Strategic Position

Google lives on the web. Most of its application need a web layer in order to operate and, if it were to find itself in a position where the access to their application where to be compromised through the equivalent of a strategic man in the middle type of attack, their business would die off. So, if Microsoft, which currently still controls around 70 percent of the web browser market, were to decided to change their code to impact how Google applications function, Google would be in deep deep trouble.

Because Google realizes that the browser is sort of their achilles heel, they had to make a play into that space. The first thing they did was help the creation of an alternate offerings, by giving large subsidies to Microsoft competitors like Apple and the Mozilla foundation, largely dolled out as revenue for traffic generation through the search box. See, one of the thing not too many consumers are told about is that the search box in Safari or in Firefox are actually paid placements: Every time a user uses that box to perform a search, a little bit of revenue goes back to the browser creator. So that’s great because it allows those alternative browsers to develop and, as long as Google is people’s preferred choice anyways, no one is complaining.

Of course, there are certain issues with the arrangement: a lot of the people who have installed Safari or Firefox don’t like online ads and some developers were happy to provide tools allowing those users to remove ads from web pages. Google wasn’t too thrilled about that but it found the issue mostly OK as long as the arrangement didn’t hurt its advertising cash cow too much.

But over time, this model created a problem. The feature was tested by consumers who, having seen too much of their screen real estate polluted by ever larger ads, liked what they saw. And, as ads became smarter and started to target users individually, it spooked consumers. Being able to block certain ads became a product differentiator and started to cause some problems to Microsoft.

So, with IE8, Microsoft is starting to claim that it will help users and one of the trial baloons it has been floating is that the user may have more control over what ads they can see and possibly may be able to block some ads.

For Google, that’s not too happy a development: the idea of being able to provide free products is based on the fact that Google is really and advertising company with a side business in search. And if the advertising is blocked, then Google’s whole business model falls apart.

So now, Google needs to regain some level of control. For many years, it’s been going after bits and pieces of the Microsoft empire: a little bit of the office suite over here (Google Apps), a little bit of the enterprise space this way (Google Appliances), a little extra screen real estate (Google Widgets), an alternate application distribution network (Google Pack)… but the premise behind most of their offerings was that life was now in the “network cloud” (basically recalling Scott McNealy’s old “The Network is the Computer” concept with 2.0 flavor).

With Chrome, Google is now trying to bypass most of Windows. There’s still a few things that Windows will be allowed to do for now (connecting to the Internet, managing the communication layer) but it seems that this is the farthest Google has gone into addressing Microsoft head on. In the mid-1990s, Marc Andreesen, then at Netscape, said he wanted to relegate Windows to being just a set of basic libraries and, with this offering,  Google is trying very hard to do so though I am sure you’ll never hear them say so.

Will it work? I don’t know. At first glance, I’d say that their challenge will be to get the software installed on a lot of machine. For all their past efforts, it looks like it may take a while. Once they have gotten Google Chrome installed, the next thing will be to move up to a default setting. That will be another challenge.

What I suspect is that the company will soon offer a customizable version to cable and phone companies to ensure that they choose Chrome over Internet Explorer. And one thing I’m pretty sure about is that whatever happens, Google will ensure that ad blocking software will not work on Chrome.

Memory Management: Marketing or Truth?

One of the things that leaves me scratching my head is whether the memory management Google claims as an important piece of its offering is actually based more on marketing messages than reality. Buried in the developer’s menu is an item that supposedly offers a view into the memory and CPU usage of Google’s new browser. Yes, the browser feels fast so it’s clear that there are a number of improvements there but what is that costing in terms of memory. Here’s what the browser reports:

What you’re seeing here is the browser running two plain HTML pages and an instance of a richer web-based application (Google Reader, which, according to this, accounts for 40Mb of memory space used). Where I get a little puzzled is when I looked at what Microsoft reported through its task manager:

The same 5 processes appear (but since Windows only knows them as running as chrome, it can’t identifty which is which but the numbers are very different: Chrome reports an aggregate memory use of 96,300K while Windows reports an aggregate memory use of 121,544K or 25,244K more. To be very honest, I don’t know which number is correct but, with only 3 tabs open (and the tabs I have on here are the minimum I have open at any time), I don’t find it very reassuring to see this type of gap appear. Will it get worse as I add more tab? I don’t know but it’s something worth investigating.

