THE INTERNET OF THINGS IS FAR BIGGER THAN ANYONE REALIZES

Original Story: wired.com

WHEN PEOPLE TALK about “the next big thing,” they’re never thinking big enough. It’s not a lack of imagination; it’s a lack of observation. I’ve maintained that the future is always within sight, and you don’t need to imagine what’s already there.

Case in point: The buzz surrounding the Internet of Things.

What’s the buzz? The Internet of Things revolves around increased machine-to-machine communication; it’s built on cloud computing and networks of data-gathering sensors; it’s mobile, virtual, and instantaneous connection; and they say it’s going to make everything in our lives from streetlights to seaports “smart.”

But here’s what I mean when I say people don’t think big enough. So much of the chatter has been focused on machine-to-machine communication (M2M): devices talking to like devices. But a machine is an instrument, it’s a tool, it’s something that’s physically doing something. When we talk about making machines “smart,” we’re not referring strictly to M2M. We’re talking about sensors.

A sensor is not a machine. It doesn’t do anything in the same sense that a machine does. It measures, it evaluates; in short, it gathers data. The Internet of Things really comes together with the connection of sensors and machines. That is to say, the real value that the Internet of Things creates is at the intersection of gathering data and leveraging it. All the information gathered by all the sensors in the world isn’t worth very much if there isn’t an infrastructure in place to analyze it in real time.

Cloud-based applications are the key to using leveraged data. The Internet of Things doesn’t function without cloud-based applications to interpret and transmit the data coming from all these sensors. The cloud is what enables the apps to go to work for you anytime, anywhere.

Let’s look at one example. In 2007, a bridge collapsed in Minnesota, killing many people, because of steel plates that were inadequate to handle the bridge’s load. When we rebuild bridges, we can use smart cement: cement equipped with sensors to monitor stresses, cracks, and warpages. This is cement that alerts us to fix problems before they cause a catastrophe. And these technologies aren’t limited to the bridge’s structure.

If there’s ice on the bridge, the same sensors in the concrete will detect it and communicate the information via the wireless internet to your car. Once your car knows there’s a hazard ahead, it will instruct the driver to slow down, and if the driver doesn’t, then the car will slow down for him. This is just one of the ways that sensor-to-machine and machine-to-machine communication can take place. Sensors on the bridge connect to machines in the car: we turn information into action.

You might start to see the implications here. What can you achieve when a smart car and a smart city grid start talking to each other? We’re going to have traffic flow optimization, because instead of just having stoplights on fixed timers, we’ll have smart stoplights that can respond to changes in traffic flow. Traffic and street conditions will be communicated to drivers, rerouting them around areas that are congested, snowed-in, or tied up in construction.

So now we have sensors monitoring and tracking all sorts of data; we have cloud-based apps translating that data into useful intelligence and transmitting it to machines on the ground, enabling mobile, real-time responses. And thus bridges become smart bridges, and cars smart cars. And soon, we have smart cities, and….

Okay. What are the advantages here? What are the savings? What industries can this be applied to?

Here’s what I mean when I say people never think big enough. This isn’t just about money savings. It’s not about bridges, and it’s not about cities. This is a huge and fundamental shift. When we start making things intelligent, it’s going to be a major engine for creating new products and new services.

Of all the technology trends that are taking place right now, perhaps the biggest one is the Internet of Things; it’s the one that’s going to give us the most disruption as well as the most opportunity over the next five years. In my next post in this two-part series, we’ll explore just how big this is going to be.

LARRY ELLISON TO STEP DOWN AS ORACLE’S CHIEF

Original Story: NYTimes.com

SAN FRANCISCO — Silicon Valley just got a little less colorful.

Lawrence J. Ellison on Thursday announced his retirement as chief executive of Oracle, a company he founded in 1977 that has transformed the way businesses use technology and made him one of the world’s richest people.

The move, effective immediately, is one of the last times that one of the tech industry’s first generation of celebrity executives is exiting the role of chief. Mr. Ellison’s generation of leaders took computers from the back offices of a few big institutions and into everyday life.

“By a lot of definitions, it’s the end of an era,” said Zach Nelson, chief executive of NetSuite, who worked at Oracle from 1992 to 1996. Mr. Ellison is the largest investor in NetSuite, a company that uses so-called cloud computing technology to manage things like retailing. “He is the longest-tenured founder and C.E.O. in the Valley.”

