B10WH

The San Francisco’s leading online daily SFGate reported that a federal jury in California has found two web hosting companies and their owner liable for contributing to trademark and copyright infringement for hosting sites selling counterfeit Louis Vuitton goods. The jury assessed damages totaling more than $32 million against web hosts Akanoc Solutions Inc., Managed Solutions Group Inc., and Steven Chen, the owner of the two companies.

In awarding the damages, the jury agreed with Louis Vuitton Malletier S.A.’s claims that the defendants knowingly allowed several websites they hosted to sell products that infringed Louis Vuitton’s copyrights and trademarks.

The U.S. District Court for the Northern District of California is expected to issue a permanent injunction banning the web hosting providers from hosting websites which selling fake Louis Vuitton goods in the future.

California Based Court Paved A Way Web Hosts To Be Sued For Their Customers Conducting Illegal Activities

Attorneys of the Louis Vuitton said that the case is the first successful application on the Internet of the theory of contributory liability for trademark infringement. Under this theory, any companies that know, or should know, that they are enabling illegal activities have an obligation to remedy the situation. Web hosts that fail to do so can be held legally responsible for contributing to the illegal activities.

Lawyers of Mr. Chen, the owner of both web hosting providers had argued that Akanoc Solutions, a company that enable Chinese citizens to launch enterprises in United States and Managed Solutions were protected under the Digital Millennium Copyright Act’s (DMCA). This is a law that limits the liability of ISPs for activities by its customers that might constitute copyright infringements. The defense lawyers said that Steven Chen and web hosting providers could not be held liable for the actions of websites they hosted but did not directly own or operate.

However the Louis Vuitton lawyers claimed that Steven Chen’s web hosting companies were contributing to the illegal activities conducted by their customers by providing the infrastructure that enabled the sale of counterfeit goods. They further said that web hosting providers had been informed of the activity by Louis Vuitton but refused to implement a policy for removing the offending sites, which was their responsibility.

A New Standard For Trademark Infridgements

The verdict “establishes a standard” for trademark infringement complaints on the Internet. In an interview with Computerworld today Andy Coombs, Louis Vuitton’s counsel said the verdict shows why it’s important for web hosting providers and ISPs to enforce acceptable use policies. “It’s one thing to have these policies, but you’ve got to implement them when given notice of abuse,” said the LV lawyer.

In the above described case, Louis Vuitton showed that it had sent numerous notices to the web hosting companies, but they were ignored or the companies didn’t acte upon expeditiously.

Reactions

The verdict drew mixed reactions. A forums poster who signed the comment as Bret Clark said in a discussion thread among network engineers in the NANOG website, that ISPs and web hosts shall not being held responsible for “policing its customers. “I’m constantly getting called up from scammers trying to [offer] me bogus warranty insurance for cars I don’t own. Does that mean I can sue Verizon because they are letting scammers use their network?”, said the poster.

“Jamie”, another user of the forum said that web hosts cannot ignore notification about one of its customers indulging in possibly illegal activities.

“It’s the first one in an Internet case where a web hosting provider was found liable for trademark infringement for failing to shut down a website after being given notice” of trademark infringing activities, said David Johnson, a lawyer specializing in digital media law in Los Angeles. He called the verdict precedent setting.

Under existing precedent a claimant who is seeking to prove a trademark infringement needs to prove that a defendant intentionally and knowingly enabled another to infringe a trademark. In the above described case, the court was convinced by the evidence presented by Louis Vuitton that the web hosting providers knew about the infringing activity.

“Web-based business software sales are growing briskly, even as most of the industry stalls, as the segment pioneered by Salesforce.com Inc benefits from the weak economy and fading concerns about security”, reported Reuters. According to research firm Gartner the sales of Cloud based software will grow with 22% to a record $8 billion. “We are still going strong,” says Sharon Mertz, Gartner analyst who advises IT managers on software purchases. “The model is pretty solid, even in these tight economic times.”, says Ms Mertz.

