Digital Walkabout

Build it and they will come

Jevon's Paradox is the proposition that technological progress that increases the efficiency with which a resource is used tends to increase (rather than decrease) the rate of consumption of that resource. When that increase is not accompanied by any more than organic growth in resource management, it can result in a resource crunch. Simon Wardley of the CSC Leadership Forum has often pointed out that, whilst cheaper operations costs and reduced capital spending should signal a reduction in TCO, the truth is quite the opposite. This argument is rather interesting on its own, but I see the greater issue for Cloud to be resource starvation. There are several parallels which reflect that, despite observed reductions in TCO, the resource crunch has resulted in both increased costs and reduced service.

We have witnessed this effect in the mobile space, where mobile bandwidth has been consumed at an alarming rate with the emergence of data services. AT&T's iPhone service in the US the last few years has only highlighted this, with the network brought to its knees in Manhattan, San Francisco, Los Angeles, Chicago and other major metropolitan centres. Advances in the utilisation of mobile network resources saw their near exhaustion in less than a decade. This has been accelerated and exacerbated by the common practise of planning infrastructure after the fact. Other regions have fared better, such as South Korea, Japan, and Europe, yet at the price of resourcing and implementing broad infrastructure projects.

Will the Public Cloud be the next usage model that only increases resource consumption? The present rate of adoption, for example, by small businesses and social network games of Amazon Web Services, seems to suggest so. These are early adopters, yet the benefits of Cloud, together with these trends, are significant enough to strongly indicate only an increase in consumption.

Despite all the buzz to the contrary, compute and storage resources are finite, andnetwork resources continue to provide the principal bottleneck. Presently, dominant Public Cloud campaigns gloss over, or entirely ignore, this finite nature. The more compute, storage and network resources transform into utilities, the greater the exponentiation of consumption. Virtualization only accelerates the consumption rate, given the increase in server density. Without understanding this, increased Cloud adoption will be pursued with poor management of resources, and, resultingly, costs will increase to a point where they are uneconomical.

Resource management will grow in importance as inter-connectivity and cloud consumption increase. Although billing and metering have developed to a certain degree within Cloud service providers, this has not been approached in a manner that would truly manage the use of resources. Much has been developed to support this at the virtualization layer, yet not at the service layer. Resource management aims to address this gap, by enabling actions to be taken with workloads based upon service level agreements and policies, resource profiles and how they map to workload execution within resource pools and individual nodes.

This impacts both TCO and ROI. TCO can be maintained at a consistent level of efficacy through managing resource availability and constraints, to optimise the cost-vs-service ratio. ROI can be targeted and achieved through assurance of resource availability. Without resource management, costs can easily increase beyond efficacy, and pathfinding activities suffocated, as resources are heavily consumed and capacity exhausted.

Whilst a high-volume, low-margin strategy suits a number of business models, those looking to the Cloud to execute their mission-critical or highly-regulated processing need more than an optimistic RAS model to assure their operations. Tenant visibility into the Cloud (more on this in my next post) combined with fine-grained resource management will make this actionable.

Cloud made easy

The world is exploding with a growing number—and variety—of computing devices. By 2015, we expect to see 15 billion devices and an additional one billion users worldwide. This growing user base will continue to demand, and expect, a wide assortment of applications and on-demand services—all with a fantastic user experience.

How will we get there? Client-aware cloud computing: Internet-based computing that provides shared resources, software applications, and information to computers and other devices on-demand—similar to your electric service.

'Client-aware’ defined 

Imagine you’re low on battery power; no problem. The client-aware application knows and has already saved your critical data. Intel Software and Services Group (SSG) pioneered the Web application programming interface (API) that adds this benefit to the cloud. 