Tristan Louis is the founder and CEO of Keepskor and writes the influential tnl.net weblog, where this was initially posted under the title Google unveils web-based OS. You can follow him on twitter here or receive his weekly newsletter by subscribing here.

Microsoft

Of course, everyone will focus on how this move puts Google and Microsoft in a competitive situation. Microsoft representatives have said they considered search an important space, potentially putting Google on the defensive. The interesting thing in the way Google approached this is that they did not react as Netscape did, launching into announcements about the future irrelevance of Microsoft; they did not take Microsoft head on in a market (Operating Systems or web browsers) that Microsoft currently dominates. What they did was leverage off a market in which they had the advantage: Search. While they did not come out and say it out loud, the message is clear: you can have search in Longhorn when it comes out or you can have it now. Try Google today and maybe you’ll want to stick around in the future.

Apple

Apple has already announced an interest in search, with the unveiling of Spotlight, a new search feature available in the next version of their operating system. Google has not released a product on the Mac platform but I would not be surprised if that were coming… after the product is available for Linux. The continuing decline of the Mac platform seems to push it further and further into irrelevance. Now, Google attacks the mac platform by taking a feature that was supposed to be a differentiator, compared to Windows, and making it available on the Windows platform. This is potentially dangerous to Apple, a company trying the monolithic approach at offering solutions: Use Apple and that’s all you need.

Modular by Design

I recently highlighted what I call the Modular by Design approach, which is predicated on 6 basic key points: standards, focus, flexibility, speed, communication, and stealth. In unveiling this new tool, Google seems to be adopting the approach as a competitive advantage. If you consider Google as the standard for search (and it seems there is a consensus agreement that, for the time being, that’s the case), they are following a pretty standard-based approach. Their focus is on search, obviously. Their flexibility comes from the ability to adapt that focus to target key markets. In terms of speed, it is hard not to see the speed of growth of the company (which did not exist 7 years ago and has rolled most of its new offerings in the last 2–3 years). From a communication standpoint, they are involved in getting feedback from their user community, often releasing products as very long beta (for example, Google News and Froogle, their shopping search engine, are still in beta even though both have been out for over a year). And moves like the announcement of Gmail and today’s new offering show a strong ability at operating stealthily.

On the relevancy of the Operating System

Almost as important in the blurring of the lines between desktops and the web, as illustrated by Google desktop, is a discussion about the long term relevancy of the operating system as an application platform. It seems that increasingly, the application platform is becoming the web, with operating systems being roughly a way to run connected software. Already today, more and more of our daily tasks are running through the Internet, whether it is communication (email, IM, VoIP), research (web surfing, information consumption from news sites and blogs), creation and distribution (weblogs and their extensions like podcasting, photoblog, etc..) or entertainment (music, movies, games…)

From there, then comes two potential areas of interest for new software developers: tools that can help the creation of new things (weblogs, photo-editing software, music editing software, other data-type creation tools like Flash), tools and protocols that can help their distribution (RSS, search tools, servers), and tools that ease their consumption (Newsreaders, picture-viewer, plug-ins, etc…) Most of those, however, seem to be increasingly able to run within the context of a web browser. So what happens when tools that bridge the gap between the browser and the desktop become more important? Google desktop does provide one of those points of integration and if you look closely, it seems that Google is placing itself at the other end, providing tools for creation (Blogger, Picasa) and organization and discovery (search). This could be a pretty large marketplace for them and could help them control a substantial part of the digital future. At the same time, the move of those tools continues to erode the relevance of the operating system as the platform as more and more services move to browser-based systems. Google firing this shot across the bow of the Microsoft ship is not only aimed at Microsoft but also at other OS vendors.

