Google Spiffs Up for Uncle Sam

July 29, 2010

Google’s got a special new version of its standard Premier Edition Google Apps that’s supposed to meet basic toe-in-the-door government security requirements.

Well, at least the data generated by the government’s use of Gmail and calendaring will be segregate from everybody else’s cloud-borne data on servers located in the continental US. Other apps will eventually be segregated too.

In this Google’s aping Microsoft’s BPOS Federal (BPOS-F), its Business Productivity Online Suite for the government.

Google’s billing the widgetry as Google Apps for Government and saying that pushing government large and small into its cloud will save taxpayer dollars that otherwise go to pay licensing fees and maintenance. Like Google Apps for the rest of us it costs $50 a seat per year.

Google has won over Lawrence Berkeley National Labs and has pilots running the government-grade Apps at maybe dozen other agencies.

It’s been pitching its e-mail to the General Services Administration (GSA), the influential 15,000-seat agency that oversees government procurement, up against Microsoft, and the GSA has just certified Gmail and Google Apps word processing as secure enough for generic federal use, stuff that may be sensitive but not classified.

Microsoft is bidding its $120-a-seat-per-year web-based Exchange widgetry and expects to get the same minimal Federal Information Security Management Act (FISMA) certification for its BPOS-F, which naturally includes Exchange Online.

Ninety percent of the federal government already uses Exchange for e-mail according to the Wall Street Journal. The GSA uses IBM’s Lotus Notes.

Ironically, Google flubbed its June 30 deadline to lift the City of Angels’ e-mail into the cloud, a closely watched five-year marquee project that it’s getting paid $7.25 million to pull off, its largest government contract so far.

Some 20,000 of LA’s 34,000 workers will have to shift for themselves for a while longer on the town’s decrepit Novell Groupwise platform and Google will have to shrug off the embarrassment.

Google beat out Microsoft for the contract last October but has encountered an LAPD roadblock in how the cops’ want their data secured, if not segregated, requirements that were supposedly clear from the beginning. Other agencies have had performance complaints.

Until Google resolves the issues, the city is going to be paying for both systems at a potential added cost of $147,000 a quarter according to the LA Times – or it would be if Google and CSC, its integrator, hadn’t just agreed to absorb the difference at least until November, when the system is now supposed to be completely installed. Additional cost overruns are reportedly still being negotiated.

Google is downplaying the fact that it may have bit off more than it can chew. It would have preferred to do a bunch of smaller municipal installations first but fate decreed otherwise.

The Times quoted a council member as saying, “Google comes in with this sweetheart deal that was supposed to be state-of-the-art – supposed to make wonders – and obviously they haven’t performed.” The city council is supposed to review Google’s contract performance next week. The deal is supposed to save the city $5.5 million.

Google says on its web site that it took guidance from the cities of Los Angeles and Orlando in coming up with Google Apps for Government. It claims “most agencies we have worked with have found that Google Apps provides at least equivalent, if not better, security than they have today. This means government customers can move to the cloud with confidence.”

It reckons Washington spends $76 billion a year on IT, and state and local governments spend $56 billion.

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Headlines – Issue No. 847 (August 2-13, 2010)

July 29, 2010

Google Spiffs Up for Uncle Sam
Kindle Wars Quicken
Justice Department Sues Oracle for Fraud
How Intel Kept Dell Afloat
HP & Dell To Sell Solaris, OpenSolaris Hung Out To Dry
Adobe Buys Day Software
Terracotta Swells Encache to a Terabyte
Yahoo Japan Bolts to Google
Nvidia Found Guilty of Infringement
Android Shifts Application Copy Protection
Oracle ‘Clarifies’ its President’s Statements
Microsoft Brings ARM In-House
SAP Trails Oracle; Its On-Demand Widgetry About To Pop
IBM Buys Storwize
Apple Dumps Nvidia
Adobe Reorgs
Google Building Its Own Facebook: WSJ
Larry Needs a Handcart To Take Home His Paycheck
VMware Starts Point System
You Can Have Any Color So Long as It’s Black: Steve Jobs
CO2 Emissions Down
IBM To Set Up Polish Cloud
Oracle Pulls the Plug on Postgres Servers
IBM & Carnegie Mellon To Establish Research Lab
LinkedIn Valued at $2.26B

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EC Opens Two Antitrust Investigations of IBM

July 26, 2010

by Maureen O’Gara

Monday, July 26, 2010 – The European Commission said this morning that has opened not one but two formal investigations of IBM and its mainframe business on the suspicion that Big Blue has abused its dominant position.

