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Amazon vs. Google?

A few years ago this would have been a crazy question. A bookstore against a search engine? Apples and oranges… not anymore. Still, we’re more used to pitting Google against Yahoo, Amazon against eBay. But think about it:

Adoption of Amazon Elastic Compute Cloud (EC2) and Amazon Simple Storage Service (S3) continues to grow. As an indicator of adoption, bandwidth utilized by these services in fourth quarter 2007 was even greater than bandwidth utilized in the same period by all of Amazon.com’s global websites combined.

The above quote is from Amazon’s earnings release. There are more then 330,000 developers registered to use Amazon Web Services. Some of these new Web 2.0 offerings will actually take off, in fact some will get mass adoption. That translates to tens of millions of users whose online activity flows through Amazon, and this is where Google comes in the picture.

Forget Search, Google is the world’s primary Advertising engine. They need to have (I did not say own!) all our data. Nick Carr is right:

For Google, literally everything that happens on the Internet is a complement to its main business. The more things that people and companies do online, the more ads they see and the more money Google makes. In addition, as Internet activity increases, Google collects more data on consumers’ needs and behavior and can tailor its ads more precisely, strengthening its competitive advantage and further increasing its income.

The business models are different: for Google everything you do is secondary (and largely free to you), since they make their money on the ads, while Amazon directly charges for their individual services (albeit not much). Amazon will have tens of millions of users, and Google wants them, too.

If we buy into Nick Carr’s “Big Switch” vision of utility computing (and I do), are these two giants competing to become “The Cloud computer”? Or perhaps one of the 5?smile_wink

Related posts: ReadWriteWeb, TechCrunch, Between the Lines, Data Center Knowledge, ProgrammableWeb.

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Is Going Green Good Marketing?

I’ve received an email from European SaaS All-in-One SMB provider 24SevenOffice (wow, that’s a mouthful, basically NetSuite+Office for really small businesses, see my earlier coverage):

2008 must be the year when we all act against the serious environmental threat that the world is facing. 24SevenOffice has developed “The Go Green Game”, a Flash-game that puts focus on the pollution caused by the millions of unnecessary server rooms and servers located in all companies.

In addition, 24SevenOffice will plant trees based on the number of players, in co-operation with Nobel Peace Prize winner Maathai’s Green Belt Movement. If you wish to make a direct contribution to the society, let yourself entertain at http://game.24SevenOffice.com/ or forward this e-mail to friends, colleagues and business partners who are committed to the environmental battle.

Thank you for showing responsibility for the environment! The game can be found here: http://game.24SevenOffice.com/

I had mixed thoughts at first reading: Obviously environmental consciousness is becoming fashionable. Companies rush to launch their green initiatives in order to look “responsible corporate citizens”. OK, that’s the cynical view, but after all, these are often useful initiatives, and I’ve already said you don’t have to be purely altruistic to do good.

Whatever this game may be, it’s just a “save the earth” message, it’s not a vehicle to push 24SevenOffice products…

But wait! Like Columbo, when you think he’s gone, but comes back and drops the gist of the conversation, there’s a footnote here:

NB! The products mentioned in this e-mail are not the environmental sinners in themselves.
The environmental problem is based on the fact that most businesses, unnecessarily, have their own
servers and server rooms. This is the issue that 24SevenOffice is addressing.

Ahh…so it is advertising after all. Oh, well, it still delivers a correct message .. let’s check out the game itself:

I need to practice my swing, I could barely smash a few servers, look how much they’ve already racked up! Even worse, I’m not good in reading instructions, totally missed option#2, which is…no, I can’t tell you, it’s too violent.smile_devil

Joke apart, 24SevenOffice clearly has a point: maintaining millions of servers for (small) businesses is wasteful, switching to Cloud Computing allows central servers to be more efficiently utilized, we’re all saving energy.

As a side-note, I’ve just looked at a web-based service that allows us, as individual consumers “go green” – will report about it when they are ready.

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Can the Software Sector be Resilient to Recession?

I was very lucky in the early 90’s being in an industry that was not only shielded from recession, in fact it was thriving.  Corporate America was taught to fight their way out of the slump by Business Process Reengineering, and what better way to execute it than by implementing new integrated business information systems.  The slump for the rest of the country was a major boom for SAP, and the entire ERP industry born in their footsteps.

Today we’re amidst another technology change, one that may just ensure relatively smooth sailing through a recession for the Software sector – at least those who are on the right side of the change.smile_wink  The belts will be tightened, says the New York Times, but technology will still grow, just at a slower rate:

Overall growth in technology spending may fall from 7 percent last year to 4 percent or less this year, according to estimates by IDC, a research firm.

