October 20, 2005 | Permalink | Comment on this post | Tag: SVW recommends . . .
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I told IBM they should buy SAP-- Kleiner's Ray Lane says...

By Tom Foremski for Silicon Valley Watcher

I've become quite impressed with former Oracle president Ray Lane and his analysis of the enterprise software industry. From his perch as a VC with Kleiner Perkins, he has developed interesting insights into the sector.



A few weeks ago I managed to chat with Mr Lane at a dinner for Virsa, possibly the fastest growing private software company today (it provides SOX compliance).

Before the dinner, Mr Lane made it plain he did not want to hear about how the enterprise software industry was now dead because of Oracle's acquisition of both PeopleSoft and Siebel. "Nothing has changed that wasn't the case before the acquisitions," Mr Lane said.

Which is true; but the acquisitions just reinforced and underlined the fact that two companies control all innovation and buyouts.

Here are some of the highlights from the dinner:

Please also see: Peoplesoft and Siebel considered merging but leadership issue blocked the deal.

Lots of M&A activity ahead

Mr Lane foresees a lot of M&A as thousands of smaller software companies try to acquire, or be acquired, as a survival strategy. Also, there are still thousands too many software startups that "won't ever produce significant revenues and should be closed down."

IBM should buy SAP

Mr Lane is convinced that IBM should acquire SAP. "Earlier this year I told Sam [Palmisano] that IBM should acquire SAP," Mr Lane said. But the IBM chief rejected that advice.

I pointed out that IBM makes more money out of SAP than SAP, because about one in ten dollars is spent on license fees, the rest is for implementation--the IT services that forms about one-half of IBM.

But Mr Lane believes that IBM needs applications on top of its middleware stack. I pointed out that IBM was terrible at enterprise applications and abandoned the market in 1999. "Well, Oracle was terrible at apps too," he said.

I covered IBM for a long time when I was at the Financial Times. Steve Mills, IBM's software chief, has been executing a strategy that has worked well and makes good sense. IBM found growth in providing middleware components to apps vendors, and not competing with them directly.

Mr Lane believes that if IBM had apps, it would be in a better position to sell more of its middleware components, which is probably true.

I would argue that IBM doesn't need to be in enterpise apps because it can let the developers create apps on its middleware platform and then use its massive IT services group to set it all up for its enterprise customers--that's where 90 per cent of the IT spend goes in such things.

A New Rules Car Corp.

I discussed with Mr Lane my description of what the new type of very successful dotcom organization would be, what I call a new rules enterprise.

These are small, highly agile, first mover companies, whose first rule is that they are new--no cultural battles to fight, and no legacy thinking and infrastructure to carry, etc.

Mr Lane agreed, "I think there is a lot to be said for a new rules enterprise. For example, if you were to build another General Motors today, it wouldn't look like GM. In fact, I think it is a great time to start a car company.

You can read more about the rules of new rules enterprises here:

These are the new dotcoms of the new rules economy...]

Mr Lane said he was a big fan of JotSpot and other types of software that allowed people/small groups to easily create personalized applications. He also said that Kleiner wanted to invest in Joe Kraus's JotSpot when it had an opportunity, but an administrative snafu lost the deal.

Why should startups take VC funding?

That's a question I like asking, because in my view, VCs were needed when startups needed significant infrastucture, such as data centers. Nowadays that infrastructure is already in place, on demand over the web, at low cost. Today it's all about knowledge capital. You just need to have a small team willing to throw their credit cards into a bowl and work for six to 12 months.

Mr Lane says there is still a role for VCs, and that the VCs provide valuable advice. Well, I can see that having Ray Lane on the board of my software company would probably be worth the 50 pounds of flesh; but otherwise, it's an expensive way to get expert advice.

And I come across an astounding level of animosity towards VCs. Too many entrepeneurs have experienced the shenanigans that go on in the VC sector; and they won't seek funding until they've built up their valuations as far as possible through other means.

I think that it's just a few bad apples in the VC community--but then again, I don't know.

Ray Lane Bio

http://www.kpcb.com/team/bio_detail.php?frm_id=10

October 20, 2005 | Permalink | Comment on this post | Tag: Thoughtleaders
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Putting the cart before the horse: more thoughts on community and technology

By Tom Foremski for Silicon Valley Watcher

I think "tribes" is a better term than community because is provides some granuality and acknowledges the different self-interests within a community.

Tribes are communities, or groups of people with an allegiance and a self-interest and a specific look, and a distinct culture. That is a more honest way of portraying yourself in context. Using the term "community" implies a unity that isn't real.

The term Tribes was very much in vogue five or so years ago, but it felt too hipster, too foisted, too orchestrated by the Hippie tech philosophers such as Stewart Brand and ilk. So when Tribe.net, the online community formed in 2003, the term already felt spent.

But now it is coming back, and for all the right reasons. It is coming back from the grassroots, from the groups, the cultures that run under the radar (rather than in the underground ;-)

And with the term, Tribe.net is coming back too. Lucaso, SVW's newest and youngest contributing editor has been showing me how his mid-20s-and-up groups of friends are using digital technologies to communicate, organize and meet. For example, instead of business cards, when they meet people they tell them their Tribe.net avatar name: Luke is Lucaso, Amy is Amyliscious, Dawn is MsZigzag...

And it is these artistic and creative groups that are best described as tribes, and they are thriving and creating new cultures; and the technology is an enabler, it is in the background rather than in the foreground. Technology disappears into the tool kit, and into the walls, and environment.

The creativity of human endevours is what becomes the focus, rather than the technology. Finally, the cart is before the horse :-)

October 20, 2005 | Permalink | Comment on this post | Tag: Tech Watch
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October 19, 2005

Let's kill the sacred cow of "Community" and reveal the hidden commercialism

By Tom Foremski for Silicon Valley Watcher

Tuesday evening I was trying to find my way to a class room in South Hall, a building on the massive, meandering UC Berkeley campus where Quentin Hardy, a senior editor at Forbes is teaching a journalism class.

Quentin invited Dan Gillmor, John Shinal from Dow Jones' CBS MarketWatch, and myself a former mainstream journalist, to speak to his class about the new online media and how it affects our sense and understanding of self.

There were about 30 students and we chatted about a lot of things, and the word "community" kept cropping up, and up and up; not among the students, but from my fellow panelists.

It reminded me of my dislike for the term "community" because it is charged with an almost sacrosanct cultural meaning, to such an extent that it defies and discourages challenge. It is a revered word/term/concept and it is one that has become broadly appropriated by commercial interests, and deliberately so.

In the blogosphere and the larger mediasphere, community is used in ways that clouds meaning and cloaks commercial enterprise.

During a chat after class, Quentin noted that he heard the word community constantly at the recent Web 2.0 conference, where the $2800 per seat audience applauded "community" business models and services from the $30K per vendor pitches.

I think this sacred cow needs to be slain and we should not use highly charged words or terms unless we mean them to be used that way.

We should use more culture-neutral terms which don't engage society's sensitivities.

Here's my contribution to slaying the cow: I pointed out to the class that commercial interests love online communities, because they are an aggregated blob into which you can more cheaply throw marketing messages.

And let's not forget the "conversations" of the online communities, which are collected and diced and sliced and packaged and sorted and sold. By Technorati, Feedster, and a gazillion others--because it is all out in the open, in the commons.

Commercial interests are acceptable--after all, everyone has a landlord or banker that needs to eat--but cloaking commercial interests behind sacrosanct terms and ideas and concepts is beyond the bounds, imho.

October 19, 2005 | Permalink | Comment on this post | Tag: Mediasphere
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October 18, 2005

GOOG-AOL misfit doesn't matter--it's a win win strategy

By Tom Foremski for Silicon Valley Watcher

Google and AOL don't seem to be much of a fit, especially in their culture mismatch. But those two companies don't have to be a good fit in order for Google to be able to monetize the AOL traffic better than any of the other suitors.

If Google doesn't get AOL, that's fine, because it has likely increased the bids to investment levels that are more challenging to recover. This is an increased burden on a competitor and integration issues are a distraction.

It's win win for Google--the planet's computer, and its most scalable platform.

Here is a USA Today story:

October 18, 2005 | Permalink | Comment on this post | Tag: Google [GOOG]
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Reverse the Google pay per click model--the rumble begins

By Tom Foremski for Silicon Valley Watcher
I was delighted to receive the following note from one our readers. It refers to a recent podcast for Sam Whitmore's Media Survey. In the interview, Sam picks up on a recent comment of mine that I'm concerned that the old media might die before the new media can walk.

I'm also delighted that others are spotting what I have maintained all along, that content-will-be-king. I have the dotcom name to prove it:-)

Content harvested by machines and algorithms is cheap and gets cheaper all the time. People-generated content is expensive to produce and will become more valuable

It's the age of the technology-enabled journalist/editor--the media engineer. imho.

Here is the podcast: http://m2.slapcast.com/mp3/SWMS/SWMS-2005-10-10.mp3

Here is a list of other podcasts by Sam.

http://slapcast.com/users/SWMS

Here is the email note from Andy Evans, Net Communities:

Tom

I was very interested in your interview on this weeks episode of Sam Whitmore's Tech Media This Week.

You guys raised a very interesting question regarding the evolution of new media verses old media models.

It is clear on both sides of the Atlantic (I am based in the UK, you sound British too!?) that print advertising revenues have dived dramatically over the past years.

Online advertising has seen massive growth. In the UK the IAB have measured a year on year growth of 63% 2004-2005 with exceptional growth in the technology market.

However, most of this revenue is being seen in search through Google and yahoo. Are they not raping peoples content? Perhaps they should reverse their revenue model and pay click revenues to the sites that get clicked on??

Just quick thought from my pda.

Andy Evans, Net Communities...

October 18, 2005 | Permalink | Comment on this post | Tag: Google [GOOG]
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SVW--An Eastwick Halloween party for hacks and flacks...and bloggers?

Eastwick Communications says that any tech beat journalist reading this on Silicon Valley Watcher is invited to its charity Halloween party--and Eastwick is well known for its Halloween parties.

Come check on Eastwick's party reputation. Ping me and I'll forward the evite to you and/or just turn up Thursday October 27 @6pm 444 De Haro Street #110 (17th street entrance).

Black and orange dress code requested (dresses are okay). Phone there is 650 480 4040.

I guess bloggers are allowed in too since I'll be there?!

More details from the invite:

The Witches and Warlocks of Eastwick take Halloween pretty seriously. Come join fellow technologists, marketing and PR mavens, VCs and journalists for the first annual Black & Orange Bash, our tribute to our favorite holiday, and our contribution to the local fashion scene.

Food, drink, music and a few surprises ....

Additional Note: For every person that shows, Eastwick will make a contribution to Habitat for Humanity.

Please park in the garage located at 16th and Kansas, one block from the Bash. Please mention "Eastwick" upon entrance.

October 18, 2005 | Permalink | Comment on this post | Tag: SVW recommends . . .
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Media giant Cnet finds the 100 needles in the 14m blog haystack--is your favorite blog a needle?

. . .where is good morning silicon valley, silicon beat and Dan Gillmor?

