CIA endorses cloud computing, but only internally

WASHINGTON - One of the U.S. government's strongest advocates of cloud computing is also one of its most secretive operations: the Central Intelligence Agency. Jill Tummler Singer, the CIA's deputy CIO, says that she sees enormous benefits to a cloud approach. But the CIA has adopted cloud computing in a big way, and the agency believes that the cloud approach makes IT environments more flexible and secure.

And while the CIA has been moving steadily to build a cloud-friendly infrastructure - it has adopted virtualization, among other things - cloud computing is still a relatively new idea among federal agencies. "Cloud computing as a term really didn't hit our vocabulary until a year ago," said Singer. For example, a cloud approach could bolster security , in part, because it entails the use of a standards-based environment that reduces complexity and allows faster deployment of patches. "By keeping the cloud inside your firewalls, you can focus your strongest intrusion-detection and -prevention sensors on your perimeter, thus gaining significant advantage over the most common attack vector, the Internet," said Singer. But now that the CIA is building an internal cloud, Singer sees numerous benefits. Moreover, everything in a cloud environment is built on common approaches. But there are limits.

That includes security, meaning there's a "consistent approach to assuring the identity, the access and the audit of individuals and systems," said Singer. The agency isn't using a Google model and "striking" data across all its servers; instead, data is kept in private enclaves protected by encryption, security and audits. And it has virtualized storage, protecting itself "against a physical intruder that might be intent on taking your server or your equipment out of the data center," said Singer. The CIA uses mostly Web-based applications and thin clients , reducing the need to administer and secure individual workstations. Speaking at Sys-Con Media's GovIT Expo conference today, Singer not only provided a rare glimpse into the IT approaches used by the agency, but also talked about one of its greatest challenges: the cultural change cloud environments bring to IT. A move to cloud environments "does engender and produce very real human fear that 'I'm going to lose my job,'" she said. Barry Lynn, the chairman and CEO of cloud computing provider 3tera Inc. in Aliso Viejo, Calif., said a typical environment may have one systems administrator for every 75 physical servers.

In practice, highly virtualized environments reduce the need for hardware administration and, consequently, for system administrators. In contrast, a cloud-based environment may have just one administrator for every 500 servers or more. Federal CIO Vivek Kundra is encouraging agencies to adopt cloud computing, and he recently opened an online apps store that enables federal agencies to buy cloud-based services from Google, Salesforce.com and other vendors. The CIA has "seen a significant amount of pushback, slow-rolling [and] big-process engineering efforts to try to build another human-intensive process on top of enterprise cloud computing," said Singer. "It will take us a good long while to break that." One thing the agency will do to address resistance will be to base contract competitions on performance, not head count, "where it's to [a service provider's] benefit to do the work with fewer bodies and make more profit for their company," said Singer. That's something the CIA will not do; its data will remain within the agency's firewalls, said Singer.

Obstacles to the adoption of cloud computing, including concerns about security and loss of data control, may slow momentum, but "I think we'll see broader adoption and higher spending after the administration makes progress in some of the pilot programs it has planned," said Peterson. Government market research firm Input has revised its forecast for federal cloud-related spending upward; it now expects the government's cloud expenditures to grow from $363 million this year to $1.2 billion by 2014. "I think this is probably a conservative estimate, considering the push from the administration," said Deniece Peterson, an analyst at Reston, Va.-based Input. Singer said the CIA's IT department was moving in the direction of cloud computing, even if it wasn't using that term, when it widely deployed virtualization technology. Abstracting the operating system and software from the hardware "is the foundation of the cloud," Singer said. "We were headed to an enterprise cloud all along."

Wal-Mart to apply green ratings to PCs, electronics

Wal-Mart will apply green ratings across electronics products in the future, which could help consumers select environmentally friendly products, the company said Thursday. This will add transparency to the quality and environmental friendliness of products, and provide customers with product information that wasn't previously offered. Products like PCs and consumer electronics that the retailer carries will contain grades about sustainability in the product information, said Kory Lundberg, a Wal-Mart spokesperson. A final decision on how the green ratings will be delivered hasn't been made, but it could be in the form of a numeric score, color code or another label type, Wal-Mart said in a fact sheet published on its Web site on Thursday.

