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December 2004 Archives
December 28, 2004
A look back at some of 2004, and more…
2004--Search engines: This was certainly the year of the search engines, the big G and all the other little ones being funded and the old ones --Yahoo, Microsoft, AOL -- finding search again. It will be interesting how the older media companies do in search. Google has a very good trusted brand -- it doesn’t matter that other search engines are just as good, maybe sometimes better. It’s the brand that counts. But, if Yahoo, AOL, Amazon, and to a lesser extent Microsoft, can convince people to switch, they have a lot of their own content, services, and products they can wrap around the search results. I’d put my money on Yahoo being able to recapture some of its former search glory.
Yahoo Search: Interesting to watch how older media companies do in search
2004--Chip industry: Chip sales and chip equipment sales have had a shorter than normal upturn — especially the chip equipment industry. The chip equipment companies are likely suffering from greater capital efficiency thanks to the rise of the chip foundries. These third-party build-to-order chip makers can make sure that their production lines are running at almost full capacity, resulting in much more efficient use of capital investments. Very important when a fab is approaching $3bn apiece. Moore’s Law however, seems to be definitely slowing, despite Intel's protests to the contrary, as chip makers search for new types of materials that can stop electrons from “leaking” away and dealing with other tricky nano-scale effects.
dk0945
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December 28, 2004 |
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2004---Enterprise software gets interesting for a bit...
2004--Enterprise Software Old School: Oracle’s battle for PeopleSoft was mildly entertaining. Er, that’s about it . ..
2004--Enterprise software New School: The Salesforce.com IPO was a key turning point, despite CEO Marc Benioff’s last-minute gaffs. I like Marc -- he is a larger-than-life character and Silicon Valley needs more like him -- it would give me plenty to write about.
Marc Benioff: The valley needs more larger-than-life characters
Also, let’s not forget RightNow Technologies' IPO, one of the hottest performing IPOs of this year, and kudos to RightNow for not taking an acquisition offer from a much larger rival this time last year. Too bad Diane Greene at VMware didn’t do the same, and accepted EMC’s $635m acquisition bid a year ago. At least she insisted on cash. Still, web services are definitely the future, and so is virtualization, lots of virtualization.
2004--Outsourcing/offshoring: Everybody’s doing it. Nobody wanted to talk about it though. It was a hot political topic so everyone kept their heads down.
dk0942
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December 28, 2004 |
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December 27, 2004
Google muzzles the press: a report from inside the Googleplex holiday media party
I'd like to tell you about the party; but it was all off the record! Damn. I picked up so many great stories that it hurts not to write about them.
I think Google made the party off the record because it was Cindy McCaffrey's birthday (head marketing honcho at the big G), and she didn't want us reporting the number of candles on her cake (16).
(Jochen, our photographer, had to surrender all his kit).
It's difficult to see, but there are two "ice" penguins cunningly disguised as waiters. It's obviously a thinly-disguised salute to Linux--and a poke in the eye to Microsoft, which has ambitions in search.
I got there fairly late, as my car was a little challenged by the journey (it's still in the car park). As I walked into the party, I was surprised how relaxed and mellow everyone was. I expected a circus of media people, cameras, the Silicon Valley Hack Pack chasing the boys and Eric around, while Wayne hoped nobody recognized him. It wasn't like that at all. It was very pleasant: there was some live jazz, maybe 50 people were milling around, and it felt very comfortable.
I looked around and I realized that these were pretty much the same people from the year-ago holiday party, which was fun and relaxed too. Sergey and Larry were floating around with no hacks chasing them. I didn't see Eric; but he always heads out a half hour earlier if he can. And pretty much the same Silicon Valley hack pack was there.
David Krane, head comms guy at the Big G came over and said, "I read you all the time, and I share it with my team." (I couldn't keep that one of the record!) That's what I love to hear, and I'll never get tired of hearing it. It is the best feedback we can get. It's not the number of hits that matters, its who's hitting on you that counts, as I remember telling stand-alone journalist Chris Nolan recently.
(She was haranguing me about how many hits I get on my site, and saying that "advertisers will want to know that." Thank you, Chris, you've obviously done your research; but that's the old business model.)
Anyway, I've worked with David and Raymond Nasr for a long time, and not just on Google stories. Raymond, for example, was at Novell with Eric Schmidt, and previously at Apple and Sun. We chatted about the time when Prince Philip, the Duke of Edinburgh (the queen's husband), paid a visit to Novell in San Jose, March, 2000. That was when Pam Mahoney was also working at Novell; these days she is at seed VC firm, Mohr Davidow Ventures. Novell, at the time, was a large contributor to the Duke's charities. I had recently interviewed Eric, and so when the Duke arrived, they rustled together a few Brits and Scots to make him feel at home.
That's how I got to have lunch with Prince Philip; and it wasn't at a table with 200 people, it was at a small round table with six people. Which was great because we could chat. I'd love to tell you what he said about Bill Gates. But I can't: off the record again. I hate to string you up like this.
Back to the Google party . . .I started thinking about what an insane year this has been for the Google team. It kicked off when my colleague at the Financial Times, Richard Waters, broke the story that Google would use an auction system to sell its IPO shares. It would spurn the investment bankers and offer its shares directly to the public. Bold stuff: the investment bankers weren't happy; but so what, kudos to Google!
Then it was non-stop Google stories for months. At the FT in SF, we had an emergency meeting where we pulled together ideas for more than 30 stories. Our editors in London were ravenous; and the best thing to do was to feed them. It's better to feed them stories, rather than allow them too much time to think up great story angles on their own. I wish I could tell you about some of the great story angles that were cooked up down the "U-bend" ---the mahogany row of FT HQ.
As journalists, we soon tired of writing Google stories; but David, Raymond and the rest of the comms team (not to mention the boys and Eric), were sucked into a global media whirlwind and it's still pretty windy.
So, it was great to kick back, tell some stories, and catch up. I just wish it wasn't all off the record! There is no better way to torture a journalist than to tell him some great stories, and then say it is all off the record! It's pure torture; I should report them to somebody at the UN.
I think this one item should be okay. Especially since it is a little cryptic. Tell me if you can work this one out:
A Google/Yahoo joint venture is due on March 20 and it will bring great joy to the Kranes.
cd1326
December 27, 2004 |
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Guest Blog/Letter to the Editor: Good Karma and Catch-22s in Tech PR...
Mark Coker, President of Dovetail Public Relations, tells SiliconValleyWatcher.com readers...
...I'd like to share a personal story about my agency that describes a dilemma I think many good tech PR agencies face...
Today, Cisco announced that they're acquiring our security client, Protego Networks. Last Thursday, Microsoft announced that they're acquiring our anti-spyware client, Giant Company Software.We signed on Giant in September. They chose us because they liked the work we did for our long-time client PestPatrol, the anti-spyware pioneer, which was acquired in August by Computer Associates. Giant correctly assumed that CA would dump PestPatrol's agency, so they could scoop up our agency's expertise and contacts to raise visibility for their own firm in what has become a very crowded market.
So all this has me thinking about a catch-22 curse that many tech agencies face: As PR practioners, our work directly (and often significantly) impacts a client's visibility, awareness, perceptions and revenues, thereby often increasing the value of their business.
Unfortunately, we sometimes become the captains of our own demise when we achieve our objectives, because we can end up accelerating or enabling liquidity events for our clients. And if you're on the wrong end of the acquisition, you lose the client.It's certainly bittersweet for us. We love to make great things happen for our clients. But we also want to keep them long term. My personal view is that this business isn't really about the companies we represent, it's about people we represent. If we serve our people well, the good karma will return with more new business down the line as these people circulate back into the tech ecosystem.
postscript:Although we've had two security clients taken out in the last week,
we're on track to replace the business fairly quickly. We're fielding three new business inquiries, two of which are security companies and all of which derive from previous clients going back as far as 10 years ago. Patience pays off in the karma PR game.
Links:
tf1221
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December 27, 2004 |
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December 20, 2004
2004--Seagate and hard drive sector hit hard times again—is this the reward for sector consolidation?
The Seagate IPO did well but Seagate hit hard times this year, along with the rest of the hard drive industry -— again. What is the point of consolidating an industry from more than 40 companies to about 5 and not being able to enjoy the promised fruits of consolidation? Is this a warning to other consolidating sectors? Wall Street calls it a profitless prosperity. Well, didn’t Wall Street drive the consolidation trend? Where is the reward? Maybe somebody can tell the drive makers.