Mr. Ellison will become executive chairman and will continue to work on Oracle’s technology as its chief technology officer, the company said in a statement.

The current chairman, Jeffrey O. Henley, will become vice chairman. The chief executive job will be shared by Mark V. Hurd, now co-president, and Safra A. Catz, co-president and chief financial officer.

Along with Bill Gates at Microsoft and Andy Grove at Intel, Mr. Ellison was one of the most important — and flamboyant — figures of tech’s early boom years.

His personal fortune, estimated by Bloomberg at about $46 billion, has helped Mr. Ellison become one of the technology industry’s most recognizable people. He has been married four times, and in 2013 his sailboat racing team, Oracle Team USA, won the America’s Cup for the second time in San Francisco.

A licensed pilot and a collector of exotic aircraft, he lives on an estate in Woodside, Calif., valued at over $100 million, and maintains several other properties, as well as a yacht nearly the length of a football field. He bought the 141-square-mile Hawaiian island of Lanai in 2012 for a reported $300 million and is turning the land into a technology-infused sustainable community.

Despite all this, Mr. Ellison does not seem ready to leave Oracle. The executive, who turned 70 last month, said during a conference call with financial analysts that he would “continue doing what I’ve been doing for the past several years,” including overseeing Oracle’s technology development, making final decisions on corporate matters and even appearing on quarterly earnings calls.

The two executives who are replacing him, Mr. Ellison said, “deserved the recognition.”

Oracle’s software and hardware are involved with the ways that companies and large organizations store and manage their data, as well as sophisticated applications for running things like international manufacturing and corporate financial systems.

It is unusual for big technology companies to split responsibilities at the top, but so far the two co-presidents have split much of running Oracle, a company with over 120,000 employees that is based in Redwood Shores, Calif. Mr. Hurd runs service and sales, while Ms. Catz oversees operations and finance.

Still, neither has Mr. Ellison’s technological expertise, nor is either likely to cast anything like the shadow that Mr. Ellison has over his 37-year career.

Born to an unwed mother in New York, Mr. Ellison was adopted by his aunt and uncle and grew up in a Jewish household in Chicago. He is known for a fascination with Japanese samurai culture.

He attended college but did not graduate, and he took a job in the computer business. An early project involved writing for the Central Intelligence Agency a database that could turn numbers into information. The idea, pioneered by IBM, was to relate one set of data to another, for example, a row of people’s names with a column of their birth dates. This, in turn, could be combined in a table of, say, all people born under the astrological sign Leo.

In 1977, working with Robert Miner and Edward Oates, Mr. Ellison created a company called Software Development Laboratories to sell their product, the relational database, to the government. Finishing the project ahead of schedule, they turned their database into software for businesses. After a second name change, the company became Oracle in 1982.

Mr. Ellison proved to be a master salesman as well as an able technologist with a good eye for managing talent, and Oracle became a dominant maker of software for businesses.

He was also adept at changing Oracle with the technological times. The company was born in an era when mainframe computers were giving way to
minicomputers, and it managed to dominate business computing through the rise of personal computers, computer servers and the Internet. Once a foe of growth through acquisitions, over the last several years Mr. Ellison has spent billions getting Oracle into cloud computing, considered the next wave in technology.

Some analysts felt that Mr. Ellison’s passion for the business would keep him busy at Oracle, despite the nominal changes.

“He’s going to have Oracle’s C.E.O.s reporting to him. He’ll have product reporting to him, and product is what it’s all about,” said Bill Hostmann, a research analyst at Gartner. “He gets himself out of day-to-day operations, but is it really that different?”

Whatever the changes mean for Mr. Ellison, they are certainly a victory of sorts for Mr. Hurd, the former chief executive of Hewlett-Packard who resigned in 2010 after a sexual harassment investigation. HP concluded that Mr. Hurd had not violated its sexual harassment policy, but the executive and the HP board were at odds over other matters of conduct.

At the time, Mr. Ellison castigated the HP board, and he was quick to hire Mr. Hurd, who has moved to strengthen Oracle’s ties to big business.

On Thursday, Oracle reported first-quarter revenue of $8.6 billion and net income of $2.2 billion, or 48 cents a share. In its previous fiscal year, the company had total revenue of $38 billion and net income of almost $11 billion.

