Business Tech

SAN FRANCISCO--Standing 52 stories in the air at the upscale Carnelian Room in the Bank of America building here, executives from Dell, Facebook, and Salesforce.com discussed the meaning and use of the latest technology buzzword, cloud computing.

The sky was blue and cloudless, but it didn't adversely impact the atmosphere of what turned out to be a Dell marketing event. It was pitched as an announcement about a partnership that involves "the next generation of cloud computing."

You might recall that Dell is the company that owns the URL Cloudcomputing.com, and made a failed attempt to trademark the phrase. Earlier this month, the United States Patent and Trademark Office rejected the company's application. Dell marketing head Andy Rhodes wasn't willing to comment on whether Dell would appeal the USPTO decision.

Despite the cloudless sky, the speakers offered genuine insights into cloud computing, an umbrella term for "hyperscale" computing that covers everything from delivering compute services like a power utility delivers electricity, to simply hosting applications off-premises (see also software-as-a-service and on-demand computing).

(Credit: Dell)

Event host Forrest Norrod, vice president and general manager of data center solutions at Dell, defined cloud computing as an economic enabler for applications, not just for single applications but for platforms-as-a-service, such as Salesforce.com. He emphasized the economies of scale advantage that cloud computing has over client/server and previous generations of infrastructure deployment.

Forrest Norrod, Dell's cloud computing chief

(Credit: Dan Farber)

Dell is currently a cloud computing arms supplier to companies such as Facebook and Salesforce.com. "Dell is focused on early adopters and large customers, about 50 worldwide, to provide optimized servers, storage, and data center infrastructure," he said. "Cloud computing is still an emerging market, with standards across the framework and software stack still emerging. We are trying to promote an ecosystem to build the software stack on top of the infrastructure. You will gradually and judiciously see us add capabilities up and down the stack.

Norrod pointed to recent Dell acquisitions--Message One, Silverback Technologies, and Everdream--as examples of Dell's focus on software, not just the hardware piece. Increasingly, both Dell and HP are building out their software stacks to compete with Sun and IBM for providing highly automated data centers running commodity hardware optimized for cloud computing.

Jonathan Heiliger, Facebook's vice president of technical operations, had some praise for Dell. "Dell is doing the most aggressive things possible to optimize for cloud computing," he said. "We think Dell is perhaps the furthest along and we see them as a thought leader." Facebook has more than 10,000 servers, Heiliger said, and it's safe to assume any of them come from Dell.

He noted the price of hardware is not the biggest issue. Vendors can even sell hardware at a loss or at a fixed margin cost to get the initial business. "What we have seen in the landscape is that most server providers are trying to provide Lexus quality products at a Toyota price. We are looking for Scion products at a Scion price," Heiliger explained. "(Vendors) have to be creative around power and airflow optimization. The cost of operating the hardware is key; you have to take down the operating cost, not just the server cost."

For Heiliger that means bare-bones servers. "We don't need fancy graphics chips and PCI cards," he said. We need one USB port and optimized power and airflow. Give me one CPU, a little memory and one power supply. If it fails, I don't care. We are solving the redundancy problem in software." Blade servers are not ideal, he said, because of the higher cost and proprietary lock-in that come with the lack of a standard chassis.

Check out the video interview I conducted with Heiliger about managing infrastructure hypergrowth as Facebook adds 250,000 users per day.

Claus Moldt, vice president of technical operations at Salesforce.com, offered similar comments to the previous speakers. The company is phasing out Sun equipment and standardizing on Dell servers (Dell is a customer of Salesforce.com). Salesforce.com has two data centers in the U.S. and one due to go online in Singapore later this year. Moldt said his biggest challenge is capacity planning, making sure that as customer usage patterns change, the Salesforce infrastructure can adapt instantly.

Dell is betting big on cloud computing to boost its enterprise footprint. At this point, Dell doesn't have plans to build its own cloud to provide hosting for external applications, Norrod said. But, there may come a time when being an arms supplier won't be enough for Dell to be competitive. In addition, selling bare-bones servers can't be much of a high margin business, which is why Dell is moving more into software and services. Norrod said Dell's cloud computing efforts have been a large component of Dell's recent market share growth. Dell's second quarter earnings due tomorrow should give a more precise indication of the impact of the cloud on company's business.

