Knowledge@Wharton takes a look at some of the key opportunities and threats in these areas, including cloud computing, data storage, social networks and Internet marketing.

This downloadable PDF contains articles with insights from Wharton faculty on the following topics:

• No Man Is an Island: The Promise of Cloud Computing
• Time for a Data Diet? Deciding What Customer Information to Keep — And What to Toss
• Leaving ‘Friendprints’: How Online Social Networks Are Redefining Privacy and Personal Security
• Privacy on the Web: Is it a Losing Battle?
• Betting on Betas: How Internet Entrepreneurs Are Creating New Paths to Online Revenue

Download article packet from Knowledge@Wharton

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Mid-Market Innovators Editor’s Note

For more business and technology insights, check out these helpful resources from Sun Microsystems and Intel:

Download a primer on how cloud computing can take your business to the next level

Download a whitepaper on Intel Xeon 5500 as the ideal foundation for cloud computing

Download a white paper on the Sun Open Archive Framework

Download a white paper on environmentally sustainable storage strategies

Download a case study about hosting company NaviSite virtualizing its datacenter

Download a data sheet of Startup Essentials

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According to a recent study conducted for The Economist, “Sixty‐nine percent of Americans connected to the web use some kind of ‘cloud service,’ including web‐based e‐mail or online data storage.” These changes in behavior and the accompanying changes in expectations require marketers to adapt the way they present information and run their services online.

Mobile on version 1.0

Many consumers of information are starting to lean heavily on their mobile devices as their primary research and reading tool. For marketers this means that mobile versions of services and sites need to be a consideration in the initial presentation and not a feature upgrade down the road.

RSS readers and conversion tools can do some of the lifting for basic information sites such as blogs, but marketers must be creating mobile‐friendly (read really small screen) versions of all information and mobile add‐ons and applications for all services.

No more lugging storage or power

Laptops, particularly the popular “netbooks,” rely increasingly on Internet based web applications and are intentionally stripped of power and storage capacity as the trade off for size and weight.

This means that marketing must be careful in the use of processor intense entertainment experiences and instead focus on simple presentations that can be viewed on 10‐inch monitors.

Where do the ads go?

Growing numbers of web applications are coming online as free or “fermium” offerings. Marketers of these services are finding increasing resistance to ad‐supported models.

However, web applications that deliver contextually relevant ads for products, services and information that supplement the primary offering should find greater acceptance as more editorial than interruption.

What’s the back­up plan?

The greatest friction to cloud computing and web application adoption is the notion of security and reliability. “If my data isn’t sitting on the corner of my desk in a pile of CDs, then how do I know who’s looking at it?”

Of course, the opposite is generally true, reputable storage and server facilities are often much more secure and reliable than the typical DIY platform, but it’s a perception that must be addressed.

Marketers can’t over do education in this arena and should probably consider offering back‐up, what if I can’t access my data, plans as part of their service offerings.

Gently adapting the changing demands and expectations of customers online is an ever-evolving communications and marketing challenge that’s better hit proactively than reactively.

The answer to this dilemma on the software side is the same as it is on the hardware side: increase parallelism by introducing a greater number of OS instances per processor, just like we’ve introduced more cores per processor. One technology for doing this is virtualization, which uses large, multicore, multisocket servers to run many OS instances. Virtualization has been on a massive upswing in adoption in the last few years, as this problem becomes more and more pressing. But management overhead is one of the by-products of virtualization, and great care is required to make virtualization work properly.  So some small datacenters may be looking for an alternative to or a complement to a full virtualization deployment.

Several server vendors are pushing an alternative solution that could be a better fit for some types of workloads; this solution often goes by the name of “Physicalization.” Physicalization involves building smaller servers out of low-power processors, tailoring them to the amount of computing resources which can be efficiently used by one OS instance, so that a one-to-one correspondence between hardware and instances can be maintained, thereby bypassing the management overhead and licensing costs of virtualization. As a side benefit, low-cost, low-power hardware, like the Intel Atom designed for netbooks, can be employed, rather than expensive server hardware.

A number of physicalization solutions have been announced in recent months, and while these solutions can’t offer greater density or PPW, they do represent a workable alternative to virtualization for some users. For instance, web hosters can offer their clients dedicated hardware, while using commodity hardware made cheaper by consumer economies of scale.  They also allow centers to harness the “free first gigabit” of ethernet over copper, and potentially avoid expensive 10GigE and Fibre installations. For some applications, physicalized servers may be the best option for using Moore’s Law to meet the ongoing challenges posed by increasing demands and limited resources in the datacenter.

It remains to be see, however, whether physicalization will actually catch on. The challenge that physicalization faces is that, for all its benefits, it simply doesn’t make as efficient use of Moore’s Law as virtualization does. Let me explain.

The problem with physicalization

Moore’s Law is most often cited as a statement about “computer power” or “the number of transistors on a chip” doubling within a specific timeframe (typically 12 or 18 months). This explanation is serviceable enough for the popular press, but it’s not entirely accurate. In its original 1965 formulation, Moore’s Law was about the cost-per-transistor dropping as a result of increased integration. In other words, as you pack more transistors into the same-sized area of die space, the cost per transistor drops dramatically given a fixed cost-per-chip.

Chipmakers take advantage of this declining transistor cost in two distinct ways: 1) they pack more transistors into the same-sized chip and charge customers roughly the same amount, but for more computer power, or 2) they make more chips that are smaller and cheaper, so that customers get the same amount of computer power but for less money.

The first option is typical of the server space, and the second is typical of the mobile space. But what physicalization tries to do is to take the second option into the server space. Unfortunately for the proponents of physicalization, if you’re going to put more hardware into the same machine, it’s always cheaper and more power-efficient to integrate that hardware onto a single processor die. This is because, as an iron-clad rule of computing, die-level integration is always cheaper than board-level integration.

So by taking multiple smaller, cheaper chips that are intended for separate mobile products, and using board-level and network-level integration to cram them into a single server product, physicalization vendors are using Moore’s Law in an odd, non-standard way that forfeits one of its major advantages, i.e., the advantage of die-level integration over board-level integration.

The only reason this works is because chipmakers are willing to take dramatically lower margins on high-volume mobile parts than they are on low-volume server parts. By repurposing the mobile hardware as server hardware and pricing it a bit cheaper than standard server hardware, physicalization vendors are attempting to make money by exploiting the size of this margin gap. If they can keep the costs of board-level integration from eating up the gap entirely, then they get to keep whatever margin is left.

If physicalization starts to take off, and if its other advantages aren’t compelling enough, all chipmakers will have to do by way of response is lower prices on their server processors to compete.

You can take the same approach to IT. Think like a startup, even if you have been in business for decades. Startups do almost all their IT in the cloud and using software as a service (SAAS). That is the default. A startup would think really, really hard about doing anything in-house or custom. Unless something is absolutely core (which means you should be the best in the world at doing it) it is best outsourced to a firm that does that as a core competency.

It is agility that really matters today. Huge companies are crumbling before our eyes. Watch Citigroup and General Motors and your daily newspaper as they go from invincible to suffering or dead. Huge companies have huge overhead. But medium-sized companies cannot afford that overhead.

In 1955, Fortune 500 companies accounted for one-third of the GDP in the US. In 2000, that had doubled to two-thirds. Within that cold statistic lies thousands of human stories of family farms, Mom & Pop stores and other small businesses trampled by Wal-Mart, Agribusiness and other large companies.

That is a massive shift. But it is not written in stone that large companies should control two-thirds of the economy. We may have seen the high water mark of this trend. It maybe reversing. The demise of huge companies is a massive, historical opportunity for smaller companies.

Mid-sized companies need to decide: Are you are agile like a startup or a smaller version of a large company? The latter may give you all the problems of a large company without their advantages of scale.

So, think like a startup. Only do some IT functions internally if you are really (no, really) convinced that those functions are totally core to your mission and you can be the best in the world at them.

That is easier said than done. You do have legacy IT and processes. The most important thing to recognize is that people’s jobs are at stake. If you make the process of moving to cloud/SAAS a genuine win for your people, those objections (”It’s OK for some companies, but its way too risky for us for this reason and this and oh this one as well.”) will disappear like morning mist.

Somebody who is maintaining/managing in-house systems needs to see one of two future career paths:

1. Within your company, moving from context to core, from cost center to profit center.

2. Outside your company, working for cloud/SAAS vendors, trading on the success of the migration of your systems.

Either is a good result, and it will vary by individual.

