The Face of Facebook
The Face of Facebook
There’s an interesting article in the September 20 issue of The New Yorker on Mark Zuckerberg, CEO and founder of Facebook. Written by Jose Antonio Vargas it is a synopsis of a short life that includes a partial Harvard education — Zuckerberg dropped out a la Gates to run Facebook — and a whirlwind thereafter. With the movie The Social Network coming out on Friday I thought it provided a good back story to the founding and evolution of this social networking site.
The main thing that struck me is how young one is as a college sophomore. I had forgotten that, though I am sure those close to me would vouch for the fact that I have not progressed much from that point. College is like work release from childhood for most of us. We’re out in the world, more or less, but still tethered to a more or less structured life of classes, projects, friends, music, parties and the usual anxieties — Does she like me? Will I get into grad school? Find a career? Follow my dream? What is my dream?
So getting a peek at Zuckerberg as a precocious programmer and accidental entrepreneur is sobering. It is more sobering than understanding the exploits of another famous Harvard dropout, Bill Gates, who left to found Microsoft. It’s one thing to build, buy or steal an operating system that will, if it runs well, be the equivalent of computer wallpaper and quite another to build and be the front man for a social networking application.
Unarguably, both men and their inventions changed the world, but it seems that Gates had just a little bit more space-time between him and the rest of reality in which to mature as a person before taking on the persona of a public titan of industry, or whatever you might call it.
While the article is, I felt, balanced and the writer interviewed Zuckerberg for the piece, the same can’t be said for the movie coming out. The article indicated that the movie and the book on which it is based used no interviews with Zuckerberg to gather source material and it is unauthorized. Now, I know this kind of thing happens all the time, but it makes one just a bit more sympathetic for Zuckerberg.
The article (and probably the movie) tracks the ups and downs of Zuckerberg’s odyssey from baby nerd programming applications for his father’s dental practice (his mother was a stay at home mom and psychiatrist) to Harvard kid helping other students develop a site that would become the progenitor of Facebook. The article and the movie get into the lawsuits over the IP too.
That’s where I said, “Whoa horsey!” I suppose there are plenty of people out there who are conniving enough to steal an idea from a fellow college student, but how many turn it into a franchise that, if the company ever goes public, will make him one of the richest people on the planet well before his thirtieth birthday?
Facebook’s founding is murky — who had the idea and who programmed it are largely established but what about the influences each had on others as the idea got hammered out? Critical questions because they go directly to how much each should receive in a settlement. Would the product be as successful with a different constellation of characters or different relative amounts of contributions from each? Would it even have gotten off the ground?
The Face of Facebook is interesting because it brings these issues to the forefront, but it also is a tale of the very early twenty-first century when almost any idea can be commercialized and the time horizon on youth is shrinking. It’s ironic that our culture, which celebrates youth, could now be forcing kids into adulthood almost before they’re ready.
Open World — You had to be there
A lot went down at Oracle Open World and you are probably as tired of reading about it as I am of writing about it. Some very good reporting and analysis has come out of it all and you can easily find it on line if you wish. I was impressed with several things that Oracle did including making strides in sales and marketing software and in introducing two new lines of compute servers.
First off, the company said it was beefing up its marketing software because too many customers were looking elsewhere for marketing solutions. This is generally in line with its acquisition of Market2Lead in May. Until now, marketing has remained a place where independent software developers could plant a flag and pretty much be left alone by the big guys. They were too busy making sales and service suites.
Then too, marketing has always been a suite in itself. You don’t build marketing the way you build sales for instance. There are many more moving parts in marketing for campaigns, for lead generation, for market intelligence and for social media inputs. No doubt about it, marketing is a big deal and when a major vendor like Oracle says it’s putting its focus on it, it is remarkable. Marketing also represents relative white space for Oracle, which makes it doubly interesting.
It’s early days as far as I am concerned with Oracle’s marketing solution. It’s even a challenge defining what is included. For instance, Oracle’s very fine loyalty application — marketing or service or sales? Ditto territory planning and white space analysis — sales or marketing?
I know what you might be thinking: some of these are clearly not marketing. But hold on, they aren’t marketing today, maybe, but what happens with the economy in the next couple of years will seriously change the CRM suite. Consider one thing: suppose demand remains sluggish in the sense that we’re not in recession but neither are we in a robust recovery.
Under these conditions many companies double down on their existing customers which changes the sales dynamic and necessarily the underpinnings for what software solutions need to do. My reading of Oracle Open World is that the company is hedging its bets and building products that can prosper in the slow growth scenario.
