Apple (AAPL) Steals Microsoft's (MSFT) Cloud Man

A report from Data Center Knowledge says Apple Inc. (NASDAQ:AAPL) has raided Microsoft (NASDAQ:MSFT) and dealt a blow to its cloud computing development by landing Kevin Timmons, the general manager of datacenter services at Microsoft.

Timmons is reputed to be the man who was instrumental in building data centers that powered Microsoft's cloud operations.

This seems to confirm the rumors Apple is looking to revamp its MobileMe Internet application some time in 2011. The company is reportedly putting together a team to develop the "future of cloud services."

Apple has said it is committed to expanding cloud services for iOS devices like the iPhone and iPad, among others.

Apple closed Thursday at $332.42, falling $3.71, or 1.10 percent.

Cloud Wars with Amazon (AMZN) (AAPL) (GOOG) (MSFT)

There is no doubt all content will eventually be digital content, in the sense that everything available will end up online, with cloud computing wars already heating up in the potentially lucrative music streaming market, with heavyweights Amazon (NASDAQ:AMZN), Apple (NASDAQ:AAPL), Google (NASDAQ:GOOG) and Microsoft (NASDAQ:MSFT) positioning themselves for the battle.

When that battles goes from music to video streaming, it's unclear at this time whether Netflix (NASDAQ:NFLX) will be able to survive.

Speaking of Netflix, the digitizing of all content doesn't mean there won't be any non-digital content, just that like physical DVDs some customers will always prefer, there will be other content on physical books and magazines. The point is whatever is out there, barring legal issues, will become digital.

While the cloud is still in development and the majority of consumers not aware of it, that is changing quickly, and once they understand they can access content anywhere they are through whatever device that's available, it's sure to catch on fast.

One tremendous application in the music sector for example, is consumers can acquire a tune and then own it on the cloud, like the service now offered by Amazon.com. Again, wherever they are they can play the tune or tunes of their choice that they've acquired. Other services allow you to stream music but you don't own it.

This will eventually be the case with all types of content available in digital form.

Amazon.com closed Monday at $184.04, dropping $0.67, or 0.36 percent.

Salesforce.com (CRM), (INTU) Partner to Market in Cloud

With the apparent goal of quickly expanding its customer relationship management business, Salesforce.com (NYSE:CRM) has announced it is partnering with Intuit (NASDAQ:INTU), maker of QuickBooks, whereby it'll increase its presence in the cloud.

Intuit is used by approximately 4.5 million small businesses, and per the agreement between the two companies, Intuit will resell Salesforce.com's CRM via its App Center.

Users will be able to put the data of their customers together with QuickBooks and QuickBooks, using an online version of tax software.

According to Brad Zelnick, vice president and senior software analyst with Macquarie Group, "CRM is the Trojan horse. With CRM Salesforce is able to land and expand and go deeper into corporations."

Intuit was trading at $53.87, falling $0.08, or 0.15 percent. Salesforce.com was trading at $134.51, gaining $0.39, or 0.29 percent.

Rackspace (RAX) (Dell) (EQIX) Partner on OpenStack

Shares of Rackspace Hosting (NYSE:RAX) soared to an all-time high on news its partnering with Dell Inc. (Nasdaq:DELL) and Equinix, Inc. (NASDAQ:EQIX) on an open-source cloud-computing platform named OpenStack they developed together.

The demo environment will be offered in three data centers: the Rackspace data center in Chicago, Illinois., the Equinix International Business Exchange (IBX) in Silicon Valley, California, and in Ashburn, Virginia.

The trio also have a strategy in place to work on similar demo environments in Equinix data centers in Asia and Europe during the second quarter of 2011.

What the demonstration environment does is empower entities to quickly and easily assess a variety of applications on the open-source cloud platform.

Rackspace closed Wednesday at $43.01, gaining $3.30, or 8.31 percent.

Amazon (AMZN) Pushes into Cloud, Rating Maintained by Lazard

Lazard Capital Markets analyst Colin Sebastian likes what he sees with the push by Amazon.com (NASDAQ:AMZN) into building a “cloud-based” digital music store, saying it's “the next logical step for Amazon in facilitating digital media consumption” and that “The service also pre-empts similar services likely coming from Apple (NASDAQ:AAPL) and Google (NASDAQ:GOOG).”