As promised, Dell unveiled several new computers Wednesday made specifically for emerging PC markets like China and India.

There are four new models in all under the Vostro line--two laptops and two desktops. The notebooks will start at $475, and the desktops at $440, and will be available in more than 20 countries in Africa, Latin America, Asia, and Europe.

New Vostro notebooks from Dell made for emerging markets.

(Credit: Dell)

The notebooks are available in 14.1-inch and 15.6-inch sizes, and come with Intel Celeron or Core2Duo processors, and Ubuntu Linux or Windows Vista. The desktops come with Intel Atom, Celeron, or Pentium processors, and Ubuntu or Vista.

Dell says there will be more Vostro products for these markets released in the next few months.

This looks to be the beginning of the company's promised push into two of the fastest-growing PC markets in the world. After establishing a retail presence in both China and India in the last year, Michael Dell said in March that while growth in the U.S. market for PCs would be "OK," Asian markets would grow more.

Dell has traditionally derived the majority of its business here in the U.S., but for the first time ever its international business ticked above 50 percent of the company's total last quarter.

But looking abroad for a boost is a strategy that Dell's not alone in pursuing. Chief rival Hewlett-Packard has been doing a bang-up business for a while now in China, which is the home turf of another PC heavyweight, Lenovo.

We'll see Thursday how effective the retail push into Asia has been for Dell, when it's due to report its second-quarter earnings.

Cisco Systems announced Wednesday plans to acquire e-mail and calendaring software maker PostPath in a $215 million deal.

The acquisition, which is scheduled to close by the end of October, is designed to bolster Cisco's collaboration portfolio by including PostPath's Linux-based e-mail and calendaring software with Cisco's "software as a service" platform.

Cisco's collaborative platform includes instant messaging, voice, video, data, document management, and Web 2.0 applications. PostPath will be folded into Cisco's Collaboration Software Group.

"The acquisition of PostPath complements our strategy to develop an integrated collaboration platform designed for how we work today and into the future, providing real productivity gains and a more satisfying user experience," Doug Dennerline, Cisco's Collaboration Software Group senior vice president, said in a statement.

Over the past two years, Cisco has focused on the collaboration market, with CEO John Chambers touting it as the next wave of innovation in the technology arena.

A major piece of that effort has been Cisco's $3.2 billion acquisition of WebEx last year. PostPath's technology will be used to enhance the current e-mail and calendaring capabilities of the WebEx Connect collaboration platform.

U.S. consumers are feeling more confident about the economy than they were last month and continue to plan to spend more on technology in the coming 12 months, according to two surveys conducted by the Consumer Electronics Association and CNET and released on Tuesday.

Both the CEA-CNET Index of Consumer Expectations (ICE), which measures consumer expectations about the broader economy, and the CEA-CNET Index of Consumer Technology Expectations (ICTE), which gauges consumer expectations about technology spending, showed rises for the month of August.

The ICE hit 165.5 points in August, in a range of 100 to 300 points, a rise of more than 3 points from its record low in July and the highest point it has reached since March. However, the index remains 9 points below the level reported a year ago.

"While still depressed on a year-over-year basis, consumers are showing some signs of confidence as the summer closes," the report said. Although mean expectations that the economy will be better off in the next 12 months than it is today increased only marginally from last month, there was more confidence related to the job market and personal financial health.

The ICTE reached 84.4 points in August, in a range of 0 to 200 points, up nearly 4 points from July, marking the third consecutive month it has risen and the highest level it has reached since February. The August level is also the first year-over-year increase since the data began getting tracked by CEA and CNET in January 2007.

Mean expectations consumers had for spending more on consumer technology was at the highest level in five months, the report said.

The survey data, which is published monthly on the fourth Tuesday of every month, are collected by calling 1,000 respondents who are randomly selected. The data are weighted to be representative of the U.S. population.