IBM is already under investigation by the Justice Department for the same thing and the EC’s move may inspire the DOJ to make its case.

IBM’s immediate reaction was to blame Microsoft and “its satellite proxies” for its troubles but that “pretty to think so” excuse doesn’t quite hold water.

One of the twin probes the EC currently has underway has nothing to do with any of the recent complaints that would-be rivals have made against IBM. It is solely the regulators’ idea.

The Commission, which has apparently overcome witnesses’ fear of reprisal, said that – on its “own initiative” – it’s investigating what smells like discriminatory behavior towards competing suppliers of mainframe maintenance services.

It said it “has concerns that IBM may have engaged in anti-competitive practices with a view to foreclosing the market for maintenance services (i.e. keeping potential competitors out of the market), in particular by restricting or delaying access to spare parts for which IBM is the only source.”

One is left to wonder where this surprise charge came from. Third-party hardware maintenance was created by the 1956 consent decree that is still supposed to govern IBM’s mainframe business. With the downturn IBM may have looked to shore up its top line by reclaiming even low-margin business like hardware maintenance.

The EC has been investigating IBM for a lot longer than most people realize, certainly a lot longer than the DOJ, which only opened its probe last October.

The EC had started down the investigatory path when IBM bought the mainframe-to-Itanium start-up Platform Solutions Inc (PSI) in mid-2008 to get its monopoly maintenance complaint dropped. Whatever the EC found out during that preliminary investigation presumably became part of its institutional memory.

The PSI charges were replaced in January 2009 by T3T, once the world’s second-largest mainframe systems integrator which wanted to resell PSI boxes. Then this past March Paris-based TurboHercules SAS, the start-up begun to commercialize the open source Hercules mainframe project, filed a formal complaint against IBM with the EC.

These two complaints reportedly dumped a heap of evidence on the EC’s desk.

The EC says its second investigation concerns the charges that both T3T and TurboHercules made about IBM illegally tying its mainframe hardware to its mainframe operating system and – in the later case – shutting out providers of emulation technology that could enable users to run critical applications on non-IBM hardware.

IBM foreswore tying in its antique consent decree and in the undertakings given to regulators on both sides of the pond to get the decree terminated by 2001.

IBM’s allegation of the “meritless” charges being the work of Microsoft and its stooges comes from the fact that Microsoft put money into both PSI and T3T, whose new business involves migrating mainframe site to Windows servers. Microsoft’s investment wasn’t made until after T3 filed suit against IBM and complained to the EC.

But that’s why Blue figures it can say that “Certain IBM competitors which have been unable to win in the marketplace through investments in fundamental innovations now want regulators to create for them a market position that they have not earned.”

Of course, one wonders how much truck Microsoft, a convicted monopolist, has with the regulators that fined it a small fortune.

In response to IBM’s statement, Microsoft said it isn’t a party to T3T complaint and that it puts money in companies like T3T to give users greater choice. “We do share T3T’s belief that there needs to be greater openness and choice for customers in the mainframe market,” it told Bloomberg. “Customers tell us they want greater interoperability between the mainframe and other platforms.”

IBM is the only mainframe maker left and as it told the UK press last week “Western civilization runs on this system.” The Commission acknowledges that the vast majority of corporate data worldwide still lives only on the mainframe. It is too expensive to move it.

The EC puts the worldwide market for mainframes last year at roughly €8.5 billion ($11 billion) and €3 billion (~$4 billion) in the European Union, but those estimates apparently just cover mainframe hardware and operating systems.

IBM’s mainframe margins are understood to be quite handsome – BusinessWeek reckons the new next-generation mainframe that IBM just announced last Thursday could have a profit margin of ~70% – and Sanford Bernstein, for one, says the mainframe contributes over 20% of IBM’s revenues and 40% of its profits all things considered: hardware, software, storage, services, financing.

Last week IBM reorganized its executive suite and for the first united hardware and software under one person. Steve Mills, its long-time software boss, will also have all of IBM’s servers, including mainframes, and the chips they’re made out of reporting to him. IBM’s latest theory is that computer systems must be “designed and brought to market as tightly integrated” packages of hardware and software, a theory that suggests it’s seeking tighter control of the mainframe.

