There’s no question that technology is key to accelerating market growth in the cloud industry. If you want to increase consumer spend and game-changing innovation, you’ll need to adopt different thought processes that will help technology drive your business to its greatest potential.

One of those strategies is by forging new and collaborative relationships with users. As the consumer base for cloud services grows, more and more CIOs are rethinking IT architecture and controls to help ease the pressure of making tough IT decisions for even the most non-technical users.

Executives are also reexamining how their organizations work best together and how to prioritize initiatives that will provide the strongest competitive advantage for the business.

Recently, a team of Rackspace experts explained how they overcame challenges to drive new, innovative initiatives for Rackspace. Speakers included Rackspace CIO Steve Mills, Rackspace CMO Suaad Sait, Rackspace CFO Karl Pichler and Rackspace Vice President of Enterprise Cloud Lisa Larson. In case you missed it, you can check out the full webinar here:.

Be sure to tune into other upcoming webinars where we’ll discuss topics including resiliency, Hybrid Cloud and Cloud Block Storage.

We encourage you to read the PAR Act – we have linked it at the bottom of the page. For everyone out there who is not a lawyer, though, we want to take a minute to explain what this bill means and why it is so important:

• Patent trolls are notorious for hiding their claims behind flimsy lawsuit pleadings. The current standards for making an accusation of patent infringement do not require plaintiffs to explain what they allege to be infringing or how the defendant infringes. This lack of clarity forces anyone accused of patent infringement into an endless (and expensive) guessing game. Section 281A of the Patent Abuse Reduction Act forces patent assertion entities (PAEs) to spell out their claims and be specific about their complaints. These specifics include how the patent is being abused; the names, model numbers and other information of the products or services alleged to infringe the claim and where the infringement occurs; and a host of other factors most patent trolls can currently omit from their suits.
• Patent trolls usually hide their actual owners behind shell companies. These patent trolls don’t want publicity because they don’t want to be known for who and what they are. Section 281A of the bill removes the anonymity of patent trolls and forces them out of hiding, by requiring them to identify not only themselves, but any other businesses or individuals who are co-owners, assignees, licensees or have a legal right to enforce the patents in question, along with exposing any person or business with a financial interest in the patent infringement case.
• Another common tactic of patent trolls is to find a first patent, sue people on that patent with a first shell company, and settle… only to find and sue the same people again on a second patent with a second shell company. This bill makes it possible to expose the money machine behind patent trolls, and to make them come to the table and take part in the case.
• One of the most expensive parts of a patent lawsuit is something called “discovery” – where companies are forced to organize and hand over mountains of internal documentation to the patent trolls so that they can introduce “evidence” of patent infringement. Trolls use discovery to drive up the cost of the lawsuit, making it cheaper to settle, and to fish for more ways in which they can apply their claims. Section 300 of the PAR Act adds fairness to the discovery process by limiting discovery until after the meaning of the patent (called “claim construction”) has occurred, and shifting much of the cost of unreasonable discovery back to the patent troll.
• Finally, section 285 institutes a “loser pays” rule for unreasonable litigation. This is the ultimate tool for balancing litigation, freeing businesses and individuals from having to shoulder the massive financial burden of fighting a frivolous patent infringement claim.

The Patent Abuse Reduction Act beams necessary sunlight onto these all-too-frequent proceedings and is a major step toward fixing the problem of patent abuse. It has a fitting acronym – the “PAR” Act – because it helps put companies “at par” and on an even playing field with those who would abuse the system.

At Rackspace, we’ve been on the front line of the problem; patent trolls have become our most pressing legal issue. We have seen a 500 percent spike since 2010 in our legal spend combating patent trolls. And we’re not alone. We hear almost daily about companies and developers that have been impacted by patent infringement suits filed for no other reason than to extort money.

We’ve stood up and fought back. Just recently we fought a troll in court, and won; we turned the tables on another, suing them in Federal Court; and we filed a challenge with the patent office against a third.

An army is now forming to fight patent trolls, and, if passed, Sen. Cornyn’s Patent Abuse Reduction Act of 2013 will be a very powerful weapon with which to battle them.

Read the full Patent Abuse Reduction Act of 2013 here.

