Sunday, December 27, 2009

3D is the New Talkies

I just watched Avatar last night and it is now clear to me that 3D is the new talkies.

What are talkies, you ask? Whenever a disruptive innovation hits the movie industry and gains traction, it tends to take over the entire industry. This was the case back in the 20's when synchronized sound was added to film. This new type of movie was called a talkie since actor dialog was the new and most salient feature. It happened again in the 50's when color films became mainstream.

It's happening now with 3D in which the viewer uses a specially treated pair of glasses to watch films processed to work with those glasses such that the elements of the film appear to have depth.

It sometimes takes a while for a technology to go mainstream. The first color processing was invented in the 20's and an earlier wave of 3D movies from the 50's died out, primarily because of the more primitive polarization effects used then resulted in eye strain and headaches. That is not the case with modern 3D.

Just like with color, animation and remastering old favorites are early adopters.

Both movie industry equipment vendors and movie theaters are making investments in the technology.

A lot of big name directors are positioning for their first 3D releases. Other applications of the technology are also being explored.

I am already starting to see in video rental that the other side of the disk is the 3D version and half of the previews what I saw when I went to see Avatar were also in 3D.

I've seen the future and it appears to be 3D.

Tuesday, December 1, 2009

Pros and Cons to Open Source Business Models

I just read this NY Times article on Open Source as a Model for Business is Elusive which claims that successful open source companies have more societal and strategic value than financial and cites the effect that MySql is having on the EU's evaluation of Oracle's acquisition of Sun as an example. They worry that if Oracle acquires Sun, then they will kill MySql which is a low cost alternative to Oracle's database product.

The article lists the usual suspects in their case both for and against open source; Red Hat, XenSource, and Mozilla being the three top reference models.

They also show how open source companies are supported by large technology vendors with deep pockets in order to wage proxy wars with their competitors. Google with Mozilla and IBM with Linux against Microsoft are two examples cited. This is actually Oracle's defense against the EU's concerns in that Oracle claims that they will continue to support MySql in order to eat into Microsoft's Sql Server market.

It seems that the exit strategy for open source companies these days is in acquisition over going public. Witness the recent purchase of SpringSource by VMware in order to gain more control up the API virtualization stack as the corporate world turns towards cloud computing. The acquisition of XenSource by Citrix is another example.

Giga OM countered to this article with an article of their own with the claim that Open Source Business Models Aren't Dead End Streets. They cite Android, Acquia, and Cloudera as example companies.

Sunday, August 30, 2009

Freemium Revisited

Earlier this year, I wrote about a WSJ article that covered the revenue model known as freemium which is a combination of free and premium. The idea is that you release a free version of your offering in order to capture a larger market share and depend on some segment of your market upgrading to a paid version.

I just read a NY Times article that used their coverage of a start-up that makes a product called Evernote to weigh in on the freemium topic.

I knew about Evernote back when it was just a freeware windows application that you could use to capture notes of various media types in one place that was searchable. Their biggest competition at that time was Microsoft's OneNote product which is now bundled with MS-Office and, frankly, I've never seen anyone use it.

Now, the windows app communicates with a centralized network which acts as a repository that you can access from multiple computers or share with others for the purposes of collaboration.

May I digress for a couple of paragraphs? A large part of my training as an engineer was in the black art of categorization. You learn to categorize things. You learn to categorize everything. The predilection to DnD is a natural one because engineers learn how to transform stuff. For example, software engineers learn how to transform specifications into working software. Transformations of that order are fancy sequences of simpler transformations. A simple transformation consists of the thing or things to be transformed (the operands) and the process by which the transformation is to be guided (the operator). The role of the engineer is to figure out that sequence of transformations and also which process to apply for each simple transformation. In engineer speak, this is called "finding the right tool for the job."

Because engineers are trained to categorize, they want a large toolbox with a wide variety of tools by which they can use to transform things. It gives them more choice, more freedom. Those who never received training on how to categorize see this as a liability instead of a benefit. They want only one choice of tool. They want a tool that does it all.

