The Business Intelligence Blog

The cloud computing space is getting heated-up. VMWare’s latest major update to their existing ESX server will be an addition to the portfolio of cloud computing software.

VMware on April 21 launched vSphere 4, a major update to its ESX Server hypervisor, declaring it to be the first operating system specifically engineered for cloud computing. It is the first major upgrade to the product since 2006.

vSphere 4 amounts to a rebuild of VMware’s core virtualization platform. Fundamentally, it combines virtual resources in the data center into one centrally managed pool of computing power. It will be made available in the second quarter of 2009, the company said.

vSphere 4′s second purpose is to facilitate delivery of IT infrastructure as a service to enterprises, so IT departments can build their own private cloud systems to provide business services internally for the company and for trusted partners, supply chain participants and other business associates.

From eWeek’s article.

From New York Times BITS Blog, a post on McKinsey’s recent study on Cloud Computing.

The McKinsey study, “Clearing the Air on Cloud Computing,” concludes that outsourcing a typical corporate data center to a cloud service would more than double the cost. Its study uses Amazon.com’s Web service offering as the price of outsourced cloud computing, since its service is the best-known and it publishes its costs. On that basis, according to McKinsey, the total cost of the data center functions would be $366 a month per unit of computing output, compared with $150 a month for the conventional data center.

“The industry has assumed the financial benefits of cloud computing and, in our view, that’s a faulty assumption,” said Will Forrest, a principal at McKinsey, who led the study.

Owning the hardware, McKinsey states, is actually cost-effective for most corporations when the depreciation write-offs for tax purposes are included. And the labor savings from moving to the cloud model has been greatly exaggerated, Mr. Forrest says. The care and feeding of a company’s software, regardless of where it’s hosted, and providing help to users both remain labor-intensive endeavors.

Clouds, Mr. Forrest notes, can make a lot of sense for small and medium-sized companies, typically with revenue of $500 million or less.

HP Unveils Worlds First 2-in-1 Server Blade for Cloud Environment

HP released a new ProLiant blade enclosure Wednesday with higher server densities designed for cloud computing and other computing-intensive applications.

With up to 32 server nodes in a single 10U blade chassis, the new BladeSystem can scale up to 128 servers, 1,024 CPU cores and 2TB of RAM in one standard-sized rack consisting of four enclosures, HP says. The new blade offers double the density of its HP predecessors by fitting two servers into each slot, says Paul Miller, HP’s marketing vice president.

Amazon finding money in the ‘cloud’

But Bezos simplified the business of Amazon.com — which has ventured into a whole new arena of computing services — by breaking down its customers into three groups: consumers, third-party sellers and developers.

Third-party sellers account for 30 percent of the units sold on Amazon, Bezos said.

The amount of bandwidth used by Amazon Web Services, which includes cloud computing and server storage space, recently surpassed the bandwidth used for its retail business, he said.

The Web services division was formed about four years ago.

Another reason why cloud computing is the in-thing these days. From WP -

Microsoft Corp sees tens of millions of corporate e-mail accounts moving to its data centers over the next five years, shifting to a business model that may thin profit margins but generate more revenue.

In an interview ahead of the Reuters Global Technology, Media and Telecoms Summit, Chris Capossela, who manages Microsoft’s Office products, said the company will see more and more companies abandon their own in-house computer systems and shift to “cloud computing,” a less expensive alternative.

Cloud computing is the trend by Internet powerhouses to array huge numbers of computers in centralized data centers to deliver Web-based applications to far-flung users.

Microsoft built its business selling software to run on local machines, both computer servers and personal computers, but, in recent years, it has invested billions of dollars in massive data centers, which are the basic infrastructure for a wide range of Web services.