March 7, 2011
Volume XXXIV, Issue 4
Cloud Computing's Coming Out Party
Excerpted from IT Business Edge Report by Carl Weinschenk
Once the hype engine starts on a new technology, it is difficult to determine precisely when it reaches maturity and begins living up to the promises its promoters make. Cloud computing and its antecedents, for instance, have been around for decades.
During the past five years or so, the explosion of available bandwidth and exponentially more powerful end-user devices has enabled the cloud to move from its earlier disappointments - when it was the application service provider (ASP) industry - to the apparent success it is having today.
This report at Information Week entitled Will the Cloud Take Over Enterprise Communications? looks at the telcos' deals. Tom Daniel, Group Manager for Unified Communication and Collaboration at Verizon, told the attendees that the company's on-demand service will also accommodate the equipment that already was bought by customers. Microsoft Product Marketing Director Yancey Smith, the story said, agreed that a hybrid model that enables a transition from on-premise purchased gear to cloud-delivered services is important.
Indeed, the Enterprise Connect conference seemed to be a lot about cloud computing. At least three major carriers - XO Communications, Verizon, and Global Crossing - made significant announcements at or in conjunction with the show. The big carriers only get into things when they are proven - but when they do come in, they come in fully prepared. This logic suggests that the carrier industry has fully embraced the cloud.
The move to the cloud seems unstoppable, though people are not without concern. Over at CTO Edge, Joseff Bentancourt wrote that he is a big fan of cloud, but is honest in assessing the potential pitfalls. He said that he is fine with relying on it because he works at a start-up. He is not so sure, however, of how he would feel if his role was with a more established firm. Incidents like the disappearance Gmail webmail give him - and others, no doubt - pause.
This interesting report from CeBIT in Germany appears to have just about the proper amount of positive and negative feelings about the cloud. On one hand, none of the sources cited in the piece dismissed the cloud; on the other hand, many have serious caveats for its use. Executives quoted in the piece suggested that there still is a lot of life in traditional approaches. In addition, there are potential problems with the cloud. These involve reliability. For example, IP networks can go down. And what about the availability of enough bandwidth at all times, not just most of the time? There is also the lack of interoperability between different clouds. The bottom line is that cloud computing is here to stay, but traditional approaches are as well.
The federal government traditionally plays a big role in fostering new technologies and approaches, such as IPv6, telework, and the Internet itself. It is playing the same role with cloud computing. Last month, according to E-Commerce Times, Federal CIO Vivek Kundra released a report aimed at promoting cloud computing. The document, Federal Cloud Computing Strategy, according to the story, does a few things. It outlines the benefits, key issues and trade-offs of using the cloud, offers a "decision framework," identifies resources and suggests how the feds can encourage adoption.
File-Sharing Service Xunlei Plans $200 Million IPO
Excerpted from Bloomberg Report by Zijing Wu and Serena Saitto
Shenzhen Xunlei Network Technology, the Chinese video and music file-sharing company partly owned by Google, is planning to raise about $200 million in an initial public offering (IPO) in the US this year, according to two people with knowledge of the situation.
The company has hired underwriters including JPMorgan Chase and Deutsche Bank for its IPO, said the people, who declined to be identified because the plans aren't public.
Xunlei may follow Chinese Internet companies including Youku.com and E-Commerce China Dangdang in raising capital from initial share sales in the US. Xunlei had about 190 million online video users at the end of last year, and also offers other Web services including games, according to Tang Yizhi, an analyst at Analysis International in Beijing.
"The company's strength is in its technology - it's able to serve up high-definition (HD) videos to users," Tang said by telephone. "It has more diversified services than a site like Youku, which is focused on online videos."
Youku, China's biggest online video site, surged 161% on its first day of trading in New York on December 8th, the largest gain for a US IPO since the 2005 debut of Baidu, China's most-popular search-engine.
LinkedIn, the largest networking website for professionals, and Oakland, CA based Pandora Media, the biggest online-radio company, have both filed to go public since the beginning of the year.
Yin Tihua, a manager at Xunlei, didn't immediately return two calls to his office. Tasha Pelio, a spokeswoman for JPMorgan, and Scott Helfman, a spokesman for Deutsche Bank, declined to comment yesterday.
Technology companies worldwide are turning to IPOs to raise funds. Yandex, a Moscow-based Internet search provider, and Renren.com, the largest social-networking site in China, are planning IPOs this year, people briefed on the proposals said in the past two weeks. Along with Austin, TX-based HomeAway.com and Salt Lake City-based Fusion-io, the offerings may raise about $2 billion.