That is why I don't use Evernote. It is a single container by which you are supposed to put everything into. I doesn't appeal to me but I recognize that it does appeal to a very large number of people. How do you feel about it? Would you rather just open a document because you want to access it or would you like to choose which tool to open a document in because different tools have different specialties and you wish to pick the tool that is most conducive to the job at hand?

Anyway, back to freemium. What's really interesting about this NY Times article is that they put some numbers to the Evernote's take on the model. They currently have a half million active users. If you stay with the service for a year, then there's a four percent chance that you will subscribe at $5 per month. They claimed that they earned $79,000 in July which, according to their other figures, means that three percent of the total active user base subscribes. They project that this subscription rate could climb to as high as 22% which would yield a little over a half million on revenue per month.

They also claim that this will scale. They won't have to staff up further as more people subscribe. They claim that their current costs is nine cents per user per month and project a break-even date of January 2011.

Whether or not you believe these numbers, the freemium model is compelling and is most probably worth some exploration and consideration. I use it in my business where access to Code Roller (the community edition of a software development project life cycle management solution) is free for all (including my competition) but you have to pay if you want my company to develop the actual software being described by your project.

What is your take on the freemium revenue model? Is it an exciting way to gain market share or do the challenges of monetization and fear of commoditization of your product or service give you pause?

Monday, August 24, 2009

Understanding Google Wave

In late May of this year, Google announced a new technology initiative of theirs called Google Wave. What is this technology about and why should anyone care?

Early reports painted the picture of Google Wave being a hybrid between instant messaging and email with an emphasis on conversant collaboration. Because of that observation, people just thought it was an email killer and Internet attention went elsewhere. After all, who is dissatisfied with email?

Since then, many Internet pundits have weighed in on the subject. Some claim that it is too complicated for rapid adoption. Others see it more as a platform for enterprise collaboration than as an email killer.

Google Wave is scheduled to expand its beta audience in about a month from now. Many sources are now skeptical about whether or not the technology is stable enough to take that step.

So, why should you care? Whether or not Google can make its commitment by the end of the week is immaterial to me. What is important is that if they can carry this off and deliver on the promise of Google Wave, then I believe Google Wave can be a dramatic game changing innovation to those web properties that thrive on user generated content.

But innovation is not always well received nor easy to accept. I will go into more details about this in a future post but what Google Wave empowers is real-time conversations across multiple web properties. Imagine a world where discussion threads are transformed into persistent chat rooms that cluster around a particular topic instead of belonging to a particular article or blog entry. Each web page devoted to that topic could share in the discussion yet the participants could also track the complete conversation in a web GUI that does look like email on steroids.

So, what's the problem? What's the big deal? This means that web properties are going to have to be ready to let go of some traffic away from their site in order to open their site up to more traffic from other sites. This philosophy runs counter to the current practice of stickiness where web sites do anything to capture and retain visitors to their site.

I'm a big advocate of sharing information online as a necessary step to fostering healthy and prosperous communities of practice so here's hoping that this wave is one that catches on. Stay tuned for more developments in September.

Sunday, July 26, 2009

The Browser Wars Circa 2009

If you have any understanding of computer technology and you haven't been in a coma for the past twelve years, then you already know that there has been a very significant trend in software application development from windows based applications to web applications.

The drivers for this trend aren't very hard to comprehend. A traditional windows application incurs a lot more development costs in terms of installation and testing on the various different types of client computers (i.e. PCs) than the same app delivered as HTML over the web. While there have been impressive advancements in reducing windows application testing and deployment over the years, there is still a higher TCO for windows apps than for web apps.

Not that web apps will completely take over windows apps. Some areas, such as graphics manipulation, VoIP, and video capture, will most probably always be in the province of windows apps. At a minimum, you will always need a web browser running on the client machine as a windows app in order to get access to the web apps. Without the web browser, the web apps are useless.

This is nothing new to the major technology vendors. As competitors over gaining IT market share, they have known this for quite some time. Own the web browser and you own the web. That is why Microsoft aggressively went after Netscape back in the mid 90s. Netscape was the corporation that formed around the original inventors of the web browser. This competition between Netscape and Microsoft eventually led to Netscape being acquired by AOL in 1998. Round one of the browser wars goes to Microsoft.

