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Google and China, A Bad Fit?

In a previous post on this blog, Josep wrote about how China seems to be loosening its tight control over the accessibility of internet content in that country. However, with recent developments with Google in China, the direction of these changes may be in question.

After a tough year, where Google internet services were down several times in China (sometimes for unexplained reasons), an incident recently happened which pushed Google to the limit of what they could take.

Google discovered a "highly sophisticated and targeted attack" on its systems that resulted in the theft of some of its source code. It was also revealed that this attack was part of a larger attack that targeted multiple US-based companies with internet presences in China, including Yahoo, Symantec, and Juniper Networks.

Google also found that the attackers tried to get into mail accounts of persons related to human right activities in China. The attackers were only mildly successful, but the sophistication and specific targets of the attacks were alarming. The attacks were based on a previously unidentified hole in old versions of the Internet Explorer browser. Likely, attackers infected individuals that had access to restricted parts of the Google networks by directing users to web pages with malicious code (using deceptive links in email messages).

Google had already struggled with regulations in China since releasing the Chinese version of its search engine in 2006. China has forced Google to censor their search results since they have been there. Google has been able to grab 30% of the search share in China, but search advertising has not taken off there, so they are not bringing in much revenue yet. Due to these struggles, as well as the hacking incident, Google seems to have begun to question the value of their China operations. After the incident, they announced that unless they were allowed to offer an uncensored search engine in China, they would shut down their search engine and would consider stopping all of their Chinese operations. China did not bend in response and basically said that Google would have to leave if they did not follow the rules. Further, the government denied having been part of the hacking incident.

After seeing China's strong response (as well as a drop in their share price), Google took a less tough stance. Google's CEO said, "We like what China is doing in terms of growth...we just don't like censorship. We hope that will change and we can apply some pressure to make things better for the Chinese people." Obviously, China is very important to Google in the future, but the current policies are making it hard for them to justify doing business there.

Even though Google may back down, this incident could have large implications in the near-term for foreign-based internet business in China. If companies do not feel secure operating there, they may not even enter the market, as the security risk and the cost of compliance may be too high to do business there.

The iPad, or how to unlock your Internet data from the mobile operator

If you were to design the best device possible to have the Internet in your hands, how would it look like? Now, we know how. Or at least, now we know how Apple has interpreted this challenge after more than a decade working on it. If you were to design the best business model to have the Internet in your hands, how would it look like? That's probably a very tricky question, but may this be the real question that Apple answered during the event at the Yerba Buena Center in San Francisco two days ago? 

During the past weeks, I have been following the hype about the launch of the iPad (now that we know how to call it!) with interest, and since now the dust is settling, it may be the right time for a bit of analysis and -why not?- speculation about the main areas of impact of this device. 

Since its target is, in words of Steve Jobs, "to hold whole Internet in the palm of your hands" (see video for a demonstration of features), one must firstly reflect on what this means. Is is about, as Brad Stone points out in his NYT article, "blurring the line between devices", or is it about really allowing us to get more Internet? What do I mean by this? Let me explain. 

We all like that Internet allows us to get access to all kinds of content at a very low cost. For that, we have to incur into two different types of spendings: the cost of the connection to the internet (i.e. ADSL, or a 3G dataplan, etc), and the cost of content. Telecom operators so far are delighted that Apple helped them to finally mobilize the Internet, since they have seen how adoption rates of data plans have increased dramatically since the launch of the iPhone (of course, since adoption was basically inexistent before the iPhone!). The iPad promises even more "mobile Internet", so at first sight, the iPad is good news. 

Then, let's have a look at the second part of the equation: content. Content creators  and distributors (of all formats -text, audio and video) have been suffering from the digital revolution. Most of them are still having problems to find adequate business models to be able to monetize content, especially on the distribution side. But we've seen that with a bit of creativity, bearing in mind the needs of the customers for simplicity and easiness, and tackling its need for "coolness" new viable business propositions have found their way. As my colleague Josep Valor was pointing out in his post last week, Apple succeeded in finding a way to find a profitable business proposition for a handset device in mobile telephony - while the main players are failing miserably. They had already done it before with music. Whose turn is now? 

