Microsoft opens philosophical can of worms with Live Search Cashback

Talk is bubbling up across the blogosphere, Gillmor Gang and Techmeme daily about social graph personal information. This may be among the most important discussions and topics of our time. How the "social mesh" works out now will affect our lives and businesses for a long time. It may even impact how we define what "me" is online. We really need to get it right, ASAP.

Yet much of the talk focuses on technology, privacy, use rights and still loosely defined standard approaches to protecting user control over data. It's still murky about how the online social network services will own and control the user- and relationships-defining data inside of their social networks, including Twitter. But there's a larger set of issues that has to do with how we want technology and the Internet to affect us people, as a business, as a society, as a market of markets and as a species.

UPDATE: Many of these issues came up, especially toward the end, of Friday's Gillmor Gang with Google Director of Engineering David Glazer. One takeaway is that, ironically, Microsoft should be among Google Friend Connect's best friends.

The discussion on social graph data portability gets to a philosophical level quickly, because the ways we have codified our personal relationships to each other -- and to larger organizations or power centers -- over eons does not necessarily apply adequately to the new virtual boundaries. It's hard to know on the Web what defines the rights of the individual, the family, tribe, community, company, village, town, state, nation, civilization, race, or species. Do accepted and proven cultural patters offline fully translate into social patterns online?

The older established "contracts" -- from Codex Hammurabi to Magna Carta to Mayflower Compact to U.S. Constitution to the User Terms of Agreement -- do not seem to get the job fully done anymore. It's not clear what I am entitled to online, whereas I'm pretty sure I know what I'm entitled to offline, and I know what to do to enforce getting what I'm entitled to offline legally, ethically and politically.

In essence, we as online users and small businesses don't have any social-order contracts with the online providers, other than what their lawyers put in the small print when you "accept" their free or paid services. And, of course, they have made available their privacy policies for all to see. So there. Click away, users galore, while they store away the user data and relationships analytics.

As a person, you only retain the right not to click (as long as you pay throughout the two-year user subscription agreement, or suffer the penalty charge for leaving). If you're lucky you'll be able to take your phone number with you if you walk, but not necessarily your email address, or your contacts, your social interactions definitions. Most of the data about whatever you did while nestled in the rosy social bosom of their servers, remains with them unless the volunteer to let it be open. So far.

Without belaboring the implications on the metaphysical scale, my point is to show that how our online social interactions as currently defined and controlled place us into uncharted territory. And as with any social contracts, the implicit and explicit ramifications of where we find ourselves later on needs to taken very seriously.

We'll want the ability to back out, if the unforeseen future warrants it, without too much pain, with our open data in tact. We should all want escape clauses for what we do online the next several years, just to be safe. Who you gonna call if it's not fair?

If things don't go well for the user or individual business, what could be done? Because this is about the Web, there isn't a government to lobby, a religious doctrine to fall back on, a meta data justice code of conduct, nor an established global authority to take directives from. The older forms of social contract enforcement don't have a clue. There is only the User Terms of Agreement, the codex of our time. Read it and weep.

Because this is about the Web, the early adopters basically make it up as they go and hope for the best. It's been a great ride. The service providers try and keep up with the fast-changing use patterns, and then figure out a business model that has legs. They write up more User Terms of Agreement. Startups get funded based on their ability to get some skin in the game, even without a business model. They show the investors the User Terms of Agreement, and get their rounds. More work goes into the User Agreements than into the infrastructure to keep the thing working once the clicks come.

This laissez-faire attitude has worked pretty darn well for building out the Web as an industry, thankfully. But now we're talking about more than building out the no-holds-barred Web, we're talking about social contracts ... We're talking about what the user possesses from their role in building out the Web, in populating the social networks, the authoring of the blogosphere. Is there any social collective ownership or rights by the participants in the Web? Or is it only really -- in the final analysis -- owned those who control the means of production of the services?

There's the Web, and there's the blogosphere -- are they they same? What rights does the individual, the person, the blog entity have on the commercial Web? Does the offline me possess the same social powers online? I really don't know.

What's clear is that people like Mike Arrington, Marc Cantor, Steve Gillmor, Robert Scoble and Dave Winer (among many others) want as much freedom about what they do online as what Western Civilization has endowed on them and their ancestors offline. In some circles, and some of these people, want even more social power online than what has been the norm offline. More power to them.

There is a power clash a brewin'. The U.S. has long struggled over states rights versus federal rights. The individual has looked to both -- and pitted them against each other -- to define and protect individual rights.

But what about online? When push comes to shove, how does the individual rights assert themselves against what the services provider can perfectly legally assert? If the server farm says they own your online address book, they probably do legally (see the Use Terms). If they say they own the meta data from your click stream on their servers over the past three years, they probably do.

So far, user rights have been strictly voluntary on behalf of the providers. Some are built into agreements. The needed rising tide of online adoption patterns and essential need to generate traffic and clicks has protected users, to a point. Let's hope it continues. I hope voluntary is enough.

Folks, you should recognize that you already have a lot of power, given the fact that social networks are falling all over themselves to show how "open" they are. They fear that you can and will bolt, even if you lose some data (the first time). Data portability is recognized by the Googles and Microsofts as hugely important, shouldn't it be huge to all of us, too?

Because as we move to always-on social interactions across all we do on the Web, what we do socially online may begin to outweigh what we do socially offline. For some of us this is already true. What distinguishes us as online or offline is blurred, and I believe will grow more so and any difference will become irrelevant.

I am social, therefore I am social. It will not matter how or where. Yet online, the fabric of control over my social universe is more under the influence of the User Terms of Agreement than anything else. Will I lose any part at all of the personal freedoms won by my ancestors when I move my social activities online?

What defines any person by what they do online -- is this a business agreement based on User Terms of Agreement or something more defined by centuries-old social contracts and mores. Does freedom trump user agreements?

When would a concept like human freedom trump any user agreement, even if it is well documented in Delaware courts? Am I free to take my social graph data, that which defines me as me, with me anywhere online because it's an inalienable right? If so, I should not need any OpenSocial standards. It's self-frickin-evident! I should not need it in the User Terms of Agreement because it's long established as precedent.

But here's the rub that came to the surface this week when Microsoft crossed the Rubicon in the Web world with Live Search Cashback.

If users can and will assert that their social graph information is theirs by virtue of their culturally endowed freedom as a human, then what about their "commerce graph?" Who you are but what you buy is not too much different as who you are buy whom you associate with. Is commerce social, or is being social commerce?

My social graph contains my person meta data and my index of contacts, their context to me, and what actually defines me as a social creature. My commerce graph exists too, it's on Amazon, Walmart.com, and dozens of other vendors that know me by how I shop, learn, peruse, compare and perhaps buy. If I search as part of the shopping process then my commerce graph is on Google, Yahoo! and Microsoft (mostly on Google). I do commerce through my social activities, and I may want a social network with those I buy from and sell to.

All this user intentions and activities information is related and should not be separated. I should be able to mix and match my data regardless of the server. I reached those servers through my own device and browser, I made those clicks and punched those keys on my machine before they showed up on someone else's. I own my actions as a free human.

Microsoft is now finding ways to build out a business model via Live Search Cashback (with more to come no doubt) that takes your commerce graph and in essence, sells or barters it to the sellers of goods and services. I'm not saying this is in any way bad, or unproductive. It seems a logical outcome of all that has preceded it online. I expect others to follow suit.

But it does have me wondering. Who owns my commerce graph? Isn't it connected to my social graph? And if Microsoft can make money off of it, why can't I? Can I only make money off of my commerce graph when I use only a certain providers' services and only through its partners? If so, then it's not really my commerce graph. I'm only as free as the User Terms of Agreement say.

If my social graph is mine, and I can move and use it freely, then I surely will want the same to be true for my commerce graph (or any other user pattern graph). This is an essential unalienable right, but I think I want it in writing.

So, please, in order for any of us progeny of Western Civilization to use any of these burgeoning online services, can we have all of this freedom business spelled out clearly in the User Terms of Agreement?

Let's make it the first line item for all online agreements from now on: "Dear User, You are a human and you are free and so that also pertains to everything you do on our Web sites and services."

Until we have technical standards or neutral agencies to route and offer our control over our own use data, then we should all insist on better User Terms of Agreement, those that spell out the obvious. We are free, our data is ours, we should be able to control it.

ZoomInfo spins off 'bizographic' platform for controlled circulation online advertising play

Business information provider ZoomInfo has spun off its advertising business units in a new company, Bizo, offering a targeted B2B advertising platform, or what it calls "bizographic" advertising.

