Written on February 25, 2008
| by RP Mickler |
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Google’s Cloud Darkens The Dalles
I live in Battle Ground, Washington, which is downstream of The Dalles, Oregon, by eighty miles on the Columbia River. Since 2006, search engine titan Google has been in the process of constructing a massive facility to house a server farm powered by the cheap hydro-electricty generated by our region.
Its campus would be as big as two football fields; 68,680 SQFT of three warehouse spaces will be used to hold their servers along with 18,800 SQFT of cooling stations, sticking four stories into the sky. The campus will also feature administration buildings and transient employee dormitories. It’s estimated that all three server buildings will be online in 2011 and will demand 103 megawatts of electricity – that’s enough juice to power 82,000 homes, or, a city the size of Tacoma, Washington. Real estate prices have jumped 40-percent and 200+ permanent jobs will be created in a town of 12,000.
However, that’s not all. Microsoft and Yahoo are also investing billions in the region, having announced big data centers of their own in Wenatchee and Quincy, Washington about 130 miles to the north of the Gorge. All of these companies hope to tap into the inexpensive electricity and abundance of fiber optics left behind by the dot-com bust of the last decade.
Why are these companies investing in such massive-scale operations and data centers? It revolves around an idea called Cloud Computing, and Clouds could represent the next generation of massive industry in the Pacific Northwest region. Cloud computing will support all of the next generation of web-based applications and services – instead of loading applications on their own hard drives, consumers will use applications available from the web. Data will be stored in the proverbial “cloud” of a vendor and accessible from anywhere, anytime, by anyone. Clouds were permit subscription-based licensing models and free web-based productivity applications – like Microsoft’s Windows Live or Office Live intitiative, and, Google’s Spreadsheet, Writely, or Picassa.
Clouds present new opportunities for the small business. Instead of hosting their own servers and managing their own applications, small businesses could “rent” server and application functions at contained expense levels and scale to meet their growth needs without significant investment in talent, facilities, or equipment. Cloud computing will transition small businesses into treating data processing as a utility: cheap, widely available, and ubiquitous.
It will be interesting to watch as the PacNW and other regions compete for becoming the centers for the new information age industrial era – creating and managing factories of information.
R
Written on February 20, 2008
| by RP Mickler |
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Interesting about this year’s survey:
1. The gradual decline of reported incidents (page 14). All of the usual threat metrics are either in a downward trend or are stable (virus attacks, phishing, IM abuse, telecom fraud, etc.). In terms of reported incidents, what is up this year and quite dramatically are insider (employee) abuses of Internet access.
2. The fact that 74-percent of respondents only spent 0%-5% of their annual IT budgets on IT security this last year (page 8). This number is surprising to me. It suggests that the security problem has either become a non-issue or lacks total priority. If the metrics are any indicator, it would seem that in terms of reported incidents, technical vulnerabilities are being contained in corporate America better than ever before, and this places less emphasis on the security function. Good news for consumers and businesses; bad news for information security consultants and technology professionals. Automation and better-designed products/services are fixing the glaring problems.
3. The effects of SOX on IT security (page 26). This was actually spotted by one of my students – credit where credit is due. The survey would suggest that many respondents do not feel that increased IT governance has improved the IT security problem, nor do they feel that the emphasis has moved away from security to governance. The transparency offered by SOX and better IT governance isn’t making a better difference in information security for a bulk of respondents? Eh? Seems contradictory to the academic, but maybe techheads in the field feel that the frontline battles are still fought tooth and nail, and have nothing to do with better oversight or management? This one is a little hard to read and is counter-intuitive, but is interesting nonetheless.
R
Written on February 4, 2008
| by RP Mickler |
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Last Thursday January 31, 2007, Terry Semel announced his resignation from the Yahoo! board of directors. A day later, Microsoft presented a $44.6 billion stock and cash offer to Yahoo! shareholders that came below Yahoo!’s 52-week high of $34.08 per share. On Friday, Microsoft’s PPS dropped six percent and Yahoo!’s shares increased 48-percent from $19.18 to $28.38, still far less than the $31 PPS bid. Seems like investors wanted a better offer and aren’t convinced this is in Microsoft’s best interests – financing the operation will take at least $4 billion more than what Microsoft has in cash reserves, and that means taking on debt which would be Microsoft’s first long-term borrowing action since 1991. Still, Ballmer says advertising online will double to an $80 billion market in the next two years and a combined Yahoo! and Microsoft would make a more formidable component to Google. Combined, the Microsoft/Yahoo! cooperation would represent 25-30 percent of the search market.
Google, of course, cries fowl, and went to extreme measures to offer their help against the Redmond vikings. Google CEO Eric Schmidt called Yahoo! CEO Jerry Yang on Friday to offer his help in protecting Yahoo! against Microsoft; Google suggests such a merger would be illegal and monopolistic. Microsoft’s hostile bid for Yahoo raises troubling questions,” David Drummond, Google’s chief legal officer, wrote. “This is about more than simply a financial transaction, one company taking over another. It’s about preserving the underlying principles of the Internet: openness and innovation.”
I attempted to contemplate what a Microsoft/Yahoo! merger would mean to the industry, me, and to my clients. The problem was ponderous. Both of these companies have been around since I’ve been in the industry and the idea that Yahoo! is to be assimilated by Microsoft shot shivers down my spine. Strangely, AOL announced this week as well that they’ll stop supporting Netscape… it’s like an end of a grand era. Anyway…
In terms of benefits, I think interpreting Microsoft’s actions may fall to what you might feel about Microsoft or Google. If you feel Microsoft is a dominating force in the industry that prohibits innovation through controlling desktop operating systems, productivity applications, and Internet browsing, then the deal looks bad. If you feel Google is a champion of open and honest and fair competition (as they’d like to paint themselves), you’d also think this deal is bad. However, you might feel that Google’s dominance of an $80 billion search market is equally bad and may welcome Microsoft’s intervention.
What does it mean to small business? I think little other than better ad prices for web. However, there could be a longer reach in terms of Internet momentum and innovation. I say this because “search” isn’t likely to become a commodity; I think Google’s market cap screams that. Search has everything to do with Long Tail (www.thelongtail.com) principles, and innovation in search is necessary to drive new value from the web. Increasing competition may be a way to force ad rates downward in the short term, and push Google to continue innovating search in the long term. Case in point: Google’s redirected its web advertising revenue into alternative energy, philanthropy, and even a space program for traveling to the moon. Last week, Forbes even asked, “Can Google fall as the world’s top internet company?”; Google’s shares dropped 8.6% on Thursday (prior to the Microsoft announcement) on word of poor earnings for Q4; Q4 was the smallest net income growth for Google on record.
Further, a student of mine recently remarked: “I see no difference between Google’s search result and MSN’s or Yahoo!’s”. Good news for Ballmer; bad news for Schmidt. However, perhaps great news for the average user because it may force Google to return a bit to reality: “Hey, Schmidt: you are a search company, remember? How’s that core competency coming along?” A threatened Google may actually be better for all of us as remembers its roots, it re-focuses on what matters, and it strives to innovate around its monster competitors, yielding better results for the web as a community.
So, as painful as it might be, I raise my glass to Ballmer. Good luck. Take the risk, eat Yahoo!, and force Google to remember who they are. In the end, acquisition may bring renewed effort to innovate search and provide better tools to us all.
R
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