Netbook PCs gain power and challenge notebooks

It's getting harder and harder to tell the difference between a "netbook" and a "notebook". Last year, Microsoft and Intel colluded to set forth the definition of a so-called netbook PC. For example, Microsoft characterized machines as ultra-low-cost PCs if they ran a processor running at or below 1-GHz and possessed 1GB or less of RAM. Furthermore, the machine could have a maximum hard drive storage of 80GB and a puny 10-inch screen.

Hardware manufacturers are ignoring these spec's by building low-priced laptops with features that were once only available in higher-end machines. The Dell Inspiron Mini 12 netbook ships comes with a 12-inch screen and a nearly full laptop-size keyboard. ASUSTek Computer Inc. announced that an upcoming model of its popular Eee netbook, the 1004DN, would ship with an internal DVD drive, a 10-inch LCD screen that supports 720p HD video, and a 120GB hard drive. These and other similar netbooks are all priced under $650 (US).

For some users, there is no real requirement to pay the Microsoft premium. Free or low-cost Linux operating systems will handle web browsing and typical document creation just fine. This will put dramatic pricing and revenue pressure on both Microsoft and Intel. Expect to see their shares of the operating system and chip markets to continue to degrade over the next several years.

Read more at ComputerWorld: Beefed-up netbooks blur lines with notebook PCs

Apple is moving the target

Over the last few weeks, Palm has been attempting to generate buzz around the Pre, which is expected to hit the market later this year. Palm believes that this new device will draw existing iPhone users as their 2-year contracts come up for renewal. As I have noted before, I have serious doubts about the efficacy of this strategy, and Apple is making it even more of a long-shot than ever.

On March 16, Apple previewed the iPhone 3.0 operating system. It includes some pretty rudimentary upgrades, like the ability to cut, copy & paste. Unfortunately, the new OS still doesn't support Flash, which a serious limitation on effective web browsing. But it does include some game-changing features like peer-to-peer capabilities. According to the company, users will be able to link up with other iPhone users via stereo Bluetooth, making their media files instantly available. I would imagine that this can easily be extended to include more mundane filesharing, too.

For corporate IT managers, this will mean that smartphone security policies will need to be updated and users will need to be cautioned about sharing sensitive data via Bluetooth.

Nevertheless, I believe this puts a major obstacle in the path of Palm's return to relevance.

More information from eWeek.com: Apple's New iPhone OS
More info from Apple: iPhone Home Page

IEv8 Survey Results: users are ambivalent

Over the past 10 days, I've asked colleagues and connections to answer a few questions about their intentions to use the next version of Internet Explorer. Version 8 is expected to be released in the next few weeks, and Microsoft is expecting the new product to reverse the trend away from IE in the browser wars. Based on these results, I'd say their confidence is not completely justified.

Of the 57 respondents, only 25 indicated that they were likely or very likely to install and and use IEv8. That's just about 45% of the admittedly small population. What should concern Microsoft is that one-third of the respondents (19) were consciously choosing NOT to install and use the new version of IE. Nearly 23% were neutral.

That means over 55% of regular internet users (93% of respondents use the internet more than 4 hours per week) either don't care about their choice of browser, or are actively choosing against the Microsoft product.

There will be more to come regarding these results, including an analysis of how current browser choices are related to the choice of future browser use. If you're interested in having your opinion be a part of this survey, then please click here to take survey.

Dell moves closer to the handheld market

At a March 24, 2009 speech in Tokyo, Michael Dell announced that his company is "...exploring smaller-screen devices. We don't have any announcements to share today, but stay tuned as when we have new news we will share that with you." Their laptops and notebooks have been shipping with 3G radios for the past three years, and it's a reasonably understandable path from small-form PCs to smartphones and handheld devices. Along those lines, an acquisition of Palm wouldn't be out of the question.

I can certainly understand why Dell would want to get into the handheld business. They bring brand recognition and a fairly strong reputation to the table, along with firm grasp of what it takes to build hardware at a low cost.

Nevertheless, it will be very challenging to displace the BlackBerry and the iPhone, even at a relative discount.

Dell Inc.: DELL (NASDAQ)
Read more at ComputerWorld: Michael Dell hints at smartphones, mobile Internet devices

Oracle beats expectations

Oracle announced their FY09 third-quarter results last week, and the firm turned in an exceptional performance considering economic conditions. For the quarter that ended on Feb 28, 2009, total revenues were $ 5.4 billion, or $100 million more than the same period one year earlier. While their sales of new software licenses took a hit, dropping 6% in nominal terms over the prior year, even a modest increase is great news for the company. Taking into account the weakened dollar, Oracle can boast even excellent sales results for the period. Furthermore, the fact that they were able to grow their support revenues means that they have done a great job in cementing ongoing customer relationships. This is all the more impressive given the strong desire for technology leaders to trim expenses as rapidly as possible.

