Small and medium businesses are becoming more comfortable using cloud services, a new study says,

The survey, conducted by Webtorials for VoIP provider Fonality found that 14 percent more SMBs say they understand cloud-based service options but most still are focused on optimizing the total cost of operations.

Those findings, said Fonality, create a window of opportunity for cloud-savvy vendors.

"These findings suggest that SMBs are beginning to connect the cost-saving potential of (cloud) services to their overall mission of reducing expenditures and minimizing TCO," said Fonality CEO David Scult. "While controlling costs by investing in new technology seems contradictory, cloud-based communications tools, in particular, can be leveraged to drive competitive differentiation and maximize operational expenses. As a result, this technology can help spur growth through enhanced productivity and efficiency."

The survey also revealed that a quarter of respondents felt flexibility and mobility with communications solutions are important, and more than 85 percent believe they need to provide access to communications solutions for remote employees.

"It is encouraging to see that SMBs are taking the initiative to learn more about cloud-based services," said Steve Taylor, editor-in-chief and publisher for Webtorials. "This is a needed first step for SMBs to realize the tools and solutions available to achieve the goals they stated as unattainable."

Scult earlier this month was named CEO of Fonality, the third chief executive for the company in the past two years. He replaced Dean Mansfield.

For more:
- see this release

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For the past year and beyond, a rising tide of concern within the European Parliament regarding its citizens' data privacy has put the U.S. on the defensive and American companies, particularly those selling cloud services, in a tight spot. EU companies and governments guard their customers' private data fiercely, but Patriot Act provisions make it possible for that data to be released to U.S. law enforcement despite EU regulations. And what the disconnect means is that U.S. cloud vendors are losing contracts, losing business, and losing traction in one of the most connected regions in the world. See this FierceTelecom story. Editor's Corner

Voxeo is partnering with Infracast, which will use Voxeo's on-demand cloud-based facilities to provide outbound messaging as part of their Enterprise Message Exchange, a hosted, web-based application that supports high volume SMS, voice, email and social media, as well as fax interactions from businesses to their customers and staff.

Infracast already has begun delivering voice-enabled services for customer care within the areas of retail, manufacturing and distribution, and it also offers a multi-channel solution for customers within financial services.

Voxeo's platform enables its clients to offer customer access to information and services over interaction channels like SMS, voice, email or social media.

For more:
- see this release

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Esnatech has rolled out its latest iteration of Office-LinX, its unified communications platform that enables enterprises to integrate UC with cloud-based technologies like Google Apps, VMware and Salesforce.com

Version 8.5 is keying on scalability and assuring uptime for enterprises, and it includes virtual high availability support, for its voice clusters with VMware vSphere support.

Office-LinX 8.5 provides high availability infrastructure in which every UC node across the network is replicated in real-time within an organization's existing VmWare infrastructure, enabling enterprises to consolidate all their voice applications to a central, distributed license. Office-LinX is optimized to work in mixed, distributed environments integrating with multiple on and off-premise telecommunications technologies and cloud-based applications and infrastructure.

For more:
- see this release

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F5 Networks' (Nasdaq: FFIV) share price rose after hours as investors expectations were buoyed by the company's strong performance in the first quarter of fiscal 2012, as well as by F5's strong outlook for the current quarter. The stock close at $108.46, but after hours was up nearly 7 percent to $115.35.

The company continued its string of double-digit revenue growth in the quarter, reporting sales of $322.4 million, up 19.9 percent from $268.9 million in the first quarter of fiscal 2011. First quarter profits also were up some 19 percent  to $66.5 million, or 83 cents per share, from $55.7 million, or 68 cents per share a year ago.

Chief executive John McAdam said strong sales in APAC, Japan, and particularly North America offset the seasonal slowdown that typically characterizes the first quarter of a new fiscal year.

"We were also pleased that sales in the EMEA region exceeded our expectations," said McAdam, adding that strength in product sales was driven in part by growing demand for Viprion 2400 across all regions and vertical markets. McAdam said sales of all Viprion products nearly tripled compared to the first quarter of fiscal 2011.