Cnet recently posted its Top 100 Blogs, giving out much link love to the blogosphere, or at least to some of the uberbloggers.

Cnet asks...

With more than 14 million blogs in existence and another 80,000 being created each day, how is a person supposed to find the ones worth reading?"

Of course, I was delighted that Cnet editors named Silicon Valley Watcher in the Top 100, and in the Top 16 of all Tech Business blogs.

[BTW, this is how link-love spreads--Cnet is very savvy.]

However, with Best 100 lists and other popularity lists attracting and aggregating the blog clicks, it must get tougher every day for new writers to establish themselves. That's why SVW will increasingly feature some of the other, less noisy voices out in the digital ether.

October 18, 2005 | Permalink | Comment on this post | Tag: Media Watch
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October 17, 2005

RightNow Technologies CEO Greg Gianforte slams rival Siebel Systems for selling hype and ignoring customers

By Greg Gianforte, CEO of RightNow Technologies

Siebel likes to say, “It’s all about the customer.” But the truth is that it has always been about Siebel. It’s an attitude that pervaded the entire company. That’s why it continues to lose customers and revenue.

If it really was all about the customer, then Siebel would have somehow made itself accountable for delivering what its customers wanted – increased revenue, greater customer loyalty, improved productivity.

But you can’t do for others what you can’t do for yourself. Are you really going to trust a company that isn’t growing to help your company grow?

You can’t totally blame Siebel, though. They just played the same game that so many other enterprise software vendors cashed in on during the go-go 90’s: take the money and run.

We’re the ones who let these companies hype their enterprise platforms, get oodles of money for them, and then leave it to customers and big-ticket integrators to figure out how to actually get any business value out of them.

But you can only sell somebody swampland once. Customers eventually realize they aren’t receiving fair value for their money, and they leave. In fact, some Siebel customers ultimately decided to write off their investment and start over with a partner who can actually deliver results.

The really amusing thing is this line from CEO George Shaheen’s letter to Siebel customers:

“Both companies [i.e. Oracle and Siebel] are in the process of developing the next generation of applications based on open standards and a service-oriented architecture.”

Actually, both Siebel and Oracle are avoiding anything that even resembles the next generation of applications--true openness, and/or software-as-a-service--like the plague. All three concepts directly undermine their shell game. That’s why customers are taking their business elsewhere.

However, just in case anyone at Siebel actually wants to know how to grow a CRM company, here are some points to consider:

-The “next generation” of applications will not require customers to invest millions of dollars in IT infrastructure, and hire legions of technologists to baby sit that infrastructure.

-Customers in all market segments are embracing hosted solutions, so they can enjoy the business benefits of software without the burden of exorbitant ownership costs. That’s what the next generation looks like.

-The only technology that’s really “open” is open source. As long as you have a vested interest in forcing customers to fork over zillions of dollars for proprietary databases, operating systems, and middleware, you can’t really say there’s anything open about your technology.

So don’t be surprised when customers get tired of paying premium prices for commodity infrastructure – and abandon you in droves. Hint: You’ll probably find them over at my place running their enterprise-class environments on Linux, MySQL, Tomcat and Apache.

-There’s nothing “service-oriented” about exposing one bloated, monolithic applications to other bloated, monolithic applications.

If you really want to give customers the ability to mix-and-match best-in-class software functionality, break your solutions up into smaller, more digestible pieces that customers can deploy quickly to achieve rapid time-to-benefit – and easily integrate with their existing applications.

That way, you’ll lower their cost-of-entry and allow them to start generating quantifiable ROI before they slice you off another piece of their budget.

Of course, while Siebel is “in the process of developing” a business model that will actually deliver value and attract customers, RightNow and other on demand software providers are busy doing it.

That’s why we’ve grown for 30 consecutive quarters and retain over 90 percent of our customers annually. Our customers are intensely loyal to us, because we’re intensely loyal to them. That’s what a relationship is about: mutual benefit and respect.

You’d think a company in the customer relationship management business would know this.

October 17, 2005 | Permalink | Comment on this post | Tag: Enterprise IT
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VeriSign will officially announce the acquisition of Moreover Technologies after Monday markets close EOM

October 17, 2005 | Permalink | Comment on this post | Tag: Media Watch
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Freshly minted Memeorandum.com is not bad...And lessons in how bloggers get media attention

By Tom Foremski for Silicon Valley Watcher

Gabe Rivera, founder of memeorandum.com certainly knows how to get my attention. I had just sat down at the far end of the table, at the recent dinner to welcome Microsoft uberblogger Robert Scoble to town.

It was a Saturday evening and the assembled leading lights of the blogosphere were all tired and cranky after a week of Web 2.0, 1.0 and 0.2 events; while Robert Scoble had skipped the conference entirely and was all fresh and friendly and looking well-rested.

Seconds after I had shaken hands with my end of the table, which included Niall Kennedy from Technorati, the stranger sitting opposite, said, "So...you cover Silicon Valley from San Francisco...?"

It took me but a nanosecond to parry that remark and ram it back in my eloquent manner:

Fu*k you, I said, and you think that Silicon Valley ends anywhere?! I sniggered...

I'm driving from San Francisco to San Jose all week long, I explained, that's how SVW gets original stories, scoops, exclusives. [Silicon Valley Watcher had $400m in M&A deals last week that were scoops and published hours and days ahead of anybody else.] Other hacks are sitting at their desks rewriting press releases or Reuters copy--you won't get any scoops doing that.

Anyway, I see Silicon Valley as a blob that has extended from its Palo Alto center and now runs fifty miles in all directions; north across the Golden Gate bridge up to edges of the Sonoma wine country, south to San Jose and further to the surfer town of Santa Cruz, and across the entire length of the East Bay.

Gabe and I get along very well now, and at the recent Slide.com sliding out party, we talked for a long time about some ideas for new types of media business models we could try, but more on that later.

BTW, everybody keeps telling me that Gabe's site is really hot. And all the uberbloggers seem to agree, plus one lady told me it was "life changing."

With such testimonials I just had to take a look, and I must say, memeorandum.com is not bad, ...not bad at all. Take a look and see for yourself.

http://www.memeorandum.com/

Background:
http://blog.memeorandum.com/

October 17, 2005 | Permalink | Comment on this post | Tag: Media Watch
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It's Google search for the dark matter of our digital times--souped-up LogLogic debut

By Tom Foremski for Silicon Valley Watcher

Startup LogLogic is targeting the dark matter of our digital times, a vast ocean of information that we never notice, at least not the users. It is the data generated by firewalls, network equipment and other IT systems.

Andy Lark, the former head of comms at Sun, is LogLogic's CMO. "There are three types of data inside corporations. There is the data in the databases, the unstructured data in emails and documents, and there is log data. And some companies, such as financial institutions, can generate terabytes of log data per week. All that data has to be stored and has to be searchable because of legal requirements."

LogLogic released what it called its third generation technology and offering Google-like searches and advanced AI techniques to locate data within terabytes of storage... sold as an appliance for quicker integration into IT systems.

http://www.loglogic.com/

October 17, 2005 | Permalink | Comment on this post | Tag: Startups
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AJAX, AJAX, AJAX...it's on everyone's lips and so is Zimbra

By Tom Foremski for Silicon Valley Watcher.com

AJAX is the word this month. Maybe for a few months. It's both a technology and a real product. AJAX is about creating a new generation of online/web based applications that are independent of virtually anything.

AJAX is not about client software versus server software--the point is that AJAX software doesn't care about the platform. And AJAX will be one of the key technologies that powers the (near) future ubiquitous wireless/wired web.

AJAX represents a unique class of applications that carry their own processing, independent of the client system. AJAX applications represent the second key technology of Internet 2.0 (the first is RSS.)

The concept represented by AJAX is neither something you download to your PC, client software, or that you keep on the web such as Hotmail--it is both and neither. In the same way that RSS is a product of Internet 2.0--it is part email part web page but neither.

It is when we encounter such near perfect paradoxes that we know that these are technologies that deserve closer attention, imho.

AJAX has begun to catch the attention of the venture capital community, and their investments are starting to drive up the value of new deals. And some companies are building a lot of buzz.

One of the darlings of the AJAX sector is Zimbra. I met Satish Dharmaraj CEO of Zimbra, a few weeks ago.

I was impressed with his energy and mentioned the meeting here on SVW. Now, I keep bumping into people who mention Zimbra and it is all very positive stuff.

Zimbra is creating an AJAX Microsoft Outlook, and it's a good execution of this familiar user interface.

Zimbra is smart, because it is leveraging first mover advantage. I know that phrase sounds 1999, but this time, in Internet 2.0, that phrase means something.

Also, VCs are throwing money into AJAX companies which is driving up valuations, and that threatens to spoil the overall market. And there will soon be thousands of developers creating AJAX applications, so first/fast mover is important. Zimbra looks to be ahead of the game so far, but how far ahead is difficult to judge.

Selling into the enterprise is a tough sell--it is a very conservative market. And the coming marketing din of AJAX startups is going to make it difficult to be heard.

It is those AJAX startups that already have some name recognition, some products, especially a user community--not to mention revenues--that stand the best chance of surviving.

Those that can be the first movers will own the fat part of the long tail, and the fat part is the best part.

[BTW, since when did one half of the bell distribution become the long tail?! If the internet enables 6 people to share an interest in an obscure cult TV show, then they are probably already doing it... No?]

More AJAX in future posts...

http://www.Zimbra.com

October 17, 2005 | Permalink | Comment on this post | Tag: Web 2.0
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October 14, 2005

Tales from the valley: Andy Lark is out and about; patents I'd like to own; it's only Web 0.2; the call of the Rooster; welcome to the Singularity...

By Tom Foremski for Silicon Valley Watcher.com

In the past, I've tried to spare you from my bit torrent of stuff and limit my posts. But, some days I need to get the current stuff out to make way for new stuff.

So, here is just one post (stress free), containing several items :-)

Andy Lark at Rivermark Peets

It's almost nine months since I spoke with Andy Lark, who used to run Sun Microsystems' corporate communications team for many years and left Sun less than a year ago.

He's got fingers in more projects than you'd think possible, given that nature allows us only 10 fingers. Among them: Andy has uncovered a search engine gold mine opportunity--and it is in the dark matter of our digital world.

When you hear about it on Monday, you'll be struck by its simplicity and its obviousness, the hallmarks of damn good ideas.

Andy is also one of the first corporate bloggers, and one of the savviest media profesionals you'll meet. Here is a quote from Andy Lark on blogging:

Not every company needs to have a blog, but every company needs to be involved in blogging.

That one piece of advice is worth millions. Here is his blog: http://andylark.blogs.com/

Patents I'd like to have...first in a series

What am I bid for the following newly granted patent? I guess the bids would come from Intel, Broadcom, Qualcomm, Texas Instruments, Cisco Systems, Samsung maybe even Google, Ebay, Yahoo, Nokia, and ...?

