TWIS#27- Google I/O coverage in depth
TWIS#27
- Google I/O news- Google TV- is TV going to be the next cloud battleground and opportunity?
- Google announces “enterprise” partnership with VMware- fails to put enterprise ready SLA’s into the mix but extends PaaS options
- Google tries it’s hand at solving the perennial SaaS distribution problem- announcing the Chrome Web Store
- Android in numbers- it’s growing FAST
- Google launches S3 Competitor- Google Storage for Developers
- Evernote continues to showcase their numbers and make the case for Freemium- new Video
- API festival at Gluecon! How people are solving the problem of Glueing SaaS and Cloud together
- But customers aren’t thinking about Glue says Information Week research…
- Sinclair Schuller on Cloud Architecture
- Reuven Cohen on the coming of Clouds from a historical hosting perspective
- Bessemer CEO conference coverage- Great Design and User eXperience essential
- In other news, Microsoft, Salesforce, Ray Wang, Xobni and Banks in the Cloud.
TWIS Events
Some of you might remember from last week that I’m talking on a SaaS panel at HostingCon July 19-21 in Austin, Texas - with Jeff Kaplan, Lincoln Murphy and others- for TWIS readers there is a discount code and a pass to give away 
Because of the holidays- I’m going to extend the draw for a couple of weeks, and draw the pass on the 14th of June- so get your entries in! To enter- email me jp@justinpirie.com with the subject “HostingCon”
If you can’t wait until then, you can use the discount code “SaaSGroup2010″ which will provide an extra $60 off the current pricing of a full conference pass with lunch for all three days.
It looks like a great conference.
TWIS#27
I got a bit carried away last week with TWIS #26- David Skok’s post on Sales Complexity was absolutely amazing, and I didn’t have any room for anything else, notably Google I/O.
One of the major announcements at I/O was Google TV- via TechCrunch.
Today at Google I/O, the company made the announcement that everyone was waiting for — Google TV. While some glitches in the demo (with the Bluetooth keyboard) prevented it from being a “wow” moment, the implications are pretty clear what Google is going for. That is, the 4 billion TV users worldwide. Or rather, advertising to the 4 billion TV users worldwide.
Google noted that while computer usage is huge with 1 billion users, and mobile is even bigger with 2 billion users, TV is the real massive medium with 4 billion users around the world. Further, Google notes that people spend 5 hours a day on average in the U.S. watching TV — and that’s more than ever before. Then the real stat came out. 70 billion dollars. that’s the annual ad spend on television in U.S. alone.
Ignoring the Ad spend- because the majority of people in SaaS don’t care about that, this is potentially a new computing platform with a huge number of users and no storage- which basically means that everything delivered to it has to be SaaS / Cloud. And that’s why I’m covering it here in TWIS.
Lets look at those user figures:
- Web = 1 billion users
- Mobile = 2 billion (and growing fast)
- TV = 4 billion
That is an enormous user base to tap into. But the TV sector is littered with failures- why is Google going after it?
Video should be consumed on the biggest, best, and brightest screen in your house, Google says. And while they’re not the first to attempt this, Google thinks they can get it right. There are four things they’re focusing on:
- With Google TV, you’ll spend less time finding, more time watching
- We’ll also show you more ways to personalize content
- We’ll make existing TV much more interesting
- This is much more than a TV
“TV meets web. Web meets TV” is the slogan Google is going with for this new endeavor. It will work as a new box — you’ll just hook up your existing cable or satellite box to it. All the hardware will include a keyboard and a mouse — but it will work with Android phones too. And you can use multiple Android devices to control the same TV — no more fighting over the remote.
You can also use the Android devices to speak to your TV — voice search on the TV.
Google TV is built on Android (2.1 right now, but they’ll upgrade it later). It runs Google Chrome for the browser. And yes, it has Flash (10.1).
Also cool, since Google TV is Android-powered, Android apps will work on the TV. With the device, there will be two app frameworks: web apps and Android apps. A new SDK for the Google TV is coming as well. And YouTube has a new product they’re launching for Google TV: YouTube Leanback — this is an optimized way to use YouTube on a big screen.
Google TV will be open sourced in both the Android and Chrome source trees.
Google has partnered with multiple device makers to bring the product to market. There will be three Google TV devices. Sony will have TVs and Blu-ray players with Google TV built in. Logitech will have a companion box. Intel will be powering all the devices with the Atom processor.
Nice. And from their demo:
CrunchGear follows with some excellent further analysis but essentially I think we are moving along a continuum in SaaS of Web-Mobile-TV.
