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Is SaaS Cheaper Than Licensed Software?

Jason Rothbart — Fri, 21 Nov 2008 14:35:00 -0800

Most people quickly answer this question in the affirmative. I certainly do. However, there are people out there who aren't sure. They look at the monthly cost of a SaaS application and compare it to the equivalent licensed product over an extended period of time. Given enough time, you will eventually hit a point when the SaaS product appears to be more expensive. Let's look at it from the perspective of the total cost of ownership (TCO).

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The true cost of a licensed product is much higher than just the software. Here are other things to factor in:

Hardware costs: You have to either buy machines or add your software to existing servers and manage them. If it is a mission-critical application, you will probably need dedicated machines and back-ups.
Additional software costs: You will most likely need an OS, application server software, a database, monitoring software, etc. Many of these products are open source now, but there are still associated costs.
Implementation costs: In my experience, the implementation costs associated with a behind-the-firewall solution are always higher than those of a SaaS application. There is simply more to do. You will either pay consultants or use your own valuable resources and time to worry about installing software, integrating it, building servers, configuration, etc.
Maintenance labor: If you have in-house software, there is going to be some level of effort required to keep it happy. Your IT people will need to take care of it, which will keep them from doing more value-added activities.

Another huge factor here is the ability to get the latest and greatest technology. Once you install software in a data center, it becomes more difficult to upgrade and maintain it (especially if you customize it). In such a case, you will be stuck with old software that you will have to replace in the same time frame described above. In other words, unless you are absolutely sure, beyond a shadow of a doubt, that your licensed software is going to meet your business needs for 5 years or more, then SaaS might make financial sense.

Let's look at a real-world example. A 100-person company has been sharing files via email and internal servers. The executives have finally concluded they need to join the 21st century and put a solution in place. One option is to implement SharePoint. Here is a rough estimate of what that might cost:

Year 1
MOSS server = $4,500
User client access license = $90
Hosting and maintenance = $5,000
Implementation and developer support = $20,000
Total = $29,590

Year 2 and on
Hosting and maintenance = $5,000
Developer support = $3,000
Total = $8,000

I know of a SaaS solution that has 80% of the file-collaboration functionality of SharePoint but charges $850 per month for 100 users.

Year 1
SaaS fees = $10,200
Implementation support = $10,000
Total = $20,200

Year 2 and on
SaaS fees = $10,200
Total = $10,200

It would take over 4 and a half years before the licensed software became cheaper. By that time, I'm quite sure there would be another solution that could replace SharePoint, and the cycle would start again. We can quibble about the numbers, but you get the point. Plus, the numbers don't reflect that the SaaS solution is likely to improve and innovate faster than the licensed software by a significant amount.

What do you think? Have you done this analysis, and what did you conclude?

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Poll: Internet Now Considered More Reliable Than TV, Radio News

Marshall Kirkpatrick — Fri, 21 Nov 2008 12:15:40 -0800

Don't trust what you read on the internet? That's no longer the dominant sentiment in the US, according to a new poll by Zogby International. A survey of more than 3000 people performed in the two days after the US Presidential Election found that 37.6% of respondents considered the Internet the most reliable source of news, 20.3% consider national TV news most reliable and 16% said that radio is the most reliable source.

The survey found that most people find all the news biased in some way and there were a number of other interesting findings. It's quite striking, though, that we're at a point in history where the internet is trusted more than TV and the Radio!

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More Numbers

Other results of interest include:

72.6% believe the news they read and see is biased

88.7% Republican and 57.5% Democrat respondents describe the news media as biased.

Lest we conclude that the Republican/Democrat split represents sour grapes more than anything else - 39.3% of those surveyed trust FOX News most for the issues they consider most important, followed by CNN with 16% and MSNBC with 15%.

The survey was commissioned by the Independent Film Channel for the IFC Media Project. The full details will be posted on the IFC site later tonight.

Zogby is a reputable polling firm but they have come up with some very interesting results before in other surveys. Last fall we wrote about a Zogby poll in which 24% of respondents said the Internet could serve as a replacement for a significant other and 11% of respondents said they were very or somewhat likely to "implant a device into your brain that enabled you to use your mind to access the internet if it could be done safely." That's a really bad idea.

A Turning Point in History

This fall we wrote about how Google is changing political debate like nothing else ever has before. It may or may not be particular Internet news sources that are trusted by the respondents to this latest poll - it may just be the world of searchable information that makes a much for a richer and more informed understanding of the news. That's pretty hard to argue with.

Either way, this is a historic turning point. The Internet, the medium most famous for being untrustworthy, at this time when it's more characterized than ever by the ability for anyone to publish, is now more trusted that professional TV and Radio news!

Given both the obvious and documented affinity that young people today have for learning with the Internet - it doesn't seem like TV, radio and newspapers stand much of a chance in the future. Do they?

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Open Beta of Google Friend Connect Coming Soon?

Frederic Lardinois — Fri, 21 Nov 2008 10:19:17 -0800

Just about half a year ago, Google announced a limited beta of Friend Connect, which allows site owners to display OpenSocial based gadgets on their sites and site visitors to sign in to these social gadgets with their OpenID, AIM, Yahoo, or Google accounts.

