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News
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Moving the Cloud
IBM Corp. announced it has acquired Cast Iron Systems Inc., a provider of cloud integration software, appliances and services. In another cloud computing move, VMware Inc.'s SpringSource is buying database-caching software company GemStone Systems Inc. In other cloud-related news, Red Hat Inc. is pulling the plug on Xen, the de facto standard for open source hypervisor technology, in its release of Red Hat Enterprise Linux (RHEL) 6.0 and replacing it with KVM.
Focal
Points:
IBM
announced it has acquired Cast
Iron Systems to broaden its
ability to deliver cloud
computing services to its
customers. Cast Iron Systems, a
privately-held company based in
Mountain View,
CA
with approximately 75 employees,
provides cloud integration
software, appliances and
services. According to IBM, Cast
Iron Systems has completed
thousands of cloud integrations
around the world for financial
institutions, media and
entertainment companies and
retail organizations. The
acquisition expands IBM’s
industry-leading business
process and integration software
portfolio, which grew more than
20 percent in the first quarter
of 2010. Cast Iron appliances
have been used to link in-house
applications to hosted and SaaS
applications such as those
offered by
NetSuite Inc.
or
Salesforce.com Inc.,
and they are even being used to
glue in-house applications with
applications hosted on cloud
services such as
Amazon Inc.'s
EC2 compute cloud. The Cast Iron
products offer integration to
Amazon EC2 and
Microsoft Corp.'s
Azure clouds right out of the
box. Financial terms of the
agreement were not made public.
VMware's
SpringSource has entered into a
definitive agreement to acquire
GemStone, a privately-held
provider of enterprise data
management headquartered in
Beaverton,
Oregon. The company has
approximately 200 customers and
employs about 100 staff. Terms
of the deal were not disclosed.
This acquisition provides VMware
with a set of technologies and
expertise to address one of the
major bottlenecks in cloud
computing – that of scaling
databases. GemStone's flagship
software is its GemFire
Enterprise, an in-memory caching
database for distributed
platforms. Although in-memory
databases are offered by a wide
variety of vendors, GemStone has
the added advantage of running
in a distributed architecture,
rather than in a symmetric
multiprocessing (SMP) one, the
company's CEO stated. This
approach allows applications to
be split across geographically
dispersed data centers.
Red Hat is planning to drop Xen
from Red Hat Enterprise Linux
(RHEL) 6.0 and replace it with
the Kernel-based Virtual Machine
(KVM) technology developed by
Qumranet, which Red Hat acquired
back in 2008.
Xen and
KVM have co-existed as
virtualization platforms within
RHEL 5.4 and 5.5 but now that
the KVM toolset has matured
sufficiently, Red Hat is
changing partners. RHEL 6.0
blurs the lines between
physical, virtual and cloud
computing and is designed to
meet the needs in all
environments. RHEL 6.0 will
offer improved flexibility and
control, incorporate numerous
performance, scheduler, and
hardware support enhancements
and features such as those that
protect the guest and host from
unauthorized access and deliver
high-performance virtual use of
physical devices. Red Hat's move
is consistent with some major
cloud hosting providers, such as
IBM,
NTT Communications
and
The Planet,
that have stated they will begin
offering services based on KVM.
RFG
believes none of the top vendors
want to be left behind when
cloud computing – whether in the
form of private or public clouds
– becomes the next big wave of
IT computing. Hence, to satisfy
the product requirements and the
customer demands providers are
acquiring missing strategic
pieces so that they can provide
the platform and services
necessary to be the de facto
standard in the space. IT
executives can expect this trend
to continue for at least the
next five years while the market
matures. IT executives
interested in pursuing a cloud
strategy should recognize the
market is still immature, lacks
all the functionality required
to meet the hype, and will
undergo significant changes as
it matures over the next five
years. Thus, IT executives
should invest with caution and
be prepared to potentially have
to discard software packages and
hardware when more advanced
components become available.
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Mixed
Business News
BMC Software
Inc.
reported fourth
quarter and full
year financials
while
Teradata Corp.
posted strong
first quarter
financial
results. In
other business
news, the
services arms of
Accenture plc.
and
Hewlett-Packard
Co. (HP)
lost market and
revenue share
last year.
Focal
Points:
BMC released
fourth quarter
and fiscal year
2010 results.
Net revenues for
the quarter on a
GAAP basis were
$491 million, up
from $479
million a year
ago, an increase
of three
percent. Net
income for the
quarter was $119
million, a jump
of 43 percent
over the
previous year's
quarter's income
of $83 million.
