Marketing Memos

When IBM tosses down 100,000,000 R&D dollars, we had all better pay attention.

IBM has discovered mobile, no doubt dumfounded by the runaway popularity of its media rival Apple. I am sure that Apple’s original 1984 poke at the then-failing IBM left a shoeprint on IBM’s corporate butt. With IT hardware commoditizing and the market for IT services being finite and more competative, it would be unsurprising if IBM was looking for where to grow next.

They may be as enamored by iPhones and Apple’s app store as a crazed public.

IBM has decided to invest $100M into mobile communications research over a five year period. Though Big Blue is focusing primarily on extending enterprise IT to handies, they are not imune to the notion of enabling B2C and C2C interaction as well. Apple has demonstrated that selling to the masses generates massive muhla.

Being an organization driven by numbers and other forms of common sence, IBM made note of two interesting datum. Foremost was that 83% of the humans roaming around the planet today do not have easy access to computers. However, these folks are being launched directly into the wireless age. IBM’s Institute for Business Value notes that mobile user headcounts will rise 191% before the end of 2011, before the next Congress has a chance to muck up the economy further than the current Congress appears ready to do.

At the end of that year a mere one billion homo sapiens will be texting one another, and in the process disproving the million monkey theory once and for all.

Think about a billion customers. If you could earn a penny from each of them, you would pocket $10M bucks. Do that every day and you would churn enough money to make even Obama blink. This explains why executives from America’s mobile carriers vigorously defended their text messaging pricing before Congress. A billion monekys may not text the complete works of Shakspear, but they will generate a wad of cash large enough to impress King Lear … or even Bill Gates.

Which is where SaaS comes in.

IDC claims that SaaS (at least in Asian markets, many parts of which skipped the industrial revolution and landed squarely in the Internet age) will grow at six times the rate of packaged software. The report lists recurring obvious statements about the low start-up cost of SaaS apps and other unsurprising factors. What it doesn’t note is the union of SaaS, cloud computing and mobile.

This is where some major gold will be unearthed.

It is a given that mobile handsets are computers and unified communications systems. People’s lives are now influenced by what they can or cannot do with a handset. As IBM notes and green-clad Iranians proved this week “…mobile telephony holds the future of communication and exchange of information.”

Yet there must be a back-end for most mobile apps. A server somewhere intermediates the exchange of everything and serves-up applications to handsets. Since mobile apps are like the Internet of two decades ago – so new that nobody knows what might be profitable – a lot of experimentation needs to occur. Apple’s app store was Steve Job’s way of letting a million minds experiment and prove which iPhone applications people really wanted and needed, and do so without investing Steve’s own R&D dollars.

The Rubber Duck iPhone app comes to mind.

SaaS on public clouds will be the defacto approach to creating public (and perhaps private) mobile applications. Low cost and flexibile scalability are necessary when introducing a new mobile application to a billion potential users. Vendors at the intersection of mobile and SaaS stand to profit handsomely. Anyone who can take the Force.com platform approach and dedicate it to mobile applications stands to earn the business of every soul searching for a way to profit from a billion mobile users.

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Seems everyone is aiming for the desktop. Some are drifting slowly, trying to grind away Microsoft’s dominance. Others are planning a full frontal assault.

Yes, Larry Ellison is in the latter category.

The slow motion mob is of course Linux. Nearly a decade ago I was helping SuSE peddle the first competent Linux desktop distro. The Microsoft hurdle was steeper then than now, and we knew advising CIOs to conduct forced march migrations was folly. But CIOs were interested in researching alternatives, clearly disgruntled at being held captive by Bill Gates and his nerdy desperados.

We advised a piece meal approach. Since our study of CIO attitudes concerning Linux showed that they wanted their IT staffs to be Linux literate, we suggested migrating just IT to Linux desktops (sans Microsoft support teams who both needed Windows on their PCs, but would also attempt CIO assassinations if they were forced to use anything else). This way all developers, administrators and support teams would be become intimate with Linux in very personal ways. Once IT staffs achieved guru status, CIOs could plot expanding Linux desktops to other end users (transactional users first, power users and stodgy CIOs last).

It seems this is about as far as they got. On average firms deploying desktop Linux at all have done so to 20% of their staffs (some very aggressive firms have hit the 80% mark, which likely skews the results upward). These numbers suggest that where Linux desktops were taken seriously, the IT staff and some transactional users have been given a Microsoft alternative. Technologically speaking, that could have been done a decade ago. Thus it appears that migration momentum may have choked at that threshold.

Which is where Larry Ellison enters the picture, eye patch on and cutlass raised in the air. In buying Sun, Larry bought Java. Java is the closest thing to ubiquitous following Windows, Flash and lying politicians. This includes JavaFX, the Java solution for Rich Internet Applications (RIA). Given growing demand for Internet based applications and server-side application hosting, and given the inherent restrictions of stateless XHTML (AJAX not withstanding), RIA is an important piece of the puzzle.

Just ask Adobe, who is currently Flexing its muscles in that market.

Newsworthy then are Ellison’s Java plans, which included ‘suggesting’ to the Open Office crew to use JavaFX as the interface for future editions of the leading Microsoft Office alternative. Larry ‘suggested’ this approach in much the same way as Pol Pot suggested people become farmers and join the Communist Party. If executed well, employing JavaFX in Open Office would make the application suite richer, more flexible, more usable, runnable from the web and executable on smart phones … all in ways that Google Docs are not.

Ellison wasn’t kidding when he said that Java was “the single most important software asset we have ever acquired.” It gives him competitive keys to the desktop.

And it is proprietary, just like Microsoft or Adobe.

For all the thunderous press that the “opening” of Java received, many key components are still owned and controlled by Sun Oracle. Plans Sun may have had to open JavaFX are likely now being nailed to a cross. Larry loves it when Open Source from third parties hammers the competition, but has shown only occasional desire to let Oracle code be opened itself. JavaFX – as a tool for driving a wedge between Microsoft’s application suite dominance and thus its desktop OS dominance – may well be a key technology in charge a market landscape, and thus worth protecting.

Though I bet Larry might release JavaFX if Adobe Flex takes too much of a lead.

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This year’s JavaOne is a conference stood on its head.

A number of elements indicate that Java is thriving, but in odd tangents and with uncertain bearing. I’m sure it was only coincidental that all Sun employees on site were wearing black shirts and near-death experience expressions. Sun staffers looked like people who woke up in a casket at their own funeral.

Or in Hell if they believe the rumors about Larry Ellison and his cloven hooves.

Exhibit floors are where you find the real pulse of an industry. Forget keynote fairytales which are often more about FUD than fact. When companies drop thousands of dollars on booth space and staff time – when spending shows their intent – that is where you learn how to place your bets in any industry.

After touring JavaOne, I’m buying more stock in Apple.

No, Apple was not demoing nor did the spirit of Steve Jobs introduce a new product. But many mobile handset manufactures and a couple of carriers were in the front of the exhibit hall trying to convince Java programmers that there is gold in them thar wireless hills. This says more about the mobile industry than the Java industry. Apple has proven that apps sell phones, and since Java is a dominate language on other handsets, device makers and carriers came to court coders and grow the set of popular apps.

There was even one vendor with a tool that turned Java into native code for iPhones (which don’t include a Java machine).

Also of note were seemingly out of place actors like eBay and Amazon. They were trolling for talent. Java is popular enough that a shortage of sufficiently skilled Java hackers remains. Top shelf companies like these rent booth space to collect resumes. If I were a young geek, I’d consider being a Java junkie. Not only is it a sane language but the pay scale seems better.

Being a former IT fellow and system programmer, what caught my attention this year is the emphasis of memory caching colliding with cloud computing. Make no mistake; clouds are the next phases of IT infrastructure. The 12% rise in my VMWare stock in the last two weeks is testament to that. More and more companies are moving to support private and public clouds, and a few more visionary vendors are rigging systems to support both.

Google showed that sharing cache memory across boxes is central to scalable systems. If you are uncertain where on the planet your servers may be, exploiting caching systems become critical. This explains both the why Terracotta was talking it up and why VMWare was parked in their booth. Clouds are great, from the virtual machine standpoint. Clouds could be clumsy from an application standpoint. Slipping cache code between a Java application and the Java virtual machine (not to be confused with the virtual server on which the virtual machine hosts the virtual app … virtually) is a slick way to make life in the clouds livable. More importantly it is an element that will make ad hoc application expansion from private into public clouds doable.

Oddly the most interesting technology on the JavaOne floor had nothing to do with programming in Java. Some excitable pups were promoting the Pulse “smartpen”. Despite my entire career being connected to technology, I’m not a gizmo freak. My cell phone is six years old. I don’t own a digital television (I might if broadcasters devise programming for intelligent adults, by which I mean killing off all ‘reality’ programs and their contestants). I haven’t even bothered to spring for a GPS to decorate my dashboard.

But I may have to get one of these pens.

These Buck Rodgers quills do two things once you put them into record mode. They digitize all your pen strokes across a piece of paper so that when you plug the pen into your computer, the pages are uploaded and allegedly ready for optical character recognition (I defy any software to read my handwriting, which alone qualifies me for medical school and a life of writing prescriptions). It also starts a voice recorder and the sound files are uploaded as well. In one tool you have everything necessary for gathering your note and diagrams while also capturing the discussion that led to the notes.

The marketing question then is why Pulse was peddling their pens at JavaOne? Because geeks like tech toys, and at an opening price of $149, it is affordable. Oh, and their products are Java powered. Now that’s worth noting.

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