In a client-aware environment, the cloud takes advantage of client capabilities to optimize application delivery and end-user experience across a range of devices in a secure fashion. Client-aware solutions adapt seamlessly to your devices regardless of the type of client system you are using. You’re in control. You are no longer tethered to a single computer or network. Change computers, and your applications and documents follow you through the cloud. Move to a mobile device, and your applications and documents are still available. There's no need to buy a special version of a software program for a particular device, or to save your document in a device-specific format. 

Intel Cloud Builders: The path to Intel’s ‘Cloud 2015’ vision 

With many IT organizations evolving to meet these user expectations of a wide assortment of applications and on-demand services, Intel SSG and Data Center Group (DCG) formed Intel® Cloud Builders—an industry initiative where leading systems and software solution providers provide best practices and practical guidance on how to deploy, maintain, and optimize a cloud infrastructure. The program’s goal is to provide a path to Intel’s “Cloud 2015” vision.

Intel Cloud Builders will deliver proven, detailed reference architecture solutions, and are designed to address IT challenges and the requirements of the Open Data Center Alliance. These best practices can be used now to build and enhance clouds that are more simplified, secure, and efficient.

“Engaging with the program benefits Microsoft and our mutual customers because we jointly create reference architectures so our customers can get a tried and true solution,” says Bill Laing, Microsoft corporate vice president, Server and Cloud Division. “Together, we're really about delivering more value to our customers at lower cost over time.”

“HP is a proud member of the program,” says Steven Dietch, vice president, Marketing, Cloud Infrastructure, Hewlett-Packard. “We're collaborating very tightly, particularly from an engineering perspective where ultimately the end goal is to make it easier for customers to deploy cloud solutions whether that is in a private or public domain.”

Simon Crosby, CTO, Datacenter and Cloud Division, Citrix Systems, Inc., said, “Our participation in the program will provide customers access to a stable, tested starting point for deploying cloud infrastructures built on state-of-the-art Intel® Xeon® hardware, and cloud solutions from Citrix. Citrix will build on these reference architectures to enable our customers to deliver scalable cloud services."

Taking the ‘crazy’ out of cloud design, deployment, and operation 

In short, Intel Cloud Builders is the vehicle by which Intel provides proven solutions that enable leading IT organizations and system and solutions providers across the industry to make the transition to cloud computing.

The goal with Intel Cloud Builders is to show an enterprise or service provider infrastructure IT engineer how to design and operate a cloud, and make the transition to cloud computing simpler, safer, and more cost-effective. 

In addition to addressing the challenge of getting a basic cloud up and running, our expanded scope includes usage models that show IT how to build a power-efficient cloud, a set of trusted pools, on-boarding, secure cloud access, scale out storage, unified networking, client-aware computing, and more.

The result is a set of detailed reference architectures—designed to address the evolving usage requirements of the Open Data Center Alliance, which should make for a few less “crazy” IT people in the world.

Software optimization makes Intel solutions shine 

For the datacenter, SSG works closely in optimizing many large scale datacenters and internet applications—Web apps, social media, video, etc. Examples include the work done with Facebook and software optimizations that led to a six times reduction in image processing at Alibaba—a global leader in e-commerce for small businesses—and a 50 percent increase in power density at Baidu—a Chinese search engine for websites, audio files, and images. 

 

Smart TV coming to a home near you

For almost 55 years, television has lived in our homes as the centerpiece of our living rooms. Today there are more than 2 billion TVs worldwide. People around the globe spend an average of 3-4 hours per day watching television.

Our favorite domestic appliance is deeply embedded into the fabric of who we are and what we do. It’s simple, easily understood and we do not want it to go away.

But that doesn’t mean TV isn’t changing. Over the years, color TVs replaced black and white screens. Then came Atari games on TV, cable, video cassette recorders, digital video recorders, high-definition screens, video-on-demand, 3-D—all have been part of TV’s evolution.

Today TV is at another big inflection point, with the advent of “smart TV,” but exactly what is “smart TV”?

What is smart TV?

