Wednesday, August 16, 2023
Friday, August 15, 2008
Monday, November 5, 2007
Facebook Dollars
I'm helping start a company that was trying to hire a real smart guy from Facebook and having some success until Microsoft mucked it up. Now the guy doesn't want to leave because his stock is worth millions.
It's the right move for the guy, but I was surprised to see how many people were taken in by Microsoft's valuation of 15 billion. Like Microsoft cares what the valuation is. They wanted to put in a 1/4 of a billion dollars to keep Google out. If all the Facebook wanted in return was a stupid high valuation why not? It's not like Microsoft is going to live or die on that valuation appreciating. Halo 4 will take care of that revenue swing in a couple of hours.
I told these compatriots what made the valuation actually seem real was that two New York hedge funds came in as well. While Microsoft is not worried about making money on their investments, hedge funds due tend to care. Except the investment turned out to be horse hockey. (I wonder now that this is a personal blog if I can stop coming up with euphemisms for swear words.) This is like Digg saying they are the sixth biggest sight on the internet. Even though it's not true, everyone will believe it from here on out.
The big question is not why would Microsoft make an investment at such a ridiculous valuation. That makes perfect sense. It's why did Facebook set the valuation so high? Talk about painting yourself in a corner. I'm all for momentum and buzz. It's the lifeblood of start-ups. But now, unless Facebook continues to perform at the stellar level they have for the last 18 months, they are at risk of not being able to do further funding. Unless they can convince the next round of investors or the public markets for an IPO they are worth $15 billion dollars, the next round will be a down round.
I don't care how big it is, no one likes a down round. Not the employees whose options are priced sky-high or the investors who have re-valued their ownership. The only ones who like it are the press and bloggers who will be like vultures when it turns out Facebook is ONLY worth 8 billion dollars.
I wonder if the OpenSocial announcement alone has made this a very real possibility for Facebook.
Disclaimer, I love Facebook. I wish I could junk Linked-In and just use facebook for my one stop business and social networking needs.
It's the right move for the guy, but I was surprised to see how many people were taken in by Microsoft's valuation of 15 billion. Like Microsoft cares what the valuation is. They wanted to put in a 1/4 of a billion dollars to keep Google out. If all the Facebook wanted in return was a stupid high valuation why not? It's not like Microsoft is going to live or die on that valuation appreciating. Halo 4 will take care of that revenue swing in a couple of hours.
I told these compatriots what made the valuation actually seem real was that two New York hedge funds came in as well. While Microsoft is not worried about making money on their investments, hedge funds due tend to care. Except the investment turned out to be horse hockey. (I wonder now that this is a personal blog if I can stop coming up with euphemisms for swear words.) This is like Digg saying they are the sixth biggest sight on the internet. Even though it's not true, everyone will believe it from here on out.
The big question is not why would Microsoft make an investment at such a ridiculous valuation. That makes perfect sense. It's why did Facebook set the valuation so high? Talk about painting yourself in a corner. I'm all for momentum and buzz. It's the lifeblood of start-ups. But now, unless Facebook continues to perform at the stellar level they have for the last 18 months, they are at risk of not being able to do further funding. Unless they can convince the next round of investors or the public markets for an IPO they are worth $15 billion dollars, the next round will be a down round.
I don't care how big it is, no one likes a down round. Not the employees whose options are priced sky-high or the investors who have re-valued their ownership. The only ones who like it are the press and bloggers who will be like vultures when it turns out Facebook is ONLY worth 8 billion dollars.
I wonder if the OpenSocial announcement alone has made this a very real possibility for Facebook.
Disclaimer, I love Facebook. I wish I could junk Linked-In and just use facebook for my one stop business and social networking needs.
What Happened to the Blog Posts?
You may have wondered why I haven't posted in a month. You probably guessed, rightfully, that I'm not very good at this and as a result it takes me a month to come up with as much content and FSJ comes up with before coffee. You would be correct in your assumptions, but not in the reason there are no new posts.
