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The Cloud Gets Crowded and more Competitive

2022, Featured, Laura's Insights ITIC Blog / By

The cloud is getting crowded.

In 2022 the cloud computing market – particularly the hybrid cloud – is hotter and more competitive than ever.

Corporate enterprises are flocking to the cloud as a way to offload onerous IT administrative tasks and more easily and efficiently manage increasingly complex infrastructure, storage and security. Migrating operations from the data center to the cloud can also greatly reduce their operational and capital expenditure costs.

Cloud vendors led by market leaders like Amazon Web Services (AWS), Microsoft Azure, Google Cloud, IBM Cloud, Oracle Cloud Infrastructure, SAP, Salesforce, Rackspace Cloud, and VMware, as well as China’s Alibaba and Huawei Cloud, are all racing to meet demand. The current accelerated shift to the cloud was fueled by the COVID-19 global pandemic which created supply chain disruptions and upended many aspects of traditional work life. Since 2020, government agencies, commercial businesses and schools shifted to remote working and learning. Although COVID is generally waning (albeit with continuing flare-ups), a hybrid work environment is the new normal. This in turn, makes a compelling business case for furthering cloud migrations.

In 2022, more than $1.3 trillion in enterprise IT spending is at stake from the shift to cloud, and that revenue will increase to nearly $1.8 trillion by 2025 according to the February 2022 report “Market Impact: Cloud Shift – 2022 Through 2025” by Gartner, Inc. in Stamford, Conn.  Furthermore, Gartner’s latest research forecasts that enterprise IT spending on public cloud computing, within addressable market segments, will outpace traditional IT spending in 2025.

Hottest cloud trends in 2022

Hybrid Clouds

Hybrid cloud is exactly what its name implies: it’s a combination of public, private and dedicated on-premises datacenter infrastructure and applications. Companies can adopt a hybrid approach for specific use cases and applications – outsourcing some portions of their operations to a hosted cloud environment, while keeping others onsite. This approach lets companies continue to leverage and maintain their legacy data infrastructure as they migrate to the cloud.

Cloud security and compliance: There is no such thing as too much security. ITIC’s 2022 Global Server Hardware Security survey indicates that businesses experienced an 84% surge in security incidents like ransomware, email phishing scams and targeted data breaches over the last two years that were especially prevalent and commonplace. The hackers are extremely sophisticated; they choose their targets with great precision with the intent to inflict maximum damage and net the biggest payback. This trend shows no signs of abating. In 2021, the average cost of a successful data breach increased to $4.24 million (USD); this is a 10% increase from $3.86 million in 2020 according to the 2021 Cost of a Data Breach Study, jointly conducted by IBM and the Ponemon Institute. The $4.24 million average cost of a single data breach is the highest number in the 17 years since IBM and Ponemon began conducting the survey. It represents an increase of 10% in the last 12 months and 20% over the last two years. Not surprisingly, in 2021, 61% of malware directed at enterprises targeted remote employees via cloud applications. Any security breach will have a domino effect on regulatory compliance. In response, cloud vendors are doubling down on security capabilities and compliance certifications. There is now a groundswell of demand for Secure Access Service Edge (SASE) cloud security architecture designed to safeguard, monitor and access connectivity among myriad cloud applications services, as well as datacenter IT infrastructure and end user devices. SASE gives users a single sign-on capability across multiple cloud applications while ensuring compliance.

Cloud-based disaster recovery (DR): The ongoing concerns around security and compliance issues has also shone the spotlight on the importance of cloud-based disaster recovery. DR uses cloud computing to back up data and continue to run the necessary business processes in case of disaster. Organizations can utilize cloud-based DR for load balancing and to replicate cloud services across multiple cloud environments and providers. The result: enterprise transactions will continue uninterrupted if they lose access to their physical infrastructure in the event of an outage.

Cloud-based Artificial Intelligence (AI) and Machine Learning (ML): Another hot cloud trend is the use of Artificial Intelligence (AI) and Machine Learning (ML). Both AI and ML allow organizations to cut through the data deluge and process and analyze the data to make informed business decisions and quickly respond to current and future market trends.

Top cloud vendors diversify, differentiate their offerings

There are dozens of cloud providers with more entering this lucrative market arena all the time. However, the top four vendors: Amazon AWS, Microsoft Azure, Google Cloud and IBM Cloud currently account for over 70% of the installed base.

