First the good news: It is very cheap to deploy additional server and application resources. In the past it would take four or five servers to handle a company’s computing needs and often those servers would be overtaxed. Today cloud offerings make it easy to deploy the same applications across any number of servers ensuring that the environment is not overtaxed. Many companies that we support who previously needed 5 servers on average are now using as many as 10 – a 100% increase in server utilization. Additionally, in the cloud the incremental cost to add servers is very low – almost free in many cases.

One of our clients (who agreed to let me write about their environment) has 21 servers in our data center. They needed a redundant environment in the cloud which we helped them create in Amazon’s cloud (perhaps the best in the industry today). They use more than 63 servers in Amazon’s cloud to do the same work that 21 servers they own did in our data center. Why so many more? Well the incremental cost of each server was almost $0 – the way Amazon charges customers based on utilization means that you pay the same amount for 1 server doing twice as much work as 2 servers doing about half the work. Two servers doing half the work works better in many cases and since the cost is the same, developers often opt for a bigger environment. We call this ‘server creep’ and it is happening to EVERYONE who is leveraging the cloud.

Now for the bad news: If servers are free your staff will find a reason to spin up a new server in the cloud faster than rabbits have baby rabbits. Your mother might have mentioned to you that there is no free lunch – and she was right. Supporting a single cloud based server is about the same work as supporting a locally based server. Each additional interconnected server added either locally or in the cloud increases the complexity and as a result support costs increase in a polynomial curve upward. For most companies, moving to the cloud can reduce their hardware costs by 50%, while their labor costs increase by 100%. Not surprisingly most cloud companies won’t explain this phenomenon to potential clients. Additionally this increased cost doesn’t show up right away – in fact it usually hits most cloud clients at 6-12 months after moving to the cloud. Most new cloud customer build up a HUGE support ‘debt’ that must be repaid with support.

The decision to move to the cloud is a math problem. Is the hardware cost savings more than the support cost increases? Most companies realize that it is smart to leverage the cloud for certain activities and leverage your server closet for others. What about your company? What are your cloud plans?

On Tuesday, the Russian anti-virus firm came clean and admitted that hackers were able to compromise the kasperskyusa.com by exploiting a vulnerable third-party application. As a result, people who visited the site were redirected to a malicious webpage.

“The website was simulating a Windows XP Explorer window and a popup window showing scanning process on the local computer and offering the user a fake antivirus program to install,” a statement from Kaspersky stated. “The domain was making these redirections for 3.5 hours in total.”

Based on Kaspersky’s terse disclosure, it’s likely visitors would become infected only if they fell for the ruse and clicked on links to download and install the malicious software. The statement provides no guidance to users who did so.

SeaMicro is the name of the company that that is their latest server. It contains 512 Atom chips in that one box. Everyone is using virtualization to create multiple virtual servers on a single box, but SeaMicro takes that idea to another level. What if you could virtualize in the other direction – i.e. when your app needs three servers they could act as one. SeaMicro lets you do just that. The big idea behind this box is its small (in comparison) electrical footprint. For example, our current data center is only about 50% full of servers, but it is at 90% of its electrical capacity – we couldn’t add much more without figuring out how to bring more power (and as a result additional cooling) to the space. By allowing us to decommission older, bigger, less efficient servers the SeaMicro will help us lower our overall costs. The box costs $139,000 each and replaces around 270 of our standard servers. Lets just say, we will be getting two…

SevenLayer - Intelligence Voice Cloud

Or at least that is what the folks at SevenLayer think. SevenLayer is latest company to be incubated in Architel Labs. Headed by Jeff Rothell, the company delivers cloud based voice applications to small and medium sized companies. Prior to co-founding Sevenlayer, Jeff built two multi-million dollar telecommunication companies. From 1999 to 2002 he served as President and CEO of Netvoice Technologies, a publicly traded (NTVT) telecommunications business operating hosted VoIP services in 52 major U.S. markets. Then in 2003 he co-founded CentricVoice, a venture-backed telecommunications company offering trunk replacement to small and medium sized businesses. Most recently Jeff served as COO of Unified360, one of the largest Cisco-powered voice vendors in the Southwest.

In the United States there are thousands of phone vendors selling hardware-based phone systems to small and medium-sized companies. Despite the advent of hosted voice options, the number of phone systems sold in the U.S. continues to increase. Business owners throughout the U.S. seem to want to own the hardware powering their phones. On the other hand they want ALL of the features that hosted solutions can offer at affordable prices. SevenLayer’s offering is designed to create a recurring revenue model for phone vendors, while offering business owners the features they demand without competing with their primary offering – selling phone systems.