The ratings will be applied to PCs and other consumer electronics, and the retailer is currently in the process of researching ways of tagging those products. The green tags may start going on products in five years, Lundberg said. Wal-Mart expects all of its 100,000 suppliers, including PC and consumer electronics makers, to comply with the retailer's new goal, Lundberg said. HP and Apple did not respond to requests for comment, but a Dell spokeswoman said the company is supporting Wal-Mart's efforts by providing feedback as the retailer develops the rating system. "Wal-Mart is a great partner, and they're being very collaborative with partners as they develop this rating system," said Michelle Mosmeyer, a Dell spokeswoman, in an e-mail. PC makers including Dell, Hewlett-Packard and Apple sell products through Wal-Mart. Wal-Mart aims to take a comprehensive look at the products - from the raw material until end-of-life disposal options, based on which it will rate products.

The retailer is first sending questionnaires to its suppliers worldwide to answer questions about the suppliers' commitment to the environment, manufacturing efficiency and efforts to reduce greenhouse gas emissions. It is taking a three-step approach to rate sustainability, which could ultimately lead to higher quality and cheaper products for consumers. The answers will be collectively researched by Wal-Mart in conjunction with partners, universities and nonprofit organizations, after which standards for the ratings will be set and applied. Wal-Mart gets its way as the world's largest retailer, so suppliers are likely to heed its "edict," as Kanellos called it, regarding green ratings. "If you want to make money in retail, you have to be in Wal-Mart," Kanellos said. Wal-Mart's green ratings could put pressure on PC and consumer electronics makers to ramp up environmental efforts, said Michael Kanellos, senior analyst and editor-in-chief at GreenTech Media.

Governments worldwide are also putting pressure on suppliers to make products that are sustainable, so Wal-Mart's request may provide extra impetus for suppliers to jump-start efforts to incorporate green business practices, Kanellos said. PC makers are already stepping up green efforts by offering free recycling and making PCs that draw less power. It may involve the cost of hiring consultants in the short term, but prove beneficial in the long term. Nonprofits are also putting pressure on PC makers to reduce hazardous substances in hardware. The ratings will matter more in the area of appliances, especially energy-efficient light fixtures. Green ratings may not weigh on PC or TV buyers as price and brand matter more, Kanellos said.

In homes, lighting accounts for more of an electricity bill than electronics and PCs put together, Kanellos said.

Start-up claims its DVDs last 1,000 years

If you really, really need to make sure those precious photos of yours last virtually forever - or at least longer than the average two- to five-year lifespan of consumer-grade DVDs, then start-up Cranberry LLC has the answer for you: a DVD that literally lasts a millennium. DiamonDiscs contain no dye layers, adhesive layers or reflective materials that could deteriorate. Cranberry's DiamonDisc product holds a standard 4.7GB of data, which roughly amounts to 2,000 photos, or 1,200 songs, or three hours of video, but the media is unharmed by heat as high as 176 degrees Fahrenheit, ultraviolet rays or normal material deterioration, according to the company. While only future generations may be able to prove DiamonDisc can last 1,000 years - never mind that DVD players will probably have been long forgotten by then - Cranberry claims its technology has been proved by researchers using the ECMA-379 temperature and humidity testing standards to outlast the durability of competitors that claim a 300-year shelf life.

However, instead of a silver or gold reflective surface, its disc is transparent, with no reflective layer. The Ferndale, Wash.-based company this week announced their product, which it says uses the same format as standard DVDs to store data. According to the company, unlike standard recordable DVDs, which use a 650 nanometer wavelength laser diode to etch a small pit into a disc's media surface, the DiamonDisc uses a higher-intensity laser to more deeply etch data into the "diamond-like" surface of its synthetic stone disc. The company is in talks with the U.S. government and the military, which are looking for archival media. "For the military, there's no heat, light, magnetic waves or environmental abuse that will have an impact on these discs," said Joe Beaulaurier, Cranberry's chief marketing officer. The DiamonDisc technology was invented by researchers at Brigham Young University and was first brought to market by Springville, Utah, startup Millenniata . While Millenniata performs the R&D on the product, Cranberry does the sales and marketing.

