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Google and Microsoft now driving SaaS’s disruptive innovation

Google Chrome OS and Microsoft Office 2010As incumbent companies go through their own versions of Clayton Christensen’s disruptive innovation, I imagine early observations about the changes-to-come are similar to these seen last week with Google’s Chrome OS announcement

Item #1:

But while I’m sure Chrome OS will pick up some fans, I have a hard time seeing this as the way of the future for computing.

Nick Mediati, PC World, Is Chrome OS The Future Of Computing? I Hope Not.

Item #2:

It’s certainly interesting and ambitious to state that the entire application platform will consist of web apps. If anyone was going to build such an OS, it’d be Google. Much of the initial commentary regarding Chrome OS has been wholly positive, but one common note of skepticism has been with regard to the “web apps are the only apps” aspect, with the frequent point of comparison being to the 1.0 release of the iPhone OS.

John Gruber, Daring Fireball, Putting What Little We Actually Know About Chrome OS Into Context

Item #3:

Netbooks may be important, but they remain a tiny part of the world’s PC sales. Google’s bet is predicated on strong demand for weak computers.

Google is counting on users of small computers not being tied to specific applications and being willing to accept low cost and, perhaps, ease of use over a more familiar and more powerful environment.

Nick Coursey, PC World, Five Reasons Google Chrome OS Will Fail

The quotes above reflect a rationale perspective on the fate of netbooks and an-all SaaS computing experience. After all, no one does that today. Most people haven’t even looked at the web-only alternatives out there. Microsoft Office is a client app. Adobe is a client app. File directories are client apps for files on your hard drive.

Why does anyone need a web-app only experience? Well, note Microsoft’s announcement of its web-based Office 2010. Something is afoot. Both Google and Microsoft are pushing forward significant initiatives that will increase the percentage of computing done via SaaS. What does Clayton Christensen’s theory say about this?

Disruptive Innovation

A disruptive innovation is one that upends the existing structure of an industry, often sending incumbents into niche positions, and niche players into incumbent positions. Three qualities define it:

  • New technologies start out less functional than existing technology
  • New technologies find their niche markets
  • At the outset, it’s really hard to believe the new technology will ever displace the incumbents

Pretty much sums up the idea of all web-based computing.

Check out the chart below, which diagrams sustaining and innovation over time and performance:

Disruptive Innovation Graph

Probably the single most important thing to note about this graph is that the incumbent companies (blue line)  continually add features to their products. This effort expands their addressable markets, as more and more niche segments are covered. It’s a rationale, smart way to grow.

But at some point, the incumbents’ innovations overshoot what mainstream users need. As Christensen notes, performance exceeds what customers can utilize. This is what happens as companies expand into niche markets.

Which brings us to the PCs of today. They are marvels, providing a slick experience for users and able to accommodate a host of new applications. But if I were a betting man, I’d say the most common activities people do with their computers are:

  • Surf the web, engage in social media
  • Email
  • Write documents
  • Build spreadsheets
  • Create presentations
  • Consume and work with media (video, music, graphics)
  • Use web-based business apps

Among those activities, what’s the magic of client-based computing? The media-related activities perhaps require the horsepower of a client app. But even those are getting better with web apps.

Web-based apps fulfill the first bullet of early disruptive innovation above – they’re not as full-featured.

Second bullet is the initial niche that wants to use the less powerful alternative to incumbents. For web-based computing, I can see two markets:

  1. Small businesses – lower cost, less hassle than installed apps
  2. Students – more comfortable with third parties holding data, low cost, activities are mostly writing and web access

Those are the initial toeholds into the operating system market. Getting significant share in a couple segments is critical to getting the attention of application developers.

The Web Apps Are Coming Along

Let’s start with the apps most commonly used in work contexts: documents, spreadsheets and presentations. Zoho has been at it for a while now, and provides a very functional set of apps. Google Docs continue to evolve toward better functionality. And of course Microsoft has joined the SaaS movement. The TechCrunch article about Microsoft Office 2010 notes:

Most certainly a direct challenge to Google Apps, Microsoft is rolling out lightweight, FREE, Web browser versions of Word, PowerPoint, Excel and OneNote. All based in the cloud, the web-based versions of these products have less features than their desktop cousins but still let users that users basic tools to edit and change documents.

