Sept. 9 - 10, 2013
San Francisco, CA

Early Bird Tickets on Sale

Ofir Nachmani is Chief Evangelist at Newvem

I believe that this is the year when the enterprise will find its way to the cloud.

The mega Internet sites and applications are the new era enterprises. These will become the role models for the traditional enterprise. IT needs remain the same with regards to scale, security, SLA, etc. However, the traditional enterprise CIO has already set the goal for next year: 100% efficiency.

The traditional CIO understands that in order to achieve that goal, IT will need to start and do cloud, make sure that IT resources are utilized right, and that his teams move fast.

1. Enterprise will move to the public cloud

The enterprise has already moved and started its proof-of-concept.

Those who have realized the option to reduce cost, increase agility, and enjoy the real benefits of the cloud will continue migrating the resources of their non-critical services. Internalizing the public cloud (specifically AWS cloud) will inspire the enterprise to learn how to maintain a robust, highly available and secured service on the public cloud. That will put the hybrid environment in the front, supporting bursting and load migrations.

The traditional enterprise follows the new era one, making sure to transition and acquire only online and mobile services. The SaaS market will continue to grow and be the premier source for the enterprise new online services.

2. Slow adoption of Openstack

OpenStack is one of the candidates to compete with AWS.

This open source platform is being led by heavy traditional industry, such as HP. These traditional vendors don’t have the Internet company culture of moving fast, supported by fast cycles of refinement. In 2012 Amazon released a huge number of new features to support the enterprise cloud, following great agile product management. By contrast HP, which leads the OpenStack community, is still dragging its feet while trying to copy the AWS base offering.

However, it is important to mention that a new trend is emerging in which enterprises are moving to deploy OpenStack instead of renewing VMware licenses.

3. Private cloud is still an option (at least for another year)

Although I am a public cloud “believer,” adoption takes time and the enterprise IT will not shut down its on-premises resources on the spot.

The hype supports the penetration of the cloud to every IT team, including the enterprise … but traditional enterprises want risk free migrations. The basic recommendation is to move on with a quick proof-of-concept to taste and test the actual benefits.

The next move comes when a need for additional resources arises, such as an upgrade, new application, or load growth. Once a real need for additional resources arises, IT managers will then decide whether to purchase new on-premises technologies or cloud resources. And the innovative IT leaders will choose the latter.

Another option is that the enterprise experiments on the public cloud, and only then purchases dedicated resources due to high lease costs. But once a real price war takes place, I believe that the preferred option will be the public cloud, although I’m not sure that this will happen in 2013.

For these reasons, the hybrid cloud model is still valid (unfortunately).

4. Cloud brokers and managed service providers will flourish

Thanks to the knowledge gap, the simple reality is that IT can’t meet the demand for cloud skills. In fact, according to an IDC study, the demand for cloud computing will grow at six times the rate of IT skills overall.

The re:Invent APN summit for partners and the IDC study strengthen the position of cloud managed services. It is obvious that Amazon loves its MSPs because these vendors are growing like crazy. I follow at least five different MSPs whose business as integrators of AWS has grown to 80-90 percent of their whole business, and these are growing amazingly fast.

Amazon also invests in these vendors as it knows that the way enterprise deals with time-to-market issues is by outsourcing, and it will continue to do the same in the future.

5. Transparency is a Key value

One of the most important things I have learned from HP Discover was that the enterprise wants and will be happy to pay to maintain control.

The cloud puts control and transparency at risk due to the fact that traditional enterprise leaders and users are used to having great control of IT resources, and the concept of not having the “irons” intimidates them. The cloud vendors and developers will have to make sure they report back to leaders on the adoption progress, making sure that these new IT resources generate the expected business benefits without harming services, compliance, SLAs, and so on.

Organizations that run to deploy without planning and control will put their cloud adoption and innovation at great risk. Choosing to run a business on a cloud is a strategic move, and picking the right way to manage your new cloud resource is part of this strategy.

And one wish for 2013 …

I wish that public cloud competition would become a reality very soon, that it would generate great price reductions, and that it would enable adoption. I hope that Amazon’s cloud will continue to strike and overwhelm everyone with its enterprise penetration, bringing that future even closer. And I hope that the traditional enterprise will be able to adopt “continuous integration” and “cycles of refinement” while removing constraints and presenting the great innovation that the cloud enables.

Ofir Nachmani is Chief Evangelist at Newvem, a web-based cloud usage analytics service that enables CIOs, CTOs, IT managers, Developers and Operators to capture and improve the effectiveness of their public cloud operations and ensure their cloud infrastructure is in sync with business performance. Follow him at @iamondemand.

Image credit: Google

Sept. 9 - 10, 2013
San Francisco, CA

Early Bird Tickets on Sale

After the Autonomy debacle, software giant Hewlett-Packard is putting its eggs in a new basket: converged cloud services.

HP has announced the general availability of its Open Stack-powered public cloud service in the hopes that this will boost customer confidence as it recovers from the $10 billion botched acquisition of enterprise search vendor Autonomy.

The race to commoditize the open-source cloud operating system is firmly underway, but as an original investor, HP has a head-start. For HP, this is part of an ongoing push to bring enterprise customers a combination of private, public and managed cloud resources — a true hybrid cloud.

In addition to releasing its OpenStack-powered public cloud product, HP also announced enhancements to its Cloud Service Automation software, and that its suite of cloud offerings now includes a platform as a service (PaaS) based on VMware’s Cloud Foundry. Read more here about the growing demand from enterprises for PaaS, which makes it easier for developers to deploy applications in the cloud.