Amit Agarwal has been keeping a close eye on Friend Connect since it was announced and he assumes that the service could go live pretty soon. Just last week, Google published a new YouTube video geared towards users and now the support site for Friend Connect is available as well.

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Some of the gadgets Google currently supplies are a comment wall and a ratings gadget. Friend Connect will also work with third-party applications built by the OpenSocial developer community. To enable these gadgets, all a site owner has to do is to copy and paste some code snippets into their site's HTML.

Google Profiles Meets MyBlogLog

Lately, Google has started to put a lot more emphasis on its own user profiles, and Friend Connect makes good use of them. Once you join a Friend Connect enabled site, other users will be able to see information from your profile, though you can set your privacy settings to disallow others from seeing your profile pages as well. In many ways, this is quite similar to MyBlogLog.

It's Social, But is it Open?

When Friend Connect was first announced, we were concerned about the direction Google was taking with this implementation of the OpenSocial standards. Also, as we noted in our earlier posts, the Friend Connect apps are displayed in an iframe, which is basically a separate web page inside another web page. Because of this, these apps are black boxes that live on your site, but don't allow the site owners to really leverage the data from these apps on their own sites.

It is interesting to note that the latest Google video about Friend Connect still prominently features Facebook as a supported service, even though Facebook has decided to eschew OpenSocial in favor of its own platform. The help pages for Friend Connect don't feature a list of supported services yet.

Benefits

There are, however, also some clear benefits to using Friend Connect. Through this service, a site owner might be able to create more user loyalty and enthusiastic readers can evangelize your site by publishing their activity on it to their own social network. Visitors will also be able to invite their friends on social networks to join your site.

In an early press release about Friend Connect, Google stated that this initiative was about helping the 'long tail' of sites to become more social. While we might worry about some of the details of Google's implementation, this by itself is a worthy cause, and it will be interesting to see how site owners will implement Friend Connect once it becomes publically available.

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Zoetrope: New Web Crawler Allows For Searching, Analyzing The Ever-Changing Web

Sarah Perez — Fri, 21 Nov 2008 07:47:01 -0800

Does Adobe think they can out-Google Google? Perhaps. The company is involved with Zoetrope, a joint project with researchers at the University of Washington. What they're building is a tool that allows for manipulating the web over time. Instead of the snapshot of the web you see today when googling, Zoetrope will let anyone use keyword searches to discover archived web information and look for patterns in the data found.

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About Zoetrope

As with the Internet Archive, the data in Zoetrope's database is a backup of the entire web, including those pages which have changed over time. But this archive won't be limited to the somewhat inconsistent periodic snapshots of the web's content like the Internet Archive offers. It will encompass everything.

Using the intuitive Zoetrope interface, a user could compare historical changes of various data through time by comparing snapshots of different pages on the web. Analyzing different, changing elements on web pages, side-by-side and over a period of time is downright difficult today - if not impossible. But Zoetrope makes it happen.

The process is done using Zoetrope "lenses" to draw boxes around elements, connect data from one site to another, and pull up charts of relevant data, all while manipulating a slider to scroll back and forth through time. That may sound hard, but if you watch this video, you'll see that it looks surprisingly easy.

For Everyone, Not Just The Computer Savvy

In a way, this project is similar to Google's new visualization API, which lets developers use historical web data to build charts, graphs, gadgets, and the like. However, where Google's tool is aimed at the technically savvy programmer, Zoetrope, on the other hand, is for the average user. Says Dan Weld, a UW computer science and engineering professor who worked on the project, "Zoetrope is aimed at the casual researcher. It's really for anyone who has a question."

As noted in the Washington University article on the project, example uses of Zoetrope could range from the basic: checking historical rankings of favorite players on a sports team, to the advanced: comparing daily air pollution levels in Beijing to number of world's records broken each day in the 2008 Olympics.

"Your browser is really just a window into the Web as it exists today," said Eytan Adar, University of Washington computer science and engineering doctoral student who's also a co-author of the research paper on the project.

"When you search for something online, you're only getting today's results...This is really a new way to think about storing information on the Web."

The researchers hope to offer Zoetrope for free as early as next summer.

Image credits: Color, Torley; Others, University of Washington

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Google Chrome May Be Pre-installed On New PCs

Sarah Perez — Fri, 21 Nov 2008 06:20:08 -0800

How did Internet Explorer become the number one browser in the world? Simple - it came with every new computer you purchased, pre-installed and ready to go. Now it seems Google is contemplating doing the same with their browser, Google Chrome. According to Google VP, Product Management, Sundar Pichai, the browser's beta period will end in January and then they "will probably do distribution deals," he says.

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In an article that ran in yesterday's The Times, Pichai revealed details on what he called Google's plans to make Chrome the browser of choice for the everyday user. A big part of that plan includes distribution deals with computer manufacturers.

"We could work with an OEM (Original Equipment Manufacturer) and have them ship computers with Chrome pre-installed," he was quoted as saying. Thanks to the anti-trust rulings that came out of the IE / Netscape battle back in the 1990's, there's nothing to prevent Google from doing deals of their own with computer makers, if they desire.

