December 31, 2012
Volume XLII, Issue 3
CONTENT IN THE CLOUD Coming Next Week
Our CONTENT IN THE CLOUD Conference within the 2013 CES Show takes place next week at the Las Vegas Convention Center on Wednesday January 9th.
At this must-attend event for everyone in interested in the impact of "the cloud" on the entertainment, media, telecom, and consumer electronics sectors, Microsoft's Dr. Jin Li will answer the question What Is Content in the Cloud, Really?
Radio Mitre's Guillermo Chialvo, Arrayent's Shane Dyer, YuMe's Ed Haslam, Endpoint Technologies' Roger Kay, IC4's Theo Lynn, The PADEM Group's Allan McClellan, Phoenix Marketing International's John Schiela, and Trend Micro's Nicole Severino will discuss The Impact on Consumers of Implementing Cloud Computing for Media Access and Storage.
GenosTV's Mike West and Dow Lohnes' Jim Burger will balance Consumer Benefits of Cloud-Delivered Content: Ubiquity, Cost, Portability Improvements with Consumer Drawbacks of Cloud-Delivered Content: Privacy, Reliability, Security Issues.
Octoshape's Scott Brown, Strategic Blue Services' Rob Kay, Equinix's Jon Lin, KPMG's Mark Lundin, Aspera's Kip Schauer, Iris Media's Dr. Wolf Siegert, Citrix's Peder Ulander, and Devoncroft Partners' Joe Zaller will evaluate The Impact on Telecommunications Industries of Cloud Computing.
Akamai's Kris Alexander will summarize Telecommunications Industry Benefits & Drawbacks of Cloud-Delivered Content: New Opportunities vs. Infrastructure Challenges.
Front Porch Digital's Brian Campanotti, Playcast Media's Guy De Beer, American Standard Television's Ian Donahue, Rovi's Gerald Hensley, Wiredrive's Bill Sewell, Gaikai's Robert Stevenson, and Gracenote's Stephen White will consider The Impact on Entertainment Industries of Cloud Computing.
IBM's Scott Burnett will highlight the top-line Entertainment Industry Benefits & Drawbacks of Cloud-Delivered Content: Flexibility and Reach vs. Disruption and Accountability.
Huawei's Lucia Gradinariu will outline Consumer Electronics (CE) Manufacturer Benefits and Drawbacks of Cloud-Delivered Content: Expanded Opportunities for New Products and Recurring Revenue Streams; New Challenges Related to Interoperability and Data Security.
Altman Vilandrie & Company's Stefan Bewley, Coughlin Associates' Thomas Coughlin, Pioneer Corporation's David Frerichs, Youneeq's Murray Galbraith, New Media, Entertainment & Technology, Hughes Hubbard & Reed's Wayne Josel, IHS Automotive's Dr. Egil Juliussen, and Navigation Solutions' Linda Senigaglia will explore The Impact on CE Manufacturers of Cloud Computing Deployment.
To register for CONTENT IN THE CLOUD at CES, please click here.
Report from CEO Marty Lafferty
 Happy New Year from the DCIA. 2012 was a very good year for the distributed computing industry, and we are grateful to you for your support.
Please accept our invitation to join us next week for CONTENT IN THE CLOUD at CES to get a jump-start on 2013, which promises to be even better.
This year, we experienced substantial increases in adoption, as the businesses of a growing array of cloud services providers (CSPs) — ranging from major established technology companies to new start-up firms — gathered momentum.
Analysts, researchers, and other industry observers now predict that over the next two years, the cloud platform will see a massive doubling in its revenue.
As 2012 closes, it's useful to examine lessons learned as well as celebrate the successes achieved during this period of increasingly dynamic growth.
Early in the year, we underscored two concerns — reliability and security — at our CLOUD COMPUTING CONFERENCE at the 2012 NAB Show, and will provide an update on progress in responding to these issues at the 2013 show.
An outstanding need we must address in 2013 is outage prevention. With massive numbers of consumers and the businesses of large enterprises relying on the cloud, as opposed to a small number of experimental end-users, unplanned downtime is unacceptable.
Amazon Web Services was the poster child for this concern, starting in April 2012 when one of its data centers unexpectedly went down. At the end of June, Amazon faced another outage as violent electrical storms incapacitated one of its data centers where battery and generator back-up systems failed.
In October, Amazon's Elastic Block Storage services were disrupted for a few hours preventing some website updates. And just last week, Amazon was unable to support peak holiday demand for Netflix.
As an industry, we need to make 2013 the year that fail-proof redundancy, through a combination of enhanced architectures and improved practices, becomes a reality.
