Goldman Sachs' latest IT spending survey is out and it looks a tech-spending recovery is on the way for 2010. To a large extent, the data suggests not so much that spending is dramatically higher, but that it has normalized at pre-recessionary growth rates, rather than contracting as it has over the past several months.
Goldman is cautiously optimistic about 2010 spending, noting that much of it depends on the macro-economic environment driving more business spending. And while most areas will see growth counter to 2009's downward spiral, some areas such as off-shore development will feel significant retraction.
Regardless, the sentiments are positive and dramatically different than Goldman's report from November 2008 where IT spending was in a total death spiral. What a difference a year makes.
A few key points from the report:
- With recessionary buying cycle clearly through the trough, the remaining question centers on the pace of recovery for 2010.
- Infrastructure, application development, and systems integration remain top spending areas, especially as CIOs start to consider newer technologies such as virtualization and cloud computing.
- There is pent-up demand in hardware most notable, positive for storage and server/PC refresh.
- The appetite for offshore services appears to be below trend at current levels.
- HP, NetApp, CommVault, Red Hat, Riverbed, and Salesforce.com are notable names showing positive upward momentum in our latest survey.
In software, Red Hat and Salesforce.com showed strengthened results with VMware and Citrix remaining top of mind, which Goldman believes to be a good indication of internal and external cloud deployments gaining momentum.
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I received a note from Andy Gilbertson, one of the developers behind Parallel Kingdom, a location-based mobile massively multiplayer (or MMO) game that uses your GPS location to place you in a virtual world atop the real world. The game seems like an obvious winner for the iPhone, but the team has been struggling to get it past Apple's app review policies.
Gilbertson's travails with the iPhone application acceptance process illustrates why Apple's gating of applications is a troubling reality for developers--and for consumers. And while it's understandable to have a gating mechanism in place, if Apple wants to remain at the top of the mobile application space, it so heavily dominates, the company needs to commit more resources to not just the application review process, but in communicating with developers. As of my last e-mail exchange with Gilbertson, Apple had not responded for more than six days. My call to App Store PR has gone unreturned for about 18 hours as of this post.
Apple's acceptance policies can be shockingly difficult to navigate, so much so that some have marveled at the fact that an ecosystem could build up at all.The fact that iPhone applications are written in Objective C, a previously uncommon programming language, is in and of itself a show-stopper for many developers, but that obviously hasn't stopped development.
Earlier today Ars Technica wrote about several prominent developer including Facebook's Joe Hewitt, Second Gear's Justin Williams, and longtime Mac software developer Rogue Amoeba, all of whom recently "decided that enough is enough" and that they would abandon iPhone development efforts. And while each cites different reasons, the underlying thread is that they've had enough of waiting for Apple to distribute their apps, an instantaneous effort on the Internet.
While restrictive or complex policies are unlikely to stop the iPhone juggernaut, they can be very painful reminders of what would happen if we regress 15 years to the unfortunate walled gardens of AOL. Tim O'Reilly reminded us of the risk of the closed Web recently, commenting that "anyone can put up a Web site, or launch a new Windows or Mac OS X or Linux application, without anyone's permission. But put an app onto the iPhone? That requires Apple's blessing."
It's unlikely that a few developers falling off of the iPhone train will have a dramatic effect on the growth of the market, but this kind of unhappiness can easily lead to a backlash. The big question is if another mobile platform can take the place of the iPhone.
Android has arguably the best chance, but it currently struggles due to immaturity of its own application ecosystem. Nonetheless, there is a huge revenue opportunity for an open-Web approach to mobile applications. It remains to be seen if Android can live up to the hype and not fall into the same trappings as the App Store. For all of Apple's sins in how they run that business, it's undeniable that it remains hugely successful.
As consumers increasingly purchase sophisticated smartphones such as the iPhone, BlackBerry, and Droid, they are developing expectations for how these phones allow contacts, calendars, e-mail, and social networks to remain in sync across all their devices.
One of the big challenges is that users don't always maintain the same source of inputting data--they switch from browser to desktop application to smartphone as their data access and entry point, introducing many variables into the data chain. And data integrity will only get more complicated as more applications become browser-based and keep no local data storage.
Most enterprise users have a local store in addition to the cloud storage, something that I still find puzzling from the T-mobile Sidekick outage, where consumer data that should have been in multiple locations (or at least present on the device) was thought to be lost.
The most common sync services are not provided directly by the mobile operator. Generally this is a good thing, as the more you can dis-intermediate the carrier, the more control you have over your data. But because the sync services are provided by others--notably Microsoft, Google, and Apple--you end up locked-in to their data structures as well as whatever privacy and data management issues that might arise in relation to advertising or other usage of your information.
