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April 30, 2006

Startup School: Launch fast, update frequently and be lazy

Mark Coker reports from Startup School at Stanford university where 600 people from around the world listened to some of Silicon Valley's top entrepeneurs give out their best advice.

By Mark Coker for Silicon Valley Watcher

Palo Alto - Launch fast, keep it simple, update frequently. That was the message hammered home this Saturday to 600 wide-eyed entrepreneurs packed into Stanford University’s Kresge Auditorium for Startup School 2006.

Attendees at the invitation-only event, who came from as far away as Europe, South America and Asia, were there to learn startup business advice from over a dozen tech industry movers and shakers. The crowd, mostly men in their early twenties, sat in rapt attention as they heard war stories of tech business success and failure from men and women not much older than themselves.

The event was co-sponsored by seed venture firm Y Combinator and Stanford’s BASES organization, and featured presentations covering fundamental topics such as funding, hiring, marketing, operations, and legal planning.

Joe Kraus: I'm a startup addict

Joe Kraus, the former co-founder of the Excite search engine that sold for $6.7 billion in 1999, kicked off the conference by confessing to the audience that he was a startup addict. The crowd laughed, probably wishing the same affliction upon themselves.

Kraus proceeded to share stories about the early days of Excite and how his passion for startups led him in 2004 to do it again, this time with JotSpot, the wiki software collaboration company. Throughout his speech, he called upon the aspiring entrepreneurs to remain persistent in the face of obstacles, hire only “A” players and accept minimal funding at first.

Kraus told the crowd that it was easier than ever to start a company because of low cost hardware and open source software. He cautioned, however, that it’s still difficult to build a successful company because lower financial barriers to entry mean more competition.

Mark Flecher: Creating the infrastructure

Kraus was followed by Mark Fletcher, another serial Internet entrepreneur, who doled out advice about how to create the Internet infrastructure necessary to support high traffic sites. His first two startups, ONElist and Bloglines, both had fairy tale endings in the form of acquisitions from Yahoo and Ask Jeeves, respectively.

Ann Winblad: Software industry breakout

Next up was Ann Winblad, whose venture firm, Hummer Winblad has been a Silicon Valley institution since 1989. To this day, they continue to invest exclusively in software firms. Winblad declared that the software industry was on the verge of a strong four year cycle of wealth creation, driven by exciting new software delivery models such as on-demand.

Tim O'Reilly: Watch the alpha geeks

Tim O’Reilly, founder and CEO of O’Reilly Media, encouraged entrepreneurs to keep their eyes on the “alpha geeks,” the early adopters whose interests in emerging operating systems, programming languages and scripting languages often presage seismic shifts in the industry. The Perl language, he said, became hugely popular among alpha geeks in the mid-‘90s before the mainstream computer trade press had taken notice, even though it was being used to create a new generation of web applications which would later spawn what is know today as web services.

O’Reilly told attendees to focus their businesses in markets where there’s the possibility for “asymmetric competition.” He cited the Internet classifieds site Craigslist as an example, noting that in 1995 Craigslist had only 18 employees compared to other big media companies such as TimeWarner and Disney that had tens of thousands.

"Figure out which industry is ripe for disruption and take the costs out of that business," he stated.

Paul Graham: Expose your ideas early

Creative destruction was a common theme of the event, where entrepreneurs were told to constantly revise the expectations of what their businesses should be, not to confuse products with business models, and let their users be their guides.

Paul Graham, a partner at Y Combinator, urged attendees to launch their Internet businesses early, even before all the development is complete. “If your idea is stupid,” said Graham, “it will be exposed early.”

He also urged entrepreneurs to continually pump out new features designed to improve user experience. Graham, known for his lyrical metaphors, declared, “Users are a fickle wind. If users pick you up, there’s no competitor that can knock you down.”

He also told the audience that in order to succeed with an Internet business, you must “sing for your supper or die.”

Caterina Fake: Less funding is good

Graham was followed by Caterina Fake, co-founder of , the photo sharing site acquired by Yahoo earlier this year. Fake, building upon Graham’s comments about quick deployments, said that it’s important to make your mistakes quickly and learn from them.

Fake recommended testing usability by listening to users, but more importantly, observing how they interact with your site.

When asked if Yahoo was going to add videos to Flikr, Fake smiled and said, “I wouldn’t exclude the possibility of there being video on Flikr some day.”

Fake spoke about the early days of Flikr and how the company had no money for marketing or PR. Yet she said that in retrospect, being under funded was a good thing because it forced them to build a product that was viral in nature, which in turn improved the overall user experience by encouraging stronger community. In the early days of Flikr, the company generated 80% of their new users from blogs.

Several speakers spoke of the need for software developers to strip out all but the most essential features when launching their businesses, and to do more by doing less and keeping it simple.

Om Malik: Don't over-engineer products

Om Malik, a Business2.0 reporter and publisher of the popular GigaOm technology blog, entered the stage waving a stack of index cards in his hand. Scribbled on the cards were his speaking notes. He announced to applause that he wouldn’t be using PowerPoint and then challenged the attendees to create an application better than index cards, because index cards were portable, cheap and easy to use.

The primary theme of his presentation was that great businesses, products and applications force a positive behavior change among customers, often by making something much easier to use. Many products today are severely over-engineered, he said.

Counseling entrepreneurs on their communications with the outside world, Malik urged them to keep their messages simple when trying to connect with users and the media. He chastised the recent batch of Web2.0 startups because it’s too difficult to discern what they do, and their appeal is not mainstream.

“Silicon Valley is very insular,” he said. “Many startups are looking to serve just geeks but what’s cool is rarely profitable.”

Chris Sacca: Too many stale pitchess

Chris Sacca, Head of Special Initiatives at Google, lamented that most Internet business pitches he receives from among his 1,500 emails a day have gone stale.

“Many Internet companies are starting to look the same,” he said, scrolling down a list of hundreds of Web 2.0 sites as the image of a homely sheep’s head emerged in the background his presentation. He called upon developers to add “interestingness” to their applications, citing photo sharing site Flikr as and example of how to do it right.

Lawyers: Invest in legal infrastructure

Several of the startup veterans, as well as lawyers Page Mailliard and George Willman of Valley law firm Wilson Sonsini Goodrich & Rosati, urged entrepreneurs to invest the money necessary when they form their ventures to file the proper legal paperwork, such as “C-Corp.” articles of incorporation in Delaware, founders agreements and stock option agreements.

In answer to a question from the audience about the cost of legal representation, Mailliard responded that her firm often agrees to provide up to $20,000 in legal fees on spec until a startup secures its first round of funding.

Joshua Schachter: Be lazy

In a form consistent with his pioneering role of popularizing Internet tagging, Joshua Schachter, founder of community bookmarking site del.icio.us delivered the sparsest PowerPoint presentation of the day. Each slide contained a single word, such as “market,” “listen,” “design,” and “scale.”

The final slide was labeled, “lazy,” for which he made the point that entrepreneurs should be lazy by avoiding low value transactions that consume your limited time, and focusing on what really matters for your business and ignoring what doesn’t.

Smart mobs: The audience reaction

During the breaks and lunch hour, attendees networked with a fervor, comparing notes of who had met whom, eager to find others willing to listen their project pitches, and mobbing Kraus, Fake, Graham, O’Reilly and Malik.

Bryan Wood, 20, who had flown all the way from Dallas, Texas, stood outside the auditorium during breaks, passing out printed flyers advertising two of his four Internet properties. One, which just launched, is LendMonkey.com, a peer-to-peer trading exchange for movies, games, music and books.

He asserts his service is far superior to better buzzed sites such at Lala.com and Peerflix, and he’s looking for capital to expand his marketing to compete. To support his fledgling businesses, he does contract programming on the side although his real dream is to devote full time to the businesses.

Earlier during the presentations, when Ann Winblad outlined the elements for a business plan, Wood murmured excitedly, “This is the type of information I came to learn.” When Caterina Fake recommended that it was important for news users of community sites to be greeted by an online host, Wood smiled again and said, “I’m going back to my hotel room tonight to build that - I’m going to greet my users too.”

Wood was not alone among Startup School 2006 attendees in his giddy exuberance, because for many attendees the emotions rivaled that of a religious revival. These programmers, many of whom must pursue their entrepreneurial dreams at night while they hold down day jobs, came here from around the world, hungry to unlock the secrets to tech business success.

During the lunch break, Eduardo Flores Verduzco, a soft spoken software systems integrator at FusionMX Software in Mexico City, joined a table of strangers. Verduzco, like most Startup School 2006 attendees, mixed effortlessly with other attendees, all of whom enjoyed sharing ideas as if conference were participating in one virtual message board.

Eduardo said he traveled to the event to learn more about the business ecosystem in Silicon Valley that allows technology ventures to sprout like vegetables in fertile soil.

In Mexico City, he says, they have the technology and the skilled labor to build technology applications, but they lack Silicon Valley’s infrastructure of law firms, PR firms and venture capital that are the catalysts of new business formation. Furthermore, he says, Mexican software developers lack the knowledge to protect their intellectual property, or to market their products on a global scale.

When asked who he wanted to meet, Verduzco smiled and answered, “Paul Graham of Y Combinator.” One of those at the table pointed to a man sitting six feet behind Verduzco and said, “there he is.”

Verduzco quickly reached into his bag and pulled out what at first glance appeared to be a think business plan, although a second look revealed it was a large coffee table book of Mexican art - a gift for Graham and an advance token of appreciation for what Verduzco hoped to learn from him.

Audio archives of the conference will be available early this week at http://startupschool.org/.

- - -

Mark Coker, former founder of BestCalls.com, dreams of launching his next startup. By day, he’s president of Dovetail Public Relations, a firm that specializing in representing venture-backed startups.

April 28, 2006

Guest Column: Who shouldn't blog in the PR industry?

By Daniel Bernstein for Silicon Valley Watcher

Richard Edelman totally spoiled ‘Fun with Dick and Jane’ for me.

Edelman, well-respected president and CEO of Edelman PR Worldwide, wrote a blog post this last Monday recommending a few ways our industry can work towards improving how we’re portrayed in film and television. He references Jim Carrey’s latest, Fun with Dick and Jane, in which the comic portrays an underdog communications executive that eventually outsmarts everyone and becomes an unlikely hero to the defenseless everyman. I haven’t seen it.

Edelman asks, “How can we build on this new Hollywood persona, the action-hero PR person? Or better yet, how can we offset the negative images of the mealy-mouthed apologist in the Constant Gardner or the cynical opportunist in Thank You for Smoking?”

He then offers four ideas: First, make the process of communications transparent and participatory. Second, move from spokesperson to participant in policymaking.

