魔力宝贝

In this week’s EIC Squared podcast, ZDNet’s Larry Dignan and I discuss the two big stories of the week–Yahoo hooking up with Google and the introduction Apple’s 3G iPhone launch.

Note: This article originally incorrectly stated the pricing for Rockstar support and the version number that has been released. Rockstar Support is actually a one-year agreement and starts at $850 per month. (or $10,200 a year). These changes are reflected below.

At $850 per year month for “Rockstar Support,” or $10,200 per year (annual contract), it can fit within the budgets of the small-business market. Even so, WebGUI 7.6’s enhanced ease of use should be attractive to organizations of all sizes.

Some of the new functionality seems destined for small to mid-size enterprises, and, indeed, this seems to be the staple of Plain Black’s customer base, though it indicates that WebGUI is in use within Fortune 1000 Intranets.

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It’s difficult to stand out in the crowded open-source content management system market, but WebGUI 7.6 may make it easier to manage a Web site on a limited budget and limited CMS expertise. It may not be ideal for every organization, but since it’s free of charge and licensed under the General Public License, why not give it a try?

An enhanced survey engine that allows users to easily create multiple choice, rating scale, and open-response questions;
Comparison charts (i.e., for putting competitive product or feature matrices, service comparisons, etc. online);
iPhone application that allows Web administrators to upload images directly to the site from their
iPhone;
iPhoto (and soon-to-be-release Google Picasa) capability to upload directly from a desktop photo application to the Web site;
And more.

There are thousands of open-source content management systems, from Alfresco to Drupal to Joomla, but one that gets less attention yet still delivers great functionality for Intranets and other smaller Web sites is WebGUI, developed by Plain Black.

Plain Black just released WebGUI 7.6 with a host of new functionality, including:

So what does it need to do with
Windows 7? Make sure the geeks love it.

And that’s where the biggest issue with Vista really is. The technology space is looked at by many in the mainstream as a higher-level industry that simply can’t be understood by the average person. Software? Hardware? Huh?

So how did it get to the point where the Mojave Experiment became necessary? How did it get to the point where Microsoft was forced to concede that it was losing the PR game and it needed to tell the world about it?

And that’s exactly why I don’t like what I’m hearing already about Windows 7. Microsoft isn’t doing enough to appeal to the geeks and it’s instead tying its success to the mainstream. From a business standpoint that may make sense–the majority of people are in the mainstream–but from a strategical perspective, the company has it all wrong.

And when you verify what they’re saying, you’ll probably end up researching the topic by going to the countless blog posts and articles by experts in the field to decide if your friend is correct, right?

Microsoft needs to start leaking information that discusses some of the features that would make the tech-savvy crowd go wild. It doesn’t have to be anything special, just enough to start building some hype. After that, it needs to give the niche press unprecedented access to Windows 7 and create a product that appeals to them. And simply by embracing the niche press, Microsoft can start rebuilding its image in that space.

But making sure the geeks love it will be difficult. Microsoft isn’t one of the most well-liked companies in the space and any chance to beat up on the company will make even the most objective geek happy.

You can blame it on the geeks and the trickle-down effect that makes the technology industry such a unique space.

The technology industry is unique because it’s segmented by a perceived knowledge barrier. Because of that, a select few are looked at as the source for knowledge and thus, provide the general public with the opinions they should be formulating. Apple has realized that–just look at the press coverage–but Microsoft failed to do so with Vista and now needs to repair its image before Windows 7 throws the company into disaster mode.

Playing nicely with the mainstream means nothing in this industry unless the niche is happy. And if Microsoft wants Windows 7 to be a success, it better create a product that appeals to that niche and start playing nice with it. If it doesn’t, look for Microsoft’s PR troubles to continue indefinitely.

Windows Vista has been a tragedy on many levels for Microsoft. First, it was marked with compatibility issues and annoyances with its User Access Control feature that started a firestorm of epic proportions. But once those issues improved, Microsoft ran into an even bigger issue: it wasn’t able to satisfy vendors, nor was it able to satisfy the geeks.

The one thing I don’t understand about Microsoft and countless other companies in the technology industry is why they don’t realize that the influential people are not the average John and Jane Doe. Instead, the technology industry is dominated by a select few who tell their friends and family why a certain product or service is useless.

And what do you find there? A slew of stories written by geeks, for geeks. And throughout the past year, those stories written by geeks for geeks were littered with criticisms of Vista and countless reasons why the company made mistakes. Sure, there were some sites that came to its defense, but the vast majority of journalists took the opportunity to beat up on the OS.

