Monday, May 16, 2011

On The Second Web - Everything is Hackable: Google Android's Open Accessory Tools Open Up the Web to Machines and Sensors

What happens when the world can address a light bulb and a light bulb can address the world?

What happens is The Second Web on steroids, a world in which innovation powered by the Web will reach not just computers and information systems but also just about anything and everything that can get within signal range of the ever-present networks that connect to the Web.

More on The Second Web...

Wednesday, May 11, 2011

Microsoft and Skype: Reaching for the Clouds, Holding on to Software

Microsoft has a fundamental problem. It's revenues are tied largely to software that's good at creating printable documents and that can store and create stuff on PCs. Yet in computers and networking, most technologies and services are moving away from these core Microsoft strengths. It isn't just that people are not printing things out as much as they used to; they're not even getting to the point of creating things that need to be printed in many of their communications. Be it social media, texting, videos or mobile communications, we're far more able to make decisions and become productive today well before anyone even thinks about creating something that gets stored on a PC or a server as a document.

This fundamental problem is the rationale behind Microsoft's $8.5 billion acquisition of Skype, the popular communications service that delivers voice, video and text chat for millions of people worldwide. Though a good $3 billion of Skype's acquisition costs go to paying down its debt service and it's barely at break-even in its financials, Skype is a universal tool for people in business and personal settings, a "good enough" method for person-to-person and group communications that is in fact much better than good enough more often than not. With the Microsoft imprimatur, Skype is likely to get more official blessing by enterprises that they service today with their software and emerging cloud infrastructure, which is certain to lead to more positive cash flow for Skype, albeit at a level that makes it hard in the short run to justify the acquisition.

But the "easter egg" in this acquisition may be more subtle than some have realized. Unlike services like Google Talk, which work within a Web browser without installed software components, Skype functions via software that's installed on a user's PC, mobile phone or tablet. Especially for PCs, this is a key factor. Although it's doubtful that Google's emerging Chrome OS laptops are going to push Windows-based PCs out of many major enterprises any time soon, new installations of Windows are crawling forward at best, now. Even as Microsoft pushes its cloud-based Office 365 productivity services, it has positioned those services to support the licensing of existing Microsoft software for PCs and enterprise servers. So although in many ways Skype's strengths are about the cloud, in fact at its essence it's a network service that relies on installed software - in other words, one more reason to hang on to your PC. Score one for new ways that Microsoft can prop up the value of its legacy products and services.

Beyond keeping its legacy products shored up, though, the Skype acquisition offers Microsoft a number of interesting and powerful strengths in areas where they have little or nothing to show for their efforts so far:

  • A global network of valuable user IDs. One of the most annoying things about using Microsoft's Office 365 service is that I was forced to use yet another login ID that means nothing to me and most certainly means nothing to anyone else. With millions of people already used to saying "Skype me" who are equipped with easy-to-share user IDs, Microsoft just acquired one of the last large and independent sources of social media logins. It may not be Facebook, but that's nothing to sneeze at - and could form the core of Microsoft's social and mobile identity for many of its products and services. With cloud-based services like's Chatter messagging beginning to challenge in enterprise social media and communications, those IDs can help Microsoft on both enterprise and consumer fronts.
  • A telecommunications platform to bypass the carriers. It's no secret that Microsoft is struggling to have any sort of impact in mobile communications, in spite of having launched a much-improved Windows Phone 7 operating system. If Microsoft is going to lag in mobile platforms, it cannot afford to lag in mobile software, with or without WP7. Skype gives Microsoft a social communications presence that will be found on virtually every smart phone around. In the not-so-long run, it may also give Microsoft a new way of approaching mobile communications services for its customers. While it's looking at Google over one shoulder, HP's recent alliance with U.S. mobile carrier Sprint, which promises to deliver enterprise-grade mobile services to its customers, looms over the other shoulder. Skype can give Microsoft a lever through which to compete with HP and others for cloud-first mobile communications services that leave the telephone paradigm in the dust. It's another point of inflection which argues for more mobile carrier services becoming raw pipelines for integrated services from companies like Microsoft, HP and Google. It's one more factor that's likely to kill traditional mobile voice services sooner rather than later.
  • A way back into home communications. Sure, you could use your Kinect device attached to your kid's Xbox 360 for video calling today, but who's going to do that? Not many, apparently. With a Skype ID attached to Xbox, there's yet another reason to use this controller, which, in anticipation of the PC's waning influence in family rooms, is becoming increasingly the focus of Microsoft's in-home experience hopes. Kinect is a powerful technology, but as shown at the recent Google I/O conference, Google has its own motion-detection services for Android that are coming soon. Microsoft has a limited window of opportunity to "wow" developers with the potential combination of Xbox and Skype, but it could be a strong combination for some. 
On the whole, you have to rate this a very strong acquisition for Microsoft. The financials of the deal don't stand up on their own merits, but when you look at the range of issues that Microsoft had to address to keep itself from falling off the tech radar in many key  arenas, this was certainly a move that both shored up revenues from existing platforms while opening up major opportunities in mobile, social, enterprise and in-home communications. The primary problem that Microsoft continues to have, though, is that while companies like Apple and Google are pushing new operating systems and platforms for their initiatives with relatively little legacy product to hold them back, Microsoft doesn't have a single platform on which it can pin its hopes for the future in a completely competitive way. Skype can give them the glue for the right services on those platforms, but the underlying bricks of Microsoft won't stand on their own as the result of this acquisition. But there are more chapters to come in this story; for now, the opening paragraphs are promising.

Shore's Peter Propp and I also discussed this deal recently on our 10-Minute Strategy video series:

Life with the Hamster: Chrome OS Delivers as Promised

My son is delighted with his new Chrome Cr-48 laptop, which dad manages to "borrow" a bit whilst awaiting the Samsung version of a Chrome OS machine. It's not much skin off his nose, of course, because with Chrome OS your presence is a login: when I get another unit I will simply power it up and all of my configuration will be there, and when he logs in there will be no noticeable trace of my diddling with it. But in the meantime, it gave me an opportunity to prepare for today's Chrome OS-oriented events at Google I/O2011 using one of 10,000 Cr-48s built for the Chrome OS pilot programme and to consider further where this shift in laptop systems is taking us.

First off, the machine delivers as promised - which is to say, Chrome OS does everything that one would expect it to quite elegantly, though the Cr-48 hardware is a bit challenged to act as a full-replacement unit for people watching high-definition videos and other functions that require more graphics and processing oomph. That aside, this is a unit that is enormously appealing in its deceiving simplicity and starkness, as alluded to in the mirthful graphics on its box, which feature a diagram for a mythical hamster-wheel-powered jet engine. An apt analogy - it's a lightweight machine that's easy to operate and packs a surprising punch. It's like a stealth PC, matte finish all around, no markings, ports for a VGA monitor, an SD card, a USB device, a headphone jack, a webcam, a keyboard and a touchpad - that's it. It powers up in easily under eight seconds to login prompt, making it faster than any of my current Web-aware appliances, including my smart phone, and is ready to work recovering from a sleep mode almost as quickly as you can raise the screen.

Configuration is a breeze, though at first the simplicity of the touchpad hides the fact that you can click on the bottom edge of it to get left-mouse-click functionality. You can configure the unit easily to respond to single taps on the touchpad as a click also. A right-click is a tap with two fingers and scrolling can be dragging two fingers up or down. I found the scrolling gesture to be a bit finicky at times, leading to using the alt-down keys sometimes, but not a great hardship for a day-one technology. The keyboard is abbreviated in comparison to PC layouts, but except for trying to highlight a line of text for copying or deleting, I was able to figure out most functions in a trice (I figured out the copy/delete function eventually).

Being a Chrome browser user already, moving in was easy, thanks to Chrome's syncing ability that enables even your PC-based browser to share settings with the Cr-48. In a few minutes I had my usual Chrome extensions installed and my favorite Web apps, while guiding my son to some apps that he can use in his config. There is the beginnings of an "advanced file system" that will enable Chrome OS to read and write files on its SD card reader drive and inserted USB drives, but for the moment production users will have to wait for the launch of the newly announced Samsung and Acer units to do anything with this feature; right now it just lists files on those drives but will not be able to read or write them. That may be an option that some enterprises would prefer, perhaps.

Other reminders that there's almost nothing on this machine beyond a Chrome OS browser with caching are minimal. There's a timestamp, a signal meter and a battery meter in the upper-right corner of the tabs level of the browser, which allow you to control the related functions. Setup on Verizon's broadband wireless service via this utility was simple, though at 100MB of monthly free access it's not quite the bargain that I had hoped. Still, for those times when you're punting into the city for a meeting, carrying a lighter machine may make this worth it. Worst case, I can use my Nexus S for a tethered signal.

In the browser itself it's essentially like any other Chrome browser experience, with few reminders that there's anything unusual about it. On a unit like this Google's Cloud Print comes in handy, and works great - it all happens in the cloud literally in this instance, since as far as I can tell there's no data transfer of the page from the Cr-48 itself involved. Except for video performance, I found no content that wouldn't run due to performance issues on the CR-48, though The Wilderness Downtown, an HTML 5 experimental multimedia show, didn't have an optimal look given how Chrome OS manages pop-up HTML windows. Of course there are situations like Microsoft's Office 365, their cloud-oriented productivity suite, that are intentionally not optimized for Chrome, but that aside it's a good-to-go unit for the Web in all respects.

Am I ready to go all-cloud? Almost, but not quite. Being in a company that services major enterprises and major conferences, we're stuck with having to produce Powerpoint presentations and other artifacts of the PC era still, so Microsoft still has some hooks into our plans. But having just completed a lengthy migration of software and files on my PC from Windows XP to Windows 7, except for Office and some high-end media production tools there's little that would stop me from going all-cloud. There are some reasonable substitutes in the cloud for these services, so in a pinch I can mange "as is" with Chrome OS. In the meantime, with Chrome OS I can leave my laptop on home for most trips and stay productive with Chrome OS for 95 percent of the work that I do on a daily basis, picking up in the cloud where I left off in the cloud seamlessly. And for the short trip to the sofa in the evening, Chrome OS can keep me connected to the Web more efficiently for many things with just a few seconds required to get there.

So now the hamster, as we've nicknamed the Cr-48, goes off to my son, who will figure out how to migrate our bookkeeping to the cloud, an important goal for us. I wonder whether we'll see a point when the Chrome OS engine gets merged with Google's Android OS. My guess is that we will on some level next year, if security and performance issues can be managed. Given the wide array of accessory and autonomous devices that will be integrated into the Ice Cream Sandwich release of Android, it would seem to make sense to enable Chrome OS to "talk" to that hardware more easily - and to make it more easy for people to access their favorite Android apps while in laptop mode. But my guess is that Android/Chrome integration will happen mostly in the cloud, perhaps with a browser extension that will enable an Android virtual machine of sorts for apps.

In the meantime, I think that the intentionally low-cost profile of Chrome OS is going to be a hit with major enterprises, students and others who are needing to be more productive than tablets can keep them. It could also, potentially, power units that accelerate Web literacy in less developed nations, a OLPC substitute that's fully Web-literate. With rumors floating around of a $20/month cloud service plan for Chrome OS units, the concept of a free unit isn't unthinkable. Welcome to our home, hamster, we're glad to have you.