Take a look, it is smack dab in the sweet spot:

United States Patent 6,952,409
Jolitz October 4, 2005
Accelerator system and method

Abstract

A network accelerator for TCP/IP includes programmable logic for performing transparent protocol translation of streamed protocols for audio/video at network signaling rates. The programmable logic is configured in a parallel pipelined architecture controlled by state machines and implements processing for predictable patterns of the majority of transmissions which are stored in a content addressable memory, and are simultaneously stored in a dual port, dual bank application memory. The invention allows raw Internet protocol communications by cell phones, and cell phone to Internet gateway high capacity transfer that scales independent of a translation application, by processing packet headers in parallel and during memory transfers without the necessity of conventional store and forward techniques.
Inventors: Jolitz; Lynne G. (22570 Citation Dr., Los Gatos, CA 95033)
Appl. No.: 756668
Filed: January 8, 2001

Here's the link to the patent office.

http://patft.uspto.gov/netacgi/nph-Parser?Sect1=PTO2&Sect2=HITOFF&p=1&u=/netahtml/search-adv.htm&r=1&f=G&l=50&d=ptxt&S1=6952409.WKU.&OS=PN/6952409&RS=PN/6952409

It's not Web 2.0 its Web 0.2

We haven't yet kicked out of early beta when it comes to the internet. That's why going to the Web 1.0 evening event last week was far better than staying at the Web 2.0 conference reception/dinner around the corner.

It wasn't such a good idea to skip dinner, but the company at Web 1.0 was very good and buzzing. It was at the House of Shields, a bar in downtown SF. Sarah Bresee from Outcast Communications and a couple of her coworkers had to drag me kicking and screaming to it. I protested that I would be missing John Battelle moderate a panel discussion--all the way through dinner.

But I figured somebody would blog it, so I didn't have to be there. Besides, I didn't have a conference badge and no badge, no dinner. Furthermore, the price was steep; $2800 per person and $30K for the vendors to take part in the multi-day event.

But down at Web 1.0 the cost of entry was nothing. In fact, I was up by a few drinks on the evening. The company was all top notch (and top Dogster, Slide, HotorNot and GoingOn, with Zazzle and many others...the (mostly) new geek generation :-)

At Web 1.0, I got into some great conversations, met new people and walked out with a ton of stuff.

More please...

The Web 2.0 conference is highly respected, and for good reason: it brings together so many key people. It has become a revered institution. But I also realized we can have some of the benefits of a Web 2.0 conference, at a Web 1.0 price--more of the time.

I've been testing an idea for The Rooster Club, an occasional get together, a salon of peers rather than podiums.

The Rooster is the perfect metaphor for the blogger (and the entrepreneur)--crowing away on its little patch of the farmyard, boasting and wanting attention. Look at me!

The Rooster is fluff, huff and air, but also cohones. It takes balls to be a Rooster, by definition :-) [BTW, that's not a gender distinction I'm making, it is a quality.]

The metaphor is fun to explore...The Rooster spots the dawn of the next day and wakes you up, and it is *always* way too early--but you can always go back to sleep if you want to :-)

Also, we are in the Chinese Year of the Rooster, and Time magazine will make it the year of the Blogger--because it represents the most disruptive force in society today. imho.

[We don't need to explore the rest of this avian metaphor right now...but I'm sure you could go further, and you would find it frightingly apt!]

We'll have a sign up for the Rooster Club soon, it'll be fun and you should come.

The Singularity is coming--Ray shows his graphs

I caught Ray Kurzweil's lecture recently, which had many provocative ideas and many very similar graphs.

The man takes 225 life-stretching pills per day, said Stewart Brand, the legendary media innovator and community builder (The Well, Whole Earth Catalog, etc), in his introduction.

Mr Kurzweil took a break from ingesting micro-nutrients and spoke for along time about the coming Singularity, detailed in his latest book.

The Singularity is an event that will meld our biology with our technology. It is the collision of many trends that are expanding on a logarithmic scale and they all meet at the same point. Ray has many graphs that prove it--in fact, they all look the same.

The Singularity will offer us mastery over our biology and our life span. Ray's ruler says we are 15 or so years away from the Singularity.

In fact, if we can make it through the next ten years without encountering our mortal nature, then we'll probably make it to the Singularity.

In this near future world our virtual-reality creation capacity will make the digital and analog worlds indistinguishable.

He described a future world that readers of Stanislaw Lem have known for decades. And Lem has already mapped out a lot of the philosophical, moral, ethical and comic dilemmas that such a future will bring. (Cyberiad is an excellent primer on Lem if you are curious.)

Lem might say: If we are so close to the Singularity, just 15 years or so away, then it is highly likely that we are already in the Singularity.

Does that change anything? Probably not. We are still bound by the rules of this world, whatever its source. But it is interesting nonetheless.

October 14, 2005 | Permalink | Comment on this post | Tag: Friday Watch
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October 13, 2005

The coming of the Omega Geeks (and Omega Bloggers too...)

By Tom Foremski for Silicon Valley Watcher.com

My buddy Paul Hrisko and I were wondering if Geeks and Bloggers will be the main survivors of any flu pandemic?

Staying in the bedroom coding or blogging away may be the best way to protect against infection. And the minimal social contact of the Geek/Blogger Life is another protectant.

The Omega Geeks will have their run of Fry's...! And the Omega Bloggers will blog it.

October 13, 2005 | Permalink | Comment on this post | Tag: Mediasphere
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Web video is easier than I thought...coming soon the SVW video interviews!

By Tom Foremski for Silicon Valley Watcher.com

I met William Jolitz recently, which was a great thrill because William used to be a key player in so many of Silicon Valley's stories--including the development of what we now know as Linux.

William is working with his wife, Lynne on a fascinating venture, which makes making short videos from small digital cameras extremely easy. I was surprised at how easy, so much so, that I sent off for a Canon SD200 to get into the game!

The idea is that you email your video clips to ExecProducer, which processes, compresses, links, and adds captions and background music and within minutes, it is sent back to you and it's on the web.

Look for short video interviews from Silicon Valley Watcher, coming as soon as FedEx delivers :-)

Take a look: http://minutepitch.valux.com/lynne

October 13, 2005 | Permalink | Comment on this post | Tag: Tech Watch
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GOOG and AOL? It's probably the comms...

By Tom Foremski for Silicon Valley Watcher.com

Why would GOOG be interested in AOL? That's a bit of a puzzle and here is Citigroup's Mark Mahaney and Tom Berquist's flash thought summary:

It is being reported that Google and Comcast are in negotiations to take a minority stake in America Online for as much as $5B. We don't have a definitive read on the likelihood of such a deal, but here is our take. * Depending on what the stake would be in, the implied valuation could appear reasonable. AOL generated $631MM in H1:05 advertising revenue. Assuming a 50% margin, that's an EBITDA run rate of...$631MM. Assuming a $10B valuation, that's 15.8X EBITDA. That's reasonable given comps. * What's in it for GOOG? Possibly a spoiling action vs. MSFT, which has reportedly been in talks with AOL. Either GOOG ups the price for MSFT or guarantees the 2.6% of its net revenue that comes from AOL. * Other rationales for GOOG? Accessing content, demographic information that could be used to target search, and IM interoperability. We're skeptical on these, however.

http://www.citigroupgeo.com/pdf/SBD73350.pdf

I think that this report, from Nick Shelness at Ferris Research might provide a better clue as to what GOOG might be interested in...

A recent briefing from AOL's instant messaging (AIM) division indicates that it might finally be getting its act together to offer capabilities beyond presence and typed text. AOL's intent is quite breathtaking. AIM plans to own the place, the computer application and screen real estate from which consumers access, initiate, and control all forms of interpersonal communication. This communication will include:

* A multi-device address book.
* Multi-device presence.
* A multi-device calendar.
* Email.
* Instant messaging (typed text).
* Text messaging via the SMS.
* Voice and Video over IP (VoIP) to and from other AIM users as well as, where appropriate, to and from the PSTN.

October 13, 2005 | Permalink | Comment on this post | Tag: Google [GOOG]
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October 12, 2005

British chip designers behind v-pod

By Tom Foremski for Silicon Valley Watcher.com

This is what I expect Apple to announce today: a Video iPod with an iTunes library of music videos available for free. The music videos can be viewed and the music offered for sale. This fills the video library gap that Hollywood likely won't let Apple have, because it doesn't want Apple's DRM controlling two large markets.

Apple doesn't need a Hollywood for iTunes, a video store in the sky, stacked high with block buster movies. It wants to sell video iPods and the content will be provided by mostly music videos. And that's where Madona comes in...Jobs and she make a music video on stage, mashitup on a Mac, and its on the video iPod in seconds.

And that's just the beginning. The new content will come from you and me and the kids and the boss. You can mashup some video clips and images on a Mac no problem. Small digital movies and other image projects will be made by all of us, because they are not difficult, and are already being made by many people. The short videos are raw but they are fun--at least for you and your circle. Then there is TV content, and of course, content specifically made for the v-pod's 3 inch screen.

In early April Silicon Valley Watcher got the scoop on the key chip inside the video iPod, Alphamosaic from Broadcom. It is designed by British chip experts acquired by Broadcom. If you look at the specs of the chip, in the following story, you'll see what types of sophisticated devices it could be used to build.

Scoop! Brit chip designers score coup as Apple picks chips for next gen mobile multimedia device

October 12, 2005 | Permalink | Comment on this post | Tag: Apple [AAPL]
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Prediction: IBM will reverse its position on blog advertising sooner than later...

By Tom Foremski for Silicon Valley Watcher.com

I'm not too worried about IBM's decision not to advertise on blogs because I'm certain that it can be changed.

Especially since IBM will, sooner than later, realize there is something much bigger going on, and that it has an opportunity to play a large role--maybe even a historic one--in helping to birth the new media.

It would take but a fraction of its massive marketing budget to help the new media sector find business models that work. And those models might look very different from today's models, based on advertising/marketing messages found in newspapers and magazines.

Those traditional messages don't work well in the online world. There is little tolerance for fluff and great value given to substance.

Yes, I would love for IBM and a dozen other companies to advertise on or sponsor Silicon Valley Watcher, and on all the other leading blogs out there. We all have landlords that need to eat.

I would love it even more if IBM and the others left behind the ad banners and advertising hype they use with other media. I'm not sure what they would replace them with, but, that's the interesting part--we all get to figure it out.

For example, what could be done with the online real estate that an advertising banner takes up? I think that space should be treated by companies as a window onto a community, a window of opportunity to provide something of value, even if it is just the time of day.

The blogosphere right now lives on passion and little else. A little of IBM's money spread around would have a tremendous amplifier effect. It would act as a validation of this new medium and draw other companies into advertising or sponsoring parts of the blogosphere.

IBM might even be able to earn a paragraph or two in the history books; that when the media turmoil of the early 21st century started to roil, IBM was one of those that had already stepped in and helped calm the waters, and aided the transformation of the old media sector into the new media sector.

History books...or not? That is the question IBM faces. imho.

Please see: IBM decides no blog ads...

