Sramana Mitra: And what kind of environments are these cloud applications working on from a user interface point of view? On the server side, I understand all these virtualization and scalability issues. What about on the client side? Is it all operating on a thin client browser based environment or are you deploying clients?
Diane Bryant: We are not doing server hosted desktop virtualization on the server side, no. We are not doing that. It’s strictly the application running in the data center in a shared infrastructure cloud environment being accessed by a thick client. All our Intel employees have notebooks, full capacity notebooks, about the drives. We refresh them every two to three years. We have many of our apps run local to your machine. Our office applications are local to a machine, so we still have a thick client as the primary device. The applications are just being hosted in the data center in the cloud environment.
Sramana Mitra: Can you also comment on what is happening in the office and productivity apps arena? I had a number of conversations with CIOs and there is a distinct turn going on now of companies moving to Google apps and these lightweight, productivity apps [offer] much cheaper deployment. Is that something you can comment on?
Diane Bryant: There are two different factors that they are on. We are building a private cloud. That is where 90% of our work occurs, and we do have an infrastructure as a service. Our private cloud today is an infrastructure as a service. The apps are deployed into that environment by IT developers. We are also working on building a platform as a service private cloud capability. Intel engineers can use it as a sand box to do rapid development. We have instances even today — and we have had for the umpteen years — where we use the external cloud as a SaaS. How we decide when to go external in SaaS versus internal is primarily based on differentiation of those apps. For non-differentiating applications, I can’t justify putting Intel IT folks on developing and running those. For instance, Intel health benefits are outsourced as SaaS, our expense report, our payroll, these kinds of standard applications. I am not going to add any value by doing internal development. In those specific instances, we use external cloud, and it’s really SaaS doing it forever, but now it is categorized as the public cloud.
We have looked at[whether] there are other applications that we can move to the cloud. For instance, your office application comment, and the problem is more expensive. I have a large IT infrastructure today. I buy an enterprise license agreement. If I go to an external cloud, I am going to pay incrementally for that external service, that incremental cost to me, so you have to try and wrap your head around why I would want to pay more for the same functionality I have today.
The other problem with it — when we did our analysis — is network cost. Today, I have a very large WAN/LAN environment. If you can imagine Intel exists around the world, we built out a large corporate WAN, so I need that for all of our big applications. My factory automation applications, my engineering applications and my email run on that WAN, basically, for free. It takes a very small bandwidth compared to all the other capacity that is driven out of the corporation. If I now move that email to a cloud solution, I have Internet traffic that I didn’t have before. I have to pay for Internet bandwidth and that bandwidth that I rent every quarter, every month, where an email hungry company, whether it is good or bad, will run the company on email. That is an incremental cost that I pay. There is no positive for my going to a cloud environment for the collaboration solutions. And we will continue to look at the numbers in the business models, continue to evolve. But today it is pure incremental cost for me to do that.
Sramana Mitra: What about functionality, though, especially in collaboration? It seems like functionality that the cloud based solutions are far superior to what is in the legacy products.
Diane Bryant: Well, I haven’t seen that. I mean, the next generation of collaboration suites is available both, native on the client as well as on the cloud. I haven’t seen — maybe you have a better example — but I haven’t seen any functionality difference. I support video conferencing. One of our big collaboration solutions is video conferencing. Every PC has video conferencing capability. A lot of the real time collaboration solutions want to run native, and the real time apps they want have a local computer, otherwise you have a quality of service issues running up in the Internet. Whether it is Voice over IP or video conferencing, it runs better when it is native on the device. I don’t think I have seen any capability offered in the cloud that isn’t also operative to the native client solution or solution inside the firewall.
Lisa: No, I agree with what you said, and lots of times, we find that the answer is to perform better natively.