View From Above

August 23, 2013  1:32 PM

Let’s talk about apps, ba-by

Posted by: Ron Miller
Apps, mobile
Two smart phones in front shelves containing various apps.

It’s not hyperbole to say apps changed everything.

It’s not hyperbole to say that when Apple decided to let third party developers create apps for the iPhone, it changed the whole mobile dynamic and it altered expectations in the enterprise too.

After that, Android came along and took it a step further, providing an open mobile platform to build apps. Whatever direction you’ve taken from that 2008-2009 timeframe a whole economy of sorts has built up around apps and billions of them have been downloaded since.

We’ve come to love our apps and they have actually changed our expectations in terms of how we assume software should operate. Apps at their best are simple, only doing a few things. They are easy to use. You download one, you open it and with little or no instruction you can use it.

After years of dealing with highly complex tools like Office or enterprise tools like content management, CRM and ERP; people were all but giddy to find apps they could provision themselves and use without training. And while in an app store, you’re going to find your share of “crapplications” (as my friend Brian Katz calls them), a good many of them are highly focused and extremely useful from both a consumer and employee perspective.

What’s even better is you don’t need IT to help you choose them or install them. They are mostly free or very cheap and if you try one, and find it doesn’t meet your needs, no harm, no foul.

Compare that with the applications we had been using prior to that and you can understand why end users saw apps as a huge breath of fresh air, and when they saw simple, highly defined apps, they began to question why the applications they were using at work were complex and often difficult (or even impossible) to use.

Let’s face it, employees just want to find a way to get their job done without wrestling the tool to the ground to do it. We’ve seen this ease of use extended in many cases to cloud applications too. They might do more than a typical mobile app, but the user interface has been designed for ease of use and that’s an important distinction.

Recently, The Enterprise Efficiency blog reported on how WGBH in Boston, a public television station that produces lots of original content for PBS, made the the transition from traditional on-premise applications to cloud applications.

One of the reasons they made the switch was because management was finding tremendously low adoption on the traditional enterprise applications. They found by switching to the cloud and making access available on mobile devices, adoption went up dramatically. There were some that weren’t popular, but they found that when an application wasn’t popular, it was invariably due to poor interface design.

All of this shows just how much interface design matters and app developers went a long way toward showing us just how important ease of use and elegant design is. Now we won’t accept anything less and IT needs to deal with that.

Photo Credit: (c) Can Stock Photo

August 22, 2013  8:07 AM

Some startups outgrow the cloud

Posted by: Ron Miller
Cloud computing
Woman standing in data center while globe twirls in front of her with currency symbols dancing around it.

As small companies grow, it may make sense to open their own data centers.

The theory goes that today it’s easier to launch a startup than ever before. You don’t need a building. You don’t need software. You don’t need infrastructure at all. The cloud gives you everything you need and as you grow it scales to meet your needs.

It makes perfect sense, but is it true?

It actually is mostly true. Many businesses have been able to launch and grow because of the power of cloud computing. But a recent Wired article suggests that there is a point where it becomes less cost-effective to continue using cloud services than it is to open your own datacenters.

We have seen this with data-intensive businesses like Netflix and Zynga. When you reach a certain size, it makes less sense to use the cloud exclusively. “Within IT departments, public clouds do tend to get more expensive over time, especially when you reach a certain scale,” VMware engineer Kit Colbert told Wired.

Of course, it’s worth keeping in mind when companies take it in-house and build a network with virtual resources, VMware is often the big winner, so it’s in their best interest to suggest that private cloud might be a better option as you grow and pull these companies that have until recently been entirely in the public cloud, back into the private side of the business where companies like VMware can profit.

But like anything else, there is also an element of truth to that assertion. As you use more and more public cloud resources, the more expensive it’s likely to get and when that happens, you have to explore your options. If you’re spending x amount of dollars on cloud services and it costs a certain amount of money to build out your own data center, and you’re expected to continue your growth trajectory, at some point you have a decision to make.

And some companies are seeing that it’s just too expensive to continue in the public cloud when the business reaches a certain level.

That tipping point is probably going to be different for every business. For some it’s not going to happen because their business might not be so data-intensive, but for others, when the numbers reach a certain level, the decision almost makes itself.