Already inside the enterprise, wikis are quite functional. As alternatives to writing up documents and emailing them around, they are quite powerful. Atlassian Confluence, Socialtext, JSPwiki and others are highly functional. They offer a formatting experience similar to the most commonly used functions of document applications.

And for graphics, a new company Aviary got a great review in NetworkWorld:

It’s true that there are a number of graphics editors online, but most fail to come anywhere close to the functionality of Adobe’s iconic software. Until now.

The ecosystem to provide online apps with functionality comparable to client apps is growing.

My Personal Evolution to SaaS

I’m a former banker, then I did product management at eFinance and Pay By Touch. In those jobs, I never bothered with hosted apps. I certainly never thought about wikis. I did my writing in Microsoft Word. At Pay By Touch, I was introduced to the Confluence wiki. I used it because engineering wanted me to, but only as a centralized document repository. I’d rather have emailed the documents around.

It was at Connectbeam that I started to really *get* wikis. The ease of writing on them. The value of a common place to find and share documents. I found the core rich text editing functions of a wiki to be quite sufficient for what I need.

Now you can’t get me off the wiki.

When I was noodling on a business idea 18 months ago, I wrote everything up on Google Docs. It was an easy way to share the documents while updating them as often as I needed to.

More recently, the client applications TweetDeck and Seesmic have been getting a lot of attention. I’ve resisted them, because I just can’t see downloading and running these apps. They take their toll on your PC, as Louis Gray wrote:

For those Web-addicted souls who spend a good deal of their day buried in Twitter, seeing their friends updates and exchanging conversations, most software options have required the installation of Adobe AIR software, which to date has whirred your CPU to life, turning on laptop fans, and chewing through memory. The work to throttle down load on RAM and CPU is a constant battle, which both Loic’s team and Iain Dodsworth of TweetDeck have been working on since their products debuted.

In contrast, logging into the new Web version of Seesmic doesn’t feel like you’ve sacrificed your computer power to get your Twitter fix, and you don’t give up features either.

In short, whenever I can make a move to web-based apps, I’m doing it. I’ve come a long way from my Bank of America days.

Google Chrome OS and Microsoft Office 2010 – Forever Changing the Game

Certainly the idea of PCs as basic on-ramps for doing work via the web has been around for a long time. In 1996, Larry Ellison believed that network computers would outsell conventional PCs by 2000. Well, we see how that turned out.

In 2009, things have changed remarkably. First, usage of SaaS for applications has grown significantly, although it’s still small as a percentage overall. Second, people’s comfort with web-based computing has grown tremendously. Most enterprise software is now delivered as a web application. Salesforce has been a tremendous trailblazer here. And Facebook is fostering a greater comfort with sensitive data held by a third party.

Finally, Google is a titan. Oracle was (and still is), but in 1996 it was the database company. No one knew what to make of its network computers. Google is an entirely different animal. It has established credibility with its Google Apps. And presumably, any web app will work well on the Google Chrome OS. Including Microsoft’s new cloud Office offering.

This doesn’t stop Microsoft from coming out with its own web-based OS. Expect that if the Chrome OS seriously threatens. A lower cost OS for low-cost PCs to use low-cost web apps.

Microsoft’s announcement is huge because the Office suite is a brand used and trusted by millions of people. With their marketing heft, this is a significant boost in the credibility of SaaS computing. Microsoft also is a student of history, and clearly doesn’t want to risk the marginalization seen in Clayton Christensen’s studies of disruptive innovation.

The past two weeks have seen two significant milestones on the SaaS front.

This brings me to my final point. Market transitions don’t happen that quickly. The Google and Microsoft offerings won’t be ready for a while. And existing hardware, software and habits are going to change overnight. We will still have client-based applications for quite a while.

But let’s see how the small business and student markets take to these efforts.

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My Ten Favorite Tweets – Week Ending 061909

From the home office in Tehran…

#1: RT @Brioneja The Future of Energy: A Realist’s Roadmap to 2050. Which technology will finally free us from oil? http://bit.ly/FXg7A

#2: People’s interest in the real-time web is as much a social thing as it is a need to stay on top of events as they happen.

