Google CEO Eric Schmidt argues that competition is just a "click away." By opening up Google's access to personal data as well as the software that collects it, Google is adding substance to that claim.
Google's secret sauce? Operations.
It won't work to write better software than Google, because Google is not a software company. The only way to beat Google is through superior execution; through better operations.
The way to lose to Google? That's easy: try to sell software that Google is shoveling out the door as free (open source) software.
This thought hit me last week as Google announced the open-sourcing of its Closure tools. These are JavaScript compression tools that Google uses to build its own Web services like Gmail. Basically, Google was saying, "Here's how we build our software services. You can, too."
This follows on the heels of Google open-sourcing other software like Android ("Here's a free mobile operating system to help more people connect to our services"), Gears ("Here's how to run Google-like services offline"), and more, each opening up windows into the software that runs Google's services.
In many ways, Google is giving away the recipe to those that would like to build a Google clone.
The problem? Google is so much more than software.
In fact, one of the primary reasons that Google can write and open-source so much software is that it isn't a software company. Not even remotely. I could have every line of Google's software, both open source and proprietary, and I couldn't hope to compete with Google.
Google is what Google does with the software, and not the software itself.
Ditto for Red Hat. The company used to retain significant chunks of proprietary code in its Red Hat Network offering, but it has released that software under and open-source license in the last year. Doing so hasn't had any effect--positive or negative--on Red Hat's sales, because Red Hat isn't in the business of selling software anymore.
Red Hat, like Google, is in the business of providing services to customers, services enabled by software but which are much more dependent on IT operations and overall efficiency of execution.
And while both companies rely on open-source software to fuel those operations, Google, more than Red Hat, realizes that the conversation has moved on from open-source licenses to higher-order value, a theme that is going mainstream. Cloudera CEO Mike Olson captures this theme well:
The license terms attached to products have become secondary to the value it offers. People now are much more rational about how they adopt technology across the board. Open source is a detail, not a defining characteristic. At Sleepy Cat, we were proud to be an open source company. At Cloudera, I think of us as an enterprise software company that happens to be built on open source software.
Such sentiment would resonate well within the walls of Google's Mountain View headquarters, I suspect.
Even within their respective open-source communities, neither Google nor Red Hat company is particularly saintly. Red Hat has never waited on the Linux Standards Base or industry efforts to coordinate Linux distributions (like United Linux), but instead forged ahead with its own efforts...until the LSB simply adopted Red Hat's distribution as the standard.
Google, for its part, takes flak for dominating its open-source project communities like Android. Google's contributions (or lack thereof) to outside projects, like Linux, don't always mesh well with others in the industry.
To open-source community critics of Red Hat and Google, some advice: get over it.
The companies that spend the most time chumming around, talking up interoperability and the need for everyone to work together are usually the ones losing the race, a race whose rules may be written in software but whose victory depends upon execution.
Google and Red Hat have moved beyond software. Software enables their operations, but software doesn't define such operations. Google, for its part, is open sourcing Microsoft, one line of code at a time, and Microsoft hasn't a clue as to how to respond, because it only knows the old world: competition through better IP.
That world is gone. Open source has killed it. The new world is built on execution and superior IT operations. Google gets this. Red Hat gets this. Microsoft? Not so much.
While the open-source crowd gets (rightly) excited by Linux's growing market share, three companies are pulling the rug out from under the feet of traditional operating systems.
Red Hat is winning in Linux while IBM cleans up the Unix market. But those are increasingly yesterday's markets as Microsoft, Google, and VMware create different breeds of operating system, each tuned to the strength of its product portfolio.
The easiest to understand are Google and VMware. Google, with its Linux distribution Chrome OS, is placing secondary emphasis on the operating system and primary emphasis on where it takes you: the Web. Given Google's strength in cloud computing, this makes perfect sense. Google needs an operating system just long enough to move users "off" their personal computers (or mobile phones, for which Google has developed Android) and into its cloud services: Google Apps, Search, Wave, etc.