Some claim that the iPad aims at books, and hence will mainly hurt Amazon's Kindle and other eReaders. Others claim it's mainly about games. Or video. And the news industry hopes it's about creating new ways of packaging news and information and therefore finally finding a viable business model. It may be about all of this. Apple has done its homework and presents a device that comes with an entire ecosystem of content, in which the iBooks store is a nice addition, but in which undoubtly the fact that it is compatible with most of the iPhone applications and the entire music is the main highlight. As developers are saying: this opens a new world of development opportunities. 

But there may be more. Let's go back to the access to content issue. How expensive is it today to access real multimedia content through a 3G network? Since multimedia implies huge data transfer, it currently requires a very expensive data plan. What will happen with the iPad? It has been much criticized that Apple seems to give a relatively low priority to  the need of including  3G. The first device that will come out to the market  -selling in the US at $499- will be WiFi only. One could argue that that's because of the lack of time to find agreements with the operators, with the notorious exception of AT&T. But one may also think that Apple has learned its lessons from the launch of the iPhone. 

Remember? It went out with a very similar proposition than the one that we've heard two days ago. Apple (not an operator) sells the device, the device is activated through iTunes. For the iPhone, Apple had added a revenue sharing proposition with the operator, and hence operator exclusivity was also part of the initial positioning. The first jailbreak (unlocking the iPhone) made this last part (with all its attached revenues!) fade away. What has Apple learned? That there's no point in exclusivity deals any longer. So the new iPad will be unlocked. Yes, there is a deal with AT&T, but its just a deal about a new data plan, not an exclusivity deal. The user decides what operator gets access to its iPad. No contract, pre-paid data. The user is locked into the iPad, but unlocked from the operator. This equals to an invitation to real competition on price to the operators. The AT&T deals of $14.99 for 250MB of data is a price killer. $29.99 for unlimited data. This has set a new limit to the value of data transport. This is great for the users, but must be terrible for the operators. 

It is also good news for the content distributors and owners, since with cheap(er) access to data, we will for sure consume more content! It will still imply that content distributors will have to find good ways to monetize content, but with this new proposition, Apple directly attacks the access hurdle. As they said on the iPad presentation event,  they have 75 million iPhone users. What they did not say is that they are all paying hefty data plans.  (all paying hefty data plans). How many users may they have  if the mobile Internet becomes cheap? 

So, while the discussions about the virtues or non-virtues of the device are nice, they may be missing the crucial point. 

The battle for the smart phone

Last Friday Sony-Ericsson announced its 2009 results: losses of $1.24 billion with a drop of sales of 40% from the previous year. This made me look at other phone manufacturers, like Nokia, Motorola or HTC. The latest data reported by the Finish company are for the quarter ending in September 09: 20% drop in sales form the same quarter in 08 and a quarterly operating loss of €426M. Motorola did not do too well either, with sales for this last quarter down to $5,45 billion, a drop of 27% from the same quarter the previous year; its operating income for the quarter has been positive, but the last twelve months show an accumulated operating loss of $1,98 billion. Some companies earn money in this business, like RIM (Blackberry), Apple, and HTC. Of these, RIM ($2.7billion operating profit in Fiscal 09 with sales of $11billion) is in fact more of a service provider than a hardware designer and manufacturer, and Apple with its iPhone is a mix of a designer, software developer, and most of all, an extremely smart ecosystem manager; since these companies do not report detailed accounting by product line, it is impossible to know the profitability of their hardware business. HTC is the pure hardware manufacturer of this trio, famous for it partnerships, and manufacturer of operator-branded phones since its founding in 1997. HTC has been a leading manufacturer of handsets for US and Japanese carriers and it was not until 2006 that the company sold its first HTC-branded phone. For this past 2009, the company has just released its unaudited numbers: sales of $4.5 billion (a drop of 5.03% from the previous year) with an operating income of $757 million.

These rather dismal results of the industry as a whole might be due to the current economic downturn, to more specific structural issues in the mobile handset market, or both, but there is no doubt that they should make companies think twice before deciding to invest heavily in it. And it is in this context that the January 4th announcement of the launch of the Nexus One by Google is even more interesting.