Smart TV is much more than just Internet-connected TV, it’s a new TV experience, that lets users:

• Search online and personal content as well as broadcast programming all from their TV
• Access downloadable applications
• Connect to social networks while watching favorite programs or movies
• Control their TV with either their smartphone or unique remote controls with voice commands

The term, “smart TV” is an Intel-generated term, says Brian David Johnson, Intel Labs futurist and author of Screen Future: The Future of Entertainment, Computing, and the Devices We Love. It’s based on consumer research, our marketing push and a new breed of a consumer electronics device.

Johnson says that smart TV is not a product but rather a whole new category of TV.

High-profile partners in smart TV

Intel is off to a grand start in this brave new world, with recent high-profile announcements with partners Google, Sony, and Logitech. Logitech last month became the first company to unveil a device that uses Google TV, which is powered by the Intel Atom CE4100 processor . The Google TV platform allows users to surf the Internet and watch TV at the same time. Sony unveiled a few weeks ago its HDTV and Blu-Ray player, both equipped with Google TV and Intel’s CE4100.

Google TV melds the hundreds of channels available on pay television with the virtually unlimited content—video, games, and otherwise—available on the Internet. It runs on Google’s Android operating system and utilizes Google’s Chrome web browser. It uses picture-in-picture technology to display your search results on top of live TV, so you never need to switch between experiences. 

Analyst Rob Enderle commented on Google TV to ComputerWorld, "In the right format and with the right usage model and customer experience, people could adopt this.” He added, "Folks probably won't be doing much browsing on their TV. But consuming Internet media? Certainly. Up until now it has been too difficult for most to do that.”

What smart TV is not (or shouldn’t be)

The message from analysts, reporters, and tech gurus could not be clearer: Do not make TVs into PCs.

"Do you want to live in a world where your Tivo says, ‘I'm terribly sorry, before you can see this next show, I have to defrag myself?’” asked Intel Fellow Genevieve Bell at a recent consumer press event.

“People don't want their televisions to turn into a computer. People actually love their televisions because it turns out they're nothing like computers.”

Bell, leader of Intel Labs’ Interaction and Experience Research group, is adamant that Intel’s smart TV push will work. This go around, she says, Intel really “gets it” because smart TV is really about the TV experience and not the Internet.

“If you just have the TV emulate the PC experience, then I think that approach will fail,” says Tim Bajarin, a research analyst and president of Creative Strategies, in PCMag. “On the other hand, if you turn the various Internet sites that might work on a big screen into channels, with viewing at the heart of the experience, and deliver an experience that consumers are used to on a big screen, then the chance of success is better.”

The concept of bringing the Internet to the TV set has been a hot topic for over a decade, adds Bajarin, but only now are we “starting to see products that deliver the promise in a way that consumers may actually find interesting.”

Learning what works, and doesn’t, is one of the hard-won lessons from our experience with Viiv, which was Intel’s platform initiative similar to Centrino and vPro that provided a collection of computer technologies with a combination of Intel ingredients to support a "media PC" concept.

What did we learn from Viiv?

“We failed with Viiv,” says Johnson. “We learned a lot of things, but the most important being we tried to turn the television into a computer.”

Gary Palangian, Google TV program manager in DHG, agrees that the Viiv approach was about putting a PC in the living room, while smart TV is about putting your Internet on the TV.

He points out, for example, that Viiv was powered by PC chips, while the CE4100 was designed specifically for consumer electronics, offering home theatre quality audio/video performance, signal processing, surround sound, and 3-D graphics.

Another key factor in our better grasp of what users want from smart TV came from an Intel research project led by Bell’s user experience group in DHG called “The Social Lives of Television.”

Intel Labs anthropologist Dr. Alex Zafiroglu, Johnson, and other anthropologists and ethnographers visited hundreds of people in their homes in India, the U.K., the U.S. and China to learn how they engaged with their TVs so that Intel could better understand what consumers actually wanted.