Another big announcement at I/O is Google’s partnership with VMware:
Today, Google is taking it one step further. At Google I/O today, the search giant has announced that Google App Engine, a platform for building and hosting web applications in the cloud, will now include aBusiness version, catered towards enterprises. The new premium version allows customers to build their own business apps on Google’s cloud infrastructure. Google is also announcing a collaboration with VMware for deployment and development of apps on the new cloud infrastructure.
Announced two years ago, Google App Engine offers a full-stack, hosted, automatically scalable web application platform. Last year, Google added the ability to build Java applications off of the platform. With the newly launched Google App Engine for Business, Google is introducing new enterprise-level capabilities, including centralized administration, premium developer support and an uptime Service Level Agreement (SLA), flat monthly pricing, and soon, access to premium features like cloud-based SQL and SSL.
The new version included centralized administration, which is an administration console lets you manage all the applications in your domain. And Google promises reliability with a 99.9% uptime service level agreement, with premium developer support available. Also Google is addressing security by only allowing users from a Google Apps domain to access applications, with and administrator’s security preferences implemented on each individual app.
In terms of pricing for the new versions, each application costs $8 per user per month up to a maximum of $1000 a month. And Google is adding more enterprise-level functionality in the future, including hosted SQL databases, SSL on a company’s domain for secure communications, and access to advanced Google services.
Added to the mix of the announcement is a new collaboration with virtualization giant VMware, which just announced a partnership with Salesforce, to make it easy and fast to build apps and deploy them to either Google App Engine for Business, a VMware environment (On a vSphere infrastructure, vCloud partner, or on Salesforce’s VMforce) or other infrastructure such as Amazon EC2. The aim is to make it easy to create rich, muti-device web applications hosted in a Java-compatible hosting environment Users of Google App Engine for business can now use VMware’s SpringSource Tool Suite and Spring Roo which are integrated with Google Web Toolkit and Speed Tracer.
Google has added new data presentation widgets in Google Web Toolkit to speed development of traditional enterprise applications, increase performance and interactivity for enterprise users, and make it easier to create mobile apps. And Speed Tracer now helps developers identify and fix performance problems not only in the client and network portions of their apps, but also on the server thanks to the integration with VMware’s SpringSource tool suite.
This clearly represents Google’s big push to bring enterprise development to the cloud, by now offering a powerful and interoperable environment and toolset to developers. This should prove to be a more worthy competitor to Amazon Web Services, which is one of App Engine’s major competitors for hosting environments.
I have to say, that despite this announcement, Google App Engine is no more enticing- with only a 99.9 SLA. I really think it’s about time the PaaS providers put their money where their mouth is and provided decent SLA’s. What is interesting however is there is starting to be some cloud interoperability- by utilising SpringSource, you now have some choice over PaaS providers. I wonder how easy it is to distribute your appication between different SpringSource providers to improve your resilience?
I thought their image positioning their offerings was interesting:
Distribution or routes to market remains one of the biggest challenges to SaaS adoption- Google is trying to solve this too:
Today at the Google I/O conference in San Francisco, Google showed off a preview of a major new product: the Chrome Web Store. Yes, this is an app store for the web.
As you can see in the images below, those big icons are all web apps. This is where the apps you choose in the store with reside. In the store itself, you will see a gallery full of these icons (much like the Chrome Extension gallery, or the Chrome Theme gallery). You can see ratings for the apps, as well as reviews. But perhaps most importantly, developers will be able to charge for these apps.
“Developers care about monetization. But they need more than just advertising,” Google VP Product Sundar Pichai said on stage. With the Chrome Web Store, Google has simplified the process of buying apps on the web. Once you sign in to your Google account, apps are just one click away (presumably using Google Checkout). From there you can say, buy Plants & Zombies, the very popular game in Apple’s App Store. But this runs all on the web in Chrome, thanks to Flash. You can run the game full-screen as well.
Another game is Lego Star Wars. This game is run through Chrome’s use of native client (so developers can use native code to develop for the web). This is a full 3D game, built using rich HTML5 APIs.
There will also be apps in this store based around content. This means that magazines and periodicals will be coming to the store — and they’ll be able to charge for them. Sports Illustrated showed off its web app on stage.
As an example of pricing, Google showed that MugTug Darkroom (shown below) will be $4.99.
But this exciting new store comes with another cost: you have to be using Chrome to use this store. It will be built right into the Chrome browser starting soon — and yes, into Chrome OS when that is launches later this year. But these web apps will be able to work on other browsers, Google says. It’s just that you have to get them through the Chrome Web Store, apparently.