HP will make the announcement of the release today at its Discover event in Frankfurt, Germany. The company faces some stiff competition from incumbent cloud computing giants — Rackspace and Amazon make similar claims about the benefits of the hybrid cloud. Dell and Internap are also rolling out their Open-Stack based public clouds. But given HP’s early experimentation in the area, it is already in the game in some ways: France’s second largest carrier, SFR, for example, is using HP’s OpenStack modification in its own offering in France (see how that deal emerged from our own CloudBeat conference in 2011).

HP’s open-cloud offering, Cloud Compute, promises to deliver reliable resources to handle heavy production workloads — its a “pay as you go” model that lets customers pay for the services they actually use. Cloud Compute is an “open cloud” service, meaning that customers are free to choose their platform and language without fear of vendor lock-in.

Free trials are currently on-offer and promotional pricing is available until January – early customers will receive the service at a 50 percent discount.

According to Network World, the company is also announcing a beta version of a cloud-based block storage service, which will likely be generally available in the coming months.

Top photo: basketman23/Shutterstock

Sept. 9 - 10, 2013
San Francisco, CA

Early Bird Tickets on Sale

PepsiCo does not plan on moving its systems public cloud. Yet.

Frank Edwards, the director of IT strategy at PepsiCo has been working on the “Exit Strategy Group” at the global food and beverage giant. The group looks at how to bring operating costs down and make PepsiCo’s backend as efficient as possible. And he doesn’t think the public cloud fits that mold.

“We haven’t seen that it’s compelling to be less expensive or to fit our risk profile,” said Edwards at the CloudBeat conference in Redwood Shores, Calif. “If you have a compelling case that will save us a million dollars, that’s not really compelling enough.”

PepsiCo takes in $65 billion in revenue a year.

In order to come to this conclusion, Edwards and his team used the Monte Carlo Simulation, which took over 40 billion different situations in which PepsiCo could save money through the public cloud, and found that it just didn’t make sense.

“I’d love to see more companies adopt this kind of mechanism when selling to large enterprise,” said Edwards. “It does seem like a lot of messages are geared toward the developer or SMBs [small to medium sized businesses].”

Edwards said that PepsiCo believes that it won’t last forever as a private cloud company, however.

“The public cloud is eventual, it’s not a question of if, it’s a question of when,” he said.

In order to prepare for that, the company has purposefully built its data centers near Amazon and other cloud providers so that it can physically hook up to them if need be.

For an enterprise company like PepsiCo, the public cloud really makes sense for product launches and other unpredictable events. PepsiCo likes to work with public cloud vendors when it has various promotions or product launches so that it doesn’t have to deal with the resulting traffic spikes.

Photo credit: Michael O’Donnell

Sept. 9 - 10, 2013
San Francisco, CA

Early Bird Tickets on Sale

If you use popular cloud storage and sharing services like Box and Dropbox, you trust your sensitive information to third party data centers.

OwnCloud, the startup that positions itself as the open-source alternative to Box, is the newest contender in the cloud storage wars.

To expand into new verticals and grow its user-base, the Lexington, Mass. based startup pulled in $2.5 million from venture capital firm, General Catalyst. The firm’s Managing Partner Larry Bohn will join the company’s board of directors.

OwnCloud claims to give its 650,000 users a drop dead easy tool and more control over their data. Its server is typically deployed on a company’s servers or trusted service provider’s servers, and integrates well with existing security, storage, monitoring and reporting tools.

Young companies are increasingly positioning themselves this way in the wake of security breaches that may undercut the market leaders in the space. With its hybrid cloud solution, Egnyte is another young cloud storage vendor that emphasizes advanced security and user experience.

The technology works a little differently than the competition — IT users can store information in their cloud of choice. IT gets to decide whether files from services like Amazon, Dropbox or Google are shared with a broad spectrum of users — or accessed by just a small subset. In a recent update to the product, file owners can set expiration dates on shared files and password-protect the URL to a shared link.

The company will use the funds to expand its 70-partner strong channel, aggressively push into the enterprise, and support service providers who implement file sync and share based on OwnCloud.

“There’s no one in this increasingly crowded market that can do the things OwnCloud does — integrate closely with existing IT, innovate at lightning speed and offer choice of storage locations,” said Bohn in a statement. “With those capabilities already in place differentiating it from the competition, we’re confident that OwnCloud will succeed.”

Cloud storage image via Jules 2000 // Shutterstock

Sept. 9 - 10, 2013
San Francisco, CA

Early Bird Tickets on Sale

As cloud adoption continues to accelerate, cloud leaders are defining ever more sophisticated app architectures that leverage both public and private clouds.

Earlier this year, a RightScale survey of more than 600 companies found that 68 percent of organizations have a cloud strategy that includes more than one cloud provider, with 53 percent choosing hybrid cloud (combining public and private clouds) and 15 percent choosing multiple public clouds.

These organizations are leveraging cloud management solutions to provide a level of abstraction from individual cloud capabilities and enable “workload liberation” — the ability to pick and choose the cloud infrastructure that is best for each application at any point of time.

Match up to the right cloud using app requirements

Combining a cloud management solution with a multi-cloud portfolio allows organizations to preserve choice while balancing technical, business and financial priorities. Here are a few examples of how cloud users match the right cloud infrastructure based to each application’s requirements:

Load variability

Applications with highly variable or relatively stable loads may be better suited for particular cloud providers. Companies like Zynga are leveraging the public cloud to handle the hard-to-predict spikes when they roll out new social games, while using the private cloud for more mature games with predictable loads.

Application requirements

Different applications may have different business requirements that influence the choice of public or private clouds. For example, CloudCare, a SaaS solution for practice management in doctor’s offices, runs web and application tiers in the cloud, while maintaining HIPAA-governed patient data in an in-house data center.

