Category: cloud computing

Software’s mini revolutions

How the CIA are driving a business revolution

The CIA’s ‘revolutionary’ announcement of their changes to the way they buy software shows just how the relationship between software vendors and businesses is evolving as cloud computing methods become widely adopted.

For businesses it means more flexibility and efficiency while for software companies the new marketplace is requiring them to be more flexible and responsive. Those changes will challenge some vendors.

What’s driving these changes is ‘big data’ – the explosion of data being collected and stored – and the move to cloud based computer systems.

The CIA, like most businesses or home computer users, used to buy software by the license. For small businesses and homes this was by buying a box of disks from the local computer shop while for big organisations there were volume licenses where they bought the right to use tens of thousands of copies of the one program.

Box licensing was never satisfactory, it was difficult for users to know what exactly they bought and customers were always a year or more behind the trend.

Keeping up with Technology

One of the big pluses with cloud based systems is you don’t have to wait a year or two for a new release incorporating the latest technology. It’s rolled out as it becomes available without any work by the user.

With the old box software model you had to wait for the latest release and even then the features you were waiting for could still be missing.

As technology is moving fast online, organisations like the CIA can’t afford to wait.

Pay as you go

Another problem with the old software model was that big and small organisations found they were buying things they didn’t need.

This is particularly true with licensing agreements where a company might have 100,000 licenses when they only needed 15,000.

Pay as you go billing, which is the standard model for cloud computing services, means a lot more flexibility and a much more efficient way of managing software spend.

Closer relationships

In his speech describing the changes, the CIA’s top technology officer Ira Hunt said the agency is prepared to give vendors a “peek under the covers”.

This sort of closer relationship between suppliers and customers is one of the biggest attractions of the cloud computing model. It means both users and suppliers are more closely aligned.

For software vendors that close alignment is where the opportunities lie; the old days of flogging fat, expensive licenses are over and the successful sellers of computer programs will be quicker and nimbler.

The CIA has been accused of formenting many revolutions around the world, this is one most business owners should be happy about them leading.

Knowledge and power

Can we use the data revolution effectively and well?

In the 16th Century English courtier Sir Francis Bacon declared “Knowledge is Power”, something certainly true during the conspiracy prone reign of Elizabeth I.

Today the data available about ourselves and our communities is exploding along with the computer power to process that information to turn it into knowledge.

We see that knowledge being used in interesting ways – US shopping chain Target recently described how they used data mining to determine, with 87% accuracy, to figure out if a shopper is pregnant.

That 87% is important, it says the algorithm isn’t perfect and bombarding a false positive with baby wear advertising could prove embarrassing, or in some families and societies even fatal.

A good example of data misuse are the two unfortunate Brummies (alright, one’s from Coventry) who were deported from the US for tweeting they were “going to destroy America and dig up Marilyn Monroe”

For the US immigration and homeland security agents, they ready the jokey tweets by the Birmingham bar manager through their own filter and came to the wrong conclusion, although it’s likely their performance indicators rewarded them for doing this.
This is the Achilles heel in big data – used selectively, information can be used to confirm our own prejudices, ideologies and biases.
In 2003 we saw this in the run up to the US invasion of Iraq with cherry picking of information used to build the false case that the ruling regime had weapons of mass destruction that could attack Europe in 45 minutes.
For businesses, we can be sure data showing the CEO is wrong or the big advisory firm has made the wrong recommendations will be overlooked in most cases.

Despite the Pollyanna view of a world of transparency and openness driven by social media and online publishing tools, the information is asymmetric; governments and big business know more about individuals or those without power than the other way round.

In a world where politicians, business people and journalists trade on their insider knowledge rather than competing in the open, free market we have to understand that filtering this data is essential to retaining  powers and privileges.

Usually when the data threatens the existing power structures it is repressed in the same way a dissenting taxpayer, citizen, employee or shareholder is discredited and isolated.

At present there’s lots of data threatening existing commercial duopolies, political parties and cosy ways of doing business.

The fact many of those in power don’t want to see what their own systems are telling them is where the real opportunities lie.

Entrepreneurs, community groups and activists have access to much of this data being ignored by incumbents, it will be interesting to see how it’s used.

The Internet Kool-Aide Machine

Don’t buy the hype when you read about the hot new product

Every few months, the web lights up with hype about the latest technology or website. For a few weeks, every tech conversation mentions this hot new product.

