Gartner: Amazon still public cloud leader by a long shot

Amazon Web Services remains the top IaaS public cloud computing provider, offering the widest breadth of services of any vendor in the market, Gartner concluded in its annual Magic Quadrant report.

In addition to having a broad range of cloud-based services, AWS also has the largest capacity to handle cloud-based workloads. Its cloud operation is estimated by Gartner to be five times larger than a dozen of its top competitors in the market combined. "AWS is the overwhelming market share leader," the report reads. "It is a thought leader; it is extraordinarily innovative, exceptionally agile and very responsive to the market. It has the richest IaaS product portfolio, and is constantly expanding its service offerings and reducing its prices."

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[MORE GARTNER:Big data has pretty much reached the peak of it's Hype, Gartner says | FROM THE ARCHIVES:Do you believe in Magic Quadrants?]

Each year Gartner compiles its Magic Quadrant for public cloud vendors by examining the estimated 15 largest market players based on estimated market share, then it ranks them based on their understanding of market needs and the company's ability to execute. In addition to the breadth and depth of services, AWS also has a robust partner ecosystem with leading technology providers offering its services through Amazon's cloud, including some of the biggest systems integrators. Gartner does warn of some cautions when using AWS services though, including complexity around its pricing and support offerings. Individual AWS offerings are rarely bundled, which can complicate purchasing choices.

No other company is really close to Amazon in terms of its offerings, according to Gartner, but there are a variety of niche players. Outsourcer CSC, for example, receives high marks in the report and is named as the only other leader in the market. Based on VMware's suite of cloud computing offerings, CSC has a very different enterprise-focused model compared to Amazon though, Gartner says. "[CSC] has a solid platform that is attractive to traditional IT operations organizations that still want to retain control, but need to offer greater agility to the business and are willing to embrace data center transformation," Gartner says. Amazon, in comparison, is more of an outsourcing play, with a limited on-premises or "private cloud" option for customers to deploy on their own premises.

Microsoft and Rackspace are listed in the "visionaries" category, while telco-oriented providers Verizon Terremark and Savvis are in the "challengers" quadrant, along with Dimension Data. Joyent, Tier 3, Virtustream, Fujitsu, SoftLayer (now owned by IBM), GoGrid, HP, and IBM are considered "niche players" by Gartner.

The IaaS market for cloud computing is rapidly evolving, but it represents the fastest-growing need among Gartner clients. "As each provider has unique offerings, the task of sourcing their services must be handled with care." Most of the vendors included have service-level agreements that ensure the cloud will have 99.95 percent uptime; some even guarantee up to 99.999 percent.

Gartner warns that security remains a major issue with cloud computing, with the extent of security measures from each provider varying significantly. While a vendor may provide some base-level of security, in many circumstances, such as with AWS, it's up to the customer to select what additional security features they want. The same is generally true with enterprise-class support, which is offered as an option for customers if they choose from many providers, like AWS. 

Customers are using the cloud for more complex workloads now compared to a year ago. Gartner recommends using cloud services for purposes such as test and development, hosting cloud-native applications, e-business hosting, enterprise applications, general business applications, and batch computing, depending on the provider.

Senior Writer Brandon Butler covers cloud computing for Network World and NetworkWorld.com. He can be reached at BButler@nww.com and found on Twitter at @BButlerNWW. Read his Cloud Chronicles here.

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Intrexon: Successful Public Offering For A Potentially Revolutionary Company

Intrexon (XON) made its public debut on Thursday, August the 8th. Shares of the leader in the field of synthetic biology ended their first day with gains of 54.6% at $24.73 per share.

Given the sky high valuation, based on the hope of future product revenues and earnings, I remain on the sidelines. While the company's products and processes could be revolutionary, Intrexon still has a lot to prove.

The Public Offering

Intrexon focuses on synthetic biology which is an emerging discipline to apply engineering principles to biological systems. The company uses its own technologies to build and regulate gene programs, or DNA sequences which control cellular functions and systems.

As such, Intrexon hopes to develop improved product and manufacturing processes for healthcare, food, energy and environmental markets. Intrexon hopes to create more effective and less costly solutions which are also sustainable.

Intrexon sold 10.0 million shares for $16 apiece, thereby raising $160 million in gross proceeds. All shares will be sold by the company with no shares being offered by selling shareholders.

The public offering values the equity of the firm at $1.50 billion. The offering took place at the high end of the preliminary $14-$16 offer range. Given the strong demand Intrexon boosted the offer size from a planned 8.3 million shares to 10.0 million shares as well.

Some 9% of the total shares were offered in the public offering. At Friday's closing price of $29.09 per share, the firm is valued at $2.7 billion.

The major banks that brought the company public were JPMorgan (JPM), Barclays, Griffin Securities and Mizuho Securities.