Google, based in Mountain View, CA, announced its investment in Xunlei in 2007, in partnership with Fidelity Asia Ventures and Ceyuan Ventures as part of its efforts to win share in China, the world's second-largest Internet market.
The Motion Picture Association of America (MPAA), a Washington- based trade group, said in 2008 that its six member studios filed a civil complaint against Xunlei in Shanghai Pudong District Court for enabling copyright infringement of movies including "Spider Man 3."
Report from CEO Marty Lafferty
 As a proud partner of the 2011 NAB Show, the DCIA is pleased to extend this special offer to DCINFO readers. Register today with code TF26 and save $100 on SMART Pass or Conference Flex Pass.
There have been a number of speaker additions for the CONTENT IN THE CLOUD Conference taking place on Monday April 11th at the Las Vegas Convention Center (LVCC) in Las Vegas, NV as part of the NAB Show.
We urge you to make plans now to attend so that you'll be able to explore this rapidly emerging technology that promises to expand the possibilities for realizing the full potential of digital post-production and distribution.
If IPTV or online delivery is in your current or future operating plans, you won't want to miss these eight keynotes and four panel discussions focused on cloud-delivered content and its impact on consumers, television manufacturers, telecom industries, and the media.
Anne-Carole Nourisson, VP of Licensing, Vivendi Mobile Entertainment (VME), will offer our opening keynote address, "Vision for Content in the Cloud." VME is a wholly owned subsidiary of the Vivendi Group, created 3 years ago, and now operating a direct-to-consumer (D2C) digital cloud entertainment service, by subscription, in France and Germany. Under the brand name zaoza, VME provides a selection of music, games, films, and TV series to its subscribers by means of cloud-based delivery.
Anne-Carole's professional background is in international marketing and sales for major brands, including media and entertainment companies, in the off-, on-line, and mobile worlds. She started her marketing career at Unilever, then joined Seagram for Tropicana European HQ division, then UK & Ireland marketing manager before moving into the entertainment industry as Marketing Director of 20th Century Fox Home Entertainment France. She joined the Internet division of Vivendi Universal in 2000.
Jostein Svendsen, CEO, Creaza Videocloud will present our second keynote, "Cloud Vision vs. Technical Reality." Creaza will launch its new cloud-based video service at NAB for the mass market, and for all media sectors. During CONTENT IN THE CLOUD, Jostein will conduct a live demonstration where participants can record and upload videos to a private Videocloud. Jostein will then edit and publish live to the cloud in front of the audience - all of this from within a standard web browser.
Jostein is a true entrepreneur, having established several successful information technology (IT) companies in the last 15 years. He has an extensive background within the high-tech industry in Scandinavia, the US, UK, and UAE. He was the founder of two of Norway's leading multimedia and Internet companies - which later had successful listings on the Stockholm stock market. One of them grew to become one of the largest Internet development agencies with 2,000 employees worldwide.
Our first panel discussion, "The Impact on Consumers of Implementing Cloud Computing for Media Delivery" will feature Stefan Bewley, Director, Altman Vilandrie & Company; Kshitij Kumar, SVP, Mobile Video, Concurrent; Mike West, CTO, GenosTV; Mike Lewis, Founder, Kapost; Tom Mulally, Principal Analyst, Numagic; Guillermo Chialvo, Gerente de Tecnologia, Radio Mitre; Bill Kallman, President & CEO, Scayl; and Jonathan Sasse, SVP of Sales & Marketing, Slacker.
Our third keynote, "Benefits of Cloud-Delivered Content for Consumers: Ubiquity, Cost, Portability Improvements," will be offered by Claude Tolbert, VP, Business Development, BitTorrent.
Claude brings a record of strategy creation and implementation from his work with The Boston Consulting Group and spent nearly a decade in telecommunications and technology with Covad Communications. His responsibilities have included negotiating strategic distribution agreements, M&A transactions, and product development partnerships. Claude received his Bachelor's Degree from Harvard College and earned an MBA from the Stanford Graduate School of Business.
Our fourth keynote, "Drawbacks of Cloud-Delivered Content for Consumers: Privacy, Reliability, Security Issues," will be presented by Jim Burger, Member, Dow Lohnes.
Jim specializes in the representation of technology companies on intellectual property (IP), communications, and government policy matters. He joined the firm's Media, Information and Technologies Group in January, 1997. Before Dow Lohnes, Jim was a Senior Director in Apple Computer's Law Department. He has worked extensively on legal and policy issues arising from the confluence of digital technology, communications, IP protection and government regulation, particularly as affecting digital content, DTV, wireless data, and the Internet.