Looking a bit closer at the announcement, we see that Oracle has even managed to trim SG&A expenses compared to the prior year. The firm is certainly doing something right. And their customers are rewarding them.

Oracle Corporation ORCL (NASDAQ)
Oracle's press release: Oracle Reports 3Q Results

Palm gets further behind

Yesterday, Palm released their 3rd Quarter results and, to no one's surprise, it is was a difficult period for the once-dominant PDA provider. For the quarter ended Feb 27, 2009, the company had $90 million in sales, well below expectations of about $150 million. The company admits that they are enduring "a challenging transitional period" as they work feverishly on their next model, the Pre.

Certainly, their management is remaining publicly optimistic that they will come out on the other end of this storm in one piece. But unless the Pre is compellingly different from the iPhone, I believe that Palm will end up getting absorbed into Research-in-Motion or Motorola by the end of next year. They have a respectable existing user base, but they seem to be counting on current iPhone users switching to the Pre once their contracts start coming up for renewal this summer. Given the loyalty inspired by Apple's transformational product, this seems to be an unrealistic expectation.

Palm's quarterly announcement: Palm Reports Q3 FY09 Results
Palm, Inc.: PALM (NASDAQ)

Microsoft closes in on IE8 Release

Internet Explorer 8 is set for final release some time this week. The big question is ... will anyone care?? According to a recent survey of almost 52,000 people inside enterprises (conducted by Forrester), 78% use IE. Of those 40,000 users, only 39% are using IE7, leaving over 60% still using the more reliable version 6.

More than 20% of enterprise customers utilize a browser other than Internet Explorer, and Microsoft's share in the browser war has been shrinking for some time now (see my earlier post here). My gut tells me that people that have already switched to Firefox, Chrome or Safari will not return to Internet Explorer regardless of how it has improved. Of course, the fact that IE ships ... as the default browser ... with Windows will help Microsoft retain market share. But that will not change the inevitable "evening out" of market share across the major browsers.

Cloud storage carries real risk

In February, Amazon.com's Simple Storage Service (S3) suffered an eight-hour failure on July 20, 2008. In February, the S3 system was down for two hours. For enterprises that have outsourced 100% of their data storage to services like this one, this is a nightmare scenario.

When you cannot get to any of your data, you are effectively out of business. Your customer-facing websites will not function. Your accounting systems and personnel applications are useless. Depending on how your email system is configured, you might have no ability to send or respond to electronic correspondence.

For most situations, one day in the grand scheme of things isn't the end of the world. It will likely become the subject of jokes within a few short weeks. Although health-care institutions and stock traders cannot afford that kind of downtime, a real estate firm, software development company, or consulting firm will quickly recover from losing less than 0.5% of a their annual productivity. Even web-based services, like Smug-Mug, can handle these kinds of reliability rates ... CEO Don MacAskill wrote in a blog post last month, "No customers reported issues, and our systems were all showing typically low and acceptable error rates."

Considering the ridiculous costs associated with in-house mass storage solutions, your firm may find that storing data with Amazon, Microsoft or some other cloud-based vendor is a good risk. You'll be paying far, far less for high-quality, high-capacity data storage than you would with just about any in-house SAN solution. And I believe you will have more-than-acceptable reliability over the long run.

But, be prepared for the "nightmare" scenario. Eventually, everyone will laugh about it. But it will be highly unpleasant while you're in the middle of it.

Don MacAskill's Blog: S3 outage - We weren’t affected

Firefox 3.5 moves into "late" beta

Mozilla is moving closer to a general release of the next version of Firefox -- currently listed as v3.5. Most industry observers believe that the general release is still a couple of months away. The organization released a 3^rd beta last week ... on March 12, 2009 ... requesting feedback on a number of fairly technical features. For example, the Mozilla Blog includes the following as a feature for the testing community to review:

Support for new web technologies such as the <video> and <audio> elements, the W3C Geolocation API, JavaScript query selectors, CSS 2.1 and 3 properties, SVG transforms and offline applications.

Really ... don't worry if you don't know what that means.

The real news is that Mozilla is fully engaged in the browser war that's currently underway. Microsoft is on the verge of releasing the new Internet Explorer 8, Apple has offered Safari 4 in beta ... and of course no one can forget Google's offering in the browser market: Chrome.

