Category Archives: cloud computing

cloud computing, microsoft, software development, windows

Microsoft reports weak financials, still failing in the cloud

Microsoft has reported weak results for the quarter ending June 2009.

Here’s a table which breaks down the results vs the same quarter last year, similar to one I made for the March figures. Numbers are in $millions:

Client Revenue % change Profit % change
Client (Windows) 3108 -28.7 2167 -33.32
Server and Tools 3510 -5.67 1349 -1.46
Online 731 –12.66 -732 -50.93
Business (Office) 4564 -13.33 2816 -16.17
Entertainment and devices 1189 -25.22 -130 -23.98

I am ignoring the hefty $1483 loss on “corporate-level activity” – though I noticed that despite announcing a projected reduction in headcount of up to 5000 by June 2010, headcount actually increased by 2% (around 1800) in the last 12 months.

Grim figures, though given the recession and that Microsoft still reported profits of $3987 for the quarter, not cataclysmic.

I expect Windows 7 will be a success and that the figures there will improve; further, if the global economy recovers (about which I am sceptical but ignorant) Microsoft’s results will no doubt reflect that. If Windows 7 does succeed, it will have spin-off benefits for other products.

Nevertheless, the company should be worried. Although we are not going to be abandoning our PCs and laptops any time soon, it doesn’t take much insight to predict that increasingly powerful internet-connected devices will tend to reduce the number of traditional computers we need, which will impact Office as well as Windows. On the server side, cloud computing will dampen demand for servers, particularly in the small business sector where Microsoft is particularly successful.

The challenge for Microsoft is to counter those trends by growing its online business, but that is not happening yet. Mobile is another potential growth area, but the figures for entertainment and devices show that Microsoft is not exploiting it successfully.

Further, if online does grow, that will damage the partner ecosystem which thrives on delivering and maintaining on-premise Windows and Office.

Right now it’s hard to disagree with Robin Bloor’s prediction of an Incredible Shrinking Microsoft.

This could change; but only if that awkward third line in the table above undergoes dramatic transformation. Although there are signs of life, with promising technology like Azure and Silverlight, I am not yet convinced that Microsoft is even aware of its predicament, though with results like these it will be soon.

cloud computing, microsoft, software development

Death of Popfly shows the dark side of the cloud

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I am not sure what goals Microsoft had for Popfly – or whether the company itself knew them – but apparently they were not met; a week ago the team announced the closure of the service, with just one month’s notice:

Unfortunately, on August 24, 2009 the Popfly service will be discontinued and all sites, references, and resources will be taken down. At that time, your access to your Popfly account, including any games and mashups that you have created, will be discontinued.

If this is a sign of a new clarity of focus at Microsoft it may even be good news, but not for those who invested time and effort in creating Popfly content.

Popfly had several aspects. It was a tool for creating mash-ups, web applications that combine data from several Internet sources; it was a game creator; it was a cloud-based IDE; and it was a visual programming tool. It was the last that interested me most. True visual programming means that program logic as well as user interface is created visually. It has never really hit the mainstream, though it is an idea that will not go away. A recent example is found in Expression Blend 3, another Microsoft product, which allow designers to add simple logic to Silverlight or Windows Presentation Foundation applications without writing code.

One day, most programming may be done this way; but not with Popfly, despite its potential and promise.

The other reflection on this modern form of software abandonment is how it highlights a risk inherent in cloud computing: what happens when your platform is removed. Software abandonment is nothing new, and most of us will recall a favourite word processor, mind mapping tool, database manager or some other utility which was chopped. In the old world though, you could still use the software, at least until an operating system upgrade came along and rendered it useless. Even that can often be overcome, thanks to virtualisation.

Not so with cloud computing. When the Popfly service closes, you simply lose access to all your work – though informally the team has stepped in with a downloader, so all is not lost.