"Amazon’s move confirms that a land grab is playing out between Apple, Amazon, Google and, more recently, Facebook, racing to secure market share in all forms of digital media: music, videos, books and other content. Critically, the common denominator for all these services is the requirement for a large-scale web-based infrastructure, which all of these companies possess. We believe that Amazon is particularly well situated here, able to leverage its AWS infrastructure for these services," Sebastian concluded.

Amazon.com customers will be empowered to store music purchases they make on the servers of the company and play them back on their mobile devices.

Sebastian maintains a "Buy" rating on Amazon, with a price target of $220 on the online retailer.

Amazon was trading at $174.34, gaining $4.99, or 2.95 percent, as of 2:38 PM EDT.

Cisco (CSCO) Acquiring Cloud Company newScale

Cisco Systems Inc. (Nasdaq:CSCO) announced today it is acquiring newScale Inc., a company that provides cloud-services software for IT units or businesses.

Parvesh Sethi, senior vice president of Cisco Services said, "Cloud computing represents a major shift in the evolution of the Internet, and as more customers migrate from traditional IT infrastructures, the need for rapid self-provisioning and efficient management becomes increasingly critical. With the acquisition of newScale, Cisco will be able to accelerate the deployment of cloud services through a service catalog and self-service portal that allows customers to easily manage their IT infrastructures."

Term of the deal, which is expected to close in the second half, weren't revealed.

Cisco was trading at $17.31, up $0.18, or 1.05 percent, as of 12:16 PM EDT.

Hewlett Packard (HPQ) Generates Confidence with Cloud Strategy

Hewlett Packard's (NYSE:HPQ) CEO Leo Apotheker in his media event Monday generated some confidence in his strategy to get the company growing again, especially with his cloud computing strategy.

"In his first major public speech since being named to the top HP spot in September, gave his answer to a gathering of press and analysts in San Francisco Monday afternoon. During a presentation that lasted a bit over 30 minutes, Apotheker outlined three major areas of focus for HP in the coming months and years: Cloud computing, a wide variety of Internet-connected hardware for consumers and businesses alike, and software, including pushing HP's (formerly Palm) webOS to hundreds of millions of PCs, tablets, printers and smartphones. The financial upside of this three-pronged strategy, according to HP CFO Cathie Lesjak, will be $7 per share in earnings (non-GAAP) by 2014.

The early word in the hallway filled with financial analysts was mostly good. What drew most of the attention was the public cloud Apotheker announced. With his cloud strategy Apotheker is steering the company away from direct competition at the high-end from the likes of IBM (IBM) and Oracle (ORCL), towards serving large companies and governments customers with less mission critical applications, and small and medium businesses all over the world with just about everything. "It's smart," says Cowen & Co. analyst Peter Goldmacher, "The growth at the top is finite, it's single digits, and that game is over. HP is going where the growth is."

HP was trading at $40.73, down $0.76, or 1.83 percent, as of 1:32 PM EDT.




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Hewlett-Packard (HPQ) Boosting Dividend, First Time in Decade

For the first time in over a decade, Hewlett-Packard Co. (NYSE:HPQ) announced it'll be raising its dividend. The company also said it plans on rolling out a "cloud computing" services soon for the general public.

New CEO Leo Apotheker, for the first time since taking over for Mark Hurd, presented his strategy and outlook to industry analysts and reporters.

Other than presenting what he termed the "public cloud," there were few other specific details during his presentation, as far as something not communicated before.

As for the dividend boost, chief financial officer, Cathie Lesjak, said it'll increase to 12 cents a share, up from the current 8 cents a share in place since 1998. Lesjak said the official declaration of the dividend should come in May from the board of directors.

She added the company plans on raising the dividend by double-digits every year going forward.

As for earnings, Lesjak has a target of a minimum of $7 a share, excluding items, by 2014. In the last fiscal year the company earned $4.58 a share.

Hewlett-Packard closed Monday at $41.49, falling $0.16, or 0.38 percent.