For those of us in the technology world, it means that application architecture & testing plans must account for all of these potential delivery platforms. This will increase the importance of abstracting the application layer (logic) from the presentation layer (user interface).

Furthermore, business leaders will need to budget for the added development time & expense associated with being compatible with four browsers. This is especially important for customer-facing applications, for which the choice of browser is somewhat unpredictable and completely uncontrollable.

The Mozilla Blog: Firefox beta now available
The Webware blog @ CNET: Mozilla says next Firefox likely months away

Unified Infrastructure is worth a look

Enterprises need to start planning for life after this recession (whenever that is). Part of that plan should focus on an in-depth assessment of the physical architecture of their data center. Virtualization has created a problem: Data center architects need more connectivity into virtualized servers because they're used for multiple purposes. A non-virtualized environment has each server running one or just a few applications, which results in limited and static connectivity needs.

Today the problem is manageable through bursts of intense effort. This will not be a successful strategy when data centers begin to grow again. A Unified Infrastructure strategy will help IT professionals begin to simplify their data centers, at least at the physical level. The goal of a Unified Infrastructure is to run storage and IP traffic through a unified network interface and a single cable. (see graphic) It's easy to see the benefits just in terms of reducing the amount of cabling required to provision a data center of any size. Of course, a non-trivial investment is required in order to migrate to this new infrastructure. Therefore, I don't recommend making this move just yet. But I strongly recommend that IT organizations begin researching this technology over the next six months. The physical simplification is just the beginning, and it will help firms leverage their technology assets more effectively than is currently possible.

Scientists discover new battery type

University researchers have discovered a new kind of battery, according to a study published in Nature. Scientists at the University of Miami (FL), the University of Tokyo and the University of Tohoku have created a device that stores energy in magnets rather than through chemical reactions. Conventional batteries store and give forth electrical power through a chemical reaction. When the chemical reaction occurs, some of the resulting power is lost before in can be transformed into into electrical energy. The so-called "Spin Battery" converts the magnetic energy directly into electrical energy, without a chemical reaction -- and without the loss of energy.

At present, the technology has not been applied to storage units with enough capacity to power even the smallest of electronic devices. However, the proof-of-concept unit is only half the diameter of human hair. As techniques for producing these devices is developed, we can expect this to be a transformative technology. A huge portion of the electricity currently produced in power plants is lost far before it ever reaches its destination. Similarly, electrically powered devices rely on large, heavy batteries to compensate for the energy lost in the chemical-to-electricity translation.

What if we no longer needed to compensate for the power loss?
Imagine a car battery that is 1/50th the size of conventional batteries.
Imagine being able to store electrical power in your home safely and efficiently, without devoting your entire basement to batteries.
Imagine the reduction in weight of all kinds of electronic devices... from iPods to weapons guidance systems to EKG machines.
Imagine if implementing the back-up power aspect of your business continuity strategy didn't require a generator the size of a tractor-trailer.

Truly, this is one of those discoveries that could completely alter the fundamental assumptions of energy production and usage.

Credit where credit is due:
University of Miami (2009, March 12).
Spin Battery: Physicist Develops Battery Using New Source Of Energy.
ScienceDaily.
Retrieved March 12, 2009

802.11n expected to spur Wi-Fi Growth

ABI Research has published a study indicating that firms are starting to switch out their existing wireless infrastructure. 802.11a/g access points still dominate the market, with about 84% of the installed devices using that standard. However, the research finds that, in recent months, health care and higher-learning institutions have begun deploying the faster 802.11n access points.

This has important implications for new office construction and network design. With real world throughput that clocks in at 160 Mbps or faster, many office technology users may not require a hard-line connection to the network. Unless the user needs to download significant amounts of data to their desktop, 160Mbps will certainly be fast enough. And in reality, the vast majority of office technology usage consists of e-mail and web-based applications... neither of which truly require the kind of throughput that a hard-line connection enables.

The consumer market will make the switch soon enough, according to the study. As existing devices come to the end of their useful life, home users will want to take advantage of the improved performance, as well. But I would not expect that to take place until later in 2010, assuming the economy has recovered by then.

Read the article in InformationWeek: Wi-Fi Boom fueled by 802.11n
Learn more about 802.11n: 802.11 Speed

Oracle expands SaaS offerings at a high price

Back in November, I posted a blog on Larry Ellison's down-beat assessment of Software-as-a-Service models. Just five short months later, Oracle is set to launch a subscription-based procurement program application called Oracle Sourcing On Demand. It has a fairly high price-tag -- $850 (US) per user per month (PUPM) -- especially compared to their SaaS CRM product which clocks in around $100(US) PUPM.