And that’s exactly why Microsoft can’t make the same mistake it made with Vista. That operating system didn’t appeal to the geeks and they spent the past year telling the world about it. Once that happened, the world started believing it (regardless of whether or not it was true) and Microsoft has paid the price.

Realizing that, Microsoft can’t expect to quiet every critic, but it needs to be more proactive in ensuring that more geeks will be happy. First off, it needs to ensure that the geeks’ desires are met as effectively as possible: the geeks want better security, more customization, and full compatibility. Secondly, it has to play the right PR game: make Windows 7 about the desires of the tech-savvy crowd and stop pretending like that crowd doesn’t matter.

Check out Don’s Digital Home podcast, Twitter feed, and FriendFeed.

Technology’s trickle-down effect is simple: a tech company screws up a product in ways that the tech-savvy crowd will notice, but the mainstream crowd won’t. Once that happens, geeks start railing on the product and discuss why it’s so bad. Eventually, they start complaining to their family and friends, who don’t know much about it and the distaste for products starts entering the mainstream. Once that happens, those people will start talking to others and soon it becomes viral.

Because of that, it’s the geek that filters opinions and creates a trickle-down effect in the space. Let’s face it–if you don’t know what you’re talking about and you know that your friend does, wouldn’t you take their word for it at the least or verify what they’re saying at the very most?

On Monday, I noted that Ubuntu’s revenue is rising significantly, and that this success is beginning to cut into Microsoft’s OEM licensing business.

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On the negative side, it is profit and the thirst for it that tends to separate great companies from paltry ones. Yes, the quest for revenue and profit can turn good companies into shady ones–witness Microsoft’s unlawful exercise of monopoly power for many years–but on balance the quest for profitability and self-sustainability tends to force companies to be pragmatic and build to suit near-term needs, not long-term aspirations.

Tuesday there is a chorus of voices calling out that Canonical is not cash-flow positive, with CNET reporting that profits are years away.

But he needs to hurry before his organization grows lazy in the expectation that “Mark will provide.” Canonical should start funding itself, rather than relying on Shuttleworth. It will be a better organization as it seeks self-sufficiency. Talking to Shuttleworth, it’s clear that he can handle the business aspect of Canonical in spades. He just needs to start doing so.

Is this cause of optimism or concern?

I personally believe Canonical would be the better for taking a hard-headed approach to the business side of Ubuntu, and the sooner the better. Shuttleworth, of course, has this in mind with his push for cloud services to generate revenue around Ubuntu, rather than directly from Ubuntu.

On the positive side, CEO Mark Shuttleworth is able to run Canonical toward mass adoption, not mass monetization. This means he can avoid trade-offs that might help the Canonical business but hurt the Ubuntu Linux distribution.

Stephen Elop

Although Elop had many of his negative perceptions changed as he interviewed at and later joined Microsoft, he also said there are some areas where he would like to see things happen faster, particularly when it comes to online services.

“The initial impression of that, as an outsider, is ‘Is that just a cheesy way of saying we are going to hold off as long as we can,” said Elop, who was an executive at Macromedia and Adobe Systems before joining Microsoft earlier this year.

Microsoft has not always been the easiest place for outsiders, particularly those who have been chief executives in their prior jobs. Elop said that’s one of the things he thought about a lot before agreeing to take over for Jeff Raikes, who is leaving Microsoft after a quarter century to become head of the Bill and Melinda Gates Foundation.

These days, Elop justifies using the
iPhone as him trying out competitive technologies, an effort that also has him playing with Google Docs and using a host of other Web 2.0 services.

He didn’t give out much in the way of new product details, but suggested a larger role over time for advertising-funded software. Even some businesses, he said, might want to use some ad-based software.

“I’m a believer you have to experiment with these things,” Elop said.

In deciding to go for it, Elop said he spoke to folks who had made the transition well, such as Ray Ozzie and Kevin Turner, the former Sam’s Club CEO who is now Microsoft’s chief operating officer. Elop said he also talked to some for whom things didn’t work out so well. (He didn’t name names and there’s a long list of people who fit that category.)

That said, Elop is not a total convert to Redmond’s ways. Although he was quick to pull out a Windows Mobile smartphone when asked, he also admits that his whole family uses iPhones and that his was in the
car.

One of the things that became clear was it doesn’t work to come into Microsoft and tell everyone how well things work at other places.

As a guy who spent a decade in Silicon Valley, Stephen Elop says he, too, had his doubts when he first heard about Microsoft’s “software plus services” strategy.

