Outside the Lines

In this week's EIC Squared podcast, ZDNet's Larry Dignan and I talk about how the economic crisis will impact the tech sector. Both the House and Senate have passed the bailout package, but the legislation doesn't mean that tech or any other industry sector will reverse the downward spiral. Tech companies and financial analysts are rapidly cutting estimates to prepare for a potential nuclear winter in the global economy.

We also discuss Microsoft's forthcoming moves into cloud computing and the state of citizen journalism following the fake Steve Jobs heart attack story that showed up on CNN.

Microsoft is applying its tried and true formula of creating software platforms that can attract millions of users and developers to the hosted applications world. It will be the next major frontier for Microsoft to conquer, competing with companies such as Amazon.com, EMC, Google, IBM, and others. And it's safe to bet that Microsoft becomes one of the major players in the cloud. More to come at Microsoft's PDC event later this month.

Oracle CEO Larry Ellison

(Credit: Dan Farber)

"The interesting thing about cloud computing is that we've redefined cloud computing to include everything that we already do. I can't think of anything that isn't cloud computing with all of these announcements. The computer industry is the only industry that is more fashion-driven than women's fashion. Maybe I'm an idiot, but I have no idea what anyone is talking about. What is it? It's complete gibberish. It's insane. When is this idiocy going to stop?

"We'll make cloud computing announcements. I'm not going to fight this thing. But I don't understand what we would do differently in the light of cloud."

I led a panel at the MIT Emerging Technology Conference earlier this week on cloud computing with some of the leaders in the field: David P. Anderson, research scientist, University of California at Berkeley; Matthew Glotzbach, product management director, Google; Parker Harris, EVP, Technology, Salesforce.com; Mendel Rosenblum, chief scientist and co-founder, VMware; and Werner Vogels, VP and CTO, Amazon.com. The group generally agreed that cloud computing involves software running off premises, but that there are different workloads and kinds of scenarios.

The problem is that every tech company now wants to be associated with cloud computing, no matter if their products and services meet the basic criteria. At least Ellison isn't afraid to address the hijacking of the phrase by marketers, including Oracle's.

Frank Gillett of Forrester speaks about the cloud envy of various companies who jump on the cloud computing bandwagon by rebranding existing services in this interview with Beet.TV.

CAMBRIDGE, Mass.--Microsoft Chief Research and Strategy Officer Craig Mundie on Thursday offered a long-term view of where Microsoft and the world of computing are heading over the next few decades. Speaking at the MIT Emerging Technology Conference here, Mundie envisioned a 3D virtual world populated by virtual presences, using a combination of client and cloud services.

He called this next generation "spatial computing" and listed numerous attributes: many-core processors; parallel programming; seamlessly connected and fully productive; context-aware and model-based; personalized, humanistic, and adaptive; 3D and immersive; and utilizing speech, vision and gestures.

What comes next? Microsoft's Craig Mundie says spatial computing.

(Credit: Dan Farber/CNET Networks)

Mundie gave a few examples from Microsoft Research to illustrate the concept of spatial computing. In a few months, the compay plans to test a new virtual reception assistant in some of its campus buildings. The assistant, which takes the form of an avatar, helps schedule shuttle reservations to get people to various locations across the 10-million-square-foot Redmond, Wash., campus.

The system includes array microphones and natural language processing by which the avatar listens to the subjects and then interacts with them in real time. The system has been programmed to differentiate people by their clothing. Someone in a suit, for instance, would more likely be a visitor and not a potential shuttle rider.

Microsoft's prototype reception assistant system.

(Credit: Dan Farber/CNET Networks )

The prototype system is a resource hog, consuming 40 percent of its eight-core processor system even when idle. Eventually, Mundie said, such a system could be used for rural medical clinics.

"For a few thousand dollars you could put in an assistant who can guide robotic interaction," he said. "There is a wealth of opportunity for this, and it will allow people to develop applications and change the way the bulk of the population interacts with computers."