“When we started working on the concept four years ago, we figured the number-one thing people would want in the future is movies-on-demand,” explains Johnson.

“But our focus groups revealed that what people really wanted on their TVs was Internet access. People saw the Internet as a way they could get whatever they wanted on demand. Watching what they wanted, when they wanted it, and where they wanted was a profound and liberating experience.”

These findings were invaluable when Google approached Intel looking for hardware to run Google TV.

Why smart TV is a must-win for Intel

The consumer electronics market is “an essential part of Intel’s strategy to expand beyond the traditional computer segments and it represents a growth opportunity for our company and shareholders,” explains DHG leader Brad Daniels.

Whilst Intel CEO Paul Otellini points out that the smart TV segment is just getting started, he told an external audience in October, he’s bullish on its prospects. “TV is about to change more in the next year than it has in the last 50 through the seamless integration of the microprocessor and the Internet into our viewing experience,” Paul predicted.

And success in smart TV will help us in other adjacent markets. “Smart TV represents a great new category to grow our business,” says Chief Marketing Officer Deborah Conrad. “But it’s also a fantastic opportunity to extend our brand and associate Intel with exciting, innovative devices and services.”

What’s ahead for smart TV?

In addition to Google TV, our CE4100 is also in D-Link’s new Boxee Box. We’re also beginning work with several other smart TV players for product releases in the coming months in the U.S and in EMEA later in 2011.

“People are used to seeing Intel in the PC space and not the CE space,” says Kevin Patterson, ASMO campaign manager for smart TV in SMG. “It’s a big opportunity for Intel.”

Intel enjoys a competitive advantage in terms of hardware over the next few years, says Wilfred Martis, manager of retail consumer electronics in the Digital Home Group (DHG), and we have a “whole lot” of OEMs lined up to bring Google TV to the market early next year. But the competition isn’t standing still. As in the smartphone world, ARM-based SOCs will gain traction, and companies like Samsung are busy designing CE chips.

“In this smart TV space, we are ahead, the first to come to market,” points out Martis, “It’s ours to lose.”

“I don’t sleep anymore, that’s how exciting this is,” he adds. “It’s been a long time coming. We can now walk into stores and say, ‘We made that happen.’”

 

Cloud computing to help foster a greener planet?

A recent Microsoft-commissioned study - focussed on Microsoft business applications - bears out what environmentally-conscious companies have hoped for all along: cloud computing has the potential to reduce energy consumption and carbon emissions by 30 percent or more. 

According to the study, conducted by Accenture and WSP Environment and Energy, large data centres, such as those run by tech giants Microsoft and Google, do benefit from economies of scale and operational efficiencies; small businesses, of about 100 users, moving business applications away from on-site servers into the cloud can see net energy and carbon savings of more than 90 percent; and mid-sized organisations, of about 1,000 users, the could see savings were between 60 to 90 percent. 

“The cloud has the ability to deliver business value for customers in an age where corporate responsibility is critical to business success," said Rob Bernard, chief environmental strategist at Microsoft. 

Larger operations are generally more efficient managing server utilisation and capacity, the researchers said, noting that they can increase the server capacity for an application during peak periods and decrease when not in use. Large public cloud environments are better at dynamic provisioning and can serve “millions of users” across many companies simultaneously on one “massive” shared infrastructure, according to the study. 

The researchers concluded that while independent organizations can incorporate dynamic provisioning, server utilization and other strategies into their own data centre, the benefits will not be as great as it would be for a large cloud provider. 

The study focused on three commonly used Microsoft business applications: Microsoft Exchange Server 2007 for e-mail, Microsoft SharePoint Server 2007 for content sharing, and Microsoft Dynamics CRM for the customer relationship management platform. Each on-premise product was compared with cloud-based equivalents: Microsoft Exchange Online, Microsoft SharePoint Online, and Microsoft Dynamics CRM Online.

