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Wall Street warns of cloud bubble
Funny money experts on Wall Street are questioning the valuation of public companies selling cloud computing and say that the market is getting overheated. Despite its success, Salesforce.com does not deserves to sell stock for more than 200 times what the company actually makes. It is "a poster child of the cloud-computing bubble," the report claims.
Harry Rady, chief on a $270 million investment fund, said that Rackspace was also caught up in the wave of optimism on cloud, and providers were riding a wave of profitability that was sure to end. He added that competitors have caught on and begun to compete in pricing, and investors did not need to pay absurd multipliers to get a hand in cloud computing stocks.
IBM buys Blade Network for private cloud
IBM has acquired Blade Network Technologies, which makes switches and IBM Blade-powered rack gear, for $400 million. Blade specializes in ultra-low latency networking, targeting financial firms that do high-frequency trading and make money depending on how fast they can game the stock market. That's one reason IBM bought the company, of course.
The other is that Blade has made a habit in the last few years of developing technologies for cloud computing, including virtual switches and an "Unified Fabric Architecture" that can help convert traditional data center operation to virtualized environments with a minimum of fuss, thus enabling private cloud developments. Use Blade gear, and it is automatically ready for Oracle VM, VMware, and other hypervisors, smoothing out the process. That's the pitch, anyway.
Dig Deeper on Cloud computing pricing and economics