to be more liberal with their trial periods to fully accommodate clients request to explore various opportunities that cloud has to offer.
Cloud computing offers significant promise for enterprises saddled with inefficient IT infrastructure. It offers the critical promise of aligning IT with business needs and creating a truly agile business environment.
"Cloud computing is a powerful tool that can shape the businesses of tomorrow and it is no longer just hype. It's real!" says Chandrasekaran.
Frost & Sullivan conducted this survey with 330 senior IT decision makers in Asia Pacific. Analysis per-country was made along with the overall trend in cloud computing across Asia Pacific.
To get a complimentary executive summary of the survey report, please write to Nicklaus Au at nicklaus.au@frost.com.
Netflix Indicates Shift toward Cloud-Only TV
Excerpted from CenterBeam Report
Cloud computing has been deployed for many business-centered functions, but a recent announcement from entertainment company Netflix suggests that the cloud may be penetrating further into everyday life.
Netflix's business model traditionally centered around a DVD rent-by-mail system. Customers paid a monthly fee and receive DVDs by mail which, after watching, can be sent back in the post and exchanged for new titles.
Under the new pricing system, however, Netflix customers will for the first time have the opportunity to receive content exclusively through Internet-streaming.
Netflix has offered Internet-streamed content since 2007, but until now this was presented as a complement to DVD subscriptions.
Not all of Netflix's DVD content is available yet in the cloud, but the company has indicated that it is shifting toward a more cloud-centered model. Jessie Becker, Vice President for Marketing at Netflix, said the company is committed to eventually offering only Internet-streamed content.
"Creating the best user experience that we can around watching instantly is how we're spending the vast majority of our time and resources," she said. "Because of this, we are not creating any plans that are focused solely on DVDs by mail."
The Netflix announcement joins other recent cloud computing developments in the entertainment sphere. In December, startup OnLive will launch the first cloud-based gaming console.
Report from CEO Marty Lafferty
 The Distributed Computing Industry Association (DCIA) encourages you to attend the first-ever CONTENT IN THE CLOUD Conference within CES to start the new decade with a valuable and stimulating gift to yourself.
The 2011 International Consumer Electronics Show (CES), sponsored by the Consumer Electronics Association (CEA), is scheduled for January 6th-9th in Las Vegas, NV. The DCIA is an affiliated organization of the CEA.
Our CONTENT IN THE CLOUD conference, which will offer important insights into this exciting area of rapid development, will take place on January 7th at the Las Vegas Convention Center.
As CEA exclaims, "Explore this cutting-edge technology that promises to revolutionize entertainment delivery! If the cloud touches your business, you won't want to miss these eight keynotes and three panel discussions focused on cloud-managed content and its impact on consumers, the media, telecom industries, and consumer electronics (CE) manufacturers."
Our Opening Keynote - Vision for Content in the Cloud - will be presented by Geng Lin, Chief Technology Officer, IBM - Cisco Systems Alliance. Cloud computing can dramatically impact many aspects of entertainment delivery from transcoding to storage to distribution to payment collection to performance measurement. Step into the dynamic world of the cloud.
Our second CITC Keynote - Cloud Vision vs. Technical Reality - will be presented by David Rips, President, Verizon Digital Media Services. Is the cloud up to the challenge of consumer content demand that is stretching the bounds of today's infrastructure? Hear a different perspective, focusing on massively scalable network capacity, advanced technology capability, and significant capital investment - the building blocks of the digital media future.
Panel Discussion 1 - The Impact on Consumers of Implementing Cloud Computing for Media Storage - will feature Todd Weaver, CEO, ivi TV; Mike Lewis, Founder, Kapost; Jason Herskowitz, VP of Product, LimeWire; Christopher Allen, General Manager, Napster; Guillermo Chialvo, Gerente de Tecnologia, Radio Mitre; Ian Donahue, Co-Founder, RedThorne Media; Jim Rondinelli, VP of Strategic Development, Slacker; and Louisa Shipnuck, Director, Marketing & Strategy, Verizon Digital Media Services. Discover how cloud storage affects users' ability to access entertainment content and to own copies of music, games, movies, and other media.
Our third CITC Keynote - Benefits of Cloud-Delivered Content for Consumers: Ubiquity, Cost, Portability Improvements - will be presented by Rob Shambro, Chairman & CEO, GenosTV. Cloud-based solutions offer consumers a number of clear advantages over older methods of online content distribution. Hear them all in this important address.