Geographical

Organizations with international reach are looking to leverage clouds, both public and private, in geographies that are distributed to match the user load and optimize performance. For example, web sites that provide online access to large data sources will typically leverage a master database in one region and replicating slaves in other geographies.

Architecting for high availability

Companies looking to eliminate single point of failures are building disaster recovery architectures that leverage multiple clouds. For example, one user that leverages the cloud for heavy-duty processing replicates their data to a second private cloud in case of an outage. Other cloud users take advantage of multiple regions, with a DR deployment that leverages a “warm” replicated slave database along with non-operational stand-by servers.

Factors to consider for a multi-cloud architecture

In most of these scenarios, companies realize that they need to create and leverage a portfolio of public and private clouds. Whatever the motivation for creating a multi-cloud architecture, companies should consider several factors:

Minding the functionality gap

When considering a multi-cloud architecture, it is important to understand that each cloud provider, whether public or private, will provide different features and services. Each cloud may provide different options for storage, load balancing, network, and application services. Even when cloud providers have similar services, the APIs and the behavior of those services will vary.

When implementing a multi-cloud architecture, a cloud management solution can bridge this functionality gap and enable consistent interfaces, processes, and automation for your organization.

Securely connecting clouds

When working with multiple clouds, organizations will need to make connections between those clouds and between their own data centers and any public clouds.

In many cases, these connections may traverse the public internet, requiring companies to use integration strategies that also meet their security needs. Companies can leverage VPN solutions like OpenVPN, VNS3 from CohesiveFT, or CloudOptimizer from CloudOpt to create this secure connection over the public internet.

There are also options to create these connections between clouds using private networks. Cloud providers, such as SoftLayer and Google Compute Engine, enable you to create an architecture that spans data centers in different geographies where all traffic between your servers is on a private network.

For securely sharing data across clouds, you can leverage SSL database replication services that are part of many databases, including MySQL, PostgreSQL, and SQL Server.

Overcoming latency

Latency, the time delay associated with network traffic in distant geographies, is an important consideration for all of your cloud-based apps. A common approach to reduce latency is to deploy your applications in clouds that are geographically close to your end users.

When serving multiple geographies, multiple independent instances of the app might be acceptable. For example, a scalable website that has separate user bases located in Asia, North America, and Europe could have separate instances that serve those local regions. In that case, you might choose different clouds for each geography.

However, in some cases, a single instance of an application or a shared database needs to serve geographically distributed users. For example, an online gaming or social site that allows users in different geographies to interact may require a single shared database.

There are several technical approaches that can be used in these situations. One technique is to leverage WAN optimization technologies that aim to optimize the amount of data being sent over the network, thereby reducing latency of any transactions. A second technique is to deploy separate instances of the application in clouds located in different geographies, while connecting the databases through replication to provide a unified experience.

Controlling costs

One last thing: It’s very important to consider cost implications as you are designing and architecting your multi-cloud solution.

The first step is to understand the cost components associated with each particular public or private cloud option. You may also need to work with your financial team to accurately model the full costs of any internal clouds you may be developing. For example, in multi-cloud scenarios, bandwidth requirements can be a critical piece of the cost. In some cases, “data ingress” to a public cloud may be free, while “data egress” may incur higher charges.

Once you understand the cost components, you can now factor in cost considerations when choosing the right cloud for a particular application. For example, an application with high variability in load or one that will be running for a short period of time, may have lower costs when deployed in a public cloud, while an app with more steady usage may have lower costs in a private cloud.

Keep in mind that cloud providers are frequently changing their cost models and often lowering the cost of infrastructure services, so the cost profile of each cloud may change over time. A cloud management solution will give you the flexibility to choose the best cloud for your needs and to retain the ability to move clouds as needed.

Wrap up

The value of multi-cloud for a wide variety of use cases cannot be disputed. Companies of all sizes, from large enterprises to small startups, are seeing the value of taking a multiple cloud approach to manage their infrastructure.

After spending the last three years at RightScale helping companies develop and execute their cloud strategies, I’m seeing a growing adoption of a multi-cloud approach by industry leaders –- and I expect that momentum will only continue as organizations take advantage of these architectures to ensure success with their cloud-based applications.

Brian Adler is a Senior Professional Services Architect at RightScale, bringing years of experience working with multi-cloud environments. Brian advises on complex application architectures with customers and their cloud implementations, working directly with customers to dynamically configure cloud resources across multiple cloud infrastructures. Prior to RightScale, Brian held positions in systems engineering, architecting, hardware, and software in defense industry applications and as a software architect for Openwave.

Clouds photo via Nicholas A. Tonelli/Flickr

Rackspace picked up Mailgun today, a Bay Area-based startup with a web service to create and manage email inboxes within apps.

Mailgun, a graduate of Y Combinator, announced the acquisition in the company blog this morning. The startup, which provides email server tools, also incorporates tracking and analytics that lets developers know whether emails have been opened (pictured, below).

It’s a six-person operation, but Mailgun’s early customers include Y Combinator and the Financial Times. The startup has raised $1.1 million in seed funding from SV Angel, Y Combinator, and celebrity investors like Ashton Kutcher since its launch in 2011. It will relocate from Mountain View, Calif. to Rackspace’s San Francisco offices.

Rackspace, an IT hosting company based in San Antonio, said in a statement that the deal “will further enhance Rackspace’s product portfolio, making it easy to integrate cloud-based email services into applications and websites within minutes,” adding that “our customers are asking for this and Mailgun is the right company to help us deliver it in a tightly integrated way.”

Rackspace is hot on the acquisition trail: This is its seventh buy-up. Since acquiring CloudKick in 2010, it added cloud monitoring to its suite of tools. The company is now the top cloud infrastructure provider after Amazon.