The rapid development of Cloud computing platforms puts pressure on established software companies such as Microsoft,  IBM, Oracle and SAP AG to play catch-up, after standing on the sidelines for most of the past decade as Salesforce and others gained credibility with corporate clients.

Many of the providers of Cloud software and Software as a Service (SaaS) host their technologies in their own data centers, offering their customers various IT services through web browsers. This model of doing computing saves corporate client and small business customers a lot of money on buying hardware and software licenses in advance and running programs on their own computers.

The SaaS model of delivering computer services through Internet begun outperforming tthe raditional model of selling software as the world economy worsened.

SaaS provider NetSuite Inc, founded by Oracle chief Larry Ellison, reported a 22%  increase in quarterly revenue. While companies like NetSuite are growing from a smaller base, their performance contrasts with a 33% fall in software revenue at SAP, a 6% drop at IBM and a 5% rise at Oracle. For example Salesforce’s forecast is to post a 23% increase in sales.

Gartner analysts expects the SaaS market to grow at average annual rates of 19.4% through 2013, far above the 5.2% growth for the overall business management software market. Salesforce, whose stock has gained 40%this year, is trading at about 56 times forward earnings according to Reuters Estimates. NetSuite, which is up 48% this year, trades at a multiple of 93. By comparison, SAP, whose shares have gained 12% this year, trades for about 14 times forward earnings. Oracle, whose stock is up 7%, trades at a multiple of 13.

It was probably impossible to predict such a scenario a 10 year a ago, when Marc Benioff quit his executive job at Oracle to found web based business software business. He brought together a few programmers who worked out of a small apartment in the building where he lived. The new team developed Salesforce’s first software programs for managing sales and marketing fairly quickly. The hard work was to get customers was a bigger challenge due to various security concerns.

However Salesforce gradually signed up customers, including financial institutions like Merrill Lynch and Aon, which conducted intensive reviews of its data centers. Having references from these companies helped the new enterprise to overthrow concerns about security.

Today, Salesforce counts among its 55,000 business customers including Dell, Sprint Nextel Corp, Starbucks Corp, Toyota Motor, and the U.S. Army.

“The maturity of the SaaS model has come a long way,” explains Tom Hattier, an IT manager with General Electric. and adds that more and more companies have embraced it. General Electric has been using web based software for several years decided to go live last October with a corporate-wide system hosted by Aravo Solutions that manages GE’s database of more than 500,000 suppliers.

However the growing popularity of Cloud class software has been boosted by innovations in Web 2.0 technologies implemented by companies like Google. The web giant sells business versions of its email, calendar spreadsheet and word processors and offers consumers, offering them extra collaboration and archiving functions.

Microsoft, which is still expected to launch its Cloud platform Azure offers online marketing software, programs targeted at small businesses and is getting ready to bring its popular Microsoft Office software online and to sell it as a service.

IBM and Oracle are alos launching new SaaS products. while SAP puts out a line of accounting programs for small to middle-sized businesses.

And a string of smaller companies sell niche software to manage sales, marketing and human resources that they hope will become the next big hit. They include Constant Contact, Kenexa Corp, RightNow Technologies, SuccessFactors, Taleo Corp, Ultimate Software Group, and etc.

There are also many other new and start-up companies such as Abiquo, Fuscan and Daas.com,which develop PaaS (Platform as a service) solutions and have already entered the market or are about to debut their cloud software in 2009.

Eucalyptus, the open-source project which was the core Amazon’s cloud infrastructures set up has been established as a private company, named Eucalyptus Systems. The Eucalyptus said that its new venture raised $5.5 million. The company aims to support the open-source cloud platform and  to deliver on-premise private and hybrid cloud computing solutions for large-scale businesses.