Our second panel discussion, "The Impact of Cloud Computing on the Consumer Electronics and Telecommunications Industries," will feature Stephen Condon, Director of Market Development, AT&T; Dan Holden, Chief Scientist, Comcast Media Center; Sean Barger, CEO, Equilibrium; Dan Schnapp, Chair, New Media, Ent. & Tech., Hughes Hubbard; Devon Ferreira, Co-Founder, Patriot Digital; Mark Vrieling, CEO, ScreenPlay; Kurt Smith, VP, Sales, Verizon Digital Media Services; and Sean Jennings, VP, Solutions Architecture, Virtustream.
Our fifth keynote, "Benefits of Cloud-Delivered Content to the Consumer Electronics and Telecommunications Industries: Advanced Capabilities, New Features, Cost Advantages," will be offered by Jonathan King, SVP, Business Development, Joyent.
Jonathan leads teams responsible for service provider sales and hardware, software, and system integration alliances. Before Joyent, he was a Client Partner Director with Verizon Business Global Solutions; and before that, led Alliance Development for Totality, a company acquired by Verizon. Jonathan holds a JD from Loyola University Chicago School of Law and is pursuing an LLM in Intellectual Property Law from Washington University.
Our sixth keynote, "Drawbacks of Cloud-Delivered Content for Consumer Electronics and Telecommunications Industries: Infrastructure, Disruption, Accountability Issues," will be presented by James Capps, VP, Systems Engineering & Integrated Technology, Comcast.
Jim oversees a department of over 50 employees and contractors responsible for the innovation and development of products and services for the Comcast Media Center (CMC), its parent company Comcast, and its customers, who include cable MSOs, television programming networks, and other members of the content development and distribution community. His department's most recent activities include developing a Headend Management System (HMS) that enables affiliates to offer advanced services using their existing NAS equipment.
Our third panel, "The Impact on Broadcasters of Cloud Computing Deployment," will feature Scott Ryan, CEO, Asankya; Alexander Marquez, Director, Intel Capital; Devon Copley, Managing Director, Kaltura; Peter Forman, CEO, Kulabyte; Alex Castro, VP & GM, Video Platform Solutions, Limelight Networks; Guy de Beer, CEO, Playcast; David Dudas, VP of Video Solutions, Sorenson Media; and AJ McGowan, CTO, Unicorn Media.
Our seventh keynote, "Benefits of Cloud-Delivered Content to Broadcasters: Efficiency, Control, Flexibility Improvements," will be offered by John Griffin, Director of Connected Electronics, Dolby Laboratories.
As leader of Dolby's connected electronics business, John oversees the management and marketing of Dolby's consumer electronics (CE) product portfolio. He works with a wide range of Dolby customers and partners on home theatre, online, Blu-ray, and connected entertainment products and services. Previously, John served as Dolby's Director of Games marketing. John earned a bachelor's degree in philosophy from the University of Illinois at Urbana-Champaign.
Our eighth keynote, "Drawbacks of Cloud-Delivered Content to Broadcasters: Interoperability, Data Security, Quality of Service (QoS)," will be presented by Scott Brown, GM US, VP Strategic Relations, Octoshape.
Scott joined Octoshape in January of 2009. Prior to this, he ran Content Delivery Services and Media Technology Strategy for Turner Broadcasting. Scott spent 11 years at Turner Broadcasting and AOL focused on media infrastructure development, and high-scale media delivery on the Internet. He holds several streaming media technology patents, and has architected streaming solutions for the largest events on the Internet to date including the coverage of the 2009 Presidential Inauguration with 1.34 MM simultaneous users.
Our closing panel discussion, "The Years Ahead for Cloud Computing Deployment in the Television and Motion Picture Industries," will feature Chuck Stormon, CEO, Attend; Christopher Levy, CEO, BuyDRM; Les Ottolenghi, CEO & Founder, Fuzebox; Geng Lin, CTO, IBM - Cisco Systems Alliance; Randy Simpson, Director, Institute for Defense Analyses; Ramki Sankaranarayanan, CEO, Prime Focus Technologies; Ian Donahue, Co-Founder, RedThorne Media; and Jody Stark, Partner - Media & Entertainment, Verizon Business.
If you haven't already done so, please register now for the NAB Show so you'll be able to attend CONTENT IN THE CLOUD. Share wisely, and take care.
User-Generated Video Views Up 147% in 2010 to 230 Billion
User-generated content (UGC) video sites, networks, channels and brands generated in excess of 230 billion domestic (US) views in 2010, up 146.9% over the previous year. Meanwhile, advertisers stepped up, and waded into market with some $426 million in pre roll ad spend made across the UGC video segment, according to an industry report published by AccuStream Research.