The reason being is that my posts are now on our corporate site at the OpSource Executive Blog.Please feel free to head over their check out my musings on the business of SaaS and Web Applications.
In the meantime, I've decided to keep this blog running. It will still be mostly industry observations, but now I won't have to worry about spelling or grammar or calling telcos evil. That said, I don't get paid for this one, so please make sure to check the Executive Blog for more regular postings.
The reason being is that my posts are now on our corporate site at the OpSource Executive Blog.Please feel free to head over their check out my musings on the business of SaaS and Web Applications.
In the meantime, I've decided to keep this blog running. It will still be mostly industry observations, but now I won't have to worry about spelling or grammar or calling telcos evil. That said, I don't get paid for this one, so please make sure to check the Executive Blog for more regular postings.
Wednesday, October 3, 2007
OpenSource vs. SaaS - The Final Word
Let me be the last to post about "Open Source vs. SaaS". Two excellent posts have been put up recently (O.K. not so recently.) Anshu Sharma's and Dave Rosenberg's. Both are very well written, and I agree with Anshu's arguments. That said, they both are essentially missing one essential point; all applications will be Web Applications (I think I'm going to say this in every post from here on out.) It doesn't matter how they are developed, people won't use them unless they can access them on the Web (my three kids don't even know what a disk drive is.) The question is why aren't more Web Applications being developed specifically as Open Source projects.
Let me say first, that the entire argument "Open Source vs. SaaS" is facetious. Open Source is a development model, SaaS is a delivery and usage model. Open Source applications can be delivered as SaaS and SaaS applications can be developed using Open Source methods. The argument arises because so few true Open Source apps are actually delivered as Web Applications (I use SaaS and Web Applications interchangeably.) Instead they are developed as single instance applications that a user installs.
Some companies then take this Open Source base and add Web Application functionality such as multi-tenancy and scalability as well as business functionality and flow to it. (We did as much with Dave's tremendous MuleSource product when we created the OpSource Services Bus.) But to say these apps are Open Source is the equivalent of saying SalesForce.com is Oracle since they built an app on top of an Oracle Database.
So why aren't there more native Open Source applications that are run as true Web Applications. Most are single-instance enterprise software that someone installs to use. The most compelling apps of the last 15 years, from eBay's bidding app, to Yahoo's Portal, to Google's Search and SFDC's CRM are all proprietary apps. Some say that SugarCRM is a Web App, but I think of them as a hybrid company selling both installed and SaaS versions of a singe app (and we know what I think of hybrids.) Ruminating with John Rowell, the only one we could come up with was Wikipedia.
Why is Wikipedia the only OpenSource/Web Application? Because running a Web Application costs money. You have to pay for servers and power and network and security and backup and so many different items, and that takes the Benjamins. Usually only commercial enterprises have the Benjamins to make that work, and Open Source communities don't want to develop for commercial enterprises. They'll do it for Wikimedia (the organization behind Wikipedia), because it's a charitable organization, but who wants to develop an app for Google or SFDC?
So back to my earlier thoughts. If the OpenSource development model is a good one, but all apps will be Web Apps (memorize this people) we need a platform where all of the expensive stuff is taken care of for the high-minded developers to start making apps. Then we can find a whole new non-topic to blog about.
Let me say first, that the entire argument "Open Source vs. SaaS" is facetious. Open Source is a development model, SaaS is a delivery and usage model. Open Source applications can be delivered as SaaS and SaaS applications can be developed using Open Source methods. The argument arises because so few true Open Source apps are actually delivered as Web Applications (I use SaaS and Web Applications interchangeably.) Instead they are developed as single instance applications that a user installs.
Some companies then take this Open Source base and add Web Application functionality such as multi-tenancy and scalability as well as business functionality and flow to it. (We did as much with Dave's tremendous MuleSource product when we created the OpSource Services Bus.) But to say these apps are Open Source is the equivalent of saying SalesForce.com is Oracle since they built an app on top of an Oracle Database.
