Archive for the ‘The money’ Category

According to 451 Research, the cloud computing market may become an oligopoly of high-volume vendors



16 July 2013 – Oligopoly: A market in which there are a limited number of providers providing the same service. Its political counterpart, oligarchy, means rule by a few. 

So starts an article by Joe McKendrick which was published in Forbes magazine last week, leading off his review of a research note by Owen Rogers, senior analyst at 451 Research, who suggests the emergence of an IT oligopoly. It’s a brilliant research note and provides a great “cloudonomics” tutorial.

Is the cloud computing marketplace becoming the domain of a few big vendors? With large players including Amazon, Microsoft, Google and IBM coming online with similar types of services, we may be starting to see a consolidation of the primary cloud computing market into the hands of a few powerful vendors.

Actually, Owen’s report goes further to say what is emerging is both an oligopoly and monopoly at the same time. With identical services comes commoditization, and only big vendors that can deliver huge economies of scale with margins will survive in this space. He adds that perhaps the “oligopoly … Read more

Wall Street debates: just how do you value data center stocks?



21 February 2013 – A favorable feature article in Barron’s can lift some stocks with a “Barron’s Bounce,” while a tough critique will also be felt in the markets. Last Saturday Barron’s followed up on a slide in Rackspace shares by taking a critical look at the methods used to value data center companies on Wall Street. That kicked off a series of articles in the financial press and blogosphere debating the merit of data center investments.

For more from Data Center Knowledge here’s a review of this week’s action (click here).… Read more

Cloudonomics: The Economics of Cloud Computing

1 November 2012 –  We receive scores of white papers on the cloud.  It is hard to plow through them all.  But here is one from Rackspace, from its CloudU™ which is a comprehensive Cloud Computing training and education curriculum developed by industry analyst Ben Kepes. We have been fortune enough to go through some of the units.

In this PDF Rackspace addresses the many reasons for organizations to move from traditional IT infrastructure to Cloud Computing. One of the most cited benefits is the economics of the Cloud. Yet while many people point out the cost savings that Cloud Computing brings to an organization, Rackspace believes attention should be drawn to four distinct mechanisms through which these cost savings are generated:
•By lowering the opportunity cost of running technology
•By allowing for a shift from capital expenditure to operating expenditure
•By lowering the total cost of ownership (TCO) of technology
•By giving organizations the ability to add business value by renewed focus on core activities

They detail these four mechanisms and introduce several case studies and examples to show

Read more

For Big Data and analytics, it’s initial public offering time

23 February 2012 –  Despite all its grandeur and prominence in “the cloud”, the financial markets have not been kind to  Earnings were off and stock suffered mightily for it.   But, ah, what a difference a quarter makes.  Let’s put it simply:  Salesforce killed it this quarter, and the shares are soaring after hours. As of 5:40 pm ET, Salesforce shares are trading at $146 even, up $14.23 or nearly 11 percent. That is what we call a bullish pattern.   So what happened? Results beat the consensus, for one thing. Earnings per share were 43 cents on a non-GAAP basis, beating the consensus of 40 cents. Sales were $632 million, knocking the consensus of $624 million on its hindquarters.   Then came the guidance, which was in truth a mixed bag. The revenue forecast stomped on the consensus: Salesforce said it expects revenue of $673 million to $678 million, well ahead of the $663 million consensus.  But?  The EPS forecast is a bit off at 33 to 34 cents, below the 36 cent consensus.   So what’s got investors so giddy? … Read more

The Rise of Cloud Computing Ecosystems

20 January 2012 – It would be fair to say that in the last year the dominant form of cloud computing has been infrastructure-as-a-service (IaaS). As popular as those services have proven to be, the odds are good that IaaS is not going to be the dominant form of cloud computing going forward. The reason for this is that IaaS still leaves much of the responsibility for managing the software environment in the cloud in the hands of local IT people. That’s appealing to a subset of customers, but in reality most cloud computing customers are looking for a more turnkey experience.

Obviously, platform-as-a-service (PaaS) offerings go a long way towards delivering that experience. But PaaS has been slow to catch on because most of the offerings to date have been tied to specific application development languages and associated middleware platforms. In effect, vendors have treated PaaS as an opportunity to extend long-standing platform wars into the cloud. Customers, however, have grown weary of being caught up in such conflicts.

