Dell makes a good chunk of change off selling servers. The Texas-based company raked in $1.8 billion off server sales in the last quarter alone — which was up 20 percent from $1.5 billion the same quarter a year earlier.

But with the emergence of companies like Rackspace and Amazon’s EC2 cloud services, there’s a diminishing need for companies to purchase servers to perform all the data crunching they need. They can offload it to public cloud servers that have the computing firepower to handle it.

Dell’s response to the public cloud? It isn’t going to affect their server sales at all, said Roy Guillen, general manager of Dell’s Data Center Solutions.

Most businesses — whether they are large or small — are still going to elect to purchase Dell servers and keep them in-house because they will be able to access the data more quickly. There are also a number of security concerns when shipping data off to cloud servers that many companies have, Guillen said. Some IT firms simply can’t meet security compliance requirements that companies have, so the public cloud isn’t an option.

Those security concerns are mostly a myth, said Jason Hoffman, founder and chief technology officer of cloud computing provider Joyent. His company purchases servers from Dell, and the public cloud infrastructure they offer is immune to security threats like rootkits. But most major companies will probably still always have security standards that will prevent them from moving their business into the public cloud.

Dell’s server business is already booming. If you split Dell’s Data Center Solutions off from the main company, it would count for the third-largest distributor of x86 architecture servers, or those with chips from Intel and AMD. Dell’s top 20 customers — including Microsoft and cloud video game company OnLive — regularly purchase tens of thousands of server nodes from the company.

But cloud computing is growing just about as quickly as everything else, and is a lot more cost efficient for many businesses. Amazon recently began offering graphics processing as part of their cloud computing products. The limits of cloud computing when compared to in-house data servers are starting to quickly disappearing. And as the public cloud options for developers continue to grow, it seems like the public cloud could be more of a threat than Dell realizes.

For now, at least, their strategy is pretty clear — see no evil, hear no evil, speak no evil.

Tags: cloud computing, hybrid cloud, private cloud, public cloud

Companies: Amazon, Dell, Joyent, Rackspace

People: Jason Hoffman, Roy Guillen

Article courtesy of VentureBeat » deals

HeyStaks Technologies, a social search startup, has raised $1.4 million in a first round of funding from NCB Ventures. The service, which is a browser toolbar and mobile solution, allows users to organize online searches into folders by topic and share with friends through email, Facebook or Twitter.

Based in San Francisco, HeyStaks was founded in 2007 by researchers at University College Dublin. The service is currently in beta but plans to launch to the public in November.

Companies: Facebook, HeyStaks, NCB Ventures, Twitter, University College Dublin

Article courtesy of VentureBeat » deals

Want a piece of Facebook, Twitter, or Zynga? It’ll cost you — even more than you think.

As trading in private shares on the secondary market heats up, Silicon Valley’s hottest private companies are charging fees for the privilege. Bloomberg reports that Facebook is charging $2,500 per transaction. CNBC confirms that, and notes that Twitter is, too. Zynga recently raised its fee from $4,500 to $6,000, according to emails obtained by Bloomberg.

All this appears legal. Unlike the primary market, where companies issue new shares directly to investors, secondary markets involve the buying and selling of existing shares, much like the public stock markets. It’s long been possible, but it’s getting simpler, more open, and less controversial than it used to be.

In the secondary market, the companies are acting as their own transfer agents, the intermediary who handles record-keeping and information-distribution for buyers and sellers of shares. In the public markets, transfer agents charge small fees, and the price is driven down by competition: Publicly traded companies generally want to encourage trading in their shares.

And that’s the difference: By charging a high fee, Facebook, Zynga, and Twitter are trying to discourage trading.

Until they go public — an eventual outcome expected for all three companies by most observers — they need to keep the number of people who own their shares down. If they hit the limit — generally 500 shareholders, though some employee stock-owners don’t count — prematurely,  SEC regulations could require them to report financial statements like a publicly traded companies, at which point they’ll have most of the disadvantages of being a public company without the benefits. As it stands, these companies have an increasing administrative burden tracking their shares, which they’re trying to cover with the fee.

So far, so fair. No need to weep for the people who are currently trading in these shares. Regulations already require them to be accredited investors, with income of more than $200,000 or a net worth of more than $1 million. (As former VentureBeat contributor Paul Boutin recently noted in Wired, this means that the average Twitterhead has no chance of profiting from that company’s explosive growth.) The average transaction on SecondMarket, an exchange that facilitates private stock sales, is $2 million. SecondMarket and its primary competitor, SharesPost, cover the administrative fee.

