Understanding The Significance Of Dell’s Acquisition Of EMC And The Emergence Of Dell Technologies

Dell and EMC intend to finalize the transaction whereby Dell acquires EMC on September 7, 2016. Under the terms of the acquisition, Dell and its owners Michael Dell, MSD Partners and Silver Lake, will acquire EMC Corporation. Meanwhile, EMC spin-off VMware will continue as a publicly traded company. The announcement to finalize Dell’s acquisition of EMC comes head on the heels of the receipt of regulatory approval for the transaction by China’s Ministry of Commerce after 98% of EMC shareholders approved the transaction on July 19. As a result of the merger of the two companies, EMC shareholders stand to receive $24.05 per share in addition to a tracking stock that represents their equity in VMware.  The newly created company, Dell Technologies, will operate immediately after the transaction is finalized. Dell’s acquisition of EMC signals the emergence of the “largest privately-controlled, integrated technology company” as noted in a press release. The confluence of Dell’s expertise in hardware and technology solutions for small businesses to mid-size organizations with EMC’s experience with enterprise customers, cloud computing solutions and security solutions means that Dell Technologies stands poised to benefit from the complementary synergies specific to the union of the two companies. The union of Dell and EMC promises to offer customers of Dell Technologies a rich portfolio of private cloud and big data solutions that draws upon an EMC corporate umbrella that includes Pivotal, Virtustream and VMware.

Expect the convergence of Dell’s experience with hardware and its relationship to small to mid-market companies, in conjunction with EMC’s storage, networking, cloud computing, big data and security solutions to enable Dell Technologies to offer enterprise-grade private cloud solutions geared toward the needs of small to mid-tier organizations as well as enterprises. Given EMC’s ownership of Pivotal and its concomitant specialties in big data analytics and the internet of things, the Dell-EMC merger has the potential to reshape the cloud computing landscape by giving Dell Technologies leadership in the hybrid cloud space while claiming Pivotal’s specialties in big data analytics and RSA’s suite of security solutions as further, notable feathers in its cap. Overall, the landscape for hybrid cloud computing stands to gain another significant player that has the means to tap into Dell’s relationships with small to mid-size companies that are increasingly ramping up their transition to the hybrid cloud. Moreover, with Pivotal under its wing, Dell Technologies promises to democratize big data and internet of things analytics by spearheading big adoption and developing progressively turnkey approaches to big data analysis. The implications of the Dell-EMC merger for the cloud computing landscape are huge, particularly in light of Rackspace’s recent acquisition by Apollo Global Management and the subsequent opportunity created in the private cloud market while Apollo Global Management and Rackspace recalibrate their long-term strategy.


IBM’s Acquisition of Cloudant And The Walmart Effect In Tech

Last week, IBM announced an agreement to acquire NoSQL database as a service vendor Cloudant for an undisclosed sum. An active contributor to the Apache CouchDB project, Cloudant delivers a JSON document database-based platform that claims high availability, scalability and elasticity amongst its attributes. Cloudant customers can take advantage of its JSON-based database as a service to store and mine structured and unstructured data from a variety of sources. Because the JSON database format is so widely used by developers of mobile and web applications, IBM’s acquisition of Cloudant stands to strengthen its positioning with respect to the development of applications for mobile devices in conjunction with the build out of its OpenStack-based cloud solution for the enterprise. The acquisition of Cloudant will be central to IBM’s MobileFirst solutions as well as its Worklight application for developing mobile applications. From an industry perspective, the acquisition represents a huge coup for the NoSQL space in general. CouchDB has historically not had the traction of MongoDB, Cassandra and Couchbase, so we should expect brand name tech companies to make similar offerings for the likes of MongoDB in the ensuing few months. Moreover, IBM’s acquisition of Cloudant testifies to the increasing emergence of cloud and big data behemoths with solutions for both hosting infrastructure, as well as database solutions that accommodate enterprise needs for scalability and the ability to store unstructured data. Cloudant CEO Derek Schoettle surmised the significance of Cloudant’s contribution to IBM’s SoftLayer cloud platform as follows:

Cloudant’s decision to join IBM highlights that the next wave of enterprise technology innovation has moved beyond infrastructure and is now happening at the data layer. Our relationship with IBM and SoftLayer has evolved significantly in recent years, with more connected devices generating data at an unprecedented rate. Cloudant’s NoSQL expertise, combined with IBM’s enterprise reliability and resources, adds data layer services to the IBM portfolio that others can’t match.

