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Numbers, Volume 5

As RedMonk, “we don’t do numbers.” But, I come across many interesting numbers each week. Here are some of them:

MIXing it Up

Netflix at MIX09

During the keynote at MIX09, Scott Guthrie said that Silverlight has 350M+ downloads. Additionally, big-time streaming video streaming with Silverlight partner said that Netflix over 12,000 videos online for streaming *

RIA of the Month

Also, while I was at MIX09 this week, keynote speaker Bondi announced and then demonstrated how they were using Silverlight to put scanned in archives of Rolling Stone and Playboy. They said this was the culmination of a 5 years of work to bring full magazine archives to the web.

Adobe Revenue Update

Adobe reported Q1 2009 quarterly revenue of $786.4 million in its financial results call today. (via email received March 18, 2009).

How much does it cost to build a “cloud”?

The 38,000 square-foot facility that SAS is building on its Cary campus will have two 10,000 square-foot server farms. The first farm is expected to be online in mid-2010 and is expected to support growth for hosted applications over the next three to five years. The second will be fitted out with servers and storage when the first farm hits 80 per cent capacity.

The construction of the data-center facility and related office space will account for between $20m and $22m (£13.8 and £15.2) of the $70m budgeted for the cloud, with the remainder going for servers, storage, and software. SAS is keeping 60 per cent of the construction and equipment spending in North Carolina and says that construction will provide about 1,000 jobs.

I continue to wonder if the economics of cloud computing will make over-all IT spend less for the world, keep it the same, or increase it. Early cloud providers like Amazon seem to have subsidized their initial cloud build-out with money from other businesses (for Amazon, their retail operations). Without that kind of cloud-build subsidy, can a cloud-vendor provide cloud services cheaply enough to lower overall costs of computation? For example, here SAS will need to bring enough revenue to pay back that $70M and then, of course, make years of profit.

On the flip-side, assume the economics are just peachy and the industry ends up paying less for overall compute power pulled from the cloud, instead of from their own data centers. Then there’s less cash floating around, per sale. For IT vendors, cloud computing is a shift from low volume, high margin sales to high volume, low margin sales. As the dot-whatever and open source trends of past showed, tech companies aren’t too keen to make that transition, nor is it clear if there’s enough cash in it to go around to all the existing vendors and the ever expanding waist-line of “The Shareholder.”

IBM and Sun

It was the day Sun Microsystems was supposed to rise again. On March 18th the Silicon Valley computer-maker had planned to unveil a new online service to allow start-ups to manage with much less hardware, by buying computing capacity from a “cloud”, rather like electricity from the grid. But the event was overshadowed by the news, hours earlier, that IBM was in talks to buy Sun for at least $6.5 billion in cash, which would translate into a near-100% premium over the firm’s depressed share price in recent weeks.

Who Else Has Cash?

C-scape Decor

With more than $30 billion at its disposal to make acquisitions and its executives promising buys, Cisco Systems has the look and feel of a company ready to shake up the technology market. And guessing what type of company — or for that matter, how many companies — Cisco will purchase has turned into a favorite pastime of local gossips.

Cisco is building out it’s “Unified Computing System” (Mainframe 2.0, you might slot it as). Big tech companies love innovation-by-acquisition, so us parlor game players are always curious what the deep-pocketed folks are gonna do next.

I expect lots of “acquisition rumor mania” this spring.

Re: Flipping Video

On Thursday [Cisco] announced it has acquired Pure Digital Technologies, the maker of the popular Flip Video camcorders. Cisco will pay about $590 million in stock for the company and will also provide about $15 million in retention-based equity as incentives to PureDigital employees, the company said in a statement.

For Cisco, video is a huge bundle of packets. That is, video takes up a hell of a lot more bandwidth than text. As networks have more video shooting across them – more content clogging up the tubes – Cisco builds itself a stronger market to sell networking equipment and video distribution management technology into. Throw in some Eye-Fi for video into these little hand-held video cameras, and you’ve got video flying around like nobody’s business: maybe you’ll burn out a few blinking lights even.

These little hand-help video cameras are pretty fantastic. They’re great for quick interviews. They tend to use weird video encoding formats that make editing them sort of a pain, but for the cost, the audio and video quality is nice.

I mean, really. They’d be a fool to get rid of VMWare

It has been more than five years since EMC acquired VMware for $635 million. As a result, the maker of data storage systems would face minimal tax implications if it decided to sell off its close to 85 percent stake in VMware.

When EMC first started selling flash systems, the disk drives cost 40 times as much as standard drives while running 30 times faster. About one year later, the price of the flash drives has fallen by 76 percent, Mr. Tucci said.

“They’re still 30 times faster but now it’s only 8 times the cost,” he said. “In the last two quarters, we sold every flash drive we could get our hands on.”

Update from The Crater

Citing Federal Reserve figures, the newspaper said the net worth of American households was $51.5 trillion in 2008, compared to $63.7 trillion in 2007. That takes household wealth back to 2004 levels and is the first decline since 2002, according to the story.

Notes from Smartphone/Netbook Land, Dell Edition

Zenoss Sponsored Netbook

After months of speculation that Dell Inc. plans to launch a smart phone, the company has given an executive who previously led Motorola Inc.’s cellphone division a $2 million retention bonus if the executive stays with the company during the next 12 months.

The contemporary train of thought is this: launched by the iPhone (and OLPC mania in the geek elite) and more (though still piss-poor) connectivity, there’s a rediscovery of the pocket computer, something beyond the perceived chunkiness of so called “smart phones”; next, throw in netbooks for light-weight, long battery and an embrace of SaaS living (read: fewer desktop apps, less traditional Microsoft, more Google & co.); and you’ve got a market desire for a new piece of hardware that people like Dell can cash in on.

Disclosure: Dell, Microsoft, IBM, Sun are clients.

Categories: Enterprise Software, Numbers, RIA.