Using nonstandard accounting, analysts had expected earnings per share to be 64 cents, according to a survey by Thomson Reuters. By that accounting, Oracle missed expectations by 2 cents.

Shares of Oracle declined about 2 percent in after-hours trading.

Mr. Ellison does not leave his company entirely untroubled. Besides continuing challenges in cloud computing, including acquisitions and new competition, the company faces a raft of new types of databases, first developed inside Google and Yahoo, that also threaten the dominance of the relational database.

Whatever troubles Oracle may face, they will not be Mr. Ellison’s.

In addition to NetSuite, he is also a major investor in Salesforce, another premier company in the next generation of business computing.

Google opens Web Store for Business Applications

SAN FRANCISCO (AP) - Google Inc. will sell the online services of other business software makers in an effort to fill its own product gaps and persuade more companies to rely on applications piped over the Internet.

The online store that was announced late Tuesday marks another step in Google's crusade to convert the world to "cloud computing," the idea of running applications in Web browsers instead of installing them on individual hard drives. The information entered in the programs also is stored in data centers run by third parties such as Google.

More than 50 software makers have agreed to sell their Internet programs through Google, which will keep 20 percent of the sales. The prices are expected to range from $50 annually to several hundred dollars annually per user.

Intuit Inc., a maker of business accounting software, and Concur Technologies Inc., a maker of expense reimbursement software, are among the best-known vendors peddling their wares in Google's store.

All the applications sold in Google's store can be melded with Google's own cloud-computing services, said Vic Gundotra, the company's vice president of engineering.

Google views cloud computing as a way to deepen people's dependence on its services and generate more revenue beyond the Internet search advertising that provides virtually all its income.

Cloud computing also provides Google with a weapon that could weaken one of its biggest rivals, Microsoft Corp.

Although it's introducing more online alternatives, Microsoft still makes most of its money from individual computer licenses of its Windows operating system and software programs.

The applications store could also could provide fodder for the low-cost computers that will run on a Google operating system named after its Chrome Web browser. The first computers using Chrome OS won't have a hard drive, meaning they will need Internet access and cloud-computing services to perform the tasks routinely done on Windows-powered machines.

Google began offering a free online suite of e-mail, word processing, spreadsheet and calendar applications in 2006. It has been selling a more sophisticated package of online services for $50 per user for the past three years.

Cloud computing can be a tough sell to corporate decision makers worried about security risks and business disruptions if a technology glitch or major meltdown blocks access to vital applications and data stored on external servers.

Google has invested billions of dollars during the past five years to keep its systems up and running. Nevertheless, Google's applications users occasionally have been cut off from their e-mail accounts and other services.

About 25 million people working for more than 2 million businesses, government agencies and schools use Google's online applications, according to the company.

Google won't say how many users pay for the service, but the number is growing rapidly. The company's revenue from software licensing and other non-advertising sources totaled $762 million last year, more than quadrupling from $181 million in 2007.

Cybersecurity Chief Confronts Google Attack, Cloud Security
Information Week

New to the job, Howard Schmidt's priorities include developing an organized response to attacks on American systems, private-public partnerships, and R&D.

The nation's new cybersecurity coordinator, Howard Schmidt, says the task of overseeing government-wide computer security has been "non-stop" in his first two weeks on the job.

Following the December announcement of his appointment by President Obama, Schmidt immediately had a cybersecurity crisis on his hands: Google's disclosure of a cyber attack on its system from within China. "I think everybody in the world who's in the security business is thinking about or working on that issue right now," Schmidt said in a brief interview at the Congressional Internet Caucus' annual State of the Net conference, where he gave his first public speech since taking office.

Since meeting with President Obama a few weeks ago, Schmidt has been working with federal CTO Aneesh Chopra and federal CIO Vivek Kundra on the requirement for secure cloud computing architectures and other issues.

Schmidt didn't offer a timeframe for when the White House would introduce a comprehensive cybersecurity strategy, but he hinted at where he might be looking to affect change. Schmidt pointed to supply chain management and education as weak links in cybersecurity. His priorities include developing an organized, unified response to attacks on American systems, fostering private-public partnerships, and addressing R&D needs.

One of the main concerns expressed about Schmidt's position before he took office was that it carried no real budget authority, but Schmidt waves that aside. "I don't believe that if you don't have the budget authority, you can't affect change," he said, noting a recent groundswell of support from policy-makers for cybersecurity efforts.