Privately held and venture-backed ZoomInfo, Waltham, Mass., announced a new set of business segments last fall, but has now taken the additional step of spinning the unit out. Former general manager and senior vice president Russell Glass will serve as CEO of the new company, which is expected to launch later this year. [Disclosure: ZoomInfo has been a sponsor of some BriefingsDirect B2B podcasts and videocasts that I have produced.]

Bizographic advertising, as ZoomInfo explains it, provides highly targeted demographic and behavioral advertising, allowing marketers to target their online advertising based on the audience of a site instead of the content.

For example, if a company wants to reach technology decision makers for an IT product offering or high-income individuals for a platinum credit card offer, it could use bizographic advertising to target directors of IT or CEOs respectively.

The field has heated up recently as CBS intends to acquire CNET (parent company of this blog's host, ZDNet) and it's BNET division, which also slices and dices audiences by work and functional definitions for the benefit of advertising targeting. Could Bizo also be on the block?

According to ZoomInfo officials, Bizo will continue to leverage the company’s understanding of business people and companies to allow marketers to target business users based on thousands of segmenting possibilities, including combinations of title, company, industry, functional area, company size, education, location, etc. The company expects over 20 million targetable business users in its network, when it launches.

Bryan Burdick, ZoomInfo's president explained the move:

"While B2B advertising is complimentary to ZoomInfo’s business, the market has been starved for the ability to target business professionals online. Creating a new business in order to meet that need was an ideal solution for us."

I gave my readers a head's up on what I called "controlled circulation advertising" last December, referring specifically to ZoomInfo:

ZoomInfo is but scratching the surface of what can be an auspicious third (but robust) leg on the B2B web knowledge access stool. By satisfying both seekers and providers of B2B information on business needs, ZoomInfo can generate web page real estate that is sold at the high premiums we used to see in the magazine controlled circulation days. Occupational-based searches for goods, information, insights and ongoing buying activities is creating the new B2B controlled circulation model.

ZoomInfo, a business information search engine, finds information about industries, companies, people, products and services. The company’s semantic search engine continually crawls millions of company Websites, news feeds and other online sources to identify company and people information, which is then organized into profiles.

ZoomInfo currently has profiles on nearly 40 million people and over 4 million companies, and its search engine adds more than 20,000 new profiles every day.

BriefingsDirect Insights analysts probe future of online advertising and find transactional lucre lurking

Listen to the podcast. Read a full transcript of the podcast.

The future of online advertising captures the headlines and attention when the likes of Microsoft courts the likes of Yahoo! And Wall Street still has a hard time figuring out how much Google is worth, based on just those little text ads next to search results.

But the future of online business has a lot more in store than advertising as we know it. The cloud compute fabrics now being constructed can support a lot more finely tuned matching of buyers and sellers, for consumers and businesses alike.

In the latest BriefingsDirect Insights Edition, Vol. 29, our experts examine the future of online advertising, and how the gathering cloud of services hosts like Google, Yahoo, Microsoft and Amazon will fare in the next era. The consensus moves toward an algorithmic meta-data driven future in which the winners will likely be taking a piece of many online transactions. This real-time marketplace can scale up to global mass media, and down to the audience and location of one.

So join us for our latest BriefingsDirect discussion and dissection of software, services, SOA and compute cloud-related news and events, with a panel of IT analysts. In this episode, recorded May 9, 2008, we gather noted IT industry analysts and experts Joe McKendrick, an independent analyst and ZDNet blogger; Tony Baer, principal at OnStrategies and blogger, and Phil Wainewright, independent analyst, director at Procullux Ventures and ZDNet SaaS blogger. This discussion is hosted, produced and moderated by me.

Here are some excerpts:

I really think people have got this completely the wrong way around. To focus on advertising is just so "0.0," to coin a phrase. Advertising exists only because we don't have the Web. Advertising is something the B2B market has to use through magazines, TV shows, or whatever, because they couldn't reach the consumer directly.

Now, the Web enables people to reach potential consumers and business prospects directly, rather than having to go through this advertising. So, the idea that the software industry is going to get funded by advertising has got it completely the wrong way around. Actually, what is going to happen is that business is increasingly going to use software in order to get closer to its consumers and its prospects. It can actually skip having to spend the money on advertising in order to make that connection.

Let me explain how that might work, instead of running adverts on sites that host discussions about bookkeeping services for small companies, for example, or instead of paying for search ads that pop up when people are searching on the Internet for bookkeeping services for small companies. As a small company, if you are using a financial application to run your company and you want some bookkeeping services, a bookkeeping service might pop up as a menu option in the software. You can sign up for and use an outsourced service over the Internet.

Instead of the bookkeeping service actually having to advertise on the search engines, in the publications, the discussion forums, and the social networking sites, they just pay to have their service made available within a software package that relates directly to the service that they are offering.

Therefore, it's not really advertising any more. It's just product placement at a point where the consumer or the business, in this case, actually needs that service.

Now hold on. So, what we were saying is that business activities and consumer activities more and more move online. Not only will we be doing away with the on-premises software business to a significant extent, but we will be doing away with the advertising business to a significant extent. Then, no longer will the entertainment businesses be glossing themselves with adverts to support themselves, but, increasingly, we'll see placement of services in the context of an activity or process, be it for consumer, entertainment, or business, in the same way that we might go to a shopping mall. People pay rent to the mall organizer, which draws people in, to put their wares out on the doorstep in front of the glass pane, in order for people to pick and choose.

So we are moving from an advertising to a placement or even visibility value, and it becomes rent to those who can draw the people in.

I think that there are some indications that the bloom is off the rose of social networking, both as a significant revenue generator, as well as an application development platform, at least for one of the social networks to become a development platform. That's from some recent revenue indicators from Google that its relationship with MySpace has not proven to be as monitizable as they expected.

Some recent statistic show that the types of applications that have been generated on Facebook are very tenuous, very one-off or fun things that would appeal to teenagers, but not with any significant depth or business value. The amount of activity from developers on Facebook has been slacking off, or at least plateauing, which is not a good indicator.

I remember back in the Web 1.0 boom and the dot-com boom, one of the things that was interesting was the discussion sites were very bad at generating ad revenue, because people didn't click on the ads.

The cost per thousand (CPM) for discussion sites, or for the discussion area of a site, was always a lot lower than other types of sites that were more information heavy. So it's old news about kind of sites where people follow what other people are saying.

People start chasing page views without remembering the reason that they are chasing is to generate value for advertises. They think, "We've got lots of page views," but they don't think back to whether those page views are going to deliver value.

Another memo from Ray Ozzie surfaced a couple of weeks back. You may recall the memo back in 2005, the famous "turn the world upside down" memo that talked about the advertising support of the online model for software. He kind of reinforced that with his latest memo.

It wasn't saying, "We must offer software advertising to support software," but it was more of a discussion about the social mesh, the community, the social networking, a paradigm that's emerging.

It's going to be interesting, but I think it's going to leach into the enterprise over the next couple of decades as well. I'm talking years from now, but it's definitely a model that will be sustaining consumer computing. We are seeing that emerging on the social computing side.

You start looking at migration to digital broadcasting. At some point -- I don't know the exact technology mix involved -- combining that with the Internet, there will be some way of micro casting. There may be a large population segment watching a specific program, but you maybe identified in terms of which demographic you specifically are. It's almost sounding 1984-ish.

I think Google actually realizes that and understands that. Therefore what they are aiming to do is get into TV advertising and all these other sectors. These are vendors that enable this kind of personalization of the message, being a conduit between the prospects and the business that's trying to sell to that prospect, and using software automation to enable that.

They are thinking beyond the old model of advertising, and I think that's Microsoft's problem. Microsoft hasn't really understood this, is still thinking about online advertising as a segment, and is not looking beyond the wider opportunity to use the automation on the Web as a way of just bringing buyers and sellers close together.

This requires a tremendous amount of cloud compute to the same levels we have seen in matching search criteria to results and then matching that to advertising. That advertising is then bought through an auction bid process among those seeking the highest placement. So, if we take that same model and apply it to all sorts of different needs and wants of business, personal, entertainment, and luxury across the board, what do we call it? It's not really advertising.

So, we think that advertising is in the rear-view mirror. We're going to move to a new era of something different or better, perhaps subscription as a business model, where you, in a sense, rent digital assets.

Listen to the podcast. Read a full transcript of the podcast.

