At a live event in San Francisco today, virtualization giant VMware unveiled what it called a “monster” of a cloud infrastructure suite, upgrading its flagship VMware vSphere, even as rival Citrix forked over more than $200 million for Silicon Valley’s Cloud.com to better compete in the cloud computing arena.

The Citrix purchase of Cloud.com gives it CloudStack, its best known product, which is a way to build open private and public cloud computing systems. It put the Florida-based company in increased competition with VMware, as well as Amazon and Microsoft.

In related news, at its partners conference in Los Angeles today, Microsoft also stressed its private and public cloud computing solutions, unveiling a wide range of updates and features to its Windows Azure and other cloud offerings.

The competition in the space is certainly heating up as several rivals compete to become the key provider of technology and management in the cloud, as companies increasingly move their business operations there.

VMware’s strategy is to go bigger and stronger, with what it is billing as the most complete cloud package for users, touting more power, performance and scale in its vSphere 5 product.

The Palo Alto, Calif.-based company said it has simplified its offering, which is the first big update to its cloud operating system since mid-2009.

All of it is about making companies more comfortable with moving completely to the cloud, which is still the biggest obstacle for a range of issues, including worries about security and, well, simple confusion.

VMware said vSphere 5 and its updated cloud infrastructure suite is expected to be available in the third quarter.

“The market has fully embraced virtualization as a key transformative technology at the heart of the next era of computing,” said VMware CEO Paul Maritz, in a statement. “With vSphere 5 and our cloud infrastructure suite, VMware is helping customers accelerate towards more efficient and automated cloud infrastructure, redefining how resources are managed and secured, and ultimately, driving a more productive relationship between IT and the businesses they serve.”

At a Q&A later, Maritz acknowledged the increasing competition, specifically pointing to Microsoft, where he once worked.

“They have been predicting our death for five years now,” he said, noting that has not come to pass. “That said, they still haven’t given up either.”

When he first joined Google nearly seven years ago to start its enterprise division, Gmail was barely out of the gate and Blogger was the search giant’s most notable acquisition. What could Google offer enterprises that they weren’t already getting from Microsoft and Oracle and IBM and scores of other established software and hardware vendors?

The answer? An alternative. Sheth pitched Google’s trio of senior executives–Eric Schmidt, Larry Page and Sergey Brin–on the idea of experimenting with standard office applications–a word processor, a spreadsheet–that operated entirely within a browser. The product evolved into Google Apps, and while Microsoft Office still dominates the enterprise desktop, it’s widely accepted that Google Apps has made some important inroads against it: 3 million businesses use it in some way, and some 30 million people use it in their businesses.

Aside from the scores of companies, governments and non-profits that have adopted it, there are millions of college students using it, attracted by the zero-dollar price tag. Microsoft has responded with its own cloud-based office offering, Office 365, but its clear that Redmond’s traditional grip on the enterprise desktop isn’t quite as tight as it once was.

Now Sheth has an even bigger target in mind. If Office isn’t so sacred, why does Windows have to be? As the Group Product Manager Chrome OS for Business, he makes an interesting argument that the Redmond-centric world of corporate desktops is quietly nursing a desire for change. Where will it come from? A combination of cloud computing, and a desktop that’s stripped down to nothing but a browser. I talked with Sheth by phone earlier this month and my first question was about his education.

NewEnterprise: You did your undergraduate degree in electrical engineering, but now you work in software. Circuit design wasn’t for you?

I realized I liked software a lot more than hardware. But I was most of the way through with electrical engineering at Stanford. So I did my masters in software.

Does having been educated first on hardware give you a different perspective on any of the work you’re doing at Google?

It is actually relevant. A lot of what I’ve done involves software and user-facing interfaces, but it also involves a lot of infrastructure. When you look at VMWare, which is where I worked before Google, it’s about what you can do with a combination of hardware and software and change the game. It’s similar with Google Apps. It’s a big set of user-facing applications, but the big thing is the cloud computing infrastructure that’s underneath. The fundamental question is about how you wire computers together in the most efficient way possible. That is really the bread and butter underneath Google Apps. And finally with Chrome OS it’s the same question: What can you do to the form factor of the hardware if you’re really only running a browser on it. The background in hardware has served me well.

So you joined Google about seven years ago with the mission of creating something–you basically had a blank sheet of paper–that Google could offer the enterprise. And your first idea got shot down. What was it?

At the time I joined Google the enterprise division was literally 25 people. We had a few engineers and salespeople, and we brought in a manager, Dave Girouard. I came in with the explicit mission of starting something else within Google that was to be aimed at businesses. And that something else was completely undefined. When I was still at VMware, a friend sent me a Gmail invite, and I started using it, and it was better than my corporate mail. I thought it could be a very interesting enterprise product. After I joined, I pitched Eric, Larry and Sergey on the idea of putting Gmail into an appliance and shipping it out to corporations. They didn’t go for it. I went back six months later, with some new insight, specifically that we could use our server architecture to make it easier for businesses and educational institutions to deploy and manage email, and that from there we could move up-market to deploy applications. We got exactly one engineer to work on that.

It was very much like running a start-up. I was the product manager and was tasked with starting this new business and we went through all the classic things that a start-up does. Building the product, building the team, selling the vision to an early set of adopters–San Jose City College was our first college customer and Northwestern and Arizona State followed after that. We started small and incubated it within Google. We did a lot of experimenting with that small team to see what was viable and eventually we were able to get more resources to make it bigger.

So how does the Google Apps experience compare to your new role in building a business around Chrome OS for businesses?

It’s very similar. In Chrome OS I’m back in start-up mode. Essentially I’m trying to build a vision. We have a small team of people that all sit together in one area, building out the business model, and we’re trying to start small and grow from there. One way to look at Google is as a closed confederation of start-ups. All these teams are empowered to build something that is visionary. But we all have a lot of leverage behind us, and so we’re able to do a lot more than we ever would have been able to do if we were a small company.

I see a potential problem there: Don’t all these start-ups within Google run the risk of creating independent silos or fiefdoms that aren’t all on the same page? We hear a lot of criticism of the silos at companies like Sony or even Microsoft. Even at Google, there’s Google Voice, which is a great product but doesn’t really fit with anything else, though I understand it eventually will. But how do you avoid this silo problem?