The third and fourth fit with the second, take the lead on issues that have historically been assigned to other corporate departments, and lastly, help to make change.

While Edelman’s suggestions are accurate, they are not groundbreaking, and certainly not any different than what’s been available for the taking for decades. The best PR people already open up the communications process and help make change, so what’s new here exactly?

Will we change better Hollywood’s (and therefore, America’s) perception of our industry by continuing to further these goals? It’s a long shot. Most likely we’ll have to change the game altogether.

A few weeks ago, I attended a meeting at CNET Networks’ San Francisco offices led by their game-changer chairman and CEO Shelby Bonnie. According to Bonnie, CNET’s business model is to develop content that “speaks to the passions of [their] users in high-interest categories.”

He explained that categories such as gaming, consumer electronics and computer hardware hold mass appeal, but differentiate themselves because of the fanatical base that drives their success. For example, you might download Firefox because it’s a hassle-free alternative to Microsoft, while not realizing it began with the fanatically passionate open-source community.

Nine out of ten PR professionals will tell you that corporate or employee blogging is the closest thing we have to a rally-around-the-flag entity like Firefox. The parts are there, fanatical base, mass appeal, etc.

Public Relations industry didn’t invent blogging, far from it. Blogging is a communications mechanism handed to us by the long tail of the Internet.

We weren’t even the first to recognize its utility as a corporate communications tool. People like Christopher Locke, Rick Levine, Doc Searls and David Weinberger pointed that out to us.

Nonetheless, senior PR professionals are either (a) the individuals responsible for determining the communications strategies of the world’s largest organizations or (b) the individuals consulting to the world’s most powerful communications executives.

Blogging appeals to PR professionals because it’s the scrawny, get-it-done middle infielder of public relations. It’s a hero’s tail, a voice a reason, nearly altruistic, “corporate communications with mass appeal.” Every starry-eyed PR professional that blogs believes, somewhere inside, that it can make them some kind of champion of business. It’s our Firefox, our feel-good alternative. It’s our Hollywood story. Convince one company to put blogging at the forefront of their communications strategy and you’ve “won one for the Gipper.” It’s as if you removed every single ethically-questionable tactic used by PR professionals and replaced them with a single olive branch.

Strumpette’s Amanda Chapel has enthusiastically embraced blogging. She hasn’t, however, enthusiastically embraced many of the PR professionals that maintain personal blogs. She actually goes out of her way to antagonize them.

In some respects, I share her concern. I believe blogging, as the delicate olive branch of PR, must be handled by the absolute best-of-the-best our industry offers. These are the Tim Dysons, the Richard Edelmans and the Andy Larks.

If we allow this wave of wannabe journalists and self-publishing addicts to control (and ultimately mishandle) what could be our White Album, we will fall … and we’ll fall hard.

“How can we build on this new Hollywood persona, the action-hero PR person? Or better yet, how can we offset the negative images of the mealy-mouthed apologist in the Constant Gardner or the cynical opportunist in Thank You for Smoking?”

We advise our clients to begin to leverage blogging (today) to help them build a core audience of fanatics. Once we learn to handle our Firefox, then it’ll be time to help our clients find their’s.
- - -
Daniel Bernstein works at Bite Communications, a Next Fifteen company whose CEO is Tim Dyson.

Learning the business of innovation: Stanford hosts sold out Startup School weekend

By Mark Coker for Silicon Valley Watcher

Palo Alto - 600 people from countries as far away as Brazil and Japan will converge at Stanford University Saturday for Startup School 2006, a conference featuring a dozen tech industry movers and shakers such as Caterina Fake of Flickr fame and Joshua Schachter of social bookmarking site, del.icio.us.

No, attendees won’t learn how to build next generation Web 2.0 websites with PHP, Python or Ruby on Rails. Instead, they’re coming to receive a one-day crash course in how to build a successful technology business.

For those lucky enough to nab a ticket to the invitation-only conference, Startup School 2006 will offer attendees a rare chance to hear first-hand war stories from the successful pioneers behind some of the biggest technology trends shaping the industry today.

Y Combinator [http://ycombinator.com], a venture firm based in Cambridge and Mountain View, organized the event in association with Stanford’s BASES [http://bases.stanford.edu/site/index.jsp] organization.

"Startup School is the only event of its kind to serve next generation founders of technology companies," Jessica Livingston, a partner at Y Combinator, said. "Most attendees have computer science and engineering backgrounds. This conference exposes them to the business side of startups, and it’s the business side that can often seem mysterious."

If you want to attend the event but you don’t have an invitation, you’re not alone. Nearly three hundred applicants were turned away due to space limitations. But don’t fret. Podcasts and PowerPoints from the conference will be archived online at http://startupschool.org/ early next week.

As you wait for the new presentations to come online, check out the Podcast archives from last year’s Startup School 2005, held in October at Harvard University, at http://startupschool.infogami.com/Presentations . Speakers included Steve Wozniak of Apple, Langley Steinert of TripAdvisor, Stephen Wolfram of Mathematica and numerous other tech veterans.

Editor’s note: Mark Coker will be on hand to cover the event for Silicon Valley Watcher.

April 27, 2006

The Next Big Thing...

By Tom Foremski for SiliconValleyWatcher
I had to take a break from interviewing and writing all day long so I popped down to the Ad:Tech conference downtown. But it was 7pm so all that was going on were the evening events.

I had some invites and it was a gorgeous evening in San Francisco and so I just wandered in and out of various places, content to observe and amble around.

And this is the point of this post: I can walk into any room and talk with anybody and I will walk away with a story. I like to joke with people that there are so many stories here, that I can kick over an empty soda can in the street and find a story. And it's true, and I do it time and time again.

So this evening I met the very excellent Chris Heuer, and his delightful entourage. And the wonderful thing about all of this is that there are so few people that speak this freakish pig-latin that people in the bloggerhood speak.

I certainly didn't speak it until I became a journalist blogger about a year or so ago. And at the time, I would estimate there were maybe 150 people that understood this special language...

Now, there is at least a 200 percent jump in that number. There might even be as many as 500 people that speak this language, worldwide (most are here).

And that number will not hockey stick, it will jump onto a logarithmic scale very, very soon. But in the meantime it's great to find like minded souls.

And it is so wonderful to be here, in Silicon Valley, the birth place (again!) of the next big thing. I've spent more than 20 years here, covering Silicon Valley as a reporter, looking over other people's shoulders with my notebook in hand, saying "Wow, that looks really interesting, tell me what you are doing."

Now, my colleagues in the mainstream media call me up and say "Wow, that looks really interesting, tell me what you are doing." It doesn't get any sweeter than that.

There is a new trend emerging, but it is not where you might expect it. Silicon Valley is buzzing, there is a new energy in the air, but it is not where most people think it is.

The next big thing is ... [I'll tell you if you ask me :-)

- - -

BTW, Chris Heuer and his buddies are heading over to New Orleans next week to bring the new social/media technologies to the neighborhoods and the small businesses that anchor the city's communities. It's a real test of our collaborative media technologies; if we say these technologies are powerful change-agents then let's put them to use in the most needed areas of our society!

My focus is schools, but there are many other places that we can put these powerful and very inexpensive technologies to great use. I support what Chris and his group are doing and you can too. You can contact Chris here on his web page if you'd like to help.

April 26, 2006

The new media press release is coming!

By Tom Foremski for SiliconValleyWatcher

Yes!!! Put-this-in-your-pipe all you "Die! Press Release Die! Die! Die!" reactionaries...

This just in from Todd Defren over at Shift Communications' PR Squared blog.

I received a note from the "rising star" staffer who's in the graduate PR program at Boston University, in response to the latest series of posts.
She wanted me to know that our "Press Release of the Future" (and Tom Foremski's inspirational rant) had been passed around and discussed in class, and that the professor recently informed his students that their Final Exam would include questions on this "PR 2.0" topic.

From: Already making a difference.

New media analysts are slow to embrace new media

By Tom Foremski for SiliconValleyWatcher

Wednesday morning I took part in a PRSA (Public Relations Society of America) teleconference organized by Barbara French of the head of Tekrati, which tracks industry analyst firms. On the panel with me was David Schatsky, president of JupiterKagan--the new company recently formed when KaganResearch acquired JupiterResearch.

The topic was: The Changing Influence Of High Tech Analysts in a New Media Age and we discussed some of the blurring distinctions between analyst, journalist, and industry bloggers. Ms French shared some interesting statistics: only about 5 per cent of the analyst community are engaged in blogging out of more than 4,000 analysts.

The number of analysts blogging seems very low to me and indicative that the analyst community does not appreciate the value of publishing their own blogs. I'm sure that will change over time, but for now, Ms French says that the number of blogs is steady although there is some churn as new blogs replace ones that have become dormant.

I'm surprised that more analysts are not blogging because it is by far the best way to establish your thought leadership and expertise. And I think that the analyst community does not yet understand this fact: blogging is by far and away the most honest form of self-promotion because if you can't walk the walk, talk the talk then it will be very readily apparent.

So is it that many analysts are afraid of being "found out" as being less expert than they really are?

Mr Schatsky has been a strong advocate of blogging within JupiterKagan and all analysts are encouraged to blog although only about two dozen or so do it on a regular basis. Mr Schatsky's blog can be found here: http://weblogs.jupiterresearch.com/analysts/schatsky/

No comment

Ms French discovered that most of the analyst blog sites do not allow readers to publish comments, or accept trackbacks. And Mr Schatsky's blog is the same, no comments or trackbacks. Feedback is by email only.

Is it a blog if there is no comments or trackback? I would argue it is not a blog it is an online publication but it is not a blog. And it misses the whole point of the value of a blog. And this is a strange position from JupiterKagan, an analyst firm that tracks the new media(!)

Mr Schatsky argues that he does not want to provide a platform for others. And that there would be considerable resources required to moderate comments and trackbacks on what is a free resource.

However, not enabling any form of visible feedback is missing half the value of online publishing, imho. I get very frustrated if I read something and I am not allowed to leave a comment or a trackback. I understand that JupiterKagan does not want to publish negative comments from the trolls but this continues to promote an attitude of "we are the experts and you are the consumers and we don't care to engage with you in an online forum."

I moderate comments but I find I never get any trolls or negative comments and the only time I delete a comment is when it is clearly spam or adds nothing to a topic.

The analyst firms seem to be scared of exposing themselves online and that makes me wonder if they truly are expert in their fields. Otherwise, they would engage in public forums with other thought leaders and they wouldn't be afraid of doing it on their own blogs.

An additional reason is most probably the amount of time it takes to be engaged in blogging, blog comments, and conversations on other blogs. Analysts bill by the hour and they cannot bill for their "blogging." And that is why so few analysts blog or engage in blogging--they don't have the time to devote to what they consider a "free resource."

