Punching Google in the Snoot
August 25, 2008
The San Jose Mercury News, Google’s home town newspaper, points out lousy decisions at the Mountain View firm. Chris O’Brien wrote “Google’s Ventures Outside Search Fail to Pay Dividends”. The sub title is even more direct, “Google to face first real test of its leadership as ventures outside search fail to show dividends.” You must read Mr. O’Brien’s story here.
For me, the most interesting point in the write up was this statement:
all those high-profile ventures the company has launched, and the acquisitions it’s made, have yet to contribute much to the bottom line. In a filing with the Securities and Exchange Commission, the company noted that revenue from services such as YouTube, Google Checkout and a host of others ‘were not material.’
Material is a code word for worthless. Even more galling is that this story puts some wood behind a remark I recall hearing about Google from a Microsoft professional: “Google’s a one trick pony.”
That trick continues to spin money, but Google is now officially fallible, a charge that must be galling to the Googlers.
My research suggests that Google’s short term flops cannot be interpreted as the longer term trajectory of the company. Here are three points from my 2007 Google Version 2.0 study for Infonortics, an outfit located near Oxford, England:
- Google focused on search, built a good system by leveraging indifference from competitors and the good fortune of having AltaVista.com engineers available due to Hewlett Packard’s cluelessness about online
- Google discovered that by solving some problems in search, the resulting infrastructure could do other functions quite well. The first big other function was a running a rework of the GoTo.com/Overture.com ad engine
- Google’s infrastructure is an application platform which can be repurposed without too much effort if you are a Google class brain.
The net net is that Google only has to get traction in one or two tangential business sectors to generate new revenue. My research indicates that a “blast off” will generate a fraction of the core business revenue, but if the area is mobile services or enterprise applications, these markets are sufficiently big to make the revenue contribution sufficient for Wall Street’s greed appetite.
I agree with Mr. O’Brien’s analysis in general. But I’m not sure I want to count Google out just yet. Google is one tiny step from becoming a commercial publisher and a video production company. The company has mow through other business sectors quickly and only put effort into those where money begins to flow. That’s what makes Google a threat in the short term and for the longer term as well.
Stephen Arnold, August 25, 2008
Google: When Old Meets New and Is Discovered by Others
August 25, 2008
I just updated my Google patent document collection. I have not done a comprehensive count, but Google’s patent production has slowed. When I get the month by month data, I will post a summary here.
Someone forwarded me Jeremy Zawodny’s Web log post “Dumber Is Faster with Large Data Sets (and Disk Seeks). You can read the full article here. For me the most interesting point in the post was:
Put another way, taking the brain-dead stupid, non-SQL, mainframe-like approach got me results 12 times faster than doing it the seemingly “correct” way.
Mr. Zawodny is a former Yahoo Jedi knight and current database guru. What surprised me is that today’s Jedi’s assume that solutions developed decades ago work. If you poke around the Google patent documents, you may, as I have, identified some “old fashioned” concepts. The rush to reinvent the wheel may prevent some organizations from mining older technologies for good ideas. Perhaps Mr. Zawodny will continue to speak out, saying “Dumber is faster.”
Stephen Arnold, August 25, 2008
Today’s Wild Business Idea: Dump Your Traditional Data Center
August 24, 2008
Dion Hinchcliffe’s “Are We Ready to Declare the “Time of Death” for the Enterprise Data Center” here. Mr. Hinchcliffe uses the Amazon Elastic Block Store service as hook for this question that stopped me in my tracks. I just submitted my KMWorld column on this subject, and I wanted to see if my analysis matched the ZDNet take on cloud computing. The question is, “Can you trust cloud computing with your enterprise data?” Mr. Hinchcliffe includes a nifty illustration which I am reluctant to reproduce. The diagram shows the difference between the traditional data center and the cloud services. It also provides some bullet points to help you recognize the difference between a server sitting in your server room or at your service provider and a service that is not sitting in one of those locations. 😉 I usually tell by the heat and noise, however.