F5 Networks also made hay from sales of its virtual clustered Multiprocessing module, which enables customers to run multiple virtual BIG-IPs on a single Viprion. McAdam said sales and demand for BIG-IP virtual editions "continued to outpace our expectations."

For the current quarter, F5 Networks has set a revenue goal of $332 million to $337 million with a GAAP earnings target of 84to 86 cents per diluted share, and a non-GAAP earnings target of $1.05 to $1.07 per diluted share.

For more:
- see this release

Related article:
Cloud growth offering opportunities across market segments

SMBs, consumers and enterprises increasingly are turning to the cloud for data backup, and that has moved providers of backup solutions to the forefront, as evidenced by news today that Code 42, a Minneapolis-based startup, has landed $52.5 million in funding in a round led by Accel Partners.

Code 42, whose popular CrashPlan backup service competes in the same space as DropBox, Box, Carbonite and others, provides online, offsite and onsite backup plans to consumers, SMBs and enterprise.

The company said the funding will be used to accelerate product development and expanded sales and marketing efforts.

The funding round is the first major investment from Accel Partners' recently announced Big Data Fund, which is dedicated to funding category-defining infrastructure and application companies in "Big Data." Split Rock Partners also participated.

CrashPlan launched in 2007, and Code 42 now manages and protects over 100 petabytes of data globally. The company has parlayed its consumer play into one that also addresses the needs of business. Its product lineup includes online backup solutions for the SMB, CrashPlan PRO, and private and public cloud solutions for the enterprise, CrashPlan PROe. All products offer multi-destination, cross-platform, continuous protection onsite, offsite and online.

The company said it's experienced more than 500 percent growth over the last three years, and now has 86 employees.

"The explosion of mobile devices and cloud services has created big data and security opportunity for the enterprise," said Matthew Dornquast, co-founder and CEO. "Accel has the unique ability to identify significant industry trends like ‘Big Data' and ‘The consumerization of IT' and help entrepreneurs translate those trends into category-defining global businesses. The insight and experience of our investor team will be invaluable as we scale Code 42."

The company counts Adobe, Google, Groupon, HP, Intuit, Kraft Foods, LinkedIn, NASA, National Geographic, Salesforce.com, Stanford University and The University of Texas among its largest customers.

Code 42 was self-funded and has been profitable since 2001; it has more than 4,000 customers around the world using its enterprise plan, CrashPlan PROe.

For more:
- see this release
- see this AllThingsDigital article

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Polycom (Nasdaq: PLCM) today launched a new cloud strategy that includes a RealPresence Cloud component that gives service providers a fully managed, carrier-ready wholesale video collaboration service.

The announcement comes on the heels of news that details how telecoms spent $13.5 billion rolling out 170 new cloud initiatives in 2011, nearly one every other day.

Polycom, which has been making a lot of noise lately about its RealPresence videoconferencing play, said the new cloud-based product will enable service providers to quickly bring to market VaaS offerings, designed specifically for service providers to equip them with the carrier-grade infrastructure, endpoints, and services they need to offer businesses of all sizes subscription-based solutions for video collaboration.

The new offering allows operators to target SMBs and enterprises who want either a hybrid solution of both premises-based video collaboration solutions and video on demand, or a pure VaaS solution. 

Wainhouse Research predicts the five-year compound annual growth rate for the hosted and managed UC market worldwide is forecast to be 30.7 percent with revenues of approximately $5 billion in 2015.

"We want to make it as easy as possible for service providers to augment their existing offerings with video collaboration solutions," said Andy Miller, president and chief executive of Polycom. "Our go-to-market objective is clear: we will be an enabler of cloud services, partnering with service providers and, in-time, solutions providers, and unlike competitors, we will not compete with service providers or offer a retail service direct to end users."

Analysts say cloud-delivered video offerings will be key to video collaboration and conferencing growth.

"Many SMBs and enterprises will find Video-as-a-Service offerings attractive due to their flexibility, scalability and cost savings," said Rich Costello, IDC senior research analyst.

For more:
- see this release

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Enterprise software maker SAP reported fourth quarter numbers that topped analyst estimates and outperformed rival Oracle as well. The company also revealed plans to focus on growing its cloud-computing software business, along with its mobile apps and real-time analytics technology.