Which is not to say that the cloud isn’t giving many small businesses an opportunity to launch in a fairly inexpensive manner. They can build their business in the cloud and as they do prove the viability of the idea. If it’s growing and things are going well, then the company is going to catch the attention of funders, and if they don’t, at least they have a compelling pitch to make when it comes time raise that capital required to build a private data center.

The data center probably won’t be your father’s data center either. It will be leaner. It will use virtualizaton and it will very likely make much more efficient use of resources. It will offer internal users a variety of services, which will feel very familiar because they will be the same types of services that they are used to seeing from their Infrastructure as a Service and Platform as a Service providers.

And these companies probably won’t abandon the cloud completely. They will very likely continue to buy commodity services like email in the cloud, but when it comes to running their core business, they may reach a point where hosting it in the cloud ceases to make sense.

And when that happens, they will build their own –and that’s fine. There’s room for both models.

Photo Credit: (c) Can Stock Photo

August 16, 2013  11:55 AM

iPhone and Android could be the next BlackBerry at some point

Posted by: Ron Miller
Apple, Blackberry, Google, mobile, Nokia
Two young men working on a project inside a Silicon Valley Garage.

Could someone be working on the next great mobile device inside a Silicon Valley garage?

This morning, Horace Dediu wrote his farewell to BlackBerry on LinkedIn pointing out the odd volatility of the mobile industry. At one point, BlackBerry against all odds ruled the mobile roost until Apple and Google came along and overturned that dominance.

Could that volatility some day work against Apple and Google as well? It’s entirely possible that that somewhere out there, a small group of individuals is working on a mobile problem the rest of the industry hasn’t considered yet.

In the beginning mobile was about phone portability and nothing more. If you could make phone calls on the go, you were happy. Then BlackBerry changed all that when they came out with their smart phones that allowed you to get email on the run. As Dediu pointed out, this small Canadian company was able to capture a market and control it for 5 years in spite of the fact it was usually competing against Microsoft and its Exchange servers.

Even though Microsoft had the clear advantage of having the internal email infrastructure in place, BlackBerry was able to win the market and control it for a number of years.

Then it all changed again. Instead of simply wanting just calls or email, now users wanted a computer in their pockets and for this job, it was a computer company, Apple that was first out of the gate with a phone that gave users just that.

Android followed a couple of years later and we have these two players battling it out for dominance across the mobile world. Meanwhile early successful players like BlackBerry, Nokia and Motorola are struggling to get marketshare.

This goes to show that tastes and needs change and as they do so does the market. While the mobile space in general continues to thrive, the most successful players seem to be swapped out every several years. Apple has been at it 6 years now. Google 4.5 or so. Could their time be coming?

For now, both companies seem safe of course. There is no obvious mobile need as there was in the first few industry shifts, but just because we can’t see it, doesn’t mean it isn’t out there and at some point, someone will create a device that changes everything that came before.

In his book, The Digital Wars: Apple, Google, Microsoft and the Battle for the Internet; Guardian reporter Charles Arthur writes about a New Yorker interview with Bill Gates back in 1998 in which Gates was asked which company he feared most of his competition. Gates wasn’t afraid of his current crop of competitors Sun or Oracle or anyone else. What scared him most, he told the New Yorker was a company that didn’t exist yet or that was just forming in the mind of some kids in in the proverbial Silicon Valley garage.

Gates was smart to fear the unknown. Just around the corner, some of those smart kids were coming up with the seeds of the ideas that would be Google and Facebook.

And the same fear should hang in the minds of the leaders at Apple and Google today because just as Nokia and Motorola did for phones and BlackBerry did for email, and the two market leaders did for smartphones; somewhere out there, someone could be forming the seed of an idea that will undo them as well.

And if you scoff at that notion, remember how dominant Gates’ company was in the 90s. Nobody stays on top forever. Disruption is the natural of order of things and sooner or later what goes up is very likely to come tumbling back down. Google and Apple would be wise to remember this.

BlackBerry is today’s big loser, but all companies must deal with disruption or suffer the same fate BlackBerry is experiencing now.

Photo by  jurvetson on Flickr. Used under CC 2.0 Share Alike/Attribution License.

August 12, 2013  9:09 AM

Blackberry begins its death march

Posted by: Ron Miller
Broken Blackberry

Blackberry is broken beyond repair.