The report, "UGC Video, Library Share Analyses and Pre Roll Media Spend," details the growth and maturation of UGC video from 2005 through 2010, with view forecasts carried out to 2012.
Combined, UGC and pro video views passed the 302 billion mark in 2010. UGC video surpassed pro video views in 2007.
While mainstream advertisers were initially reluctant to buy the segment, media planners have clearly taken notice of the growth in both volume and unique users. The report examines UGC libraries in depth, and breaks out viewing share by content category for major sites.
UGC video channels are fertile content environments predicated on synchronous publishing, sharing and viewing. Consequently UGC video has effectively expanded the scope of content categories, driving more views and increasing pre roll inventory.
Premium content (semi-professional and professional video) is essential for UGC video. Professional video channels deliver sought after content that is tightly integrated into UGC libraries, and an essential component to pre roll ad sales initiatives.
UGC video sites with pre roll advertising include Break.com, Metacafe, Dailymotion, MySpace, Veoh and YouTube, the latter the largest ad network by far.
YouTube's partner channels (semi-pro and pro) now account for the majority of views on the site. Further, an analysis of the site's library shows music is the most popular content category, generating 56% of total views. Based on insertion frequency, music captures the largest sums of pre roll video ad spend on the site.
CPMs across the UGC video segment's 7 billion monthly avails range from low single-digits to $25 or more, depending on placement, content area and depth of the library buy.
AccuStream Research is a publishing, research and consulting firm producing sector reports covering online audio, video, CDN, OVP, Video CMS, Video Ad Networks, video advertising, Mobile Ad Networks, and subscription media stores.
Investors Are Drawn Anew to Digital Music
Excerpted from NY Times Report by Ben Sisario
Since it emerged in the 1990s, digital music has been hugely popular with fans, but for online music companies and their investors it has almost never been profitable. And yet the money has again started pouring in.
Pandora, the popular Internet radio service, filed for an initial public offering in February that would raise $100 million. Spotify, a highly lauded European service, is reportedly raising $100 million from private equity firms to help it come to the United States.
And those are just the big fish. Since the end of last year, at least $57 million in venture capital has gone to digital music start-ups, ending a recent financing drought and setting up an array of young companies like Rdio, SoundCloud and RootMusic in an already crowded marketplace.
The heightened interest in a field that has had few winners and a vast graveyard of losers has left some longtime executives and analysts scratching their heads. Faced with thin margins, persistent piracy and expensive licensing deals from record companies, dozens of digital music start-ups have collapsed over the last decade, taking with them hundreds of millions of dollars in investment money. Even Apple, the largest music retailer, has long maintained that it makes little profit from its iTunes store, which has sold more than 10 billion songs since 2003.
"A number of the investors have not invested in digital music before," said David Pakman, a venture capitalist who is the former chief executive of the download service eMusic. "Usually the ones who have, have learned over the decade that it's an impossibly hard place to make money."
Even more challenging for start-ups, two very big players are expected to introduce cloud-type music services this year: Apple and Google.
But more bullish investors point to technological developments and shifts in consumer behavior as signs that the business is about to turn a corner. These changes include the migration of digital media libraries from personal computers to the remote storage of the "cloud," as well as the explosive success of smartphone applications. Pandora's apps, for example, have been the biggest factor in driving that service to 80 million registered users, up from 46 million a year ago. (A basic, ad-supported service is free; the upgraded version, with no ads and higher-quality audio, is $36 a year.)
"Services like iTunes, Pandora and Spotify have shown that with the right product and the right business model, you can effectively monetize digital music, which is kind of new," said Doug Barry of Selby Ventures, an early Pandora investor. "The last time around it was mostly about file-sharing and limited monetization."
Rdio, which streams music by subscription, was founded by Janus Friis and Niklas Zennstrom, the entrepreneurs behind Skype, and the company recently announced that it had raised $17.5 million, some from the founders' own venture firm, Atomico.
SoundCloud, which distributes user-generated audio content, said in January that it had raised $10 million. Over the last several months Slacker, Songkick, TuneUp, FanBridge, RootMusic and 3G Multimedia have each brought in $2 million to $6 million, according to figures reported by the companies and in the news media.
What most new services do not have yet, however, is a critical mass of paying users, usually defined in the millions. Investors look to the 20 million subscribers at both Netflix and Sirius XM Radio as signs that consumers are willing to pay for streaming content.
Yet those kinds of numbers have remained elusive throughout the history of digital music. Rhapsody, a streaming service begun in 2001, has 750,000 subscribers; eMusic, which sells downloads, has 400,000. Spotify, which has free and paid versions, has 10 million users in Europe, but only 750,000 of them pay (the rate is about $15 a month), a ratio that concerns the record labels.