Oracle claims that Sourcing on Demand will integrate seamlessly with their on-premise ERP systems, as well as with others. Of course, they all say that. And of course, such a claim relies on a loose definition of "seamless." Nevertheless, it's an important concession by a company that, like SAP, has self-servingly downplayed the efficacy of SaaS solutions. They realize that their long-term survival will depend on making their products easy to buy. In today's market, the best way to do that is to reduce or eliminate the up-front capital outlays normally associated with such solutions.

Still, a single annual subscription for Oracle's new product tops $10K, and a firm with five users is looking at $50K before they even start to integrate the product into their business. It appears to me that Oracle is pricing themselves out of the market.

Oracle, Inc.: ORCL (NASDAQ)
Related newstory: Oracle Offers Procurement SaaS

Microsoft slow to resolve browser vulnerabilities

Secunia, a vulnerability-testing company located in Copenhagen, Denmark, released a report earlier this week that highlights the security performance of the top browsers, including Firefox, Internet Explorer and Safari. Interestingly, 115 bugs and flaws - including security and non-security issues - were reported for Firefox in 2008, while on 31 were reported for IE.

However, Firefox bugs were resolved far more quickly than IE issues. In fact, as of December 31, 2008, Microsoft still had not resolved three security vulnerabilities that had been disclosed more than 200 days earlier.

While security patches for Firefox are available, on average, about 43 days after they are reported, Microsoft has required an average of more than 95 days to resolve security issues -- not including those that have not yet been resolved.

For these types of reasons, it is no surprise that Microsoft's share of market in browser usage has dropped from nearly 75% a year ago to 67.44% in January.

More Information:

• Browser Research from Secunia
• Browser Market Share Statistics from Net Applications

ITIF Report: Expand Broadband to the rural market

The Information Technology and Innovation Foundation - a non-partisan research and educational institute - has identified how they believe $7.2 billion in government subsidies should be allocated. The recently enacted "recovery bill" allots that amount "in support of broadband" initiatives, and ITIF has stated that those funds should be used to deploy moderate-speed broadband to locations in "unserved" areas in the US. Most of these unserved areas are in rural, sparsely populated parts of the country where it is currently cost-prohibitive to deliver high-speed internet access. For customers located there, the only option is dial-up.

In the same report, ITIF suggests that non-wire-based technologies will probably be the best way to deliver these services.

In particular, 4G wireless can be a good alternative to fixed wireline in rural areas where subscriber density is low and fixed outdoor antennas are used to maximize radio signals.

Companies, like Sprint for instance, that have already begun deploying this type of advanced wireless technology will be in a good position to take advantage of this legislative action. Of course, there's no guarantee that regulators will take the advice of ITIF in this regard. But the law has been passed, for better or for worse. And if the money is going to be spent, to me this seems like a fairly reasonable approach.

Read the ITIF Report: The Need for Speed: The Importance of Next-Generation Broadband Networks

Health-related Technology poised for a big boost

Recent spending bills have authorized $19 billion to accelerate the use of computerized medical records in doctors' offices. The legislation calls for incentive payments of more than $40,000 -- spread over the next few years -- to physicians who buy and use Electronic Health Record (EHR) systems.

Last year, the New England Journal of Medicine found -- in a government-sponsored survey -- that about 17% of the country's physicians are using computerized patient records. The incentives, then, are a significant part of the government's effort to expand their use to the other 83%. Market leaders in EHR technology, such as GE Healthcare, Health MedX, and eClinicalWorks are no doubt ramping up efforts to take advantage in this change in the technology landscape. Professional services providers should follow suit, primarily by preparing small-market solutions to serve the 1-10 physician doctors' office.

Why?
Because over 75% of the country's doctors practice medicine in offices with 10 or fewer physicians. These small practices have been hit hard by a number of economic factors, not least the increases in insurance costs over the past 15 years. Yet, they will still want to take advantage of EHR systems, especially now with this incentive in place.

An EHR provider who can offer this capability in a Software-as-a-Service (SaaS) model, while successfully addressing security and performance concerns, will have a distinct advantage in the overall market. Can a cloud-based EHR work? I'd be interested to hear what you have to say.

New SAN technology - faster response time

A new technology is on the horizon that could provide a significant boost to the Storage Area Network (SAN) market. It's called Fibre Channel over Ethernet (FCoE) and it is expected to hit the streets later this year. All of the major players are developing the necessary infrastructure, including chipsets, network adapters and switches capable of handling 10 gigabits per second of data transfer.