On December 17th, I made my mobile predictions for the coming year. The first one was predicting the demise of RIM. Today, the company reportedly suspended shares and formed a special committee to administer the Last Rites.

The actual purpose of the committee is to find a buyer or find some way to keep the company afloat, but at this point, it seems highly unlikely that is going to happen. As I wrote last year, Blackberry 10 was the company’s last stand, and even though it created a nice phone and developers reportedly liked the BB10 development program, it was too much, too little, too late.

It wasn’t as though the prediction was a huge gamble on my part. As I wrote at the time, “After losing market share for years, and having lost consumers along with it, the handset business will be cut off and drowned in Lake Ontario. No body will be found. I’m sure somebody will buy the other pieces like their patents and perhaps their server business, but Blackberries will go back to being fruit and the handsets will be a footnote in mobile history.”

In fact, you might find this hard to believe, but as recently as June, 2008, RIM gained almost 10 points of marketshare to settle in at 44.5 percent. That would be the watershed moment for the company. A year later, Android would begin to take hold and between Android and iPhone, consumerization and BYOD along with a lack of vision on the part of the company, Blackberry would begin its long descent from being to nothingness.

Lest you think I take glee in this company’s demise, I don’t. I hate to see it leave the smartphone market stage, partly because it was the pioneer in the market and for a long time produced good phones that did the job solidly and well, and partly because it’s one less competitor for Google and Apple –and that’s bad for all of us. But like so many disrupted companies, Blackberry, a once great company, simply couldn’t adapt quickly enough to a changing market. By the time, it came out with classy Z10 and the retro Q10, the game was already over. The company just didn’t know it yet.

Blackberry is trying to put its best face on what is clearly the beginning of the end by forming this committee as one last effort to keep the company going. According to a statement released by the company this morning, the committee is charged with finding strategic alternatives. “These alternatives could include, among others, possible joint ventures, strategic partnerships or alliances, a sale of the Company or other possible transactions.” What they don’t say of course, but what is between the lines, is that it is exploring alternatives to packing it in and going home. That would seem unseemly to shareholders though, wouldn’t it?

But make no mistake, this day and this committee marks the end game for Blackberry, at least as we’ve known it, as an independent company. There’s a bunch of assets and cash on the books, so they can hang on for some time, but the company that was once the gold standard of smartphones has begun its death march– and it’s sad day for us all.

Photo Credit:  miggslives on Flickr. Used on CC 2.0 license.

July 26, 2013  7:30 AM

When it comes to mobile, the thrill is gone

Posted by: Ron Miller
Young man sitting on skate board leaning against SUV talking on smartphone

When it comes to smartphones, we’ve settled in and the one we have is probably good enough.

The latest trend for mobile carriers is upgrade plans. They want to give us a way to have the latest and greatest phone when it appears we no longer really want that.

The phones we own are good enough.

GigaOm reported last week that two of the four major US carriers have instituted upgrade plans that enable you to upgrade faster than under the old two year cycle. I would expect the others will soon follow suit because really if you think it about it, why would the carriers care if you upgrade sooner than later.

But there appears to be an underlying problem here that the upgrade plans could be trying to address. People are holding onto their cell phones longer than we used to. We no longer are compelled to get the newest Apple, Android, Windows or Blackberry because we just don’t care that much anymore.

The changes have become so incremental that we are not compelled to get rid of that perfectly good phone we have in our pockets today.  I can tell you that personally, my iPhone 4 is almost 3 years old. I let the 4s and the 5 pass without upgrading. Siri is fun, but it’s not enough to make me upgrade.

I keep my phone in good condition. It’s got a high-quality screen protector and I store it in a flip case. If you take it out of the case and spray a little cleaner on it, it’s in pristine condition. Sure, I wouldn’t mind better battery life or updated antenna technology, but none of that has convinced me to give it up yet and replace it with a new iPhone or even another brand.

Let’s face it, we used to wait with baited breath for each new phone. The launches were events and soon after the announcement we were lined up at our carriers getting the newest model. I just don’t have the sense that people care enough about mobile devices anymore.

Sure, the manufacturers still try to make them into events, and we still pay attention (at least a little), but we don’t get excited like we used to. A smartphone is not that big a deal anymore, and you can only add so many bells and whistles. The differentiators aren’t big enough to compel us to switch.

