Thursday, June 30, 2011

Google+ Could Make Twitter the Next Myspace

This post was also published in VentureBeat.

There are numerous comparisons between Google’s new Google+ social offering and Facebook, but most of them miss the mark. Google knows the social train has left the station and there is a very slim chance of catching up with Facebook’s 750 million active users. However, Twitter’s position as a broadcast platform for 21 million active publishers is a much more achievable goal for Google to reach.

There are two different types of social networks, private and public — each defined by its default privacy setting. Facebook is by default private and meant to connect actual friends. Twitter by default is public and anyone can follow anyone else. Google+ is decidedly in the Twitter camp — meaning you can follow anyone, including Google CEO Larry Page. Google+ lets you see Page’s posts and “like” his photos of kite surfing in Alaska. When posting on Google+, it forces users to select specific social circles they are posting to, which includes “everyone” as an option that mimics a Twitter-style broadcast. If not for the lawsuits and FTC settlement about Google Buzz automatically broadcasting posts, it is likely that Google+’s default setting would be pubic posts.

Although Twitter is growing (having just hit 200 million tweets a day), Twitter has left itself open to be displaced with a slow pace of adding features. Even newly returned founder Jack Dorsey has said that it was too difficult for “normal” people to use Twitter.

So, how can Google go after the 21 million people who are actively publishing on Twitter, and, more importantly, the few thousands that own the majority of Twitter followers? These types of posters are generally publishers, and Google’s core competence is serving publishers. Publishers pay a lot of attention to Google, from search engine optimization to increase the ranking on Google searches, search engine marketing keyword ads to drive traffic, and on-site advertising solutions ranging from AdSense to DoubleClick.

Publishers are interested in increasing their search rankings and improving their reach. Posting content to Google+1 increases search rankings. The black toolbar across the top of Google services, which integrates both Google+ and Google+ notifications, definitely provides reach and is now in front of as many user minutes as Facebook commands. Users commenting or liking on items from publishers will show up in their friends’ toolbars. Even if they only have a few friends, the overall traffic bump will be significant. The Google+ bar has not yet been activated on YouTube, a key publisher and celebrity channel, and likely will broadcast YouTube likes, comments and shares.

While Facebook is not sweating about Google+, the threat to Twitter is significant. Google has the opportunity to displace Twitter if it gets publishers and celebrities to encourage Google+ follows on their websites as well as pushing posts to the legions of Google users while they are in Search, Gmail and YouTube. Google was turned down when it tried to buy Twitter for $10 billion, and now it is going to try to replicate it. With Google+, the company actually has a shot.

Why Microsoft’s Office 365 will Clobber Google Apps

This post was also published in VentureBeat.

Yes, Microsoft is a slow, lumbering giant. It has been working on cloud for years, with numerous iterations, that took so long cloud proponent Ray Ozzie got fed up and left. Microsoft had to work through cannibalizing reseller arrangements, reconciling how to reach consumers versus businesses and a host of other issues. With Office 365, Microsoft has finally delivered an end-to-end cloud platform for businesses that encompass not only its desktop Office software, but also its server software, such as Exchange and SharePoint.

Contrary to Google’s narrative, cloud based office software is still a wide open market. The three million businesses that have “Gone Google” — proclaimed on billboards in San Francisco airport’s new Terminal 2 — are for the most part Gmail users, who are still happily using Microsoft Office and even Microsoft Outlook. Gmail is a fast, cheap, spam-free and great solution for business email, especially relative to the expensive, lumbering email service providers. Google Apps has definitely found a niche for online collaboration, but generally for low-end project management types of spreadsheets and small documents. The presentation and drawing Google Apps are barely used.

Yes, there are definitely Google Apps wins, since it seems cheap. On implementation, businesses find that switching to Gmail is one thing, but switching their entire business infrastructure to Google Apps is a completely different animal that goes far beyond simply changing how employees are writing memos.

Imagine you are a 25-person law firm in Kansas City running Microsoft Office, Microsoft Exchange for email and calendaring, Windows Server for file sharing, SharePoint for wiki/collaboration, and have a custom billing application written in .Net and running on Microsoft SQL Server. Like the majority of small to medium-sized businesses, you are an all-Microsoft shop.

Google comes in and presents: Google Apps looks primitive and doesn’t have all the features of Word and especially Excel and PowerPoint. It also doesn’t work offline. Email and calendar is sort of the same, but you should really use a browser instead of Outlook to get full functionality. Plus, you have to manually move all of your SharePoint content over to Google Sites, the file server isn’t integrated with the Windows or Mac desktops, and you have to keep your .Net app the way it is or rewrite it into Google AppEngine.