Last week, our fight took a big step forward, as a gathering to highlight the patent troll problem and plot a path to legislation swelled into a standing-room only affair. The “big tent” meeting, hosted by the Coalition for Patent Fairness, drew a large, diverse crowd of influential industry representatives. Look at this amazing list of who showed up to listen, learn and weigh in:

• American Association of Advertising Agencies (4A)
• National Association of Broadcasters (NAB)
• Food Marketing Institute (FMI)
• National Grocers Association (NGA)
• American Hospital Association (AHA)
• Retail Industry Leaders Association (RILA)
• National Retail Federation (NRF)
• National Restaurant Association (NRA)
• Financial Services Roundtable (FSR)
• The Securities Industry and Financial Markets Association (SIFMA)
• American Bankers Association (ABA)
• Newspaper Association of America (NAA)
• Entertainment Software Association (ESA)
• Engine Advocacy
• Public Knowledge
• Internet Association
• Internet Infrastructure Coalition
• Business Software Alliance
• Consumer Electronics Association
• Computer & Communications Industry Association (CCIA)
• Information Technology Industry Council (ITI)
• Software & Information Industry Association (SIIA)

Importantly, as you can see, many of these groups represent independent small businesses, the type of companies we hold near and dear as they make up a significant portion of our customer base.

These organizations – large and small – are fed up. They’re sick and tired of patent assertion entities (PAEs), more commonly known as patent trolls, and their often baseless but costly attacks. In a blog post on Patent Progress, Josh Lamel, Executive Director at The Foundation for Innovation and Internet Freedom, likened the energy at the big tent meeting to the iconic scene from “Network,” where Howard Beale (Peter Finch) persuades viewers to scream out “I’m as mad as hell, and I’m not going to take it anymore.”

There have been encouraging developments recently, with President Obama addressing the issue live in a Google+ hangout and New York Senator Charles Schumer unveiling plans to strengthen the America Invents Act to improve patent quality and reduce meritless litigation. But more is needed. No one silver bullet will solve the problem, so industry leaders are contributing ideas to concerned members of Congress.

We expect the Coalition for Patent Fairness, our host of the big tent meeting, to contribute and help pass a list of excellent and fair proposals designed to work together to knock out the most egregious abuses of the patent system. The Internet Association will also weigh in with strong and thoughtful legislative proposals.

The Internet Infrastructure Coalition is taking up the flag of end user rights. Patent trolls sue small business end users as “soft targets,” because it is not cost effective for these defendants to hire lawyers. Protecting end users from suit will limit the options for PAEs, forcing them to pursue the manufacturers or providers of common products or services, rather than their customers.

Combining our efforts in this war on trolls will have the maximum impact. There is true power in numbers, and the diverse group of people who have joined the fight is a clear indication that banding together can make change happen.

Here’s one of the times I was on stage this week at the NextConf in Berlin: http://nextberlin.eu/2013/04/robert-scobel-google-glasses/ Very cool seeing Bruce Sterling, famous science fiction author, again. We had him on stage to try out Google Glass.

Several people wonder why Rackspace pays me to talk about Google and Google Glass and what giving a keynote about the Age of Context (that video is here: http://nextberlin.eu/2013/04/robert-scoble-the-age-of-context/ ) has to do with my duties at Rackspace; especially when Rackspace, OpenStack and even cloud computing rarely come up in the conversations.

I’ll tell you why. Topics like Google Glass and the Age of Context are new kinds of conversation starters. They will have huge impacts on Rackspace and its business in coming years. It’s the same reason I go out and talk to small five-person startups. There are new technologies emerging every second powered by companies of all sizes, and these technologies are driving change. It’s my job to get the word out about new advances, whether from small companies like Chartio and Tellagence, or large ones like Google (which often get the most attention). Google Glass is one of these game-changing advances.

Here’s some of what we’re seeing:

1. Google Glass already has a ton of developer interest. When I spoke at BetaWorks (which just bought Instapaper) I saw it. At Google IO, more than half the audience laid down $1,500 to buy a pair. Etc., etc.

