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- 2011: The Enterprise Resets
- TextWeight Tracks Your Weight Loss Progress, Bugs You Through SMS
- AOL’s Awkward Billboard Ad About Your Boss
- Streamonomics
- Facebook Close To Naming Sun Microsystems Campus As New Headquarters
- California Bill Criminalizing Online Impersonations In Effect Starting Today
| Posted: 02 Jan 2011 07:20 AM PST
This post was written by Aaron Levie, CEO and co-founder of Box.net. His last guest post for us was “Building The Simple Enterprise.”. On a recent call, an analyst shared a story about a company whose IT infrastructure was completely wiped out in a natural disaster. Forced to start from scratch, the company reinvented the spirit and composition of its enterprise IT strategy, and the set of solutions that emerged from the rubble made their organization inherently more mobile and efficient. Which begs the question: what would enterprise IT look like if all companies were afforded the opportunity to “start over?” In 2011, we might just find out. Other less destructive but incredibly powerful drivers for change are at work, and the coming year will be one of massive transformation in the enterprise. The cloud has tipped for the enterprise IDC forecasts that worldwide IT spending will hit $1.6 trillion this year, with 13% growth coming from software and services, and public cloud solutions making up the largest growth area. Cloud services are no longer on the periphery. 2011 will make this undoubtedly clear, bringing a massive wave of adoption, innovation and transformation as the cloud crosses the chasm from the early adopters to larger, more pragmatic organizations.
Evidence that the cloud has tipped is everywhere. It especially hit me when my dad, who works at a blue-chip paper company, told me that one of his business units had recently adopted NetSuite. Microsoft has started advertising their cloud products at airports and on television. In 2010, the US government determined that Google apps is secure enough for the GSA and Microsoft’s BPOSS for the USDA, citing millions in cost savings annually. Even Larry Ellison, one of the cloud’s biggest detractors, opened his Oracle Openworld keynote talking about, well, cloud computing. Suffice it to say, we’re in the middle of one of the most important computing shifts in history. And as has happened before with other major paradigm transitions, new businesses will emerge to define and dominate markets. Apple and Microsoft took over as we moved from Mainframe to Personal. Google’s power grew alongside the rise of the consumer internet era. Facebook is owning social. We know the drill. We will look back on this period with wonder, when five years from now managing your own servers and infrastructure will seem about as quaint as when Bill Gates supposedly said, “No one will need more than 637KB of memory.” Cloud in the enterprise is a classic disruption story. It began as a way to deliver lower-end applications that we didn’t yet care about or know we needed. Most incumbent vendors ignored or tried to delay the early indicators. But that’s how all disruption stories start: from the low end, and as the technology matures – more security, uptime, traction – the wave builds momentum. Soon, the enterprise wakes up to the fact that this approach to doing business and IT is not only more time and cost effective, it’s transforming the way their organization operates. The first cloud deployment in a large enterprise is always the greatest hurdle, but once Walmart implements SuccessFactors for performance management or Chiquita’s CIO decides that Workday is reliable enough to be its system of record for HR, there’s very little holding these organizations back from moving other non-core systems to outside vendors. And their cloud adoption paves the way for others, creating a ripple effect through organizations of all sizes. If you had surveyed the market a year ago you’d have found many enterprises still wary about the state of cloud solutions for their business, but we’re now seeing the inverse become true: enterprises are no longer comfortable with investing in on-premise systems when trusted web-based alternatives exist. Just as mainframe computing became obsolete when personal computers and servers matched their power far more efficiently, today’s big iron IT infrastructure may well see its own obsolescence for the majority of needs. In fact, perhaps the most prescient quote of all was from Thomas J. Watson, former president of IBM, when he said, “I think there is a world market for maybe five computers.” He was just about 60 years too early.