Once Google has a glitch-free version of Chrome sometime early next year, "we will throw our weight behind it," said Pinchai. "We've been conservative because its still in beta, but once we get it out of beta we will work hard at getting the word out, promoting to users, and marketing will be a part of that." (A link on Google's homepage might help with those marketing efforts, but not as much as we previously thought).

Pichai also noted that versions of Chrome for Linux and Mac computers will become available in the first half of next year which would allow the browser to work on almost 99% of computers worldwide.

Is It Ready?

Just because Google whips off the "beta" label (perhaps making Chrome one of the first products to leave beta with such speed) that doesn't necessarily mean the browser is ready for prime time.

Shortly after its launch, a serious security flaw was discovered in the browser. The exploit took advantage of an underlying vulnerability in WebKit that had already been known about for more than two months. Apple had patched their Safari browser against this flaw back in July, but Google Chrome launched in September with the flaw still in place. Google's overlooking of this risk is concerning.

Also, for some Windows users, it wasn't until the most recent update the scroll-up functionality on their laptop's trackpad even worked (this author was affected and was pinged by several Twitter friends that were, too). And even now Chrome is misbehaving on a pre-beta build of Windows 7. Googling from the address bar no longer works since the upgrade on my test machine.

Before the product goes gold, we at ReadWriteWeb would like to see the browser add support for RSS feeds, a surprising omission in the feature set. As fans of Google Reader, we had hoped to see deeper integration with other Google products in Chrome, but that doesn't appear to be the case. Subscribing via the browser doesn't even work, let alone allow us to subscribe via Google's own RSS Reader.

Still, these problems may only be a patch or two away from being repaired. Hopefully, Google wouldn't release their browser before it's ready, especially if they plan on promoting it so heavily among mainstream computer users, many of whom have already switched over to Firefox and seem to be happy with their selection. For these individuals, Firefox addons are now also a major part of the browsing experience - will people willingly give those up and move to Chrome? We suppose we'll just have to wait and see.

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Dark Side of the Cloud

Rick Turoczy — Fri, 21 Nov 2008 00:12:45 -0800

For all the optimism surrounding the potential of computing in the cloud - lower costs, better performance, easier scaling - it isn't a perfect system. No matter how distributed and redundant the architecture or how rigorous the backup system, when it comes right down to it, there's a complex series of hoops through which the data has to jump to travel between the user and where it actually resides on a piece of physical hardware. And when a segment of that process fails, all the benefits of the cloud suddenly seem all the less magical.

Take a recent unfortunate situation for Ylastic, a company that provides a single front-end to manage Amazon Web Services, who was recently an unwillingly participant in one of these cloud bursts.

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Ylastic noticed something strange occurring with one of the Amazon Elastic Cloud Compute (EC2) Elastic Block Stores (EBS), a service that is "particularly suited for applications that require a database, file system, or access to raw block level storage."

But something wasn't quite right. And over the course of a few hours the story played out via Twitter as Ylastic noticed issues with its EBS instances.

When the problem was finally identified, Ylastic discovered that the data could not be recovered. They were forced to recover from an earlier snapshot, that contained only a subset of the data.

Finally, after recovering what data they could, Ylastic had to go to its customers with the unfortunate message:

"AWS has finally terminated the frozen instances. But the EBS volume is still detaching and has been for hours. It doesn't seem like we will be able to get into it at this point. Some time in the last month or so, our EBS snapshotting of this stuck volume seems to have stopped working correctly.... We have gone back and run through all the snapshots, and the last good snapshot that we have is from October 1."

Who was at fault? Amazon? Ylastic? Truly, no one. It was simply a combination of issues. A perfect storm in the cloud, as it were. And that perfect storm resulted in data loss for Ylastic and its customer base.

Does this mean we should run screaming from the potential the cloud holds? No, absolutely not. But it's an unfortunate reminder that the system is far from perfect and that those who are relying on the cloud to serve critical aspects of their business should be ever diligent to ensure that the data is being backed up.

For all the technical magic of the cloud, it's still the basics of data management that matter most.

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Six Apart TypePad Connect Beta Holds Promise for All Bloggers

Rick Turoczy — Thu, 20 Nov 2008 21:18:19 -0800

Today, Six Apart is launching three new features for TypePad: enhanced TypePad profiles, a new commenting system, and TypePad Connect, a no-cost combination of services that promises to make participating in and managing communities easier for bloggers on a variety of platforms - not just those offered by Six Apart.

For users familiar with the Six Apart family of products, the profiles will be a welcome step forward from the original TypeKey implementation and the new commenting features offer functionality users have come to expect from commenting systems. But it's TypePad Connect - or more appropriately the vision for what TypePad Connect could be - that makes this announcement interesting.

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So What Is It?

According to Six Apart, TypePad Connect "makes community management easier for bloggers with the ability to track, moderate and respond to comments across multiple sites and blogs from one dashboard or via email." In other words, it's your lifestream and your blog conversations - be they on your blog or someone else's - all in one spot.