Profits-strapped Sun continues decade-long pitch to developers on Java dominance

Leading up the the JavaOne developers conference, Sun Microsystems posted an embarrassing quarterly profit loss, is making OpenSolaris more open than ever, bringing the OpenSolaris platform value to the Amazon Web Services cloud, and is still using variations on the projectile theme to send T-shirts into the international crowd of eager Java developers.

Here in San Francisco on Tuesday, the 12th annual JavaOne developers conference opened, still drawing throngs of the Java devoted. It's clear from the gathering that Java tools, standards, middleware, runtime instances and distributed computing methods still dominate the non-Microsoft enterprise IT landscape.

Even as many other innovations over the past decade have encroached on and often out-delivered on the "write once, run anywhere" mantra, Java has done great things for the ability to develop and deploy complex, mission critical applications that leverage assets and resources across multiple tiers of computing. The n-tier computing model based on standards of interoperability is alive and well.

Java continues to play a binding role among hundreds of the most impactful IT vendors and their products -- from IBM to Oracle to SAP to developer consultancies of one busy person. Yet the arenas in which Java, now an open source reference model stack, dominates has is limits. Java's role in the future growth areas of Internet and mobile computing may well be as a foundational but necessary pivotal component.

The growing arenas of SOA, Web 2.0, cloud computing, webby applications design/delivery, OSGi container flexibility, PHP, Ruby on Rails, Adobe and Silverlight RIA/cross-browser development/deployment -- all are moving beyond the Java orbit.

At the same time, Sun has aligned itself to Java so much it recently changed its stock ticker to JAVA. Sun certainly helped create the Java community and value -- with a lot of help -- but then also alienated many Java contributors and market drivers as Sun sought to dominate Java and to mashup Java's success onto Sun.

So far, some 13 years in, Java remains consistently more successful than Sun.

And there was plenty more evidence at this year's show of the always-interesting relationship between Sun and Java. Sun's Executive Vice President for Software Rich Green, in his keynote, said that the Amazon's Kindle device is powered by Java, even the store that the content is bought from, uses Java. And we were given a demo of Kindle's prowess by Ian Freed, vice president of Kindle at Amazon.

Interesting to note that neither the device, nor the cloud services supporting the Kindle's content sales and syndication, comes from Sun as a business. But the software was developed on Java. So, Java=1.0, Sun=0.1.

Rikko Sakaguchi, senior vice president of Sony Ericsson, showed some neat mobile handset devices running cool video and media. Java's role is core to the handset and content and applications. Java helps make the software run on the device, and encourages partners to develop content and apps. "Java powers the device," said Green. But again Java and Sony Ericsson=1.0, Sun=0.1.

We were also showed a demo of a Facebook widget, Connected Life, that at first crashed, perhaps due to Moscone Center's Internet connectivity. But then it came back up. The widget was written in JavaFX, a Sun scripting language and runtime. The demo showed that the widget can run in a browser or as a rich Internet application using Java runtime, but that crashed too. And the widget can run on mobile devices too.

JavaFX also allows for video to run, 2D and 3D. There was some nice eye candy, but nothing you can't get with Adobe AIR/Open Screen, Silverlight, or QuickTime, among other RIA approaches.

So Java still helps "write once, run anywhere." Facebook and widget writers with Java=1.0, Sun=0.4 (if it sells the tools and licenses the Java runtime, and perhaps sells some servers to Facebook).

JavaFX Mobile will be forthcoming (spring 2009)to allow one runtime across the mobile and desktop tiers (fall 2008), said Green. A demo showed a mobile device running the Android emulator running Connected Life. Showing that JavaFX-written applications runs in many places, including mobile phones supporting Java.

Sun took some heat last year when it introduced JavaFX, but the "create-once, present anywhere" value is clearly a priority for Sun, as well as for Adobe, Microsoft and others. Sun will try and leverage the Java runtime installed base to be a player in this market, but it will be a real tussle given the competition

Glassfish kernal container at 98 kB will also support a wide swath of device types, said Green. He said Glassfish downloads are robust and global. Recent MySQL addition to Sun is getting 65,000 downloads per day, said Green.

NetBeans ecosystem is growing year over year by 44 percent, based on active users, said Green. And Java ships in the prominent Linux distributions, including Ubuntu and Red Hat, he said.

Sun's Project Hydrazine offers a platform for mashable services in the cloud, for "find, merge, deploy and share," said Green. It's due in later 2009. Another project, Project Insight, involves managing actions of users and data for ad placement.

Sounds like Sun is building an ad delivery platform, or at least to manage the meta data that supports ad placements. So Sun is competing with Google, Microsoft, and Yahoo! on ad infrastructure?

Sun CEO and President Jonathan Schwartz said battle is brewing for development platform for next generations of devices. "No matter where they are, Java will reach them," said Schwartz.

He likes the idea that apps running in a browser can be dragged off of the browser by the end user and onto the desktop of devicetop, thanks to Java on the device.

"And it will all be free," said Schwartz. So again, Java=1.0, Sun=0.x.

Neil Young joined the Sun executives on stage. Neil likes Blue-ray, and plans to deliver a multimedia anthology content offering via Blu-ray from his illustrious and prolific 45-year career.

"Just recently we've been able to bring this forward, ... it's really quite an experience," said Young, referring to using Blu-ray and Java, over past technologies, including DVDs.

And Java runs on Blu-ray devices! So Java+Neil Young=1.0, Sun=0.x.

Sun continues to try and define x as a major means to drive its future growth and profits. Let's hope that the past is not prologue on that account.

What MicroNoHoo means for enterprises

Now that Yahoo gets to remain a stand-alone company for a few more months, you may think that a battle royale between Microsoft and Google over the online advertising and social networking/communications services future has little bearing on enterprises. But you'd be wrong.

Here are seven reasons why:

• As we discussed Saturday on an emergency Gillmor Gang, this cloud wars business is largely about audience size, reach, and details on consumer needs/preferences. This audience intelligence value can be sold to advertisers, but also to enterprises, retailers and marketers as they seek to deliver their brands, goods and services more efficiently to users/buyers everywhere, every digital way. The cloud compute-based, automated, bid-auction-driven, buyer-seller matchmaker powerhouses will be necessary partners for most enterprises. In other words, you will be doing business with the top one or two cloud leaders.

• Nearly all enterprises and SMBs will continue to have large Microsoft product footprints in their organizations for at least several years. You want such a critical supplier to remain focused and fiscally healthy and to invest in current and future products -- or you have a Microsoft extraction problem. If Microsoft goes tits-up online, it will be a weaker company and therefore a weaker supplier. If Microsoft needs to spend lavishly on labor, acquisitions, technology and marketing to get to number one or number two online, it will be distracted from its business-focused businesses. In other words, enterprises spending on Microsoft now subsidize Microsoft's future needs to go cloud-strong, and perhaps enterprise software soft. You'll need to pay Microsoft on premises now so that you can pay Microsoft online later.

• As a hedge on the future, Microsoft is creating online strategy sets that can satisfy consumer online markets while also bringing purely online and "software plus services" hybrid services to SMBs and enterprises. How well these services compete with other offerings from other cloud-based services providers will determine how well these services perform for you as a company. In other words, your future in leveraging Microsoft's path from on-premises software provider to services provider hinges on how well Microsoft does online, which depends on audience and advertising/services (see no. 1). It will at some point behoove Microsoft to push you to its online business services, probably by making on-premises stuff expensive. But you will have more choice over your online suppliers than your did on your PC and department server supplier.

• An emboldened and stronger Google, resulting from a hobbled Yahoo and a runner-up Microsoft, means that more partners and applications will emerge around the Google ecology. We'll see more deals with Google from Salesforce.com, IBM, Apple, mobile handset providers, mobile Internet device makers, and probably the major media companies (lacking a choice). This just makes Google stronger, more diversified, able to spend $1 billion per quarter on capital investments, able to woo the best engineers, and a darling of online start-ups and entrepreneurial developers and content creators. This means Google is not only a channel for enterprises to reach consumers, it increasingly becomes the provider or channel for more and more business services to more types of businesses in more global locations.

• Microsoft is becoming more open. In order to catch up to Google and other ad-driven cloud compute-based providers, probably without Yahoo's audience clout, Microsoft will need to become even more open on standards. That's good news for enterprises. Microsoft is loosening up its strangle-hold on enterprises through its self-imposed standards. More importantly, Microsoft is giving its developers more choice. This is a slippery slope, because at some point Microsoft gets so open that the stickiness and lock-ins lessen so that the Windows runtime (and associated license sales) can be swapped out for open source or virtualized runtimes. Developers can pick and choose what Microsoft stuff they want to use, and then seek cheaper alternatives. To seduce developers and start-ups from Google, Microsoft must continue to get open in more ways, aiding the open source evolution and maturity, and giving enterprise more choices and lower total IT costs.

