The PATRIOT Act’s acronymic name may evoke harmless images of bunting, parades, and national anthems, but the reality is rather different. A product of America’s post-9/11 entrenchment, the Uniting (and) Strengthening America (by) Providing Appropriate Tools Required (to) Intercept (and) Obstruct Terrorism Act of 2001 affords the Federal Government wide-ranging and far-reaching powers that show little — if any — respect for geographic boundaries or inconveniently contradictory local legislation. A US company (like Microsoft or Amazon) is subject to the Act’s powers all around the world. A US citizen’s data, stored in a US company’s data centre that is physically situated in the United States is subject to the Act, and everyone might be reasonably comfortable with that. But so is a German citizen’s data, stored in an Amazon data centre in Ireland; and German, Irish and European lawmakers appear almost powerless to intercede.

European countries tend to be stricter about use (and abuse) of personally identifiable information than the US. Although surveys identify some national differences, it also appears that Europeans broadly embrace the approach taken by their governments. And, anecdotally, conversations with European and American entrepreneurs and European and American individuals repeatedly point to rather different sets of basic presumptions operating on either side of the Atlantic. Europe’s Data Protection Directive, and its implementation in national legislation such as the UK’s Data Protection Act, are clear about the ways in which a citizen can expect data about themselves to be collected, stored, shared and used. The penalties for intentional abuse could probably be tougher, but the sentiment remains clear. The Safe Harbor Principles provide mechanisms by which US companies can self-certify that their normal operating procedures meet European standards (Microsoft, Google, Amazon and many others do this). The February 2010 ‘model clauses‘ that Microsoft embraced last month codify some of these protections in a manner that — theoretically — makes it easier for customers’ lawyers to understand what Microsoft will do with their data. It’s unlikely that the legalese (PDF) will actually make things any clearer for the average customer, though.

So, from the perspective of Europe’s governments and citizens, and for US companies that choose to trade here, things appear more or less ok. Personally identifiable data can be collected, stored, shared and used, but only within a set of constraints that Europeans broadly seem comfortable with. Unfortunately, all those Safe Harbor self certifications and model clause endorsements are summarily ignored whenever the PATRIOT Act is invoked. Data Protection Directive requirements not to transfer data to random third parties are trumped by PATRIOT Act powers enabling the US Federal Government to take what it wants. Data Protection Directive stipulations that citizens be informed when their data are taken are over-ruled by the PATRIOT Act’s cloak of secrecy. And on and on the list of contradictions continues. And the PATRIOT Act wins every time, because its powers, its penalties, and its backers are so much scarier than the officials in Brussels. Despite tougher language, it’s not clear that sweeping changes to Europe’s data protection directive will really resolve the contradictions. Indeed, once enshrined in law, the proposals will most likely result in more polarisation, not less.

In Europe too, of course, there are exemptions to the data protection legislation specifically intended to permit reasonable use of data by law enforcement agencies and others. This makes sense, and it could be argued that the PATRIOT Act is simply more of the same. But it’s not, because European law enforcement agencies must demonstrate a far clearer need before they’re allowed to — legally — start rooting through a citizen’s data.

It is unlikely that the PATRIOT Act is routinely invoked, or that US officials spend much time reading Europeans’ email. The cloud — even the parts run by US companies — remains broadly safe, secure, and reliable. Safe Harbor provisions, model clauses, and the ability to insist that data normally resides in one territory or another remain an effective means of ensuring that day-to-day cloud operations meet user needs whilst complying with relevant local, regional and international legislation. But, every now and again, the PATRIOT Act will be invoked, and data will be taken. Whilst it’s something to be aware of, it’s probably not something for most people to lose too much sleep over. You’re more likely to lose data yourself, or have it escape into the wild because of an error in your own systems or a malicious hack by a competitor. And you could and would be held accountable for those breaches, in a way that you almost certainly wouldn’t for a PATRIOT Act data seizure.

So the PATRIOT Act may not be as scary as it might now appear. But it remains a visible illustration of a rather more worrying issue; a belief that the laws of one country should be able to trample over the laws of other countries at will — even inside those countries. Further, it suggests a (growing?) disconnect between the attitudes and expectations on either side of the Atlantic. And one particular aspect of that is the subject for my next post.

