The Won't Do Nation

Way back in September 2009, President Obama went to Hudson Valley Community College in New York to give a speech on innovation.  The choice of location was interesting, as the southward journey of the mighty Hudson River tells a sequential story of the demise of the American economy. 

The Hudson Valley runs due south from Albany to New York City. It is bordered on both banks by the tracks of railroads and the ancient mansions of families with names like Vanderbilt, Roosevelt, Delano, Astor and Rockefeller. On its southward journey it passes towns like Schenectady -- which Thomas Edison chose as the birthplace of GE. Then it moves further south past Kingston, Poughkeepsie and East Fishkill, which once housed more than 50,000 IBM employees in 3 bustling plants that built and tested mainframe computers and designed and developed advanced semiconductors. Those plants today are shadows of their former prosperity. Further south, it passes IBM's headquarters in Armonk, its research center in Yorktown Heights and continues to New York City, where it rolls past the palatial offices of investment banks and AIG.

So it was an interesting venue on that day 15 months ago when the President laid out a three-part plan to rejuvenate innovation in a country and a region that once set the bar for the world in technology innovation.  His plan called for:

1. Investing in the Building Blocks of American Innovation. 

2. Promoting Competitive Markets that Spur Productive Entrepreneurship, and 

3. Catalyzing Breakthroughs for National Priorities.

It was a bold and detailed plan that you can see in the accompanying diagram. It set as a priority restoring American leadership in fundamental research.  As we stand on the verge of continuing the Bush-era tax cuts, the idea of restoring our leadership in R&D seems remote. We appear to be a nation and an economy hell bent on cutting costs rather than investing in the kind of research and development that made us the most powerful and prosperous nation in the world for over a century.  While there are many who claim that stimulus plans rob future generations by burdening them with debt, it is hard to believe that the residual impact of cuts could exceed the negative impact of not investing in research and development required to create new jobs, revitalize industries, support education, create new industries and keep us focused on innovation in a world that is increasingly competitive.

We have always been a defiant nation. That has served our greatness when directed at outside threats.  But it serves to hasten our demise when used against each other. We seem to have forsaken the "Can Do" attitude that fostered more than a century of innovation along the banks of the Hudson River and across the nation. We have replaced it with a "Won't Do" attitude that divides us and defies any attempt to unify us in a common purpose to restore our greatness.  Has protecting wealth trumped stimulating innovation and the ability to compete globally?

You Know It's Real When It Enters the "Trough"

In August, Gartner Group released its annual Hype Cycle on Emerging Technologies. We here at 3Point Communications were awaiting the release of this year's Hype Cycle because we were particularly interested to find out if cloud computing -- which had been at the "Peak of Inflated Expectations" in 2009 -- would begin its descent into what Gartner terms the "Trough of Disillusionment."

You see, the ultimate goal of any emerging technology is to become an accepted technology as quickly as possible, go mainstream, thus lowering the cost of production. It is then that the investment in the new technology can be recouped and profits realized. This doesn't happen until the emerging technology makes the perilous trip through the Trough.

Some emerging technologies enter the Trough of Disillusionment never to be seen again, such as broadband over power lines, while others, such as interactive TV and speech recognition, are well on they way to mainstream adoption.

It is our belief that cloud computing will quickly become standard operating procedure for businesses and consumers alike, and this was confirmed by Gartner's recent report which has cloud computing going mainstream within 2-5 years. So seeing cloud computing entering the Trough was a welcome sight.

Here are five reasons we think cloud computing is here to stay:

1. It's already here. If you've used a photo-sharing site such as Shutterfly or accessed email on a friend's PC, then you've already tapped into the power of cloud computing. These simple applications, and countless others like them, don't exist on your PC, laptop or mobile device, they "live" in the cloud and are accessed on an as-needed basis. On the business front everything from email to CRM to customer support has migrated to the cloud. Not every company has moved every application from internal IT systems to the cloud, but the trend is well underway and in our opinion inevitable.
2. Cloud computing saves money. When businesses move infrastructure, platforms and software applications to the cloud, they save money. If your core business is not IT, why invest resources, time and money in owning and managing an infrastructure? A good example is Recovery.gov, the first government-wide system moved to the cloud, which expects to save $700,000 in its first budget cycle with more savings to follow.
3. Cloud computing is more secure than people realize. The number one concern among CIO and IT professionals is security when moving a company's data and resources to the cloud. But in many cases, cloud-based security is more secure than a company's internal systems. For example, an Aberdeen Group report found that a company's email security may improve by as much as 53% when moved to the cloud.
4. Going mobile. With the success of Apple's iPad, new tablets hitting the market, smartphones and other mobile devices, businesses and consumers are both accessing information on the go. These devices simply don't have the storage capacity or internal power to house thousands of apps. Rather, mobile devices are portals into the world of cloud computing. And IDC predicts that more than a quarter of a billion smartphones will be sold this year and numbers will increase next year by 10% or more. All will access the cloud.
5. Money talks. Amazon, Google, Microsoft, HP, IBM, Cisco, CA, Oracle and thousands of other companies big and small, are investing billions of dollars in cloud computing. Some, like Microsoft, have made bold claims that cloud computing must be the future of the company if it is to survive and thrive. With this much momentum behind the cloud, it is only a matter of time before it becomes mainstream.

We would interested in your thoughts on cloud computing. Are you there yet? Have you begun the journey? Or is something holding you back?

For the record, 3Point Communications embraces cloud computing and uses cloud-based applications to manage and run our business.

Social and Collaborative Applications are Working Their Way into Enterprise 2.0

The Enterprise 2.0 Conference is taking place through Thursday of this week at the Westin Boston Waterfront Hotel in the scenic Seaport District of the city.  As you probably guessed from the conference name, the focus of this tidy expo is collaborative technologies, Web 2.0 solutions, designed specifically to enable enterprises to become more efficient, productive and innovative.

Steve Wylie, the conference GM (you'll find tweets from the show at #e2conf), points out that while businesses are taking advantage of game changers like cloud computing and data center virtualization, applications that exploit these infrastructure technologies have lagged the application advances being made in the consumer market.

That's what e2conf is all about: examining and showcasing the latest developments in enterprise-class social and collaborative applications. And there's no shortage of talent at the expo.  Today I had the opportunity to spend a few hours listening to the keynotes, kicking tires on the show floor and asking a few questions of the software developers who were there.

As you might suspect, most of the exhibitors on hand are smallish, privately held software companies.  The big guys were there too, including Novell, IBM and Cisco.  But the vast majority are innovative, emerging companies developing very exciting social and collaborative solutions for business.

In one day it's impossible to get a close look at all the companies there, but I was able to take a look at quite a few.  From what I saw and heard, these three are my picks for the coolest companies at this year's e2conf:

• Doodle, in their own words, "makes scheduling virtually effortless."  Using Doodle, scheduling a meeting with busy coworkers is as easy as creating a poll, casting a vote for the preferred date and time, and informing participants of the outcome.  Doodle was founded in 2008 in Zurich, Switzerland and has about 10 employees.  And I love the name.  Do you Doodle?

• At the other end of the emerging company spectrum is Jive Software, a well-funded, well-established company with more than 2,500 customers (they claim).    Jive Software, now based in Palo Alto, Calif., (the firm was started in Portland, Ore.), is eyeing an IPO in 2011 and is led by industry veteran Tony Zingale, who led the sale of Mercury Interactive to HP four years ago.  I saw Zingale's keynote earlier today and he still turns it on.  Jive Software is partnering with heavyweights like Google and Twitter and looks to be well on its way to building an enterprise 2.0 company with staying power.

• I'd be remiss if I didn't mention Baydin, a San Francisco-based company and winner of today's "Launch Pad People's Choice," a fun text message-based audience-participation contest pitting four newish companies against each other.  Baydin has an "Unsearch" product that's built into Outlook and hunts down or "automatically discovers" in your email, documents and colleagues who could help you with any given project.  I love this:  at Baydin, they talk about "the future of search...is not having to search."

I apologize for leaving out so many other cool companies and I'm already looking forward to the next edition.

Is Cloud Computing Bringing us Back to the Future?