Valuation

Intrexon is working with collaborators to create superior solutions which can be provided through current industry processes. The company's business model is to commercialize technologies through exclusive channel collaborations, in which partners will bring the potential processes and products to the market.

For the year of 2012, Intrexon generated annual revenues of $13.9 million, up 71% on the year before. Net losses attributable to common shareholders increased slightly to $103.9 million.

First quarter revenues were up by 145% to $4.0 million. Net losses more than doubled to $42.7 million.

Intrexon operates with $143.5 million in cash and equivalents and no outstanding debt or preferred stock investments. Including the $160 million in gross proceeds from the public offering, Intrexon will operate with a net cash position of around $285 million.

Given the lack of operating revenues, as most revenues are the result of collaborations, any valuation multiples based on past performance are meaningless.

Investment Thesis

As noted above, the offering of Intrexon has been a huge success. Shares were offered at the high end of the preliminary offering range. On top of that came opening day returns of 55%, followed by a strong session on Friday. At Friday's close, shares are trading some 94% above the midpoint of the preliminary offer range.

Intrexon is an interesting case. The company has been around for fifteen years and has been reporting large losses on the back of a lack of real product or process revenues. At the current loss rate of over $150 million per annum, the company will run out of cash within two years, despite the successful public offering. As such, dilution or bankruptcy are key risks.

To generate future product revenues, Intrexon has engaged in nine exclusive channel collaborations (ECCs), in the field of healthcare and food. The most prominent collaboration is formed with Elanco, the animal health division of Eli Lilly (LLY). Yet none of these collaborations have resulted in a revenue generating products or processes yet, and it could take a while as gene therapies need FDA approval.

Given the significant losses, the long development trajectory, and the high valuation of almost $3 billion, I am hesitant to jump on the bandwagon. On the other hand, Intrexon is trying something really new which could be the start of a revolutionary process and turn the company into an absolute global leader in the future. Yet the $3 billion price tag is quite a high valuation. In comparison, current industry leaders like Amazon.com (AMZN), Microsoft (MSFT) or Wal-Mart (WMT), had a much more modest valuation when they went public.

Therefore I stay on the sidelines. The company could become a long term success, thereby destroying all those who might initiate a short position. Yet I see few reasons to initiate a long position on the back of the high valuation and the high uncertainty for product revenues going forward.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. (More...)

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University of Maryland Partners with PRSA to Advance Public Relations Instruction in MBA Program

University of Maryland Partners with PRSA to Advance Public Relations Instruction in MBA Program

Pilot program aims to create better understanding of corporate communication strategy,
methodology and value among current and future business leaders

College Park, Md. – June 12, 2012 — The University of Maryland’s Robert H. Smith School of Business is one of five business schools selected by The Public Relations Society of America (PRSA) to participate in a groundbreaking pilot program aimed at enhancing the strategic communication and reputation management education provided to the nation’s MBA candidates.

The schools selected by PRSA have demonstrated a commitment to teaching the strategic value of public relations at the MBA level, and currently offer or have previously offered public relations classes or coursework in their MBA and/or Executive MBA programs. Under the pilot program, the Robert H. Smith School of Business will integrate a new, turn-key public relations course into its MBA curriculum for the 2012-2013 academic year.

“Communication and reputation management are necessary skills for executives and all leaders,” said G. “Anand” Anandalingam, dean of the Robert H. Smith School. “We have always stressed the importance of these competencies to our students by delivering workshops and short courses. Our students will benefit further from this semester-long format.”

The Smith School will work collaboratively with the other business schools in the pilot on identifying and documenting best practices in terms of subject matter and teaching methods, and on incorporating its findings into a formal report to be released at the pilot program’s end.

“Being a part of this pilot gives us the opportunity to positively influence business education across the country,” said Ken White, assistant dean of Marketing Communications, who will teach the course. “We will work together with the other pilot schools and PRSA to offer a best-practices guide for the public relations course curriculum to business schools nationwide.”

The other institutions taking part in the pilot include Dartmouth College’s Tuck School of Business; Northwestern University’s Kellogg School of Management; Quinnipiac University’s School of Business; and the University of Texas at El Paso’s College of Business Administration.

“We’re extremely proud of the quality and diversity of the university programs that showed interest and were selected to take part in our MBA pilot program,” said PRSA Chair and CEO Gerard F. Corbett, APR, Fellow PRSA. “Our aim was to identify schools that were best-in-class in their respective categories and representative of various geographies, sizes and specializations, and I’d say we exceeded those goals, given the caliber of the institutions selected.”

PRSA Study Underscores Need for Public Relations Training

In October 2011, a Kelton Business Leader Study commissioned by PRSA surveyed 204 American business leaders (vice president and above) to gauge the organizational value that U.S. business executives place on corporate communications and reputation management, and on senior managers having advanced knowledge and grounding in those areas.

