Thursday, June 24, 2010

The End of No Software?

The other day, I caught a story how - the pioneers of No Software and Cloud Computing - are building an app for the iPad and Android devices both expected in 2011.

That's right: the leader of the cult of no software is developing - gasp - a software application.

Clearly I am missing something. Yes I understand how important mobile computing is and the rest of it, however, I am at a loss to understand why would step out of the cloud and onto terra firma in the world of deployed software. I am wracking my brain to understand why they would do this. Their applications and platform work just as well on Safari and Chrome as they do on IE and Firefox so why divert valuable development resources into building a closed box application on the iPad.

Then it struck me - might some merger or the like happen between Apple and some time in the very near future?

It makes perfect sense (to me anyway). are completely complementary to Apple in so many ways and together they are devastating. I'll explain:

Apple has:
1) Great devices
2) Great application platform for mobile computing for consumer apps
3) Great ecosystem of firms building consumer apps
4) Great customer loyalty and numbers
5) Market cap of over $240 billion
6) Strong central leadership and a CEO who is a visionary and thought leader

Apple hasn't:
1) Trust of enterprises/large corporations around security or application development
2) Any real revenue from corporate businesses
3) A clear successor for Steve Jobs (sorry - they don't) has:
1) Great application platform trusted by large corporations
2) Great customer loyalty and growth
3) Market cap of just under $12 billion
4) Strong central leadership and a CEO who is a visionary and thought leader hasn't:
1) Any consumer-based revenue
2) No device business
3) A tough road to go from $1 billion in revenue to $5 billion as planned

So what if you put these two firms together, what do you have:
1) A firm that can deliver end to end applications - browser or device-based
2) A huge ecosystem of partners building apps for either businesses or consumers
3) A firm ready to merge consumer and corporate apps into one channel
4) Technology trusted by businesses and consumers
5) A firm to really compete with Microsoft and Google and win - big
6) A successor for Steve who is 10 years younger than he is

I might be enjoying the glorious Friday weather too much but this makes way more sense than those or rumours/stories we've all heard. Imagine - the power of the device leader with the cloud computing leader. Wow.

It would be an absolute game changer for the industry and complete the shift to cloud/mobile computing. Businesses would be able to buy in more heavily into the mobile cloud story with the combined entity. Parker Harris and his team would address any security concerns with the OS and take the Apple productivity tools into their cloud with relative ease (that's my guess). The ecosystem could tap into two channels - consumer and business - and start to develop huge revenues through each.

RIM would be done and really have no choice but to sell to Microsoft to give them a viable device business. Microsoft would need to double-down on Azure and hope their .NET developer community can win out over the Apple OS and Java developer community that the entity would carry.

If there is something to this hypothesis, it would be a good year or so away (didn't say they would have an iPad app by mid-2011) and does assume Mr. Jobs is ready to pull back a from running Apple much like Bill Gates has done with Microsoft. I think Mr. Jobs concern is he has a Steve Ballmer type ready not a Steve Jobs type. No offense to Mr. Ballmer but he isnt in the 'visioning thing'.

Marc Benioff is - big time. There are parallels between Mr. Jobs and Mr. Benioff in that Mr. Benioff worked for a time at Apple, has been the slayer of giants and mover of mountains in leading the cloud computing charge. Mr. Jobs we know has done similar in the mobile space. And both have a passion for getting Microsoft.

What if......

Monday, June 14, 2010

Dallas - Threat or Opportunity?

I just finished reading a little article from InfoWorld on Microsoft's Dallas project. For those who don't know what Dallas is, Microsoft hopes Dallas to be "the iTunes for data" according to Douglas Purdy, Microsoft's Chief Technology Officer for data and modeling. Dallas is important for Microsoft's cloud strategy since it promises to be the data warehouse/store for apps running on Azure, Microsoft's cloud infrastructure.

According to a Dallas program manager, Microsoft intends Dallas to be "broker for discovering information", something well underway with data from InfoGroup, NASA, Zillow and the Associated Press available through Dallas. At a high-level, the plan is to expose information from providers through a series of APIs (application programming interfaces) or hosted within Azure by the data owner. One assumes if the data is held off-Azure, Dallas/Azure will offer a standardized api with support tools to allow scalability for data providers - essentially a proxy service whereby users wishing to consume data from a number of sources need only program to one service yet call multiple content offerings - a data nirvana for a number of heavy data users such as investment banks and hedge funds.