(Credit:
Microsoft )

But, if Elop was initially skeptical, he’s now an ardent believer. In an interview in San Francisco last week, the president of Microsoft’s business division spoke like a lifelong ‘Softie, extolling the virtues of everything from SharePoint to Office Live to Microsoft’s OneNote note-taking program.

Elop pointed to, say, a trucking business that might use traditional software for its offices but let those on the road check their company e-mail from a Web-based service. The key word is choice, he said. Businesses will get to choose between traditional software, subscription licensing, or having Microsoft host the software itself. Consumers, meanwhile, will have options funded by a wide range of business models.

Google said it worked with Microsoft’s IE engineers on some of other issues, including memory-related performance issue when running JavaScript programs in the browser, and Google pared back some user interface features that had been causing trouble for IE 6 users.

But a huge swath of Internet users is still getting by with IE 6, which is no doubt is why Google just released a new version of Gmail for the vintage 2001-era browser.

There’s a lot of action in the browser market these days: Google just launched its Chrome browser,
Firefox 3.1 is due in months, Apple hopes
Safari will spread across the world of Windows, and Microsoft is touting its second beta of
Internet Explorer 8.

The update means IE 6 users will get access to colored labels for messages, Gmail Labs features, integration with AOL Instant Messenger, and invisible mode for IM, Google engineer Jon Perlow said on Google’s Gmail blog on Friday. The upgrade catches IE 6 users up to features available to users of Firefox 3, IE 7, and Safari 3.

A Facebook representative told CNET News on Thursday that the company had not yet actually been served with the lawsuit, and that its legal team consequently did not have a formal statement at the time. STA Travel, Gamefly, and Overstock all declined to comment; none of the other defendants could be immediately reached.

That’s why there’s already been a suit involving Beacon that specifically targeted Blockbuster for participating in such a program: a Texas woman filed suit against Blockbuster in April, claiming that the VPPA bars it from Beacon. Facebook was not named as a defendant in that suit, and though the plaintiff sought class action status for her case, she does not appear to have any involvement in this week’s suit.

One of the plaintiffs, Sean Lane of Waltham, Mass., was immortalized in a Washington Post story about Beacon: He’s the guy who bought his wife a diamond ring on Overstock.com, only to have her spot the purchase in a Facebook news feed, spoiling the surprise.

“Until we’re served, we’re not being sued, so we don’t have any comment,” Overstock general counsel Mark Griffin told CNET News.

There’s one odd law that may make the plaintiffs’ case stronger: the Video Privacy Protection Act of 1988. The law was passed amid the fracas surrounding Robert Bork’s controversial nomination to the U.S. Supreme Court, when a journalist obtained Bork’s movie rental record from a local video store and published it.

“If the user was not a member (of Facebook), Facebook still obtained the notification from the Facebook Beacon Activated Affiliate,” the filing for Lane et al v. Facebook, Inc. read. “Information regarding user activities was sent in real time to a third party Web site–one which was not open or active in the user’s browser, and one which, in many cases, the user may never even have visited or heard of.”

Beacon gained almost immediate notoriety when Facebook unveiled it as part of its Facebook Ads announcement last fall. Privacy advocates, most notably liberal activist group MoveOn.org, lambasted the program for not allowing users to disable it easily. Facebook has since modified the program and the controversy has wound down. But in the lawsuit, the plaintiffs point to the window of time before Facebook instituted the new controls–between November 7 and December 5 of last year–and claims that the social network still has access to a large amount of user data that was gathered in that period.

Guess he’s still irritated.

A class action lawsuit filed earlier this week targets Facebook and eight of the participants in Beacon, its ill-fated advertising product that shared information about third-party site activity with the social network. The set of 20 plaintiffs, mostly residents of Texas, filed the suit in the U.S. District Court for the Northern District of California on Tuesday. Named as defendants are Facebook, as well as current or former Beacon participants Blockbuster, Fandango (owned by Comcast), Overstock.com, STA Travel, Zappos, Hotwire (owned by IAC/InterActiveCorp), and GameFly.

The defendants named in the suit don’t encompass all of Facebook’s original Beacon partners, but several of them could tie into VPPA protections: GameFly rents video games, Fandango sells movie tickets, Hotwire and STA deal with travel bookings, and Zappos and Overstock are both online retailers with a large scope (Overstock sells DVDs, for example). The suit also names the California Computer Crime Law and the Electronic Communications Privacy Act as grounds for the suit.

Vogels noted that cloud computing is in its infancy, but it’s not difficult to see the broad outline of how it will evolve. Nick Carr’s book The Big Switch tells the story.