Amazon AWS: Amazon AWS has been the undisputed cloud market leader for the past decade. And it remains the number one vendor in 2022. Simply put, Amazon is everywhere and it has amazing brand recognition. Amazon AWS offers a wide array of services that appeal to companies of all sizes. The AWS cloud-based platform enables companies to build customized business solutions using integrated Web services. AWS also offers a broad portfolio of Infrastructure-as-a-Service (IaaS) and Platform-as-a-Service (PaaS).  These include Elastic Cloud Compute (EC2), Elastic Beanstalk, Simple Storage Service (S3) and Relational Database Service (RDS). AWS also enables organizations to customize their infrastructure requirements and it provides them with a wide variety of administrative controls via its secure Web-based client. Other key features include: data backup and long-term storage; Service Level Agreement (SLA) of “four nines” – 99.99% – guaranteed SLA uptime;  AI and ML capabilities; automatic capacity scaling; support for virtual private clouds and free migration tools.

As with all of the cloud vendors, the devil is in the details when it comes to pricing and cost. On the surface, the pricing model appears straightforward. AWS offers three different pricing options. They are “Pay as you Go,” “Save when you reserve” and “Pay less using more.”  AWS also offers a free 12-month plan. Once the trial period has expired, the customer must either choose a paid plan or cancel its AWS subscription. While Amazon does provide a price calculator to estimate potential cloud costs, the many variables make it confusing to discern.

Microsoft Azure: Microsoft Azure ranks close behind Amazon AWS and the platform has been the catalyst for the Redmond, Washington software giant’s resurgence over the last 12 years. As Microsoft transitioned away from its core Windows-based business model, it used a tried and true success strategy: that is, the integration and interoperability of its various software offerings.  Microsoft also moved its popular and well-entrenched legacy on-premises software application suites like Microsoft Office, SharePoint, SQL Server and others to the cloud. This gave customers a sense of confidence and familiarity when it came to adoption. Microsoft also boasts one of the tech industry’s largest partner ecosystem. Microsoft regularly refreshes and updates its cloud portfolio. In February, Microsoft unveiled three industry-specific cloud offerings: Microsoft Cloud for Financial Services, Microsoft Cloud for Manufacturing and Microsoft Cloud for Nonprofit. All of these services leverage the company’s security and AI functions. For example,  new feature in Microsoft Cloud for Financial Services, called Loan Manager will enable lenders to close loans faster by streamlining workflows and increasing transparency through automation and collaboration.  Microsoft Azure offers all the basic and advanced cloud features and functions including: data backup and storage; business continuity and DR solutions; capacity planning; business analytics; AI and ML; single sign-on (SSO) and multifactor authentication as well as serverless computing. Ease of configuration and management are among its biggest advantages, and Microsoft does an excellent job of regularly updating the platform, but documentation and patches may lag a bit. Azure also offers a 99.95% SLA uptime guarantee which is a bit less than “four nines.”  Again, the biggest business challenge for existing and prospective Azure customers is figuring out the licensing and pricing model to get the best deal.

Google Cloud Platform (GCP): Like Amazon, Google is a ubiquitous entity with strong brand name recognition. Google touts its ability to enable customers to scale their business as needed using flexible, open technology. Google Cloud consists of over 150 products and developer tools. GCP is a suite of cloud computing services provided by Google. It is a public cloud computing platform consisting of a variety of IaaS and PaaS services like compute, storage, networking, application development and Big Data analytics. The GCP services all run on the same cloud infrastructure that Google uses internally for its end-user products, such as Google Search, Photos, Gmail and YouTube, etc. The GCP services can be accessed by software developers, cloud administrators and IT professionals over the internet or through a dedicated network connection. Notably, Google developed Kubernetes, an open source container standard that automates software deployment, scaling and management. GCP offers a wide array of cloud services including: storage and backup, application development, API management, virtual private clouds, monitoring and management services, migration tools, AI and ML. In order to woo customers, Google does offer very steep discounts and flexible contracts.

