This week’s Cloud Watch items from Elemental Cloud Computing:
Cloud Watch now underway… Lawyers, Data and Money
This week, I’ve started up the Cloud Watch section of Elemental Cloud Computing. Cloud Watch items are snippets from cloud computing industry news, business and technical publications, and thought leaders. These snippets may be as short as a 140-character tweet, or as long as a few paragraphs. Cloud Watch items will be posted throughout the course of the day, and may be expanded as more voices and sources cover a hot topic. Cloud Watch items may include a short Elemental Cloud Computing perspective.
The opening cloud watch items are a mix of business and economics, and data, contracts and legal issues:
- Bessemer’s 8th of Cloud Computing and SaaS: Leverage and monetize the data asset
- Workload Metrics: Business Transactions per Kilowatt?
- Microsoft Exec: Customers Embracing "Cloud Computing" <– But whose?
- GigaOm: 10 Open Source Resources for Cloud Computing
- Lawyers, Clouds and Warrants
- McKinsey to CIOs in ‘New Normal’: Rethink Procurement…
- Irving Wladawsky-Berger: Cloud Computing is Relevant for (mostly) everyone
- Joyent is First in China: Launches Commercial Cloud Computing Platform
From Elemental Cloud Computing, there several ways to follow the cloud watch. The Current Cloud Watch section on the homepage, the Cloud Watch tab of the Recent Posts navigation element in the sidebar, the Cloud Watch tab of the site navigation, via the Cloud Watch or Full Site feeds and email, and on Twitter.
Software from Walmart? Water from IBM? Giants, adjacent markets & tech providers
This week, the talk will be about Cisco boldly entering the blade server market and the end of co-opetition as we know it:
“Cisco’s chief technology officer, Padmasree Warrior, says the company has moved boldly in the past, and suggests the old rules are changing. “We’re going to compete with H-P. I don’t want to sugarcoat that,” she says. “There is bound to be change in the landscape of who you compete with and who you partner with.”
Battles are breaking out across the industry. Within the past year or so, H-P has fueled a new rivalry with IBM in tech outsourcing by buying services giant Electronic Data Systems Inc. Microsoft set its sights on Internet-search giant Google Inc. by attempting to buy Yahoo Inc. Sun Microsystems Inc. is moving beyond its core market in servers and software to take on database-software leader Oracle Corp. Later this month, Dell Inc. says it plans to introduce new data-center management software that will compete with existing offerings by H-P, IBM and others.”
Of course, that is interesting and important news. And I completely get the drivers of wanting to win in the data center and the convergence of data center technology – compute, networking and storage.
However, I find myself interested in what I’d categorize as ‘recessionary moves of giants with cash, guts and (relatively) decent stock prices’. Namely, recent adjacent market moves by Walmart and IBM.
On March 12, the WSJ reported that Walmart will start selling electronic medical records software, installation and maintenance, to single physicians and medical practices via Sam’s Club:
“Wal-Mart said it is forming a partnership with computer maker Dell Inc. and closely held software maker eClinicalWorks to offer a lower-priced medical records system, plus installation and maintenance, through its Sam’s Club membership warehouses. Sam’s Club would be the one-stop contact for any physician follow-up questions about the system. The questions would then be routed to the appropriate person at Dell or eClinicalWorks.
“Whether it is a single physician or a physician’s group who comes to us, we can offer a system that enables them to electronically prescribe medication, set appointments, track billings and keep records,” said Gregg Rossiter, a spokesman for Wal-Mart.
The system, expected to be available at the clubs in the spring, will cost $25,000 for the first installed system, and $10,000 for each additional system, plus $4,000 to $5,000 a year in maintenance costs.
The more complex systems cost about $40,000 for the first installation in a small physician group, said Kent Gale, founder of Klas Enterprises LLC, a research company for health-care technology.”
As I shared via Twitter, this is an installed offering, not a cloud offering, like the patient oriented Google Health. That tweet led into an interesting discussion on compliance in the cloud, which is exactly why companies such as Sonoa Systems exist. But, I digress.