Today, you can fairly easily sync your mobile device with most common online e-mail and PIM services although the BlackBerry, Droid, and the iPhone differ in their approaches--or at least in the visibility of how they work. For example, you can sync with Gmail and other services on the iPhone, but it rather perversely requires the Microsoft ActiveSync protocol.
By controlling the address book, Google and Apple effectively lock-in users to their sync service, leaving the carriers and devices to be easily replaced (minus the cancellation charges.) The user would barely notice the difference, aside from the sticker on his phone that says AT&T or Verizon.
Mobile operators do not want to cede control of the address book to Google or Apple, but they are late to the game and do not yet have sync solutions of their own. As a result, they are scrambling to add this functionality, but building a sync solution that works with all different devices and email services is no easy task, thanks to the widespread problem of device fragmentation in the industry.
One option is to deploy a white label solution, like the open mobile cloud sync offered by Funambol. Funambol CEO Fabrizio Capobianco told me the company has been approached by many of the top mobile operators, with several of them looking to setup sync services for their customers. They all recognize the issue, and according to Capobianco can turn to Funambol as a way to quickly bring a high-quality solution to market.
With all the different players in mobile sync, users will begin to question who owns their data. Enterprise users, in particular, should have privacy concerns about trusting their data to someone else. In the case of Android users, there is a growing anti-Google sentiment, and if Google already owns your email, calendar, and search queries, do you really want them to own your phone contacts as well?
Microsoft's launch party videos have proven to be entertaining to viewers even if not for the reasons for the marketing department had hoped for. There were a great many comments on my post that provided context to their release, but generally speaking most industry-watchers have been confused as to the goals behind the program, questioning the target audience not just for the videos, but for the launch parties as well.
I reached out to Microsoft for comment but they withheld at this time as the videos are apparently just one step in a much larger integrated marketing campaign.
I personally found the most recent video weird, but after thinking through things a bit I think this is a case of a good idea hampered by poor execution. The videos are well-done and professional and try to connect with consumers in a humanistic tone. The fact that it feels like you stumbled into a shiny-happy Windows world filled with sit-com throwaways is the problem. Even if this is a training video to show others how to throw a launch party, it's hard to connect with the vapid characterizations of party guests.
This is the crux of Microsoft's marketing problems. It's not that they aren't good at technical marketing issues, it's that the brand itself is so voluminous, it's very hard for people to connect to specific products like Windows. And the efforts to persuade consumers isolate the tech media and confuse IT shops.
... Read moreIn trying to figure out what exactly is at the heart of the problem (don't say Apple's "control issues"), I heard an interesting perspective on this brouhaha from Todd Barr, vice president of marketing at Bandwidth.com, a nationwide CLEC voice carrier that sells voice and data services to businesses. (Note: Fellow CNET blogger Matt Asay provides a good overview of the company's FreePBX product here.)
Barr believes that what this controversy boils down to is number portability. Increasingly, our phone numbers (especially mobile numbers) have become our identity, and the FCC enacted the number portability act some time ago to make sure that businesses and consumers can take their number with them when they switch carriers. The FCC believes this is important because number portability ensures competition among providers and allows businesses and consumers to keep their number to ensure continuity of their identity.
At the time, the FCC contemplated carrier competition - but now, Barr described, there are these "meta" carriers, like Apple, that have a key control point in the telecom ecosystem: the phone user experience. "Just like users want to control their number and identity, they also will increasingly want to control their own telephony experience - like having one number, that can ring to any phone you specify, and even display the correct called-ID number when you call from any phone. Ultimately, I think the crux of the issues is how far the idea of number portability extends to the entire user telephony experience, not just the phone number."
This will be an increasingly important issue to carriers as they experiment with fixed-mobile convergence features that let business users control their call flows in more intuitive ways, such as sharing one number and common features across wireless and fixed networks.
It will also become very important for services like Google voice that abstract the number from the carrier and make the networks dumb pipes.
For users to ultimately be in control of their telephony experience and to encourage the next wave of telephony innovation, the concept of portability will need to extend beyond just numbers to the telephony user experience.
Follow me on Twitter @daveofdoom
Recent data from Chubby Brain identifies $102.49 million in total VC/angel investment divided among 17 iPhone application start-ups.
The iPhone is a great mini-computer and may be the next big gaming platform, but I'm still struggling to get the math to work in terms of what a typical VC expects as their return on investment.
Macworld's App Guide lists more than 58,000 apps available for download with more coming online every day, though it's not clear that downloads are equating to sustained revenue for developers.