#3: In case you didn’t know…Atlassian’s new release of Confluence 3.0 includes status updates: http://bit.ly/yNZn4

#4: RT @rhappe the tight engagement you build with a small group will go viral… a big group with a lot of ‘extras’ won’t have the same

#5: RT @prwpmp Very insightful article in today’s WSJ about the power of daydreaming! http://bit.ly/2hJZMs {Daydreaming = AHA! moments}

#6: Which are most likely to survive in social media-driven news world? The mega global media (e.g. NYT), regional newspapers or local papers?

#7: New Spigit blog post: Kaiser Permanente Crosses the O-Gap in Innovation http://bit.ly/PNcom #innovation

#8: What is the magic number where the size of a group outstrips its ability to stay on top of everyone’s ideas? 25? 50? 100? #innovation

#9: Is there such a thing as the “avg distance” between a firm’s employees & its customers? SMBs’ avg distance < enterprises’ avg?

#10: ABC7 prediction market: Will the Dow Jones Industrial Average end 2009 below 2008′s year end close? http://bit.ly/1rjAt My vote = NO

Get a $5 Enterprise Wiki and Help Some Kids: Atlassian’s Stimulus Plan

atlassian-logo

Last week, we saw a fun race to a million followers on Twitter, where the real winners were people around the world suffering from Malaria. Business combined with charity.

This week, Atlassian is running its own special event: the Atlassian Stimulus Package. Here are the details:

  • $5 annual license for Confluence wiki
  • $5 annual license for JIRA issue tracker
  • Available to teams of up to five people
  • First year comes with support and maintenance included
  • Proceeds go to Room to Read, which builds much-needed schools and libraries in developing countries
  • Pricing is available for five days from April 20 – 24, 2009

Not too shabby, particularly when you consider that both Confluence and JIRA start at $1,200 each. And considering where Gartner positioned Atlassian in its Social Software Magic Quadrant

gartner-social-software-mq-2008

…it’s not a bad way to get your feet wet in the social software world. And help some children in need as well.

One Thing Social Software Needs: The Guaranteed Delivery Button

At the start of January, Jennfier Leggio and I launched the 2009 Email Brevity Challenge. The goal is to reduce the length of emails, with an eye toward migrating a lot of what’s in them elsewhere.

Well, January is over. Time to see how I did:

email-stats-jan-09

As you can see, I’ve got some work to do. First, my average email weighs in at 164 characters. 164 characters…hmm, doesn’t sound so bad but it’s pretty far beyond 140 characters.

Even worse, 41% of my emails are beyond the bar set for the email brevity challenge. One positive? Check out that median length – my heart is in the right place in terms of brevity.

But I can do better.

Looking at my emails, I see an obvious candidate for cutback. Seven of those 140+  character emails are essentially links with commentary of snippets.

Say what? You work for a social bookmarking company man! And you’re emailing links?!!

Well, yes. But I also bookmark them. Let me explain. I bookmark plenty of links for my own purposes. And true to social bookmarking’s purpose, other people can find them as well, which is better for discussions around the information.

Some of these bookmarks are more than useful information I want for recall later or for others to find in their research. Some are relevant to things that we’re working on right now. They provide context to product, development and marketing efforts.

Those bookmarks need to have higher visibility than typical links do.  And a problem with only bookmarking a link is that many people won’t see it who should.

That’s what email provides: guaranteed delivery. Everyone is using the app, and everyone checks their email. So I know the link + commentary will be seen. What social software needs is an equivalent mechanism.

Social Software Options for Guaranteed Delivery

In fact, many apps do have such guaranteed delivery mechanisms. For instance, you can think of the @reply on Twitter as a form of that. Although even then, it requires someone checking that tab. So TweetReplies will actually email you when someone uses your @name in a tweet.

As I wrote before, email’s evolving role in social media will be more notification, less personal communication. Email is still a centralized place for all manner of notifications and it has that lovely guaranteed delivery aspect.

So what are alternatives for emails inside companies?