October 12, 2005 | Permalink | Comment on this post | Tag: Media Watch
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IBM says it won't advertise on blogs...but wants its workers to be bloggers

By Tom Foremski for Silicon Valley Watcher.com

IBM, the world's largest computer company says that it has decided not to advertise on blogs. This decision comes in the midst of a massive push within the company to encourage hundreds of thousands of its employees to become bloggers.

IBM's mixed message risks stalling not only the growth of its own internal blogging effort, but also that of the wider blogging community. The lack of viable business models in the new media sector is a key problem and one that will be harder to solve without IBM's participation.

Jim Finn, head of communications at IBM Americas, said that there had been a decision made not to advertise in blogs but that he had advised that IBM should at least advertise in some of the leading blogs.

Mr Finn recently spoke on a panel at the Impact '05 conference at New York University. He told the audience that over the past few months, IBM had managed to encourage thousands of its employees to start blogging, and that there was a large program to encourage thousands more to become bloggers.

He explained that IBM wants its staff to become participants in the online world, and not for any promotional or marketing purpose. "It's the same as in the 1990s when IBM staff were encouraged to get connected to the internet because we felt that the internet was an important technology."

IBM has been the most courageous of all the corporations in its huge push to swell the blogosphere. It has created many educational programs, guidelines, and established legal frameworks for its bloggers. And these are starting to be copied by other companies, helping to establish a leadership position for IBM.

But IBM's decision not to advertise on blogs could undermine that effort because it could be very easily interpreted as a lack of trust in the new medium. And that blogging is not a serious medium worthy of its advertising support.

It remains to be seen how IBM's internal bloggers will react--and if they view a disconnect between Big Blue's internal blogging push, and its lack of advertising support for the broader blogging community.

Please see our scoop from May: IBM preparing to launch a massive corporate wide blogging initiative

October 12, 2005 | Permalink | Comment on this post | Tag: Media Watch
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October 11, 2005

Huge egos and lies: The software industry’s dirty secrets from Story of Informix author Steve Martin

By Steve W. Martin, author of The Real Story of Informix Software and Phil White: Lessons in Business and Leadership for the Executive Team (www.storyofinformix.com)

Q. What do Microsoft, Oracle, Computer Associates, Veritas, Sybase, Symantec, I2, Red Hat, Macromedia, Microstrategy, BMC, and Informix Software all have in common?

A. They have all made financial restatements because of accounting irregularities that skewed previously released financial results.

According to a recent report from the Huron Consulting Group there were 203 financial restatements in the software industry between 2000 and 2004.

Approximately half of these restatements were made because of revenue recognition issues. As is usually the case, almost all of these revenue restatements were lower than the originally reported numbers.

Revenue restatements are more than just accounting reversals. Their impact affects a company in every possible way. Customers are hesitant to purchase products, investors watch stock prices free-fall, employee morale is ruined (along with the value of employees’ stock options), and flurries of class-action lawsuits are filed by lawyers eager to capitalize on misfortune.

It’s a devastating experience that almost always results in a management change and sometimes in bankruptcy. As I2’s CEO and chairman said about their company’s restatement, “Surely, the audit was no fun for us or our customers, and our customers were asked a lot of questions internally by their own people.”

If these restatements are “no fun,” then why are they commonplace today?

John Coffee Jr., professor of law at Columbia University, offers the following reasons: “First, there is intensifying or weakening of a particular company’s stock, which usually occurs during a stock market bubble. Second, there is an overall decline in business morality and in the words of Federal Reserve Chairman an atmosphere of ‘infectious greed.’ Third, the company has a weak board of directors who are not independent from senior management.

Finally and most importantly, it’s gatekeeper failure--the failure of the auditors, securities analysts, and securities attorneys, who prepare, review or analyze disclosure documents.”

While Professor Coffee would rightly argue these restatements are the result of greed, cronyism among the board of directors, and a gatekeeper that wasn’t independent, I would like to suggest four additional reasons for revenue restatements that are specific to the software industry.

Pride. The high-tech industry is filled with leaders who have a fundamental desire to become rich and, equally important, famous. Since one of their most important possessions is their pride, they will go to any length to prove they are right and to avoid embarrassment, even if they have to cheat.

I would argue that the CEOs’ desire to protect their egos is just as powerful a motivator as greed.

Pressure. The pressure starts at the local sales office, where proving oneself is a matter of survival. Pressure is exerted on the finance department to keep the numbers up. Pressure is on the gatekeeper to keep the client happy, and an incredible amount of pressure is placed on the CEO from investors, analysts, and the press alike. Pressure at all these points encourages revenue fraud.

Politics. When the management regime changes at a troubled technology company, it is in the best interest of the new leaders to restate earnings and make the largest restatement possible. By doing so, they reset expectations extremely low and improve their likelihood of turnaround success.

In other words, they debook as much revenue as possible, regardless of necessity, so that it can be recounted later and improve the financial numbers under their watch.

Past history. History naturally repeats itself. The Huron Consulting Group report also revealed that fifteen percent of all restatements filed in 2004 were by "repeat filers." These companies had encountered financial trouble in the past and reported erroneous financial information on more than one occasion since 1997.

The difference between greatness and infamy has never been smaller for today’s business leaders. Under the business climate of Sarbanes-Oxley, officers risk losing not only their careers but also their freedom, every time they sign off on their company’s numbers.

However, the real story behind the software industry’s restatements is about the humanness of its leaders and a value system based upon net-worth instead of self-worth. And unfortunately, there most assuredly will be more revenue restatements in the future because history has a way of repeating itself.

In the words of Machiavelli, “Whoever wishes to foresee the future must consult the past; for human events ever resemble those of preceding times. This arises from the fact that they are produced by men who ever have been, and ever shall be, animated by the same passions, and thus they necessarily have the same results.”

By Steve W. Martin, author of The Real Story of Informix Software and Phil White: Lessons in Business and Leadership for the Executive Team www.storyofinformix.com

October 11, 2005 | Permalink | Comment on this post | Tag: Guest Writer
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SVW exclusive breaking news stories on $400m in M&A deals! Plus, find out what is the most troubling question in media today, imho.

By Tom Foremski for SiliconValleyWatcher

The last few weeks have been great. Two big shows in town means plenty of stories. Not only that, Silicon Valley Watcher had two big scoops in two days!

We broke the news that VeriSign acquired Moreover Technologies, and the next day that VeriSign sold its online payments group to Ebay!

That's about $400m in deal flow, and you read it here first!

That's why you should come back often or subscribe to our RSS feed [just paste this link into your RSS reader: http://www.siliconvalleywatcher.com/index.xml.

Also, Silicon Valley Watcher got a very good mention in the New York Times on Saturday, right next to Silicon Valley's top blogger John Battelle. We are on Cnet's first ever Top 100 blogs list [picked out of 14m!] And John Battelle has invited SVW to be part of his premium brand top 20 advertising network, fmpub.net.

Chas Edwards is the man

I hear John snagged one of the most talented advertising sales guys in the industry, Chas Edwards, formerly of Cnet and TechTV.

That's what Sam Whitmore of Sam Whitmore's Media Survey told me. Sam knows who's who because he constantly watches the trades and mainstream press and talks to everybody. Lots of PR companies subscribe to Sam's interviews and teleconferences.

Sam has also encouraged me to dip my toe into podcasting. Last Friday I recorded a second podcast with Sam, a chat about what's going on in the media sector and about the Weblogs sale to AOL.

Sam interviewed me about my recent trip to New York, where I was speaking on a panel with Joe Trippi at Impact '05 conference. I was staying at the Yale Club, in mid-town, in the heart of the media center of the universe. It is an enormous thrill for a news reporter.

Shortly after I returned to California, the New York Times announced 500 job cuts and Knight-Ridder cut 100 newsroom jobs in Philadelphia.

Our media industry, Google, Yahoo, Ebay (they all publish pages of content and ads) is growing like crazy. These technology enabled media giants produce content mostly by machine, by aggregating content, harvesting links, etc. No newspaper or magazine can compete against those operating costs.

What happens if the old media withers away faster than expected, while the new media business models are still being created?

Let me use myself as an example. I was the first high profile newspaper journalist to leave a top global newspaper (Financial Times) to become a blogger journalist. The business models to support my work are still in flux. I'm betting that things will get better...eventually!?

Scary Media

But what if the new media business models improve slowly, as the older media business models collapse quickly?

That's a scary scenario because newspapers, magazines, radio, and TV are how society "thinks" and how it processes its thoughts; these are mechanisms used by society to make decisions on important subjects.

Can the Blogosphere get us through this huge transition in media business models?

That's what I'm hoping will happen. There are many great blogs and blog-like online publications that already shoulder a lot of society's media needs.

The Passion of Blogs

But the work of the Blogosphere is largely paid for by passion--or a day job. Passion gets you through the day, and the next, and the next, but it is a subsidy. My landlord or the supermarket doesn't recognize it as legal tender.

We need a way to harvest the true value of people-produced content and in such a way that quality is recognized and rewarded. I don't see anything like that out there yet.

Google can scale up by simply plugging in another bank of servers. People-produced content can only be scaled by adding more people, yet there is no revenue to support an expansion.

So, again, what happens if the old media businesses collapse faster than the new media business models can be created?

October 11, 2005 | Permalink | Comment on this post | Tag:
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This is why Dave Winer sold...here is a ping on Pong from developer Chris Simpkins

Dear SVW readers, I received this note recently from the developer of a new approach to pinging, I haven't tried it out yet but it looks like a novel approach that fixes a few issues. -Tom

From Chris Simpkins:

Hi Tom,

I am a developer of a new XML-RPC ping application called Pong that allows authors to directly notify blog tracking services about updates to their weblogs and feeds from their desktop.

The application is free and available under an Apache 2.0 license. Pong was designed for ease of use and rapid transmission of pings to the tracking servers.

By decentralizing the ping process to a user's desktop, the messages are sent immediately to all tracking services that the user selects. Weblog authors no longer need to deal with delays in their posts as blog authoring software or hosting services attempt to forward pings. They no longer need to open a browser and navigate to multi-service ping relaying sites in order to send these notifications.

And most importantly, control over when and where these pings are sent is placed in the hands of weblog and feed authors, not a centralized service that makes this determination based upon business partnerships and financial incentives (this is happening, see these BusinessWeek and WSJ articles).

Pong utilizes the extended XML-RPC protocol (for services that support it) to transmit both weblog and feed URL's. The user simply points and clicks the tracking services that they would like to ping and, with the push of a button, the pings are sent.

This is followed by immediate confirmation of the success of transmission based upon responses from the respective servers. There is no need to search for the XML-RPC URL's of individual tracking services or configure an application to use them.

Pong is currently available for both Windows and Mac OSX. On both of these platforms, it is portable on removable media so it can be used to ping from wherever the weblog author posts.

I would like to invite you to try Pong. It's free and is presently undergoing beta testing by members of the blog tracking companies included in the application as well as by over 300 weblog and feed authors who have downloaded the application in the past week since it was released.

I look forward to any comments or suggestions that you have and would greatly appreciate any publicity that you would be willing to provide for the project through a review on your weblog or by forwarding this e-mail to individuals who may find the application to be useful (or both!).