ThoseinMedia, a web site where media professionals connect and blog, has a group on the social networking site LinkedIn where it promotes itself as "THE group for Media Professionals." Its membership includes people working in social, online and broadcast media, advertising sales, PR, SEO and pretty much every other media category you can think of. It's a popular LinkedIn group with thousands of members and as you'd expect, its members are highly engaging. If you work in media and you're not a member, you'll be doing yourself a favor by checking it out. In the spirit of full disclosure, I'm a member.

Exactly three weeks ago, an online marketing and social media strategist for a U.K. provider of domain names and Internet services -- GroupNBT -- posted an open ended question to the ThoseinMedia group on LinkedIn: "Cloud Computing - What's your take on it?"

Three weeks later, group members continue to post responses to Francois Hotte's seemingly innocent question -- though the question isn't that innocent since Hotte's company sells a "Virtual Private Server" which, he says, is a "similar product to Cloud computing." Ok, so he's selling a bit, but I give him credit for engaging the group's membership on a very interesting topic.

What's really interesting to me is that responses to the question are coming from all corners of the world and from a broad range of industries and professional disciplines; and from the very young and the not-so-young. If it takes a discussion of cloud computing to get Gen Y talking with Baby Boomers, then it's a good thing.

One year ago, McKinsey&Company published "Clearing the Air on Cloud Computing" and in it claimed there are 22 separate definitions of the cloud. One year later, and based on some of the opinions reflected by ThoseinMedia group members, it isn't clear if we're any closer to a unified definition. But what is clear and what is important is that the discussion around cloud computing is at a fever pitch. It's become a lightening rod for some of the most stimulating and provocative thinking in technology in recent memory and marketers and communicators everywhere are spending cycles trying to help their customers find clarity in the clutter.

I hope the thread on ThoseinMedia continues. If we keep working on it together, I bet we get to the point where we can agree on what cloud computing is.

Here are a few of my favorite comments from the thread:

"Like many others I hate the term 'cloud computing'. It's BS. The cloud is just the internet."

"I've seen EMC cut huge checks for not being able to protect and serve remote data. IBM shovels cloud computing services like they're going out of style, and they're no experts either."

"The term 'Cloud Computing" may have a marketing connotation, but its widespread adoption by companies offering web-based applications means the 'cloud,' as it were, really is different than just the plain-old Internet."

"The simplest cloud computing I use is zumodrive. It is easy to use and it allows me to access my files regardless of where I am."

"Cloud is not the internet...What Cloud is, is the business model that takes virtualization and makes it a profitable opportunity for infrastructure providers on a 'one to many' basis -- build it once and sell it to many uses."

"Think of the Cloud Server as the mainframe, and each computer connected to it as a 'smart terminal' capable of processing its own data. ...Today's Cloud Computing almost brings us full-cirlce, back to the mainframe-terminal relationship."

"With iPhones, iPads and other devices like these for on the go and on the spot information, 'Cloud computing' is only going to increase. Welcome 2010 (grin)."

And this one from the head of a NYC-based marketing and advertising firm: "With all due reverence to the interesting insights offered above, I would just like to point out that the term 'cloud' in 'cloud computing' is a decades old reference to the original cloud-like diagrammatic representation of Public Switched Telephone Networks."

Is that really true?

Cloud Computing is Just in Time for SMBs

Small and medium-sized businesses, affectionately known as SMBs and historically relied on to help lead economies out of recessions or worse, are still smarting from the sting of this mother of global recessions. In fact, market research firm International Data Corp., affectionately known as IDC, issued a report this week revising its earlier forecast of a speedier recovery for SMBs.

"The downturn had a devastating impact on SMBs worldwide," said Ray Boggs, vp, Small/Medium Business and Home Office Research at IDC. "Moving forward, small businesses will not follow the past pattern and return to prerecession's spending levels more quickly than midsize firms. Instead, SMBs of all sizes will remain cautious with their IT spending over the next several years."

Ouch. Did Boggs just say "over the next several years"?