2004--Microsoft gives back money: Microsoft announces large shareholder dividend, gives billions back to investors. To me this says: We don’t know what to do with this money and we do not have a good track record of investing this money in our business or other businesses. You, our investors, can probably do better than we can.
Bill Gates: Finally MS gives billions back to investors
dk0939
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December 20, 2004 |
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2004--The Geek revolution is on the march--the end of (quite a bit of) commercial software (...eventually)
2004--Linux and the Open Source Debate Finishes: It’s over. Linux and open source software won.
Open source software is a lot more than just Linux -- there is an amazing amount of free or almost free server-side software and not a huge talent pool. Do not waste your time on any more debates on this subject -- it’s over. If you are an application developer keep scrambling up the stack because open source will kill you or good-enough will.
Linux: The penguin is just everywhere
What will occupy the idle cycles of millions of Indian, Chinese, Russian, Polish, Phillipine, and other programmers coming onto the global market? What will they do with their spare time? Not all of them, but a lot of them will put energy and brains into open source software projects, which means there is a lot more coming. Software will be free because it can be free -- there is a business model for free software.
You can do a heck of a lot with free server-side software such as MySQL, PHP, Perl and a boatload of open source application scripts. Yes, it does take a little bit of time to string it all together, but then you are done for a good while. Virtually free IT -- stick it onto the most efficient business processes you can find. You end up with a highly-efficient, highly-automated, low-cost business process(es) module. This is one part of the emerging New Rules Enterprise--more on that next year.
2004--Blogs, blogging and bloggers: There was a lot of it and there will be a lot more next year. East of Reno it's still brand new. I've always maintained that there is a cultural lag, a several month gap between the cultural waves of ideas that ripple out of Silicon Valley. The Foremski universal cultural konstant states that new ideas on innovation take about 6 months to travel 3,000 miles, or about to the East coast of the US :-) Europe would be about a year behind.
So, that means a good 18 months or more of interest in blogging, and blogging about blogging. Which is pretty good if you are a blogger.
Silicon Valley is back: It’s true. You’ll see more signs of it next year.
What did you see in 2004?
dk0935
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December 20, 2004 |
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Trapped inside a crumbling business model? Exposing print advertisers to online can be disastrous
I recently had a chat with a buddy of mine who publishes one of the best business magazines around, and it’s been doing reasonably well despite the continuing downturn in advertising.
He told me that his publication might close down its web site. Why, I asked? We lose money from advertisers pulling their ads from the magazine, he said. When their online ads get very few clicks, they then decide that the print advertising is also not getting through to the right people. So they pull all their print and online ads.
About $1,000 in poorly performing online advertising can result in pulling out $20,000 of print advertising.
That’s why you will see more and more print publishers doing less and less online—they can’t afford to expose themselves to the online advertising model. That’s why many print publishers are trapped inside a crumbling business model. Print advertising won’t go away, but it won’t stay the same. Big changes are ahead and we will cover them here.
dk0933
December 20, 2004 |
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December 16, 2004
Silicon Valley PR firm Voce is building a business around its blogging expertise
Voce Communications is a PR company that likes to go against the grain--a quality that never fails to catch my attention. When its competitors were fawning over dotcom clients in 1999 (many accepting payment in shares), Voce was snapping up big enterprise clients. These were companies that already had a business model, rather than dotcoms in search of a business model.
Now Voce is moving against the grain again. Local PR companies such as Outcast, Text 100, Bite PR and Horn Group are intently focused on winning large enterprise clients. Voce revealed to SiliconValleyWatcher.com that it is working with the biggest dotcom of them all: Yahoo, the world's largest Internet media company. And what is it doing for Yahoo? Helping set up its blogs, helping it publish internally-generated content and involve thousands of readers.
My colleague Dida Kutz and I stopped into Voce on a recent Friday lunchtime (10-Dec). It's something I like to do, visit with local PR agencies, chat about what we're doing, what they are working on, the mood of the industry, etc. Voce is also the home of Mike Manuel of Media Guerrilla, one of our favorite PR bloggers.
We met the three founders of Voce, Richard Cline, Dave Black, and Matthew Podboy (cool name) and many of the team, plus the man himself, Media Guerrilla Mike Manuel. (This is a great example of the power of blogging; I would never have noticed Mike if he weren't writing his blog--- this shows that you have to publish to your communities.)
We had no idea that Voce would reveal its relationship with Yahoo--it had not made it known before. We met Nancy Evars, who is working at Yahoo running the Yahoo Search Blog. And we met one of the superstars of the blogosphere, Yahoo engineer Jeremy Zawodny, who writes a hugely popular blog from his vantage point within the engineering group at Yahoo Search.
We talked about blogs, and what blogging means, etc. And it wasn't long before I realized that we were all talking about the same thing: how to produce compelling, high-quality content; how to be editors and reporters. We were all, essentially, talking about how to produce quality journalism. Because you can't fool the readers.
At Yahoo, Nancy was saying that the Search Blog has had a tremendous response from readers; but also, has been extremely well received internally by senior management. Nancy also said that Yahoo has collected lists of the most influential blogs, and that it pays particular attention to what those bloggers are discussing.
When Jeremy spoke about his blogging, it sounded like good old-fashioned journalism to me. It was about how to tell a story, and tell it honestly. In journalism it's fine to have an opinion, which lends itself well to blogging; but the content also needs authenticity. And you can't fake authenticity for long; your readers will know when it's not there, or not coming back. "Do you always keep it real?" Jeremy asked. (Did I tell you that Jeremy is a natural journalist?) Let me put it this way: if you can't keep it real, don't say it (...or use a pseudonym!).
Richard Cline spoke about how Real Networks hired Voce to engage in online discussion groups on the subject of Apple's refusal to open up the iPod platform to competing digital music vendors. This was a successful project because the media spotted the debates and took up the Real Networks angle on the story.
Matthew PodBoy and Dave Black spoke about how they managed to persuade their client, JotSpot (very cool application BTW---more on that later), to use the power of the blogosphere for their recent product launch. Joe Kraus, the CEO of JotSpot, initially resisted, but finally gave in. What they got from Kraus's blog was a far higher response from the target market---software developers and corporate IT experts---than through any media coverage. This is a key point here because JotSpot received a lot of media coverage when it announced its wiki-like enterprise application in the summer, largely because Joe Kraus was the first president of the early 1990s search firm Excite.
(I remember meeting with Joe in about 1993, Excite was one of the leading contenders going after Yahoo's success. Excite promised a search engine that had semantic capabilities: it could distinguish the search term "bond" from "James Bond," "chemical bond," or any other bond out there. That never came about...and it merged into Excite@home, which just seemed to sit there, next to a very bright, electronic animated billboard on 101... .until it went away and its former office became a "see-thru" building, one of many.)
Back to Voce... Matthew Podboy said he is working on putting together a committee to create a collection of best practices around blogging for PR professionals.
There's a lot more to say about Voce and the work they are doing. And it's very similar to what we are trying to do at SiliconValleyWatcher.com: figure out how to use the blogging format and the blogging software to publisher compelling content and, very importantly, maintain ---at all costs--- that trusted relationship with readers.
(More on this topic in numerous future articles...!)
By the way, in real-life Mike Manuel does not look gritty or grainy like his photo. He is clean-cut and mild-mannered, although he says he has come under pressure to replace the photo. Dida said he looked like a heroin addict; a colleague agreed; and his wife wants him to change that photo, too. I think he just looks a bit hung-over. I sometimes feel grainy in the morning too.
Links:
Dida's companion article on the Yahoo's ability to turn its geeks into marketing mavens.
cd1126
Give her Coco, by Chanel (she'll thank you.)
December 16, 2004 |
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Yahoo Search Blog: Blogs as a Feedback Tool
Tom and I met with the founders of Voce Communications last Friday, 10 Dec., for an informal lunch meet and greet (see Tom's companion piece). Among the guests were Nancy Evars and Jeremy Zawodny of Yahoo, who worked together to put up the Yahoo Search Blog.
This pairing in itself was interesting to me, as engineers (Jeremy) and marketing types (Nancy) have traditionally been allergic to one another. (I've seen this many times from my former vantage point inside many startups.) So I found it fascinating they have managed to work together to create a succesful blog.