Almost always this hype is driven by the company in question duchessing a few key “opinion leaders” in the tech, social media or other circles. These folk start writing up this product and, if they are lucky, the stories get picked up by the broader media and the product becomes “hot.”

The aim is to find the greater fools, for the investors and founders of these business they want to cash out by selling the operation to a bigger entity.

When you read the hype about the latest user generated, online sharing social media service that’s growing at a remarkable rate be aware you’re actually seeing a pitch to a big company being framed along the lines that “you can’t afford to miss out.”

By all means sign up to the service to have a look but don’t buy the hype and remember you’re not the customer – the gullible big business manager looking for the next big thing is.

Image courtesy of Blary54 through sxh.hu

The death of sport

Sports groups have always felt threatened by new technology.

In the 1960s, sports administrators refused TV replays of games because it would affect their revenue.

Sports broadcasting rights were invented.

In the 1970s, sports administrators resisted live TV coverage of games because it would affect their revenue.

Sports broadcasting rights became lucrative.

In the 1980s, sports administrators claimed TV viewers using video recorders would affect their revenue.

Sports broadcasting rights became more lucrative.

In the 1990s, sports administrators worried cable and satellite TV would affect their revenue.

Sports broadcasting rights soared.

In the 2000s, sports administrators warned the Internet would affect their revenue.

Sports broadcasting rights soared further.

In 2012, sports administrators shout that cloud computing services will affect their revenue…….

Photo courtesy of mzacha on SXC.hu

Confidence in the cloud

Cloud computing services need open data to succeed, vendor lock in will stunt the growth of online markets.

Will the cloud ‘hit the wall’ without good integration? asks Ross Mason in GigaOm – that question is a good one.

In many ways we’re no better than we were twenty years ago with some business – particularly big corporations like banks or telcos – plugging the same information into four or five different databases or software packages with all the subsequent mistakes, lost data and double handling.

The old business model for software companies was to lock customers into a proprietary format and and make it as difficult as possible to move the information to a competitor. Those days are now over.

Business – and increasingly consumers – expect their data to open, accessible and easily moved between different programs, if somebody wants to connect their customer database to their accounting package, or project management software to their word processor they don’t see why they shouldn’t be able to.

Confidence is also the greatest key to success in cloud computing; customers need to know that if a service fails or they decide to take their business elsewhere then their data will be able to move with them. The prospect of losing years of customer records or accounting records is untenable.

A few years back the early cloud based accounting programs tried to tie people onto their platforms by making data almost impossible to retrieve, those businesses failed badly.

One of the promises of business technology is that it will increase productivity and reduce errors; sharing one set of data across the organisation goes a long way towards delivering on that promise.

Today software has to compete on features, not vendor lock-in. Trying to trap customers into using your products is an old business model that no longer works.

Megaupload, cloud computing and trust

Has Megaupload damage cloud computing’s reputation.

The closing down of file sharing site Megaupload has raised the question of trust in the cloud; “It has made cloud services look that much less legitimate” one daily paper quotes futurist Mark Pesce as saying.

For those of us advocating cloud services and advising businesses on using them, this trust issue isn’t anything new. All of us have to be careful about who we trust with our data and Kim Dotcom, the founder of Megaupload, doesn’t come to mind as someone who would stand a great deal of due diligence.

Like investments – another area where trust is essential – we have to spread our risk around. Saving copies of data to your own computer and making sure the information you save on the cloud is in a form easily read by different systems is important, as is not trusting any one service for critical services.

The taking down of Megaupload also raises other questions – as privacy advocate Lauren Weinstein points out;

“But the Megaupload case is more akin to the government seizing every safe deposit box in a bank because the bank owners (and possibly some percentage of the safe deposit box users) were simply accused — not yet convicted — of engaging in a crime.

What of the little old lady with her life savings in her box, or the person who needs to access important documents, all legitimate, all honest, no crimes of any sort involved.

They are — to use the vernacular — screwed.”

It’s this over-reaction by government agencies which is the real concern and the co-operation of large corporations in shutting down services – as we saw with the shutting down of Wikileaks – probably does more to damage trust in all online services, not just cloud computing.

Cloud services are no less trustworthy than our computer systems, all of which can breakdown, catch viruses or be compromised by staff making mistakes. We have to understand that all technologies carry some degree of risk.

For businesses and home users, we need to spread the risks around – don’t just trust one service or technology to deliver your products or services and have a fall back plan if things go wrong.

Tightening the screws

Cloud computing changes business IT economics, but it isn’t a magic pill.

