Guest Blog

June 13, 2005

Technology and transcendence: a report from the recent Mind States VI conference

By Luke Maroney and Dawn Montefusco for SiliconValleyWatcher

While VCs were sailing their boats and enjoying the sunshine of Memorial Day weekend, 500-plus psychedelic geeks and silicon hippies gathered at the Palace of Fine Arts in San Francisco for the 6th annual Mind States conference. Now that the buzz has worn off, it’s time to give a rundown of what happened at this unique event, subtitled Technology and Transcendence.

The West Coast conscious heard the latest developments in everything from techno-biological enhancement to current psychedelic research, herbiculture and visionary art. The most interesting thing, however, wasn’t the chill room or the mescaline-packed San Pedro Cacti but the substance of the sessions.

Marc Pesce, the writer, educator, and technological guru, gave a presentation called "Hyperpeople," in which he described a world interconnected by social technology where "we no longer need to rely on mass media to get our information."

Pesce commented on the evolutionary pressure that the information explosion is forcing upon us. Audiences are abandoning big broadcasters in favor of direct relationships with independent amateurs. "After all," he said, "the amateur only wants to satisfy himself and his friends, while the big broadcasters have to satisfy advertisers."

The use of knowledge swarms like wikis and blogs to share information is creating a vast network of free media. A new trust is forming between peer-producers and peer-consumers, and this trust is breaking down the dependence upon mainstream media. "We can now be our own TV stations," Pesce said.

As these networks emerge, the jump between the technological collective and the conscious collective becomes easier to make. In effect, the technology is creating a virtual conscious collective. “It sounds hippy dippy, but science is now proving that it’s true." said Piers Bizony, author of Invisible Worlds and another presenter at Mind States.

But Pesce warned that these subterranean worlds of virtual reality have a seductive quality. He said he used psychedelic drugs to expand his thinking, giving him a different world view that he says enhances creativity. Toward the end of his lecture he asked: "Where is the outside world? Where are the voices of others? Do you see the light in their eyes?"

His question seemed to have a double meaning. On one hand, advances in technology are validating previous concepts of collective consciousness. But as skeptics of psychedelic drugs have said, what happens when you don’t come back from the trip? Or, in this case, back from the virtual world?

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May 06, 2005

Open-source enterprise applications can be sold just as profitably as proprietary software

A guest article by Charles Oppenheimer, CEO, Recursive Technology, for SiliconValleyWatcher

Larry Augustin of Medsphere, the open-source electronic health records company, gave a talk last week at the SDForum SIG on open source. It was a great talk, especially for the unfortunate few of us whose entire creative energy revolves around enterprise software. There was lots of audience interaction, and we barely got out of there by 9pm. The thesis of Larry's argument is that open source based companies can operate with profit margins similar to those at typical enterprise software companies that rely on license revenue. And the time is right for open source products at the application layer, which is significant because applications are why customers invest in the whole technology stack in the first place.

There was a general acknowledgment that in most areas open source applications are not challenging existing enterprise software companies yet. But as more open source applications come out with wider distribution and lower cost, they will put pressure on the more expensive software providers from below. It was noted that a few application-level open source companies are already doing quite well, including Compiere, SugarCRM, Asterisk, and Medsphere.

Expanding the open source area, even when it means reducing license revenues, actually expands the total size of the enterprise software market due to the larger number of businesses that can afford lower-cost enterprise software systems.

Enterprise software vendors are like vacuum-tube radio providers, in an era where the transistor radios represented by open source are still of a lower quality. Eventually, transistor radio technology moved upstream in quality, redefining the market. We know how that turned out. Pretty exciting stuff.

