Oracle Buys Sun. Now does Larry buy into the cloud?

It’s the biggest news of the day, at least in the world of tech, if not business. Oracle has agreed to buy Sun Microsystems for $7.4 billion. You can read the press release from Sun to get the official details.

It is definitely an aggressive move by Oracle and one that sees them grab the crown jewels of Java, MySQL, and Solaris. It gives them many ways to play the game, with core assets to entice big enterprise customers, as well as, new ways to approach small and medium-sized businesses.

Although, Larry Ellison has scoffed at the definition of cloud computing, that’s not the same as dismissing the concept itself. If anything, he’s simply said, “Hey, wait, haven’t we been doing this all along?”

Well, not quite. But, clearly he gets that the technology and the thinking is here today. It’s a matter of evolving it a bit further, packaging it up right, and wrapping it in some standards. And, then, keeping it open. None of which will be easy. Yet, all of which is something the industry is moving towards and that customers, developers, and vendors appear to be quite interested in exploring and adopting.

Therefore, the move by Oracle may also be seen as a confirmation that cloud computing is the next legitimate wave of computing. By acquiring the core assets of Sun, it can now think about packaging the pieces and offering them as a true utility. As Larry said: “”Oracle will be the only company that can engineer an integrated system – applications to disk – where all the pieces fit and work together so customers do not have to do it themselves.”

What better way to offer that integrated systems than via the cloud?

Finally, Oracle has the resources to invest in such things, while they continue to print money from their database franchise. It’s a shrewd, timely move, from one of the best operators in the game. With this move, Larry Ellison has made it clear that he intends to lead the next wave of computing by fighting it out with all challengers. It looks like the oracle has spoken.

Hey, hey, You, you: Get off of my cloud

So, McKinsey & Company came out with a report, “Clearing the Air On Cloud Computing,” that throws–at first blush–cold water on the benefits of cloud computing. McKinsey is a world-class consulting firm and their analysts certainly have earned the right to be listened to. Of course, that doesn’t mean they’re always right. It just means they’ve done some thinking on the subject and have drawn some conclusions from it.

If anything, the biggest splash of cold water they toss is that there’s a heck of a lot of hype around cloud computing. So much so, that it’s all a bit of “irrational exuberance”. Therefore, we should proceed with caution. After that dose of reality (as if we needed reminding), they then report, essentially, that cloud computing is no replacement for your data center. That it’s simply not cost effective.

Gee, really? That conclusion, in its own way, is a kind of anti-hype. I’ve not come across anyone saying cloud computing will replace an enterprise’s data center. Far from it. But, cloud computing sure can augment IT, and thus, the business broadly speaking.

McKinsey seems to be countering the benefits of cloud computing with a straight line examination of the price of compute cycles via Amazon Elastic Compute Cloud (EC2). Well, that tells a very small part of the story.

As John Foley states, in article, Cloud Computing Gets A Much-Needed Reality Check, “Here’s the flaw in McKinsey’s argument: Few if any major corporations are looking to replace their data centers with a cloud…The more likely scenario, and the one that’s playing out, is that companies of all sizes will use cloud computing to supplement their own IT infrastructures.”

Yeah, like I said: there’s hype on both sides of the argument. To  me,  it makes perfect sense for Fortune 500 companies, as well as, small and medium-sized businesses, to explore cloud computing rather than continuing to throw resources at existing problems and, or, struggle as they try to spin up resources for new projects. A balance is what’s needed. That’s all most of those on the pro-cloud side of the argument have been suggesting.

While, McKinsey’s report is great for debate and offers a counterpoint to all the positive news stories, it should be read just as critically–even if they’ve got a lot of brains and experience going for them. In the end, cloud computing is part of the business and IT equation. It doesn’t solve it completely. But, that was never really the intent.

Managing and Monitoring Cloud Services

An area of concern that comes up when talking about the merits of cloud computing has to do with monitoring and managing cloud services. There is a perception that doing so in the cloud is far more difficult than within the four walls of the data center.

Well, there are some real-world examples that turn that perception on its head. Robert Scheier, in his InfoWorld article, Can IT manage the cloud? These CTOs can, dissects the issues surrounding it by looking at how the choices one makes depends, in part, on the cloud model itself (i.e. software, infrastructure, platform), as well as, the availability of third-party tools (often open source), and the critical issue of data security.

For example, when it comes to software as a service, “you don’t have to trust the vendors’ reports to assess whether they deliver the service promised. IT pros can use anything from simple network-sniffing tools to open source monitoring software and enterprise-class management systems to see what they’re getting from the Web.”

On the other hand, when it comes to infrastructure as a service, where customers may have the greatest management needs, one “should ideally use “the same agents, the same tools, the same configuration, and management tools” as in their own datacenters to simplify and standardize administration, says Joseph Tobolski, a partner at Accenture Technology Labs. While there isn’t universal integration between such tools and the cloud service providers’ APIs, he expects such integration “pretty soon” because of the need for “some sort of control of the cloud.”

The following real-world examples show how IT pros are managing and monitoring their cloud services.

• OmniPresence, which sells videoconferencing and teleconferencing equipment and services, uses the Zenoss family of management software to monitor the equipment and services it provides to customers.

• For Agora Games, it was critical to have root-level access to the 60 to 70 virtual servers it runs at cloud provider Terremark Worldwide. Using Terremark’s cloud computing environment, Agora Games can just as easily manipulate their virtual servers as if they were in-house or at a collocation facility. A test environment for a new game can be built, then easily cloned for production, and then removed when the popularity of the game fades.

