Report: Cloud and data centers join forces for a new IT platform for internet applications and businesses

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Cloud and data centers join forces for a new IT platform for internet applications and businesses by Rich Morrow:
An increasingly large swath of businesses are realizing that the cloud-plus-data-centers model provides the best of both worlds, and integrating the public virtual cloud with the physical data center is the best way to cost effectively scale, secure, and serve modern production workloads.
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Report: The importance of benchmarking clouds

Our library of 1700 research reports is available only to our subscribers. We occasionally release ones for our larger audience to benefit from. This is one such report. If you would like access to our entire library, please subscribe here. Subscribers will have access to our 2017 editorial calendar, archived reports and video coverage from our 2016 and 2017 events.
Windowed City Skyscraper Architecture Beneath Cloudscape in Black and White
The importance of benchmarking clouds by Paul Miller:
For most businesses, the debate about whether to embrace the cloud is over. It is now a question of tactics — how, when, and what kind? Cloud computing increasingly forms an integral part of enterprise IT strategy, but the wide variation in enterprise requirements ensures plenty of scope for very different cloud services to coexist.
Today’s enterprise cloud deployments will typically be hybridized, with applications and workloads running in a mix of different cloud environments. The rationale for those deployment decisions is based on a number of different considerations, including geography, certification, service level agreements, price, and performance.
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Smog computing: Why tech biz should learn from past regulations

Watching the President’s State of the Union and his calling upon Congress to enact legislation to better protect our personal information, I started wondering how much good we’ve actually gotten from regulatory compliance standards like HIPAA and Sarbanes-Oxley already in place. I knew I couldn’t dismiss them as useless, but I wanted to look for a model of regulatory compliance that’s been steeping longer from which I could reel some parallels to the current state of information privacy.

California’s air quality law — and subsequent state and federal legislation — was an acknowledgement that progress comes at a price. But environmental regulations are themselves an admission that we cannot completely eliminate the dangers associated with modernity; they are instead an attempt to mitigate the risks.

Los Angeles was still something of a sleepy outpost on America’s burgeoning West Coast when oil was discovered there in the 1890s. According to the 1900 U.S. Census not many more than 100,000 people called L.A. home. The oil boom and a growing film industry attracted enough people through the 1910s that the population quintupled to over a half-million by 1920. Growth continued during the next two decades when the concurrent Great Depression and Dust Bowl catastrophes touched off a westward migration that saw hundreds of thousands of people move from America’s Midwest and relocate to California in search of work.

In 1943, industry and automobiles resulted in the first report of smog in the city. By 1947, Los Angeles’ toxic air had become so problematic that Governor Earl Warren signed the Air Pollution Control Act, thus beginning the age of environmental law.

You might say the Air Pollution Control Act was the first piece of regulation that endeavored to protect people from “the cloud.”

Information and cloud security can take a lesson (and solace) from the pages of environmental law. Despite early attempts at regulation, air quality grew far worse before it got better. We’ve learned more about the dangers and how to better reduce their effects, and so it is with protecting and managing data.

Protecting data in the cloud

As with environmental stewardship, there should be laws in place that create incentives for implementing strong data security practices in the context of cloud adoption. Once again California took the lead with the passage of landmark data breach notification law, SB1386, in 2002. More state and federal laws have followed, including HIPAA/HITECH, Gramm Leach Bliley, Sarbanes-Oxley, Massachusetts 201 CMR 17, PCI DSS and others.

The problem is that the legislative process unfolds based on the lessons of the past while technology advances with an eye toward the future. Attempts to write novel law that anticipates and remedies the unknown and adverse effects of technological innovation can have unforeseen and detrimental consequences, such as discouraging further innovation or the adoption of needed innovations.

Reliance on regulation can also have the effect of directing resources inefficiently — to appease auditors rather than address problems that need solving. In fact, the nature of the third party audit trade itself would seem to reward a pursuit of repeat business rather than effective compliance.

At the same time, CIOs are paradoxically chartered to be both compliant (ticking the box) and innovative (thinking outside the box). Software-as-a-service (SaaS) adoption is a good example of this double standard. Business units demand tools like, Marketo and SuccessFactors, but compliance teams and auditors raise red flags over lack of data governance and unclear privacy accountability. To outsiders looking in, the need to keep up with progress is self-evident, but doing so in the context of our current regulatory environment puts those who follow the rules at a clear disadvantage.

Looking back at air pollution regulations, California’s compliance standards actually made it more difficult for Californians to buy low emission diesel cars in the previous decade because the idea of a low emission diesel vehicle was not considered by those who created the law. Therefore, in California, it was illegal to sell cars which polluted less than their standard gasoline powered equivalents simply because they were “diesel powered.” Regulators eventually caught up to the times in 2012 when California passed the LEV (Low Emission Vehicle) III regulations.