So why aren't there more native Open Source applications that are run as true Web Applications. Most are single-instance enterprise software that someone installs to use. The most compelling apps of the last 15 years, from eBay's bidding app, to Yahoo's Portal, to Google's Search and SFDC's CRM are all proprietary apps. Some say that SugarCRM is a Web App, but I think of them as a hybrid company selling both installed and SaaS versions of a singe app (and we know what I think of hybrids.) Ruminating with John Rowell, the only one we could come up with was Wikipedia.
Why is Wikipedia the only OpenSource/Web Application? Because running a Web Application costs money. You have to pay for servers and power and network and security and backup and so many different items, and that takes the Benjamins. Usually only commercial enterprises have the Benjamins to make that work, and Open Source communities don't want to develop for commercial enterprises. They'll do it for Wikimedia (the organization behind Wikipedia), because it's a charitable organization, but who wants to develop an app for Google or SFDC?
So back to my earlier thoughts. If the OpenSource development model is a good one, but all apps will be Web Apps (memorize this people) we need a platform where all of the expensive stuff is taken care of for the high-minded developers to start making apps. Then we can find a whole new non-topic to blog about.
Tuesday, September 4, 2007
Web Services - Terminal Services
When we first started getting in to SaaS back in 2004, there were a lot of companies still looking for shortcuts in to the space. Virtualization and terminal services were seen as a way to take your current app and "voila", turn it in to a SaaS offering. Three years later, I cannot think of one company that has been successful in the market using these types of services instead of trying to create true multi-tenant native web applications, yet we see many companies looking to repeat those mistakes with Web Services.
(That said, I have seen some companies successfully navigate a transition strategy. By artfully employing multi-instance versions of their code with Web Front ends, a number of companies bought themselves some time to make the move in to a true SaaS offering.)
Today the big rush is to offering your App as a Web Service. A couple of our customers such as Visual Mining and Fliqz were built from the ground up to be integrated into other apps as their primary vehicle. Many other people want to add that capability.
This is more than just using Web Services to integrate with apps behind the firewall (such as Boomi helps companies do.) It's actually designing your app to be a part of other apps. Amazon is doing it, so is Facebook with F8, now everyone wants on board.
And they are looking for quicks ways to get there. Mention Web Services to a SaaS company and they immediately want to know how they can use that to make their app available for Mash-Ups. So much so, many companies (including OpSource) are rushing to develop and deploy those tools.
Will those tools be valuable assets in offering applications as Web Services, or will they be the second coming of Terminal Server, a non-functional solution designed to hold analysts, customers and press at bay? My guess is that it will depend. If it's just a quick and dirty way to get in to Yahoo Pipes, then we've read that book. But if the tools add value above and beyond the app (such as providing pre-built marketplaces or new functionality) we might see them become an integral part of tomorrow's applications.
(That said, I have seen some companies successfully navigate a transition strategy. By artfully employing multi-instance versions of their code with Web Front ends, a number of companies bought themselves some time to make the move in to a true SaaS offering.)
Today the big rush is to offering your App as a Web Service. A couple of our customers such as Visual Mining and Fliqz were built from the ground up to be integrated into other apps as their primary vehicle. Many other people want to add that capability.
This is more than just using Web Services to integrate with apps behind the firewall (such as Boomi helps companies do.) It's actually designing your app to be a part of other apps. Amazon is doing it, so is Facebook with F8, now everyone wants on board.
And they are looking for quicks ways to get there. Mention Web Services to a SaaS company and they immediately want to know how they can use that to make their app available for Mash-Ups. So much so, many companies (including OpSource) are rushing to develop and deploy those tools.