The EC is also entertaining another official complaint about IBM’s “on-going anticompetitive and abusive conduct” in the mainframe market that it didn’t mentioned this morning. That one was lodged in late June by Texas-based Neon Enterprise Software, a company 100% owned by John Moores, the “M” in BMC. Neon is also suing IBM for antitrust in district court in Texas.

Observers wonder whether the EC will ultimately open a third investigation involving Neon’s allegations. And Ed Black, the head of the Computer & Communications Industry Association (CCIA), whose complaint led to the DOJ investigation, issued a statement saying, “Although we are pleased the European Commission is taking a serious look into IBM’s actions, it comes as no surprise to us as the evidence of anticompetitive behavior is strong. We believe competition authorities around the world, as they learn about and focus on this vital market will take similar actions….It is vital that a market that is responsible for more than three quarters of the world’s government and business data not be walled off from competition and innovation. All we ask is that IBM actually apply the same principles they espouse in the open source world to their mainframe business as well.” Microsoft is a member of CCIA.

T3 president Steven Friedman, who is trying to get his antitrust suit against IBM back on track – it was dismissed on a legal technicality and he’s appealing that decision – said, “We applaud the EU Commission for taking formal action on the material issues raised in our complaint. We’ve felt all along that through a prism of just the fact of our case, the commission and others would find enough compelling documentation on IBM market abuses to warrant a complete investigation into IBM’s practices over the past decade. We’re hopeful that other judicial agencies will come to the same conclusion.”

Roger Bowler, the president of TurboHercules SAS and the originator of the Hercules project, said, “We welcome the European Commission’s decision to initiate formal proceedings against IBM’s suspected abuse of its dominant market position. Hopefully, it will lead to remedies that will allow companies like TurboHercules to compete in the mainframe market. We simply ask that customers be allowed to run their mainframe applications on the hardware of their choice. It is also good news for the Hercules open source community and its 11-year history of innovative development.”

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The Dells, Both Company & CEO, Pay the Piper

July 23, 2010

Dell said Thursday that it would pay $100 million to settle with the SEC over its accounting sins in 2001-2006. CEO Michael Dell will pay a separate $4 million for not talking straight about Intel.

The AP remarks that the fine isn’t that large but “the decision to charge a sitting chief executive of a major company and reach a seven-figure settlement with him is rare.”

The director of the SEC’s Enforcement Division Robert Khuzami issued a statement saying, “Accuracy and completeness are the touchstones of public company disclosure under the federal securities laws. Michael Dell and other senior Dell executives fell short of that standard repeatedly over many years, and today they are held accountable.”

The deal includes the payment of a $4 million civil penalty by former Dell CEO Kevin Rollins and a $3 million penalty by former CFO James Schneider as well as $83,096 in restitution and $38,640 in interest. Former regional VP of finance Nicholas Dunning will pay a $50,000 penalty.

Nobody of course admits to being guilty of anything. There is however a permanent injunction forbidding Dell to fiddle any more and it has to hire an independent consultant to spiff up its “disclosure processes, practices and controls.” Michael Dell has also been enjoined against repeats.

Dell employees jigged its numbers to meet expectations. In 2007 Dell restated four years worth of financial reports indicating that revenues had been overstated by $359 million and earnings by $92 million. The company also caught flak over the payments from Intel that it treated as revenue.

The SEC said Dell never explained how payments from Intel from 2002-2006 in exchange for not using AMD chips inflated its numbers and let it meet its earnings targets or how when the payments were cut when it finally started using AMD chips it never explained why its numbers dropped.

In the glory days Dell even asked Intel for bigger payments to make the quarter. By the time, it put AMD in its line Dell was getting 76% of its operating income from Intel.

The upticks that the Intel payments created were explained away as being due to cost-cutting, declining component costs or execution.

The company established a $100 million reserve last month.