But the founders of Netscape were not willing to give up so easily. Even as the company was being sold, they created a non-profit foundation devoted to the proposition that innovation on the Internet would thrive only if there was available a web browser that was not so directly controlled by any single vendor. This Mozilla Foundation eventually spun off a for profit subsidiary in order to gain the revenue needed to continue to provide a quality web browser.

This "phoenix from the ashes" strategy worked well. While continued development of Microsoft's web browser languished, the Mozilla browser (called Firefox) continued to enhance and innovate on the web browsing experience. Mozilla was able to do this because they used the open source model to keep their development costs low. Recently, there has been much speculation about the mass migration of web browsing from Microsoft's Internet Explorer web browser to Firefox. Round two of the browser wars goes to Mozilla.

What about the other players in this war? Well, Apple has always had a place on the battlefield with their Safari browser. They don't have much in the way of market share, however. There's a few other minor players but their low market share numbers make it such that they are really not worth mentioning here. What is newsworthy is when Google announced their entry into this war with their web browser named Chrome. For one thing, a lot of the revenue for Mozilla comes from Google. The concern is that revenue stream will dry up now that Google and Mozilla are direct competitors.

Google Chrome currently doesn't have a lot of market share yet so why the concern about Chrome? Google is a big company with deep pockets. This coup has been tried before by another big company with deep pockets, Microsoft. Google is ratcheting up their marketing machine over Chrome.

There are also some noticeable difference between what Google has done with Chrome and what Microsoft did with Internet Explorer. The biggest difference is that Chrome is based on open source.

Recently, the NY Times published a story on the latest turn of events in the web browser wars. The war is very lukewarm now. Not a hot war at all. Google will continue to fund Mozilla, at least until 2011. Google's funding accounts for over three fourths of Mozilla's revenues. Mozilla recently moved their physical office away from the main Google campus.

Why do you care? If you are a software vendor or IT shop that makes and publishes web applications, then you want to make sure your applications run smoothly in the most popular web browsers. If your web applications suddenly stop working, then you have a serious problem.

That is why industry watchers keep up with the web browser wars. They don't want to be caught by surprise by the threat of a web browser upgrade or patch that was purposely designed to destroy the competition.

Friday, May 22, 2009

Linking is a Good Thing

Twenty years ago, Oxford University graduate Tim Berners-Lee wrote a memo to his boss while he was working at CERN. This memo was an information management proposal for a distributed hypertext system that we now know of as the World Wide Web. Note the major feature that he describes which was not video blogging nor banner ads nor even online chat. The major feature in this proposal was hypertext or "human-readable information linked together in an unconstrained way."

This past February, the same visionary gave a presentation at the annual TED Conference where he was still advocating for more or less the same thing. This time, instead of web pages linking to each other, the data that feeds web pages should also be available online and link to each other. This is what is called Linked Data.

Linked Data is collectively intelligent. Individuals contribute relationship information when they link. This relationship information aggregates into fantastic models of our world. Models that help researchers, journalists, and ordinary folk span problem domains in order to solve new and ever increasingly complex challenges.

But there are barriers in the adoption of Linked Data whose measure of success and effectiveness will depend directly on its ubiquity. One big problem is that many organizations value their data and quite naturally wish to protect it. Propriety and intellectual capital are profound cultural barriers to linked data that I, for one, do not understand how to overcome. I think that it's going to be a little more of a challenge than simply to ask you to stop it.

Here is another, even bigger, cultural problem to Linked Data. In our current web society where page rank is the coin of the realm, nobody wants to provide links anymore. Linking is passé. When you link out to another site, you contribute to their page rank. If you compete with that site, then that diminishes your page rank. It's some weird mind-share zero sum game. It's the new variation on the tragedy of the commons all over again. You're so protective of your own page rank that you dare not provide outbound links. Thus, the original, fundamental, collectively intelligent value of the World Wide Web is tragically subverted by individual or organizational greed. This mindset has gotten so bad that many sites automatically flag your content as spam if it includes a link in it. I link a lot in my posts so I can tell you from first hand experience that many prejudiced people will dismiss you as a spammer if you provide a link, even if you are linking to something that you have no official relationship with.