But the most interesting part of the show for me was observing the transition of Oracle from cloud skeptic to cloud believer. As with any religious conversion, the newly believing are, shall we say, an acquired taste. A year ago, CEO Larry Ellison questioned the need for the designation but this year he had cloud religion. Of course religious beliefs span a spectrum and the Oracle version of cloud computing can best be described as Amazon EC2 Reformed.
Simply put, Oracle’s approach is infrastructure as a service (IaaS). Nothing wrong with that but it brings to mind something Ellison said a year ago, paraphrasing now, cloud computing isn’t new, it’s what we’ve always done. Certainly IaaS is what we’ve been doing or what’s been done before. It consists of selling compute time and storage made available on the Internet with a side order of your favorite licensed software. Nothing wrong with that either except for Oracle’s other big announcement of Exalogic, a beast of a fault tolerant computer that Ellison referred to as a cloud in a box. Rule One of selling is to sell what you’ve got and Ellison certainly did that is his conception of “Hardware. Software. Complete.”
Marc Benioff, CEO of Salesforce.com and advocate of cloud computing as a transformative innovation that he calls Cloud 2, sold what he has too. Benioff gave a keynote extolling the virtues of all things Cloud 2 including multi-tenancy and Chatter, a new category of collaborative tool that leverages crowd wisdom to enhance company performance.
In the process, Ellison and Benioff each used their keynotes to one-up the other while advocating for their favorite definitions of cloud computing. I have to say it was entertaining and a bit silly. The publicity heat given off by the back and forth gave each company free coverage but did little to settle the argument.
It is an argument that will rage for a long time because the market actually needs both forms of cloud computing. For big companies with deep investments in software licenses, the Oracle cloud is a good way to lower the overhead incurred with running a data center. Lower those costs and you’ve made computing more affordable and the details about how you achieved the results is almost immaterial — until you need something new.
The Salesforce idea of cloud computing better fits the needs of any company looking to build net new solutions or to take advantage of new applications from other vendors and new application types. A company is less likely to convert its Oracle general ledger to Salesforce but many are very open minded about moving to the Salesforce cloud for net new and new category applications like Chatter. I didn’t hear any talk about the Oracle development platform because that’s Fusion and it won’t be generally available until next year. When it becomes available things could change.
I have seen Unix computers running converted mainframe applications complete with green screens and I see no reason why the Oracle cloud won’t look like that — i.e. a place for legacy applications — in the future. It’s a huge market and for a long time I expect to see both forms of cloud computing to co-exist and flourish. But eventually, the Oracle form of cloud computing will need to bend to the inevitable and begin to resemble Salesforce in the multi-tenant aspect.
So my big take-away from Open World? As always it’s an industry in transition and the number and kind of solutions are huge. Oracle is doing some neat things at the application level and protecting its flank where needed. All told, it was illuminating and fun.
#oow10 Part 3 Cloud Orthodoxy
Writing about the seminal event for CRM at Oracle Open World — the public cloud computing debate between Larry Ellison and Marc Benioff respective CEO’s of Oracle and Salesforce.com — is tougher than coming up with rent and alimony. There are so many threads to pull together and I have so much history following the debate that I might need multiple posts to get it right. As I see it there are technical, economic, social and personal threads to this.
Technical
Oracle Open World 2010 may be seen in retrospect as the schism-point for cloud computing. Until now, the two main camps did a passable job of playing nice with Oracle often discussing support for so-called hybrid implementations for instance. But that façade was wearing thin and finally cracked this week.
On one hand Oracle introduced some important hardware that will propel its version of the cloud model for a long time to come. On the other, Salesforce.com CEO Marc Benioff reiterated the advantages of multi-tenant cloud computing and made a strong case that cloud computing represents a new paradigm of interactive, social and highly mobile computing that supports new business models. The debate will rage for years, but should it?
It has been clear for a long time that conventional computing involving private data centers running licensed software will not suddenly give up the ghost. Too much time, money and expertise is invested in the status quo for it to go away quietly. Oracle’s Exalogic compute server introduction is aimed at extending this paradigm by reducing the cost of conventional computing.
Oracle’s approach is to make computing resources ubiquitously available to customers for deployment at a moment’s notice. This introduction will be seen by conventional data centers as an important advancement. Though not the first to offer access to virtualized compute services, Oracle maintains that it has competitive advantages from owning the database, middleware and in some cases the operating systems. It claims superiority because all systems are engineered to work together. But implicit is this argument is the idea that the applications to be deployed already exist, an oversight that shouldn’t be ignored.