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Headlines – Issue No. 846 (July 26-30, 2010)

July 22, 2010

RackSpace Wants To Define the Cloud
The Dells, Both Company & CEO, Pay the Piper
An Anti-Oracle Play, IBM’s Succession Plan, or Both?
IBM Unveils its ‘System of Systems’
Unisys To Offer Price Fixe Cloud
Hackers Create First Industrial Control Trojan
Microsoft Money Machine Grinds On
Color Hollywood’s Cloud UltraViolet
Dell Motherboards Pre-infected with Malware
IBM Blows It
Intel Antitrust Settlement Waits on FTC Commissioners
Dell Buys DeDup Start-up
Novell Scores Cloud Coup in China
VMware Numbers Up
Apple Hits the Cover Off the Ball
Apple To Flog iPads in More Places
Salesforce Gets Facebook’s Business
SAP-Sybase Escapes EC Limbo
Stand By for the PalmPad
iSuppli Raises its iPad Estimates
HP Raids Salesforce.com
Nokia Reportedly Looking for New CEO
WS-I To Disappear into OASIS
Black Market in IP Addresses?
A Small Smile Plays on Steve Jobs’ Lips
Tweet, a Takeoff on Howl

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RackSpace Wants To Define the Cloud

July 22, 2010

Rackspace Hosting wants to be the one that defines the public and private commodity cloud, denying bigger competitors the chance to do it.

So the other day – in the name of fostering standards, ensuring cloud interoperability and defeating vendor lock-in – it set in play OpenStack, an open source cloud platform to which it immediately contributed the code to its Cloud Files Amazon S2-like storage widgetry and promised to kick in its Amazon EC2-like Cloud Servers code once it’s ready.

Cloud Files and Cloud Servers is the stuff that powers Rackspace’s public cloud and the reference implementations that come of the OpenStack effort will be free. There will be no dual-licenses like Eucalyptus Systems, the other open source cloud where ex-MySQL chief Marten Mickos is now CEO. RackSpace says it will put all its code out under the Apache 2.0 license.

Obviously it thinks this will work and it won’t wind up in the poor house. It believes users aren’t going cloud for fear of lock-in by Amazon, Microsoft, Verizon or Google and that it can thrive on its reputation for support.

Anyway, for star power it brought NASA into the game.

NASA, which is hardly what you’d call a commodity player, just got involved a few weeks ago. It’s supposed to contribute technology from its large-scale Nebula private infrastructure cloud platform.

Apparently what NASA’s got that’s interesting to RackSpace is what the space agency calls a fabric controller and what other people might simply call the proprietary glueware to hold an immense data-dripping cloud together. Otherwise, Nebula looks like Eucalyptus, which in turn is compatible with Amazon EC2. NASA is partial to Ubuntu and Python.

Then Rackspace went out looking for converts.

It reportedly got 150 people representing 40 companies to come to a four-day design summit at its headquarters in Texas to talk about roadmaps, design processes and development processes and at the end 25 of them or so lent their names to the effort, 15 of them even left coders behind validating code.

The signatories included AMD, Citrix, Cloud.com, Cloudkick, Cloudscaling, CloudSwitch, Dell, enStratus, FathomDB, Intel, iomart Group, Limelight, Nicira, NTT Data, Opscode, Peer 1, Puppet Labs, RightScale, Riptano, Scalr, SoftLayer, Sonian, Spiceworks, Zenoss and Zuora.

Citrix, for one, means to ensure there’s Xen support for the thing. RackSpace uses Xen; NASA uses KVM. RackSpace claims OpenStack will eventually be hypervisor-agnostic.

AMD is looking to optimize its chips for any serious venture; RackSpace uses some AMD boxes but mostly it’s on Intel. And Cloud.com means to support the effort in its own open source cloud stack.

Besides the distributed object store from Cloud Files and some other Cloud Files infrastructure components, OpenStack is supposed to get a hugely scalable compute-provisioning engine called OpenStack Compute out a combination of Nebula and Cloud Servers. The engine, based on RackSpace APIs, is supposed to available later this year. First release is set for October.

RackSpace CTO Jonathan Bryce said OpenStack would also include the Rabbit MQ messaging system and the SQL Lite relational database.

Rackspace and NASA are supposed to use OpenStack to power their cloud platforms, and Rackspace has dedicated open source developers and resources to develop and evangelize OpenStack among enterprises and service providers. It has yet to exhaust its European and Asian convert possibilities.

For its part NASA would rather be in the space race than the cloud business and is perfectly willing for others to meet its requirements.

See http://openstack.org.