Again, I think this is a mistaken approach and that mistake will be made readily apparent by the success of those analysts that do take their blogging seriously. Charlene Li, Forrester's top Internet analyst is a great example of an analyst that has used her blog to bring in over $1m of new business to Forrester, and also boost her own standing within her community.

Sharing the platform

However, Ms Li's success brings up another core issue for the analyst firms: do you let your analysts use the analyst firm platform to boost their individual reputations at the risk of those analysts eventually heading off to become independent and set up competing organisations?

This is an issue that many companies face, how do they encourage their staff to blog without also building their personal brands to such an extent that their staff become more visible than the company?

It all comes down to sharing the media brand both personal, and the company brand. And successful bloggers, be they analysts or others within an organizations, will have to be valued higher than others. Robert Scoble, for example, is Microsoft's top blogger, and in the blogosphere he is easily Microsoft's second most famous employee.

Yet Mr Scoble receives a salary of about $100k per year, something which he has complained about because he knows how much value his blogging has created for MSFT. But does MSFT recognize the value of Mr Scoble? It would appear not and MSFT risks losing Mr Scoble to a competitor.

Blogging is the next big thing

One common aspect between the mainstream analysts and the mainstream media is that both communities have been among the last to understand what blogging is all about. I know, because I was in the same position. When I was working at the Financial Times, the general view was similar to that at other newspapers, we viewed blogging as a fad, a CB radio of sorts. After all, it is "just" online publishing.

It wasn't until I jumped into becoming a full time journalist blogger nearly two years ago that I realized there is no "just" about blogging. It is so much more than just online publishing and it represents a class of media technologies that will dramatically change our entire society.

We now have a new Internet, it is an Internet 2.0, not web 2.0. We can now publish to the outer reaches of the internet and we can now publish back from the outer reaches of the internet--we have a two-way flow and that is truly game changing/disrupting for every organizations.

Media is where we see this game changing/disruptive effect most clearly. But in reality, the disruption is happening in every company because every company is a media company to some degree.

Every company, whether it is a steel producer or a chip maker tells and publishes stories to itself, to its customers, to its potential hires. Those stories have to be compelling and truthful and they should use the media technologies that we have available, to maximize their reach and effect.

Yes, media companies have to change to become technology-enabled media companies. And that is a big challenge. But if you accept my point that every company, to some degree is a media company, then every company faces the challenge of adapting to, and incorporating the new media technologies.

This has become a very important competitive factor. And I can guarantee that those companies that understand this, will move ahead of rivals that don't.

By the time the rivals figure things out, it might be too late. And it is already to late for some...

April 25, 2006

On McNealy departure: Where are the new leaders?

By Tom Foremski for SiliconValleyWatcher

Scott McNealy's departure from Sun Microsystems has been on the cards for more than a year. It will likely be just one of many departures by veteran Silicon Valley and other captains of the tech industry over the next year or two, as that generation moves into the grey zone of life.

Mr McNealy has a superb track record, and his executive team over the years has gone on to lead many other companies. But it is hard to preside over a company that is not growing as Sun used to grow: explosively.

I remember chatting with Ed Zander, about a year after he left Sun and he spoke about how tough it was to downsize a workforce, and the many difficult decisions that Sun would have to make to survive the longest downturn in Silicon Valley's history. When you've spent most of your time hiring like mad, and focused on staff loyalty, downsizing is an anathema.

Managing a company that is growing very quickly is a very different challenge from managing a company in today's very tough markets. It is a very different culture and it requires a cultural change that not every company can manage well.

Sun has a huge market and has large opportunities, it won't go away anytime soon, but it does need a boost in the arm. I've often said that a Sun and Hewlett-Packard merger looks good to me, with some very good synergies. And it would be an interesting play against IBM, a West Coast v East Coast rivalry that could play well.

Is Mr McNealy's departure and the subsequent head count reduction, estimated at 5,000 by financial analysts, a way to dress up Sun for an acquisition or merger?

And who else will depart for the green pastures of the golf course? Steve Ballmer over at MSFT has been a bit quiet, Ray Ozzie is on the ascendent, there might need to be some room made at the top...

Who will be next to go is less interesting than who will be in the ranks of the new leaders of Silicon Valley and the tech industry. To be honest, I don't see much of a leadership emerging yet; maybe it is under the radar, maybe the new leadership will be apparent when the new upstart companies emerge?

But will we have new upstart companies that can survive beyond five years before they are acquired? Is the game these days a case of scale? In which case, the giant sucking sound of GOOG, YHOO, ORCL, SAP, INTC, EBAY, etc will dominate the technology/media world. And thousands of startups will compete to get sucked into those gargantuan organisations and we won't get the same crop of dynamic and colorful business leaders that used to characterize Silicon Valley.

That is one, very obvious scenario. However, the expected scenarios often don't come through quite as expected so I'm looking forward to picking out the new leaders. Let me know if you have any suggestions on who might be in the ranks of the new Silicon Valley/tech leadership.

April 24, 2006

Serena Software CEO praises $1.2bn deal to take the company private

By Tom Foremski for SiliconValleyWatcher

Silver Lake Partners, the leading Silicon Valley private equity firm recently took Serena Software from public to private in a $1.2 bn deal. I spoke with Mark Woodward, the CEO of Serena about the move.

Serena provides software that helps companies manage their information technology and has been in business 26 years and has 15 thousand customers. Mr Woodward said that despite several acquisitions, including the acquisition of a much larger company--Serena was unable to budge its market cap valuation.

"We felt that Wall Street didn't understand our business and despite working hard in making the right acquisitions, and more than doubling our revenues, we still had the same market cap valuation. It was very frustrating."

In addition Mr Woodward said that it was difficult to make long term planning decisions because of the constant focus on meeting quarterly numbers. "For example, we wanted to expand our services business as a strategic move but services is a lower margin business and so the market would have penalized us, but it makes sense from a long term perspective."

Serena met with four large private equity firms and decided to go with Silver Lake because it had a better understanding of its business. Silver Lake has people such as James Joyce, the former CFO of IBM, and Dave Roux, a co-founder of Silver Lake and he used to head M&A at Oracle--both men are now on Serena's board.

"The Silver Lake people have great connections and they have a lot of experience," says Mr Woodward. "Most members of public company boards are focused on reducing their liability, and on governance issues--which is fine. But our board now has the same interests as the company and is there to help us grow the business rather than try to limit their personal liability."

Serena's long term strategy is focused on investments in the Asia Pacific market where growth is expected to be three times greater than anywhere else; and in the federal government sector.

There are drawbacks to being a private company and one common complaint is less media attention. "We don't get covered by the financial analysts anymore but they weren't doing a good job anyway, and we are getting plenty of attention from the press on our initiatives."

The expense of Sarbanes-Oxely compliance was not a factor in taking Serena private, he said.

Silver Lake's big coup was taking Seagate private nearly 7 years ago as part of a complex deal with Veritas. Seagate again became a public company at the end of 2002 and Silver Lake is still the largest shareholder.

Mr Woodward says that there will likely be many more similar deals as private equity firms take other companies private, remake them, and then bring them back to the public markets. But he noted that there are few tech companies around that have the cash flow needed to service a large debt, a strong management team, and also have the capital to invest in long-term business initiatives.

He predicted that with several very large private equity funds competing for the best companies, in a year or so, those funds will have to reset their internal rate of returns and take on companies that they would reject today.

"The goal is to reposition Serena and then to eventually take it public again in three to four years. By that time, Wall Street will have forgotten about Serena and we can position it how we like. And by that time, our business will be much stronger because we can follow through on the long-term business strategy without worrying about quarterly numbers and the effect on our market cap."

- - -
Here are some of Silver Lake's investment announcements:

Serena Software To Be Acquired By Silver Lake Partners In A Transaction Valued At Approximately $1.2 Billion
November 11, 2005

KKR And Silver Lake To Acquire Agilent’s Semiconductor Unit For $2.66 Billion
August 15, 2005

Nasdaq To Acquire Instinet - Silver Lake Partners To Acquire Instinet Institutional Broker
April 22, 2005

Sungard Data Systems To Be Acquired By Private Equity Group For $36 Per Share Or Approximately $11.3 Billion
March 28, 2005

April 23, 2006

PageRank assassination and other nefarious online activities

By Tom Foremski for SiliconValleyWatcher

I've been thinking a lot about the many ways companies can engage in new types of competitive battles for the pole position on that first page of Google's search engine results--which is defined by your PageRank.

Over on ZDNet, I've been writing about the potential for PageRank assassination and other nefarious acts of information warfare:

I'm not an advocate of search engine optimization techniques--beyond the basics. Because I believe you should optimize your site for your customers and not the spiderbots. Let the search engines optimize themselves to find the right content--it's their job.

However, the techniques of search engine optimization have potential application in the reverse: they can be used for PageRank assassination. [PageRank is the relative importance Google assigns to a web site] You can apply SEO techniques to potentially cripple an online competitor by making it seem as if it is engaging in forbidden SEO practices.

Google has strict policies on what you can and cannot do to make yourself visible to its spiderbots. And other search engines also try to root out web sites that are using SEO techniques to try and trick them into a higher PageRank.

Google will dumb-down the PageRank of a web site if it believes it is engaging in non-prescribed SEO practices. And it has even banned the web site of a large corporation, BMW in Germany, to show that small and large companies can be banned from its index.

The potential for competitors taking potshots at each others' online reputation is just too tempting. And such activities can be easily disguised.

And there are many other strategies of online competitive warfare that could tempt companies, such as renting a zombie network for an afternoon or two to mount a DNS attack on a competitor.

But it doesn't have to be sneaky. Public companies are vulnerable to scrutiny by the media and investors. A competitor could encourage the scrutiny of certain weak business groups, as an example. Bringing attention to problem business groups within a competitor can be easily done in many ways . . .
[Please continue reading . . .]

April 21, 2006

Fridays with Foremski starts today on San Francisco Chronicle's online site

I've started writing for the San Francisco Chronicle's "Tech Chronicles" a weekly column/blog called "Fridays with Foremski."

It is a great thrill for me to be writing for one of the longest established news organizations in the US, and also to be working with the excellent editorial team in the business section, Al Saracevic, Tom Abate, Dan Fost and many others...

Check out the column this week and find out what Vinod Khosla, Silicon Valley's top VC is up to; Ebay's local push and the lessons of Craigslist; and Jobster comes to town...

Fridays with Foremski

April 19, 2006

Apple moves ahead with assault on journalism

In a San Jose court room Thursday morning, Apple Computer's lawyers will launch the next stage in Apple's efforts to muzzle journalists and to remove journalist protections from prosecution.