IBM: It’s no secret that IBM Cloud lagged behind market leaders AWS and Microsoft Azure, but Big Blue shifted into overdrive to close the gap. Most notably, IBM’s 2019 acquisition of Red Hat for $34 billion gave IBM much needed momentum, solidifying its hybrid cloud foundation and expanding its global cloud reach to 175 countries with over 3,500 hybrid cloud customers. And it shows. On April 19, IBM told Wall Street it expects to hit the top end of its revenue growth forecast for 2022. IBM’s Cloud & Data Platforms unit is the growth driver Cloud revenue grew 14% to $5 billion during the just ended March 31 quarter. Software and consulting sales which represent over 70% of IBM’s business were up 12% and 13%, respectively. IBM Cloud incorporates a host of cloud computing services that run on IaaS or PaaS.  And the Red Hat Open Shift platform further fortifies IBM’s hybrid cloud initiatives. Open Shift is an enterprise-ready Kubernetes container platform built for an open hybrid cloud strategy. It provides a consistent application platform to manage hybrid cloud, multicloud, and edge deployments. According to IBM, 47 of the Fortune 50 companies use IBM as their private cloud provider.  IBM has upped its cloud game with several key technologies. They include advanced quantum safe cryptography which safeguards applications running on the IBM z16 mainframe which is popular with high end IBM enterprise customers. Quantum-safe cryptography is as close to unbreakable or impenetrable encryption as a system can get. It uses quantum mechanics to secure and transmit data in a way that currently makes it near-impossible to hack. Another advanced feature is the AI on-chip inferencing, available on the newly announced IBM z16 mainframe. It can deliver up to 300 billion deep learning inference operations per day with 1ms response time. This will enable even non-data scientist customers to cut through the data deluge and predict and automate for “increased decision velocity.”  AI on-chip inferencing can help customers prevent fraud before it happens by scoring up to 100% of transactions in real-time without impacting Service Level Agreements (SLAs). AI on-chip inferencing can also assist companies with compliance; automating the process to allow firms to cut audit preparation time from one month to one week to maintain compliance and avoid fines and penalties. The IBM Cloud also incorporates the Keep Your Own Key (KYOK) which uses z Hyperprotect in the IBM public cloud.  Another key security differentiator is IBM’s Confidential Computing which protects sensitive data by performing computation in a hardware-based trusted execution environment (TEE). IBM Cloud goes beyond confidential computing by protecting data across the entire compute lifecycle. This provides customers with a higher level of privacy assurance – giving them complete authority over data at rest, data in transit and data in use. IBM further distinguishes its IBM Cloud from competitors via its extensive work in supporting and securing regulated workloads, particularly for Financial Services companies. The company’s Power Systems enterprise servers are supported in the IBM Cloud as well. IBM Cloud also offers full server customization; everything included in the server is handpicked by the customer so they don’t have to pay for features they may never use. IBM is targeting its Cloud offering at customers that want a hybrid, highly secure, open, multi-cloud and manageable environment.

Conclusions

Cloud computing adoption – most especially the hybrid cloud model – will continue to accelerate throughout 2022 and beyond. At the same time, vendors will continue to promote AI, machine learning and analytics as advanced mechanisms to help enterprises derive immediate, greater value and actionable insights to drive revenue and profitability.

Security and compliance issues will also be must-have crucial elements of every cloud deployment. Organizations now demand a minimum of four nines of uptime – and preferably, five and six nines of availability – 99.999% and 99.9999% to ensure uninterrupted business continuity. Vendors, particularly IBM with its newly Quantum-safe cryptography capabilities for its infrastructure and IBM Z mainframe, will continue to fortify cloud security and deploy AI.

 

 

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IBM Platform Resource Scheduler Automates, Accelerates Cloud Deployments

Laura's Insights ITIC Blog / By

One of the most daunting and off-putting challenges for any enterprise IT department is how to efficiently plan and effectively manage cloud deployments or upgrades while still maintaining the reliability and availability of the existing infrastructure during the rollout.

IBM solves this issue with its newly released Platform Resource Scheduler which is part of the company’s Platform Computing portfolio and an offering within the IBM Software Defined Environment (SDE) vision for next generation cloud automation. The Platform Resource Scheduler is a prescriptive set of services designed to ensure that enterprise IT departments get a trouble-free transition to a private, public or private cloud environment by automating the most common placement and policy procedures of their virtual machines (VMs). It also helps guarantee quality of service while greatly reducing the most typical human errors that occur when IT administrators manually perform tasks like load balancing and memory balancing. The Platform Resource Scheduler is sold with IBM’s SmartCloud Orchestrator and PowerVC and is available as an add-on with IBM SmartCloud Open Stack Entry products. It also features full compatibility with Nova APIs and fits into all IBM OpenStack environments. It is built on open APIs, tools and technologies to maximize client value, skills availability and easy reuse across hybrid cloud environments. It supports heterogeneous (both IBM and non-IBM) infrastructures and runs on Linux, UNIX and Windows as well as IBM’s zOS operating systems. …

IBM Platform Resource Scheduler Automates, Accelerates Cloud DeploymentsRead More »

IBM Platform Resource Scheduler Automates, Accelerates Cloud Deployments Read More »

nCrypted Cloud secures, stores BYOD, Cloud-based Information

Laura's Insights ITIC Blog / By

Cloud computing and Bring Your Own Device (BYOD) are inarguably two of the hottest trends in high tech today. These enabling technologies increase productivity but they also present corporations and consumers with significant security, privacy and manageability challenges.