The most interesting section in this write up includes the statement:
But it’s fairly clear that the classical multi-hundred thousand square foot proprietary data center is a dinosaur of another age, like mainframes are for most organizations today.
You will have to work hard to find a better statement of the received wisdom on this point.
My column takes a different line of attack. Like the addled goose I am, I pick out what I consider the weak links in the argument and probe that point. I can’t reproduce the column; otherwise, my publisher will not mail me the really big check that I get for my golden prose. I can identify the a simple check list to help you decide if cloud computing is for you.
First, if you have little to lose, cloud computing makes sense. If the pictures or other ephemera disappear , it’s a heart ache, but you have lost memories, not your money, your freedom, or your business one hopes.
Second, if you are operating on a leash with one end around your throat and the other in the hands of a venture capital firm, law enforcement, or a client with a penchant for crushing worms who fumble a project, you will use cloud computing under carefully controlled circumstances.
Third, you want to experiment and don’t place much value on the test set, go for it.
Fourth, it’s a school project, a research exercise, or a competitive analysis, cloud computing is ideal.
Fifth, you don’t know about security, reliability, service level agreements, etc., sign up now. You may not get bitten, and you will learn a great deal.
My knock against cloud computing is focused on risk. If the risk is acceptable, cloud computing may be the greatest thing since sliced bread. If you are risk averse, you will want to engineer a solution so there can be some fuzzy cloudiness involved, but there’s a great deal of other engineering to match the dream with the risk inherent in a cloudy environment. Everybody may be doing it, but some situations are not for “everybody”.
Stephen Arnold, August 24, 2008
Another Extract from the Harmann-Communicatie Interview
August 24, 2008
I received a couple of requests for additional extracts from my interview with Eric Hartmann, who is sponsoring a conference about content management and content processing in Utrecht in September 2008. You can obtain more information about the program here. Here are three more snippets from the interview. The question is in bold. My response is in normal weight.
Everybody who’s talking about search has Google on his mind. Is that good or bad?
I have written two detailed studies of Google, The Google Legacy in 2005 and Google Version 2.0 in 2007. Google is an important company because it legitimized an alternative to desktop applications and on premises enterprise solutions. Along the way, Google changed the Web search landscape, dominated online advertising, and pushed its snout into telephony, online payments, publishing, and several other major non-search market sectors.
Google now has 70 percent of search traffic in North America. In Denmark and Germany, Google’s share of the search market is over 90 percent.
There’s a lot of talk about Google, but there is not much understanding of how the company’s strategy of disruption works, its business model options, or its potential to move into non search markets without warning.
Google’s also important because innovators are learning from the Google model. People who quit Google to start a new company—what are called Xooglers—build on the ideas made concrete by Google. As a result, Google the company could go out of business. But Google the model will have a continuing impact for many years.
On the hot seat.
After several take-overs, the market of enterprise search parties has somewhat shrunk. What’s your view on the investment and revenue opportunities?
That’s a good question. On the surface, it looks as if search companies are selling out. For example, Lexalytics has fused with a UK company. Powerset sold out to Microsoft. Fast Search also accepted a Microsoft offer. SAS Institute bought Teragram. Business Objects (now part of SAP) purchased Inxight Software.
However, there’s investment as well. Intel and SAP pumped $14 million in Endeca. I have worked on a couple of investments in search and content processing systems not yet announced to the public.
In my files I have the names of more than 300 companies engaged in search, text analytics, and content processing. The search sector is quite active even in the present economic climate.
The reason is that many people think, “If Google did it, so can we”. I don’t see any let up in search activity for the foreseeable future. Most search systems are not so good; therefore, there’s a big payday in the enterprise market. There’s a growing suspicion that Google may not be everyone’s idea of “My Favorite Monopoly”.
The search space is still like two or three interacting magnetic fields. It’s dynamic, unpredictable, and exciting to some.
What can we expect from Google, Microsoft, Autonomy and other parties?