Tristan Louis is the founder and CEO of Keepskor and writes the influential tnl.net weblog, where this was initially posted under the title Blurring the line: Google Desktop. You can follow him on twitter here or receive his weekly newsletter by subscribing here.

The news of banners poking fun at Microsoft made people think that the new operating system would be something to contend with. With statements like “This should keep Redmond busy”, one would expect some radical improvement to this new OS… but most of the changes were under the hood and most of them showed a company that seems to be on the defensive. Let’s look at what they offered and what are the hits and misses in this new OS:

the Dashboard will probably be the feature that most people talk about as it is the most visual new component to the new version of this operating system. Put simply, it is a collection of widgets that can sit on your desktop, similar to the third-party produced Konfabulator, a company that will now have a hard time competing with Apple. It also seems to be a defensive move to counter the power that XAML will offer to its developers. Beyond the issue of Apple running over one of its own development partners (ie. Konfabulator), the fact that their dashboard does not seem to offer any programming interface and does not seem to offer a way to integrate rich Internet client applications (what I call hybrid applications) seems like a fairly tremenduous gap. Why not open it up to developers so they can start coding applications now so that, when the new OS comes out, an increased number of widgets is available?

Safari RSS is another one of those features where Apple runs over one of their own developers. This is a big win for RSS, similar to the news that Microsoft is building RSS into their tools. It may be a leap but I believe that Microsoft will have an RSS reader in their OS too. A couple of missed opportunities in the implementation Apple is highlighting, though. First, why keep it limited to Safari? It seems that this is the perfect kind of service to integrate with .mac in order to compete with something like my favorite RSS reader, bloglines. The problem with keeping it limited to a desktop app is that I don’t spend all my time on a mac (I know, I can hear the shock and dismay in Cupertino) but want to be able to read my RSS feeds from different computers and devices. How about integrating it with their own ipod line?

New Search Technology: There seems to be a trend in operating systems about making better use of search. Longhorn is looking to offer better metadata and search handling, merging Internet and hard drive search in a single tool. Apple is trying to restore parity on this front with a new feature. At this time, it provides a nice set of file types to search for. Noticeable in this queue is the lack of support for search of windows media files, and what looks like a lack of interfaces to allow other developers to offer their data types as part of the scope. On the Microsoft side, the way they handle this is through some changes to their file system (a new file system called WinFS will sit at the core of the new operating system) with a richer metadata set. A question here is whether Apple is changing the underlying file system of their operating system to support this. It would be nice to know as nothing was said about backward compatibility.

Another improvements is Automator, a new visual interface to scripting repetitive tasks into your OS (basically, you could call it Applescript++). This is actually a pretty nice thing and I hope that Microsoft will include something similar in their next OS. It could greatly simplify things. I guess this is one of those cases where a photocopier could be useful in Redmond.

Another feature that Redmond should copy is the iChat AV product, a competitor of MSN messenger. Apple understands that those chat products are used for collaboration and Microsoft needs to learn from that. Desktop sharing, audio and video conferencing, complete with VoIP integration is a product that will become key in the enterprise market in the future.

A significant announcement is the support for 64-bit processors. While this is not a huge market right now, it is evident that Apple is placing big bets on its G5 product line. This could be a good move in terms of getting more involved with the research community. Great for number crunching but I don’t know what apps will run on this beyond the scientific community. Similarly, announcements of improvements to their rendering technology and support for advanced video coding will probably appease members of the creative community who have generally been at the core of the Apple market. These two announcements are aimed at market protection and are a good move.