Terms of the deal were not disclosed; the acquisition is expected to close at the end of the week.

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Sept. 9 - 10, 2013
San Francisco, CA

Early Bird Tickets on Sale

With so much talk about “big data” lately and data-focused companies like 10gen and Delphix recently grabbing large funding rounds, it’s a topic that won’t be going away any time soon. But what exactly is it and is there an easier way to comprehend just how big it all is?

Typically, big data describes working with monster-sized data sets that are hard to manage using standard database tools. Thus, we have all kinds of companies scrambling to provide new software and tools to manage, store, and analyze those data sets. Other big data startups that have seen investments include Cloudera, Palantir, Datahero, and Precog. On top of that, big dogs like Google, Yahoo, and HP are providing their own solutions too.

HP-owned Autonomy has taken a stab at trying to explain “big data” with a new infographic. Autonomy’s private cloud surpassed 50 petabytes in April and just last week, the company released new tools focused on big data, so clearly the company has big data on its mind.

Check out the infographic below:

Top photo credit: VLADGRIN/Shutterstock

Sept. 9 - 10, 2013
San Francisco, CA

Early Bird Tickets on Sale

Enterprise software and services player Autonomy‘s private cloud for businesses has now surpassed 50 petabytes to extend its lead as “the world’s largest private cloud,” the company announced this morning.

HP loudly announced its decision to buy Autonomy back in August 2011. And when the $10.3 billion deal closed in October, HP immediately folded Autonomy into its offerings for enterprises. The Autonomy buy was spearheaded by former HP CEO Leo Apotheker, who was later booted from the company. The expensive Autonomy purchase may have been one of the reasons Apotheker was canned, while another was his exploration of spinning off the company’s PC business. But after his replacement, Meg Whitman, took the reins, HP did everything it could to give the successful enterprise-focused company even more resources, especially when it came to the cloud.

Autonomy’s private cloud service, which has more than 1,000 customers, has grown at an incredible rate since HP announced its intent to acquire the company. It amounted to 31 petabytes in August 2011 and now stands at 50 petabytes, meaning the company grew its private cloud size 38 percent in nine months. Those 50 petabytes of data (equal to 665 years of high-def video) are stored on 6,500 servers in 14 data centers across the world.

“In terms of content stored under management, we believe no one else is even close to matching our offering,” Mike Sullivan, CEO of Protect at Autonomy told VentureBeat. “We have 1 billion pieces of content coming in each day.”

Sullivan said that with HP behind it, Autonomy has been able to speed up previously held plans to serve more customers and integrate with HP’s services and infrastructure. Using its Intelligent Data Operating Layer (IDOL), the company’s private cloud can recognize patterns in all the structured and unstructured data in takes in each day. IDOL enables “marketing and revenue optimization, archiving, data protection, eDiscovery, and information governance,” the company says.

Private clouds like Autonomy’s differ from public clouds like Amazon’s because they clearly separate usage for each organization, whereas users of public clouds have to share resources. (Amazon, by the way, reached a new growth peak with its Simple Storage Service (S3) last week and is now storing 905 billion objects.)

Sullivan said Autonomy’s private cloud gives businesses and government organizations much more security than they could get with public clouds. Nine out of 10 of the world’s largest banks use Autonomy’s private cloud for financial data, and it has attracted government agencies in the U.S. and Europe.

“We’ve been doing this for 20 years,” Sullivan said. “We know we have to offer a high level of security.”

Clouds photo: Paul Bica/Flickr

Sept. 9 - 10, 2013
San Francisco, CA

Early Bird Tickets on Sale

Cloud storage is easy, but if you’ve got a lot of data, the costs can escalate quickly.

Case in point: DNAnexus, a startup that is storing DNA data so researchers can access and analyze it through a web interface, is using Amazon Web Services (AWS) to power its applications, and Amazon Simple Storage Service (S3) to store data.

The company now has half a petabyte of data stored in the cloud, at a cost of 11 to 12 cents per gigabyte per month. Additionally, Amazon charges 11 to 12 cents per gigabyte for data downloads. That adds up to a total cost of tens of thousands of dollars just for storage.

Like an old-school dime store hooking kids on nicotine with free cigarettes, Amazon makes it easy to get started.

“Amazon has made it very attractive to send data to them — they don’t charge for that. But they do charge when you want to get that data out of the cloud,” said Andreas Sundquist, the CEO and co-founder of DNAnexus.

Add up the costs, and Amazon looks like it’s about the same price as local storage.

“I can go to Fry’s and get a hard drive — and that’s what it costs to store data on Amazon for a month,” said Sundquist.

Despite the costs, it’s beneficial to have the data stored closely to the computing and web resources that Amazon offers. AWS has given DNAnexus flexibility and computing power it couldn’t have easily accessed otherwise.

Sundquist spoke on a panel discussion at CloudBeat 2011 today with vendors from four storage providers: Crossroads, Coraid, Scality and Whiptail.

The consensus of the panel: Initial costs, also known as capital expenditures (CapEx, or what you’d spend at Fry’s for that hard drive) are only part of the story. For large-scale enterprise storage, you’ve also got to account for network management, storage management, maintaining all those storage servers, ensuring that your storage area network is compatible with the rest of your applications, and so on. Therefore, the cost per gigabyte of raw storage is misleading.

“It’s a metric that doesn’t make any sense,” said Jerome Lecat, the CEO of Scality.

For that reason, it’s smarter to focus on the total cost of ownership per month, and in that light, Amazon doesn’t look like such a bad deal.

“Amazon is 70 percent cheaper than what legacy companies do, typically,” said Forrester analyst Andrew Reichman, who has studied the comparative costs of different storage solutions. “The biggest difference is you don’t need to pay for excess capacity. You only pay for what you do send to Amazon.”