Intel's (INTC) Cloud Presence Stronger than Believed Says Morgan Stanley (MS)

Morgan Stanley (NYSE:MS) said they're maintaining their "Overweight" rating on Intel (NASDAQ:INTC), citing especially the strong cloud computing presence of the company, which they see as undervalued by investors.

Analysts at Morgan Stanley said, "We think that Intel’s Data Center/Cloud opportunity (-22% of revenues) remains under-appreciated by investors, as concerns about potential share loss in PC and Server, to ARM-based microprocessors, continues to depress INTC’s multiple."

At this time about 60 percent of analysts covering Intel have a "Buy" rating on the giant tech company, with an average price target of $25.10 on it.

Intel was trading at $21.56, up $0.17, or 0.79 percent, as of 11:50 AM EST.

Hewlett-Packard (NYSE:HPQ) Lands $400 MIllion Deal with Centrica (CNA)

Hewlett-Packard (NYSE:HPQ) announced it has entered into a $400 million 7-year deal with UK-based Centrica (LSE:CNA) to provide cloud-computing services for them.

HP said its subsidiary, HP Enterprise Services UK Ltd., will deliver services to help Centrica move to "cloud computing," a system of pay-as-you-go access to servers, storage and other computing resources. Instead of Centrica having to operate its own data centers, HP will run the machines on Centrica's behalf in the U.K It will also provide support from HP centers in India, Malaysia and the Philippines, and project and applications services from HP, said an AP report.

The change will help Centrica "respond to market changes to supply gas and electricity to homes and businesses more efficiently," noted Dave Bickerton, Centrica's group chief information officer, in a statement.

Hewlett-Packard closed Monday at $43.63, up $0.95, or 2.23 percent.

Google (GOOG) Data Loss Shows Risks of the Cloud

Another breach in the cloud, this time by Google (NASDAQ:GOOG) and those using its Gmail services, reveals the risky underbelly of the increasingly popular means of story data and information.

Minyanvill says, "This weekend, Google's email cloud suffered a severe thunderstorm. Roughly 150,000 Gmail users found all of their data -- their emails, their chat logs, their contacts, their attachments, everything -- missing. Vanished. Gone. Once again, the convenience of having your data stored online and accessible from a wide variety of devices is rendered moot by a massive glitch.

"Currently, Google is working to restore the data lost in the error and has set up an Apps Status Dashboard to log any updates as they happen.

"The last report before the repetitive message: "Google Mail service has already been restored for some users, and we expect a resolution for all users in the near future. Please note this time frame is an estimate and may change."

"Although the company is ensuring a full recovery of data, this glitch underscores the necessity of email backups should you store your content online. Whether using Google, Yahoo, Microsoft, or work servers, everyone should have locally stored backups."

The bottom line is everything in the cloud must be thoroughly backed up.

Google was trading at $614.52, up $4.48, or 0.73 percent.




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Microsoft's (NASDAQ:MSFT) Ballmer Under Pressure, Shaking Up Management

After missing big in improvement market segments, Microsoft Corp. Chief Executive Officer Steve Ballmer being pressed by the Board of the company to start increasing the performance at the company.

According to those close to the matter, Ballmer is going to respond by placing more people with engineering backgrounds in senior product positions at the company.

Smartphones and tablet computers are of particular note in poorly executed products and campaigns, and there needs to be more focus and movement with Web services like cloud computing.

Major competitors like Apple (NASDAQ:AAPL) and Google (NASDAQ:GOOG) enjoyed solid growth over the last year, while Microsoft shares have had little movement.

Overall, the pressure is on Ballmer to perform, and the perception, and probably reality, is he hasn't done the best job in putting the right people in the right positions.

It appears that's what the Microsoft management shaking up is going to be all about.

Microsoft closed Monday at $28.20, up $0.43, or 1.54 percent.

Microsoft's (NASDAQ:MSFT) Windows Azure Adopted in Brisbane

Brisbane City Council has become one of the first Australian public sector organisations to adopt a public Cloud service from Microsoft, leading the charge as state and federal governments consider the implications of such a migration.