Another question has been whether Schmidt has the President's ear and the authority to make policy. He reports to both the National Economic Council and the National Security Staff, rather than to the President.

"I was particularly pleased and it made me feel good that there is a direct link to the National Security Staff as well as the National Economic Council," he said in his speech. "By being dual-hatted, it gives us a much broader perspective and helps us to have balance. It's important to understand we have a foot in both camps and utilize both camps."

Schmidt said privacy would be a key component of any cybersecurity plans he helps to develop. "Privacy and security are two sides of the same coin," he said. "As I was coming into this position, I was always sure that we had the discussion about privacy."

Schmidt took over for Chris Painter, who was acting in an interim capacity. Painter kept things going forward, Schmidt said, adding that he hopes to keep him at the White House "as long as I can keep him." Schmidt has a staff of about 10 working on issues from privacy to intelligence.

Microsoft Moving Fast on Cloud Computing

LOS ANGELES — After more than two years as Microsoft's low-profile chief software architect, Ray Ozzie finally has something to say: Windows Azure.

The man who replaced Bill Gates as Microsoft's top technical thinker said today that Microsoft will compete with Amazon.com, IBM and other rivals in selling information storage space and computing power "in the cloud," distributed across massive data centers worldwide. The system, Windows Azure, will let companies and hobbyists alike build Web-based programs without having to invest in their own server farms.

Ozzie's remarks at a Los Angeles conference for software developers indicated that after several years of disparate experiments, Microsoft is closer to a companywide strategy for coping with an upheaval in the software industry — the shift from powerful desktop programs to more lightweight, inexpensive ones that run over the Internet.

Nimbler Web companies like Google have moved quickly to make programs that do much of the work of Microsoft's cash-cow Office suite — but they do it over the Internet at little or no cost to the user, and can be updated frequently with new features and bug fixes.

Microsoft has largely fumbled this transition. In its "cloud" products before now, Microsoft has offered some of its business server software on a subscription basis and has cobbled together consumer Web services like e-mail and messaging under the "Live" brand.

Windows Azure is meant to be a broader "platform" for the cloud, much like Vista for PCs and Windows Mobile for phones and other devices. Microsoft's own programs will run on it, as will those made by outside companies.

Ozzie said Microsoft has learned enough managing its own Web sites and programs, anticipating Web traffic spikes and lulls and ramping up or dialing down capacity, that it's ready to market this expertise to others.

From the perspective of an average computer user, Ozzie said in an interview, Azure is another step toward solving the modern headache of accessing files from many different devices — for instance, home, work and portable computers and mobile phones.

Microsoft is letting software developers test Azure, but Ozzie emphasized that the system will change as more people kick the tires through 2009. He did not say when Microsoft will start selling access to Azure or how much it will cost.

Ozzie, 52, came on board in 2005 as a chief technical officer when Microsoft bought his collaboration software company, Groove Networks. Already respected for his work with Web computing, Ozzie was asked to figure out how Microsoft could survive the sea change toward software being delivered online.

In the 1980s, Ozzie worked at Lotus Development Corp., where he led work on Lotus Symphony, a precursor to Microsoft's Office package, and Lotus Notes, which let people form groups to share documents and e-mail. Notes' success prompted IBM to buy Lotus for $3.5 billion in 1995.

Ozzie then started Groove to refine his idea of "groupware" that lets multiple people collaborate. Groove made it possible for people work together on the same virtual sketchpad, view the same video or edit documents simultaneously, all while chatting by text or voice.

This expertise made Ozzie a natural replacement for Gates as the mastermind of Microsoft's broad software strategy. Shortly after joining the company in 2005, Ozzie wrote an influential memo advocating a shift away from some of Microsoft's traditional reliance on selling desktop software and toward Web-based and sometimes ad-supported software. He urged Microsoft's product groups to make software that can run on a computer desktop, in a Web browser, on mobile devices and in game consoles, and to give users "seamless" access to their files no matter where they log on.

But while Microsoft watchers have clamored for a concrete plan from Ozzie, Microsoft's efforts have come off as scattered.

Ray Valdes, an analyst at the research group Gartner, said today that Microsoft's Web services strategy still isn't cohesive. Microsoft is "taking every major asset of intellectual property and cloud-enabling it to some degree," the analyst said.