Silicon Valley Watcher is part of the Amicus brief in support of the defendants in the Apple v Does case. SVW stands firmly against Apple's moves which are detrimental to society and its need for high-quality media.

Here is more information from Derek Slater, an activist at the Electronic Frontier Foundation (EFF) whose lawyers are in the front lines of this fight:

http://www.eff.org/news/archives/2006_04.php#004571

Court Case to Determine Rights of Online Journalists

Arguments Set for April 20 in San Jose

San Jose - On April 20, EFF Staff Attorney Kurt Opsahl will argue Apple
v. Does – a case with broad implications for journalists and their right
to protect the confidentiality of their sources – before a San Jose,
California, appeals court.

Apple Computer, Inc., has sued several unnamed individuals, called
"Does," for allegedly leaking information to online reporters about an
upcoming product code-named "Asteroid." As part of the suit, Apple has
subpoenaed Nfox, the ISP for PowerPage publisher Jason O'Grady,
demanding that the ISP turn over the communications and unpublished
materials O'Grady obtained while he was gathering information for his
articles. Apple has also been granted permission to issue subpoenas
directly to Electronic Frontier Foundation (EFF) clients PowerPage and
AppleInsider for similar information.

The trial court held that if a journalist publishes information a
business claims to be a trade secret, this act destroys constitutional
protection for the journalist's confidential sources and unpublished
materials. EFF and co-counsel Thomas Moore III and Richard Wiebe have
appealed, asking the appeals court to correct the error and restore the
well-settled constitutional protections for a journalist's confidential
information.

"The California courts have a long history of supporting and protecting
freedom of the press," said EFF Staff Attorney Kurt Opsahl. "We are
looking forward to the opportunity to ask the Court of Appeal to correct
a ruling that endangers all journalists."

WHAT:
Apple v. Does (O'Grady v. Superior Court)

WHEN:
April 20, 9:30am

WHERE:
333 W. Santa Clara St. Suite 1060
San Jose, CA 95113

For more on the Apple v. Does case:
http://www.eff.org/Censorship/Apple_v_Does

Bird flu will test our collaborative technologies

By Tom Foremski for SiliconValleyWatcher
It is a very early Tuesday morning at 4.30am: I am standing with several thousand people on Market street in downtown San Francisco, watching mayor Gavin Newsom give a speech to commemorate the 1906 earthquake. Alongside him are some of the survivors, an amazing living link to an event that totally remade San Francisco.

One hundred years ago the city received a devastating double blow. A massive earthquake destroyed hundreds of homes but it was the firestorm that came in its wake that razed the city to rubble from horizon to horizon. More than 3,000 were dead, 250,000 were made homeless.

The commemoration of the event was a perfect way to remind people and businesses in the Bay Area/Silicon Valley region to be prepared for the next big earthquake. The Hayward fault in the East Bay is the one that is way overdue for a tectonic shift. It runs east and west under the most populous communities in the Bay Area region.

Most businesses do have contingency plans, and rally points, and equipment to help their staff survive a big earthquake.

But there is another contingency plan that most companies do not yet have: How they will deal with the very real possibility of an epidemic of Bird flu. The migratory birds will start landing in their hundreds and thousands in North America in the late summer and Fall and that's when it will begin infecting domestic birds, and pets such as cats, and then humans.

Will its 57 per cent human mortality rate become less lethal as the virus mutates? Will the virus figure out how to move from human to human? Will Bird flu kill millions of people in the US?

All these things are likely--although not guaranteed. And there are dozens of questions and different outcomes. However, it is a very serious health crisis and we can only watch as it unfolds...

Ted Shelton, an entrepreneur in residence at Mohr Davidow Ventures, the early stage VC firm, has been following the topic of Asian flu, as a lay expert, for more than a year.

"We will be lucky because the rest of the world will first see the effects of avian flu. We should be better prepared because we'll be able to witness the outbreaks in other countries," says Mr Shelton.

Recently, I ran into Andy Yue, who is VP of Operations at Worksoft, one of the largest Chinese software outsourcing companies. I was quite impressed by the description and achievements of Worksoft and how it integrates into Silicon Valley startups and larger organisations.

We spoke about Chopin and Debussy, and I also mentioned my concern about the bird flu virus. And I realized Silicon Valley companies have development teams all around the world, India, China, the Philippines, etc. All areas of the globe will have to deal with the same issue sooner or later: how do you continue doing business and protect your people around the world?

In the Bird flu outbreak, the goal will be to limit the spread of the virus by limiting human-to-human contact. In other words, we'll all be working from home for a while.

Which is lucky, because we now have all these wonderful, and simple collaborative media technologies: Blogging, wikis, instant messaging, online whiteboards, group calendars, simple development languages, etc.

The Bird flu will be an opportunity to put our collaborative technologies to the test in a full scale, mission-critical environment. And out of it will come scores of best practices and totally novel applications.

But let's hope the collaborative media technologies work as advertised and we can hole up until the vaccine arrives, or the virus burns itself out.

In this year of the centennial commemoration of the 1906 earthquake, please review your companies earthquake response readiness and also make sure you have an Bird flu response plan.

Please see: U.S. Plan For Flu Pandemic Revealed

Yahoo Full Coverage: Bird Flu

Multi-Agency Proposal Awaits Bush's Approval

April 18, 2006

Are Google, Yahoo, Ebay and AMZN fast becoming the digital Wal-Marts of the emerging Internet 2.0 era?

By Tom Foremski for SiliconValleyWatcher

Are Google, Yahoo, Ebay , Amazon (and maybe MSFT and Craig's List too) becoming the Wal-Marts of the digital age? It's an important question as they roll out more of their "local" products and fight for the next big market - local advertisers.

But as with Wal-Mart - smaller, local web sites will find it increasingly harder to compete with these giants because of their scale: their e-commerce platform, products, and services.

And as with Wal-Mart, money will be drained from local communities to the coffers of faraway companies rather than circulating in the community. This will become more of an issue as online commerce grows from its still very small share, less than 10 per cent, of overall commerce.

And as with Wal-Mart, these companies are increasing their use of overseas producers (software developers in India and China) which competes with US developers.

Is this a good thing? It is if they return significantly more in value/services than they take away--which could happen but it unlikely.

I'd rather that the local internet "air space" be owned by local organizations/communities so that the resources and capital stay local and continue to enrich the community. Why should the local pizza parlour advertise on on GOOG, YHOO, EBAY or AMZN? It would be better to advertise on a local community owned site--if one existed that was truly local.

I think that the digital Wal-Marts of the Internet 2.0 will have limited success with their "local" services because you cannot use servers and software to become a "local" online resource. You need to become a member of the community, and the digital Wal-Marts cannot become a visible and vital part of communities because you have to have your people in those communities.

And that's why true local online sites will win the battle for the local advertisers over time, imho.

- - -
Later this week I'll post an idea on how local communities can battle the digital Wal-Marts and win.

April 17, 2006

Dan Gillmor's citizen media project acquired by Backfence

By Tom Foremski for SiliconValleyWatcher
Dan Gillmor's Bayosphere citizen media project has been acquired by Backfence, a Vienna, Virginia based company that intends to use local communities to generate all online content and sell advertising around it.

It is a logical move but it also shows that citizen media is not easy to do. Bayosphere did not become the runaway success that characterized Oh My News, the Korean citizen media venture.

In my view, Bayosphere suffered from a lack of professional media involvement. Dan Gillmor, blogged there semi-occasionally but he has always been more interested in lecturing and talking about citizen media than in the work of creating it.

Mr Gillmor had been looking for someone to takeover Bayosphere since December 2005. And at one point, he approached Silicon Valley Watcher. However, SVW did not have the resources to run Bayosphere.

In my view, citizen media projects will be difficult to create unless there is strong involvement from professional media. News media is difficult to produce and citizens often lack the basic training to produce high quality media.

The best solution is to combine professional media, with citizen media and with what I call smart-machine media (SMM). In the SMM category are online ventures such as Gabe Rivera's Tech Memeorandum.

Here is Dan Gillmor's announcement and also the press release from Backfence:

From an email sent today by Dan Gillmor:

By now you may have heard about the new direction that Bayosphere is about to take. The folks at Backfence, a community information network based in the Washington, D.C., area, are expanding and have offered to continue our operations here under their wing. My business partner, Michael Goff, and I made the decision with our investors. We all agreed that this was the best possible outcome of several alternatives.

I'm truly pleased with this move. Let me explain why.

Backfence, which launched its first sites in the Washington area, is a genuine pioneer in the citizen media field. The company focuses specifically on "hyperlocal" sites, forging new media and models to better serve communities and neighborhoods in ways we couldn't do before the Internet came along. Its founders, Mark Potts and Susan DeFife, are smart, talented and energetic -- and combine terrific backgrounds in journalism, the Internet and business. They care deeply about the future of local news and information, and they've put enormous thought and effort into their operation.

They're expanding, and have known since they started that the Bay Area would be a great place to try some new ideas. We're able to give them a leg up with what we've done here at Bayosphere

I'm happy that this means the small community we?ve nurtured here has a chance to grow and mature. (There's also some small financial relief for me, as I've been covering Bayosphere's costs for months now.) One of the obvious options was to simply shut it down. We never wanted to do that. But it wouldn't have made sense to keep it going indefinitely, either, without some clearer purpose and direction.

There will be changes, major ones. Backfence is all about local, not global,serving needs that many of us believe has been underserved by traditional media -- for entirely sound business reasons. Take a look around the Backfence sites, and you'll see how their tools focus people in a relatively small geographical area on helping each other know what's going on.

I'm going to keep blogging here. The Bay Area has been my home for more than a decade. I'll be aiming my own postings on the technology economy and other facets of our lives here, such as housing and traffic, and hope to keep our conversations, which have sometimes been downright enlightening, as lively as they've been in the past.

One of the lessons I learned in 2005, when we were all exploring some new ideas about bottom-up media, was that we didn't have sufficient focus on the Bay Area. Although our conversations (some might call them arguments) about Big Issues were interesting, they ultimately may not have served us as well as the ones where we had a personal and more immediate stake in the situation. There are hundreds of places where we can beat each other up about Iraq and Bush. There are relatively few where we can help each other through the daily travails and joys of our communities.

Again, to be clear: The new site will reflect Backfence's hyperlocal style much more than mine, though as noted I'll continue to blog here and do everything I can to make this transition a smooth one. I will offer my advice to Susan DeFife, Mark Potts and colleagues at Backfence, and I hope you will, too. But they will make the final decisions.