Google had a big boost this week with Spanish bank BBVA announcing its 110,000 staff will switch to use the cloud based productivity software.

This wouldn’t be good news for Microsoft as their struggle to retain their almost monopoly position in corporate desktop applications and will undoubtedly mean reducing licensing fees and accepting tighter margins on their products.

BBVA’s move is interesting on a number of fronts although there’s a few myths among the trend towards cloud computing services and office productivity.

Cost saving myth

Part of the focus of selling these products is on cost and the head of Google Enterprise apps in Europe, Sebastien Marotte, said that his corporate customers on average achieved cost savings of between 50% and 70%.

The cost aspect is interesting, I’ve posted before about exaggerated claims for cloud computing savings, and Marotte’s statement deserves a closer look.

It’s highly likely the claimed cost savings are based on licensing – the standard Google Apps cost of $50 per user per year is substantially less than even the discounted rates large corporations receive on Microsoft licenses.

While the licensing cost is a serious line item, particularly when you have 110,000 employees, it isn’t the whole story; there’s training, maintenance, disaster recovery, security and a whole range of other issues.

Cloud computing services address a lot of those costs, but nothing like the order of 50 to 70%. In fact, it would be hard to find an enterprise that had the sort of slack in its IT operations to achieve those sort of savings.

In one respect, this is where its disappointing that cloud computing vendors tout those sort of savings – not only does it commoditise their industry but it perpetuates the myth amongst executives that IT staff spend the bulk of their time playing video games.

While there are real savings to be made for businesses switching to cloud computing, any sales person claiming a 50% or greater saving should be asked to justify their claims or shown the door.

Clean slate

Another interesting point with BBVA switching to Google is how the bank wants employees to leave all their old email and data in their old systems. Carmen Herranz, BBVA’s director of innovation, says we “want to start from scratch… don’t want to carry across old behaviours”.

Not migrating data is an interesting move and how BBVA’s users deal with retrieving their contact lists, dealing with existing email conversations and how staff will deal with feature differences like document revision tracking – an area where Microsoft Office outdoes Google Docs.

Internal use only

BBVA are only applying the Google services to internal documents as well which means the bank will be using other software – probably Microsoft Office – for corresponding externally.

This makes it even more unlikely the touted cost savings of 50 to 70% are achievable, and may actually increase support costs while reducing productivity as many customer facing staff will have to deal with two systems.

Having one system for use inside the business and another for external communications seems to be a European trend – before Christmas French company Atos announced it was abolishing email within the company but still using it for outside messages.

Both abolishing email and moving to cloud based office packages are really about improving productivity in a business while cost savings are nice, the main focus on adopting cloud computing – or any other new technology – should be on freeing your staff to do more productive work.

Protecting your technology over the holidays

There’s some easy things we can do to protect our systems over the Christmas break.

This post first appeared in the Xero Accounting Software Blog, the advice for protecting your computers and networking equipment applies for home and business users.

The holiday season is here and for many it’s time for a much needed break. Before doing so it’s worthwhile taking a few precautions with your computers and other electronic equipment.

While most of us are moving our data to the cloud, there may still be some data that remains on your office systems. Bear in mind that if your router is damaged or desktop computer has gone missing, you won’t be able to access the web.

And even though your systems will spend much of the next fortnight turned off there are still risks such as power surges, fire and theft etc. There’s even the risk of a virus creeping in when you turn things on when you return. So here’s some things to consider before you leave.

Reset passwords

The New Year is a good time to refresh passwords, so review what your key login details are and update them to stronger, more secure phrases. I personally like using phrases like a song or poem and dropping characters into the spaces so a password might look like: Mary$had$a$little$lamb

You can make the passwords stronger by adding numbers and capitals as well.

Staff turnover happens in all businesses and you may have forgotten to remove some former employees from your accounts when they left. The end of the year is a good time to review who has access to your cloud and remote access accounts.

If you’re a social media user it’s also worthwhile checking what applications you’ve allowed to access your Facebook, Twitter or other online services. That mafia or farm game looks harmless, but often you’ve given it the right to post things and collect data from your account, so take off the ones you no longer find useful.

Unplug everything

Even when turned off, most modern computer equipment still has power running through its systems. This puts technology at risk during storms or brownouts. Printers, modems, routers, should all be turned off and disconnected from power and communications lines.

Network, telephone line or cable connections should be unplugged – power surges can often affect phone and cable network connections. In fact you should unplug anything that connects your equipment to the outside world.