Schoettle notes that IBM is extending its infrastructure innovations to the “data layer” and as such, follows in the footsteps of Amazon Web Services and EMC/VMware spin-off Pivotal, which similarly deliver a combination of cloud and big data solutions in their platform and product offerings. The notable consequence of this convergence of cloud and big data product offerings is that only large enterprises with the requisite capital and resources can afford to cobble together combined cloud-big data product offerings. As a result, cloud startups and smaller data vendors will need to continue to compete by way of their agility, responsiveness, consultative support and superior technology. In effect, the IBM acquisition of Cloudant signals a Walmart effect in technology, of sorts, whereby large, well capitalized vendors have the ability to create marts of diverse data and analytics products that threaten the viability of cloud, big data and analytics startups in the same way that massive retailers such as Walmart threaten the viability of independent stores or small chains. Oracle’s recent acquisition of Blue Kai, a big data management platform geared toward marketing, constitutes another example of the way in which tech giants are continuing to integrate diverse data products into increasingly heterogeneous product portfolios. The question that remains unanswered, however, is whether the emerging Walmart technology maze is sufficiently easy to navigate that enterprises opt to partner either with one vendor for all of their technology needs, or whether they feel more comfortable shopping from a diverse range of technology vendors in order to avoid vendor lock-in and locate products that richly respond to the specificities of their industry-vertical and customer needs.

Cloud Computing Market Trends 2012

Although 2012 is barely two months old, the cloud computing landscape already evinces some important new trends related to the market appetite for cloud products and services. Whereas 2011 witnessed the proliferation of new market entrants that established or consolidated their branding, the market for cloud computing services has matured in 2012 to a point where the battle lines are beginning to be drawn as the actors take their place at the table. On one hand, the market for cloud computing products and services has exploded at a dizzying pace, leading to an increasingly variegated market landscape that differentially competes in price, features, support, portability and support for compliance standards. But despite the proliferation of venture backed new market entrants, the boundaries of the battle for cloud computing market share have been redrawn with unmistakable precision as follows:

1. Amazon Web Services versus OpenStack

The rising popularity of OpenStack has thrown down the gauntlet to Amazon Web Services and proprietary cloud solutions more generally.

Amazon Web Services consolidates its positioning as the leader in cloud computing market share by adding feature after feature to its dizzying array of cloud computing products and services. Less than 50 days into 2012, Amazon Web Services announced Amazon DynamoDB for Big Data processing, a partnership with CheckPoint for cloud security, as well as agreements with Red Hat to host its Virtual Storage Appliance for Amazon Web Services and the Red Hat MRG Enterprise cloud services via Red Hat Cloud Access.

OpenStack’s fortunes continue to soar, fueled both by the allure of its inter-operable framework and the cost-savings enabled by open-source software, even in its commercialized form. Even though the dent in Amazon Web Services market share from OpenStack deployments is likely to be miniscule, at this point, OpenStack takes the cake in terms of organic publicity and its attractiveness as the basis of a business model based on an alternative to proprietary cloud solutions. OpenStack is gearing up for its Essex release in the second quarter of 2012. Separately, its ability to integrate with third party automated provisioning software such as Chef, Puppetlabs and RightScale is both impressive and promising.

Rackspace occupies a unique position in relation to the emerging battle between Amazon Web Services and OpenStack as the purveyor of a proprietary public cloud solution and distributor of a commercialized version of OpenStack for private clouds.

2. Proliferation of OpenStack-based, enterprise grade private clouds

Coincident with the rise of OpenStack is the proliferation of enterprise-grade deployments of OpenStack for private clouds. The market has witnessed a veritable cottage industry of companies dedicated to commercial-grade OpenStack deployments that feature automation, management tools, cloud security and support for regulatory standards such as FISMA, HIPAA and other government regulations. Vendors that have commercialized OpenStack include Citrix Systems, Dell, HP, Internap, Nebula, Piston, Rackspace and Cloudscaling. Rackspace recently announced a partnership with Redapt to facilitate deployment of private clouds based on OpenStack.