Our fourth CITC Keynote - Drawbacks of Cloud-Delivered Content for Consumers: Privacy, Reliability, Security Issues - will be presented by Jim Burger, Member, Dow Lohnes. What have various industries experienced with inadvertent leaks or intentional hacking of confidential data? When users go offline, how can they mitigate inaccessibility to their applications or losing data accidentally? And what happens if a cloud provider goes out of business?
Panel Discussion 2 - The Impact of Cloud Computing on the Entertainment and Telecommunications Industries - will feature Stephen Condon, Director of Market Development, AT&T; Alex Limberis, VP Business Development, Next Issue Media; Doug Heise, VP of Marketing & Strategy, Panvidea; Guy de Beer, CEO, Playcast; Mark Friedlander, National Director, New Media, Screen Actors Guild (SAG); Mark Vrieling, CEO, ScreenPlay; Kurt Smith, VP, Sales, Verizon Digital Media Services; and Anne-Carole Nourisson, VP Licensing, Vivendi Mobile Entertainment. Content rights holders and broadband network operators are concerned that cloud storage could affect the way they manage their intellectual property (IP) and utilize network resources. Gain valuable insights on this critical issue for both industries.
Our fifth CITC Keynote - Benefits of Cloud-Delivered Content to the Entertainment and Telecommunications Industries: Efficiency, Control, Flexibility Improvements - will be presented by Barry Tishgart, VP, Internet Services, Comcast. Cloud-based solutions provide a number of clear advantages for content rights-holders and broadband network operators over older methods of online content distribution. Explore these benefits in this strategic overview.
Our sixth CITC Keynote - Drawbacks of Cloud-Delivered Content for the Entertainment and Telecommunications Industries: Infrastructure, Disruption, Accountability Issues - will be Claude Tolbert, VP, Business Development, BitTorrent. What problems do rights-holders face in adopting their internal content management processes to cloud-based media storage? What does the on-demand always-accessible nature of cloud-based entertainment delivery mean to conventional distribution systems? What new kinds of liabilities does the cloud present to participants in the distribution chain?
Panel Discussion 3 - The Impact on Consumer Electronics Manufacturers of Cloud Computing Deployment - will feature Mick Bass, VP, Strategic Alliances, Ascent Media; Sean Barger, CEO, Equilibrium; Les Ottolenghi, CEO & Founder, Fuzebox; Alexander Marquez, Director, Intel Capital; Mark Taylor, SVP, Content & Media, Level 3 Communications; Michael Papish, Product Development Director, Rovi Corporation; AJ McGowan, CTO,, Unicorn Media; and Stuart Elby, CTO, Verizon Digital Media Services. Our expert panel examines the implications of remotely accessing applications and data that must be integrated into networked end-user devices. A look at servers and other edge storage hardware products rounds out the discussion.
Our Closing Keynote - The Years Ahead for Cloud Computing - will be presented by Mark Teitell, Executive Director, Digital Entertainment Content Ecosystem (DECE). End the day with a comprehensive overview of the benefits and drawbacks of cloud-delivered content for CE manufacturers: expanded opportunities for new products and features at various price points; challenges for interoperability and data security; and advantages of cloud-based solutions for popular entertainment.
We are pleased to provide DCINFO readers with these details in advance of this important upcoming event. Please plan now to attend what promises to be the most exciting International CES in its more than forty-year history. Share wisely, and take care.
Netflix Advice on Moving to Amazon Web Services
Excerpted from ReadWriteWeb Report by Alex Williams
Netflix's video streaming service has nearly tripled in growth during the past year. To scale the service, Netflix has moved its API and other operations to Amazon Web Services (AWS) over the past several months.
In an interview today on the Cloudscaling blog, Netflix Cloud Architect Adrian Cockcroft discusses why Netflix moved to AWS. He gives advice for those that wish to follow in Netflix's path. In particular, he outlines why a public cloud infrastructure has certain advantages compared to building out a data center.
Cloudscaling CEO Randy Bias conducted the interview. Cloudscaling works with telecommunications companies, service providers, and enterprises to build Infrastructure-as-a-Service (IaaS) environments. The interview is part of a series Bias is doing with cloud computing innovators.
Cockcroft said encoding movies for streaming, log analysis, the production website, and the API moved from the Netflix data center to AWS, and that most everything that scales with customers and streaming usage is now on AWS.
Operations staying in Netflix data centers include "most internal IT that scales with employee count, legacy stuff, DVD shipping systems. account sign-up and billing systems," Cockcroft said.