Then there are tablets. I’ve got an old (old) iPad 1 from way back in 2010 when it first was released. Now that was an event. Tablets were new and nobody knew what to expect. Those were exciting times.

Today, Android tablets are a dime a dozen and while the iPad mini is nice and the retina display on the bigger iPad is lovely, I have a device. It works fine for me and it does what I want it to do. I’ve considered buying a Kindle or a Nexus 7, but when it comes time to do it, I wonder what can they do that my trusty ancient iPad can’t do? Once again, it’s good enough.

Mobile has reached that point like many long-term relationships. It doesn’t have the unbridled passion it had at the beginning, and that makes sense because it’s hard to maintain that level forever. At some point, you settle in. You still enjoy your smartphone, but just as you don’t get excited by the latest television and run and buy a new one every 18 months, you don’t wait for the latest smartphone anymore, not when the one you have works perfectly fine.

Photo Credit: (c) Can Stock Photo

July 23, 2013  11:31 AM

Maybe Microsoft was always just a one trick pony

Posted by: Ron Miller
Cloud computing, Microsoft
Microsoft CEO Steve Ballmer standing in front of a giant projection of Windows 8.

As PC sales decline, so has Microsoft’s market dominance.

Did you ever consider that maybe Windows and Office was all Microsoft ever really had. They were the quintessential one-trick pony, only the pony was so lucrative the company could stumble on for years even after those two products increasingly became less relevant.

That could be the period in we are now.

By now you’ve probably all heard about the Microsoft reorganization and its less than stellar quarterly earnings report. There were lots of takes on this, but however you looked at it, it was the company’s first quarterly loss ever and didn’t bode well. Some people saw it as the beginning of the end of Windows, while others said it wasn’t so bad because the loss wasn’t as big as the so-called experts on Wall Street thought it would be.

But I saw a couple of posts this week that really got me thinking that perhaps Microsoft is in bigger trouble than even this quarter’s numbers might suggest. The first was Benedict Evans’s post The Irrelevancy of Microsoft in which he makes a case that Microsoft’s dominance peaked in 1995 with the release of Windows 1995.

Since then it has been all downhill. Meanwhile PC sales since 2007, when the first iPhone hit the market have remained almost flat with a decline starting at the end of last year. In contrast, iOS and Android devices have been on a steady growth path since the middle of June 2009.

You can click through to the story and see all of his graphs, and the bottom line is it shows that the decline of Microsoft is not just a perception thing, it’s a reality supported by numbers over long periods of time.

Microsoft obviously recognized this trend as well as anyone, or at least they should have, and that could account for its attempts to turn the company toward the cloud, develop Windows 8 as an all-purpose multi-platform OS, release Windows Phone 8 and develop its own tablets.

But as we’ve pointed out before in this space, so far these attempts have been futile. The Surface RT was a disaster resulting in a $900 million write down. Windows phones, mostly due to the success of Nokia, have passed Blackberry, but that doesn’t mean much when both companies combined marketshare doesn’t equal 10 percent of total share.

Microsoft’s share of the tablet market is negligible at this point and Windows 8 sales have been slow to develop, probably due in large part to the decline of PC sales and the desire for many companies to stay put with Windows XP or Windows 7.

Office 365 is starting to gain some traction with $1.5 billion in annual revenue, but if Office/desktop starts to decline as would make sense over the long term as PC sales decline, it’s not clear that Microsoft can make up the lost revenue online where the competition is much steeper than on the desktop.

This all harkens back to an even earlier era when Microsoft recognized it needed to shift to the internet in the 1990s, and while it it did it, it never made much money from its online divisions. Even today when you consider so many people are accessing services online, Microsoft reported that while the online division grew a respectable 9 percent for the quarter, it only accounted for $804 million in revenue, pittance when you consider the company total revenue of more than $19 billion.

It’s not easy to say that a company that makes that kind of money is in decline, but more than half that was from Windows at $4.411 billion and the Business Division, which prior to the reorganization included Office and Office 365, accounted for $7.213 billion. It’s worth noting another $5 billion or so came from the enterprise division, which you could argue developed specifically because of Windows dominance in the enterprise. If that were to decline, then it would make sense the reliance on Microsoft enterprise products would decline with it.