Backfence is about local news and information, and we hope you'll be part of that more local conversation. For example: Post your views about local issues. Share with us your favorite place in the area to have a burger, or your tip on a good local plumber. Let everyone know about a community event you're putting on - and then tell everybody (don't forget photos!) how it went.

That's some of the local flavor we hoped for when we started Bayosphere, and now Backfence is going to continue that vision, beginning in Palo Alto in May and expanding into other Bay Area communities over the next few months. Please help them out by suggesting things they should do with the site and communities they should focus on. And if this appeals to you, please share your local knowledge and participate in the community conversation. That will benefit everyone.

Dan Gillmor

Here is the Backfence press release:

Backfence.Com To Acquire Bayosphere and Expand to San Francisco Bay Area

Company to Launch Hyperlocal Bay Area Community Sites Featuring Dan Gillmor’s Blog

Merrill Brown Joins Backfence Board of Directors

VIENNA, Va., April 17, 2006 — Backfence Inc. (www.backfence.com), which is building a network of hyperlocal citizens’ media community Web sites, announced today that it is acquiring Bayosphere, a site cofounded by citizens’ media pioneer Dan Gillmor, and expanding to the San Francisco Bay Area.

“Dan will be a tremendous asset as we bring Backfence to the Bay Area,” said Backfence President and CEO Susan W. DeFife. “His vision, commitment and accomplishments in the field of citizens’ media are unparalleled. We are delighted to have him join our efforts to provide the citizens of the Bay Area an opportunity to more closely connect with their communities.

Gillmor’s blog on technology and Bay Area life will be featured on Backfence’s five new Bay Area community sites, the first of which will launch in Palo Alto in May. In the meantime, the existing Bayosphere site, which has become a popular destination for discussions about regional issues and technology news, will operate under the Backfence banner, and Gillmor’s blog will be available at www.backfence.com/bayarea beginning immediately.

“I'm happy about this for many reasons, not least of which is that we're going to be able to go forward with what we started at Bayosphere” said Gillmor, a former columnist for the San Jose Mercury News and author of “We the Media,” the definitive book on citizens’ media. “The people at Backfence care deeply about the future of grassroots local news and information, and they've put enormous thought and effort into their operation. I’m confident that the Bayosphere community will be excited about using Backfence to post, discuss and share local issues and information.”

Bayosphere, which was launched in June 2005, has close to 100,000 unique visitors per month. It has become a lively forum for debate on Bay Area issues, as well as a home for Gillmor’s popular blog on technology, citizens’ media and social issues. Gillmor announced in January that he was stepping away from fulltime participation in Bayosphere to concentrate on the Center for Citizen Media, a think-tank he founded in cooperation with Harvard University Law School and the Graduate School of Journalism at the University of California, Berkeley.

Backfence launched its first sites in McLean and Reston, Va., in May 2005 and has since added sites in Bethesda, Md., and Arlington, Va. Consisting entirely of content contributed by readers, the sites provide hyperlocal news coverage of the communities, as well as event listings, reviews and ratings of local businesses, photo galleries, free classifieds and other services.

“Backfence provides local community members with a vital gathering place for local information and discussion that’s not available anywhere else,” DeFife said. “It has been exciting to watch as each community creates a place that reflects its unique personality. We look forward to being part of the Bay Area and watching as it brings its own voice to Backfence.”

DeFife said Backfence chose to launch its first Bay Area hyperlocal site in Palo Alto because “it is the linchpin of Silicon Valley. Its broad collection of community organizations, strong business and commercial base, high Internet penetration and its population base are the kinds of things we look for in deciding where Backfence should open local sites. We’re looking forward to becoming an important part of the Palo Alto community and then launching additional sites in Bay Area communities over the next few months.”

Both Backfence and Bayosphere received funding from Omidyar Network, the mission-based investment group founded by eBay founder Pierre Omidyar to foster social, political and economic self-empowerment. Bayosphere also received funding from technology entrepreneur Mitch Kapor.

Backfence also announced today that Merrill Brown, the founding editor of MSNBC.com and a leading new-media consultant, has been elected to the company’s Board of Directors.

Brown, who had been a member of the Backfence Advisory Board for the past year, brings a wealth of media experience to the company’s Board of Directors. He is a principal in MMB Media, a consulting and investment firm and was recently named National Editorial Director of News 21, the content development component of the news initiative launched by the Carnegie and Knight foundations. In addition, Brown was the founding Editor-in-Chief of MSNBC.com and a founder of Court TV. He also has been an executive with RealOne, Channels magazine and The Washington Post Co., and is a member of the advisory board of Gillmor’s Center for Citizen Media.

“I’m very excited by the potential for Backfence to reinvent the way that local communities get and discuss local news and information. The company’s concept for hyperlocal citizens’ media represents a powerful new form of advertising-supported information, and I’m looking forward to helping the Backfence management team bring their concepts to fruition,” Brown said. “I’m a longtime admirer of Dan Gillmor, and am pleased that he’s working with Backfence. I’m confident that Bayosphere will be a vital part of Backfence’s westward expansion.”

About Backfence
Founded in 2004 by Mark Potts and Susan DeFife, Backfence (www.backfence.com) has headquarters in Vienna, Va. Backfence is building advertising-backed, hyperlocal community Web sites in which members of the community create virtually all of the content. Backfence sites bring together user-generated content tools such as blogs, photo galleries and events calendars, as well as do-it-yourself advertising tools. Backfence is designed to be easy for participation by everyone in the community. Access to the sites is free, and all that is required to post information is a simple registration. Backfence is supported by local and national advertising, including display ads, enhanced Yellow Pages listings and business classified ads—all priced low enough to make purchasing an ad to reach the Bay Area community a “cash-register decision” for local businesses.

The company raised $3 million in funding in October 2005 from SAS Investors of New York, Omidyar Network of Silicon Valley, and a group of Washington-area private investors. The company has 10 employees.

About Dan Gillmor

Dan Gillmor is founder and director of the Center for Citizen Media, a project to enhance and expand grassroots media and its reach. The center is an affiliate of the Berkman Center for Internet & Society at Harvard University Law School and the Graduate School of Journalism at the University of California, Berkeley. Gillmor is author of "We the Media: Grassroots Journalism by the People, for the People" (O'Reilly Media, 2004), a book that explains the rise of citizens’ media and why it matters. From 1994 until early 2005 Gillmor was a columnist at the San Jose Mercury News, and wrote a weblog for SiliconValley.com. He joined the Mercury News after six years with the Detroit Free Press. Before that, he was with the Kansas City Times and several newspapers in Vermont. During 2005 he worked on media projects at Grassroots Media Inc., which was funded by Omidyar Network and Mitch Kapor. A Phi Beta Kappa graduate of the University of Vermont, Gillmor received a Herbert Davenport fellowship in 1982 for economics and business reporting at the University of Missouri School of Journalism.

April 14, 2006

I'd love to buy the San Jose Mercury . . .

By Tom Foremski for SiliconValleyWatcher

I would love to buy the San Jose Mercury if it's still for sale. I know *exactly* what to do with it, how to turn into a superbly profitable cash printing laughing-to-the-bank golden-goose machine.

Maybe I could buy it for $1 and be paid $66m as when the Hearst Corporation did in 2000 when it divested its San Francisco Examiner as part of its acquisition of the San Francisco Chronicle.

And they should sell it to me because I know the secret formula. Well, it is secret for about the next 18 months to two years. All secret formulas, just like all great ideas, eventually become obvious to all. But a two year window is nothing to be sneezed at, although you could try :-)

April 13, 2006

Tibco's Florida user conference stresses new IT architectures

I spent a few days this week in Orlando, Florida but I didn't visit Disney's Magic Kingdom. Instead, I was at Tibco's user conference.

Usually I rarely get to go to user conferences but I wanted to see Tibco in its environment. Tibco has been one of my earliest supporters in this brave new world of online publishing/blogging at Silicon Valley Watcher, and this was good chance to learn more about the company, and the IT industry.

Tibco is a well established IT enterprise software company but what it does is complex IT. The company has technology that helps enterprises connect up multiple layers of legacy IT systems into a single, real-time business system.

And now, with the advent of the age of the services oriented architecture (SOA), as opposed to the database centric IT architecture--Tibco is addressing the upper-most layers of the enterprise stack--the business process management. This goes beyond applications and into the realm of where IBM, the world's largest services company, has strong ambitions.

Tibco might be David to IBM's Goliath but the battle doesn't require either one to lose because there is a huge potential market that can support many vendors as it expands over the next few years.

CEO Vivek Ranadive's keynote on Wednesday morning stated the case for business process automation in reasonable and rational terms. And Mr Ranadive wasn't shy about hitting out at the enterprise software application vendors. He said that IT departments had been "extorted" by enterprise applications vendors for many years.

Enterprise software application vendors have earned a reputation for being expensive to license, operate, and integrate. Not to mention the failure of software enterprise applications in markets such as supply chain management. That is something which has made cash-strapped IT departments very unhappy.

Mr Ranadive believes that corporations should leap to the next stage of IT design by adopting a services oriented architecture rather than focusing on applications. This approach takes away the need for a central database, it democratizes data, and it is an event-driven system rather than relying on constant polling for data.

That means anything that inputs data into the system is at a peer-to-peer level. This makes communications of data far easier compared with having to deal with hierarchies of IT systems, and also IT silos around each departmental group.

And by focusing on services, corporations can focus on the business process rather than trying to adapt to fit the business process construct of an application. Mr Ranadive made the point that when everyone has access to the same applications and IT systems, the differentiation between competitors is in their business processes. And that is why business processes should not be commoditized but kept unique.

A business process is like a story narrative that describes a series of steps that result in an action; and the goal is to automate the business process. But that content is unique and that's what makes a business unique.

Another advantage of this approach is that if you could automate all the business processes of a corporation, you would be able to use your modules to quickly construct additional business processes and deploy them in a matter of days.

Partnerships with other companies become much easier because SOA enables the sharing of real-time data. That means you could bring several corporations together for short-term ventures.

And it would make M&A deals easier to integrate and therefore speed up sector consolidations; resulting in a more rapid return of value to shareholders, and possibly, customers.

SOA however, is still very far from making an impact in most corporations simply because their IT departments are mired in projects and only have resources to pursue small steps towards an SOA goal.

Charles Feld, executive VP at EDS , the IT services giant, gave a very good presentation following Mr Ranadive. Mr Feld is one of the most experienced global CIOs. He has worked as CIO for massive organizations such as Frito-Lay, Delta Airlines and First Data.

Mr Feld warned large corporations that they might not have much time to dally because their legacy systems will hurt them. That's why upstarts such as Jet Blue can gain a significant competitive advantage over older, established competitors--they are not weighed down by the burdens of legacy IT systems.