The survey results showed that many American business leaders view recent MBA graduates as being under-prepared in the areas of strategic communication and reputation management. The results also showed that many of the business leaders surveyed believe MBA programs lack sufficient emphasis on communications strategy and related leadership skills.

To help address this lack of training, PRSA’s MBA initiative is a multi-year, collaborative effort to advocate the value of including foundational communications strategy in MBA programs. Ultimately, the program is intended to give MBA candidates a better appreciation of public relations’ strategic value and help them understand the communications methodologies required for success in the future.

The program has the support of the Arthur W. Page Society, Council of Public Relations Firms and International Association of Business Communicators. Initial funding was provided by the PRSA Foundation, and ongoing financial and material support is being provided by MWW Group, Kelton Research, Hilton Hotels Corporation and Southwest Airlines.

About the Robert H. Smith School of Business
The Robert H. Smith School of Business is an internationally recognized leader in management education and research. One of 12 colleges and schools at the University of Maryland, College Park, the Smith School offers undergraduate, full-time and part-time MBA, executive MBA, MS in business, PhD and executive education programs, as well as outreach services to the corporate community. The school offers its degree, custom and certification programs in learning locations in North America and Asia.

About the Public Relations Society of America (PRSA)
PRSA is the largest professional organization serving the U.S. public relations community. With a mission to “advance the profession and the professional,” PRSA provides news and information, thought leadership, continuing education and networking opportunities; sets standards of professional excellence and ethical conduct; and advocates for the business value of public relations and greater diversity among public relations professionals. Based in New York, PRSA comprises 112 local Chapters; 14 Professional Interest Sections that focus on specific industries and practice areas; and the Public Relations Student Society of America (PRSSA), which is active at more than 320 colleges and universities.

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Public quizzed on media ownership

30 July 2013 Last updated at 14:34 GMT The world's news environment has changed radically in recent years The government is holding a public consultation on UK media ownership of newspapers, TV, radio and online.

The Department for Culture, Media and Sport (DCMS) has published the consultation "to question how media plurality should be measured".

It said this was to "ensure the media landscape isn't dominated by too few organisations".

The consultation will also ask whether the BBC, which is publicly funded, should be included.

The process is open until 22 October.

Government policy on this issue usually focuses on ensuring that there is a wide-range of viewpoints available across various platforms.

The 27-page document is aimed at inviting views on new ways to measure plurality in a news environment radically different to when the current model was established, early in the last decade.

The consultation asks the public what media it should include in its study i.e. TV, radio, web content and what genres it should cover.

Top news channels

The consultation said the publicly-funded BBC's "impact on plurality" needed to be assessed.

"The BBC is estimated to have spent about £430m on news and current affairs output during 2011 - more than the remaining UK television and radio news broadcasters combined," it said.

Under the current regime, the secretary of state may intervene to block mergers where there is a public interest concern about the impact on plurality.

TV and radio licences are also barred from people whose influence may be of "concern", such as advertising agencies.

Public service broadcasters have a range of further obligations, while TV and radio broadcasts are subject to rules on due accuracy and impartiality.

Data in the consultation report said that while the BBC produces 25% of the news broadcast on television, it accounts for 73% of TV news viewing.

Across all platforms, the BBC reaches 86% of people who read or watch news content - compared with 40% for ITV, 28% for Sky and 27% for News Corp.

Media ownership rules

And among the top 20 news channels across platforms, BBC One reaches 65% of adults, 37% ITV, 23% for both Sky and the BBC News website, followed by the BBC News Channel on 22%, the Sun on 16% and BBC Radio 4 on 14%.

Social media such as Facebook and Twitter are also a key consideration of the consultation, along with online aggregators such as Google News. The algorithms used to draw up the list of content, will also be subject to the consultation.

The document also stated that the current media ownership rules "only apply to newspapers, television and radio", adding that "they do not extend to other media organisations that only operate in the online sphere - such as the Huffington Post".

It said that for news consumption, 41% of adults in the UK now regularly access news via the internet. This has this has grown from just 15% in 2002, according to 2012's report from Ofcom on news consumption in the UK.

Much online content is "generated by media organisations that used to reach their audience via another medium eg newspaper or TV" the document said, adding that the internet "has also created an outlet for new voices to reach the public, including a myriad of individual, smaller voices that can be heard, for example through blogs".

Reforms to the way media plurality was calculated were recommended in the wake of the proposed merger of News Corp and BSkyB in 2011 and later by Lord Justice Leveson's report into the culture, practice and ethics of the press.

The consultation said that "online publication should be included within the scope of any new measurement framework for plurality".

Other measures in the document include calling on TV platforms to "end the charging of public service broadcasters to feature on those platforms, in recognition of the value audiences place on that content being available".

Currently, the BBC, for example, has to pay Sky for Sky to carry its programming and listings.

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