Google Shocks: $12.5 billion for Motorola Mobility
It’s too early to go through all the possible iterations. Robin Wauters posted an announcement in
Techcrunch on August 15th entitled “Google Buys Motorola Mobility For $12.5B, Says “Android Will Stay Open”. I’ll try to give you a brief synopsis and to put things into perspective; however, stay tuned as this mega-deal unfolds and as the players shakeout.
Google was sitting on $39 Billion in cash. Google owns Android and Motorola Mobility is a dedicated partner. Motorola Mobility is sitting on 14,600 patents and another 6700 patent pending apps. So the leading search engine and online advertising goliath is combining with not only a strong Android smartphone manufacturer but also the “market leader in the home devices and video solutions business”.
Google co-founder and CEO Larry Page stated that Motorola Mobility will “enable us to better protect Android from anti-competitive threats from Microsoft, Apple and other companies”. It remains an open question how HTC, LG, Samsung, Sony Ericsson, Acer, Lenovo and other Android device makers will handle this acquisition. Wauters gives us a link in his announcement to reaction already from some of these vendors.
Here’s the Full press release:
“Google to Acquire Motorola Mobility
Combination will Supercharge Android, Enhance Competition, and Offer Wonderful User Experiences
MOUNTAIN VIEW, Calif. & LIBERTYVILLE, Ill.–(BUSINESS WIRE)–Google Inc. (NASDAQ: GOOG) and Motorola Mobility Holdings, Inc. (NYSE: MMI) today announced that they have entered into a definitive agreement under which Google will acquire Motorola Mobility for $40.00 per share in cash, or a total of about $12.5 billion, a premium of 63% to the closing price of Motorola Mobility shares on Friday, August 12, 2011. The transaction was unanimously approved by the boards of directors of both companies.
“Motorola Mobility’s total commitment to Android has created a natural fit for our two companies. Together, we will create amazing user experiences that supercharge the entire Android ecosystem for the benefit of consumers, partners and developers. I look forward to welcoming Motorolans to our family of Googlers.”
The acquisition of Motorola Mobility, a dedicated Android partner, will enable Google to supercharge the Android ecosystem and will enhance competition in mobile computing. Motorola Mobility will remain a licensee of Android and Android will remain open. Google will run Motorola Mobility as a separate business.
Larry Page, CEO of Google, said, “Motorola Mobility’s total commitment to Android has created a natural fit for our two companies. Together, we will create amazing user experiences that supercharge the entire Android ecosystem for the benefit of consumers, partners and developers. I look forward to welcoming Motorolans to our family of Googlers.”
Sanjay Jha, CEO of Motorola Mobility, said, “This transaction offers significant value for Motorola Mobility’s stockholders and provides compelling new opportunities for our employees, customers, and partners around the world. We have shared a productive partnership with Google to advance the Android platform, and now through this combination we will be able to do even more to innovate and deliver outstanding mobility solutions across our mobile devices and home businesses.”
Andy Rubin, Senior Vice President of Mobile at Google, said, “We expect that this combination will enable us to break new ground for the Android ecosystem. However, our vision for Android is unchanged and Google remains firmly committed to Android as an open platform and a vibrant open source community. We will continue to work with all of our valued Android partners to develop and distribute innovative Android-powered devices.”
The transaction is subject to customary closing conditions, including the receipt of regulatory approvals in the US, the European Union and other jurisdictions, and the approval of Motorola Mobility’s stockholders. The transaction is expected to close by the end of 2011 or early 2012.”
The Cloud Provider's Infrastructure - AND - Apple's New Data Center
Once again Thomas Trappler has come up with a very informative piece and at a very opportune time (Steve Jobs, Apple’s CEO, just announced its iCloud featuring its state-of-the-art iDataCenter – more on that later in this posting). Trappler’s article in COMPUTERWORLD entitled “The Cloud Contract Adviser: Know your provider's infrastructure” deals with the importance of knowing your provider and their ability to meet your need for availability (i.e. “uninterrupted service”). As Trappler points out, Service Level Agreements are just part of the equation (see April 30, 2011 posting in this Blog entitled Importance of Service Level Agreements for the Cloud). What should really matter is the ability for the Provider to manage its Cloud and he ponders if perhaps the technology to provide Cloud Computing is ahead of the skill to manage the data center that will be providing the cloud services. In a nutshell Trappler lays out the complexity facing the operations management team:
“In addition to general computing components such as virtual machine monitors, data storage and associated middleware, a public cloud infrastructure has to deal with things like workload management, data replication and recovery, and resource metering. And to make matters worse, all of these have to interact effectively, while they change over time as feature improvements and bug fixes are continuously rolled out.”