The mobile enterprise will finally be realized Mobility is creating major demand for cloud offerings today, and is a disruptive force on its own. In last year’s summer earnings call, Apple COO Tim Cook shared that, “…in the first 90 days, we already have 50% of the Fortune 500 that are deploying or testing the iPad.” In 2010, AT&T said that nearly 40% of iPhone sales were going to businesses and enterprises, with the most relative growth in enterprise market share coming from Android devices in 2010. As Aberdeen’s Andrew Borg points out, these devices aren’t completely enterprise ready, yet it doesn’t take much clairvoyance to see that this trend will continue to gain momentum in 2011; and with greater diversity of sophisticated mobile devices in the enterprise comes completely new opportunities for disruption. For these new devices to be fully corporate-ready, they need seamless access to email systems, business data and intelligence, communication tools, and more. The cloud rewrites the rules here, enabling new handsets and tablets to connect to the “grid” like any other computer, something that is finally making the mobile workplace a reality. And with the truly mobile workforce, completely new computing cases are emerging. Remote sales teams are pulling down inventory or product information from the cloud while on-site with just their iPad in hand. Construction workers on rooftops are viewing up-to-date digital blue prints from the main office. Good luck doing that with SharePoint. Mobile devices are becoming a catalyst for completely new enterprise applications, and vice versa. The marriage of the two is so uniquely powerful that businesses will experience a wave of productivity transformation over the next few years. The polygamous enterprise and the fall of Microsoft monogamy While enterprises of prior decades may have gotten by predominantly on a combination of software developed in Redmond and Redwood Shores, this won’t be the case for the enterprise in 2011. The mandate of the modern enterprise IT department is transitioning from maintaining and upgrading systems from a limited set of vendors, to piloting and implementing a diverse set of services to solve problems. We’re even seeing this shift on the hardware side, as Macs enter corporations in greater proportions, seeing double and in some cases triple digit growth within large enterprises and the government. The era of near-religious adoption of vertically integrated tools from behemoth vendors is coming to an end, providing an unprecedented opening for best-of-breed solutions to compete for enterprise customers. Microsoft will likely be the most affected party, but enterprises in 2011 will start to feel both the upsides and management strain immediately. With the floodgates open for new and heterogeneous solutions, we’ll continue to see massive adoption of technology directly from employees themselves. This is quickly becoming the fastest entry point for new software and hardware, and these tools aren’t being immediately turned off by IT. During an audience survey at this year’s Dreamforce conference half the group said they had SharePoint in their organization; yet when asked how many were looking to switch off SharePoint in the coming year, more than half of the group kept their hands up. Ballmer and company are still trying to figure out how to operate in a world that isn’t centered around them, and the rise of cloud and mobile is producing just exactly that. Microsoft—a company that has traditionally grown through complexity and new product lines—is going to have to fight to stay competitive. Social and personalization will permeate all business apps All this variety would normally create chaos, except that these applications are becoming connected in incredibly powerful ways. They’ll work harder for us, surfacing more relevant information for a passive user than an active user could ever possibly discover in their silo-ed legacy software. Social capabilities will transform how we interact with our applications, and not just within the category of enterprise social software, which is finally beginning to move from the periphery to mainstream, with Gartner estimating a $1B market size in 2011. To get much further than this, Rob Koplowitz of Forrester points out that business value has to be established, and organizations must learn to embrace a different kind of risk, suggesting there’s more danger today by not sharing enough than having too much transparency. This is not just about our software becoming more social in the contemporary sense, with status messages and communication between users. It’s about our software becoming much more personalized for our job functions, and being smarter than us in the areas it has more knowledge. Your content management solution should surface information and collaborators that are relevant to your current projects. Your social software platform should recommend experts for a team you’re putting together without being prompted. LinkedIn should tell you what candidates fit the position for which you’re hiring. And as the business social layer continues to grow, a rich ecosystem of applications that connect to one another will emerge. This will lead to the ability to write mashups on top of our business social software, have viral business applications that live on top of the “graph,” and an enterprise experience in 2011 that is far more personalized and contextual to our own work behaviors. The disruption story of cloud in the enterprise is still in its early chapters, but in 2011 it will be impossible to deny. Don’t be surprised if the rise of mobility, the fall of vendor hegemony, and the spread of social capabilities across all business applications creates massive upheaval in the enterprise software market—more than we’ve seen in the past five years combined. (I may be biased here since I run an enterprise cloud startup, but I may also be right). It will also create short-term challenges for IT departments as they find their footing in a world with more applications and devices to manage than ever before, but with a long-term upside of significantly reduced system maintenance and a role that is inherently more strategic and dynamic. For users, however, this disruption only brings benefits. The devices they want to use are finally the ones they’re being armed with, and thanks to cloud applications, they can now work from anywhere. The technology they’re using is best-of-breed rather than chosen by default or vendor lock-in. And the social capabilities that have revolutionized their personal lives are now being applied to their work lives in ways that are arguably even more powerful. Welcome to 2011. Photo credit: Flickr/Jennifer Konig        
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| TextWeight Tracks Your Weight Loss Progress, Bugs You Through SMS Posted: 01 Jan 2011 11:55 PM PST
For me and many others “lose weight” isn’t just a New Year’s Day resolution, it’s an every single morning one. But yeah, there’s nothing like a crashing boozy halt to a December spent scarfing crappy chocolates and piling on the gravy to make you feel like you should hit the gym, especially after hitting the scales. A simple service created by Kevin Morrill, textWeight holds you to your New Year’s weight loss vows by sending you a reminder text at 8am every morning, to which you reply (on the honor system) with your weight. textWeight then creates a graph of your weight loss progress, so you can measure every pound lost towards your goal over time. While sites like FitBit.com, Skinnyo.com, and Myfitnesspal.com all try to solve a similar problem, I’ve yet to see anything so simple focusing on weight loss. And true that 8am wake up text is way harsh, but Morrill is working on time adjustment features as well as other ways of scaling the project. Users with less fortitude can also stop recieving texts any time by sending “stop” as a reply to any textWeight message or clicking the stop button on the website graph. I just signed up to receive my first annoying text tomorrow. I can’t, um, weight.        
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| AOL’s Awkward Billboard Ad About Your Boss Posted: 01 Jan 2011 11:06 PM PST
I still don’t get why our parent company spells AOL in all caps but uses “Aol” in its logo. There’s probably a memo around here somewhere that explains it. But that isn’t what this post is about. This is a picture of a new billboard ad recently put up along highway 101 in Silicon Valley, visible to southbound traffic around the Whipple exit a few miles north of Palo Alto. We first heard about it from a tipster, who called it “odd.” And I agree. It’s not that AOL isn’t super awesome to work for some of the time. They have a great new office in Palo Alto that we don’t have to actually go to, and Molly in human resources is extremely helpful and efficient. AOL is Shangri-La compared to working at Yahoo. But people aren’t exactly fleeing their jobs to go there, at least as far as I know. If you want to go work somewhere in Silicon Valley before your boss does, it’s Facebook, Twitter or Zynga. The pre-IPO startups. It seems a little, I dunno, over-confident. Nevertheless, they’re hiring. So if neither you nor your boss can get a job at one of those hot pre-IPO companies you may want to consider an exciting and rewarding career at AOL. People with extremely large red heads are preferred.        
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| Posted: 01 Jan 2011 07:11 PM PST
Luckily, the world continues to provide comedy (Rose Parade announcer Bob Eubanks tagging a marching band version of I Want to Hold Your Hand by hoping Stevie Wonder was listening) as we struggle to graft new technologies onto old memories and habits. Twitter provided a running commentary on this effort, from the 3D version of the Yuletime burning logs channel to Yoko suggesting John would have loved Twitter and Facebook. It certainly would have shortened the Lost Weekend. Imagine (cough) his tweet stream: Crawled off to sleep in the bath, isn’t it good @NorwegianWood. Speaking of Apple TV, I went out and bought another one to go with the largest Sony screen I could get delivered from Amazon along with a freebie home theater audio add-on. Both kids got iPads from the grandparents, and already they’re lobbying for Apple TVs for their rooms. The good news here is that at a hundred bucks plus an HDMI cable my eldest can handle that from her baby sitting stash. She thinks I’m dreading her coming of age at 18. Thank god she doesn’t read TechCrunch. What she does do is watch Netflix constantly. Amazingly, for one streaming sub of 8 bucks a month everyone in the house can now watch different Netflix shows simultaneously. Or download a newer show or movie to the iPad and Airplay it to a free screen somewhere in the house. Suddenly weekends are argument free — no more endless Disney channel blaring on the unwatched living room TV. instead I can push Mad Men season 1 to the big screen and 5.1 sound, and if the little one complains too much, push it or her into a bedroom. You can extrapolate from this streaming culture in several directions. In the home, television and gaming are now virtualized. The content comes in via various services, is attached to the streaming network, and is consumed and metadata-tagged across devices before being pushed back out on the mobile network. As we vote for these services with our clicks and device shuttling, the amount of revenue will grow to a meaningful share of delivery models. That in turn will drive advertisers and companies seeking relationships with audiences toward an equitable business revenue stream on both sides. As a result, Netflix will be able to produce useful metadata that can be mined to reduce the cost of customer acquisition, in their case Hollywood windowed content. This produces interesting economic effects, such as AT&T losing customers to a Verizon iPhone but saving even more overall by lowering the expensive acquisition costs of the iPhone subsidy. Similarly, if Apple TV/Netflix customers present a more influential cloud of metadata across the same recent/archive content base as Comcast provides, the media cartel may decide to lower the cost of their premium content to preserve a direct connection to the targeted audience. Put in dollars, we spend $350 a month on Comcast (triple play including broadband and something called a land line I have no use for) and perhaps $30 or so on on demand movies. Let’s say $140 of that is for broadband (50 megabits downstream) and basic cable, so add $8 for Netflix and $50 for Apple TV recent movies and shows. There’s about a hundred bucks delta there, which will probably convince Comcast to unbundle some of their premium network shows to tap the new Airplay audience without losing a percentage of those customers. Seems counter intuitive but look what Google does with Maps, Google Voice, and Gmail. Trade lock in for a bigger slice of a broader targeted market. The