Here are the URL's that you need in order to learn more about Pong and download the application:

Website: http://pongpong.org
Beta download: http://beta.pongpong.org (location of the latest beta version)
Quick Start Guide: http://www.pongpong.org/quickstart.php (five minute guide to running Pong)
Screenshots: http://www.pongpong.org/screenshots.php (sexy!)
Weblog: http://www.pongbuzz.com (updates on the development of Pong and news on the tracking services that follow weblogs and feeds)
Feed: http://feeds.feedburner.com/pongbuzz

Thanks for your help,
-Chris Simpkins
Developer of Pong

If you are interested, here is more information on the development of Pong:

Maintenance of a real-time, searchable blogosphere is dependent upon communication between weblog authors and the blog tracking services that index the content of these publications as they are published. For the majority of tracking services, this is accomplished using an XML-RPC based ping mechanism that transmits the URL of the updated blog (and more recently, feed URL) to the tracking server in order to prompt the server to evaluate the specified file for new content.

To date, weblog authors have had to rely either upon automated mechanisms in blog authoring software and blog hosting servers, or manual ping relay via multi-ping web services (such as Ping-O-Matic) in order to transmit these notifications.

The former approach is limited by the lack of user notification of the success of the pings. Interested authors have to manually check that the update to their site has been indexed.

The use of centralized servers via the latter approach has become increasingly inefficient as a result of the increasing demand placed on these servers by the extremely rapid growth in the number of weblog authors over the last several years.

Perhaps most concerning has been the recently substantiated rumor that deals are being struck to determine when and where pings will be sent from some centralized services that automate the handling of these notices for weblog and feed authors (see Wall Street Journal and Business Week). This information has largely been witheld from the authors of the very publications that are generating profit streams for these companies.

While my primary concern throughout development of the application has been for the weblog author, the application stands to benefit the recipients of pings as well.

I have discussed various phases of the development of the application with members of the top blog tracking services (including Bob Wyman at PubSub, Ian Kallen at Technorati, Greg Gershman at Blogdigger, Nick Gerakines at Feedster, Chris Frye at FeedBurner, Jeff Barr at Syndic8, Shane Adams at Blo.gs/Yahoo!, and Greg Reinacker at NewsGator) and their feedback has been incorporated into ping lockout intervals that are indvidualized to each service.

This mechanism limits the practice of 'spam pinging' that has increased the burden on tracking servers. In turn, this helps to prevent users' URL's from landing on blacklists that are not indexed based upon abuse of the ping service.

In addition to this check against ping spam, the application also validates all URL's entered by the user for an appropriate http protocol format (to prevent innappropriately entered URL's from being trasmitted) and tests the user's site and feed for an http response code that indicates the presence of a valid webpage or xml feed prior to transmitting the ping(s).

Limitation of unnecessary pings benefits the tracking services because their servers are relieved of having to process the forwarded ping, determine whether the file exists, and scan the site or feed for updates.

These are costly tasks, particularly when multiplied by the millions of unnecessary pings that are presently transmitted to their servers. To give you an estimate of this figure, Matt Mullenweg (co-developer of the Ping-O-Matic service) has estimated in the FeedMesh Yahoo group that approximately 70% of pings handled by Ping-O-Matic are generated by spam pingers.

The Ping-O-Matic site reports that they have sent over 400 million pings, so this represents an extremely large number of unnecessary notifications. Ultimately, limitation of unnecessary pings will benefit authors and readers by maintaining updates that are as close to real-time as possible as the demand on this system of notification grows.

October 11, 2005 | Permalink | Comment on this post | Tag: RSS Watch
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October 10, 2005

Scoop: VeriSign has sold PayFlow to Ebay

By Tom Foremski for SiliconValleyWatcher

VeriSign will announce later today after the close of markets that it has sold its online payments PayFlow group to Ebay.

The terms of the deal are not known. VeriSign says that it enables over $100m per day in online transactions.

PayFlow will become part of the PayPal group at Ebay. PayPal cost Ebay $1.5bn.

October 10, 2005 | Permalink | Comment on this post | Tag: Tech Watch
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Selling the BlogoSphere Part 2: Why are the Geek new media/blogging pioneers selling out to the big corporates?

. . .do they know something we don't?
By Tom Foremski for SiliconValleyWatcher

Why are the leading lights of this new media\blogging movement selling off key companies to large corporate entities that are considered clueless by the blogosphere?

Did those corporations get a copy of "Cluetrain Manifesto" for their birthday?

Within the last two weeks three deals have taken place. AOL acquiring Jason Calacanis' Weblogs Inc., VeriSign acquiring Dave Winers' Weblogs.com ping server; and VeriSign acquiring Nick Denton's Moreover Technologies.

Did these prominent leaders of the blogosphere take the money and run?

The valuations on those deals seem weak which suggests the owners couldn't see much upside ahead. Put some lipstick on the pig, I think was the expression sometimes used in investment banking circles. Well, if they were pigs, congratulations gentlemen, you got one over the suits.

And of course, the new owners might be more able to scale those assets across their broad infrastructure and customer base. Or they will have no idea what to do and will keep buying dated books on internet marketing :-)

October 10, 2005 | Permalink | Comment on this post | Tag: Media Watch
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The coming Big PC Crunch: the broadband-fed black hole within each PC

. . . a thin client redux
By Tom Foremski for SiliconValleyWatcher

Like a universe that finally feels the pull of its dark matter gravity and starts to pull back towards its singular moment of creation, the massive PC market could be facing the same pull on its further expansion.

The onward rise of the PC microprocessor, more powerful and complex than ever, won't be stopped by Moore's Law. It will much more likely be stopped by the fact that it becomes cheaper, and better to do the processing on a large computer system, rather than on a PC, no matter how fast the PC microprocessor.

It is a thin client/fat server world developing, a world that many predicted and many debated in the late 1990s. But this time, there won't be much debate because it is an obvious and irrepressible trend.

The black hole in the middle of the PC world is the growth of massive computer data centers, which perform increasing amounts of all computing work on the planet, and the web.

The processing power that was kicked out to the edges of the computing world, in the form of the personal computer revolution, is now rushing back in towards the middle.

Thin client deja vu

The debate over thin clients or fat servers in the late 1990s went on for many years and produced little. Because at the time we didn't have all the pieces, the changes, the culture, the technologies, the tools.

Now, the thin client/fat server trend is happening--rather than being debated. And you will see client devices of all stripes, including the PCs, becoming thinner and dumber, and all providing richer user experiences. Users won't know and won't care how fat or thin the client is--it'll be transparent.

Aggregators of machine cycles

This trend is being enabled by companies such as Google, Yahoo, Ebay, MSFT, IBM, and the large telcos; all are building massive aggregations of computer power to support the large web based commercial/collaborative applications companies are using.

Increased broadband access also helps this trend as large computer centers suck in more data packets, process them, and kick them back out--faster than a PC could.

We will all timeshare a big computer in the ether(net) and we already do much of the time now (Google). It's back to 1965 and Doug Engelbart.

The PC of the near future, just needs to decrypt and render pixels and audio bits--jobs done very well by inexpensive multimedia graphics chips, much cheaper than a general purpose microprocessor.

Dumb hardware and dumb browsers

You don't need sophisticated operating systems or browser software because the new types of web services applications such as the AJAX type, carry their processing with them.

Smart people, smart communities

Importantly, PCs/notebooks/mobile phones would be affordable to huge populations that otherwise wouldn't be able to get online for decades.

Think how such a computer architecture model could accelerate global development?

As opposed to the current attempts to slash PC prices by making ever more powerful and complex PC microprocessors.

We can get to the promised land of digital experiences for all, all the time--much faster with this type of computer architecture.

The graphics/audio processor then becomes the key chip. It has to handle the sights and sounds of a PC at lightning speeds.

Similarly, make the PC OS/browser simpler, not more complex.

Of course, in such a scenario I am assuming we have ubiquitous broadband access anytime, all the time, anywhere. Which we know will happen. And so will the rest. imho. :-)

October 10, 2005 | Permalink | Comment on this post | Tag: Future Watch
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New York Times features links to Silicon Valley bloggers

By Tom Foremski for SiliconValleyWatcher

Saturday evening at the Robert Scoble welcoming dinner my good buddy Om Malik of GigaOm and Business 2.0, mentioned that Silicon Valley Watcher had been featured that day in a New York Times column.

It was in the lead story in the "What's Online" section of the New York Times, called "No News Is Good Blogging." I was pleased with the excellent placement of Silicon Valley Watcher in the article, right next to Silicon Valley uber blogger John Battelle and his Searchblog.

The Dan Mitchell article was about last week's head scratching that greeted Sun Microsystems and Google's seemingly vaccuous announcement of a technology alliance. Most commentators said it was probably to do with Java and distributing Google's search box.

But Tom Foremski, keeper of the SiliconValleyWatcher blog, says he thinks it's all about hardware. The chief executives, Eric Schmidt of Google and Scott McNealy of Sun, "were very likely talking about computer architectures," he writes, noting Sun's expertise in large-scale systems - the kind Google uses. The companies did say Google would buy more Sun gear under the new arrangement, though they declined to say how much or what kind.

Mary Jo Foley of Microsoft Watch is also quoted in the article.

Here is my original post (check out Chris's illustration!):

. . .

Len Apcar editor-in-chief of NYTimes.com was at the recent Impact '05 conference, where I was speaking on a panel with Joe Trippi.

Mr Apcar spoke about changes and one of those would be that it would start to include links to trusted third party web sites, which was warmly received by the audience and seen as a further sign of NYT's greater understanding of online matters.

The other changes included asking readers to pay for access to its top columnists. This is not a popular move according to Editors Weblog:

New York Times' paid online experiment criticized

October 10, 2005 | Permalink | Comment on this post | Tag: About SVW
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October 9, 2005

Scoop: VeriSign is about to announce acquisition of Moreover Technologies...

. . . is it building a massive news and blogs tracker?

By Tom Foremski for SiliconValleyWatcher

VeriSign is about to announce it acquired Moreover Technologies, the San Francisco based news aggregator. The acquisition price is around $25m according to SVW sources.

On Friday, VeriSign said it acquired Weblogs.com for $2.3m, which tracks weblog changes. The David Winer founded site, combined with Moreover, will give VeriSign the ability to track and publish the content of virtually all news producing online sites.

David Winer is one of the pioneers of blogging and a co-developer of the RSS syndication technology. VeriSign now has one of the largest ping servers--an extremely strategic position as RSS use explodes. It also controls the root DNS servers--these link all the web sites on the internet.

The move by Verisign signals an ambition to aggregate a catalog of infrastructure capabilities such as security, content, and authentication services used by many large commercial web sites. The new acquisitions will enable VeriSign to track most new content published online, and track who accessed it and where.

October 9, 2005 | Permalink | Comment on this post | Tag: Tech Watch
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October 6, 2005

USA Today's Kevin Maney to swell the bulging ranks of the blogosphere!

By Tom Foremski for SiliconValleyWatcher
It gives me great pleasure to introduce a new blogger, Kevin Maney, technology reporter and columnist for USA Today. I ran into Kevin recently in New York where we were speaking at the Impact '05 conference, and he is in town this week for the Web 2.0 conference.