Will those tools be valuable assets in offering applications as Web Services, or will they be the second coming of Terminal Server, a non-functional solution designed to hold analysts, customers and press at bay? My guess is that it will depend. If it's just a quick and dirty way to get in to Yahoo Pipes, then we've read that book. But if the tools add value above and beyond the app (such as providing pre-built marketplaces or new functionality) we might see them become an integral part of tomorrow's applications.
Friday, August 3, 2007
Door Close Buttons
So I use Good Mail to get mobile e-mail on my BlackJack. I find it much more usable than the mail client in Windows Mobile 5 to get my exchange mail, and the good people at Cingular have yet to offer Windows Mobile 6 (can you imagine if I couldn't upgrade my Mac to Leopard because my ISP wouldn't allow it?)
While I generally find Good to be a very workable system, sometime the system does get jammed. No new e-mails come in, even though I know I'm receiving them. Whenever this happens, I use the "Send/Receive Now" command. In the three years I've been using Good (back to my old Treos,) that has never worked. Sending an e-mail to myself usually does the trick.
I was trying to figure out why I do it every time when it doesn't work. It reminds me of the door close button on an elevator. Never once have I hit that button and actually had the door close. Some people claim that it works for them, but I think it's mostly they happened to hit the button when the door was going to close anyway.
This led me to thinking about all types of buttons that we have in the computer world that don't do anything. I've got a print screen button on my keyboard now. Hitting it doesn't print the screen. Maybe it did back in the old MS-Dos days (though I don't remember that ever working back then either) but it definitely doesn't now. I don't even know what the Scroll Lock and Break buttons were ever supposed to do. Yet they sit their mockingly on my keyboard asking to be pushed.
I think a lot of software and hardware has these types of "Vestigial Buttons." Features or devices that once meant something but never really got used or are currently meaningless. They seem to be more of a problem with traditional installed applications than web apps, but I don't know for sure if that is a function of the constant updating of the web allowing for more pruning or that the apps are just newer and haven't evolved enough yet to have "Vestigial Buttons."
Often these types of features clutter up the interface and actually make the application less usable. The creators of the apps often convince themselves they are important when they are at best a distraction in using the app and at worst a deterrent to adoption all together. How many people get frustrated like I do with hitting the "Send/Receive Now" button and have nothing happen. Even though the app works fine, I think of it as being permanently broken. Not where Good wants to be.
While I generally find Good to be a very workable system, sometime the system does get jammed. No new e-mails come in, even though I know I'm receiving them. Whenever this happens, I use the "Send/Receive Now" command. In the three years I've been using Good (back to my old Treos,) that has never worked. Sending an e-mail to myself usually does the trick.
I was trying to figure out why I do it every time when it doesn't work. It reminds me of the door close button on an elevator. Never once have I hit that button and actually had the door close. Some people claim that it works for them, but I think it's mostly they happened to hit the button when the door was going to close anyway.
This led me to thinking about all types of buttons that we have in the computer world that don't do anything. I've got a print screen button on my keyboard now. Hitting it doesn't print the screen. Maybe it did back in the old MS-Dos days (though I don't remember that ever working back then either) but it definitely doesn't now. I don't even know what the Scroll Lock and Break buttons were ever supposed to do. Yet they sit their mockingly on my keyboard asking to be pushed.
I think a lot of software and hardware has these types of "Vestigial Buttons." Features or devices that once meant something but never really got used or are currently meaningless. They seem to be more of a problem with traditional installed applications than web apps, but I don't know for sure if that is a function of the constant updating of the web allowing for more pruning or that the apps are just newer and haven't evolved enough yet to have "Vestigial Buttons."
Often these types of features clutter up the interface and actually make the application less usable. The creators of the apps often convince themselves they are important when they are at best a distraction in using the app and at worst a deterrent to adoption all together. How many people get frustrated like I do with hitting the "Send/Receive Now" button and have nothing happen. Even though the app works fine, I think of it as being permanently broken. Not where Good wants to be.
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