"Until you get scale, it's just too hard of a business to work," said Tom Andrus, who is on the board of Rhapsody.
In another challenge, Apple announced two weeks ago that it would take a 30 percent cut of subscription fees and other purchases through its App Store, a move that digital-media companies of all kinds have criticized as being too steep.
Many investors say that while the labels' weakened finances have led them to make slightly more friendly deals, they remain tough negotiators. Spotify, for example, recently signed contracts for American distribution with Sony and EMI, but only after more than a year of talks. (Spotify, as well as three of the four major record companies, declined to comment for this article.)
Partly as a way around the record companies, there has been a particular interest among start-ups for services that avoid license negotiations. These include Internet radio - although they still pay royalties set by statute - as well as ancillary businesses like ticketing and concert listings. Yet the focus remains on services that provide music to listeners, and many veterans of the field are skeptical that any of the new models can bring in the revenue to sustain a company.
"People are tantalized by the notion that all music is going to be digital, and that there's a massive global demand that is not being met," said Dave Goldberg, a former general manager of Yahoo Music who is now chief executive of SurveyMonkey, an online survey company. "But I don't know that there's a good solution out there for anybody who's rationally looking at this as an investment."
Pandora's public offering brings some much-needed market glamour to the digital music business. But even some of the bulls caution that despite hope on the horizon, more music start-ups will inevitably end up in the digital graveyard.
"I think it will get overfunded," Mr. Barry said. "At the end of the day there is a limit to how many people will pay a hefty subscription."
"But in that process," he added, "great services will be built."
Gomez: Which Cloud Service Is the Fastest?
Excerpted from Datamation Report by Stuart Johnston
With all the urgency and excitement revolving around cloud computing these days, it's not surprising that differentiating among the various services becomes important -- and one of the top criteria is sure to be performance.
In fact, newly-released "last mile" rankings for December show bitter rivals Microsoft and Google running neck and neck, according to Compuware's Gomez cloud performance tracking service.
For December, Microsoft's Azure beat Google's App Engine by a nose. Azure came in with an average response time of 10.142 seconds sizzling past Google's average of 10.164 seconds.
By running simple daily performance checks on a random subset of some 150,000 PC peers around the world (with the owners' consent), Gomez calculates average response times for loading a pair of simulated web pages on the main cloud services providers. The 15 providers where ranked by response time, which Gomez defines as "the total time elapsed while downloading both Web pages in the multi-step test transaction."
As far as the other players go, Amazon's Elastic Computing Cloud (EC2) came in fifth with a 10.942 second average. GoGrid came in third at 10.468 seconds, while Teklinks held down fourth place with a response time of 10.568 seconds.
"About a year ago, we built a 'reference' site of two pages that is representative of what's out there," said Doug Willoughby, director of cloud strategy for Compuware.
"Any given hour we're running 200 tests," he added. "The clients are selected at random."
Compuware acquired Gomez in October 2009. The Gomez First Mile service was designed to provide performance management to applications in the cloud.
Microsoft and Google have collided in a number of markets, and cloud services is increasingly becoming another battleground. However, it hasn't broken out in open warfare yet, perhaps because cloud computing is still a relatively nascent trend.
Gomez's December rankings are posted on the company's CloudSleuth blog.
A Google spokesperson said the company would have no comment regarding the Gomez figures, because "there is not enough background data to understand how the tests were run."
A Microsoft spokesperson did not immediately respond to a request for comment on the Gomez test.
Send in The Cloud: Amazon Trumps Netflix with Savvy Interactivity
Excerpted from On Media Report by Diane Mermigas
Rapidly evolving content economics is like a tennis match. The ball is in a different court every day. The ultimate winner will generate more revenue per customer in more ways with social marketing, transactions and various layered services.
Despite all the fuss over Netflix, Hulu, and iTunes, the honors could go to cloud-based Amazon. It already leads in bringing those areas together around content and products by thinking outside the silo.
Amazon's profitability is rooted in its savvy use of digital interactivity to integrate every option for simultaneous consumer consumption, access and communication. It already functions as a seamless facilitator in the computing cloud, where it has done business since 2006.
Where Netflix (for now) is winning the short-term battle in streaming media, Amazon is positioned to win the integrated interactive war.
Case in point: CBS finally joined rival broadcast networks, signing on to Netflix. CBS is licensing only classic series no longer in ad-supported prime time or in the first cycle of syndication. That way, it doesn't threaten those two existing revenue streams. (At some point, that kind of juggling may not be possible as digital replaces traditional delivery.)