Technically the same thing could happen to Google Apps, Salesforce.com, Windows Azure, Amazon web services and the rest, though the chance of these large concerns with millions of users (Azure aside) closing suddenly is tiny. The death of Popfly is nevertheless a warning: if your cloud computing service is either delivered by a small concern, or is of small concern to a large concern, the risks of data and service loss are very real.

cloud computing, microsoft

Microsoft announces Azure prices, availability, still haunted by legacy

I attended a briefing on Microsoft Azure, its cloud platform. We were given details on Azure pricing and availability, along with brief presentations from organizations intending or hoping to make use of it. The press release is here.

Microsoft is promising commercial availability in Q4 2009, possibly at PDC 2009, scheduled for Nov 17-19. This will be English only, and will cover 21 countries including the US, UK, Ireland, Canada, India, Japan, Australia and New Zealand. In March 2010 availability will be extended to over 30 countries, though Azure itself will still be English language only.

Pricing is as follows:

  • Azure: $0.12 per hour per VM. Storage $0.15 per GB/Month plus $0.01 per 10K transactions.
  • SQL Azure: Web edition with 1GB database for $9.99 per month, or Business Edition with 10GB database for $99.99 per month.
  • .NET Services: $0.15 per 100K message operations.
  • Data transfer: $0.10 per GB inbound and $0.15 per GB outbound.

It is hard to compare directly; but my initial reaction is that Microsoft is somewhat more expensive than Amazon Web Services. SQL Server looks especially pricey; and I wonder if Microsoft is conscious of all its partners selling SQL Server as part of a hosting offering and not wanting to undercut them. Another legacy problem.

Microsoft has also announced SLAs for the new service, promising 99.9% uptime for Azure services with a 10% credit in the event of failure (that’s my summary of a slightly more complex guarantee). This is useful as a statement of intent, but not particularly valuable from a business perspective. The cost of downtime can be huge, and a 10% service credit does not begin to compensate.

I found the case studies interesting, even though they were generally expressions of intent rather than absolutely firm plans. Perhaps the most compelling was EasyJet, who told us that airport systems are generally antiquated and inefficient, and plans to bypass them as far as possible using an Azure-based alternative. If I can find time I’ll write this up in more detail.

Judging by these case studies, Azure is appealing to Microsoft-platform customers who enjoy being able to take their existing or new ASP.NET applications and migrate them to Azure with relatively few changes. Without the abandonment of SQL Data Services in favour of full SQL Server this would not have been possible.

Is Microsoft serious about Azure? I’m beginning to think that it is, though the marketing has been muted, and I am sure the company is aware of the tensions inherent in selling server licenses for on-premise use on the one hand, and services which make them unnecessary on the other. I doubt whether Microsoft would be in this space at all, if it did not fear the likes of Google App Engine eating away at its business.

cloud computing, microsoft, windows, windows 7

Windows 7 will build the global IT economy, says IDC/Microsoft, or will the Cloud kill it?

Microsoft has sponsored an IDC report on the economic impact of Windows 7 [pdf]. Among the claims:

  • For every dollar of Microsoft revenue from launch in October 2009 to the end of
    2010 from Windows 7, the ecosystem beyond Microsoft will reap $18.52.
  • 19% of the global IT workforce will be working with Windows 7 by the end of 2010
  • IDC expects that employment related to client operating systems will grow by more
    than 300,000 new jobs or more than 30% of total growth in global IT employment in
    2010 solely because of the launch of Windows 7

There is also a forecast that shows Windows 7 taking the majority of Windows client sales in 2010, and which appears to assume that Windows 8 will not be available before 2014.

Realistic figures, or some kind of fantasy? While I expect Windows 7 to take over rapidly from Vista, and to stimulate demand for PCs and laptops somewhat, I don’t believe this steadily rising graph. Cloud computing, software as a service, and growth in mobile devices, will all exert downward pressure on PC sales – even though some of those devices will still run Microsoft’s OS.

I had a conversation with Ian Osborne at Intellect while researching a supplement on software as a service. He made a good point about the unwillingness of the IT industry to embrace change. Although he thinks the cloud is changing everything, he remarked:

You’re dealing with the social phenomena of people working in ITdepartments and data centres who have invested their careers in learning how to make the other stuff work. You tend to want to cling on.

