Catalyst Investors Blog: Understanding IT Outsourcing and Web Hosting

Cloud computing. Managed hosting. Managed services. Software-as-a-service.

There are lots of buzzwords that are both used and misused to describe the various types of IT outsourcing and web hosting. Back at the Catalyst Investors blog, I walk through the different layers of the IT outsourcing and web hosting landscape. I explain the difference between cloud computing and traditional computing, and compare and contrast the different layers of the technology stack, including co-location, dedicated hosting, hybrid hosting, infrastructure-as-a-service, managed hosting, platform-as-a-service, application hosting, software-as-a-service, business process outsourcing and business process-as-a-service.

To read the post, click HERE.

Catalyst Investors Blog: Real Time Bidding and the Rise of Mid-Tail Content

For those of you interested in online advertising technology, my colleague Susan Bihler and I have written a two-part series on the Real Time Bidding ecosystem and its effects on online and offline media. The second part is a discussion about how RTB will help the Mid-Tail publisher, how RTB will hurt traditional TV and cable advertising and how Google is well-positioned to dominate the market. (click link to see the article)

Cloud Computing a boon for the heartland

In this article in AlwaysOn, Greg Ness writes about how cloud computing may be further freeing IT workers from having to live near big cities and, along with telecommuting, bringing good jobs to rural America.  Not unlike how electricity and the automobile freed industrial plants from needing to be concentrated in big cities or near rivers.  The strategic resource for rural areas to attract cloud computing "factories": access to cheap power.

McKinsey on Energy Productivity

Technology Watch:  As the CleanTech Blog brought to my attention, the McKinsey Global Institute has released a study suggesting that if the world invested $170BN a year in increasing "energy productivity" between now and 2020, the world could cut greenhouse emissions in half AND enjoy a 17% IRR on its investment, achieving savings of $900BN annually by the end of the period.  Interestingly, none of the investment needs to be in "alternative energy", but instead in energy efficiency, which it dubs "energy productivity" to cast it in a more positive, capitalist-appealing light.

Half of the capital ($80Bn / year) would go to global industrial sectors, a quarter ($40BN/yr) would go to residential and about an eighth would go to commercial and transportation.  Two-thirds of the investment would need to go to developing countries, with China alone requiring 16% of the total.  McKinsey points out the near-universal policy of providing fuel subsidies in developing markets is a particularly egregious market distortion that holds back efficiency gains.

This suggests that a good portion of the VC dollars being thrown at cleantech is barking up the wrong tree by focusing on alternative energy and that the real money (and earth-saving improvements) are to be made in the "energy productivity" sector.

Sprint and Clearwire near a WiMax deal

Technology Watch:  It looks like Sprint and Clearwire are again near a deal to form a WiMax joint venture that would involve a $2BN injection from Sprint and potentially other companies such as Intel and Motorola.

I personally believe that the activist investors that are giving Sprint a hard time for its potential WiMax investment are being short-sighted.  As this BusinessWeek article attests, mobile penetration is hitting the mature level of 80% this year, which means the industry can expect slower growth and more price competition going forward.  Sprint itself may even throw down the guantlet with a rumored all-you-can-eat plan.

Meanwhile, yesterday Comcast ruled out buying Sprint (or Yahoo) in the near term.  Sprint has attractive assets and is trading at a fraction of book value, but is at a clear operational disadvantage vs. AT&T and Verizon on the mobile wireless side, and if it hives off its WiMax business does not have a strategy to move back into a competitive position with them.  The eventual natural acquirors are Comcast or Time Warner Cable, but such an acquisition is likely years away and Sprint becomes less strategic to the cable cos without the wireless broadband assets.  Frankly, now Clearwire would be the more attractive (and affordable) target for the cable companies, particularly if it completes its JV with Sprint.

[FULL DISCLOSURE: My firm Catalyst Investors was an early investor in Clearwire and still owns a stake.  May family also (unfortunately) owns stock in Comcast and Sprint.]

The Catalist – Tech Tidbits

Today’s linkfest to media and technology news and articles:

Consumer tech and media:

Silicon Alley Insider – Online ad spending less robust than you think

TechDirt – Your Website Shouldn’t Be Just An Electronic Version Of Your Print Publication

SiliconAlleyInsider – Digital music growth slowing

Telecom:

SiliconAlleyInsider – Strong wireless growth at AT&T

ClickZ – Agencies describe hurdles facing mobile ad market

Green Tech / Other:

GreenTechMedia – What will a recession mean for greentech VCs and startups?