Thus the challenge - is Dallas a threat or opportunity?

Well, like most things depends on who you are, quite frankly.

For a firm like Mashery, a API management provider, Dallas and Azure might very well be a huge threat to their business. Mashery currently boasts customers such as Thomson Reuters, Hoovers, ZoomInfo, the New York Times and Trulia (a real estate information provider), Dallas effectively could offer a competitive solution, with the backing off an industry leader with a distribution network of millions of firms. Ouch.

For tier-two information providers, Dallas offers a huge opportunity as a data distribution channel whereby customers can access their information easily and integrate it with their office productivity tools. For example, for a firm like Dow Jones, plugging into Dallas would in theory allow for an investment banking customer to seamlessly integrate data into hosted pitch-books that leverage Microsoft Excel and Powerpoint, thus simplifying the work flow in which a junior banker needs to simply update the template, (i.e. replace company A with company B) replace the data, update the book and publish it through the Azure cloud to others within the firm - a far easier and cleaner method than exists today.

For, Dallas is also a threat. Despite the acquisition of Jigsaw by, lacks broader information that is needed across the enterprise - Jigsaw's contact and company data is targeted more for sales and some marketing types. With the right content sources, Dallas can address Jigsaw's competitive advantage and move beyond the value due to broader need for information. hasn't fully (or at least publicly) stated a broader content strategy to compete with Dallas although I do know someone did pitch this need last year to them. Perhaps Jigsaw is the start of such a strategy - it remains to be seen.

For customers, particularly the large investment banks, hedge funds and asset management firms that consume huge quantities of information for a number of different business purposes, Dallas is a huge opportunity. These firms use a number of sources - internal and external - for both business operations and compliance purposes, Dallas offers a single warehouse/api to pull this information together. And, with Microsoft allowing storage of data by customers, the opportunity for a single master copy of data is within reach. Clearly there are operational risks and regulatory issues to be considered but there is the possibility.

Finally for those large information providers such as Bloomberg, Standard & Poors and Thomson Reuters, Dallas is both a threat and opportunity. The threat really lies in what's possible. If customers or 3rd party application providers can build complex, .NET apps on Azure that are as good or better than what these vendors offer themselves, customers may simply move to these hosted apps and away from the terminal products these firms offer. This shift would then dictate customers wanting 'only the data' something I'm not sure these firms want to provide. Should they resist, the opportunity exists for the raft of smaller tier-two and niche information providers to grow.

However, there is an opportunity as I said. If one of these leaders can embrace the Azure platform, the distribution channel it offers and get the commercials right - they can readily gain to the expense of the others. Since Microsoft has hundreds of millions of users of its software and office productivity tools, a new economic model can significantly shift the playing field to the detriment of the others - perhaps for good.

Wednesday, June 2, 2010

Poisoned Apple?

Sitting here in Times Square between meetings, gazing at the ad on the Nasdaq board for their new iPad app a thought occurred to me - if AT&T has introduced a new 2-tier data plan (which I predicted 6 months ago to my ex-colleagues at Thomson Reuters), won't this have an impact on the usage (and value) of this app?

In looking at the new AT&T models, it appears most users will stay under their $25/month plan - but those numbers are not with devices running multiple apps simultaneously, something only recently can mobile devices do on the AT&T network. The usage described in their press release is very single-threaded and does not factor streaming updates to devices (if it does I missed it) which begs the question I asked my ex-colleagues - if the wireless carriers govern last-mile delivery of information, who holds the power for mobile computing?

Add to it the proposed alliance of over 20 of the largest carriers to build an app platform themselves, have information firms offering apps on the Apple devices jumped the gun? Have they now boxed themselves and have those who have yet to move into mobile computing have an advantage?

Have, as I suggested to my ex-colleagues, info providers made a error in jumping on the Apple bandwagon, only to be hung out by carriers themselves?

I'm sure many will say, no, Apple rules, but Apple has a terrible habit of imploding at their height. I'd argue they are on the verge of doing it again. For example:

- they aggressively push a closed, proprietary platform which they offer at a premium over their competitors

- they aggressively sue competitors or competitor's partners to defend their near-monopoly position

- their strength rests on the harmony of hardware and software

- their products follow a linear path and are not significantly different then their flagship product

Looking at Apple today and Apple of 20+ yrs ago, I see a similar company behaving the same way. Will history repeat? We'll know in 5 years......