In a lengthy response to the Australian Government to the Australian Government Information Management Office’s (AGIMO) draft Cloud strategy paper released last month, the software giant highlighted the local government’s move to Windows Azure, making it one of the first Australian government organisations to fully adopt a Cloud service.

According to Microsoft, Brisbane City Council adopted contract management software from Melbourne-based independent software vendor (ISV) Open Windows.

“Not only has Open Windows been able to take Brisbane City Council to the Azure Cloud but Council has embraced it in a big way, already creating over 11,000 user profiles in the system, and looking to take the application to their whole organisation,” the company’s submission reads.

A closed tender from the council indicates Open Windows was awarded the contract for its software in 2009. At the time, the council stipulated the solution should be hosted, either on a private or public Cloud.

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Terremark (Nasdaq:TMRK) Soars on Verizon (NYSE:VZ) Bid

Terremark (Nasdaq:TMRK), a provider of cloud and colocation services, was acquired by Verizon (NYSE:VZ) Friday, with the share price of Terremark skyrocketing, as well as other cloud providers such as SAVVIS, Inc. (Nasdaq:SVVS).

Terms of the bid were $19 in cash, which was a 35 percent premium over the closing price of Terremark in the previous trading session. Boards of both companies have unanimously approved the deal.

On an equity value basis, the bid values Terremark at 4.4 times trailing sales and 18.6x trailing EBITDA. The deal is expected to close by the end of the third quarter.

Terremark will operate as a wholly owned but independent subsidiary of Verizon. The existing management team will remain in place. The 220 datacenters currently owned by Verizon will be operationally taken over by Terremark.

Savvis, a competing cloud computing company, as mentioned, was brought into the limelight with the deal, now being considered among the top firms remaining which would be attractive to a competitive suitor of Verizon.

Savvis closed Friday at $30.26, gaining $3.69, or 13.89 percent. Terremark closed at $18.92, up $4.87, or 34.66 percent. Verizon closed at $35.63, losing $0.86, or 2.36 percent.

VMware (NYSE:VMW) Remains Attractive on "Cloud Computing" Secular Trend

After the earnings season is over, Needham expects investors to flock back to VMware (NYSE:VMW), saying that cloud computing infrastructure remains among the strongest secular trends for software.

Needham says, "We believe VMware continues to be in the middle of a secular trend towards virtualization of IT infrastructure. It is our sense CY10-11 is the year of 'build-out' for public and private cloud infrastructure, suggesting we are still in early stages of license consumption in a multi-year trend. We believe investors will move back to VMW shares, post earnings season, as the attractiveness of “cloud computing” infrastructure (VMW, Riverbed Tech (Nasdaq:RVBD), others) remains one of the best secular trends in software...Our estimates for CY11 go from $3380m and $1.86 to $3507m and $1.86 EPS; introducing CY12 of $4000m and $2.20 EPS."

Needham & Company maintains a "Buy" rating on VMware (VMW), which closed Tuesday at $84.28, down $3.45, or 3.93 percent. Needham boosted their price target on VMWare from $90 to $95.

Microsoft (Nasdaq:MSFT) Lands USDA Cloud Computing Deal

Microsoft Corp. (Nasdaq:MSFT) has landed a major deal in their cloud computing segment, securing a agreement with the U.S. Department of Agriculture (USDA) to supply a variety of online applications to the government agency, including e-mail collaboration.

The USDA has approximately 120,000 employees.

By Microsoft standards the deal is tiny, as it is valued at $27 million over a period of three years, with an estimated savings of $6 million for the USDA during that time over the technology it's now using.

The key for those providing cloud computing services is to get their foot in the door with various government agencies in hopes of expanding across various government entities.

From a government standpoint, they've been migrating to cloud services because of the lower costs in a tough economic climate which isn't going to improve for years.

Competitors like Google (Nasdaq:GOOG) and Salesforce.com (NYSE:CRM) have complained of Microsoft being favored in these types of deals, the USDA's chief information officer Chris Smith responded, saying, they already had a large investment with Microsoft and its software, and it was taken as "an opportunity to parlay this investment into the cloud solution."