Mr Feld also made a pleas for the CIO to strongly push for the changes within corporations that are needed to be made in the trek towards SEO. Otherwise many of the global 2000 corporations will not be here by the end of the decade.

I later ran into Madeline Bayliss, vp of sales at Solstice Software, which has an SOA testing suite. With SOA, there can be many modules and business processes across many different platforms--which quickly makes for a very complex system. How do you know a new services project will work without defects? And trying to find defects manually can be a gruesome and tedious ordeal.

Ms Bayliss, who has had a long career in financial services IT, says that it can take a long time to find problems unless you can automate the testing. And that is very much where the future of IT is heading--it is all a mashup of IT services organized into business processes but potentially touching dozens and maybe hundreds of other business processes. Solstice is in a good position to help deal with such a world.

April 11, 2006

Red Hat jumps into M&A: Is the $350m deal defensive or aggresive?

By Tom Foremski for SiliconValleyWatcher

Red Hat's acquisition of open source company JBoss on Monday was a big surprise because Oracle was the one that all my sources told me was the purchaser. Maybe the price was a bit steep for Oracle at $350m?

One interesting thing about this acquisition is that private valuations of open source companies have reached very high levels--much more than comparable companies in the public sector. The other interesting aspect of this deal is the potential emergence of RHAT as a major force in the software business.

This was clearly a strategic acquisition and it is part of the software vendors racing to build an enterprise stack of operating systems, middleware, and e-commerce applications. Red Hat now has the operating system and a good middleware application server. All open source, but it's not really about open source it is about: The Enterprise Stack. You've either got it or you don't. You, the customer, will be paying a monthly stack fee whether it is open source or not--you are paying for the maintenance and hosting.

So who will be the first with a one-price-one-bill enterprise stack? Who will be the acquirer, who will roll-up the enterprise stack? Could it be Red Hat? Could it be Ingres? Oracle will certainly continue with acquisitions, and Sun Microsystems is another competitor, not to mention IBM, SAP, Computer Associates, Symantec and Microsoft.

The way things are going, everyone is heading into this from different market positions. And they are trying to preserve their own business model while trying to commoditize the business model of their competitors.

That will be interesting to watch.

- - -

Dave Dargo, the CTO of Ingres has a lot of insight into the software market, especially the open source movement from his previous job at Oracle, where he built the unbreakable Linux platform. He recently started a blog:http://blogs.ingres.com/davedargo

This is from "White Knight or Strategic Investor?" Dave Dargo's analysis of the Red Hat deal.

Well, it happened. It wasn’t Oracle, thankfully, in my opinion. It was Red Hat, but was Red Hat being a white knight and saving the open source world or were they making a smart, strategic investment. I think it’s a little bit of both with a heavier emphasis on the strategic investment.

The new rules of newspapers. . . and some of the old rules

By Tom Foremski for SiliconValleyWatcher

Newspapers need to get away from thinking that their distribution mechanism (newsprint) defines them. The distinction between print and online has to go away.

News organizations should see themselves as content creators. Print and electronic media are the distribution channels for their news content.

And there is no sense in locking up the content by asking readers to pay for it because we live in a world that is one big scramble for attention. We've realized that in a world with 500 cable channels, a gazillion Internet channels (web sites) and our families, friends, boss, colleagues, (and our internal) clamor for our attention is huge.

That is why if I can get two minutes of your daily attention on Silicon Valley Watcher that is great. But there is a responsibility here. Attention is a scarce resource that is why I feel a responsibility to provide something of value because I am taking time away from your family, friends, boss, etc--all these very important people in your life.

I don't want a "sticky site" I want readers to come in and out as quickly as possible. I want them to always leave feeling they got more than their time investment.

Old rules still apply

I don't want to add to the noise, I want to provide original, you-can-only-get-it-here scoops, interviews, insight and sometimes, fun stuff. And I want it available to everyone and anyone with an interest in such things.

These have been the traditional goals of newspapers for hundreds of years. The new media operates on the same principles, it is just that the distribution channels have multiplied; newsprint or online--it should not matter.

Yet in most newspapers or news magazines--the online journalists and editors have been a separate group and very much second-class citizens. That is changing rapidly but the ingrained discrimination means that many print journalists dislike becoming "online" journalists. And the blogging revolution now means that these journalists have to interact with their communities--which is even more work on top of already low salaries.That is why this transition to the new media world is tearing apart the professional media sector.

It will regroup, and it will reform, and it will become a better professional media sector because we will realize media is all about the battle for attention and professional media people are good at grabbing attention. This is a valuable talent for any business and that is why news groups will be valuable businesses--once we've gone through this transition.

Some of the new rules

In order to grab attention you need unfettered distribution and easy access. Newspapers should be available for free in public places such as restaurants and coffee shops. In fact, they already are--a lot of diners and coffee shops have a central basket of newspapers that were left behind by patrons.

But the format of newspapers and news magazines will have to change. They have to become showcases of their overall content available through any and many electronic means of distribution.

The business model can still include subscriptions, and news stands can still sell newspapers and magazines but that will be just one avenue for revenues. The business model will include many different revenue streams, of which some we know and others will be invented.

News organisations will sell attention instead of papers. And the electronic forms of distribution will enable them to sell far more different types of products and services than just printed adverts...(that's the secret of the new media :-)

- - -
[PS: I'm away most of this week at Tibco's user conference in Florida--full report when I get back.]

April 9, 2006

Are PR companies tempted to make false promises on "new media" communications?

By Tom Foremski for SiliconValleyWatcher

Startups and large corporations are crying out for "new media communications" and PR companies are happy to offer their services. However, very, very few of them have the domain expertise in-house to work in the new media world of blogging, and other online "conversations."

Mike Manuel, from Voce Communications states things well in this article on Media Guerrilla: The Social Media Services Gap

Bottom line, while there are some exceptions, IMHO *very* few PR firms today can effectively balance and execute an integrated comms program -- meaning one that blends new and old media. It's not a dig, I just think a lot of people, a lot of firms are grappling with a changing media environment, a dearth of in-house expertise and evolving client needs/expectations -- basically, industry transition.

A related link from Tom Murphy on PR Opinions: Do PR people need new media skills?

Some questions to ask your PR company to evaluate its ability to work in new media communications:

1 - Ask to see their blogs and how long they have been publishing online.

2 - Ask them how they use collaborative technologies such as blogging and wikis, internally.

3 - Ask them if they know who are the influential online journalists/bloggers in your sector.

4 - Ask them if they send out new media press releases rather than the old style. A new media press release is one that has lots of links, it is partially deconstructed and sections are clearly labelled and tagged, and it is delivered in electronic format in html source code.

- - -

Most PR companies will be deficient on those questions but that is something that can be fixed. For example, I've spent a lot of my time trying to educate the PR sector on the way things are changing. I've spoken on panels and I've done a lot of teleconferences, and I'll be doing a select amount of consulting in this area to help organizations transition to a new media world.

Education is important but at the end of the day, unless you become involved in the new media technologies you will not fully "get it." And you can't "get it" by just reading about it... I know that is hard to imagine, but it's true. You dig?

April 7, 2006

The virtuous trackback: A proposal for paying for content

By Tom Foremski for SiliconValleyWatcher

SVW reader Todd Defren has proposed a micropayments system for content, but I don't think such a thing would work because people don't like being nickel-and-dimed for content.
[Please see SVW: We need a Google AdSense on Steroids to pay for content.]
Also, payment for content implies that if you don't pay you don't get to read the content. I wouldn't want to lock up my content behind a subscription firewall I'd like it to be free to roam the internet.

However, what about a type of commercial trackback? What if linking to a blog post you agreed to run a small text link advert at the bottom of the post as part of the blog link policy?

For example, if someone were to write a blog post and link to this post. The blog software would ping this post and then send back a text advert link. So at the bottom of the post linking to this one would be something like this:

[Links in this post are from: Silicon Valley Watcher, Scripting.com, WikiPedia.

These links are sponsored by: Dreamhost--for all your web hosting needs.; "The Power to Predict : How Real Time Businesses Anticipate Customer Needs". ]

The blog software would assemble this bottom panel automatically. It would be a type of Google AdSense advertising network that is "stuck" to the content and follows the content wherever it is reffered to or quoted from. And, it could be done in such a way that everybody could share in the revenues.

For example, if one of my readers writes a blog post and refrences my post which might be sponsored by Amazon and thus an Amazon text link appears on any reffering blog post. If that link on the other blog post generates a sale for Amazon, I get a piece of the sale but so does the other blog site, and so on down and up the line.

In this way, a popular blog post would be able to have broad distribution of its content and its associated text advertising link. Those blogs reffering to the original post would bring attention to the original post and thus are creating value. They get to share in the monetisation of that value through any clicks/sales on the text ad link.

The virtuous trackback

Could you scam/spam something like this? I don't know. There would be nothing gained from just blogging other posts hoping to get affiliate clicks/sales unless those original posts carried some intrinsic value. And bloggers agreeing to such a setup would know that they are helping support the creation of the original content, thus creating a virtuous cycle in which good/great content is rewarded and monetised and reinvested in producing yet more content. It's the virtuous trackback :-)

Another aspect is that because of permalink, one popular blog post would essentially create an advertising network across many pages on the internet and it would be permanently there. Thus, the original sponsor of the original blog post could be changed, and that would be reflected in all the other, connected blog posts.

What do you think? Maybe we can get Dave Winer to comment on this since he is the inventor of RSS and trackbacks. What do you say Dave? Can you give us a commercial virtuous trackback so that we can pay for content without going to micropayments?

Links in this post are from: Silicon Valley Watcher, Scripting.com, WikiPedia.

These links are sponsored by: Dreamhost--for all your web hosting needs.; "The Power to Predict : How Real Time Businesses Anticipate Customer Needs".

April 6, 2006

Is Silicon Valley too smart?

By Tom Foremski for SiliconValleyWatcher

I arrived at Software 2006 in time to catch some sessions on Wednesday. First, I met with Joe Kraus, co-founder of Excite and now co-founder of JotSpot, the wiki-roll-your-own software company.

Just before I met with Joe I ran into Ross Mayfield, ceo of SocialText--also a wiki-roll-your-own-software company. Both are two of my favorite contacts and very much alike, a kind of Twiddle-dum and Twiddle-dee except skinnier--like their software (Please see "Skinny apps.")

Both Joe and Ross share the same neighborhood, physically as well as in the market. And I enjoy talking with them because they seem to come to similar conclusions as I do, but they get there in different ways, with different thinking.