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VMware Goes Cloud Size

July 19, 2010

VMware is expected to make its vSphere virtualization platform “cloud scale” Tuesday, capable of juggling 3,000 virtual machines in a single 32-node cluster, double what it could before. And its vCenter management software will be able to keep tabs on 1,000 hosts and somewhere between 10,000 and 15,000 VMs, triple its previous capabilities.

The company claims its new vSphere 4.1 rev sets the bar in virtualization, redefining the economics of computing.

Whether it does or not, come September 1 VMware is changing how it prices its vCenter management solutions, moving to a per-VM licensing model like Amazon instead of its current per-CPU pricing.

The company says users find the new model more logical since it counts the virtual machines under management rather than the physical hardware.

VP of product marketing Bogomil Balkansky claims users’ bills should be a little bit cheaper under the new regime, and simpler to compute. At least they won’t get hit with additional costs for porting computing environments across diverse hardware configurations and multiple CPU scenarios.

VMware has been running a special the last four months to tempt SMBs to vSphere and found that it was making more on the trebled volume than it had under the old price schedule so it’s going to institutionalize the promo price and change its packaging.

There will be a new vSphere 4.1 Essentials kit for small businesses that costs $495, which has proved less of a sticking point than $995. It covers six processors and includes thin provisioning, an update manager, four-way SMP, VCB/vStorage APIs and VC Agent.

VMware is also changing the name of its free ESXi single-server edition to vSphere Hypervisor so it’s not confused with ESX anymore and will include its vMotion migration widgetry in its $583-per-processor vSphere 4.1 Essentials Plus and $995-per-processor Standard editions

The new vSphere upgrade expands VMware’s memory management boundaries as well as its resource pooling capabilities, developments that are supposed to accelerate the evolution of data centers and service providers into cloud computing environments.

It says 4.1 can get up to 25% better application performance and 10%-15% better consolidation ratios complements of new memory compression technology. Increased consolidation translates into lower cost-per-application.

It’s also promising five times faster vMotion virtual machine migrations, enabling up to eight concurrent vMotion events per host pairs instead of two. That too means better performance and availability.

vSphere 4.1 has been endowed with granular controls that dynamically allocate storage and network resources to VMs based on business priority rather like the company’s Distributed Resource Scheduler (DRS) manages compute resources across vSphere clusters and pools. Administrators can set quality of service priorities per virtual machine.

The widgetry introduces new storage APIs for array integration so the storage folks can tightly integrate, which should increase the efficiency and performance of the platform in cloud environments too.

VMware has also expanded its management portfolio with the Ionix gear it got from parent company EMC. Ionix Application Stack Manager and Ionix Server Configuration Manager are now called vCenter Configuration Manager, which is supposed to ensure policy-based compliance and sidestep configuration drift by automating manual configuration tasks across virtual and physical servers and workstations.

Meanwhile, Ionix Application Discovery Manager has become vCenter Application Discovery Manager for mapping application dependencies to accelerate data center moves, planning infrastructure consolidations and virtualizing business-critical apps.

VMware said per-VM licensing will take effect in September for vCenter AppSpeed, Chargeback and Site Recovery Manager and in late 2010, early 2011 for CapacityIQ.

Application Discovery Manager and Configuration Manager are priced per virtual machine managed with base configurations typically starting at $50,000.

VMware claims 170,000 customers and 84% of all the virtualized apps in the world. According to Gartner, Red Hat, which now sees VMware as the horse to beat and its chief rival, is still a niche player.

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Microsoft Packages Up Azure

July 15, 2010

Now you too can have a standardized, turnkey Azure cloud of your very own.

Microsoft announced Monday that it’s boxing the thing up as a server appliance so that companies and government agencies touchy about where their data is can have private Azure clouds, and service providers can set up public Azure clouds. It will also be the basis of hybrid Azure clouds.

HP, Dell and Fujitsu have thrown in with this idea and will be peddling the things as well as running their own Azure clouds. eBay is one of the first enterprise takers and means to have an internal Azure cloud up and running new applications in two of its data centers this year, expanding to other uses later.

The vendors mean to sell versions of Azure with their own particular hardware although they’re together kind of vague about what they will look like, how many servers each Azure instance will run, or what they will cost. It doesn’t even have a pricing model yet. Resellers are also nervous about how they’ll fit in.