It’s a great question, and its something we’ve thought about a lot. There are basically two extremes. The first extreme is on one hand you have different teams doing things completely different from each other. The other extreme requires that everything be integrated extremely well together. We tried to find a happy medium. The benefit for one is that you can move quickly. But if you do the other extreme, you slow down innovation. Your project may take several times longer. One big advantage is the Google infrastructure is all there. You don’t have to think about user authentication or how to store files. That’s all done for you, so everyone is using the same infrastructure. A lot of the parts you need are there and you just build on top of them. You can never strike a perfect balance, but we think ours is pretty good.

So what’s your mission with the Chrome OS?

My mission is to bring Chrome to business and to ask how we make it something that can reshape the enterprise desktop. The thing that was really intriguing for me, is that cloud computing has done so much for businesses. You don’t need to think about deploying the hardware, you can just turn things on. You don’t need to worry about massive up-front payments for hardware, you can just pay monthly for what you use. And your applications just keep getting better. In my mind the cloud really stops at the desktop.

The desktop is tremendously hard to manage. It costs a lot to maintain, most of the cost for a business is all in the maintenance. It doesn’t get better over time, it gets slower as you use it. I think there’s a huge opportunity to bring the principles of cloud computing to the desktop. It gets better, and it’s fast and secure. That’s the vision. We think we can do that because we have a unique operating system. It’s just a browser that’s completely stateless. As a result of that, you can boot up in 5 to 10 seconds. And no matter where you go, you log in, you have your entire desktop. If the system breaks, that’s not a problem, you just jump on to another system. If you lose it, it’s not a problem because its stateless.

There are people who would say its crazy to try and dislodge Windows as the operating system of choice for businesses, and yet you think you can do it. What kind of results have you seen so far?

If you just have a browser and take out everything else, life gets a lot simpler. And this is why I think that the desktop OS is ready for a radical change much like the enterprise applications were a few years ago. One thing we’ve found is that very significant portions of the population are using only a browser right now. Those trends show that this area is ripe for a change. If you look down the line in three years, the majority of those business users will use only a browser. We created this pilot device called the Cr48, which is a notebook with Chrome OS installed on it. We received 50,000 applications from businesses interested in trying it, and we now have thousands deployed in the field. We have companies like Intercontinental Hotel Group, Virgin American and Groupon using them for different things. We’ve even heard from the US Army Intelligence Office. We heard from a lot of companies we didn’t expect interest from.

I think you’ll see some early adopters, groups of users within companies, this year. Some companies’ pilot programs want to do large roll-outs to call centers and to customer service reps and some want to roll them out to mobile sales people. Many will find that it makes sense to them because it brings the cost down. No one wants to pay to have to fix a system that’s broken because two applications are in conflict with each other. No one wants to pay to go patch an operating system. That kind of thing is going to become a lot easier with Chrome OS.

Yahoo announced its first-quarter earnings today, showing a continued worrisome revenue growth stall, due in large part to declines in search revenue from its partnership with Microsoft.

The Silicon Valley search giant reported revenue of $1.06 billion, down six percent from a year ago, on net earnings of 17 cents a share, down 28 percent.

The performance was essentially in line with Wall Street expectations, which had been estimating that Yahoo would report $1.05 billion in net revenue and earnings of 16 cents a share, after traffic acquisition costs (TAC) was taken out of its results.

That compared to revenue of $1.13 billion and 22 cents in earnings in the same period a year ago, results that were goosed by the sale of its Zimbra email asset to VMware.

Yahoo’s revenue growth drought was due largely to declines in its search advertising business, which fell 19 percent in the quarter from $440 million to $357 million.

Contractual guarantees paid by Microsoft, its search partner, masked even larger declines.

On a GAAP basis, search revenue was $455 million, a 46 percent decrease compared to $841 million for the first quarter of 2010.

Yahoo said display revenue ex-TAC increased 10 percent to $471 million, compared to $427 million for the first quarter of 2010.

It was a good performance, but by no means a barn burner, especially compared to Google’s 27 percent revenue growth year-over-year in its earnings last week.

Thus, it seems the turnaround efforts at Yahoo, much touted by CEO Carol Bartz, are still turning.

In a statement, she said:

“We are solidly executing toward our plan for returning Yahoo! to sustainable revenue and profit growth. During the quarter, we beat the midpoint of revenue guidance while continuing to deliver on the bottom line.”

As BoomTown had previously written, in the last quarterly call, Bartz had warned that MicroHoo had not grown yet into the beautiful swan expected in this ugly-searchling tale, noting that it might take until the second half of 2011 to see some prettier results.

Thus, Yahoo is right to focus on display advertising, an arena it dominates still, despite increasingly successful incursions from Google and Facebook.

Yahoo’s stock is certainly reflecting the worry, holding fast to its share price in between $16 and $17 for a while now. It closed today at $16.12, down 23 cents a share.

A year ago it was above $18.

The shares rose almost three percent in after-hours trading, though, to $16.57.

I will be liveblogging the conference call Yahoo’s top execs have with analysts, starting at 2 pm.

Until then, here’s the official Q1 earnings press release to peruse:

YHOO_Q111PressReleaseFinal

I can tell you that Windows Azure is going to make the telematics systems in the next generation of Toyota cars smarter. And I also know that this unit of Microsoft has been in a state of management flux recently. Amitabh Srivastava, the Microsoft Distinguished Fellow, who in 2006 took over a project then known only as Red Dog that went on to become Azure, left the company in February.

It’s no secret that, like so many other companies, Microsoft has some big plans for cloud services. It recently disclosed that it plans to spend more than $8 billion in research and development funds on its cloud strategy.

On a recent visit to the Microsoft campus in Redmond, I got a chance to sit down with Doug Hauger, Microsoft’s general manager of Windows Azure. And my first question was really really basic.

NewEnterprise: Doug, there’s so much happening in the cloud computing space these days, and most of the time when people think of cloud services they think of Amazon Web Services. And if they mention Windows Azure, they think, well, that’s Microsoft’s answer to Amazon. But you describe Azure as more of a platform-as-a-service. Can you walk me through the differences?

