Apr 23

Steve Ballmer at MIX08 in MilanToday I had the great pleasure of presenting a session on Web 2.0 and Enterprise 2.0 at MIX08 Italy in Milan. I was there as a guest of our strategic partner in Italy and Germany, Reply. The day was kicked off with a keynote by Microsofy CEO, Steve Ballmer (see videos here). There are other posts about his comments on Yahoo! So I thought I would just share some of my thoughts on the other parts of his talk (and the follow-up Q&A).

Content + Community + Commerce was the mantra for the talk. This seems to be there way of recognizing that software is not the main driver in IT any longer. Now it is all about getting people what they want (content) in a social experience of their choosing (community) and, of course figuring out how to monetize that (commerce) so you can stay in business. The one thing that struck me from the talk was that the only monetization model he talked about was advertising. While I’m sure they are considering service subscription models as well, he didn’t mention it. During Q&A the theme came up again when he said the reason they were after Yahoo! was that they were a advertising and marketing platform that was already at “critical mass.”

Software + Services is the solutions theme for Microsoft. This is there take on how they will help us serve the C+C+C from above. Despite Ray Ozzie’s release of Live Mesh and some observations that MS finally sees that software is dead, Steve stressed the continued importance of software. He described how software will evolve in an environment that wisely balances desktop, Web, enterprise, and devices. Seems to me the “software vs. services” debate is semantic posturing. In either case we will still need engineers writing code that moves bits.

“Consumer, consumers, consumers.” That quote and his discussion of consumers was the only part Steve’s talk that made me cringe and think they still don’t get it. In this day and age, no business should look at their users/customers as consumers. I agree with Matt Jones’s definition of consumers. The people who use our products are our partners, not mindless consumers. Empowering people to partner with us to make our products better is at the heart of Web 2.0. If Microsoft does not get this, they are going to have a tough row to hoe.

Looking foward five years. Finally, perhaps the most animated and interesting part of his talk were his visions of the future of computing. They really were about services (supported by software) that reflected the pending convergence in media and technology. To paraphrase badly, he told a brief story envisioning a future when he is golf watching “TV” and shouts “Hey Bill, did you see Tiger sink that putt”. His intelligent “TV” would recognize that Steve wanted to say that to Bill Gates and would instantly find if Bill Gates was available for Steve. Bill’s “cell phone” would let Bill (sitting on a beach somewhere) know that there was a message from Steve and play the audio of Steve’s comment as well as the video of Tiger’s putt. Steve would respond, “that was nice – what kind of ball is he using?” Steve would rewind the video, zoom in on the ball, click it and get instant information about it and a link to buy it. He would tell Bill the brand and order two boxes for them. This was just one example of his crystal ball gazing - he also discussed ePaper and projectable surfaces.

Overall, his talk was interesting but didn’t break any new earth. But it did make me wear a tie. I try to avoid wearing a tie like I try to avoid root canal surgery. When I asked my Reply hosts if a tie was required for my presentation, the response was something along the lines of, “we know Americans don’t really wear ties - let’s wait and see what Steve does…” So, I was counting on Steve to go tieless. Wisely, he chose to show respect for the host culture and he wore a tie. So, I followed suite.  The most difficult part of the whole day was remembering how to tie my tie…

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Apr 14

Steve BallmerJust a quick note:  If you will be in Milan on March 23, drop by the Crowne Plaza Hotel for MIX08 Italy.  Steve Ballmer and his Microsoft crew will be giving the Microsoft spin on what is hot in Internet development in the morning.  I will be joining a host of colleagues from our Italian partner company, Reply, for additional presentations on delivering Web 2.0 and Enterprise 2.0 solutions in Italy in the afternoon.  So, if you decide that Milan sounds like more fun than another year of Web 2.0 Expo in San Fran, drop on by!

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Apr 10

Here is some undoubtedly errant math from a former AOLer (me):

In December 2005, Google purchased 5% of AOL for just over $1 billion, pegging its market value of about $21 billion. The Washington Post ran this article today:

Murdoch and AOL Join Fight Over AOL

So, from the numbers in the article (notably all based on hear-say and conjecture), I did some back-of-the-envelope math:

Supposing first that Yahoo’s contention that the Microsoft offer of $42 billion undervalues them, let’s give them a 7% markup, bringing their current value to about $45 billion. From the article:

“Under the terms of the possible Time Warner deal, the AOL unit would become part of Yahoo. In exchange for AOL and an undisclosed sum, Time Warner would receive a 20 percent stake in the enlarged company, said the source, who cautioned that the terms were not final and that the deal could founder.”