Researchers calculated the carbon footprint of server, networking and storage infrastructure for three different deployment sizes, of 100 users, 1,000 users, and 10,000 users, according to the writers. The study relied on actual data provided by Microsoft to estimate cloud-based energy use and carbon footprint. 

Choosing the cloud option can enable a significant reduction in carbon emissions, and the smaller the organization, the larger the benefits, said the study. In fact, the research team calculated that 32 percent of emissions could be saved by moving 50,000 e-mail users in North America and Europe off individual Exchange servers and on to Microsoft Exchange Online. 

Companies are generally considering the move to cloud computing to reduce costs and increase business flexibility. Along with hoped for reductions in the electric bill, companies are interested in minimizing the number of physical infrastructure, such as servers and switches, needed. Companies can also outsource some of the performance and management tasks.

 "The benefits of cloud computing are clear: Increased productivity, reduced costs and lower management overhead of products have become key considerations for organizations evaluating Microsoft's cloud services,” said Bernard. 

The study focused on select Microsoft applications, but the study authors felt it was “likely” that “similar advantages” would be seen for other business applications and cloud providers. 

 

 

MeeGo v1.1 released

The MeeGo open source project hosted by the Linux Foundation, and supported by Intel and Nokia, announced the project release for MeeGo v1.1. MeeGo provides a solid baseline for device vendors and developers to create software for a range of devices such as netbooks, tablets, handsets, media phones, smart TVs and in-vehicle infotainment (IVI) based on the Intel® Atom™ processor. Optimized for the Intel Atom processor, MeeGo delivers an exciting new internet experience on these devices. MeeGo was designed as a common software platform across various devices with adaptable, yet consistent, user experiences. SSG believes open source is the best method to engage the broad developer community and advance innovation in these new device categories. With MeeGo, companies can deliver a differentiated user experience that reaches across device categories and increases the opportunity for OEMs, application developers and service providers to reach more customers. The MeeGo v1.1 release includes: Core Operating System (OS) v1.1 – consolidated common base operating system for all UXs Netbook User Experience (UX) v1.1 - complete set of core applications for netbooks In-Vehicle Infotainment (IVI) UX v1.1 – includes a sample IVI home screen and taskbar built with Qt 4.7 and speech recognition Handset UX v1.1 - technology snapshot implements basic development UX for voice calling, SMS messaging, web browsing, music and video playback, photo viewing, and connection management SDK v1.1 Beta - SDK for MeeGo Core OS and supported UXs will be released later this month. MeeGo code is expected to be released to the open source community twice a year. For more information please visit www.meego.com or www.meegozone.com.

 

The forecast calls for open, interoperable clouds

On October 27, Intel launched a three-pronged initiative for cloud computing: the unveiling of its ‘Cloud 2015 vision,' the announcement of Intel's role in helping create and serving as the technical advisor to the Open Data Center Alliance, and the expansion of the Intel Cloud Builders program. You can see the launch on the webcast replay.

This launch was in response to the industry’s call for greater interoperability, increased flexibility, and open industry standards for the cloud and next-generation data centers. At the launch, Intel outlined three key elements of our ‘Cloud 2015’ vision: a world of interoperable ‘federated’ clouds; ‘automated’ movement of services and resources; and ‘client aware’ clouds that know what processing should take place in the cloud or on your laptop, smart phone or other device to provide optimal user experience.

To achieve this vision, Intel helped to form and serve as a non-voting technical advisor to the Open Data Center Alliance, an independent consortium of more than 70 IT leaders that together represent over $50 billion in annual IT investment and have cloud research or projects underway. Their mission focuses on delivering next-generation data center and cloud requirements to meet the challenges facing IT in an open, industry standard and vendor agnostic fashion. Intel also announced the expansion of Intel Cloud Builders−which feature 20 of the world’s leading hardware and software makers−along with its commitment to resources to spur innovation and make clouds easier to deploy, use, and share.