Hauger: Windows Azure started about five years ago. At that point it started because the company, as with all service providers, was facing some challenges on providing large, scalable, manageable services, not just to consumers, but to businesses that could dynamically scale, and that we could innovate on quickly, and bring out new features. Originally it was meant to be a platform we would use internally for services that we would then deliver out to customers. We quickly realized that we should sell it to partners and customers, and allow them to build on it as a platform.

There are fundamental differences between infrastructure as a service and what we did as platform as a service. It’s different in key ways from, say, what Amazon does with EC2 and S3 or VMWare being implemented in a data center. Our starting point for the design was to see the data center as a unit. That means the networking structure, the load-balancers, the power management, and so on–rather than in infrastructure as a service, you start from an individual server and move up.

If you allocate a service into Windows Azure and say you want it available 100 percent of the time, we will allocate it across multiple upgrade domains and physical power domains in such a way so that if any individual rack goes down or if we’re upgrading the operating system, there’s no interruption in service. That’s just a fundamentally different starting point, with an individual server and moving up. And the way that we do that is we have built out an abstraction layer of APIs that let you write to a set of services, storage services, computer services, networking services, et cetera. As a developer you can write to the service, and give us your application, and it just gets provisioned through what we call a fabric controller, that controls the data center, and also across multiple data centers. That was a design point. That’s how we allow people to write services that can scale and won’t fail and will be available all the time.

The conversation about infrastructure as a service typically starts at cost savings. You go see a customer and they say they want to cut their IT budget and outsource their IT, and so they start there. Platform as a service you start at the cost savings, but very quickly you see 10, 20 or 30 percent cost savings. But the conversation quickly turns to the innovation life cycle that they can get out of the platform. It’s much faster than you can at infrastructure as a service.

The big point that everyone gets about the cloud is that they can use it to save money, but then they quickly start asking what more can they do with the cloud. Are you seeing the same thing?

Yes, exactly. In the enterprise, they’re starting to turn the crank on innovation. I talk to customers who are turning things around in six weeks or a month whereas before they would six months or a year. I actually just talked to a customer the other day, and they said their developers were spending 40 to 50 percent of their time managing services and they couldn’t use that time writing software which was their job. When they moved to a platform as a service, they didn’t have to worry about that anymore. We’re seeing this happening in the enterprise where people are doing this for internal development and on services they’re building for their customers.

One example, Daimler just did their new version of the smart car. They wanted a service so you can check the status of your car when its charging from your smart phone, locate it, et cetera. They turned it around in a couple of weeks on Azure and launched it at the same time as the car launched.

We’re also seeing small players compete at the enterprise level. There’s a small company called Margin Pro and they do mortgage analysis and risk assessment on mortgages. Basically it’s a couple of economists and developers. They wrote the software on Windows Azure, and now they have 70 banks around the world, tens of millions of dollars in revenue, and they are competing with some of the biggest financial services companies in the world because of this back-end infrastructure data center they can use to deliver their results to their customers.

But do you have customers who run standard apps on it too?

Many standard applications have some level of customization, and so we’re seeing a lot of hybrid applications, where customers are extending them into Azure. We have a case with Coca-Cola Enterprises which has a back-end order-processing app that they’ve extended into Azure. And what they wanted to do was get more reach and more agility for the front-end. So they built a secure connection between their data center and Windows Azure and then extended the application out to their partners and customers, essentially people like Domino’s Pizza who order Coca Cola products. We’re seeing a lot of these cases of existing applications being extended like that.

We’re also seeing companies using the high performance computing workload. One example is a company called Greenbutton, which has done a high performance scheduling and billing system on Azure. Another is Pixar, which has an application called RenderMan, which does rendering. Most large animation houses have their own clusters they do this rendering on. Pixar wanted to open up a market for smaller animation houses, little Pixars if you will. They’re working with Greenbutton to embed their technology into RenderMan. They can farm their rendering out to Azure and be billed on a usage basis. That’s a case where you have a large company and a smaller one working together and leveraging the power of the cloud to open up a whole new marketplace where they can be competitive. We call it the democratization of IT.

At what point is the customers’ thinking right now? Are they still at that point where they want to see how much money they can save by moving things that are on-premise to the cloud or are they past that by now?

I would say there’s three buckets of customers. I’ve been in this role for three years and the conversations have evolved in some interesting ways. Three years ago I was telling people they should be adopters and get on board with this platform early. They all said to come back and talk to them in five years. Then about two years ago, the majority of customers were in the first bucket, interested in wanting to save money but they weren’t interested in doing any new innovation. And then there were a few willing to innovate a bit by extending their applications into the cloud. Today I would say many, but not the majority yet, but a lot of them say they get the cloud, they get the cost savings, and now they want to drive the innovation life cycle faster. And there is a growing percentage who are willing to do something completely different and compete in a new way and build a brand new business. It’s been exciting to see that.

What’s been really exciting has been seeing mid-sized companies realizing they can use the cloud to give them an advantage to innovate faster and compete against really big companies. So that is sort of the landscape. Interestingly, I’ve been seeing a lot more adoption among the financial services companies than I had anticipated.

Aren’t they the ones who are supposed to be the most conservative when it comes to IT? I mean, they’re aggressive on performance, but obsessed with security and so skeptical of using the cloud because they don’t want to let their data leave their hands.

Exactly. But think about financial services. They’ve been in cloud computing forever, but it’s just been running on their own proprietary clouds. And so they are very good about understanding their application portfolio, and what can run in a public cloud, what has to stay in a private cloud, and how they can span those clouds. You can basically say you want to do risk assessment on portfolios, you anonymize the data, and you run it on the public cloud, you do all the analytics, you bring it back on-premise and then you deliver it to your customer. Having that kind of mentality in that industry allows them to move very quickly.

Also, manufacturing is moving and adopting the cloud faster than I would have guessed. And interestingly enough, government–not so much federal, because there’s so many certification requirements–but state and local governments are embracing the cloud because of the economic situation, and these are not just governments within the U.S. In Australia and Western Europe, we’re seeing governments adopting and building out applications so they can get services out to their citizens.

So what’s keeping you up at night? What makes you worry?