Once your people are on your side, you can set business objectives and create a project team. When you select cloud/SAAS vendors, keep in mind that you want agility/flexibility. Don’t do business with any cloud/SAAS vendor who cannot show you these three things:

1. A month-to-month plan with no penalty for cancellation. You should stay with them because you want to and not because you have to.

2. Data portability. You (yes you, not an IT expert) need to see how you can export your data from their system. It has to be as easy as exporting say credit card transactions from your bank into a spreadsheet.

3. An open API, so that other vendors that you use can integrate with them as needed.

Many years ago, there was a small startup called Digital Equipment Company (DEC). They sold minicomputers, a simpler/cheaper form of IT than the mainframes sold by IBM. They were hugely successful and grew and grew and grew. They always dreamed of becoming IBM. Then one day they woke up and they were IBM, and it was a nightmare. They had become a slow moving bureaucracy. When the PC came along it destroyed DEC. (It nearly destroyed IBM, but they were transformed by Lou Gerstner as described in the epic “Who Says Elephants Can’t Dance.”)

The waves of change are bigger than ever today. There is a perfect storm of change driven by four big waves of change all happening at once:

1. Demographics: Baby boomers are in their retirement phase. They have mastered the rules of the traditional company, and, with only a few years to retirement, they tend to resist fundamental change. When they leave, they take with them accumulated decades of experience, knowledge that is not easily codified for handing down to the next generation. Generation Y has grown up in the fluid world of digital economics and social media. GenY is not enticed by rigid command and control structures controlled by a generation that does not want to hand over power.

2. Social media: Companies have historically been all about secrecy, structure and control. Social Media is exactly the opposite. Secrecy, structure and control have served real needs for a long time; they work. When the irresistible force of social media hits the immovable force of traditional companies, it makes a loud noise. The strategies are not obvious. “We will make social media technology bend to our rules” will lose a lot of the real value. “Blow up all the rule books, let self-organizing networks evolve” may work out brilliantly, or it may blow up catastrophically; the risks are unlikely to be easily contemplated by existing management and investors.

3. Globalization: Power and wealth is shifting east, to China and India. Massive new markets are opening up as billions move from subsistence to consumer economies. The Internet makes these global markets accessible to even small companies. True micro-national firms — tiny but global — are thriving today. This also creates unprecedented competition, as people and companies in these markets can compete in what you consider your home market.

4. Digital economics: Doing business online is fundamentally, totally different from doing business offline. This is like Alice down the rabbit hole or Dorothy in Kansas, everything is crazily different. What Fred Wilson (a VC) calls “bits of destruction” are hitting every industry and market. This is massive opportunity and massive threat.

This is not an environment to be saddled with legacy technology and processes. You need to think and act like an agile startup every day. Challenge every assumption in your IT systems and processes with a zero-based IT planning process.

A typical data center contains many servers. Traditionally, since hardware was cheap and applications were complex, many administrators installed one application per server. Though this provided their applications with security and isolation from other processes, it resulted in server sprawl. Workload on these servers would vary widely depending on the time of day and user activity. Many of the servers would spend a large percentage of their time idling away, doing practically nothing. Average server utilization levels are typically about 10%. Server virtualization increases each physical machine’s utilization by dividing physical servers into multiple virtual servers. Each virtual server contains its own operating environment and applications; it looks and acts exactly like a real server.

There are three ways to run virtual servers: full virtualization, para-virtualization and OS-level virtualization. In all three, the physical server is called the host and the virtual servers are called guests.

Full virtualization uses a special kind of software called a hypervisor to supervise the guests. It interacts directly with the host’s CPU, disk and network access. The hypervisor keeps each of the guests independent of one another and unaware of the other servers running on the same machine. Full virtualization requires the most overhead, and thus allows the least number of virtual servers per physical server.

With para-virtualization, the guest servers are aware of each other’s existence. Though it also uses a hypervisor, para-virtualization doesn’t require as much overhead as full virtualization because the guests are each aware of the load that they’re placing on the host. This method requires that the host be running a specially modified version of the operating system to cooperate with the hypervisor, but it offers a considerable performance improvement over full virtualization.

An OS-level virtualization doesn’t have a hypervisor at all. The host’s operating system performs the hypervisor’s duties and interacts with the guests. The biggest drawback of OS-level virtualization is that all of the virtual servers must run the same operating system as their physical server, but the performance in the guests can be similar to an actual physical machine!