Image by Flickr user John Morgan

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San Jose-based Cirtas emerged from stealth back in September 2010 with a $10 Million (€7.86 Million then) Series A funding round, their novel Bluejet hardware appliance, and the backing of Amazon.

Today they’re back, with a new CEO and another $22.5 Million (€16.6 Million) in the bank. The Series A investors — New Enterprise Associates, Lightspeed Venture Partners and, unusually, Amazon — are joined by Shasta Ventures and Bessemer Venture Partners for a Series B round that positions the company for some rapid growth.

Cirtas’ Bluejet Cloud Storage Controller is a hardware appliance, deployed in the data centres of medium and large enterprises to simplify the task of integrating existing on-premise Tier 2 and Tier 3 storage with disparate Cloud-based solutions such as Amazon’s S3, EMC Atmos, Iron Mountain and AT&T’s Synaptic Storage as a Service.

Talking ahead of today’s announcements, new CEO Gary Messiana suggested that Cirtas’ decision to deliver a hardware appliance rather than a software-based solution reflects their deep understanding of both their customers and the sales channel. Messiana is not the first to suggest that buyers of enterprise storage are a conservative bunch, and he’s certainly not criticising that conservatism; when business continuity depends upon the decisions you make and the systems you buy, you’re hardly going to take unnecessary risks, now are you? A piece of physical hardware that you can see, touch (and even hug) delivers an element of familiarity that appears to appeal to enterprise-class customers taking the first steps to leverage Cloud-based storage within their existing solutions portfolio. With Bluejet, Messiana suggests, control continues to reside inside the data centre. The Cloud provider(s) to which the appliance directs data are simply (dumb?) utilities upon which the enterprise may choose to draw in a manner abstracted by Cirtas’ technology. A hardware solution also suits the channel-based (rather than direct sales) model by which these companies tend to buy. As Messiana notes,

“[much of] the money changes hands in the channel… and [channel partners] know how to sell tin.”

Formerly an entrepreneur in residence at Series B participant Bessemer, Messiana talks persuasively about the clarity of proposition and go to market strategy that drew him to Cirtas. Drawing upon pre-Bessemer experiences as CEO of traffic optimising Netli (acquired by Akamai in 2007), Messiana argues that the shift off-premise makes expertise in moving data just as critical as the data storage skills of incumbents. Might Akamai, Limelight and their ilk make inroads into this market, at the expense of EMC, HDS, 3Par et al, I wonder?

In storage as in so much else, big incumbent enterprises are very different from smaller or younger companies. Whilst startups and SMEs might be quick to embrace entirely virtual solutions — often starting in the Cloud rather than migrating to it from elsewhere — the ‘multi-billion dollar corporations’ served by Cirtas will almost inevitably follow a very different path. Across Pharma, HR, manufacturing, publishing, insurance and finance, Messiana reports that customers with market caps of $500 Million – $10 Billion and more are flocking to the company.

So why take more VC money, so soon, and dilute the company? Messiana insists that “plenty” of the initial $10 Million is still in the bank, and that VCs were falling over one another in their enthusiasm to invest. The deal was apparently closed rapidly, with an aggressive valuation that sees “minimal dilution” whilst giving Messiana the cash to expand sales, support, and other areas of the company.

Cirtas would appear to be off to a good start, but it would be dangerous to be complacent. The company is not alone in seeing hardware as a way to encourage enterprises toward the Cloud, and there are plenty of software-based cloud storage gateways waiting for the opportunity to demonstrate their capabilities as those conservative CIOs become more willing to trust the Cloud. And then there’s Amazon. What might they do next?

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Event organisers are feeling the squeeze as advertising, travel and ‘training’ budgets present easy targets to Finance Directors seeking to balance their books in the current economic climate.

Amidst announcement after announcement of cancelled and radically down-sized trade shows and conferences, one bright spot in the event management space appears to be anything related to ‘The Cloud.’ There is an understandable perception that Cloud Computing will save money, so that ticks boxes back at HQ. There is also a perception that a sound understanding of the Cloud (and yes, it’s more than simply outsourcing your Data Centre to save some money) will position companies to come out of this economic downturn extremely well placed to exploit new opportunities and grow.

One of those events to cross my radar just before Christmas was Powered By Cloud, which is being held in London – just around the corner from the UK Parliament – on 2 and 3 February. According to the site, attendees will learn;

“What does [the Cloud] mean for your business model?

