In the 1990s, Lotus Notes gained notoriety, in part, for the nifty collaboration features it brought to corporate e-mail. IBM's CEO at the time, Lou Gerstner, was so impressed that he paid a premium to consummate what began as a hostile tender to buy Lotus in 1995.
Notes went on to become an unqualified commercial success with some 145 million users around the world who use the product. Still, Lotus hasn't quite secured for itself the reputation of offering the must-have enterprise collaboration technology in the age of the Internet.
What with the proliferation of competing Web-based technologies targeting that market, it will be tough for any one company to claim that moniker for itself. But Big Blue will stake its claim with its upcoming entry--courtesy of its Lotus division in Cambridge, Mass.--with a cloud computing angle.
The work comes out of a project that got under way at Lotus last fall to develop an Internet-based collaboration and social-networking service. In Web 2.0 parlance, the idea was to meld social networking with business-collaboration tools in a way to make it easier for corporate users to use and share information. The project was to culminate in finding a way for users to tap the Web to access applications such as instant messaging or document sharing.
So it is that IBM on Wednesday will announce a service called LotusLive Engage, what it bills as an integrated social networking and collaboration cloud service. You can go up on the Web site today and take a tour, but this is a teaser test run. Although the official announcement will take place at the O'Reilly Web 2.0 Conference, which opens in San Francisco, LotusLive Engage becomes commercially available on April 7.
Brendan Crotty, program manager of LotusLive said the project, initially geared at the small to mid-size business market, benefited from often frank feedback by beta testers who told IBM what they liked and disliked about the interface. In the hour-long demo I had Tuesday afternoon, it appeared that IBM's designers had taken those comments to heart. The console layout was lapidary and intuitive. Enterprise users who previously worked with products like Notes or Microsoft Exchange shouldn't have any trouble figuring out what does what.
LotusLive Engage's communications and collaboration tools work both within and beyond the corporate firewall so that employees can interact with clients, partners, or suppliers. IBM's phrase to describe what's going on is "extranet collaboration." The short list of the features include profile and contact management, online meetings, file sharing, instant messaging, and project management capabilities.
Any information warehoused on LotusLive services will live in a cloud managed by IBM. Pricing will range from $10 to $45 per user.
I don't think the question is so much whether the product's bells and whistles will spark the same keen interest evinced by the corporate world when Lotus Notes debuted. Cloud computing may be the buzzword du jour, but let's take a breath. Fact is that enterprise customers are still in the tire-kicking phase. There remain myriad questions within IT about security and the guarantee of up time for companies which rely upon the cloud.
But the fact that this is coming out of IBM helps account for the approximately 30,000 businesses that were involved in the pilot program leading up to Wednesday's announcement. Let's make no mistake about it: here's one case where size really does matter.
Once you're lucky, twice you're good? So went the title of a recent book about Web 2.0 entrepreneurs. Pretty soon, we may have an idea whether it applies to Caterina Fake.
Fake, the co-founder of Flickr, announced on her blog Friday afternoon that her new start-up, Hunch, is sending out invitations to try the service, now in beta test.
What is it? I'll hand the reins over to Fake and let her explain:
Look. Decision-making is difficult, and decisions have to be made constantly. What should I be for Halloween? Do I need a Porsche? Does my hipster facial hair make me look stupid? Is Phoenix a good place to retire? Whom should I vote for? What toe ring should I buy?
It's dark and lonely work. Coin-flipping, I Ching consultation, closing your eyes and jumping, postponing the inevitable, Rock-Paper-Scissors, and asking your sister are all time-honored means of coming to a decision--and yet we think there's room for one more: Hunch.
Hunch is a decision-making site, customized for you. Which means Hunch gets to know you, then asks you 10 questions about a topic (usually fewer!), and provides a result--a hunch, if you will. It gives you results it wouldn't give other people.
Will it fly? Who knows, but in the midst of this miserable economic depression, there probably are lots of people out there who feel as if they don't have a clue anymore.
PALO ALTO, Calif.--Facebook's chief operating officer, Sheryl Sandberg, says the company's still not sure why the recent redesign process irked so many of the Web site's users.
Facebook COO Sheryl Sandberg
(Credit: Corinne Schulze/CNET)"In terms of what went wrong with the redesign, we don't know yet," Sandberg said during a Q&A session at the Global Technology Symposium held Thursday at Stanford. But she added that the percentage of users giving the redesign a thumbs down was smaller than previous changes to the site.