The company Friday reported revenue of $4.7 billion, an increase of 12 percent from a year ago. It also reported operating profit grew 10 percent to $2.3 billion, again, beating analyst expectations. The good news caused the company's share price to jump.

In December, SAP acquired SuccessFactors for $3.4 billion, signaling its desire to push further into the cloud-computing market and take on companies like NetSuite and Salesforce.com as well.

"They outshone Oracle," said Mirko Maier, an analyst at Landesbank Baden-Wuerttemberg in Stuttgart with a "hold" rating on SAP shares. "It's a very positive statement, since they kept more than they promised and calmed investors after the disappointment at Software AG."

For more:
- see this Bloomberg article

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Federal spending on IT in the next fiscal year could be hurt by the failure of the Congressional Super Committee to agree on a deficit reduction agreement last week, although experts still expect purchases to rise one or two percent.

Federal budget proposals are set to start landing on desks in February, though how administrators are hit by the requirements for the government to cut $1.2 trillion in spending over the next decade will vary.

Because the government already has begun an aggressive program to reduce spending through the use of a variety of unified communications platforms and an increasing reliance on cloud services, it is likely to continue that spending, said Ray Bjorklund, chief knowledge officer at Deltek. The government plans to close 34 percent of its own data centers, about 962 operations,  by 2015.

IDC analyst Shawn McCarthy agreed, but warned that as non-IT related programs are cut to reduce the deficit, IT spending associated with those programs will be cut, too.

For more:
- see this NetworkWorld article

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Concert Technologies has landed a contract with the federal General Services Administration that could be worth up to $5 billion over the next nine years as it supplies U.S. government agencies with telecommunications, network and communications solutions to meet equipment, building and campus infrastructure needs.

Under the Connections II contract, the Dulles, Va.-based company and its partners, CDW-G, Dell, Telcordia, Johnson Controls, BCCP Consulting, Panduit, SuprTEK, Ventraq and Aquilent, will assist the federal government in acquiring and implementing technology to reduce costs and transform business processes.

The federal government has been aggressively reworking its mix of technology over the past decade. It has increasingly adopted cloud apps like Google Apps for Government and other collaboration tools in an effort to cut costs. It also has worked to close data centers, moving information to the cloud, to cut opex and capex.

"Connections II leverages the Concert team's nationwide and international deployment and support networks to address customer's challenges and to implement solutions with high quality, a secure supply chain and real efficiency," said Dennis Mazaris, President and founder of Concert Technologies.

The Connections II (CNX II) Program is a multiple award, indefinite delivery/indefinite quantity (IDIQ) contract with a three year and three month base period with six one-year options. Connections II complements and enhances GSA's Networx and regional telecommunications contracts. It can be used by federal agencies, authorized federal contractors, agency-sponsored universities and laboratories, and authorized state, local and tribal governments.

Concert Technologies, founded in 1995, is a privately-held small business, technology service company.

For more:
- see this release

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Despite a stumble with its latest Gmail app for the iPhone and iPad, Google (Nasdaq: GOOG) is continuing to push deeper into the enterprise email and collaboration space, signing a deal with General Motors that could put its Google Apps product in the hands of the giant automaker's 100,000 employees.

GM won't sign a final deal until Google meets certain requirements with the software, according to the Wall Street Journal; GM declined to confirm the deal.

Google Apps--Gmail, Google Docs and the Google+ social networking platform and its video calling component--in the form of Google Apps for Government, has been gaining traction with city, state and federal governments looking for cost savings. The software helps contain costs and reduce capex.

The State of Wyoming, City of Los Angeles and the federal government's General Services Administration are among the biggest wins for Google Apps.

Research firm Gartner has said Gmail, which currently has only a one-percent share of the enterprise email market, poses a significant threat to Microsoft's (Nasdaq: MSFT) Entourage software.

GM currently uses Lotus Notes, an IBM product. Both Microsoft and Google have targeted the company's email and collaboration business. A deal would give Google, which has made inroads with SMBs as well as governments, a high-profile customer in the enterprise space.

