Brij’s One More Idea

We were discussing about threshold gas price which can tip behavior and force people to change their habits. I think anywhere near $5 pg should cause widespread introspection.

Blogged with MessageDance using iPhone

Steve Ballmer is saying “What’s fair is fair” and dropping a not so subtle hint that Microsoft will be coming after those who are enjoying the fruits of open source without paying the patent toll (or troll) tax.

Timing and news coverage is bit fishy here.

Redhat launched RedHat exchange and further solidified their perceived leadership role in open source. Fud like the one Microsoft is raising can send mixed signal to companies hoping to join RedHat exchange. Who knows what might happen and who is trolling for what.

Second interesting aspect is about Fortune breaking this news. Fortune had been critical of open and free software in the past. Mostly by taking a stand that OSS/FOSS movement is anti-business.

Last point is more interesting and that concerns Google. Depending on how scared Microsoft is about Google and knowing Google runs all their data center servers on Linux this can have potentially interesting dimensions. Again this is all theory but lawyers tend to think very differently from engineers so we shouldn’t be surprised about the broad direction of fud, whereas Microsoft’s intended target could be very specific.

Blogosphere will wake up on Monday with full of anti-Microsoft posts. Diggers and Slashdotters will have field day with this.

Redhat is by far the only big pure-play open source success story out there. They have perfected their subscription based revenue model and now it seems they are intent on putting more and more components to add incremental revenue. Complete SOA stack strategy is designed to shift enterprise budget from licensing model to the subscription model.

They are marching up the stack. This became clear when they announced the acquisition of MetaMatrix, a proprietary integration framework which acts as a data glue between business applications and different data sources. Sort of like Tibco for data. MetaMatrix competes with big companies as well as innovative startups such as Composite Software.

This acquisition has a potential to cause lot of disruption among existing integration players. People have already started talking about “shorting” Tibco and BEAs of this world. Ashlee Vance recently reported about seismic changes taking place in the mid-market enterprise software segment. Ray Lane of Oracle fame making  a chilling prediction of carnage coming in the mid-market. Companies will loose lot of their pricing power when caught between three giant forces changing the economics of software industry - consolidation at the very top, move towards software as a service and popularity of open source model.

Redhat is ideally positioned to scale out their subscription model with more and more interesting components in the mix. They will make more acquisitions to expand vertically.

[Cross posted on OpenAppDotOrg]

It’s the grass which suffers. In this battle there are many different kinds of grass which will now have to adjust in which direction they will be tilting going forward.

For those who don’t get their daily high from Techmeme, news of the day is that Google is now offering premium version of their Google Apps. We use it internally so we can totally appreciate the impact. Infact feature expansion to include GData and SAML based SSO are some cool features. Definitely worth experimenting with.

I think the bigger news is how this will impact SaaS market in general. Lot of people miss out on the importance of email as a center of any business application. Take CRM for example. Every customer wants to tightly integrate email with CRM system - both as a lead capture, ongoing communication and campaigns. Thats why companies charge for Outlook connector. With Gmail, Google has established it can write a world class email client. Combining that with Calendar, Document, and Spreadsheet we get a decently integrated office productivity environment. So far so good. Chills to Microsoft but nowhere an Office-killer. In IT world nothing gets killed, competition shifts elsewhere. Same thing will happen here as well.  [Update: Google lead engineer writes how this whole thing started with Gmail.]

I think biggest losers in this game will be business application vendors who are endorsing SaaS as a delivery model. Specially the non-differentiated category apps - expense management, CRM etc. Reason I say that is that lot of analysts haven’t fully factored is the importance of Jotspot acquisition in this Google move. I think Phil needs to factor in Jotspot acquisition as well:

That leaves open the option of adding additional pricing levels for more richly featured versions, which is exactly what Salesforce and many other on-demand operators have done over the years. So I think Google Apps will remain profitable at that level, and won’t undermine the profitability of other on-demand vendors.

What will happen when Jotspot is fully integrated with Google Premium package offering custom applications for internal use, complete with SSO, user access control and other enterprisey frills?. Jotspot combined with whatever development toolkit Google is working will be a good enough service for lot of companies NOT to look in the direction of Salesforce because of tight Gmail integration. That will also be the reason why Zoho kind of companies cannot survive standalone for too long.

They have been talking about this for some time now.

Overall its a great step in expanding the use of productivity applications. Long tails and emerging markets will win big time with this. So will bootstrappers like us.

Phil Wainewright guesstimates SaaS market to be around $7 billion. Though the definition of SaaS is still all over the place but his explanation comes out strongly:

Web conferencing/collaboration (WebEx, Citrix Online, Microsoft Live Meeting, Raindance, Convoq, Projectplace, LivePerson etc): close to billion dollar
Human resources/payroll (Employease, Taleo, Workstream, Successfactors ) : ~$250 million?
CRM (Salesforce, Oracle, SAP, RightNow, SugarCRM, Sage, entellium ) : close to billion dollar
Supply chain and spend management ( Concur, Ketera, Rearden Commerce, Frictionless commerce, Emptoris, Mitrix, GXS) : ~$500 million
Web content management/Ecommerce/Email and email marketing : ~$3 billion (very rough est.)
Financials and business admin (NetSuite, WinWeb, Twinfield, Quickbooks) $500million

Even after discounting for my usual Google obsession I can’t help thinking why software as a service trend will stop at that. Eventually this has to become an underlying layer to be known as “software behind the search”. As a bad joke it can be termed as Softbets. This market definition will get more fuzzy once Microsoft Live and Google Domain service start getting adoption.

Why this Google For Your Domain is a big news? Even if Google is just scratching on the office footprint, revenue numbers are huge and considering the growing  market  this number will increase as well -

Microsoft’s Office products generated $11.7 billion in revenue for the
fiscal year ended June 30 and nearly $8.3 billion in profit. The vast
majority of sales came from the company’s core desktop suite.

We have been beta testing GFYD service for nearly a month now. Together with gmail, spreadsheet and Writely we are quite satisfied. Though support is at times bit tricky but things seem to work most of the time. Apptility size (nearly 20 employees) company is a sweet spot for Google. Small but spread across three timezones, using three operating systems (Mac, Linux and Windows - with majority being Linux) and near real-time collaboration needs. If you can collaborate over word document and spreadsheet in real-time then its huge. It’s quite obvious that the collaboration is a big deal in multi-location businesses. I think increasingly finance folks in small companies will challenge their geeks and ask them to use Google tools to save on licensing fees.

Suddenly the promise of cheap office-alternative over cheap hardware looks promising. Lot of people sitting in bay area just ignore the importance of hardware in comparing between office alternatives. Just try running Outlook, Excel, and Word at the same time. It’s not funny most of the time. Performing same functions on the browser appears less daunting. Now bandwidth and offline synchronization becomes the real deal.

Now this may come as a side note in this debate but I don’t see much market for wiki in the office collaboration suite. If Writely can allow upto 50 users collaborating on the same document then why you need to spend countless hours learning pesky formatting rules?

Now disruptive is a much used (abused) word but I am tempted to use that to describe Writely. Its very well designed and comes with extensive features.

Though comparisons will be made against Microsoft Word but I think it’s biggest impact will be on the Wiki market. It has powerful collaboration and revision control which will put Writely in direct competition with leading Wiki solutions. I don’t see many reasons why would anybody use Wiki in the intranet type of environment where Writely will just do fine to manage revisions and sharing.  (Wiki is useful but formatting and large document navigation is a major pain) .

Also in Writely  you get blog posting, pdf export and best of all OpenOffice format which takes format closer to xml for automated import/export.

Very smart acquisition by Google. I doubt they will put ads on this tool, there is much bigger opportunity in linking this with blogger and generating public document repositories.  This is a much better tool for joint book authoring as compared to any wiki or blogging tool.

Chris Anderson’s take on the demise of hit phenomena reads like a manifesto for user-generated-content philosophy

The mass market is yielding to a million minimarkets. Hits will always be with us, but they have lost their monopoly. Blockbusters must now compete with an infinite number of niche offerings, which can be distributed just as easily. Justin Timberlake still makes albums, but today he has thousands of bands on MySpace as rivals. The hierarchy of attention has inverted – credibility now rises from below. MTV and Tower Records no longer decide who will win. You do.

What if he is right? If as a model this is here to stay then it have bigger impact on the world of start-ups and venture capital business. VC business is rooted in the culture of hits!

Anybody remember CORBA? It was just yesterday when this designed-by-committee acronym was the hottest thing in town. Panacea to all your integration and dynamic interface requirements. I experienced this first hand while working on Visigenics, Orbix and later on while doing a project for Active Software (later bought by Webmethods).

CORBA suffered from that slipper slope of designing solution to make everybody happy.  It never happens that way in real world.

Mich Henning is talking about the lessons from that failed initiative:

The platform had a steep learning curve and was complex and hard to use
correctly, leading to long development times and high defect rates

Simplicity wins and simple solutions carefully directed at the equilibrium points in complex chain yield better results.

WS-* is running the same risk as CORBA and specification war has made hacking difficult.  REST is making WS-* benefits appealing to lot of developers who just want to tie-in other services and not worry about the niceties of specs. Look around and see what is driving mash-up madness. CORBA didn’t pass the hackability test.

Honest and innocent looking Base page listings are now a major threat to lot of walled gardens. Content based business models need reach, scale and precision. Nobody has this better than Google right now. Richard MacManus has more on the slow and silent expansion of Google Base into new verticals.

Mixing bizarre with sensible content, Google will keep many companies on their toes.