While Google won't find this strategy to be easy, it has the brand and expertise to bring "desktop" substance to cloud applications.
Similarly, VMware's vSphere attempts to untether computing from "desktops" and on-premises servers. VMware describes vSphere as:
...the industry's first cloud operating system, transforming IT infrastructures into a private cloud--a collection of internal clouds federated on-demand to external clouds--delivering IT infrastructure as a service.
VMware recently acquired open-source Java leader SpringSource to complement this strategy, giving developers an easy way to build, deploy, and manage Java-based applications for vSphere (and beyond). With Java applications already running at full steam in vSphere, this move should serve to heighten the value of vSphere.
And then there's Microsoft. The company prints billions of dollars worth of profits each quarter from its Windows franchise, yet for years it has been quietly developing its next big operating system. And no, I'm not referring to Windows 7.
With Windows under fire from VMware in virtualization (though Gartner thinks Microsoft stands to gain on VMware) and from Google in Web-based applications, Microsoft has created a bridge "between personal productivity and line-of-business applications," one that stitches together Microsoft's "desktop" dominance with its cloud ambitions.
It's called SharePoint, and with over 100 million seats and $1 billion in revenue, the odds are that your company already has it installed.
Microsoft CEO Steve Ballmer long ago declared that "SharePoint is the definitive operating system or platform for the middle tier," and I don't think he's using the term "operating system" lightly.
Increasingly, SharePoint is the center of the Microsoft universe, at least, for enterprise computing. SharePoint serves as the hub for Microsoft's suite of operating systems, applications, and third-party software. It is a content application server, of sorts, one that provides the platform upon which so much of Microsoft's value is now being built.
I've disparaged SharePoint in the past for its tendency to lock customers into its proprietary repository. But let's be clear: a large number of companies seem perfectly happy to make that trade-off and are actively using SharePoint at the heart of their intranets, extranets, and Web sites.
Between Microsoft SharePoint, Google Chrome OS, and VMware vSphere, we're in for real innovation in what "operating system" means. While this shift will take awhile, leaving traditional vendors plenty of time to make money in traditional operating systems--hey, companies are still making money in green-screen software--the future of the operating system is almost certain to look different from vanilla Windows, Linux, or Unix.
Disclosure: My company, Alfresco, offers an open-source content application server that has been positioned in the past as directly competitive with SharePoint.
Follow me on Twitter @mjasay.
Microsoft has a new advertising campaign and, as Gordon Haff of the CNET Blog Network argues, this one has the potential to nail Apple to the wall.
Even as Microsoft tells the open-source world to stop competing with it on price and instead focus on value, Microsoft is blitzing Apple with a new advertisement suggesting that your next laptop purchase should be all about cost.
Microsoft needs something. As recent data from Net Applications suggests, Apple is eating into Microsoft's market share in the operating-system market, even as Firefox chews into Microsoft in the browser market.
Browser Market Share Data, February 2009
(Credit: Net Applications)The more market share Firefox takes from Internet Explorer, the worse things will be for Microsoft, and not merely in browsers. The browser is the key to operating-system independence: the more applications that one uses in the cloud, exposed through a browser, the less need for Windows, paving the way for Apple and Linux.
Apple's design aesthetic prevents it from putting its weight behind Firefox, but this is short-sighted. Apple needs Firefox to succeed, and it is unlikely to be able to drive as big a wedge in Microsoft's market share with Safari, which, while growing, lacks Firefox's potential.
Of course, what's bad for Microsoft is also bad for Apple. Someone needs to counter Microsoft's clever new ad with a shock to both Microsoft's and Apple's system: why pay $1,000 for a laptop at all when, for the price of a free Firefox download and super low-cost hardware running Linux ($100 or less), you can get all of the power of the desktop and the Web? Hardware and the operating system become afterthoughts, at that point.
But that's not really a marketing message about which either Apple or Microsoft want you to think.
Follow me on Twitter at mjasay.
As we navigate the second year of a global recession, enterprises need to be looking for ways to optimize existing infrastructure. Sure, new IT projects will bring in additional technologies, an increasing percentage of which will be open source and software as a service, but the pressure is on to do more with less.
Hyperic, an open-source systems management company, just released a new service--Hyperic Operations IQ--in partnership with open-source Business Intelligence vendor JasperSoft, which promises to do just that.
Hyperic isn't taking any chances on the integration with Jasper server, either: the company hired JasperSoft's ex-chief technology officer, Barry Klawans, to lead development on the integrated product.
I normally don't care much about product announcements, as this blog is more about strategy than technology. But I like what Hyperic Operations IQ promises: a tool that gives IT executives and business managers the same insight into IT performance and Web operations as highly technical system administrators. In other words, Hyperic and JasperSoft are lowering the bar to systems management utility.
As Javier Soltero, Hyperic's founder and CEO, declares:
For companies who are dependent on Web technologies, access to data center and application performance metrics is a critical strategic weapon that should not be limited to the IT and operations teams. Service-level interruptions or downtime can have serious implications to a company's bottom line.
With Hyperic Operations IQ, our customers can see everything that's happening in their data centers at every level of the stack. They'll be able to make better and timelier decisions to support their customers and strengthen their businesses.
This is a smart business move. Why? Because the more people within its customer base that Hyperic can invite into its product experience, the more support it will have at renewal or upgrade time. Making systems management an executive affair is shrewd and should pay dividends.
Disclosure: I am an adviser to JasperSoft.
Follow me on Twitter at mjasay.
Several sites are tallying up lists of start-ups that are undergoing significant layoffs. (Interestingly, not much noise on that front is coming out of Europe.)
Every day, we're hearing about yet another start-up (or established technology vendor) laying off workers. This may mean that the companies are battening down the hatches in preparation for a nuclear economic winter, but it also likely means that these same companies haven't been prudently managing their VC investments.
It took Sequoia Capital to describe the obvious: we're in a tight, recessionary economy. But any CEO worth her salt should have seen this long ago. I wrote in February about a pending recession and its effects on open-source start-ups like SugarCRM, but I was no prophet: everyone was talking about a weakening economy.
I guess it took the collapse of a few financial institutions to convince us that we actually have to start treating our companies like businesses, not Monopoly games. Perhaps we were distracted by cutesy Web 2.0 names. More likely, we were distracted by the cutesy Web 2.0 revenue models that are long on marketing and short on substance.
At any rate, welcome to the real world. In the real world, CEOs get paid for vision and holding to a budget. In the real world, companies must be managed well to win. Sure, every so often, there's a Google that grows for years without any apparent adult supervision, but for every Google phenomenon, there's a Microsoft, Intel, or IBM that wins because it out-executes the competition.
The next IBM is likely to be born in this recession. You'll know it because it's the one pumping out profits, not press releases.
As reported by NetworkWorld, VMware CEO Paul Maritz suggested at VMworld that VMware has "thought about whether we want to open source ESX," the company's leading hypervisor, but provided no substance as to whether or not the company were inclined in that direction.
Instead, the former Microsoft executive paid lip service to open source's model for encouraging third-party participation in development.
That's OK, as his attention is not focused on the license and development model for ESX, but rather on what his customers should expect from the next generation of virtualization. Though Maritz was cagey about a forthcoming VMware technology as an "operating system" (OS), it seems clear that this is, in fact, what VMware is building, as ITworld describes. In response to a direct question as to VMware's plans to build an OS, Maritz equivocated:
... Read more"The die is cast," declared Julius Caesar, anticipating Microsoft's fateful decision to protect its Windows cash cow at all costs.
