Acadia - Virtual Computing Environment (VCE) coalition

This coalition is a an alliance/coalition/joint venture between Cisco and EMC with investments from Intel and VMware. Acadia is aimed at next generation data centers that are designed to deliver private cloud infrastructure. By joining forces, EMC and Cisco can expand into the server market quickly, offering integrated systems built with technology from both.

The integrated systems, called VBlock Infrastructure Packages, will allow customers to buy all the equipment and software they need together, from one seller. EMC and Cisco will offer systems that would allow customers to install new software or manage company information from a single control center. The new venture will focus on designing and building systems that rely on virtualization technology, which can help customers create a more flexible technology infrastructure and lower their capital spending costs.

The alliance could be a major boost to Cisco’s effort to expand beyond the networking equipment business. In 2009 Cisco launched the Unified Computing System, a new line of server computers. This put Cisco in competition against industry titans IBM and HP, which sell integrated computers and storage products. EMC and VMware are dominant players in storage and server virtualization, technology that allows many computers to run together as efficiently as one machine, but can’t match IBM and HP in servers or Cisco in networking.

“They’ve taken server, networking, and storage and put them together into a single unit,’’ Mark Bowker, senior analyst at Enterprise Strategy Group in Milford said.

Big issue here is the openness of the platform. None of these players are known for their embrace of open software, and most are far more famous for squeezing high margins out of proprietary code. IBM and Rackspace have been pushing for some type of open cloud effort, which it defines as being built through a standards group. Vblocks are a refutation of that model, and of the idea that commodity hardware will underlie most clouds.

Sources: 

http://www.boston.com/business/technology/articles/2009/11/04/emc_cisco_alliance_takes_on_computing_giants_ibm_hp/

http://gigaom.com/2009/11/03/cisco-acadia/

http://www.nytimes.com/2009/11/04/technology/business-computing/04cisco.html?_r=1

http://www.forbes.com/2009/11/03/cisco-emc-vmware-technology-cio-network-datacenter.html

http://newsroom.cisco.com/dlls/2009/corp_110309.html 

Open source as a fundamental business model

Red Hat, Inc. was founded in 1995 by entrepreneurs Robert Young and Marc Ewing, and is a market leader in open source software systems for mainframes, servers, workstations, and embedded devices. The company's core product is the Red Hat Linux operating system, which is the leading Linux system for servers. More recently the company has expanded its product line to offer open source solutions in such areas as e-commerce, embedded devices, and database solutions.

The company's mission was to market and develop its own version of the Linux open source operating system to end users. While Red Hat made its version available for free downloading, it also sold CD-ROM versions. When it released Red Hat Linux 5.0 in November 1997 for $49.95, InfoWorld called it "a complete Internet server in a box." The software package included everything a system administrator needed to get an Internet or corporate intranet server running in one day, including the Apache Web server, a mail server, a news server, a domain name server, a gopher server, and more. It also included development tools and a freeware database engine. 

Business model:

Unlike proprietary systems that carefully guard their source codes, Red Hat employs an open source software model. It opens up software code to innovation from an international community of contributors while licensing and selling software that has been tested for reliability and interoperability with a variety of popular applications. Leveraging the volunteer community of users working to improve the code, RHT sells its software for prices often under-cutting their competitors.

Red Hat sells subscriptions for the support, training, and integration services that help customers in using open-source software. Customers pay one set price for unlimited access to services such as Red Hat Network and up to 24/7 support. 

Revenue comes from two sources: software subscriptions and training and services. The company makes about 85% of its revenue from software subscriptions, which include set-up, ensurance of compatibility with existing software, and other services involving upgrades and trouble-shooting. In fact, Red Hat derives its revenue from these services rather than the software alone. The remaining 15% from services that include advanced technical support, hourly consulting, engineering, and customer training and education services.

Red Hat also pursued a strategy of building tight partnerships with industry-leading technology companies. The company's first round of strategic financing was completed in September 1998, when it received financial backing from Intel and Netscape Communications as well as from venture capital firms Benchmark Capital and Greylock Management. It completed a second round of financing in March 1999, when computing industry leaders Compaq, IBM, Novell, Oracle, and SAP took minority equity positions in the company, indicating their commitment to the development and adoption of Linux operating systems.

It entered in strategic partnership with IBM and Dell. Under the agreement, developers from IBM and Red Hat would team to move Linux onto IBM's Netfinity servers, PC 300 commercial desktops, IntelliStations, and ThinkPads.

Red Hat filed for its initial public offering (IPO) in June 1999 and hoped to raise about $96 million. The company had revenue of $10.8 million for its fiscal year ending February 28, 1999, compared to revenue of $5.1 million in fiscal 1998. On August 11, 1999, Red Hat shares began trading at $14 a share. By the end of the day they closed up 227 percent at just over $52 a share.

In November 1999 it acquired Linux pioneer Cygnus Solutions for $674 million in stock. Cygnus's business included producing compilers and debuggers, developing embedded software for handheld devices and other appliances, and application development tools.

In January 2000 Red Hat acquired e-commerce software vendor Hell's Kitchen Systems Inc. for $91 million in stock. HKS's payment processing software was a key component for e-commerce operations. The acquisition helped Red Hat position its Linux offerings as a more viable software solution for businesses that wanted to migrate their operations online. Around the same time Red Hat entered into a strategic partnership with electronic security firm RSA Security Inc. that added encryption capabilities to Red Hat's Linux software.

Red Hat's next major acquisition involved performance management software vendor Bluecurve for $35 million in stock. The acquisition enabled Red Hat to offer a tool for monitoring Linux systems. Bluecurve software allowed developers to simulate transactions and scale their infrastructures to different levels of service.