real competitor is Facebook, which faces the same calculation as Netflix in expanding revenue to keep the balance of value while growing the streaming audience. The DVD market is already dead, but BlueRay will not replace the revenue. Once we move to realtime acquisition and deployment of content, we’ll never go back. Simply put, the quality (or lack of it) of television and first run movies will encourage us to wait for the majority of it to hit the download or streaming venue and cherry pick the hits in the theaters. And those cable or satellite services that count on us not switching will find the rich metadata moving away from them even if we keep both services until the shakeout runs its course. Once, or while these network effects accelerate, the shape of the set top box will change even more dramatically. Take a look right now: the Comcast DVR dwarfs the Apple TV. With his little hobby, Steve Jobs has done to TV what Twitter has done to news and the iPod did to music. By leapfrogging the hard drive to the Cloud, he’s created a streaming user experience across the entertainment media that we won’t leave. Fail whales, stuttering broadband, whatever — we’ll just move up the stack and pay à la carte if we can’t wait for the bits to flow again. By the time the network traffic is overwhelming, the increasing leverage of the streaming cloud will pay for repaving the cowpaths. None of this is winner take all. In fact, the rapid construction of the realtime cloud depends on healthy competition to create comparisons we can evaluate. Much is made of Apple’s controlled platform versus Google’s Android openomics. But In actuality Google’s model requires them to keep HTML 5 and H264 open across both platforms in order to preserve the ubiquity of search data and YouTube. Google preserving Flash on its platform buys them allegiance to a desktop model that is being replaced at the very moment as we’re switching to the streaming cloud. If we arrive at the ? Icon or click on an image to start a video that doesn’t work, we don’t blame Apple, we blame everybody else. By contrast, Apple lets Skype offer video conferencing on the iPhone over both WiFi and 3/4G. Although some think that will hurt FaceTime, I think it provides a ubiquity path for FaceTime to absorb Skype much as iChat effectively did with AIM. In the meantime, the small number of people who use 3G with the Skype client will not tax AT&T or Verizon if that happens. And letting Android phones into FaceTime gives Apple the broader market while preserving the ability to innovate across the streaming stack. That’s when the streaming cloud welcomes the enterprise. Happy New Year.        
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| Facebook Close To Naming Sun Microsystems Campus As New Headquarters Posted: 01 Jan 2011 05:16 PM PST
The move doesn’t come as a surprise. Facebook had practically outgrown its current offices on S. California Ave before it even moved in, and it’s already subleased additional space at 1050 Page Mill Road, just down the street from its current location (employees can take shuttles between the two buildings, but it’s not very convenient). With over 2,000 employees and no signs of slowing, the company needs a lot more leg room. Facebook says it isn’t a done deal quite yet (actually, they wouldn’t even confirm the location they’re looking at):
Prior to moving to its current home on S. California Ave, Facebook occupied a handful of buildings that littered downtown Palo Alto near University Avenue. Based on Facebook’s comment it sounds like this new space could become their home for the foreseeable future. Back in 2003 Google had similar rapid growing pains and began subleasing SGI’s office space in Mountain View — it later purchased this land and expanded after its IPO. Image via Dianiel Rosenthal’s Sun blog        
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| California Bill Criminalizing Online Impersonations In Effect Starting Today Posted: 01 Jan 2011 02:29 PM PST
California’s SB 1411, which adds a layer of criminal and civil penalties for certain online impersonations, goes into effect starting today. The consequences include a fine of up to $1,000, and/ or up to a year in jail. So don’t go and do something crazy like impersonate Google CEO Eric Schmidt on Facebook. There may be consequences. The full text and a summary of the bill are below. There’s a good overview and analysis of it as well, on ZDNet. The state has created a new crime, and a new section is being added to the penal code. There has to be intent to harm, intimidate, threaten, or defraud another person – not necessarily the person you are impersonating. Free speech issues, including satire and parody, aren’t addressed in the text of the bill. The courts will likely sort it out. Hopefully without my direct participation.
       
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