Which is best? It depends on the needs of the data center. If all the servers run the same operating system, the OS-level virtualization would be the fastest and allow the most virtual servers per host. If you need to combine a number of servers running different operating systems, both full virtualization and para-virtualization can do the job, but full virtualization is the older and more mature technology for doing so.

When to use Virtualization?

Virtualization is perfect for small to mid-size applications and services that don’t fully tax the hardware resources. Since virtualization is dividing a server’s resources into fractions, applications that are too resource-intensive can overwhelm the server. When the physical server can’t meet the demands of one of the virtual servers, all of the virtual servers will bog down.

Virtualization allows for server consolidation. If there are many applications that each only use a small amount of processing power, the administrator can consolidate several servers into one virtual machine. In a data center with hundreds or thousands of computers, the power and cooling savings would be significant.

In the past, when you upgraded your server hardware because it was obsolete, you were usually required to upgrade, or at the very least, extensively test all of the software running on it as well, because the old version of the software might not run the same on the new hardware. With virtualization, though, it is possible to maintain the same operating environment regardless of any changes to the physical infrastructure of the server. This has far-reaching implications for server upgrades, because upgrades are typically incredibly expensive, not just because of the cost of the actual hardware but because of the associated costs of testing to make sure that that everything behaves as it should.

Can Virtualization Make Your IT More Complex?

Virtual servers not only require ongoing maintenance and support but can also greatly increase the complexity of the IT environment. The combination of server virtualization and server consolidation can create a situation where specific physical machines become even more critical to the business. The way around this problem is to develop redundancy by running the same application on multiple virtual servers spread across different physical machines. If one server fails, or is taken offline for maintenance, the other computer would continue serving the application without any interruption in service.

In a large virtualized environment, patching and updating servers is more complex than in a traditional one. Not only do you need to upgrade the virtual machines but the physical server will also require updates. These will occasionally require that the host be restarted. This will also impact the virtual servers which will also need to be taken offline for the duration of the reboot. Having all of the servers hosted inside on machine down, even for just a restart, will impact the business a lot more than if it was just one server. Planned downtime, even for something as simple as a minor update, becomes something that needs to be carefully planned and orchestrated.

Backing up is also more complex. Not only does the physical machine need to be backed-up, but each of the virtual machines does too. Do you need to backup the entire virtual machine, or just the data created by the applications running on it? Backing up just the data will be faster, but it will more difficult to restore the machine to working state because you’ll also need to recreate the virtual server. Backing up the entire virtual machine, on the other hand, will require vastly more storage space to contain.

Monitoring is another issue that is more complex in this environment, because you’ll need an application to monitor both the physical and virtual machines. A server with ten virtual servers would require eleven instances of the monitoring application to make sure that everything is running normally. This will add some overhead that will need to be accounted for when planning the number of virtual services to distribute per server.

Finally, you can’t run everything in a virtual server; some applications are more suitable for virtualization than others. Server virtualization is the technology du jour, but it is definitely something to deploy after carefully thinking through the options and all of the ramifications.

If so, you can still watch the full webinar here. Meanwhile, let me give the highlights of some of what you missed 

The goal of the webinar was to outline strategies and tips for growing your business by leveraging information technology.  I was the moderator and one of the speakers. I was joined by two extremely knowledgeable people:

• Chris Peters, End User Product Marketing Manager, Server Product Group – Intel
• Mac McConnell, Global Program Manager, Systems Group at Sun Microsystems

Business Outlook

First we covered the current business and economic environment. Our collective view is that although the economy is still in the midst of a recession, some cracks are starting to emerge in the dark facade. We noted the small signs of improvement here and there. For instance, U.S. Treasury Secretary Timothy Geithner has reported that the global recession has stabilized. A number of analysts and economists are now predicting that the recession will bottom out and end in the second half of 2009.

But perhaps the most interesting data point about recovery came from the webinar participants themselves. When asked about their budget expectations for the rest of 2009, 41% of the webinar participants reported that they expected budgets to increase. Compare that to only 18% who expected budgets to be cut. That was mildly surprising to us, given the economic environment we are living through, but also encouraging to see.

No matter what, innovative growth-oriented SMBs know that technology gives leverage and can support and even accelerate growth.  For instance, research by Six Disciplines found that SMB companies strategically using technology outperformed their competitors by 100%.