Benioff’s vision of the cloud starts where Ellison’s leaves off. Benioff believes the future of computing is social and mobile and his forward looking approach seeks to claim net new application customers in the same companies Oracle sells to, which brings us to economics.
Economics
Paradigms shift. Sometimes they move quickly and other times they move at a glacial rate. They also overlap with old and new coexisting during the transition and often the highest evolution of the old paradigm also turns out to be its swan song. Forget about the IT industry for a moment and think about the revolution passenger aircraft that replaced piston engines with jets. The jet engine was the disruptive innovation of its day but it won a paradigm debate because it offered characteristics that included lower maintenance costs, speed and performance. But piston driven aircraft didn’t disappear overnight.
The shift from piston driven passenger aircraft to jets took about twenty years and retired piston planes flew cargo for a long time after that. Perhaps the highest evolution of this kind of plane was the Lockheed Constellation, a beautiful plane with numerous amenities but with piston engines, a dinosaur when it went into service.
Back to IT. In some ways it’s interesting that we’re placing so much attention on cloud computing because the mainframe era is still with us. There are still over six thousand mainframes running mission critical applications in enterprise computing. My point is that while salesforce.com might have the keys to the future, there is still a lot of opportunity left in the older business model of licensed software. I don’t know too many people who want to start a software company based on this model nor do I know anyone interested in building a three-hundred seat piston engine driven passenger aircraft. But I should probably get out more.
I don’t believe the Exadata and Exalogic represent evolutionary dead ends like the Lockheed Constellation. The industry needs the huge capacities these machines represent. Their initial use in serving private clouds with virtualized systems is a good fit but as that paradigm sunsets I believe this technology or its successor will find a home in the larger conception of clouds.
Oracle has a large captive market to sell these new machines to. Selling paradigm extending clouds in a box makes perfect sense for Oracle just as selling a multi-tenant cloud makes perfect sense for Salesforce. Larry and Marc are each playing the hands they were dealt and these guys play well. So look for more sniping from both camps. It will be entertaining, which is why I was recently quoted comparing this situation to a low calorie beer commercial.
Speaking of beer, let’s get social.
Social
The paradigm shift that Marc Benioff and others ushered in ten years ago was about technology but if you look carefully, you can see that the paradigm is shifting again. This time it is about computing at the user level rather than at the producer level. That’s a good reason for why Benioff is promoting Cloud 2 and trying to distance himself from Ellison’s cloud even as the two debate who really has the secret sauce.
We all know about the impact that social media and its use are causing in our culture. Ironically, if you listen to the Enterprise 2.0 crowd, all this socialization was supposed to have been adopted by business ten years ago. But top down, command and control management initially rejected the idea of decentralization instead opting for better technological controls thus extending that hierarchical paradigm. That’s a key reason sales force automation developed as it did, i.e. as a reporting tool.
Social media initially found a home in personal use and it is now transitioning to the enterprise as an overdue paradigm shift. So the debate between Oracle and Salesforce can be seen in this light as a sideshow to the shift in corporate culture. Of course, the shift has to be supported by software and so we have the debate.
Along with social models comes the need for mobility. This might not seem intuitive but think about it, without mobility technology to serve social software, we can only be social some of the time. And since we can’t ever hope to synchronize our activities social becomes an all or nothing proposition dependent on mobility at least some of the time.
The difference between the two computing paradigms comes into sharp focus over the idea of social integration. Benioff’s cloud is fundamentally a social cloud leveraging the wisdom of crowds, which makes this cloud ascendant. Benioff is putting a great deal of effort into socializing the enterprise. Chatter is perhaps the best known social application in the Salesforce quiver but before Chatter there were the Sales Cloud and Service Cloud each of which leverages the wisdom of crowds to discover hidden information that enables enterprises to achieve goals faster and for less expense.
Chatter does for the enterprise what the Cloud offerings do for departments. Using crowd wisdom techniques, Chatter surfaces information and knowledge that is usually hidden from view in an enterprise. By making what was previously unknown at least knowable, Chatter unlocks a new source of productivity for the enterprise. So far Oracle’s cloud paradigm has no answer for it.
Finally there is a personal thread running through all this. We all know that Marc worked for Larry and that Marc credits Larry as one of his mentors. Larry was also a very early investor in Salesforce and a member of the board. The two appear to enjoy the rivalry and I suspect each realizes that having a foil on the other side of an argument is better than being alone in the market, even if you are the leader. It generates press and free publicity as Benioff readily acknowledged in his keynote on Wednesday.
None of this should be taken to mean the situation won’t change. It may be true that past is prologue but one’s history is not one’s fate. As a very big company Oracle has become good at being what Oracle CRM leader Anthony Lye calls a fast follower. Conversely, Salesforce is still relatively small and continues its nimble ways. A future iteration of the debate spawned by Open World could easily expand into social strategies within the enterprise or between it and the customer. It could also grow to include a debate over whose platform and development strategy is best. The possibilities are vast and the options will fuel the conversation for a long time.
#OOW10 The Other Fall Classic Part 2
Dust off your baseball metaphors because they all apply. Yesterday, team Oracle threw strikes, played small ball, swung for the fences, shut down the opposition and generally stole home in a very satisfying win. We’re talking Open World.
It was a team effort at the Moscone Center in San Francisco where forty-one thousand guests and who knows how many Oracle employees participated in a learning program that revealed new products and services up and down the product line from hardware to software. CRM is my interest and there was plenty to see.
I don’t know how many billion dollars Oracle spends on research and development each year, though the number seven sticks in my brain. And I don’t know how much of it goes into CRM but I am reliably informed that the lion’s share goes into our favorite software.
It shows too. As a result, there is a great deal to talk about and only this small space — and, truthfully, my brain has not finished processing it all — so all I can provide are some highlights.
Parenthetically, it is good for me to see that some of the product directions are based on some of the same market assumptions I have been discussing for the last couple of years. Though we might disagree about the drivers for the market shifts the practical effect is that we’re seeing markets change affecting how companies go to market and that directly drives CRM development. Oracle is developing and has developed products that leverage change to help their customers.
A key point is the Sales Performance Suite, developed in Fusion that is penetrating both Siebel CRM and Oracle CRM On-Demand. The parts make for some interesting discussions. For instance, Fusion has analytics support built in and analytics permeate applications based on the platform. This results in some interesting applications for sales planning, territory planning, predictive analysis and one of my favorites, white space analytics.
In the future that I see, selling will look a lot more like retail, pharmaceuticals and consumer goods do now — established vendors selling into known customer bases and less new ground to cover. Vendors will necessarily need applications that can help them pinpoint how and when to sell upgrades or to make new offers to existing customers. That’s where analytics will shine and it points out the need for better social tools that capture the raw data these analytic engines will use.
That’s Oracle’s vision of sales performance. The goal is to help organizations better ensure adequate opportunity across all sales territories and with better coverage achieve better results overall. On the other side of the coin, new or improved applications designed to help vendors better understand customer lifetime value come with more social media support.
As Anthony Lye explained in one of his team’s presentations, customer lifetime value used to be measured only by the amount of revenue a vendor could expect from a customer.
Now, though, with the addition of better analytics and social tools, customer lifetime value is being extended to include the value of a person’s social network and the likelihood that a person will tell his or her network about a product or service. It’s viral marketing on a grand scale and one term to know is Social Activity Stream.
Other revelations might have been less dramatic but more reassuring. For instance, with regard to Fusion and Fusion applications, more than once I was told that Fusion is positioned as a tool for incremental application improvement not wholesale application replacement, though that’s certainly possible too. This means the brands that Oracle bought several years ago are not slated to disappear under a tsunami of Fusion applications, over time Fusion will be used by each product set to improve it.
One of my favorite ideas is Cross Channel CRM. Simply put, it is what makes it possible to surf the Web, talk to a sales person make a purchase on-line and pick it up at a nearby store. The logistics involved in passing all the data around to the many different channels are significant and a n important direction for Oracle.
Then there’s mobility, which isn’t exactly new but the concept is being enlarged. Oracle expects that sales of hand held devices will exceed conventional computers in the near future and that they — including tablets like the iPad — will become the primary CRM device. Take a minute to let that sink in.
It doesn’t mean the PC industry is in trouble but it does suggest the increased importance of mobility. In a world with high transportation costs, and regular is $3.59 down the street form me right now, every change of location is important and saving transportation costs is a key future direction. For those reasons alone, mobile devices fueled by data and intelligence from headquarters will be important for maintaining a competitive edge. These are some of the same reasons that territory planning and lead optimization and analyzing white space become more important. All help a company’s customer outreach to be more efficient and the return on sales investment has always been important and that won’t change.