On the security front, 2012 revealed "virtual spying" as a fundamental and preventable problem. For virtual machines (VMs) co-located within the same server, code needs to be written to detect and block unauthorized access to software and data across partitions intended to ensure privacy.
Industry-wide, we need to initiate verification mechanisms that provide customers using VMs with total integrity assurance.
This is very important for commercial deployments that rely on multi-tenant, virtual-server hosts, where one physical server is used by multiple companies and customers.
And finally, billing practices need to be re-examined in 2013. As the cloud-computing sector matures, we owe it to our customers to eliminate the need for deciphering complex and inconsistent billing formats.
During 2012, we experienced multiple vendors offering different configurations and definitions of their virtual CPUs, for example. Suppliers not only offered various levels of service and volume discounts — a good thing — but they also defined combinations of memory, CPU, and storage differently from one another.
This made direct comparisons difficult and actually impeded commercial advancement.
Instead of requiring that prospective users gather, arrange into spreadsheets, and analyze reams of information, we can serve both the supply and the consumption sides better with common, plain-language terminology for services provided.
On the positive side, and for the most part we have extolled the industry as its strongest advocate throughout the year, there has certainly been much to applaud.
As the year progressed, new cloud service providers (CSPs) joined the early major front-runners bringing customers a greater number of increasingly attractive, customized, and competitive options to choose from.
Smaller firms added more targeted technologies that leveraged their ties with the larger companies making the cloud arena even more robust.
And 2012 brought increased differentiation among sizes of virtual servers, including micro, small, medium large, extra-large, and double extra-large cloud servers. Later, servers that featured high-memory extra-large, double extra-large, and even quadruple extra-large were introduced.
Concentrated CPUs arrived in the form of high-CPU medium and high-CPU extra-large. Cluster instances, graphics processing unit instances, and high I/O instances rounded out the list.
Price-cutting helped further expand the market, in a trend that started when Amazon reduced its Simple Storage (S3) prices by approximately 25 percent. Then Google reduced its storage prices by 20 percent, marking the largest discounts since these services were created.
And finally, in 2012, major telecommunications companies, led by Verizon domestically and Telefonica in Europe, expanded their involvement in the cloud-computing space with their own services and, perhaps most notably, advanced the provisioning of more reliable back-up data centers.
Broadband network operators are working to provide duplicate systems stored in multiple locations along with transport facilities sufficient to transfer all data needed for restorations in a few minutes.
One of the most promising solutions has been ongoing replication to back-up sites on an ongoing basis, so in the advent of a disaster, only a small percentage of data must be migrated.
Stay tuned in the New Year, and stay involved by participating in CONTENT IN THE CLOUD, the CLOUD COMPUTING CONFERENCE, and CLOUD COMPUTING EAST 2013.
There's much more to come. Share wisely, and take care.
Netflix Fixes a Streaming Disruption
Excerpted from NY times Report
A disruption at one of Amazon's Web Services centers hit users of Netflix's streaming video service on Christmas Eve and was not fully resolved until Christmas Day, a Netflix spokesman said on Tuesday.
The disruption affected Netflix subscribers across the United States, Canada, and Latin America and blacked-out various devices — including videogame consoles and DVD players — that enable users to stream movies and television shows, the Netflix spokesman, Joris Evers, said.
Mr. Evers said the issue was the result of a failure at an Amazon Web Services cloud computing center in Virginia and started at about 3:30 PM Eastern time on Monday and was fully restored Tuesday morning, although streaming was available for most users late on Monday.
"We are investigating exactly what happened and how it could have been prevented," Mr. Evers said.
"We are happy that people opening gifts of Netflix or Netflix-capable devices can watch TV shows and movies, and apologize for any inconvenience caused last night," he added.
A disruption at Amazon Web Services knocked out sites like Flipboard and Foursquare in October, and a storm in June similarly affected services like Netflix, Instagram, and Pinterest.
Public, Private, Hybrid Cloud Storage
Excerpted from BitPipe Report
Cloud technologies are getting more popular, but they're still often met with apprehension. A lot of hesitancy toward the cloud is due to a lack of knowledge - and that makes sense, because cloud technologies are still relatively new.
Luckily, this expert SearchStorage e-guide contains everything you need to know to form a basic knowledge of cloud storage. Read on for in-depth features including: five advantages of cloud storage; four key definitions pertaining to private cloud storage; four things to know about hybrid cloud storage; and more
Click here to sharpen your cloud storage know-how.
2012: Cloud Computing Took a Bite out of IT
Excerpted from MIS Asia Report by Eric Knorr
When we started talking about cloud computing five years ago, it meant one thing: services such as Amazon or Salesforce that customers could self-provision over the Internet and pay as they go.