IDC analyst Al Hilwa said landing GM would be a "feather in Google's cap" and a "credibility boost for cloud services for large companies."

Typically, Google charges businesses with more than 10 users $50 per year per user, but that pricing structure may have gone out the window in its attempt to win GM. Hilwa said Google may be offering a discount of up to 50 percent.

For more:
- see this Wall Street Journal article

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Server virtualization specialist VMware rode strong sales in Asia to more than double third quarter income, the company reported Tuesday.

The company, the largest in its segment, reported revenue of $941.9 million, up 32 percent from the year-ago quarter's $714.2 million, and reported earnings of $177.5 million, or $0.41 per share, in the quarter, up from $84.6 million, or $0.20 per share, a year ago.

Adjusted earnings were $0.53 per share, topping analyst expectations of $0.50 and revenue of $929.8 million.

"Demand was especially strong in the Asia-Pacific markets, and we also experienced the seasonal impact of sales to the U.S. federal government," said Mark Peek, VMware's chief financial officer.

VMware said it expects to continue to roll in the fourth quarter, forecasting a revenue increase over the year-ago quarter of 23 to 27 percent to between $1.03 billion and $1.06 billion. Analysts predict revenue of $1.03 billion.

VMware has seen its growth accelerate as more companies invest in data centers, running software in the cloud to help reduce costs and capex.

VMware is majority owned by data storage company EMC Corp.

For more:
- see this Associated Press article

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Cloud email currently makes up only 3 to 4 percent of the overall enterprise email market, Gartner says in a new report, but that number is expected to rapidly grow during the next 10 years.

And, while Google's (Nasdaq: GOOG) Gmail currently only has a one percent share of the enterprise market, Gartner said it is a real threat to players like Microsoft (Nasdaq: MSFT), which leads the segment, because it makes up some 50 percent of the cloud email market overall.

"While cloud email is still in its infancy, at 3 to 4 percent of the overall enterprise email market, we expect it to be a growth industry, reaching 20 percent of the market by year-end 2016, and 55 percent by year-end 2020," said Matthew Cain, research VP at Gartner. "The intense competition between Microsoft and Google will make both vendors stronger and enable them to apply cloud expertise to other enterprise cloud endeavors."

Enterprises have taken a shine to cloud email provider The Chocolate Factory, one of the more successful enterprise providers aside from Microsoft Exchange.

Gmail's growth will depend on its willingness to make it easy for enterprises to customize.

As Gartner's report said: "While Google is good at taking direction and input on front-end features, it is more resistant to the back-end feature requests that are important to larger enterprises. Large system integrators and enterprises report that Google's lack of transparency in areas such as continuity, security and compliance can thwart deeper relationships."

For more:
- see this Register article

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Networking infrastructure now accounts for 15 percent of the data center equipment market, a market that is growing at nearly 20 percent a year, new research shows.

Synergy Research Group reported that the market for global data center equipment saw growth of 10 percent between Q2 2010 and Q2 2011, and currently is dominated by Cisco (Nasdaq: CSCO), which holds a 49 percent share, followed by Brocade and Juniper.

IBM and HP (NYSE: HPQ) each have 30 percent of the computing equipment segments of the data center equipment market, the largest piece of the technology. EMC leads the data center storage equipment market, at 25 percent share.

"Vendors big and small can benefit from growing investment in cloud computing and data centers," said Synergy Research Group's Jeremy Duke. "Strong market growth in all major world regions is creating new business opportunities. For example, Cisco's dominance in the networking infrastructure segment is not preventing Juniper, F5, and RiverBed from increasing their market shares and growing their revenues substantially."

For more:
- see this release

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Just how big a business will cloud computing become? According to a survey of mid-market IT and business leaders, less than the hype would suggest.

The survey, administered by SWC Technology Partners earlier this year, found that cloud computing is still in its nascent stages and generally is viewed as a complement to traditional technology.

Of the 210 people surveyed, 54.2 percent said their companies weren't pursuing a single cloud-computing initiative. and just 3.7 percent said their entire company had adopted a cloud computing solution. About 30 percent were testing the viability and value of a cloud computing solution, and 12 percent had select groups working with cloud computing solutions.