Kevin told me he will start blogging towards the end of October, and I think he also said that he will be the first USA Today blogger, but, I need to check that.

Kevin's blog will be under the USA Today brand, and he will continue with his regular daily duties and responsibilities.

This is not uncommon these days, other publications now demand the same from their journalists, that they "blog" for their employer, as well as keep doing their day job.

That's why mainstream journalists hate the blogging phenomenon because it is extra work on top of an already stacked-high pile caused by newsroom cutbacks.

But that's not why Kevin wrote a column in January that was headlined: "Chill, blogophiles; you're not the first to do what you're doing."

Here is an excerpt, and here is the link to the entire piece.

These days, Internet blogs are all the rage. Blog-related companies such as Technorati and Six Apart have people in technology hyperventilating like it's 1999. Blogs are ripping down mainstream media and the ruling class! Blogs give power to the people! Everything is blogolicious!

Jeez. Take a pill, all you blogomaniacs.

The column makes some fair points but its tone is clearly annoyed and frustrated, and very typical of many mainstream journalists, including myself when I was working at the Financial Times.

Paradoxically, journalists have tended to be the last people to "get it" in regards to blogging. We would see it exactly the way Kevin described things in his column, that it is just another way to publish things, a natural progression in lowering the cost of the printing press.

What Kevin, and myself missed however, is that the media technology that enables blogging, enables a two way communication. During Internet 1.0 we could broadcast our articles to anyone with a web browser. In Internet 2.0, we broadcast and receive back, and that is the kicker.

At the time Kevin's column appeared I said that such statements have a tendency to come back and bite-you-in-the-butt; there is never anything good to come from tempting the fates.

[That's why Google should change Do No Evil to something less fateful, like "Get 8 hours sleep every night and brush your teeth"--if the fates conspire against you, no harm done!]

http://www.siliconvalleywatcher.com/mt/archives/2005/10/the_friday_wrap_3.php

October 6, 2005 | Permalink | Comment on this post | Tag: Media Watch
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A Zigzag way to build a blog audience in record time

. . . here's my secret.

By Zigzag for SiliconValleyWatcher

As a woman I've got a lot to say. And let me be frank, I'm tired of saying all the things I'm supposed to say. I want to say the things my mother told me not to say, so I started a blog.

It gave me the opportunity to speak my mind without any trepidation. Coincidentally, so did about a gazillion other people. Blogs are the new black.

I learned fast that the competition is fierce. But I'm a writer dammit. My MFA says so, and when I started my blog I wanted readers, and I wanted them instantly. (We are a society of instant gratification right?)

The question was how do I drive traffic to my site? Real traffic. Significant traffic. Not 10 to 15 readers at a time. And I didn't want to work for hours researching blogs to generate readership.

So I did it. I went from zero to 200 + readers a week within the first two weeks of creating my blog. I now have an average of 1000 hits a month, and I've only been blogging for three months. My readership is steady and growing.

Want to know my secret?

I incorporated a new tactic: I linked my blog to my profile on a social network called Tribe.net.

It's similar to myspace and friendster, but with one significant difference: tribe.net offer users the opportunity to become high profile "celebrities" by utilizing conversations within numerous "tribes" to allow you to become a significant voice within the context of various subjects.

Once my profile was well recognized and I had accumulated over 250 "friends" my tribe profile became visible to everyone linked to me. All I had to do was keep my audience interested.

For instance, I'm part of "tribes" for bloggers, rock climbing, writers, life coaching, outdoor sports, actors, business gurus, etc. You name it, it's there.

After a few months of posting and commenting on various topics everyone knew who I was.

My catchy nickname was easy to remember and easy to follow. It's a nickname I've had for years (my parents even call me Zigzag) and I created a "brand" for myself: Ms. Zigzag. My URL became www.mszigzag.com.

Then I bought a membership to typepad and linked it to my domain name. After that I linked my tribe profile to the URL. Wala! I had 200+ readers and they keep coming back for more.

My personal blog tips:

I have found that a good catchy headline for each blog entry helps. And I mean really catchy. Who wants to read about a trip to the new Costco in your neighborhood, or a hike in Yellowstone? Booooring.

Tell people something more specific like, "Woman buys 75 boxes of tampons and I had to stand behind her in line," or "The Moon fell out of the sky and landed on my head at Yellowstone."

Also, pictures have been key for me. I use a picture for each of my blogs. Most people like pictures. It gives them a visual cue to what is being offered.

You have 7 seconds to grab them and a picture is (forgive the cliche) worth a thousand words and it can also add a bit of humor. People like to laugh even if the subject matter is serious.

A catchy banner also reels them in. Especially if you have a good slogan.

My banner is "Ms.Zigzag: exposing the unexposed." My pitch is that I offer people the truth by offering good info into the private world of my life. I actually tap into universal "truths" that hit a chord with the public.

The trick is to make it useful to other people.

Most people avoid the average personal blog because the average personal blog avoids most people. Incorporating universal truths that speak to the soul of the public is key to getting readers back.

And don't be afraid to speak your mind. I teach writing workshops and I always say to write like your parents are dead. Go for it, whatever it is, but make it useful.

And yes, writing about sex helps, but if your blog deals with technology or business trends this might be difficult.

The bottom line is that it's all about communication. We are writers and we want to be heard, and sometimes it's necessary to reveal yourself in ways that are specific.

The real juice is in the details, and exposing yourself as much as possible.

October 6, 2005 | Permalink | Comment on this post | Tag: Mediasphere
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Introducing Ms. Zigzag, a very new voice in the blogosphere...

I met Ms Zigzag in the early summer when Lucaso was in town and what can I say? She creates a remarkable presence online and offline, and that's a combination of qualities that can make a big difference in the world.

Originally from New York, she is now living in Portland where she had been working as a teacher. She had just started blogging after much proding by Luke (Lucaso).

When I met her, she exhibited the tell-tale signs of a blogger: the passion and the discovery of something that was like nothing she had expected. "I've created a monster," Lucaso said.

Ms ZigZag jumped into blogging with both feet. And keeping things real and authentic was something she instinctively knew was important from the very start.

She's also keen to share what she has learned about how to build a blog audience, so here's an entertaining post with some of her tips.

Genderification of blogging

Some have asked me where are the women bloggers, and why are there so many men bloggers, and other gender blogger related questions.

Well, blogging came out of the male dominated software engineering community. But these days I'm seeing way more new women bloggers than male bloggers.

Anyway, I have little interest in the genderification of the blogosphere and much more interest in the meritocracy of content.

Here is Ms ZigZag:

How are you? Didn't you move recently? How did that go? I saw Lukes new column ....it's great. I'm sure your readers will love it. :)

I'm writing because I wrote an article that I thought might be a fit for SVW. Not sure. I wanted to run it by you, as a new woman blogger. let me kow what you think.

It's about how I have generated 200+ readers a week instantly upon creating my blog. It also gives some valuable tips that I have not read about in all my searches.

My pitch is that most people avoid the average personal blog because the average personal blog avoids most people. It also speaks about tribe.net, which I feel deserves more PR.

I would (of course) love it of you ran it, or if you had any suggestions. Feel free to edit it - I'm open to anything you might want to add or remove. The title should be shorter (I think) but I think it works.
- Zigzag (Dawn)

October 6, 2005 | Permalink | Comment on this post | Tag: About SVW
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October 5, 2005

Sun Microsystems will help Google build the world's largest computer with Sun's SPARC microprocessors....

. . .imho
By Tom Foremski for SiliconValleyWatcher
Nothing there! Says perplexed tech industry and media on the Sun and Google pact announced earlier this week.

That was the consensus, but they were looking in the wrong place, imho.

Eric Schmidt and Scott McNealy were very likely talking about computer architectures. These are hardware geeks not software. Sun knows how to build highly scalable massively parallel SPARC microprocessor based systems.

Free Google computers

Sun understands 64-bit microprocessor design and the total system design of large IT systems very, very well. Oh, and before I forget, Sun also has a lot of IP in the client/digital gadget side of things...

Within a year we'll see a Google consumer computer announcement, and it'll be free, and cheap to make and made from inexpensive chips because the machine processing power moved into the big computer in the ether(net).

Google and the price of oil

I know for a fact that Google has bought large Intel Itanium systems in the past. And I know it will need massive amounts of computing power over the next couple of years.

Building everything with PC boards is massively inefficient and incredibly electric power hungry. A big Sun system uses far less electric power per microprocessor cycle than that generated by racks of PC servers.

Jet Blue to JFK

I wouldn't be surprised if Mr Schmidt shows up at Sam Palmisano's office in Armonk next to order some IBM POWER systems. Like Sun, IBM has tremendous expertise in the microprocessor PLUS IT system design that Google needs.

And this doesn't mean Itanium systems are being replaced--by SPARC or POWER.

Google is not concerned with either/or, it is concerned about more!

October 5, 2005 | Permalink | Comment on this post | Tag: Google [GOOG]
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Update: Moreover Technologies acquisition completed but announcement unlikely until early next week. . . EOM

October 5, 2005 | Permalink | Comment on this post | Tag: Tech Watch
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Silicon Valley Watcher proposes free WiFi solution for most of San Francisco. . . and it could be done this afternoon!

By Tom Foremski for SiliconValleyWatcher

There has been much chatter about San Francisco's plans to offer WiFi to all its residents and businesses, and Google's offer to set up a city-wide hotspot for free.

Here is my proposal for (nearly) free WiFi solution that could be in place this very afternoon:

I realized we already have much of the infrastructure in place. In virtually any location in the city, I can pick up several WiFi signals from local networks. We just need to persuade people in SF with a wireless router to remove password protection and hang their antenna out the window, or place it by an outside window.

We already have the simple technologies to protect individual PCs/notebooks from being hacked wirelessly, which means we don't need to have closed wireless networks. Instant bridging of the digital gap!

What do you think?

October 5, 2005 | Permalink | Comment on this post | Tag: Tech Watch
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Web 2.0: Instant RSS simplicity from KnowNow

By Tom Foremski for SiliconValleyWatcher

KnowNow today introduced its "eLerts" RSS service to the general public which pops up an alert that new content has been published.

And users don't need a news aggregator or a portal to read and manage RSS feeds. It is all done through the tool bar.

The free service is based on an enterprise IT system KnowNow already sells to corporations, except that this one runs on KnowNow servers.

Okay, it does require yet another Explorer tool bar to be installed, but it is worth giving up the screen real-estate because of its simplicity of use.

I downloaded the Beta of eLerts and played around with it and it was pretty much effortless. Drag and drop and click are *all* users should have to know in order to subscribe to an RSS feed.

Enabling such simplicity is a service to the entire community of RSS feed publishers.

. . .

RSS is still an unspoiled communications channel. It is spam filter and virus free, highly personalized and it is opt-in too. Let's hope RSS stays unspoilt because those qualities I just described are what online marketeers dream about :-)

October 5, 2005 | Permalink | Comment on this post | Tag: Tech Watch
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October 4, 2005

Yahoo gets content . . .but can it make content?