The next day, Netflix's meteoric stock plummeted on news of intensified streaming video competition from Amazon, which could trump even Apple's controversial new subscription service, as well as cable operators' anywhere offerings.
Although Amazon's streaming video service is less than one-third of Netflix's business, it would be easy for Amazon to match or exceed Netflix's 20,000 streaming titles at less its starting $7.99 monthly subscription price. Amazon just began offering free streaming of about 5,000 titles to its 10 million Prime customers, who pay $79 annually for free two-day shipping on anything anywhere.
Amazon says it has 90,000 movies and TV programs waiting to stream for free, virtually rent for $3.99 or buy for $14.99. The company is nudging into Apple iTunes' territory -- especially when, not if -- it offers streaming apps on Apple's own iPad or Apple TV.
It includes social networking (from community chats to recommendations) which Netflix doesn't have. Even Facebook is trying to leverage its 650 million-plus members into with real-time "American Idol" voting and a foray into television that can bring all the chat and e-commerce that can go with it on mobile-connected as well as in-home HD screens.
Amazon's Prime subscriptions generate about half a billion dollars in annual revenue and could double with this new video streaming push, allowing most of the proceeds to go to licensing choice content from Amazon loyalists.
For Amazon, streaming video (windowed or otherwise) is just one part of a bundled proposition; it is a means to a multifaceted service's end. It is not unlike the impact Amazon's Kindle platform has had on publishing and the $1 billion e-book market of which it has better than 50% share.
Even when Amazon subscribers pay per view, they will be enveloped by interactive functions and services no one -- not even Apple -- can match involving Amazon's well-oiled transaction, social and search infrastructure. The result is maximum returns for consumers and content providers that generally restrict themselves by viewing distribution deals strictly in video terms.
According to one analyst, CBS will be able to generate more revenues per subscriber from its new Netflix arrangement than from retrans fees arrangements with cable system operators, which generally have been heralded as the long-awaited second revenue stream for video producers. Even those retrans arrangements may prove fragile in the future; cloud competitors beat cable operators to the streaming punch with video, so-called "addressable advertising" and marketing transactions they still can't quite get.
Amazon can trump them all because it owns the sweet spot everyone else wants. It already has redefined advertising and marketing by making the search, recommendations and transaction of products individual and personal. It can make the economics work for both content providers and consumers. As I observed in this column two years ago, Amazon's vast, efficient cloud-based services are a springboard to other digital business lines. It is the ultimate digital Trojan horse.
Because Amazon already has well-regarded open, social, recommendation, transaction and storage elements built into its universal dominance, it has the ability to best Netflix and ad-supported Hulu and even Apple.
Google, which has pledged to spend $100 million on content to bring its YouTube into the commercial streaming video fold, provided another stark reminder this week of how ugly, greedy and controlling gatekeepers can get with its new algorithm system. It will make it more difficult for many content aggregators to secure the favored search placement on which their business relies.
One possible outcome from recent events: Amazon could take advantage of Netflix's wildly declining stock price and peaked performance by acquiring it and its subscriber list, since Netflix already heavily relies on Amazon's Web services.
Another possibility: Apple could use its $60 billion in cash to buy Facebook and add an instant social infrastructure to its hardware and content ecosystem to more effectively compete with Amazon.
But Amazon still trumps with the cloud, which is all about the ability to easily access and pay only once for content on any device or platform -- even if means layering in more services, pricing options that take advantage of the direct relationship with consumers.
In a recent report on the subject, Needham analyst Laura Martin cites expert forecasts suggesting more than one-third of the digital universe will be in or around the cloud, half of which will be directly tied to entertainment content. Cloud computing services are expected to generate $15 billion in content-related revenues by 2014.
The business of trying to figure out and capitalize on consumer behavior is not easy; the fast-moving, rough-and-tumble new world of interactive video is not for the faint of heart. The prospects for interactive content economics are becoming more exciting as leadership players like Amazon bring a new sense of relevance and integrated sensibility to the playing field.
Cloud Computing: Microsoft vs. Google
Excerpted from GL Business Journal Report by Phil Deschaine
Until very recently software has been purchased in a box, or through a download, or businesses purchasing license packs. Just about all this software runs on desktops and on-site servers.
Cloud computing changes this model by allowing a business to access computer assets on demand as it needs them, from servers located off premises, which are "in the cloud."
With cloud computing, if you have Internet access, you can also access your applications and files. Cloud computing has become viable in the past few years because of the increase in high-speed Internet access, and the common use of Web browser-based applications. For many people, applications installed on the users' computer and those running on a remote computer accessed through a browser have become almost interchangeable.