Strategies and Tips

Among the specific strategies and tips, we discussed:

Setting goals and understanding the challenges you are under. Communicate closely with all the functions in your company, including the Sales Department and Finance, especially during times like these.  You may be in a “no growth” mode but find that it is actually costing money to defer expenditures.  Intel discovered that it could save $19 million (PDF) in its own internal operations, by actually spending money to refresh servers.  Also,  you may be called upon to turn on a dime and gear up quickly to address increased sales growth as the economy opens up again.

Use open source software and existing tools to save money. You can get a software package off the shelf, and customize the software internally to suit your needs.

Using SaaS (software as a service) and cloud computing, avoids having to make large up-front investments for software licenses. It allows SMBs to manage cash flow better.  Also, as many SaaS contracts are month-to-month or short term, you gain flexibility by not being locked in.  However, Mac pointed out that by placing so much reliance on an SaaS vendor, it can have a chilling effect on your ability to switch vendors, in effect giving you less flexibility.

Also discussed were a number of strategic hardware management techniques, including trade-ins, server clustering, virtualization, and the computing performance increases you can gain in your organization.

Chris Peters pointed out the “Server refresh savings estimator.” This is an online tool that enables you to evaluate the benefits of replacing server technology with the latest generation of servers.

One key point was illustrated several times:  by doing a strategic technology refresh, the benefits multiply and spill over beyond just the cost of any hardware itself.   Example:  by consolidating servers, you not only end up with fewer servers that you have to buy, but you also increase computing capacity.  At the same time, it  reduces power consumption, reduces demand on staff time to administer and manage the servers, etc.

Customer Case Studies

Mac and Chris covered 3 customer case studies involved Sun and Intel, showing how SMBs (including one non-profit) had benefited from a strategic approach to technology and had put in place some of the strategies discussed.  The case studies are online:

• Practice-IT, an online training technology provider, utilized VMware and was able to significantly expand its capacity to support increasing workloads without increased cost as the company added new customers.

• NaviSite, a medium-sized hosting company, has 17 data centers around the globe. The company has a large VMware environment and needed to consolidate this environment to save costs while increasing the agility to respond to their customer’s needs.

• Catholic Diocese of Boise, a non-profit providing services and support for 54 parishes, 33 missions and chapels, 14 K–12 schools, a library, and 40 offices, has 38 employees who work at a central administrative office.  They were able to reduce 28 servers down to 4, by implementing Windows Server 2008 Hyper-V to minimize costs and increase server utilization.

There was some livetweeting going on behind the scenes, using the hashtag #MIDMKT. Follow the Twitter discussion  here.

This recap only scratches the surface of what we covered.  To get the full context, all the details, and much more advice, please listen to and watch the full webinar:   “Managing For Growth And Change In A Tough Economy“?

Measuring and tracking sounds boring and complicated, so that’s the first hurdle when you address this topic. Most of the books on the subject of marketing metrics are so full of academic speak that they don’t provide much in the way of a simple and effective approach

I firmly believe that if you mine your data for just a handful of key indicators, you can create a dashboard of information that you can actually react to, impact on, and lead from. Keep it simple and build elegant processes to extract and monitor just a handful of key marketing indicators.

There are thousands of things you can measure, but growth objectives can be attributed to measuring just these four against a set of goals.

Lead generation – Where do the best leads come from? How many do you need to generate, and what actually generates them — if you don’t know this, it’s likely you will waste lots of money on things that are not generating the wrong kinds of leads, or potentially worse, abandon a lead generation tactic that’s actually working.

Percentage of leads converted – The biggest resource killer of all for businesses is chasing leads that are not qualified, not educated (by you, not in life), and not ready to appreciate the unique value your organization has to offer. When you measure this, you have to fix it. It’s too painful otherwise.

Cost per customer acquisition – Every new customer comes with a cost. By marrying that cost with some sort of value to the organization over time metric you can determine what you can actually afford to spend to acquire a new customer and go to work on lower what you need to spend while creating more accurate budget forecasts.

Average dollar transaction per customer – It’s is generally much easier to increase your revenue through additional sales to existing customers than to go out and find new ones. You can do this through one of two ways –- increase the perceived value of your offerings and raise your prices, or consider supplementing your core offering with products and services that meet additional needs.

As you can see, no rocket surgery with this list, but tell me, are you really measuring these four significant numbers? So often business owners and managers get caught up in trying to track so many metrics that it’s nearly impossible to focus on what’s truly significant.