(Credit: CEA-CNET )

Solid-state drives, if not yet ubiquitous, have arrived. You can find them in laptops big and small and as a high-octane storage option for gaming PCs.

Alienware 128GB SSD option adds $550 but on the Dell XPS M1530 this option adds only $450.

(Credit: Alienware)

SSDs made their mark by appearing in the trendiest ultraportables like the Apple MacBook Air and Asus Eee PC--typically as stratospherically priced options, fashion statements rarely seen in the real world.

These drives are now coming off their rarefied shelf space and appearing across a wider range of laptops and ultraportable computers.

Any new, lightweight enterprise laptop worth its salt comes with a large-capacity solid-state drive option now. Hewlett-Packard recently introduced the 3-pound EliteBook 2530p with an Intel 80GB solid-state drive option and Dell this month announced the 2.2-pound Dell E4200 with a 128GB drive.

Dell E4200 ultraportable can be configured with 128GB SSD

(Credit: Dell Computer)

Dell also offers solid-state drives on more mainstream laptops such as the 15-inch XPS M1530 laptop. The SSD option on the M1530 is twice the capacity and half the price of drives offered to date: 128GB for $450. The first generation of solid-state drives in the MacBook Air, for example, added almost $1,000 to the cost for only 64GB of storage. Dell lists it as an "Ultra Performance" M1530 option.

Solid-state drives are almost synonymous with the new category of tiny laptops called netbooks. And the category continues to grow. Lenovo is the latest high-profile entry. Earlier this month the China-based company introduced the IdeaPad S10 with a 4GB solid-state drive option.

More notable is the 10-inch Asus Eee PC 1000 that comes with a 40GB solid-state drive and that's priced at just under $700.

HP VP Keith LeFebvre holds a new EliteBook 2530p ultraportable. The laptop comes with an Intel 80GB SSD. Larger 160GB drives from Intel are expected in the fourth quarter.

(Credit: Intel)

In the gaming space, solid-state drives are just beginning to be aggressively marketed as the ultimate high-performance storage option. Last week at the Intel Developer Forum, Chris Saleski from Intel's Storage Technologies Group demonstrated an Intel 80GB X25M solid-state drive crushing 7,200-rpm, 500GB Seagate Barracuda drives in benchmarks. The single Intel drive hit 44,000 IOPS (input-output operations per second), while the Seagate array did under 550 IOPS.

If this benchmark holds up in the real world, solid-state drives could catch on at game PC makers like Falcon Northwest, which demonstrated its FragBoxes at the Intel forum also beating high-performance hard-disk drives.

Dell's Alienware game PC unit currently offers a 128GB solid-state option for $550 on its Area-51 M15x laptop. "Solid state drives are the best performance options Alienware offers hardcore gamers," Alienware said in a statement. "These drives offer them shorter load times and faster access rates that put them at a much higher level of performance than traditional hard drives."

Alienware currently offers up to a 256GB SSD in a "RAID 0" configuration.

Hewlett-Packard completed on Tuesday its mega-acquisition of computer services giant EDS.

The deal, worth about $13.9 billion when it was first announced in May, is among the largest in the technology industry. It's also the second largest one for HP since its acquisition of Compaq was completed in 2002.

HP executives have said they are buying EDS to expand HP's business beyond traditional computing and printers. HP has been trying to develop its software and services business over the last few years. EDS adds a service component that will help the company compete head-to-head with IBM.

Annual revenue for HP and EDS, combined, in fiscal 2007 was more than $38 billion with 210,000 employees between them operating in more than 80 countries.

But bigger doesn't always mean better. Merging the companies' businesses and cultures won't be easy. And once the combined company manages to get through the integration, some experts say it still has a long, tough road ahead of it as it tries to compete with IBM.

Under the deal, EDS will operate a new business unit, which will be called EDS. It will continue to be led by EDS' current CEO, Ronald Rittenmeyer.

The deal has had the support of HP shareholders from the beginning. It won approval from U.S. antitrust authorities on June 30 and passed muster with European regulators on July 26.