For instance, if you have half a petabyte of data, you’d actually need to purchase 2 petabytes of storage capacity, in most cases, Reichman said. Cloud storage gives you the ability to pay for just what you use.

However, Amazon’s costs are higher than some of the alternatives. If you have the ability to build your own storage system in a datacenter, the companies on the panel are all able to offer you cost-effective alternatives so you can build your own cloud storage.

• Crossroads specializes in making tape storage work with modern storage systems, by essentially making the tape drive act like a USB drive. Because tape can be stored without requiring power — all you need is more cabinet space — it’s particularly economical for vast quantities of data. Crossroads storage can cost less than 1 cent per GB per month, or 1/10 the cost of Amazon, especially at the largest scale (exabytes of data).
• Coraid uses commodity hardware and Ethernet cabling to replace expensive FibreChannel and storage arrays. Using these pieces, it was able to sell the U.S. Department of Defense a $1 million storage contract with a “buy one petabyte, get the second petabyte free” deal. Coraid storage has a total cost of ownership of 5 cents per GB per month, or about half what Amazon charges.
• Scality offers software that makes storage networks work more efficiently, making it easier to add more capacity as needed — like “building an Amazon S3 at home,” Lecat said. Scality-based storage also costs about 5 cents per GB per month, all-in.
• Whiptail creates solid state storage-based systems that are more expensive than traditional spinning hard disks, but which are extremely fast. While it doesn’t charge by GB per month, its total cost of ownership works out to about 10 to 12 cents per GB per month for the largest scale installations.

Despite the advantages, it seems that DNAnexus will be sticking with the public cloud for now.

“The nice thing about Amazon is, I don’t have to think about what sort of storage device it is stored on. If I need to double my storage, I just do it,” said Sundquist.

Photo credit: Sean Ludwig/VentureBeat. Panelists, left to right: David Cerf, Crossroads; Kevin Brown, Coraid; Jerome Lecat, Scality; Dan Crain, Whiptail Technologies; Andreas Sundquist, DNAnexus; Andrew Reichman, Forrester Research.

Sept. 9 - 10, 2013
San Francisco, CA

Early Bird Tickets on Sale

About two months ago, Oracle announced it would finally take the plunge into public cloud computing with the Oracle Public Cloud. Oracle technology product marketing VP Rick Schultz talked more about the public cloud today and admitted it was a new frontier for the previously cloud-agnostic company.

Schultz talked with VentureBeat editor-in-chief Matt Marshall on stage at CloudBeat 2011 in Redwood City. The crux of the conversation concerned how Oracle is moving to launch its version of the public cloud in the spring of 2012.

One point Schultz emphasized is how Oracle’s public cloud would not force you to stay in their ecosystem, and that it would allow developers to move their applications to other clouds if they needed to.

“We don’t lock you in,” Schultz said. “You can send your app to the Amazon cloud, for example.”

One challenge presented to Oracle that Schultz mentioned is convincing customers who have already embraced the cloud to join up with Oracle as well. But he said there are many customers who have already used a private cloud, and who are now interested in the public-private hybrid model.

“Forty percent of Oracle customers already have adopted the private cloud,” Schultz said. “But we’re seeing the public cloud grow and the interest in the public cloud is growing fast. Our role in the public cloud will evolve over time”

Schultz also noted that Oracle technology already helps power many clouds, including parts of Amazon’s cloud and Softbank’s cloud. He said customers would continue to use Oracle tech to power the cloud and use the company’s new public cloud to help explore new models.

“We can provide customers with a roadmap of how to get from here to there,” Schultz said, “We have a lot of customers who are doing cloud computing in a revolutionary manner. For us, it’s about giving our customers a roadmap to explore public and private models.”

In the cloud space, Oracle also recently announced plans to acquire cloud-based sales force automation and customer service company RightNow for $1.5 billion in late October.

Sept. 9 - 10, 2013
San Francisco, CA

Early Bird Tickets on Sale

Recently, we were proud to publicly unveil the private cloud computing infrastructure that we use to scale our social games — infrastructure that we internally (and affectionately) call zCloud. zCloud leverages both our internal infrastructure components and our public cloud partner, Amazon Web Services. This hybrid cloud, using private and public clouds in unison, allows us to scale our social games efficiently and effectively for our millions of daily players.

The first rollout of zCloud was focused on building an Infrastructure-as-a-Service (IaaS) model designed specifically for social games in terms of availability, network connectivity, server processing power and storage throughput. And as we built and deployed zCloud, we challenged ourselves to drive innovation past the concept of a hybrid cloud and ask what other services zCloud could provide to our social games. We wanted to understand how we could make Zynga’s games faster, more reliable and easier to scale.

Before we could answer this question, we needed to understand the infrastructure requirements of each of our social games. Zynga is a particularly challenging environment to find exact computing requirements since each of our games is unique. Each one uses a variety of programming languages, storage mechanisms and social mechanics. On top of that, games continuously evolve, and we constantly explore the boundaries of new technologies to make our games more social.

To begin, our teams spent time building instrumentation for each layer of our application stack and understanding the existence of potential bottlenecks. We did this instrumentation both on zCloud and on AWS – this step was vitally important to help us understand our games’ operating environments. In some cases, we found servers that were constrained by the multi-core CPU performance, in others we found that our networking throughput or storage I/O was a limiting factor or that we had over-provisioned memory on some servers. In a private cloud, you need to measure how your applications perform and build matching infrastructure.

Because zCloud is our own private cloud that we can manipulate and control, we were able to optimize our infrastructure to quickly alleviate nearly all of these potential bottlenecks. Public clouds, while exceptionally good at providing a wealth of services for a great number of customers and computing needs, often leave little flexibility for infrastructure optimization.  We found that we had to modify how our games operated for their environment.