I walk into the special speaker VIP room with Joe Kraus, and the room is large and has trendy sofas around its edges and in the middle of the room there is a portable fountain (not chocolate).

We sit and chat and ask each other "What do you think of..." It is great hearing other people's take on things and it's also great if you get to the same place--but with different routes.

We talked about Silicon Valley. Joe says, "Sometimes I think that Silicon Valley is just too smart for its own good."

Do you mean the way everyone is running around trying to commoditize their competitor's markets I ask?

"It's the way there is so much faith in technology but if you look at the current success stories such as MySpace or FaceBook they are badly designed, the technology is old, yet they are successful," Joe says. "It's about how you use the technology."

I say you are so right, we have enough technology, the Geeks- bless their souls--have done a fantastic job. We now have almost free technology--now it is all about how you use it, it is all about publishing, it is all about media. I see the world through a media lens or rather I have a media hammer, I tell Joe.

A little while ago, Dave Winer, who I consider one of the original thinkers on the internet, asked on his blog, is media the new technology? I was so thrilled that someone else had spotted this. And yes, media is the new technology. You might not quite understand it yet, but you will in time . . . and it will become very obvious.

Anyway, lots to tell you about my chat with Joe, but at a later time, it's getting late now :-)

April 5, 2006

I missed the first day of Software 2006 but I made it to the reception and dinner

By Tom Foremski for SiliconValleyWatcher

It was late in the day when I got to the Software 2006 conference on Tuesday and some people were already leaving. As I walked the short distance from the car park to the Santa Clara Convention Center I kept running into people I knew and so it took me an hour or more to get into the conference area.

First, I run into Fred Vogelstein, who is now independent and I had just an hour earlier emailed and he is with Andy Lark, the former Sun Microsystems comms chief and one of my topten media/communications professionals.

Andy really understands how to use this new media and figured things out a long time ago. I catch up with Andy then I meet Shanker Trivedi, from Callidus Software who turns out to be the cousin of Edward Luce, a former colleague at the Financial Times.

[Edward is a raconteur in the classic style--marvelously entertaining and will tell stories for hours as long there is an adequate supply of red wine and cigarettes. His father was once Governor of Gibraltar so Edward's stories illuminate a unique section of British society.]

Then I run into Jean-Baptiste Su the French correspondent for La Tribune, who now also is running a restaurant called Gervais on 14560 Big Basin Way in Saratoga, CA 95070. Then I walk straight into Jim Finn comms chief at Ingres, then Tom Berquist, the Ingres CFO and former star Wall Street analyst walks up and chats for a few minutes. Then Bruce Lowry, comms chief at Novell walks by and I taunt him a little bit about Novell's open source business and how come it has gotten so badly out of whack.

I think Novell should take a look at how Wind River did things, and adapted to open-source. Wind River used to be very anti-Linux then they swung the other way and embraced it and made money for the first time in years.

Bruce got away with a minor ribbing, and then we walked into the reception. I ran into Ross Mayfield, from SocialText. Dan Farber of ZDNet was there, of course, loaded with camera and other gear. One of these days I will see Dan with a satellite transmitter in a backpack so he can upload his blog, his video blog, his photos, and his podcast simultaneously. I think Al Franken style though would be a lot cooler looking :-)

So Ross and Dan and I manage to grab a few minutes of secret blogger conversation before we get split up by vendors wanting to chat. I remember that Ross said his company had just launched a mobile wiki, and he was calling it a Miki. I told him I could sell him the domain name WalkAbout Wiki dot com for a reasonable price, but he said he preferred Miki.

Turns into a big production

Then we go into the Gala dinner and it's a big room, beautifully decorated and with Cirque Du Soleil type performers gamboling around. I sit with Emma McGrattan from Ingres and her colleague Dev Mukherjee.

The evening turns into a big production, MR Rangaswami gives out half a dozen awards. Each award seems to be for a great social cause which means we have to sit reverentially through a ten minute video commercial for the charity--usually with Robert Redford narrating.

I had to pop out in during the awards ceremony and make some calls to my kids and came back and it looked as if it were safe to eat dinner. And it was for a while, but then the awards started up again and the videos and I noticed there were still another 4 award sculptures to go. And because I had to drive all the way from San Jose to San Francisco in the pouring rain -- I slipped out and went home. Although I had missed the conference sessions there was a good buzz in the air, and in the hallways, which is a good sign.

I'm a big fan of MR and his Sandhill.com online enterprise software magazine, and the gala event was a bold idea but it didn't quite work out. I'm sure most people would have been happier chatting over dinner than watching charity videos. And MR could have saved a few bucks on the glitz. But I like the way his awards emphasized the importance of being involved in a social enterprise.

This is very important these days: your organization has to have a strong social enterprise focus because people don't want it all to be about money. There is a tremendous amount of juice in being involved in ventures that have ambitions for creating a lot of positive social value.

It is not enough for a company to offer money and options--there has to be a bigger picture, there has to be a better story. Microsoft is finding out that it can be difficult to retain people if you don't have a big pitch.

By having a strong social enterprise vision--a company has a higher motivated workforce--which makes it more effective in its social enterprise role--and its commercial role. And if you need a social enterprise project I urge you to pick education. Get involved in your local schools.

Silicon Valley cannot run around the world saying "We are inventing the future here" when the world sees broken down public schools on our doorstep.

Silicon Valley public schools are basket cases -- when they should be showcases.

April 4, 2006

We need a Google AdSense on steroids: The Grand Challenge of Internet 2.0

By Tom Foremski for SiliconValleyWatcher

I've been really enjoying my job lately. I've been writing a lot about the open source movement and the changes it is having on the enterprise software market. Ingres is an excellent example of how the most innovative business model thinkers are taking advantage of the market opportunities.

I feel that I am often in a unique and fortunate position to move quickly on stories. And that is great for a journalist blogger--which is how I define myself.

What is also very interesting is that I don't have a business model to defend, or a boss looking over my shoulder. That means I am free to call things as I see them.

For example, I've been taking on the least progressive elements of the PR industry in my attack on the press release in its current format. I've offered a design for "new media" press release which has inspired many people to create totally new types of news releases.

The role of journalism - professional and citizen

It's not that I'm the only one that sees things "as I see them" because many others understand my positions. But I often am able to give voice to those that cannot speak directly. And that is one of the major failings of "citizen journalism."

There are members of our society that need to have independent journalists tell their stories. And that is what professional journalists do every day--they help our communities tell their stories.

That is our mandate as journalists and nothing has changed in this new media world--except that the delivery mechanism doesn't rely on a newspaper delivery. It's all about the content not the delivery mechanism: paper or plastic (or digital)? It sounds ridiculous to make such distinctions when you think about it.

Dan Gillmor, the great champion of citizen journalism is right when he says his audience knows more about a news subject than he does. But they cannot tell the story. They would get in so much trouble if they wrote about what goes on at work under their own names. That is why journalists cultivate contacts over many years, so that those contacts feel safe in telling their stories.

Yes, there is no transparency in such cases, I will not reveal sources to whom I have pledged anonymity. But it is an important way that journalists can communicate news and information that could not come out into the open in any other way. And the more information is open and shared, the better it is for all.

Media is how society solves big problems

Media is how society thinks, it is how it debates and discusses important issues. That is why it is important to have a professional media class--supported by a citizens media army in the form of blogging and fact checking. That is a scenario for a high quality mediasphere.

And we need a high quality mediasphere because we have some towering problems ahead to solve. Avian flu is the most immediate, but there is a long line of equally disturbing challenges ahead for us that require high quality information widely distributed.

We have one Mediasphere

A couple of Sundays ago, Al Saracevic, deputy business editor at the San Francisco Chronicle was at the CyberSalon in Berkeley. He asked the assembly, [which featured many of the blog/media demi-gods of our times,] can you figure out a way to pay for him and his editorial teams? Al is now a blogger, and he understands that both blogging and newspaper journalism share one mediasphere--and they share the lack of a viable business model.

Blogging is not disrupting journalism--that is a false comparison. Blogging enhances journalism, it contributes to journalism, and it helps disseminate important information in a way that no other way has managed before. This combines to produce a higher quality mediasphere -- at least for now. The problem is the decimation of the professional media by the marketing money flooding toward search engine marketing.

Our current media business models cannot carry the information load because they are being decimated faster than the ice caps are melting. What happens if the old media dies before the new media learns to walk is something that I have been warning about (thanks to Sam Whitmore) for almost nine months. And it is getting worse.

I know we can solve the challenges that face us, because humanity has incredible capabilities. But we must solve the most important Internet problem: how do we recover (pay for) the value of high quality media content? Right now, all the money is in aggregation of news/content, such as Google News, and pennies for the creators of content.

This is the Gordian knot of the Internet, figure out the value-recovery-mechanism that rewards high quality content and pays for more high-quality-content. Are there any Alexanders out there?

This is a virtuous cycle--one that Google AdSense took a baby step towards solving and then stopped.

We need a Super-duper-supercalafragalistic-AdSense that can reward quality content with real $$$ that can lead to investment in yet more quality content.

We don't have that value-recovery-mechanism and without that we are in serious trouble. Because we have no sponsor for journalism.

Selling products by advertising around journalism used to be a cost of sales. Now, it is far, far cheaper to sell products/services around the search box.

How will we pay for the professional journalism that we need? Solve this problem and you will inherit a chapter in Wikipedia. And I'll commision a statue in your (best) likeness.

- - -
Update:

- What about a virtuous trackback? - Could this be one way to pay for content?[Read]

- - -

April 3, 2006

Ray Lane sells Virsa to SAP: M&A continues in enterprise software markets

By Tom Foremski for SiliconValleyWatcher

VIRSA Systems.jpg Ray Lane used to be known as one of the industry's best software salesmen a talent that helped him become president of Oracle. In his 8 years at Oracle, sales grew from $1 bn to more than $10bn before he left the company in 2000.

These days he might become better known as the best salesman of software companies as SAP, the world's largest enterprise software maker announced today that it is acquiring Virsa Systems. The financial details were not disclosed.

Virsa is founded by Jasvir Gill, who says he used to be a stand-up comedian. I will resist the obvious line about his visit to his bank.

When I first ran into Virsa at a Horn Group PR event, the executives told me they were giving out "get out of jail free" cards at trade shows. The company's Sarbanes-Oxely compliance software offers a great degree of assurance to top executives that their operations are SOX compliant and they won't become the first test court-case.

Mr Gill was very wise to seek out Ray Lane, General Partner at the top Silicon Valley VC firm Kleiner Perkins Caufield & Byers.

When I met with Mr Gill last year, in October he said, "We didn't really need funding but I really wanted to have Ray Lane on our board of directors because he really understands the software business."