• Requirements on the PC change and shift. As Google and Yahoo drag Microsoft into a more pure-Web-play, and seek to offer attractive online alternatives to "software plus services," enterprises can re-evaluate their hardware spend and requirements on the desktop. Apple will also offer compelling alternatives for the full Windows PC experience. So enterprises, already resisting the hardware upgrade costs and help desk hit from moving to Vista, may benefit from Microsoft's need to "go Webby" because their hardware requirements will amount to supporting a browser mostly, at least for some users like call centers. This also opens up the market for use of more thin clients, as well as more use of desktop-as-a-service and virtualized app delivery services. Dumb terminals are not dumb if you need to pay for them and support them. By backing off of client-server, Microsoft will cut your PC device total costs. And no more audit threats!

• Microsoft's stock performance in the cloud era will depend less on its business revenues and more on how well it competes against Google, Yahoo et al. In the post Yahoo acquisition saga (volume 1), Microsoft may well see its value as a corporation decrease, even as recessionary pressures build against growth rates for its consumer and business product lines. Microsoft could have fewer resources to devote to its enterprise businesses (see above). At the same time, IBM, Oracle, Red Hat, and HP are firing well on their enterprise business cylinders, and they may see Microsoft blood in the enterprise sales waters. As an enterprise buyer, ask now and for the foreseeable for discounts and better terms from those enterprise vendors that compete directly with Microsoft. Microsoft's sales reps may not be able to respond like they used to. Microsoft's enterprise competitors will seek to take some oxygen from the field in the next several quarters. This is good news for enterprises, and SMBs.

So there are a number of reasons for enterprises and IT departments to be aware of and concerned about what goes on between Microsoft and Yahoo, and -- most importantly -- Microsoft and Google.

Thought leadership grows around advancing 'WOA plus SOA' as enterprise-cloud duo

Respected developer, adviser and thought leader Dion Hinchcliffe has posted a watershed blog that develops a compelling rationale for Web Oriented Architecture's (WOA's) advancing role in enterprises.

The logic is not to supplant or dismiss Service Oriented Architecture (SOA), but rather to examine how WOA -- also known as lightweight, Web 2.0 applications development and deployment -- should provide an onramp to and stepping stone for SOA generally. WOA and SOA together -- in a harmony that unlocks both the power of cloud computing and of traditional enterprise architectures -- presents a very interesting future indeed.

Dion builds on recent posts by Dave Linthicum, Joe McKendrick, Tony Baer, myself, Phil Wainewright, and some reported findings by Burton Group’s Anne Manes. Many others have been also developing concepts and methodologies for providing the means for enterprises to exploit pure web resources for advancing developer productivity and business process extensibility.

Dion's right. Enterprises don't need to wait four years to build out and culturally align to SOA, not when they can proceed to WOA and continue on their long-term cadence toward building what IBM calls the federated "ESB backplane" for managed business services.

WOA simply allows for many productive SOA activities now -- without the huge investment, the wrenching cultural shifts, and the required several years of IT-business transformation. WOA plus SOA forges the mentality of managed cloud-based services and continued on-premises infrastructure exploitation right away.

WOA plus SOA for even modest B2E, B2C, and B2B business processes development and augmentation is just too good a deal to pass up, and it contributes to longer-term and perhaps more highly structured internal SOA infrastructure values and practices.

Enterprise marketers grappling with huge media and online outreach change, cannot wait years to gain the ability to foster, participate, share and satisfy the needs of socially aggregated communities. Sales forces can not go through IT and its SOA roadmap to combine data and market analysis effectively. Product designers can't managed a global supply chain using ERP alone. Procurement officers can't do more for less based on EDI alone. Integration can not be accomplished for business ecologies based on middleware designed for point-to-point EAI.

The crucial functions of sales, marketing, just-in-time supplier integration, and just-right procurement can't wait for SOA. They can make use now of WOA plus SOA.

As Dion says:

So if so-called Web 2.0 companies — which value participation almost above all else, both from consumers and organizations that want to integrate them into their offerings — are seeing highly desirable levels of adoption and significant ROI, how can this help understand how to improve our efforts in the enterprise? Most new Web 2.0 applications start out life with an API since getting connected to partners that will help you grow and innovate is a well-known essential for success online today. Despite years of SOA, we still don’t focus on consumption and openness as fundamentally essential characteristics to building an internal partner ecosystem that have beat a path to your door to use the services you are offering to them to build upon.

And as I've said, SOA lacks the political center of gravity and heft to spur adoption through grassroots demand. The critical constituencies of users/workers, sales, marketing, product development, and procurement -- and perhaps quite a few developers -- are not demanding SOA. It remains too abstract to them, while what they see possible on the web is tangible, understandable, seemingly attainable.

SOA may be the right thing to do, but ushering in its adoption broadly and deeply is proving arduous and stifles the expected ROI, which erodes the acceleration of further adoption. WOA plus SOA can help solve this.

WOA has evolved via massive scale trial-and-error, and so has been designed through viral adoption, user pull, self-help and with self-qualification of real-time productivity in mind. It works because it just works, not because it's supposed to work, or because someday it will work. As Dion says, "And these new models intrinsically take advantage of the important properties of the Web that have made it the most successful network in history."

Cloud providers and mainstay enterprise software vendors could make sweeter WOA plus SOA music together. They may not have a choice. If Microsoft acquires Yahoo!, there will be a huge push for Microsoft Oriented Architecture that will double-down on "software plus services." And MSFT combined with Yahoo would have an awful lot in place to work from -- from the device and PC client, to the server farm, business applications, developer tools and communities, and ramp-up of global cloud/content/user metadata resources. I think Microsoft already understands the power of WOA plus SOA.

Therefore Google, Amazon, Apple, eBay, and perhaps some of the traditional communications service providers and media companies will need to form natural and more attractive alternatives ... fast. There is no reason why IBM, HP, Oracle/BEA, TIBCO, and SAP should not seek out the consumer-facing cloud partner that can bring the WOA to their SOA.

They will need cloud partners that best further their business interests, and the productivity interests of their online clients and users. Microsoft will be offering some significant enticements along these lines -- and once again getting between the providers and the users, with a cash register going cha-ching, cha-ching all the while.

Enterprises and software vendors need WOA plus SOA, if for no other reason than Microsoft needs WOA plus SOA even more.

[Disclosure: HP and TIBCO are sponsors of BriefingsDirect podcasts.]

Microsoft-Yahoo! combination could yield an Orwellian Web world

About 10 years ago, we used to ask Jim Barksdale, then head of Netscape, a stock question during news conferences. Did you bag any "default browser" deals lately? Inevitably Jim would demur and say they were still trying.

Those were the days when the light was swiftly fading from the Netscape's browser's beacon, and Microsoft's newcomer (and inferior) browser, Internet Explorer, was bagging the default status for PC distributors and online services. That was enough to cement Microsoft's dominance of the Web browser market globally in a few short years.

The fact is, in an online world, convenience is the killer application. For most folks starting up their PCs, whatever comes up on the screen first and easiest is what they tend to use. That's why we have craplets, it's why Netscape bit the dust, and it's why Microsoft's unsolicited bid to buy Yahoo! is Redmond's last grasp at their old worldwide Web dominion strategy. The only way for Microsoft to hold onto its PC monopoly is to gain a Web monopoly too.

And Microsoft would have a good shot at cementing those two as a monopoly with the acquisition of Yahoo!. Because for the vast majority of people who simply do no more than fire up their PCs, click to start their browsers, open a Microsoft Word document, an Outlook calendar entry, an online email or instant message -- they will entering (mostly unbeknownst to themselves) a new default Web services environment.

With both Yahoo!'s and Microsoft's directories of users integrated, the miracle of single sign-on makes them in the probable near future part of the Microsoft advertising network, the Microsoft ID management complex, the Microsoft "software plus services" environment -- all by default, all quite convenient. And once you're in as a user, and once the oxygen is cut off to the competition, the world begins to look a lot more like Windows Everywhere over time.