Trappler suggests that you develop a set of questions to ask the Cloud Provider and he assists in this endeavor by positing a few vital points that need to be covered in order to educate yourself on the infrastructure of the Could Provider, such as:
* Capacity and resource planning
* Data replication, storage, distribution and recovery
* Change management policies and procedures
* Virtual server provisioning and management
* Asset inventory and management policies and processes
*Software development quality assurance
Apple’s iCloud and its Suite of Services
Derrick Harris reports in his article in GIGAOM entitled “Apple launches iCloud; here’s what powers it” that just this week, Steve Jobs, Apple’s CEO, announced the launching of its iCloud and their infrastructure that will make it all happen.
Apple’s iDataCenter is in Maiden North Carolina:
It is 500,000 square feet, cost $1billion to build, uses clustering technology from IBM, Veritas and Oracle, and a second data center is planned for the same site:
Apple ordered 12 petabytes of Isilon file storage from EMC:
Intellectual Property Magazine - Cloud Computing: What In-House Counsel Needs to Know
Intellectual Property Magazine - Cloud Computing: What In-House Counsel Needs to Know
Intellectual Property Magazine asked me to write an article for their March 2011 issue. We discussed various topics and ultimately settled on the subject matter in the title of this Blog posting above. Our arrangement allows me to publish my work in my Blog. The graphics in the published article are really quite amazing. What follows is the text of my article minus the graphics:
Cloud Computing: What In-House Counsel Needs to Know
The only constant is change. I remember being at an Oktoberfest back in the late ‘80’s. My friends and I noticed a young man wearing a phone on his belt. We laughed and thought how self-important he must think he is. Well, I confess that today I do not leave the house without my Smart-Phone firmly attached to my belt. I can make and receive calls, send and receive emails, surf the net, and even take a picture if needed. The old adage “Change, embrace it” holds true in today’s technological environment.
It is said that the speed of processing chips doubles every 18 months. There does not seem to be an end in sight in the growth in sales for the ubiquitous mobile phones. Apple’s iPad is all the rage and the Apple stores cannot keep them on the shelves. The number of applications to be written for all mobile computing devices in the coming year is staggering. So the next phase in innovation in this burgeoning IT industry is Cloud Computing. The term “Cloud” gives the concept a rather nebulous tone. Studies show the sales in the Cloud Computing marketplace have doubled in the last few years and there is no slowdown in sight. Let’s first define exactly what Cloud Computing is in order to rid ourselves of the uncertainty and then examine its advantages and disadvantages.
Cloud Computing – What is it?
Software as a Service, also known as SaaS or On-Demand, is the term most closely associated with Cloud Computing. The key word is “Service”. SaaS acts similar to a linked network of computers, or a cluster of linked networked computers, to perform different functions. This cluster of networked computers acts as a virtual supercomputer. Each person working on his or her own laptop computer is provided with the exact application they need to work and perform the tasks on their part of a project or to perform their assigned tasks in their area of work in the corporate entity. These applications are provided to that person via the internet. The user can work remotely and the applications needed are accessed by them from the internet through their web-browser. It is a seamless delivery system and it appears to the user that the applications are installed on their lap-top. The software and the data generated are not stored on the premises or the user’s own hard drive, but rather on shared servers at the vendor’s site.
What are its advantages?
The major reason usually given for Cloud Computing is that SaaS is faster to get up and running into a productive environment when compared to a full blown enterprise wide implementation and therefore a much less expensive alternative. Hand in hand with the touted speed to productivity is the claim that the enterprise can avoid the upfront capital expenditures for additional or specialized hardware that are usually required in most Enterprise Resource Planning (“ERP”) implementations. The servers are not on premises. It is a shared server array at the software vendor’s site. Since it is a service, the pricing is based on a per seat use rate and so the millions in the initial cash outlay for the software suite are non-existent. The theory is that the enterprise pays for what one uses and no more. Depending on the application, the pricing might not be exactly pay as you go, but a hybrid. The software vendor may have a subscription based pricing for the estimated number of users or hits required over a shorter period of time. This pricing model can then be adjusted as events require. Another advantage to this delivery model is that it is easily scalable and provides flexibility as projects or the enterprise at large experiences growth. Users, storage space, and upgrades to new versions and releases to the software can all be dealt with as the needs arise.
What are its disadvantages?