Not all of the R&D budget goes directly into building products. I was impressed to hear Anthony Lye’s travel statistics for the last year — 240,000 air miles, 60 cities, 40 countries and more. He is not alone, the rest of the CRM team has similarly impressive numbers, which Lye said are accumulated visiting customers and listening to their needs as a routine part of the product development process. As it should be.
Oracle is not a perfect company but at Open World you get a palpable sense of how important customers are and how driven Oracle people are to deliver products and services that customers need. Customers love it and this is one reason so many of them flock to San Francisco every year. Open World continues today with more announcements and demos.
#oow10 The Other Fall Classic
Oracle starts the first full day of Open World today down one game in its best of five series with its customers after two uninspired keynotes by HP EVP Ann Livingston and CEO Larry Ellison. Not to belabor the point, but I must, HP’s, keynote was a run of the mill commercial while Ellison’s was short on vission.
Mercifully HP’s effort was short and to the point. Unfortunately it seemed to me, and the analysts around me, that it was last year’s message if not a verbatim re-presentation. It could be condensed into a simple tag line — buy more stuff, please. Got it.
Neither speech ignited a huge Sunday night audience that was clearly set to be launched into a week of discovery and learning. There was no theme, which seemed odd to me because candidates abounded. Absent any mention of the sour economy and our need to climb out of two years of tough times, the business climate naturally took on the aura of the proverbial eight hundred pound gorilla.
Some nod to this reality and a link to technology as a savior that can help all companies rise above their circumstances was all that was needed but not supplied. Instead we got more or less a grocery list of important things that could have carried greater impact if they’d been arranged better.
Larry Ellison didn’t seem to be on his game. His talk lacked what the first George Bush called “the vision thing” even as he introduced a new hardware offering — Exalogic — a combination of Sun technology, Oracle database, virtual machines and support for several flavors of Unix. Exalogic looks like a real computing beast capable of running all of Facebook on two racks. Exalogic is fault tolerant and boasts a host of added value over its nearest SMP rival from IBM and costs about 75% less but Oracle managed to bury the lede in an avalanch of details that would have been better left for a breakout session.
When Ellison wasn’t extolling the considerable virtues of Exalogic he was trying to redefine cloud computing or, curiously, bashing Red Hat Linux. I am not a Unix guy but apparently the difference between Red Hat Unix and Red Hat Compatible Unix from Oracle is something to care about. I think it got silly when Ellison said Oracle does not test its database with Red Hat, only with its compatible offering, and that Red Hat returns the favor. I am not sure many customers were reassured.
I am something of a cloud computing guy though, having followed its evolution at least as long as anyone in the audience or perhaps even on the planet. I remember the bad old days of client-server architected systems that broke easily because they lacked standards and because they were incredibly difficult to build and maintain.
I also remember the high costs of systems that took two or three times the software license fee to pay for customization and implementation. Cloud computing and its direct antecedents brought those days to an end replacing them with multi-tenant internet accessible solutions that have made gains in robustness, reliability and power every year for over a decade.
The fashion today is for recent converts to cloud computing to cherry pick the gains and consolidate them into what they are calling cloud computing. The formula that the industry is settling on includes browser based interfaces and software managed on a server farm off in the distance but not multi-tenancy. This enables them to appropriate the cloud business model of charging by use and offering what they call elasticity for computing power. Elasticity is a very good thing but cloud computing should be more than infrastructure as a service.
This conception of cloud computing, which looks a lot like a time sharing redux, preserves the most lucrative parts of the old software licensing paradigm complete with the need for a smaller army of developers to knit it all together.
Such is Oracle’s conception of what cloud computing should be and for reinforcement it points to Amazon’s EC2 model as proof. In the Oracle conception the pioneering bookseller is on the leading edge of advanced technology while the trailblazing Salesforce.com is merely ten years old and destined for history’s ash heap. This definition is gaining altitude but only in the way that any other flat earth theory repeated often enough sounds credible.
Of course, this kind of one-upsmanship has been a staple of the software industry for decades and the rest of the cloud community will have many opportunities to present its case beginning as soon as Wednesday when Marc Benioff invades the Yerba Buena Theater to give his own version and vision of cloud computing.
Nothing is guaranteed in life but I would bet body parts that Benioff will give a thoughtful and inspiring talk on the future of cloud computing — just the thing that we badly needed but didn’t get on Sunday.
Today the sessions start and the real information exchanges can begin in earnest. There is an incredibly full docket and I am confident that things will look a lot different by day’s end. The pitching staff failed in the first game, but as in baseball, you can’t do anything about yesterday so don’t dwell on it. Today’s game will be better.