Inside my company, I actually have three alternatives to emailing the links with lots of commentary”

Connectbeam: As I mentioned, a simple bookmark has no guarantee of visibility. But the app does include email (and RSS) notifications of new content. You can subscribe to emails of individuals’ and Groups’ activity in real-time, or get a daily digest of those options plus keyword-based notifications. So what I can do is set up a Group, call it “Email Worthy”. I then have all my colleagues subscribe to real-time notifications of activity in that Group. Voila! I add a note to my bookmark, save it to the Group and I know everyone will get it.

Confluence: Another option is to create a wiki page for these entries. I can put longer form commentary in the pages, include a link and tag them. Since Connectbeam automatically sucks Confluence wiki pages into its database, these individual wiki pages would be as good as a bookmark. I could then email a link to the wiki page (using a bit.ly URL), going Twitter style with a brief intro.

Yammer: Yammer now has Groups. Which is something people have been wanting with Twitter. You can publish a message in Yammer (a “yamm”?) to just a particular Group. Yammer has nicely added an email notification feature for Groups. So similar to what I described above for Connectbeam, we can create a Group on Yammer called “Email Worthy”. Everyone can join the Group and elect to recieve email notifications when new yamms come through.  I can post the link + commentary, and be assured of guaranteed delivery.

One problem with using Yammer this way is that information put there is separate from the wiki entries and bookmarks we have. So people would have to check two places for information. As I wrote over on the Connectbeam blog, that creates a de facto silo.

It’s February, A New Month

I’m going to experiment a bit with this. Of course, I need to get my colleagues to subscribe to email notifications for Connectbeam. But I’ll just tell them, “do that or I’ll email ya!” And I’ll try the Confluence wiki approach as well.

I’ll let you know how it goes.

*****

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Atlassian’s Confluence Wiki Gets Social: Embed Your Favorite Social Media

Zoli Erdos has a nice write-up of enterprise software company Atlassian, titled Business Models and Right-brained Geeks. In it, he notes the culture of Atlassian is different from many enterprise software companies:

Atlassian is a “different” company in so many ways… no wonder they are still hiring while the rest of the world is busy downsizing.  But one thing I’ve not realized until now is they have a backup business plan. They could quit Technology tomorrow and become a Creative Agency overnight.smile_wink Need proof?

We use Atlassian’s Confluence wiki in our office, and I’ll bet a lot of you do as well. It’s easy to use, and I’ve become a big fan of it versus using Microsoft Word.

So it’s no surprise that the latest release, Confluence 2.10 has a really cool feature: the Widget Connector. Uh…come again?

The Widget Connector. It is a lightweight way to embed content from 16 different social media sites:

atlassian-confluence-connector-widget-supported-sites

I have to say, that’s pretty cool. The ability to embed media created elsewhere is a wonderful feature for any site. I’ve embedded my recent SlideShare on the About Page for this blog. And the ability to embed Vimeo videos was great for a recent post where I talked with MADtv’s Chris Kula.

LinkedIn recently started doing this as well. You can add content and applications from 10 different sites to your profile. It’s a smart play for companies. By letting you bring content from elsewhere, these sites become valuable platforms for getting business done.

Considering the Widget Connector in a Business Context

The interesting thing here is that these sites are indeed social. So the content that will be included is likely to be that which is OK for public viewing. Which means some sensitive internal content won’t be found on these sites. I know many of these sites allow private, restricted access content. It’s unclear whether restricted access content can be embedded though.

But a lot of what businesses do is perfectly fine for public consumption. Well, make sure you embed it in the wiki! Conference presentations, product demos, marketing media, product pictures, etc. In fact, the bias should be to have this content public and findable unless there is a real concern about loss of confidential information. Being a presence in the industry means getting out there with information and ideas that you share. Of course, not everything should be accessible. For instance, a webinar should be public, while a customer presentation will stay internal.

The reality is that companies are expanding their presence on social media sites, even if it is happening in a halting fashion. Turns out consumers are starting to expect it. As use of these various social media sites expands, having a central place to view and track the content on them makes a lot of sense.

Another use I see for this is collecting information from various services and users to build out research on:

  • New product or service initiatives
  • Competitors
  • Customers
  • Regulatory and standards development

Consider Atlassian’s release of Confluence 2.10 another step forward in expanding the use and value of social media for business purposes.

