Goldman Sachs' latest IT spending survey is out and it looks a tech-spending recovery is on the way for 2010. To a large extent, the data suggests not so much that spending is dramatically higher, but that it has normalized at pre-recessionary growth rates, rather than contracting as it has over the past several months.
Goldman is cautiously optimistic about 2010 spending, noting that much of it depends on the macro-economic environment driving more business spending. And while most areas will see growth counter to 2009's downward spiral, some areas such as off-shore development will feel significant retraction.
Regardless, the sentiments are positive and dramatically different than Goldman's report from November 2008 where IT spending was in a total death spiral. What a difference a year makes.
A few key points from the report:
- With recessionary buying cycle clearly through the trough, the remaining question centers on the pace of recovery for 2010.
- Infrastructure, application development, and systems integration remain top spending areas, especially as CIOs start to consider newer technologies such as virtualization and cloud computing.
- There is pent-up demand in hardware most notable, positive for storage and server/PC refresh.
- The appetite for offshore services appears to be below trend at current levels.
- HP, NetApp, CommVault, Red Hat, Riverbed, and Salesforce.com are notable names showing positive upward momentum in our latest survey.
In software, Red Hat and Salesforce.com showed strengthened results with VMware and Citrix remaining top of mind, which Goldman believes to be a good indication of internal and external cloud deployments gaining momentum.
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Arguments for and against the cloud are starting to calm down a bit, and most people agree that the cloud is somewhere in your future, if not in your present.
Instead of arguing semantics of application development and delivery, the discussion should really be around how to deal with a mix of on-premise and on-demand, a combination that is unlikely to change in the foreseeable future.
I spent the first half of this week in Las Vegas at a nontech trade show, and missed both VMworld and the Red Hat Summit. However, watching and reading from afar, I noticed two major themes in discussion around both cloud computing and virtualization: cloud interoperability and the lack of application management tools.
Cloud interoperability--the ability to abstract the programmatic differences from one cloud to another--is a key to adoption. If we assume that some percentage of private compute clouds will be based on virtualization, and we know that a large percentage of public clouds already are, then the ability to move among virtual machines is a critical function in this regard.
Red Hat is obviously taking interoperability seriously, with Thursday's launch of Deltacloud, a new open-source project "designed to enable an ecosystem of developers, tools, scripts, and applications that can interoperate across the public and private clouds."
Let's remember that right now, there is a difference between managing applications that are in your own data center and managing those at a cloud provider. Missing here are new management tools that cross borders in a seamless manner and don't discriminate against different hypervisors or application platforms.
Cloud application management isn't so much about workloads as it is the ability to move applications and associated data from cloud to cloud and system to system with no interference. This new realm of internal-external systems management opens up a world of opportunities but faces some significant speed bumps.
I noted last week that Amazon's announcement of virtual private clouds presents a challenge for many cloud-oriented start-ups. The issue is that Amazon calls the shots on the cloud and VMware on virtualization. And while both companies have done fairly well by their users (let's say better than we would expect from Microsoft or Oracle), innovation is stuck within their respective ways of doing things.
Regardless, there is a cloud management opportunity, with open-source projects like Puppet, as well as Red Hat's new release of Network Satellite 5.3. While neither is cloud-specific, applications that support large-scale infrastructure management are perhaps the first step in harnessing the computing power inside and attached to your data center.
Arguments for and against the cloud are starting to calm down a bit--and most agree that the cloud is somewhere in your future. The discussion should really be around how to deal with a mix of on-premise and on-demand, a combination that is unlikely to change in the foreseeable future.
Follow me on Twitter @daveofdoom.
The Linux Foundation recently released an updated study of Linux development statistics that reveals interesting statistics relating to who actually writes the kernel that allows others to build on top.
More than 70 percent of total kernel contributions come from developers working at large companies including obvious participants like Red Hat, IBM, Novell, and Intel as well as other less obvious small companies such as Parallels.