Security is the paramount concern. Where’s my software? Where’s my data? We have government regulations to adhere to. There are new banking regulations and new privacy rules. What about protecting non-public personal information? How do you assure me that my data does not get mixed up with another entity’s data? And the list can go on and on.
How do we address these concerns?
Cloud Computing is inevitable. Given the centralized nature of Cloud Computing, security becomes more efficient. Instead of fighting the concept, it might be wiser to prepare for its eventual acceptance and implementation. It is a good idea to train your IT department personnel for the change so they can have a shorter learning curve when the switch is made. One way to approach this matter is to initiate trials for your personnel by creating an innovation sandbox in the cloud. Contractually, this is the time when in-house counsel needs to lean on the “techies” on the business team. Actually both sides must feel comfortable with the solutions to the security issues. Let the business teams gather all the questions and all the means to address those concerns. Then it is the contract draftsman’s job to memorialize these areas of concern and the consequences into the contract to be signed if such matters are not met.
The teams must agree on the specifications of how the data is to be isolated and protected. Include language that allows and mandates that the customer’s data is retrievable in a format that is desirable and safe. The ability to retrieve your data in the right format should be part of any Disaster Recovery language and the policies and procedures discussed and inserted into the contract. Your data should be backed-up periodically on a regular basis and copies of the back-ups should be stored off-site at another secure facility. Support levels and upgrades are part of the selling feature of any SaaS initiative and so these must be clearly spelled out in the contract, usually via a separate Support Schedule attached to the terms and conditions and incorporated by reference. In addition to clearly defining what is included in Support, make sure to have your team develop in conjunction with in-house counsel and the vendor’s team a Software Support Response Schedule for inclusion into the contract. Such a Response Schedule should have up-time availability percentages for the Productive System and a sufficient penalty if these availability percentages are not met. Do not be afraid to include tough penalties for failure to achieve the agreed upon up-time availability to adequately incentivize the On-Demand vendor to meet their promised availability times. These penalties usually are a dollar percentage credit to the customer’s monthly or quarterly use fees. The teams should work on clearly defining different levels of priority and the times to respond to such calls for support (e.g. Level 1 is Very High Priority due to Productive System Shutdown. Response time after reported is 1 hour). The contract must clearly state that the vendor is SAS 70 certified and such certificate must be made available to the customer upon signing of the contract. It should go without saying, but verify that all of the promises made have been confirmed by a team from the customer by an on-site visit to the vendor’s facilities. The on-site visit should be able to confirm all the physical security claims and the policies and procedures discussed in the contract negotiations. Once the promised savings materialize due to reduced costs on maintenance and upfront costs for specialized hardware, the enterprise can use these funds and direct its efforts to more innovative ways of running the business.
Is complete surrender the only alternative?
Depending on the type of business your company is engaged in, considering the move to Cloud Computing and the nature of the data to be processed, the concerns over security might be just too high a hurdle to overcome. The new Privacy Laws and computer hacking and new government regulations sometimes present an insurmountable obstacle. Another approach is to perform a cost benefit analysis of just certain parts of your business and the results might make the transition to Cloud Computing more palatable. On-demand service providers, another name of SaaS software vendors, are coming up with hybrid delivery approaches to Cloud Computing. If the enterprise has a myriad of smaller customer interfacing transactions at a multitude of cites, why not make use of the Cloud with all its advantages of scalability and pricing based on use while leaving the more sensitive data processed and stored on premises in a single tenancy traditional approach. This allows the enterprise to take advantage of the cost savings of using Cloud Computing while still maintaining the integrity of the more sensitive data stored on premises.
Where do we go from here?
The worldwide recession has kept the lid on software vendors raising prices. But this economic downturn cannot last forever. During this time, there has been a consolidation of software developers in the ERP industry. In April 2009 Oracle purchased Sun Microsystems. This purchase alone gave Oracle, one of the prime players in the ERP market space, access to not only Sun’s premiere hardware capabilities, but also the keys to some of Sun’s stalwart software applications, most importantly the Java programming language. Along with Oracle’s purchase of Sun came the Solaris operating system asset as well. With all the assets of the Sun Microsystems purchase, including both the software and hardware, Oracle has placed itself in a position to provide the foundation to build its SaaS and Cloud Computing services.
SAP, who has been partnering with IBM since the late 90’s, plans on developing along with IBM a product that will facilitate the creation of an in-house cloud. SAP’s new endeavor, the “Reservoir” cloud computing project’s aim is to spread the utilization of requested applications across the enterprise’s servers thus addressing under utilization and spikes in usage.