Why would anybody enter such an industry at this time? The market seems crowded of smart phones (see iPhone look-alikes) 
and one could expect reasonably desperate moves in pricing by the companies that have invested heavily in the design of these devices and need to sell them at any price above their manufacturing costs in order to recover their investment. The entrance of Google in the mobile market has to be analyzed in the context of the overall digital value system. Users, the final payer of this entire ecosystem, are increasing dramatically the time devoted to mobile surfing and will continue to do so when “surfing” will be embedded in the devices we carry with us all the time, not only our phones, but out tablets (book readers?), navigation devices, car radios, and every conceivable electronic instrument that will benefit form being connected to the cloud.

Microsoft has shown the world the importance of the operating system in the devices that thrive from a myriad of specialized developers providing different pieces of the final product that need a “connector”. Windows is the inevitable glue that allows my Dell machine to run my Adobe software. Becoming a proprietary standard in an industry is a gold mine; these are not news, and the players in the mobile space know them. In a world in which users look for usability (the current paradigm of usability being the iPhone) the mobile industry is not technically mature enough to provide great user experiences via independent providers coupled by open standards. The iPhone is a step above anyone else because Apple controls all the relevant steps of the iPhone value chain, from hardware to the OS and the application store. This imposes obvious rigidities, but ensures impeccable Apple style user experience. In this context, it is of no surprise that the integrated platforms grow (Apple and Blackberry) and the competing proprietary open multiple-player platforms lose (Symbian and Windows Mobile). What is then the role of Google? It is not a secret that the company from Mountain View wants a leading role in the information distribution industry; it plays it in PC-based information distribution, but it could lose it in the mobile space to Apple and perhaps Microsoft. In this context, Google has no choice but to try to make sure that two things do not happen when the market matured: (1) that Apple is the only game in town, and (2) that if a multiple player ecosystem develops, Microsoft owns an important piece of it and captures most of the value provided by the rest of players.

This situation has forced Google to develop Android, an operating system poised to compete head to head with Apple OS in functionality at an unbeatable price for hardware manufacturers: free. But for Android-based phones to provide an experience close to the iPhone in a short time, and before insurmountable network effects take place and the Apple device is definitively unbeatable, Google needs great hardware perfectly integrated with the capabilities of Android, something that only the companies that control both have been able to obtain: Apple and Blackberry (RIM). Therefore, Google had no choice: build its own phone. And once this decision was made, the partner of choice was HTC; its experience developing devices under other company’s specs, particularly NTT DoCoMo, made it unbeatable. And here is the Nexus One.

Keeping with the company tradition, though, Google cannot operate the same way as Apple does: it sells the Nexus only via de Internet (as it did with its shares in its IPO) and not exclusively with a carrier (as Apple did with ATT). The Nexus role in life is not to become a dominant player as the iPhone tries to be, rather, it is to be an example for other hardware manufacturers of how to integrate with Android, and to provide software and application developers a credible alternative platform to the iTunes store. The next few months will be crucial to see how the market will evolve. In a few weeks, the third player will show its cards: Microsoft will present the next version Windows Mobile (perhaps 7.0) at the Mobile World Congress in Barcelona: good luck trying to collect license fees from the money-losing handset manufacturers. It better be an astonishing piece of software.

Why Enterprise Use of Social Media Needs More IT Involvement

The time has finally come. We can now publicly speak about the findings of the research study on the enterprise use of social media that has been in the works since the beginning of 2009. Cisco, the sponsor of the study, issued a global press release on January 13th and over the last few days the story has been picked up in online media. The coverage has been quite broad (CNN Money, CIO Magazine UK, Read Write Web, and ZDNet among others have covered the story; you can also watch a short video below), which of course makes me feel good about almost a year-long effort.

After having skimmed through several online stories, however, I felt that there is a key piece missing in how journalist and bloggers present the key finding of our study. Yes, it is true that the study showed that when it comes to the enterprise use of social media outside of the corporate firewall, marketing and communications folks are calling the shots, while IT involvement is lacking. It is also true, that many companies tend to underestimate the importance of putting in place formal policies and procedures to manage their portfolios of social media initiatives and tools. But what most stories seem to have overlooked is why more governance and IT involvement is needed.