Nancy said the Yahoo Search blog was created as a means of creating a 2-way dialogue with customers regarding internet search.
She stressed that it was not set up to be a PR tool, but as a resource that "influencers" (influential bloggers) would read and contribute to, thus providing valuable feedback to Yahoo from those who matter most. (Which brings up the point that metrics such as hits and unique visitors are not in themselves useful -- it's WHO is hitting on you.)
I asked her whether the blog could become a way of replacing traditional marketing and research. She replied that no, they would not take the place the place of focus groups and other traditional means of doing market research, but instead the blog is viewed as a tool for enhancing marketing efforts. Other Yahoo departments considering new product launches are now consulting with her on how to use blogs to beta test and launch upcoming products.
This is one of the greatest strength of blogs: they provide companies a relatively low cost means of conducting market research and obtaining user information from those who are actually using the technology in question. All companies need to create a genuine dialogue between themselves and their customers, and blogs provide an elegant low cost solution to the age old problem of figuring out what the customer wants.
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cd1007
December 16, 2004 |
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If you are not publishing to your community, you are not known to your community--send me a guest blog!
For at least a year, I’ve harbored ambitions of becoming a micro-media mogul. So much so, that I even bought the URL: MicroMediaMogul.com. This would give me the option of at some point, using Tom@MicroMediaMogul.com as my email address. I think it would look good on a business card. (I also have ThinkTankThinker.com, which looks great on a business card.)
However, I am not yet a micro-media mogul. I need a lot more content. And so while I try to recruit others to join me in this innovative venture about the business of innovation, in the innovation capital of the world, I have devised a process where I can nearly double my content without increasing my workload by much.
Which is why you will see us repackaging some of our content in various ways, and continuing core themes in future entries, columns, and e-books.
Also, you will see a lot of guest bloggers. Think of these as guest columnists from people you probably already know, and others such as you and your colleagues.
Would you like to blog but can’t find the time to do it?
Those RSS news readers are a vicious way to root out the weedy bloggers. If there haven’t been any new entries on your blog for a while, it’s likely to get deleted from the news reader. So then you lose your audience. Which is why you should send a guest blog to us. And then you can have a life too, because blogging is extremely time consuming.
Your guest blog doesn’t have to be long, you can keep it under 800 words, or cut it into smaller chunks. The content should be meaty, original and fluid. Shoot from the hip style, one-take journalism! Or use your own compelling style in your voice. This way, you can get your name out into your community. Because these days, if you are not publishing to your community, you are not known by your community.
For software engineers, this has been the case for a couple of years now; you can’t get hired if you are not blogging. And your page rank had better be good too. Jeremy Zawodny, the Yahoo engineer that runs one of the top tech blogs, got his job at Yahoo largely because of his blogging. It is the best and most honest self-promotional tool out there--bar none.
That’s why you should consider becoming a guest blogger for Silicon Valley Watcher. You can directly address your community, and we will feature you on our “watch” sections focused on tech, PR, media, VCs, Angel and many other Silicon Valley communities.
Also, you’ll be reaching an international audience. The Silicon Valley name is a huge global brand that has acquired a mythology that rivals that of Hollywood. The world is very interested in what goes on here, and it wants to listen in on what you and your colleagues are thinking, saying, doing.
So send something to us. Think of it as “letter to the editor” or a column or, better yet, an e-mail. Over at Voce Communications the other day we were chatting about how some of our best writing is often in our emails. Those quick, off-the-cuff, one-take emails are probably your best blogs! Send me an email on any topic. You can also send in news stories, or reports from a conference, or anything you think that will interest your community—you will know best.
In return, we’ll look through your copy to check for clarity and typos. And we might or might not suggest a cut or an edit—but only to make you look even better!
So send something in, and keep sending it in. Then, with your help, I will be well on my way to becoming a micro-media mogul--and I can print it on my business card.
Email:GuestBlog at SiliconValleyWatcher
dk0556
December 16, 2004 |
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Great, all that work for nothing much---SOX compliance will do little to shield shareholders from losses says Booz Allen study
Analysis of the performance of 1,200 $1bn market cap companies over a
five-year period has found that Sarbanes-Oxley compliance systems will not shield companies from a seven-times higher risk of losses from normal competitive blunders.
Highlights:
More shareholder value has been wiped out in the past five years as a result of strategic mismanagement and poor execution than was lost in all of the recent compliance scandals.
The 360 companies that trailed the S&P 500 between 1999 and 2003 -- destroyed almost seven times more value through strategic missteps than by compliance failures.
"Fully 87 percent of value destruction was attributable to such failures as management ineffectiveness in reacting to competitive pressures or forecasting customer demand, or operational blunders, such as cost overruns and M&A integration problems."
The full article: It's Time to Take Your SOX Off” by Paul Kocourek, Jim Newfrock, and Reggie Van Lee
cd1930
December 16, 2004 |
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How The Register Scooped New York Times on IBM-Lenovo sale
From Peter Kirwan's excellent UK-based Fullrunner newsletter:
IBM-LENOVO: HOW THE REGISTER TRUMPED THE NEW YORK TIMES:Rival tech hacks have reason to be miffed at the way the New York Times covered itself in glory after last week's apparent scoop on Lenovo's interest in buying IBM's PC division. The Times published its story, written by Andrew Ross Sorkin and Steve Lohr, on Friday 3 December -- and it rapidly went around the world. But, as the Register's Tony Smith cannily points out, the Times was actually relatively late to the party. Back on 16th November, Smith noted reports of the IBM-Lenovo deal in the Chinese-language newspapers Commercial Timesand Economic Daily News. The Register hack deserves serious kudos for picking up this story, which seems to have eluded just about every other western tech hack on the planet. Even more kudos, of course, to the unknown Chinese journalists who broke the story in the first place. As Smith's piece makes clear, their account was remarkably detailed -- far more so, in fact, than the Times's sketchy outline. (New York Times | Registration required) http://www.nytimes.com/2004/12/03/technology/03ibm.html (The Register | Free access) http://www.theregister.co.uk/2004/11/16/ibm_lenovo_jv/
>>> ABOUT THE FULLRUNNER. . .
You have been reading from the email edition of The Fullrunner, a weekly subscription-based news source published by Fullrun for tech marketing professionals, PRs and media owners.
The Fullrunner is written and edited by Peter Kirwan.
A parallel blog edition is continuously updated during the week at
Fullrun's website: www.fullrun.com (username and password required).
Peter Kirwan
Co-Founder, Full Run Ltd
|| Tools For Tech Marcoms Pros || www.fullrun.com
Telephone: +44 (0)7803 975234
Email: peter.kirwanATfullrun.com
Annual subscriptions to Fullrun range in price from £360 to £2,300,
depending on which parts of our service you'd like to use, and the nature
and size of your organization. If you would like to apply for a FREE
30-day trial subscription to Fullrun, follow the instructions at
www.fullrun.com
cd1100
December 16, 2004 |
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December 15, 2004
Oracle + Peoplesoft = ?
Larry Ellison got his way - and what self-respecting billionaire doesn't? - but what are the prospects for Oracle's acquisition of PeopleSoft? Not good, says Silicon Valley's leading newspaper.
Oracle-CEO and founder Larry Ellison: Bad perspectives?
San Francisco Chronicle writer Benjamin Pimental telegraphs the sad news in the first sentence of his article on the front page of today's business section: "What do you get when you combine a company run by an Armani-clad executive known for take-no-prisoners tactics with a firm led by a fatherly founder who hands out bagels and lets his workers wear flannel to work?"
Merging employees from the two incompatible cultures is considered the prime challenge:
"They are two different cultures," said Richard Stiller, a Cupertino human resources consultant who has been involved in more than 20 mergers.
Referring to Oracle, he said, "They're the barbarians. It's take no prisoners. A guy like Ellison never lets them relax."On the other hand, he said, PeopleSoft is much like the old Hewlett- Packard Co., whose founders popularized the famed HP Way, which put heavy emphasis on the welfare of employees.
Kinikin said, "I think a lot of those people who wanted to manage by walking around and having bagels every Friday are probably going to leave -- because that's not the Oracle way. The Oracle way is about survival of the fittest."