In September 2000 Red Hat announced the creation of the Red Hat Network, a new Internet-based subscription service for developers and users. Subscribers would be able to access open source advances, upgrades, and security features. Developers could register information on their hardware and software systems, thus facilitating joint projects. The Red Hat Network also included a number of support services from open source experts, tight integration with the Red Hat Package Manager, and customizable update management services. The Red Hat Network also made it easier for Red Hat to deploy upgrades and security patches over the Internet.

Red Hat proposed an open source code, eCos, for 2.5 and third generation wireless devices. Plans called for the new source code to be developed by Red Hat in association with 3G Labs. The new operating system would be based on Red Hat's open source embedded real-time operating system, not Linux.

The company continued to expand its product offerings with the introduction of a new open source e-commerce software suite.

It represents a fundamental shift in how software is created. The code that makes up the software is available to anyone. Developers who use the software are free to improve the software. The result: rapid innovation.

Principal Competitors:

Caldera International, Inc.; Microsoft Corporation; SuSE Linux AG; Turbolinux Inc.; VA Linux Systems.

Utilities and tools:

Over and above Red Hat's major products and acquisitions, Red Hat programmers have produced software programming tools and utilities to supplement standard Unix and Linux software. Some of these Red Hat "products" have found their way from specifically Red Hat operating environments via open-source channels to a wider community. Such utilities include:

• Disk Druid (for disk partitioning)
• rpm (for package management)
• sosreport (gathers system hardware and configuration details)
• systemtap (tracing tool for Linux kernel, developed in collaboration with IBM, Hitachi, Oracle and Intel)
• NetworkManager 

Porter's five forces about Red Hat on Prezi

Resources: Wikipedia; InternetBusinessModels; Wikinvest; RedHat; FundingUniverse

George Dyson at the birth of the computer on TED

First movers, early followers and the future of the virtual worlds.

In 1992 Neal Stephenson's  novel Snow Crash presented us with the Metaverse,  where humans, as avatars, interact with each other and software agents, in a three-dimensional space that uses the metaphor of the real world.  All this was nothing but science fiction then - the technology was not mature enough, nor the network to get the vision to its own life.

In 1999 a hardware company called Linden Lab was found that was geared towards the research and development of haptics (http://en.wikipedia.org/wiki/Haptics). They needed a virtual world to go with their hardware, and so in 2001 they started building what became Linden World and, later, Second Life, the 3D virtual world with user generated content, where users could interact with each other in real time.

Linden World was spread almost seamlessly across multiple servers (albeit, only a couple), and it was envisioned that one day it might become a sprawling and distributed agglomeration of third-party servers. The streaming content architecture and protocols allowed people to create content and to participate in content creation in real-time - without drowning their connections in data.

This company was actually a first mover to an industry that will gain momentum and hype throughout the world. But in the beginning nobody wanted to fund it - people did not see advantages to use the platform and the idea of a game. In one meeting the vision changed - the investors attention went from the game to the seamless, real-time, collaborative content-creation platform. 

Soon "The rig" would be renamed to "Second life" and would be released to a limited testing audience in 2002. In 2003 the beta testing version was distributed. People started generating content and trying to evade taxes, but essentially Second Life was a lone player on the market for virtual reality. That also meant financial troubles. Regardless the marketing campaign of the Rosendale, the platform didn't generate a lot of users. In 2004 the complementary software started emerging - Tringo for example is an online multiplayer game, available to play inside the virtual reality platform, was created by Nathan Keir (aka Kermitt Quirk).

And then it happened - due to technological advancement as quick time media streaming, changing the user interface to easier one, better connection speeds, basically empty world, waiting to be filled with people's vision and the perceived millionaire advantage  - Second life became a mass hit. Business Week  wrote about it, firms started their virtual offices there and wrote press releases about them, media outlets went crazy with the stories. 

This in turn generated interest in the regular user, who could download the platform, log in the virtual universe and create whatever vision he/she had in mind.  Of course this was a golden mine for banks, schemes and casinos, pornography, and etc. A lot of companies as Adidas, Nike, Cisco, IBM, HP saw it as a gold PR opportunity. Many universities followed suit and establish online classes. The book publishing industry did not hesitate and actually a publishing house from Britain carried out the first virtual book fair in 2007. Publishing houses like Random House, Penguin UK, Wiley and others.

And the bigger the hype, the more users it generated. It also generated early followers:

"Utherverse" -  is the universe or "Metaverse" that engulfs all of the cities that make up the environment. This is the major competitor of Second Life.

SmallWorlds - its beta was launched late 2008, it do not need download - use it from your web browser, it is highly customizable and took a lot of the users from Second life cause it was able to deal better with the generated traffic, so needed by brands. 

Other competitors are IMVU, Active Worlds, Onverse, Kaneva and Blue Mars.

GOOGLE also decided to create its own virtual world and created a lot of talk and interest in the initial stages but failed miserably with their web based virtual environment - "Lively". The project was alive less than an year before its discontinuation on 31.12.2008. Not only their world failed to generate interest, but probably the time was not the right one to enter the segment. Google were at least smart enough to stop the project fast enough.

With the advancement of technology, available interest from people it is only a matter of time for the virtual life to become a regular part of life. Though there are a lot of lessons to be learned from the early market entrants - problems with funding, technological problems, legal difficulties, there is a lot of space to be explored also. One of the big pluses is ROI advantages for business and online classes for academia. 

Resources: here and here, virtual news, and from wikipedia