Ray Lane told me in October that the first thing he did was to enter into a sweetheart deal with SAP. "SAP has the channels and the distribution so we entered into a sales deal in which SAP gets 80 per cent of the business."

Mr Lane knew that the rewards would come later--and not much later by the looks of it. He also made sure that Virsa adopted a platform agnostic position, and would also supporting the Oracle database platform.

The goal at this early stage of a company is to develop a customer base so therefore a platform agnostic position is the best choice. And Mr Lane knew that by offering sweetheart deals the partner would potentially make a lot of money because its sales force is motivated, and it can quickly see the overall value of Virsa--should it consider an acquisition.

There is the additional strategic benefit that one partner could be played off against the other. And in today's hot M&A enterprise software market, it didn't take long to package up Virsa--the fastest growing private software company--and find a willing buyer.

Which other companies might be in line for the Ray Lane effect? From Mr Lane's bio at Kleiner:

He sits on the boards of Elance, Metamatrix, Virsa, Visible Path, Xsigo Systems, SpikeSource and PodShow. He also serves on one public board, Quest Software.

Here are excerpt's from SAP's announcement:

SAP acquires fastest growing Silicon Valley software company

By Tom Foremski for SiliconValleyWatcher

SAP, the leader in enterprise applications said it is acquiring Virsa Systems, one of the fastest growing private US software companies.

Virsa specializes in software to enable companies to be in compliance with Sarbanes-Oxely and other government regulations.

Here are extracts from the SAP press release, analysis follows in next post:

Founded in 1996, Virsa has more than 300 enterprise customers, many of which Global 1000 companies, across all major vertical market segments. SAP stated that the transaction with Virsa is continuing evidence of its strategy to use "fill-in" acquisitions to add to its broad solution offering by gaining specific technologies and capabilities that meet the needs of its customers, within industries or across industries, while maintaining its successful organic growth track record. Terms of the all-cash transaction were not disclosed.

Said Shai Agassi, president of the Product & Technology Group and executive board member, SAP AG. "Leading companies are looking to adopt an integrated view of governance, risk and compliance instead of the current reactive and fragmented approach. Acquiring Virsa extends the value of SAP applications and represents a key component of our strategy to be the primary source of enterprise risk management support, regardless of company size or industry segment.

Virsa is the leading provider of compliance solutions that monitor and enforce business controls in real time across enterprise systems and legacy applications. Virsa solutions help customers maintain continuous compliance with Sarbanes-Oxley, HIPAA, GLB and other regulations. SAP and Virsa already have a highly successful relationship at three levels:

-- Technology: Virsa solutions are designed and delivered on the SAP
NetWeaver® platform, making Virsa one of the more than 1,000
independent software vendors (ISVs) who have committed to build and
market solutions on SAP's leading platform.
-- Go to Market: SAP and Virsa have been closely aligned in joint
marketing, sales and product development activities. Since March 2005,
SAP has been reselling Virsa's flagship product, Compliance
Calibrator(TM), as an add-on to mySAP ERP. In the one-year period since
that agreement was announced, SAP and Virsa have partnered on more than
150 customer wins. Additionally, SAP Ventures is an investor in Virsa.
-- Customer / Vendor: SAP has one of the largest global deployments of
Virsa's Compliance Calibrator and Access Enforcer, with more than
40,000 users around the world.

"Virsa established itself as an innovator by embedding compliance into business processes -- making compliance repeatable, sustainable and less costly," said Jasvir Gill, CEO and founder, Virsa Systems, Inc. "Together, SAP and Virsa are simplifying cross-enterprise compliance so that CEOs and CFOs can focus their core business instead of compliance.

In making the announcement, SAP stated that the acquisition is expected to be completed in May 2006 and is subject to the approval of the respective antitrust authorities. Headquartered in Fremont, California, Virsa employs nearly 250 people and has offices throughout the United States, as well as in the United Kingdom, Germany, India and Australia. While integration plans are now being explored, SAP said it intended to continue operations in these offices and that Virsa employees would become part of SAP America and the worldwide network of SAP Labs.

How to monetize your Google Maps mashup

Joshua Weinberg sent me this note about PlaceBase and it's launch today of its Pushpin Google API compatible maps service:

Over the past eight months Google Maps has become a wildly popular platform for hobbyists creating Web based map applications in their spare time. Google Map’s popularity has primarily stemmed from its easy API, the great maps it produces and the generous non-commercial licensing terms offered by Google.
As its popularity soared, many professional developers searching for a mapping solution for commercial applications looked to Google Maps. While these developers loved the Google Maps output, the licensing and support were not appropriate for their needs. Particularly they found:

No support is available—even for a fee
All maps are branded “Powered by Google”
Google’s terms say they have the right to include advertising in the maps at any time and without notice.
Daily transactions are capped
Internal corporate applications can not be built because Google’s terms require that all uses of Google Maps be “freely accessible to end users.”
The API is subject to change at any time and there is no guarantee the applications built on the previous API will continue to work
Google Maps does not provide any provisions or upgrade path for advanced cartography features such as thematic mapping

Placebase, a five year old GIS company who has worked for Fannie Mae Foundation, UCLA and the Brookings Institution, saw this need and developed Pushpin LE. Pushpin LE will be launched on April 3rd at a mapping conference in San Francisco (Location Intelligence).

April 1, 2006

Counting comments; A pod of bloggers? I am not Strumpette; Self-esteem and PR; Spiderbot armies

Counting comments

Tom Abate, my long time buddy from the San Francisco Chronicle stopped in for a visit a couple of days ago. His boss Al Saracevic, a senior business editor at the San Francisco Chronicle recently launched The Tech Chronicles--a business tech blog. [Here is a link to a post about Howard High]

I'm a big supporter of newspapers launching blogs and Al is really enjoying it and he says his team is exploring this new kind of printing press, that is always-on.

Tom was saying that the traffic to the Tech blog isn't that great but I disagree, the numbers are very good especially since this is launching a new media brand and it takes some time to build--even when you leverage the San Francisco Chronicle brand.

Also, I remember telling Al that he should not look at the numbers of comments as an indicator of the blogs' success. Because most people are often more comfortable discussing things in their own peer-groups rather than on a very public forum. It can be very intimidating to leave comments on a very visible mainstream media blog but less-so on lower profile sites.

You can often follow the trackbacks and Google Alerts and Technorati links to see where your posts are creating discussions. That's a far better metric to see who is discussing the posts and where those discussions are taking place.

. . .

A Pod of Bloggers

Tom Abate and I were wondering what would be a good collective noun to describe a group of bloggers? A gang? A collective? A guild? None of those terms seemed quite right.

But how about a "pod" of bloggers? Pod usually refers to whales and bloggers sometime carry whale-sized egos, and some have assumed a whale-like profile :-) and we also have the iPod generation...so "a pod of bloggers" hits on several relevant cultural points. What do you think?

. . .

I am not Strumpette

Some have asked me if I am Strumpette, not I am not despite the coincidence that Strumpette went off-line at about the same time SVW went off-line.
[BTW Strumpette is back-online and here is the latest: Church Ousts Dominatrix from Vicarage

The thorny subject of gender is raised in the whole Strumpette venture. Which is a loaded gun and nothing good comes out of this debate as everyone heads for the moral high grounds or prefers not to engage.

I wish we didn't have the gender wars. Yet I regularly I see feminism used in exactly such a way.

I'm exploited by this system too, yet why am I "the Man" becuase I'm a man? Why do we have such a divisive form of feminism instead of an inclusive and collaborative form of feminism?

Any form of discriminiation in society is discriminatory and should be done away with, imho.

. . .

Self-esteem and PR

There is a tendency for people that work in public relations to have low self-esteem, and that's because they have low esteem for their work--at least in its current form.

PR people are asked to spin and that doesn't make anyone feel good. I keep saying that PR shouldn't be about spin. It's supposed to be about truthful communications.

And PR or for that matter corporate communications, should not be run by marketing.

Let me say it again: PR or corporate communications should not be run by marketing.

Marketing is not communications. Marketing is spin. Marketing is clueless when it comes to communications.

. . .

Spiderbot armies

I went off-line on Friday because I ran out of my bandwidth allocation for the month thanks to 20-odd robots hitting me multiple times a day and sucking up a third of my bandwidth and then returning less than 5 per cent of my traffic.

Could somebody do a study of how much bandwidth the spiderbot armies are sucking up across the internet?

And every week there are more and more of them, at some point they will gum up the entire internet. They reduce server performance and negatively affect the internet experience for everyone.

Yes, I could put up a robots.txt file and tell them to bugger off--but there has to be something in between. How about a Robots.txt file that only lets in spiderbots that have made a payment, to cover the bandwidth costs at least.

April 2006 Archives

April 30, 2006

Startup School: Launch fast, update frequently and be lazy

April 28, 2006

Guest Column: Who shouldn't blog in the PR industry?

Learning the business of innovation: Stanford hosts sold out Startup School weekend

April 27, 2006

The Next Big Thing...

April 26, 2006

The new media press release is coming!

New media analysts are slow to embrace new media

April 25, 2006

On McNealy departure: Where are the new leaders?

April 24, 2006

Serena Software CEO praises $1.2bn deal to take the company private

April 23, 2006

PageRank assassination and other nefarious online activities

April 21, 2006

Fridays with Foremski starts today on San Francisco Chronicle's online site

April 19, 2006

Apple moves ahead with assault on journalism

Bird flu will test our collaborative technologies

April 18, 2006

Are Google, Yahoo, Ebay and AMZN fast becoming the digital Wal-Marts of the emerging Internet 2.0 era?

April 17, 2006

Dan Gillmor's citizen media project acquired by Backfence

April 14, 2006

I'd love to buy the San Jose Mercury . . .

April 13, 2006

Tibco's Florida user conference stresses new IT architectures

April 11, 2006

Red Hat jumps into M&A: Is the $350m deal defensive or aggresive?

The new rules of newspapers. . . and some of the old rules

April 9, 2006

Are PR companies tempted to make false promises on "new media" communications?

April 7, 2006

The virtuous trackback: A proposal for paying for content

April 6, 2006

Is Silicon Valley too smart?

April 5, 2006

I missed the first day of Software 2006 but I made it to the reception and dinner

April 4, 2006

We need a Google AdSense on steroids: The Grand Challenge of Internet 2.0

April 3, 2006

Ray Lane sells Virsa to SAP: M&A continues in enterprise software markets

SAP acquires fastest growing Silicon Valley software company

How to monetize your Google Maps mashup

April 1, 2006

Counting comments; A pod of bloggers? I am not Strumpette; Self-esteem and PR; Spiderbot armies

- The Less talked about feature in New Xeons.

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