Indeed, the proposed Microsoft takeover of Yahoo! is really the continuation of the failed (but strategically imperative) Hailstorm initiative. You might recall how Microsoft wanted to use single sign-on to link any users of Hotmail, or Instant Messanger, or Microsoft's myriad Web portals and services (MSN) to all be onramps to the same federated ID management overlay to reach all kinds of services. It was the roach motel attempt to corner the burgeoning network -- use Internet protocols, sure, but create a separate virtual Web of, by, and for Microsoft. The initiative caused quite a donnybrook because it seemed to limited users' ability to freely navigate among other Internet services -- at least on a convenient basis (and for a price).

So Microsoft's first stab at total Web dominance worked at the level of gaining the default browser, but failed at the larger enterprise. Microsoft thought it was only a matter of time, however. And it planned prematurely to begin pulling users back from the Web into the Microsoft world of single sign-on access to Microsoft services -- from travel, to city directories, to maps, to search. Microsoft incorrectly thought that the peril of Web as a Windows-less platform had been neutralized, it's competitors' oxygen cut off. Microsoft began to leverage its own Web services and monopoly desktop status to try and keep users on its sites, using its Web server, and its Web browser and its content offerings -- making for the Microsoft Wide Web, while the real Web withered away for use by scientists (again).

But several unexpected things happened to thwart this march into a Big Brother utopia -- a place where users began and ended their digital days (as workers and consumers) within the Microsoft environment. Linux and Apache Web Server stunted the penetration of the security risk Internet Information Services (nee Server) (IIS). AOL created a bigger online home-based community. Mozilla became a fine and dandy Web browser alternative (albeit not the default choice). Java became a dominant language for distributed computing, and an accepted runtime environment standard.

Dial-up gave way to broadband for both homes and businesses. The digital gusher was provided by several sources (many of which were hostile to to Microsoft and its minions). Software as a service (Saas) became viable and Saleforce.com succeeded. And, most importantly, Google emerged as the dominant search engine and created the new economics of the Web -- search-based juxtaposed automated link ads.

Microsoft had tried to gain the Web's revenues via dominance of the platform, rather than via the compelling relationship of convenience of access to all the relevant information. Microsoft wanted Windows 2.0 instead of Web 2.0.

Social networks like MySpace LinkedIn, and Facebook replaced AOL as the communities of choice. And resurgent IBM and Apple were containing Microsoft at the edges, and even turning their hegemony back meaningfully. Mobile networks were how many of the world's newest Internet users access content and services, sans a Microsoft client.

And so only a mere three years ago, Microsoft's plans for total dominance were dashed, even though they seemingly had it all. Just like Tom Brady, they just couldn't hold on to cement the sweep, and their perfect season ended before the season itself was over. What Microsoft could not control was the Internet, thirst for unfettered knowledge, and the set of open standards -- TCP/IP & HTML -- that sidesteps Windows.

Yet at every step of the way Microsoft tried to buy, bully, create or destroy in order to control the onramps, applications, developers, content, media, and convenience of the Web - even if the genie was out of the bottle. They did their own dial-up networks, they had proxies buy up cable franchises, they tried to dominate mobile software. They created television channels, and publishing divisions, and business applications. They largely failed against an open market in everything but their original successes: PC platform, productivity apps, tools, and closed runtime.

And so the bid for Yahoo! both underscores that failure as well as demonstrates the desperate last attempt to dominate more than their desktop software monopoly. This is a make or break event for Microsoft, and has huge ramifications for the futures of several critical industries.

If Redmond succeeds with acquiring Yahoo!, imagine a world that was already once feared, back some 10 years ago. That is an Orwellian world in which a huge majority of all users of the Internet globally can -- wittingly or otherwise -- only gain their emails, their word processing, their news, their services, their spreadsheets, their data, their workflow -- all that which they do online essentially -- only by passing through the Microsoft complex and paying their tolls along the way.

All those who wish to reach that mass audience, be it on a long tail or conventional mass markets basis, must use what de facto standards Microsoft has anointed. They must buy the correct proprietary servers and infrastructure, they must develop on the proscribed frameworks. They must view the world through Microsoft Windows, at significant recurring cost. Would Microsoft's historic economic behavior translate well to such control over knowledge, experience, and personal choice?

This may sound shrill, but a dominant federated ID management function is the real killer application of convenience that is at stake today. Google knows it, and quietly and mostly responsibly linked many of its services to a single sign-on ID cloud. When you get a gmail account, it becomes your passport to many Google services, and it contains much about your online definition, as well as aids and abets the ability to power the automated advertising juggernaut that Microsoft rightly fears. But at least Google (so far) lets the content and media develop based on the open market. They don't exact a mandatory toll as much as take a portion of valued voluntary transactions, and they remain in support of open standards and choice of platforms.

We now may face a choice between a "do no evil" philosophy of seemingly much choice, or an extend-the-monopoly approach that has tended to limit choice. The Microsoft monopoly has already needed to be reigned in by global regulators who fear a blind ambition powerhouse, or who fear unmitigated control over major aspects of digital existence. Orwell didn't know how political power would be balanced or controlled in his future vision, perched as he was at the unfortunate mid-20th century.

How the power of the Internet is balanced is what now is at stake with the Microsoft-Yahoo! bid. Who can you trust with such power?

Microsoft's Yahoo bids speaks as much of failure as opportunity

Is Microsoft buying Yahoo! because it has succeeded in its own Windows Everywhere strategy and 12 years of lackluster performance on the Web?

Is Microsoft trying to buy Yahoo! because Yahoo! is seemingly at a weak point, unable to dominate in the key areas of search, advertising, and media?

Nope, Microsoft is trying to buy Yahoo! because neither Microsoft nor Yahoo! is succeeding on the Web in the ways that they should. And it's not just Google that has an edge: Consider Apple, eBay, Salesforce.com, Facebook, MySpace, Disney.

And how much sense does putting Microsoft and Yahoo! together make now? Not as much as it did two years ago when Yahoo! was stronger and Google was weaker. We should also thrown in that Apple and Amazon are also much stronger now than at any time in the past. The media conglomerates are starting to figure things out.

So once again, we have Microsoft throwing outrageous amounts of money late at what should have been an obvious merger for them a long time ago. I recall is discussion on the Gillmor Gang podcast at least two years ago that wondered when -- not if -- Microsoft would buy Yahoo! Most of those on the call, including me said it was the only outcome for Yahoo! and the only way for Microsoft to blunt Google.

But that was then, and this is now. So the burning question today is not whether a Microsoft-Yahoo! mashup makes sense -- it has made sense for years. The question is whether it makes sense now, at this outlandish price, and if this in fact marks the point where Microsoft makes a desperate and devastating mistake.

Is the Yahoo! cloud built on Windows? Nope. So the model of Windows Everywhere is junked. Accessing Yahoo! services only requires a browser -- so much for the "software plus services." Will the burgeoning Microsoft cloud and the aging Yahoo clouds work well together? Will one be able to absorb the other. I say no to both. These will be separate and ill-fitting infrastructures. Will the Redmond and Silicon Valley cultures work well, or will huge layoffs in California portend even more gridlock in the eastern Seattle suburbs?

What might be even worse -- Microsoft make try and require all the Yahoo! users to get better service via their clients. Would they be deluded enough to try and tie Microsoft client-side software to Yahoo! web services? Watch the flood to Google, if they do. Watch for Google to scream about monopoly abuses if they do. [Good thing the new mega mother of all hairballs will be under anti-trust review for a bit longer, eh?]

Does this mean what Microsoft was wrong about open source too? Because Yahoo! has built its infrastructure on a lot of open source code, including its cloud infrastructure keystone Hadoop. So Microsoft will own one of the world's most massive open source distributed datacenters. As an enterprise, should you choose a Windows platform -- or Microsoft's new choice to win on the web -- open source?

Right, so for the need to win in search, media and adverting, Microsoft is now selling its Windows Everywhere soul. They have been handing you an expensive line of proprietary crap for years, and by buying Yahoo! and its totally different approach to Web infrastructure -- they admit it.

What's more, will the world like getting their news from Microsoft? As a user, which search engine will I get when I log in to Yahoo! or MS Live? Which email will I get when I log in? Can he Yahoo! directory merge with the Live, nee Hotmail, directory? Which company will be the one I think of as the "brand"?

This spells a significant period of confusion. And that's for consumers, IT buyers, enterprise CIOs, and advertisers as well.

And for the enterprises that have invested their fates in Microsoft infrastructure, how will they get their Web services? Will it be Yahoo! for the consumers, and Microsoft Live or the business folk? Or vice versa? Both, a mish-mash? Yikes!