This store just made Chrome OS a lot more interesting — to be developers and users. Google is attempting to take the currently popular idea of one-click app purchasing and translated it to the web. This is a direct shot at both Apple and Microsoft.
Here’s some more info from Google:
Are applications in the Chrome Web Store different from other web apps?
No. Web apps listed in the Chrome Web Store are regular web applications that are built with standard web tools and technologies. The same web applications will run in other modern browsers that support these technologies.
What’s the advantage of “installing” an app from Chrome Web Store?
When Google Chrome users “install” a web application from the store, a convenient shortcut is added for quickly accessing the app. Installed web apps can also request advanced HTML5 permissions. For more information, read the preliminary documentation about installable web applications
in Chrome.
How will I add my web application to the store?
We will invite developers to start adding their web apps later this year before the Chrome Web Store opens. To find out how to prepare your web app for the store, read our preliminary documentation
When is the Chrome Web Store opening?
The Chrome Web Store will be available for users and developers later this year. Subscribe to our developer discussion group
And in pictures:
Here’s what tabs currently look like in Chrome (notice the TC favicon, Google is watching):
Here’s what installed apps will look like (on the left):
Here’s the app installation pop-up (notice that it informs you what it will need to access):
Here’s what the app launch page in Chrome will look like (the final icon is for the store itself):
Here’s one app, MugTug Darkroom, running in Chrome:
But don’t they already have an (Android) app store? TechCrunch again:
Today at Google I/O during the Chrome press session, one question seemed to come up over and over again: why build a new Chrome Web Store when there is already an Android Marketplace? This is the latest extension of the thought that two different areas within Google (Android and Chrome) are increasingly competing with one another as platforms. But Google has a different take. For them, it’s about natural selection for now. And eventually, it will be about a natural convergence.
Google VP of Product Sundar Pichai
Google co-founder Sergey Brin
He notes that during the keynote today, we got a glimpse at how the HTML model is coming along. Web apps are now able to go offline, and they can have richer graphics thanks to HTML5. “It’s getting similar to app frameworks,” he says. He also notes that there are benefits to using web apps versus native apps, such as the lack of installation, and certain aspects of security. ”It’s headed in a positive direction, but these are fairly recent developments,” Brin says.
Brin acknowledges that for now, the market is proving the need for native apps. The current generation of cellphones aren’t quite powerful enough, and HTML5 isn’t quite developed enough, he notes. Pichai also notes that screen sizes on mobile devices makes native apps more enticing as well.
But despite some of this cautious talk, the general vibe from Google’s top brass seems clear: the web will win in the end. Eventually, Android will morph into Chrome OS to create a unified web platform, if Google has its way.
Someone might want to tell Apple.
Plus with the announcement of Google TV this would make sense- too many platforms are bad for developers and bad for consumers. We’re then in an interesting deviation- apps for devices are a short term win but strategically the Web will win.
I/O coverage wouldn’t be complete without some Android- TechCrunch again:
Today at Google I/O Vic Gundotra made a big revelation. Last year, Google was activating 30,000 Android phones a day. The past February, that number jumped to 60,000. Today, Google is now activating over 100,000 Android phones a day.
Android was the second best-selling smartphone this quarter, Gundotra says. They are only behind RIM — and yes, ahead of that other rival. Gundotra also pointed out the stat from AdMob that Android was first in terms of web and app usage among smartphones.
And that’s not all. Gundotra also announced that there were now over 50,000 apps available for the platform. And there are some 180,000 developers working on the platform.
There are now over 60 compatible Android devices from 21 OEMs in 48 countries. The devices are spread across 59 carriers.
So to have some figures to back up your stat’s or market analysis:
Google-powered Android phones and iPhones are both gobbling up market share. The combined worldwide market share of both operating systems reached 25 percent in the first quarter, up from 12 percent the year before, according to Gartner
Methinks the Apple / Google gloves are officially off…
Finally on the Google I/O front, they announced Google Storage for Developers which is:
a RESTful storage service for developers to store their data on the highly replicated Google infrastructure. In addition they also announced an open source command-line tool to store, share and manage data, called gsutil.
This seems to be the arrival of the famed G Drive- a direct competitor to Amazon S3. But there is more to it:
Apart from the impact of this announcement on the market and speculations about Google’s motives, there is something that is more interesting here and it has been highlighted by Mitch Garnaat in this blog post.
“What was even cooler to me personally was that gsutil leverages boto for API-level communication with S3 and GS. In addition, Google engineers have extended boto with a higher-level abstraction of storage services that implements the URL-style identifiers. The command line tools are then built on top of this layer.”
Interesting- could Google help lead the ability for people to store and manipulate the same files across multiple CDN’s?
Kudos to Evernote for continuing to share their Stats:
Last week at the Founder Showcase
Evernote, for those who haven’t used it, is a great service for quickly storing and organizing ideas, photos, documents and other information that you encounter both online and in the real world. This is actually one of the secrets to the service’s success — as people add more of their content to the site over time, it becomes increasingly valuable to them. Libin has previously shared similar information during his mentorship at Ressi’s incubator The Founder Institute
Founder Showcase -- Phil Libin Keynote from Adeo Ressi on Vimeo.
Here are some of the main points Libin covered during his talk:
- Sometimes people say “The best product doesn’t always win”, and are implying that you should focus on other areas, like marketing. In the Internet age, a good product can get the rest of that stuff (marketing, etc.) for free. So focus on that. And then charge for it.
- A year ago Evernote was making most of its money from licensing its technology, but it focused on its premium plans ($5/month or $45/year) because that was more scalable. Now, premium subscriptions bring in around $300-400k a month, and licensing represents around $45k.
- Evernote has 3.1 million cumulative users, and adds around 10k a day. Around 68k paying customers.
- Users have grown more valuable over time. New users convert to premium at a rate of .5%. But of the users that signed up two years ago and are still active, 20% have become paid customers.
- This trend is important — most users quit quickly. But the ones that stay become much more likely to pay over time.
- Evernote’s cost per user is around 9 cents per active user per month. It makes around 25 cents per user per month. The site reached break even a year and a half ago.
- Entrepreneurs should aim to be making money on each new active user as soon as possible. Otherwise scaling just means you’re losing money faster, rather than earning it
We should note that Libin has previously discussed
I’m more sceptical about freemium than ever before- I’d be interested to hear your perspective…
This week I wished I was at GlueCon because I think API’s are getting more interesting- how the Cloud and SaaS is stitched together is getting more and more important. RWW covers:
It’s like an API festival here at Gluecon. I tweeted that this afternoon. But it’s not just Gluecon, though -- they’re one of the hottest topics in discussions about cloud computing.
In his presentation today at Gluecon, John Musser of Programmable Web illustrated how hot APIs have become and how they’ve matured.
Perhaps most illustrative is his “API Billionaire’s Club.”
Members of the club include Google and Facebook with 5 billion AP calls per day. Twitter has 3 billion per day. Ebay has 8 billion per month. NPR gets 1.1 billion calls per month for its API-delivered stories. Saleforce.com gets 50% of its traffic through its API.
According to Musser, it took eight years to get to 1,000 API’s but just 18 months to get to 2,000. This year, the number of API’s are double what they were last year on a month-per-month basis.
Internet/platform as a service (PaaS) API’s are now number one. That’s illustrative of the increased usage of services like Amazon S3 and all its competitors. Maps are the number three API, dropping from the number one spot last year. Social API’s are number two.
REST API’s are far surpassing SOAP.
There’s a real energy here at Gluecon around the discussions about APIs. The room was packed for the presentations on the topic.
As the space matures- the Glue is going to become more and more important- at the moment I don’t think people outside of the industry are thinking about it enough:
According to a recent InformationWeek Analytics 2010 survey, more than half of software-as-a-service users (59%) look on SaaS as a tactical point solution “for specific functionality.” That’s all well and good, given that SaaS started out that way, mostly in terms of specific applications (CRM, HR), and its primary appeal is still speed of implementation, which is a tactical maneuver.
But they need to be thinking about it in the wider context- without integration it’ll just become another dysfunctional silo…
Even SaaS should no longer be looked on as just a quick fix. In the InformationWeek Analytics survey, about a third of SaaS users (32%) say their “long-term vision [is] to primarily use SaaS applications.” That’s a significant chunk of true believers, and a (growing) cloud constituency that’s hard to ignore.
Still, you don’t have to throw everything over to embrace the cloud. As systems and business processes run their course, cloud services should be considered as replacements. The cloud, or even SaaS by itself, doesn’t have to be the whole of your IT strategy to be part of your IT strategy.
+1 from me.
Sinclair Schuller is thinking along similar lines to me at the moment:
Given that there is so much velocity, tumultuousness and general confusion (acronym hell coupled with taxonomical conflation -- aka the “everything and everyone is a platform” syndrome), we’re bound to see some order evolve in the future where the evolution will be motivated by what people actually use and adopt rather than the current landscape which is driven by who can yell the loudest.
The big question is what will the future of cloud architecture look like: a stack of interchangeable layers that allow one to choose best of breed or a group of incompatible but highly specialized “holistic silos?”
Looking at the history of infrastructure middleware, the answer seems to be quite clear. Typically, the trend has been that layering functional best of breeds into stacks provides the best combination of “lowest common denominator” coupled with the necessary functional value to “get things done” and keep risk minimal. For example, I can choose servers made by HP, a Windows OS, Java and JBoss, and build a killer enterprise app. If I so decided, I could have swapped Windows for Linux and essentially had a compatible stack experience. Why, then, are silos cropping up in the market?
Silos like Force.com have their appeal. They promise a world where all your needs, ranging from hosting and execution runtimes in the cloud all the way through development frameworks and distribution channels. The problem, however, is that the software market cannot be addressed as a broad stroke.
The needs of software companies vary wildly: ISVs in the healthcare space may care more about hosting certifications than someone in the CRM space, while those in business intelligence need low latency, high compute availability and the others who altogether care very little about the hosting and it’s all about what middleware they are going to use. The number of needs permutations is staggering.
To think that Platform as a Service vendors that own the full stack, from hosting through runtime and even UI components, can ever optimize for each of these scenarios is ludicrous. Furthermore, the silo providers ask for something huge in return for a suboptimal solution: control of the ISVs destiny in all regards. That’s a high price to pay for a promise that can’t be fulfilled.
Which is why specialised clouds are emerging. Reuven Cohen puts this into perspective from the hosting business going towards cloud:
One of the biggest transitions in the hosting space over the last decade has been that of Virtual Private Servers (VPS)-- a market controlled effectively by one company, Parallels. A critical problem with the Virtuozzo Containers product line and approach has been that there is effectively no difference between any VPS hosting company. The lack of differentiation among the various VPS hosting firms has meant that the only real way to set your service apart from that of the other guys is based purely on price. This price centric approach to product/service differentiation creates a commodity market for all the providers. Basically they’re sales pitch is “We’re cheaper”. This means you’re now competing based on a low margin, high volume business, not on any real value proposition. Effectively the VPS space has become a race to zero. So in this market you’ll find that most VPS hosting companies are now charging roughly the same low price, a few dollars a month, with the same low margins for same basic service. The only one making any real margin is Parallels at the expensive of their customers.
What’s interesting about the emerging cloud service provider segment is the opportunity to differentiate based on the value you provide to your customers. It’s not that you’re cheaper than the other guy, but instead that you have an actual solution to a problem they have — today. Maybe your platform can scale more easiliy, or you’re in a specific region or city, you possibly you have a particular application deployment focus.
Great to see that from another perspective- and I really buy into that, because not all customers are the same.
Bessemer’s CEO summit was last week, and for those of you that don’t know, they have a Designer In Residence, Jason Putorti. Design, or User eXperience (UX) is becoming more and more important in the way businesses and consumers choose which products to buy- so it’s essential to get to grips with it. To quote Bessemer’s Cloud Laws- people expect software not to suck anymore. Never before in the history of software have developers had the ability to analyse and adjust in real time their software to iterate quickly- there are no more excuses!
Jason’s presentation was focused on the “10 Things Every CEO Needs to Know About Product Design and User Experience”. The full presentation is available at the bottom of the post but here are the key highlights:
- Design can change businesses: little things can have a great impact. A simple example: the difference between “I am on Twitter” and “You should follow me on Twitter here” increased the registration rate by 173%!
- Design is more than pretty picture: it is all about the user experience and the brand you are trying to build
- Talk benefits not features: It is much better to write “Understand your money” than “20 colorful configurable charts and graphs”. Another way to think about it is Microsoft vs. Apple packaging :+)
- Think in flows, not screens
- Do not make the user think: Make obvious what is clickable, minimize noise, omit needless words
- Start with a great story: Make the value obvious and present it first in the user flow
- User design as a lever: The best marketing tool you can have is a well designed application
- Get out of the office: Watch people experience your product or service
- Have your bible: Synthesize your design guidelines in a company style guide
- Repeat & refine: Allot product cycles to improvement
In other news:
- Microsoft files lawsuit against Salesforce.com, alleges infringement of nine patents.
- I missed this great post by Ray Wang on the many flavours of SaaS and Cloud
- Xobni launches contextual “gmail style” gadgets for Outlook- it’s finally becoming Social and much more useful- when are Microsoft going to buy them
- Banks taking up Cloud? Safety in numbers it appears for Bank of America, Commonwealth Bank of Australia and Deutsche Bank
Have a great week.
Justin