A new software service from nCrypted Cloud, a Boston-based startup, secures and encrypts cloud-based data in a straightforward, easy-to-use and affordable manner.

nCrypted Cloud encrypts data from recognized cloud services like Dropbox, Google Drive and Microsoft’s SkyDrive. nCrypted Cloud comes in three versions: a basic Consumer version which is free; a Consumer Pro version and an Enterprise edition aimed at corporate users. …

nCrypted Cloud secures, stores BYOD, Cloud-based InformationRead More »

nCrypted Cloud secures, stores BYOD, Cloud-based Information Read More »

Microsoft: Bullish or Bottoming Out? Part 2

Laura's Insights ITIC Blog / By

According to some press and industry, you’d think that Microsoft was all but dead. Microsoft’s tactical and strategic technology and business missteps are well publicized and dissected ad infinitum. Less well documented are Microsoft’s strengths from both a consumer and enterprise perspective and there are plenty of those.

Microsoft Strengths

One of the most notable company wins in the past five years is the Xbox 360 and Kinect.

Xbox 360 and Kinect: Simply put, this is an unqualified success. The latest statistics released earlier this month by the NPD Group show that Microsoft has a 47% market share and sold 257,000 Xbox 360 units in the U.S. in June, besting its rivals the Sony PlayStation 3 and Nintendo Wii for the 18th consecutive month. But Microsoft and indeed all the hardware games vendors find their sales shrinking due to the sharp increase in the numbers of users playing games on their smart phones. In Microsoft’s 2012 third fiscal quarter ending in March, Xbox 360 sales dropped 33% to $584 million. The consumer space is notoriously fickle and games users are always looking for the next big thing. Microsoft’s ace in the hole is the Kinect motion-controller, which still has a lot of appeal. The company is banking on that as well as slew of new applications and functions like the Kinect PlayFit Dashboard which lets users track the number of calories they burn when they play Kinect games. …

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Microsoft: Bullish or Bottoming Out? Part 2 Read More »

2011 YTD in High Tech: Bold Aggressive Actions

Laura's Insights ITIC Blog, News / By

It’s hard to believe but the first quarter of 2011 is now a memory and we’re well into spring. The tone for the year in high technology was set in early January: fast, bold, aggressive action and sweeping management changes.

In the first four months of the year high tech vendors moved quickly and decisively to seize opportunities in established sectors (smart phones, virtualization, back-up and disaster recovery) and emerging markets (cloud computing, tablet devices and unified storage management). As 2011 unfolds, it’s apparent that high technology vendors are willing to shift strategies and shed executives in order to stay one step ahead of or keep pace with competitors. The competition is cutthroat and unrelenting. No vendor, no matter how dominant its market share, how pristine its balance sheet or how deep its order backlog and book to bill ratio dares relax or rest on its laurels for even a nanosecond.

Recaps of some of the year’s highlights thus far are very revealing. …

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2011 YTD in High Tech: Bold Aggressive Actions Read More »

HP, Microsoft Still Have Some ‘Splainin’ to Do on Application-to-Infrastructure Pact

Laura's Insights ITIC Blog / By

The recently announced joint Hewlett-Packard/Microsoft Application-to-Infrastructure Model Partnership has intriguing possibilities for both companies and their respective and overlapping installed customer base. However, it remains to be seen how quickly and efficiently the two industry giants can deliver products and market the merits of the solution. Now $250 million is huge investment even for two high tech powerhouses like HP and Microsoft. So we know this is a serious committment.