Intel, the world’s prime chip manufacturer, purchased McAfee, a leader in network security industry. With this purchase Intel hopes to integrate security directly into the architecture of its chip. If this is accomplished, Intel’s potential to enter such new markets as network security, smart phones, and PC tablets is boundless.
Google, purveyor of the prime search engine of choice, has recreated itself into a vendor of mobile devices, operating systems, and Cloud Computing. Other big IT players such as CISCO, IBM, and HP, now flush with cash and seeing the impending paradigm shift in the industry, have gone on a shopping spree purchasing unified communications vendors, and network security companies, and business intelligence vendors. Oddly enough all of these companies apparently are perceived as being outside of the acquirer’s original area of expertise.
With this consolidation in the market many of the potential ERP customer’s choices will be eroded as only a handful of ERP vendors will remain. It’s a fair assumption that prices will be on the rise. Your IT budgeters should expect the need to request increases in funding for the usual items that accompany an ERP Business Suite purchase such as increased costs for support, higher rates for users, and the ever burdensome costs of a full blown enterprise wide implementation with all its foibles and miscues. One way to counteract the consolidation in the ERP market space is to examine the alternative methods for deployment of the needed IT services. Cloud Computing, Software as a Service, a hybrid approach, or Managed Services are options your IT department should be considering. As I have discussed the insurmountable hurdles to Cloud Computing can be overcome. With the right contracting model, adequate assurances and protections, along with sufficient penalties to incentivize adherence to agreed upon terms of protection, Cloud Computing can be the viable alternative for your IT department. Change is coming. Embrace it.
Epilogue : My editor asked me to develop a “To Do” list for the readers. The graphics in the published piece consist of a yellow legal pad with the following bullet points:
To-do-list
· When implementing cloud computing, it is a good idea to train your IT department personnel for the change so they can have a shorter learning curve when the switch is made.
· In addition to clearly defining what is included in support, make sure to have your team develop in conjunction with in-house counsel and the vendor’s team a software support response schedule for inclusion into the contract.
· The contract must clearly state that the vendor is SAS 70 certified and such certificate must be made available to the customer upon signing of the contract.
· Make use of the cloud with its advantages of scalability and pricing based on use while leaving the more sensitive data processed and stored on premises in a single tenancy traditional approach.
Droid: Can Verizon Topple AT&T with the Newest Smartphone by Motorola
Well, by now you probably have seen the commercials. The first commercial began with a children’s lullaby playing in the background as a series of “i don’t” phrases appeared on a whiteboard. This was just enough to catch one’s curiosity when the final “i don’t” phrase dissolves into an eerie Sci-Fi fuzzy screen and a voice is heard announcing the coming of Droid. As a fighter pilot wannabe, the second commercial was much more to my liking. A squadron of what look to be 2nd or 3rd generation stealth fighter-bombers is flying in formation when the order is given to release the pods. A shower of what appears to be meteors fills the skies. Upon impact the locals gather around each crater and the pods begin to open when the background voice announces the arrival of Droid.
Last Friday Verizon’s iPhone killer went on sale. Motorola’s Droid has a mobile open source
platform on the Verizon network. Michelle Megna reports for Internetnews.com on the impending battle between Apple, the maker of the iPhone, and the PC community in her article entitled “Droid First Step in iPhone Fade Away?”. Megna quotes Tim McLaughlin, CEO of Siteworx, a mobile app and Web development company,
"History shows that unlike Apple, PCs gathered the ecosystem of profitable companies, such as Dell and IBM, thanks to its open technology. Apple, however, only develops systems that benefit itself. It all comes down to economics, and the only company interested in making the iPhone ubiquitous is Apple. On the other hand, you have Google, Verizon, Motorola, all these big companies together, the cumulative market value is huge. You put all of those resources together, and even though it's less effective because it's not centralized like Apple, it will still have a huge impact"
Brad Reed and Matt Hamblen have done their due diligence research on the product and have come up with a nifty review in their article for Computerworld entitled “Four reasons to buy (and one reason to avoid) the Droid”. I’ll try to provide a brief summary of their five points:
1. Droid is the strongest device on the Verizon Network with the following three characteristics:
a. Mobile browsing capability
b. A very good voice recognition functionality
c. The largest 3G data coverage network of Verizon
2. The Google connection: The open platform will stimulate development of new apps and allow users to switch to new carriers while maintaining the same device.
3. Ability to run two applications simultaneously: iPhone can’t do it. Once Droid develops the appropriate security features, then Blackberry will need to pay attention as Droid could become the device of choice for the enterprise user.