Some highlights of the talk:

- The cost of sales at a typical enterprise software company (he used Siebel as an example) equals about 75% of total license revenues
- Therefore, companies that buy enterprise software are essentially paying for the sales cycle
- A successful open source project that has a high volume of downloads, such as SugarCRM, has greatly reduced cost of sales, approaching zero in some models
- Enterprise software companies have very high general & administrative costs, due to their wasteful operations and big profit margins
- Research and development costs are typically lower in open source companies
- Larry did some magic with the numbers, removing license revenue, and showed how the gross margin % remained the same without license revenues

Some critical comments:

- One of the key questions in this assumption is whether the sales cost could be kept down as larger deals are pursued. Large deals would be critical for legitimate enterprise software companies, open source or not. Assuming that an open source product will have a huge distribution and no sales cost is not an accurate expectation. Companies such as RedHat that sell to enterprises (although not in the application space) have high sales costs, similar to standard enterprise companies
- In enterprise software sales, in my experience, price is rarely the primary decision factor. It almost always comes down the features, or the ability of the vendor to sell the features. Only when an open source application can compete head to head with a commercial application and win on merit will there be significant traction. It’s a fair prediction that there will be more and more applications that can do that. JBoss can beat WebLogic now, and JBoss Inc. has an extremely low sales cost. That is the ultimate model, but it takes great software.

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January 18, 2005

Guestblog: Louise Kehoe recalls Steve Jobs' rock star comeback to Apple

by Louise Kehoe for SiliconValleyWatcher.com

1997 MacWorld was a memorable event, in many ways. I was sitting in the front row wedged between Muhammad Ali and Ellen Hancock (Muhammad is a large man, the seats were small). This was Gil Amelio’s last MacWorld appearance. He talked for nearly 3 hours. I don’t remember much of what he said, only that Ellen was suffering on his behalf, I was suffering on her behalf and we were all suffering for lack of seating space. Then Steve Jobs walked on stage. He spoke briefly, to wild applause, in sharp contrast to the reaction that Gil received. We all knew then that Gil was on the way out.

Louise Kehoe chatting with Steve Jobs: So what have you been up to, Steve?

And perhaps I can turn the clock back a little further, to the day when Steve came back to Apple. With typical arrogance, Apple called a press conference with just an hour or so notice – late afternoon on the Friday before Christmas (that must have been 1996, I think). The press pack rushed down there…those based in SF arrived late. Gil took the stage in the Apple auditorium to announce Apple’s plans to acquire Next…and that Steve would return to Apple as a “consultant”.

Enter Steve, from the back of the room, bounding down the steps.

When the formal proceedings ended, we reporters rushed the stage. I had just one question for Steve: “What are you up to?” He assured me that he had no intention of reclaiming his role at the head of Apple. “Oh no Louise, I have other interests now. I have a family….” Then I asked Gil if he knew what he was doing. Wasn’t he opening the door for Steve to oust him, in the same way that Steve had attempted to oust John Sculley a decade earlier? Gil seemed sure that this could not happen. The rest, of course, is history.

But perhaps I can add one more reflection. If we are comparing notes on the most memorable Steve Jobs’ presentation, then I would have to say it was in 1984 when he and John Sculley introduced the original Macintosh. Like later events, this one was carefully choreographed. But that, in itself, was an innovation in those days. I, and many others, had been pre-briefed on the Macintosh product and I had written most of my story in advance. But the news desk wanted to add some “color” from the event at the Flint Center in Cupertino. As the event got underway, I made my way to the back of the theatre to use a pay phone (no cell phone in those days) and got through to the crusty FT news editor just as Steve Jobs walked on stage, the music started blaring and the crowd (mostly Apple employees) started screaming!

I attempted to describe the scene, but the background noise was overwhelming and the news editor was skeptical. “Where are you?", he kept asking. “You are supposed to be at a computer event!”

dk181040

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January 12, 2005

Guest Blog: Some thoughts on event-driven enterprise syndication

by Michael Terner, CEO of KnowNow Inc

The Internet revolutionized the way businesses operate. Now RSS is about to completely change the way employees, partners and customers communicate. RSS will, for the first time, truly enable the information you need, and only the information you need, to find you. Whether employees need the most up-to-date corporate financial data, manufacturing and inventory statistics, FCC filings, breaking industry news or any other time-sensitive information, “event-driven” RSS is taking over where other communication mediums fall short.