- Red Hat: 12.3%
- IBM: 7.6%
- Novell: 7.6%
- Intel: 5.3%
- Independent consultant: 2.5%
- Oracle: 2.4%
- Linux Foundation: 1.6%
- SGI 1.6%
- Parallels 1.3%
- Renesas Technology: 1.3%
- Academia: 1.2%
- Fujitsu: 1.1%
- MontaVista: 1.1%
- MIPS Technologies: 1.1%
- Analog Devices: 1.0%
- HP: 1.0%
Another interesting fact is the rate of development and constant refactoring of the kernel code. An average of 10,923 lines of code are added with an average of 5,547 lines removed every day, ensuring that the code is high quality and relevant for the most important implementations of the kernel.
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Despite all the hype associated with a never-ending Linux versus Windows battle, it's Unix, and specifically Sun Solaris that has felt the most pressure in the server operating system landscape.
While I doubt that Solaris will completely languish long-term under Oracle's watchful eye (in fact, it may well flourish), there is little question that Sun's ups and downs in the recent past have made customers look to alternatives.
At a recent IBM analyst meeting, Inna Kuznetsova, director, Linux strategy, told attendees that the Linux business is strong and growing.
- In the past three years, over 1,800 customers have migrated from competitive platforms to IBM, and nearly 50 percent of those IBM wins included Linux.
- IBM doubled their number of Sun customer wins between first quarter and second quarter 2009.
Much of the growth comes from IBM's close relationship with Red Hat, which allows IBM to play all sides of the fence in terms of OS suggestions to their customers.
This comes at a time when Novell has decided to invest further into OpenSUSE, adding full-time staff to the project team. As The Register noted, it's a bit shocking that it's taken this long for Novell to properly fund the effort, but it seems like an obvious time to take advantage of the market opportunity as Solaris and OpenSolaris are potentially on the ropes.
Follow me on Twitter @daveofdoom.
(Credit:
Red Hat)
Red Hat recently posted an interesting case study on how retail giant The Gap moved from a Unix and Windows based e-commerce infrastructure to one based on Red Hat Linux with support for Microsoft's Active Directory via LikeWise, a product that improves the management and interoperability of Windows and Linux systems.
According to the case study, "Gap Inc. Direct needed to revamp its entire end-to-end business technology platform--from the customer-facing front-end system, to the back-end order management application, to the business tools that supported the company's long-term growth strategy."
Platform growth and adding new features were key to the underlying infrastructure and the ability to integrate a heterogeneous environment was the other major hurdle that needed to be addressed. Positive ROI was an added bonus.
"The ROI (return on investment) of the Red Hat-Likewise solution is hundreds of thousands of dollars annually once you add the hardware and software savings to the reduced costs of manually auditing our systems. Likewise Enterprise's compliance enhancements allowed us to expand our use of Red Hat Enterprise Linux," said Jeff Arcuri, senior manager, IT for Gap Inc. Direct.
I'm sure there are many Red Hat Linux wins to be touted, just as Microsoft would happily tell you about their customer successes. What's interesting here is that Red Hat is actively telling a story that includes a diverse environment and not pushing a myopic, single vendor view of the enterprise.
Follow me on Twitter @daveofdoom.
Red Hat announced a new JBoss Open Choice program today that gives developers the ability to employ and deploy more Java frameworks and applications than had previously been available.
With JBoss Open Choice, Red Hat says it "plans to provide application developers with the ability to choose the framework, language and programming technologies that best fit the application requirements they are trying to achieve without sacrificing reliability, availability, scalability or manageability across their projects."
Basically, this means that JBoss will interoperate more readily with popular programming models such as Spring, Seam, Struts, and Google Web Toolkit, all of which can be viewed as competitors to the JBoss app server.
While not earth-shaking, this announcement provides insight into the Java application server market--which is being supplanted in many situations by simple programming models. It also shows that a strategy of open-ness and integration, even with competitive products, is an inevitable path.
Follow me on Twitter @daveofdoom.