Economic forces may keep together a workforce that culture might otherwise separate, however. Given the current tight Silicon Valley job market, chances are good that PeopleSoft employees will learn to grin and bear it, assuming that they don't get the ax in the inevitable post-merger layoffs.
Links:
When firms merge, a clash of cultures: Oracle, PeopleSoft managing styles couldn't be more different, by Benjamin Pimentel, San Francisco Chronicle, 15 December 2004
What's the story? Doug Millison also edits OnlineJournalist.org, "on a need-to-know basis"
cd1107
December 15, 2004 |
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Nobel Prize winner Dr Richard Smalley tells SF chip conference of the urgent need for action on energy issues
Dr Richard Smalley, Nobel prize-winner and a top US nanotechnologist, made an impassioned call on Tuesday to a gathering of more than 2,000 of the world’s top chip experts to join in a mission to eradicate the world’s ten largest problems.
Mr Smalley was the honored speaker at a lunchtime gathering of the International Electron Devices Meeting in San Francisco. The four-day conference attracts the world’s leading technologists.
The Nobel Prize winner lost no time in slamming President Bush’s poor support for scientific research and education. He said that the situation would likely not improve over the next four years. However, he said that President Bush had an opportunity to turn things around and help solve critical global problems.
“The president has four more years to accomplish a mission and set a grand challenge, a problem difficult enough and challenging enough to inspire new generations of scientists and engineers,” said Mr Smalley.
He said that the most critical problem facing the world today is energy and finding new sources to support a population of 10 billion by 2050. He calculates that our present population of 6.5bn consumes about 14.5 Terawatts of energy, which is equivalent to 220m barrels of oil per day. By 2050 this could rise to as much as 50 Terawatts yet “the world is likely to pass through its maximum point of oil production in a matter of weeks,” he said.
New fossil fuel sources and current energy technologies are inadequate to meet the looming global challenge. But this can become the challenge for the world’s top scientists. “If you solve the energy question you solve the other nine top global problems such as war, water, food, and environmental change.”
A vast array of technologies would need to be invented to provide future populations with sufficient energy to support a “reasonable lifestyle.” However, this cannot be accomplished unless the energy is affordable to all and doesn’t damage the environment.
Mr Smalley won the Nobel Prize in Chemistry in 1996 for his work on buckyballs and carbon nanotubes. These are exotic nanotechnology materials that could lead to advanced types of chips and a multitude of other breakthroughs. He is currently working on ways to mass-produce carbon nanotubes, which could also play a part in the development of future energy related technologies.
In a press conference after the speech, Mr Smalley called upon veteran business leaders such as Intel’s chairman Andy Grove and CEO Craig Barrett to take up the cause and meet with President Bush. “Politicians like to talk with business leaders; I’m sure the president would listen to them.”
However, Mr Grove and Mr Barrett might find it wise not to mention Intel’s latest PC microprocessor, which consumes an energy hogging 140-watts.
dk0941
December 15, 2004 |
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Give Moore's Law a rest and let the software engineers carry the performance load for a while....
My good buddy Mark Osborne, editor of Semiconductor Fabtech has been in town this week and we’ve been at the International Electron Devices Meeting (IEDM) conference, which boasted record attendance of more than 2,000 of the world’s top chip experts.
Mark can tell fascinating stories about 157-nanometer lithography and how wet immersion litho is allowing chipmakers to move ahead on Moore’s Law. And, when I really need to get some sleep, I ask him for his opinion on low-k and hi-k dielectrics and can the industry make it to the 65 nm industry road map node, let alone 45 nanometer. I usually sleep like a log!
I'm being facetiuous here because I am as geeky as Mark, and I take great pleasure in such discussions. And, as a chemistry major, it’s familiar territory to some degree. The chip industry is all about chemistry, and the big chipmakers such as Intel were founded by chemistry graduates. And chemistry, or rather, the creation of new materials through precise chemical processes is more important now than ever before.
Producing the next generations of chips requires so many new materials, and so many new ways of working with those materials, that many chipmakers are falling behind their schedules. Or rather, they are falling behind on Moore’s Law.
Is that such a bad thing? I say let’s take a breather, catch up the materials science a bit, get more out of the current capital equipment investments, and, very importantly let the software developers carry the load for a bit.
The hardware developers are breaking their backs, scouring the periodic table for new chemical combinations (we are running out of elements!) so that Moore’s law can drive performance improvements of what is essentially sloppy software design!
Let me prove this to you. The new crop of video console games came out for the Xbox. This included games like Halo 2, the top selling Xbox game. I’ve played it some with my son, Matt. The game is better than the original, which came out nearly five years ago. The graphics are tremendously better, the characters are more life-like. Yet, the hardware platform is the same.
The hardware platform hasn’t seen anything of Moore’s Law in more than five years yet the game experience is incredibly improved. It’s the software that got better.
dk0937
December 15, 2004 |
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December 14, 2004
Symantec's bid for Veritas risks damaging distraction to both at a critical time
The New York Times announced a scoop late Monday evening, claiming Symantec will soon announce an agreement to acquire Veritas Software in a deal valued at more than $13bn.
I have to say that this one does not make any sense to me.
These companies are two of Silicon Valley's up and comers. IBM veteran John Thompson is a rock solid CEO at Symantec. He's built Symantec into a computer security powerhouse through disciplined focus on corporate and consumer markets, a steady diet of half-a-dozen small acquisitions per year, and excellent execution quarter to quarter. When I met with Mr Thompson last year (his office is filled with Tiger Woods memorabilia), he dismissed any notion of acquiring a large public company and he was confident that Symantec was too large to become an acquisition target for anybody else.
Symantec anti-virus software: Veritas take-over soon?
Veritas CEO Gary Bloom is also one of Silicon Valley's top managers. The former number two at Oracle, he took over data storage software leader Veritas during boom times only to run headlong into the lengthy and continuing IT spending drought. He's had to remake the company and stay ahead of a voracious pack of competitors including IBM, Sun, and of course, EMC.
The deal doesn't make sense because it will distract the two companies during a critical time in the industry, and a critical time for IT users.
Symantec is the leader in computer security software; but the battle isn't yet half won, and it is way behind in fighting a far more insidious threat: spyware, sometimes known as malware or adware.
Spyware is far more of a threat to computer systems than computer viruses. While the media was focusing its attentions on the rapid spread of fairly harmless computer viruses --spyware authors were able to create incredibly complex and insidious software programs that hide themselves deep within the confines of a PC and then phone home. They gather information and send it back out to someone.
Some of this spyware is in a murky legal zone, connected with accepted technologies such as cookies for tracking online users and advertising. And some of this spyware is so complex that computer experts say they don't know what it does.
Yes, there are many spyware cleanup applications but none of them can get ALL of the spyware. Plus, you have to know about the spyware in order to find and root it out of a PC. Computer viruses make themselves known because you can see the spikes from data traffic and many other tell-tale signs. Spyware doesn't send out such easy to find signals.
Spyware is already a serious problem and Symantec should be dealing with that issue, and may other computer security and spam issues rather than acquiring Veritas. As far as I know, Veritas has nothing to offer in that department. Veritas, with its storage systems software, shunts data around the enterprise, backing up data centers and storing data. There's lots of data and much more coming, as we've all heard for years. But the challenge facing Veritas is the battle for assembling the components to make an "operating system" for a very large IT data center. This would manage the shunting of data around the enterprise, to storage systems, to databases, etc. It would also shunt computing loads across systems, manage thermal cooling systems, and be able to create a single, virtual computer system from many thousands of servers, or a million virtual servers running 10m applications. It could shift resources to manage changing IT loads, install applications on the fly, and a thousand other things. Complex stuff, but Veritas is familiar with this type of complex stuff.
That's the long-term battle; but currently the battle lines for Veritas are much closer to home. It is in the form of EMC Software, the Silicon Valley based spearhead of a much revitalized EMC. I didn't think a hardware company could do it; but EMC has masterfully assembled an incredibly potent $1.5bn plus revenue software group, right under the very nose of Veritas.
It wasn't that long ago that EMC was trying to regain momentum and recover the generous margins it once enjoyed on storage hardware. This meant a big reorganization and focus on building up its software revenues. This was done mostly through acquisitions, some very savvy acquisitions.