Eucalyptus is an acronym from ”Elastic Utility Computing Architecture for Linking Your Programs to Useful Systems”. It has recently became a component of the Ubuntu Linux server distribution.  According to company founder Rich Wolski ”Eucalyptus Systems will enable businesses of any size to leverage their own IT resources to get the benefits of cloud computing without the concerns of lock-in, security ambiguity, and unexpected storage costs that can be associated with public clouds”.

Eucalyptus is the only private cloud platform today that supports the same application programming interfaces (APIs) as Amazon Web Services.

Hewlett Packard announced that it releases a new blade server and storage system that aims to power the new generation virtual data centers and to be used for cloud computing class IT services and platforms.

Along with the HP BladeSystem Matrix (a a cloud infrastructure in a box) HP has said that the new HP LeftHand storage P4000 SAN is available as a standalone iSCSI SAN product or as a part of virtualized blade server infrastructure in a bundle called HP StorageWorks SB40c with P4000 Virtual SAN Appliance Software.

The HP’s announcement of the new enterprise IT storage solution came month after Cisco entered the blade server market with its new Unified Computing System for virtualized data centers, and a week after EMC introduced a Symmetrix V-Max storage system and new architecture. Cisco and EMC agreed to join forces to ensure their systems can easy to interoperate.

One of the well-recognized U.S. dedicated hosting providers The Planet announced that it plans to go overseas and to open its first data center in Europe. This would be the first data center operation of the company outside North America. the company claims to face an increasing demands for an international, globally redundant hosted infrastructure. The Planet says its new facility will be build in London area.

”For the past 18 months, we’ve evaluated international markets that are of strategic importance to our planned global expansion, and Europe has been at the forefront of those discussions. We’ve had serious customer interest, which underscored that the time was right to move forward”, said Douglas J. Erwin, Chairman and Chief Executive Officer at The Planet.

The dedicated hosting provider plans to start offering its proprietary virtual racks solution on UK and EU market in April. The Planet will offer 20kW of power per rack, backed by N+1 redundancy on generators, transformers and UPS systems. According to hosting provider, its new customers will have access to a 10GB private fiber interconnect to The Planet’s core network, as well as local connectivity to Tier-1 providers and the major EU peering exchanges.

The company has begun building its London based data center two years ago. Recently it added some peering points on the East and West Coasts of the United States. The Planet says that their storage cloud and CDN (Content Delivery Network) products also provide global access points. 42% of the provider’s customers are coming from outside U.S.

The Planet has signed a colocation agreement with TelecityGroup, a company that maintains 20 data centers in 7 EU countries. The web host announced that the procedures in its new facility comply with ISO 9001:2000, a standard that defines requirements for the quality management systems for data center operations.

At the need of the 2009 The Planet said it planed to open its 7th data center in Dallas, a 86,000 square foot collocation facility in Dallas. It is expected to be opened in May 2009.

New Your Internet (NYI.net) has been ranked as the most reliable web hosting provider in Netcraft’s February survey. The company has failed to respond to only one of the requests made by Netcraft’s performance collectors throughout the month.

NYI.net is followed by UK2, Server Intellect, WebFusion and Pair Networks, each of which failed to respond to 2 requests in February.

By winning in February New York Internet has stayed on top of the world’s list of the most reliable web hosts for the third consequent month. The company was also ranked top in December 2008 and in January.

The NYI.net is established in 1996. The company’s data centers are located in 100 William St., 21st Floor and 25 Broadway, in the hart of Manhattan. The company offers dedicated hosting, collocation and virtual web hosting. The NYI.net’s main website is based on Apache/FreeBSD.

The web host’s services are among the expensive ones on the hosting market. A dedicated hosting service based on Intel Pentium E Dual Core 2.0GHz, 1GB RAM, 80 GB SATA HDD, 5 IPs, FreeBSD 7.x OS is priced by New York Internet at $193/month with $567 set-up fee.

“There is a little difference between how large companies and small businesses will utilize Cloud computing”, this is one of the conclusions which was made from lates survey conducted by Hosting.com. The web hosting provider with one of the most targeted names in web hosting industry has released a research paper titled - “2009 Cloud Computing Trends Report”.