The point we are trying to make is not that IT needs to insert itself into the loop merely for the sake of not losing control over corporate users and systems. More oversight is needed because the nature of the enterprise externally-focused social media initiatives is shifting. Having originated in marketing and PR with the primary focus on communication with external stakeholder audiences, these initiatives are now spilling into core areas of the value chain and starting to affect core business processes and functions, such as product development and innovation, customer and supplier relationship management, service delivery etc. As this shift accelerates, companies will not be able to limit their involvement to creating communities on Facebook and conversing with customers on Twitter. They will have to make sure that the enabling web 2.0 tools and collaboration platforms integrate seamlessly with the rest of the enterprise architecture. And this is where IT comes in.

Integration, however, is not the only aspect where IT may be able to help. Ensuring alignment between social media initiatives and the overall business strategy, something that many of the study participants had struggled with, may well rely on mechanisms similar to those for aligning IT investments and strategy. Likewise, achieving security compliance, helping streamline implementation, communicating and supporting end users, documenting use cases and measuring impact are all areas where IT is well equipped to make a contribution. And what we’re suggesting in the study is that instead of waiting till the need becomes immediate and pressing, IT needs to be more proactive and step up to the plate now.

The Business of Shortening URLs

Google recently rolled out a service called goo.gl, which will compete with the current leading web address shortening system, bit.ly. The use of web address shortening systems has skyrocketed as the use of micro-blogging sites, such as Twitter, has also rapidly increased. Micro-blogging sites limit the number of characters that can be posted in a message (140 for Twitter), and so it is often necessary to shorten a web address in these messages. Shortening services solve this problem by creating a short unique link to their page, which then redirects readers to the actual website.

The widespread use of these shortening systems has allowed them to offer another valuable service to users, website visitor analytic data. Much of the success of bit.ly has come from the fact that they offer real-time information about who is visiting websites across the web. Further, they have opened their system, so that users can access the real-time web traffic data for their own programs. A last advantage of the system is that bit.ly keeps track of users' shortened urls, which allows users to look-up their previously shared links.

However, not everything is perfect for users of these systems. Unfortunately, readers can not see the real destination web address when clicking on a shortened link. This means that users can misdirect readers to sites that they were not intending to visit. While this has not been enough of a problem to slow growth of these services yet, as the services become more mainstream, malicious use may increase, and people may become more hesitant to click on shortened links.

Bit.ly received 2 million dollars in financing earlier this year, and there is potential for them to make money from their services. They have already announced that they will release a "pro" version that will include better analytic data. They could also possibly charge businesses for custom URL shortening. Further, there are rumors that they may be acquired by Twitter. However, in this unsettled new market, bit.ly's primary concern right now is likely maintaining their user share as one the biggest possibly competitors, Google, enters their market.

Lost your wallet or a file? Dropbox!

“You have been there. You are about to buy lunch and you realize that your wallet is in your other pants.” It is true, I have been there. Many times. In fact, not only am I often searching for my wallet or my keys, I also have problems remembering where I have the most updated version of my electronic files, documents, spreadsheets, etc.

The above quote is the opening sentence of a video from Dropbox. Dropbox, a storage provider released in September 2008, might be the solution for everyone who – like me – tends to lose track of stuff. It is hard to imagine, at this point, after having used it for three weeks, how I could have survived without it.

But let me first explain what my initial problem was. I often work at different places, using my office desktop, my home desktop, or my laptop. Sometimes I go home and want to finish what I was working on, or I receive an email from an angry student, who wants to know how I could have given a C for the final report.  I used to have my data on the network drive of the school and could access it in that way from my home desktop or laptop. However, the system I used (Netdrive) was not compatible with Windows Vista, so I had to look for a different solution. For some weeks, I have kept my data on a USB flash drive. Of course, this was asking for problems; after forgetting my flash drive several times, and once thinking I actually lost it (with no backup), I gave up on this potential solution.

A colleague advised me to try out Windows Live Sync, a file synchronization application, or Carbonite, an online backup service, but I didn’t get either to run well. Finally, things got better when I got the word that Dropbox was the answer to my problem.