"As a percentage of our users, this one is much less than before," she said.
She also offered a backhanded compliment to Twitter, the microblogging site that Facebook considered buying last year.
"What's interesting about Twitter is that they are a very good company doing one thing very well, which is real-time update," she said. "We are, by far, the largest photo-sharing site on the Web...Similarly, we are larger at doing what Twitter does. We think what they're doing is good. Our redesign is not in reference to them--nor was our redesign in reference to Flickr."
Separately, Sandberg said that the economy has not reduced advertising revenue. "We are growing our revenue. We are growing our advertising," she said, without getting into the specifics.
Update: Following the publication of this post Thursday afternoon, Sandberg subsequently sent me the following note, which I am including with her permission:
I appreciate your story and want to clarify what I said at the Stanford conference. Our recollection is that an audience member suggested in a question that Facebook had a flawed redesign process, and I responded that it was too early to tell if it [the new home page] was flawed at all. Consistent with how we have been speaking about the new home page, I absolutely did acknowledge that some of our users are upset and we are listening to them. And as announced on Wednesday, we've made changes in response. Facebook is always iterating on the site and we regularly launch new features and make changes along the way, often incorporating suggestions from users. In fact, we don't regard the process as a flaw at all. We believe the level of engagement of our users and the feedback loop we've created gives Facebook a unique competitive advantage.
Edgios, a little-known search start-up, may be about to come out of its self-imposed shell.
The company, which has offices in the United States and Serbia, has received extensive advance coverage--especially on Serbian developer discussion boards prior to its official launch.
Edgios: Dropping a big hint?
(Credit: Edgios)Edgios has been alpha testing its software since the fall. However, Steve Jurvetson, a managing director at Draper Fisher Jurvetson, one of the company's major venture backers, today dropped a broad hint that the coming-out party may be near.
In a presentation he delivered on the history of technology innovation at the Global Technology Symposium on Thursday, Jurvetson said there would be a big announcement from Edgios "in the next week or two." He spiced up that tease by saying that Edgios believes it can "reinvent search." When I caught up with him later on, Jurvetson declined to amplify on his comments.
From the little that is known--or at least speculated upon--Edgios is thought to be a search engine based upon a peer-to-peer technology. That may be a plausible assumption. Jurvetson said Edgios would not need a massive data center or infrastructure build-out. What's more, Edgios' founder, Borislav Agapiev, has previously written about the advantages of P2P and a distributed approach to search, which likely will feature a cloud component.
But Agapiev, too, hasn't disclosed much to clarify the guesswork. For what it's worth, here's the company tease:
"Edgios is bringing you the future of search. This doesn't just involve a bigger index. And it's not just a way for us to deliver you the same old results more cheaply. We're re-inventing web search, opening up the entire process, fundamentally democratizing the discovery of information. Do any of the big search engines let you control what goes into the search index? Do they rank search results according to what real people want? No, they don't. But Edgios does."
Such it is with marketing statements, that could describe anything and everything under the sun.
But Zuora is betting on a computing trend: that as more applications move to the cloud in coming years, the natural corollary is that developers will follow the money and necessarily move in the same direction.
Even on Facebook.
"There are 140 new applications a day on Facebook because it's so easy and so viral a platform," Zuora CEO Tien Tzuo said. "But is anyone making money on Facebook?"
Probably not many. While developers have built profitable businesses on cloud-based platforms, such as Amazon Web Services, Salesforce.com's Force.com, and Google AppEngine, the same can't be said of Facebook. That's a source of no small amount of frustration for developers hemmed in by Facebook's restrictions on placing ads on the service (not to mention the relatively low advertising rates for in-application ads on the service.)
That does not preclude the possibility that someone will find a way to unlock the potential of the so-called Facebook Economy. But so far, it's more of a scenario than a reality. Tzuo, who is about to give it a shot, argues that if each active user on the service had a $1 monthly subscription, that scenario could turn into a reality with more than $1 billion in annual subscription revenue.
So it is that on Monday, Zuora is debuting a cloud-based service at the Demo conference. The product, called Z-Commerce, consists of different modules that a developer can use to set up and manage a subscription service on Facebook. Z-Commerce also comes with pre-built widgets that can get plugged into existing Facebook apps without the need for additional code work.
