Google announced yesterday that it is buying ITA Software for $700 million. ITA does two main things: airline eCommerce and reservations management solutions and a cross-airline flight comparison tool called QPX, used by most of the major travel comparison Web sites including Kayak, Orbitz, and Microsoft Bing.
Google purchased it for the QPX product in a classic example of buying technology instead of either building it in-house or licensing it.
Today, Bing, Microsoft’s search offering, offers a solutionthat is based on QPX to help customers search for flight information on the Bing Web site. Google has nothing comparable; instead, they direct customers to other travel specific sites (see the screenshots below).
Google is focused on the goal of staying at least half a step ahead of Microsoft in all aspects of search technology; in order to stay ahead of Microsoft in this area, Google had three major options: 1) License the technology; 2) Build it themselves; 3) Buy ITA.
Licensing the technology would mean that Google would end up with a solution equivalent to Microsoft’s and not as robust as specialized Web sites like Kayak. Building the technology would take several years, allowing Microsoft and other competitors to continue to differentiate themselves and pull ahead.
This left the acquisition as the only viable path to regaining leadership in this area, while at the same time placing Microsoft in the awkward position of relying on Google-owned technology as the backend for one of their major search features.
Many product strategists are, like me, old enough to remember software stores like Egghead. Those days are gone. Today, consumer packaged software represents a very limited market – the software aisle has shrunk, like the half-empty one at the Best Buy in Cambridge, MA (pictured).
Only a few packaged software categories still exist: Games. Utilities and security software. And Microsoft Office – which constitutes a category unto itself. Some 67% of US online consumers regularly use Office at home, according to Forrester’s Consumer TechnographicsPC And Gaming Online Survey, Q4 2009 (US). Office is the most ubiquitous – and therefore successful – consumer client program aside from Windows OS.
Office 2010, Microsoft’s latest release, will continue to succeed with consumers. On the shoulders of Office 2010 rests nothing less than the defense of packaged software in general. It’s also the most tangible example of Microsoft’s Software Plus Services approach to the cloud – a term that Microsoft seems to be de-emphasizing lately, but which captures the essence of the Office 2010 business goal:
To sell packaged client software and offer Web-based services to augment the experience.
Today, Google announced Google App Engine for Business, and integration with VMware’s SpringSource offerings. On Monday, we got a preview of the news from David Glazer, Engineering Director at Google, and Jerry Chen, Senior Director Cloud Services at VMware.
For tech industry strategists, this is another step in the development of cloud platform-as-a-service (PaaS). Java Spring developers now have a full platform-as-a-service host offering in Google App Engine for Business, the previously announced VMforce offering from salesforce.com, plus the options of running their own platform and OS stacks on premise or in virtual machines at service providers supporting vCloud Express, such as Terremark.
What’s next? IBM and Oracle have yet to put up full Java PaaS offerings, so I expect that to show up sometime soon – feels late already for them to put up some kind of early developer version. And SAP is also likely to create their own PaaS offering. But it’s not clear if any of them will put the same emphasis on portability and flexible, rich Web-facing apps that Google and VMware are.
So Google aims to expand into enterprise support – but will need more than the planned SQL support, SSL, and SLAs they are adding this year. They'll also need to figure out how to fully integrate into corporate networks, the way that CloudSwitch aims to do.
Okay, so I'm a sucker for nostalgia. But being on the same stage as Gilda Radner and John Belushi and John Candy and Tina Fey was a thrill. And being in the same studio where Elvis Costello and the Attractions stopped "Less Than Zero" after a few bars and jumped into "Radio Radio" in defiance of NBC's wishes brought a rebellious, empowered smile to my face.
NBC's Studio 8H, home of Saturday Night Live, is where Microsoft launched SharePoint 2010 and Office 2010 yesterday. It was a short, punchy, customer-filled event. These products are the latest in the "Wave 14" product set, a ginormous (as my 9-year old says) overhaul of the Office product line. And they're beauts. Here's my (admittedly enthusiastic) analysis of what Microsoft has accomplished with this product.
The lion awakens and roars.
Microsoft's Office business has taken a battering in the press as journalists chase stories about the important innovations from nimble startup competitors, open source alternatives, and Web-based productivity tools. But let's face it. Microsoft doesn't have 500,000,000 people using its tools for no reason. And while three years is a long time to wait for a product release (especially in this era of instant innovation via the Internet), Microsoft has re-confirmed its position as the most important driver of business productivity on the planet. This launch will crush the dreams of a 100 entrepreneurs and force another 1,000 to rethink their companies. That's okay. It's what happens when Microsoft turns a niche product for a geeky few into a global feature that anybody can use. As an economy, we need it.
I've just had the chance in the past few hours to really play with the device. I find myself smiling each time a new SMS bubble pops up. I love it. I also like seeing my friends' faces on my phone. I love being able to navigate my content and messages via my friends. Loved how easy it was to set up my email, Facebook, and Twitter. Packaging rocks ... and is recyclable. What is subtle in this device, in my opinion, is how intuitive the UI is. The UI looks and feels similar to others I have seen, but I was able to pick up this phone and use it without reading the instructions.