2. Google Glass is going to drive the need for a new kind of cloud computing and Google won’t be able to satisfy all the demand. If Google Glass is as big a deal as I think it will be, humans will generate much more data than they do today; either because of sensor tracking to do things like play location-based games, or do health tracking or more. Think about Waze, a traffic app, on Google Glass. These new developers and their new apps will need new cloud computing. Plus, I see Glass as part of a contextual system, one that uses an Internet of Things, but also brings data from your own businesses in along with Big Data computation that will find new patterns to display on our Glass.

3. Rackspace has always been on the bleeding edge – it successfully given birth to OpenStack, which now has more than 800 companies participating – and it is looking for the next thing. If it finds it, our meteoric growth will continue for the next decade. Which is why Rackspace, along with a dozen other sponsors, funded me and Shel Israel to write a book about the contextual future coming at us quickly.

It’s getting clearer and clearer to me that the future is contextual systems. Rackspace, if it executes well, should be a leader in providing infrastructure for these systems. If not, shame on us; but at least we knew where the goal line was because of the conversations we’ve been having with developers, analysts and press about Google Glass.

4. This is a new form of marketing, one that has Rackspace in listening mode. It is also a front-row seat on what people expect to do with these things. I’m already passing that info back to executives so we can make sure we have products and services ready to go to support the developers of the future.

A Big Data revolution is underway. I’m already carrying 20-plus sensors at any given time thanks to my cell phones, my Google Glass, my Basis health monitor and a few other devices. That number keeps going up. The data streaming off these things is quite different than the data that, say, Oracle was written for (which was mostly banking and business data, which is why relationships was so important back then). In this world a constant flow of data is streaming off of us, our cars, our homes, our businesses and it’s going to increase exponentially. That’s forcing all sorts of database innovation from MongoDB to FoundationDB to Firebase, and others.

Rackspace needs to make some tough strategic choices to make sure it stays on the bleeding edge, which is where the profits are. Luckily, we’re betting hard on open source and great service where our competitors are betting on lock-in. But that will change due to customer demand and I’m pushing executives and developers inside of Rackspace to retool and rethink our data strategies.

Developers are going to need a lot of flexibility in this new world. Some might want to put a cloud server inside newer smartphones. Can Amazon or Google do that? OpenStack could. How about if a new company serving Google Glass doesn’t want to use Rackspace, but wants to control its own servers to use some new ARM processors, or something that Rackspace doesn’t offer? Open Source gives that developer that kind of flexibility. Neither Google, nor Amazon, nor Microsoft give developers that kind of “take your cloud anywhere” flexibility.

But, really, this keeps us thinking like a startup. In fact, just yesterday three new apps were sent to me by developers and, in my email now, there’s two more. Keep in mind that most of the 8,000 Google Glasses sold so far still haven’t even shipped!

The truth is that these new apps might become companies. The only time they are going to really be open to discussing cloud computing choices is right now. In a year they will be too busy scaling their businesses. So, we want to have discussions with those new businesses today so that they pick the right cloud computing platform and don’t get locked into something that will limit their growth in 18 months (or cost them a lot of money to either trade out, or code around).

That’s why Rackspace is paying me to go around the world studying the bleeding edge of the Internet, whether it be medical sensors, Google Glass or new kinds of apps like Moves.

Coming up, I’ll be at Google IO, BetaDay (BetaWorks’ learning day) in New York (May 16th), LeWeb in London (early June) and lots of other places. Drop by, say “hi.” I’ll let you try my Google Glasses. I’ll setup a time when I’m in San Francisco soon for you to come by and think about the future with us.

Let’s continue the conversation. What are you building? What do you need to make a contextual startup?

By the way, this is a Rackspace ad I shot in a Lufthansa plane this week with my Google Glass. Sort of meta.

Graham Weston lives and breathes entrepreneurship. As one of Rackspace’s founders, Weston says that building a startup is all about the energy, and the excitement of wondering where a fledgling business will lead. Will it fail? Will it succeed?

While there’s no secret formula to building a great startup – it’s about finding what customers want and focusing on that, Weston says. At Rackspace, we keep that spirit alive through our Rackspace Startup Program where we focus on companies that aren’t necessarily funded by VC’s and can often be overlooked.

It boils down to innovation. That’s the lifeblood of a startup. Startups are disruptive. The cloud lets these startups innovate and disrupt inexpensively, while an open cloud gives them a neutral platform upon which they can control innovation and progress of their ideas. An open cloud enables startups to move at the speed of the future, Weston says.