Compare this experience to the Microsoft value prop: go home on Friday, and on Monday when you come back everything will look the same, except now we are hosting it all and you can lay off your IT staff. There’s no training required. Employees can run apps on the desktop or in the browser, whichever they like, and the browser version looks like the desktop version, only cheaper. For a regular business where technology really is just a pain and an expense item — not a mission in life — it’s really a no-brainer. In addition, Microsoft has historically been very smart about seeding nonprofits and educational institutions with copies of software that are virtually free, which it will likely also do with Office 365.

The thing about Microsoft Office 365 is that it looks really good, and looks and act just like the well-known native Office apps. The ribbon interface is intuitive and the apps are fast and responsive. Google Apps, conversely, looks like it was made by college students from a weekend project. I don’t understand how Marissa Mayer loves fashion like Oscar de la Renta at night, but goes to work during the day and insists on data-driven web sites that look like crap. Google hasn’t shipped a good user interface since Google Maps. The different between Office 365 and Google Apps is glaring.

Microsoft definitely has a few issues to work out. As Google pointed out, collaboration is not very simple, since you have to be a Microsoft Office 365 subscriber in order to collaborate. However, Microsoft already launched, a free Office offering with free collaboration. Microsoft will likely integrate Skype into Office 365, which will offer chat, audio and video conferencing, screen sharing and (probably) free document collaboration based on

Google’s claim that Office 365 doesn’t support many platforms is moot. It works fine on my Mac OS X with Chrome, and officially supports Internet Explorer, Safari and Firefox. Office definitely has numerous pricing tiers. The lowest tier is on par with Google Apps and the higher tiers include subscriptions to the desktop software, which help to transition Microsoft from feature-driven bloatware to subscriptions — a model that has worked for Adobe.

Google Apps will definitely have a place for new businesses and small businesses with younger employees that aren’t tied to the Office user interface. Google App Engine is a hidden jewel within Google Apps and its hands down the fastest solution for programmers to create and deploy a comprehensive web app. However, with Office 365, Microsoft is clearly on a trajectory to continue its Office hegemony. Microsoft is much more concerned about Apple than Google at this point, and insuring that it monetizes Apple devices like it used to make more per Mac than Apple did in the early 1990s. Conversely, Google should be much more concerned about Microsoft, which now has almost 30% marketshare in search.

Wednesday, June 08, 2011

Is Apple’s iCloud an Excuse to Overcharge for Storage?

This post was also published in VentureBeat.

After falling far behind in the shift to cloud computing, Apple’s much-anticipated iCloud offering fell far short of expectations. Rather than a cloud locker that could stream media to a variety of clients, iCloud turned out to be a glorified file synchronization service like Dropbox. iCloud will automatically sync all of your apps, settings, and files to all of your iOS devices.

Syncing all of your files is definitely a useful feature for consumers, but it is starkly different from the approach of other industry titans. Google and Amazon were so terrified of Apple streaming music that they both pushed shoddy beta-quality music lockers out the door in the past few weeks. Instead, Apple shipped the ability to recognize ripped or illegal music on a user’s hard drive and then automatically sync copies of songs at higher quality across devices. While recognizing that a user already has ripped a CD and skipping the upload does not seem like a killer feature, the music labels sued for that very feature over a decade ago, and Apple had to pay the labels a reported $100-$150 million to automatically sync the music that is already on a hard drive.

Google is staunchly in the cloud camp with its Google Apps, Google Music, and Google Drive offerings. Microsoft has launched its Office 365 cloud based Office, which enables businesses to offload their IT infrastructure such as email to the cloud, and announced that Windows 8 will automatically configure itself to a user's settings on login, so a user will be able to walk up to any Windows 8 machine and recreate their entire desktop experience. Amazon has always been a leading cloud vendor with its Amazon Web Services business offerings, and streams video rentals immediately for consumers in addition to its new Cloud Player streaming music locker service.

So what’s going on over at Apple? It’s quite simple, actually. Apple makes an enormous amount of money selling overpriced Flash storage, and it is therefore incented to sync every file to every device rather than stream media files on demand. Apple charges $6.25 per gigabyte of Flash storage on iOS devices. In comparison, retail pricing for generic Flash storage is $1.44 per gigabyte. That’s quite a margin for Apple; and of course you can’t add your own Flash upgrades to iOS devices unlike Android and Windows devices.

While a case can be made that, in the age of bandwidth caps, it is cheaper to copy everything to every device once, music is relatively low bandwidth to stream when compared to full duplex voice over IP or video calls. The age of ever-expanding Wifi networks also tilts in the favor of streaming. And ironically Apple owns the patent on the creative solution of storing the first few seconds of media on a device so it will play immediately when a user clicks play, which gives the music stream a chance to buffer and then take over playing.

Getting $100 for $16 gigabytes of storage is an excellent reason for Apple to dislike streaming. However, it is definitely a contrarian position to the overall market, and it risks that consumers will get wise the next time they upgrade a device and switch to Android or Microsoft.