My colleague Charles Golvin will provide a more in-depth analysis of the device itself.
From a social networking/media perspective, the KIN is a good start, but I hope to see more with upcoming releases, especially around helping people build their social graph. I don't put this burden on Microsoft alone, but on the industry and all handset manufacturers. The content we create needs more meta data or labels. We need logic to mesh this content together and navigate through it. It's great that I can navigate to my friends' status and messages through my contacts (and KIN's UI is a lot of fun). I also want to navigate through my photos and location. Location should be table stakes for photo/status/review (restaurant/bar) content and the logic shouldn't flow in just one direction. Based on my location (simple location or map), I want to see who is nearby or what restaurants my friends liked. Navigating through my friends, I want to see what restaurants they liked. I want to group photos by location. I want to group photos by friends. These are just a few examples. With every product and service developed, one can't have everything. There are cost, time and design trade-offs. I completely understand that the KIN and DROID and others couldn't get everything done in v1.0. I look forward to the next version.
I had the opportunity to go to the KIN launch today. My colleague Charles Golvin has a full take here.
I loved the social networking features on the phone (and the graphical interface with the "spot" though I'd need a change-up on noises). This isn't the first phone we've seen where the experience is centered on my friends and my contacts, but they keep getting better. We argued (see report) long ago as many did that the cell phone should be the hub of one's social graph and not simply an application on the handset. The KIN comes close and does many things well including:
- Offers status updates inside of my contact profiles which are "live" on my homescreen
- Allows the user to post photos directly from the phone
- Tags photos with location
- Allows me to choose one of many communication channels within profile (many options, but not my full list)
- Builds an online journal of my photos, videos, messages and contacts (looks to me a lot like the concept Nokia tried with their life blog application a while back)
What it is missing, but I suspect is in development:
- Tags (meta data) that allow me to build a richer social graph by tagging my photos with contacts, groups, trips, etc.
- Ability to help me find my friends
- Location tags integrated into maps that connect me to my friends' favorite restaurants, bookstores, etc. - or more generally their content - could also be photos, videos and posts
I was lucky enough last week [22 March 2010] to moderate a panel at EclipseCon on the future of application servers. The panelists did a great job, but I thought were far too conservative in their views. I agree with them that many customers want evolutionary change from today to future app servers, but I see requirements driving app servers toward radical change. Inevitably.
The changes I see:
Get more value from servers, get responsive, get agile and flexible
The reports show that Windows 7 penetrated the consciousness of the market by the end of 2009, with a strong majority of US consumers aware of the product. We also found that consumers who adopted Windows 7 in Q4 were generally very satisfied with their Windows 7 PCs.
Perhaps the most interesting finding of the reports involves upgrade behaviors. Historically, most consumers have not upgraded their PCs with new OSes -- though Mac users and some technophile consumers have been an exception on this count. Instead, the majority of consumers have acquired new OSes when they purchase their new PC. These are known as "replacement cycle upgrades."
With Windows 7, however, upgrade behavior was much stronger. Why? In short, Windows 7 is a thinner client program than was Windows Vista, meaning that it works well on older hardware configurations. In the past, OSes were designed with Moore's Law as an underlying assumption -- that is, that newer PC hardware would be significantly faster and more powerful than the previous generation's hardware. Windows 7, however, is a less burdensome OS than Windows Vista. The rise of Netbooks, the physical assets of multi-PC households, and an attachment by many consumers to their Windows XP machines all contributed to the need for a sleeker, thinner Windows OS, which Windows 7 delivered.
Among early adopters of Windows 7, in Q4, for the first time upgrading behavior matched replacement cycle purchasing, as this Figure shows:
Microsoft announced on Friday that it will stop selling new Select licenses from 1 July, 2011. Customers with existing agreements can renew them for another 36 months, as per their agreements, but the replacement Select Plus program is likely to be a better option. Microsoft launched Select Plus on 1 July 2008, and I wrote at the time that it was an improvement on the basic Select structure: Microsoft Simplifies Its Volume Licensing.
However, Microsoft's pricing team struggled to persuade its LARs to promote Select Plus over the more familiar Select agreement, and customer adoption was disappointing. So the decision to drop the older program makes sense for Microsoft, because it will force its channel partners to embrace the new model. And its no bad thing for buyers - you've one less choice to make, and there's little negative impact.
The biggest advantage of Select Plus for sourcing managers is that they no longer need to submit a three-year spending forecast - this is extremely difficult for central teams buying on behalf of autonomous business units that won't havent planned Microsoft technology adoption that far out. Instead, pricing works like an airline loyalty program, on the current and previous years' actual transactions, as the figure below from my report illustrates. My report explains some more advantages, such as the flexibility to opt tactically for software assurance on individual purchases.