 

It starts with a very nice, simple website (www.dropbox.com). This is a website layout as I would like my desk to look like: calm and orderly. Then there is an explanation video, again simple and concise. Downloading and installing literally took me 5 minutes.

What does it do? You designate a folder on your hard drive by calling it “dropbox” and the server silently creates a backup of the folder on their drives, which may take some time, depending on the folder size and your connection. Then you create dropbox folders on your other laptop, desktop, or PDA, and the service will create identical copies of the original folder. I now have all my work data in the dropbox folder, so I can access, modify, create, or delete files on any location, while it feels as if there is only one database. In fact, if you are traveling and your laptop brakes down, you can still access all your data via a web interface. Finally, the best part… this is all for free! You are wondering, where is the catch? Well, the catch is that this is so convenient that you will want to use more than the 3 GB that Dropbox offers for free, so you may end up paying $10 per month for 50 GB or $20 for 100 GB of storage.

In my opinion, this is not just a convenient idea that will come and go, replaced by something better. This is a step on a one-way road with no return. Do you remember the small data cassettes and floppy disks we used to use? Or the punch cards and punch tapes we used just some years before that? I still see colleagues walking around with CDs or DVDs, not realizing that is so passé… The idea that data storage is something you can touch will fade away within a few years. It is just as when I speak with my 10-year old son and try to explain him what the internet looked like before Google… a difficult concept to grasp for somebody who has never experienced it.

 The bigger picture in my mind is that this is just one small development towards computers and data becoming more ubiquitous in our lives. In my work as academic, in one week I may need to teach in Madrid, attend a conference in the US, or visit friends in Holland while needing to keep in touch with my students. I foresee a future in which computers become a commodity as our data, software, and personal preferences are stored on the web. Of course, this is not a new idea. But when you use a service such as Dropbox for the first time, you come to realize how fast this development is going and how irreversible it is. Enough for today. Let me save this document … in my Dropbox folder of course!

 The author of this blog, Govert Vroom, is an Assistant Professor at the Strategic Management Department of IESE Business School Barcelona. He is by no means an expert in IT or affiliated with Dropbox Inc. There are many other online storage providers, see for more information: http://en.wikipedia.org/wiki/File_hosting_service.

Long lives the user! How the crowd (this means US) is regaining its right of privacy

Yesterday Facebook announced that its has reached the 350 million users mark. No doubt, the figure is impressive, and the masses are with Facebook. Looks like smooth sailing. But certainly, there has been some severe white water rafting, too. The main hurdles? The users' privacy. 

Over the past weeks I have been following with interest the most recent movements that some leading online companies have done in the privacy space. We probably all remember how Facebook failed to change its terms of use in February, when it tried to persuade the users that their data would stay with Facebook even if the owner decided to delete its Facebook profile. Response against this move was inmense, and Facebook had to correct. Interestingly, this failed episode probably has kicked off the increasing privacy debate that has been going on over the past months. Users all over the world have been showing more and more concern about their data, and what leading online companies have been using with them. This, in turn, is forcing companies to react, which often implies a public statement (or even more) of respect of the user's privacy. Which should be obvious, but in the past some sort of ambiguity was enough to distract mistrusting users.

To be clear, some companies have made clear statements about privacy already in the past. In this sense, a blogpost on LinkedIn from February 2008 is interesting, since the company defends (already then!) data portability. This is interesting, since most social networking sites live from the lock-in they create by "owning the users data - which means, by creating switching costs that make it costly for the user to move from one site to the next. Data portability implies that I can decide to withdraw my data and take it with me to the next site at no cost (or effort). Actually, the dataportability project has been around for some time now, and its worthwhile to keep in mind its vision and mission (Source: www.datportability.org): 

A closer look at LinkedIn reveals that its privacy policy has had its ups and downs (from starting with a business model in which only people within 3 grades could see my profile, to one in which by paying everybody can see it). But, as another more recent post says, privacy (and security)  is a serious matter.