What's more, the Microsoft-Yahoo! amalgamation will become the enemy of the media companies worldwide. There was a certain détente between Microsoft alone and Yahoo! alone and the media world. No more. And Google could position itself as the happy medium (pun intended).

This proposed deal smacks of desperation, not multiplication of growth opportunities. But the price premium probably makes it inevitable. The only way to make this work is for Microsoft to spread itself more thickly as a media, advertising, technology, services, platform, tool -- everything to everybody. The risk is to be less and less of anything to anybody.

Microsoft is perhaps perceiving itself as pouncing on Yahoo!, given its current disarray. There's the weird board action, and the layoffs, and the performance issues. But this is weakness buying weakness, with a large period of confusion, dilution of value and brands, and risky alignments of cultures and technology.

And this from Microsoft - the hithertofore conservative acquirer that doesn't go for the big, blow-out acquisitions. Well, this is the big blow-out media merger of the year. Seems that going in the other direction, of splitting Microsoft up into logical sections that can operate and compete on their own, is out. For some time, no doubt.

The biggest risk is that if this ends up the mess it appears, that it just may end up just driving more consumers, advertisers, and businesses into the waiting arms of the singularly understood and focused Google, Apple, and IBM. It could well backfire.

And I for one will miss both Yahoo! and Microsoft because whatever they cobble together from the two won't be able to do the same that either did separately. It will be hard to define just what it is ... I think I'll call it Amalgamated Digital. It certainly isn't "micro," and it's not "soft." Any yahoo can see that.

Wind River's John Bruggeman on Google Android and the advent of mobile internet devices

Listen to the podcast. Or read a full transcript.

The Android open source mobile platform made a splash in October when Google announced it, along with the Open Handset Alliance (OHA). An Android software development kit (SDK) came on Nov. 12, and the first Android-based open source platform mobile phones are expected in mid-2008.

The impact of such a platform on mobile phones and carriers has been roundly debated, yet the implications for an entirely new class of mobile internet devices has received less attention.

In this podcast, John Bruggeman, chief marketing officer of Linux software provider Wind River Systems, digs in to the technical, business model and open source implications of Android and OHA -- but he goes a step further.

Android will lead, he says, to a new class of potentially free mobile internet devices (MIDs) that do everything a PC does, only smaller, cheaper and in tune with global mobile markets that favor phones over PCs for web connectivity. [Disclosure: Wind River has been a sponsor of BriefingsDirect podcasts.]

Listen as I interview Bruggeman on the long-term disruptions that may emerge from the advent of Android.

Here are some excerpts from our discussion:

What’s new [in Android] is the business models that open up, and the new opportunities. That’s going to fundamentally change the underlying fabric of the mobile phone space and it’s going to challenge the traditional operators' or carriers' positions in the market. It’s going to force them, as the supply chain, to address this. ... Carriers potentially are going to have to embrace completely new revenue and service models in order to survive or prosper.

Clearly, the great promise of the Google phone platform is aimed more at an ISP mentality, where they make money on how we provision or enable new services or applications. ... the traditional carrier is a more connection-based business model. You pay for connection. This model will clearly evolve to be some sort of internet model, which today is typically an ad revenue-share model. That’s how I see OHA will play out over time. We’re going to have to adopt or embrace an ad revenue-share model.

There might be revenue that’s derived through connectivity, but increasingly we're seeing the big money around the monetization of advertising attached to search, advertising attached to specific content, and advertising attached increasingly to mobile location and presence.

I don’t think that the extreme is that improbable, that the actual connection price would go down to zero. I could have a mobile phone and pay a $0 monthly fee. ... The ad revenue is where the real dollars are here, as well as all the location-based value that you can do. This is the true delivery on the promise of the one-to-one marketer's dream. You’ve got your phone. I know exactly where you are.

It would be naïve to say the technology issues are completely solved, but I think a lot of the hard problems are understood, and there is a path to solution. Those will play out over the next 12 months. I see a clear road to success on the technology side. It will be easier for the technologists to overcome the obstacles than it will be for the business people to overcome the new models in an open source world.

There’s going to be a lot of pressure to drive down that connectivity price really quickly. I say that because I think you can’t ignore the overtones of Google being willing to buy their own bandwidth and become their own carrier. That threat is out there. As a carrier, I've either got to embrace or fight -- and embrace seems most logical to me.

These devices, the converged mobile device in particular -- something like an iPhone -- strikes me as a stepping stone between a traditional PC, as we know it, and some of these mobile devices.

If I can get a lot of what I get through the PC free or low-cost through one of these mobile devices, the only real difference is the size of the monitor, keyboard, and mouse. Isn’t there an opportunity in two, three, or four years that I might say, “I don’t need that PC and all that complexity, cost and so forth. I might just use my mobile device for almost all of the things I do online?"

PC manufacturers and those that are the traditional part of that supply chain are threatened by that every day now. You've hit it on the head. There’s an emerging market. Maybe the most important technology market to observe right now is the mobile Internet device (MID).

Many analysts are starting to pick up on it, and it could be viewed as the next generation of the mobile phone. But I think that’s underselling the real opportunity. If you look on the dashboard of your automobile, the back of your airplane seat, everywhere you go and everything you touch, it is a potential resting place for a MID with a 4x6 screen or a 3x5 screen, or all different kinds of form factors. That kind og use gives you the experience that is the eventual promise of the Android platform.

We all should start thinking about and talking about the MID market pretty quickly. ... The pie that we're defining isn’t really just mobile internet or voice, presence, and mobile commerce. It’s really the whole internet.

The first thing is we need to get some Android-based phones out there. Some time next year, you're going to see the first phones and that’s when we're actually going to have to see the operators who offer those phones address all the business model issues that you and I've have been talking about today.

So the next big step is that it’s got to move from the talk about to the reality of "here are the phones," and now we're going to have to resolve all these issues that are out there. That's not years away -- that’s next year.

Listen to the podcast. Or read a full transcript.

ZoomInfo offers more evidence of a 'controlled circulation' advertising benefit quickly emerging on the web

Get ready for new "controlled circulation" models on the web, ones that target you based not on your preferences for music or soft drinks -- but on what you consume in your occupation. Think of it as B2B social networking.

First, some set-up ... One of the great media inventions of the mid-20th century was the notion of affinity-based, controlled circulation publishing. Those creating magazine titles that catered to defined groups -- rather than mass media volume plays like network television -- went granular.

By focusing on concentrated audiences, these publishers walled up "universes" of buyers that passionately sought specific information as defined by discrete hobbies or occupations. Bill Ziff Jr. honed in on the hobbies, and grew a media empire on titles that linked up dedicated buyers -- of things like electronics kits, models, automobiles (and the jackpot, personal computers) -- to the sellers of the actual goods behind the passion. The ads inside these special interest pubs generated high premiums, based on the tight match between engaged (and well monied) buyers and drooling sellers.

Norm Cahners took the model in the direction of industrial business niches. He provided free monthly magazines based on slices of industrial minutiae that delivered useful albeit dry information to those specifiers of myriad corporate goods and services. You order gizmos for your buggy whips? You probably spend millions of dollars on procurement per each kind of good per year. Let me introduce you to some sellers of those goods who want to make you a deal.

The Cahners Publishing magazines -- on things like plastics use, integrated circuits developments, materials handling and design engineering -- were free to readers, as long as those readers identified themselves as corporate decision makers with budget to spend. Again, high ad premiums could be charged by linking engaged readers (with huge annual budgets) with advertisers who needed reach hard-to-find and shifting groups of corporate buyers.

Soon the burgeoning lists of these readers, sliced and diced by buying needs, and sanctified by audit bureaus as valid (mostly), became very, very valuable. As a controlled circulation publisher, if you had the top one of two monthly magazine titles that generated the definitive list of those buying all the industrial values, say, in North America -- you were sitting pretty. You controlled the circulation, defined and refined the audience, and so told the sellers how much they needed to pay you to reach those buyers. You priced high, but still less than these sellers would need to spend to send a warm body carrying a bad into each and every account (on commission).

In effect, the controlled circulation publishers collected straight commissions on billions of dollars in commercial and special interest goods being bought and sold. They were a virtual sales team for all kinds of sellers. Editorial was cheap. Life was good.

And then 10 years ago the Web came along and pretty much began to blow the whole thing apart. Engaged users started using Web search, and explored their vendors' web sites on their own. Vendors could reach users directly, and used their websites as virtual sales forces too. Soon there were wikis that listed all the sellers of goods in certain arenas of goods and services. Those seeking business or hobby information could side-step the editorial middleman and go direct to the buying information on goods and services they wanted. We're only into the opening innings on this, by the way.