Netflix uses Akamai, Limelight, and Level3 content delivery networks (CDNs) for streaming movies. Cockcroft says that AWS CDN service isn't a big enough player in the space at this point to use for that service.
Cockcroft says business agility and the inability to predict capacity are the main drivers for moving to AWS. Business is accelerating. Netflix customer growth is up 52% compared to last year. Customers using streaming services are up 145% to 11 million subscribers.
Cockcroft says its Netflix data centers run Oracle on IBM hardware. He says Netflix could have added commodity hardware and scaled its data center but the cost would have been substantial.
It would have also meant hiring any number of systems administrators and database managers. In contrast, Cockcroft says Netflix has "added four to five times as many systems in the cloud as the total we have in our datacenter over the last year."
Scaling is elastic with AWS. Costs are based on usage. When Amazon drops prices, capacity gets cheaper for Netflix. When AWS introduces a new instance type, the technology is available within hours. AWS introduced its 11th new instance last week. It is called the Cluster GPU Instance processes and renders some of the most complex actions such as those required in financial services and the sciences.
Cockcroft says the biggest challenge is to get in a Google mindset. It means re-architecting applications for a multi-tenant environment:
"You have to assume that the hardware and underlying services are ephemeral, unreliable and may be broken or unavailable at any point, and that the other tenants in the multi-tenant public cloud will add random congestion and variance. In reality you always had this problem at scale, even with the most reliable hardware, so cloud ready architecture is about taking the patterns you have to use at large scale, and using them at a smaller scale to leverage the lowest cost infrastructure."
The next challenge is a political one. Cockcroft says a CIO would prefer to build data centers than become irrelevant to internal customers. These internal customers will eventually turn to services like AWS. The cost comparisons are pretty clear. AWS is far less expensive.
"For me, if it's not multi-tenant, it's not cloud, and only the biggest organizations should be building datacenters to host clouds, and they should be offering them publicly. If you are doing internal cloud and you have a dominant internal customer then you are doing it wrong, because you have to choose between baking in a lot of unused extra capacity or the risk that at some point that customer will blow up your cloud."
Compliance issues still create problems. Organizations do not consider the cloud in their checklists. That will change. It's just a matter of when it will occur.
In the end, Bias presents a solid testimony from Cockcroft about the disruptions we see in the market. The interview shows how one customer is scaling its services with a cloud infrastructure. That's helpful on a number of levels for companies considering a move to cloud computing.
Netflix's Move onto the Web Stirs Rivalries
Excerpted from NY Times Report by Tim Arango and David Carr
In a matter of months, the movie delivery company Netflix has gone from being the fastest-growing first-class mail customer of the United States Postal Service (USPS) to the biggest source of streaming Web traffic in North America during peak evening hours.
That transformation - from a mail-order business to a technology company - is revolutionizing the way millions of people watch television, but it's also proving to be a big headache for TV providers and movie studios, which increasingly see Netflix as a competitive threat, even as they sell Netflix their content.
The dilemma for Hollywood was neatly spelled out in a Netflix announcement Monday of a new subscription service: $7.99 a month for unlimited downloads of movies and television shows, compared with $19.99 a month for a plan that allows the subscriber to have three discs out at a time, sent through the mail, plus unlimited downloads. For studios that only a few years ago were selling new DVDs for $30, that represents a huge drop in profits.
"Right now, Netflix is a distribution platform, and has very little competition, but that's changing," said Warren Lieberfarb, a consultant who played a critical role in creating the DVD while at Warner Brothers.
For the first time, the company will spend more over the holidays to stream movies than to ship DVDs in its familiar red envelopes (although it is still spending more than half a billion dollars on postage this year). And that shift coincides with an ominous development for cable companies, which long controlled home entertainment: for the first time in their history, cable television subscriptions fell in the United States in the last two quarters - a trend some attribute to the rise of Netflix, which allows consumers to bypass their cable box to stream movies and shows.
Netflix now has the frothy stock price to show for its success. The stock has enjoyed a Google-like rise, nearly quadrupling from its 52-week low in January, and with a market value of nearly $10 billion, Netflix is now worth more than some of the Hollywood studios that license movies to it.
In some ways, the closest parallel as a one-stop digital marketplace is iTunes, the Apple service that has put itself at the center of the digital world and has used that power to demand concessions from its suppliers.
"How did Hollywood end up supplying Netflix in the first place, particularly a product that was given to them on a flat-rate, wholesale basis?" said Jonathan Knee, a media investment banker and co-author of "The Curse of the Mogul."