But that won’t be nice 4% growth for the entire industry; I strongly believe pioneers of Software as a Service (SaaS) will be amongst coming out of a slow-down as winners, leaving others in the dust. 

TechCrunch is optimistic for the entire Web 2.0 business:

All of those Enterprise 2.0 startups out there, or even Amazon trying to sell Web-based computing infrastructure, are actually at an advantage. Customers are more likely to try cheap cloud computing when they can no longer afford the alternatives.

ZDNet’s Dan Farber disagrees:

Most of the Web/Enterprise 2.0 startups can’t get a hearing with CIOs and tech buyers at corporations. While consumer applications are influencing corporate applications and coming in through the back door, Enterprise 2.0 apps (blogs, wikis, predictions markets, social networking, mashups, collaborative cloud-based apps and technologies such as RSS and tags) are just beginning to reach the radar of larger corporations, and they are not considered mission critical, which is where the money is funneled first

I think they are both right – and wrong.  I don’t agree that the entire Web 2.0 sector is immune to a down-turn: the advertising market will shrink,  the “lets-grow-insanely-who-needs-a-business-model” types will suffer. As Software VC Will Price says:

It may well be that Slide raising $55m from mutual fund companies at $500m+ pre-money will be the “what were we thinking” moment of the current cycle.

I also agree with Will, that a movie we’ve all seen will be playing again:

The last downturn saw the valley swing violently away from consumers to the enterprise – bastions of value, hard ROI, tangible value propositions, enterprise pain points and budgets, etc became the mainstay of investment decisions and the consumer, I kid you not, was literally a bad word…
The valley became all enterprise, all the time.

It will not be all, and not only Enterprise, but Business Software, whether for the Enterprise or small businesses will come back with a classic, “old-fashioned” business model of actually charging for value (product or service) delivered.  Of course there is still the dilemma of selling business software – much better if you don’t have to, it is getting bought instead. smile_shades  Yes, Dan is right, “Web/Enterprise 2.0 startups can’t get a hearing with CIOs and tech buyers at corporations” and their  apps are not considered mission critical, but the whole point is that a lot of these Enterprise 2.0 tools are not sold at the CIO level.

The after-bubble nuclear period of “no IT spending at all” found me at a startup. We did not exactly hit it big, but did not go under, either, and that’s because our model allowed us to get in the door way below the threshold that would have required higher authorization. Not classic SaaS, rather SES (Software Enabled Service), we were essentially data providers and often got into an “enterprise” account at $3k for the first month … ramping up to $60-$100K annually.   Anyone familiar with Enterprise Sales knows the term Economic Buyer:  typically getting involved later at the sales cycle, approving or nuking the deal.  Well, we saw no Economic Buyer: being under the threshold, we sold to the User directly.

As Zoho CEO Sridhar Vembu adds to the discussion:

It is useful to remember that both Salesforce & WebEx thrived during the last recession – in fact they were relatively unknown during the last boom. Cost was a major part of the reason they thrived in the bust.

Indeed. Software as a Service and the typically associated pay-as-you-go model allows businesses – enterprise and SMB – to use software without the typical upfront investment the traditional model would require, therefore SaaS providers have a good chance of withering a Recession.  Another noteworthy idea in Sridhar’s response is that they really don’t have to have a “massive win”, a total move from the desktop to the cloud: a “marginal” business  is good enough.

Of course this “marginal business” is not as attractive to many startup entrepreneurs as fast forwarding to the IPO, preferably over $1.5B. In fact it’s really boring… building a business gradually; no IPO thrill; serving millions of customers, helping them actually conduct business.  Oh, and making millions of dollars of real revenue in the process – not bad, if you ask me.  And it’s quite bubble-proof. smile_wink

Related posts: Vinnie Mirchandani –  Why it will be very different this time, Fred Wilson- This Time Will Be Different.

Update (1/28): Forrester Research predicts gains for Enterprise Web 2.0 apps in 2008.   Also read: Between the Lines, ReadWriteWeb.

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Not All Presentation Managers Are Created Equal…

Sorry if this post feels a bit tongue-in-cheek. It is.  But I can’t help making the comparison when I see both Google and Zoho announcing new features of their Presentation Managers the same day.

We can’t stop adding features!  – announces the Google Docs Blog.  Today’s newbies are PDF support and adding vector shapes.  Some shapes.. the pic to the left shows the available inventory.

The pic below lists the shapes available in Zoho Show:

 

Add to the above hundreds of clipart items in Zoho Show, all of which, as well as the shapes can not only be moved and resized, like those in Google, but also flipped, rotated directly by dragging them.  And of course there’s Zoho’s theme gallery to jumpstart your presentation with… and a zillion more features.

Oh, well… draw your own conclusion.  Bias alert:smile_embaressed  I am an advisor to Zoho.  Don’t just take my word – go and play with Show yourself.

Related posts: Download Squad, Googlified , Google Operating System, Google Blogoscoped

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SmartTurn: Inventory & Warehouse Management SaaS-style

Here’s further proof that the Software as a Service (SaaS) model will not be limited to CRM and Accounting: SmartTurn, providers of the first On-Demand Inventory and Warehouse Management System (WMS) announced today its $5M Series A financing led by New Enterprise Associates (NEA) and Emergence Capital Partners.

I admit the announcement took me by surprise; I have not heard of the company before. A quick look at the Oakland address made me suspicious though, and yes, I was correct: this company is a spin-off of Navis, who are veterans of Warehouse Management systems, from the “old”, i.e. on-premise world. Old-world or not, the Navis team carries the SaaS DNA: a little-known fact is that their CEO, currently Chairman of SmartTurn John Dillon was CEO of Salesforce.com before Founder Marc Benioff took the reins back in 2001. The investors are not exactly new to SaaS either: Emergence Capital were early investors in Salesforce.com, and they specialize on SaaS and nothing else (I believe they are the first Valley VC firm to do so).

Warehouse Management is an awfully complex area (I know first hand, having lead SAP logistic projects in the 90s), so if SmartTurn is successful, it will truly be a validation of all aspects of “Enterprise Software” being eligible for the On-Demand model.

There are very few Enterprise SaaS players around, but SAP’s (SAP)new SaaS product, Business ByDesign for the SMB market and NetSuite (N) for small businesses are worth mentioning: they both offer complete, integrated systems, including Inventory and WMS. The opposite of the integrated systems is the best-of-breed approach, in which case one of the most difficult decisions in enterprise systems is where you draw your functional boundaries, and for companies implementing a multi-system scenario what functions are left in which systems, where to cut overlaps. Inventory Management is planning and accounting for your inventory levels; Warehouse Management is the extension of the concept down to physical locations (warehouses, buildings, down to bin levels). SmartTurn appears to support the Procurement and Order Fulfillment processes as well, which, from a logistics point of view are the inflows and outflows to/from your warehouse.

This is an area worth keeping an eye on and I expect to revisit it once I know more about the company and their customers.

On a lighter note… $5M to manage the inventory of major businesses vs. $50M to superpoke FaceBook users… am I the only one sensing imbalance here? smile_wink

Update: No, apparently I am not the only one… Will Price, Managing Partner at Hummer Winblad Venture Partners:

It way well be that Slide raising $55m from mutual fund companies at $500m+ pre-money will be the “what were we thinking” moment of the current cycle. I think, however, the investor who leads a $4 on $4m Series A in a company with a differentiated technology and a direct tie to hard ROI will feel calm in the storm.

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LinkedIn Outage

This may very well be the first LinkedIn outage I’ve caught, and it comes on the day Google’s Blogger was down, and the Technorati Monster popped up it ugly head again.  Oh, well, at least this one is cute.

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Macworld Live Blogging via CoveritLive? Nope. CoveritDead. Twitter Dies, Too.

CoveritLive is supposed to change live blogging. What better opportunity to debut than Macworld? Except that I am off to a shaky start trying to watch Crunchgear’s coverage:

Upgrade? I’m already on the latest FireFox, thank you. smile_sad

Update: Now the CrunchGear CoveritLive page does not load at all. Coveritdead. thumbs_down

Update: Fake Steve Jobs also tried CoveritLive, then attempted to switch to Twitterwhich died, too.

Well, at least CrunchGear’s mothership, TechCrunch stayed with the conservative, manual updates… their coverage works.

Update (1/21): Here’s a new review on CoveritLive @ReadWriteWeb. We’ll just have to wait for another major event to see it truly “live”.

Update (2/27): Jeff Nolan and Dennis Howlett praise CoveritLive.

Related posts: Mashable, mathewingram.com/work, Paul Kedrosky’s Infectious Greed, Data Center Knowledge, Furrier.org, Mashable!, Valleywag, CenterNetworks, TechCrunch.

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Weird Google Blogger Error

blogger error

We’re sorry, but we were unable to complete your request.

What request? I did not request anything. Did not touch my keyboard or mouse at all.

Describe what you were doing when you got this error.

I was simply reading this blog post when it blew up.

This is an error I’ve observed several times recently: click on a link to read a post on Google’s Blogger: the post comes up normally, but a few seconds after I start reading it, it just blows up and I get the above error.  But I haven’t touched anything – is this a speed-reading test?

Update: apparently it’s a frequent error, but typically encountered while publishing, not reading.