But the same disruption that plagues newspapers like the San Jose Mercury News and The Boston Globe -- both of which should be doing great based on their demographic reach -- is undermining the trade media too. It's the web. It's search. It's sidestepping the traditional media as a means to bind buyers and sellers. The web allows the sellers to find the buyers, and the buyers to find the sellers with less friction, less guessing, less cost. Fewer middlemen.

And this means the end of controlled circulation has we have know it. ... Or does it?

Just as the web made has made it a lot harder for media companies to charge a premium for advertisers to reach a defined universe of some sort, the web could also allow for a need breed of controlled circulation, one that generates "universes" on the fly based on special interest search, not based on special interest magazines.

The current web ad model has evolved to be based on blind volume display ads, with the hope of odd click-throughs, usually of less the 0.5 percent of the total banner ads displayed. Advertisers know exactly what their ad dollar gets them, and it's not enough. Even when seekers click on ads, they usually get sent to a home page that was just as easily reached through keyword searches from a web search provide (for free), based on their real interests. Enter Google. And you know the rest.

Why the history lesson? Because we're now beginning to see some new variations on the controlled circulation theme on the web that create additional models. Controlled circulation could be back. It that could mean much bigger ad bucks than web display ads or even key-word-based ads can generate. It's what has Microsoft gaga over Facebook. And News Corp. gaga over MySpace. And Viacom beside itself because it has no such functional base yet.

Controlled circulation is coming to the web on one level via social networks, mostly for consumer goods and services -- sort of what Bill Ziff did for hobbyists in the 1950s and 1960s. Social networks like Facebook and MySpace endear their member users to cough up details about themselves -- just like controlled circulation publishers used to require for readers to get free magazines on specific topics. Based on the need to expose yourself on a social network to get, well ... social ... you therefore provide a lot of demographic details that can then be carved up into the equivalent of controlled circulation universes. Based on your declared consumer wants, fad preferences, age and location, you give advertisers a means to target you.

This model is only just now being probed for its potential, as the Beacon trial-and-error process as Facebook these days attests. Soon, however, an accepted model will emerge for binding consumers and sellers of goods and services, a model better than banner ads, one that can go granular on user preferences (but not too granular, lest privacy bugaboos rear their paranoid heads). When this model is refined, everyone from Microsoft to Yahoo to Google and Time Warner will need to emulate it in some fashion. It will be the third leg on the web ads tool: display, search-based, and now reader-profile constructed controlled circulation.

Which brings me to ZoomInfo. (Disclosure: ZoomInfo has been a sponsor of some BriefingsDirect B2B podcasts and videocasts that I have produced). What's so far missing in all of the Facebook hysteria is the Norm Cahners part, of how to take the emerging controlled circulation web model and apply it to multi-trillion dollar B2B global markets. How to slice and dice all the companies out there with goods and services you -- as a business buyer -- need to know about? Instead of the users giving up profile information on themselves as a way of providing profile-constructed controlled circulation, why not let the companies provide the profiles that the users can access via defined searches based on their actual needs?

Wade Rouch over at Xconomy gives us a glimpse of this model based on what ZoomInfo is now doing with "business demographics" or what Zoom calls Bizographics. This is the B2B side of what social networks are doing on the consumer side, but with a twist. By generating the lists of businesses that provide goods and services sough via a search, and even more lists of the goods themselves, users can educate themselves and the bond between B2B buyers and sellers is made and enriched. All's that's needed is the right kinds of searches that define the universe of providers that users can then explore and engage with.

ZoomInfo is but scratching the surface of what can be an auspicious third (but robust) leg on the B2B web knowledge access stool. By satisfying both seekers and providers of B2B information on business needs, ZoomInfo can generate web page real estate that is sold at the high premiums we used to see in the magazine controlled circulation days. Occupational-based searches for goods, information, insights and ongoing buying activities is creating the new B2B controlled circulation model.

What's more, these defined B2B universes on the fly based on occupations and buying needs amounts to giving more power to the users via what Doc Searls correctly calls Vendor Relationship Management. It's a fascinating concept we'll be seeing a lot more of: Matching buyers and sellers on the web based on their mutual best interests. Mr. buyer, please find Mr. Seller -- on your terms, based on your needs.

IBM's 'Blue Cloud' signals the tipping point for enterprise IT into services model

I recall a front page story I wrote for InfoWorld back in 1997. At the time there were still plenty of naysayers about whether websites were a plaything or a business tool. There was talk of clicks and mortar, and how the mortar would always determine business outcomes.

And then General Motors -- the very definition of a traditional big business -- unveiled an expansive website that fully embraced the Internet across its businesses. We at InfoWorld wrote about GM's embrace of the Web then as a corporate tipping point, from which there was no going back. Clicks became mainstream for businesses. Case closed.

And so it is today, with IBM's announcement of Blue Cloud -- an approach that not only talks the services talk, but walks the services walk. We are all at the tipping point where IT will be delivered of, by and for services. If Google, Yahoo!, Amazon and eBay can do what they do with their applications and services, then why shouldn't General Motors? Or SMB XYZ?

So the king of mainframes and distributed computing moves the value expectations yet again -- to the pre-configured cloud architecture. The standards meet the management that meets the utility that gets the job done faster, better, cheaper. Slap an IBM logo on it and take it to the bank.

The future of IT is clearly about the efficiencies and agility of the grid/utility/Live/fabric/cloud/SOA/WOA thing. There can be no turning back. I believe Nick Carr is coming out with a book on this soon, The Big Switch: Rewiring the World, from Edison to Google, and IT is by no means irrelevant this time.

IBM's Blue Cloud, arriving in the first half of 2008, will use IBM BladeCenter servers, a Linux operating system, Xen-based virtualization and the company's own Tivoli management software. Nothing about this is terribly new. Sun Microsystems has been talking about it for years. HP is well on the way to making it so, given its Mercury and Opsware acquisitions. Citrix has an eye on this all too. Red Hat has its approach. Amazon is game. Google is riding the wave. Even Microsoft has hedged its bets.

But the tipping point comes when IBM's global clout in the major accounts is brought into play. The sales force will feel The Force, Luke. IBM will march in and let your IT services architecture mimic the service providers' basic set-ups too. You gain the ability to integrate your internal services with those of your partners, customers, suppliers, vendors and providers. Next will come an ESB in the cloud, no? This makes for a fertile period of innovation.

Perhaps IBM will also cross the chasm and host their own services -- not applications per se, but commodity business functions that ISVs, providers, and companies can innovate on top of or in addition to. Google has maps, but IBM has payroll, or tax returns, or purchasing. Could be quite interesting. I would expect IBM to offer ads in these services too some day (come on, Sam, it's not so bad).

And that also means you'll be provisioning IT internally and externally as subscription services. Charge-backs and IT shared services models become the standard models across both supply chains as well as value-added sales activities. Businesses will determine their margins based on the difference between what they pay for IT services (internal or external) plus the cost of the value added services -- and then what they charge on the receiving end. High-volume, recurring revenue, fewer peaks and troughs.

This is really the culmination of several mega trends in two major areas: IT and economics of online commerce. The trends that support this on the IT side include virtualization, high-availability clustering, open source platforms and tools, industry standard multi-core hardware, storage networks, Java middleware, WAN optimization, data services and federation, scripting language maturity -- as well as application consolidation and modernization, datacenter unification, low-energy-use dictates, and common management frameworks. The result is something like Blue Cloud.

The online economics trends include ecommerce, advertising supported Web services/media/entertainment, pay as you use services and infrastructure as a service, and - of course -- free code, free tools, free middleware, free stacks. It's all free -- except the service, maintenance, and support (otherwise known as a subscription).

And if one major corporation buys into IBM's Blue Cloud and they deploy in such a way as to exploit all these mega trends -- while counting on IBM as the one throat to choke as the means to reduce change risk -- what happens?

Well, they might see total IT operating costs go down by 40% over a few years, while also able to enjoy the productivity benefits of SOA, SaaS, services ecologies like Salesforce.com, and therefore become more agile in how they acquire and adjust their business processes and services delivery. You might get to do more for a lot less. And a lot less IT labor.

And so our Blue Cloud-user corporation has their competitors who will, no doubt, need to follow a similar course, lest they be set on a path of grave disadvantage due to higher costs and an inability to change as quickly in their markets. If a mere 50 of the global 500 move to a Blue Cloud or equivalent, it would be enough to change the game in their respective industries. We're seen it happen in financial services, retail, music and media, and IT itself.