For its part, Zuora assumes responsibility for the back-end arrangements, including billing and payments. The ambition is large: to attract enough Facebook developers to the idea and transform their applications into subscription services. If enough of them conclude that this is an idea whose time has come, Tzuo believes that Facebook can actually evolve into an enterprise cloud computing platform.
A tall order, to be sure. Still, I'm sure Mark Zuckerberg wouldn't have any issues if that came even halfway true.
Today the Rocky Mountain News publishes its final edition after nearly 150 years. Elsewhere, newspaper publishers everywhere from San Francisco to Philadelphia face equally grim prospects.
The reasons have been well chronicled by others like Poynter Online and I won't waste time rehashing familiar arguments and analyses. But one complaint about newspapers is that they increasingly are out of step with their readers, who for too long were ignored at the bottom rung of a one-way hierarchy which defined their relationship.
Facebook's Mark Zuckerberg: "Openness and transparency isn't an end state. It's a process to get there."
It was only a coincidence, but the Rocky Mountain News announcement came on the same day that Facebook declared that it would embrace a community-driven process for governing. Responding to a controversy earlier this month over changes to its terms of service, Facebook said it will henceforth put any proposed modifications to its membership up for public debate in a "notice and comment" forum.
Not everyone was impressed by the announcement. Marshall Kirkpatrick posted a scorcher over at ReadWriteWeb, dunning Facebook's management for losing its grip. But if I read Marshall correctly, he's not slamming the company for its bid to be more transparent. Rather, he's arguing that Facebook still hasn't fully absorbed the real reason behind the flap.
What's delusional about the company's position? Multiple company officials on the call today said that the controversy showed how much of a sense of ownership users have over Facebook and that they wanted a sense of participation in its governing. (You complain about us because you love us!) We'd argue that it is pretty clear people have a sense of ownership instead over their content and want Facebook to keep its hands off. Ownership of content, not the lack of input on policy, was what people were upset about.
Fair enough. And voting may not be the best idea out there. Still, I think Facebook deserves credit for at least trying. Listening to the conference call on Thursday, I found myself wondering whether some of the very decades-old newspapers now going through a horrid time might have fared had they found a way to similarly engage their readers once the Internet went commercial. How long, for instance, has it taken for newspapers to let its reporters begin blogging? How about the inclusion of reader comments--let alone taking feedback on how to make coverage more relevant to the community's needs? Or reader blogs, for that matter? (There still aren't many of the latter.)
There are obvious differences between Facebook and a big city newspaper and I'm not suggesting that the cure here is simply to sprinkle some Web 2.0 fairy dust and everything will be as it was 25 years ago. But Facebook is also a media company and as Larry Magid smartly writes, its 175 million users are the ones who supply the content. Giving them a voice in policy making, whether to quell a brewing storm or to get out ahead of the next one--that's less interesting to me than Facebook's willingness to experiment.
It's not a perfect system and there doubtless are going to be rough spots ahead. Still, I'm going to cut them a break. It's easy to be cynical about the motivations but if Facebook has found a way to offer up more transparency and yes, even as Marshall suggests, participation over governing, then the company has hit upon a formula that will keep it relevant. Wish The Rocky Mountain News and its industry cohorts would be able to say the same. Sigh.
Update, 12:33 p.m. PST: A Brooklyn blog reports that The New York Times next week will begin neighborhood blogs. Thanks to a pointer from TechCrunch, where Jim Schachter, the editor for digital initiatives at the Times, confirms the pilot program. Schachter also asks the following:
Can we create a combination of journalism, technology and advertising that people who don't work for us can adopt? How much or how little oversight by us would be needed to keep the quality high? Would people pay to be associated with us? Would there be enough revenue that some split between us and a non-NYT blogger would work? I'd love to know what readers here think.
About two years ago, Jeff Bezos used the occasion of his appearance at the Web 2.0 Summit to talk up the merits of EC2 and S3, Amazon's entries into the then-nascent area of cloud computing.
The predictably perky CEO was enthusiastically regaling a standing-room-only ballroom about a future in which his company would sell data storage infrastructure and server capacity by subscription: the idea being that customers of the new services could move quickly from idea conception to a successful product by farming out the infrastructure side for Web scale computing to Amazon.
Now, that's hardware!