To recap, HP and Microsoft said they will invest $250 million into their Frontline Partnership. The deal aims to deliver full, integrated stacks that support Microsoft’s Exchange Server and SQL Server, including management, virtualization and cloud implementations. The resulting product offerings will consist of pre-packaged application solution bundles that incorporate the aforementioned management and virtualization capabilities. The two companies said the pact calls for them to partner on engineering, R&D, marketing and channel sales.
Still, the announcement left many industry watchers with more questions than answers. As my colleagues Charles King and Merv Adrian noted in their Breaking News Review in the January 14 special edition of Charles King’s Pund-IT, HP and Microsoft “have worked closely for years, share tens of thousands of common customers and channel partners and have long supported each other’s interests.”
So what’s new about this announcement? That question should be answered during the coming months. A $250 million investment is considerable even for two high technology titans. It now remains for HP and Microsoft to execute on their promise to produce solutions that thoroughly integrate the two companies’ infrastructure and applications stacks to ship pre-configured and optimized solutions for Microsoft’s Exchange Server, and SQL Server, virtualization, cloud computing converged infrastructure and pre-packaged application tools.
But perhaps the most immediate and daunting challenge is for HP and Microsoft to deliver a product roadmap that also includes specific details about the pricing, training and services the two firms will commonly deliver. Above all, companies must market and sell this deal to the legions of skeptics. The high tech industry has witnessed numerous high profile partnership deals announced amidst much industry fanfare never to be heard from after the initial press releases.
Remember the Cisco Systems/Microsoft Directory Enabled Network (DEN) initiative of the late 1990s? No. Not many people do. Announced with great fanfare, this dream team was supposed to incorporate the functionality of Microsoft’s Active Directory into Cisco routers and provide network administrators with a more comprehensive means of managing various devices on their network. In reality, the Cisco/Microsoft DEN initiative was a partnership on paper only. There are dozens of similar examples. Hence, the skepticism that greets such announcements is understandable.
This is all the more reason for HP and Microsoft executives to follow up on last week’s announcement with quick, decisive action and not just more fodder for the PR Newswire. For example, when can we expect to see the first fruits of the so-called “deeply optimized machine environment” that will provide turn-key, pre-packaged and pre-integrated server, application, networking and storage solutions? Who are the specific target users and how will they benefit? How will Microsoft and HP license and service these products? Those are just a few of the questions that need to be answered.
Non-Exclusive Partnerships Sometimes Make Strange Bedfellows
The partnership also has especially intriguing implications for HP which now has pacts in place with all of the major virtualization providers, including Microsoft’s biggest rival, and VMware. The new HP/Microsoft Application-to-Infrastructure is a non-exclusive three year partnership. It’s worth noting that HP already has a deal in place with VMware, whose ESX Server is the market leader in server virtualization. Microsoft also gets a boost from this deal. Microsoft’s Hyper-V has been gaining ground, particularly among small and mid-sized corporations. However, it has a long way to go to catch up to ESX Server’s installed base, particularly among large enterprises, so this pact helps keep Microsoft competitive. Additionally, HP also delivers a full suite of management solutions that integrates VMware’s vCenter offering with HP’s Insight management product. HP and Microsoft intend to similarly integrate HP’s Insight and Microsoft’s Systems Center. So again, this helps Microsoft broaden the appeal of its virtualization appeal to its existing base and makes it a more attractive solution for prospective customers.
The partnership with Microsoft put’s HP in the proverbial cat-bird’s seat: it now has a full line of its own servers that runs all the VMware products and similar plans to support Microsoft’s SQL Server and Exchange Server. This gives HP the ability to offer a full line of integrated hardware and services customers their choice of virtualization vendors, while remaining agnostic.
From Microsoft’s perspective, the partnership with HP also has immediate value: it allows Microsoft – at least on paper – to keep pace with VMware, by working with HP, a top OEM hardware vendor and services provider, which is no mean feat. Former Microsoft executive Paul Maritz who now runs VMware is intent on rejuvenating that company and he knows that the way to solidify and expand VMware’s influence is to increase its stake in management and applications. Just last week, VMware purchased Zimbra, the open source Email and collaboration unit of Yahoo for a rumored $100 million. Not coincidentally, Zimbra describes its Collaboration suite as the “next generation” Microsoft Exchange server.
Microsoft clearly felt the need to respond in kind.
The plethora of technology and partnership deals such the HP/Microsoft Application-to-Infrastructure pact, serve as a reminder of the intensity of the IT industry’s competitive landscape – particularly in burgeoning markets like virtualization and by extension, nascent markets like cloud computing. No vendor can afford to rest on its laurels. They must continue to upgrade their product and services offerings to keep pace with the competition.
Microsoft and VMware will continue to try and top one another, and HP is the beneficiary of this ongoing rivalry. Let’s hope the end users are also winners, too.

HP, Microsoft Still Have Some ‘Splainin’ to Do on Application-to-Infrastructure Pact Read More »

Windows 7 is a make or break release for Microsoft

Laura's Insights ITIC Blog / By

The long awaited successor to Windows XP and Windows Vista, will ship several months earlier than planned. Expectations are high industry-wide.

Windows 7 is crucial to Microsoft’s over-arching software business and technology strategy for the next two years. Although it is an incremental upgrade and not a major overhaul of the underlying Vista kernel, Windows 7 represents a crucial upgrade for both consumer and corporate customers.

Practically speaking, Windows 7 must do what Vista didn’t: deliver near seamless, plug and play integration and interoperability with the overwhelming majority of Microsoft and third party applications, device drivers, utilities and hardware peripherals. As a standalone operating system (OS) Vista was fine. Unfortunately, there’s no such thing as a standalone OS. The lack of backwards compatibility between Vista and third party software and even incompatibilities in the file formats between Vista and Office 2007 and other Microsoft products was a nightmare for corporations and consumers alike.