In what’s nothing more than conjecture, I’d speculate that Walmart’s investment in EMR software is related to its in-store health clinic initiative. If so, it’s a good way to capitalize on an internal investment — something more organizations should consider. If not, then it’s possibly a harbinger of software offerings to come.
On March 13, the WSJ (amongst others) reported that IBM is “embarking on a new business venture in which it will help manage water resources, an attempt by the technology giant to further expand its footprint outside traditional computer services.”
“The new business…will design and install systems of sensors and back-end software to monitor water pipes, reservoirs, rivers and harbors, according to Sharon Nunes, who heads the Big Green venture.
IBM has been touting its ability to help create a “smarter planet” by designing systems to monitor physical world activities such as electricity flows and traffic patterns. “There’s a lot of stress on water systems around the world. With a limited supply, you’d better be able to manage it,” said Ms. Nunes. She estimates that information technology for water management could become a $20 billion market.”
Sure, you could say that IBM selling IT for water management is business as usual, but the truly interesting part of this announcement is the research development:
“In a related development, IBM researchers said they have created a new desalination-membrane technology that goes beyond current systems and removes arsenic and boron salts from contaminated ground water, making it safe for humans. Desalination membranes filter out salts, allowing clean water to pass through.
Robert Allen, a chemist at IBM’s Almaden, Calif., lab said that his team found a way to put a polymer designed for immersive lithography — a technique for making semiconductors — into membranes that reject the toxic salts. He said arsenic contamination is a problem in some water supplies in Texas, Turkey, Bangladesh and China. IBM expects to license the technology rather than make desalination plants itself.”
For a quick overview of the breakthrough, check out this youtube video.
This move comes days after CEO Samuel J. Palmisano addressed, in the chairman’s letter of IBM’s 2008 annual report (pdf), the economic climate:
“We’re not looking back, we’re looking ahead. We’re continuing to invest in R&D, in strategic acquisitions, in growth initiatives—and most importantly, during these difficult times, in our people.
In other words, we will not simply ride out the storm. Rather, we will take a long-term view, and go on offense. Throughout our history, during periods of disruption and global change, this is what IBM has done. Again and again, we have played a leadership role. We have imagined what the world might be, and actually built it.
We find ourselves at such a moment now. This is an inflection point—both in the course of modern technology and economic history, and in the nearly 100-year journey of IBM. As someone who has been here for more than a third of that journey, I can tell you that it presents the best opportunity I have seen in my IBM career to align those two trajectories in very powerful ways.”
What else does this “inflection point” have in store for us? Who will our primary IT providers be? And will IT be their primary business? Curse or not, we d
o live in interesting times…
Illustration: Since the market collapse, Walmart & IBM have consistently outperformed the Dow.
[Click on Chart to enlarge]
[Disclosure: None of the companies mentioned in this post are direct clients of my company, Elemental Links. However, Cisco, IBM, HP & Sun are sponsors of the SOA Consortium, which is a client of Elemental Links.]
Economist Tech Quarterly: Fueling your morning and commute with coffee
As you probably gathered from the title, although this post is technology related, it is definitely off-topic. However, I found the article interesting, and thought others might as well. Plus, my brother (an engineering geek) stops by occasionally, so if nothing else, this one is reward for slogging through posts littered with “tech acronym du jour”.
And yes, I did the math. 1 gallon of coffee ground derived biodiesel requires the consumption of 50lbs, approximately 2,250 cups of coffee. So, if you see a major uptick in my writing output, accompanied by jittery speech, you know I’m doing my part in the “beaning of America”.
Without (even) further ado, what follows are excerpts from Fuelled by coffee, in the most recent Economist Technology Quarterly.
The basics:
“In the case of coffee, the biodiesel is made from the leftover grounds, which would otherwise be thrown away or used as compost. Narasimharao Kondamudi, Susanta Mohapatra and Manoranjan Misra of the University of Nevada at Reno have found that coffee grounds can yield 10-15% of biodiesel by weight relatively easily. And when burned in an engine the fuel does not have an offensive smell—just a whiff of coffee. (Some biodiesels made from used cooking-oil produce exhaust that smells like a fast-food joint.) And after the diesel has been extracted, the coffee grounds can still be used for compost.”