These look like “cling on” charts to me. It is an excellent point though: if the traditional IT industry is being turned on its head by the cloud, that has implications for the shape of IT employment around the world which I’ve not seen spelt out anywhere.

I don’t know if the 20-1 figure quoted by IDC/Microsoft is correct, but it is a useful reminder of how much IT ecosystem revolves around Microsoft’s platform.

cloud computing, internet

The UK government and the cloud: to Google or not to Google?

Last month I interviewed the UK Government’s Chief Information Officer John Suffolk for a software-as-a-service supplement that appeared as an insert to the Guardian on July 2nd – unfortunately it is not online at the moment. The question was how the public sector might take advantage of cloud computing.

A few days later, the Times revealed that the conservative party is contemplating a policy which includes storing personal health records with Google or Microsoft. This idea, and the links between the Tories and Google are further examined by John Lettice here.

The Tories are not in government. Nevertheless, I was fascinated by the contradiction between what Suffolk told me, and this new proposal. Suffolk:

What matters to us is first of all, where are the data centres located? What’s the scalability and the security? Do I believe in using somebody else’s cloud, where I don’t know what they’re doing in it? No, I never foresee that if we’re using personal data.

He is talking up the idea of a government cloud built on the public sector network – in other words, an independent implementation.

Although this idea sounds reassuring to those who dislike the idea of handing over our personal data to Google or Microsoft (and I am one such), it lacks the immediate benefit and cost-saving of replacing internal systems with an existing cloud provider.

Why sink all that public money into reinventing what is already available, and possibly ending up with something that works less well?

The themes are familiar. How secure is the cloud? How reliable? Can we trust Google? How much are we willing to pay, for the greater freedom and control that comes from owning our own systems?

It is not implausible that a year from now the UK may have both a Tory government and a desperate need to curb public spending. In the end this is going to be an economic as well as an ideological argument; and I suspect it will be increasingly difficult to be high-minded about putting personal data on “somebody else’s cloud”.

cloud computing, exchange, google, microsoft, windows

Google Apps add-on breaks Outlook features in email wars

Google has released an add-on to Outlook that apparently breaks Outlook search. Google Apps Sync synchronizes Outlook email, calendar and contacts with Google Apps. Google recommends it as a transition tool for people migrating from Exchange, or for people who prefer the Outlook UI. A premium version of Google Apps is required.

Unfortunately it breaks some Outlook functionality. In particular, Outlook search no longer works correctly. There are also potential issues with the Hotmail connector and, according to Google, the Acrobat PDF Maker toolbar and the Outlook Change Notifier.

Although uninstalling Google Apps Sync should restore the features, this wasn’t working in early versions of Google Apps Sync. So the somewhat counter-intuitive advice is to upgrade Google Apps Sync to the latest version and then to uninstall; or tinker with the registry yourself according to Microsoft’s guidance.

Let’s reflect a bit on what is happening here. Google is encouraging its users to install an add-on that damages the functionality of a rival product. Understandably annoying for Microsoft; but it is explained in the documentation if you read it carefully. I doubt it is deliberate sabotage; on the other hand, it highlights the fragility of desktop versus cloud applications. Google’s technical advice on the subject is pretty much a shrug: if you don’t like it, uninstall it.

Another perspective on this is that if you are happy with Outlook with or without Exchange, be wary of third-party add-ons, especially from companies that want to migrate you to another product. If you are making the transition to Google Mail and just need to export your data, of course, breaking Outlook a little will not worry you.

The broader reflection is that many third-party add-ons for Windows, though claiming to make things better for you, actually make things worse.

adobe, cloud computing, google

Adobe’s cloud office takes shape, gets spreadsheet, goes commercial

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Adobe has announced a spreadsheet-like product for its cloud Office suite at Acrobat.com, along with commercial terms for business users of Acrobat.com conferencing and document collaboration. Acrobat.com itself is now out of beta. The new product, called Acrobat.com Tables, is available to try at Adobe Labs, where it joins Acrobat.com Presentations.