This concern is going mainstream. In the past month Google has introduced Dashboard, a sort of balance scorecard of the information that Google has about me. Next, Mark Zuckerberg from Facebook has issued two days ago one of his rare open letters explaining that the company is introducing a series of changes that imply an increased control by me of my privacy at the site. This is especially interesting since a past announcement in July was indicating that the site would open rather than close my control over my profile (basically, it was about increasing visibility to "everyone" - probably a thought at that time to prevent Twitter from becoming more and more powerful...). Finally, the implementation path that Facebook has chosen is the opposite, and hence we get increased control over our own privacy. Good news, no doubt.

These are just two (albeit very visible) examples of many many moves. And one might wonder if a snowball effect is already happening, and if this will extend to other parts of the web, too. Especially interesting is that of the "privacy" of content owners. In this sense, we've seen Rupert Murdoch's News Corp achieving an exclusive deal with Microsoft's Bing search engine. And just today Google announced a new news crawler which gives publishers more control over news crawling. This is again, good news for the hardly hit pulishing industries, no dout. Let's continue watching.

Chrome OS: In the Cloud in less than 7 seconds

Seven seconds. That is the amount of time it takes to boot up a computer with Google’s Chrome OS. After four months of announcing their intention to develop their own OS, Google previewed Chrome OS last Thursday at Mountain View headquarters. However, it will not be available until a year from now, but it represents a fundamental component in Google’s strategy towards building internet based applications, also known a cloud computing. This means that computers will work without the need of heavy proprietary OS installed, with all the data available and synchronized in the cloud. At the end of the day more web use translates into an increase of revenues for Google. That is the reason why Chrome OS has been designed to allow the user to log on faster, eliminating all the stacks performed  by traditional OS with a more PC centric focus. It seems that the free Chrome OS targets low-cost netbooks that mostly run Windows XP and the new Windows 7 today. Moreover, some analysts forecast that low-cost notebooks will be offered by service providers in a analogous ways to the mobile market, where Google is already gaining momentum with Android. Nevertheless, it has to been seen if users are going to trust all their data to Google servers.

What is Google Chrome OS?

Android anyone?

I believe it is time to discuss the effect of the Operating Systems in the mobile space. To date, for the majority of users the operating system in the mobile device has been an indistinguishable part of the device; in fact, for many people, it is hardly noticeable that the usual stack we are accustomed to live with in the PC world (hardware, operating system and applications) is also present in the mobile phone we carry in our pockets, or purse, as it may be he case.

We know from observing the PC industry that the operating system brings invaluable service to the users and developers alike, as it allows for the same application to be able to run in a myriad of different hardware as long as all have the same operating system. In fact, the operating system is the “adapter” that allows the same application software to be compatible with the hardware of many different producers. The “adapter”, if it is able to turn into a “universal adapter”, harnesses huge value capturing power for its owner, as it becomes an indispensable tool for any user. Not for nothing Windows has become the most purchased software program in the world: it is a platform that allows developers to efficiently deploy software for most computers build around the Intel architecture. The value Windows has brought to the IT industry is unquestionable, as it has been its ability to generate wealth for Microsoft.

In the mobile space, and in the smart phone in particular, we have not had to worry too much about operating systems because users have not been installing and running applications on them at the same rate that they do on their PCs. We used to buy a smart phone, the applications were already installed (email, calendar, or whatever), and we used them right away. Different operating systems could coexist as long as manufacturers provided customers with complete solutions and these customers were not looking around for third party applications to run on their devices. But this is changing rapidly. Smart phones are becoming powerful computers and the possibility to have mobility-based applications that solve real business needs is a reality. In this context, it is unavoidable that the market will converge to a single “connector” that will avoid the painstaking effort that current developers have to endure to rewrite their applications for different devices, as they have to do now.