SAN JOSE, Calif.--Nvidia is making a case for the graphics processing unit, the other chip inside the PC, at the Nvision conference that opened on Monday.

In his inaugural keynote--this is first Nvision conference--Nvidia CEO Jen-Hsun Huang reminded the audience that the graphics processing unit (GPU) has come a long way. In short, the GPU has evolved from the simple fixed-function graphics accelerator (e.g., the IBM 8514 that debuted in 1987) to the modern graphics chip, a computing engine capable of almost one teraflop of processing power. (A teraflop is equal to one trillion floating point operations per second.)

Huang, responding to an email query, made it clear that the GPU is complementary to the CPU, or Central Processing Unit. "It is not about replacing the CPU at all," he said. "We don't believe that replacing the CPU is a good strategy. Supplementing the CPU is far better." Intel is the world's largest supplier of CPUs.

In the keynote, Huang cited Stanford University's Folding@home program, a distributed computing project that uses about 2.6 million PCs--for a total of 288 teraflops of computing power--to study protein folding and misfolding. This is expected to deepen researchers' understanding of diseases like Alzheimer's and cancer.

Nvidia has released a version of the Folding@home program based on its CUDA development environment using more than 24,000 GPUs. Though this number represents less than 1 percent of the total processors in the Folding@home project, it provides 1.4 petaflops of performance, or nearly five times the processing power of all the CPUs in use by Folding@home. The researchers at Stanford hope that GPUs will significantly accelerate the time to discovery for the cures for many diseases.

Following this, Peter Stevenson of Realtime Technologies (RTT) gave a demo of real-time ray tracing used in auto design, in this case demonstrating a digital prototype of a new Lamborghini model. Ray tracing has been mentioned frequently by Intel over the last six months as a technique it would possibly use in the future. PC graphics technology today uses rasterization to generate images. (A discussion of ray tracing vs. rasterization here.)

Ray tracing can render three-dimensional graphics with extremely complex light interactions, allowing the creation of transparent surfaces and shadows, for example, with stunning photorealistic results.

This demonstration was followed by Joshua Edwards of Microsoft Live Labs. He gave a demo of Photosynth, which is based on the research of Noah Snavely and Steve Seitz at the University of Washington and Richard Szeliski of Microsoft Research. Photosynth uses dozens or hundreds photos of a place to reconstruct a 3D model and then displays a 360-degree perspective of the location.

Edwards showed how a series of photographs can be combined to create an interactive view of Stonehenge and the National Archive building.

Later, Huang showcased a technology getting a lot of buzz--3D stereoscopic graphics. (At the Intel Developer Forum last week, Intel announced a deal with DreamWorks Animation to enhance 3D cinema and bring 3D to TVs and other devices, which the two companies branded Intru3D.) The 3D stereoscopic demo showed 3D stereo clips from Nvidia's Medusa demo and Age of Empires.

Next up was Jeff Han of Perceptive Pixel. (Han's touch screen technology has been featured as the "Magic Wall" on CNN's Election Center coverage.) Han demonstrated his company's multitouch user interface technology using a 100-inch multitouch display, giving the audience a taste of what the UI of the future could become. Han said the current bottleneck to multi-user computing are antiquated input devices like the mouse. Han and Huang were able to simultaneously interact with one display, moving things around the screen and calling up objects with simple hand motions.

Initial applications are limited to military and high-end design, but the technology will trickle down into enterprise and home computing. (Microsoft Surface is an analogous example of this type of user interface.)

Rival game makers Electronic Arts and Take-Two Interactive Software signed a confidentiality agreement after agreeing to hold private talks about a potential transaction, EA announced Monday in a regulatory filing.

EA, which had unsuccessfully courted Take-Two for six months, announced last week that it was abandoning its $2 billion hostile bid after Take-Two agreed to present its three-year product release schedule and financial forecasts to EA.

"As a result, EA does not intend to make any further announcements regarding the status of any discussions or negotiations with Take-Two unless and until discussions between EA and Take-Two have been terminated or such parties have entered into a transaction," EA said in a regulatory filing with the U.S. Securities and Exchange Commission.