Who loses? Midlevel employees at these companies, mostly. They’re left waiting for a liquidity event that may be years away. They may want to cash in some shares that they own free and clear, earned as part of their compensation and properly exercised, so they can buy a car or take a vacation. At that scale of transaction, $2,500 to $6,000 is a hefty chunk of the transaction. Imagine if your broker charged you that much to sell shares.

They’re stuck in sanctioned employee stock-sale programs, where the company generally doesn’t charge a fee but limits the number of shares that can be sold, sets the price, and dictates the buyer — generally a friendly investor like Mail.ru’s DST Global unit, which has bought shares on the secondary market from Facebook, Groupon, and Zynga employees and founders.

Secondary markets have brought a lot of benefits to tech companies faced with frozen IPO markets, offering at least partial exits to people whose wealth might only exist on paper. Mark Zuckerberg’s $100 million donation to the Newark school system, for example, was made possible because there’s secondary trading in Facebook shares.

Something feels wrong about these fees, though. They hardly discourage the wealthy from getting wealthier off private stock sales. But they do hit the tech sector’s middle class. In meritocratic Silicon Valley, should there really be two sets of rules — one for the wealthy and another for the rank and file?

Tags: secondary market, secondary markets, transfer agents

Companies: Facebook, SecondMarket, Sharespost, Twitter, Zynga

Article courtesy of VentureBeat » deals

Remember Ross Mandell, the Sky Capital founder who was accused of conspiracy and securities fraud in a scam that was (allegedly!) perpetrated using “boiler room-like tactic,” which could result in him going downtown for 25 years? He’s pretty sure he’s innocent and he’s like to share that innocence with the world. How? I’m glad you asked

Mandell figures the best way to get the word out re: what he’s about (family, karate) and not about (fraud) is a reality TV show. “This is about facing the public, clearing my name and the legacy of my wife and children,” the budding Snooki told Reuters. “People think that I’m a beast, that I’m an animal,” he added. “I’m a loving human being, I’m a sober man, I’m God-fearing and a member of Alcoholics Anonymous.”

Article courtesy of Dealbreaker

$$$ With a sharp wit and a sharper tongue, Mr. Hendry, a plain-spoken Scot, has positioned himself as the public contrarian thinker of this city’s very private hedge fund community. The euro? It’s finished, Mr. Hendry proclaims. China? Headed for a fall. President Obama? “If there was a way to short Obama, I would,” Mr. Hendry said. [NYT]

$$$ When Volcker reached his office the next morning he learned that Dodd and Frank had agreed overnight to drop some of the restrictions in the compromise proposal, including the dollar limit on hedge-fund investments. “ ‘Shock’ is too strong a word,” Volcker recalled. “But I was disappointed.” [New Yorker]

$$$ FYI: BP Says Seepage Near Well Unrelated to Macondo Leak [CNBC]

$$$ Investors Question the ‘Stress’ in Stress Tests [WSJ]

Article courtesy of Dealbreaker

Finance Bill Close To Passage In Senate (WSJ)
Sens. Scott Brown of Massachusetts and Olympia Snowe of Maine both said they would vote for the measure when Democrats bring it to a vote, which could happen as soon as this week. Democrats and administration officials believe this gives them the necessary backing to overcome a potential filibuster after weeks of uncertainty and unexpected pitfalls.

Paulson Likes What He Sees In Overhaul (NYT)
“We would have loved to have something like this for Lehman Brothers. There’s no doubt about it,” Mr. Paulson declared about midway into our conversation. He was referring to a provision of the bill known as resolution authority, which would enable the government to unwind a failing investment bank or insurance company in an orderly way without forcing it into bankruptcy, thus avoiding the unintended consequences that a bankruptcy might create.

Bankers – More Unpopular Than Benefit Fraudsters Or Bogus Asylum Seekers (HITC)
‘Sure, we all know that things have to change and that firms have to align bonus payments with long-term performance’, one banker told Here Is The City, ‘But let’s not hear all this nonsense about regaining the public’s trust; we never had the public’s trust in the first place, and thanks to the political rhetoric of the last 2 years, we’ll never be loved. And, let’s face it, given the choice, most of us would rather be hated and bonused up, than hated and poorly paid’.