Last month, SevenLayer launched what they call their Intelligent Voice Cloud, powered by their AVAS platform, and began offering live features including:

• Recording – a key application for call centers, financial services, healthcare and real estate. Formerly an expensive feature to acquire much less manage, can be offered as an add on service delivered from the cloud with no heavy upfront costs to implement, while making tracking, management and storage of recordings easy and secure.
• Conferencing – moving conferencing to the cloud may seem excessive, but in doing so an enterprise can leverage the power of our IVC conference scheduler allowing easy access to your address book. Imagine being able to schedule a meeting at a specific time and instead of having to remember to dial in, the IVC will dial each party at the appropriate time.
• Business Continuity – the greatest weakness of premises based features is the premises itself. In the event of a service disruption the cloud-based IVC can guarantee 100% uptime on inbound calls by automatically re-routing calls to alternative landlines or mobile numbers.

In the coming months SevenLayer will release a full suite of features and applications accessible to any small business through the click of a mouse.

As the Dallas Business Journal reported the scoop on Friday:

Architel Holdings LLC, a provider of flat-fee information technology support for small to midsize businesses, has acquired competitor Applied Resource Technologies Inc. in a seven-figure transaction, according to Architel CEO Scott Ryan. Both companies are based in Dallas.

Details of the deal were not disclosed.

“We hope to become the largest managed services provider in D-FW,” Ryan said. Ryan said his company saw an opportunity to secure future growth with the 22-year old Applied Resource Technologies, which served roughly 160 clients’ IT and technology networks.

“The trend is toward flat-fee services,” said Scott Baradell, a spokesman for Architel. “Architel was one of the earliest using this model.”

Architel uses a flat-fee service model in which clients pay a set amount per month for unlimited access to tech support, Baradell said. In the traditional “break-fix” model, practiced by Applied Resource Technologies, the client would pay for service every time there was a tech support issue.

“If Architel can reach out to the customers and convince them that this model works, then that should provide a good growth opportunity,” said Michael Rareshide, executive vice president at Dallas-based Partners National Real Estate.

Baradell added: “One of the benefits of the acquisition is that it builds Architel’s client base among Dallas-Fort Worth law firms, an area in which the company anticipates further growth.”

The acquisition is one of the reasons Architel is currently building a new, state-of-the-art data center and network operations center at its headquarters. The new facilities will provide clients with enhanced disaster recovery protection, including the ability to provide temporary office space, desks, phones and connectivity to hundreds of users.

The new facilities are expected to go live this summer.

Founded in 1988, ART originally focused on software development services for Oracle, Informix and Sybase. The company began offering IT support services in the late 1990s, and in 2001 became a managed services provider.

Architel retains 100 percent of ART’s employees as part of the acquisition, bringing the company’s total employees to more than 100. We are delighted to officially welcome these new members of the Architel family!

Since its founding in 2008, this monthly gathering has hosted more than 2,500 entrepreneurs, investors and others with an interest in the Dallas-Fort Worth startup scene.   On the first Monday of each month, they meet at the High Tech Bar to seek advice, make pitches, evaluate potential investments – and get to know one another.  Architel’s goal in sponsoring the event is to ensure that entrepreneurs across North Texas have an opportunity to pursue their dreams.

Affected Software

**Server Core installation not affected. The vulnerabilities addressed by this update do not affect supported editions of Windows Server 2008 or Windows Server 2008 R2 as indicated, when installed using the Server Core installation option. For more information on this installation option, see the MSDN articles, Server Core and Server Core for Windows Server 2008 R2. Note that the Server Core installation option does not apply to certain editions of Windows Server 2008 and Windows Server 2008 R2; see Compare Server Core Installation Options.

Simon has shared his concepts with audiences from members of Congress and the United Nations to Hollywood studios, from small business entrepreneurs to senior executives at corporations like Microsoft and American Express.  He also teaches his concept of The Golden Circle at the Strategic Communication Program at Columbia University.

• When: Wednesday, March 24th between 6pm and 8pm
• Where: 1950 Stemmons Freeway, Suite 2022, Dallas, TX 75207
• To RSVP: email jdonica@architel.com (space is limited)

Simon at TED: