August, 2008

Cloud computing on the rise in 2009

nbsp;Salesforce.com is heading for the clouds, if not in the eyes of Wall Street. The company posted good growth (almost 50% y/y) but said third-quarter numbers would likely reflect slowing growth, though they guided up for the year. Significantly, they made a big deal of cloud computing and the creation of an ecosystem for developers and application owners.

We have also heard from our enterprise survey base that cloud computing is getting a lot of attention suddenly. One said “Cloud Computing is really making a paradigm shift…The entire concept of Virtualizing Data Centers has caught massive attention all across the industry and now even Financial Services seem to be nodding to this concept that will potentially save huge amount of $$$ plus provide a highly reliable, top of the line Data Center capability plus the capability to provide aggregated services which was just a notion before is turning into reality now.”

The cloud computing wave could have a major impact on 2009 planning for just about everybody, with the possibility that enterprises would turn to cloud-based services as an alternative to building out more in-house data center capacity. So far, however, there is no sign this will impact the sales of the IT giants like IBM and HP.

Ecrisson, STMicroelectronics form mobile phone joint venture

In yet another move seemingly aimed at Google’s Open Handset Alliance, Ericsson and STMicroelectronics are forming a joint venture (JV) to create software and semiconductors for cellphones. The move comes after rival Nokia bought out Symbian and made it open source, and Google’s Android seems poised to enter the market.

There is a major push toward the creation of ecosystems around mobile devices, and we note that there is a similar drive to create vertical partnerships through APIs at the operator level. It seems clear that the industry has decided that developers are the key to their future.

Death of analog TV could benefit telecoms

The upcoming death of analog TV broadcasting may save the U.S. cellular providers from one of the risks of an open handset — the deployment of cellphones able to tune into analog TV. This type of phone is sold by ZTE in China, where analog service will continue for another six years.

There may be a link between the open handset programs and the death of analog, in fact, because the use of cellphones to tune free TV would likely hurt telecoms’ mobile TV plans. We’re hearing that a number of firms are now looking at two dodges to the “no-analog” problem; one is working on a tuner for digital TV small enough to carry in a handset, and the other is looking at using Wi-Fi or WiMAX to deliver DVB-H TV in broadcast mode only, selling advertising to pay the bills.

OSS, SDP converge as vendors, providers shift business strategies

There are signs that the OSS world and the SDP world are converging, with the driver being a combination of the strategies of major vendors and the shift of service providers toward IT dominance of infrastructure projects.

Major players in the OSS space like Amdocs and Telcordia are becoming players in the SDP space, and vendors like Oracle who have SDP plans are now looking at whether they also must field a full OSS platform.

All of this is happening because the network operators, as part of their IP transformation strategies, are demanding more agile services at lower operating costs. Achieving that combination is not a network mission at all, but rather an OSS/SDP mission, or more broadly a mission of software and systems — IT.

We have noted before the growing momentum for change in the TMF, the only standards body that is taking up both OSS and SDP missions, and we believe that body has read the tea leaves and is positioning itself for maximum relevance in what is likely to be the major 2009 market trend in the carrier space.

First Google Android handset due before year’s end

Google Android will be making its debut for the holiday season according to reports, with its first phone created by HTC and offered by T-Mobile. The new phone will have a touch screen, larger slide-based keyboard, and support an unknown number of Android applications from developers in the Open Handset Alliance program.

Android is the strongest of the open handset systems in our view; we have joined the programs and examined the material. There are other handset players and providers looking at announcements as well, but we do not believe that any more than one additional player has any chance of making an announcement by year-end.

We hear that HTC/T-Mobile will actually be ready likely in October but may delay a bit to insure pre-publicity is strong and that others don’t have time to capitalize on any holiday marketing successes.

Yahoo announces Fire Eagle developer platform

Yahoo is making its Fire Eagle geo-platform available to all developers today. The new platform is an example of the work that Yahoo in particular, but also other web giants, are doing to facilitate the development of applications through the release of useful tools that reduce developer effort.

Fire Eagle allows developers to build applications that can determine a user’s location, and also support the registration of location information in a secure way to other applications. This area will be closely watched by many because it presents some risk of being exploited by stalkers or online predators.

We note here that CIMI Corporation is working with Yahoo in the integration of Yahoo APIs with our ExperiaSphere effort. See our progress on the ExperiaSphere website (http://www.experiasphere.wikispaces.com).

P2P/BitTorrent fall on hard times

P2P may be falling on hard times in at least one sense; BitTorrent confirmed a 20% layoff but said the move had nothing to do with the Comcast throttling issue. In some ways it would have been better for the company had Comcast been the culprit, since the FCC has ruled that Comcast can’t strangle a particular type of traffic.

We believe that the real problem is that there is little BitTorrent can do to rehab the image of P2P, which our research and modeling shows is used for illegal file sharing in more than 90% of cases. It’s ironic the giant of P2P is now suffering, given that the telcos are at the same time looking at P2P signaling architectures as an alternative to centralized signaling systems like IMS. Recent rumors say that operators are researching the use of a P2P architecture for delivering “rich service signaling” without the need for a central signaling system and without the limitations of SIP/SDP/IMS.

IBM focuses on enterprise mobile applications

The boom in enterprise use of smartphones and the fact that carriers are anxious to promote business customers’ use of data services combines to make the space an attractive target for IBM, not as a provider of equipment but as a facilitator of mobile enterprise applications.

The latest offerings from IBM include tools to let mobile users get easy access to applications from the road, a Citrix-like capability. We believe that mobile enterprise application opportunity will be a major driver behind U.S. operators’ FMC plans as well.

AOL profits way down; Time to sell

Time-Warner’s AOL unit saw profits fall by 26%, and has been in talks to split and sell off AOL to boost the parent company’s financials. The drop in AOL’s fortunes came not because of a shift from an access model to an ad model per se, but because of the shift to broadband Internet.

Broadband is not an ISP business; it’s an access carrier business. However, the fate of AOL as a portal is linked to broader problems on the Internet, which include an increased polarization of sites as search, entertainment or social networks. There are strong incumbents in the first space. The second is yet to be proved as a source of financial gain, and entertainment is where everyone who isn’t a search player wants to be. Crowded markets don’t make money for anyone, and the faddish nature of Internet viewing won’t help. T-W should sell AOL off now while it can.

Cisco beats numbers, but issues remain

Cisco reported numbers that beat estimates by a penny but still showed some signs of difficulties in the markets. Switches and routers grew in the mid-to-high single digits, 5-to-6 percent lower than usual but better than the last quarter.

The Cisco numbers are consistent with our view of the current state of enterprise tech spending, which is that the investment in the current SOA-driven cycle is still carrying momentum and that budgets have not been curtailed in this area.

With software spending strong, we would expect to see hardware and networking pulled along the track. If the current quarter shows strength, it will be an indication that budgets for the year are being released more in the second half, which would be positive for the entire industry in 2009.