After more than five years participating in the open-source realm, I always find it interesting that we continue to ask the same questions about open-source companies versus projects, and consistently mix them up. Admittedly, we haven't always made it easy on ourselves with confusing licenses, varied revenue models, and reliance on a free product to manifest itself as a revenue stream.
Open source is a development and distribution strategy that software developers use to get their products into the hands of users. It's not a business model.
The business model is found in the additional value that developers (which are often vendors) put on top of the software in the form of support, additional features, etc. These provide revenue opportunities, which in turn creates a business.
An open-source "company" is the the strategic implementation of monetization efforts around an open-source software product.
... Read moreCisco Systems has always been a highly aggressive acquisition machine, and today's announcement that the company has acquired Jabber makes sense in light of the push toward enterprise collaboration that started with the acquisition of WebEx.
While Cisco made no mention of the fact that Jabber was largely open source, I would assume that's because open source is "accepted" at Cisco. A number of products contain open-source components, and despite some GPL issues in the past, Cisco has contributed to open-source projects.
So, is Cisco the company to consolidate open source, or to just consolidate software in general? I would be willing to wager yes, provided it can generate even slightly more revenue from the assets it acquires.
Typically, Cisco looks for acquisitions that would bring in $300 million or more of revenue (anything less isn't very material to the bottom line) and open-source companies are nowhere near that. However, with Cisco's massive brand power and ability to put pretty much anything into a box, they could easily monetize all kinds of open-source projects.
Several of the leading open-source companies fit right into the Cisco business: Hyperic (systems management, including virtualization), Funambol (mobile) and don't forget the world of SOA and system infrastructure, including XML acceleration.
Minus a few product like databases and CRM there are few open-source products that Cisco couldn't make money from. At the moment there isn't much appetite for open-source acquisitions at the obvious places (Sun, Red Hat, IBM, Oracle). Maybe Cisco will jump ahead of the traditional software players and consolidate the open-source ecosystem.
VMware's announcement Monday of its new VCloud initiative is an early attempt to offer a more "enterprise-class" cloud offering. Considering that most cloud offerings are based on virtual machine images, it's a smart (and obvious) move by VMware to stake its claim.
To date, the majority of cloud offerings have lacked certain enterprise fundamentals--things like security models, licensing agreements, and so on that are requirements, not accessories. By aligning with hosting providers like Rackspace, VMware starts to offer show some of the enterprise type of attributes we'll eventually see from companies like IBM and Hewlett-Packard.
But why has VMware taken so long to embrace the cloud? And what will happen to all of the providers who are VMware customers who now find themselves competing directly with the source?
Things should start to get interesting for Xen and XVM. I only have cursory knowledge of Red Hat's Qumranet acquisition, but there is a clear opportunity for basically everyone who is not VMware to go after the providers that are currently locked in.
Oh, and don't forget Microsoft, which has a massive network of value-added resellers and hosting providers locked in to Windows and who will undoubtedly adopt Hyper-V.
Overall this move is beneficial for the whole virtualization market, but it's hard to see how VMware can maintain its dominant position if cloud providers see them as a threat instead of a partner or technology supplier.
As Suse Linux fades further from any relevance outside of Microsoft, and Red Hat and Sun make huge strides in virtualization, Novell plans to offer support for Suse running on Windows. Is there meaning here or is Novell just becoming more of a Microsoft puppet?
Microsoft and Novell announced that they will jointly support a virtualization scenario in which Suse Linux is running as a guest operating system under Microsoft's Hyper-V virtualization.
I can't see any production scenario where you would possibly want to go through all those layers of abstraction and performance degradation. As one commenter stated "Linux running in a VM on top of a MS host platform..because everyone wants to put their Corvette on top of a skateboard."
But, Sun also announced a partnership with Microsoft on virtualization, which leaves Red Hat and VMware without an MS relationship. Dare to dream that all the vendors will figure out a way to make virtualization consumable and portable across operating systems?
Now that Microsoft's Hyper-V is free it will be widely adopted. Which means that Windows won't be displaced at companies that are going down a virtualized path. Portability and interop have been an after-thought for all of the vendors. It's about time they started making things work together.