 

The Policy of Innovation

As a Technology Strategist, my charter is to drive bold technologies to transform my organisation, deliver world-class technical innovation, know the external research community, know my organisation, and provide technical leadership. I thus spend a significant amount of my time looking for how to achieve that transformation through "innovation". With a smaller portion of my time, I present at a number of conferences on these strategies, their associated technologies, and how they can be applied to solve real-world problems.

One recent presentation was given at CloudCamp Hamburg. One of the reasons I chose to do so was to reach a new audience. The sessions at the event were quite good, focussing on developments in the business models, usage models and technologies of the Cloud. Yet, I read posts such as this one, and wonder that, based on my experience in Europe and the Americas, if there a) is a problem with the state of innovation in Europe, or rather, b) the taxonomy of innovation exemplified in the post is a problem in and of itself.

Anyone who has spent any time with me will know that I am not one for fussing about with taxonomies. I feel that, essentially, these are a tertiary consideration, and to be addressed after what I consider to be the 'real work of taking a concept from idea to reality. My personal opinion is that taxonomies are pedantry, used to constrain, limit and control the process of innovation, and are too often used as a device to be heard, rather than to solve any problems of significance. Yet, when I hear or read the use of the word 'innovation' or phrase 'big picture' to focus only on business models, and ignore usage and technology, think there's something amiss. If we limit 'innovation' to *exclude* usage and technology advances, we are truly advancing style over substance.

Most of the widely recognized innovations in history which have advanced the standard of living for many in modern civilisation arose from usage or technology innovation addressing very specific, detailed problems. The innovation may have encompassed a grand vision, but that vision arose from connecting the dots which started with solving a specific problem. To make the blanket claim that innovation is hindered by being too "busy nitpicking on time consuming details" makes as much sense as reality television. An artist worth the enduring attention of the public will need to have mastered the fundamentals of their craft; a reality 'star' will exit the spotlight in relatively short order (although not fast enough for some of us) since their recognition was purely situational, and they had not addressed any of the 'time consuming details' necessary to sustain any career in entertainment.

Based on my assumptions, the iPhone is 10% innovation and 90% evolution. The device has truly been innovative in its enablement of Augmented Reality - Apple improved a number of existing technologies such as touch screen, application integration and metadata management, to provide a usage model which was a step beyond the expectations of a mobile device. The innovation lay in how the individual technologies were deployed to provide a better (and now widely adopted/mimicked) usage model; the whole is greater than the sum of the parts. Yet even the improvements in the parts, not to say new usage model, required a foundation rooted in time consuming details. Ask any Apple engineer working on any of the technologies that were developed or revised, and they can attest to how much effort - deep in the bowels of hardware, software and/or user experience engineering - was required of each and every one of them to deliver them.

The innovation of Rich Internet Applications (RIA), and subsequently the Rich Services Cloud - something with which I have been intimately involved - arose from similar efforts. The underlying engines supporting this, such as Flash, had already been widely deployed for nearly a decade, but it was the understanding of the limitations of Web 1.0, at the level of nitpicking on time consuming details, married with the vision for a rich yet agile development and user experience, that drove the development of platforms such as Flex and Apollo/AIR, Silverlight, and now HTML5/Chrome. Each of these implementations of RIA innovation recognised that the real world, devil-in-the-detail problems of Web 1.0's fully remoted architecture were non-performant, did not scale, and limited the web experience to very simple, highly constrained models

Innovation is not in the vision itself, or in the nano-level details, but in how recognising the vision that can be realised from creating or enhancing bits at the level of time consuming detail, and successfully mapping them. Business across Europe may not have adopted North American-style Public Cloud, with its Lowest Common Denominator (LCD) user experience and generally coarse Service Level Agreements (SLAs), but that does not reflect their difficulty with innovation. Rather, it reflects that organisations across Europe have chosen to focus their energies solving some very important problems, after already bravely diving into related areas such as the Open Business Initiative wholly, and learning important lessons from such moves. Europe has proven itself truly innovative in business models, usage models, and technology, as exemplified in it's world-leading or -challenging development in areas of mobile, automation, and web, to name a few. European organisations have not been shy to embark on bold endeavours to transform their business and usage models by developing, adapting or adopting innovative technologies.