In this video, hear more about why Rackspace and Weston love startups and why we want to help as many of them succeed as we can.

Check out the previous installments of Rackspace On Startups featuring Rackspace Startup Liaison Officer Robert Scoble, author and speaker Guy Kawasaki, Rackspace President Lew Moorman and Springboard founder Sean Kane.

Senator Schumer tirelessly championed the implementation of this provision, weighing in with comments to the Patent Office’s rulemaking, reinforcing that it was “enacted for the dual purposes of improving patent quality and reducing meritless litigation of low quality business method patents.”

This week, Senator Schumer has announced his intention to strengthen the program, so that it will apply to all types of business method patents, to include more businesses, and would also make the program permanent. This is welcome news. As I have said in prior blog posts on the patent problem, it will take a number of initiatives to stamp out abusive patent litigation.  Senator Schumer’s approach is right on the money and will be a huge help in solving the patent troll problem.  We look forward to working with him and other members to get this important legislation passed as soon as possible.

It is sad, but true, that Rackspace is just one of many companies dealing with endless suits over dubious patents. It’s a never-ending game of whack-a-troll. What is different, though, is that we have decided to break the silence and shine a bright light on these patent-powered parasites.

Recently, we were sued by a Patent Assertion Entity (PAE) called Rotatable Technologies. Rotatable owns a patent that it claims covers the screen rotation technology standard in just about every smartphone. You know, when you flip your device sideways and the screen shifts orientation from portrait mode to landscape mode? Like nearly all the apps in the Apple and Android app stores, Rackspace uses standard functionality provided by Apple’s libraries and Android open source software to provide this display feature in one of our mobile cloud applications.

Rotatable provides a textbook case of patent extortion. One court identified how to spot patent extortion: a patent troll will file a series of “nearly identical patent infringement complaints against a plethora of diverse defendants.” (Eon-Net, 653 F.3d 1314.) Trolls do this to cast as wide a net as possible. They purposefully include companies that aren’t prepared to engage in patent litigation.

Rotatable didn’t just sue us; they’ve sued a number of companies including Apple, Netflix, Electronic Arts, Target and Whole Foods Market.

Patent trolls then follow each filing with a settlement demand “at a price far lower than the cost to defend the litigation.” (Id. at 1326.) This allows trolls to use the high cost of litigation as a club against operating companies. Patent litigation typically costs defendants between $1 million and $5 million just to stay in the fight.

When Rackspace contacted Rotatable to ask for a routine extension of time to answer their complaint, Rotatable admitted their trollish motives. Unprompted, they told us they had been instructed by their client to offer a settlement of $75,000 to anyone who contacts them asking for an extension of time. And that the number was negotiable.

As patent settlements go, that is very cheap. We also believe it is completely unacceptable.

Rackspace has decided to stick up for ourselves, the open source community, app developers and every other company in the mobile applications world. Today we filed a challenge to Rotatable’s patent in the patent office (see the petition here). It’s called an IPR, or Inter Partes Review. It’s a new proceeding made available under the America Invents Act. It gives us a chance to show why the patent is invalid and should not have been issued in the first place. Once we file the IPR, the patent holder can file a response. From there, a board of patent reviewers has a year to decide whether the patent in question is valid.

When it comes to fighting this particular troll, we believe an IPR is our best option to have this patent abolished at its source – eliminate the root, destroy the weed. We are optimistic that the patent office will agree with our petition and invalidate the patent, stopping Rotatable from attacking businesses in hopes of pilfering their hard-earned money and hindering app developers and the open source community from bringing their best every day.

IPRs can be risky and costly. We know this IPR will cost us more than the $75,000 that Rotatable wanted to extort from us. But we are not just fighting for us; we are fighting for all the app developers who are also in the line of fire. As the noted software engineer and blogger Joel Spolsky wrote, “Life is a bit hard sometimes, and sometimes you have to step up and fight fights that you never signed up for.”