Once again, this noble visionary has provided a map to a more intelligent world but we are going to have to revisit our current values in order to completely embrace the gifts that he has given us.

Sunday, May 10, 2009

Implementing Virtual Worlds in Business

I occasionally cover stories on enterprise focused virtual worlds technology because I believe that it shows some promise and could, therefore, become a relevant trend. Last week, I attended an event in Second Life hosted by Nokia on this topic.

This event had a question oriented talk show format in which representatives from IBM, Linden Labs, Nokia, and Remedy Communications promoted their respective company's efforts in enterprise virtual worlds.

I hope that I don't have to explain who IBM and Nokia is and why they might be interested in enterprise virtual worlds. IBM hosted their own two day conference on the subject not too long ago. Their representative at this event was Zha Ewry who is a male using a female avatar in a professional role.

Linden Labs is the company behind Second Life. They host a public grid and sell the platform to companies who want a virtual world behind the firewall.

Remedy Communications is a marketing company who specializes in developing marketing collateral in virtual worlds. They have recently become a reseller for Rivers Run Red who competes with Linden Labs in what they brand as the immersive enterprise collaboration space. Their representative at this event had an avatar named Dusan.

Someone from Sun Microsystems was supposed to be here too but never showed up. Considering their recent change in leadership, I can only assume that there was a sudden and last minute change in plans.

One of the biggest things I learned at this event is that there are now several video sites devoted to enterprise virtual worlds. Metanomics takes on an education based approach to fostering corporate appreciation for virtual worlds. will be launching later this summer. They have both an entertainment and a business focus and are a spin off of SLCN. All of these Internet video broadcast sites feature shows exclusively filmed in Second Life.

One of the advantages to a virtual world event is the presence of a back channel in which the attendees can comment amongst themselves while the event is taking place. The presenters get to monitor the back channel in real time. I learned in the back channel about an European conference called MetaMeets about the present and future of virtual worlds (also called the 3D web).

I go into more details on the content of this talk in my blog at the Toolbox for IT Knowledge Sharing Community.

Sunday, May 3, 2009

Living in the Facebook Downline

Just ran across this NY Times article on an emerging trend in social networks where Facebook and Twitter are openly and actively encouraging third parties to consume their services and re-purpose their content. The article then covers several startups who are feeding off of this social knowledge ecosystem.

With regards to this ecosystem, what I have seen in the wild are three patterns. A lot of UGC sites now permit you to post non-anonymously via some kind of federated login system. The second pattern is publishing content in multiple places such as micro-blogs on both facebook and twitter. The third pattern is profile synchronization across multiple social networking sites.

With federated login (sometimes called single sign on), you don't have to register at every site that requires registration. Instead, you can participate on a site as a registered user by logging in to an already existing account that you have. Under the covers the system, where you have an account, shares some knowledge about you with the system you are trying to use. Both Microsoft and Sun Microsystems tried their hand at federated login over a decade ago. Both failed miserably. Today's big players at single sign on are Google, Yahoo, and Facebook. Google and Yahoo use the OpenID technology to carry this off while Facebook uses its own Facebook Connect technology.

In the second pattern, you post some content and the system provides a way for you to immediately promote your content on the various popular social networking sites. Originally, this was called Viral Marketing where the system would volunteer to spam your friends if you would let it access the address book or contact lists from your main-stream email accounts. In this iteration, you are presented with options to send facebook notifications or tweets.

The need for the third pattern has risen only very recently as people start spending a lot of time updating their profiles on all of the social networking sites that they use. This trend is still fairly recent but two examples that come to mind are Disqus and Gravatar.

As to the startups referenced in the original NY Times article mentioned in paragraph one here, I would be a little nervous in investing in these companies. After all, they use the facebook and twitter back-ends as their main entre whereas these other companies see it more as the icing on the cake. I mean, what are they going to do if Facebook ever decides to shut down their free API?

Monday, April 27, 2009

The Whuffie Factor

I just ran across this great talk at last year's Web 2.0 conference by Tara Hunt on a knowledge management blog that I frequently visit.