Likewise, I've encountered plenty of innovation in North America arising from the unabashed confrontation of time-consuming-detail problems presented by the challenges of Cloud Computing. There have been plenty of clever applications of Cloud, but no matter how cool they may be, the real innovation, in my definition, is in the usage models and technologies that have enabled them together with a number of not-so-cool apps. Throwing something on the Cloud with a slick interface and a minimal SLA isn't innovation. Developing the foundations for HTML5 and Native Client Libraries, developing MapReduce and Hadoop, developing image recognition algorithms that scale by shifting cycles across compute resources based on capabilities and utilisation  - these mapped to new business and usage models is innovation.

How Big is Amazon's Cloud Computing Business?

http://gigaom.com/2010/08/02/amazon-web-services-revenues/

It goes without saying that with its array of web services, Amazon has transformed the computing landscape and nurtured what is generically known as the cloud computing industry. By turning expensive storage and computing hardware into a billable service, it has opened up new vistas for entrepreneurs and made corporations rethink how they build and use their computing and storage resources. The question often people ask: How much money is Amazon making from these web services? I’ve heard some wild estimates.

Today, UBS Investment Research analysts Brian Pitz and Brian Fitzgerald released a report which projects revenue numbers against Amazon’s web services. The duo estimate that in 2010, AWS will generate about $500 million in revenues and will grow this number to $750 million by 2011. By 2014, it would bring in close to $2.54 billion in revenues.

UBS analysts believe that the total market for AWS-type services will be between $5-to-$6 billion in 2010 and will eventually grow to $15-to-$20 billion in 2014. How they arrive at these numbers:

• IDC says the total global cloud market in 2010 will be $22 billion and $55 billion in 2014.
• IDC says the total servers and storage account for $5 billion-to-$6 billion in 2010 and $15-to-$20 billion in 2015.

Of the twelve AWS product lines, only two (EC2 and S3) compete in this subcategory. AWS essentially ‘rents out’ IT infrastructure to companies that seek to outsource IT needs such as Application Hosting, Web Hosting, High Performance Computing, Storage, E-Commerce, and more. Amazon was one of the first entrants (3Q06), and is a top player in the rapidly growing market. (UBS Research Report)

(Amazon Web Services: Revenue Model)

They argue that while so far the AWS revenue has been small and immaterial when compared to the overall Amazon revenues (roughly $25 billion), that will change soon and AWS will contribute about 10 cents a share in earnings during 2010, and grow it to 22 cents in 2011. The UBS analysts value the AWS business at between $3.4 billion to $3.8 billion. According to their estimates, AWS business had a net income of $58.2 million in 2010 and will make $100.7 million in 2011. By 2014, that number will jump to $393 million, or 83 cents a share. The analysts estimate that gross margins of the web business will be around 50 percent versus Amazon’s gross margins of around 22 to 23 percent.

These are astounding numbers and, if accurate, will prove that Amazon was smart to bet early and bet big on the cloud computing opportunity. Perhaps one thing I should note (and caution) — so far, Amazon has not publicly broken down its revenues along various product categories.

Yet I wonder how elastic this is, given the traditional Web Hosting market supported by AT&T, Rackspace, etc and other markets? Also do IaaS and PaaS provide incremental revenue for these services, or has this affected revenue for them?

 

Entering the tablet fray

CNet columnist Brooke Crothers, wrote this week that “Intel is wasting precious time waiting for its ‘partners’ to build the equivalent of an iPad and iPhone," and that Intel should build its own tablet.