According to an article published today at InformationWeek, Cisco has developed 10-Gpbs capable switches in 20- and 40-port models, and is expanding the product line with chassis/blade versions for delivery later in 2009. Intel, Emulex and QLogic are already shipping 10-Gpbs network interface cards designed to work with these Cisco devices. And other manufacturers are building new lines of products to support these developments.

The significance of this is found in the way today's businesses are exploiting their data. Contemporary business applications, both internal and customer-facing, require rapid access to ever-increasing amounts of data. Think about the predictive modeling that goes into Amazon's "recommendations" and expand it exponentially. That kind of analytical power will create unacceptable response times using conventional data access technology. It's why fiber channel SAN devices were originally developed. By enhancing the capability of Ethernet to transport data more speedily from the SAN to the application server (that's doing all the work), we can make more sophisticated analysis available to all types of users. This will improve decision-making, enhance customer experiences, and make SAN technology more flexible and adaptable to changing business requirements.

InformationWeek Reports: Tech Strategy (Link requires registration)

Microsoft continues its pursuit of Google

The current standings in Internet search are ...

1. Google -- 58.8%
2. Yahoo! -- 22.2%
3. Microsoft - 9.8%

Based on my years' of observing the Redmond, WA company, they don't like to be second place at all, much less in third place. Once they set their sites on a competitive target, they normally catch up within 2 years. For instance, Lotus 1-2-3 was the de facto spreadsheet standard for almost a decade. Then Excel rendered it irrelevant. The same can be said for WordPerfect. For years, SQL Server was not even part of the enterprise database engine conversation. It was Oracle, IBM, or nothing. But Microsoft rolled up their sleeves and turned MS SQL Server into a robust and scalable platform.

For whatever reason, they just haven't been able to translate that track record into search engine supremacy. Even as the various installations of Internet Explorer come pre-configured to use Microsoft's search engine, Google still dominates the market. Certainly, it's no accident that "Google" is now virtually a verb in the English language.

So it makes me wonder about a recent lead from Microsoft that internal staff are being encouraged to test out Kumos, their next search engine. One of the bloggers at the Wall Street Journal recounts an internal memo that states:

In spite of the progress made by search engines, 40% of queries go unanswered; half of queries are about searchers returning to previous tasks; and 46% of search sessions are longer than 20 minutes. These and many other learnings suggest that customers often don’t find what they need from search today.

I don't know about you, but I find these numbers to be unrealistic. If search queries were that unsuccessful, then they would not be the most common method of finding information on the web. And "Google" would definitely NOT have reached the status of Kleenex, Xerox and Band-aid in the American lexicon.

Obviously, Microsoft believes there is real value in being the search engine of choice. But I'm not so sure it's worth the development, marketing and support costs. Google has become a habit for nearly 60% of users. And they earned that position by being the first to market, and by producing consistently good results.

Articles from the Wall Street Journal Online (links may require registration):

• Digits blog @ WSJ
• Microsoft begins search engine testing

Microsoft Internal Memo: All Things D

Microsoft Corp.: MSFT (NASDAQ)
Google, Inc.: GOOG (NASDAQ)
Yahoo! Inc. YHOO (NASDAQ)

Broadband nears saturation in US

There are clear signs that broadband adoption is nearing its saturation point in the United States. According to Steve Rago, an analyst with iSuppli, new subscriber additions amounted to 3.1 million in 2008 million, down 56.1 percent from 6.5 million in 2007. Since economic conditions worsened so dramatically in the 3rd and 4th quarters, it's tempting to attribute such a slowdown to the recession. But remember two things. First, the early part of the year was fairly robust, with no talk of layoffs, credit crises, or even skyrocketing oil prices. Secondly, the bundling of service offerings by cable and phone companies, which made broadband very consumer-friendly, really took off in 2005. Nowadays, the coupling of cable and internet is -- almost -- a foregone conclusion. And that type of mindset is normally indicative of a highly mature product.

So, over the next 18 months I think we can expect that internet access fees for consumers will become more competitive... especially with fiber offerings from the phone companies (like FiOS) expanding into more and more neighborhoods. We can expect to see more information-oriented content being delivered to end-users directly from their web sites, bypassing -- to a limited extent -- traditional media ... especially television. This is different from marketing content, and I suspect consumers will reject over-the-top marketing pitches that show up on their computer screens.

And finally, information content that is truly interactive will gain tremendous traction very quickly. Contrast your computer-use posture with your television viewing posture. We even use different vocabulary: We watch TV... but we use the computer.

So we need to focus some creative energy on building applications that our customers can use to actually do business. Doing so will do more for customer loyalty than all the promotions, call centers, and CRM applications combined.

More information about broadband adoption: The Broadband S Curve