4. Connection to the internet through Wi-Fi: Also use of the same processor as the iPhone will allow a fast and smooth browsing experience.
5. AND the one reason to avoid this device is the keyboard: Droid has the touchscreen capability, but in order to get that feel of hitting the keys, they have also developed a slide-out keyboard. This feature allows enough room for a larger display screen. Reed and Hamblen report that users do not get the same feel with this shallow keyboard.
Gartner Reports Smartphone Sales Strong
Gartner reports that worldwide sales for Smartphones topped 32 million units for the second quarter of 2008. It seems that the North American consumer shrugged off any thoughts of a downturn in the economy. This market experienced an annual increase of over 78%. Even with new competitors and the new touch screen technology, Nokia kept its leading worldwide market share, although its growth rate was half the market average. Nokia will address this sluggish growth by introducing its own touch screen Smartphone later this year.
On the other hand, Research in Motion (“RIM”), the maker of the Blackberry, came in with a stalwart performance for 2008 topping 126% growth from last year. Gartner reports:
“RIM continued to execute well at the consumer level, increasing its global market reach. In the second half of the year, the company is expected to launch smartphones based on new form factors, which are necessary to keep pace with the competition at the consumer level”
The apparent lackluster sales for the Apple iPhone was due to inventory troubles on the initial sales of the iPhone, but we should expect record sales numbers for the second half of this year.
Read the complete story as reported by Judy Mottl of InternetNews.com in her article Smartphones Show No Signs of Slowing.
Speaking of RIM and its latest clamshell BlackBerry …
Research in Motion announced its latest entrant into the consumer market with the BlackBerry Pearl Flip 8220. This model is aimed at Apple’s iPhone consumer based market.jpg)
and not the conventional RIM enterprise user. The usual full keyboard has been reduced to a 20 button keyboard which favors the web surfing of consumers over the text entry preference of the enterprise user. Competition in this space can be fierce with such competitors as Apple’s iPhone, Nokia’s Symbian OS, and the soon to be released Google Android.
AR Communications analyst, Carmi Levy, commented on RIM’s strategy,
"RIM's ability to get all of its next-generation devices out the door and into the channel by year's end as originally planned is critical to its continued market and revenue growth,"
This latest 8220 Flip open Smartphone boosts 2 LCD screens. When closed, the outside LCD allows the user to preview calls, emails, and text messages. Also available on the 8220 will be AOL AIM and ICQ instant messaging services, and AOL Mail.
Read RIM's BlackBerry 'Flips' Out to Woo Consumers for a more complete story.
Apple's iPhone: Bumpy Start
I must confess that I just don’t get it. I am not a person that has to be the first to have the newest gadget, especially when it comes to the latest technology. Give it time. Let them work out the kinks.
Long lines were the order of the day for those wanting to be the first to get their iPhones.
Some people even got creative in their quest to be first in line.
One consequence that should have been anticipated was that iPhone buyers were unable to activate their phones as Apples online iTunes store was swamped.
Customers were told to go home and activate their phones by connecting them to their own home computers. The media is loaded with horror stories on this information meltdown.
Here are some links to articles just to give you a flavor of what happened today:
iPhone goes on sale, problems arise
Software problems bug Apple's launch of new iPhone
My other nightmare -- first the -4 and then AT&T activation
Augmentation of Recent Posts
In my reading of interesting and relevant articles posted on the web, there have been several follow-on articles which expand on some of my more recent posts to this Blog. Due to the number of articles that I have come across, I thought it best to cite to some these articles, with a line or two of brief explanation, and let the reader pick and chose any article(s) of interest. I found the following to be of particular interest:
Time to Scrap Your BPM Spreadsheets? SMBs have powerful SaaS alternatives: Here is a way to streamline the budgeting and financial planning process. This will facilitate collaboration, what-if scenarios, and contingency planning.
Apple Watchers Salivate Over 3G iPhone Rumors - Developer conference expected to be launch venue for new iPhone: This will be one to watch this week. Apple’s Worldwide Developers Conference (WWDC) starts Monday, June 9th in San Francisco. Could this be Apple’s answer to the recent flurry of applications announced to be integrated into the BlackBerry?
Software Sales in 'SaaSy' Transition - The consumer-inspired trend of easy, online access to applications is finding a ready market in the enterprise: What can I say. We told you so. This is a discussion about applications designed for the end-users and not colorful reports to impress the top brass.
BlackBerry Defies Stagnant Tech Spending - Companies are untying IT purse strings for smartphones but not for much else these days: With IT spending slowing down, RIM’s market share is estimated to reach 82% this year.