• Pathwork Diagnostics uses Amazon.com’s EC2 infrastructure to meet big spikes in demand for computing power whenever it acquires specimens of various types of tumors and must race competitors to create tests to detect those tumors. Pathwork only needs to monitor the virtual “compute units” it is using, as well as the amount of memory allocated to each, says Zoran Popovic, a senior software engineer. To do that, he uses Unix open source tools for both jobs.

• Dreambuilder Investments has built its key business applications on Salesforce.com’s Force.com platform, and it relies on cloud services from other vendors for its backup, accounting software, and even PBX, The company has built a few simple tools to monitor the quality of its Web connections, but it usually relies on the CRM giant to keep its applications running and provide updates on their health.

Of course, one of the biggest issues businesses face when considering cloud computing is data security. “For example, Agora could encrypt the data on each server but doesn’t, because of the likely drag on performance. The fact he has root-level control of each server means “we can prevent anyone else from getting access to the data,” says Brian Corrigan, CTO of Agora.

Moreover, “a number of other IT managers say that the use of virtualization and open source monitoring tools lets them do just as good a job, if not better, monitoring and managing virtual machines in the cloud as equipment in-house or in a collocation facility.”

So, what have we learned? Well, for one, you need to think strategically about what applications and services can be moved into the cloud. Secondly, you need to consider skill sets, whether it’s mission critical, and the needs of the business. Yet, the bottom line is that managing and monitoring cloud services can be done, often “easier than in a brick-and-mortar, in-house datacenter.” This is definitely evidence that, when done right, cloud computing can live up to its promise in terms of cost, flexibility, and speed.

More Bang for Your Buck: Vendors Strike Back

Sun unveiled new systems and storage solutions for MySQL claiming these will allow customers to scale for growth with up to 3X better performance and up to 83 percent lower costs. Read more here.

Sun also announced what they touted as “the world’s first unified storage appliances” that greatly simplify storage management and problem solving at not-seen-before speed and scale. The storage systems, code named “Amber Road”, and now known officially as the Sun Storage 7000 family, included customer validation with reports of increased performance and cost savings up to 75%. Read more here.

Oracle was in the news announcing the latest version of Siebel CRM 8.1.1, which includes industry-tailored customer self-service, customer loyalty, and support for open standards. Read more here.

Oracle also announced continued momentum with Oracle CRM Gadgets for Sales. It provides secure access to enterprise application data and services and delivers a productive user experience through a combination of personal information, Internet content, phone conversations and enterprise data. Read more here.

HP said that it has teamed up with NetSuite to deliver NetSuite’s software-as-a-service business management applications to small and midsized businesses through the HP channel of 15,000 value-added-resellers (VARs). Read more here.

HP also took aim at the mainframe market stating that more than 250 customers worldwide have switched from mainframes to HP Integrity systems and that customers have seen cost saving up to 70%. Read more here.

Microsoft made news in the small and midsized business arena by launching Windows Small Business Server 2008 and Windows Essential Business Server 2008. Read more here.

Targeting Midsize and Small Businesses: The Latest from IBM, Microsoft, and SAP

Recently, three of the biggest players in the enterprise and business applications market made announcements targeting midsize and small businesses with unique approaches by each vendor. Let’s take a closer look.

SAP announced what is more of an evolution than something entirely new with their program and brand called Enabled By SAP® Business One which essentially puts together SAP’s software for small and midsize businesses together with industry-specific implementation solutions from business partners. The program leverages SAP’s broad partner network with the stated goal of helping customers identify, purchase, and implement pre-packaged solutions so that the customer can get a better and faster return on their investment. To start there are already 18 industry or “micro-vertical” solutions available in 20 countries.

Similarly, IBM expanded its offerings for midsized businesses with the latest IBM Express Advantage offerings – combining hardware, software, and services – delivered by its partner network. They also announced new tools to help partners shorten the sales cycle, while increasing value added services, and a new software toolkit to sharply reduce and ease implementation time. But IBM didn’t stop there. Recognizing the tough economic climate, they also announced new financing offers under the “Why Wait” umbrella, which include no interest payments for 90 days.

But, perhaps the most interesting and most anticipated announcement came from Microsoft. After nearly three years of work, Microsoft announced Windows Azure and the Azure Services Platform. It is nothing less than their formal entry into cloud computing and software-as-a-service (SaaS). Ray Ozzie, Microsoft’s Chief Software Architect, hailed it as “the systems that we’re building right now for cloud-based computing are setting the stage for the next 50 years of systems, both outside and inside the enterprise. It is being pitched as a direct competitor to Amazon’s Elastic Compute Cloud. It is aimed at not just customers, but also developers, startups, and consumers.

One of the more interesting comments came from Walid Abu-Hadba, corporate vice president of the Developer & Platform Evangelism Group at Microsoft, when he said, “There’s this notion out there that all of technology will be sucked up in to this thing called the ‘cloud,’ and the cloud will virtually replace all the other technology or render it irrelevant. The reality is that the cloud only complements existing technology and provides people with flexibility and another way of doing things. Our intent with the Azure Services Platform is to seamlessly extend Microsoft’s platform out to the cloud so customers don’t have to choose, or deal with silos of Web-based information.”

I couldn’t agree more. Whether Microsoft can execute against this reality and deliver their next generation platform as stated will remain to be seen. But it’s a heck of a start.