In another demo, Mundie offered a glimpse into the future of the live Web. He played out a scenario in which he was in an store, took a picture of a magazine cover on Northwest Indian art with his smartphone, and then placed the phone on a Microsoft Surface technology table when he got to his hotel. The pictures in the phone showed up on the surface table and he dragged them around. The system analyzed the image to determine how to use the photo as a way to pursue next steps in a virtual Web world. The system found the a digital version of the magazine and Mundie proceeded to explore magazine pages. From the magazine image of an art object, he went virtually to the store where the art object was on display.

The 3D store environment was stitched together with Photosynth technology and interactive. Mundie could "walk" through the store and have a text or voice conversation with a store representative or someone, such as his wife, via his buddy list. In addition, he could watch videos and examine 3D models of the art objects, spinning them around to look at all the different parts of a sculpture.

Then he showed how a smart handheld device could be used to navigate in a physical space. Pointing the device at a particular space would show local information, such as when buses were expected to arrive or what stores are having sales that would be of interest to the user based on their profile.

Mundie categorized this demo as an illustration of the power of the client and the cloud in spatial computing. "You have to have a to-and-fro between local and centralized data services," he said.

Programming tools, which have been a strength of Microsoft, will play a crucial role in the emergence of spatial computing. To create a kind of parallel universe--a cyberspace version of the physical world--everyone has to contribute on a continuous basis, Mundie said. Sensors and users will be generating trillions of bits of data, which requires addressing concurrency and complexity in a more loosely coupled, distributed and asynchronous environment, he said.

"Our tools are not designed to address this level of system design," Mundie explained. "We have to see a paradigm change in the way we write applications."

(Credit: Microsoft)

Mundie also said that software development hasn't graduated to become a formal engineering discipline. "The resilience of systems is not up to the task," he said. "We have to master the transition to a parallel programming environment, with highly distributed, concurrent systems. It's nascent at this point but it's required to achieve these capabilities."

In addition, creating a rich virtual environment that reflects the real world and is available to billions of people requires a lot of programmers. "If we want a million people to know how to do this, we have to mask complexity," Mundie said. His goal is to program computers to have the equivalent of human senses that can operate well together. "That's how we get to natural interfaces," he said.

Mundie's demos showed some progress in fulfilling Bill Gates' dream of natural interfaces and seamless computing. The challenge for Microsoft will be turning lab demos into real products and services that can scale. With the Internet as the platform, and not Windows, Microsoft will have many more competitors, and partners, in its quest to realize the vision of spatial computing.

See also: Mundie: The cloud needs killer apps

Microsoft Chairman Bill Gates appeared on the NBC Nightly News Wednesday speaking with Tom Brokaw about the current economic crisis. Gates wasn't concerned about the state of the U.S. economy in the long run. Historical data would support his longer-term view, but that won't make the current disarray and uncertainty about the economy any less scary for investors riding the daily, nausea-inducing roller coaster.

Brokaw observed that Gates seemed to be cool, or not terribly worried, about the U.S. financial crisis. "The U.S. economy in the long run is going to do very, very well. There are some interesting and meaningful decisions to be made in the next weeks," Gates said. He didn't get into the details about those decisions facing Congress, but legislators and the business community are likely seeking his advice. His good friend Warren Buffett of Berkshire Hathaway is investing around $5 billion in Goldman Sachs, providing a confidence boost to the market.

As for continued technology innovation in light of the economic upheaval, Gates said, "In terms of inventing new medicines or improving software, or new ways of doing things, the level of investment will stay very high." That said, conservation of capital will be in the minds of VCs and start-ups until the economy rights itself.

Earlier in the day, Gates told Bloomberg that problems with the U.S. economy would likely reduce government support for combating the world's problems, such as poverty and disease. "There are the rich-world economies and the developing-world economies and, while the degree to which they are linked is not well understood, when one suffers it can't be good for the other. Rich-world budgets may not have room for increased generosity.''