First impressions of the Tables application is that while it looks great, it is rudimentary; and this is why Adobe has called it Tables and not Spreadsheets. Unlike Presentations, which seems immediately useful, Tables looks more like work in progress. That may partly be lack of documentation at this early stage. For example, I cannot see any way to format the text in a cell. Cell referencing is limited at the moment. In a formula, you can reference the current row in another column, but not yet an arbitrary cell. You can sum an entire column in a summary row, but not a range of cells in a column (as far as I can see). You cannot yet import or export the table. No charting yet either. Still, this is in Labs and these features will be added later. Everything is Flash, of course.

The underlying reason for the inferiority of Tables versus Presentations, I guess, is that Presentations has a natural synergy with Flash and is design-oriented (Adobe strength), whereas spreadsheets lack that synergy.

The big feature of Tables is collaboration. By default, changes made by others to a shared table appear to all users in real time. This could get confusing if other users change the layout, for example sorting by a different column, so you an enable “private view”, which means you have control over your own layout though data changes are still saved and shared. ,

In the press briefing, Adobe emphasised its collaboration features. Erik Larson, director of product management for Acrobat.com, spent a lot of time reminding us how inefficient it is to revise documents by sending out email copies. The point is well made, though there are other ways to avoid that, starting with the humble shared network folder. Web-based collaboration is undoubtedly the future, though I suspect there are downsides to real-time collaboration on a document – chaos, for example – but in the right context it will work well, and in practice asynchronous changes are likely to be more common.

Adobe’s cloud office

Clearly Adobe is serious about mounting a challenge to the likes of Google Docs and Zoho with its own cloud office. It has now announced business terms, though these are mainly focused on conferencing and are initially for the USA only. For $390 per year or $39.00 per month you get 20 person meetings on Acrobat.com, telephone support, and unlimited file downloads (the free offering is limited to 100 downloads per file). There’s also a Premium Basic offering for individuals, at $140 per year or $14.99 per month, with meetings up to 5 participants and phone support. The free option remains, with meetings up to 3 persons. There is 5GB of storage at all levels, from free to premium.

Larson says 5 million people have signed up to Acrobat.com, with new registrations at 100,000 per week, and that these are 70%-80% business users rather than consumers. Many of these accounts may be dormant; Larson says “hundreds of thousands use it every day” but could not be more precise on this aspect.

Big changes are planned for the autumn. “We’re going to bring all these products together in a single user interface. We’ll also bring them together into an online AIR application, so that you can have a seamless experience available from the desktop. At that point we’ll also offer Smartphone access. We’ll add team workspaces in the Winter,” says Larson.

Unfortunately there are no immediate plans for offline document access, though Larson concedes it is “absolutely important”. Having said that, according to Larson “for our actual users, the internet has become so pervasive that lack of offline access is for a large percentage of people more of an irritant than a requirement. Things like charts, importing from PowerPoint, and an actual spreadsheet as opposed to just tables, those things are absolute blockers.”

Personally, I’m not in that large percentage. When Acrobat.com has an AIR application that works online and offline with the same documents, I will find it more compelling for everyday use. The advantage is not only availability when out and about, but also the security of knowing that if Acrobat.com goes offline, you will still be able to reference your documents.

Another aspect of Acrobat.com is a range of collaboration and document services APIs. This enables you to add features to your own applications, such as file upload to Acrobat.com, or real-time chat, voice and video.

Can you trust Acrobat.com not to lose or leak your documents? “We do have a service level agreement”, says Larson, adding “there’s a general trend towards increasing comfort with online services. People are more comfortable with having super-sensitive information up there. It’s much more secure in a general sense than if it’s on your hard drive. Our data centers are much more protected than your laptop.”

A winner?

Adobe’s cloud offering is fascinating from a RIA perspective, because use of Flash is its USP. It can also exploit the popularity of PDF and the desktop abilities of AIR, though we have not yet seen this fully exploited. While there is some momentum behind Acrobat.com, it seems limited compared to that behind Google Docs. I rarely see links to documents on Acrobat.com, whereas I frequently get directed to a Google spreadsheet. In other words, my sense is that Acrobat.com has not yet broken through. The features announced today will help, but I suspect the big Autumn announcement with the promised Smartphone and iPhone support will be more significant. For myself, I’m waiting for the offline piece that, according to Larson, is not yet on the roadmap.

Links: Erik Larson presents the changes;  Lisa Underkoffler describes Tables.

amazon, cloud computing, microsoft, software development

Cloud Computing survey: more fog than cloud

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Yesterday I attended a presentation from NTT Communications, a managed hosting provider, on the plans of 200 CFOs and CIOs from larger UK organizations (500+ employees) with respect to cloud computing. Since NTT would presumably like more companies to stick more stuff on its hosted servers, I presume it was hoping for a strong endorsement of the idea. Unfortunately for NTT, that was not the case. Fewer than 20% of those surveyed think they are using cloud computing now, a bit more than 20% think they will adopt some of it in the next two years, but – and here’s the real killer – cloud computing is way down the list of investment priorities, at around 5%. I’m not clear 5% of what exactly; but the report says it is the lowest priority.

What are companies spending money on instead? Servers and storage, network infrastructure, security, company web sites, backup and disaster recovery, unified communications, desktops and laptops, software, almost anything else in other words.

What’s wrong with the cloud? The three top issues, for those surveyed, are security, immaturity, and reliability.

These are valid concerns, though each one is open to debate; but the entire survey was undermined by the fact that most of those surveyed admitted to not knowing what cloud computing is. The reason is not ignorance, but the many and various ways the term is used. The common strand is that it is something to do with the internet, but even that is undermined if we describe virtual on-premise servers as a “private cloud”.

What are the varieties of cloud? Almost infinite, but here are a few:

  • Multi-tenanted applications such as Salesforce CRM, Google Docs, NetSuite. This is the model that has the biggest inherent economic advantage.
  • Hosted application platforms including Google App Engine, Microsoft Azure, Force.com. These are hosted application servers, where you write the code, taking advantage of integrated hosted services for storage, identity, transactions and so on.
  • Utility services such as Amazon S3. It’s a great example: S3 offers nothing but storage, though you can use it in conjunction with other Amazon web services.
  • On-demand infrastructure such as Amazon EC2. You get virtual servers to do what you like with. NTT’s services are mainly in this broad category. It’s cloud but you are mostly not getting the benefits of multi-tenancy.
  • Anything on the internet. Running a web application? Hey, you’re in the cloud.

If we are going to have a sane discussion about these things, we need to know what we are talking about. Maybe rather than asking companies whether or not they are doing that cool cloud stuff, it would be better to enquire how they see their use of the internet evolving.

Another big question is the extent to which companies are willing to buy in their IT infrastructure as a third-party service. Although it makes obvious financial sense in most cases, it is a big ask given how business-critical it is, hence the concerns about security, immaturity, reliability.

Smaller companies with ad-hoc IT systems are likely to be more amenable to the idea, but this group was not covered by NTTs survey.

Conclusions? The main one is “watch this space”. In the end I reckon sheer economics will drive cloud computing adoption – in all the areas described above – but the one thing NTT’s survey proves is that larger organisations are in no hurry to make that jump.

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adobe, cloud computing, microsoft, salesforce.com

The battle to be part of the emerging cloud stack: Force.com for Google App Engine

I was interested in today’s announcement of a new Force.com for Google App Engine. App Engine lets you build Python or, since April 7th this year, Java application and run them on Google’s servers. Salesforce.com already offered Python libraries for its Force.com platform, but these have now been joined by Java libraries which are more complete:

The Java toolkit supports the complete Partner WSDL of the Force.com Web Services API. All operations and objects are included in the library and documentation. If you are a Java developer, you can also leverage the Java resources found here.

whereas the Python toolkit only supports “many of the key Force.com Web Services API calls”. I suspect the Java toolkit will have more impact, because it is the language and platform many Enterprises already use for application development.

On the other side, there is also a Google Data API Toolkit for Force.com.