There’s a few things I think about. While we drive customers to a very fast innovation life cycle, we need to stay ahead of that innovation life cycle ourselves. We’ve done a pretty good job with that. One example, when we first released in beta a few years ago, we had .NET but we didn’t have PHP or Java. We got feedback immediately, almost on the first day, that customers wanted those and right away. And so we turned it around and added those within three months. Our ability to turn the crank pretty quickly is there. And that is something that in the software industry and specifically Microsoft, we have to make sure we make this turn toward service delivery, where we have to innovate quickly so you can deliver services. I think we’re doing a good job, but it’s something top of mind for me.

What are they asking for now? Is there something new the customers want that they don’t have?

They’re asking for continued investment in Java. We have it now, but making it a truly first class citizen, which is what we’re focused on delivering. We also need to keep our ear to the ground around things like application frameworks, extending the modeling capabilities in Visual Studio and things like that. It’s just a matter of thinking about the developer. We need to understand what they want, that’s what we’re here for.

Taylor Barada (pictured here), Yahoo’s recently appointed head of M&A, is joining Zynga in an unspecified role.

Barada replaced Andrew Siegel, who left Yahoo in December to join Condé Nast.

Yahoo staff was told of the move yesterday.

According to his bio at the Silicon Valley Internet giant:

“Taylor works with the Americas and Global Product orgs at Yahoo! leading strategic analysis/execution of acquisitions, divestitures, investments and other strategic relationships. Recent transactions include the sale of Zimbra to VMware and the acquisition of Citizen Sports. Prior to Yahoo! he worked as an investor, consultant, and operator at Rosewood Capital, Bain & Company, and Peregrine Systems. Taylor started his career as a professional soccer player and was a three time National Champion at the University of Virginia while completing his B.A. in History and Foreign Affairs.”

Barada’s departure to the San Francisco online gaming phenom–which was apparently able to extend him a more lucrative offer–will will put a crimp in Yahoo’s already slow-moving merger and acquisition strategies.

Yahoo declined to comment and I have emailed Zynga and have not yet heard back.

The new data centers would add to its sizable footprint of 36 data centers already in operation. While it won’t yet say where they’ll all be, some will be in Asia, a few in the Europe-Middle East-Africa region, and at least three will be in the US. Steve Schuckenbrock, president of Dell Services, wouldn’t go into any further detail than that. He did say Dell selected the locations based on a combination of where it already has a data center presence and where it sees new demand emerging.

Schuckenbrock, along with Praveen Asthana, Dell’s vice president for Enterprise Solutions, talked about the plans on a conference call with reporters yesterday. They said Dell’s plan calls for a new push to offer both platform and virtual desktop-as-service as well as IT outsourcing. Dell will run both private and public clouds, and will offer Microsoft Azure as well as VMWare and Openstack, an open-source cloud architecture it has backed, based on the customer’s needs.

It also announced a new product called vStart, an easy-to-buy virtual infrastructure that’s based on its Dell PowerEdge servers, which incidentally run on Intel’s Xeon processors which were the subject of a big upgrade announcement on Tuesday. VStart combines the servers, its EqualLogic storage product, and its PowerConnect switches into a single product that can run either 100 or 200 virtual machines at once.

Dell also deepened its relationship with Microsoft around cloud services, announcing a three-year strategic partnership with Redmond that’s based around Microsoft’s System Center, a product for managing IT infrastructure. It is also adding new file-backup and email archiving services to the mix.

Finally Dell is rolling out a virtual desktop product that strikes me as piercing the heart of its identity as a PC vendor to large companies. It’s offering a virtual desktop solution that can essentially replace the desktop that you’re probably using on your desk right now with a virtual machine, where all the computing happens in a data center.

Asthana says there’s a lot of benefits to running a virtual desktop. For one thing virtual machines are more secure, they’re easier to support. He says Dell’s customers are struggling with the complexity of switching to virtual desktops. “They don’t even know where to start, giving all the questions around hardware and software,” he said. Though it still lags behind Hewlett-Packard in the desktop PC business, its experience in understanding how companies use old-school desktops gives it a leg up in taking the hassle out of moving to virtual ones, he said. The point is to make it easy. Time will tell what companies think about about it.

The order is said to coincide with the forthcoming release of a new product that Isilon is expected to announce next week.

So huge an order for data storage would coincide with the construction of Apple’s huge data center in Maiden, N.C., and that’s expected to be the hub for a new version of iTunes that relies more on storing media in the cloud and less on using its customers local hard drives.

If you have trouble getting your head around the petabyte, the fine folks at another EMC unit, the backup service Mozy (soon to be a unit of VMWare) produced this fascinating graphic. As they tell it, one petabyte is enough to store more than 13.3 years worth of HD video, meaning 12 petabytes would be enough to store nearly 160 years worth.

The scale of the storage infrastructure, if true, would amount to another potentially intriguing clue to the environment Apple is using inside its data center. Previously it had disclosed in job ads on its Web site that its hardware there will include a mix of systems running Mac OS X, IBM’s AIX, Oracle’s Sun/Solaris, and some Red Hat Linux-based machines.

PREVIOUSLY:

• Apple’s Area 51: The Truth Is Out There
• Apple’s N.C. Data Center Intended for iTunes, MobileMe
• Apple Owns Another 70 Acres Near NC Data Center
• Was Apple Planning on Doubling Its North Carolina Data Center All Along?
• Apple Reaching for the Cloud With MacBook Air and N.C. Data Center
• That’s Apple’s New Data Center? Where’s the Giant Glass Cube?

Conceding that Cisco has been “slow to make decisions” and “been surprised where it should not,” he promised to take “bold steps and make tough decisions.” The consensus appears to be that divestitures are coming.

Cisco has been an acquisition machine during the last decade, but has little to show for it. Obvious candidates for divestiture are its consumer products business, which includes the Linksys brand of home networking gear, and Pure Digital, the makers of the Flip Digital video cameras. Consumer products carry lower margins than other products, and Cisco’s already got enough problems with its gross margins, which have stood at 64 percent since 2008 and gone nowhere.

One problem, the analyst Brian Marshall of Gleacher and Co. wrote in a note to clients issued yesterday, is that Cisco has so thoroughly dominated its core networking markets that it has effectively saturated its market. In looking for new areas to grow into, Cisco has been forced to look for what Marshall calls “adjacent markets,” like consumer networking gear, TV set top boxes, among others, both of which sap the potential for margin growth.

And while it’s hard to argue that Cisco’s low valuation doesn’t create a buying opportunity, there’s a lot more to consider, Marshall says. While Cisco grew its total revenue base by 7 percent from 2008 to 2010, a group of smaller independent competitors–Marshall calls them the “chimps” compared to the Cisco “gorilla”–like Juniper, Checkpoint, F5 Networks, Aruba Networks and a few others–collectively added roughly the same amount of incremental revenue that Cisco did during the same period, and nibbled away at Cisco’s dominance in the process. “Innovative companies can still have an impact in the technology industry even when competing against an 800-pound gorilla,” Marshall wrote.

One ace in Cisco’s deck, Marshall says, is VBlock, a data-center-in-a-box made by VCE, a company Cisco jointly owns with EMC and VMWare, and run by former Compaq CEO Michael Capellas: Cisco adds the networking component, servers and management software, EMC brings the storage and VMWare brings the virtualization. The product is just getting off the ground, but VCE recently said it has a pipeline of orders worth $1 billion and 120 interested customers. It is at least something for Cisco bulls to hang their hats on for now.

Two of the new directors come from the software security firm McAfee, where Jive CEO Tony Zingale held a board seat from 2008 until its $7.7 billion acquisition by chip giant Intel: Charles Robel was McAfee’s chairman and has been on its board’s audit committee, and sits on the board of Autodesk and is the lead independent director on the board of Informatica; and David DeWalt was McAfee’s president, and before that was president of software sales and services at storage giant EMC, following the acquisition of Documentum, which it acquired in 2003 and where he was CEO. Dewalt is chairman of the board at Polycom.

Jonathan  Heiliger  is  the  Vice  President  of  Technical Operations at Facebook, meaning he’s the one who makes Facebook go. He reports directly to CEO Mark Zuckerberg. Before that he led the engineering team at Walmart.com, and before that he was COO at Loudcloud, the company that ultimately became Opsware.

Sundar  Pichai  is  vice  President  of  product  management at Google, and oversees such products as Google  Toolbar,  Chrome  and Chrome  OS. Before Google, he worked at Applied Materials, the maker of chip manufacturing gear, and was management consulting for McKinsey and Co.

I asked CEO Tony Zingale about Jive’s plans to go public. He wouldn’t comment on that, naturally, but its well understood that Zingale, who ran software company Mercury Interactive until its $4.5 billion sale to HP, was brought on with an IPO in mind, as The Wall Street Journal reported last year. He also wouldn’t comment when I asked him if Jive has hired any bankers.

But he did say that Jive is at what he called “an inflection point.” In case you hadn’t notice, social enterprise software is a segment that’s growing like crazy, with offerings from Salesforce.com, Parature, Yammer, and a host of others. “We’re building the next great enterprise software company,” Zingale says. “And guys like this don’t join boards of companies that aren’t already successful and that don’t have a pretty good runway ahead of them.”

Jive certainly has some momentum. It has about 3,000 corporate customers–including big names like Cisco Systems, Nike, VMWare, Intel and fast food giant Yum Brands–and about 15 million end users. And last year it landed a big $30 million investment from Kleiner Perkins. Its other investor is Sequoia Capital, which invested $15 million in 2007. Boomtown’s Kara Swisher talked to Zingale and another Jive director Ted Schlein about the investment in a video interview last year, which I’ve added below.

]]> http://allthingsd.com/20110330/in-another-pre-ipo-move-jive-software-adds-four-directors-all-with-public-company-experience/feed/ 0 http://allthingsd.com/20110321/peter-levine-veritas-veteran-and-data-center-guru-joins-andreesen-horowitz/ http://allthingsd.com/20110321/peter-levine-veritas-veteran-and-data-center-guru-joins-andreesen-horowitz/#comments Mon, 21 Mar 2011 19:32:01 +0000 Arik Hesseldahl http://newenterprise.allthingsd.com/?p=4190 Venture capital firm Andreessen-Horowitz said today that it has appointed Peter Levine, a veteran of the enterprise software company Veritas that’s now a part of Symantec, and the former CEO of XenSource, now part of Citrix, as its first venture partner.

Levine is the third partner to join AH in recent months. In January it named HP and Opsware veteran Mark Cranney as a partner for market development. And in March it added IronPort’s Scott Weiss.

“Adding Peter makes us smarter at the firm on a certain class of products where he is much more experienced and goes much more in depth than we do, in areas like virtualization and storage,” AH co-founder Ben Horowitz told me. A key area of expertise is one that Levine developed specifically at Veritas, he said, that of working with manufacturers of infrastructure products. “Veritas was probably the most successful company in the history of enterprise software at the OEM model except for Microsoft,” Horowitz said. “It’s a very complicated thing to do–and a very complicated thing to do correctly–so he brings a specialized skill set to the table.”

Horowitz also said Levine will help AH expand its reach and find deals in places where it hasn’t had a presence before, places like the Massachusetts Institute of Technology where Levine is a lecturer. One example: Bromium, a stealth startup that AH says it is investing in. While Horowitz didn’t disclose the amount the firm is investing, he did describe Bromium as a “security plus virtualization company.”

“It’s the kind of deal we wouldn’t have known about without working with Peter,” Horowitz told me.

“We’re at the second generation of what you can do with virtualization,” Levine told me. “Companies like Citrix and XenSource did a lot of the hard rock-breaking to get chipset support from companies like Intel to support virtualization, and once they did that there was an opportunity to take virtualization to the next level. Bromium is a company that takes advantage of all that.”

Levine is continuing in his role as a vice president of Strategic Development at Citrix and will continue teaching a class on Technology Sales at MIT’s Sloan School of Management. Previously, he was senior vice president and general manager of the Data Center and Cloud Division at Citrix, having joined that company in 2007 by way of its $500 million acquisition of XenSource, a provider of open-source virtualization sofware, where he was CEO. XenSource’s customers included Microsoft, Symantec, HP, NEC and Dell.

This will be Levine’s second go in the venture capital ring. He spent three years as a general partner at the Mayfield Fund and in that capacity served on the board of Consera Software, which was purchased by HP. He sat on the advisory board of VMWare and was an investor in Actona, which was ultimately acquired by Cisco Systems.

Levine first rose to prominence as an early employee of Veritas Software, and during his 11-year stint there helped to grow it to 5,000+ and more than $1.5B in annual revenue. His last job at Veritas was executive VP, where he was responsible for worldwide marketing, OEM sales, business development and several product divisions. Before that, he was a software engineer at MIT and worked on Project Athena, an early-1980s research project to build a campus-wide distributed computing network that turned out to be a forerunner of the kind of corporate networks we now use every day.

]]> http://allthingsd.com/20110321/peter-levine-veritas-veteran-and-data-center-guru-joins-andreesen-horowitz/feed/ 0 http://allthingsd.com/20110215/tk-4/ http://allthingsd.com/20110215/tk-4/#comments Tue, 15 Feb 2011 12:00:36 +0000 John Paczkowski http://digitaldaily.allthingsd.com/?p=57801 Company-subsidized tablets may outnumber their employee-owned counterparts sooner than expected.

Morgan Stanley recently surveyed 50 enterprise CIOs about current and future tablet deployments and came back with some pretty astonishing findings: 21 percent of them are already purchasing tablets for employees and 51 percent expect to begin doing so in the coming year. In total, 67 percent of the CIOs surveyed said they’re either planning to deploy tablets or provide support for employee-owned ones this year. Now the scope of these deployments remains to be seen, but the fact that so many are being budgeted suggests the tablet is gaining meaningful traction in enterprise.

And if you’re dubious of that claim, consider this: Pads accounted for 29 percent of new enterprise activations of Good Technology software in December 2010, up from 25 percent the month prior. Clearly, there’s growing corporate interest in the tablet, which means there are growing opportunities for companies that provide enterprise software solutions for it–mobile security vendors like Check Point, desktop virtualization companies like VMware and cloud-based applications outfits like Salesforce.com.

]]> http://allthingsd.com/20110215/tk-4/feed/ 4 http://allthingsd.com/20110210/cloudy-with-a-chance-of-transformation-new-microsoft-server-and-tools-head-nadella-speaks/ http://allthingsd.com/20110210/cloudy-with-a-chance-of-transformation-new-microsoft-server-and-tools-head-nadella-speaks/#comments Thu, 10 Feb 2011 16:40:49 +0000 Kara Swisher http://kara.allthingsd.com/?p=40589

After he was appointed the new president of Microsoft’s important Server and Tools Division from his top engineering post at its come-from-behind Bing search unit, Satya Nadella now finds himself a leader of a business that also needs to keep catching up.

In a wide-ranging interview with BoomTown yesterday, Nadella talked about both his four-year stint at Bing and how he looked forward to the challenges of his new job.

Nadella got the nod, he said, after CEO Steve Ballmer went through a process of what was Microsoft’s “position in this business and a certain set [of ideas] about who should come in next.”

Interestingly, almost 20 years earlier, after working at Sun Microsystems, Nadella had started in the same area of Microsoft he will now lead.

Quoting the famous T.S. Eliot lines–”We shall not cease from exploration, and the end of all our exploring will be to arrive where we started and know the place for the first time”–Nadella was an evangelist for Windows NT.

Eventually, his career brought him to the search arena, most recently to the most aggressive and expensive effort yet by Microsoft with Bing to try to eat into the massive and lucrative lead of Google.

“Those were fairly dark days for us,” noted Nadella, pointing out that any market share gains by Microsoft seemed impossible.

But, according to numerous surveys, it has been only uphill for Bing, especially after it started to really spend and also inked its search and online advertising deal with Yahoo, a partnership that Nadella was a key player in striking.

“We have, depending on which one you look at, grown five share points,” he said. “But behind that, I am most proud of launching a brand and a product that is delivering.”

Of the recent controversy in which Google accused Bing of lifting its results, Nadella borrows another quote, this time from Gandhi.

“‘First they ignore you, then they ridicule you, then they fight you, then you win,’” he said, noting Bing has always said it uses toolbar and other public user data. “The real debate is whether we are better.”

In any case, as Nadella sees it, the Bing experience has helped him prepare for his new job, noting he was in charge of building a 200,000-machine grid to serve the various online services at Microsoft.

“I have been CIO of a cloud platform where there are only two of that size,” he said. “So, I know what it is like to be a customer of those services.”

His hope for his next job, he said, is to make it the next-generation cloud platform, while also serving the needs of current customers with its current product.

‘We have a product and brand that are really foundational, but there is a threshold to it,” Nadella said. “We have to serve the needs of our existing customers, while also moving them to the cloud and building a next-generation offering.”

At Bing, he said, “every day is upside, since we came from so far behind, whereas in server and tools, we are the leader.”

Big competitors are different and the same too, when it comes to the cloud.

“Amazon has done a good job, but not in the same game as us,” said Nadella, ticking off Google, Oracle and VMware as rivals in different ways too. “It’s a nascent marketplace.”

Acquisitions, he said, will also be important. “We are always looking at what opportunities there are,” he said.

His overall view?

“I think that the challenge is how to operate in a space where we have a $15-plus-billion-dollar business and we know the paradigm is shifting and managing that shift where we are the disruptors and also the leaders at the same time.”

In other words, between a rock and a hard place, a place Nadella knows well from Bing.

“We can’t be stuck in current paradigm,” he said. “And we can’t shoot too far ahead of ourselves either.”

To get a good sense of his style as he moves from consumers to enterprise, here’s a video interview I did with Nadella back in mid-2009, just after the Microsoft search deal, and another I did this past summer at one of his regular search updates for the media.

]]> http://allthingsd.com/20110210/cloudy-with-a-chance-of-transformation-new-microsoft-server-and-tools-head-nadella-speaks/feed/ 0 http://allthingsd.com/20110209/exclusive-rackspace-to-acquire-anso-labs/ http://allthingsd.com/20110209/exclusive-rackspace-to-acquire-anso-labs/#comments Thu, 10 Feb 2011 00:05:48 +0000 Arik Hesseldahl http://newenterprise.allthingsd.com/?p=3021 Web-hosting and cloud services provider Rackspace is acquiring Anso Labs, a San Francisco-based outfit that provides cloud consulting and services, according to sources familiar with the deal, which is small enough that financial terms are not going to be disclosed.