So, what’s there to gain by focusing on these particular indicators?

Tripling or quadrupling your lead conversion number is usually the easiest thing to do once you start paying attention to it. It’s much harder, however, to significantly increase the number of leads. But through careful lead analysis you can greatly cut the cost per lead by making better lead spending decisions.

By creating a cost-per-customer-acquisition baseline, you can begin to budget and plan growth much more accurately than ever before.

In fact, this is where you can come full circle with your marketing measurement, because now when the CEO (or you) suggests that the marketing plan calls for 25% growth over the next 18 months, you can begin to tie specific marketing and sales activities and spends to achieving that result – or at least demonstrating why or why not it’s realistic.

Application virtualization is a technology that provides the ability to package and deliver an application in a way that isolates the application from the host operating system on which it is executed. This isolation is made possible by the packaging process, which captures all of the application’s settings, files, registry entries, libraries, etc. and bundles all of them together in an easy to deploy package, such as an executable file. As you might imagine, not all application virtualization offerings are the same. Some require agents or other software installations, while others can operate in an “agent-less” environment.

Regardless of how the solution works, application virtualization provides a plethora of benefits. For instance, application virtualization creates the opportunity to run incompatible applications on the same PC. Let’s say FinanceApp 2.0 doesn’t behave well when MoneyApp 1.5 is also installed, but your finance department absolutely requires both applications on every PC. Putting two PCs on each employee’s desk would be impractical, especially when application virtualization would allow you to simply package one of the applications, let’s say MoneyApp 1.5 in this case. Thus, IT folks fluent in this technology could come to the rescue by installing FinanceApp 2.0 per the usual process while deploying a virtualized MoneyApp 1.5 to those who require it.

Another situation where application virtualization can prove extremely beneficial is when a company migrates to new versions of major software, such as an office productivity suite. Sometimes IT departments aren’t ready to deploy new software as soon as users need that software. This type of situation is usually isolated to small groups of users, and it can increase costs to start supporting multiple non-standard configurations. So, rather than installing the new application on these users’ PCs and creating non-standard configurations, you could virtualize the new version of the application and make it available in a limited deployment to those users who truly need it immediately. Because virtualized applications don’t get installed in the traditional sense, it’s easy to remove them when they are no longer needed or need replaced.

Keep in mind that some applications are not ideal candidates for virtualization. Any application that requires a device driver, for instance, would not be something you would want to try to virtualize. Additionally, software that is heavily integrated with the operating system can be extremely difficult to virtualize.

Virtualization solutions are becoming more widespread, and the offerings continue to mature and improve. Any company exploring virtualization solutions and strategies should strongly consider adding application virtualization to that research. Since many of its benefits can result in immediate cost-savings and more flexibility, application virtualization may have a natural place in your company’s attempt to create a leaner and more efficient IT.

The Energy Star program, a joint project of the Environmental Protection Agency and Department of Energy, rolled out its first set of standards for server products. The new standards, which were developed through consultation with major players in the industry, will apply to single and dual-socket servers. Manufacturers that have a product that meets or exceeds these energy efficiency measures will be allowed to place an Energy Star label on it, providing purchasers with a convenient way of picking hardware that won’t bust their power budget.

The relevant documents have been posted on the relevant portion of the Energy Star website. They include a memo that describes the production of the new standards, a spreadsheet for companies interested in certifying a product, and a document that describes both the energy use allowed in a compliant server, as well as plans for an upcoming iteration of that will expand the range of hardware covered.

The hardware that’s not included in the server-room standards is pretty substantial. This time around, the hardware left out includes blade systems, fault-tolerant servers (those with duplicate hardware), server appliances, and networking and storage hardware. Also omitted is any server that has more than four sockets for processors (the number of cores per processor never enters the equation). A lot of that is expected to change with the release of the next standards, termed Tier 2, which are expected to be released late next year. Things listed as under consideration for Tier 2 include blades, servers with more than four sockets, and various server appliances. There’s also consideration of developing a standard based on the energy use per unit of work performed.

All of that is in the indefinite future, however; the new standards are here now. These include specific efficiency numbers for the item that’s often the biggest power draw, the power supply itself. These vary based on the load of the server and the capacity of the power supply, but start at 70 percent energy efficiency, and rise above 90 percent in some circumstances.