3. Growth of PaaS vendors and platforms

As noted by Gartner’s Yefim Natis, the Platform as a Service vertical stands poised for explosive growth in 2012. PaaS appeals to enterprises that lack the technical resources to manage complex IaaS deployments even though they typically need to install a PaaS infrastructure within a private cloud environment. PaaS provides an easier on-ramp to the cloud for enterprises that are anxious to begin deploying applications into a cloud-based infrastructure. The PaaS market currently features products such as OpenShift (Red Hat), Cloud Foundry (VMware), CloudSwing (OpenLogic), Engine Yard Cloud (Engine Yard), Heroku (Salesforce), Azure (Microsoft), Google App Engine (Google), Cumulogic PaaS (CumuLogic), dotCloud, Appfog, ActiveState Stackato (ActiveState), AnyCloud (CloudBees) and Jelastic. Engine Yard’s revenue of $28 million in 2011 illustrates the earning potential within the PaaS vertical.

U.S. Director Of National Intelligence Sees Increased Role For Cloud Technologies In Spy Agencies

U.S. Director of National Intelligence James Clapper revealed that cloud computing technology will prove central to the IT budgets of U.S. spy agencies over the next five years. In a speech at the Center for Strategic and International Studies, Clapper remarked that cloud computing has the “potential for achieving savings and promoting integration.” Clapper elaborated that considerations of data security would become paramount as more and more highly classified data moved into the cloud in order to enable enhanced access and greater collaboration amongst intelligence employees. The National Intelligence Director noted that the next five years would witness significant changes in the methodology used for tagging and sharing data across different intelligence agencies. Congress passed the Intelligence Reform and Terrorism Prevention Act in 2004, which created the Information Sharing Environment (ISE) to promote the exchange of intelligence related to terrorism. Although it is widely believed that the U.S. has enhanced its intelligence infrastructure for sharing classified and sensitive information, Clapper announced that the U.S. would continue to invest heavily in auditing and monitoring technology and develop a “national insider threat policy” in order to avoid incidents such as the 2010 WikiLeaks disclosure of classified information on the order of hundreds of thousands of classified records. Big Data technology, meanwhile, is also leveraged by U.S. intelligence agencies as evinced by Kitenga, whose Hadoop-based ZettaVox analytics platform specializes in actionable business intelligence and enterprise search capability for deriving insights from massive amounts of structured and unstructured data.

Cloud Computing 2011: The Year in Review

Whereas Time magazine selected “The Protester” as the Person of the Year, the award for Technology of the Year surely goes to Cloud Computing. 2011 marked the year that cloud computing emerged with force and gravitas onto the enterprise landscape. In the case of enterprise CIOs and IT leaders pondering the use of cloud computing infrastructures, the question of the day suddenly morphed from whether to engage the services of a cloud provider to when and how. Over the course of the year, cloud providers grew, emerged, acquired companies or were acquired, raised venture capital and announced products at a dizzying pace.

Within months, the cloud computing landscape transformed from the Amazon, Rackspace, Joyent, Terremark, Savvis show to something radically heterogeneous and complex. As more and more cloud technologies proliferated, analysts and technologists alike began to feel that the term “cloud computing” itself was losing its meaning. Meanwhile, news agencies and blogs struggled to keep up with the pace of innovation and deployment as startups and enterprises alike announced new, exciting and powerful cloud technologies day after day, week after week.

Below are some of the highlights of cloud computing in 2011, the year of the cloud:

• In January and February, Amazon Web Services busted out of the gate in 2011 with the launch of Elastic Beanstalk and CloudFormation. Elastic Beanstalk automates the process of deploying an application on Amazon’s virtual servers. CloudFormation automates the provisioning of virtual resources using templates that streamline the setup of an infrastructure for deployments of new instances.

• In May, Citrix announced plans to launch Project Olympus, an IaaS platform that allows customers to leverage the OpenStack operating system code to create public or private clouds. Project Olympus marked the first commercialization of OpenStack and thereby inaugurated a series of commercial OpenStack deployments throughout the remainder of 2011.

• In May, Red Hat launched IaaS platform CloudForms and PaaS platform OpenShift. CloudForms signaled genuine innovation in the IaaS space because of its Application Lifecycle Management capabilities and hybrid infrastructure flexibility. OpenShift, meanwhile, presented direct competition to Google Apps, Windows Azure and Amazon’s Elastic Beanstalk because of the breadth of its deployment platform and claims about increased portability.

• In June, Apple announced details of iCloud, a software framework that synchronizes files across multiple devices such as iPads, iPhones and personal computers, and pushes software updates to a constellation of devices in unison. In a keynote address at the Apple Worldwide Developer’s Conference (WWDC), Steve Jobs famously remarked that iCloud would “demote the PC and Mac to being a device,” because “we’re going to move the digital hub into the cloud.”