I’m going to ignore the “and an undisclosed sum” to make my fuzzy math easier. Assuming the 80% of the new venture that Yahoo would keep reflects their current $45 billion value, then the resulting entity would be valued at about $56.25 billion. So, Time Warner’s 20% would be worth about $11.25 billion.

Now, that probably does not reflect the full current value of AOL. Earlier in the article it states:

“Yahoo, meanwhile, is working out a complicated deal to acquire most of AOL from Time Warner, the world’s second-largest media company…”

I’m guessing the part they won’t buy is the AOL access (i.e., dial up) business. It’s not news that Time Warner is seeking a buyer for that already, but I haven’t seen any guesstimates of what the selling price would be if they can find a buyer. So, I’m going to pull a sale price out of my elbow (see - clean language Mom!) and say they could sell it for $1 billion. That would give AOL a current market value of $12.25 billion (under the deal outlined in the Post).

So, loads of fuzzy math aside, that means since the Google purchase in 2005, the value of AOL has dropped 40%. Let’s compare that to the TWX stock price. On December 21, 2005 (the day after the Google purchase was announced), the TWX closing share price was $15.58. Yesterday it closed at $14.43 - a drop of 7%. If what Google paid in 2005 was just, and the AOL value tracks with TWX overall (a great simplification), then AOL’s current value would be about $19.5 billion.

So, if all the fuzzy math and conjectured prices in today’s article are correct, one (or more) of three things is true:

  1. Google paid too much for its 5% stake in 2005, and/or
  2. The other Time Warner divisions have compensated for the 40% drop in AOL’s value such that TWX overall value only dropped 7%, and/or
  3. The deal speculated in today’s Post undervalues AOL by about $7 billion

Given the conjecture in the post article, “In the unlikely event that both deals close, News Corp. and Microsoft would control Yahoo, MSN, MySpace and AOL…” and the fact that Google can decide to sell (or keep) its 5% of AOL this July, 2008 is going to be a very interesting year for AOL.

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Mar 29

reply_banner.jpg

This week I have been in Milan delivering train-the-trainer for our Web 2.0 University™ (W2U) partners at Reply. Reply has license to exclusively deliver the Web 2.0 Executive Bootcamp, Enterprise 2.0 Bootcamp, and Ajax Bootcamp in Italy and Germany. It has been an exciting week working with the dedicated and experienced folks at Reply to localize our learning content for their target audiences.

Reply E2.0 TTTDuring the training we discussed how many of the Web 2.0 ideals and applications play out differently in Italy and Germany. From the legal restraints that make music sites like Pandora impossible to the generally more conservative attitude toward social applications, Reply is customizing the W2U content to deliver outstanding learning to their clients. They have become quite Web 2.0 savvy and I’m sure they will do a great job leading the 2.0 revolution in Europe. So, if you want to leverage the competitive advantage of Web 2.0 or Enterprise 2.0 in Italy or Germany, visit the Reply W2U site.

Unlike most trips abroad, I took some extra time to enjoy Milan. Friday evening I had the great pleasure of being treated to dinner by Piero Rivizzigno, the CEO of the soon to be released, Glossom.com. (This social website will focus on design and fashion – link to come soon where you can learn all about it.) Piero took me into the city center for the best fresh mozzarella I have ever had as well as traditional Naples pizza that was fantastic. Piero mentioned that the owner of the Buffalo Ristorante (I think that was the name - confirmation to come) is hoping to open a restaurant in Georgetown in DC. That would be a wonderful development! Piero was a great host and our discussion of the future of social applications was illuminating. We discussed data portability and Piero was spot-on in his observation that website-owners who benefit from the content we provide need to do a better job of sharing their revenue (at least a small portion) with us.

Saturday I got to play tourist in full glory and traipsed all over Milan city center. I visited the Parco Palestro, the Castle of Milan, and the Milan Duomo and the Galleria Vittorio Emanuele II. Sadly, the battery on my camera bit the dust at the Duomo, but here are a few pictures:

The Palestro in the Parco Palestro…

Milan Palace

The drawbridge at the southern “Little Bridge” entrance to the Castle of Milan:

Milan Castle Drawbridge

Inside the Caste of Milan (or as it should be called – the castle of cats – they owned the moat):

Milan Castle

Approaching the Duomo Church (both inside and out, it is simply magnificent):

Milan Duomo

My personal favorite: A beautiful fountain fighting the unbelievable moss that it swallowing it with the Duomo behind:

Milan Fountain near Duomo

Now it is on to the butt-busting flight from Milan to Frankfurt to DC and back to my family (hopefully my son will look up long enough from Adventure Quest to notice I’m home ;o).