As a result, there is no margin for error. Windows 7 must fulfill users’ expectations, business and technology needs from the first day it ships. Microsoft will not get a second chance to make a good first impression. Failure to do so could send customers running to rival desktop platforms like Apple’s Mac OS X 10.x and Linux distributions, or even online options such as those being pitched by Google. . And if Windows 7 does not deliver the features, integration, interoperability and reliability Microsoft is promising, it may well create a domino effect that adversely impacts the upcoming releases of related solutions like Exchange Server and the Office platform.

Integration and interoperability are the most important criteria, besting even cost, when it comes to choosing a new technology. The results of ITIC’s May 2009 Application Availability survey of 300 businesses worldwide found that 60% of business said integration and interoperability with existing and legacy applications tops the list of “must have” items in new software application and operating system purchases. Cost came in a close second with 56% of the respondents followed by ease of use and installation (55%).

The stakes for Windows 7 are also high because of intensified competition. Rumors abound that Microsoft pushed up the release date by at least three months so that Windows 7 hits the streets in advance of the low cost netbook version of Google’s Android. Microsoft also faces increased competition in its decades-old rival Apple. During the past two years Apple’s Mac OS X 10.x running on Apple’s Intel-based proprietary hardware has been making a comeback in corporate enterprises. Apple products do not represent a significant threat to Microsoft’s corporate desktop dominance, but they can nibble at the fringes, potentially dilute momentum [for Windows 7] and take some market share. In this ongoing global economic downturn, no vendor wants to concede any revenue or even a percentage point of market share.

Microsoft of course is acutely aware of these issues. In recent months, company CEO Steve Ballmer and Senior Vice President Bill Veghte have publicly stated that users were stymied by the incompatibility issues they encountered with Vista. They intend to avoid those problems with Windows 7.

Fortuitously, for Microsoft, there are many factors in Windows 7’s favor. They include:

  • Pent-up Demand. To date, only 10% of the 700 survey respondents in ITIC’s 2009 Global IT and Technology Trends Global Deployment Survey have deployed Vista as their company’s primary desktop operating system. The results indicated that Windows XP remains the primary desktop OS for 89% of the respondents. Nearly half—45%—of the survey respondents indicated they would skip Vista and migrate from XP to Windows 7. The main reasons for this were cost constraints associated with the bearish economy, and reluctance to undertake a complex OS upgrade with manpower constraints.The prevailing sentiment among businesses is that they can afford to wait because Windows XP adequate met their business and technology needs over the last two years. ITIC believes this bodes well for Windows 7 deployments in the short and intermediate term. If 20% of the installed base of legacy Windows XP users migrate or indicate their intention to upgrade to Windows 7 within the first three or four months of shipment, Microsoft will be well-positioned. There is a reasonable likelihood of this, providing Windows 7 delivers the goods. And the advance word from customers interviewed by ITIC is generally positive.
  • New feature set. Windows 7 will have six different versions, but to minimize the confusion that accompanied the Vista launch, only the Home Premium and Professional editions will be widely sold in retail outlets. Specific versions that are designed for enterprise use or developing nations will be aggressively marketed to those specific accounts and geographic regions, thus taking the guesswork out of purchasing. Most importantly: Microsoft says that every one of the versions will include all of the capabilities and features of the edition below it which will help to minimize upgrade woes. Corporations and consumers that want to move to a more feature rich version of Windows 7 can use Windows Anytime Upgrade to purchase the upgrade online and unlock the features of those editions from their desktops.ITIC interviewed several dozen Windows 7 beta users over the last several months and an overwhelming 9 out of 10 respondents expressed their satisfaction with improvements in many Windows 7’s core capabilities when compared to both Windows XP and Vista. This includes faster boot sequence, better reliability, improved security, a much faster and more comprehensive search engine, and more flexible configuration options. Additionally, Microsoft bolstered the inherent security of Windows 7 with DirectAccess and BitLocker To Go features. The DirectAccess capability is designed to provide remote, traveling and telecommuting workers with the same secure connectivity as though they were local by establishing a VPN “tunnel” to their corporate networks. BitLocker To Go extends the data encryption features introduced in Vista to include removable storage devices such as USB thumb drives support in Windows 7. Users can employ a password or a smart card with a digital certificate to unlock and access their data. And the devices can be used on any other Windows 7-based machine with the correct password. Users can also read, but not modify data on older Windows XP and Vista systems.
  • Economical and feature rich Licensing contracts. Finally, the terms and conditions of Windows 7 licensing contracts promise to make upgrades easier on corporate IT budgets. In February, Microsoft said it would provide a license that will allow customers to directly upgrade from Windows XP to Windows 7. There is a caveat, though: users will have to wipe their hard drives and perform a clean install – so technically, it’s not an upgrade. Microsoft has not yet released pricing details for Windows 7 but ITIC believes the upgrade license will most likely cost 20% to 40% less than a new license.Additionally, corporations that purchased Microsoft’s Software Assurance Maintenance and upgrade plan as a standalone product or received it as part of their Enterprise Agreement (EA) licenses, are entitled to free upgrades to Windows 7 since it is an incremental release. Additionally, in order to make life easier for users (and to engender goodwill) Microsoft is letting the Release Candidate (RC) free trial license for Windows 7 last a full year until June 2010! And users looking for a discounted version of Windows 7 to run on low cost, minis or netbooks take note: Microsoft and Intel have agreed that in order for a device to be considered a netbook, the screen must not exceed 10.2” Prior to this, Microsoft allowed customers to get the Windows XP or Vista discount for or devices as large as a 12.1” screen.