• In August, Amazon Web Services announced the launch of GovCloud, a private cloud for government agencies that complies with regulatory and compliance rules for the Federal government such as FISMA, FIPS 140-2 compliant end points, SAS-70, ISO 27001, and PCI DSS Level 1.

• In September, OpenStack, the open source cloud computing infrastructure that gained the backing of 144 companies including AMD, Canonical, Cisco, Dell, Intel and Citrix, released Diablo, its latest software version since the Cactus release in April 2011. Diablo, the first upgrade to OpenStack released on a 6 month schedule, upgrades its existing Nova, Object Storage and Glance components.

• Also in September, Joshua McKenty’s startup Piston Cloud Computing launched pentOS, one of the first enterprise grade versions of OpenStack for private clouds. With the launch of pentOS, Piston joined HP, Citrix Systems, Nebula and Dell in an elite group of vendors that commercialized the OpenStack platform in the latter half of 2011.

• In October, Rackspace revealed plans to turn over the leadership of OpenStack to an independent foundation. After founding OpenStack with the collaboration of NASA in the summer of 2010, Rackspace decided to hand over trademarks and copyrights to an independent foundation to ensure that OpenStack remains vendor neutral.

The meteoric rise of OpenStack constituted the cloud computing story of the year, by far. Commercial deployments of OpenStack by Piston Cloud Computing and other vendors underscored the emerging power of OpenStack as an increasingly competitive option to Infrastructure as a Service (IaaS) vendors such as Amazon Web Services and Rackspace. Moreover, OpenStack promised global cloud inter-operability and standards resulting from an open source organizational framework for which respect snowballed within the developer and enterprise community alike. Much of the story of cloud computing in 2012 will hinge on the ability of the OpenStack foundation to continue to promote the software framework’s adoption in the private sector and establish itself as a credible counterweight to first mover Amazon Web Services and other proprietary cloud vendors.

Amazon Web Services Announces Cloud Supercomputer Ranked 42 On Top500 List

On Monday, Amazon Web Services (AWS) announced the Beta launch of Cluster Compute Eight Extra Large (CC2), a supercomputer on its EC2 cloud infrastructure that ranks 42 on the list of the world’s top 500 supercomputers. Cluster Compute Eight Extra Large can be used for “physics simulations, seismic analysis, drug design, genome analysis, aircraft design and a variety of business computing and analytics applications.” In addition, the high performance computing (HPC) application can be used with Amazon Elastic MapReduce to analyze massive amounts of data from structured and unstructured data sets using the Hadoop software framework. Amazon Web Services revealed the deployment of Cluster Compute Eight Extra Large in conjunction with this year’s November 12-18 Supercomputing 11 conference in Seattle. The announcement represents a clear strategic move to increase enterprise market share by targeting organizations such as pharmaceutical manufacturers, large scientific research groups and financial services firms that encounter the challenge of crunching massive amounts of data.

Key features of Cluster Compute Eight Extra Large include the following:

• 2 Intel Xeon processors, each with 8 hardware cores per instance
• Hyper-threading that allows each core to process instructions in parallel
• A whopping 60.5 GB of RAM and 3.37 TB of instance storage
• Choice of Amazon Linux AMI or Windows 2008 R2 for the operating system
• Availability only in Amazon’s US East (N. Virginia) Region
• Price of $2.40 per hour per instance

A cluster of 1064 CC2 instances resulted in a speed of 240.09 teraFLOPs. 290 CC2 instances resulted in a speed of 63.07 teraFLOPs with pricing less than $1000/hour. The Cluster Compute Eight Extra Large product represents an upgrade to High Performance Computing offerings introduced by Amazon Web Services last year. Customers of its HPC offering currently include Harvard Medical School, which uses Amazon’s HPC product to investigate problems in genomics and personalized medicine. Lawrence Berkeley National Labs was another user of Amazon’s initial HPC offering known as Cluster Compute Instances.

The release of CC2 positions Amazon Web Services strongly in a market dominated by the likes of IBM, Cray, HP and Dell. Because supercomputers often start in the price range of $500,000 and up, AWS seeks to compete in price and ease of deployment. The offering also represents yet another tactic to gain market share in the hotly contested Big Data space, particularly given the compatibility of CC2 with Amazon Elastic MapReduce and its Hadoop based infrastructure. In the cloud computing space, however, Cluster Compute Eight Extra Large represents a clear move to consolidate market share in the enterprise space by democratizing supercomputer usage beyond the domain of scientific and research organizations.