She talks about how the leveraging of the feeling of reciprocity and social capital and the nurturing of a gift economy in the design of your product or web site's user experience is the most efficacious way to promote your message. She calls it The Whuffie Factor which is a term inspired from a book written by Cory Doctorow called Down and Out in the Magic Kingdom.

She also contrasts this approach to traditional PR and shows how The Whuffie Factor is a logical extension to the prosumer approach of establishing authentic conversations.

The Whuffie Factor: The 5 Keys for Maxing Social Capital and Winning with Online Communities (Tara Hunt) from Steffan Antonas on Vimeo.

Monday, April 20, 2009

Oracle to Acquire Sun

Sun Microsystems has been on the ropes since the first decade of this millennium when some of the largest Internet properties (e.g. Google, Yahoo, Ebay, Amazon) switched from Sun's Solaris to GNU Linux. That, and the two most recent stock market crashes, have really beaten this server hardware vendor and inventor of the Java programming language and platform down from a share price of $233 to $3.

A few weeks ago, it looked like IBM would be the one to purchase Sun. Now, it looks like database vendor and services company Oracle is stepping up to make the purchase.

This could be of particular concern to the large number of web companies who use MySql as their database. MySql is owned by Sun and will fall under Oracle's control once the acquisition is complete. Will Oracle poison or sunset MySql in order to make their own database product more compelling? Oracle has tried to acquire MySql before and has acquired one of MySql's back-end storage systems so you can't tell me that they aren't thinking about it.

That's the big news. Oracle makes a few other tools that compete with Sun tools too. Will Sun's NetBeans take a back seat to Oracle's JDeveloper?

May Update: Sun shareholders sue to block Oracle Acquisition.

June Update: Oracle fails to get regulatory clearance by the deadline.

September Update: DOJ gives Oracle approval to proceed with acquisition. Only barrier now is EU Commission approval.

Wednesday, April 8, 2009

IBM Virtual Worlds Conference

I just got back from a two day conference that IBM hosted on Second Life called Beyond Blogging which is a conference billed as by IBMers primarily for IBMers but also open to the public. I believe that this conference was organized by IBM's Seeking Business Value from Investment in Virtual Worlds on the 3D Internet group.

The first day of the conference was more about how cool Second Life is for consumers. My own interests in Second Life are more towards how the enterprise can use virtual worlds as an affordable way to telepresence for remote teams to web seminar with a back channel, all in an easy to use HUD. That is why the second day of the conference held more interest to me. They billed this as "virtual worlds behind the firewall."

The first speaker of the second day was Neas Bade (Sean Daque) who is a developer for OpenSim which is a 3D Application Server that can be used to create a virtual world which can be accessed through a variety of clients and on multiple protocols.

He talked about the Open Source Metaverse where you can create your own simulator and connect it to a public grid for free. He talked about some EAI for OpenSim such as LDAP and web integration. When asked about integrating virtual worlds with cloud computing, he referred to a small group of analysts called RedMonk.

The second speaker for the second day was Rufus TT Horsefly (Neil Cats) who talked about how IBM asked Linden Labs to bring up an instance of Second Life within the IBM firewall on their blade center hardware (they had 250 users per session) in order to host their AOT Conference. Some of the lessons learned here was the importance of identity for attendees including the use of realistic avatars and the need for helpers and for training including help with installation of the HUD and with getting voice chat to work. He also talked about integration with their Domino product and an offering of theirs called Sametime 3D.

From this conference, I definitely get the sense that IBM is anticipating increasing corporate interest in virtual worlds as a way of mitigating travel expenses for remote teams to work together and as a way to reach out to customers in a way that is more affordable than the traditional conference model.

June Update: Now it's official. IBM's New Meeting Platform is Based on Open Sim.

Monday, March 30, 2009

Dyson Cool on Global Warming

It seems to me that global warming has become as much a hot button topic as Cuba, abortion, evolution or the Holocaust. That is to say, there are people on both sides with apparently deep convictions who make claims that strongly contradict each other. I counted myself on the side of believing that global warming was real and an apparent and compelling danger, that is to say until I read this past weekend's NY Times Magazine article on Freeman Dyson.