Documentum for $1.7bn was the first of these strategic moves. I remember a dinner interview with Gary Bloom last year, where we were scratching our heads over where EMC was going with that acquisition. Gary was quite cheerful, convinced EMC would soon be bogged down in the quagmire of enterprise applications markets. It would be a big distraction for EMC, he said.
But it wasn't a distraction; and EMC's next acquisition, $1.3bn for Legato Systems (a smaller version of Veritas), was a logical move. The next acquisition was a brilliant move: VMware for $635m. VMware, run by Diane Greene, is a very impressive company with a very critical and important software component for the upcoming data center OS battles. It has the ability to create virtual application servers, which dramatically improves the efficiency of corporate IT systems. (VMware is not part of EMC Software group ---at least not yet.)
I bet Diane Greene is kicking herself that she didn't wait and push for an IPO. VMware sold out in the very same month that RightNow Technologies considered scrapping its IPO in order to accept a generous all stock offer from Siebel (see Silicon Valley Watcher story, Was Siebel the mystery bidder for RightNow Technologies, one of the hottest IPOs of 2004?
The VMware IPO would have done as well as the Salesforce or RightNow Technologies IPOs, which have returned large fortunes to their staff and investors. At least VMware took cash money, not stock.
Interestingly, VMware was self-funded and under no pressure from VCs for a liquidity event. I remember Diane telling me in the summer of 2003: "The main reason we would seek an IPO is that it helps to provide us with validity amongst our corporate customers by becoming a public company." Being acquired by a large IT vendor provides that customer validity too ---but not the rapid growth in share value that an IPO provides.
Getting back to Symantec and Veritas, these two companies risk falling behind in their core markets, or at the very least, leaving customers high and dry while they figure out the acquisition.
cd1455
December 14, 2004 |
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December 13, 2004
Polish software engineers show-off the legacy of pre-war "Enigma" code-breakers
Teams of Polish programmers have been winning large competitions and showing off the prowess of Poland's top universities, reports Clay Bullwinkel, who works with Silicon Valley companies setting up hardware design partnerships in Poland.
Clay tells Silicon Valley Watcher:
For the third time in a row Tomasz Czajka of the University of Warsaw won the annual worldwide Top Coder software programming contest sponsored by Microsoft, Intel, Yahoo and Nvidia.In the university competition, Czajka's University of Warsaw was 3rd behind MIT and Stanford. In the country competition, Poland finished second to the U.S.
In 2003 University of Warsaw won the worldwide university team title in the ACM-ICPC contest held at Baylor University: The 2004 World Champions I was told that the University of Warsaw had several different teams, all of the same ability, but chose to send only one. Most of the major universities (including academies and polytechnics) in Poland do not even enter these contests. The U.S., Russia and China all had a dozen or more entries.
Algorithmic programming and problem solving have a long tradition in Polish universities. In 1939 three Polish algorithm experts did what teams from France and England could not. They solved the current version of the Nazi coding machine "Enigma" without which the huge deciphering effort at Bletchley Park outside of London would have not have been possible. Many historians have said that cracking the Enigma code was crucial to Allied victory.
The following page has the ranking charts in the right hand margin. The article on this page is awkwardly written --- perhaps not a native English speaker. TopCoder
(Send a note to Silicon Valley Watcher if you'd like to contact Clay)
cd1527
December 13, 2004 |
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Trend-spotting: citizen advertisers
Citizen journalists, meet your logical corollaries: citizen advertisers.
Apple iPod photo: Homemade ad object
If you don't want to blog the news, you can blog the ads:
School teacher George Masters has the marketing world abuzz with a homemade ad for Apple Computer's iPod that is rapidly "going viral." To some experts, Masters' ad heralds the future of advertising. Homemade ads will play a big part in marketing, just like blogging is shaking up the news. Masters' 60-second animated ad features flying iPods, pulsing hearts and swirling '70s psychedelia. It's set to the beat of "Tiny Machine" by '80s pop band the Darling Buds.
cd1011
Links:
Home-Brew IPod Ad Opens Eyes by Leander Kahney, Wired News, 13 December 2004 (page includes link to Masters' ad)
What's the story? Doug Millison also edits OnlineJournalist.org, "on a need-to-know basis"
December 13, 2004 |
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New wave mags assume revived tech biz boom
Another sign that a new tech business boom is underway: top-tier press coverage of venerable magazines re-tooling to catch the new wave.
MIT Technology Review will become bigger (moving from 56 to 72 pages per month, and from 10 to 12 issues a year) and "more serious," reports the New York Times in today's puff piece. Designer Roger Black is reworking the magazine's look-and-feel.
The Times notes that the magazine will face renewed competition from another '90s tech boom holdover, Red Herring, and a new challenger, Tech Confidential, from the publishers of The Daily Deal.
cd1004
Links:
M.I.T. Technology Review Adopts More Serious Tone by Victoria Shannon, New York Times, 13 December 2004
What's the story? Doug Millison also edits OnlineJournalist.org, "on a need-to-know basis"
December 13, 2004 |
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Priming the pump... some thoughts on Dan Gillmor leaving the San Jose Merc
In an exclusive interview with OhmyNews founders, Dan Gillmor says he is starting a venture to publish an online citizens' newspaper along the lines of the South Korean citizens newspaper OhmyNews.
Dan Gillmor: Leaving the San Jose Mercury News
And it seems that Dan might be leaving the tech beat too. In the interview, he hasn't said much about tech, or continuing to cover tech.
I'm not sure if that's a good idea. If I can remember the do's and don'ts of Personal Brand Building for Journalists 101, you use your employers brand to build a personal brand associated with a specific expertise / viewpoint / industry. Then you have a better chance of monetizing it later.
I would advise Dan not to give up coverage of the tech beat unless he has exemplary skills as an editor because a citizens newspaper means working with thousands of very enthusiastic amateur journalists. And that means lots, and lots of editing, coaching, and teaching. There is no such thing as "free" content.
Also, why is Dan playing with us? Consider the following:
December 9, 3.59 pm: Dan's decision to launch an online venture is announced first by fellow Merc Silicon Beat bloggers. (This is classic two-bites at the cherry launch strategy: give a pre-brief and exclusive to one publication in advance of the launch.)
December 9 at 7.41pm: Dan announces his departure on his own blog and says the following:
"My colleagues Matt Marshall and Mike Bazeley beat me (and everyone else) to the punch on posting about my departure -- here's their own blog entry. Seems in keeping with the blog world that they got it first."
My good buddy Om Malik on GigaOm points out that Mr. Gillmor is not the first top-tier journalist to leave his job for the blogging world. Some chap called Tom Foremski apparently did it first.
What's next for Dan Gillmor? The OhmyNews interview.
More priming of the pump by Dan at pjnet.org:
July 25, 2004 Gillmor: An OhMyNews Could Have USA Success
June 25, 2004: Media Guerilla (aka Mike Manuel) from Voce Communications runs the results of an informal poll asking which leading tech journalists would leave for the blogging world first:
"Dan received about 60% of the votes, followed by brother Steve Gillmor at eWeek with 22%. Surprisingly, Tom Foremski (despite recent speculation) only garnered 11% of the votes. Neither Jon Udell at InfoWorld or Hiawatha Bray at the Boston Globe received any votes."
cd1958
December 13, 2004 |
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Will Yahoo's top engineers reveal secret technology projects?
I hit it big on Friday: I got a very decent-sized mention on Jeremy Zawodny’s blog, in an entry titled Tom Foremski on Google and Yahoo Culture.
Jeremy, an engineer at Yahoo, is a big, big name in the blogosphere and is a natural journalist. He has been one of the leading advocates within Yahoo for corporate blogging, and for Yahoo's adoption of blogging related technologies such as RSS. He also works in the Yahoo Search division, which makes him even more interesting.
On Friday, I had written a piece about Google, saying it was run from top to bottom by engineers---there is not a single media executive in sight. Yet isn't Google a media company? Yahoo is run by seasoned media executives throughout its ranks.
This brought out some interesting information about Yahoo's culture from Jeremy. He remembers that he and others at Yahoo had gone through a long period of internal debate on whether they worked for a tech company or a media company. Although Yahoo is clearly a media company, Jeremy says it is also a technology company.
"In simple terms, you don't get to be the biggest Internet Media Company without also being one hell of a Technology Company.