As recently as a few years ago, Netflix didn't look like a case study in success: if anything, it seemed to be just the latest media company destined to be run over by technology.
From the company's beginning in 1997, Reed Hastings, the chief executive and co-founder, had always thought of Netflix as an entertainment distribution service rather than a mail-order company, and by 2000, the company was experimenting with delivering movies over the Internet. In 2003, Netflix came up with a hardware solution, a $300 hard drive that would download films. But slow speeds - it could take six to eight hours to download a feature length film - doomed that effort.
But the advent of streaming - watching video in real time as opposed to downloading - gained prominence in 2005 with the explosive success of YouTube. Mr. Hastings decided that software, not hardware, was the key to delivering films over the Internet and pushed to develop high-quality streaming technology. Pricing remained an issue, however, and in a move that gave Netflix a big head start, the company decided to give the service away to existing mail-order customers.
Netflix now has more than 16 million subscribers. The company does not release figures on the most popular films or television shows streamed, but as a general rule, films that can be streamed instantly are not fresh out of theaters or plucked from the current TV season. People who want to relive past seasons of "The Office" can do so instantly, but if they are looking for the current season - or any season of "Mad Men" - they are out of luck.
"We are very proud to announce that by every measure we are now a streaming company, which also offers DVD-by-mail," Mr. Hastings recently told Wall Street analysts.
Just as important, Netflix arrived with an open checkbook at a time when the film industry's main source of profits, the sale of DVDs, was plummeting.
"As the home entertainment industry comes under pressure, they are the only guy standing there in a red shirt writing checks," said Rich Greenfield, an analyst at BTIG Research. "That makes Netflix really unique right now."
The biggest check came a few months ago, when the company spent nearly $1 billion to stream movies from three Hollywood studios - Paramount, MGM, and Lionsgate.
Steve Swasey, the company's Vice President for Communications, said, "As we move from paying US postage to acquiring movies and television episodes from the studios and networks, Netflix can become one of their top customers."
But digital economics can be much less lucrative to content companies. For example, under the terms of Netflix's deal with Starz, the pay-TV channel, which allows Netflix to stream movies from Sony and Disney, Netflix pays about 15 cents a month for each subscriber, much less than the $4 to $5 a month that cable and satellite owners pay for access to Starz, according to research by Mr. Greenfield.
For that reason, Netflix is increasingly viewed as a threat by cable companies and movie studios, who are considering a variety of ways to put the brakes on the company's growth.
For example, big media companies like Time Warner are moving quickly to offer their own streaming products. Studios have pushed back on release dates, requiring Netflix to wait through a window of 28 days while studios pushed more expensive and lucrative sales of the DVD and on-demand versions on cable.
And the studios are positioning themselves to demand more money in future negotiations over streaming rights, especially next year when Netflix's deal with Starz expires.
"Though already a significant customer, they've grown faster than anyone anticipated, and going forward we expect the economics to improve significantly," said John Calkins, Executive Vice President of Digital and Commercial Innovation at Sony Pictures Home Entertainment.
For now, Netflix has become a barometer of the apparently voracious consumer appetite for streaming movies: a recent study by Sandvine, a broadband equipment maker, showed that Netflix, surprisingly, accounted for more than 20% of all Internet download traffic in North America in peak evening hours.
"Netflix used an open-source network, the US Postal Service, to launch an alternative distribution business without asking anyone for permission," said Tim Wu, a Columbia University law professor and author of "The Master Switch: The Rise and Fall of Information Empires."
"Now they are using another open-source network, the Internet, to transform the business. It is much easier for Netflix to change, because they don't have to undergo a kind of religious conversion like media companies will have to."
Gartner Hails Cloud Computing Business Evolution
Excerpted from ITPro Report by Tom Brewster
Cloud computing will make as much of an impact on the world as e-business did, an analyst firm has claimed.
However, the cloud will not just bring benefits to firms, it will have negative effects as well, Gartner has suggested.
"Overall, there are very real trends toward cloud platforms and also toward massively scalable processing," said Stephen Prentice, Vice President and Gartner fellow.
"Virtualization, service orientation, and the Internet have converged to sponsor a phenomenon that enables individuals and businesses to choose how they'll acquire or deliver IT services, with reduced emphasis on the constraints of traditional software and hardware licensing models."
It now appears that more people are understanding the central ideas behind cloud computing and seeing the possibilities it offers, Gartner added.