The announcement is the latest twist in EA's long-running but oft-rebuffed effort to acquire Take-Two.

EA took its buyout offer public for the publisher of the wildly popular Grand Theft Auto franchise in February at $26 a share after Take-Two spurned an earlier attempt at a friendly takeover at $25 a share. Take-Two rejected the $26 offer as too low, and EA launched its hostile bid in March. EA subsequently reduced the offer to $25.74 a share. But repeated extensions and offer revisions seemed to hurt the company's credibility.

On Wednesday, the Federal Trade Commission said it had conducted an investigation of a merger of the companies, but said no further action was required, and closed the investigation.

As it kicks off its Nvision conference Monday in San Jose, Calif., chipmaker Nvidia must be hoping that the N stands for "new" and "now"--and not "no thanks."

Nvidia is trying to shake off a tough second quarter and is staring down a slump in earnings tied to chip glitches and stiffer competition from rival Advanced Micro Devices. The home page for the Nvision 08 conference urges interested parties to "join the visual revolution" and promises attendees two days' worth of "jaw-dropping visual wonderment" in the realms of games, movies, and science.

A big chunk of the graphics chip supplier's woes stem from a $196 million second-quarter charge taken for defective graphics processors. Though Nvidia CEO Jen-Hsun Huang has said that the "failures are only seen in a small percentage of all the chips," Hewlett-Packard and Dell have listed a number of models affected by the glitch.

A possibly bigger challenge is AMD's resurgent ATI graphics chip unit. Huang said in the second-quarter earnings conference call that his company had "underestimated" the price and performance of AMD's latest graphics chips, leading Nvidia to "to misposition our fall lineup" of chips.

(See: "AMD reclaims the high-end 3D card belt.")

AMD's recently introduced midrange and high-end graphics boards have been well-received and typically come at a discount to Nvidia boards that are roughly equal in performance. This forced Nvidia to cut prices on its performance graphics chips.

What does Nvidia think about AMD's new products? "Our competition has built a nice product but...the nice things that people write about their product is that it's well-priced," according to Huang, speaking during the earnings call.

Analysts confirm that AMD is making inroads. "(It's) pretty discernible. Certainly desktop standalone graphics, they've seen improvement there," said Dean McCarron, the principal and founder of Mercury Research, a company that tracks chip market movements.

Microsoft announced on Monday plans to track Australian delegates attending its annual Tech.Ed conference in Sydney using RFID tags embedded in conference badges.

Until now in Australia, human-targeted deployments of RFID tags have largely been limited to state prison systems. ACT Corrective Services said earlier this year that it had commissioned U.S. RFID provider Alanco and NEC Australia to install a Wi-Fi-compatible inmate-tracking system within its walls.

Microsoft's experiment will take place over the five days of next week's conference, although it could involve a relatively large sample size. The conference typically attracts no fewer than 1,000 delegates.

The software giant will allow delegates to opt out of the tracking experiment, but they will be enticed to participate with the offer of greater access to conference information. Delegates who opt out will have standard barcodes printed on their badges instead.

The benefits promoted to delegates to partake in the RFID tag experiment include access to real-time information on when sessions are filling up, the ability to see what sessions others are interested in, and tracking where Microsoft so-called most valuable players and regional directors are located.

Microsoft will also track sessions that each delegate attends and will use that information to customize sessions, the company said in a statement. It will also send delegates an instant record of what sessions they have attended.

The RFID tracking system took just three weeks to build and deploy, according to Microsoft.

Research firm IDC has predicted that use of RFID tags by business will rise by 122 percent in 2009. The track and trace chips were used in 8 percent of companies last year, while 18 percent of them expect to use them in 2009.

Microsoft was not immediately available to comment.

The move comes months after 50 academics, researchers and students at the University of Washington began an unrelated social-networking experiment, in which participants voluntarily tag themselves. The system records the location of tags every five seconds and publishes movements to a Web page.

Liam Tung of ZDNet Australia reported from Sydney.