May 30, 2011
Volume XXXV, Issue 4
Major IPTV Adoption Means $27 Billion Revenues By 2014
Excerpted from Media Daily News Report by Wayne Friedman
Worldwide Internet protocol television (IPTV) video providers will continue to see big growth results - as opposed to older cable and satellite TV providers, which have been slowing down.
Subscriptions from IPTV-based companies - including telco companies - will almost double in three years to 70 million from 30 million at the end of 2010, according to SNL Kagan.
Keys to the medium's growth will be IPTV video-on-demand (VoD) service, as well as a continued push by both video programming retailers and TV networks for TV Everywhere deals, which IPTV companies can benefit from with consumer authentication.
SNL Kagan says there has been a big IPTV adoption rate over the past six years - a 92.4% compound annual growth rate.
Western Europe continues as the biggest IPTV market and will hit 26.7 million homes by 2014. China is next, rising to 12.4 million subscribers by 2014. The US and Latin America are the third-largest territories, respectively.
IPTV video service revenues will more than double in three years - growing to $27 billion in 2014 from $12.9 billion in 2010. This will make up a 11% share of all global subscription-TV revenues; in 2010 it was at a 6% share. Five telco operators accounted for 44.3% of the global IPTV subscriber base at year-end 2010.
"Although IPTV presently accounts for just 6% of the world's pay-TV subscribers, the platform is fueling hyper-competition and video service innovation in major markets globally," stated Julija Jurkevic, Media and Communications Analyst at SNL Kagan.
"Telcos often provide the spark igniting consumer interest in multi-screen services, HD, and VoD," she adds, "generating parallel support for investment in next generation broadband networks."
Marketing Industry Migrating to the Cloud
Excerpted from CRM Magazine Report by Brittany Farb
IBM announced this week that it is seeing a growing adoption of IBM cloud services with a variety of its clients venturing into its enterprise marketing management services. IBM's Global CIO Survey showed that 60% of chief information officers (CIOs) are preparing for cloud computing, which is double the interest level of two years ago.
"Companies are migrating to the cloud," observes Michelle Eichner, Product Management Leader for IBM's Enterprise Marketing Management Group. "It really helps open up the opportunity for companies to take advantage of what they wouldn't otherwise consider."
Eichner believes cloud solutions "save money and are more efficient. Essentially every business could take advantage of it," she says. "The marketing community can go out and make decisions, sometimes without the IT department, and I think that's a plus because they can go out and purchase on-demand products that fit their needs without necessarily having to worry about other departments as well."
The study credits the growth in cloud computing's popularity to its ability to "control costs, provide widespread and easy access across geographics, and to house large amounts of data at low cost."
With the growing popularity of the cloud across the marketplace, privacy has been a recurring concern. Eichner acknowledges that some worries are in fact justified. "Certain things could potentially occur or there could be a little bit more risk when you've got the cloud as opposed to having things on premises," she says.
Despite the concerns, IBM plans to spend $20 billion in the next several years in acquisitions, according to Eichner. "From the company's perspective, it broadens our offering so somebody doesn't have to take something on-premises and gives them the flexibility to utilize software that they wouldn't otherwise have to purchase hardware for and have resources for," she explains.
IBM E-mail Optimization solutions already enable marketers to determine the kind of e-mail clients their customers are using, understand who is forwarding messages, and create more channels of engagements across platforms and campaigns.
"IBM's E-mail Optimization tools are helping us ensure every e-mail we send is optimized to provide our clients with a consistent, properly formatted e-mail experience, regardless of their ISP or platform," said Sammar Faraj, E-mail Marketing Team Leader at Quicken Loans. "In addition, delivery monitoring tools assure us that our e-mails are reaching our recipients' inboxes, and not being bulked or blocked, which is critical to our continued e-mail marketing success."
Report from CEO Marty Lafferty
 On June 17th, more than 500 of the most influential decision-makers in the media, entertainment, and technology industries will gather at the brand new Renaissance Arlington Capital View Hotel near Washington, DC for the 8th Annual Digital Media Conference (DMC).
This year's conference will have six tracks addressing the latest trends affecting mobile, social media, television/video, marketing/advertising, law and policy, and digital media.