"The potential benefits of cloud are a shift from 'capacity' on demand to 'capability' on demand, a reduced cost of computing resources and a shift from technology use to 'value' consumption," said Rakesh Kumar, research vice president at the analyst firm.
UK Communications Minister Ed Vaizey recently talked up how cloud computing could help with the explosion of portable devices.
"Cloud computing is especially significant today, at a time when we are seeing an explosion in the number of portable devices with limited storage capacity," Vaizey said during a speech at the UK - China Internet forum, held in London.
Click here for our special report on the cloud.
Adobe & Salesforce: A Match Made in the Cloud
Excerpted from EContent Report by John Doyle
The rising prominence of cloud computing is disrupting the traditional software model of on-premise IT infrastructure, networks, and client/servers, whereby software companies are clamoring to expand into cloud-based offerings. M&A activity in this space will continue to stay hot as companies seek strategic acquisitions that allow them to leverage their existing platforms over the web.
One of these companies is Adobe, which has built its empire on the foundation of a vast array of creative software solutions. Adobe's recent acquisitions, such as Adobe Connect (web conferencing), Omniture (web analytics) and Day Software (website design), make it clear that it understands the increasing importance of the web. Most of its acquisitions are web-based enterprise solutions that augment one of its primary applications-Adobe Acrobat.
Another deal it should look at is a merger with Salesforce.com. One typically associates mergers with consolidation within an industry, but this one would instead be a strategic locking of arms to broaden enterprise-level service offerings in online document management and interactive marketing solutions.
With Adobe and Salesforce presently valued at a respective $17 billion and $15.4 billion, a merger between the two would create a combined entity worth $32.4 billion. Adobe currently trades at 4.8 times trailing 12 months (TTM) revenue and 14.8 times TTM EBITDA (earnings before interest, taxes, depreciation and amortization), while Salesforce carries significantly higher multiples of 10.3 times and 88.0 times. The merged company would create a $4.7 billion revenue juggernaut that would be well-positioned to expand globally while becoming a dominant presence in cloud CRM and web-based marketing services.
The primary lead generation tool for businesses selling products or services to other businesses has long been the white paper. These days, most white papers are distributed electronically, and they reside on the web. Adobe Acrobat is the indisputable leading software tool for securing this type of content.
The web will continue to play a crucial role in the sales cycle, in addition to becoming a more integral part of the sales process for most businesses. But the sales cycle starts with a lead, and Adobe would serve itself well to support the revenue side of the income statement. This is where Salesforce comes in. Salesforce helps businesses generate leads as well as manage both their existing or future customer relationships.
Salesforce is an excellent product with a large customer base that is centered squarely in the enterprise market. In addition to its recent acquisition of Jigsaw, a user-generated lead-sharing database company, Salesforce has developed an application exchange for cloud-based software and on-demand services called Force.com. (Cloud computing refers to the delivery of software over the Internet.) Force allows Salesforce to leverage its vast pipeline of businesses and to take a small piece of a substantial number of transactions from software developers using their exchange "shopping mall."
In theory, this shopping mall should be a revenue avalanche for Salesforce, but it remains a small percentage of the company's revenue. Since every shopping mall needs an anchor tenant, Force could benefit from having a universal product such as Acrobat, as well as other Adobe products, to bring people in the proverbial door. This would also attract more high-profile software developers to sell their software over Force.
Adding heft to Force is not the only reason Salesforce needs Adobe. Although Salesforce's CRM software is arguably the best out there, it could offer customers more useful functionality by incorporating certain tools from Adobe. Imagine if a customer could use Salesforce's CRM software to build a website (Day Software) around one or more white papers (Acrobat) and then track the performance of its online advertising spend (Omniture) to see where it was getting the most bang for its buck. The customer could then manage inbound leads and track outbound correspondence from one platform.
Cloud computing is more than just a buzzword. It is a disruptive business model that is only going to become more prevalent due to its ability to substantially lower IT infrastructure costs. Small businesses with limited resources are the early adopters and primary drivers of cloud computing. As those companies grow into larger enterprises, traditional software companies with outdated models risk becoming obsolete as businesses choose to contain costs over flexibility.
Joyent & GuardTime Enhance Trust in the Cloud
Joyent, a leading global provider of cloud computing solutions, and GuardTime, creator of the patented Keyless Signature technology used to validate the world's data, this week announced a partnership that delivers unprecedented security enabling enterprises to safeguard some of their most valuable assets in the cloud: code, logs, and data.