Anso Labs is helmed by Jesse Andrews, the former lead architect at Flock, the Web-browser company that was recently acquired by Zynga, and Soo Choi, a former exec at Booz Allen Hamilton. Anso Labs is best known for its work on the cloud computing front with NASA, the U.S. space agency.

The move takes place against the backdrop of a surge in consolidation in the cloud computing and data center business. Last week, Time Warner Cable dropped $230 million for NaviSite. And on Jan. 28, Verizon acquired Terremark for $1.4 billion. That one-two punch in data center deal-making has led to persistent speculation that other data center companies, Rackspace among them, will be rolled up by larger companies–like Hewlett-Packard, Dell or Cisco Systems–that are eager to add cloud services to their portfolio.

Ask Rackspace executives about this–and I have–and they’ll tell you they’re not thinking about that. Rather than being rolled up by someone else, they’re focused on rolling up the assets they want to grow, and to remain independent. Late last year Rackspace acquired Cloudkick, a start-up focused on building cloud monitoring tools.

Rackspace did $629 million in revenue in 2009, and is expected to show annual sales of about $775 million when it reports fourth-quarter earnings tomorrow. It has 100,000 customers, and while many of them are small- and medium-size businesses, larger enterprise customers like Coca-Cola, Target and Vodaphone are tapping Rackspace for Web hosting and to run their cloud applications.

Rackspace wants Anso Labs for its expertise and devotion to OpenStack, an open-source cloud computing software project backed by Rackspace, Dell, Citrix, Cisco and Canonical, the company behind the Ubuntu flavor of Linux.

Rackspace wants to create a bunch of inter-operable cloud services so that customers can move workload from one cloud service provider to another at will, giving them increased flexibility. It’s comparable in some ways to vCloud from VMware and Eucalyptus.

]]> http://allthingsd.com/20110209/exclusive-rackspace-to-acquire-anso-labs/feed/ 3 http://allthingsd.com/20110120/juniper-engineering-vp-joins-stealth-networking-start-up-nicira/ http://allthingsd.com/20110120/juniper-engineering-vp-joins-stealth-networking-start-up-nicira/#comments Thu, 20 Jan 2011 17:47:37 +0000 Arik Hesseldahl http://newenterprise.allthingsd.com/?p=2026 Rob Enns, vice president of engineering at Juniper Networks, has joined Nicira Networks, a networking start-up in stealth mode that’s backed by an investment from Andreessen Horowitz, which invested $9 million in the company earlier this month. It’s also backed by VMware founder Diane Greene.

Enns had spent 11 years at Juniper and oversaw the unit in charge of its Junos network operating system. Before that, he spent 10 years at Berkeley Networks, FORE Systems and IBM.

The news comes only a day after Juniper announced that it had hired Brad Brooks, a vice president of Microsoft’s Windows business unit, as its new vice president of enterprise marketing. Juniper has also been acquisitive in recent months, and bought three companies late last year.

Nicira is working on creating software that it says “virtualizes the network.” The company was founded by researchers from Stanford University and the University of California, Berkeley. Its CTO and co-founder, Martin Casado, did his Ph.D. work on the technology that Nicira hopes to bring to market. Its other two founders are Nick McKeown and Scott Shenker, professors of electrical engineering and computer science at Stanford and Berkeley, respectively. Its CEO is Steve Mullaney a veteran networking executive who’s worked at Palo Alto Networks, Shoretel and Cisco Systems, among others. AH co-founder Ben Horowitz sits on Nicira’s board of directors.

]]> http://allthingsd.com/20110120/juniper-engineering-vp-joins-stealth-networking-start-up-nicira/feed/ 0 http://allthingsd.com/20110119/when-it-wasnt-stuffing-cars-emc-was-doing-real-business/ http://allthingsd.com/20110119/when-it-wasnt-stuffing-cars-emc-was-doing-real-business/#comments Thu, 20 Jan 2011 02:56:45 +0000 Arik Hesseldahl http://newenterprise.allthingsd.com/?p=1964 When it wasn’t stuffing a Mini Cooper full of dancers storage concern EMC actually did launch a huge batch of new products yesterday.

The headliner was VNXe, its first low-end offering, priced at less than $10,000 and aimed at small and medium businesses, a segment where Dell used to resell EMC equipment. In another bit of product-launch theater, EMC had a fourth-grade boy onstage to demonstrate that the box–which in this case was mounted on the back of another Mini Cooper–could be managed and configured from an iPad.

I caught up with EMC Chief Marketing Officer Jeremy Burton to talk about it and the 40 other products EMC launched yesterday.

NewEnterprise: So 41 products all at once?

Burton: I’ve never been in a situation where the release dates of so many products aligned. We realized we might as well do them all at the beginning of the year. Internally we called it the “mega-launch.”

What kind of opportunities do you see in that lower-end market. This was your first entry into that market.

We estimate maybe a $4 billion opportunity there. We don’t have much of it now, call it zero. We’ve never really built a product that’s tailor made for that market. And for a product like that, you can’t just build it–you have to build it in a way that the channel can make money on and create customer satisfaction. We’ve got several partners who will take this product to market. We’ve committed $20 million there to generate demand and bootstrap the whole thing.

Tell me about this go-to-market effort.

Traditionally EMC has been led by direct sales. We have a sales force and they call on the customer directly. With a products that sells for $9,000 or $10,000 you can’t afford to sell that in the same way. We have to create pull for the product with our partners. You have to get the customers calling to ask for the product. It’s a little bit of everything. There’s advertising, there’s direct campaigns. Anything to get the phones to ring. To get the reps at the events jazzed up we’ve leased a fleet of 21 Mini Coopers. We’ll be doing 108 partner events around the world.

So who do you see as a typical customer for this?

Before I worked for EMC I ran a software company that had about 700 or 800 people. We had about 20 guys in the IT department. We didn’t have a lot of specialists, we had a lot of generalists there. So I’d say any company that’s at less than $25 million in annual sales is a perfect candidate. They’re not going to have the high-end skills to deal with the complexity of the high-end arrays. But they’ll have VMWare, they’ll have exchange environments, they have file shares, and they’ll want to get going quickly.