At first blush, TypePad Connect may appear to be a reactionary response to services like IntenseDebate, Disqus, and Backtype - possibly even FriendFeed. Services that have all but usurped the conversations that once were the domain of individual blogs.

And maybe in some ways, it is. But there's clearly something else happening here.

If it lives up to its promise, TypePad Connect has the potential to combine both popular lifestreaming features and comment-aggregation features under one user profile. And with an open approach, they could do it in a way that allows users to begin to experience the promise of the distributed social Web.

Vision

When it comes to understanding the social Web, SixApart definitely has vision. The company sprung from the early days of blogging, launching one of the first major blogging platforms. They were the birthplace of OpenID, a single digital identity that has continued to gain support throughout the online community. Members of the company remain deeply involved in a number of efforts driving the social Web today.

This move toward a distributed social presence falls right in line with their previous efforts. Like other services with "Connect" in their names - Facebook Connect and Google Friend Connect - TypePad Connect has a grand vision of moving personally relevant content outside the proprietary constructs of specific blogs - or even of Six Apart, itself - and making it useful and accessible to other services.

In other words, the same way that Facebook Connect, for example, offers other sites access to your Facebook profile information - saving you the time of establishing yet another profile on yet another service that replicates the information you already have stored elsewhere - TypePad Connect offers other blogs easy access to your profile. And in return, you get the ability to manage all of the comments you make from one spot. Your profile is no longer beholden to a blog or service, it's available to be distributed.

Embracing the concept of community that has the ability to exist and live outside the walls of a given blog or proprietary product is definitely a step in the right direction. (For that matter, it doesn't take a huge intuitive leap to see the value of having a TypePad Connect profile as the endpoint for an OpenID URL.) TypePad Connect could be another step toward the realization of a truly distributed social Web.

Current Reality

Even in its current beta iteration, the offering has some definite benefits. Things like simplified avatar management, lifestreaming of multiple services under one profile, and comment management features from a central dashboard will be appealing to many existing Six Apart customers and will likely attract new users, as well.

But as with any beta offering, there are some downsides and issues.

Ironically, one of the current issues with TypePad Connect is comment management. Even though comments are not stuck on a specific blog, comments are still stuck within TypePad Connect. Allowing users to export comments is on the roadmap, but in the beta version, all comments are currently being held on the TypePad Connect servers. That's a concern.

There's also the opposite problem: there's currently no way to import comments into TypePad Connect. That means if you're starting a blog from scratch, you'll be fine, but if you're adding TypePad Connect to an existing blog, you're going to have an old comment database and a new one. So you'll be managing two sets of comments.

That said, it's a beta. It's expected to have flaws.

Verdict

TypePad Connect definitely has a vision for a far more grand offering than the current beta. No doubt, pressure - be that pressure from users asking for the functionality or pressure from competitors like Automattic (which has begun to amalgamate the ingredients for a similar offering with Gravatar and IntenseDebate) - necessitated Six Apart moving sooner rather than later.

But when it comes right down to it, it's the vision in which I believe. I think Six Apart has a chance to provide a compelling solution for a common problem, even if they're not quite there yet. And once they begin to get closer to that vision, it could change the way we think about managing our conversations online.

Vision aside, would I implement this solution today? To be honest, I'd be hesitant to adopt TypePad Connect on an existing blog until some of the beta kinks are worked out. But if I were starting a new blog today? TypePad Connect would definitely be in the running for my centralized commenting system - even though I wouldn't be starting that blog on one of Six Apart's platforms.

If you're interested in trying it, TypePad Connect offers native support for Blogger, Movable Type 3.x and 4.x, Tumblr, TypePad, WordPress.org 2.0 and higher. It can also support any other installation with a chunk of javascript. Support for additional platforms are planned once the offering comes out of beta.

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Inventor of the Wiki Responds to Google Search Wiki

Marshall Kirkpatrick — Thu, 20 Nov 2008 17:27:41 -0800

Google put on a full court media push tonight for a major change the company is making to its search experience. According to the Official Google Blog and a very unusual email the company sent out to press, a new feature called Google Search Wiki will launch soon.

We're not seeing it yet, but read on for an explanation of what the feature will do and a reaction to the announcement from Ward Cunningham, the man who invented the wiki.

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The feature will allow logged-in users to change the order of search results and mark up search results pages with notes. Only their own results will be changed - unless they click a link to view all Search Wiki notes on a search's page. Very few details are out yet, nothing regarding vandalism, libel, history, messiness, collaboration or other wiki matters. Those are pretty important concerns given that this could become the biggest and most important wiki in the world.

This isn't Google Labs, this isn't a little project off to the side, apparently there's a Google Search Wiki team and they have access to the primary search results page. We expect this to be a very big deal.

Reaction from the Inventor of the Wiki

We asked Ward Cunningham, inventor of the wiki, what he thought about Google Search Wiki. This was his first reaction.

I think it looks pretty sharp. It's simple and powerful - it will respond well to scale. I'm surprised that they called it a wiki. When I heard they wouldn't call a wiki a wiki [Jotspot was renamed Google Sites -ed.], then I decided I wouldn't call my searches Googles. Now that they are calling a wiki a wiki, I guess I'll call my searches Googles again....or should I call them wikis?