I have always had a lot of respect for this venerated icon of the scientific intelligentsia. I have put him up there with other greats such as Richard Feynman and Bucky Fuller. Even his daughter, Esther, is a well known and respected intellectual. So, when this article told his take on global warming, it gave me pause to reconsider my opinion about it.

You can read the article for yourself but here is my short take away from it. This is in my own words and not a reflection on the thinking of Freeman Dyson. Global warming has become politicized to the point where there is very little good science behind it. Global warming has become for the liberals what terrorism is for the conservatives, that is to say a rallying cry and red herring for distracting public opinion away from more compelling topics that need discourse and public attention.

I'm not saying that global warming is just some liberal revisionist's wet dream. But Dyson's position does motivate me to revisit Al Gore's Inconvenient Trust with a more critical eye.

Wednesday, March 18, 2009

IBM to Acquire Sun

Whoa! My world was rocked today when I picked up the NY Times and read about yet another decline in the stock market. Even more upsetting is that Sun Microsystems is in talks with IBM to be acquired.

This acquisition shouldn't really be all that upsetting. It does make perfect sense for IBM, which has always prided itself on its servers, to want to acquire the other technology company who also pride themselves on their servers. I'm sure that those two companies have competed head-to-head for years.

Sun is also the founding company of Java Technology which IBM is now heavily invested in. IBM has shown a lot of commitment to Open Source over the years with their development of a major OSS IDE called Eclipse and their endorsement of Novel's SUSE on the desktop and Red Hat for servers. So, when Sun Open Sourced Java, that most probably made Sun that much more of a desirable acquisition target to IBM.

The Sun blade servers have always been very respectable hardware from an engineering standpoint so I hope that IBM doesn't just retire the line to get it out of the way of their own similar offerings.

Maybe what is really the most upsetting part of this news for me is to have to see Scott McNealy down play his hot headed nature to be more compatible with IBM's more staid Sam Palmisano.

Or maybe it's the fact that the article clearly ties the reasoning behind this move to the faltering economy.

April Update: It looks like IBM has withdrawn its offer for now.

Monday, March 2, 2009

Harnessing the Collective

If you've spent any time in I.T., then you have most probably heard of Forrester Research, Inc. They are a $391M tech and market research think tank. They are kind of like an upscale Gartner Group. Like the Gartner Group, they release these extremely high priced executive documents. Today, they released a document (hey, it's only $2G so be sure to pick up an extra copy) called Vendor Landscape: Innovation Management Software. What used to be called workgroup software has passed through the adolescent stage of Knowledge Management to bloom into full adulthood as Innovation Management Software which has grown from the intersection of idea management, threaded discussions, and Web 2.0 concepts like voting and ranking.

This is how organizations will leverage the growing Web 2.0 trend of collective wisdom. I believe that the release of this research paper heralds the transition of this trend from early adopter to mainstream.

Monday, February 9, 2009

The Era of Collective Wisdom

These are changing times. When you see the same theme gaining predominance in many different areas, then pay attention because you are at a turning point in history.

I believe that we are entering into such a time. I call it the celebration of the collective.

This is most obvious in the political arena. Almost completely gone is the Republican mandated rhetoric of trickle down where big government is supposed to serve by abdicating it responsibilities as public servant. Even the most die hard GOP faithful advocate government bailout now. Years earlier, that would have been considered as either heresy or treason by those same people.

President Obama speaks often about how the major players are now the masses. Not only are the people who the government must serve but it is also up to the people to do the hard work of solving our current economic problems.

Crowd-sourcing (sometimes called collective intelligence, sometimes called community sourcing) is the online equivalent of this trend for celebrating the collective. In crowd-sourcing, the choices of the masses are cleverly aggregated to form recommendations to solving complex problems. This is a logical, evolutionary progression to the wikinomic movement where prosumers provide both the attention and the content.

Many companies have started to embrace the collective intelligence approach to solving their problems. Starbucks has launched their own site where you share your product or marketing suggestions for them. Dell has launched their own variation on this theme. Even old school media companies such as NBC and NPR are climbing on board this train.