So in my mind, Yahoo is both. No, the engineers are not front and center, but that doesn't mean they aren't dreaming up and building some really cool stuff. I only wish I could talk about some of the projects we've got in the works."
He ends with an invitation:
"Tom, if you think the engineers have been kicked aside, you need to come visit Yahoo. I'd be glad to introduce you to some of the smartest engineers in this industry."
Jeremy, I'll take you up on on that!
By the way, this reminds me of the first time I met Jerry Yang. Yahoo had just received their first $1m in VC funding. We were in a small run-down office space, with old plastic chairs and tables. The Yahoo server was in the other room. It was a great interview, and I've always liked Mr Yang's straightforward manner and his humble nature.
cd1939
December 13, 2004 |
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December 12, 2004
Help find a missing friend - Daniel Clune
It's not often one has to request this kind of help ...
Soon after Meetup.com launched, members of Bookcrossing.com, a fledgling web community where book lovers "set books free," started having Meetups in their towns to trade books and chat. And since, a wonderful community has flourished on --and off-- line. (Over 4,500 Bookcrossing Meetups to date!)
It was a real shocker to learn a few weeks ago that Daniel Clune, the head programmer at Bookcrossing.com, disappeared on November 6th in Sandpoint, Idaho.
Daniel Clune: Missing since November 6, 2004.
Please consider this plea from a Bookcrosser:
"His family is devastated and the community dumbfounded. A young, healthy man, Daniel, 29, is known for his reliability... a stand up guy. Not the sort to take off on a flight of fancy. No one believes that his disappearance is voluntary. Something happened to Daniel Clune, and his family and friends need to know just what that something is. Please consider featuring the story of Daniel's disappearance. The key to finding him is out there somewhere, but has not yet been found. Exposure is badly needed."
Some links:
http://finddanny.com/
http://www.bookcrossing.com/forum/5/1441038/22/subj_PLEASE-HELP
http://bookcrossing.meetup.com/
Maybe you can help spread the word?
Thank you.
-Myles (and the Meetup team)
myles weissleder
vp, communications
http://www.meetup.com
415-332-3205
http://press.meetup.com
cd1930
December 12, 2004 |
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December 10, 2004
Stuff you didn't know about Google---a report from the 2003 Googleplex Xmas party
The Google media Christmas party is coming up next Thursday, which should be interesting. I'm not expecting much in terms of Google news items now that it's a public company, but there should be plenty of gossip to pick up from the assembled hacks [Brit. slang for journalists].
At the Xmas party last year, I met Wayne Rosing, VP of Engineering. Mr Rosing is the key to understanding Google: he is the one that built up the bulk of the Google engineering culture. He is a veteran of Apple Computer and Sun Microsystems, and was brought out of semi-retirement by Eric Schmidt, himself a top dog engineer, a former long-time CTO at Sun Microsystems.
Googleplex in Mountain View: Xmas with Larry, Sergey and Wayne Rosing is coming up
I arrived about half-way into the Xmas party. I was in the heart of the Googleplex, which is a familiar place because it was part of a campus built by Silicon Graphics (SGI). (SGI was once the toast of Wall Street and its shares climbed to a huge valuation on huge sales of its graphics workstations to Hollywood movie studios.) Back to the party: the Silicon Valley hack pack was following Sergey and Larry and Eric around, trying to look nonchalant while doing it. Jochen Siegle (from Der Spiegel---the top German magazine) and I happened on Mr. Rosing, who was unrecognized and thus ignored by the celebrity seeking hacks.
Mr. Rosing was happy to chat about a lot of things; and what he said gave me some insight into Google and its culture.
Interesting facts:
Did you know that Google stores a copy of every web page, except images, that it finds while spidering the web? "We put the data on tape and store it," Mr Rosing said. What will you do with it? "We don't know."
. . .
Did you really believe that Google does ALL its magic with just cheap PC servers and algorithms running on Linux? Google's data centers include a lot of the same equipment and software found in traditional IT data centers. For example, Google has a supercomputer based on hundreds of Intel's advanced 64-bit Itanium microprocessors. There are also a lot commercial IT solutions within Google, but vendors are not allowed to talk about it.
. . .
Google does cooperate with law enforcement requests for information on searches. Mr Rosing would not say how often that has occurred.
. . .
Engineers work in teams but he does not control or set their projects. There is no management of the engineers.
. . .
I asked Mr Rosing why Google News doesn't use a few full-time editors to clear out duplicated stories and clean up sometimes poorly aggregated pages. He looked at me as if I was crazy. Why would Google want to use people? Google News is an engineering solution, he said. It's true: Google News was set up as a side project by its top engineer. It's a decent news site and very popular; but it could be a lot better.
The trouble with applying an engineering solution to news aggregation is that you need to know what the answer should look like. Why not use a trained professional? A news editor, or let's call them a "media engineer." Maybe that would make it easier to understand value creation within Google.
The conversation with Mr Rosing was striking because it revealed how Google sees itself. It sees itself as a hard-core engineer culture that has virtually no managerial controls, and yet can toss out beta projects such as Google News for many years to come. That's fine, but Google is a media company isn't it? But no one seems to have told them that.
Google publishes pages of content and sells ads on those pages. That's a very traditional newspaper or magazine business model, except that Google uses machines to harvest and publish the content instead of using editors, reporters, copy editors, etc. Advertising is also harvested by machines, running a simple auction system between advertisers. And the distribution channel is the global computer network of the internet. It's a very efficient business process; but it is a media business process.
.
Yahoo, for example, clearly thinks of itself as a media company. It is full of media professionals, such as John Marcom from the FT, appointed senior VP of international operations in June last year. Terry Semel, the chief executive, is one of the media industry's top executives (he still lives in SoCal). Take a look at his profile:
Formerly: President, Theatrical Distribution divisions, CBS, and then Walt Disney; 24 years with Warner Bros. in positions including Chairman and Co-Chief Executive Officer.
Yahoo kicked the engineers aside quite some time ago. Co-founders Jerry Yang (does he still carry the title of "chief yahoo" on his business card?) and David Filo probably still do engineering type stuff; but the business is handled by people who know how to run a large media company.
Yet at Google, there are NO media professionals! They've done well so far, no one would disagree; but can computer engineers grow a media business? This could be Google's Achilles' heel.
cd1930
December 10, 2004 |
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Cybercops: Software industry takes p2p pirates more seriously
The media has gone wild with stories about internet copyright infringements for years now. Illegal file sharing of music and video files on peer-to-peer networks kept reporters (including me, I admit) busy writing thousands of stories on this issue as well as on how the entertainment industry has been blaming the p2p revolution for their gigantic downturn.
Mark Ishikawa: Big brother is watching and tracking software pirates
But how about all the other industries affected by global mass cyber theft via KaZaa/FastTrack, eDonkey, Gnutella, et cetera? Not much has been written about other digital content producers, for example artists, photographers, web-designers, porn directors or other creative (or not so creative) content heads, protecting their intellectual property on file-sharing networks and fighting p2p pirates. Not even the software industry’s challenge to stop the piracy of their products has been a significant media theme. The reason why: The software companies just didn't care much.
While the entertainment industry has sued thousands of peer-to-peer users since last year, hiring web-tracking companies as cybercops to pursue virtual pirates all over the world and to take down millions of illegaly distributed files, the multi-billion dollar software industry more or less just watched from the sideline.
It looks like that’s gonna change.
One of the biggest players in providing these web-tracking and monitoring services to the entertainment moguls is Los Gatos based BayTSP, an internet security firm founded by Mark Ishikawa, curiously enough, a 39-year-old ex-hacker who was busted as a teenager for hacking into the Livermore National Laboratory’s server. So far, BayTSP has recruited its main client base from the entertainment industry. Specific companies served is unknown, since Ishikawa is not permitted to release any names. "At least three of the five leading music labels and two of the seven top movie studios," Ishikawa says with a bright smile.
Now it seems the four-year-old company has extended its highly confidential business heavily into serving software companies. For the last couple of years, BayTSP released monthly statistics for the top pirated movies on peer-to-peer networks. This week, the Silicon Valley venture for the first time published additional stats for top pirated software titles on the leading p2p services, FastTrack and eDonkey. According to BayTSP spokesperson Jim Graham, the firm has compiled test data for pirated software apps for the last five months.