But as PC sales continue to drop, the revenue from those two cash cows, Windows and Office, are going to drop as well. And as employees increasingly choose their own devices, they are foregoing Microsoft and choosing other platforms.  Microsoft’s one-trick pony will no doubt continue to trot along for years, but unless it learns another trick or two quickly that generates significant revenue it can’t go on forever like this, and sooner or later the reality of the numbers will catch up with it.

Which is not to say that Microsoft or the PC is going away tomorrow. Both will survive for a very long time yet, but if PC sales continue to decline, and every indication is that that they will, there is strong reason to believe Microsoft’s dominance will as well.

Photo Credit:  Dell’s Official Flickr Page.

July 19, 2013  8:45 AM

It’s getting harder to make money selling smartphones

Posted by: Ron Miller
A group of teen girls is staring at their smart phones and not interacting with each other at all.

It’s becoming increasingly difficult to make money selling smartphones.

It seems it’s getting harder to make money selling smartphones, no matter how many millions you’re selling.

Take Nokia, for example. It was a good news-bad news kind of report for them yesterday when they had their quarterly earnings call with outstanding Lumia sales catapulting them past Blackberry for the first time.

Unfortunately, even though the company sold an impressive 7.4 million units worldwide last quarter, the handset division still lost 33 million Euro or approximately $41 million. That’s a 32 percent loss over last year for those keeping score at home.

What does it mean when a company sells millions of units, but still loses significant sums of money? It could be a sign that it’s becoming increasingly difficult to make money in the handset market, no matter how many you sell.

Apple sold almost 38 million iPhones for the quarter ending March 31st. That was up from around 35 million phones sold the previous year. In spite of selling more phones, their revenue dropped from $11.6 billion to $9.5 billion. That’s not a huge loss and not all can be attributed to the iPhone –unlike Nokia Apple doesn’t break down their revenue in this fashion– but clearly it’s getting harder to make money simply selling devices.

There is much speculation in the technology press that when they report that this quarter, Apple could sell as low as 23 million iPhones, which is a precipitous drop from one quarter to the next.

I don’t want to begin to get into the debate about which smartphone platform is more successful. Some will fall on the side of profit. Others will say marketshare. This argument is an endless and pointless loop with lots of charts and graphs supporting each argument, and frankly, it makes my head hurt.

What we have to look at is the fact the pie is still growing. As Horace Dediu reports on Asymco, in spite of what conventional wisdom might suggest, not everyone has a smartphone. In fact he says, data indicates a full 41 percent of Americans don’t have a one. And that’s just the US. When you get into poorer areas of the world, I’m sure the numbers are much higher.

When I was at the Mobile World Congress in February, Telefonica wanted to introduce the new ZTE Open Firefox phone in South America to a large degree because it believed that there was a low-end smartphone smartphone market among young people currently using feature phones, but hungering for an affordable smartphone.

All of this means that there probably is some significant room to grow this market, but can anyone actually make money? It’s further complicated by the fact that people aren’t rushing out and getting the next big thing as quickly as they once did and that slowing upgrade market is hurting handset makers.

I can say from personal experience that I’ve had my iPhone4 for close to 3 years and I haven’t felt compelled to upgrade to 4s or a 5. I’m looking at the next version and maybe I’ll upgrade at that point, but only because the battery life and antenna have improved more than any great features I’ve got to have –and I’m obviously not alone

I’m guessing the handset market is very quickly on its way to becoming commoditized and this is having an impact across the board and affecting everyone from Apple to Samsung and Nokia –who learned this week that’s it not enough to sell millions of phones to make money. And that has to be a fairly frustrating lesson.

Photo Credit: (c) Can Stock Photo

July 12, 2013  6:57 AM

Verizon joins forces with Ubuntu, but is there a US market?

Posted by: Ron Miller
Picture of the proposed Ubuntu phone.

Verizon has joined forces with Ubuntu to sell their mobile devices in the US, but is there a a market for another phone?

In a surprising move yesterday, Verizon announced it had joined the Ubuntu Carrier Advisory Group. Presumably that means, it intends to sell Ubuntu phones and tablets in the US whenever they become available.

According to ZDNet, the membership does have its privileges, specifically having a say in the kinds of features the OS will have and being able to offer Ubuntu mobile devices before non-members.

Certainly cool in a way to get in the ground floor of an open source mobile OS and help shape it, but will such a device even fly in the US? It’s hard to say.