Since the full 25-page IDC report retails for $4,500, most of us will have to be satisfied with the report summary from the IDC press release announcing the report. Here are a few stats:
- SMB IT spending levels will not return to 2008 levels until 2011
- Spending on PCs and peripherals will see the biggest growth.
- Central and Eastern Europe, the Middle East and Africa will see the strongest spending growth.
- Together, North America, Western Europe and Japan account for 70% of worldwide IT spending by SMBs.

"To succeed, technology providers need to develop separate strategies that address the distinct needs of companies in each of these settings," Boggs added.

Almost on cue and on the heels of this report, enterprise IT providers -- who by their own admission have underserved the SMB IT market -- are courting SMBs with renewed urgency and tailor-made IT solutions, including the cloud-based variety.

In fact, cloud computing is strutting its stuff just in time for many SMBs who want to leverage the latest technology has to offer but without the big price tag. "For small businesses, cloud computing hits a particular sweet spot," Ziff Davis Media Networking & Small Business Analyst Samara Lynn reports. "With cloud services, small businesses reap the benefits of not having to deploy physical infrastructure ... a lot of today's small business needs can be fulfilled almost completely with cloud-based offerings."

Take 3Point Communications for example. We fit the small business profile and exploit the advantages of low-cost "anywhere, anytime" cloud-based solutions including: Gmail, Dimdim for live collaborative meetings and shared white boarding, Basecamp for project management, Ning for our corporate Intranet, Yammer as a our private Twitter-like platform and ooVoo for video conferencing.

SMBs are turning to cloud applications like these, and also to new office productivity cloud offerings, like the Business Productivity Online Suite from Microsoft. With BPOS, SMBs get access to email and calendering, file sharing, virtual meeting and messaging tools starting at $10 per user per month.

"There will be a cloud component to every product we offer," said Birger Steen, Microsofts VP for SMB.

SMBs aren't getting all of their IT challenges solved through the cloud. IBM and Microsoft, for example, will continue to offer in house IT solutions for small businesses and branch offices. And a number of SMBs will elect the hybrid approach, running some services online and others in house.

But with the IDC SMB IT spending report as a caution that the global recession still has its talons in the backs of many SMBs, it's a relief to this critical market segment that new IT pricing models that help keep costs down are here and are only going to improve.

The Dark Side of Cloud Computing

The old axiom in real estate is location, location, location. I just spent a full day at the CloudConnect Conference in Santa Clara, CA and the manta repeated by every one of the presenters on the future of cloud computing was security, security, security!

One presenter after another quoted data from Gartner Group, McKinsey & Company, or privately-funded research to show that 9 out of every 10 potential customers listed security issues as the number one barrier to implementing a cloud computing strategy at their company.

And the concern about cloud computing security is well founded.

One of the presenters asked conference participants if they knew what enterprise had the largest cloud computing presence in the world. Among the guesses were IBM, Microsoft, HP, Facebook, Amazon, and of course Google. The answer, however, was an outfit, if you can call it that, with which many in the audience were not even aware – Conficker .

A New York Times article from last year describes Conficker as program that “uses flaws in Windows software to co-opt machines and link them into a virtual computer that can be commanded remotely by its authors. With more than five million of these zombies now under its control – government, business and home computers in more than 200 countries – this shadowy computer has power that dwarfs that of the world’s largest data centers.”

Indeed, Conficker’s “cloud” is larger that the cloud computing efforts of Amazon, Google and IBM combined! And its sole purpose for existing is to disrupt normal business operations inside of companies, organizations and governments. With that monster looming in millions of “cloud computing resources” around the world it’s no wonder 9 out 10 customers considering implementing cloud computing strategies are nervous about security breeches.

But all is not doom and gloom. Despite the security issues that must be taken seriously, the benefits of moving resources to the cloud far outweigh the risk, and many organizations, including the US Government, are doing just that in a big way.

Much of the same research that showed security as the biggest impediment to cloud computing adoption also showed cloud computing revenue growing by more than 20 percent in the next three years. Of course with that much money in the balance, Conficker, and other ne’er-do-well’s won’t be far behind. That’s why security will remain front and center in any discussion about cloud computing.

In my follow up post next week, I’ll address Gartner Group’s “Seven Deadly Sins” of cloud computing security and what questions companies should ask of their cloud computing vendor before taking the plunge.