The company is also working on developing a Blu-ray version of their DVD product, Beaulaurier said. Cranberry performs the data-write for customers on the DiamonDisc they purchase. Photos, videos or other content that consumers want to store can be uploaded directly to Cranberry's Web site or mailed to the company. When compared to other consumer archive DVDs, such as Kodak Gold Preservation Write-Once DVD-R , which costs around $6, DiamonDisc carries a premium . A single DiamonDisc costs $34.95, two or more individual discs go for $29.95, and a five-pack is $149.75. Beaulaurier said prospective customers should factor in not only the longevity of the product, but the services provided. You burn a DVD once and it eliminates costs and energy down the road." Of course, the company is also happy to sell you its burner, but that will set you back $4,995. But, for $5,000 you get 150 DiamonDiscs to burn away until to heart's content.

Cranberry checks the burn of each disc to ensure the quality of the finished product. "So [the consumer doesn't] need to monitor the burn process and make sure it took," he said. "This is also very green technology. The burner plugs into any standard USB port and uses any standard DVD burning software, Beaulaurier said.

FAQ: What the Dell-Perot merger means for the IT industry

Dell on Monday announced a definitive agreement to purchase Perot Systems, the IT services company founded by Ross Perot in 1988. The acquisition, expected to close between November and January, greatly expands Dell's reach into the IT services and support market, particularly in government and healthcare sectors. Dell is paying $3.9 billion for Perot Systems, a 68% premium over Perot's actual stock value. Here's a look at some of the key questions related to the deal.

Why does Dell think Perot is worth such a high price? The 2007 hiring of Stephen Schuckenbrock, former COO at Electronic Data Systems, was one of several moves signaling Dell's intent to move further into the services industry. Buying Perot is part of Dell's plan to expand its footprint in the IT services market, which may be a necessity in a time when hardware sales are falling. But the Perot deal is the strongest step yet in this regard. "Over the last couple of years they have more or less created a platform for a true entrance into the service market," says Forrester analyst Paul Roehrig. "They're really over-exposed on the hardware side. "In a lot of ways, this is a natural extension of the trajectory they have been on." (Read what analysts have to say about the acquisition.) The Obama administration's attempt to expand federally funded healthcare coverage is another consideration. By purchasing Perot, Dell immediately expands its penetration into both markets, which are likely to grow, Roehrig says. "If you were betting a couple billion dollars, what industry would you bet on?" he says. "In North America and globally there's a lot of technology enablement that has to happen in those spaces." Dell officials said they are also seeing demand from customers who want to virtualize their data centers and build private cloud networks, and buying Perot will significantly bolster Dell's ability to serve those customers. Nearly half (48%) of Perot's revenue comes from the healthcare industry, and 25% of Perot's revenue comes from the government sector.

How will Perot be operated within Dell? Dell said it will combine its own services organization with Perot's. The operation will be run out of Plano, Tex., Perot's corporate headquarters, and will be led by Peter Altabef, Perot's CEO. Dell has pulled in $5.1 billion in services revenue over the last year, while Perot did $2.6 billion in business, so the combined services organization has annual revenue of nearly $8 billion. Perot Systems will become the focus of Dell's services business. What will happen to Perot's employees and leadership team? Dell officials say they expect to cut $300 million in costs out of the two companies over the next two years.

As with any acquisition, there will likely be layoffs to reduce overlap between the two companies. Top executives are staying put, with Dell saying it has reached "long-term retention agreements" with both Altobef and "critical members of his senior leadership team." Perot has 23,000 employees. The 79-year-old Perot has served as chairman emeritus of the company's board since September 2004. Perot, a former presidential candidate and a major figure in the IT services industry for nearly five decades, is also the founder of Electronic Data Systems, which was purchased by HP. (Slideshow: Techies turned politicians)  Perot's son, Ross Perot, Jr., is a former CEO of Perot Systems and is now chairman of the Perot board of directors. Is Ross Perot still involved in Perot Systems? Perot, Jr. will be considered for appointment to the Dell board after the acquisition closes, according to Dell. The acquisition "definitely makes a statement," says Gartner analyst Dane Anderson, and gives Dell new expertise in the healthcare and government markets.