“Events” are anything that produces a change in the business state, such as a drop in the available inventory of widgets. For instance, as soon as the number of widgets drops below a certain level, event-driven alerts are syndicated via RSS to subscribers of that information—without having to poll for it—so they can take immediate corrective action. Event-driven syndication eliminates latency, reduces errors, ensures regulatory compliance and fits nicely into existing business processes. This sort of notification used to be handled by e-mail, but that channel is now completely overburdened, having been either drowned in spam or ignored until it’s too late. Event-driven RSS provides a solution to this problem. With event-driven RSS, stakeholders in an organization’s overall success move from searching for information to watching it.

Connecting employees in large organizations has always been a challenge, and traditional fixes like portals and email have fallen short. Neither solution addresses the need for real-time, event-driven communication. And both put a significant burden on users to manually filter vast amounts of information in order to determine what is relevant to them. Email is and will always be plagued by spam, and portals don’t satisfy the increasingly stringent regulatory requirements regarding timeliness, accuracy and accountability surrounding financial transactions and reporting.

Employees already depend on public RSS feeds for the information they want. Now corporations can use the RSS standard to connect employees with the corporate information then need, when they need it.

But for all if RSS’ virtues, its use in the enterprise up to now has been inefficient. For instance, there’s been a lack of standardized tools for viewing, authoring, administering and providing security for syndicated content, and RSS puts a heavy load on IT infrastructure. In large corporate environments, thousands of users are constantly polling for updated RSS feeds, either manually or via readers with automated polling. Other problems include duplicate feeds being moved across the network, thousands of users polling for the same information and duplicate data being pushed to users who are polling when no updated data is available.

Event-driven RSS alleviates these issues. An event-driven RSS model benefits publishers who bear the cost of network hosting infrastructure; end users, who like to get information as soon as it becomes available; and large corporations, which have thousands of constituents that haven’t standardized on any one reader technology and taxes corporate bandwidth.

For publishers, event-driven RSS lets consumers subscribe to feeds and receive updates as soon as they’re made, rather than polling for them. That alleviates much of the pressure created when a publisher’s site gets popular and regular polling by consumers of that site overwhelms its serving capacity. Corporate IT departments realize even more significant benefits. Event-driven RSS integrates with corporate data stores and applications and connects entire organizations, even across the firewall. Companies also gain centralized control and management of their content, can introduce intelligent matching and searching, audit logging, filtering and user selection to eliminate regulatory exposure.

It hasn’t taken long, but RSS is a proven disruptive technology. SiliconValleyWatcher.com is a perfect example; Tom Foremski and his crew have already made it onto the list of the 250 most influential media blogs according to Bacon’s International, a decidedly old-school media research firm. For the blog medium to be so recognized in such a short period of time is a testament to the power of RSS.

Quick corporate adoption of the technology isn’t far behind. By publishing data changes to subscribers via RSS as soon as those changes occur, companies become truly transparent and connected. Like journalists, corporate IT departments, marketers and compliance officers realize that they too must “publish or perish.”
dk122140

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January 11, 2005

Guest Blog: Symantec/Veritas deal could provide McAfee with an opportunity to regain lost markets

Mark Coker represented Symantec competitor McAfee for about four years from June 1993 to July 97. He says there are some lessons Symantec could learn from McAfee's attempts to grow by acquisition-Tom Foremski

by Mark Coker, President, Dovetail Public Relations for SiliconValleyWatcher.com

Symantec's acquisition of Veritas risks paralleling a similar strategy pursued by McAfee Associates in the mid '90s that ultimately failed. In early '94, company management believed their annual antivirus revenues, which were then at around $15 million, would peak soon around $20-$30 million (yes, really), so they decided to use their cash hoard and strong cash flow to diversify their product line by creating an integrated suite of network security and management tools. As inspiration, they looked to Microsoft, who had obliterated its desktop productivity app competitors in the early '90s by coming out with Microsoft Office, an integrated suite.