The driving factors for adopting cloud services are nearly the same for all company sizes, shows the poll. It laso shows that business sizes does not play a big role in the process of adoption of cloud technologies.

Another result of the survey is that leaders of smaller companies list Cloud Computing as a priority at the same rate as executives in larger companies. Small businesses are likely to receive a greater amount of IT services from a cloud platform. The survey also says that an increased education on cloud benefits, solutions and design is very important to be mastered from businesses of all sizes.

Small businesses require an immediate and measurable results from cloud-based solutions. This includes reduced costs, increased scalability, improved service level agreements for customers, and higher availability.

2009 is slated to be a banner year for cloud computing providers and solutions. Until now the expected primary source for increased revenues was large corporations, specifically for test and development environments. However, over the past several months decreased revenues and operating budgets have driven small businesses to explore and implement production cloud environments.

Services Businesses Use from Hosting Providers

As show on the graphic above 72% of the businesses said that they use web hosting, 54% use email hosting, 32% use database hosting, 30 use application hosting and 21% use hosting providers for online storage.

What “Cloud Computing” Means For Respondents?

47% of the survey respondents say that cloud computing refers to a “fundamental change in how technology services are provided”. 19% said that it was a “tool that if delivered properly, can provide instant value for my company”, while 9% told researchers that cloud computing was “a tool that might work for another company”. 13% of the respondents define cloud hosting as “another buzzword - all hype” and 12% are unsure what cloud computing means.

The Hosting.com’s document is based on data collected over a 5-week period by conducting an open survey that has 644 respondents. All of them are C-level executives and business decision makers. More that 40% of them are holding CXOs, president, vice president titles or are owner on the companies.

All major industries such as financial services, retail, social networking, health care, manufacturing, IT service providers, marketing and advertising, non-profit sector and city governments are represented in the survey.

69% of the respondents work for companies that have less than 100 employees. 11% have more than 1000 employees. 64% of survey’s participants work fr companies with annual revenue less than $10 million, while 13% of them manage businesses with more than $100 million annual revenue.

Two thirds of the survey participants believe that Cloud computing will have a moajor impact on the IT industry. Contrastingly, 22% were familiar with the term but did not thing that it would provide value to their company.

Three Most important Factors To Invest In Cloud Computing

Cost savings, uptime and high availability, and performance are the key factors that make companies to start using Cloud Hosting technologies.

Obstacles Cloud Computing Providers Must Overcome

As you can see on the above graphic, the security is a top priority for businesses. Companies spend countless hours and investments to protects their data assets.

IT Services To Be Delivered From Cloud Platform (Next Year)

More than 75% of the survey respondents said that only 6% of It service they will use within the next 12 months will be delivered form a cloud platform. For 51% - 75% of the respondents the percentage of IT services from the cloud is 8%. 26% - 50% of executives responded that expects 12% of IT services to be delivered from the cloud within the next year, 10% - 25% of the respondents said that 23% of their IT services will be coming cloud computing.

Solutions Best-Suited For Cloud Computing Environment

70% of the survey participants answered that web applications are the service which is best suited for cloud hosting environment. 41% of the respondents think that their database servers should be hosted on cloud computing systems, and 37% said that they would host application server in cloud environment.

How Customers Prefer To Pay For Cloud Hosting Services?

32% of potential users of services delivered from Cloud Computing prefer to pay on monthly basis. 18% say that would go for annual contract based on their resource needs and bursting.

The results from the survey illustrates the need of additional education of the uses and benefits of the Cloud Computing. There are still a large number of people that consider Cloud Computing as a Buzzword or are just unfamiliar with the term. 36% are unsure when cloud Computing will impact their business. 12% have no intention to use Cloud Computing and Cloud Hosting services. 39% think that 1% to 10% of the IT services they use will come from a Cloud Computing platform.