GuardTime's Keyless Signatures provide proof of signing authority, time of the signature, and integrity of all data located in the cloud.
The signature never expires and its verification is based solely on mathematics, eliminating the need for secrets, keys, or human intervention.
As part of this partnership, Joyent customers will be able to purchase GuardTime SmartMachines, which will allow organizations to: secure an application by signing its gold master code, preventing compromised applications from executing; safeguard the SmartMachine's logs (e.g. administrative, policy, configuration, or events), making accidental changes or malicious tampering impossible to conceal; and protect data backups, turning private and public cloud storage into safe, tamper-evident archives.
"This partnership delivers unparalleled security and authenticity in a massively-scaled cloud environment," said Jason Hoffman, Founder and Chief Scientist of Joyent. "Organizations can now access a mathematically driven solution that cannot be compromised by human error or breached by cyber miscreants."
"The integration of our unique Keyless Signature technology within the Joyent SmartMachine gives organizations the unprecedented opportunity to trust their applications, logs, and data in the cloud," said Mike Gault, CEO of GuardTime.
"We are thrilled to be joining forces with Joyent to provide independently verifiable proof of operating integrity in the cloud for both cloud-based service providers and cloud-consuming institutions around the world."
The partnership was made possible by Singapore's Infocomm Investments (IIPL), which brought the two companies together. IIPL is also an investor in GuardTime. Dr. Kuo-Yi Lim, CEO of IIPL, said, "The GuardTime-Joyent solution addresses a key security concern on the public, private or hybrid cloud. We believe that this collaboration will bring security in cloud computing to a new level and in turn spur the development of the cloud computing industry in Singapore."
The GuardTime SmartMachine will be available in December 2010.
Google Unlikely to Have Music Store up by Holidays
Excerpted from Electronista Report
Google's cloud-based music service is still facing troubled negotiations that will probably push its launch into 2011, according to purported insider tips on Wednesday.
A conventional per-track deal may be mostly settled, but Google's insistence on a widely rumored online locker for music is still triggering opposition. Labels still want additional payment for artists, the New York Post's contacts claimed, but also note that Google refuses to separate the locker from the regular store.
"What's been holding things up is that the labels will do downloads, but they need to know more about the locker service, and Google really wants to keep the two together," an unnamed music industry veteran reportedly said.
A chance still remained that Google could have a very late launch this year, but an executive added that a late first quarter 2011 launch, or March, was more probable. Warner Music chief Edgar Bronfman, in the same results call that brought a renewed Spotify deal, said he hoped Google's store would come online in 2011.
The lack of results would let Apple sustain its advantage in online music stores for awhile longer but would also reflect an industry-wide difficulty in persuading labels to let users store their content online.
Apple has been rumored for much of 2010 to be developing cloud-based iTunes access but hasn't secured licensing deals that the labels feel are necessary. Despite the lockers simply representing the user's own collection on a server, studios have argued that a locker is a shift in formats like cassettes to CDs and thus that they should have a right to charge a second time for a file copy operation.
Google had teased its music service as early as the I/O conference in May and would likely tie it closely to Android. Without a locker option, however, the company is said to be considering Internet radio as a fallback and would be little different than downloading a separate app like Pandora or Slacker.
The search giant wouldn't comment on the rumors.
Spotify Could Launch in US without Major Labels
Excerpted from The Guardian Report by Josh Halliday
Spotify is moving closer to a US launch for its P2P music-streaming service, though it could reportedly be prepared to do so without having the four major record labels on board.
People familiar with the company's negotiations with Universal, Sony, Warner, and EMI - it has been in discussions with EMI for more than a year - told the Financial Times Spotify is considering launching in the US without having all four on board at launch.
The company's accounts for 2009, filed only last week, paint a bleak picture with a net loss of $25.2 million on revenues of $17.8 million. The company's auditors, Ernst & Young, warned that "material uncertainty" could cast "significant doubt about the group's ability to continue".
Spotify has expanded into seven European countries since its 2008 launch, though protracted negotiations with major US record labels have halted its ambition to expand into north America. In October, the music-streaming service said it had around 10 million users - though only about 500,000 of these are paying for the premium offering.
But now the European startup is likely to hasten to a US launch as its board grows impatient at the delay. Daniel Ek, Spotify's co-founder and chief executive, has previously said the service would have a US presence by November.
A Spotify spokesman said: "2009 saw us focus on establishing a new and innovative music service and bringing it to millions of people across Europe. The groundwork laid in our launch year has been crucial to the significant achievements made in 2010. Further strengthening and expansion of the service remains our top priority."