Why is Salesforce.com cosying up to Google? The way I see it, there is an emerging cloud stack and vendors need to be part of that stack or be marginalized.

What’s a cloud stack? You can interpret what the expression means in various ways. Sam Johnston has a go at it here, identifying 6 layers:

  • Infrastructure
  • Storage
  • Platform
  • Application
  • Services
  • Clients

There isn’t a single cloud stack, and all parts of it are available from multiple vendors as well as from open source. It is a major shift in the industry though, and there is no reason to think that the same vendors who currently succeed in the on-premise stack will also succeed in the cloud stack, rather the contrary. You could describe the RIA wars (Adobe Flash vs browser vs Silverlight) as a battle for share of the client stack, for example, and one in which Microsoft is unlikely to win as much share as it has enjoyed with Windows.

By positioning itself as a platform that integrates well with Google App Engine, Salesforce.com is betting that Google will continue to be an important player, and that it will pay to be perceived as complementary to its platform.

A factor which holds back Force.com adoption is that it is expensive. Developers can experiment for free, but rolling out a live application means subscriptions for all your users. Getting started with App Engine, on the other hand, is free, with fees kicking in only after you have succeeded sufficiently that you are generating substantial traffic (and hopefully making or saving some money).

.net, cloud computing, microsoft, web authoring, windows

Microsoft’s quarterly results: will it ever make sense of the cloud?

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Most comments on Microsoft’s quarterly results are understandably focused on the overall picture: a quarterly revenue decline for the first time ever.

Revenue decline can be forgiven during a recession, but it’s more interesting to look at the breakdown. I made a simple quarter-on-quarter table to look at the pattern:

Quarter ending Mar 31st 2009 vs quarter ending March 31st 2008, $millions

Client Revenue % change Profit % change
Client (Windows) 3404 -15.6 2514 -19.29
Server and Tools 3467 7.07 1344 24.44
Online 721 –14.47 -575 -154.42
Business (Office) 4505 -4.78 2877 -7.99
Entertainment and devices 1567 -1.57 -31 -129.25%

The weak Windows client figures are unsurprising. The poorly-received Windows Vista is out in the market, and the highly-praised Windows 7 is being prepared for release. When anyone asks me, I suggest that they should wait for Windows 7 before buying a new PC or laptop, if they are in a position to delay.

The Business division (Office) remains massively profitable, even though it too has declined a little. Office may be ludicrously expensive, but there’s little evidence of a significant shift to cheaper or free alternatives.

It’s also notable that the server and tools business continues to perform well. Again, I’m not surprised: Server 2008 strikes me as a solid product, and there’s not much wrong with products like SQL Server 2008 and Visual Studio.

Not much to say about entertainment and devices. Xbox is doing so-so; Windows Mobile is rather a mess.

The real shocker here is the online business. Revenue is down and losses have grown. It is no use just blaming the recession: this is a sector that is growing in importance. Should Microsoft back out and leave it to Google? That would be as if Kodak had refused to invest in digital photography. But something is badly wrong here.

That said, I’m guessing that the figures mostly represent the failure of the various Windows Live properties to attract advertising income; the small market share of Live Search must be an important factor. The newer cloud computing business model, where Microsoft sells subscriptions to its online platform and services, is largely still in beta – I’m thinking of things like Windows Azure and Live Mesh. Further, I’m not sure where Microsoft puts revenue from things like hosted Exchange or hosted Dynamics CRM, which straddle server and online. There is still time for the company to get this right.

I’m not convinced though that Microsoft yet has the will or the direction to make sense of its online business. Evidence: the way the company blows hot and cold about Live Mesh; the way SQL Server Data Services was scrapped and replaced by full online SQL Server at short notice; and the ugly and confusing web site devoted to Windows Azure.

When I looked at Virtual Earth recently I was impressed by its high quality and ease of development. It illustrates the point that within Microsoft there are teams which are creating excellent online services. Others are less strong; but what is really lacking is the ability to meld everything together into a compelling online platform.

That could change at any time; but we’ve been waiting a long while already.