As one respondent told SWC:

"I don't foresee the cloud as replacing the traditional use model we have now, but rather augmenting it. The cloud is a way to share data across many devices, enabling a user to work anywhere at any time in the most efficient manner. It doesn't replace the need for high performing, well designed, and low latency local applications and end user support."

The biggest concern with the cloud isn't anything new. In fact, I'm sure you've heard it or even said it before: Privacy and security. More than one-in-five respondents said it was the single biggest area of concern. Cost was cited just 9.8 percent of the time.

The SWC Technology Survey 2011 took a broad look at technology; it was last conducted in 2009. Obviously, there's been some change in the IT landscape.

In 2009, the top three priorities identified were security, business intelligence and storage. This year, security was still the top concern, but virtualization moved into the No. 2 spot followed by business intelligence.

The cloud? SWC said that "despite strong industry focus on cloud computing at the production level, enterprise implementation of this technology model is lagging."

Not everyone dismissed the cloud.

"Cloud computing, web conferencing and the ability to work from home due to emerging technologies are very promising tools in relation to our business. So we have recently moved our Exchange & SharePoint from in-house to Microsoft's BPOS service, and I am also looking to possibly move our file server/backup to the cloud as well," said a respondent.

As far as companies switching their entire IT operation to the cloud, respondents were split as to when it might happen. Well, not all of them. Some 42 percent, when asked if it could happen by 2015, said it "would never happen," 32 percent said only if many "currently unresolved issues get addressed," 20 percent said it would happen, but not by 2015.

Only 5.6 percent said it would "absolutely happen."

Despite plenty of stories to the contrary, SWC found only 14 percent of those survey described telecommuting as "the norm." That was down a percentage point from 2009, although larger companies-those with 2,000 employees or more--generally were more likely to use it extensively (20 percent).

"During the recession technologies that support telecommuting, such as unified messaging and video conferencing were positioned as cost savers; specifically following the value proposition that remote employees reduced corporate rent and that remote meetings could reduce the cost of travel," SWC said. "Why the adoption didn't meet expectations is hard to conclude. One assumption may be that coming out of the recession business leaders had a desire to have a more concrete or physical interaction with their respective teams."

Check out the full results of the survey here, and let me know what you think.--Jim

P.S. Did you know that FierceEnterpriseCommunications is on Twitter, too: Follow@FierceEntComm

Waking up to damage from Irene after this weekend, residents of the Northeast and Mid-Atlantic states are probably feeling a range of emotions--relief that it wasn't any worse; sadness at loss of personal property or perhaps even a loved one; shock at the immensity of the re-building task ahead of them. Worrying about how their businesses are affected probably is and should be a little further down the list of considerations.

Still, every time this kind of disaster occurs--whether it's an earthquake, hurricane or tornado--businesses get a not-so-subtle reminder of how important it is to have a disaster recovery plan, particularly one that ensures redundancy of IT services. It's a lesson a lot of companies have learned and that some have learned the hard way, but when the next disaster strikes, you can be certain at least one business will be learning it for the very first time.

Cloud services can be part of the disaster recovery solution, and at this point, most businesses probably know at least a little about cloud services and how they can help in disaster recovery. However, as these businesses look to invest in cloud services, they face a new challenge--figuring out a very crowded and confusing market that contains both public Internet and private network cloud solution service providers, which range from Internet retailers to well-known technology vendors to telephone companies.

What's needed most at this point is clarity, so businesses can make the right decisions. Virtualization company VMware this week is taking a step to help businesses find some clarity in the cloud by launching a Web site to help them find and test offerings from VMware cloud partners. It's one step in the right direction, but if cloud service providers want to truly help their potential customers recover from the next disaster, they need to be honest and detailed about what their services can and can't do. Being clear amid the confusion gives you one less think to worry about with the next hurricane that blows through.--Dan

Server virtualization pioneer VMware is holding its VMworld conference in Las Vegas this week, and among new announcements, it has unveiled a new online resource to help corporate enterprises find and test VMware cloud services partners, many of whom are telcos or similar service providers.