That's what we call the "public cloud" today, as opposed to the "private cloud," which refers to the application of public cloud technologies and practices to one's own data center. And guess what? The public cloud was where the action was in 2012 — and it's where much of the action is going to be in 2013. According to IDC, businesses will spend $40 billion on the public cloud this year, rising to nearly $100 billion in 2016.
Despite that rapid growth, public cloud dollars still represent a small fraction of the trillions of dollars devoted to IT globally every year. The data center isn't going anywhere — but it needs the greater efficiency and agility the private cloud offers. The question of the day is whether the private cloud will evolve quickly enough to stop an accelerated exodus to public cloud services.
In 2012, the biggest thing to happen to the cloud was the arrival of three major new infrastructure-as-a-service (IaaS) players: Google Compute Engine, HP Cloud, and Microsoft Windows Azure. All three entrants face an uphill battle competing against the incumbent leader Amazon Web Services — and even against Rackspace, long the distant No. 2 IaaS provider.
Why the surge in providers? IaaS revenue continues to grow, of course, but I think the real driver is anticipation of a long-awaited tipping point: when enterprises start moving their production workloads — as opposed to dev and test or batch processing jobs — to IaaS platforms.
Up until now production IaaS workloads have tended to originate with other tech players, from consumer companies like Netflix to small platform-as-a-service (PaaS) players such as Engine Yard. I think 2013 could be the year when that changes. I've had several off-the-record conversations over the past few months that convince me we'll see a number of large enterprises move core applications — including ERP — to IaaS providers in the coming year.
It's no surprise, then, that Google, HP, and Microsoft are positioning their offerings as much more tailored to enterprise needs than Amazon Web Services, which the insurgents like to dismiss as generic and ill-suited to run enterprise production workloads. That might have been true a few years ago. But today, Amazon has a tremendous lead — in virtual machine configuration options, in the native services it offers, and in the huge partner ecosystem it has developed.
Amazon continues to expand its enterprise sales and support, bulk up its SLAs, and now offers "virtual private cloud" services that provide greater isolation among customer workloads.
Regardless, in a ballooning market, everyone has a shot. Google Compute Engine, currently in beta, claims it will have a performance and reliability advantage. HP Cloud seems willing to bend over backward to accommodate particular enterprise needs -- and promises "convergence" with its private cloud offerings to support unified management.
Windows Azure may be the most interesting case of all. Over two years ago it officially launched as a PaaS catering to Microsoft developers who wanted to build and deploy applications in the cloud. Adoption was not brisk. In the summer of 2012, Microsoft quietly added IaaS -- including support for Linux and MySQL — backing off its long-held assertion that PaaS was the vastly superior option.
Of course, Azure has plenty of PaaS company; Google's App Engine, VMware's Cloud Foundry, Red Hat's OpenShift, and Salesforce's Force.com and Heroku are the most prominent. But there are many smaller players, including Zend Developer Cloud for PHP coders, CloudBees for Java programmers, Joyent (also an IaaS provider) for Node.js programmers, and AppFog, which supports multiple languages.
As far as I can determine, PaaS has not gained much traction with enterprise developers at all. Instead, small ISVs that build and deploy mobile or web apps — or agencies contracted by enterprises to build public-facing web apps — tend to form the bulk of PaaS customers.
It's not hard to see why: These platforms provide a quick way for independent developers to dev, test, and deploy Web apps, yet enterprises are none too thrilled about putting their intellectual property in the hands of PaaS providers.
Please click here for the full report.
2013: Amazon, Google on Collision Course
Excerpted from The Age Report by Alexei Oreskovic and Alistair Barr
When Amazon chief executive Jeff Bezos got word of a project at Google to scan and digitize product catalogs a decade ago, the seeds of a burgeoning rivalry were planted.
The news was a wake-up call to Bezos, an early investor in Google. He saw it as a warning that the web search engine could encroach upon his online retail empire, according to a former Amazon executive.
"He realized that scanning catalogs was interesting for Google, but the real win for Google would be to get all the books scanned and digitized" and then sell electronic editions, the former executive said.
Thus began a rivalry that will escalate in 2013 as the two companies' areas of rivalry grow, spanning online advertising and retail to mobile gadgets and cloud computing.
It could upend the last remaining areas of cooperation between the two companies. For instance, Amazon's decision to use a stripped down version of Google's Android system in its new Kindle Fire tablet, coupled with Google's ambitious plans for its Motorola mobile devices unit, will only add to tensions.
The confrontation marks the latest front in a tech industry war in which many combatants are crowding onto each others' turf. Lurking in the shadows for both Google and Amazon is Facebook with its own search and advertising ambitions.
"Amazon wants to be the one place where you buy everything. Google wants to be the one place where you find everything, of which buying things is a subset," said Chi-Hua Chien, a partner at venture capital firm Kleiner Perkins Caufield & Byers. "So when you marry those facts I think you're going to see a natural collision."