Release resources when no long needed

I’ve heard the Amazon story many times, but Vogels offered a few new tidbits, such as S3 is storing 18 billion objects and how Amazon thinks about building to its 1,000 services.

“Amazon built these services internally as tools, not as a framework. Each team can use whatever development tools they need. Infrastructure services need to be very generic and people can switch to competing services internally,” Vogels said. For example, users could work with Amazon EC2 and a different storage service than S3.

Scalability

Turn fixed cost into variable cost

(Credit:
Dan Farber)

Cost-effective

Pay for what you use

Click here to see more of CNET’s stories from the Structure 08 conference and on cloud computing generally.

Live coverage of Structure 08

Security

Amazon CTO Werner Vogels

Vogels outlined the core objectives and principles that cloud computing must meet to be successful:

Leverage other’s core competencies

Acquire resources on demand

Now Werner Vogels, vice president and CTO at Amazon.com, is talking about why Amazon is in the cloud computing business, how it got there, and why customers should want it. Instead of every company or developer doing the heavy lifting, dealing with the “muck” as Amazon CEO Jeff Bezos likes to say, Amazon opened up its software-as-a-service stack (Amazon Web Services) and infrastructure (Elastic Compute Cloud, S3, and SimpleDB) to external parties.

In the early morning at Structure 08, AMR Research’s Jonathan Yarmis described various tech trends around cloud computing. Mendel Rosenblum, a founder and technical lead behind VMware, outlined the role of virtualization in data centers.

Performance

Availability

• Outgoing CFO George Reyes said the biggest expense was Google’s data centers; capital expenses totaled $698 million. Hiring was a relatively slow, increasing by only 448 to reach 19,604.

In the first quarter about a tenth of queries showed universal search results, but now, “A bit under a third of our queries now have a bit of universal search in them,” Brin said. “Our feeling is, and our experiments (show), this is significantly improved information for our users. I think you’ll find increasing universal coverage in corpuses that you wouldn’t expect.” And it’s the unexpected universal results that are valuable, he said, where, for example, Google shows a video on a search where the user wouldn’t have thought to click on the video search tab.

• Schmidt, who has spoken of the urgency of converting YouTube popularity into revenue, had this to add: “We’re enormously happy with YouTube. The cultural and end-user success is far, far greater than we ever expected. We’re working on revenue scenarios, and newer (ad) products. I personally do not believe the perfect YouTube ad (mechanism) has been invented. We just rolled out in-video ads.”

• ”We’re very pleased with what we believe are good results in one of the weaker quarters in our normal cycle,” Schmidt said. “Traffic and revenue held up well despite uncertain economic conditions.”

• Ah, now to the heart of the matter. Brin said Google is having second thoughts about how much it reduced “coverage”: the fraction of search results that have ads. Google generally tries to reduce coverage to drop low-quality ads that searchers don’t click on, but it may have overshot the mark, he said.

• Co-founder Sergey Brin: “We substantially increased the size of our index. The index we refresh every few minutes has grown tremendously, so our users get much fresher and faster results across a greater range of sources.”

• Brin said Google has “increased coverage in universal search,” under which Google search results show not just a list of Web pages but also pull in results such as maps, videos, and images.

(Credit:
Google)

Most investors would be delighted with a 35 percent increase in net income, but not when it’s Google in a soft advertising market and the results fell short of expectations. Here are highlights of what Chief Executive Eric Schmidt and others had to say during Google’s conference call about its second-quarter financial results.

• More from Schmidt on YouTube, as he calls finding the right ad model the “holy grail” that will mean tremendous revenue.

• ”The partnership with Yahoo is obviously the signature event,” Schmidt said of the quarter. “We believe the ad deal is a win for the industry because it allows Yahoo to remain independent.”

Google revenue continued its upward trajectory in the second quarter, but not to the satisfaction of Wall Street. (Click image to see larger version.)

“There is some evidence that we were perhaps a little overly aggressive in decreasing coverage in the past quarter,” Brin said. “Historically…we try to reduce our coverage at the same time as improving the monetization. Clearly that’s not the ideal strategy indefinitely, because we don’t want to end up with no ads. From a quality point of view, ads are a significant addition to our page.”

• Chief Economist Hal Varian: “Despite the weakness in the economy, ad revenue seems to be holding up well in most sectors.” The weakest sector looks like real estate.

• Brin: “AdSense now allows third parties to host and serve ads. It’s important to many advertisers. Lenovo is now advertising with us because we can support third-party advertising.”