Finally, while most people tend to focus on the desktop, let’s not forget that there is also a server product. OSX v10.4 server is Apple attempt to compete in the enterprise space. The introduction of blogging software blojsom into this server shows that Apple understand that blogs are now an important feature of the server enterprise space. This is another significant win for RSS and for the blogosphere as it adds legitimacy to the concepts of syndication and blogging. Also of interest in the server product is the fact that Apple is bundling NT migration tools. If Apple attempts to keep quiet their goals of displacing windows machines, this might not be the way to do it.

Tristan Louis is the founder and CEO of Keepskor and writes the influential tnl.net weblog, where this was initially posted under the title OSX 10.4 preview: hits and misses. You can follow him on twitter here or receive his weekly newsletter by subscribing here.

The Hybrid World Lives!

Many of you may remember the February 10th issue about Hybrid Computing. While talking with Birger Steen, CEO of Scandinavia Online, I discovered that the concept is not that far off the market. It is his contention that WAP-enabled phones are largely a pain in the back when it comes to interface. Having to key in every letter on the small phone keyboard is far from the easiest thing in the world. As a result, Scandinavia Online has developed a set of services that allows users of their portal jump on their site and configure their WAP view on the web. From his point of view, this is the best service he can offer now to wireless users.

The point was reiterated by a few people around the conference that told me that going to the web to configure a cell phone was the best way to deal with the small screen interface problem encountered by most WAP phones. Anne Rasmussen, of WAPportal.net demonstrated how their company plans to offer a similar service in a hosted fashion for corporate sites and others. The word around Scandinavia is that if you want to find the best way to configure a WAP phone, you have to go to the web via a computer to do so.

M-Commerce Huge … but not for Etailers

Another significant trend is the rise of M-commerce. In Finland, and to a lesser extent Denmark, Norway and Sweden, people can already use their WAP phones to buy from vending machines. The vending machine has a telephone number on it. You dial that number and a credit is added to the machine, to be billed on your phone bill. With the introduction of security in the new WAP standards, a few people were talking about how in the future the question “will it be cash, check, credit card, or phone?” may not sound silly.

What they envision is that WAP phones could become the new credit card.

A recent survey found that in Scandinavian countries, 82% of the people would go back to get their cell phone if they forgot it before leaving home, while only 64% would do the same thing if they forgot their wallet. The basic concept is one that may be foreign to those of us who live in the United States and revolves largely around the fact that GSM phones are equipped with a small identification chip called a SIM card. You can take the chip out of one phone and put it in another and you don’t have to worry about changing phone number or contact info.

Because of the emergence of such a way to do billing, some of the speakers at the conference predicted that the long run path for mobile phone operators would be to merge with financial institutions as their services will increasingly resemble those of credit card companies.

However, few people were optimistic about the prospects of etailers when it comes to mobile phones. “When I’m in a store buying something, I’m not going to go up on the web to check if it’s available at a web store,” told me one attendant. “I want to get it now and not wait a few days for it to show up in the mail.”

As a result, the promise of m-commerce is good for software vendors (who will sell packages that allow operators to set themselves up as currency clearinghouse) and mobile phone operators (who could become the next big financial force) but unfortunately, current etailers will not fare as well.

Content is King… in a Wireless Republic

The promise of advertising supported content on wireless phone has been hailed by some as a new way to support content sites. Unfortunately, few content providers will survive in the wireless space as demand for those services does not seem to meet expectations. Talking with people from the Scandinavian arm of large American companies who have tried to go the wireless route as a distribution channel, I discovered that there was not much demand for those services. “Sure, people do check the price of their stock on the phones but they still call our voice line to place their order,” said one executive from an online trading company.

As a general rule, the demand for content seems to be limited to a few areas: entertainment (bars, clubs, and restaurants locators), financial (stock prices) and sport-related (latest scores). However, many of the people involved in those areas told me that they were still looking for a proper business model. The locators are looking at a coupon-like scheme, whereas bars can offer a special coupon and people can go to a bar and show the phone coupon to get a rebate on drinks (“It appears that beer is the hot wireless app” quipped one panelist). Financial services and sports services are currently looking at possible subscription based models or at deals with operators whereas they would share a portion of the revenue they are generating for the operators.

CN U RD THS

On the other hand, communication in the hot wireless app. SMS has clearly become the hot app when it comes to wireless service across Scandinavia and across Europe. Because operators are charging lower rates for data services than they are for voice traffic, short messaging has become the quickest way for people to get in touch. A new lingo is starting to pop up around SMS as people are trying to economize the number of keystroke they type (SMS messages are limited to 160 characters). As a result, the headline for this section would translate from CN U RD THS to Can you read this?

Convergence in the Making

I also talked to a bartender who told me that the previous night a woman was in the bar looking for some of her friends and asked him if he could change the TV channel to a particular teletext page (in a lot of European countries, TV channel use the extra bandwidth to carry data. As a result, while watching the BBCyou could switch to the BBC teletext channel and read the latest news, etc… on there). The channel this woman was using allowed her to converse with several of her friends in a TV-based chat room by using her phone and an SMS gateway. True convergence in my book but the problem here is where revenues for an online operator are. Unfortunately, the only operators who will make money on this will be the phone operators who are racking up extra data minutes of usages.

Smaller, Faster, Cheaper

The good news, from a user’s point of view, though, is that those services are coming in a smaller package. A lot of the phones I saw over there would put our American phones to shame. On average, European phones are now weighing about 2.78 ounces (79 g.), a form factor of 3.9 X 1.75 X .6 inches (101.5 X 44.5 X 17 mm.), and a battery life that allows for either 150 hours of standby time or 4 hours of talk time. Of course, they come equipped with voice recognition (so you can have the number dial based on a name you give to it), predictive text input (a new set of tools for SMS which allows the phone to predict what word you’re going to type based on your input), and are WAP ready. The most interesting thing is that they usually are priced under $200 which makes me feel that we’re overpaying in the US.

The future is now?

The new thing around that space, though, is not a smaller phone or a better way to do e-commerce but a new set of services around higher speeds of access. The first step in that direction is GPRS, which offers about 20kb per second and has been rolled out around Europe. This is seen as a way to distribute such services as music and better news on the phones. However, the real discussion is centering on UMTS which promises wireless throughputs of 2Mb per second or more. Portions of the UMTS spectrum have already been allocated in the United Kingdom, Germany, France, Spain, Norway and Finland, with the rest of Europe moving quickly on allocating this space. UMTS proponents envision the use of wireless video conferencing and a better Internet experience to result from this new development.

Euro Fighting

One of the big challenge in terms of doing business in Europe is location. Because most of the European countries are too small to create an actual market for digital services, European operators usually have to provides sites in multiple languages, and support multiple currencies. As a result, European etailers tend to be in favor of the Euro, which would make their lives a little easier. However, as the currency is slowly deflating in the currency market, opposition to the Euro is growing across Europe. On September 26, Denmark is holding a vote on whether to join the Eurozone or not and this election is seen across Europe as a big test for the Euro’s power.

The reason it the Danish election is so important in Europe is that if the Danish vote fails, England’s upcoming vote will probably do so too. As a result, there is a lot of concern across Europe about this election. Many etailers I met in Copenhagen told me that they were trying to organize themselves to push for adoption and work across borders when it comes to those election. Danes I talked to told me that British conservative politicians (who are opposed to joining the Eurozone) had been lobbying in Denmark. This is a race that etailers both in Europe and the United States should pay attention to as it will most probably dictate the viability of the Euro as a currency and, if the Euro succeeds, could mean less headaches to all of us.

Going beyond Economic matters, support or lack thereof could mean either an acceleration or a slowdown for eEurope, a new initiative by the European Union to become a force in the information age by normalizing rules related to e-commerce across the difference members of the EU and offering incentives to companies that want to bring net services to the EU marketplace. Among the initiative supported under eEurope are net access in public schools and public centers, lower access costs for businesses and individuals, agreement on common specifications for a smart card infrastructure, financial support for emerging tech companies and a number of social support and government services becoming available to all via the Internet.

All and all, what eEurope would mean is that countries would work in the EU government to set up rules about the Internet. I do not need to tell anyone reading this that it would be better for those of us in the industry as we would not have to lobby several governments in order to get the proper support for our industry.

Tristan Louis is the founder and CEO of Keepskor and writes the influential tnl.net weblog, where this was initially posted under the title From Scandinavia With Love. You can follow him on twitter here or receive his weekly newsletter by subscribing here.

Why network computers fail

The Denial Of Service attacks that crippled several websites this week show that our increased dependency on the network is not without its faults. I was talking to a friend of mine who was complaining about not being able to read her email (she’s got a Yahoo! account). Meanwhile, other users were deprived of use of their calendars or address books because they could not access the service. Did this information need to always be online? Not really. While the online element allows portability (being able to get to those applications from anywhere in the world… anywhere, that is, where you can get access to a net connection and a browser) but throws in an extra wrinkle: you have to have access to a network. Any problem with the network and the application fails. Ultimately, network computing fails because it tries to offload too much to the server.

Why non-connected devices fails

Meanwhile, non-connected devices have taught us that they can do certain things really well but could do them better if they were connected. Not every application needs to be connected (most of the time, I don’t need my word processor to be connected) but most seem to be dramatically enhanced by being connected. Games? Most of them are interesting but ultimately, computer games were a fallacy in that they didn’t allow for multiple players. The net connection allows for that. Business applications? New levels of sharing are now possible with business application, allowing teams to be more efficient and to work across long distances.

A new paradigm: Hybrid Computing

However, those applications can stand on their own. What we are witnessing is the rise of a new kind of applications and a new kind of computing: Hybrid Computing.

What is Hybrid Computing?

In order for an application to fall into the hybrid computing category, it has to be able to follow two conditions:

• The device or software program should be able to work on its own, without being connected to the net at all time.
• The device or software package is enhanced through its connection to the net.

Examples of Hybrid devices and software packages

While we all already have heard about the Palm VII wired palmtop, a device that offers the functionality of regular palmtops with a little extra when it comes to connectivity, there are many other pieces of software that have not received the same kind of publicity. For example, imagine being able to get information about the CDs you’re listening to while you’re listening to them. Yes, you can do so on your computer but now, you can also do so with the TuneBase family of CDDB-compliant devices, that hook up to your TV and CD player. While still a little kludgey (one should have all that directly embedded into a single CD player unit, it shows the power of hooking up a CD player to the web. The player can get enhanced information from the web but doesn’t have to in order to work: that makes it a hybrid application.

Lately, I’ve also been playing with a new application from Contact Networks. It’s a simple piece of software that hooks up to your outlook directory and allows you to exchange electronic business cards over the web. If, for example, I update my information in that contact manager, the change is sent to the web. If you have the same application, the next time you synchronize your address book, my contact information will be made current in your contact manager. It’s a great concept if people start using the application. After all, who really has the time to keep track of ALL the contact info lines for everyone they’ve encountered. Once again, this is an application that takes a non-networked concept (address book) and creates an hybrid application around it.

Those hybrid applications harness the power of a local machine and use the net to enhance that power. Either way, they can work on their own or connected. And for years to come, until we make the net truly ubiquitous (have you ever tried using a net connection in the New York Subway, let alone make a cellular phone call?), we will have to live in a world where large areas are off the grid.

Over the next few years, as computing devices become more pervasive, we should start seeing more of those hybrid devices because after all, the Internet is nothing more than another evolutionary step in the computing and communication world.

Tristan Louis is the founder and CEO of Keepskor and writes the influential tnl.net weblog, where this was initially posted under the title Hybrid Computing. You can follow him on twitter here or receive his weekly newsletter by subscribing here.