Both companies have a lot at stake. Google's market capitalization of $235 billion is about double Amazon's, largely because Google makes massive net earnings, expected by analysts to be $13.2 billion this year, based on a huge 32 per cent net profit margin, according to Thomson Reuters. By contrast, Amazon is seen reporting a small loss this year.
Amazon shareholders have been patient as the company has invested for growth but it will have to start producing strong earnings at some stage - more likely if it grows in higher margin areas such as advertising. Google's share price, on the other hand, is vulnerable to signs of slowing margin growth.
Not long after Bezos learned of Google's catalog plans, Amazon began scanning books and providing searchable digital excerpts. Its Kindle e-reader, launched a few years later, owes much of its inspiration to the catalog news, the executive said.
Now, Amazon is pushing its online ad efforts, threatening to siphon revenue and users from Google's main search website.
Amazon's fledgling ad business is still a fraction of Google's, with Robert W. Baird & Co. estimating Amazon is on track to generate about $500 million in annual advertising revenue - tiny, given it recorded $48 billion of overall revenue in 2011. By contrast, 96 per cent of Google's $38 billion in 2011 sales came from advertising.
But Amazon's newly developed "DSP" technology, which taps into the company's vast store of consumer purchase history to help marketers target ads at specific groups of people on Amazon and on other websites, could change all that.
"From a client's perspective, the data that Amazon owns is actually better than what Google has," said Mark Grether, the chief operating officer of Xaxis, an audience buying company that works with major advertisers. "They know what you just bought, and they also know what you are right now trying to buy."
Amazon is discussing a partnership with Xaxis in which the company would help Amazon sell ads for the service, Grether noted.
Amazon can bring in higher-margin revenue by selling advertising than it can from its retail operations. By showing ads for products that it may not actually sell on its own website, Amazon establishes itself as a starting point for consumers looking to buy something on the web.
Research firm Forrester reported that 30 per cent of US online shoppers in the third quarter began researching their purchase on Amazon, compared with 13 percent who started on a search engine such as Google - a reversal from two years earlier when search engines were more popular starting points.
Amazon now sells ads that show up to the side of product search results on its website. There were 6.7 billion display ad impressions on Amazon in the third quarter, more than triple the number in the same period of 2011, according to comScore.
Please click here for the full report.
How Cloud Computing Will Take Shape
Excerpted from Proformative Report
There is no question about it; cloud computing is going to grow even larger than it already is in 2013. Traditionalist accounting firms will find it increasingly difficult to ignore organizations' prevailing use of cloud storage internally and with their clients.
According to a recent study by the AICPA, 11 percent of CPA firms already operate completely in the cloud. Another one-third of the 624 respondents reported using cloud software, such as bill management, accounting, and payroll applications, in some areas of their practice.
While the biggest concern surrounding cloud use is security, professionals around the world are benefiting from remote access to work data and information, forgetting about software updates, among other benefits.
As the cloud is going to hover over the accounting profession more and more, here are three predictions to consider.
Less than one week left before New Year's Eve and Washington has yet to announce a solution to the looming fiscal cliff.
If Congress doesn't come to an agreement and the country tumbles over the metaphoric edge, billions in tax increases and automatic spending cuts will quickly hit US businesses and government agencies, reports the NY Times. That's scary.
The past decade can be defined by two words: Economic uncertainty. It's precisely this environment that has fueled the growth of cloud use and software-as-a-service (SaaS), writes Jeffrey M. Kaplan in an analysis for E-Commerce Times.
"Continued economic uncertainty and the threat of higher operating costs caused by the current fiscal crisis will drive more businesses to adopt cloud-based alternatives," he states.
Meanwhile, globalization is no longer a choice for many companies. Relying on markets in Europe adds the eurozone crisis to the list of incentives to keep operating costs down.
In addition, faced with constant market forecast haziness, more organizations will turn to cloud services for cost management services.
Twenty years ago, the word "business" invoked images of an office space where people came dressed nicely to work at desks between the hours of 9 AM to 5 PM on weekdays.
"You can throw that all out the window thanks to the cloud," writes Raj Sabhlok for Forbes.
Customers are no longer satisfied with receiving services only in person during traditional work hours. More organizations are realizing the need for constant virtual presence and support.
Meanwhile, an increasing number of employees are craving work environments that cater to their personal lives. They want to access professional information on their personal devices and work from wherever they choose. Cloud computing lets them do this.
Many businesses are actually realizing they don't need brick-and-mortar structures anymore to house work, saving them exponential costs on real estate and office furnishings, explains Sabhlok.
