Microsoft to Yahoo: You're On Your Own

Late last week, Microsoft made it clear that Yahoo wasn't worth the money it would take to buy it. This was after Microsoft raised its offer from $44 billion to nearly $48 billion.

I couldn't agree more. Yahoo isn't as large as you might think, and its growth isn't as impressive as, say, Google. In the last quarter, Yahoo brought in a bit less than $2 billion in revenue and only $112 million in operating income. The only way a company this size would be worth almost $50 billion is if its growth were truly staggering, which it's clearly not.

My bigger concern is that Yahoo has nothing that Microsoft hasn't already built or bought. Microsoft would be far better off using its billions to invent the future, not to buy the past. Tell me where I'm wrong at dbarney@redmondmag.com.

SaaS Rules
Software-as-a-Service isn't yet the dominant way that applications are delivered, but it's the No. 1 thing on the minds of enterprise software customers -- at least, according to a survey by venture firm Sand Hill Group and consultancy McKinsey & Company. The No. 2 trend is actually similar: Web services and SOA.

For large apps, the services model makes a lot of sense. It can take years to properly install and configure ERP, CRM, BI or a management framework -- and there's no guarantee it will work right when it's done. Pre-configured services allow corporations to try out functions bit by bit, and let the service provider do the heavy lifting.

What's your experience? Are you using SaaS? And if so, what do you love (and hate)? Let us all know with a quick e-mail to dbarney@redmondmag.com.

Virtual I/O's Time Has Come
Server and PC virtualization aren't exactly old hat, but they are established markets -- and established technologies that are proven to work.

A lesser-known area that's ripe for take-off, I believe, is I/O virtualization, where connections to networks and storage lose their physical constraints and gain the flexibility of virtual connectivity. Setting up a new server, for instance, doesn't have to involve the manual installation and configuration of NICs, HBAs and all the rest.

One company I came across in this space is Xsigo Systems. Unlike earlier forms of I/O virtualization where a regular I/O device is shared by multiple apps, systems or VMs, Xsigo does away with the adapters all together. In their place is a new device that acts like the physical devices, but can be dynamically assigned and allocated. Pretty slick.

Tom Valovic, executive editor of Virtualization Review (that's our new magazine/Web site which can be found at VirtualizationReview.com), found another player, 3 Leaf Systems, that also virtualizes I/O. From what I can tell, the 3 Leaf V-8000 Virtual I/O Server is very similar in concept.

How much have you virtualized? Servers, desktops, apps, storage? Tell me your story by writing dbarney@redmondmag.com.

Redmond Report Awaits Your Presence
Our newest Web site is RedmondReport.com, a portal to all things Microsoft. This site is designed to give you a quick view of what's happening with the world's most powerful and interesting software vendor (in my opinion, at least). Take a look and let me know what you think!

About the Author

Doug Barney is editor in chief of Redmond magazine and the VP, editorial director of Redmond Media Group.

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