In summary, all indications are that Microsoft has learned from its Vista mistakes. As a result, businesses and consumers stand ready to reap significant benefits in compatibility, features, pricing and licensing with Windows 7.

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Apple Shines

Laura's Insights ITIC Blog / By

Apple rang in 2009 by celebrating a trio of milestones that were impressive by any standards including those of a company whose 32-year span has been filled with a cornucopia of noteworthy events. In quick succession, Apple posted the best financial results in its history: during the just ended 2009 first fiscal quarter it achieved record revenues of nearly $10.2 billion on record net quarterly profits of $1.61 billion and it sold an astounding 22.7 million iPods, another record. The icing on the cake: Apple’s flagship Mac computer celebrated its 25th birthday amidst the news that the Cupertino, California firm’s latest Mac Book and Mac Book Pro notebooks contributed to the overall financial bonanza with sales of 2.5 million units; a 34% gain in year-over-year unit shipments.

These feats would be extraordinary at any time but they offered even more cause for celebration due to their arrival during a week in which the news from almost all of Apple’s high-tech vendor counterparts ranged from disappointing to dismal to downright dire. Intel said it would shed up to 6,000 workers and close five manufacturing plants; Microsoft announced it will lay off 5,000 workers (the first such major action in its history) amidst declining demand for Windows PC solutions, and even the goliath Google saw a sharp decline in its 2009 first fiscal quarter profits.

With such a bountiful harvest, it was more than a little perplexing to read the headline in the January 22 issue of Silicon Valley.com column proclaiming: “Mac’s influence could wane.” Granted, the headline was a bit misleading. The article itself stated that things look good for Apple and its Macs in the near term, but what about the next 25 years? Good question.

Long term forecasts of even five years are more art or guesswork than science. But decades long prognostications are rarities unless you’re talking about Nostradamus or the Oracle of Delphi. So we’re left to forecast with the tools at our disposal – in this case, the facts. So here for your consideration is our Top 10 List concerning Apple’s health and well-being. It includes some little known facts of both a positive and even potentially negative nature.

10. Big Mac sales shrink. Apple Mac desktop sales dipped slightly even as sales of its notebooks and the lightweight Apple Mac Book Air soared. This is hardly surprising. Both the American and global consumers and workforces are becoming increasingly mobile, transitioning into an era of ever-more powerful notebooks, Netbooks (or minis) and PDAs. Critics argue that the commoditization of PC hardware will make it difficult for Apple or any hardware vendor to distinguish itself. As a result, Apple desktop sales may continue to contract along with those of PCs although they won’t become obsolete for many years. Meanwhile, Apple has a wide array of Mac Book, Mac Book Pro and the Mac Book Air products to take up the slack. The company also wisely cut hardware and OS X 10.x operating system prices to be more competitive with PCs.

9. iPod and iPhone. Apple sold a record 22.7 million iPods during the quarter, and the device has approximately 70% market share in the U.S. Worldwide market share percentages vary by country from 70% in Western Europe and Australia to well over 60% in Japan and over 50% in Canada. At the same time, iPhone sales in Q1 were 4.36 units million, representing 88% unit growth over the year-ago quarter. At some point, iPod and iPhone sales may reach saturation but that won’t happen anytime soon and when it does, Apple will most likely have another device in the offing.

8. Up, up and away. Data is no longer tied to the PC or desktop, it is moving to the cloud. Apple is right there in the cloud. Cloud computing is the new buzz word for delivering applications as services via the Internet. The first fruits of Apple’s cloud computing initiative involves the integration of Google’s cloud computing offering, the Google App Engine with Apple’s iPhone mobile computing platform. ITIC anticipates Apple will expand its reach into the cloud, again based on customer demand. Nearly half – 49% of the ITIC/Sunbelt Software survey respondents said they plan to increase integration between existing Apple consumer products like the iPhone to allow corporate users to access corporate Email and other applications over the next 12 months.