CAMBRIDGE, Mass.--Ning co-founder and CEO Gina Bianchini started off her keynote speech at the MIT Emerging Technology Conference by describing Ning as the social network you've never heard of.

Unlike Facebook, which is more of a beehive with 100 million members buzzing around, Ning allows individuals and groups to create their own social networks.

Bianchini said here Wednesday that Ning is gaining traction, minting a new social network every 30 seconds. That's more than 86,000 per month on top of the nearly 500,000 social networks (65 percent actively used) already on Ning. Among those half a million sites, 3 percent are paying for premium services ($19.95 per month), which allow people to run their own ads and have their own domain. The company reserves the right to run ads on pages of the free service. Ning is launching an iPhone application this week, and also plans to support Android phones.

In her speech, which was devoted to showing off Ning, Bianchini compared her company's social networks to "hosting a fabulous party." These hot "parties" range from a social network for the music artist 50 Cent to one dubbed Twitter Moms.

She tried to make the case that Ning is a "platform" that provides creative freedom, whereas Facebook, MySpace, YouTube, and LinkedIn are "walled gardens" that limit freedom. In this context, freedom is the ability to have more control over the user experience and data.

Ning CEO Gina Bianchini compares Ning social networks to hosting a great party.

(Credit: Dan Farber)

Her "open" social network argument is not a very convincing to me, though. Ning users can move components around on the screen and choose from 50 design templates. Ning also has APIs that allow for data portability and access to member data. However, the primary code that runs Ning is proprietary. Ning does allow some modification of templates and code, such as the photo component, under an Apache 2.0 license. Programmers can change the way a photo is displayed or sorted, for example.

"Platforms win because they enable people to do things because they are programmable and give people control," Bianchini said. Ning and other more open platforms will make walled gardens obsolete, she contended. "It's not the case today, but this is what happens throughout history when people have choice." Facebook, MySpace, Google, and others would argue that they are platforms, which are defined by having a robust ecosystem and developer/user community. And they are open to the extent that they have APIs allowing access to their social graphs and other data. In addition, supporting open standards, such as OpenID, should be part of an open platform. But Bianchini said that OpenID is not user-friendly enough at this point and still has some security issues.

Overall, Ning is more "open" than other social networks in terms of the flexibility it gives users, but it serves a different purpose than Facebook and other social networks. Facebook's growing membership seems to appreciate the consistency of the user experience, the growing feature set, and the APIs, such as Facebook Connect.

Bianchini expects that there will be millions of social networks and that people will express themselves "for every conceivable niche, need, location, and language, with an infinite choice of features."

"If we do this right," she added, "it will happen on the Ning platform."

Clearly, something is happening on Ning. Whether it will become the next Facebook or MySpace in terms of growth and user activity remains to be seen.

The pile of digital data is growing, doubling every 18 months or less. That pile is the new gold, drawing data miners hoping to strike it rich by finding patterns and uncovering insights that can lead to more efficient markets, higher productivity, safer streets, and the much loved increased profits.

Stephen Baker's new book, The Numerati (Houghton Mifflin), introduces some of the data miners, or numerati, who are leading efforts to probe the depths of the global data dump.

He profiles several numerati, focusing more on the personalities and potential use cases than the arcane details of the computer science and mathematics. Baker, who has written for BusinessWeek for more than 20 years, paints a rich portrait of how the flood of data and the efforts of the numerati will transform shopping, marketing, politics, health care, matchmaking, work, medicine, and other disciplines.

"Just as they've helped medical researchers find genetic markers pointing to certain types of breast cancer and Huntington's disease, they might tell grocers what type of fruit to promote to buyers of canned food or what kinds of magazines dog-food buyers tend to read," he wrote.

IBM researcher and featured numerati Samer Takriti is building detailed mathematical models of 50,000 of his colleagues. Baker describes Takriti's ultimate goal as follows:

"The goal here is to build entire models, complete with each person's quirks, daily commute, and allies and enemies. These models might one day include whether they eat beef or pork, how seriously they take the Sabbath, whether a bee sting or a peanut sauce could lay them low. No doubt, some of them thrive even in the filthy air in Beijing or Mexico City, while others wheeze. If so, the models would eventually include this detail, among countless others. Takriti's job is to depict flesh-and-blood humans as math."

In practical application, data processed by numerati from calendars, instant messaging, e-mail, cell phones, social networks, project records, resumes, and other sources could render a digital portrait of each worker. Machines could handily determine the optimal group for a specific project, taking into account budgetary, geographical, and other constraints.

The data could also be used to ferret out employees who aren't fulfilling their productivity quotient or are bypassing the chain of command. Companies have technology installed to monitor e-mail for spam, porn, and other abuses, they might as well use it to see what people in the company are thinking, Baker told me in a conversation last week. He acknowledged the significant privacy issues that go along with unleashing numerati on the world of data and addresses the issue in his book:

"At work, perhaps more than anywhere else, we are in danger of becoming data serfs--slaves to the information we produce," he wrote.

"Part of what needs to be calculated is how much this freaks out workers. It impacts productivity and the morale of employees. If a big technology company gets a reputation for monitoring every keystroke, the smart people will choose to work elsewhere. Companies have to figure out what works and what is overkill or freaks people out," Baker told me.

He states in his book that the "mathematical modeling of humanity....promises to be one of the great undertakings of the twenty-first century." This concept could be applied to Google and other companies who are extracting and analyzing billions of digital signals generated by individuals and groups.

Just because computer science and applied math makes data divination possible, the means don't necessarily justify the ends. The same technology used to determine the mathematical model of a terrorist or poor performer in the workplace can be used to violate the privacy and rights of unsuspecting, innocent people.

Baker told me in our conversation that we need tools to decide what information to share and with whom. Some of the social networks and major Web sites are working on that problem, but the solutions so far are inadequate. We'll need a generally accepted Bill of Rights for personal data to give the numerati and their overseers guidance on how to avoid "evil" in the evolving digital world. Of course, that is wishful, optimistic, and, perhaps, naive thinking.

Global domination. That is the dreamy aspiration, mostly unspoken, of CEOs around the world of companies large and small. Market share domination is probably a more accurate description of the goal. In times of economic distress, companies with the stronger balance sheets are like sharks in the water, seeking to gain market share through acquisition or attrition. With the dawning of a new era of government regulation, spawned by the current and ongoing financial meltdown and the Enron generation, the sharks are circling but keeping an eye on antitrust regulators.

While tech spending doesn't exactly correlate to the credit crunch, IT purchases are expected to slow down over the next three quarters, according to Forrester. Advertising spending in 2009 could be curbed if the economy spirals downward. Of course, no one knows which direction the gyrating stock market and spending patterns will go. If the $700 billion government (taxpayer) handout brings more confidence into the markets, the outlook will be better. But the majority of companies lacking strong financials or sales pipelines will be looking for reasonable exits or ways to conserve cash while the economy sorts itself out.

Consolidation is already happening as a result of the meltdown in the banking sector. The frenzied consolidation triggered during the tech meltdown earlier in this decade will resume. The sharks--Microsoft, Google, HP, IBM, Cisco, Oracle, and a few others--are looking at the landscape to see what fits best into their portfolios at discounted prices. Web start-ups aren't immune to the economic circumstances, but many of them are hoarding their VC cash, hoping to outlast the storm. Whatever the future holds, the threat level has gone from to yellow to red alert, and CEOs are preparing for the worst.

On this week's EIC Squared podcast ZDNet's Larry Dignan and I talk about the gyrating, uncertain financial markets. Larry says that consolidation in the financial sector could result in an IT spending decline, but notes that Oracle's latest quarterly results were solid.

We also discuss the hacking of Sarah Palin's Yahoo e-mail account, and Web 2.0 reaching middle age.