Cloud computing is cost effective because multiple companies can share servers and other computing resources, which can reduce costs significantly. Typically, most businesses only utilize at 10 percent of the server's capacity at any given time. The cost savings come when, using pooled servers in the cloud, 10 companies can share the expense of one server.
The cloud is particularly attractive for small and medium businesses, which in many cases cannot justify or afford the large capital expenditure of traditional IT such as hosted e-mail or a hosted collaboration/intranet tool like SharePoint. These small businesses can make the switch to the cloud more easily as they are both more flexible and they have less existing infrastructure and therefore less inertia to overcome in order to make the move.
Another persuasive reason for a business to consider moving to the cloud for IT services is that, like your electric or gas utility, users pay only for what computing resources they need, only when they need it.
Small businesses today are heavily invested in Microsoft technologies. For example Windows Operating Systems, Microsoft Office Suite and Windows Server are found in the vast majority of businesses in the United States and abroad. So, it is somewhat surprising to find that Microsoft is encouraging companies to move existing IT resources off their existing "grounded" infrastructure and move into the cloud.
To understand why Microsoft is today becoming a leading proponent and provider of cloud services one has to look back to 1995. Microsoft launched Windows 95 and Office 95 and seemed to have a lock on virtually all the software running on small business desktops. That grip turned out to be rather weak, when in the late '90s, the Internet, the Netscape browser, and Google searches changed how we use computers. It took Microsoft several years to catch up and redefine itself in the Internet-based computing world we have today. Along the way Microsoft has found it has a formidable competitor in Google, Inc.
Six years ago, Google launched Gmail and it has led to the acceptance of Web-based e-mail even in business environments. Google followed this up with Google Apps, a suite of Web-based applications including word processing, spreadsheets, calendaring and more. Today, many businesses are asking if they should continue with the Microsoft Office/Exchange infrastructure or move to Google Apps Premier and Gmail. With its inexpensive cost of $50 a year and universal availability, many companies are adopting Google cloud computing as an alternative to Microsoft.
In order to stem the loss of its Office market share to Google, Microsoft is attempting to again reposition itself, this time as a cloud-based provider of online software and IT infrastructure.
Microsoft is not new to the cloud. It launched Hotmail in 1996 and in 2005 launched Windows Live, a hybrid of client and cloud-based applications. Microsoft's next cloud move was to launch Microsoft Office Live, a Web-based set of tools for online storage, file sharing, Web site design and hosting. These tools were designed to work with conventional, desktop-installed Microsoft Office, but could also be used separately.
In 2010, Microsoft took a bold step into the cloud with its Business Productivity Online Suite (BPOS). At its core, BPOS provides a company with an enterprise-class, cloud-based messaging and collaboration platform without having to make substantial investments in servers and licensing software.
BPOS consists of four components: 1. Exchange Online with 25GB of e-mail storage for each user; 2. SharePoint Online for company document management, information sharing and team collaboration; 3. Office Live Meeting for PC audio and video conferencing and screen sharing; and 4. Office Communicator Online for secure instant messaging and online presence
There is nothing quite like BPOS in the market today. It allows a small business to make use of the powerful features of Exchange, SharePoint and Live Meeting without having to make large upfront capital investments in servers and software. Microsoft is offering BPOS for $10 a month for each user.
With Microsoft offering this much computing infrastructure for $120 a user per year, the company clearly intends to challenge Google's early lead into the cloud. Sometime in 2011, Microsoft will bring together BPOS and Office Professional into a unified product called Office 365.
Both Google and Microsoft are targeting their cloud offerings at businesses concerned with reducing IT overhead while simultaneously increasing employee productivity.
While boxed or downloaded software may not be dead, clearly things are changing again in the world of computing. With its new cloud computing push, Microsoft is offering businesses enterprise-quality services at a fraction of the cost of purchasing and hosting it themselves.
Meanwhile, Google continues to offer business enterprises its cloud-based Gmail and Google Apps Premier Edition for about half the cost of BPOS.
This competition for the cloud between Google and Microsoft will likely benefit businesses, as prices are expected to stay low while the range of cloud services are expected to expand. Moving your company's IT infrastructure to the cloud may save money and make business more productive than it is today, with grounded servers and software.
Top Issues Related to Cloud
Excerpted from Financial Times Report by Tom DeGamo
All the hype that cloud computing has got over the past few years tends to push business leaders into one of two camps: those who love the simplicity and convenience of Software-as-a-Service (SaaS) offerings, like those supporting sales force automation (let's put everything in the cloud!) and those who do not believe the false promises from vendors and think cloud computing is not ready for enterprise-class security and business continuity requirements.
The truth, as usual, is somewhere in between, and the most rewarding adoption patterns will vary considerably depending on the market and competitive situation individual enterprises are dealing with.