While Sabhlok suggests organizations will grow less wary of open source cloud computing software like CloudStack and OpenStack, Kaplan writes many businesses will strive to find a hybrid mix between private and public systems.
Cloud Computing and Big Data
Excerpted from CloudTweaks Report by Abdul Salam
The cloud is all about applications, media, and information. But of the three, media seems to be the largest with applications coming in at close second, while information ranks last place.
But what we are seeing in the last two years suggests that information and other data is gaining ground and will soon overtake the other two in terms of relevance, at least in the non-consumer space, the business side.
Experts call this Big Data, and it is all about data processing and analytics.
Everything we do online from social networking to e-commerce purchases, chatting, and even simple browsing yields tons of data that certain organizations collect and poll together with other partner organizations.
The results are massive volumes of data, hence the name "Big Data." This includes personal and behavioral profiles that are stores, managed, and analyzed on demand.
On the more academic side of things, our world is undoubtedly data-driven. We have vast data which comprises knowledge bases from a multitude of disciplines like science with its databases for astronomy, genomics, medicine, zoology, and even environment, weather, and transportation data.
We also have the Humanities and Social Sciences with its vast resources on historical documents and social interactions data.
And then we have Business & Commerce, Entertainment, and Social Networking, which would possibly be the current leader in data growth on a daily basis.
So what can we do with all of these data and where does the cloud come into play. Well, the cloud infrastructure is simply the best platform for the collection, storage, management, and subsequent distribution of all these data.
It will allow a lot of cross-referencing with distributed databases and allow scalable analytic innovations because of the accessibility provided by cloud computing. By allowing data scientists to connect to various databases though cloud collaboration, they can make use of distributed computing for faster processing and analysis of the data which will allow for almost instantaneous results.
This is of course is still a future possibility that only needs application as it is very possible with the current state of cloud computing technology.
In the coming years, Big Data will play a pivotal role on the type of applications that will be made available. This might even change the way we interact with the world around us, as information becomes more easily available and less private.
Big Data: Bringing Meaning to Social Minutia
Excerpted from CIO Insight Report by Frank Ohlhorst
The amount of data created on a daily basis is reaching mind-numbing proportions, with social media posts and other trivial entries becoming a significant portion of the daily storm of digital data.
While many treat social media as little more than gossip, inane blathering, and information that matters to only a small group of individuals, the truth of the matter is all that minutia may have value.
Nevertheless, the real trick is how to uncover that value — to make any sense out of the numerous tweets, Facebook posts, and other bits of social information.
The path to "making sense" can be paved with big data technologies that are starting to come into vogue for businesses large and small. It is truly the processes that make up big data analytics that can deliver answers and drive business processes.
It may not be so easy to see how big data analytics can garner value out of social minutia. However, big data analytics has the muscle to plow through the enormous realm of Facebook, the twitterverse, and numerous other worlds of social interactions. After all, big data analytics is all about mining information from huge piles of data.
Nevertheless, value is a subjective element. Simply put, when mining for gold, you have to know what gold is — and isn't.
That said, the tools that make up big data analytics have limitations and a human touch is needed to make sense out of all the noise.
The trick is to know what to look for.
Arguably, business marketing and product development has the most to gain from applying big data analysis to social data sources. Those business processes can benefit from customer sentiment analysis, product adoption trends and common complaints that float around in the ether.
Big data analysis can focus on mining social media data sets for keywords, such as a product or company, and then cross referencing all occurrences to that mention to create a sentiment index, which can lead to invaluable insights.
While it may sound simple, the truth is it is anything but simple. Businesses will need to turn to data scientists and others to really make big data analytics work for them. And, of course, they will have to educate themselves on how big data works.
Government Cloud Computing as 2012 Ends
Excerpted from Govplace Report
Government agencies are implementing cloud-based services at a rapid speed, making legacy IT infrastructures and their data centers things of the past.
As 2012 wraps up, it's a good time to reflect on the state of government cloud computing, IT data centers and other technological trends. Although many data centers still exist to support operations, many agencies are supporting their employees to government cloud computing services to reduce costs.
Cloud e-mail, storage, and other applications are helping agencies improve their IT departments in a world of ever-changing technology.
Minnesota implemented cloud e-mail services at 70 state agencies earlier this year to reduce costs and provide new, collaborative tools. The 70 agencies are home to over 40,000 employees that use IT services every day. Cloud computing solutions provide an answer to CIOs who are looking to save money while providing efficient services that are of high quality.
"The cloud is the only salvation the public sector has from an IT standpoint," said Kristin Russell, a CIO from Colorado.
Michigan and Utah are the states that are at the forefront of cloud computing technology. Hawaii has also undertaken a 12-year-plan to reconsider how it approaches and deals with technology.