Crothers seems impatient for someone, anyone, to bring some competition to  Apple’s tablet. He said Intel had the wherewithal to produce compelling products and should “short circuit” the process of watching OEM partners “prattle about Intel-based tablets, then do nothing.”

In most computing markets, he said, Intel of course can’t produce its own branded products because we would compete with products from our OEM customers, not to mention attract charges of dominating those market segments. But, he said, tablets and smartphones are different.

“In these markets, Intel does not carry the clout (potential for big revenue streams) as it does in PCs...In tablets and smartphones, Intel is just another chipmaker—and not seen as competitive to boot,” he wrote.

He noted that there’s a lot of design expertise at Intel, and that some of the first eye-catching ultra-thin laptop designs came from Intel. And the hiring of former Palm executive Mike Bell increases that expertise even more.

He agrees with Intel execs who say tablets aren’t eating into PC sales. But he asked, “Will Intel keep saying this while slowly consigning itself to insignificance in some of the most interesting newfangled device markets?”

Mobility and QoE with Hardware-Assisted Workspace Virtualization

Workspace Virtualization provides a scalable, performant architecture for desktop virtualization, which simplifies the creation, access and management of virtual desktops.

The advantages of Workspace Virtualization include global scalability and enhanced manageability, which enable enterprises to create a hierarchical desktop virtualization management system that can be distributed globally with multi-site storage support; automated synchronization and on-going backup of virtual workspace images; isolation and workspace security to prevent data leakage and reduce the attack surface of the virtual environment.

This provides a compelling architecture for Cloud Computing that is truly mobile and productive. Although great advances have been made with mobile networks, we are still only intermittently connected, contending with high latency, low bandwidth, or no connection at all. With virtual workspaces deployed to devices, you address the issues of intermittent connectivity. If the virtual workspace is only run remotely, in the data centre, you need to be reliably connected in order to be productive. That simply isn't realistic for the enterprise, thus the demandd for a rich device to run the virtual workspace.

Imagine bringing in a contractor into your enterprise, who brings their company-owned notebook, and remotely loading a virtual workspace onto that device with the relevant workload for the project. This workspace is secure, partitioned from one's corporate workload, and when the contract is finished, the workspace is removed, leaving practically no footprint on the device.

Now extrapolate that to the Bring-Your-Own-Computer (BYOC) scenario - you have a device that you love, and rather than provisioning you with another device, you use yours onto which the enterprise's virtual workspace is deployed. You then have the corporate workload on an attested image, running in a virtual workspace. The enterprise can trust it because it's secured from both your user information and based on the device identification. The enterprise only has to manage their virtual workspace, the user manages all their personal data and applications, neither environment can affect or unbalance the other. The user gets the device they want, and the enterprise remains productive.

The same applies for Desktop-as-a-Service (DaaS), which targets small and medium business (SMB) - Service Providers can deliver virtual workspaces to user devices that can be initialised, upgraded, and revoked with a fine-grained degree of control, without ever having to see or touch those devices. The SMBs can rest assured that only authorised, vetted devices can access their services in a truly scalable and mobile fashion.

The power of this architecture is derived from capabilities delivered by the underlying hardware which provide devices with identity; execution, communication and I/O isolation; trust attestation; encryption acceleration; and remote, in-band and out-of-band management capabilities. This hardware-assisted workspace virtualization realizes the full value proposition.

Intel and RingCube have come together to deliver hardware-assisted workspace virtualization with vDesk 3.1 - providing scalable, high performance desktop virtualization for Windows 7. vDesk leverages the capabilities of Intel's vPro mobile platform to provide truly mobile user productivity, lower desktop management costs and eliminates the performance and resource overhead of virtualization technology. Users can run their vDesk workspace on managed or unmanaged devices, providing a solution for campus workers, field staff, telecommuters, contract/off-shore workers.

Read more about how RingCube vDesk 3.1 and Intel vPro deliver Workspace Virtualization in the joint white paper now available.