The three OEMs already have in hand what Microsoft calls a limited production release of the Windows Azure platform appliance and they all mean to sell a plethora of services around it.

The appliance, expected to be in broader release later this year, will support anywhere from hundreds to tens of thousands of servers. Initial version will start around a thousand.

Fujitsu apparently means to put its back into the venture because its president Masami Yamamoto told a press conference in Japan that Fujitsu would spend $1.13 billion (100 billion yen) on cloud computing in the 12 months starting this past April 1 – that’s up 54% – and sees itself selling 1.3-1.5 trillion yen of the things, up from 100 billion yen in Fujitsu’s last fiscal year. Fujitsu’s also looking for more global partnerships and acquisitions.

Fujitsu will set up the appliance in its data centers in Japan to start and in the US, UK, Australia, Singapore and Germany by next March. It says it will offer IaaS and AaaS services as well as a newfangled activity-as-a-service. It will train 5,000 consultants and developers to work with customers and ISVs.

Microsoft says it currently has 10,000 paying customers on the public Azure cloud running on Microsoft’s own infrastructure. eBay is one of them; it uses the thing to power the iPad version of its web site.

The newfangled appliance consists of Azure, SQL Azure and a Microsoft-specified configuration of network, storage and server hardware optimized for scale-out applications. Some apps may have to be modified.

Microsoft quotes IDC as projecting that the cloud will drive 19% of new software spending in 2013-14 and that cloud spending will grow five times faster than applications spending or 26% CAGR.

Microsoft also said Monday that it has a release candidate for System Center Virtual Machine Self Service Portal 2.0 and a beta of Windows 7 Service Pack 1 and Windows Server 2008 R2 Service Pack 1. It introduced the Microsoft Management and Virtualization Solution Incentive and Private Cloud Deployment Kit.

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Headlines – Issue No. 845 (July 19-23, 2010)

July 15, 2010

Microsoft Packages Up Azure
VMware Goes Cloud Size
Microsoft: O Cloud, O Cloud, O Cloud
Intel Hits It Up, Up & Away
EC2 Goes into the Supercomputer Biz
Microsoft Expands Intune Cloud Beta
PC Sales Up Better than 20% in Q2
Eucalyptus Rival Gets Funding
Microsoft Amassing Slate Army
Google Gets its China License Renewed
Apple, Google, Microsoft, Others Sued for Patent Infringement
Apple Schedules Emergency Press Conference
Jobs KNEW: Reports
EnterpriseDB Stokes Checkbook
NTT Buys Dimension Data
Tibco Uses Free & Cloud for Bait
AMD Does Better than Thought
Apple Reportedly Bid for Palm
Microsoft’s Vampire OS
Google App Inventor GA
Google Loses Share
Citrix GoToMyPC Faces Patent Challenge
Wind River Linux Seeks Level 4+ Cert
NetApp Loses Leslie
iPad II Reportedly Coming
Larry Fails To Sink Shot
HP Reportedly Shelves Android Slate
White House Freezes $3B in Tech Spending: WSJ
China’s Green Dam Reportedly Goes Bust
Apple To Be Google-Free?
Would-Be Spy Worked at Microsoft

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EMC Turns Cloud Killer

July 9, 2010

Right before the Fourth of July weekend EMC stuck a firecracker in the production arm of Atmos Online and blew it off.

It does not bode well for clouds anywhere.

Atmos Online was its 14-month-old, potentially Amazon-challenging, multi-tenant/multi-petabyte storage-as-a-cloud service that was supposed to let people build their own on-premise cloud service or, complements of federation, leverage a public cloud to deliver content and information services to reduce costs.

EMC says on its web site – without saying why though – that the widgetry, which eBay used for its storage, will only be available from here on out – and who knows how long that is – as a development environment “to foster adoption of Atmos technology and Atmos cloud services offered by our continuously expanding range of Service Provider partners who offer production services.”

Paid subscriptions and support are gone. Ditto any SLAs.

EMC is telling customers to “migrate any critical data or production workloads currently served via Atmos Online to one of our partners offering Atmos-based services” and naming three: AT&T’s on-demand Synaptic Storage as a Service, Hosted Solutions’ Stratus Cloud Storage and Peer 1 Hosting’s CloudOne Storage. No mention of any help migrating though it claims in an e-mail that “We have worked with customers to make transitions as seamless and secure as possible.”

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