The top pirated software application in November 2004 was Norton Antivirus 2005 with almost 41,000 copies available for download on the mentioned p2p networks. Other top ten titles include Adobe’s Photoshop and MS Office 2003, as well as the Nero 6 CD and DVD burning software. Novell’s SUSE Linux 9.0 ranked #10. "Surprisingly, people are not just sharing Windows applications through p2p services," Graham says. Only three applications from Redmond made the cyber underground's most-wanted software list.
However, even more interesting than these statistics are indications that the software industry is starting to take the p2p-phenomena more seriously. "These companies are definitely watching the p2p space much more closely these days," says Graham. His boss Ishikawa confirms that BayTSP is currently working with leading software companies but he is again not allowed to name clients. "Much like the entertainment industry, they are very low key about it," Encryption expert Ishikawa says.
Another interesting angle from the latest online tracking data: The most prominent peer-to-peer service, KaZaa, has been overtaken by eDonkey. The eDonkey network now counts a daily average of more then 2.8 million users compared with Fast Track's 2.43 million users. One of the main reasons for the climbing numbers: The media industry has succesfully flooded the former number one file-sharing service KaZaa with millions of fake audio and video files, so-called "spoofs." Interdiction specialists such as Overpeer, MediaDefender or MediaSentry do that job for the entertainment giants.
It seems like it is the software industry's turn now to use these companies' effective tactics. On the other hand, it has to be a combined effort for all players involved -- interdiction experts, entertainment companies, software firms or other intellectual property owners -- to figure out a way to stop the increasing popularity of eDonkey.
dk0545
December 10, 2004 |
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December 9, 2004
Armchair quarterback
Oracle chief Larry Ellison showed his true Silicon Valley tycoon colors yesterday, talking "as if his acrimonious 18-month bid to acquire competitor PeopleSoft was a done deal" and delivering "the kind of tongue-lashing to the 49ers' owners, Denise DeBartolo York and her husband, John York, that he usually reserves for tech rivals," according to the San Jose Mercury News.
Oracle-CEO and founder Larry Ellison: San Francisco 49ers the next take-over?
Ellison's comments are premature in both cases. Oracle has not completed a take-over of PeopleSoft and faces new legal challenges due to the "poison-pill" defense that PeopleSoft has mounted.
Ellison doesn't own the San Francisco 49ers football team, either, although rumors have suggested that he has been interested in purchasing the team.
Links:
Ellison talks about Oracle's plans for PeopleSoft, then blasts 49ers, by John Boudreau, San Jose Mercury News, 9 December 2004
What's the story? Doug Millison also edits OnlineJournalist.org, "on a need-to-know basis"
December 9, 2004 |
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Prediction: Dotcoms will eat lunch this time around — the Reversal of the Internet Business Timeline. Part I
Around about middle of 2003 something interesting happened. I can't quite put my finger on what exactly it was, or what caused it, but the internet business timeline started reversing.
Maybe it was talk about the Salesforce.com IPO that signaled the reversal. Anyway, it started to be increasingly clear we were going to re-run the last seven to nine years in reverse with a few twists.
I've dubbed what's coming as the Greenfield Enterprise Economy. The following will happen:
--Dotcoms will slowly start coming back into vogue, eat the lunch of the established companies, and go on to eat the companies themselves while spitting out the crunchy infrastructure legacy costs and sucking out the fatty stuff-- the IP and brands.
Some of the new Dotcoms will be web services vendors, currently acting in the traditional enterprise software model of "arms dealers," selling their technology to others. And some of these web services companies, while selling their technology to others, will begin using it themselves in new markets and in regional applications. Sometimes this will occur in partnership with other web services companies. For example, suppliers of say, e-commerce ASP services, will establish a regional shopping mall.
The logic will be clear: why spend millions marketing technology, trying to convince potential customers of the gain of large operational efficiencies when instead they can invest that money into establishing new ventures that take full advantage of the technology.
Such ventures would not necessarily compete with potential customers because they will be focused on specific regions or used to develop new types of services. The focus of most of the new Dotcoms will be on cracking the regional business market - currently the single largest commercial online opportunity.
With this strategy, sales to customers will be boosted because those ventures will serve as technology showcases, demonstrating how to combine technologies and business models to recreate profitable ventures in other regions or niches.
Also, those ventures can be flipped -- sold to customers. This generates new capital and sales at the same time.
The best business opportunities will come from the emergence of Greenfield Enterprises -- these will become the true new Dotcoms of the new economy (yes, the term new economy will return).
The Greenfield Enterprises will be absent most of the legacy costs of competitors. The correct application of technology combined with business model innovation will mark the successful Greenfield Enterprise.
The Greenfield Enterprise Economy Dotcoms will then eat lunch. I will explain how in Part II of the Reversal of the Internet Timeline...
cd1050
December 9, 2004 |
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December 8, 2004
The story so far
Pardon me for tooting our own horn here, but after a few short weeks of publication, Silicon Valley Watcher is a hit - and we'd like to invite you to help us in the effort to make it the location on the Web for insight into the world's leading site for technology business innovation. After all, nobody knows Silicon Valley the way you do.
Hundreds of people - interesting, involved, busy, like you in other words - now visit Silicon Valley Watcher every day (and the number is increasing) and we'd like to give you all more of what you're learning to enjoy here.
We know that you know about business deals in the works, new projects, personnel moves, new products and services in the pipeline, research breakthroughs, future trends. If you have a success story to share, please do - and if you've got a cautionary tale, that's valuable, too.
We'll keep it confidential and anonymous if that's necessary.
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Doug Millison
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doug at siliconvalleywatcher dot com
cd1900
December 8, 2004 |
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December 7, 2004
Oracle World is very boring...a report from the front lines of enterprise software
Oracle World, the big Oracle conference and trade show, started this week in San Francisco. I couldn’t make it to the show on Monday, but I was thinking about popping in on Tuesday.
However, I did speak with a senior editor at a large IT publication, who is in town and attended the Oracle World keynote and other events on Monday. He said it was “boring and full of marketing hype.” And that Chuck Philips, the Wall Street analyst-turned-Oracle-president, has lost any remaining vestiges of independent analytical expression and has become a full-on software salesman.
The whole enterprise software sector seems very boring anyway. Not much happening and it looks like it will stay that way for quite some time.
The enterprise software companies are sitting pretty on top of large customer bases.
There are very few new customers being created so they don’t need to compete for new business. Which is why tech advertising, especially print, continues to fall.
They can live quite well off their installed customer base, on the maintenance revenues, etc.
And they face no real competition because their customer base won’t buy software from small, private enterprise software companies out of fear of being left with unsupported products.
The only way private enterprise software companies can make sales is if they are partnered with larger IT companies. This means there is not much pressure to “innovate” since they can just buy up a promising private company. And with so much consolidation in the industry leaving just a few big players, they can control the valuation of private companies because there is less competitive bidding.
dk0941
December 7, 2004 |
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Chris Nolan, stand-alone journalist and blogger reveals the secrets to looking prosperous and youthful
I recently ran into Chris Nolan, who writes the popular political "blog" site Politics from Left to Right at ChrisNolan.com. Chris was looking fabulous, she looked wealthy, relaxed, and ten years younger.
What could be going on? How can Chris looks so good, look so prosperous and relaxed? Isn’t she a stand-alone journalist, a blogger? That means she makes hardly any money, doesn’t it?
I asked her, have you discovered the blogger’s El Dorado? What is your secret? I’m running around all day trying to chase down stories and I’m bleary eyed from staying up most of the night researching and blogging and trying to make a living. I look ten years older not ten years younger.
Chris was happy to share her secret and here it is:
“The Chanel counter at Macy’s,” she said. “They’ll fix you right up.”
I hope they do men.
By the way, keep an eye on ChrisNolan.com, there is some interesting stuff happening that I cannot talk about--just yet.
ChrisNolan.com
cd1916
December 7, 2004 |
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December 6, 2004
Was Siebel the mystery bidder for RightNow Technologies, one of the hottest IPOs of 2004?
RightNow Technologies, one of the most successful tech IPO's of this year, seriously considered an acquisition offer from a much larger software company just a few months before announcing its public debut.
The information was revealed in a recent Harvard Business School case study, part of a new course focused on teaching students how to bootstrap companies.