McAfee made numerous acquisitions over the next few years, leveraging their high flying stock as currency. Acquisitions included network management, additional network security (encryption, firewalls, etc.), systems management, help desk and storage management products, and made an unsuccessful bid to acquire Cheyenne Software. (Cheyenne was then one of the three storage management leaders along with Veritas and Legato. Although the attempted Cheyenne acquisition failed to happen, the industry took McAfee seriously from then on). McAfee ultimately acquired Network General, the Sniffer company, and renamed the combined entity Network Associates. Most of the acquisitions languished or imploded, while anti-virus became the little-engine-that-could and exploded beyond anyone's expectations.

More recently, the company sold off or closed its distracting diversions, returned to its security roots, and changed its name back to McAfee.

Why did McAfee's strategy fail?

1. McAfee/Network Associates never fully executed on its grand plan to create integrated suites, and it's questionable whether customers ever wanted integrated suites. Customers ultimately chose best of breed point solutions over McAfee's kludgey integrations (which were often dissimilar point products thrown together into a box with integration that ran no deeper than the shrinkwap).

2. The alleged book cooking scandals under then-CEO Bill Larson knocked the wheels off the wagon for a few years (for the best summary anywhere of those wild years under Larson, check out Elise Ackerman's cover story in the San Jose Mercury News that appeared February 15, 2001).

3. Culture clashes with acquired companies.

Will Symantec's bold gambit be a spectacular failure too? I don't know. While I doubt everything will go as smoothly as Symantec anticipates, times have changed and there's more reason today for storage and security to become integrated disciplines. To succeed, however, they'll need to successfully integrate company cultures; hold on to Veritas' best employees; not over-reach the reasonable bounds of what should become integrated and what should remain standalone; maintain, protect and expand Veritas' customer base; successfully navigate the often separate and sometimes competing corporate IT purchasing feifdoms of Storage IT and Security IT; not become so distracted by expanded focus that they fail to protect their security franchise; prepare to compete head-on with EMC and other storage vendors who are now to a greater degree staking their own futures on storage management software; and stave off Microsoft's incursion into anti-virus and anti-spyware (curiously, Symantec has been late to the anti-spyware game).

Ironically, Symantec's move into storage management and the distractions that will follow will ultimately benefit McAfee, now the security pure play. Security customers ultimately choose vendor partners they view as specialists, for the same reason heart surgery patients wouldn't choose a general practicioner to perform a triple bypass operation.
dk1111015

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Guest Blog: Symantec/Veritas deal could provide McAfee with an opportunity to regain lost markets

Mark Coker represented Symantec competitor McAfee for about four years from June 1993 to July 97. He says there are some lessons Symantec could learn from McAfee's attempts to grow by acquisition-Tom Foremski

by Mark Coker, President, Dovetail Public Relations for SiliconValleyWatcher.com

Symantec's acquisition of Veritas risks paralleling a similar strategy pursued by McAfee Associates in the mid '90s that ultimately failed. In early '94, company management believed their annual antivirus revenues, which were then at around $15 million, would peak soon around $20-$30 million (yes, really), so they decided to use their cash hoard and strong cash flow to diversify their product line by creating an integrated suite of network security and management tools. As inspiration, they looked to Microsoft, who had obliterated its desktop productivity app competitors in the early '90s by coming out with Microsoft Office, an integrated suite.