The new site, vcloud.vmware.com, provides information on about 48 vCloud service providers so far and allows companies to test-drive their services. VMware eventually plans to include reviews and recommendation tools to further help virtualization customers connect with the cloud.

In a similar vein, the company also announced Global Connect, a service to help multi-national corporate enterprises find cloud service provider partners in different regions of the world and combine them into a single global virtual cloud services platform.

VMware's success may increasingly depend on the future of such partnerships as chief competitor Microsoft (Nasdaq:MSFT) continues an aggressive marketing campaign against the company that started the whole virtualization trend--or at least made the market take notice. VMware also has taken some odd turns recently, having launched a new licensing strategy that stoked controversy among customers. After an outcry, VMware revised the licensing scheme but its competitor Microsoft has alleged it merely masked its price hikes.

At this week's conference, VMware also is announcing a new database management platform called vFarbric Data Director, which enables greater control over dispersed databases.

For more:
- read this CNET post

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While "official" Washington is talking a good game about aggressively pursuing "cloud computing" services in an effort to reduce operating costs and expenditures on hardware, a number of the agencies are moving ahead slowly, unsure of just how to implement the technology and whether they want to. Despite the benefits, which also include increased flexibility and the ability to scale quickly, surveys of chief information officers of federal agencies show security remains a major concern. Article

The single office/home office (SOHO) segment is booming as innovations like cloud computing, videoconferencing and other developments in telecom and office communications make it easier to support a remote workforce, a new study says.

And the study, from In-Stat, forecasts that spending in the SOHO segment could surpass $17 billion in five years, especially if the economic conditions that helped spur SOHO growth continue.

In-Stat analyst Greg Potter said spending in SOHO will grow 20 percent over the next five years, although some products and segments will see much larger growth.

"Healthcare and social services, construction and retail trade market segments will experience the largest overall gains over the forecast period, each increasing their overall spend by $240 million" Potter said. "Cloud computing, as a product category, continues to experience the largest percentage of growth."

In fact, cloud computing is anticipated to grow some 150 percent, partly due to the nascent state of its offering.

Software as a service is also expected to see strong growth, increasing to almost $800 million in 2015.

In-Stat's research, "SOHO Markets for Telecom Services: Wireline Voice, Wireline Data, Wireless, Cloud Computing and VoIP in 20 Verticals," provides forecasts of U.S. business telecom spending for the 2010-2015 period with detailed segmentation by product category, size of business, corporate liable spending, individual liable spending and vertical market.

For more:
- see this release

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Consumer mobile VoIP is grand, but what we are really interested in is the business applications. Luckily, companies are catching on. Cloud Net is getting into the mobile game with the launch of its first mobile version of its VoIP for business service.

The Cloud Net Mobile PBX is launching for the iPhone and the iPad with business VoIP features and a fully hosted virtual PBX. Cloud Net Connect users will see an extension of the features they know and love with follow-me number portability as they go mobile. It features a management portal to configure the system, free calls on Cloud Net's network, voice mail, fax boxes, call redirect, call recording, ring back, conferencing and Caller ID.

New users can sign up for a free 14-day trial to test out the new offering.

For more:
- read the post

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Voxeo is continuing its M+A strategy bringing on a smaller competitor Teleku for an undisclosed amount of money. The Fla.-based IP telephony company has also recently bought up a number of other complementary companies: IMified, an instant messaging platform, VoiceObjects, a self-service voice systems company, and Micromethod Technologies, a communications collaboration software maker.

This latest acquisition of Teleku serves as a compliment to Voxeo's Tropo, the service provider's cloud-based web and telephony development platform. The goal of both services was creating a cloud-based voice and text applications platform for web developers. Teleku adds an easy to use API that supports multiple web-telephony XML formats including VoiceXML, Twilio's TwiML as well as PhoneML.

For more:
- read the article

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As business computing gets more advanced and cloud computing moves beyond email, competitors are flooding in to challenge incumbents. GigaOm takes a look at some of these and sizes up the market. Article

No Jitter has an interesting top 10 list on how the advent of Cloud computing will change the way we handle voice. Highlights include cloud-based virtual phones and fast launching outbound call centers. Article