The list below offers a set of issues many enterprises are discovering as they engage with cloud computing. We recommend senior leaders spend a little time "in front of the mirror" and make sure they have not fallen prey to them.
1) Thinking cloud computing is only about public cloud services, or only about transforming internal IT into private clouds.
All the great stories about companies taking advantage of public cloud services leads some enterprises to think the cloud computing opportunity is only about external service providers. But much of the medium term value to be harvested from clouds will come from transforming internal IT by emulating the style of computing defined by these types of external services.
This requires a deep appreciation for their differences in architecture, technologies, processes, and differentiating roles for IT staff. In other words, by creating private clouds. But putting all your efforts into private clouds ignores the real value that can be found from the on-demand, limitless capacity of public cloud services and the instant-on availability of applications.
The best use of cloud computing is derived by adopting an integrated model, one that transforms internal data centers into private clouds and makes use of external clouds where their value proposition is distinctive.
2) Not anticipating the new challenges created by integrated clouds.
Acknowledging the disruptive opportunity of the integrated cloud model is only the start. Companies that adopt the technologies and external cloud services willy nilly end up recreating a complexity and maintenance challenge that defeats two of the biggest paybacks from cloud investments: business agility and business alignment.
Virtualization technologies, for example, have already recreated "server sprawl" in its virtual form in situations where staff are able to request new instances of virtual servers without guidance from IT policies or "cleanup" systems in place.
Enterprises also need to anticipate the scalability and security challenges of systems integration in cloud environments and the impact that rapid introduction of new metadata from SaaS vendors will have on data management in integrated cloud computing environments.
3) Moving forward without a strategy.
Many companies already have elements of this emerging integrated cloud model in place; they use server and storage virtualization, they have partially automated the management of the data center and they use SaaS offerings. Few companies have laid out a vision and strategy for moving to a defined future of integrated clouds. A leading practice is to use a cloud maturity framework so you can proceed logically from assessment of current state to realization of desired future state.
This includes important delineations of the core component parts of this future state. PwC has established a conceptual model of exactly this architecture comprising 7 categories of technology types. By establishing this reference architecture it is possible to define your road map, avoid wasteful spending on solutions that promise "instant clouds" but introduce proprietary technologies that will not fit into the architecture, and establish an order for what comes first.
Without a strategic plan of this type it is not obvious whether an individual decision to use a service or technology will get you closer to real benefits of cloud computing - agility and business alignment.
4) Failure to recognize the transformative value of cloud to the business - cloud computing is not just a better way to deliver IT.
The openness and architecture of cloud infrastructure establishes a disruptively powerful business collaboration platform that empowers companies to deeply integrate their business processes with partners.
We see this already with Web-centric businesses, such as those in retail and hospitality industries. Without leaving, say, a convention Website, customers can make restaurant reservations or purchase tickets to events.
The user has an integrated experience even though the convention, restaurant, and ticket service providers are separate companies. And traditional "bricks and mortar" companies, such as those in financial services, are unbundling functions like risk exposure management that were formerly parts of an integrated offerings and making them available in the cloud as "e-services."
As a result cloud is positioned to transform how we integrate and communicate between businesses. However cloud puts new demands on strategy and governance with its agile applications and infrastructure, far more so than previous generations of IT.
Although ERP and CRM have had major impacts on the enterprise the focus has been almost entirely on internal processes. Cloud moves that focus to external business collaboration and integration.
Coming Events of Interest
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.
NAB Show - April 9th-14th in Las Vegas, NV. For more than 85 years, the NAB Show has been the essential destination for "broader-casting" professionals who share a passion for bringing content to life on any platform - even if they have to invent it. From creation to consumption, this is the place where possibilities become realities.
CONTENT IN THE CLOUD at NAB - April 11th in Las Vegas, NV. What are the latest cloud computing offerings that will have the greatest impact on the broadcasting industry? How is cloud computing being harnessed to benefit the digital distribution of television programs, movies, music, and games?
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.
Cloud Computing Asia - May 30th - June 2nd in Singapore. Cloud services are gaining popularity among information IT users, allowing them to access applications, platforms, storage and whole segments of infrastructure over a public or private network.CCA showcases cloud-computing products and services. Learn from top industry analysts, successful cloud customers, and cloud computing experts.
Cloud Expo 2011 - June 6th-9th in New York, NY. Cloud Expo is returning to New York with more than 7,000 delegates and over 200 sponsors and exhibitors. "Cloud" has become synonymous with "computing" and "software" in two short years. Cloud Expo is the new PC Expo, Comdex, and InternetWorld of our decade.
|
