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Cloudy Forecast for Technology

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Tech companies make cloud computing announcements underneath cloudy economic skies.


It's been a tough month for the economy in general and the technology sector in particular. Even Microsoft, which had not previously laid off employees, resorted to job cuts. So did AMD, EMC, Ericsson, IBM, Intel, Lenovo, Philips, Seagate, Sprint Nextel, Sun, Texas Instruments, and Yahoo. Yet the news was not all about poor earnings and job cuts. Several of the big vendors rolled out cloud computing enhancements or new offerings. The pace of these announcements suggests a demand for cloud computing alternatives in this tough economy.


At its recent Lotusphere conference, IBM said it is broadening its offering of low-cost and free software. The announcement, specifically targeted to SMBs, introduced IBM Lotus Foundations Start 1.1 and a new offering, Lotus Foundations Branch Office. Lotus Foundations is IBM's hardware and software solution that helps SMBs collaborate using email, office applications, file sharing, and backup and recovery. For more discussion of Lotus Foundations, see "IBM Lotus Foundations Delivers Promise of Autonomic Computing" by my colleague Chris Smith. Also at Lotusphere, IBM unveiled LotusLive, an integrated set of social networking and collaboration services in the cloud.  LotusLive includes the ability to link on-premise solutions with LotusLive services. LotusLive can now also integrate with partner applications from the LinkedIn professional networking service, the Salesforce.com customer relationship management system, and the Skype Internet voice communication service.


IBM also said that IBM Lotus Symphony, IBM's free office suite, passed 3 million downloads worldwide. Symphony also comes with Foundation and the IBM Open Client Linux desktop software bundle. Also, IBM and Red Hat announced they would cooperate to move IBM Lotus clients from Windows to Linux desktops. Finally, IBM said it would acquire the assets of Outblaze, an online messaging and collaboration service that offers multilingual email and social media services to 40 million users. All of these announcements show that IBM believes that in this difficult economy, SMBs seek low-cost, easy-to-implement computing solutions.


Oracle announced release of Oracle CRM On Demand Release 16, its customer relationship management offering in the cloud. New in the release are advanced customization capabilities, new partner relationship management capabilities, and a hosted single-tenant standard edition. Despite the application being in the cloud, Oracle claims users can customize the user interface, process, and data layers of the solution. The release also enhances reporting capabilities and adds industry-specific functionality. While Oracle has not historically warmly embraced the concept of cloud computing, this release shows it is serious about taking on Salesforce.com in the enterprise hosted CRM arena. Especially of note are the customization features, which are often lacking in cloud-based solutions.


Microsoft's Kirk Gregersen, Director, Office Live Product Management and Marketing, said the company decided to converge Office Live and Windows Live into an integrated set of services at one destination. Office Live Workspace and Office Live Small Business now have 4 million subscribers, according to the company. Office Live Workspace offers online document access, sharing, and storage. Office Live Small Business provides email, e-commerce, and Web site design and hosting. Windows Live is a consumer service that includes email, online storage, people networking, instant messenger, photo sharing, and mobile access. Microsoft will provide more details on the convergence, yet the services are essentially the same, meaning there should be a thinning of repetitive services, resulting in a more cohesive Microsoft cloud computing position.


Meanwhile, Sun Microsystems acquired Q-layer, a cloud computing company that automates the deployment and management of both public and private clouds. Q-layer provides data center virtualization with provisioning of services such as applications, bandwidth, servers, and storage. Q-layer will be part of Sun's recently defined Cloud Computing business unit that also includes MySQL, storage services, other virtualization technologies, the Sun Modular Datacenter, and the Sun Constellation System.


Symantec jumped into the fray of business cloud computing with the beta release of its GoEverywhere service, a secure personal online workspace that makes applications and data accessible from any computer. Symantec offers a single login to the workspace, which provides a central spot to use office applications and access data over the Internet. Also pre-release is offline Gmail, just released in Gmail Labs. In a sort of cloud-diffusion initiative, Google creates a local cache of one's email on their computer so that when there is no connection, one can still access the messages. And rumors abound about an upcoming Google online storage service tagged Gdrive. As Google expands into SMBs with its various cloud-based offerings, it seems cognizant of the need to address customers' cloud computing concerns about not being able to access key applications if a connection is down.


With the economy in the dumps, SMBs are watching every dollar, and surely the technology vendors feel the pain too. Therefore, it makes sense that there is a parade of cloud-based solutions promising everything businesses might have already, but at much lower costs. However, SMBs should exert caution in any switching and perform proper cost-benefit analysis for their particular scenario. In addition, plans for transitions should strive to minimize disruption to the business. In addition, SMBs should evaluate the overall direction of the contending vendors in terms of their levels of integration, customization, and cloud-enabled features. There are definitely opportunities for SMBs to embrace the cloud, and doing so while vendors are hungry could result in investments that pay back relatively quickly.

Ron Exler

Ron Exler is a senior product manager at Arbitron, the media ratings company. Previously, he was an independent analyst and consultant. He was formerly Vice President and Research Fellow for Robert Frances Group (RFG), a provider of advisory services for information technology (IT) executives and vendors. Mr. Exler has worked with executives from some of the world's largest enterprises, so he understands how business executives make decisions. He also writes a blog (http://www.thegeofactor.com/) and was named one of the top English-language analyst bloggers by Technobabble 2.0. Mr. Exler has had more than 125 articles and technical papers published.


Prior to RFG, Mr. Exler worked for several enterprise software companies, including Landmark Systems (now ASG) and Intersolv (now Serena Software). He held positions in marketing, product management, research, sales support, software development, and training. He has an M.S. from the University of Wisconsin, Madison and also earned a B.S. from Oregon State University.



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