Last week, a patent assertion entity (PAE) called Parallel Iron sued Rackspace and 11 other defendants in Delaware for allegedly infringing on a trio of patents that Parallel Iron says cover the use of the open source Hadoop Distributed File System (HDFS). This is the newest in a series of 23 similar suits Parallel Iron has filed in Delaware since last June, which is when Parallel Iron was forced to dismiss an earlier set of lawsuits on another patent it could not enforce. Parallel Iron is the latest in a string of shell companies created to do nothing more than assert patent-infringement claims as part of a typical patent troll scheme of pressuring companies to pay up or else face crippling litigation costs . At least that is what it looks like on the surface.

In actuality, it is a bit more complicated. Our dealings with this particular troll reach back to December 2010 when IP Navigation Group (IP Nav), as agent for a supposedly secret patent owner, now known as Parallel Iron, accused Rackspace of patent infringement. IP Nav told us that they could not divulge the details of their infringement claims – not even the patent numbers or the patent owner – unless we entered into a “forbearance agreement” – basically, an agreement that we would not sue them. IP Nav was worried that as soon as we found out what their patents and claims actually were, Rackspace would sue to invalidate their patents or for a declaration that Rackspace does not infringe. We were unwilling to enter into such a one-sided agreement, so we negotiated a mutual forbearance agreement that required either party to give 30 days’ notice before bringing suit.

IP Nav has used this trick before. Sending a letter like the one IP Nav sent Rackspace – and trying to pressure the target into a forbearance agreement – got IP Nav into hot water with a Wisconsin federal court in late 2011. The court decision, as reported by Techdirt, describes the tactics that IP Nav deploys, and uses literary references to Shakespeare and Chekov to excoriate IP Nav. It even cited the “Duck Test” – if it quacks like a troll, it probably is a troll. Search online for “IP Navigation Group.” You will find that this group’s only business is acquiring patents and suing companies.

Once again, the Duck Test holds true: walking, swimming, quacking, everything. True to form, Parallel Iron sued Rackspace in Delaware without providing any notice, breaking the agreement they insisted upon.

We aren’t going to take it. We have sued IP Nav and Parallel Iron in federal court in San Antonio, Texas, where our headquarters is located (see the complaint here). We are asking the court to award Rackspace damages for breach of contract, and to enter a declaratory judgment that Rackspace does not infringe Parallel Iron’s patents.

Meanwhile, IP Nav wears its designation as a patent assertion entity, or patent troll, as a badge of honor. It makes the laughable claim to be a “white hat” patent troll created to “give the little guy a chance.” This is tragic comedy at best. There are few trolls more notorious than IP Nav, and there is no such thing as a patent troll that has the best interests of small businesses in mind. Instead, IP Nav and Parallel Iron are acting in their own selfish interests and suffocating innovation, while stripping capital away from businesses both large and small. Everybody knows they are a duck – or should we say, a troll.

Patent trolls like IP Nav are a serious threat to business and to innovation. Patent trolls brazenly use questionable tactics to force settlements from legitimate businesses that are merely using computers and software as they are intended. These defendants, including most of America’s most innovative companies, are not copying patents or stealing from the patent holders. They often have no knowledge of these patents until they are served with a lawsuit. This is unjust.

At Rackspace, we have seen a 500 percent spike since 2010 in our legal spend combating patent trolls – we recently fought one and emerged victorious. To put the scope of the problem into perspective, a Boston University study of patent trolls, conducted last year, found that they cost the U.S. economy about $29 billion in 2011, up from $7 billion in 2005.

Until Congress reforms the patent laws, companies of all sizes and industries could – and likely will – find themselves in the crosshairs of a greedy patent troll looking for a quick cash-grab. No company is immune, and, sadly, small companies can’t afford to fight. If they don’t succumb to the troll’s demands by settling, they face certain ruin.

Our goal with this lawsuit is to highlight the tactics that IP Nav uses to divert hard-earned profits and precious capital from American businesses. This time, the patent troll should pay us.

Jonathan got involved with cloud computing in 2005 while developing a shopping cart application called RightCart. The project turned into a real business and Jonathan started shopping it around to e-commerce websites. Through those discussions, he learned about Infrastructure-as-a-Service and, after selling RightCart, began work on tools to start working with IaaS. He formalized those tools into RightScale.

Since then, he’s founded RightSignature and invested out of RightVentures, and Exceptional Cloud Services was once called RightErrors. Not surprising, considering the fact that Jonathan owns 709 domains with various “right”-related permutations.