McAfee made numerous acquisitions over the next few years, leveraging their high flying stock as currency. Acquisitions included network management, additional network security (encryption, firewalls, etc.), systems management, help desk and storage management products, and made an unsuccessful bid to acquire Cheyenne Software. (Cheyenne was then one of the three storage management leaders along with Veritas and Legato. Although the attempted Cheyenne acquisition failed to happen, the industry took McAfee seriously from then on). McAfee ultimately acquired Network General, the Sniffer company, and renamed the combined entity Network Associates. Most of the acquisitions languished or imploded, while anti-virus became the little-engine-that-could and exploded beyond anyone's expectations.

More recently, the company sold off or closed its distracting diversions, returned to its security roots, and changed its name back to McAfee.

Why did McAfee's strategy fail?

1. McAfee/Network Associates never fully executed on its grand plan to create integrated suites, and it's questionable whether customers ever wanted integrated suites. Customers ultimately chose best of breed point solutions over McAfee's kludgey integrations (which were often dissimilar point products thrown together into a box with integration that ran no deeper than the shrinkwap).

2. The alleged book cooking scandals under then-CEO Bill Larson knocked the wheels off the wagon for a few years (for the best summary anywhere of those wild years under Larson, check out Elise Ackerman's cover story in the San Jose Mercury News that appeared February 15, 2001).

3. Culture clashes with acquired companies.

Will Symantec's bold gambit be a spectacular failure too? I don't know. While I doubt everything will go as smoothly as Symantec anticipates, times have changed and there's more reason today for storage and security to become integrated disciplines. To succeed, however, they'll need to successfully integrate company cultures; hold on to Veritas' best employees; not over-reach the reasonable bounds of what should become integrated and what should remain standalone; maintain, protect and expand Veritas' customer base; successfully navigate the often separate and sometimes competing corporate IT purchasing feifdoms of Storage IT and Security IT; not become so distracted by expanded focus that they fail to protect their security franchise; prepare to compete head-on with EMC and other storage vendors who are now to a greater degree staking their own futures on storage management software; and stave off Microsoft's incursion into anti-virus and anti-spyware (curiously, Symantec has been late to the anti-spyware game).

Ironically, Symantec's move into storage management and the distractions that will follow will ultimately benefit McAfee, now the security pure play. Security customers ultimately choose vendor partners they view as specialists, for the same reason heart surgery patients wouldn't choose a general practicioner to perform a triple bypass operation.
dk1111015

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December 27, 2004

Guest Blog/Letter to the Editor: Good Karma and Catch-22s in Tech PR...

Mark Coker, President of Dovetail Public Relations, tells SiliconValleyWatcher.com readers...

...I'd like to share a personal story about my agency that describes a dilemma I think many good tech PR agencies face...

Today, Cisco announced that they're acquiring our security client, Protego Networks. Last Thursday, Microsoft announced that they're acquiring our anti-spyware client, Giant Company Software.

We signed on Giant in September. They chose us because they liked the work we did for our long-time client PestPatrol, the anti-spyware pioneer, which was acquired in August by Computer Associates. Giant correctly assumed that CA would dump PestPatrol's agency, so they could scoop up our agency's expertise and contacts to raise visibility for their own firm in what has become a very crowded market.

So all this has me thinking about a catch-22 curse that many tech agencies face: As PR practioners, our work directly (and often significantly) impacts a client's visibility, awareness, perceptions and revenues, thereby often increasing the value of their business.
Unfortunately, we sometimes become the captains of our own demise when we achieve our objectives, because we can end up accelerating or enabling liquidity events for our clients. And if you're on the wrong end of the acquisition, you lose the client.

It's certainly bittersweet for us. We love to make great things happen for our clients. But we also want to keep them long term. My personal view is that this business isn't really about the companies we represent, it's about people we represent. If we serve our people well, the good karma will return with more new business down the line as these people circulate back into the tech ecosystem.

postscript:

Although we've had two security clients taken out in the last week,
we're on track to replace the business fairly quickly. We're fielding three new business inquiries, two of which are security companies and all of which derive from previous clients going back as far as 10 years ago. Patience pays off in the karma PR game.

Links:

Dovetail Public Relations

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