AT&T to bring out Nokia phone with Windows

Last week, Steve Ballmer joined Nokia CEO Stephen Elop in unveiling the Lumia 900, their newest phone at a press event in Las Vegas (ahead of CES). The device represents Nokia and Microsoft's best chance yet to break Google and Apple's hold on the U.S. smartphone market. The new phone will use AT&T's LTE wireless data network. Since this is Nokia and Microsoft's (last?) chance to disrupt the most lucrative phone market, I can't wait to get my hands on one of them and experience the new device. I also would like to hear about their developer plans.

Google to Buy Motorola Mobility for $12.5 Billion

Looks like Larry Page didn't waste time since he moved to the CEO position. It is hard to believe that the acquisition was made for Motorola's hardware business. Google wouldn't risk alienating all the smart phone makers (Samsung, HTC) who are using the Android operating system. It seems to me that Google wanted to make sure that no patent lawsuit would stop Android's growth. I see a few dark clouds on the horizon for this acquisition:

• Looking at the problems AT&T is facing with the T-Mobile acquisition, I wouldn't be surprised to see the Feds looking at this transaction very closely and, despite approving other patent acquisitions, investigating the run for patents.
• Set top box, smart phone and tablet manufacturers may ask Google to reconsider the move or get guarantees from Google about the future of their relationships.
• Nearly 20,000 employees to integrate in a software, Silicon Valley culture-driven company. It will be a challenge for both sides to adjust to the new environment.

There is no doubt that there is a huge patent war going on between Google on one side and Apple and Microsoft on the other side. What will happen when they run out of patents to buy?

Microsoft Proposes Acquisition of Yahoo!

Let's look at the numbers: $44.6 billion in cash and stock (62% premium to current trading price). This is on par with the carriers acquisitions we have seen in the past.

Yahoo, you should take this offer and run. Nobody else can make you a better offer and you don't stand a chance to make it on your since you haven't had any significant innovation in the last few years that can threaten Google's domination in the search area (if this is your space?). You are in a slow decline and I don't see a leader emerging to take over the company and make the changes needed. Anyone trying to make the required drastic changes would go against the board that probably doesn't want this kind of changes.

Microsoft, you have a huge amount of cash but nothing in the works that can produce growth on the scale needed by your shareholders. Yahoo is a falling knife that you are trying to catch. This seems the only options, but I can't imagine how many start-ups or smaller companies you could evaluate, purchase, and develop with $44 billion dollars. Far more difficult but so much more rewarding.

Sun unveils Virtualization Hypervisor

I'm very bullish on virtualization as the next evolution in the data center environment. Here's a very interesting announcement from my former company Sun Microsystems. VMware and Microsoft are the leaders but it's good to see convergence between software and hardware vendors in that space. As a start-up, we see very clearly the benefits of server virtualization for our development efforts. This is giving us a tremendous leg up to get our product out of the door while keeping our IT costs under control.

Cisco to Acquire WebEx

This is a very bold move from the networking giant. Cisco is not only dominating the network corner of the triangle, they are looking at owning the content side (or supply side). How serious are they? Well, $3 billion looks like serious to me. What better strategy to sell more of their routers and Unified Communications products than to provide applications that will create a demand for higher bandwidth (voice and video) and quality of service. Microsoft will have to respond and will probably lower their prices or bundle office and VoIP applications with their Live Meeting offer.

What is the play for the Service Providers? Will they just resell either webex or livemeeting? The center of gravity of the network triangle is clearly shifting on one side away from them.

Evolution of the Data Center

As I am looking at the triangle to explain the transformations happening around content, networks, and devices I can't help thinking about the other changes happening in the IT industry. Is one driving or enabling the other?

In the past, I talked about utility or cloud computing and it seems that cloud computing is becoming the new buzz word. It is true that content providers, service providers and network infrastructure manufacturers believe in the same shared network service architecture. Cloud computing meets all the scalability, reliability, flexibility and performance (one could argue with this last one :-) required to deliver these services over the web.

Big players like Sun, Microsoft, IBM, HP, Oracle and Amazon are already offering cloud computing services to other companies to run their software. Like email and web hosting in the past, this is not for everyone. Large companies still see their data centers as a competitive weapon and won't let anyone running it outside their four walls. They are using the same convergent infrastructure (server, storage, software) to make their own data centers much more flexible but it will be a while before they transition. This explains the success of VMware ($700M of revenue can't lie).

In the meantime, more cash-sensitive companies will buy computing resources on the web to run some of their software (or buy the service outright from salesforce.com). The data center is evolving to better server the business model outlined in the triangle.