For more from Michael Vizard click here.… Read more

Survey: Cloud isn’t a cost panacea, but few expect it to be

5 December 2011 — Cloud computing is not the money saver it’s sometimes made out to be. But don’t fret — it’s still a very valuable delivery model for IT resources, according to a new survey by systems integrator Computer Science Corporation.

While cost savings, where present, were small among the survey’s 3,645 respondents — under $20,000 in 35 percent of cases — the cloud brings a wealth of benefits around mobility, efficiency and, believe it or not, jobs. Mobility, the ability to access applications and data from a variety of end-user devices, was actually the No.1 reason respondents gave for adopting cloud computing. The survey results aren’t entirely surprising when one considers ideal cloud use cases, especially with regard to infrastructure-as-a-service clouds.

For IaaS, the delivery model is arguably best-suited for handling dynamic or unknown workloads because organizations don’t have to overprovision resources before launching their applications. It’s also very helpful for testing and development, ad hoc applications, and other workloads where companies don’t want to buy and manage physical servers and storage. Cloud computing very likely will cost … Read more

SaaS valuations: off the charts and staying that way


25 November 2011 – Legacy software companies get no respect — or market valuation — compared to Software-as-a-Service (SaaS) players. New research shows that over the past year, SaaS company valuations grew twice as much as valuations of legacy software companies rooted in the client-server world. And that SaaS valuation trend will continue for the next 12 to 24 months, according to new research from Martin Wolf M&A Advisors.

For an old-line company it makes sense to freshen up with a SaaS purchase, even paying top dollar in anticipation that the target’s value will rise as more companies get comfortable offloading tasks from on-premises to a service model. At the same time, existing SaaS players want to broaden their services portfolio with more vertical SaaS options, said Martin Wolf, president and founder of the company.

For more click here.… Read more

Software Pricing Starts to Catch Up to Cloud Computing

7 November 2011 — One of the more confounding aspects of cloud computing is that software pricing is frequently out of sync with the way hardware is acquired. IT organizations can easily pay for hardware on an hourly, monthly or yearly basis. Software pricing, on the other hand, has generally remained tied to the number of processors being used on a yearly basis.

OpSource, a unit of the IT services firm Dimension Data, is taking that issue on starting today with the release of OpSource Cloud Software, an offering that allows customers to consume Microsoft SQL Server, Microsoft SharePoint and eventually other database and middleware platforms on a pay-for-use basis that can be priced hourly or monthly.

According to Keao Caindec, chief marketing officer for OpSource, this shift to giving customers a usage software-pricing model for software consumed in the cloud is long overdue. As a unit of Dimension Data, OpSource is leveraging special pricing and payment options that Microsoft provides business partners to resell its software as a service.

Over time, OpSource expects to make available usage-based software … Read more

ETF Chart of the Day: Cloud Computing

26 October 2011 — “Cloud Computing” made its way to the exchange traded fund landscape in July of this year, with First Trust ISE Cloud Computing Index (SKYY) and E-TRACS Monthly 2X Leveraged ISE Cloud Computing (LSKY), which listed earlier this month.

SKYY has gathered approximately $57 million in assets since its launch and we expect it to be even more active amidst Amazon’s earnings release last night after the closing bell, as the stock will likely be extremely active. Amazon shares were down 10% in morning trading Wednesday.

AMZN is the top holding in SKYY (4.64% weighting), as the index follows a modified equal dollar weighted methodology. Other holdings that round out the top five in the fund are BBBB (4.47%), RNOW (4.42%), CSCO (4.10%), and TDC (4.04%). Other familiar names in the index include GOOG and ORCL.

For more click here.… Read more

The Big Business of “Big Data”

We are going to collect more information about ourselves and the world than we knew existed. Expect a bust, along with a benefit.

24 October 2011 — Is Big Data a Bubble? In case you’re in a hurry: Of course it is. And that is good.  Longer version: Last week there were several events that convinced me that one of the great tech bubbles inflating right now is around what people have agreed to call “Big Data.” Basically the term reflects the fact that its now so easy to digitize and put on the Internet all kinds of information — things as diverse as the measurements of passive sendors,  most or all the world’s books,  200 million tweets a day and most of the world’s significant financial transactions — that the data is growing enormously.

Big Data is really about, however, the benefits we will gain by cleverly sifting through it to find and exploit new patterns and relationships. You see it now in things like Facebook ads, which are put in front of you because the posts you have … Read more