But, developing an iPhone application still seems like a good business move, provided you can market effectively and not fall into the boom and bust cycle that many applications find themselves in.
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I wrote last week about Sony CEO Howard Stringer's comments suggesting Sony could have beaten Apple in digital music if only the had embraced open technology. While technology certainly could play a role in Sony's success, it's clear that the company needs a whole new way of thinking.
At a breakfast Thursday cohosted by the S.I. Newhouse School of Public Communications at Syracuse University and The New Yorker, Sony Pictures Entertainment CEO Michael Lynton told the audience his not-so-inner thoughts about the Internet.
"I'm a guy who doesn't see anything good having come from the Internet...(The Internet) created this notion that anyone can have whatever they want at any given time. It's as if the stores on Madison Avenue were open 24 hours a day. They feel entitled. They say, 'Give it to me now,' and if you don't give it to them for free, they'll steal it."
According to WWD.com Lynton tried out another simile. Referring to the Obama administration's goal to spread broadband access without, he said, regulating piracy, Lynton made a comparison with building highway systems without speed limits or driver's licenses. "We do need rules of the road," he said.
Rules of the road are one thing, but these type of short-sighted, borderline absurd comments suggest a more systemic problem. Instead of embracing new technologies and delivery methods, Sony chooses to stick to the old, now failing ways, as evidenced by the company's recent $1 billion loss.
With leadership like this, Sony only has itself to blame.
In an interview with Nikkei Electronics Asia, Sony CEO Howard Stringer pledged that the company would use more open standards in the future, saying "If we had gone with open technology from the start, I think we probably would have beaten Apple" in the music market.
Sure, and if Sony had created a music store, a desktop application, and a great device, it could have won that way too. But it didn't. Certainly, open technology would have helped to create some kind of ecosystem, but it wouldn't have solved the strategic problem of creating a holistic consumer experience. Nor would it have made a difference in the fact that Sony owns a huge library of music that Apple monetized far more efficiently while Sony fought for CDs to outlive MP3s.
Sony had many, many chances to use open standards and technologies for a wide variety of products and opted against in most cases. The company also gave up its massive lead in music players as Apple leaped ahead by creating a seamless user experience while Sony focused on that blue alien.
Sony is however leaning toward openness in the PlayStation Network (PSN) where the digital rights management is based on Marlin, an open scheme (yes, open DRM is an oxymoron) developed by consumer electronics companies and other companies that will allow other systems to participate in the PSN.
"What does all this mean?" he added. "Very simply, it means that Sony has begun the transition from a closed system to an open one.
Hindsight is 20/20 and I am sure Stringer believes his statement to be true. But open is a relative term. Just because other companies will be able to interact with the PSN it doesn't mean that the rest of the world's developers will be able to participate in developing games or applications or creating a cottage industry as Apple has done for the iPhone.
Being open doesn't guarantee that a community or ecosystem will sprout up around a product. A company with Sony's coffers could do a lot more to make its devices and content accessible to a broad range of developers who would seed the market and make it more money.
Via Engadget
Follow me on Twitter @daveofdoom.
BusinessWeek is running a piece on Microsoft's latest attempts to fight back against Apple and Linux and its secret strategy to force unwitting Windows users to upgrade to various flavors of Windows 7.
Because of the smaller size of Windows 7, three versions of the program will come loaded even on lower-end machines. If a consumer on a cheaper PC running the "Standard" version tries to use a high-definition monitor or run more than three software programs at once, he'll discover that neither is possible. Then he'll be prompted to upgrade to the pricier "Home Premium" or "Ultimate" version.
Microsoft says the process will be simple. Customers enter their credit-card information, then a 25-character code, make a few keystrokes, then reboot. (Microsoft Corporate Vice President for Consumer-Product Marketing Brad Brooks) says pricing hasn't been determined, but upgrading "will cost less than a night out for four at a pizza restaurant."
I can't decide if this strategy is profoundly stupid or just utterly moronic.
Besides the fact that when you buy an Apple computer you aren't hoodwinked into upgrading the operating system, just think of all the simple things that can go wrong: ... Read more
As you've undoubtedly read by now, Apple CEO and co-founder Steve Jobs is taking six months off to concentrate on getting healthy. The blogosphere has been abuzz with rumors for months, and some of the mainstream press bought in, while others have been in complete denial.
CNBC reporter Jim Goldman got the Steve Jobs story wrong from day 1, while outright mocking sources, specifically Gizmodo, suggesting that Jobs was sick.
Dan Lyons, aka Fake Steve Jobs, takes Goldman to task, starting at 3:33 minutes into this video. It's both amazing and painful to watch.