(Credit: John Deere)"We make muck so you don't have to," Bezos joked.
It was an interesting idea but a left turn for Amazon. I remember that the guys sitting next to me weren't equally impressed by the pitch. They joked among themselves that Amazon was a company that sold books. Who was Bezos kidding?
Well, we know how that story turned out. Bezos' timing was propitious. Amazon happened to go into Web-based services around the same time that customers had started to lose their fear of "the cloud." Not everyone, mind you. But increasing numbers of start-ups and small companies were receptive to the idea that they could increase their server and storage capacity on a subscription basis. With millions of people going online to store data, run applications, or communicate via Webmail services--and all that functionality stored on the cloud--now they could participate in that computing shift without breaking their budgets.
This all was proceeding apace. But it was a slow transition. Then came last fall's financial meltdown, and suddenly, cloud computing's proponents had a timely marketing message. On the "Charlie Rose" show Thursday night, tech pioneer-turned-prescient-doomsayer Mark Andreessen, took note of the impact this computing shift has had on the tech business.
"So you've got a whole generation of start-ups that are basically just a couple of programmers with a couple of laptops, and they upload everything into the Amazon cloud. It's pay-by-the-drink like utility. So all of a sudden, you have this whole new wave of Internet start-ups getting started for practically no money, right? So there is a level of innovation. Every kid coming out of Harvard, every kid coming out of school now thinks he can be the next Mark Zuckerberg, and with these new technologies like cloud computing, he actually has a shot."
That's the classic sales pitch on behalf of cloud computing but Andreessen basically has it right. What's new is that with the economy going through a rough patch, this is turning out to be one of the few bright spots in an otherwise gloomy tech landscape. IDC predicts that cloud computing will account for about 30 percent of new growth in the Internet over the next three years. Poor economy or not. "It's not a surprise," said Frank Gens, the firm's research chief, who contends that the financial crisis only magnifies the benefits of the economics behind this computing model.
But here's the rub: While many executives responsible for their companies' IT operations grok the vision, they still refuse to make the switch. More than 60 percent of the companies surveyed recently by Kelton Research reported they did not use cloud-computing technologies, and most of them have no plans to use them anytime soon.
Chalk up their lingering resistance to a couple of old bugaboos which have been around since the days when "MIS directors," pressed to decentralize their computer operations, ruled the tech roost: security and fear of loss of control. If past is prologue, those issues will get sorted out over time--the same way that the sundry issues surrounding client-server and Internet-based computing models ultimately got resolved.
Capacity on demand is a big deal, especially for start-ups that are in no position to be buying servers. With API deployment, you say "launch" on these virtual servers and you're off to the races. It's just a lot more convenient to have an Internet-based data center.
Not long ago, Sun Microsystems' Dave Douglas told me that "every one" of his conversations with customers ultimately comes around to a discussion of where the cloud is heading. That pretty much jibes with what I've heard from executives at other hardware and software companies. Pay attention to this trend because it's taking place in real time, away from the media's glare. In an age where Twitter, Facebook, and a laundry list of forgettable social network doo-dads have dominated our attention, all of a sudden, infrastructure has become cool again.
Who woulda thunk it?
After Tuesday, Barack Obama and John McCain will (presumably) bury the hatchet and move on with their lives. I'm not quite sure I can say the same thing about the respective heads of Zoho and Salesforce.com.
Sridhar Vembu, CEO of AdventNet, the company behind the Zoho suite of online applications, has again called out Marc Benioff in a public post accusing Salesforce of attempting to "block customers from migrating to Zoho CRM."
Earlier this year, Vembu publicized details of negotiations he had with Salesforce in a bid to make Zoho work with AppExchange, an online marketplace for hosted business software applications. A week prior to the product launch, however, Vembu claimed that Benioff suspended all joint development work between the companies in favor of a different tack.
"He offered repeatedly to acquire Zoho outright, which we rejected. I told him there is absolutely no fit between our companies, particularly with his business model (as noted above) and our business model. I told him there is just no cultural fit between our companies and such an acquisition would be miserable for both parties. Finally, he offered to let us integrate Zoho into AppExchange, provided we pull the plug on Zoho CRM. We told him that kind of pre-condition is totally unacceptable, and it also completely negates his claims of openness of their platform. Needless to say, we never did agree on the issue, and we dropped the integration effort."