The flexibility that zCloud provides for our games is another key to our ability to scale. When we conceived of zCloud, instead of thinking about building infrastructure for specific games, we thought about the need for every one of our games to operate on any server in any geography – or on every server in all geographies. It was essential that we understood the implication of this flexibility on networking, load balancing, storage, caching, security, application messaging, and so forth.

As the next step in building zCloud, we looked to build software and tools that allow us to operate and scale faster. These new automation tools allow us to provision services in minutes that used to take days to deliver and validate. We can now consolidate and correlate thousands of alerts into a single notification, associating specific processes for people to perform. We also built a reporting dashboard that shows both real-time and historical information about the performance of each game on zCloud.

It’s this next set of zCloud services that has made our games perform faster, scale better and be more reliable. Our keys were instrumenting our application well, building the right infrastructure to match the application needs and thinking about the flexibility that a private cloud allows for our games.

As unique as Zynga’s infrastructure needs may be, these are tenets that all businesses may want to consider when exploring cloud deployments.

Allan Leinwand is the chief technology officer for infrastructure engineering at Zynga. He is responsible for all aspects of technology infrastructured used in the delivery of Zynga’s social games, from data centers to cloud computing. He was previously a venture partner at Panorama Capital and founded Vyatta in 2005. He spoke with Dean Takahashi, lead writer for GamesBeat at VentureBeat, at our CloudBeat conference this week.

Sept. 9 - 10, 2013
San Francisco, CA

Early Bird Tickets on Sale

Oracle plans to acquire cloud-based sales force automation and customer service company RightNow for $1.5 billion, the company announced Monday morning.

The planned acquisition makes a ton a sense in light of Oracle CEO Larry Ellison’s announcement earlier this month to finally push Oracle into public cloud computing after many years of shunning cloud services. The Oracle Public Cloud will let its customers use Oracle apps direct from the Web or deploy native apps in the cloud.

The acquisition of RightNow will help Oracle continue branching out in the cloud in a different fashion. RightNow’s focus is on helping clients with customer engagement and problem solving through social media, rich online interfaces and contact centers. With those services in tow, Oracle will be able to better compete with the likes of Salesforce.com, which Ellison has been critical of.

“Oracle is moving aggressively to offer customers a full range of cloud solutions including sales force automation, human resources, talent management, social networking, databases and Java as part of the Oracle Public Cloud,” said Thomas Kurian, Oracle Development Executive VP, in a statement. “RightNow’s leading customer service cloud is a very important addition to Oracle’s Public Cloud.”

Oracle’s offer of $1.5 billion equals $43 per share, a nearly 20 percent premium over RightNow’s closing price of $32.96 on Friday. Bozeman, Mont.-based RightNow said it has 2,000 customers and is currently listed on the NASDAQ stock exchange alongside Oracle.

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HP is the world’s biggest technology company, but it hasn’t necessarily been the leader in those areas in the past. But Apotheker, speaking today about company strategy in San Francisco to analysts and press for the first time since he became CEO in November, said HP will build and operate its own “public cloud,” or a platform to deliver all kinds of services to businesses and consumers.

That cloud will interact with its customers’ own private clouds and provide the kind of high-interaction services that consumers have come to expect in the age of the internet for transactions such as e-commerce or digital distribution.

Apotheker said HP is prepared to securely deliver end-to-end services and technologies to make this happen. The public cloud platform will be interoperable, trusted, have its own app store, and work with the 100 million-plus WebOS devices that HP plans to ship in the coming years via its PCs, smartphones, tablets and printers.

“To be clear, we don’t need to own the big transactional platform,” he said, noting HP can partner to do that.

HP’s acquisition of Vertica Systems is an indication of where HP is going, and the company will have a new appliance on the market when that deal closes. HP announced the deal on Feb. 14, and it will provide HP with real-time analytics for “big data,” or huge databases for handling interactions with large numbers of consumers.

As for software, HP will offer software over the cloud in the form of software-as-a-service, as provided by rivals such as Salesforce.com. As an example, HP said it could apply all of the real-time analytics and customer information at hand to figure out the exact rate that a rental car company should apply to a customer who wants to rent a car.

Apotheker said that security is the key to ensuring cloud computing is safe. HP is the fifth-largest security information technology company in the world, and its focus is to provide a security backbone across a distributed infrastructure.

He said HP can handle operations for small, medium and large businesses itself. Or it can offer them components that they can mix and match together in a heterogenous environment. Or it can offer services and hardware that the businesses can operate.

“No company is better positioned than HP,” Apotheker said.

In a Q&A with reporters, Apotheker said elements of the cloud infrastructure are in place now and more will roll out during 2011 and 2012. The same goes for HP’s own app store. I asked Apotheker if HP will now compete with its own cloud-computing customers. He said the company will continue to partner with its current customers and will roll out the public cloud for those customers who are asking for that and will not do it themselves.

HP is playing catch-up in a big way in the cloud compared to rivals such as Rackspace and Amazon. But, he said, “We will catch up and we will talk to you about it when we do.”

SecureWorks gives users with a number of tools to help manage security threats and control access to local networks. The service includes email encryption, and SecureWorks provides a degree of consulting for its customers. The entire security suite is deployed on in-house servers.

Most of Dell’s business is in providing companies with private, in-house cloud servers that run multiple computers. Dell has said before that it doesn’t feel threatened by the public cloud — a bunch of services that offload heavy-duty computing to remote servers and stream the results through the Internet. Dell brought in around $1.8 billion last quarter off sales of its servers. Dell’s Data Center Solutions is the third-largest distributor of servers using chips from Intel and AMD.