For single and dual socket servers, the key item is idle power. For a base system with 4GB of RAM and a single hard drive, a single-socket server should burn 55 watts or less when idling; a dual socket system is allowed to go up to 100 watts. Servers with dedicated management hardware are allowed to go a bit higher. For standard hardware beyond this minimum system, every component increases the power allotment: a hard drive is worth eight watts, each additional power supply is worth 20 watts, each Gigabit ethernet port is worth two watts, and so on.

For four socket servers, there’s nothing like these hard numbers. Instead, the server must have any hardware power management features turned on in the BIOS and enabled by the operating system they ship with. They also need to have the ability to provide feedback on power use to their owners, including power consumption, air temperature, and CPU load.

So far, the standards are pretty limited, but they’ve undoubtedly been useful, both in terms of starting to give Energy Star a presence in the server room, and in terms of starting the industry-government cooperation needed to continue and extend the program.

Listening to the incessant drum beat of financial crises, stock market dips, lowered company earnings and slashed  budgets, you can easily fall into a mindset that bad news is here to stay.  Relentless bad news creates a climate of fear and uncertainty.  It weighs you down, if you let it.

Luckily, the cycle of bad news leading to worse news is not permanent.  One of the good things — some would say the ONLY good thing — about recessions is that eventually they end.

In the past two weeks we’ve seen a number of positive — although weak and emerging — signals that economic  recovery will start in the second half of 2009.

For instance, the Washington Post reports that the economy is showing signs of stabilizing.  Notice they didn’t say “growing” or even necessarily “improving” — just stabilizing.  But after months of everything seeming to get worse with each passing day, that’s a positive sign.  The article relies in part on the relatively optimistic remarks of Fed Chairman Ben Bernanke in the past week.

In another report, Marketwatch says that the tech outlook is showing signs that recovery may be near.  Although many large publicly-traded tech companies no longer give predictions on their upcoming quarter’s financial results, some executives are making cautiously-positive noises in speaking engagements and remarks to reporters.  Research firm IDC is now predicting that we will see a tech recovery in the second half of 2009.

But to me, perhaps the most encouraging sign of a recovery is the sentiment of business executives themselves.  Do IT decision makers feel optimistic about the near future, even if money is incredibly tight right at this moment?  What are executives planning?   In this context, the condition of the stock market or credit markets is less relevant than the actions we expect to take in our own companies.

One positive sign of executive sentiment comes from IT Retailer CDW.  CDW does a bimonthly survey of IT executives called the CDW IT Monitor. The most recent CDW IT Monitor from April 2009 finds that decision makers in small and mid-size businesses are looking more optimistic about their plans to invest in technology before the end of 2009:

“After more than a year of confidence decline, the first tentative signs of IT growth are appearing. According to the latest CDW IT Monitor, an increasing number of IT decision makers from small and medium-size business sectors anticipate investment in the next six months.

According to the latest survey, 29 percent of small business IT decision makers expect budget increases in the next six months, an increase of seven percentage points from February. Additionally, 18 percent of medium-size business IT decision makers anticipate hiring in the next six months, an increase of six percentage points since February.”

So the headline here is that small and midsize businesses are leading the way with an intention to increase or once again start making IT investments.  In fact, medium size businesses (100-999 employees) may be the most optimistic as this chart from the Monitor shows (notice the uptick in the red line since February):

The survey actually was conducted during March 2009, before most of the other positive economic signs started appearing.  That makes the data even more interesting.

And why are IT decision makers going to invest in IT?  Well a number of possibilities come to mind, including:

(1) IT decision makers expect sales at their own companies to improve in the next six months (or perhaps sales are already showing signs of improving).  There is in fact some survey data from the CDW IT Monitor suggesting this is how medium-sized business executives feel.  As a result, they expect budgets to ease up and to have more money to spend.

(2) Small and midsize businesses already may have cut expenses to the bone, and have held back on new purchases to the point that they can wait no longer.  All those deferred purchases grow more urgent and necessary as time marches on.

(3) Or it may simply be that forward-thinking IT executives know the value of investing in their IT to get a jump on the recovery.  Companies have to invest to make money and grow.  There’s a lot to be said for getting a head start as the economy improves.  Sometimes winners are simply those who managed to outlast their competitors, keep their cool, and seize on opportunities when things start picking up.

Whatever the reasons, I look forward to seeing many more positive signs of economic growth.  Here’s to the economic recovery ….