The accidental discovery:
“The researchers’ work began two years ago when Dr Misra, a heavy coffee drinker, left a cup unfinished and noticed the next day that the coffee was covered by a film of oil. Since he was investigating biofuels, he enlisted his colleagues to look at coffee’s potential.”
Advantages beyond aroma:
“The researchers found that coffee biodiesel is comparable to the best biodiesels on the market. But unlike biodiesels based on soya or other plants, it does not divert crops or land from food production into fuel production.
A further advantage is that unmodified oils from plants, like the peanut oil used by Diesel in the 19th century, have high viscosity and require engine alterations. Diesel derived from coffee is less thick and can usually be burned in an engine with little or no tinkering.”
The math (why we won’t be doing this at home):
“Although some people make their own diesel at home from leftovers and recycled cooking oil, coffee-based biodiesel seems better suited to larger-scale processes. Dr Misra says that a litre of biodiesel requires 5-7kg of coffee grounds, depending on the oil content of the coffee in question. In their laboratory his team has set up a one-gallon-a-day production facility, which uses between 19kg and 26kg of coffee grounds. The biofuel should cost about $1 per gallon to make in a medium-sized installation, the researchers estimate.
Commercial production could be carried out by a company that collected coffee grounds from big coffee-chains and cafeterias. There is plenty available: according to a report by the United States Department of Agriculture, more than 7m tonnes of coffee are consumed every year, which the researchers estimate could produce some 340m gallons of biodiesel.”
If you found this interesting, check out the full article and the reader comments.
What does that cheap server really cost?
Kenneth G. Brill, executive director of the Uptime Institute, has an eye opening piece in Forbes on the full cost to purchase, house and run cheap ($2,500) servers. In his work, Brill aggregates facility related server costs that are typically dispersed across several budgets:
“Data-center building depreciation is often carried separately from data-center mechanical and electrical equipment. Utility bills often go to a centralized energy function. Site operation costs for technicians, security staff, power and cooling equipment maintenance, property taxes and other costs are often split between facilities and IT budgets. Nowhere is the total picture consolidated.”
What Brill found is that “Annual facility costs will exceed the cost of a “cheap” server in two years in the best case scenario, or 14 months in the worst.” In other words, “Spending $2,500 on a server really means spending between $8,300 and $15,400 in facility capital to provide the necessary space for housing the server and powering it.”
Other interesting data points:
“–Just the electricity required to provide power and cooling will exceed the cost of the server in six years. Utility bills virtually never go to IT, and often don’t go to facilities either, which inhibits conservation.”
“–For an organization with 5,000 servers, the industry rule of thumb is that up to 30% are technologically obsolete. This means that up to 1,500 servers can just be unplugged with no negative impact on data-center production. The savings: $12 million to $23 million recovered in data-center facility capacity, $700,000 in annual electric savings and 6,000 annual tons of reduced greenhouse gas emissions. These savings result merely by telling the “kids” to turn off the “lights” when they leave the room.”
Brill then continues by asking what this turns the lights of habit could mean for companies and the economy — not to mention the environment:
“If we did this on a broad national scale, do we really need to be building all the new data centers, or could we defer a large portion of this investment into the future? Our companies and economy would be far better off if that money went into new application development instead of bricks and mortar!”
While $15k might seem like small money, Brill concludes with an example of a $22 million blade investment that didn’t account for facilities in the purchase decision:
“One company’s IT department decided to invest $22 million in blade servers but forgot to inform facilities. The facility investment required to merely plug-in the blades was an unplanned $54 million. An additional unplanned $30 million was required to run the blades over three years. So what appeared to be a $22 million decision was really an enterprise decision of over $106 million.”
I’ve only provided some excerpts here. I think this article is a “must-read” not just for managers and senior IT executives, but for all IT professionals making server line-item requests. How can you help shift investment dollars from facilities to the delivery of business capability?