I imagine there are customers who are tired of giving their money over to large companies like Google, Apple and Microsoft and might be hungering for an alternative, and being open source makes it even more attractive. Of course, being from Verizon could be a negative, given recent revelations about Verizon sharing user metadata with the federal government under a FISA court order.

Regardless whether customers intend to punish Verizon, it remains the largest US carrier and it carrying Ubuntu devices is an interesting turn. Right now, we have what is basically a two-horse race in the mobile device market with Google and Apple grabbing a vast majority of the marketshare.

Depending on whose numbers you believe Microsoft and Blackberry are fighting it out for the table scraps in third place. Both have tried desperately to gain marketshare over the last 12-18 months, but so far the numbers aren’t there for either one.

In comScore’s latest  US numbers that came out last month and cover through April this year, BlackBerry had 5.1 percent, down .8; while Microsoft had 3.0 percent, down .1 percent. IDC, which looks at worldwide shipments had Microsoft in third place with 3.2 percent, up from 2.0 percent a year ago; while Blackberry had just 2.9 percent, down from 6.4 percent a year ago.

IDC reports that Linux had just 1 percent of the worldwide phones shipped in the first quarter, down from 2.4 percent a year ago.

Whatever the numbers, we’re talking about three operating systems fighting for less than 10 percent of the pie. One factor that the competitors fighting the Google-Apple hegemony have going for them in this market is that the pie is not fixed. The market is still growing so there is room for competition in spite of these dismal numbers at the bottom of the markeshare pile.

Given that at least some customers are a bit fed up with Apple and Google, you would think there would be an opening, but it’s not quite as simple as that as Microsoft and Blackberry have found. You can create an innovative OS and you can line up manufacturers to create a range of hardware to meet a variety of pricing requirements, but it’s clear that the App Stores are big differentiators for consumers, and if they find that it doesn’t offer enough variety, it’s hard to grow a customer base.

And as I’ve written, it’s hard to draw developers to build those apps when you don’t have the customer base. It turns out, that is a mighty hard cycle to break.

That’s why I think as interesting as yesterday’s announcement was that it’s not going to mean much in the scheme of phone sales at Verizon or any other carrier because unless they build some decent apps, nobody’s very likely to buy the Ubuntu phone, no matter how nice it may be.

Photo Credit:  n.kondo on Flickr. Used under CC 2.0 Share Alike/Attribution license.

July 3, 2013  11:48 AM

Sleeping with the Enemy: Oracle and Salesforce Deal Can’t End Well

Posted by: Ron Miller
Cloud computing
Cat and dog in sleeping nest together.

Oracle and Salesforce can play nice in public, but I don’t see this deal ending well.

A week after the Larry and Marc love-fest, making the  partnership official, I have to say I still don’t get this deal at all. Nor do I see it ending well.

First of all, there’s sheer size of the egos involved. The two executives can make as nice as they like in public, but as soon as some conflict arises in the deal–and it will–it’s going to be a clash of the Titans with these two. And I don’t see either one backing down for the sake of harmony.

Secondly, they are truly the technology world odd couple. Oracle is a dyed in the wool hardware and enterprise software company. They’re all about being big and complex and expensive.

Salesforce, is the original cloud upstart, even though back in 1999 nobody called it the cloud. They introduced and popularized the notion that people would store their valuable enterprise data on someone else’s servers if it saved them a few bucks and was relatively easy to use.

Then there’s the cultures. I can’t speak directly to this, but I can guess; and I’m seeing Salesforce is a bit more footloose and fancy free, and Oracle as a bit more buttoned down.

Yet for all these differences, after all this time, they are both large enterprise software companies. Salesforce can no longer claim to be the disruptor. It’s as much a conventional enterprise software company trying to do everything for everyone as Oracle.

As I wrote last Fall, both of these companies are struggling with change. The leaders seem to sense that they are being outflanked by smaller and cheaper rivals, but they seem unable to make the necessary moves to get their companies moving in a new direction. That happens when you’re the leader and reach a certain size. You react much more slowly to changes in the marketplace.

That’s why this move confuses me. Do they really think that by joining forces, that will somehow solve the problem? I’m not so sure. In fact, I think it will more likely create a whole new set of unforeseen problems. Certainly, creating a partnership between two very large organizations won’t make either one more agile or quick to react.