• To recap, Google reported net income of 1.25 billion, a 35 percent increase over the earlier year. But earnings per share, excluding various items, were $4.63 per share, short of the $4.74 expected by analysts surveyed by Thomson Reuters. Revenue increased 39 percent to $5.37 billion. Excluding $1.47 billion in commissions called traffic acquisition costs, the revenue was $3.88 billion. Analysts had expected revenue, excluding commissions, of $3.9 billion.

• I wasn’t overpowered by the ability to add artwork or other fancier graphical skins to iGoogle, the company’s customizable home page, but apparently some people were when the company launched it in April. “Hundreds of thousands signed up for iGoogle because of themes,” Brin said.

“Where would we have been without erratic policy? We must end the yo-yo…and hold Congress to account,” he said.

“The difference is that in the past year, everyone would make money. Now we have a competitive marketplace, and half of you will win and the other half won’t,” he said.

Standardization

Apart from policy and financial issues, the clean-technology business needs to mature in a number of ways, speakers said.

But the credit crunch at the end of last year put a damper on some deals, particularly those that rely on debt equity, such as biofuel plants. The pace of money flows have largely returned, but ongoing credit problems still linger, Liebreich said.

(Credit:
Martin LaMonica/CNET News.com)

The wind industry, for example, is suffering from supply chain problems that have pushed up prices about 40 percent in less than two years and stretched product delivery time out from 5 months to 13 months, said Liebreich.

Wind is expected to be the fastest growing form of renewable energy around the world, said Eric Martinot, a senior researcher at the Institute for Sustainable Energy Policies. Solar power adoption could skyrocket in many places in the world once solar panels become cost-competitive with retail electricity prices within five years, said Liebreich.

NEW YORK–Economic and policy problems have placed a few potholes in front of the fast-growing clean-technology business.

Renewable energy products also don’t have the same maintenance and service infrastructure that other industries have, said Sklar. Things like solar and wind installations need to have remote monitoring so operators know if there are performance problems in real time.

A lot of money needed

As it stands, the capital demands to commercialize clean technologies are far too low to meet existing U.S. government targets, never mind greenhouse gas emission reduction or energy independence goals, said Andy Karsner, the assistant secretary of energy efficiency and renewable energy at the Department of Energy.

“I am stunned that we don’t have modularity and standardization. We cannot scale this industry without standardization, Sklar said. “We need better data on wind and solar resources…We still have a long way to go.”

The prospect of the tax credit not being renewed is already stalling business, and it could cost the clean-energy industry thousands of jobs, according to estimates.

Andy Karsner, assistant secretary in the office of energy efficiency and renewable energy at the DOE.

Still, demand for clean technologies remains strong, and adoption will continue. For example, the electricity transmission grid needs modernizing to provide more reliable energy, said Sklar.

“The fundamental drivers have never been better,” said Michael Liebreich, the CEO of New Energy Finance. “But the credit markets have been a problem, and (government) policy is stop-go, and not just in the U.S.”

Scott Sklar, a renewable energy policy expert and president of consulting firm The Stella Group, predicted that the potential loss of jobs from an expiring tax credit will force Congress to extend the policy for one year. He gives it a 50 percent chance of getting a two-year extension.

He estimates that between $50 billion and $100 billion annually is needed to commercialize energy technologies. Last year, there was $14.1 billion spent. To get more financiers to invest in clean energy means transitioning from an industry driven by tax credits to more traditional project finance, he argued.

But the business conditions for companies in the field have gotten harder, said Michael Eckhart, president of the American Council on Renewable Energy, which put on the conference.

Performance on Wall Street, as a whole, has been great as well. “In 2007, almost nothing went wrong,” said Liebreich.

More troubling is the “erratic” nature of federal renewable energy policy, which Karsner lambasted. He said many policymakers don’t understand how markets work, a situation that is slowing the commercialization of federally funded clean-energy research.

Interest in clean tech–anchored in high energy prices, global concerns over the environment, and countries’ desire for more energy security–has led to huge movements of capital into technology start-ups, renewable-energy projects and the like.

Forecasts for clean-technology adoption all point upward these days, buoyed by high double digits growth rates in sectors like wind and solar power over the past several years.

But a panel of financial experts here at the Renewable Energy Finance Forum on Thursday detailed several challenges to scaling clean technologies beyond their current niche status of about 2 percent of energy in the U.S.

An important tax credit that is set to expire at the end of this year. Attempts to renew the investment tax credit–which affects both residential renewable energy and large-scale projects–have been defeated several times.

“It’s not a business (model) that permanently scales to handle national and global objectives,” Karsner said.

Also required for consistent clean-energy investment is a price on carbon dioxide emissions in the form of climate change regulations, said Liebreich.