How fast will this happen?

How can I make money from Cloud Computing?

What technologies will be used?

What are the implications for consumers, privacy and security?

What is the future of Cloud Computing?”

Speakers on the programme look like a nice mix of solutions providers, customers and analysts, and include Amazon‘s Simone Brunozzi, Dave Armstrong from Google, Woodson Martin from Salesforce, Rightscale CEO Michael Crandell, Elastichosts CEO Richard Davies, Simon Wardley and Sam Sethi.

If you’ve got a couple of days to spare, can convince the Finance Director to agree (tell ‘em Cloud Computing saves money…), and can get to London then this looks like a pretty good investment for that diminished travel budget. It might even be worth enduring Heathrow to reach.

And, thanks to Philip Low at event organisers BroadGroup, here’s something that might even make the Finance Director smile… If you use discount code ‘SPKR‘ when you register, you can get in cheaper and save even more money. Enjoy!

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A short post, sparked by two related items that arrived by Twitter and email almost simultaneously.

Via Twitter, TechnologyReview reports that it’s getting easier to visualise massive data sets without the traditional supercomputer.

Via email, the UK’s Joint Information Systems Committee (JISC) announces its contribution of £200,000 to a joint funding call with the United States’ National Science Foundation (NSF) and National Endowment for the Humanities (NEH), and Canada’s Social Sciences and Humanities Research Council (SSHRC). The scope of the call? The challenge of working with Big Data. I’m very keen to see the bids to that particular call… and to see the innovation that answering its challenges will (hopefully!) spark.

Add to that my post last month about Amazon’s Public Data sets, and  the signs are getting ever-stronger that there are real opportunities here.

It’s getting easier to manage massive data sets. Those data sets are increasingly addressable over the Web. There’s growing interest in working across and between data sets, and there are even licenses to ensure that researchers can do what they need to.

Interesting times, indeed.

Recent advances in the business of Cloud Computing form just such a picture, and reach out to encompass previously unrelated aspects of Web 2.0, the Semantic Web, Platform Computing, Software as a Service (SaaS) and the economics of Disruption. Not merely some game of buzzword bingo on an unprecedented scale, it is becoming increasingly easy to see the opportunities for a significant shift in the way that we access computational resources; and to recognise that the walls separating organisations from their peers, their partners, their competitors and their customers will become ever-more permeable to the flow of data upon which those distant machines will compute.

There is much to understand that is already known in related fields, and much to discover that only becomes possible in this space. One early challenge is in carving a discrete niche for the place toward which we are moving with such rapidity. Far more than ‘just’ the Cloud; an evolution on from the playful flippancy that diminishes so many of Web 2.0′s poster children; and difficult to relate to the mainstream misconceptions of the Semantic Web’s complexity. Yet this new place is the sum of these parts, and far greater than they can ever be alone. So do we extend the already ephemeral notion of Cloud Computing? Do we appropriate the ‘next big thing’ label of Web 3.0? Or do we need a healthily fresh attitude to business computing’s apparently insatiable desire to apply labels?

First, though, let us consider the shape of this thing that is taking on more substance with each passing day.

Reporting on last week’s Web 2.0 Summit in San Francisco, CNET’s Dan Farber notes that

“The cloud was omnipresent,”

before going on to close his report with;

“cloud computing won’t be very compelling without what is variously called Web 3.0 or the Semantic Web.”

Indeed.

For too long, the emphasis in Cloud Computing circles has been almost exclusively upon provision of rapidly scalable and ad hoc remote computing on top of cost-effective commodity hardware. The Cloud play from Salesforce, Amazon’s EC2 and the rest has been dominated by the implicit assumption that these Cloud-based resources are an extension of the corporate data centre; a way to simply reduce the costs of enterprise computing.

There is value in this business, but there are bigger opportunities.

Nick Carr is amongst those to fear that a small number of players may come to dominate the provision of Cloud resources. He outlines many of these arguments in his latest book, The Big Switch, and more recently has been involved in an interesting discussion with Tim O’Reilly on the topic. Justin Leavesley shares some of Talis‘ views on the economics behind all this over on Nodalities, broadly agreeing with Tim O’Reilly;

“It’s pretty clear that utility cloud computing is highly capital intensive so it should come as no surprise that there are powerful economies of scale to be had. But the bottom line is that you are talking about plant and power. These are rival goods, scarce resources that are created and consumed. This is not different from many utility industries with one exception: the distribution network has global reach, already exists and is very cheap compared to existing utility distribution networks. It is a lot cheaper to access a computing resource on the other side of the planet than it is to send electricity or gas across the globe… [So] what is to stop economies of scale turning this into a global natural monopoly?