*****

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My Ten Favorite Tweets – Week Ending 120508

From the home office in Truth or Consequences, NM…

#1: Love this post by Atlassian’s @barconati Connectbeam Connects | Confluence Customers Beam http://bit.ly/5VhY >> why E2.0 integrati …

#2: Noticing that my tweets that hit 140 characters are having text cut off well before 140. Anyone else?

#3: @twitter A bug. Char. < and > are stored as 4 char. in ur DB, not 1. Means each use cuts max char. of tweet by 3. This tweet’s max=134

#4: One effect of BackType – I am more conscientious than ever about commenting. Comments have the effect of Google Reader shares.

#5: Lump by Presidents of the USA comes on radio. Says 20-something, “Oh that’s the classic rock station.” Lump is classic rock? Ouch!

#6: One thing vacations with little kids ain’t…restful.

#7: RT @timoreilly Derived intelligence from large data sets is a kind of interest or “float” on data. Analogy of Web 2.0 data to capital.

#8: The H-P Social Computing Lab is doing some really interesting research http://bit.ly/k7dI

#9: RT @jbordeaux re: enterprise 2.0 “And like pornography: they’ll pay too much, get over-excited after tiny results, but soon regret it.”

#10: But at least I’ve got a Sam Adams.

Why Isn’t This the Tag Standard? Multi Word, Comma Separated

Tagging is a great way to put context on user generated content. The tag cloud to the right shows what the hundreds of thousands of blogs were talking about on the evening of August 21. (Click the image to see what bloggers are talking about right now).

Pretty much any web 2.0 service that has user-generated content supports tags. Flickr. YouTube. Del.icio.us. Google Reader. Last.fm. Tagging is entrenched in the web 2.0 world, and it’s one of those idea that spread without any standards.

But there is a problem of no single standard…

Beta, VHS.

Blue-Ray, HD-DVD.

Space or comma delimited?

What’s happened is that tagging formats are all over the map. Each web 2.0 service came up with what worked best for its product and developers:

This post at 37signals described the same tag formats above, and it got a lot of comments. Good energy around the subject. Brian Daniel Eisenberg thinks the failure to have a consistent tag method may undermine its adoption by the masses.

To me, there really is one best format.

Multiple Words, Comma Separated

I tweeted this on Twitter/FriendFeed:

Can there be a universal standard for tags? Multi-word tags, comma separated. Odd combos (underscore, dot, combined) are messy, inconsistent.

You can see the comments on the link. The gist of them? Multiple words, comma separated is the best format. Here’s why I think so:

  • Forced separation of words changes their meaning (“product management” or “product” and “management”)
  • Forced separation of words creates tag clouds that misrepresent subjects (is it “product” content? or “management” content?)
  • With single terms, too many ways for users to combine the same term:
    • productmanagement
    • product.management
    • product_management
    • product-management
  • Writing multiple words with spaces between them is the way we learn to write
  • Putting commas between separate ideas, context, meanings and descriptions is the way we write

Let people (1) use more than one word for a tag, (2) written naturally without odd connectors like under_scores, and (3) using commas to separate tags. These rules are the best fit for germanic and romance languages, and I assume for most other languages as well.

To Brian’s point about the masses, let’s make tagging consistent with writing.

For Developers, It’s Pretty Much a Non-Issue

In The Need for Creating Tag Standards, the blog Neosmart Files writes:

Basically, it’s too late for a tagging standard that will be used unanimously throughout the web.

A lot of developer types weighed in on the comments. For the most part, they’re sanguine about the issue of different formats. Rip out any extraneous characters like spaces, periods, underscores, etc. What’s left is a single string that is the tag.

It’s About the Users

The issue fundamentally is how boxed in people are if they want to tag. In the Neosmart Files post, commenter Jason wrote this:

As this topic suggests, there are issues in resolving various tags that whilst literally different they are contextually equivalent. I believe this to be the critical juncture. Perhaps the solution lies not in heaping upon more standards, but improving the manner in which tags are processed by consumers.

From my perspective, multiple word, comma separated format is the most wide open, flexible way to handle tags. If a user likes running words together, he can do it. If a user wants to put underscores between words, she can do it. If a user likes spaces between words, not a problem.

But making users cram together words in odd combinations takes them out of their normal writing and thinking style. Tags should be formatted with humans in mind, not computers.

That’s my argument. What say you?

*****

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