Years later, as Joe Nocera eloquently opines in The New York Times, Microsoft has tethered itself to its Windows operating system and almost certainly lost its way on the Internet as a result:
Windows is already dying a death by a thousand cuts. Yes, Microsoft still makes billions by selling pre-installed Windows via computer manufacturers. But ever-so-gradually, the Internet is upending its business model just as surely as it has upended models for the music, television and newspaper businesses....Bill Gates saw this coming many years ago.... But in the subsequent decade-plus, the company has been unable to keep it from happening. Think about it: do you really care anymore which operating system you use?
Microsoft opted to try to harness the Web to accompany its desktop monopoly, but the Web is too big to serve as handmaiden to any one company's monopoly. Microsoft needs to learn to serve the Web, not the other way around.
The more Microsoft seeks to protect its past (i.e., desktop monopoly and all the revenue that comes with it), the less relevant it will be to the future. Microsoft hopes to straddle the two, and maybe it will succeed. But its desktop anchor may well end up sinking the ship.
I'm in the middle of a fascinating study by Robert Breza of RBC Capital Markets entitled "On Demand Evolution, Volume II: Insights and Best Practices at Leading On Demand (SaaS) Providers." The research details the characteristics and best practices of successful sales operations and R&D at SaaS companies. I share some of its central findings because many of the same principles apply to open source, as both leverage subscription-based business models.
Just as barriers to open-source adoption continue to go down, so, too, do barriers to SaaS adoption. Indeed, some of the same factors may be driving increased acceptance of subscription-based software purchases. Forty-four percent of RBC's survey respondents indicated "no major concerns with SaaS adoption," which is up from 35 percent in a similar survey from Q1 2008.
But someone still needs to sell these products/services. One suggestion from the report is that subscription-based vendors should segment "hunters" (new license salespeople that are paid a higher commission) and "farmers" (renewals and upsell salespeople, generally paid a lower commission) early in the company's growth. Such vendors should also focus more on the long-term value of a customer, not the short-term initial contract payout:
The company is more concerned with farming the customer than they are with negotiating that initial contract. An effective and "sticky" product coupled with an efficient sales model should be able to drive customer retention above 90% while revenue retention is at or above 100%. (10)
Many of these companies (Omniture is a prime example) opted to start with "mid-grade" salespeople early on (Think: inside sales), later moving to "high-grade" sales people once the market opportunity was better defined. The idea is to start with more junior, hungry salespeople to prove out the market, and then bring in more expensive headcount to "reap" in the market once it has been established.
... Read moreThis is one of the funniest, best posts I've read in a long time. Randy Jensen wrote it back in 2007, but it just popped up on Digg today. I had never read it. It's hilarious.
Jensen compares different operating systems to types of houses, and comes up with some gems like this:
Windows is the government housing. The houses are built quickly, cheaply and go up anywhere and everywhere. Unfortunately since they were all built so cheaply, you end up spending twice as much later to keep the place standing.
And this:
Linux is the carpenter/designer's dream house. The foundation is rock solid and is inspected every year by thousands of the best carpenters all over the world. The house is everything you want, if you know what you're doing. It's all there for you. The doors, windows, walls and roof. You 'get' to assemble it yourself any way you like....
Everyone on the block is envious and wants to know how you bought such a beautiful house so cheaply. After you explain to them that you built it yourself, they leave in disgust and never talk to you again because you're one of "them".
As for the Mac? "The floors are so clean there is a mirror reflection of every item in the house and the lights are positioned perfectly to make everything look just perfect...just the way the owner wanted it, so don't touch!" Classic.
For all the benefits of "the cloud," there are two primary problems:
- Lock-in to the platform. Where are you going to go with your application once you've written it for a particular cloud platform? Some promise portability, but it's still a question worth asking.
- You're at the mercy of someone else for uptime.
This second item has always seemed like less of an issue given that the companies involved (Google, Microsoft, Amazon, etc.) are all fantastic at operations. Surely they can do better than you or I could?
With Google's AppEngine going down yesterday, the answer may no longer be as clear....
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