Actually, unless there are some large network effects, quite a lot stops single companies ruling entire industries. For a start, without network effects, economies of scale tend to run out: the curve is usually U-shaped. Telecoms, Gas, rail companies have strong network effects from their infrastructure-it makes little sense to have duplicate rail networks or gas networks in a country. Utility computing does not have this advantage because the distribution network is not owned by them.”

Continuing the conversation, Carr captures the usual widely held perception of Cloud Computing nicely;

“The history of computing has been a history of falling prices (and consequently expanding uses). But the arrival of cloud computing – which transforms computer processing, data storage, and software applications into utilities served up by central plants – marks a fundamental change in the economics of computing. It pushes down the price and expands the availability of computing in a way that effectively removes, or at least radically diminishes, capacity constraints on users. A PC suddenly becomes a terminal through which you can access and manipulate a mammoth computer that literally expands to meet your needs. What used to be hard or even impossible suddenly becomes easy.”

This is quite true, but continues and further entrenches the misapprehension that the Cloud is little more than an adjunct to the corporate data centre; a misapprehension that we shall get down to challenging in a moment.

First, though, there is a growing recognition that today’s market leaders will inevitably need to become more interoperable if this business segment – and they – are to grow. The proprietary nature of their offerings today may allow them to innovate ahead of the standards process (that will be shaped in large part by the lessons they learn), and the relatively high cost of switching to a competitor today may give each the critical mass upon which to invest and grow, but the characteristics of the current market are clearly the characteristics of a nascent market; computing’s new Wild West. As so often before, standardisation, true competition, mainstream adoption and commoditisation will all follow as we move toward phases 2 and 3 of Gartner analyst Thomas Bittman‘s intriguing ‘evolution of the Cloud Computing market.’ Similarly, Erica Naone offers a useful overview of Cloud Computing’s open source component in Technology Review this month. None of the projects she covers are a significant challenge to Amazon’s EC2, Microsoft’s Azure, Salesforce’s force.com or Google’s App Engine… yet. But together they help to keep these commercial entrants honest, and remind all of us that switching costs can be brought very low indeed if the pain of the status quo becomes too great.

Writing ‘Welcome to the Data Cloud?‘ for ZDNet last month, I began to explore the important role that data could and should play in the Cloud;

“Just as ‘we’ used to duplicate and under-utilise computational resources, so we do something very similar with our data. We expensively enter and re-enter the same facts, over and over again. We over-engineer data capture forms and schemas, making collection exorbitantly expensive, whilst often appearing to do all we can to limit opportunities for re-use. Under the all-too-easy banners of ’security’ and ‘privacy’ we secure individual data stores and fail to exploit connections with other sources, whether inside or outside the enterprise.

In a small way, the efforts of the Linked Data Project’s enthusiasts have demonstrated how different things should be. The cloud of contributing data sets grows from month to month, and the number of double-headed arrows denoting a two-way linkage is on the rise. Even the one-way relationships that currently dominate the diagram are a marked improvement on ‘business as usual’ elsewhere on the data Web; even in these cases, data from a third party is being re-used (by means of a link across the web) rather than replicated or re-invented. Costs fall. Opportunities open up. Both resources, potentially, improve. The strands of the web grow stronger.“

It is here, in the use and reuse of data, that the potential of the Cloud will be realised. Back in the previously cited conversation between Nick Carr and Tim O’Reilly, O’Reilly himself came very close to saying so;

“In short, Google is the ultimate network effects machine. ‘Harnessing collective intelligence’ isn’t a different idea from network effects, as Nick argues. It is in fact the science of network effects - understanding and applying the implications of networks.