For the full
year BMC posted
sales of $1.91
billion, up two
percent from the
previous year
when revenues
were $1.87
billion. For the
year software
license revenues
rose five
percent from the
prior year to
$201 million
while
maintenance and
professional
services
revenues were
relatively flat
with revenues of
$255 million and
35 million
respectively.
Teradata
posted better than expected
financial results for its first
quarter of fiscal 2010. Net
revenues for the quarter were
$429 million,
an increase of 17 percent from
the same period in the previous
year when it had revenues of
$367 million. On a GAAP basis,
net income for the quarter
expanded by more than 49 percent
to $67 million from last year's
quarter of $45 million. Hardware
and software product revenues
shot up 27 percent to $200
million while maintenance
revenues grew by eight percent
to $112 million. Consulting
services revenues increased by
10 percent during the period to
$117 million. Revenues in the
Americas
expanded by 23 percent to $252
million, representing more than
half of the company's sales. The
other regions only grew by nine
percent during the same period.
In 2009 the IT
services market declined by 5.3
percent from 2008 levels, with
Accenture and HP taking the
biggest hits amongst the major
IT services players. Accenture
saw its market share fall from
2.9 percent of the total sector
revenues to 2.7 percent while
its revenue share fell by 11.8
percent. HP saw its revenue
share decline by 10.4 percent
and its market share slide to
4.5 percent, according to
Gartner Group.
The firm also
reports that the top twenty
players represent 37.5 percent
of the total market.
IBM Corp.
is still top with 7.2 percent of
the total while HP holds second
place with 4.5 percent.
Fujitsu Ltd.
has 3.1 percent, down minimally
0.4 percent over the prior year.
RFG believes management software and business intelligence (BI)
platforms will expand in 2010,
with BI, analytics and
optimization software being one
of the strongest sectors. 2009
was a transition year for HP
services; now that EDS is fully
integrated and duplicative units
eliminated, the group is well
poised for good growth in 2010.
Accenture took double-digit hits
in most of its key consulting
units last year and has
restructured in order to get
back on track. However,
competition will remain quite
strong and customers expect more
for their money. Accenture will
have to adjust its rate
structure if it expects to
compete effectively in all
sectors and in companies of all
sizes. IT executives should
invest in platforms that can
assist them in managing the
business better provided the
hardware and/or software can
yield a reasonable return on the
investment. Additionally, IT
executives should aggressively
press their services providers
to offer their best onsite,
offshore, and blended rates, and
where appropriate, executives
should open the bidding up to
competition.
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Technology
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RSA Two Factor with Soft
Tokens
We have a client who is looking at
replacing their
current RSA
two-factor
technology with
a soft
token
that appears to
have a much
lower TCO. They
asked if we
agree with that
from our
sources?
And, if we have
any information
on the soft
token technology
built by SESTUS
and marketed by
UNISYS, pro or
con?
It is clear that the total cost of (tokenless) ownership
is significantly less than the
cost associated with traditional
key fob token authentication
systems.
However, it is unclear as to the tokenless solution
efficacy. As such, Experture
strongly recommends a trial for
a period of anywhere from 2 – 6
weeks to test how this approach
will work within your
environment.
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Trends
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RFG believes Palm's
future looks brighter today than
it has since the early part of
the decade. However, the
integration of two companies'
product portfolios and
development talent is not
trivial. To reach its goals, HP
must not tie developers' hands
to only the webOS platform and
allow them to create and release
applications wherever they like.
The strength and needed ubiquity
of a consistent webOS' platform
can present a compelling
opportunity currently not found
elsewhere. If tied correctly
with platform development
investments, leading product
designs, marketing energies, and
manufacturing excellence, HP
could prove to be a substantial
player.
RFG believes the company
understands and intends to
speedily address these
evolutions, but the future is
far from a foregone conclusion.
The company's future, and
enterprise support of the webOS
platform, will rest on HP's
capacity to kickstart both
platform and developer network
innovations.
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Management
We have a customer who is saying that they have a Data Warehouse
that is not
being utilized after many years, by their
business to its fullest potential. They would
like to know what they should and could do
(actions) to increase the visibility, value and
usage.
What do best in class organizations do?
There are many reasons for
underutilization of a resource that is designed
to enhance and improve business performance.
It is important to first identify
those underlying reasons before embarking on a
costly marketing campaign or a time-consuming
training program. Usually, it is the business
groups that demand a data warehouse, so it would
be logical to assume that they would be using
it. If this is true, then the reasons for
underutilization may have something to do with
unrealized expectations that specifically might
have to do with ease-of-use or relevancy.
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