Other states are joining in on the trend as CIOs and other leaders realize the opportunities that the cloud provides. "We're seeing this slow evolution from a system-centric view to a services-centric view of the world," said Doug Robinson, NASCIO Executive Director.
According to Bloomberg, states differ when it comes to how they view the cloud, particularly when it comes to taxes. Experts wonder whether or not taxes should be incorporated into cloud deals. Should vendors be taxed for their offerings? Should buyers?
As more cloud offerings come on the market, state government leaders are not only deciding whether or not to implement cloud-based services, but if these services should be taxed on a statewide level.
According to a group of panelists who spoke at New York University, many states are taxing cloud computing services in the same way they tax software.
Cloud Computing Changes HIT & HIE Strategies
Excerpted from HealthTECH Report by Ed Daniels
Many professionals dealing with personal health information see something akin to a flashing "danger" sign when someone mentions "the cloud." Similar to its natural namesake, "the cloud" seems fuzzy and elusive and thus raises concerns about security.
But "the cloud," or "cloud computing," as it's formally referred to, offers many benefits that some healthcare organizations are already using to deploy health information technology across their enterprises.
Cloud computing also enables revolutionary research accelerating the drug discovery process and lowering drug costs. Healthcare professionals need to worry less about the infrastructure of cloud computing, and focus more on understanding it as a new method for deploying technology, helping organizations to meet new requirements for data exchange and more coordinated, team-based care.
With proper safeguards, cloud computing offers powerful capabilities, especially when it comes to acquiring and managing health information technology (HIT) and extending data across the care continuum, what's now commonly called health information exchange (HIE).
Voices calling for greater data availability and use are reaching a fever pitch due to new payment systems and healthcare delivery reforms.
The goal of cloud computing is quite simple: provide scalable and easy-to-access computing resources and IT services. In fact, most people take advantage of cloud computing already (i.e., Gmail and other web-based e-mail providers, Google Docs, DropBox, Evernote, Office365 and others).
The General Services Administration (GSA) recently awarded contracts to 17 companies to provide cloud-based e-mail to different federal, state, local, and tribal agencies under the Cloud First Initiative.
These technologies afford users free or low-cost applications for e-mail and storage of documents and images accessible anytime and anywhere via the Internet.
For similar reasons, cloud computing is also appealing to healthcare organizations as they balance IT and staff budgets with increasing demands for a connected and patient-centered healthcare environment.
Cloud computing offers economies of scale and resource pooling that enable cost effective storage and computing power for users across an enterprise and for organizations participating in an HIE.
Across all industries, cloud computing services are considered the fastest growing segment of IT outsourcing worldwide, and are expected to grow 48.7% in 2012 to $5 billion, up from $3.4 billion in 2011.
Healthcare is expected to see growth from $1.7 billion in 2011 to $5.4 billion by 2017 — a compound annual growth rate of more than 20%. It's really no longer a question of if healthcare will use cloud computing, but when.
Adverse reactions to cloud computing stem primarily from the fact that it is new. And, if nothing else, people understand that someone else — the cloud technology company — maintains direct control of the applications and services delivered.
It's been particularly difficult for healthcare organizations to relinquish control because they believe cloud technology companies are not aligned with the evolving regulatory landscape.
But cloud technology companies intent on making a serious footprint in healthcare have actually built the requisite capabilities for HIPAA compliance and they have improved security in general. It's also worth noting that many of the top cloud providers are large, experienced technology companies.
Similar to other technology decisions, choosing a cloud technology provider boils down to due diligence in the selection process and the negotiation of the service level agreement (SLA).
Healthcare organizations need to inquire about the company's disaster-recovery strategy, backups, compliance with national health standards (e.g., HIPAA and state law requirements), migration plan from the existing IT infrastructure and security protocols and procedures.
It is possible for healthcare organizations to negotiate effective SLAs if they take the time to understand the risks and benefits and pursue the right contract provisions to protect their patients' data and their own data.
It's important to remember that cloud computing is just another method of implementation or deployment of technology and services.
Cloud computing can be used for ancillary business applications (i.e., payroll management system, revenue cycle management systems patient billing tools), clinical applications like EHRs, computerized provider order entry systems and imaging technology or myriad applications used to stand up an HIE.
The most natural fit for cloud computing and healthcare is probably the deployment of HIE. Cloud computing makes tasks like image sharing in an exchange environment possible. The massive storage space required for images is cost-prohibitive for smaller hospital systems.
Offering radiology information system and picture archiving and communications system software in the cloud saves money and time.
Organizations will pay less in storage fees and have to dedicate fewer IT staff for maintenance. Providers will have more timely access to the images and benefit from easier collaboration with other care providers who may also access the image simultaneously.