If you do a quick search on the deal, the first page of results will give a range of opinions on then on the merits of the agreement with people weighing on both sides with one or another thinking that each company picked the other’s pocket –or somewhere in between.

I’ll let you decide on who you think got the better of the deal, but in my view it’s wash because I can’t see this deal doing much for either company.

Partnerships are usually are based in trust and common needs. I don’t see either party really needing one another in this instance. Maybe Oracle believes it will make them more cloudy and Salesforce thinks it will them more enterprisey, but in the end what happens when you sleep the enemy? Can’t end well.

Photo by  MïK. Used under CC 2.0 license.

June 24, 2013  10:46 AM

If the government wants you, where you store your data doesn’t matter

Posted by: Ron Miller
Cloud computing
If the government wants you, it'll find a way to monitor your network whether it's in the cloud or behind your firewall.

Revelations of government surveillance gave everyone pause, but if the government wants you, it doesn’t matter where you store your data.

The worst fears of the anti-cloud cabal came true recently when the curtain was lifted and we saw a glimpse of the extent of the US surveillance state, but is that enough to make you stop using the public cloud?

I’ve been listening to people debate about the pros and cons of the cloud since 2008, which was about the time the term came into popular usage. In fact, I remember well attending a discussion at a conference in 2008 where representatives from Google, Amazon and explained the merits of cloud computing.

They were then peppered with an audience full of doubters. There was of course the Patriot Act to deal with, and for anyone from outside the US who had to respect more stringent privacy laws, the idea the government could demand data in the cloud at will was a show stopper for many –and remains so to this day.

The fact we now know the extent of government listening means that the Patriot Act was a minor annoyance compared to widespread warrantless Internet monitoring.

I’ve sat in similar discussions since. At CeBIT in 2011, The Germans, which as a country have particularly strong privacy laws, could not embrace the cloud even though many saw the advantages of a cloud approach.

But the cloud offers such a compelling economic case, in many cases that’s going to overcome any fear a company might have the government could be snooping on your data.

ZDNet had a couple of compelling posts recently about this. On the pro cloud side, Jason Perlow wrote in NSA Prism: The cloud laughs at the Tin Foil Hat brigade, “I hate to break it to you guys, but the government just isn’t that into you.” He added, “And this recent revelation about PRISM and other wide-ranging NSA electronic surveillance programs, while disturbing, fundamentally changes nothing about an overall shift to cloud-based computing.”

But ZDNet’s Steven J. Vaughan-Nichols isn’t so sure as he wrote in NSA Prism puts “public cloud” in new light. As Vaughan-Nichols wrote, “Let’s just take it as a given, if you put information on the public cloud, there’s a reasonable possibility that it can be looked at by a government [three-letter acronym organization].” He adds with certainty, “But, if you put your infrastructure on a private cloud you dodge this problem. Even a hybrid cloud—where you keep only low-value materials on a public cloud—could still do well by you.”

But it’s not that simple for many organizations. I saw CIOs from the San Francisco Giants, The Boston Red Sox and The Boston Celtics speaking last week at the E2 Conference in Boston. For these three CIOs, the cloud allowed them to run lean departments with 11 or fewer employees while promoting some extremely ambitious IT projects. As Bill Schlough, CIO of the Giants put it, “The more data that’s in the cloud, the happier I am.”

There are social, political and economic ramfications of government monitoring and I’m not about to minimize any of those, but I’ll put it this way: I’m inclined to agree with Perlow’s view on this.

The government doesn’t really care what most private businesses are doing, and if they did, it wouldn’t really matter if you were using public cloud services or your own data center.  The NSA and other government agencies are amazingly resourceful when it comes to data collection. If Anonymous can get past your security, do you really think the NSA or some other government agency can’t?

There are a myriad of ways to gain access to networks without being inside an organization from phishing to keystroke loggers to social manipulation. Once inside the network infrastructure whether you are a malicious hacker or the government, you can pretty much do whatever you want.

With that in mind, if a government agency wants you, they’ll find you no matter where you choose to store your data, with a warrant or without it, whether you know it or don’t. Given that reality, recent revelations should not alter your approach, nor should it scare you off from public cloud usage.

Photo Credit:  (c) Can Stock Photo

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