Should competitors in the IT services industry be worried by the Dell-Perot combination? But the merger is not a guarantee of success. "Whether they suddenly become the next big competitor to IBM, Accenture, or HP EDS, that remains to be seen," he says. HP, having purchased EDS, does $40 billion in services revenue, Anderson says. Size-wise, Dell's services organization still pales in comparison to some competitors. IBM is even bigger with $57 billion in services revenue. Yes, but which company might get acquired next is anyone's guess, Anderson says.

With EDS and Perot now off the block, are there any other IT services firms that might be acquired? Companies like CSC and Accenture could be takeover targets, but the same could be said of numerous services vendors. "The reality is, I'm not sure anyone is out of play," Anderson says. "The issue is who has got the intestinal fortitude and cash to make things happen." HP and IBM obviously have the cash. You really have to find a way to create volume in those smaller deal sizes." Can we expect Dell to make more acquisitions? But HP already acquired EDS, and IBM has such a large services organization that further growth will be difficult to achieve. "I don't think IBM will acquire a big services company, but it's not necessarily ruled out," Anderson says. "IBM already has $57 billion, $58 billion in services revenue, so how do you grow that effectively, especially when there are many fewer billion-dollar plus deals out there? Yes. Should Dell and Perot customers have any concerns about the merger?

Dell was able to expand its ISCSI storage business last year by purchasing EqualLogic and has indicated a willingness to continue expansion through acquisition. "We're looking for more things like EqualLogic which build on strong IP and allow us to extend the significant customer reach we have," Michael Dell, chairman and CEO of the company, said in a conference call Monday. Customers should always examine the potential ramifications of an acquisition, analysts say. But on balance, customers have reason to expect that the Dell-Perot combination will provide new opportunities or at least not be harmful. "With these kinds of integrations, clients get nervous," Roehrig says. One question is whether Dell will pressure clients to use Dell hardware rather than servers and storage from Sun, HP or others. But "customers shouldn't panic about this.

In fact, they should look at it as an opportunity to see if it remains a good fit and see if they can generate additional value for their own firms based on [the combination of Dell and Perot]." Customers of service companies that have close partnerships with Dell's hardware division may have reason to be nervous, however. "If my service provider is really relying on Dell, that's something I'd worry about," Roehrig says.

Microsoft: Word legal foe paints cockeyed tale

Microsoft Corp. called the claim by Canadian developer i4i Inc. that it plotted to drive the company out of business "distorted," and "a breathless tale" that was not supported by the evidence, according to a court documents. But Microsoft also pressed the appeals court for a complete reversal, saying that decisions made by the Texas lower court led "to erroneous verdicts of infringement and validity, and grossly unsupportable damages." Microsoft's response brief saved its most blistering words for i4i, the Toronto-based company that in 2007 said Microsoft illegally used its patented technology to add XML editing, and "custom" XML features, to Word 2003, and later, to Word 2007. "Having little to rebut Microsoft's arguments on the merits, i4i devotes the majority of its brief to a distorted presentation of irrelevant 'evidence'," read Microsoft's brief. "i4i labors mightily to paint Microsoft pejoratively, portraying it as a once-close 'business partner' that supposedly stabbed i4i in the back and 'usurped' i4i's patented invention." Last week, i4i claimed Microsoft marketed the former's XML software to potential customers at the same time it planned to make that software obsolete by building similar features into Microsoft Word using its technology. At the least, Microsoft told the U.S. Court of Appeals for the Federal District, it deserves a new trial. "At minimum, a new trial is warranted," the company said in a reply brief filed Monday. Within days of a 2001 meeting between representatives of the two companies, according to an internal e-mail, someone at Microsoft said, "[I]f we do the work properly, there won't be a need for their [i4i's] product," i4i said as it linked the two events.