Hide your equipment

Give thieves as little temptation as possible. Electronic equipment has a high resale value and is easily moved. Lock away anything portable and draw the curtains or blinds in rooms where less portable equipment is kept.

If you have an old laptop or mobile phone sitting around it’s not a bad idea to hide away the modern equipment and leave the old stuff in an obvious location. This is a variation on the old “leave ten dollars in the cash draw” ploy that gives thieves something without them ransacking the place. Don’t leave the sacrificial laptop in plain sight or you’ll be inviting break-ins.

Backup

One of the advantages with cloud computing is that many of your backup needs are taken care of. Unfortunately you still need your own local backups.

In most offices not everything gets saved to the cloud and that information matters. For many small business years of work is sitting on the hard drive.

External hard drives and DVDs are the most popular ways of saving backups. Your backup should include documents, email, address books, favorites and bookmarks.

Store the backups away from the computer, preferably offsite. I recommend making two copies, leave one onsite for easy access and store one elsewhere. If something terrible happens to your home or office while you are away, your data is at least safe.

For home offices, it’s a good idea to leave a copy of the backup with your neighbours or a relative in a nearby suburb. An old client of mine swaps external hard drives with his mother- in-law at church each week so he has a reasonably up to date copy of his data somewhere he knows he can get to.

When you return

Your computer is the very last thing you should turn on. Turn on modems, printers, external drives and network equipment before your computer. If you have a cable or ADSL Internet connection, give it a few minutes to connect before trying to log on.

Update your system

While you were away new Internet nasties in the form of viruses, Trojan horses and spyware will have come out and there’s a good chance some of them may be waiting in your inbox.

Before checking emails or surfing the net, update your security software and check for any system updates. Don’t do anything on the net until everything is updated.

Christmas and New Year are times when you should relax. There’s nothing worse than returning to find office equipment and valuable data lost. By backing up your systems and taking some precautions you don’t need to feel anxious about your business being up and running quickly when you get back to work.

Enjoy your holidays and let’s all look forward to a great New Year.

Distrusting the cloud

Why are customers distrusting cloud computing services?

The recent KPMG Convergence Report looking at online trends in the mobile web found that nine out of ten Australian consumers are concerned about the security of their online data.

In light of recent corporate security breaches such as Sony’s and Telstra’s this is understandable which creates a real barrier for the adoption of cloud computing services.

For cloud computing to be taken seriously, customers have to be certain their data and applications will be respected and protected.

The corporate sector’s failure to hold senior management responsible these problems shows how big businesses largely aren’t taking user privacy or security seriously.

This is a great opportunity for new businesses, we’ve already seen Amazon become the biggest host for cloud services over storage and Internet incumbents who five years ago would have dismissed Jeff Bezo’s company as a glorified book stand.

For newer companies offering cloud services it’s a chance to build a culture where customer service, privacy and respect comes before management bonuses and perks. Where delivering what you promise is more than waving a vague Service Level Agreement (SLA) document under customer’s noses.

As customers, big and small businesses have much to gain from cloud computing‘s productivity, collaboration and cost saving aspects but trust that data will be protected and the service will be available is essential.

Before choosing a cloud service have a search of the web and popular forums to check what people are saying about the product.

Don’t rely on fancy marketing, or assume that a big company will be better at protecting your data. The evidence is clear that smaller, newer companies are doing a better job at protecting data and ensuring business continuity than many of their bigger competitors.

Over time, customers are going to get used to trusting cloud service providers and the businesses who’ll succeed in the online applications world are those who’ve been shown to be trustworthy.

This is one way the web is changing the way we do business.

Securing the USB stick

There are some risks with carrying around private data on a portable drive

While I’m always reluctant to publicise security company’s media releases – believing many of them to be hysterical hype – a quick study by Sophos on lost USB keys has some interesting lessons for all of us who use thumb drives to carry data.

Sophos bought 50 USB drives at Sydney’s CityRail unclaimed lost property auction and analysed them for malware and security risks.

The study – not yet online – found more than 4,400 files including photos, CVs and job applications. Confidential material that could be used for identity theft, stalking or commercial advantage.

Encryption

If you are moving confidential data between computers, it may be a good idea to consider encryption software that protects files from unwanted visitors. Mac OS X has encryption software built in as does  all but the home versions of Windows 7 and Vista.