I want to emphasize one more point: the heart of my argument about Web 2.0 is that the network effects that matter today are network effects in data. My thought process (outlined in The Open Source Paradigm Shift and then What is Web 2.0?, went something like this:

1.  The consequence of IBM’s design of a personal computer made out of commodity, off- the-shelf parts was to drive attractive margins out of hardware and into software, via Clayton Christensen’s ‘law of conservation of attractive profits.’ Hardware became a low margin business; software became a very high margin business. 
2.  Open source software and the standardized protocols of the Internet are doing the same thing to software. Margins will go down in software, but per the law of conservation of attractive profits, this means that they will go up somewhere else. Where? 
3.  The next layer of attractive profits will accrue to companies that build data-backed applications in which the data gets better the more people use the system. This is what I’ve called Web 2.0.

It’s network effects (perhaps more simply described as virtuous circles) in data that ultimately matter, not network effects per se.”
(my emphasis) 

Talis CTO Ian Davis would appear to agree, commenting;

“People need to be  investing in their data as the long term carrier of value, not the applications around them… the data is more likely to persist than the software so it’s important to get the data right and take care of it.”

Salesforce CEO Marc Benioff, too, used his Dreamforce User Conference this month to move a company long associated with the ‘data centre extending’ Cloud firmly in the direction of embracing data and the network. As Krishnan Subramanian noted on Cloud Ave before the keynote,

“Till now, the Force.com platform served business users to develop apps that can be used internally within an organization. They have to tap into Force.com APIs from outside platforms to offer customer facing web apps. With the new initiative, it becomes easy for customers to allow the internet users to “interact” with their data.”

Over on VentureBeat, Anthony Ha had more;

“Salesforce.com wants to become an even big player in the cloud computing market with a new service called Force.com Sites, which allows companies to host public-facing web applications in the Force.com platform. That means Salesforce — nominally a maker of customer relationship management (CRM) software, but also an increasingly important platform for business-related applications — is moving closer to direct competition with cloud giants like Amazon Web Services and the Google App Engine.”

Locked away within an organisation, and only accessed by that organisation’s applications, data cannot be put to full use. Much of the value in each individual datum lies in comparing it to other measurements, in delving into detail and in pulling right back to observe the bigger picture.

Organisations believing that either the big picture or the detail reside within their own systems alone are woefully misguided. Even the most specialised, the most proprietary, the most confidential of data only reveal their true value when placed in context, and that context is all the richer when informed by numerous perspectives.

Cloud Computing, and the various *aaS movements, have finally brought us to a place where the fiercely guarded and tightly delineated boundaries between the organisation and those outside it may become permeable in ways that should benefit the organisation rather than threaten it. Data is just a resource. In the terminology of Geoffrey Moore most data is often mere context, and there are savings to be made both in reusing the data of others or in re-selling necessary context to those prepared to pay. Some data, of course, is core to the business, and this may continue to receive the same reverence and protection that we misguidedly apply to the entire database today. Even here, though, the opportunities afforded by (controlled?) sharing may outweigh any desire to maintain data protectionism.

The language of Groundswell offers opportunities to go further, to embrace and to exploit the behaviours and the motivations of customers and the wider Web.

There is clearly far more to write in clarifying this view of both the components and the whole, but as it passes 2,000 words this particular blog post has perhaps gone on long enough.

For now, then, I should conclude by asking what role the Semantic Web has to play in any of this.

The Semantic Web, with its unadulterated recognition of the primacy of the web’s hyperlink? The Semantic Web, designed from the outset to convey context and relationships derived from data spread across the Web? The Semantic Web, supported by technologies that operate openly and at Web scale?

Isn’t it obvious yet?

Returning to the Web 2.0 Summit with which this post began, another presentation was from Kevin Kelly, founding editor of Wired Magazine. As I wrote this post, I referred to Steve Gillmor and Nicole Ferraro, from whose reports I inferred that Kelly had built upon an earlier presentation (that I greatly enjoyed), in which he argued;

“You have to be open to having your data shared… which is a much bigger step than just sharing your web pages or your computer.”

Fact-checking before hitting publish, I notice that last week’s video is now up, here, and Kevin’s championing of the primacy of data in the cloud resonates with every word I’ve just written.

Yep. Here we go, on a journey toward Kevin Kelly’s “World Wide Database.”

In subsequent posts I’ll explore some more of the detail, and I hope you’ll stick around for the journey.

Storm Clouds image © ‘shidairyproduct‘ 2008. Shared on Flickr, and licensed with a Creative Commons Attribution License. Converted to a jigsaw by Big Huge Labs.