Microsoft's reply was the latest round in a patent infringement case that started two years ago when i4i accused the software maker of using its technology in Microsoft's popular Word software. That's nothing but a tall tale, Microsoft said. "Unfortunately for i4i, the truth is both comparatively mundane and innocent: After a handful of unfruitful meetings, i4i and Microsoft went their separate ways and Microsoft later released the custom XML functionality for Word that it had told i4i it was developing," the company's lawyers said in the brief. Last May, a Texas jury said Microsoft was guilty of patent infringement, and awarded i4i $200 million in damages. The injunction, said Microsoft, meant it might have to pull Word, and the Office 2003 and Office 2007 suites, off the market for months. In August, U.S. District Court Judge Leonard Davis added more than $90 million in additional damages and interest to Microsoft's bill, then issued an injunction that would have prevented it from selling Word 2003 and Word 2007 as of Oct. 10. Microsoft quickly won a fast-track appeal after warning the three appellate judges that the injunction would create sales chaos for the company and its partners, including Hewlett-Packard Co. and Dell Inc., the world's two largest computer makers.

Two weeks ago, the court of appeals suspended the injunction while it hears and decides Microsoft's appeal. But the company's lawyers also disputed claims made by i4i in the brief it submitted Sept. 8, particularly the conclusion that Microsoft had schemed to tout i4i's software on the one hand, and use its technology in Word on the other. "Most of the evidence demonstrates only that i4i attended certain meetings with Microsoft," the company said. "There is absolutely no evidence in this record from which a juror reasonably could infer that Microsoft had knowledge of the contents of the [i4i] patent." Nor should the injunction against selling current versions of Word stand, said Microsoft. "Even assuming that i4i had shown both competition and harm tied to that competition, an injunction is inappropriate because i4i has not shown that whatever harm it has suffered is irreparable and cannot be remedied by money damages," Microsoft stated. "Today's reply brief is an opportunity to reinforce our key assertions in this case," said Microsoft spokesman Kevin Kutz on Monday. "We believe the district court erred in its interpretation and application of the law in this case [and] we look forward to the September 23 hearing before the U.S. Court of Appeals." Kutz's reference was to the oral hearing scheduled for next week, when both parties will present their arguments before the panel of three judges. i4i was unavailable for comment on Microsoft's brief. Most of Microsoft's brief was a recitation of points made last month in its request for an appeal, when it lambasted Davis for his handling of the case and called the verdict a "miscarriage of justice." Microsoft again hit on some of the same points, criticizing Davis' rulings during the trial and arguing that i4i's patent was obvious, and thus not protected.

Former Microsoft open-source chief joins cloud startup

Former Microsoft open-source chief Sam Ramji has joined cloud-computing startup Sonoa Systems, taking over product strategy and business development at the Santa Clara, California-based company. Last month he also took a position as interim president of the CodePlex Foundation, an open-source group formed out of his work at Microsoft. In his last job at Microsoft, Ramji was responsible for fostering more interoperability and collaboration with the open-source community as head of its Platform Strategy Group.

However, when the foundation and Ramji's role in it were unveiled, he said he was leaving Microsoft Sept. 25 to join a cloud-computing startup, though he did not specify which one. It also provides visibility, management and governance to make cloud services and the APIs (application programming interfaces) that connect to them as robust, policy-compliant and scalable as on-premise applications, according to the company's Web site. Sonoa offers technology called ServiceNet that helps companies manage their cloud-based services by setting policies for them, acting as a proxy server between service providers and the consumers of those services. In addition to ServiceNet, Sonoa also has released an analytics tool for API developers called Apigee as a free way to monitor and manage how their services are being accessed in the cloud. Sonoa's customers include MTV and Guardian Insurance.

In an e-mail, a company spokesman compared the tool to Google Analytics. Sonoa's CEO is a former BEA Systems executive, Chet Kapoor. The foundation also was formed by Microsoft to inspire other proprietary software companies to participate more in the open-source community, though eventually it is meant to be run as an independent group. Microsoft has not named anyone to take Ramji's role but said when the CodePlex Foundation was unveiled that the Platform Strategy Group will remain intact and will continue to promote collaboration with and participation in open-source projects.