Form a technical standpoint, cloud computing can offer such capabilities as the "split-merge." This means the technology encrypts then strips PHI from imaging data before an image passes over the Internet. The technology then decrypts and re-matches patient identifiers if the image is forward to an authorized viewer.
Perhaps most importantly, cloud computing in an HIE saves on interface expenses — the most costly. It has become more evident, as HIEs pursued sustainable business models, that the complexity and expense of integrating with every practice onboarding to an exchange was simply untenable.
With the acceleration of new payment and healthcare delivery models like accountable care organizations and patient-centered medical homes, many healthcare organizations could find success with cloud computing.
Areas like home health specifically will need new technology to gather, process and analyze data coming in from at-home monitors and telemetry. Cloud technology could accelerate capabilities and help providers proactively manage the health of a community, preventing hospital and even some clinic visits.
Cloud computing could help healthcare industry catch up to other industries in terms of IT use. Some healthcare organizations are already implementing cloud computing for such services as data sharing and archival storage.
Emory Healthcare in Atlanta turned over many of its ancillary applications to the cloud and has since cut annual hardware, archival storage and Internet service provider costs by as much as 60 percent. The hospital now asks all vendors to deliver their Software-as-a-Service via the cloud.
The cloud originated mainly because many enterprise applications require too much maintenance and support. Costs were also spiraling up, and organizations needed solutions to avoid paying full price for using portions of applications installed onsite.
Cloud computing is now enabling greater speed and access to data for healthcare providers and patients.
Better anywhere, anytime access to cloud applications will enable more effective use of healthcare resources and more effective exchange of information among patient care professionals.
Financial Services in Public Cloud: Go or No Go?
Excerpted from GigaOM Report by Barb Darrow
Most financial services companies officially forbid the use of public cloud (aka Amazon Web Services [AWS]) completely. But the forward thinkers among them — like State Street — keep their options — and minds — open about such deployment in the future.
Question: Just how much mission-critical work do financial services firms and companies in other heavily regulated industries put on the public cloud?
Answer: It depends on whom you ask.
IT execs in financial services — including Chris Perretta, CIO and Executive Vice President of State Street — say they absolutely do not allow the use of AWS at all. Period. (For my purposes, public cloud for now pretty much means AWS). They deal not only with their own top-secret data but with that of clients, which makes a move into a cloud they don't control a career-limiting decision.
But if you talk to others in the cloud services arena, the answer gets more nuanced. An earlier GigaOM post on this topic sparked a debate on Twitter about just how much CIOs really know about what their devs are doing.
My feeling is that many developers even in risk-averse companies get around obstacles to do at least some test-and-dev work in AWS and perhaps even get reimbursed for it. But when it comes to deployment and use of live data — all that work comes back in-house for deployment.
This is not to say that big finance firms aren't moving to cloud at all. Just look at State Street, the Boston-based financial services giant that has $23 trillion (that's trillion with a "t") worth of assets under management for customers including mutual funds, pension funds and non-profits.
Since it won't use AWS, State Street built its own private cloud for internal use, using a lot of open-source software and racks of its own design. (Other than that Perretta won't say much about the State Street cloud.)
The lack of public cloud adoption by companies like State Street boils down to concern about security and reliability — it would be hard for any CIO to argue for putting mission-critical stuff in AWS after last year's outages.
It doesn't matter to the boss that some of those snafus may have been caused by customer deployment issues. But it also has to do with the industry's own hide-bound resistance to change.
"You have to overcome a lot of resistance from regulated industries before moving their stuff to the public cloud. You'll have a hard time with your auditors in the short term if you go to public cloud," Perretta told me recently. But, he's keeping his eyes open because the cost savings of the public cloud are too good to ignore if these other issues can be resolved.
"Certainly if you look at the economics that Amazon and Rackspace are getting — that's pretty impressive. But a lot still depends on how you build the application and you do have to build them differently to take advantage of the services they offer," he said.
In other words, forklifting existing applications unchanged from an internal data center to the public cloud is not all that productive in his view. "We're talking to the big cloud providers to understand how they run and what we'd have to do to make our systems run in that robust environment," he said.
One goal of State Street's cloud is to come up with new analytics that will let customers combine the data they keep themselves with data State Street keeps in their behalf and analyze it to get new insights. For that, State street needs to provide complete transparency so the clients can always see exactly what's happening in their portfolio.
Public cloud gets a lot more compelling to companies like this if it can act as the foundation for what is really a secure private cloud. "If they can partition us off and give us a hard barrier around our stuff, that's very interesting and we'll always listen. But we'll probably await the next-generation," Perretta said.