I can't tell if they have a wiki there or not, it might just be a forum. Collectively editing thoughts is what leads to the unique wiki behavior and I didn't see that demonstrated in the video.

They are going to get a lot of data. They obviously have the ability to wield information, let's just hope that we will all benefit. I don't think it's obvious that we all will benefit - but I guess I have enough trust in the behavior of a large number of people.

Photo of Cunningham by Joi Ito

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I Want My MTV? Not Anymore, Music Promotion Moves to Web

Richard MacManus — Thu, 20 Nov 2008 16:01:37 -0800

It's clear now that the Web has once and for all replaced TV's role in the music business. Yesterday Guns n' Roses released their very long awaited album Chinese Democracy via a colorful MySpace page. Then today NPR announced that they will offer an "Exclusive First Listen" to the new albums of two music legends - Neil Young and Paul McCartney. In late September NPR had a similar arrangement for Bob Dylan's latest album. Younger musicians are flocking to Web platforms such as Imeem and last.fm to promote their music. For bands still under the radar, all the afore-mentioned sites cater to them - but also small sites like Muxtape (a notice on its homepage currently reads: "relaunching soon, in the service of bands").

All of this is further proof that Web technology has gone mainstream in the music business.

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In an age when MTV seemingly doesn't play any music anymore - instead preferring to bore anyone over 15 years old with insipid 'reality tv' shows - it represents a big shift away from TV to the Web, when promoting new music.

The Guns n Roses MySpace page is impressive. It offers the full album online, a couple of days before the official release in stores. True GNR fans, including this author, will still buy the album when it is released. But by promoting the album online a couple of days before release, it encourages new fans and gives Guns n Roses a lot of free publicity and viral uptake on the Internet. This will almost certainly increase overall sales.

While Guns n Roses hasn't gone as far as Radiohead did with their latest album In Rainbows - which was released as a 'pay what you want' download before it was even an actual CD product - Guns n Roses and MySpace is an appropriate partnership for both parties. For Guns n Roses, it allows them to reach a young, hip, massive audience. And for MySpace, it gives them a lot of page views and we presume a very healthy profit from the record label and retailers such as Best Buy (which has a banner ad right at the top of the page). We should also point out that Guns n Roses has employed some heavy handed tactics to stop illegal file-sharing of the album, so they haven't been entirely savvy about the Web. Still, the MySpace promotion is inspired.

We've been impressed by many of the online music services this year - last.fm has continued to evolve its web services, Imeem has been a revelation for many music fans, Pandora's traffic continues to grow despite ongoing legal issues, sites like The Hype Machine (our coverage) and Muxtape (when it was available) offer something new and different, and so on.

But we're also noticing some of the more traditional radio stations vastly improving their Web sites - and NPR is a great example of that. NPR Music is currently marking its one year anniversary. It features content from NPR and 12 of its public radio stations, but what's impressed us has been the "original-to-NPR Music features" such as live performances, studio sessions, first listens to forthcoming albums, and interviews. This author is a subscriber to NPR's All Songs Considered podcast, which has recently featured a full Radiohead concert and a Guest DJ appearance by Radiohead frontman Thom Yorke.

I want my MTV? Not anymore. I can get everything I want in my Web browser! Although to be fair, even MTV has moved its music to the Web.

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Mossberg Says Innovation is the Key to Success During the Econaclypse

Lidija Davis — Thu, 20 Nov 2008 13:31:23 -0800

Walter Mossberg, who has been reviewing technology since 1991 for the Wall Street Journal in his weekly "Personal Technology" column, is convinced the companies that succeed in this type of econaclypse, as AllThingsD has dubbed the economy, will be those that focus on innovation. "It has been my observation that while things do slow down in bad times, they don't stop," Mossberg said.

Speaking to a packed room this week at the Dow Jones VentureWire Technology Showcase in Redwood City CA, Mossberg, the "Most Influential Computer Journalist" according to Time Magazine, described the trends that excite him right now as happening both in computer hardware and computer software: outside the browser Web applications, service in the cloud, and hand held computers.

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Much like during the mid to late eighties, when we saw advances in the personal computer, Mossberg explained we are once again witnessing advances in hardware innovation. This time however, we are not getting excited about the Commodore, Radio Shack and Apple II devices; instead, a new model of computer is energizing the world of consumer technology. The super smart phones or hand held computers as Mossberg prefers to call them: the iPhone, the G1, and the soon to be released BlackBerry Storm.

In much the same way, this time also reminds Mossberg of the mid to late nineties as we are once again observing a swell of Internet innovation; this one happening on the software front with widgets/Web apps and service in the cloud.

With so much information available on the Internet, and the instant gratification demanded by consumers today, the melding of these products is inevitable. Mossberg, who believes widgets will flourish on hand held computers, suggested that while the new class of mobile devices offer better browsing than their predecessors, it is in the apps that he sees competition, innovation and ideas fermenting. "We don't necessarily need to go through a browser," he said.