It’s funny I should be talking to you today. I just published a Q&A with Ping Li of Accel Partners. We got to talking about the storage needs of companies moving to the cloud, particularly around their database environments, and he said the trend is toward running open-source things like Hadoop on commodity hardware. He said he’s not seeing a lot of EMC gear at Google or Facebook or many of the other Web companies. There’s a lot of people who are seeing both a trend and an opportunity around that. What do you see?

If you’re Google and you’ve got your own team of rocket scientists who can build your own file system and kernel and download modules from the Internet every day, you don’t need it. But if you’re Pfizer, you probably have a lot of rocket scientists, but you probably don’t want them working on reconfiguring kernels, you probably want them working on discovering new drugs. And so, picking the techiest of the tech companies and saying they don’t use our stuff, yeah those are companies with the smartest tech guys on the planet. The problem is they’re not in all the Fortune 500 companies in the world, and in fact I’d argue they’re in almost none of them.

So if you want to have that scaled-out commodity storage and you want to manage big data, and you don’t want to hire 1,000 rocket scientists to do it, we can sell it to you. It won’t be true commodity hardware, but then you won’t have to hire so many people to manage it. That to me is kind of the rub. EBay is a big name on the Web, and it uses our Object Storage infrastructure. Could they have built it themselves? Probably. But there’s a little intellectual snobbery inside these companies. They say, “We don’t want to buy your stuff because we’re smarter than you.” Those are the edge cases. If we just get the rest we’re happy.

Let’s talk about the broader picture in IT spending. What are you hearing from your largest customers about their intent to spend this year?

2010 was a decent year. Going into 2010 folks said they thought their spending would increase two to three percent. They probably ended up with three to four percent. Looking out into this year, people seem a little more optimistic. But even still I think it’s in the three to five percent range. One thing we saw in 2009 is that folks didn’t buy much storage capacity last year and instead tried to use what they had. Going into 2010 there were signs of recovery and people started to spend again, and we see that continuing into 2011. One reason for the Isilon acquisition is that we do see a trend toward spending into different areas of the business.

At another level I think I agree with you and with Ping that certain companies will move to Hadoop for a certain class of application and we’ve got a pretty strong relationship between our Greenplum division and Hadoop. What a lot of people want to do is analyze traditional enterprise data in conjunction with something else. What Greenplum has tried to do is bridge the gap between Hadoop and the more traditional storage infrastructure. Hadoop is not going away, and its something that we fully intend to work with.

]]> http://allthingsd.com/20110119/when-it-wasnt-stuffing-cars-emc-was-doing-real-business/feed/ 0 http://allthingsd.com/20110111/replacing-dirk-meyer-at-amd-will-be-no-easy-task/ http://allthingsd.com/20110111/replacing-dirk-meyer-at-amd-will-be-no-easy-task/#comments Tue, 11 Jan 2011 23:00:44 +0000 Arik Hesseldahl http://newenterprise.allthingsd.com/?p=1654 The sudden and unexpected resignation of Advanced Micro Devices CEO Dirk Meyer yesterday has left some issues in its wake.

First, the departure has jarred the confidence of investors who have pushed the value AMD stock up by more than 57 percent since September. Shares are down by more than 8 percent today.

Second there’s the problem of hiring a replacement for Meyer, who had been on the job only a little more than two years. I’ve been talking to people both inside AMD and longtime AMD watchers outside of the company and practically all of them have been having trouble coming up with a short list of potential candidates.

For one thing, I’m hearing from people familiar with the thinking of those involved in the hiring process that there’s a strong preference for an external candidate.

Among the criteria are someone with a proven record of running large technology companies, and one with some charisma who can get the marketplace excited about AMD again. While Meyer deserves credit for getting AMD back on relatively stable footing following the divestiture of its manufacturing operations–now GlobalFoundries — and his predecessor, Hector Ruiz, gets the credit for doing the heavy lifting of getting the complicated transaction related to that split, neither could be described as charismatic.

Historically, AMD knows what it’s like to have a charismatic CEO. Jerry Sanders who founded the company and ran it from 1969 until 2002, possessed plenty of it, and some of the more colorful anecdotes about Silicon Valley history concern him. The board wants someone who’s both capable and cool at the same time. Someone who can represent the company well to the outside world, bring an air of stability and competence and elaborate a vision that will move the company forward. That’s a tall order for a company like AMD, whose fundamental strategic problem can be summed up in a single phrase: Competing with Intel is brutal, no matter what you do.

The list of potential candidates isn’t obvious by any stretch. Still in my conversations today, a few names came up, some more idealistic than realistic. One internal candidate who will probably get courtesy consideration I’m told is Rick Bergman, senior vice president and general manager for AMD’s products group. He oversees both the graphics and microprocessor operations and came to AMD in 2006 as a senior executive at ATI, the graphics chip company that AMD acquired for $5.4 billion in 2006. His résumé includes time at Texas Instruments and IBM. He’s described by those who know him as hard-driven and competitive and a capable well-respected manager, though at the end of the day not likely to get the nod.

Another name that has come up is that of Pat Gelsinger, not necessarily because he’d be a candidate for the job, but more as an example of the kind of person AMD would like to hire. Gelsinger was Intel’s CTO from 2001 to 2005 and was senior corporate vice president for the Digital Enterprise Group until 2009, when he suddenly jumped to EMC as president, COO and apparent successor-in-waiting to CEO Joe Tucci.

Finally there’s Michael Capellas, whose name invariably comes up whenever a significant CEO slot comes open. He’s currently running Acadia, a private cloud computing joint venture between Cisco Systems and EMC with investments from Intel and VMWare. Capellas was the CEO of Compaq Computer when Hewlett-Packard acquired it in 2002, then went on to helm MCI and engineered its turnaround and sale to Verizon in 2006. His next stop was the payment giant First Data after it was taken private in a leveraged buyout by the private equity fund Kohlberg Kravis Roberts. He was considered for the CEO job at Hewlett-Packard, before Léo Apotheker was named, but was said not to be interested. He’s got the tech and management chops and has a proven record for getting troubled companies on solid footing. It’s unclear if he would be interested.

Whoever they pick, they may want to do it quickly. AMD has a tough road ahead of it, and uncertainty at the top certainly isn’t going to help.

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