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A Storm of Money Coming to the Cloud

One way to tell if something is going to get bigger is to see how large companies are willing to invest in it.  These companies don’t care about fads; they are in for the long haul return on investment.  IBM and Salesforce.com are together are increasing their cloud infrastructure by 4.5 billion dollars.

Salesforce is buying Exactarget for a 2.5 billion dollar price tag.  The move is thought to allow the company to have a deeper reach into ad revenue on social media sites.  One study cited claims that by 2017, marketing departments will spend more on technology than CIOs.

IBM on the other hand, is buying Softlayer.  Softlayer specializes in building in-house cloud servers.  This acquisition will help IBM shore up the gap in its current cloud service line-up.  Don’t think it’s worth it?  Well, IBM think it’s worth 2 billion dollars.

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When Building is Better then Buying

Google has been bucking the trend of building software instead of buying it.  But is that a good policy? “In the long run, it is cheaper to build and not buy,” said Justin McWilliams, a software engineer at Google.  Instead of buying commercial offerings, Google has built software from scratch to handle everything from their IT management to their VPNs. Most other businesses search for an outside service to fulfill their software needs since it is considered cheaper than constructing and maintaining in-house programs. This practice has evolved over the decades as IT needs have become more and more specific. So what’s different about Google?

One thing is growth.  Google has doubled in size since 2008 and is still growing.  It must have the ability to scale any aspect of its infrastructure within a short time span.  If they had contracts with other firms, they would have to wait until those contracts expire and the lag time would cause inefficiencies.  Also, searching for a company that meets their wildly varying demands would tricky and time consuming.

A second reason is machine management.  Google needs to operate across platforms.  To increase product compatibility, engineers work with operating systems they are producing products for, something not all companies are capable of doing.  In their infancy, Google used the open source product Puppet to create patches for Mac users.  However they quickly found that it wouldn’t suffice and outside sources would cost about 100 dollars a machine, a cost mostly derived from licensing.

Google has always been a trend setter.  It’s push towards using scalable, open source products may be an example for us all.  We are living in an age of data sharing.  The open fields will always attract more people than fenced in ones.