The problem of course is replicating data across devices in a smooth, cohesive manner to ensure that data available on the Internet is available on the handheld. And that's where service in the cloud comes in. While corporate America has enjoyed technologies such as BlackBerry Enterprise Server, Microsoft Exchange, and Lotus Notes that have enabled data to be replicated between devices [servers, desktops, laptops and handhelds], according to Mossberg, nobody has yet been "wildly successful" in bringing this technology to the wider consumer world via the cloud.

And so the race begins. While Mossberg has always claimed he is not responsible for business coverage of tech companies, the fact remains that for the past 17 years, the star of the Wall Street Journal has accurately assessed innovation within the consumer tech market. Given his insights this week, the only questions that remain are: who will bring cloud services to the masses, and will it happen during the econaclypse?

Read the transcript of Mossberg's keynote below.

Walter Mossberg: Dow Jones VentureWire Technology Showcase 2008

Effects of the economy

I think it's obvious to everybody that we're in for a serious recession. The question is only how serious. Barack Obama probably had thirty seconds of feeling happy and now has a whole lot to worry about.

At AllthingsD.com, our website, we have coined a term for the economy; we're calling it the 'econaclypse' and I think we are in kind of an econaclypse.

My observation, and I have been writing about tech for 17 years, I don't fund anything, but I do get pitched like VCs do.

I see all kinds of new companies, sometimes many months, sometimes over a year before their product ships. And it has been my observation that while things do slow down in bad times, they don't stop.

There is a digital tidal wave in the world, all kinds of digital products, whether they are hardware products, software products, services, web 2.0, whatever the hypesters are going to call the next phase of the Web. That stuff doesn't stop. It slows down a little, but doesn't stop.

And the companies obviously that can hold together and continue to work on their innovation, whether it's business model innovation, but especially if it's product innovation, those are the companies that come out of these things strongest.

Obviously this is not a typical company and I realize the model is different when you have 25 billion dollars in cash in the bank and no debt - which is what this person has - but Steve Jobs said, it was about a month ago or three weeks ago, Steve Jobs jumped on their earning call - he rarely deigns to be on their earnings call as many of you know - and he jumped on their earning call and said: in the last recession, that's when we opened our Apple stores, that's when we did... and he mentioned a couple of different innovative and expensive projects they'd taken on during the downturn, and he says we're going to try and keep innovating our way out of it.

Obviously on a smaller scale and without the 25 billion in cash, and maybe with a little debt that he doesn't have, still I think it's the right thing to do. And even if you don't manage to do that, somebody else will.

Just because the market is in the eight thousands instead of the eleven thousands or unemployment - which is actually the more serious number in my opinion for gauging the length of the recession - is 8.5 percent, which it might get to rather than 4 percent, it doesn't mean people stop working on new ideas, particularly in tech and particularly in consumer tech.

Mossberg's take on consumer technology today

Let me talk about what I think is going on, kind of the big picture of where we are and then we'll do some Q&A if you want.

This period we're in right now if we put the econaclypse off to the side for a minute, this period we're in right now, to me reminds me a lot of the mid to late eighties and the mid to late nineties at the same time. And here's what I mean. It reminds me a little bit of the mid to late 90's because we have another wave of Internet innovation going on.

There is obviously a million different things going on in the Internet but there are two categories I look at - and you've got to remember I don't write about, and I don't pay any attention to corporate technology, or niche technology. I also don't ever use the word enterprise, because the least enterprising and least entrepreneurial part of the entire economy are these giant bloated corporations to whom that term is often applied. I don't see anything enterprising about Ford Motor Company I just call them big corporations or big government agencies or whatever they are. Fine with me that they buy technology - it's great that they buy technology, and sure there is wonderful technology being produced for those folks, but it's not my job to write about them. So everything I say is in the context of consumer

So what do I mean when I talk about things going on on the Web that are to me as exciting and there is as much fervor and ferment and intellectual energy as there was when the Web was getting going in the mid to late nineties?

There are two buckets.

One is outside the browser - it's these widgets, web apps, whatever you want to call them, that did start on the PC and Mac. Actually in a funny way, some of them were tried in Windows 95 with what was called Active Desktop. Unfortunately the way that Microsoft presented it to the world was as sort of selling your personal computer desktop to Disney and Warner brothers, which allowed me to write a couple of great fulminating columns, and not just me.

But it was kind of this idea. And then the next instantiation of any importance, of any sort of economic clout was when Apple put this dashboard aspect into the Mac OS and then Microsoft followed with the sidebar in Vista. But really the place where I think it flourishes is on handhelds. Hand held computers, the iPhone class of computers of which there are now about to be three, and I'm going to get to that in a minute.

So, that's the first bucket, and I think there is colossal developer energy, intellectual energy, going into this question of "okay we have the Web out there, the Internet out there, it's just full of all kinds of information; commerce engines, and search opportunities, and entertainment opportunities, but we don't necessarily need to go through a browser - we can go through an app that takes advantage of the processing power and the graphics engine and all that on the computer that is narrowly focused on whatever it is.