It is urgent that CIOs regularly examine the impact of regulation on productivity because, unlike California, enterprise IT can’t afford to wait a decade for compliance to catch up to the needs of their business.

Could Rackspace start the cloud vertical movement?

There are plenty of other posts detailing whether Rackspace (NYSE: RAX) should sell or split. I detailed my own thoughts here back in May 2014. With the speculation continuing to twist in different directions, one thought got me thinking. Ideally, the board of Rackspace would do what they felt was best for shareholders. Maybe the current thinking of split or sell is too simplistic. Maybe there is a possibility that takes them from the muddled world of cloud infrastructure players to a relatively niche area that is ripe for the taking. This shift would put Rackspace in a unique position of differentiation.

Leading the cloud verticals

What if Rackspace shifted gears to focus solely on providing services to cloud verticals? We already know that Rackspace does a fine job of their hosting and cloud services. To that end, their ‘Fanatical Support’ is well respected in the industry. Put cloud verticals together with Fanatical Support and it may end up being a fine option for the future of a leading organization. There are still challenges between the hosting and cloud business revenue models to consider. But beyond that, there is a chance to delve into an area that presents a challenge for many would-be cloud customers.

Starting with Healthcare

Across the spectrum of industries, the financial performance of healthcare (+23.7%) has outperformed other industries in the past year with information technology (+22.0%) trailing closely behind. There are a number of use cases in which cloud computing could (and does) provide value to healthcare organizations. Even considering the compliance requirements of the Health Insurance Portability and Accountability Act (HIPAA), cloud services from IaaS to SaaS make sense. Creating a specific vertical of services that is centered around environments with regulatory issues such as HIPAA enable an easier decision for healthcare organizations as opposed to the alternative where they create their own cloud-based solution.

Fanatical Support pivots

One of the core tenants to Rackspace’s value has been their Fanatical Support. Over the years, their Fanatical Support has served as a key differentiator for the company. Considering the specialized needs of different verticals (like healthcare), it would make sense to pivot this support model from general-purpose support to specialized support for each vertical. Again, bringing support back into the fold as a core differentiator and building on their existing successes.

The value of specialization

In the general-purpose cloud market, the services are fairly confusing and muddled. Not to mention the drive toward razor-thin margins. Different cloud providers offer slightly different features, classes of services and ecosystems. By specializing on cloud verticals, Rackspace could lead the charge in building a specific ecosystem around specific verticals. It has long been discussed that cloud verticals is the logical next step for cloud maturity. Pairing their support model with the specialized services needed by each vertical would create a new level of differentiation and potentially different economic model. And this economic model would present an opportunity for growth beyond the general-purpose cloud solutions offered today. Add in the leadership that Rackspace covets in the OpenStack space and the interest only grows further.

Is Rackspace the only provider that could leverage this route? No. But considering the position that Rackspace currently holds and their suite of components, it would be an interesting approach to follow. And it might present an opportunity for the entire company to pivot without considering sale or split. Granted, there is still a good case to be made for going private too.

Retailers can look to healthcare for lessons in security

With retailers destined to stumble from their tightrope walk between privacy and security requirements and the use of new customer information, it is instructive to look at the implications and consequences of HIPAA privacy and EHR mandates and incentives in healthcare. is a veritable legal blog documenting various costs for transgressions by healthcare IT buyers and vendors alike:

Breaches such as one revealed this week can tap both medical and credit card data. A four-year HIPAA breach was also reported in December. As HITN reports:

“HIPAA covered entities and, more recently, business associates can be slapped with up to $50,000 fines per HIPAA violation due to willful neglect that goes uncorrected. Entities could face $10,000 per violation due to willful neglect when the violation is properly addressed.”

Further, the costs of meeting the regulations and requirements can be steep when an implementation simply goes awry, rather than sparking fines or a liability suit. The Maine Medical Center slipped into the red when its Epic EHR implementation went over budget, with nearly $55 million in its latest additional spending required for staff training alone.

Retailers are forced to traffic in sensitive customer data by dictate of the market; healthcare organizations, by the government. But it is likely that laws will be passed to enforce greater penalties for retail transgressions than are paid presently. Both industries will need to further ruggedize systems handling new levels of private customer data.

Microsoft’s Mundie: Big data could cure U.S. healthcare

If the U.S. wants to solve it’s healthcare problem, it should bring the Internet model to bear on it, Microsoft’s chief strategy and research officer said Monday. That means sharing, not segregating data, and using the government’s buying power to mandate change, Craig Mundie said.

BeyondCore combines compliance and the cloud

With its new SplitSecure technology, Structure 2011 LaunchPad finalist BeyondCore is trying to prove that companies processing sensitive data don’t have to be afraid of cloud computing. The company has actually been around since 2003, but SplitSecure represents its first foray into the cloud.