Spotify has risen to prominence across Europe as a legal alternative to free-at-the-point-of-access music. Users can download the Spotify application for free-to-listen-to music punctuated by occasional advertising, similar to commercial radio. It also offers a premium service where users pay for extra features such as a mobile app and offline streaming.
This business model, which the company has said is fundamental to its attraction, lies at the heart of its wrangle with US record labels, which have failed to warm to the idea of free streaming. Spotify converts 5% to 7% of its free customers into subscribers, the Guardian understands.
The company's report for 2009 shows it made £6.8m from subscriptions and $7.1 million in advertising revenues. But Spotify's cost of goods, which includes licensing fees paid to record labels, reached $28.4 million.
Mark Mulligan, a music analyst at Forrester Research, estimated that the best case scenario for Spotify would be to convert 10% of its user base to paying customers. He said the company is "making great progress" but really needed to hit the 10% mark "before they can start patting themselves on the back".
"Free music itself is never going to work as a business model while there is such a disparity between ad revenues and license fees. But the freemium model has solid merit," Mulligan added.
"More promising though is the subsidized model whereby music feels free to the customer but is in fact paid for by someone else, such as an ISP or phone company. That is the mass market way to square the circle of people not wanting to pay for music but record labels needing to be paid."
Kieron Donoghue, founder of the Spotify-associated ShareMyPlaylists.com, said that the $7.1 million advertising revenue for 2009 was "no mean feat" for a startup. The company's proportion of revenue from subscriptions - 60% - was a "huge testimony to the viability of the business model", Donoghue added.
"By taking their time and making sure they get the US launch right, they have done exactly the right thing. You only get one chance to launch in the US so they must make sure that they have got the right model in place before they do," he said.
The Music Biz Shrinks Yet Again, as Courts Close EMI
Excerpted from MusicDish e-Journal Report by Moses Avalon
It's official. EMI has lost in court and it's now only a matter of time before its assets are chopped up, dispersed and the famous Capital Records building in Hollywood goes condo.
After EMI is dismantled there will remain only WMG, UMG, and Sony as the remaining "Big Three" labels in the US and the UK.
The Silicon Valley giants are probably very excited today, since this means that there are only three major record distributors left to destroy before they can finally buy up their catalogs and not have to deal with the RIAA or their stupid one-sided interpretation of the Copyright Act.
Yes, this is a great day indeed for those who think music should be free. Because the Beatles recordings along with Led Zeppelin, Rolling Stones, and many others will probably soon be the property of an ISP giant, or computer company who will use them as loss leader to attract subscribers.
If you need to catch up go here, but basically what has happened is that Terra Firma, who bought EMI in 2007, it seems paid a bit too much for the company and cannot pay CitiBank, the financier of the deal, under the terms of their loan agreement.
Rather than pay back the loan, or ask for a refinanced one, Terra Firm sued their bankers by asserting that CitiBank basically "tricked" them into borrowing $4 Billion from them to buy the faltering record company.
The trick manifested, according to EMI lawyers, by CitiBank not disclosing that nobody else was interested in buying EMI at that price.
Apparently Terra Firma never heard of a little thing called due diligence.
Sounds like a lawsuit that only a music lawyer could come up with: you owe me because I didn't do my homework and spent too much. Ironically, a CitiBank executive said under oath that the record company made a bad deal and now they just don't want to live with it; a cruel twist because usually it's the record company telling the artist that very same thing.
I wonder how they feel being at the other end of that pitch? A jury took less than five hours to agree that the suit was dumb and now EMI will very likely be foreclosed upon. Rumors that Terra Firma's owner, Guy Hands, had raised some private money to help maintain the loans have turned out to be little more than wishful thinking.
Who are the likely buyers for EMI vestiges? My number one draft pick is, do-no-evil tech giant, Google. They have made substantial investment in their soon-to-be music subscription service.
And while Warner and UMG will have their checkbooks out, financially, none of them can out bid Google, with their seemingly bottomless pit of cash, which, when pitted against WMG's debt and UMG's massive overhead, will be no contest.
And while it might seem that one of the remaining Big Three would desperately want the vintage catalog, it's Google that has the stronger motivation to over pay.
With their music store just months away, what better way to say "See, we're better than iTunes," than to offer the one thing that iTunes has none of- the Beatles original recordings.
Can't you just already see the TV adds; "It's a Google Revolution."