How many people here have an iPhone or an iPod Touch? I'm talking about everything from the simple stock widget on there, to the now over 7000 apps for that phone - for that hand held computer. That's since 11th July. Two million downloads and 7000 apps for that phone, for that hand held computer. So that's one big area of excitement.

The other one, of course, is trying to take what has been true in corporate America for a long time, which is a sort of service in the cloud - whether it's the Blackberry Enterprise Server, or Microsoft Exchange or Lotus products that replicate data across devices and, push e-mail and other data out and bring that to the wider consumer world.

You see Google making some effort, you see Microsoft making some effort, you see Apple with Mobile Me making some efforts - that so far hasn't been successful. Nobody has really been wildly successful. Even RIM - much of the RIM effort has been focused - and when I talk about the consumer space most of the RIM, distributed computing through the cloud, is still out of the enterprise - although that is changing with their customer profile.

So those are the two big exciting areas that I see. I'm not talking about business models for those things. I understand that there has been some debate in some of the sessions about the viability of the advertising model versus other kinds of models, and I share some skepticism about relying solely on advertising.

But without regard to business model for a minute, I think those are two huge pools of excitement.

And then, complementing that and this is what makes me think of the mid to late eighties as opposed to mid to late nineties. What was happening in the mid to late eighties?

Remember the personal computer; the mass market personal computer appeared in 1977.

You had three of them; one of the most important of the three was the Apple II, but you also had a Radio Shack and Commodore. And those were the first machines where somebody without an engineering degree could actually take it out of the box and do something with it. And on the Apple II in particular, that's where business began to adopt personal computers because Dan Bricklin and Bob Frankston wrote a program called VisiCalc. It was a spreadsheet, it ran on the Apple II and you were off to the races in terms of businesses using personal computers.

But it was in the eighties that you began to see this tremendous competition and intellectual activity and design activity and engineering activity around "what is a personal computer?"

So you had Apple doing its stuff, you had Commodore, you had Radio Shack, you had, you know, a million companies.

When I started writing my Personal Technology column in 1991, PC Magazine, and first of all, PC Magazine was the size of Vogue, and when they did their ratings of computers, there were 75 or 80 PC makers, and they were not all making the same sort of thing.

Well I think we're kind of back there because I think there are new form factors and models of computers. Some of them are these netbooks, everybody's heard that term, it's actually a misnomer. The original idea was it would be a very thin client, with very little memory and processing power and would mostly be used to access things on the Net, these widgety kinds of things. And there is still some of that, but within eight months, they've all gotten hard disks, they've all gotten Windows XP so they've all kind of become very small laptops, but nevertheless, it's an interesting category.

The much bigger category of new kinds of computers is what I call hand held computers or another term might be super smart phones. I mean this smart phone term has been out there and has meant very little. At one point Microsoft actually was using it as a brand for something that by today's standards would look very primitive.

You know, Treos were smart phones, Blackberry is a kind of smart phone, obviously these Windows mobile phones that have been out there but there is something new, another whole level of game changing power, and application development that was kicked off with the iPhone and there are now two devices in my opinion that are in that category; one is the iPhone, and one is the G1, the first Android phone, and there will be many other Android phones.

And this week we're about to see a third, which is this, the BlackBerry Storm, which is their effort to compete with the iPhone head on. It's a touch screen phone which will have an app store, and I'm not referring to the - there have obviously been third party apps for the Blackberry, but this is going to have, it has a new SDK, and it will have a major app store like Apple has like Google has for the G1.

These things are computers that happen to make phone calls.

Some of you who have tried some of these 7K apps on the iPhone know that here is pretty much a staggering variety of what you can do on there. And I at least can say in my travels and daily life, I'm as glued as the rest of you probably are to this stuff. I'm pulling out my laptop less and less often during stopovers at airports, and it's not just like when you use to have your Blackberry or Treo and you could look at your e-mail.

I'm doing Web surfing in the browser - which is a good browser in the iPhone - and all of these, the marks of these is they have a much more real browsers than the old phones used to have, but I'm also using a lot of these apps. These are kind of big broad areas where I think it is quite fun and exciting to see competition, ideas ferment; and innovation.

Now are these things immune to the economy? Of course they're not - of course RIM would rather be launching and Verizon would rather be launching Blackberry Storm in last years economy than in this years economy, and it may be that what it would have done in last years economy is not going to happen in this years economy. But luckily for me, I don't have to cover the business side of RIM or Verizon, I don't have to predict sales, I just have try to review and try to understand these products and where they are heading.

Just as a lot of the design and engineering energy left things like CD-ROMs and rushed into the Web when it was clear that it was a big deal, I observed, and I don't know about all of you, but I'm observing a tremendous migration of design and engineering activity into these super smart phones or hand held computers, iPhone class devices. And into these both cloud services and these kind of widgety outside the browser Web apps.

So that's what I think are the big kind of trends that going on right now, at least in consumer technology - of course mixed with other things. People are still making laptops, we have a new version of Windows coming, which I actually think has a chance of being quite good, and quite good is not a phrase you would have seen in any of my columns next to the word Vista, but I think the track they're on with Windows 7 is quite promising. So I'd like to open up to Q&A and we can talk about these topics or any other topic you might think I might be quite competent.

Thank you.

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Crowd Science Giveaway: 50 Free Accounts to RWW Readers

Admin — Thu, 20 Nov 2008 13:00:00 -0800

Crowd Science is a new tool that allows web publishers to gather demographic data. We're using Crowd Science currently on ReadWriteWeb - you may have already come across a pop-up invite and filled out the survey. If you haven't, that's because it's done randomly. So if you do get the Crowd Science pop-up, we'd love it if you filled in the demographic survey. The data from this survey lets us know more about our readers, which helps guide us in our topic selection and so on. Plus of course it enables us to get sponsors and ads that are highly relevant.

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Crowd Science has given us 50 free Personal accounts to give away to our readers. To get a free account click here and enter the promo code "RWW". Crowd Science will choose 50 people, randomly, to get an upgrade to a Personal account - which you will get free for a period of 1 year.

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YouTube Tests HD Videos

Frederic Lardinois — Thu, 20 Nov 2008 11:08:26 -0800

According to a report by Wired's Meghan Keane, YouTube is testing stereo sound as a default option for videos and is also offering very high quality HD versions of a small selection of clips. We weren't able to find a lot of videos that were encoded in the 720p HD format, but it is important to note that this is different from the 'watch in high quality' option YouTube already offers, which only features a resolution of 480x360 and which doesn't look half as good as the 720p option.

It would not surprise us if Google was adding these options to give professional content producers and TV networks more of an incentive to upload their content to YouTube instead of using Google's competitors.

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Competing for High Quality Content

As HD cameras are pretty much already becoming standard in the consumer electronics space, it would make sense for Google to start supporting this format. Also, a lot of YouTube's competitors like Vimeo already offer HD playback with a resolution of up to 1280x720.

We also know that Google is trying to get more professionally produced TV shows and movies onto its service. In this space, YouTube is competing with Hulu, which already offers some shows in HD, as well as the offerings of individual TV networks like ABC, which streams a large selection of its primetime shows in HD.

This February, we already wondered why Google was allowing YouTube to fall behind its competitors by not offering HD video, but now it looks as if Google might be catching up again. The question that remains, however, is when these 720p videos will become a default option for content producers.

To see these HD videos, you have to add "&fmt=22" to the YouTube URL, but we haven't been very lucky in finding a lot of videos where this option was enabled yet. If you find any, let us know in the comments.

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Casual Internet Use Is Good for Kids, 3 Year Study Concludes

Marshall Kirkpatrick — Thu, 20 Nov 2008 10:16:45 -0800

The ways young people use the internet everyday are transforming learning in ways that adults often fail to understand but represent major new opportunities that need to be taken advantage of by supportive educators. That's the conclusion of a major new study by 28 researchers over three years released today by the University of California at Berkley and the MacArthur Foundation.

Titled "Living and Learning With New Media," the study articulates the value of social networking, text messaging and other forms of new media use better than anything we've seen yet. It's a major contribution to our understanding of the new web and the way it impacts the world at large.

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Funded by the MacArthur Foundation's Digital Media and Learning Series, the research is summarized in one two page document a 30 page white paper and a 12 part online book titled Hanging Out, Messing Around, Geeking Out: Living and Learning with New Media. MIT Press will be offering a print version of the book soon.

Leading education blogger Will Richardson pulls out some of his favorite parts of the study on his blog, some of which we excerpt below as well.

Self Directed Exploration Uniquely Motivating

New media allow for a degree of freedom and autonomy for youth that is less apparent in classroom setting. Youth respect one another's authority online, and they are often more motivated to learn from peers than from adults. Their efforts are also largely self-directed, and the outcome emerges through exploration, in contrast to classroom learning that is oriented toward set, predefined goals.

That makes sense, of course, but is it effective?

New Forms of Learning Essential to Participation in Contemporary Society

Social and recreational new media use as a site of learning. Contrary to adult perceptions, while hanging out online, youth are picking up basic social and technological skills they need to fully participate in contemporary society. Erecting barriers to participation deprives teens of access to these forms of learning. Participation in the digital age means more than being able to access "serious" online information and culture. Youth could benefit from educators being more open to forms of experimentation and social exploration that are generally not characteristic of educational institutions.

What kinds of rolls can adults play in this?

Adults Should Help This Process

Youth using new media often learn from their peers, not teachers or adults, and notions of expertise and authority have been turned on their heads. Such learning differs fundamentally from traditional instruction and is often framed negatively by adults as a means of "peer pressure." Yet adults can still have tremendous influence in setting "learning goals," particularly on the interest-driven side, where adult hobbyists function as role models and more experienced peers.

It's a new world for those privileged enough to have access to the web. The consequences of these changes will unfold in years to come. Do schools need to adapt to these new forms of learning in order to keep functioning well? Perhaps. But perhaps for some learning subjects in particular traditional schools have never worked as well as they could in the future if they support these new collaborative styles of learning.

This report is the end result of work done by 28 researchers over 3 years, based on interviews with 800 young people and 5000 hours of online observation. Check it out in full for yourself and let us know what you think.

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