7. Marketing. No one does it better. From the moment that Steve Jobs stepped onstage 25 years ago and unveiled his 20lb. baby, to the creative licensing of the Rolling Stones tune “Like a Rainbow”, to partnering with the Irish rock group U2 to help promote iPod usage, Apple’s marketing has always been stellar. Apple uses every available channel – from the airwaves to the street – to promote its brand. There are now 251 Apple retail stores open in 10 countries, with total quarterly traffic of 46.7 million visitors.

6. New gadgets. Users and industry watchers have grown accustomed to Apple debuting revolutionary new products at MacWorld and they disappointed when it doesn’t happen. It is unrealistic to expect that any company, even one as inventive as Apple, can deliver a iPod or iPhone every year. Meanwhile, users will have to “settle” for evolutionary innovations like new laptop batteries that will run for eight hours without re-charging and Time Capsule, an all-in-one 802.11n wireless backup router that includes up to 1 terabyte of disk storage.

5. Leadership. It’s impossible to overstate or understate what company founder Steve Jobs has meant to Apple. His 1996 return to Apple sparked one of the greatest corporate revivals since Lazarus. An iconic figure in Silicon Valley for over 30 years, Jobs’ future is now clouded by health concerns, and investors and industry watchers are rightly nervous. Only time will tell when or if Jobs will return. If he does not, it will be a devastating loss on many levels but it will not cripple the company’s ability to thrive and survive. Still, Apple must allay customer, investor and government concerns by being truthful and forthcoming regarding Jobs and the company’s future.

4. What’s in Apple’s Wallet? Cash — $28.1 billion to be exact and $0 debt. That’s more than Google ($15.85B); Microsoft ($20.3B); IBM ($12.9B); Intel ($11.84B) or Sony ($6.05B). Apple also has double digit profit margins of 14.70% and operating margins of nearly 19%; return on assets is 10.77% while return on shareholders’ equity is a robust 24.47%. Few if any corporations can boast such a healthy balance sheet, which leaves Apple free to invest heavily in R&D, marketing initiatives and other efforts to keep ahead of competitors.

3. Apple is hot – and cool. Consumers have always loved Apple and there’s nothing to indicate that will change. Consumer enthusiasm for iPods and iPhones has fueled the resurgence of Macs and OS X 10.x in enterprises. Everyone it seems has or wishes they had an iPod or an iPhone. Beyond that the latest joint ITIC/Sunbelt Software data indicates that Apple is increasing its presence in many markets thanks to the performance and reliability of the core products. Eight out of 10 businesses – 82% of the survey respondents – rated the reliability of the Mac and OS X 10.x as “excellent” or “very good,” while almost 70% of those polled gave the same high marks to the security of the Apple platform. Tellingly, 68% of the survey respondents said their firms are likely to allow more users to deploy Macs as their enterprise desktops in the next six-to-12 months.

2. Enterprising. Over the past three years Apple has made a comeback in the enterprise. The latest joint ITIC/Sunbelt Software survey of 700 companies worldwide indicates that nearly 80% of businesses have Macs in their environment and 25% have significant (>30) numbers of Macs. But while enterprise users love Apple, IT managers remain divided. The biggest drawback for the Mac is the dearth of enterprise-class third party management and performance enhancement tools but technical service and support is also an issue. Apple will have to address these points if the company expects or plans to challenge Microsoft’s dominance on business desktops. So far, Apple has been silent about its enterprise strategy but a new consortium of five third party vendors calling itself the Enterprise Desktop Alliance (EDA) is determined to promote the management, integration and interoperability capabilities of the Mac in corporate environments.

1. Mobile and agile, not fragile. The combination and plethora of Apple consumer and corporate devices makes for a powerful product portfolio with widespread appeal. Unlike many of its competitors Apple is not dependent on a single product or market segment. Hence, when sales decline in one sector, the slippage is offset by another product as we’ve seen with Mac notebooks picking up the slack for Mac desktops. This enables Apple to adjust both its technology plans and market focus accordingly, strengthening and insulating the company from cyclical downturns.

One of the hallmarks of Apple’s existence has been the ability to re-invent itself – not only changing with the times – but keeping its fingers on the pulse of an often fickle public and anticipating what its users and the industry wants. Apple is well positioned for both the near and intermediate term. It will have to stay focused, keep its edge and clearly communicate its strategy in order to maintain the same level of success it has achieved in the last 32 years.

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