Vembu again revisited that chronology in Tuesday's post, one day after Benioff, making the invidious comparison to Microsoft, described Salesforce's strategy as inclusive.
"Since then, Salesforce has repeatedly tried to block customers from migrating to Zoho CRM, by telling them (falsely) that they cannot take their data out of Salesforce until their contract duration is over. We have emails from customers recounting this."
Later, he told me that he had had a private e-mail exchange with Benioff as recently as a month ago, where the question of Zoho applications running on the Force.com platform again got raised.
"He refused," according to Vembu. "He just said that that's part of their business stragety and their prerogative. No one is questioning his right to do that, but it's not consistent with openness. They claim that Force.com is open but that's really not true."
A Salesforce spokeswoman said the company would not have immediate comment.
The company on Tuesday morning announced Z-Payments, an online payment service for subscription-based businesses. Interestingly, the product will also accept payments from PayPal.
Along with the announcement, PayPal's president, Scott Thompson, has joined Zuora's board of directors.
What with the stock market in a funk and companies acutely concerned about the impact of a slowing economy on their bottom lines, the pitch Tzuo plans to make is that Z-Payments can handle the job of collecting recurring payments more efficiently and at a lower cost than doing it themselves--especially compared with paper-based payment processes. So the question becomes: If the economy tanks, will subscription services like Zuora's benefit?
In an interview, Tzuo made the case for the subscription model. In a post he wrote a few days ago, he laid out the same argument:
For one, the cost to subscribe is much more affordable than it is to buy. Look at Zipcar, for instance. It's far less expensive to subscribe to an entire fleet of cars vs. purchasing your own. Not to mention, many can't get the credit they need to buy a car or other goods right now, making subscriptions the only option. Likewise, it's more cost effective for businesses to use SaaS applications. Companies operating under this model have an advantage to win more business for that reason alone. Salesforce.com, as an example, thrived during the recession from 2001 to 2002.
Also on the subject of cost savings, it's less expensive for companies to offer their apps as a subscription. Building a Web app can be very inexpensive compared to a desktop app or one that you buy off the shelf. Paying for server space vs. manufacturing and shipping is also a consideration that many businesses are taking into account as they build out their products.
This marks the company's second product in the online subscription segment. In the spring, Zuora introduced Z-Billing.
I kidded Tzuo about the PayPal arrangement, suggesting it may be the prelude to a marriage between the companies. But it's not so far-fetched. PayPal doesn't do billing, and in an interview with ZDNet's Phil Wainewright, Thompson gushed about the extension of Zuora's pay-as-you-go model.
"All these enterprise software vendors sell you a chunk of stuff, most of which you don't want," he said--and it becomes a burden, he added. "Your business is slowed down because you're dragging along this big anchor."
George Carlin said that when you live in the United States, you're guaranteed a front row seat to the freak show. Events of the last few weeks only reconfirm how right he was.
(Credit:
CNET News)
But first, think back a few years.
The deflating of the Internet bubble, which began in 2000, wasn't a one-day blowup. Instead, the pain was spread over months and only ended after dozens of one-time high-flying technology companies got obliterated.
Out of the rubble emerged a new generation of start-ups that went on to operate under the Web 2.0 rubric. And since 2002, the innovation in consumer and social-network services has been the more interesting story in tech.
But this latest market upset takes place at a very inconvenient time. (When is it not inconvenient?) It's hard to know exactly, but most of these start-ups aren't swimming in cash. Before it's over, this may become a particularly hard transition for companies that depend on Internet advertising to pay the bills. Especially companies that operate according to the "freemium" model.
What's "freemium"? Fred Wilson of Union Square Ventures nicely defines how the model is supposed to work.
Give your service away for free, possibly ad-supported but maybe not, acquire a lot of customers very efficiently through word of mouth, referral networks, organic search marketing, etc., then offer premium-priced, value-added services or an enhanced version of your service to your customer base.
The idea is predicated on the assumption that you'll be around long enough to collect. In normal times, that might work. Does anyone believe we're living in normal times? Even if Bush convinces congressional renegades in his party who opposed the Wall Street bailout, this economy's getting worse by the week.
If past is prologue, the technology business may emerge changed, and ready for the next big challenge. But that's the longer-term perspective. In the meantime, there's that matter of meeting payroll. "Freemium" was a grand experiment but its practitioners don't have the luxury of time any more.