So far, the company has 135,000 embeddable objects and 64 million monthly consumers of its widgets, which live on blogs, social-networking sites, and other Web destinations. The most popular widgets are "The Fun Classic Super Mario Game In Flash," BabyTicker: The Baby Countdown Pregnancy Ticker," "Cyber-pet," "Bubbles," and "Idiot Test."

While Widgetbox claims 462 million widget views in a month across 500,000 discrete domains, the big numbers don't add up to a big business. The majority of Widgetbox views are happening on blogs, which led Widgetbox CEO Will Price to become more than a widget supplier.

This week, the company launched the Widgetbox Blog Network, which catalogs widgets in 29 verticals, such as Autos, Music, Sports and Politics. "It's a natural step in the process for us to move away from a pure technology story about widgets," Price said.

The Widgetbox network, which is starting with close to zero unique users per month, will primarily appeal to the long tail of bloggers who lack distribution. Participants include the network channel widget on their blog pages, and Widgetbox applies algorithms to determine which content gets pushed up to the top of the network categories. It publishes leaderboards listing the top contributors.

Widgetbox is launching an ad network, categorizing widgets into 29 content verticals.

"To date, widgets don't have the concept of a network effect. The more people who use them, the more utility is created for individual users. Given bloggers are one of our largest user sources, taking a blidget (RSS feeds turned into a widget) from a single source, and sharing it with the community, and showcasing it in the channel, and having leaderboard benefits bloggers, online content publishers, and advertisers," he added. "The new channels extend reach, drive traffic, improve brand awareness for bloggers."

The Widgetbox network also gives the company an improved business model. Currently, the majority of revenue comes from custom advertising campaigns for companies such as Intel, Wal-Mart Stores, and Apple. But the vast majority of Widgetbox inventory cannot be monetized, Price said.

The company is developing an ad network to take advantage of the categorization into verticals.

"We have 462 million widget views a month, but advertisers are not getting it. We want to target demographics and have a user story--64 million unique users broken into 29 vertical channels, each with 15 to 300 authors," Price explained. "We have to (determine a) domain, categorize them into channels, and understand ad treatments such as drop downs, pop-overs, peel-backs, and rotations, in a way that satisfies users, publishers, and advertisers. It's still early. There are no standard ad units or blueprints to follow, but we are trying to figure it out. The goal for the rest of the year is to answer questions and go into next year with some case studies."

Google is publishing a series of brief articles during September by 10 of its top scientists on how the Internet will evolve in the next 10 years. In the first article, Alfred Spector, a vice president of engineering, and research scientist Franz Och, outline how Google's search engine will evolve over the next decade.

Traditionally, systems that solve complicated problems and queries have been called "intelligent", but compared to earlier approaches in the field of 'artificial intelligence', the path that we foresee has important new elements. First of all, this system will operate on an enormous scale with an unprecedented computational power of millions of computers. It will be used by billions of people and learn from an aggregate of potentially trillions of meaningful interactions per day. It will be engineered iteratively, based on a feedback loop of quick changes, evaluation, and adjustments. And it will be built based on the needs of solving and improving concrete and useful tasks such as finding information, answering questions, performing spoken dialogue, translating text and speech, understanding images and videos, and other tasks as yet undefined. When combined with the creativity, knowledge, and drive inherent in people, this "intelligent cloud" will generate many surprising and significant benefits to mankind.

It appears that Google will stay on the same path that it is on today, taking advantage of Moore's Law in terms of faster and cheaper systems, as well as faster and cheaper storage and networks, and moving from hundreds of thousands of servers to millions working in parallel to deliver more relevant and media rich answers to queries.

Google isn't betting on pure artificial intelligence, replicating all the functions of the human brain, as the way to put more intelligence in the network. The army of Google software engineers will continue to focus on machine-learning and human-engineered relevancy algorithms to unpack trillions of data bits collected from Web crawling and user inputs.

At this point in time Google performs somewhere around 71 percent of Internet searches in the U.S. Google appears destined to increase that share over the next decade unless Microsoft or some company just hatching can come up with a substantially superior search experience.