Web startups have flocked to Amazon Web Services, but few big corporations have taken the plunge. Azure is "a defensive maneuver" to make sure those corporations that already rely on Microsoft's servers and other technology don't defect to Amazon or others, Valdes said.

Today's announcement was aimed at programmers who wanted to know that their software skills will still be relevant as Microsoft shifts into this new phase. On Tuesday, the company is set to discuss changes for average PC users, with top Office and Windows executives slated to speak.

Overuse of the Term 'Cloud Computing' Clouds Meaning of the Tech Buzz Phrase

'Cloud computing" is the latest buzz term sweeping through the information-technology industry, but it's losing whatever meaning it once had as an increasing number of companies apply the label to their wares.

The word "cloud" has been a go-to metaphor for the Internet for almost as long as the network has existed. It never made much sense -- clouds are billowing masses of condensed water vapor while the Internet is a host of connected computers -- but the Power Point set needed a graphic for their slides and clouds conveyed the sense that the Internet was intangible and bigger than the sum of its parts.

The term "cloud computing" surfaced earlier this decade, but didn't really catch on until August 2006 when Amazon.com Inc. introduced a service called Elastic Compute Cloud, or EC2, which allows people to run Web sites and online applications on servers that Amazon operates.

Cutting-edge technology is notoriously difficult to explain, but the term "cloud computing" has a whimsy about it that makes it instantly accessible. More importantly, the term makes one feel that it's OK not to fully understand the details: The computer processing takes place in this thing called the cloud, and as long as it works, no one really needs to know any more about what goes on there.

Soon, International Business Machines Corp., Google Inc. and others started to use the term to describe their efforts to turn vast farms of personal computers into supercomputers that academics could use to process data-intensive calculations. While slightly different from what Amazon.com offers, these services also use the Internet to access processing power on someone else's computer.

The term could have been helpful if it stayed in that niche of the IT world. But in late 2007, Salesforce.com Inc. Chief Executive Marc Benioff read a BusinessWeek article about cloud computing. Not wanting to miss out, he says he put two slides that called Salesforce.com's online sales-automation software "cloud computing" into his next presentation. When Google and Salesforce.com announced in April that it was possible to share information between online software from the two companies, the press release mentioned cloud computing nine times.

With the term's meaning broadening, no one in the tech industry wanted to be left behind. These days it's hard to find a tech company that isn't pushing its own brand of cloud computing. Online software? That's cloud computing, as are services that let people store data on the Internet. Virtualization software that lets multiple applications run on a single server? That's cloud computing, too, because it makes leasing server space possible. Oracle Corp. on Monday announced a version of its database software for cloud computing. Dell Inc. recently tried to trademark the term because, the company argued, none of this would be possible without the servers it makes.

So the term has become almost meaningless, though companies continue to use it. "We're in that nutty stage," says Billy Marshall, CEO of rPath Inc., which says it makes technology that enables, you guessed it, cloud computing. "It's absolutely too broad right now."

What Employees Really Do Online

Businesses are increasingly turning to the Internet to run software. Workers are increasingly using the Internet to do, well, whatever they want.

Those are the two key findings in a study of traffic on corporate networks by Palo Alto Networks Inc. Caveat Emptor: The company's technology helps businesses identify what Internet-based applications are running on their networks, so it has a vested interest in making the Internet seem like the Wild West. The study is based on an analysis of network traffic at 60 large businesses.

Palo Alto discovered 424 different applications in use by these companies. About half of these are applications that are accessed through a Web browser but communicate with servers that a company operates, such as Microsoft Corp.'s SharePoint collaboration tool or some email and instant-messaging programs. The rest are either Web-based applications or Web sites, including searching for new vendors and using Google for B2B Discovery and B2B SEO.

The most common was online video. In fact, about 10% of all network bandwidth at the businesses Palo Alto studied came from sites like YouTube, Hulu, and even Slingbox, a program that lets people watch television from their computers.

"Employees are staying entertained," says Steve Mullaney, Palo Alto's vice president of marketing. And often they're doing it without the IT department's knowledge. For example, most businesses say they have a policy against using peer-to-peer networks, which allow people to exchange files directly with one another. But the study showed that peer-to-peer software was used by employees at almost all of the companies.