We caught up with Jonathan for a few quick questions:

Q: What does Exceptional do?

A: When you push your baby into a production environment and something goes wrong, how do you get feedback? Most of the time there’s a separation between operations and developers. A lot of valuable information in logs is just ignored, even at big companies. To get an accurate view of what’s going on, you’re cobbling together tools that give you a lot of information but no single view. Adding it all up is what we do.

We also run the largest community of hosted Redis with over 20,000 active instances up right now. We cannot wait for Rackspace to teach us how to provide Fanatical Support at that scale.

Q: How did you get started with this project?

A: The way that software is being developed is changing. Before, developers did heavy quality assurance cycles that would take six months or longer. But in the last five years there’s a desire to get new software out there quicker, make it more relevant and reflect the changing needs of the customer. Instead of waterfall development, they’re choosing an agile process. Instead of a static language where there’s a lot of protection that can be caught in the compiling process, they’re leveraging more dynamic languages and relying on third-party services to get things done.

All these changes are aimed at moving fast and companies need new tools and support to make sure that everything doesn’t fall apart. We’re the most direct route for error control. We get all the rich information around an error, capture it, catalog it, de-duplicate it and alert the right individual on the team to remediate that issue.

Q: Tell us why you’re excited to be part of Rackspace.

A: The excellence in customer satisfaction. We’ve been a relatively small team satisfying 10,000 paying customers and it’s not easy. Our team has a lot to learn from Rackspace on how to deliver satisfaction at scale. It’s great for our team and great for our customers.

Even though Rackspace is a big, successful company, I’ve felt like everyone I met was a teammate or a potential teammate. It feels like a place that can be a home.

Q: You’ve been involved in cloud for a long time. Where do you see it going?

A: The promise of cloud was that if I bring my servers to a vendor, it manages the complexity so that I don’t have to. But there have been all kinds of new complexity, especially with vendors offering black box systems. We see them failing but we don’t know why. You have to be pretty sophisticated to operate with this in mind. As a developer, I don’t want to have this on my plate.

Long term, there’s a big question to answer: is the cloud just ‘public cloud’ or is it an API and the commoditization of what a server can be? If it’s the latter, then [Rackspace] is the company to bring it over the finish line and satisfy the market demand.

Red Hat indemnified Rackspace in the case. This is something that Red Hat does well, and kudos to them. They stand up for their customers and defend these Linux suits. The lawyers who defended us deserve a ton of credit. Bill Lee and Cynthia Vreeland of Wilmer Hale were creative and persuasive, and their strategy to bring the early motion to dismiss was brilliant.

The patent at issue is a joke. Uniloc alleged that a floating point numerical calculation by the Linux operating system violated U.S. Patent 5,892,697 – an absurd assertion. This is the sort of low quality patent that never should have been granted in the first place and which patent trolls buy up by the bushel full, hoping for fast and cheap settlements. This time, with Red Hat’s strong backing, we chose to fight.

The outcome was just what we had in mind. Chief Judge Leonard Davis found that the subject matter of the software patent was unpatentable under Supreme Court case law and, ruling from the bench, granted our motion for an early dismissal. The written order, which was released yesterday, is excellent and well-reasoned. It’s refreshing to see that the judiciary recognizes that many of the fundamental operations of a computer are pure mathematics and are not patentable subject matter. We expect, and hope, that many more of these spurious software patent lawsuits are dismissed on similar grounds.

It’s obvious to us that patent trolls like Uniloc are having a caustic affect on innovation. Patent trolls have become Rackspace’s most pressing legal issue. We have seen a 500 percent spike since 2010 in our legal spend combating patent trolls. Until patent laws are reformed, companies of all sizes could – and likely will – find themselves in the crosshairs of a greedy patent troll looking for a quick cash-grab. No company is immune.

That is why patent reform should be a top priority for Congress. The rapid dismissal of lawsuits filed by patent trolls coupled with legislation to make it difficult for them succeed in their litigious shakedowns would be a massive step in the right direction.

At Rackspace, we will continue to fight the battle against patent trolls on several fronts – in the courts, in the news and by working with members of Congress. We encourage our customers, partners, open source collaborators and friends to support the continuing war against innovation stifling lawsuits. Join us.