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Mar 15

Yesterday I had the great pleasure of presenting at a great day of learning on The Future of Enterprise Computing at University of Virginia. The seminar was put together by Professor Ryan Nelson, the director of the Center for the Management of Information Technology (CMIT) in UVA’s McIntire School of Commerce. Ryan pulled together a great panel of speakers:

  • Andrew McAfee, Harvard Business School, the person who coined the term “Enterprise 2.0″
  • Paul Daugherty, Accenture’s Chief Technology Architect
  • Jeff Kelly (yours truly) representing Web 2.0 University(tm)
  • Lewis Shepherd, CTO at Microsoft’s Institute for Advanced Technology in Governments

The audience consisted of about 70 graduate students in UVa’s MS MIT program and about 30 members of UVa’s Center for the Management of Information Technology. We were fortunate to be one of the first groups to present in the newly remodeled, state-of-the-art facilities in Rouss-Robertson Halls. I’ll give a brief recounting of each presentation, but I’m hoping that soon I will be able to edit this post to add links to videos of the presentations (3/17 update: it turns out the videos can’t be released - sorry about that).

Andrew McAfee at UVAAndrew McAfee led off with a great 60-minute summary of Enterprise 2.0 and it’s implication for enterprise technologists. I’ll briefly mention two points he made that I thought were intriguing. The first was his discussion of the underlying trends of E2.0 which included “lack of up-front structure” and “mechanisms to let structure emerge”. Those two trends align with the “freeform” and “emergence” concepts that Dion Hinchcliffe added in his FLATNESSES checklist - which is an extension of Andrew’s original SLATES checklist. We discussed it briefly over lunch, and the E2.0 trends that Andrew is encountering are congruent with what we have been seeing. The other interesting idea Andrew introduced centered around the value of weak ties in a social network. He mentioned Mark Granovetter’s The Strength of Weak Ties from 35 years ago and the Web as platform for social network is reproving how accurate Marks isights continue to be. He postulated - and I agree - that the people with whom we have weak social ties may be more valuable than the people with whom we have strong ties. That idea supports the research I have been doing about the importance of diverse and inclusive groups as the greatest driver of innovation.

Paul Dugherty at UVAPaul Daugherty was the second presenter and he provided very rich insight on the future of technology and what it means for the enterprise. Accenture has surpassed IBM as the world’s largest systems integrator, so Paul certainly has a keen perspective from which to predict future trends. His presentation was full of rich insight. While there was too much great content to review here, I will share his list of the eight power shift trends that will impact enterprise technology:

  1. Cloud Computing & SaaS
  2. Systems Integration - Regular & Light
  3. Enterprise Intelligence at Scale
  4. Continuous Access to People and Content
  5. Social Computing
  6. Explosion of User-Generated Content
  7. Gradual Industrialization of Software Development
  8. Green Computing

Jeff Kelly at UVAJeff Kelly - I designed my talk to give the audience of technologists insight into the requests they might see coming from the business line. I based it on the platforms and strategies that resonate the most with the audiences we have at our Web 2.0 University ™ learning events. I provided a very brief summary of our two most popular learning events and then the topics that resonate the most with the business leaders who attend. You can see that list on slides 13 and 18 in the presentation deck linked here:

UVA Presentation Slides

uva_shepherd.jpgLewis Shepherd gave a great capstone presentation that illustrated the practical application of the ideals and theories covered earlier in the day. His perspective was that of someone who came to DC from Silicon Valley after 9/11 to help devise ways for the US intelligence community to better gather, share and collaborate on various intelligence sources. So, much of his presentation focused on implementing Enterprise 2.0 platforms in a ultra-secure environment. His insights were excellent and provide great fodder for countering security-veiled resistance to E2.0. (It gives us the ability to say, “well I’m sure the information sharing your employees will do does require the most robust security available - let me tell you how the US intelligence community uses to wikis to share top-secret information…”). Lewis walked us through the evolution and success of Intellipedia as well as covering some other federal E2.0 projects. He also pointed out that my alma mater, EPA, is doing some great Web 2.0 work at epa.wik.is. I encourage you to read the EPA Web 2.0 Whitepaper - grand kudos to Brand Niemann and everyone else who is finally getting EPA to the level of public data exchange the Myles Morse and I (and many others) were hoping for 14 years ago when we worked on Enviro$en$e.

The day wrapped up with a panel moderated by Stefano Grazioli where Lewis, Paul, and I (Andrew had an early flight) fielded questions. The entire day was a great learning opportunity and I look forward to delving deeper into the wealth of information that was presented.

Thanks much to Brian Weston for posting pictures from the event!

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