By Tom Foremski for SiliconValleyWatcher

There has been much chatter about Yahoo's renewed efforts to become a content producer. My good buddy Om Malik, at GigaOm, even proposed that I help them out.

I'm happy to help out with some advice, and that is: original content production is very expensive compared to servers and algorithms.

And, if Yahoo wants to be in the media creation business, it should have a campus in, or around San Francisco.

Yes, Geeks will travel down to the Yahoo campus, which is almost in San Jose(!) But Hacks? I don't think so! Hacks didn't choose a poorly paid career so that they could crawl down to San Jose and back every day.

Patrick Houston, who until just a few months ago was at Cnet, is heading the Yahoo effort to produce original content. And there is no denying Patrick's talents and his many years of experience in building editorial teams.

We shared a cab in New York not too long ago, and he told me he was excited about the project and the chance to do something new, from the ground up. And to use many of the media technology tools at his disposal in novel ways.

Yahoo's DNA, however, is aggregation and search. It generates content by machine, not person. It serves up aggregated headlines and web page links.

Many times, there is an effect going on within organizations that I call "you can't get there from here."

I'm not sure Yahoo can get there from here. Just as many of the older publishers trying to beef up their online business groups, cannot get there from here.

I think that these days, you need to be more like an AJAX-type-of-media company :-) C'est moi! Et vous?

October 4, 2005 | Permalink | Comment on this post | Tag: Yahoo [YHOO]
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Loco Luco and the Bassnectar beat of the digital tribes

“Loco Luco”
onelucaso@gmail.com

Un-digitize, people, it’s time for some spice! Lucaso here to give you the low down on what’s hot ‘cross my network. And it’s not just hot, it’s bad ass (and pssst… cool was so, like, 1993)!

Just recently back from the land of burning art and desert star beams, I start this weekly column with a run down of the network that helps continue the vibes of Burningman year round: tribe.net.

When I should be checking my feeds and getting caught up on the tech world, I’m usually off surfing the tribe network. There’s nothing new, per se, going on within the tribe.net architecture (P-Air, tribe’s biz dev guy, told me about a few new tribe mobile ideas in the works, but only ‘cause I asked about kite surfin’ first ;). Other than new advertising in the tribe threads, it’s pretty much the same as it’s been since they launched the new profiles six months ago.

Werd. So what’s the deal on tribe? What makes it so bad ass? Number one: real world crossover. This network isn’t confined to the online world. It has moved so far beyond the need to be jacked-in in order to access it, that its presence is felt at parties, clubs, restaurants, businesses, etc., all over town. You name the place, I guarantee tribe has come up in conversation and the “network” has been accessed (this is where tribe mobile would come in handy).

Last night at a street fair I had a conversation with a wicked juggler, an amazing vocalist, a delicious designer, and a cutie from Santa Cruz. Today, I’m linked to all of them: the juggler is down with a performance gig I’m thowin’ next month, the singer wants to play a holiday show together in December, the designer is making a pair of superstar ‘lucaso’ wristbands for me, and let’s just say I’ll be visiting Santa Cruz in the very near future.

The tribe network makes those little creative brainstorms that come up in conversation a reality. The community and network exist outside the matrix, and tribe is the tool that connects the community and helps to organize those creative ideas. Yea… the damn thing works for us, we don’t work for it. oh, yea, and it’s free.

It is community without borders. Your people. Your Family. It’s like a family reunion that you want to go to. It’s the power of creation; creation of identity, of community. You can create your own tribe or join others. It’s opening the newspaper and all the news is written by your friends. It’s your PR and word of mouth campaign to the tenth power.

Yea… that’d be one stop shoppin’.

Here’s your spice:

-Profiles (you are encouraged to shamelessly promote yourself too): Ali*kat, ZigZag, Dee, Astrogirl, Buddhamonkey, Argon: on and off the grid, that’s who they are (yes, some of their mothers even call them that now too). They are the creation of themselves, independently and creatively designing their own identity/brand/business and doing it in super star fashion. Yea… that’s bad ass.
-Tribes (groups with threads): “West Coast NYers,” where you can rag on all those softy west coast, new-agers while simultaneously praising the west,“Wireless Future” and “Social Software Intellectuals,” where you can debate and share tech ideas or show off your latest find, “Travesty Revue,” where you can keep up with your favorite debaucherous cabaret act and all the gals. And, of course, if you’re feeling a bit lonely, you can always hit the “Flirting Shamelessly” tribe, for, ya know, flirtin’.

Werd. I gotta split. Astrogirl just tribe-mailed me a hot tip: Bassnectar’s new CD is out and it’s bad ass. Check the Bassnectar tribe (http://bassnectar.tribe.net/) for more details.

-lucaso

October 4, 2005 | Permalink | Comment on this post | Tag: Culture Watch
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Introducing Lucaso, our newest columnist...

By Tom Foremski for SiliconValleyWatcher

It gives me great pleasure to introduce a new columnist for SVW, Lucaso, a pseudonym for a young 28 year old writer/geek, who brings us a taste of his world.

He brings us a taste of a generation, a group, a Northern West Coast culture, found in San Francisco and northwards, through Portland and up to Seattle and Vancouver.

I'm interested in how the groups in our increasingly fractured society talk, what they think about, how they communicate, and how they pursue happiness.

The more I look at what is happening as a result of the emerging media technologies, I am increasingly convinced our near-future will result in less knowledge of each other's worlds. We will live in societies in which we inhabit the same geographic location but inhabit totally different online/offline worlds.

We already see that trend in the rise of the gated communities of homes in the real world, and the same is happening online and in our job and social networks.

Our direct exepreince of our society's diversity increasingly narrows as our media technologies improve.

We spend more time at work, the future is Always On. And so we see the same people, same economic class, same type of intellect, most of the time. The reason we think we live in a small world is that we do--we rareley venture out of our groups, professional and otherwise.

It's an increasingly Snowcrash world, a 1992 novel that I think about a lot these days, nearly everyday. Because it pointed to things that are coming into being in this emerging Internet 2.0 world. Among those things in Snowcrash, is the many different groups living in sharply different cultures right next to each other, and mostly oblivious to each other.

I think the communications gaps between our society's groups will increase in the future, especially as we begin to withdraw into semi-public conversations.

But, we have choices and we don't have to listen, or preach to the same choir, we can listen to other voices too. And that's what SVW hopes to bring you more frequently than before...

Take a look at the adjoining post, Loco Luco by our newest and youngest columnist, Lucaso.

October 4, 2005 | Permalink | Comment on this post | Tag: Future Watch
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October 3, 2005

News: PayPal co-founder to come out of stealth mode this month with Slide.com. . .

. . .sliding into another winner?

By Tom Foremski for SiliconValleyWatcher

Max Levchin, the co-founder of PayPal, the internet commerce giant, is coming out of stealth mode mid-October with his next big venture: Slide.com, an online photo sharing site.

Mr Levchin has funded other businesses, such as Yelp; but this is the first one, since PayPal was sold, that he is heading as CEO. Mr Levchin, 30 years old, was the former CTO of PayPal, which sold to Ebay for $1.5bn in 2002.

Mr Levchin told Silicon Valley Watcher that Slide.com "is like iTunes for your photographs." It automatically finds photos on your system and organizes them. Users can share their photo albums using very simple one-or-two-click tools to publish online.

Mr Levchin is expected to announce commercial partnerships around Slide.com, and further details of his strategy, later this month.

San Francisco based Slide.com has many aspects that are familiar in other online services such as Flickr, and in social networking sites such as Friendster. Mr Levchin is betting on Slide.com's simplicity of operation, and its combination of "social" network technologies, to attract large numbers of users.

Slide.com is hosting an event on October 14 celebrating the official launch of its service.

This week, San Francisco is the venue for the Web 2.0 conference, where many online services and online companies launch new products.

Foremski's Take:

There is no doubting Max Levchin's entrepreneurial skills; he could have retired at 28. He once told me, "I took a year off after Ebay bought PayPal; but I didn't do much, and I was bored...I'm much happier coding until 4am."

Slide.com has a good user interface' and Max knows how to grow businesses: PayPal was his fifth venture.

Such persistence to succeed will be needed for Slide.com; but we have to remember that we are still in the early stages of the internet, and there is still plenty of time to build a strong online brand.

The hard part

And that is the hard part, not the software coding. Building an online brand takes time, and a consistent, unflagging effort to build up the user community.

These days, such brand building efforts cannot be done by throwing money around in a big advertising/promotional campaign [as during internet 1.0...]; it has to be done in a much more grass-roots fashion, with subtle marketing; and that is not easy.

Another PayPal?

Max has built up large PayPal communities, [and these are essentially "social networks"] so he could do the same with Slide.com, and grow communities in a similar, viral way.

PayPal's success, however, depended on its ability to guard against fraud far better than the credit card companies; and this enabled it to offer a smaller retail transaction fee.

For small merchants, PayPal's low-cost of transaction became an extremely valuable service and one that they encouraged customers to use--and the PayPal network grew by leaps and bounds.

In a similar way, Slide.com will have to demonstrate it offers an extremely valuable service in order for its users to evangelize it in their communities, and for it to spread in a viral fashion. It can be done, but it can't be forced.

October 3, 2005 | Permalink | Comment on this post | Tag: Tech Watch
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October 1, 2005

An engineer responds to Real Men Have Fabs. . .

[Occasionally I will take an interesting comment posted by our readers and publish it separately. I may sometimes cut shorter such pieces, and correct obvious spelling errors. But I won't mess with the style, tone, pattern of our readers' writing--that's the good stuff! The only non-original text in the following post is in [brackets] and that is my comments or subheads, to make the page easier to read, hopefully :-) - Tom Foremski]

[Orignal story: Real men have Fabs]

By Mark Wendman
Real Men have Fabs is a bit trite.
This is coming from a 22yr veteran process engineer.

The Real Issue - is how to best make money from microdevices and to have your company prosper and grow.

It is not a question of $B fabs, versus nothing, it is a question of given your assets (human, capital and plant) how do you maximize profits. Oftentimes it is too easy to give up and take the easy way out.

Given any kind of business model you can make money if you bother to sweat the details, understand the markets and sell well and profitably.

[Linear Technology gets it]

One excellent fab model with no $B fab vain ego, is the superbly run Linear Technology. They sweat the details and there are NO $B capital expenditures in sight.

I once ran into an IT Support engineer from LT and he was alternately meekly bemoaning the old computers running the business and taking pride in the fact they were old machines (DEC Alphas and older PCs) but that LT's profits ran like clockwork.

[Real men have battleships]

The main unspoken weakness of Fabless models is that there is mostly a huge over reliance on PEACE between CHINA and TAIWAN, that is in fact pretty darn shaky at present. That is the unspoken risk hardly ever faced with a degree of reality by any articles .

Fabless IC yields are significantly harder to improve, because the interface between the Fabless engineers and the Foundry has natural Boundaries of significance not to be trifled with. Only weak management or engineers expect the impossible and misplan with abandon.