RightNow Technologies offers hosted CRM applications and is closely associated with Salesforce.com, a company with a similar business model, but with the larger and louder, publicity-seeking CEO Marc Benioff.
Greg Gianforte, founder and CEO of RightNow Technologies (based in Bozeman, Montana) told the Harvard Business School that his company received a generous acquisition offer from a large software company in its sector. The offer was such that it would have created more than $100m in wealth for Mr Gianforte, and multiple tens of millions of dollars in wealth for many other investors and executives. The offer was considered in December 2003. RightNow was started with a $5,000 investment by Mr Gianforte. In 1994 he had sold Brightwork Development to McAfee for $10m.
The software company making the bid for RightNow was not identified. However, the description of the bidding company in Harvard Business School case study N2-805-032 indicates it was likely to have come from one of Silicon Valley's largest software companies--Siebel Systems. The case study documents refer to a large, well-established software company in the CRM space, whose software is expensive and requires several years to install.
Siebel headquarters in Foster City: Mystery bidder for RightNow?
The offer valued the company at a market-leading multiple to revenues but the multiple was not disclosed. The valuation was based on RightNow's revenue run rate of about $50m rather than its trailing 12-month sales of $35m. The bid was all-stock and no cash.
The Harvard study notes that there was extensive deliberation by RightNow board of directors, and discussions with investors. However, Mr Gianforte, the largest shareholder with about 60 per cent of the company, rejected the offer.
The deal was considered counter-culture to that of the company, which had worked since 1997 to pioneer a hosted CRM model. RightNow, along with Salesforce.com and others, have spent many years promoting the idea that traditional enterprise software applications have become inefficient. Their sales pitch is that a hosted IT application model, in which customers pay according to use and the software is hosted elsewhere, is a more economical model. This is sometimes referred to as "web services."
The traditional enterprise software market relies on the sale of software licenses to large companies, which run the software in their own data centers. This procedure can take several years to implement because the new software has to be integrated with legacy applications. In the web services model, companies can start using the IT applications within just a few hours.
The decision to reject the offer paid off handsomely for RightNow staff, and investors. It announced its plans for an IPO in April 2004 and completed it in August, following the Salesforce.com IPO in June.
At the close of trading on Friday December 3, 2004, RightNow (RNOW) closed at $18.68. This is considerably higher than its IPO price of $7 per share and represents a market capitalization of nearly $542m.
Shares in traditional enterprise software companies have lagged considerably over the same period. Siebel reached a 52-week high of $16.19 in early January. It slid to a 52-week low of $6.97 in mid-August and regained some lost ground, closing at $10.38 on Friday, December 3, 2004.
cd1930
December 6, 2004 |
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News: IBM plans to produce families of Cell microprocessors in bid to dominate consumer electronics markets
IBM, which is working on design of the advanced Cell microprocessor with Sony and Toshiba, is planning to produce many derivative designs for a wide array of consumer entertainment applications.
The move will put it into more direct competition with Intel, the world's largest chip maker, as the two giants fight over premium consumer chip markets.
Peter Hofstee, one of IBM's top chip experts and one of the leaders of the Cell design project, told Silicon Valley Watcher, "We plan to have many different versions of the Cell chip for different applications but we can't talk about them yet. The first application you will see is in a workstation product later this year, which will be used as a development platform for consumer products."
Cell will be used by Sony in a future PlayStation video game console product. But it will also be used in a wide variety of consumer entertainment products. IBM will make the first versions of the Cell microprocessor in its cutting-edge Fab in Fishkill, New York. Later versions will likely be manufactured by Sony, Toshiba, and its fab partners.
Intel is making a big push into consumer markets with its Pentium and XScale microprocessors. But it faltered recently when it scrapped plans to produce a chip for large screen TVs.
Intel has spent several years promoting the concept of the "digital home" in which PC-like devices are used to provide wired and wireless entertainment applications such as games, movies and music. But such devices are expected to cost $800 or more--similar to PCs. The Cell microprocessor is based on IBM Power microprocessor--an advanced 64-bit microprocessor. It is designed to be used in applications such as video games consoles, costing about $200. The video game console price is subsidized by video game sellers, who pay a fee to the console maker.
Mr Hofstee has previously worked on designs of the IBM Power microprocessor that use less electrical power and thus produce less heat. Intel and other chip makers have run into problems with heat generated by advanced chips. Intel recently said it would adopt a multi-processor architecture for some of its future chips. This type of design produces less heat.
cd1957
December 6, 2004 |
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Can H-P survive?
Hewlett-Packard gets the cover of this week's BusinessWeek.
Bottom line: "Hewlett-Packard still needs to prove it can execute its broad strategy. If not, pressure will build to break up this Silicon Valley icon."
Possible solutions?
BusinessWeek has interviewed more than 100 people, including past and present HP employees, investors, customers, partners, and competitors, to explore the issues and potential solutions. Suggestions abound. Some call for Fiorina to hire an operations ace to manage the company's far-flung divisions and get them working in sync. Others call for the company's PC division to retreat from its global network of retail distributors and to ape Dell's super-efficient direct-sales model. And many opine that HP should gobble up software and tech-services companies to better compete against IBM. The risk? If the company adds to its portfolio without first tackling the operational issues, the already daunting complexity could multiply. "Carly has to prove she can execute and it just hasn't happened yet," says a former HP vice-president who left earlier this year. That view is widely shared by many others interviewed by BusinessWeek.
Links:
Carly's Challenge, BusinessWeek, 13 December 2004.
What's the story? Doug Millison also edits OnlineJournalist.org, "on a need-to-know basis"
December 6, 2004 |
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The emperor still has no clothes
Microsoft's consumer electronics offerings continue to take hits from influential columnists.
Last week, Walter Mossberg slammed the Portable Media Center, a Microsoft design implemented by Samsung, Creative Labs and iRiver, in the Wall Street Journal.
Today, Mike Langberg focuses on the shortcomings of Microsoft's new MSN TV 2 Internet & Media Player in Silicon Valley's hometown newspaper, the San Jose Mercury News.
The new Microsoft system, Langberg observes, "tries to do two things at once, almost always a recipe for disaster in personal technology."
"The $199 box, introduced in October as an update to the fading WebTV line, wants to offer simplified computer-free Internet access to techno-phobes as well as fancy home networking to discriminating ultra-geeks," Langberg writes.
"MSN TV 2 makes it easy to find digital photos, video and music on your PC's hard drive for playback through a TV, as well as delivering of streaming Internet audio and video," he notes, but "broadband users won't want MSN TV 2 for much else, because Web browsing, e-mail and instant messaging would be so much faster on a PC."
His devastating conclusion (and one that you'd think the marketing specialists at Microsoft would have hit upon): "There's no reason, in other words, to pay $10 a month to Microsoft for the privilege of accessing your own media files."
Links:
'Broadband enthusiasts' likely to turn up their noses at MSN TV 2 by Mike Langberg, San Jose Mercury News, 6 December 2004
Mossberg goes for the PMC jugular by Doug Millison, Silicon Valley Media Watch, 2 December 2004
What's the story? Doug Millison also edits OnlineJournalist.org, "on a need-to-know basis"
December 6, 2004 |
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December 3, 2004
Fanning's back
Front page news in the San Francisco Chronicle's Business section today is Napster founder Shawn Fanning's new venture, Snocap, in a story based on one of Fanning's first public interviews (Business Week and many other publications have the story today, too, so that claim seems a bit weak) since Napster wound up in bankruptcy proceedings.
The Chronicle frames the story as Fanning's effort to get back into the good graces of the record industry after alientating them with Napster:
As founder of Napster Inc., Shawn Fanning achieved rock-star status among fans of Internet file sharing, but he also became public enemy No. 1 with the record industry.Today, Fanning officially takes the wraps off a new technology venture that is working with the biggest record labels to find profits in the online music phenomenon he ignited.
Fanning's new business model?
Snocap has created a database platform to be licensed by record companies, individual musicians or other copyright holders to manage the sale and distribution of their work. The technology is designed to let copyright holders set prices or other terms of distribution.Universal has agreed to register its entire catalog of songs with Snocap. How those songs will be sold online is unclear, but Fanning is using Snocap's database as the first step in what he hopes will be the creation of a single worldwide clearinghouse for online music distribution, whether through a Napster-style file-sharing network or an online service like iTunes Music Store.
Business Week describes how it works: