Reality Check | Ephraim Schwartz | March 2008

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March 2008

March 28, 2008

Microsoft caves, in part, to online computing

There’s nothing more satisfying than an intelligent observation about life or business that communicates a real truth.

So it is with great pleasure that the following observation...

"First they ignore you, then they laugh at you, then they fight you, then you win," attributed to Mahatma Gandi is also true about high tech vendors and how they react to upstart competition.

Here’s today’s headline, actually an email I received this morning, Friday, March 28, from Microsoft public relations.

"I want to let you know that Microsoft Dynamics CRM’s on-demand service, previously referred to as "CRM Live," will be launched under the name "Microsoft Dynamics CRM Online."

The email went on to explain:

"During this incubation phase, the working name for the new product was Microsoft Dynamics CRM Live. In recent months, Microsoft has launched the new Online brand, with tremendous investment in and focus around on-demand technology for business users."

Will Microsoft Online Office follow?
One piece of advice, don’t laugh.

Posted by Ephraim Schwartz on March 28, 2008 07:19 AM

March 27, 2008

Eyewitness to H-1B scammers

In a series of blogs earlier this month I wrote about how the H-1B visa program is being gamed by outsourcing companies.

If you recall I noted some statistics that said, 8 out of the top ten companies that win the H-1B visa lottery are not U.S. firms that say they need to bring in foreign nationals on an H-1B to complete a project. Rather most of the H-1B visas are awarded to Indian outsourcing companies.

A couple of weeks later I wrote about how these companies don’t even keep their employees who have the H-1B visa in the States.
Rather, after being trained here they are sent back home to complete the task.

With that in mind I thought I would publish this email I received on Thursday from someone who says they have firsthand knowledge of this practice.

So without further ado, here is the email--unedited except for adding paragraph breaks--that I received.

"Yes, Having worked with an Indian software company, I've seen first hand how this system works. As soon as an employee completes one year with the organization, s/he gets their visa processed.

"The documents are filled out as early as Dec[ember] of the previous year.

"Imagine a company with 70,000 employees which files for 10,000 applications. It merely gets a foothold with the volume principle.
Their mantra is flood the USCIS [US Citizenship and Immigration Services] with applications, the more that gets in, the better for the company.

"This is the basis for the company to bargain with clients and get them to shell more on projects. Once 6,000 candidates get their visas in October, hardly 2,000 use it and come on site. The rest fall in the bargaining chip category for future projects!

"Appalling but true. This is just one company that I worked in.. Imagine 5-6 companies doing the same thing.. 65,000 just gets washed away by these mammoths..."

Posted by Ephraim Schwartz on March 27, 2008 06:23 AM

March 26, 2008

Social networking hits the bar scene big screen

Consider: just about everybody now carries a cell phone in their pocket, belt clip or pocketbook. Add to it the fact that monitors, big screens and small, are popping up everywhere.

Mix with that the phenomenon of social networking where people would rather talk to each other anonymously--see the movie Denise Hangs Up-- than in person, and you have the makings for some innovative business concepts.

Enter Sanjay Manandhar who realized there was a cool way to create a business out of the intersection of all these trends.

What Manandhar created was Aerva, a technology and a company that allows a company to become its own interactive but private broadcast network.

The social networking part is this. You can actually put content up on the screen found in any bar today in order to make contact with the the guy or gal who is sitting next to you or who you may have noticed two bar stools away.

In the Boston area, Aerva licenses its server software and Linux appliance to BarCast. BarCast in turn signed up fifty local bars for which it creates schedules, manages and sells ads against content.

It also allows those at the bar to put up text, images or even videos. Of course, the management software allows the barkeep to have the last word on what's displayed. Otherwise things might get a bit dicey.

Now the manager or editor doesn't even have to be behind the bar or in the backroom office. If the editor is remote, it will send thumbnails of the content to an iPhone, for example, at which point the editor can approve or disapprove of what is in the display queue.

The interactive part also allows those at the bar watching a game to vote on who they think will be the MVP by texting their choice to the posted number which goes through the local carrier to the Aerva hosting site. The survey results and winner can then be posted on the local screen.

A content editor can create and manage content from any device with an Internet connection and launch it onto as many screens that the editor manages. The editor can also import Adobe Flash files, using Adobe tools as part of the process.

An application called Pic2Screen allows users to send a picture through email to the server which strips out the junk and displays the picture. The same can be done with a Text2Screen application.

A certain Scandinavian Fortune 100 company is already using Aerva on its many campuses to keep employees informed via displays located around the campus. Employees can respond to messages and ask for more info. Or better still, if coupons are offered they can be sent to the cell phone.

Aerva is behind this story that popped up yesterday on CNN Money.

Posted by Ephraim Schwartz on March 26, 2008 12:41 PM

March 25, 2008

Is the slow economy hurting high-tech sales?

As the economy continues to dive, are we witnessing the first ripples in a revolt against consumerism and the spending attitude that typically says, "Damn the interest and full speed ahead with the credit card spending"?

Signs of change

Two events indicate that such change is on the way.

First, Sirf Technology Holdings, a GPS (Global Positioning System) chipmaker announced today it is laying off 7 percent of its workforce due to an expected downturn in first-quarter revenue.

The company outlook went from revenue of $71 million to $77 million to $60 million to $62 million.

According to the Wall Street Journal, the reduced revenues are due to softer demand for GPS systems in autos.

What does this mean?

I think it may mean a return to frugality, at least a temporary return. Buyers of new cars are saying, "You know what, if the automaker wants to charge me $1200 to $1500 for the GPS option, I’ll use a map."

I know that is what I decided to do when I bought a Subaru recently.

The second signal is also about something I did -- sorry to be personal -- but I did check it out with friends who appear to be doing the same thing.

After receiving an AT&T phone bill that included almost $25 for 411 information calls, upon closer inspection of the bill I saw that AT&T is charging something like $1.50 per call to 411 info.

Right then and there I dusted off the Yellow Pages. And if I can’t find it there, I go online.

Once the crisis passes, ...

Is America changing permanently? I doubt it.

Small cars made their debut in the 1970s after the first oil crunch only to see big gas guzzlers reappear as soon as the pipelines opened up again.

Will we ever get as frugal as a Swedish friend of mine says his countrymen are? He tells me that the Swedes put out sand on driveways and sidewalks -- not salt -- and at the end of the winter sweep it up and save it for next winter’s use.

That’s frugality.

Posted by Ephraim Schwartz on March 25, 2008 10:38 AM

March 25, 2008

Take the smarts out of smartphones

Last week's IBM-Sprint Nextel announcement left me dazed and confused.

According to the announcement, the Lotus Expeditor software platform will be adopted by Sprint Nextel, which in turn will provide mobile application developers with a beta version of a "new" software platform named Titan, which can be downloaded on most Windows Mobile 6 smartphones from Sprint.

But I'm sure that is all perfectly clear to readers more technically savvy than I.

Not to pick on IBM or Sprint, but I'm just about up to here (edge of hand tapping Adam's apple) with yet another, as Bob Egan, principal analyst at Mobile Competency puts it, "discrete choice" in the mobile platform industry.

The mobile platform industry is already confusing enough.

Making sense of the mobile runaround
Parsing the IBM-Sprint Nextel release in hopes of finding clarity, we get IBM calling Expeditor a software platform for "extending desktop computing and Web 2.0 capabilities to mobile phones" and Sprint announcing a new platform, Titan, based on Lotus Expeditor, a platform unto itself.

According to a Sprint representative, this is only the beginning of what is being called the Titan client framework, which includes the IBM Java Virtual Machine, a configuration of IBM Lotus Expeditor, and the Prosyst OSGI Framework.

On the enterprise side, Titan is integrated with both IBM Lotus Expeditor and Prosyst mPRM (mPower Remote Manager).

I also spoke with Bharti Patel, director of Lotus Client Platforms, and she stressed that all of this is built on Eclipse.

"The key point here is that you are building this on top of something that is open," Patel told me.

So open that, at present, it only runs on Windows Mobile 5 or 6 smartphones and "some Symbian" devices, according to Patel.

Oh, but not according to the Sprint representative, who said it works only on Windows Mobile 6 platforms, at least on the Sprint Nextel network.

Well, my key point is that the mobile industry is trying to force IT to become mobile technical evaluators, a role that they are unlikely to be qualified for or do not have the mindset to be involved with, considering all of the other priorities IT faces today, Mobile Competency's Egan says.

Strip down your mobile strategy
If IT does detect some kind of business benefit from mobility, my advice is to wait until we see who wins out among all the providers of these discrete, siloed mobile technologies.

The three big players are, of course, Windows Mobile, BlackBerry, and Symbian. Oh, how could I leave out the up-and-coming iPhone?

One way to approach untangling this industry, from an IT perspective, would be to declare a companywide edict deciding on one of the above and establishing a policy that supports nothing else.

Of course, this scenario is unlikely. All the company needs is one executive to stroll into the office with the latest trendy gadget, and there goes your homogeneous environment. The best approach is instead to recognize that we live in a heterogeneous world, and stop messing around with employees' cell phones of choice.

I'm not saying there won't be great new cell phone technologies coming down the pike. But as a business tool -- one that needs to be integrated into the company network, requires support and training, not to mention the sourcing and refreshing of models -- perhaps the phone should be used only for voice and e-mail, end of story.

Yes, I know all about vertical solutions like the winery that has a custom app for growers who distribute handsets to field workers who send back reports on the quality of the vines and the grapes. That's not what I'm talking about.

Yes, it is fine if you can identify a specific group of users with a specific communications problem that needs to be addressed, as Brian Riggs, research director of Current Analysis, suggests as an interim solution.

Is there any light whatsoever at the end of this mobile tunnel?

Riggs, speaking of the IBM Sprint Nextel announcement, offered this spark:

"The difference here is there are a lot of Eclipse developers, and it just is a first step. Sprint is not the only one looking at this. Other mobile carriers are as well," Riggs says. "The key point is that people can begin to have a platform that third parties can develop interesting applications on that might work with multiple carriers and multiple devices."

I'm not so optimistic.

For me, Expeditor on Sprint as a way to create mashups on your cell phone needs to go to the back of the next-big-thing-in-mobility line behind PBX extensions to cell phones, dual-mode cell phones, WiMax cell phones, VoIP cell phones, UC (unified communications) and presence on cell phones, ERP on your cell phone, and -- did I leave anything out?

I'm sure if I did, someone will text me from their MMS (Multimedia Messaging Service) video cell phone to show me what I might have omitted.

Posted by Ephraim Schwartz on March 25, 2008 03:00 AM

March 24, 2008

U.S. Immigration [USCIS] changes selection process for H-1B visas

An interesting development in the H-1B lottery this year that you may not know about.

As you may know the number of applications for an H-1B visa far exceeds the cap by the first submission day, April 1.

The cap is currently 65,000 H-1B visas plus 20,000 for foreign citizens with a graduate degree from a U.S. university.

However, up until this year the USCIS [U.S. Citizenship and Immigration Services] policy was to have a random drawing from the day’s receipts that are needed to meet the cap.

Typically, this meant that the USCIS used two days’ worth of H-1B applications.

However, this year, according to Greg Siskind of Siskind Susser Bland, an immigration firm, the USCIS for 2009 will randomly select winners from applications received on the first five days.

I am not a statistician but I think this could create a drastic change in who is awarded H-1B visas.

Up until now, as I said in a blog a few weeks ago, eight of the top ten companies that were awarded H-1B visas for their workers were Indian outsourcing companies.

I assume they received the lion’s share of the visas because they were able to flood the USCIS with the most applications in the
shortest time.

Now, if the USCIS uses five days’ worth of applications, I think it will open up the H-1B visas to more companies. Companies that are not training H-1B visa folks here and then sending them back home to do the work. At least now they will be spending pay checks and shopping in the States. That’s better than getting the visa and then disappearing.

For more I suggest you go to the VisaLaw site. This week it is chock full of H-1B information.

Posted by Ephraim Schwartz on March 24, 2008 10:26 AM

March 18, 2008

Will the iPhone force Apple to change course?

If you say your product is "enterprise-ready" within earshot of anybody who works for InfoWorld, you'd better be able to prove it. So when Apple claims "IT professionals" will be able to seamlessly integrate the iPhone into their enterprise environments, a great many questions need to be answered.

[ For more on the iPhone in business, see "IT's guide to the iPhone." ]

The fact is, Apple, at least up until now, has focused on delivering well-designed products that are basically self-service. Let's start with that premise.

The problem as I see it is this: Apple has been, in essence, a "unified experience" company (controlling the hardware and user experience with its own UI, operating system and support software) pushing out products that are basically plug-and-play within the Apple environment.

The enterprise is about applications; Apple is not
I don't think anyone can claim that Apple is an applications company.

But the iPhone presents a new challenge for Apple, in that it will require the company to provide mobile applications support. When that happens, a whole new set of services will be required of Apple.

For example, as much as those in IT complain about the high cost of maintenance and support from the likes of Oracle, SAP, Microsoft, and IBM -- and I've heard those complaints firsthand -- the truth is, IT couldn't live without those companies' supports services.

These companies could probably give away their software and still maintain a healthy profit thanks to maintenance contracts rather than acquiring new licenses. Oracle's acquisitions of PeopleSoft, JD Edwards, Siebel and so on had a lot to do with that calculation of revenue from maintenance and support contracts.

So now we come to Apple. It delivers products that usually deliver a great user experience and set a high design bar for integrated technology systems.

What it is not is an applications software company with a huge network of system integrators, consultants, and VARs, nor does it have a homegrown network able to support a huge enterprise-level customer base.

And let's face it, if enterprise companies buy computers in the hundreds at a time, given the right product, these companies may buy handsets by the thousands.

Making it even more difficult is the fact that even hardware-only companies are now also required to beef up their services. Witness Dell. A few years ago, Dell survived on sending boxes out to the enterprise. But over the past few years, as PCs and servers have become commodities, Dell was forced to look to services to keep investors happy.

My guess is this is the reason why Hewlett-Packard finally surpassed Dell in sales. Once PCs became a commodity, it was HP that had a very long history of support services.

Application software is even more demanding. The major software companies typically have anywhere from three to four support people for every salesperson at the company.

Backing the iPhone's business claims
Yes, the next iPhone OS revision is promised to include a great many enterprise features such as built-in Cisco IPsec VPN and Microsoft Exchange support, as well as remote data wipe and push e-mail, calendar and contacts.

But is the iPhone a consumer product that adds a few enterprise features, or is it a truly enterprise product that can be supported by an ecosystem of service providers? Because that is what it will need to survive in the enterprise.

Is Apple prepared on a huge scale to help its new enterprise customers integrate the iPhone with their existing infrastructure? Will the device be able to extract and process data from the back end? That's certainly not an application you should expect to see sold through the iTunes store, Apple's current venue.

Or does Apple intend to leave that type of support to AT&T, a telecommunications giant that is not exactly comfortable in dealing with the high-tech needs of the enterprise, either?

And then there's the nitty-gritty:

Can Apple build a consumer product that satisfies the needs of companies that want to prohibit their employees from downloading YouTube videos on the phone?

Can users multitask on the iPhone? Will programs run in the background or retain state when the iPhone rings?

Can IT do more than remotely wipe all data from an iPhone? What about blocking use of Bluetooth radio?

At the moment, the answers to these questions are no, the iPhone cannot control these components, it does not multitask, nor does it retain state.

Of course, these are issues that can probably be resolved over time, perhaps with the next SDK.

The bigger issue, however, is whether Apple will develop the necessary business model to back up its new business claims. Is it prepared to invest the time and money in becoming an enterprise-level company that understands the needs of large companies and meets those needs head on?

Related articles:

Special report: IT's guide to the iPhone
Apple iPhone SDK upends mobile market
Eight months ago, Apple was a nonplayer in the mobile space. Now, according to Apple, iPhone is the second most popular smartphone solution after BlackBerry.
iPhone SDK exceeds developer expectations
Apple also bolsters the iPhone's enterprise chops with ActiveSync, remote data wiping, and better VPN support
Sun: We'll put Java on the iPhone
Sun readies virtual machine to make Java apps run on Apple's mobile platform
How to make the (new) iPhone work at work
Apple's new SDK and iPhone updates should make it even easier to add the popular device to your enterprise. Here's what you need to know.

Posted by Ephraim Schwartz on March 18, 2008 03:00 AM

March 17, 2008

H-1B bill would stop use of visa for third party consultants

As reported in InfoWorld last Friday, Representative Gabrielle Giffords,[D-Arizona], introduced an immigration bill,[HR 5630]The Innovation Employment Act that would raise the cap on H-1B visas from 65,000 to 130,000 next year, and set aside the cap completely for foreign graduate students attending U.S. colleges studying science, technology and other related fields.

The bill, if it became law, would increase the cap to 180,000 from 2010 to 2015.

"Section 214(g)(1)(A)(vii) of the Immigration and Nationality Act (8 U.S.C. 1184(g)(1)(A)(vii)) is amended to read as follows:
'(vii) 130,000 in fiscal year 2008 and each succeeding fiscal year, except that in fiscal years 2010 through 2015, if such limitation is reached in the previous fiscal year, such limitation shall equal the greater of 180,000 and the limitation applicable for the previous fiscal year increased by 20 percent; or'."

Okay that's the bad new, however, there is some good news as well.

The bill would put a stop to the practice by outsource providers of bringing in foreign workers on the H-1B visa and then using them as third party consultants. In other words they must be employed directly by a company that is not a consultancy.

It would also stop the practice of training them here and then sending them back to their home country to complete the work.

The bill states that you cannout use individuals on an H-1B visa for third party consulting.

This practice flies in the face of why the H-1B visa was created, says Bob Meltzer, CEO of VisaNow, a company that specializes in immigration issues for its clients.

Meltzer says the point of the H-1B visa was and is to support U.S. businesses. Unfortunately, Meltzer believes because 80 percent of the top ten firms that receive H-1B visas are Indian firms this does not support U.S. businesses.

According to BusinessWeek, data from the U.S. Citizenship & Immigration Services [USCIS]--I was unable to find this data for 2007 at the USCIS site--shows that Infosys Technologies and Wipro were the top two beneficiaries of H-1B visas.

Meltzer says that even though there is a lottery system, these companies typically flood the immigration service with so many visa requests that by the law of averages they come out on top.

Infosys has 4,559 approved visas and Wipro 2,567 approved visas.

Further stats from USCIS, says BusinessWeek, indicate six of the top 10 recipients in 07 were based in India and the other two, seven and eight, are headquartered here but have most of their operations in India. The other two are Cognizant Technology solutions and UST Global.

The top U.S. companies that employ H-1Bs are Microsoft and Intel, with 959 visa petition approvals and Intel with 369.

Meltzer’s says that by sending H-1B visa recipients back to their home country to complete the work after training here the intention of H-1B is being short circuited and by extension the U.S. is actually losing U.S. high tech jobs.

Another part of the Giffords bill says that if you have 50 or more employees no more than half can be from the H-1B visa pool.

"(I) If the employer employs not less than 50 employees in the United States, not more than 50 percent of such employees are H-1B nonimmigrants.'."

Now while some may think the bad outweighs and good, let me just say this is a bill that is not even out of committee yet. It most likely will be modified and modified again and again until it comes to a final vote, that is if it gets out of committee.

The bill has no co-sponsors, not a good sign I would think for its future. So who knows the good bits of the bill may resurface in yet another immigration bill while some of the unacceptable items, such as the large cap increase, may be modified down.

I’ll keep you posted.

Posted by Ephraim Schwartz on March 17, 2008 12:29 PM

March 11, 2008

Outsourcing to the Middle East

The business park phenomenon proliferates, as cheap IT labor communities keep cropping up in emerging markets

As globalization continues to blanket the world and companies continue to look for geographies where they can get IT work done for less, the latest find appears to be the Middle East.

In a small suburb of Cairo, a company called Smart Villages launched Smart Village Cairo, where you will find the likes of Dell, IBM, Microsoft, Alcatel, and Eriksson, each with its own building, about 100 companies in all.

[ For more on recent trends in outsourcing and offshoring, see "The ins and outs of outsourcing and offshoring" ]

I spoke with Virender Aggarwal, director and senior vice president of Satyam Computer Services' RoW (Rest of World) territories, which include Asia Pacific, Middle East, India, and Africa. Satyam, an Indian company, just opened up its Global Solution Center in Smart Village Cairo for software implementation and maintenance, as well as other IT services.

"Egypt has a large population with a lower income and good-quality manpower," Aggarwal told me.

What more could you ask for?

Someday soon, there will be a book that chronicles the mad search by corporations for the very last place on earth where they can find cheap labor -- a comedy or drama, I'm not sure.

Meanwhile, I suppose Smart Villages are nothing more than glorified business parks, but to be honest, the whole idea of a Smart Village is somewhat creepy. It is sort of like putting all the worker bees in one spot, but in this case, you won't find the queen hiding in the center. Instead, she sits in a far-off place exceedingly more luxurious than Smart Village Cairo or Smart Village Damietta or Smart Village Alexandria.

I touched on this offshore phenomenon back in May 2007. The concept of a putting all your worker bees in one spot where they not only work but live is all the rage in China.

The Chinese government built a million-apartment complex as part of a business park. The government pays the mortgage for workers, giving them a 70- or 99-year lease, and it pays for their commute to and from work.

And so last week, Satyam opened its solution center in Smart Village Cairo serving mainly the European market, especially those with operations in the Middle East.

Egypt, which has a population of 80 million, graduates a lot of software engineers who speak French as well as English.

As Aggarwal puts it, oil is more than $100 a barrel, meaning a lot of money is flowing into the Middle East. Satyam has offices in eight oil-producing countries in the region, including Saudi Arabia, Dubai, and Oman.

Global companies, Fortune 1000 especially, with operations in the Middle East are looking to mitigate risk. Rather than getting all the work done in India with a single outsourcing provider, many companies prefer to have the work located in multiple countries even if it is all contracted with the same vendor. Keep in mind the geopolitical risks and the needs of business continuity as well as keeping work close to its customers' Middle East centers.

I'm of two minds about the creation of a place like Smart Village Cairo.

Yes, to an American, it is creepy to have fabricated villages designed just to serve the needs of giant international companies -- not that we haven't been doing something similar with migrant workers for years.

On the other hand, it creates jobs where there were none, and that could mean a better life for millions of people -- with the caveat that the workers are treated well and paid fairly. This, in turn, can bring life to local economies. Perhaps if the workers don't like the food at the corporate lunchroom, a small falafel stand inside an RV will motor up to the employee entrance every day at noon -- that kind of thing.

It is hard to say where this all leads. If we look back far enough, we see that all businesses started locally, and as technology advanced –- trains, planes, and refrigerated container trucks-- it allowed companies to expand their markets.

Some say no one country can be self-sufficient. We all need to import and export goods in order to survive. But I suppose as technology advances, more and more of our manufacturing, farming, and production will be automated, so services will become the backbone of what the workers of the world will supply. In that case, what we are witnessing with the outsourcing phenomenon is the next evolutionary stage in commerce: the importing and exporting of services.

That's fine, I guess, as long as we don't forget that services are not a commodity product that can be packed up on a pallet with an RFID tag stuck to its side and loaded on a truck. Services require people, and they must be treated with respect. I still hold out hope.

One last odd thought: As the world's natural resources become depleted, someday the earth may not be self-sufficient, and we may have to find new worlds to trade with.

Posted by Ephraim Schwartz on March 11, 2008 03:00 AM

March 10, 2008

First iPhone app built from the new SDK arrives

Credit to Erica Sadun for writing if not the first certainly one of the first applications using the iPhone SDK launched last Thursday, 03/06/08.

Sadun wrote it in 24 hours.

The application called Todo App is fairly rudimentary according to reports on developer sites around the Web.

At present say the gurus at CyberSurge, it "will only run in the Aspen Simulator within Xcode."

ToDo will give users the ability to add, edit and delete their things to do.

Another site which calls itself TUAW.com [The Unoffcial Apple Weblog] says that when Apple delivers signing keys to registerd and paid developers the
applicaton can be loaded and tested on real phones.

Stay tuned.

Posted by Ephraim Schwartz on March 10, 2008 06:41 AM

March 07, 2008

Developer talks of iPhone SDK pluses and a few minuses

Antonio Rodriguez, former CEO of Tabblo, a photo sharing site since acquired by HP and who is now the general manager of HP publishing services was so excited about the SDK he called me from the airport between flights.

I interviewed Rodriguez before the release of the SDK and he was a bit skeptical at the time of how much Apple would give to developers.

[ Get the whole scoop on the iPhone SDK, how to make the iPhone fit in the enterprise, and the latest security issues that the popular smartphone raises in InfoWorld's special report. ]

Rodriguez was absolutely ecstatic about most of what the SDK offers, but he also had some reservations that he hopes will be fixed with a little pressure on Apple from the developer community.

Rodriguez called Cocoa Touch, the iPhone version of Cocoa for the Mac desktop, the best library for developing user interface stuff he has ever seen in his career as a developer.

"It is the crown jewel of the iPhone SDK," Rodriguez told me.

On the down side, Rodriguez’s major gripe is that you can’t run applications in the background from the emulator. A lot of social networking applications suffer from that, and so if you want to run a location-based service and have it check for something every 10 minutes, you would have to restart it every 10 minutes.

"It’s kind of a bummer. They will have to yield to developer pressure and fix that," Rodriguez said.

As a developer, however, Rodriguez said the revenue model -- Apple gets 30 percent, the developer 70 percent -- is not bad. But the real issue is the distribution model. "They need to have alternative distribution paths," he said

For example, HP uses an enterprise application for hardware procurement. HP would never put that application in the iTunes store, Rodriguez said, which at present is the only way to distribute an iPhone application. So even the smallest application that you would want to distribute only over a LAN must go through the store.

I’ve heard this from other developers as well, and in fact, Apple said that it is working on creating an alternative distribution path for the enterprise.

Rodriguez’s plane was boarding, but I would have to say if he represents in any way how other developers feel about what Apple is giving them, you are going to see some amazing applications and most likely future sales of the iPhone skyrocket for consumers and business users.

Posted by Ephraim Schwartz on March 7, 2008 03:22 PM

March 05, 2008

Will Apple give iPhone developers the SDK they want?

Unless you were one of the lucky ones to get an invitation to the Apple event in Cupertino tomorrow where Steve Jobs will unveil the iPhone SDK (Software Developer Kit), you’ll have to wait for the news reports to find out how much power Apple will give to third party developers.

In advance of that I thought I’d ask a few ISVs what they’d like to see in an SDK.

[ Get the whole scoop on the iPhone SDK, how to make the iPhone fit in the enterprise, and the latest security issues that the popular smartphone raises in InfoWorld's special report. ]

Ronjon Nag, CEO of Cellmania, is an ISV with a large community of developers that use the Cellmania platform for mobile applications.

Nag says at a minimum level, developers need access to the iPhone APIs for phone book, address book, location-based and GPS-based services plus access to the media player functionality.

However, Nag says Apple is likely to be wary of handing out too much control to the developers lest they interfere with the carriers service and network.

On the business side, Apple has to answer the most important developer question of all, how can I make money? And, Nag warns, if any one of the parties that share in the revenue stream gets greedy the whole ecosystem breaks down.

Antonio Rodriguez, former CEO of Tabblo, a photo sharing site since acquired by HP is now the general manager of HP publishing services.

Rodriquez would also like to see programmatic access to location-based services and access to the iPhone camera.

However, Rodriguez has his doubts as well if this will happen.

If you rate Apple from 1 to 10 on how much they want to control their environment, Rodriguez says, he would give Apple an 11.

"Apple will come out tomorrow and probably sand box developers from using the network altogether. If they do grant access to the network it will have to go through some sort of certification process like they do with iTunes," said Rodriguez.

Rado Kotorov, Technical Director of Strategic Product Management at Information Builders, a business intelligence ISV says it’s all about VPNs [Virtual Private Networks].

"The key problem is there is no enterprise level security and no enterprise level VPN," Kotorov said.

Without that, Kotorov’s customers have no secure way of logging into dashboards, sorting or doing calculations. Kotorov loves the UI which would allow users to jump from chart to chart and dashboard to dashboard but without enterprise level security it just won’t happen.

Odd as it may sound, Kotorov says that although the iPhone screen is way small in comparison to a laptop users know how to create the report parameters that make sense for the screen size but are still useful when away from their main device.

Then there’s Tony Meadow, principal at Bear River Associates, a mobile ISV.

Meadow has been working with mobile systems since Apple’s Newton in 93.

What is exciting for developers is that Apple has redefined cell phones the way Mac redefined personal computers, says Meadow.

iPhone's strong emphasis on usability not just graphic design is what developers find attractive. Meadow points to moving from the point and click metaphor to the pinch and squeeze interface as an example of why usability on the iPhone goes deeper than just graphics.

"It’s a gestural interface," Meadow says.

Meadow’s hope and he says the hope of most Mac developers, is that they will be able to write native applications that live on the iPhone.

"While there are amazing things you can do with Web-based applications using Java script, which is what Apple suggested when the iPhone first came out, there are a lot of things you can’t do that well with a Web-based app," says Meadow.

Meadow expects an SDK similar to what is available for the Mac using a high level language like Objective C.

What he really hopes is for transportability between Mac and iPhone applcaitons.

"I would like to think of it as writing for the Mac but this one runs in the palm of your hand," Meadow said.

Rob Enderle, principal at the Enderle Group, is not a developer and he looks at the SDK from a different perspective.

"Apple should maintain a lot of control over development because there is no [consumer] tolerance for an unreliable phone," Enderle told me.

On the other side of the coin, Enderle thinks developers don’t trust Apple to allow them to talk to customers directly.

The friction between what Apple wants and what the developers want is where the drama comes in, says Enderle.

If you give a lot of control over to developers and Apple does not maintain the high quality of what goes on the iPhone, "the market will move elsewhere," he says.

We will have our answers tomorrow.

Posted by Ephraim Schwartz on March 5, 2008 02:05 PM

March 04, 2008

The benefits, such as they are, for using femtocells

Last week I discussed femtocells and how I believe the carriers are ripping the consumer off by making them pay more for quality service that should have been delivered in the first place.

This week, as promised, I want to tell you why you might end up accepting the additional wireless charges in exchange for better cellular service at home.

So, without further ado, here are the benefits of femtocell technology:

Number 1: Better coverage indoors.
Femtocells have an indoor range of somewhere between 150 to 600 feet. This should allow a cell phone caller to use a handset anywhere in the house without having to search for the location that gives the clearest reception.

Number 2: Faster data rates.
Because a user is not sharing a cell tower with thousands of others, femtocells will give users close to full, peak performance. The kind of performance you could only expect if you were the only one using a particular base station and you were standing right below the tower.
If you were getting 7Mbps with a high speed data service, it’s yours, no sharing required.

Number 3: Improved multimedia.
Why, if you were at home (where the femtocell operates), you would want to watch a movie on your cell phone screen or a sporting event for the life of me I don’t know, but if you did, then obviously the high data rates will give you a great multimedia experience.

Number 4: A single device to manage. For those with a hand held and a cell phone handset, the improved capabilities available with the femtocell will give users the opportunity to 86 the handheld in favor of the handset. It might even allow you to drop wire line service altogether.
Femtocells are also compatible with VoIP.

Number 5: Cell phone as home gateway. Femtocell proponents say you can download your music, pictures and video automatically to your PC from your cell phone the moment you walk back into the house.

Number 6: In order to entice users, the carriers are offering free voice minutes when the femtocell is being used. So, in addition to free evenings and weekends that you probably already have, this will give you free usage at other times while at home.

A few caveats.

Each femtocell, at least for now, is enabled for only one cell phone service -- no swapping SIMS here, thank you. So, if your household members have various plans with different providers, forget about it. One femtocell per provider.

The wireless carriers see femtocells as a way back into the fight for the all important fight over who owns the customer at home. This market is critical to their growth. So you can expect more and more services embedded along with the femtocell.

You will probably also see femtocell technology embedded in other devices, like TVs, set top boxes, etc. as a way to compete with cable, Wi-Fi, and WiMax.

Google, among others have already made investments in femtocell companies so whether you like the idea or not, don’t dismiss it out of hand. We’ll be hearing a lot more about femtocells this year and next.

Posted by Ephraim Schwartz on March 4, 2008 01:17 PM

March 04, 2008

Outsourcing moves to the core

The next generation of outsourcing will include porting knowledge-based business functions offshore

Big ideas can be outsourced For those who thought that outsourcing would remain the domain of heads-down coders and customer service representatives, guess again.

A new form of outsourcing is suddenly sweeping across the U.S. and European enterprise landscape. No, I'm not first discovering BPO (business process outsourcing) or ITO (information technology outsourcing). What I am talking about is called KPO, aka knowledge process outsourcing.

[ For more on recent trends in outsourcing and offshoring, see The ins and outs of outsourcing and offshoring ]

Don't misunderstand; cost savings remains the key driver of outsourcing, according to Peter Brudenall, partner at Hunton & Williams, an international law firm with global technology, outsourcing, and privacy practice groups.

However, Brudenall backed up a report published only last month by KPMG's global sourcing division titled "KPO: unlocking top-line growth by outsourcing 'the core,' " pointing to KPO as the next generation of outsourcing, focusing on knowledge-based skills.

We're talking about financial services companies going outside their borders for company valuations, feasibility analysis, fraud analytics; health care facilities having doctors in India read x-rays -- you name it. No one is immune.

If I can sit in my home office in snowy Vermont writing about high-tech trends, I see no reason why a wordsmith sitting at his desk in Bangalore can't do the same.

But until they come for me, let me tell you a bit more about KPO and what industries are opting in and why.

First off, let's face it. Outsourcing has gained credibility among most all the organizations that have employed the staffing strategy for so-called commodity skills, begging the question: How much longer before outsourcing providers gain the respectability necessary to take on core business functionality?

According to the KPMG report, led by Egidio Zarella, global partner-in-charge of KPMG's IT advisory group, and Pradeep Udhas, global partner-in-charge of KPMG's sourcing advisory group, insurance companies are already outsourcing product design and profit testing. And in the U.K., legal firms are outsourcing due diligence research to India, Brudenall adds.

Legal research, financial modeling -- what can be more "core" than that?

For due diligence, Indian lawyers have access to an extranet through which they review all the documentation. Whereas that would be done by a junior lawyer in Great Britain for 150 to 200 pounds per hour, says Brudenall, in India you would get a senior lawyer charging out at 50 pounds an hour.

Of course, the Indian legal system is based on the British system of law, so Indian attorneys are familiar with the concepts and legal frameworks.

Years ago, a SAP executive told me one of the rationales for opening research and development labs worldwide was because talent is worldwide. Doing so also takes SAP out of its comfort zone, giving it a new way of solving problems.

As for the first wave of KPO, the financial services sector appears the most intent on moving beyond the bounds of the organization. Insurance and actuarial, equity research and investment banking, corporate credit, structured and project finance, and retail banking and marketing are buying in to the new knowledge-based outsourcing paradigm.

KPMG identifies seven countries -- India, Canada, Australia, Singapore, South Africa, Ireland, and Wales -- as places with abundant talent, cost savings, and low political risk, where KPO can be done efficiently.

As opposed to being spurred exclusively by cost-consciousness, the KPMG report states in a 32-point pull quote, that "decisions about outsourcing will be accelerated to preserve and increase competitive advantage."

The first time my eyes scanned the quote my brain read:

Decisions about outsourcing will be accelerated to preserve and increase "cognitive" advantage.

At the end of the day, I think that's what it is all about.

Posted by Ephraim Schwartz on March 4, 2008 03:00 AM

March 03, 2008

Microsoft targets Google with its latest Online Service announcement

The news out of Redmond this morning that Microsoft will expand its online offerings to companies with under 5,000 seats may indicate that the sleeping giant is almost fully awake and ready to really compete in the new world of online applications.

Matt Cain, research vice president at Gartner referred to today’s announcement as "titanic," mainly because the Redmond giant is moving from hosting its online services on a dedicated server model targeted at large enterprises to hosting on a multi-tenant server model that targets SMBs with under 5,000 Microsoft seats.

As Cain sees it today's announcement is Microsoft's answer to Google Applications, a suite of free online productivity apps.

It is true that Microsoft hasn’t had substantial competition in the productivity market for a long time--not since the likes of WordPerfect, Lotus 1-2-3, et al.

However, until we know whether or not Microsoft has had a change of heart concerning how much of their productivity suite they are willing to offer online and the pricing model we will not know if Microsoft strategy is just meant to maintain the status quo.

For the moment Microsoft is offering Exchange Server as a hosted service for calendar, email, and contacts, plus shared workspace, web conferencing and video conferencing.

There has been only speculation that the full Microsoft Office suite, including Word, Excel and PowerPoint will be offered in the future.

While Cain called today’s announcement titanic, Dana Gardner, principal analyst with Interarbor Solutions said of the announcement, "it’s more like rearranging the deck chairs on the Titantic."

Gardner believes we still have to wait for the other shoe to drop, mainly how aggressive pricing will be for non-Microsoft licensees.

As to the promised discount to current licensees Gardner points out that Microsoft is only offering a discount to those who are deploying into the Microsoft model for on premise licensed software. Microsoft is trying to give those customers a way onto the Web while still paying Microsoft in the same old way, said Gardner.

"It strikes me as playing defense to protect its existing business model rather than really embracing the full Web experience," Gardner said.

While it is true that hosted solutions are not part of Microsoft’s traditional business model or as we like to say part of its DNA, Cain says Gates and company received a much needed shot of DNA "courtesy of Google."

"It [today's announcement] never would have happened without Google," says Cain.

Nevertheless, while Cain points to Google as the competition, he also says if you are a new vendor that wants to crack a market the best way to do it is to enter as a SaaS delivery model. In this case, Cain is lumping Google’s free model with the SaaS model which is a pay-as-you-go model, but pay indeed.

We have to distinguish between two different models.

The free model is actually the old publishing model updated for the Web which says give them the software for nothing and it will attract so many users you can sell advertising against it.

Whether readers realize it or not, most print publications lose money on every issue due to the high distribution and product costs, including the price of paper and postage. Advertising is what keeps them solvent.

The second online model is SaaS software. In this model, users are charged on a per user, per month basis most typically. This is mainly the domain of backend applications like CRM and ERP.

The point is although they are both hosted they are not the same so that Microsoft, and other on premise solution providers, have to compete against each differently.

Just because you go SaaS doesn’t mean you go free and supported.

Therefore, on the backend Microsoft has its SaaS CRM and ERP Dynamics solutions. Dynamics competes with Salesforce, NetSuite and others.

But on the front end, desktop productivity applications, Microsoft must compete with Google Apps, OpenOffice and to a lesser degree StarOffice and other free applications.

The question is how can Microsoft give away what has been a large part of its revenue?

The answer is they may not have to give it away. And yet they still can be competitive with the likes of Google.

Gardner believes the Microsoft’s strength is in their ability to package up applications and services which he says they do in a "masterful" way.

"They can package these things together and a manager will say I want the whole suite for my end user and I will pay Microsoft to manage it," Gardner suggests.

So in the final cost benefit analysis administrators may decide they are better off paying Microsoft for the convenience of a one-stop shop with no fat client and no support fees.

This puts the ball back in Google’s court. They have to be able to package up their productivity applications if they want to appeal to directors and managers. Otherwise, as Gardner says, so-called free applications to the enterprise are "free like a puppy."

The answer will come from the enterprise.

As is the case with software development, companies can decide to standardize on Visual Studio and get the benefits of a fully integrated, packaged development environment or they can let their developers use whatever they wish as long as they remain productive.

"What we don’t know is if the developer model applies to productivity workers as well and to what degree workers will have a choice," Gardner said.

Posted by Ephraim Schwartz on March 3, 2008 10:25 AM

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