Oregon Senator Wyden Effectively Kills Internet Censorship Bill
Excerpted from The Raw Story Report by Stephen Webster
It's too early to say for sure, but Oregon Senator Ron Wyden could very well go down in the history books as the man who saved the Internet.
A bill that critics say would have given the government power to censor the Internet will not pass this year thanks to the Oregon Democrat, who announced his opposition during a recent committee hearing. Individual Senators can place holds on pending legislation, in this case meaning proponents of the bill will be forced to reintroduce the measure and will not be able to proceed until the next Congress convenes.
Even then, its passage is not certain.
The Combating Online Infringement and Counterfeits Act (COICA) would have permitted a blanket takedown of any domain alleged to be assisting activities that violate copyright law, based upon the judgment of state attorneys general.
"Deploying this statute to combat online copyright infringement seems almost like using a bunker-busting cluster bomb, when what you need is a precision-guided missile," Wyden said.
The act was unanimously approved by the Senate Judiciary Committee yesterday.
"Few things are more important to the future of the American economy and job creation than protecting our intellectual property," said Senator Patrick Leahy, a Democrat from Vermont who co-sponsored the bill.
"That is why the legislation is supported by both labor and industry, and Democrats and Republicans are standing together."
Opponents of the bill insist that many sites which contain allegedly infringing materials also traffic in legitimate data that's constitutionally protected. There's also a fear that whatever action the US takes, other countries will seek to emulate, and some to a much more zealous degree.
Activist group DemandProgress, which is running a petition against the bill, argued the powers in the bill could be used for political purposes. If the whistleblower website WikiLeaks is found to be hosting copyrighted material, for instance, access to WikiLeaks could be blocked for all US Internet users, they suggested.
A group of academics, led by Temple University law professor David Post, have signed a petition opposing COICA.
"The Act, if enacted into law, would fundamentally alter US policy towards Internet speech, and would set a dangerous precedent with potentially serious consequences for free expression and global Internet freedom," Post wrote in the petition letter.
"Blacklisting entire sites out of the domain name system," explained the Electronic Frontiers Foundation (EFF), a privacy and digital rights advocate group, is a "reckless scheme that will undermine global Internet infrastructure and censor legitimate online speech."
The EFF has published a list of websites it believes are at highest risk of being shut down under the proposed law. Included in the list are file-hosting services such as Rapidshare and Mediafire, music mash-up sites like SoundCloud and MashupTown, as well as "sites that discuss and advocate for P2P technology or for piracy," such as pirate-party.us and P2PNet.
Sir Tim Berners-Lee, often cited as the father of the world wide web, has called Internet disconnection laws in the name of copyright protection a "blight" on the net.
Coming Events of Interest
LA Mobile Entertainment Summit - December 7th-8th in Los Angeles, CA. This event is brought to you by the producers of the widely acclaimed 3D Entertainment Summit, this high level strategy and networking event will explore all facets of the mobile entertainment industry.
International CES - January 6th-9th in Las Vegas, NV. With more than four decades of success, the International CES reaches across global markets, connects the industry, and enables consumer electronics (CE) innovations to grow and thrive. The International CES is the world's largest consumer technology tradeshow featuring 2,700 exhibitors.
CONTENT IN THE CLOUD - January 7th in Las Vegas, NV. The DCIA's Conference within CES explores this cutting-edge technology that promises to revolutionize entertainment delivery. Six keynotes and three panel discussions focus on cloud-delivered content and its impact on consumers, the media, telecom industries, and consumer electronics (CE) manufacturers.
Global Services Conference 2011 - January 27th in New York, NY. Cloud computing has implications not only for IT services but also for business processing; cloud-based delivery models present a discontinuous and disruptive shift that will redefine how IT and BPO services are delivered. The conference will present actionable propositions to leverage cloud-based models.
Cloud Connect Conference - March 8th-10th in Santa Clara. CA. Learn about all the latest cloud computing innovations in the Cloud Connect Conference -- designed to serve the needs of cloud customers and operators - where you will see the latest cloud technologies and platforms and identify opportunities in the cloud.
Media Summit New York- March 9th-10th in New York, NY. This event is the premier international conference on media, broadband, advertising, television, publishing, cable, mobile, radio, magazines, news & print media, and marketing.
1st International Conference on Cloud Computing - May 7th-9th in Noordwijkerhout, Netherlands. This first-ever event focuses on the emerging area of cloud computing, inspired by some latest advances that concern the infrastructure, operations, and available services through the global network.
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