Abu Dhabi May Make BP Investment, Crown Prince Says (Bloomberg)
“We are still thinking about it,” Sheikh Mohammed bin Zayed Al Nahyan said in an interview in Abu Dhabi today, when asked about potentially buying a stake in the London-based oil producer.

Moody’s Cuts Portugal’s Credit Rating (NYT)
Moody’s said it was cutting Portugal’s sovereign bond ratings to A1 — still investment grade — from Aa2. It noted that the national debt had risen sharply relative to gross domestic product as a result of spending on economic stimulus measures, and it warned that weak growth would weigh on government finances for two or three more years.

HSBC’s Green Says More Shocks Possible (WSJ)
Speaking at the British Bankers’ Association’s annual international banking conference, Mr. Green said he welcomes much of the effort by governments and regulators to improve financial system oversight—including the U.K.’s plan to create a new financial policy committee to try to guard against booms and busts in the economy—but that there’s also a risk that the new order for global supervision could lead to “rigidity, bureaucracy and complexity.” “We are three years in from a crisis that is far from over. We are not out of the woods yet and may see some shocks from countries” that are facing big amounts of debt, Mr. Green said.

George Steinbrenner Has Died From Heart Attack (USA Today)
George Steinbrenner died at about 6:30 a.m. ET today after suffering a heart attack last night.

Goldman Seeks Another Extension From SEC (NYP)
Sources tell The Post that Goldman has argued that the SEC has had years to build its case against the firm, while the maligned investment bank has had to handle other pressing issues, including dealing with other investigations while the firm prepares to release its second-quarter results on July 20.

Barclays Capped By Regulatory Risk (WSJ)
Barclays shares enjoyed a much-needed boost last week from speculation the U.K. bank was mulling a spinoff for Barclays Capital—something that would create significant value, according to a Mediobanca research report. Barclays was quick to dismiss the idea, reaffirming its commitment to the universal bank model. But the idea of a Barclays breakup being pain-free reassured those investors spooked by fears the U.K. may force such a split.

Article courtesy of Dealbreaker

Solar power developer Solargen Energy has secured $4.1 million of an expected $10 million in a second round of funding, according to a filing with the SEC. UMC Capital and Chinatrust Venture Capital participated in the round. The funding comes as the public company develops a 420 MW solar farm in central California’s Panoche Valley. Solargen expects the farm, which will cover 16,000 acres, to generate energy for more than 125,00 PG&E residential customers.

Companies: Chinatrust Capital, Solargen Energy, UMC Capital

Article courtesy of VentureBeat » Deals & More

The castle-dweller, who Citi got rid of last year after the public got its panties in a bunch over his $100 million bonus and Vikram found himself between a rock and a hard place (that place being the US government’s steel-toed boot, just grazing his rectum), informed clients that the fund did everything right, just not right enough.

“Unfortunately, we did not dodge the onslaught,” Mr. Hall, 59 years old, wrote in a June 1 letter to his investors. “We did reduce risk but not fast enough. We did hedge but not well enough. And we did re-enter some markets that we had exited, prematurely, as it turned out.” His commodities fund posted a decline of more than 10% last month, its weakest month in the last two years, to put it down nearly 10% this year through May, which is behind similar hedge funds. Mr. Hall was bullish as shares of commodity producers and other energy investments declined.

Article courtesy of Dealbreaker

Motricity (MOTR) shares are getting a decidedly unenthusiastic reception on the company’s first day in the public markets.
The company, which provides mobile phone data services, came public this morning with an offering of 6 million shares at $10; that includes 1 million shares being acquired at the IPO price less [...]

Article courtesy of BARRONS.com: Tech Trader Daily

First off, was this public knowledge Big Lar has a sweating problem? The narcolepsy, obviously, is right before our very eyes but I don’t think we’ve ever gotten into Summers’ other issues. But…good to know? From Jonathan Alter’s new book, The Promise:

Summers’ friends claimed he had mellowed by the time he entered the Obama White House, and it was true that he had learned to take ribbing. Obama teased Summers for repeatedly falling asleep in meetings, for sweating in winter, and for attaching probabilities to everything. Summers’ habit of finding a cloud around every silver lining led the president to privately dub him “Dr. Kevorkian.”

Maybe this is the real reason Larry Boy’s been threatening to quit? Is someone a little sensitive?

Article courtesy of Dealbreaker