And so large enterprises will need not just make decisions about technology platform, supplier, and computing models. They will need to make bigger decisions based on broad partnerships that produce services ecologies in niches and industries. For an enterprise to adopt a Blue Cloud approach is not just to pick a vendor -- they are picking much more. The businesses and services and hosting all become mingled. It becomes more about revenue sharing than just a supplier contract.

Yes, Blue Cloud and many other announcements and alignments in 2007 point to a 2008 in which a services ecology evolves and matures for many industries. The place where differentiation matters most is at the intercept of proper embrace of the service model, of picking the right partners, and of exerting leadership and dominance of best practices within a business vertical or niche. You'll have a different relationship with your services partner than you do with your IT vendor. IBM will show you the way.

Hear the music? It ain't the Blues! It's the quick-step. Dancers, pick your partners carefully. You're going to be spending a lot of time sharing your futures together.

Citrix's end-to-end virtualization powerhouse hastens the massive disruption of PC applications as we know them

Citrix Systems is moving aggressively to desktop virtualization with today's announcement of the new Citrix XenDesktop 2.0 products. Combined with other recent Citrix strategic moves, the world of PCs and applications delivered as services is soon to be flipped.

Heads or tails, both end users and those seeking to make a good living delivering business and consumer applications as services should win.

The slew of announcements come at Citrix's iForum user conference in Las Vegas, and quickly builds on the now-final acquisition of open source virtualization vendor XenSource, which Citrix picked up for $500 million in August.

Citrix XenDesktop combines Citrix Desktop Server, which uses the Citrix ICA (Independent Computing Architecture) protocol, with a virtual infrastructure for hosting virtual desktops in the data center based on Citrix XenServer.

The combo exploits dynamic provisioning to stream desktop images on demand from network storage based on the Citrix Provisioning Server (acquired with Ardence early in 2007). Citrix XenDesktop is due in the first half of 2008.

Using these technologies and approaches, entire PC desktops en masse can reside in efficient datacenters. And these are datacenters that can leverage and exploit: open source, virtualization instances of server runtimes and discretely supported applications, low-cost blades on standard hardware, automated provisioning and fail-over, and tightly managed and centralized operations. You'll get nice BI on how the apps and data are used, too.

In short, you get datacenters as the means to lifecycle delivery of apps, media, and web services dramatically lower TCO. It means a virtualized back-end utility-grid of delivery resources supports more of what has been a massive client-server money pit for going on 20 years. It means an applications delivery infrastructure that's actually under control, with declining total costs on energy and labor, that is flexibly able to deliver just about any environment, desktop, application, media and services.

When you combine virtualization benefits up and down the applications lifecycle -- with such functionality as back-end automated server instance provisioning -- you get excellent cost controls. You get excellent management, security and code controls. And you marry two of the hottest trends going -- powerfully low TCO for serving applications at scale with radically simpler and managed delivery via optimized WANs (NetScaler Web application accelerator) of those applications to the edge device.

A new type of ROI is now up for grabs, when you factor in datacenter consolidation, applications and middleware modernization, savings on labor, energy and real estate. And, golly, you'll be virtualizing Linux and Windows instances and serving up those platforms' applications as services right beside each other, running efficiently on the same highly utilized metal. See more on the cost and management benefits of virtualization runtime instances in a recent BriefingsDirect SOA Insights Edition podcast.

Incidentally, all of this augers really well for SOA -- discrete services can be supported and delivered this way too. And so they should be straight-forwardly composed and reused to build out flexible business processes. More on that another day.

For now, this end-to-end virtualization value that Citrix is quite close to assembling disrupts beyond the support cost-benefits analysis to include adoption and exploitation of new business models, such as subscription and targeted advertising for making such desktop and applications services very inexpensive or even free to those accessing them via a provider.

And the traditional channel is going to be shaken up, too. XenSource will reportedly soon announce an OEM deal with Dell and a resale support agreement with HP, says Internetnews.com.

Indeed, I expect that the Citrix solution set to begin to sell more among providers -- either outside of enterprises or internally with shared services and charge-back-based managed services bureaus -- than traditional IT departments. Citrix used to amount to a value of wrappering traditional apps with presentation services delivery to ease complexity and dealing with "problem" applications. Now, the value is about rethinking applications and their deployment lifecycles entirely -- and working toward the dual-necessity of improving the applications experience for users while dramatically cutting costs via simplified runtime environments and innovative economics.

Also on the disruption front, Citrix is now offering serious alternatives to virtualization market leader VMware, while also reming close (for the time being) to Microsoft and its forthcoming Viridian hypervisor. See more on the increasingly complex relationship in a recent BriefingsDirect SOA Insights Edition podcast.

So to take a step back and consider what Citrix is providing this week (and others will no doubt ned to step up to the plate with, too). We have the back-end and delivery benefits, catalyzed by virtualization. We have the managed delivery via Citrix's presentation, WAN optimization, and security services, etc.

Yet because we're centralizing the delivery, we can also see how those services can be metered out on a per-user and per-service basis. So this enables the ecology of providers to offer comprehensive desktops and apps, as well as -- at the same time -- gives these service providers -- internal or external -- an economic means for charge-backs, managed services P&Ls, and subscriptions. You can make money. You can save money. You can do both.

Now, let's take it a step further. We can also inject and manage advertisements, training, knowledge-sharing, targeted links and content -- just about any relevant information in any media -- right into the actual presentation UI of the apps, media, services, content, etc.

Remember the BI benefits? By being centralized, the meta data on each user and apps use is there for the analysis and algorithmic associations. As users -- and their employers -- see the benefits of targeted content associated within applications and processes -- via display ads, links, RSS feeds, etc. -- they can empower the users, while also subsidizing the entire cost structure of providing the applications and services lifecycles.

This new monetization scheme would no doubt work differently for enterprises, small business, and consumers (and mobile users), but it could work very well through a variety of models. Again, you can make money. You can save money. You can do both. When you have centralized and managed serving of all the elements of work and play PC activities, the world is your oyster. You can innovate wildly.

All of this raises Citrix's profile dramatically, and makes for some interesting blue-sky "what ifs."

Think about "what if" Google had entree to this entire end-to-end apps delivery portfolio (and desktop virtualization jazz) and added it to its already heady SaaS offerings and massively effective targeted advertising arsenal. You could do Google web services, or Windows apps, or Linux apps (or green-screen mainframe apps!), all on a rich client or off the wire -- or whatever combo works best in the immediate circumstances. All of it is (or part of it) ad or subscription supported; all complementary with what's inside enterprises, and what's best acquired as services from outside.

So think about if Google were to partner closely (or even acquire) Citrix. Think about whether Microsoft could have the stomach for that. Imagine a bidding war between Google and Microsoft for Citrix solutions OEM deals (or the company itself). Or image Citrix remaining independent and playing to two nicely off of one another. Imagine that IBM might cotton to this as a way of getting in on the SaaS and ad-based models, while being applicable and amenable to the large enterprises.

Sure, let Microsoft continue to dominate the applications development and deployment environment. And then use Citrix to provide for those applications and services simple, low-cost host and delivery alternatives (and multiple business models). All those VB developers are beavering away to create apps that you can better and more cheaply delivery via your virtualized and centrally provisioned environments. Microsoft subsidizes the applications creation, in effect, but only gets a portion of the pay-off on the deployments side in the form of Windows licenses for the virtualized server runtime instances. (But Microsoft begins to lose on PCs OS license, the Office license, and the cash cows go on a diet. Ouch!)

Meanwhile, let Google broker ads that can be injected (with permission) into the Citrix-powered services streams for all those applications. The cost savings for providing the apps goes closer to the degree of free for the business, subsidized by the cash from the targeted ads and hopefully useful content.

The myriad services providers and Internet providers adopt this all as the way to provide applications, desktops, content, media, and services off of the wire to small business, enterprise and home users at a compelling per month per user subscription rate. Those subscriptions can be baked into the triple or quad play of Internet, telephone, cable TV, mobile, and of all the needed or desired PC functions and applications. Talk about share of wallet!

I suppose I'd call that "Everyplay." Users can check off what they want, and its provisioned on the back end and readily delivered to the device (a low-cost converged device like the iPhone perhaps). And a home or small business could probably get all of what they need for less than $150 per month, with adds ons for beyond-basic services, (ringtones!), of course. Sounds like a business to me.

Yes, the Citrix strategy bears careful monitoring. The implications are really quite staggering. And this could happen sooner than you think.