Should you have a computer that doesn’t come with encryption, or you’re taking the drive between different venues, then you may need a third party encryption program like TrueCrypt. Note you’ll need administrator rights to install the software on every machine you use.

The Malware threat

As a security company Sophos leaned heavily towards the malware aspect with a headline that 66%, or 33, of the drives had some sort of malware on them.

While that statistic is suspiciously high, it does illustrate the risk of plugging USB sticks into school, office and internet cafe computers. Like unsafe sex, the likelihood of catching something nasty increases with the more partners you have.

Perversely Apple Macs could be helping spread the malware as Mac users generally don’t use or need anti virus sofware and any viruses picked up on someone else’s Windows system can sit undetected and dormant until they are used on another PC.

Consequently, its good practice to wipe a drive when you’re finished with it so along with deleting malware you are also not keeping unnecessary and possibly out of date files on your drive.

Overall, Sopho’s survey illustrates why cloud services like Dropbox and Box.net are best for sharing data although the USB stick still has an important role when everything else goes wrong.

Business is fine

Everything is good in business, until one day it isn’t.

“I don’t need high speed broadband,” snarls the businessman in a country town, “business is fine as it is.”

A hundred years ago this year the iconic Australian horse coach company Cobb & Co went into its first bankruptcy as it declined from being the dominant transport service of rural Australia.

Cobb & Co was founded in 1854 by four young Americans in the Victorian gold rush and grew around the expansion of Australia’s rural farming and mining industries. By 1900 the company had 9,000 horses travelling 31,000km (20,000 miles) every week.

By 1924 Cobb & Co was gone. Displaced by the motor car and restrictive state government rules designed to protect their railways.

Many businesses, including the management of Cobb & Co, thought the motor car was a fad. No doubt many at the time also thought electricity was dangerous and unnecessary.

Business worked fine as it was when stagecoaches carried the mail and bullock carts carted the crops, steam engines were fine to power the farms and businesses while the telegraph was just fine for those times when a three month letter to your customers or creditors in London or New York wasn’t quick enough.

All those businesses went broke. They didn’t go broke fast, it was a slow process until one day owners realised it was all over and then the end came surprisingly quickly.

That’s where many of us our today – cloud computing might be the latest buzzword, social media might be a distraction for coffee addled children of the TV generation and the global market might be just a way to dump cheap goods and services on gullible consumers – but markets and societies are changing, just as they did a hundred years ago.

Sure, your business doesn’t need fast Internet. Business is fine.

Stage coach image courtesy of Velda Christensen at http://www.novapages.com/

Cloud Computing Explained: 702 Sydney Weekends

This month’s 702 Sydney Weekend spot looks at cloud computing.

What on earth is cloud computing? Is it just another IT buzzword or something that you can use in your home and business?

On the November 20 ABC Weekends show, Paul and Lex Marinos discussed what cloud computing is and how it can help you.

We also helped out listeners with various computer and tech questions, including the following;

Malware

Sue was caught out by the DNS Changer Trojan that was recently busted by the FBI. Probably the best fix for this is downloading and running the free Malwarebytes software.

Our IT Queries site has instructions on the somewhat convoluted process for removing this Trojan and other viruses from your computer.

Synchronising an iPhone with iCloud and Google Calendars

One advantage we have with the cloud is that it means you can use devices anywhere, however there is a bug where iPhone calendar functions aren’t synchronising with Google Calendar.

Unfortunately the problem is the iCloud and Google services aren’t compatible on the iphone so one has to be turned off.

If your preference is to use the Google services, then you will have to turn off the iCloud services through the iPhone’s settings app and turning off all of the calendar and contact settings.

You may then want to check your Google services are being synchronised through the iTunes settings.

Sharing data between laptops.

One of the advantages with networking is that you can share data between computers. Sonya wanted to know how she can setup her windows 7 laptops to share data to an external drive.

The best option is to use a Windows 7 compatible Network Area Storage device that sits on the network.

For the setup to work, the network name has to be the same on all three devices, Microsoft has instructions for setting Windows7 network name and the hard drive will have the instructions included for setting it up correctly.

It’s also worthwhile using Microsoft’s Active Sync software to synchronise machines as well so you have files stored on your computer.

If you missed Sunday’s ABC program, there’s more details at Netsmarts’ Cloud Computing explained and The Networked Business, we’ll also be running a Demystifying the Cloud webinar on the Australian Businesswomen’s Network at the end of November.

That will probably be the last ABC 702 Weekends spot for 2011 unless there’s something else that comes up.

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