This makes for a substantive limiter in rate of yield improvement (process learning for device specific issues); but there are also other factors to consider in the Fabless business model.

[How to cushion low yields]

Fabless devices which use bleeding edge processes MUST have high enough ASP's / Margin, to accommodate the slower rate of Yield Learning. Facts of Life in the Fabless perspective. It is not better nor worse, but different.

Low margin Fabless product types have much less margin for gross yield glitches than High Margin Fabless devices, as margins and asps are typically in a range that is considerably less forgiving of low yield or yield glitches.

[US chipmakers lack guts?]

Another aspect to this subject is that FABs (factories really), to be run well, take a certain strength of stomach, so to speak, that many North American microelectronics manufacturers sometimes are weak in.

Case in Point was the mid-80's "Fear" of the Japanese vaunted IC manufacturing skills. Both National Semiconductor and Intel at the time "succumbed" to the exaggerations, and for the time in the mid 80's there was a modest cry wolf attitude (the sky is falling, etc.) about the future of IC Fab Manufacturing in the US.

This was greatly overblown; and Intel, through [Intel CEO] Barrett's superb manufacturing acumen, blew that one out of the water - with the result that Intel is the biggest FAB business and most successful today.

Yet some Intel, and other managers of wafer fab domain in the mid-to early 80's, were pretty timid technical manufacturing leaders, as one might call it.

[It's raining DRAMs]

The cry of the loss of DRAMs is a case in point that, in retrospect, had to do with an absence of "thinking mans elbow grease". At the time, some pretty prestigious folks, and some lesser known, but very well-credentialed, "leaders", were reaching conclusions prematurely, and very wrongly.

Despite the credentials of those involved, the cries of "the sky is falling" now seem pretty hollow.

Barrett busted through the mental barriers that were then characterized by some leaders in Oregon in those "long ago" days; and proved the timid folks wrong, thank goodness.

[Touché]

The seeds of FAB supremacy of Intel today were laid with the Battle Cry of Gambati in Livermore and elsewhere (Gambati is Japanese for On-Guard, or similar).

Limits of capability are often in the mind, from weaknesses of discipline of thought. Fabless is best for those who do not have the stomach to manage the huge complexity of FAB manufacturing and Yield Improvement, quite daunting even to the "best" of engineers, if you don't keep your nose to the grindstone, focus focus focus, and do so strictly pragmatically.

[The discipline of attention]

It is too easy to overcomplicate pretty straightforward yield problems, and miss how to do the real yield improvement in fab. Often times, yield is held down due to not paying attention to details; and you cannot every take anything for granted ever.

The phrase of the Reagan years, "Trust but Verify", is a mantra appropriate for fab yield improvement. If you let rest technical issues due to bureaucratic (artificial) boundaries and your own FAB's yield suffers, you have no-one else to blame but yourself. It is nice to complain; but better to work hard and sweat the details.

Case in point is that time after time, low yields persist because someone (or many) did not pay attention, and misinterpreted data or the limits to an experiment. Often this is subtle to the unsuspecting; but when all hell breaks loose, you'd better know your stuff cold.

Despite the sometimes seemingly grimy aspect of manufacturing, success at the art requires discipline and insight that some do not have; else you had better count on having the wages of mainland china to accommodate your sloth.

[T.J Rodgers of Cypress Semiconductor said it]

The trite phrase "Real Men Have Fabs" (from someone who has an epi reactor explosion under his belt) is overused, and at times inappropriate.

"Real Men" pay attention to the details of their business, and do not stray from their responsibilities, FAB or FABLESS, catchy phrases notwithstanding.

October 1, 2005 | Permalink | Comment on this post | Tag: Letters to SVW
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SPONSORWATCH TIBCO TIBCO's First Hardware Delivers Quantum Leap Performance – Changing the Game for Enterprise IT TIBCO Positioned as a Leader for SOA Governance in 2009 Magic Quadrant TIBCO Contributes General Interface to the Open Source Community Comments Tom Foremski on 10 Basic Digital Publishing Skills Journalists/Anyone Should Know... Yes, you can change the video size to whatever you'd like. Just take a look at the embedd code. Cog on 10 Basic Digital Publishing Skills Journalists/Anyone Should Know... I think I would pass almost all of them, but how do you resize a youtube or other embedded video to fit a web page's size? I know you have to keep the dimensions proportional, but can you just change the height and width, or is there something else you have to follow? Mike on Startups In LA... Building The West Coast Corridor Of Innovation - 1400 miles Long There is no place like the West Coast for innovation Sandy Kotch on Startups In LA... Building The West Coast Corridor Of Innovation - 1400 miles Long I love the feeling of innovation for 1400 miles- that is the West Coast! Having moved from San Francisco to Santa Monica in the late 90s and being in start-up modes with companies for a majority of that time, it is great to confirm my true feelings all along - that we are in the innovative crux: California! Couldn't agree more that the creative energy in LA is bound to drive the technology here, it is a great place to be - although often expensive to do business! Tom Foremski on Social Media Is Not About Conversations... It's About Something Much More Amazing David: I don't think the problem is finding a new term for a stilted conversation, but that 'conversation' is misleading when applied to social media because it's about something that is much more exciting and amazing. Conversation is a red herring when it comes to understanding this next phase of the Internet... David Shantz on Social Media Is Not About Conversations... It's About Something Much More Amazing I beleive that the nomenclatures may be what's failing us. None of our current lexicon really fits exactly: A CONVERSATION is really an exchange of ideas, with each response being dependant on the other and with the overall context... A DISCOURSE is more of a formal debate. PUBLICATION is as you say, to make content available publicly (but seems not to have enough emphasis on exhange) Perhaps we need a new word. "Publicly sharing an idea that is Doug Millison on Social Media Is Not About Conversations... It's About Something Much More Amazing I enjoyed reading this. McLuhan is worth re-reading, especially his book THE MECHANICAL BRIDE. Digital media are bringing us back to something like the manuscript era, where readers were usually writers who compiled their own books. Now we're creating & compiling our own "books" -- sometimes we call them "blogs" -- by mixing text & image & sound/music online. My "prose+comics scrapbook" format makes this explicit & ushers in a new, interactive scribal epoque, as we let readers become co-cr Bud Gibson on Social Media Is Not About Conversations... It's About Something Much More Amazing I agree with your bounds on what constitutes non-conversation, but somewhere in between is conversation. Ten to fifteen comments is often quite interactive. There are also side conversations that can happen in those large comment streams you mention. I've particularly seen this in some buzz threads. Another small point of contention: you're using a term, publishing, which is increasingly becoming archaic. I tend to think of it as having been replaced by three distinct activities: Seth Grimes on Social Media Is Not About Conversations... It's About Something Much More Amazing Personally, I think "conversation" works quite nicely, but I'd guess I'd define "conversation" more expansively than you do. Actually, I kind of like the WordNet definition: "the use of speech for informal exchange of views or ideas or information etc." (http://wordnetweb.princeton.edu/perl/webwn?s=conversation), which fits what we're doing on/with social media. In any case, I wouldn't get hung up on conversation/publication. Isn't the point that social media supports both back-and-f Dave Kellogg on Social Media Is Not About Conversations... It's About Something Much More Amazing I love the McLuhan quote. If you read the comment streams on blogs, it's usually not a conversation. It's usually what an old boss of mine used to call "parallel independent conversations" which is very much in line with the notion of two-way publishing. Chris Dymond on Social Media Is Not About Conversations... It's About Something Much More Amazing Question for me is: is it sufficient and to the greatest benefit for legal frameworks to simply consider social media as publishing, or should they adapt to consider a new category - something like a 'permanent conversation'? In other words should it hold people accountable in the same way it does when the act of publishing and hence the motivations of the publisher are clear? Seems to me that the normative effect of maintaining that legal stance will be to force a change in behaviou Andrew on Farmville valued $1B More Than Twitter By The Smart Money The Microsoft deal with Facebook included an advertising deal--the $240M was for a share of the company and for the ad deal. Thus, saying they bought at a valuation of $15B is significantly inaccurate. Tom Foremski on Tech Giants Struggle With Copy And Paste... George, sarcasm sometimes gets lost in translation, my apologies. Daphne on Analysis: Could $GOOG Face Problems Outside Of China For Its Opposition To Chinese Government? The Chinese governement has this stigma attached to it, basically don't mess with them. If google is mad enough to take them on, I wouldn't put it past them buying google and sacking the moron who made the decision. George on Tech Giants Struggle With Copy And Paste... And that significant lead will result from...adding something Apple has already added? And that make sense to you? Steve "@PodcastSteve" Lubetkin on Dirty Little Secrets: Social Media Is Terrible At Promoting Products Tom, you and I are of the same mind on this. I am so tired of reading blogs or listening to podcasts or watching video embeds about social media people using social media to talk about social media. I really want to hear about specific business uses of social media. As I've said frequently, we need to remember that these tools are just communications channels, and we'll all be better off when we reach that day when it will sound really silly to hear a news headline like "Tom Foremski used Twi Tom Nocera on Analysis: Financial Times Says GOOG Has Detailed Plans To Close China Search An excellent analysis, Tom Foremski. I think there could be a great long term benefit for Google by its foray into China. By the timing of its very prominent presence there, coming during the great boom in Internet usage and awareness, Google's retreat, may become a kind of catalyst in the long term memories of tech savvy Chinese...the leaders of tomorrow. I forecast a triumphant return for Google one day, and it will be without the curse of censorship which only helps governments to contro Jonathan Mendez on Why Ad Networks And Exchanges Will Never Help Publishers Great post. I believe publishers can have advertising supported businesses. In fact I don't think that's debatable. First though they need better tools to leverage their audience data and their own ad matching systems. Essentially they need to build a new improved display channel. New pub controlled networks could then emerge that would crush the performance of what exists today. Then all the margin eating middle men would vanish and both ends of the transaction get yet more value from the m Tom Foremski on Is the Future Of News Dependent On The Generosity Of Billionaire Philanthropists? Eric, What's wrong with making a reasonable profit as a news organization? I agree with you that there is a race to the bottom going on because the econopmics of online news continue to worsen. At some point, we have to figure out how to reward news organizations doing a good job otherwise we are in serious trouble as a society. That's what I would like to see Mr Hellman's money go towards -- figuring out a solution to one of the most difficult problems we have. There's not Tom Foremski on Techmeme's Gabe Rivera Is More Editor Than Aggregator... Gabe: You should get a press pass and if you don't, you should ban SXSW stories from Techmeme. (SXSW gets very noisy, you'd be doing us all a big favor :) SVW RSS Feed - One daily update by email - Subscribe to SVW Rooster Newsletter! Also: Keep up with breaking Silicon Valley and US tech news with our RSS pre-loaded SVWatcher News Toolbar. It's fast, easy on or off, and it saves a lot of clicks: SVWatcher Newsbar Silicon Valley Watcher--reporting on the business and culture of innovation. Sponsored by Tibco Software, Intel and Edelman © Silicon Valley Watcher 2004, 2005, 2006. Licensed under Creative Commons Attribution-noDerivs 2.5.Details of license.