There will be twenty panels, three keynotes, and multiple networking opportunities. The DCIA is honored to be working with event organizer Digital Media Wire to present a very special CONTENT IN THE CLOUD session at DMC.
CONTENT IN THE CLOUD will examine issues now affecting the adoption of technology solutions based on cloud computing for processing, storage, distribution, monetization, and analytics associated with high-value entertainment content delivery over public and private broadband networks.
As part of both the Digital Media and Law & Policy Tracks, CONTENT IN THE CLOUD will explore both the leading business issues and key legal considerations related to cloud computing solutions for content distribution.
Featured speakers will include Stefan Bewley, Director at Altman Vilandrie & Company; David Dudas, Vice President of Product Management at Sorenson Media; Sean Jennings, Vice President of Solutions Architecture at Virtustream; Jonathan King, Senior Vice President of Business Development at Joyent; Kshitij Kumar, Senior Vice President of Mobile Video at Concurrent; Kurt Smith, Group Vice President of Sales for Verizon Digital Media Services (VDMS); David Steinberg, CEO of SnappCloud; and Mike West, Chief Technology Officer and Co-Founder of GenosTV and the Genos Corporation.
Stefan Bewley is Director at Altman Vilandrie & Company, a boutique strategy consulting firm focused on the communications, media, and technology sectors. He primarily advises clients in business strategy, marketing plans, investment due diligence, operations optimization, and technology decisions. Stefan's recent client engagements include work for executives and investors focused on cloud computing, content distribution networks, and network-based business applications.
David Dudas is Vice President of Product Management at Sorenson Media, where he is responsible for defining and executing the online and desktop product strategies. He has more than 15 years experience developing consumer and enterprise product lines, including expertise in hosted digital media platforms and software-as-a-service (SaaS). Prior to Sorenson Media, David was Co-Founder and CTO at Eyespot, which launched the world's first web-browser-based video editing application, filed for five patents, and won numerous industry awards.
Sean Jennings is Vice President of Solutions Architecture at Virtustream. Sean has over 20 years of experience enabling commercial and government enterprises of all sizes gain efficiencies and competitive advantage through the design and deployment of creative, forward looking IT solutions. At Virtustream, he is focused on initiatives around virtualization and cloud computing and the ongoing architecture of the xStream platform and the integrated suite of software tools and professional services associated with it.
Kshitij Kumar is Senior Vice President of Mobile Video at Concurrent. Acquired by Concurrent in 2010, TellyTopia, where Kshitij served as CEO, was a visionary start-up bringing online content to the cable TV and broadcasting industries. Truly a multinational executive, Kshitij previously held leadership, business, and software development positions at C-COR and Lantern Communications in the USA, Lantern Canada, Nortel Networks in Canada, and C-DoT in India.
Kurt Smith is Group Vice President of Sales for Verizon Digital Media Services (VDMS), overseeing the division's client acquisition, globally. Kurt's organization consists of worldwide sales professionals including industry partners and architects, all with vertical expertise. In his previous position as Senior Manager of Business Development within Deloitte Consulting's Media and Entertainment practice, Kurt was responsible for delivering strategic sales and support for Deloitte's largest media customers throughout North America.
David Steinberg is the CEO of SnappCloud. SnappCloud is a "cloud and app broker" that delivers distribution to thousands of cloud services and app developers through large PC and platform OEMs. David has over 30 years of high technology leadership experience in sales, operations, technology and executive management. He is a leader in cloud and app marketing and sales; most recently, he was CEO of one of the most successful cloud companies through its founding and sale to Symantec for $124 million in 2008.
Mike West is the Chief Technology Officer and Co-Founder of GenosTV and the Genos Corporation. He is a graduate of The University of Cambridge in the United Kingdom, holding Masters and Bachelors degrees in Electrical and Natural Sciences. He has 25 US patents issued with several more in process, plus numerous other inventions and publications. Mike held a broad range of technical leadership positions in engineering, architecture, R&D, strategy, business development and client consulting during 28 years at IBM, both in the UK and the US.
In addition to CONTENT IN THE CLOUD - featured on both the Digital Media and Law & Policy Tracks, DMC will feature Research Presentations - top digital media trends; Investing in Digital Media - VCs speak; What's Next in Mobile Apps; Social TV - the conversation is now; The State of Online Advertising; and many additional valuable sessions.
To register now at a discounted rate, please click here. Share wisely, and take care.
Vudu Getting Its Own Button on Vizio Remotes
Excerpted from Digital Trends Report by Geoff Duncan
Earlier this year, streaming video service and DVD rental outfit Netflix made a few eyes roll announcing deals that have consumer electronics manufacturers putting dedicated Netflix buttons on their remote controls.
Now competing service Vudu is following suit, announcing that top consumer electronic brands including Vizio - will be adding Vudu buttons to the remote controls of selected HDTVs, media players, and Blu-ray players.
The deal will give the Wal-Mart-owned Vudu more exposure in the marketplace and - if the image of a Vudu button they're distributing is to be believed - will put Vudu right next to Netflix in consumers' hands.
Vudu currently offers customers access to more than 20,000 movies, including new releases as well as catalog titles and independent films. Vudu rentals start at $2 for two nights and don't involve any subscription fees; Vudu also likes customers to know its catalog doesn't have the same 28-day delay Netflix often experiences making new releases available.
The Vudu button will first appear on a range of Vizio HDTVs, 3DTVs, and Blu-ray players. The company hasn't offered any information on when the new Vudu-equipped remotes will be reaching consumers.
AETN Sits on Brightcove App Cloud
Excerpted from Multichannel News Report by Todd Spangler
A&E Television Networks (AETN) is using a beta version of Brightcove's App Cloud, a development tool designed to streamline building applications for different device platforms, to manage apps for several current shows and plans to use it for next season's crop as well.
The App Cloud product represents a new line of business for Brightcove, which has been focused on online video since its 2004 founding. The company announced that its video-management platform will now be called Video Cloud.
Brightcove's App Cloud lets developers create native apps and sites for Apple iOS and Google Android smart-phones and tablets. The tool combines an HTML5-based development model for cross-platform compilation, automated app distribution, analytics, advertising, and connectors for accessing "cloud" services.
AETN used App Cloud to create iOS and Android apps for shows including Lifetime's "Army Wives" and "One Born Every Minute." The programmer can continuously update the apps with content, including video previews and clips, photo galleries, schedule information, tweets and sharing on social networks.
Brightcove expects App Cloud to become commercially available in the second half of 2011. The product is currently in private beta for approved customers and partners.
"Delivering content apps across fragmented devices forces media publishers to choose between redundant one-off app development and cookie-cutter templates," Brightcove Chairman and CEO Jeremy Allaire said. "With App Cloud, Brightcove cloud content services offer unprecedented choice, control and efficiency for initiatives spanning online video, native apps and touch websites."
App Cloud automatically generates compiled Apple iOS and Google Android native apps and HTML5 Web experiences for touchscreen-based devices. Developers use HTML5, CSS3, JavaScript, and the App Cloud software development kit to create templates reflecting the desired functionality.
Cambridge, MA based Brightcove, founded in 2004, counts more than 3,000 customers in 50 countries for its video-management system.
Broadcast Networks: Survival Means Mastering Multi-Rev Streams
Excerpted from On Media Report by Diane Mermigas
As the broadcast networks look to generate more than $9 billion in advertising commitments from their new prime-time schedules, even though a vast majority of new programs will fail, their overall value proposition is being marginalized by a deluge of broadband video options relying on less risky economics.
Betting on eyeballs, advertising and content at a specific place and time just doesn't carry the same cache when the value of video is incessantly controlled by a slew of unlikely competitors and empowered consumers.
It's a potent reminder that networks' futures must increasingly depend on fee-based revenues enjoyed by cable and other dramatic changes to their business model.
A new Morgan Stanley report provides a compelling overview of the multiple revenue stream and screen options broadcast networks must master to survive, even as ABC, NBC, CBS and FOX engage Madison Avenue in their tireless upfront ritual.
Broadband-delivered video has created a boom in on-demand viewing, which represents a key economic shift that will upset the linear ecosystem - from first-run ad-supported broadcast to international licensing, domestic syndication to TV home video - that drives 75% of broadcast network prime-time TV revenue.
The growing ubiquity of the high-speed Internet and its interface with the traditionally passive television will rapidly render a new generation of "Me-too TV" streaming video entrants with an edge: They will repackage exiting on-demand and linear content, and pair it with search and discovery tools and lower price points.
With Netflix demonstrating how quickly this new phenomenon can take hold, the broadcast networks could quickly go into a tailspin trying to keep up with the new rules of play for a TV ecosystem turned inside out.
By decade's end, they will be glorified content aggregators competing with emerging rivals, such as Netflix, Google's YouTube, Apple's iTunes and Amazon, to produce, buy and distribute video across all screens and devices.
These new entrants will drive up the ultimate cost of content (think Netflix paying $1 million per episode for "Mad Men" episodes) which will be passed along to cable and satellite operators. Those operators will be forced to maximize "TV everywhere and anywhere" options, just to broaden their revenue base - en route, muting all the fuss over cord-cutting.
The broadcast networks will become less viable for their general branded scheduled platforms and more for their TV studios, which will function as content factories for competing players with deeper pockets and more agile mechanics. That new dynamic could ultimately give the broadcast network companies an edge over their cable network counterparts as major suppliers to on-demand viewing that reaches beyond cable and satellite to more pervasive Internet and cloud distribution.
That's when things get really interesting.
Here are some of Morgan Stanley media analyst Benjamin Swinburne's more intriguing scenarios and assumptions:
By allowing viewers to increasingly watch what they want, whenever and wherever, technology better aligns audience/value to revenue. The trend favors broadcast networks and their TV studio businesses, while threatening the margins of cable networks with "low barrier-to-entry" programming.
Broadcast TV programming is gaining a greater share of the digital video pie by reaching beyond conventional ad revenues to generate incremental dollars from retrans fees and new payments from "an explosion of new broadband video aggregators or "networks," such as Netflix. Even more lucrative is the live sports content the broadcast TV networks exclusively provide to passionate audiences, commanding premium subscriber fees and advertiser rates.
The growing adoption of Internet video will increase time-shifted viewing, which will reduce TV ad inventory, Swinburne contents. By 2015, roughly half of TV revenue will be generated by reoccurring subscription fees and syndication sales taking share from advertising, he estimates. So much for the notion of "free TV."
Even as retrans fees and the growing syndicated fees "help the broadcast model power through this trend," ad-supported cable networks that lack sufficient audience reach could face some revenue pressures. For instance, direct-response advertisers that can comprise 15% of total ad spend on a network generally favor ROI and frequency (rather than reach and content), which is effectively delivered by on-demand video options.
Because the broadcast networks "under-monetize their audiences," while controlling costs and reaping profits from the content produced by their TV studios, they potentially have more to gain from these changing industry dynamics - as long as they are willing to substantially alter their business model.
Their TV studios will benefit so long as they "price their content appropriately by forgetting about traditional time-based windows" - namely their celebrated prime-time schedules. In an ironic twist, some cable networks will become threatened by the rising cost of original program production and acquisition, which was once a demon of broadcast networks. Swinburne estimates that incremental earnings margins for US cable networks will decline, falling below last decade's average due largely to rising program costs.
The report essentially glosses over the most problematic obstacle to television's brave new world: the nagging absence of accurate, one-to-one audience measurement as a way to realign the broadcasters' value proposition and set the standard for all broadband video. Nielsen's complex iterations for TV viewing on extra days and time-shifted platforms have little to do with online consumption. They are based on estimates in a digital world in which refined technology defies guesses.
Why no company or individual has been able to more adeptly crack the measurement code is disturbing and mindboggling. The video future Swinburne describes, as well as the reinvention of the broadcast TV networks, depends on it.
In a year when cable TV networks are collectively expected to match their broadcast TV network counterparts in upfront ad commitments, the Big 4 are acutely aware of the need to rewrite their playbook, even as they defend their diminished critical mass. One thing is certain: Straddling the old and the new worlds will not be an option for much longer.
Apple Nears Cloud Music Service with Label Deals
Excerpted from Reuters Report by Yinka Adegoke
Apple is close to launching an online music storage and streaming service after reaching deals with three of the four major labels and is expected to wrap up the fourth in a few days, according to several people familiar the plans.
The iPhone and iPad maker completed work on the new service a while back, according to two people, and will beat Google and Amazon in the bid to launch a comprehensive cloud music service. The iTunes cloud-based service will offer users the ability to buy, store, and stream favorite songs and albums wherever they have an Internet connection on any device.
Warner Music Group Corp was the first to reach a cloud deal with Apple more than two weeks ago and was followed by EMI Group and Sony Corp's Sony Music Entertainment more recently, according to three people with knowledge of the talks. Vivendi SA's Universal Music Group, the largest music company in the world, is "within days of putting pen to paper on the new cloud service," said a fourth person.
Spokespeople for Apple and the labels all declined to comment.
The big technology companies are vying to be leaders in new ways for fans to access songs and videos. As the sales of physical media such CDs and DVDs fall rapidly, the tech giants are betting they can sell media subscriptions, software, and innovative devices linked to these services.
While Amazon is the leading e-reader maker, Apple and Google are competing on mobile platforms for smart-phones and tablet devices.
Apple has discussed plans for a cloud-based iTunes service on and off over the last year with the labels. It stepped up negotiations recently, according to these people. It is now expected that Apple will likely be in a position to announce its cloud music plans in time for the Apple Worldwide Developers Conference on June 6th.
Steve Jobs, Apple's founder, has in the past unveiled products, including the iPhone 4, at the WWDC.
There is a chance the new music service could be ready to launch by June 6th, but it would also need deals with song publishers. Apple has opened talks with some publishers, according to two people.
Amazon and Google launched music locker services in the past few weeks without new licensing agreements, leading to threats of legal action from some music companies. At the time, Amazon argued its Cloud Drive service does not need licenses and said uploaded music belongs to the users, something the labels dispute.
Facebook Partners with Spotify
Excerpted from Around the Net Report
Facebook has reportedly partnered with cloud-based music-streaming service Spotify for a new offering, which could debut in as little as two weeks. "The integrated service is currently going through testing, but when launched, Facebook users will see a Spotify icon appear on the left side of their newsfeed, along with the usual icons for photos and events," reports Forbes, citing sources.
"The benefit to the industry would come via monthly subscriptions for premium access to streaming websites or from buying CDs or downloads of the music they discover and assemble on sites like Spotify," according to Reuters, which was filled about the deal by Spotify board member and Facebook friend Sean Parker.
Should Apple be preparing to wave a white flag? Not at all, insists All Things Digital. "If Facebook and Spotify do deepen their relationship, it will be a nice feature for Facebook and a nice promotional outlet for Spotify," it writes. "But it will still be the same service: A limited amount of free music, and the option to upgrade to a paid subscription."
What's more, as Digital Trends writes, "If the two companies do announce a partnership, the service can only be rolled out in the countries where Spotify already has deals with music companies," i.e., not the United States. "Spotify is, however, planning to launch in the US, possibly this year, though no date has yet been fixed."
"Our sources are pouring ice cold water on the idea," TechCrunch writes of the would-be deal. "Even through Spotify is doing very well on its home turf of Sweden, it has yet to launch in the US. And a launch in the next two weeks looks highly optimistic. Citing sources, TechCrunch adds: "Spotify has in fact secured two big unnamed record labels - but needs two more labels to come on board before it can launch in the US."
Miro 4 Allows for Torrenting, Video & Music Syncing, Podcasting
Excerpted from Android Police Report by Matt Demers
Miro is an open-sourced, free solution to your media problems with Android. It's touted as an all-in-one solution, and with its feature list, I'm not about to disagree. It offers a media player, BitTorrent client, video encoder, music store and device sync component all wrapped up in a single program, which covers some of the problems Android has run into without its own downloadable client.
With your phone connected to your computer, you can use Miro to sync music and video to your phone. It maintains a library by scanning folders, and can even import your current iTunes library on first load. This is a welcome feature, as it eliminates the hassle of re-tagging all your music, in case it wasn't perfect before.
While Miro doesn't have wireless syncing options like its main alternative, DoubleTwist, features like the ability to convert video into Android-compatible formats and podcast support definitely keep it attractive.
I had a chance to play around with the program, and it definitely made syncing music a little easier than managing them in your OS' file explorer; I don't keep nearly enough music on my SD card (or change it often enough) to make Miro a daily use for me, but for people who don't have a secondary music player, this service is likely invaluable.
Miro also allows you to import video feeds via RSS, which makes it an efficient way to keep on top of YouTube (and other) feeds. You can download flash videos instantly (if it's in the compatible format) using the program's search engine, as well.
It features links to the Amazon Music Store, App Store, and Google Android Market as part of a built-in browser; this allows for further purchasing in-app, giving you the complete package from within Miro.
Miro is a free download from the company's website, and doesn't require an app installed on your phone to function: just plug it in and go.
Cloud Computing and the 10X Effect
Excerpted from GigaOM Report By Marten Mickos
In the IT industry, technology and the usage evolves faster than in perhaps any other industry. As a rule of thumb, systems can grow 10 times under their current architecture or paradigm, then they must be re-architected. This 10X effect causes old technologies to become obsolete and new ones to emerge. It also underlies the massive shift to cloud computing.
The last major computing infrastructure paradigm shift happened in the '80s when "client/server" was introduced as the new way to design business applications. Those applications typically ran on x86 computers - aka PCs.
Then, in the '90s, the "client" part of this overall design was disrupted and changed with the advent of the Internet. Instead of having applications running on a desktop PC accessing application servers on other PCs, we started accessing applications through web browsers which did little more than rendering on your own desktop or laptop computer. Now, 10-15 years later, we're seeing the "server" side of client/server disrupted and replaced by cloud computing.
The underlying driver of these changes is the 10X effect - writ large. The early Internet had around 10 million users. Today we have on the order of one billion users (100X) on the Internet, and up to three billion if you count Internet-enabled mobile phones too. Whereas in the early days of the Internet, there were perhaps one million websites, today we have about 100 million active websites (100X). The total number of Internet connected devices is today around five billion (a 100X growth from about a decade ago), and the boldest predictions say that in the next few years this number will grow to a trillion! That's 200X the current number.
These massive growth numbers, stepping up two or three orders of magnitude in about a decade, are forcing us to look for a new way to design our IT systems. The old architecture is completely unable to handle the new compute load, so we must re-architect the systems on all levels. Cloud computing is the new architecture.
Cloud computing is a term that reaches from the lowest piece of computer hardware all the way up to the highest level of web and mobile services. Google's search is a cloud service. Salesforce.com is a cloud company. Apple's iTunes is music and entertainment in the cloud. Amazon Web Services is cloud computing, as is Microsoft's Azure. Cloudera, RightScale, and Eucalyptus are innovators of infrastructure software for the cloud. The modern servers produced by Dell and HP are made for cloud computing, as are the new storage solutions from giants like EMC and NetApp and from newer players such as Fusion-io.
Whereas in current IT systems, computers and other resources are hardwired to serve just one specific set of users or set of applications, cloud computing lets any computer serve any need of any user. Computers are finally learning from the Three Musketeers: one for all and all for one.
Interestingly, the converse can be true as well in the cloud. When usage shoots through the roof (think of a mobile game that suddenly becomes popular), all cloud computers can be put to the use of one single application. Compute resources such as servers, storage devices, and network equipment, can be called to duty and sent back on leave in an instance. This is called "elasticity."
The "one for all and all for one" principle is possible because computer and software engineers have made sure that compute resources are fungible, i.e. mutually replaceable. You'd think engineers would have made this possible decades ago, but this has been a very hard nut to crack. It requires new thinking so new products (both software and hardware) are ready to operate across multiple computers from the start. This may sound like a natural thing to do, but so far in our history of computing, most software and hardware products were designed to function on their own with little interaction with other similar products.
Fungible compute resources that produce enormous elasticity are the only way to serve the growing Internet. When we reach the point of having one trillion connected devices, those connected devices all need service from the underlying computer network, but they do so at unpredictable times and with unpredictable workloads. It's totally impossible to have servers devoted to certain uses - sitting there idly waiting for the user or the application to need them. Such a model would require close to a trillion servers. But with cloud computing, resources can be shared across the cloud, and a much smaller number of servers can successfully serve the fluctuating needs of the users and the connected devices. With fewer servers, we save time, money, and energy.
As compute loads grow 10 times, 100 times and even 1,000 times, we need new architectures for our IT systems. In cloud computing, it is all about creating elasticity by making the compute resources fungible. When any computer can step in at any time to do any computation needed, scaling will no longer be an issue.
Start-Ups Needed for Cloud Computing Gray Areas
Excerpted from Business Insider Report by Martin Zwilling
Cloud computing is still all the rage in the business world these days. Yet I find that most business people don't understand and fully trust it, and I defy even the technologists to define it in ten words or less for business people. Many say it's just marketing hype applied to old principles that have been around for a long time.
A typical definition (from Wikipedia) is that "cloud computing, is Internet-based computing, whereby shared resources, software, and information are provided to computers and other devices on-demand, like a public utility." That's about 25 words which I'm certain doesn't paint a very precise picture to the entrepreneurs I know.
Putting aside the acronyms and technical jargon, I think I can distill the essence of the cloud computing vision to the following five key points:
1. Buy service from a central utility, rather than buy assets. Now you can pay for a metered service delivering compute power, data, and storage, based on your business demand, through the Internet. No need to buy and manage these as assets. This is a great cost leveling advantage to businesses, which used to be called time sharing.
2. Maintenance and support are provider responsibilities. Small companies no longer need an IT staff, with the inherent costs and management responsibilities. That allows them to focus on their core competencies, reduce overall costs, and be more agile in responding to market changes.
3. Access to new services and data is instantly global. Employees don't need to come to an office to do their job, and customers don't need special software installed access a new application. International standards and localizations are assumed from the beginning, rather than added much later.
4. Availability is 24/7, just like your electric utility. No more down time on weekends, or during the nightly backups. The Internet is a huge power grid that services computing needs (cloud computing) of businesses and consumers, just like the electricity grid services power needs (cloud power).
5. Easy integration of customized applications. People have traditionally bought their own computers simply to provide a common platform where all their applications could talk to each other, even though customized, and share data. The cloud provides these transformations with security and integrity.
Make no mistake about it, these are the dreams, not the reality today. Even the pundits agree that cloud computing is still for "early adopters," meaning it's not all there yet. Many people can quote cloud computing successes, like businesses using Amazon Web Services for huge scaling, or failures, like the Google App Service major outage a while back.
Other gray areas include how to do secure credit card transactions in the cloud, tax considerations for international operations, multiple virtual machines in one cloud, and properly addressing differing geographic regional requirements in a single cloud. Then there is the connection problem of sharing data with standard applications not in the cloud.
When a vendor starts talking about his paradigm shift to a dynamically scalable and virtualized solution in the cloud, with software-as-a-service (SaaS), platform-as-a-service (PaaS), managed service provider (MSP), or web services in the cloud, tell him to show you how well he does on the five points above.
Even though "the cloud" is a familiar cliche for the Internet, cloud computing is still very much an opportunity for start-ups, with lots of room for innovation and better solutions. Now is the time to jump on board, but a cloud usually means you should expect a few storms ahead before you see the sunshine.
FCC Calls Out US Broadband Lack Again - NC Passes Law That Won't Help
Excerpted from Daily Online Examiner Report by Wendy Davis
The Federal Communications Commission (FCC) has just issued a report concluding, for the second straight year, that broadband isn't being deployed in a reasonable or timely manner.
The FCC's conclusion rests on several data points, but two in particular stand out. First, up to 26 million Americans, mainly in rural areas, lack access to high-speed web service. Secondly, up to 100 million Americans aren't purchasing broadband subscriptions - in many cases because people aren't willing to pay the high costs of monthly subscriptions.
One way of addressing both problems is for towns to build their own fiber-to-the-home (FTTH) networks. Doing so obviously makes broadband physically available; additionally, cities that have built networks have been able to offer residents service at relatively fast speeds and low prices.
Not surprisingly, cable companies and telecoms aren't thrilled by the new local networks and the competition they bring. In some cases they have gone to court to oppose such networks - as happened when the Minnesota town of Monticello decided to build its own FTTH network. (The case reached the Minnesota Court of Appeals, which okayed the project.)
Incumbent providers have also pushed lawmakers for new laws curbing cities' ability to create their own networks. In North Carolina, the lobbying was successful. The state just passed a measure that will make it significantly more difficult for towns to build their own networks.
Ironically, just as the FCC was issuing its report late last week, North Carolina Governor Bev Perdue allowed that bill to become enacted. Although Perdue issued a statement criticizing the new law, she also declined to either sign the measure or veto it. With her inaction, the bill became law.
The FCC has urged Congress to make clear that localities shouldn't be prevented from building their own networks. Congress, so far, hasn't taken the FCC up on its suggestion to side with small towns against big telecom and cable companies.
Police Confuse Bitcoin Miner's Power Use for Growing Weed
Excerpted from Techland Time Report By Jerry Brito
There are unconfirmed reports this week that at least one Bitcoin miner has been raided by police because unusually high power consumption led authorities to suspect that he was clandestinely growing marijuana. The tip comes from an IRC chat captured by blogger Mike Esspe, though there are no corroborating details.
Bitcoin is the anonymous virtual currency that uses distributed computing power to validate transactions. Users who dedicate their CPU cycles to the network are potentially rewarded with Bitcoins. It's like gold mining, except that instead of digging, a miner uses cryptographic math.
Like marijuana growing operations, Bitcoin mining runs up high electricity bills and produces a lot of heat because it employs super-fast computers. High power consumption has previously alerted police to marijuana growing operations and led to busts.
According to one Bitcoin mining blog, "The Canadian town of Mission, BC has a bylaw that allows the town's Public Safety Inspection Team to search people's homes for grow ops if they are using more than 93 kWh of electricity per day."
While it's unlikely that police will be surveilling the power usage of private residences as a matter of course, it is possible that police will look to electric bills and heat radiation to confirm a suspicion.
But increasingly ubiquitous prosumer computing could well lead to false positives, not just for Bitcoin miners, but for hardcore gamers, as well as anyone running video rendering farms or web servers from home. It will be interesting to see how courts will adapt to such uses when interpreting reasonable suspicion standards.
Coming Events of Interest
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.
Conference on Cloud Computing - June 3rd-4th in Pune, India. Cloud Security, Amazon Elastic Beanstalk, Legal Issues in Cloud Computing, OpenStack, Xen Cloud Platform, Rails and CouchDB on the Cloud, CloudFoundry, Gigapaces PAAS, Monitoring Cloud Applications, ORM with Objectify-Appengine, Scalable Architecture on Amazon AWS Cloud, Cloud Lock-in, Cloud Interoperability, Apache Hadoop, Map Reduce, and Predictive Analysis.
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.
The Business of Cloud Computing - June 13th-15th in San Diego, CA. Cloud Computing is the latest disruptive technology. Enterprises, large and small, are looking to cloud computing providers for savings, flexibility, and scalability. However, potential adopters of all sizes are concerned about security, data management, privacy, performance and control.
CIO Cloud Summit - June 14th-16th in Scottsdale, AZ. The summit will bring together CIOs from Fortune 1000 organizations, leading IT analysts, and innovative solution providers to network and discuss the latest cloud computing topics and trends in a relaxed, yet focused business setting.
Digital Media Conference - June 17th in Washington, DC. The DCIA presents CONTENT IN THE CLOUD as part of the digital media business issues and law & policy tracks at this eighth annual gathering of over 500 of the most influential decision-makers in the media, entertainment, and technology industries.
Cloud Leadership Forum - June 20th-21st in Santa Clara, CA. This conference's enterprise-focused agenda, prepared with the help of nearly a dozen IT executives, will bring you case studies and peer insights on how leading organizations are approaching the cloud opportunity - plus much more.
Cloud Computing World Forum - June 21st-22nd in London, England. This third annual event is free to attend and will will feature all of the key players within the cloud computing and software-as-a-service (SaaS) market providing an introduction, discussion and look into the future for the ICT industry.
TransmitCHINA Talks - September 14th-16th at the Great Wall of China. International leaders, thinkers, innovators, and creators will have an exclusive opportunity to hear a cross-section of preeminent thought leaders from some of the world's most innovative organizations in the digital and creative content ecosystem.
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