It is clear then, that following the PC model, the stakes are high to try to dominate this market. The owner of the winning operating system will be able to rip enduring long-term profits simply by maintaining a good product in the market at non-abusive prices. Who will win? This is an interesting question. The table above presents the Q3 2009 shipments of the different operating systems compared with those a year ago. Symbian, riding the lead of its owner Nokia in devices, leads the pack with 46.2% of the shipments, followed by RIM (Blackberry) with 20.6% and Apple with 17.8%. Symbian and Apple have increased slightly their market share from a year ago, while RIM has increased it drastically (a whooping 5.4% larger share) at the expense of Microsoft that has dropped its market share of shipments from 13.6% to 8.8%. Of notice is the irruption of Android form Google, that went from not existing a year ago to 3.5% this past quarter. Given the different strategies of the parent companies, the war will be fought between Symbian, Microsoft Windows Mobile, and Android. Why? RIM and Apple are closed platforms; they run only on the hardware developed for their companies, the Blackberry and the iPhone, and they are unlikely to be licensed to run on various hardware, so their abilities to become “the universal connector” is inexistent unless the complete market turns their way and we all end up carrying either a Blackberry or an iPhone, unlikely.

Having said that, the only systems that can run on multiple hardware platforms are Symbian, Microsoft’s Windows Mobile, and Google’s Android. Of those, the first two are licensed for a price and when the final user buys a phone, they also purchase the operating system, and a certain amount goes to the rightful owner of the system, much the same way as we do when purchasing a PC. When buying an Android phone, the cost associated with the operating system is zero, as Google makes it available to the developing and hardware community for free. Zero cost, a very sophisticated graphic interface, more than adequate developer tools, and a free killer application like the Earth Navigator (see previous blog post) makes Android my favorite candidate to win this battle. Needless to say that Google, not being a charity, has its own agenda for giving away such a potential money machine. This agenda includes eventually dominating the content distribution and advertising market in mobile, much the same way it dominates in the Internet. Additionally, if a "free" operating system becomes the winner, the purchaser of the device will have extra money to purchase additional third party applications or phones with more capabilities, which also makes the Android a favorite for manufactures and developers alike.

In any case, the next few months will be crucial to see the new devices and applications on Android, their acceptance by the market, and the evolution of these market shares. Then we will be able to bet on the winner with more probability to guess right.

 

 

Going Rogue with Google Docs

A few days ago Palo Alto Networks, a leading manufacturer of enterprise firewall solutions, released its latest semiannual end-user application usage report. The report is based on the analysis of the network traffic that passes through Palo Alto Network’s firewalls deployed on the edge of corporate networks. In other words, the study reflects objective application usage data, not self-reported usage common in this type of research. While there is a bunch of interesting findings in the study, the one that caught my attention was a 300% increase in the use Google Docs (measured as the number of sessions and the bandwidth consumed). The report also states that the use of Google Docs was registered in 82% of the participating companies.

This is huge, isn’t it? But wait a second, how did I miss the big news that enterprise adoption of Google Docs had skyrocketed over the last 6 months?  The Google Apps for Business page doesn’t seem to suggest anything out of the ordinary – the standard sluggishly growing list of adopter companies. The usual suspects, TechnoCrunch, Mashable etc., seem to be silent on the issue as well. So, there must be something else in play here. But what is it?

What we’re dealing here, I think, is unauthorized use of GoogleDocs initiated by employees.  Or the way security folks would put it “rogue” deployments of Google Docs. A 300% jump in rogue deployments -that can’t be good, can it? But why do employees start using GoogleDocs on their own? GoogleDocs is no YouTube, Facebook, or even Twitter for that matter. You can’t really do much with it for fun. It is a personal productivity suite, an online collaborative workspace, and most people would use it …well, for work. What this suggests, perhaps, is that employees turn to Google Docs when a particular project or task requires them to collaborate with others inside and outside of the organization in an easy and unrestricted fashion. They need to be able to start such collaboration pretty much on-demand, but the current enterprise business apps infrastructure at most firms has very little to offer in that department. Hence, a 300% jump in the use of Google Docs.

There is no question that IT departments have the means necessary to shut down the use of Google Docs or other similar cloud apps from within corporate networks. But would this be the right thing to do? As individual users have become accustomed to simple, customizable, and unrestricted ways to connect and interact with people online in their personal lives, they will increasingly expect a similar degree of flexibility and control at work. It doesn’t have to be Google Docs, but the need for an integrated collaborative user-driven enterprise platform has arrived and is here to stay. It’s time now for corporate IT to step up to the plate and work together with the users to put such a platform in place. Everybody will win in the end - the users will become more productive, the company – more agile, and the IT department – well, the IT folks as usual will remain the “unsung heroes”.