If your company doesn't have the economic commitment to develop their own from scratch, then there is also a bundle of pure players in this field whose offerings you can leverage. You can either submit your challenges to be solved in their online site or license their software for a white label version of a site that is your own property. Innocentive is perhaps the original pure player in this space. Cogenuity takes the lessons learned from Innocentive and improves on it with a deeper integration of crowd-sourcing with social networking. There are also less corporate focused offerings such as the Why Not? Idea Exchange.

Sometimes it's not so obvious when you are participating in the wisdom of the collective. Every time you link to a another site from your site, you are contributing to Google's prediction market based collective intelligence product known as Pagerank. Netflix and Amazon do something similar with their recommendation engines.

We have entered the era of collective wisdom. Let us hope that the power of the people can prevail where the idolized individual heroes of the past have feared to tread.

Monday, February 2, 2009

Growing Your Business With The Freemium Revenue Model

The Wall Street Journal published an interesting article today on The Economics of Giving It Away. The article describes how, in the past, web startups would use an advertising based revenue model and give away their product/service increasing the size of their audience until they were acquired by a bricks and mortar company willing to pay out the cash for mind-share at a premium. The global recession has changed the efficacy of that game where VC, advertising, and acquisition money has pretty much dried up.

Since the classic exit strategy is no longer available, new ventures need to generate revenue in other ways. It's not as simple as charge for the service for two reasons; the culture of the web now has a tradition of free services so people are hesitant to pay there and people have less discretionary money to spend.

So, what's an entrepreneur to do? The author suggests going the so-called freemium route where you build your network with a free service but allow users to upgrade to a premium service which gives them access to more features. First time and casual users are not likely to pay for your service but passionate users are. You continue to build social capital with the free version but also build economic capital with the premium version.

Thursday, January 15, 2009

Enterprise Architecture Talk on Second Life

I've blogged about the current global recession's affect on innovation before. I have blogged many times about the waxing and waning of virtual worlds technology called Second Life. Now, I get to blog about both subjects simultaneously.

I recently attended a presentation in Second Life by Gene Leganza of Forrester Research, Inc called Six Trends for Enterprise Architecture Professionals in 2009. This presentation was held at a meeting space on Second Life owned and operated by a small business development networking brokerage firm called Unique Customer Service Approach International. It looked a lot like a proper lecture hall with some virtual world style embellishments like giant, floating question marks that you click on when you want to ask a question. The speaker used voice chat but you could use the Second Life Instant Messaging feature to ask questions. You also had to click on your chair to cause your SL avatar to clap.

The talk itself was very informative and well thought out. I have blogged elsewhere on the actual content of the presentation but the upshot is this. Times are tough so you Enterprise Architects out there need to actually start doing what you were originally hired to do which was to deliver software development process, methodology, and architecture that is optimized at increasing long term shareholder value. Please excuse my attitude but I am passionate on the subject.

Thursday, January 8, 2009

It's Not Your Daddy's PR Anymore

From the time I first heard it, the acronym PR has always had two different meanings to me. PR could stand for Public Relations or it could stand for Press Release. In what the Cluetrain Manifesto called The Long Silence (a.k.a. the days of the Mad Men), these two meanings weren't all that indistinguishable. In today's Wikinomics world, ruled by the prosumer generation, these two meanings are as different as night is to day.

In the old days, a PR group was all about selling media. How much broadcast time on radio and TV and column inches in magazine and newspaper print could you afford in order to condition your prospective clients to chose your offerings? That is still necessary but no longer sufficient in today's world. Now, a PR group has to also be concerned with establishing authentic conversations. Can your community managers effectively attract and keep people interested in interacting with each other around your offerings? Can you establish and maintain buzz? If you can't, then it will be quite a long time before that cat barks.

Your marketing message in the broadcast only world had to be broad and appeal to a wider audience. That won't fly with the prosumers. In addition to your broad message, you also have to develop lots of narrowly focused messages to appeal to a wide array of niche markets. Remember, they are no longer passively taking in your message. They now get to talk about your message with everyone else. So, give them something that they are interested in talking about. How do you create these narrow messages without becoming self conflicting? How do you do all of this on a tighter budget?

No wonder it's so hard to find a good PR group these days.