But companies buying Dell’s servers have to bear the costs of keeping those private cloud servers up and running. That isn’t the case with public cloud servers from companies like Amazon and Rackspace. Dell’s strategy lately has been to reduce those upkeep headaches and keep companies interested in the private cloud. It recently acquired Compellent, which provides some software to help companies store and access their data more efficiently on private cloud servers, as part of that strategy.

Dell’s largest customers, like OnLive and Microsoft, are probably going to stick with the private cloud because it is faster. Dell still needs to bring in some new incentives for smaller and mid-sized businesses that are flocking to public cloud services because they are typically cheaper. One way to do that is to draw attention to the notion that public cloud services aren’t as secure as private servers because the information has to be transmitted across the Internet.

This is the second big acquisition in a few months for Dell. SecureWorks raked in about $120 million in revenue last year and has around 1,500 customers running its software. The financial details of the deal weren’t disclosed, but it probably wasn’t cheap with that kind of revenue.

Security firms are another big acquisition target. SecureWorks acquired VeriSign and DNS Limited, other security providers, last year. Intel also dropped $7.7 billion to buy McAfee, one of the largest providers of computer security software, last year.

Atlanta, Ga.-based SecureWorks was founded in 1999 and has around 700 employees. It has raised $31.5 million in funding.

After easily beating the expectations of many analysts with its most recent earnings report, Oracle is setting its sights on capturing market share and claiming HP’s spot of number two database hardware and software provider behind IBM.

Net income for Oracle jumped 28 percent to $1.87 billion in its second quarter of 2011, up from $1.46 billion in the same quarter a year earlier, according to its most recent financial statement. Oracle’s operating revenue also rose 47 percent to $8.6 billion in its most recent quarter, compared to $5.9 billion in the same quarter a year earlier.

Oracle continues to successfully fend off the public cloud  (which allows developers and companies to offload storage and heavy-duty computing to remote servers at a lower cost) said Oracle president Mark Hurd on the company’s earnings conference call. Some of its servers and accompanying software can cost upwards of $1 million. But the strategy seems to be working. Its most recent line of servers and software is able to run more than 30 million online transactions per minute, shattering the previous record of 10 million transactions per minute set by IBM.

“We expect overall that our new generation of SUN machines, Exadata, Exalogic and SPARC will enable us to win significant share in the high-end server market,” Ellison said. “That will put us in the number 2 position very soon behind IBM, then we’ll fight it out for the number 1 spot.”

Despite the popularity of the public cloud, servers and databases that are run in-house are usually faster and easier to access. A number of security concerns prevent some of the largest companies in the world — big targets for Oracle’s hardware and software products — from jumping on board the public cloud. Those are companies that can afford the massive price-tags of Oracle’s software and hardware and have the staff to install and maintain them.

HP, which is second in market share at this point because of its legacy in servers, came a distant third in speed with 4 million transactions per minute, Ellison said. Despite the presence of former HP CEO Hurd on the conference call, Ellison did not mince words when it came to HP’s servers. He said they were downright terrible when compared to Oracle’s new products and IBM’s servers and software.

“HP’s servers are slow, expensive and have little or no software, that makes them vulnerable to market share,” Ellison said. “All our new servers are engineered to run databases and middleware faster than HP and IBM.”

But even with its success with on-premise database hardware and software, Oracle isn’t going to shy away from the public cloud. It’s releasing a suite of applications called Oracle Fusion that can run on in-house hardware and public cloud servers. Ellison said he expects it to compete with Salesforce and other public cloud applications beginning next year.

“You’re just seeing the beginning of us getting share in applications,” he said.

Investors loved the news, sending Oracle’s shares up about 4 percent to $31.45 in extended trading.

Rackspace is one of several companies that run public cloud servers. That means application developers and companies can offload programs that require a lot of heavy-duty computing firepower onto remote servers like the ones Rackspace provides. It’s an increasingly popular trend as it lets smaller businesses and developers have access to some pretty powerful hardware without having to buy servers and databases and set them up.

Cloudkick basically gives developers and companies using applications on cloud computing servers a dashboard that shows how they are performing. The core product is free, but Cloudkick recently started charging for premium tools. The idea is to help manage cloud computing applications and squeeze out a little more efficiency in order to cut down cost. It’s important because a lot of public cloud providers charge per gigabyte of storage or for a certain amount of time spent using the servers — so, literally, every second counts.

If the success of services like Rackspace and Amazon’s EC2 weren’t enough to show how popular cloud computing has become, how about this: Cloudkick is only two years old. The company was originally incubated in Y Combinator and pretty quickly raised about $3 million in venture capital funding. It has a number of the largest companies in the world on the Fortune 500 list as its clients.

Cloud computing might not be the sexiest field in the world, but it does something a lot of technology fails to do — it just works. It works well enough that Rackspace is willing to take a chance on a company that’s just two years old, and it works well enough that a company like Salesforce will pick up a three-year-old company that will help cloud computing development for more than $200 million.

Only time will tell whether Marc Andreessen’s vision of everything but love notes existing in the cloud will ever come to fruition. But, for the time being, the cloud is proving to be pretty powerful.

Compellent, like 3Par, is a provider of technology and software for cloud-based storage. It allows users to store data on both public and private cloud servers more efficiently and cut some management costs.

It’s an increasingly important set of technology as many companies move to have their employees use virtualized versions of software that are run on remote servers. That brings hardware costs down by letting companies just purchase high-powered servers — or computing power from public cloud providers like Amazon — instead of multiple individual computers.

Not to be outdone by HP, Dell took what it could as a consolation prize after 3Par sparked a massive bidding war between the two companies. Dell was willing to offer up to $2 billion for the storage provider, and HP countered with a successful $2.4 billion offer. The very public bidding war is another indicator of how important this kind of technology has become.