That's already starting to happen: Amazon's Virtual Private Cloud that lets business customers cordon off some infrastructure for their own use. In addition, Amazon Cloud.gov which was built to meet security mandates of state and federal government entities could help prove that AWS is up for the task of running secure applications. (This weekend Amazon added its Relational Database Service (RDS) and DynamicDB to the services available via Cloud.gov.)
Big enterprise systems integrators like Accenture, Deloitte, and Capgemini could also fill in some important check boxes for financial services companies wanting to go to the public cloud by providing the types of service level agreements (SLAs) corporations want and that AWS does not yet provide.
Joe Coyle, CTO of North America for Capgemini said more enterprise loads are "marching into public cloud but in the private mode of public cloud," as seen in the AWS VPC model. "I see the compliance issues, the regulatory stuff as being resolved — I don't see anything stopping that migration," Coyle told me recently. (Of course, Capgemini which aids in such migrations has a vested interest in this being the case.)
As one GigaOM commenter on an earlier story about AWS traction in the enterprise pointed out: "The first public cloud company to provide private cloud services is going to dominate the market for a while. A customer will then not need to worry about the tin, that will be provided and maintained by the public cloud company, who will provide their best-of-breed practices to the customer."
"The customer will be able to save costs by using a combination of private and public services offered by the provider. Enterprise software will move the same way as the smart phone environment and will be "apps" that run on this environment."
There will be more third-party services coming that claim to bolster public cloud for use in sensitive industries in that whole private-cloud-atop-public-cloud scenario. Startup CloudVelocity says it can take existing on-premises applications and put them on AWS and run them there securely.
Claims like that sound good as far as they go, Perretta said,although his company would spend "a pretty significant amount of time validating that claim." More importantly, for him, wringing the most value from a cloud move would require re-building applications to get the most out of that expansive infrastructure.
"I can move a pig to the cloud but it'll still run like a pig," he said.
BitTorrent to Work with Hollywood
Excerpted from IP Brief Report by Matthew Bernstein
Whenever people think about companies that distribute torrents, the typical reaction is that such conduct is dishonest and entails stealing from artists and rights holders.
Although this reputation is widespread and difficult to shake, companies like BitTorrent are trying to move away from such characterizations by partnering with the artists and rights holders.
BitTorrent's Executive Director of Marketing described this challenge by explaining that the company must demonstrate that its not just "two teenagers in a basement in Sweden," but an actual company that can deliver an extraordinary distribution system for digital media creators.
Indeed, BitTorrent could prove to be an extremely valuable tool for the entertainment industry in distributing new digital content.
The company currently has one of the largest user bases on the Internet; one that amounts to more than double the combined user bases of Hulu, Spotify, and Netflix.
Furthermore, BitTorrent already works with Facebook in providing file-transferring services, demonstrating that it has experience working with large companies.
Obviously, the big concern for the entertainment industry is BitTorrent's past issues with unauthorized downloading and file sharing of digital media.
However, this eagerness to partner with the entertainment industry appears to be a step in a new direction for BitTorrent, and potentially a new way for people to distribute and consume digital media.
Coming Events of Interest
2013 International CES - January 8th-11th in Las Vegas, NV. With more than four decades of success, the International Consumer Electronics Show (CES) reaches across global markets, connects the industry and enables CE innovations to grow and thrive. The International CES is owned and produced by the Consumer Electronics Association (CEA), the preeminent trade association promoting growth in the $195 billion US consumer electronics industry.
CONTENT IN THE CLOUD at CES - January 9th in Las Vegas, NV. Gain a deeper understanding of the impact of cloud-delivered content on specific segments and industries, including consumers, telecom, media, and CE manufacturers.
2013 Symposium on Cloud and Services Computing - March 14th-15th in Tainan, Taiwan. The goal of SCC 2013 is to bring together, researchers, developers, government sectors, and industrial vendors that are interested in cloud and services computing.
NAB Show 2013 - April 4th-11th in Las Vegas, NV. Every industry employs audio and video to communicate, educate and entertain. They all come together at NAB Show for creative inspiration and next-generation technologies to help breathe new life into their content. NAB Show is a must-attend event if you want to future-proof your career and your business.
CLOUD COMPUTING CONFERENCE at NAB - April 8th-9th in Las Vegas, NV.The New ways cloud-based solutions have accomplished better reliability and security for content distribution. From collaboration and post-production to storage, delivery, and analytics, decision makers responsible for accomplishing their content-related missions will find this a must-attend event.
CLOUD COMPUTING EAST 2013 - May 20th-21st in Boston, MA. CCE:2013 will focus on three major sectors, GOVERNMENT, HEALTHCARE, and FINANCIAL SERVICES, whose use of cloud-based technologies is revolutionizing business processes, increasing efficiency and streamlining costs.
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