Most of Dell’s business is in providing companies with private cloud servers. It sells large servers that are run and maintained in-house and are directly connected to networked computers rather than using the Internet. Usually private cloud servers are faster, and a lot of people argue that they are more secure than public cloud services. Dell has already said that it doesn’t expect public cloud services to overtake private cloud usage for those exact reasons.

But with private cloud servers, each company has to bear the costs of keeping those servers up and running. That isn’t the case with public cloud servers, where companies like Amazon and Rackspace are responsible for keeping them running. So adding ways to reduce the IT headaches that private cloud servers bring seems to be another way Dell is hoping to keep the private cloud popular.

Dell’s server business is already booming. If you split Dell’s Data Center Solutions off from the main company, it would count as the third-largest distributor of x86 architecture servers, or those with chips from Intel and AMD. Dell’s top 20 customers — including Microsoft and cloud video game company OnLive — regularly purchase tens of thousands of server nodes from the company.

This post is sponsored by Dell. As always, VentureBeat is adamant about maintaining editorial objectivity. Dell had no involvement in the content of this or other posts.

If you’re tackling your company’s computing needs, you’re going to have to look to the clouds. But which ones?

You’ve likely heard of cloud computing – shared computing resources available over the “cloud,” or the Internet. But it turns out there’s more than one way to cloud.

When most people talk about the cloud, they mean a public cloud — big server farms maintained by companies like Rackspace and Amazon.com available to and shared by a wide range of customers. They typically sell storage, bandwidth, and computing power at rates cheaper than most businesses could obtain on their own by maintaining their own computing infrastructure.

There are also cloud applications, like Salesforce.com’s customer-relationship management service, which provide both the software and the computing power needed to run it as a package deal. These, too, are a specialized form of public cloud.

The cost savings are compelling: Why own when you can rent? But cloud computing requires a shift in how programmers design and develop applications, however. That’s a burden for businesses both large and small. Add to that lingering concerns over security and availability, and it’s easy to understand why not everyone’s rushing to the public cloud.

Security concerns with the public cloud are mostly a myth, said Jason Hoffman, founder and chief technology officer of cloud-computing provider Joyent. But most major companies will probably still always have security standards that will prevent them from moving their business into the public cloud. Many businesses don’t want to ship sensitive information off to public cloud servers, especially if they’re in regulated industries. And for time-sensitive tasks like, say, computerized trading, firms may not want to give up the edge they get from running their own servers.

That doesn’t mean companies can’t embrace cloud computing. The notion that the cloud is “all or nothing” is a myth, Amazon.com CTO Werner Vogels, a big public-cloud proponent, said earlier this year.

Some businesses are beginning to set up their own cloud-like pools of computing resources, called private clouds. They use the same kind of over-the-Internet architectures as public clouds, but they’re reserved for the use of the organization and can be firewalled off from the public Internet for a higher level of security and performance.

The best-of-both-worlds mix, where businesses use private clouds for their most important computing tasks and public clouds for occasional peaks of demand or less-sensitive tasks, like serving up images on a website, is the hybrid cloud. And it could be the way forward for businesses that aren’t ready to sail all the way to the cloud.

Startups and big software companies are gearing up for the hybrid-cloud opportunity. Eucalyptus Systems, a startup which recently raised $20 million, is making tools that help businesses adapt their applications to run on hybrid clouds. Microsoft and SAP are increasingly talking about hybrid clouds, where their software is available for installation on customer-owned servers and also provided as a service over the Internet.

Odds are that the public cloud will be the infrastructure that inevitably wins out, especially as the strength of their security gets tested and proven to the satisfaction of customers and regulators. But hybrid clouds could win in the short-term, as a way to get businesses started on cloud architectures. And in some ways they live up to the ultimate promise of cloud computing — that it doesn’t matter where our servers are physically located. Public cloud, private cloud, hybrid cloud — as long as it’s in the cloud, and we’re getting more efficient, we’re headed in the right direction.

But with the emergence of companies like Rackspace and Amazon’s EC2 cloud services, there’s a diminishing need for companies to purchase servers to perform all the data crunching they need. They can offload it to public cloud servers that have the computing firepower to handle it.

Dell’s response to the public cloud? It isn’t going to affect their server sales at all, said Roy Guillen, general manager of Dell’s Data Center Solutions.

Most businesses — whether they are large or small — are still going to elect to purchase Dell servers and keep them in-house because they will be able to access the data more quickly. There are also a number of security concerns when shipping data off to cloud servers that many companies have, Guillen said. Some IT firms simply can’t meet security compliance requirements that companies have, so the public cloud isn’t an option.

Those security concerns are mostly a myth, said Jason Hoffman, founder and chief technology officer of cloud computing provider Joyent. His company purchases servers from Dell, and the public cloud infrastructure they offer is immune to security threats like rootkits. But most major companies will probably still always have security standards that will prevent them from moving their business into the public cloud.

Dell’s server business is already booming. If you split Dell’s Data Center Solutions off from the main company, it would count for the third-largest distributor of x86 architecture servers, or those with chips from Intel and AMD. Dell’s top 20 customers — including Microsoft and cloud video game company OnLive — regularly purchase tens of thousands of server nodes from the company.

But cloud computing is growing just about as quickly as everything else, and is a lot more cost efficient for many businesses. Amazon recently began offering graphics processing as part of their cloud computing products. The limits of cloud computing when compared to in-house data servers are starting to quickly disappearing. And as the public cloud options for developers continue to grow, it seems like the public cloud could be more of a threat than Dell realizes.

For now, at least, their strategy is pretty clear — see no evil, hear no evil, speak no evil.