There companies are good at keeping secrets and each is willing to sue anyone who provides highly specific information about what’s next from their creative ovens. I can offer some high level opinions with the caveat that my hunches may not be what these outfits actually do.
Autonomy. This company is morphing from search into a different type of information solutions company. When I look at the range of products on offer, I see a mini solutions conglomerate, not a search or content processing company. For example, fraud detection may or may not involve words. Fraud detection focuses on patterns in data, not search. Another example, is the company’s video solutions. Search plays a part, but Autonomy offers a more robust way for an organization to manipulate its rich content. On the strength of its non search businesses, Autonomy seems poised to grow to $300 million or more in revenue. This is a great achievement, but it is not a pure search play.
Google is a bit of a mystery to me. The company has some interesting patent documents and fascinating demonstration services. Google is content to collect billions from online advertising and sit on its hands as Amazon, Salesforce.com, and other companies push aggressively into cloud services. Google makes money from ads, but I am reluctant to say, “Google is a search company.” Google is an applications platform. Search and advertising are a couple of popular applications, not the whole company.
Microsoft is quite interesting to me. I think the fate of Microsoft will be to end up as an applications company, a game company, and a server company. Microsoft wants to have an online company like Google, but I don’t think it can achieve this unless it shatters itself and then starts online without the baggage from the past. In terms of search, Microsoft is a me-too squared company. Google is deeply duplicative of AltaVista.com, Overture.com, and Microsoft.com. Microsoft, oddly enough, is trying to duplicate Google which has duplicated part of Microsoft. Copies of copies get blurry, so Microsoft lacks focus in its search efforts across its very different business units. The Microsoft money comes from upgrades to operating systems and applications. I think the company has a struggle for the foreseeable future.
Stephen Arnold, August 24, 2008
The Unthinkable: Verizon Dates Google
August 23, 2008
Late last year and in the first four months of this year, one of the consulting firms who use me as an old rented brain had me do Google Mobile briefings. We did five or six of these to different telcos. I showed up, did my talk, took bullets and left. I can honestly say that the telcos were clueless about Google.
The key points in my briefing included:
- Google’s interest in thing telephonic date back to 1999. One of its first patent applications was for Quality of Service
- The sweep of Google’s patent documents and technical papers was broad, making it clear that ideas were not confined to two or three lone wolves; there was a range of interests evident
- Search was “baked in” to many innovations; that is, an innovation in mobile “snapped in” or “hooked” into search functions.
Now battle lines are starting to be visible. AT&T has a deal with Apple. Verizon may have a deal with Google. You can read informed descriptions of the speculations, insights about informed guesses, and business analyses. I found these write ups useful:
- eCommerce Times has a “why the deal is good” write up here.
- GigaOM’s useful business-technology comments here.
- The RedHerring.com site has a good business slant on the alleged deal here.
My take on this deal is somewhat different from the Wall Street Journal type of analysis. First, I think Verizon, like IBM, believes it has the upper hand in any deal with a vendor. Google’s a vendor, so the Verizon mind set is “we have this under control.” I think Verizon has only limited awareness of what Google’s capabilities are. Remember. Verizon is doing a search deal.
Second, Google is going to benefit from this deal. When the agreement is finalized, Google gets to learn from Bell Heads. How this first hand knowledge plays out is anyone’s guess.
Third, Google is not “officially” in the telephony game. Forget the Android partners. Forget the Sprint close dancing. Google and Verizon–it’s the hard evidence that Google is serious.
Exciting stuff if the deal gets done.
Stephen Arnold, August 23, 2008
Microsoft Search Server Express 2008 Redistribution Is Okay
August 22, 2008
Microsoft says it is okay to redistribute its search “lite” system. You can get the short version of what to do from Microsoft’s “Microsoft Enterprise Search Blog” here. The longer version is here. There are some hoops, but the good news is, you can get a free search system with document limits, of course. You will need a Windows Live ID as part of the process. If you don’t have one yet, click here. Enjoy.
Stephen Arnold, August 22, 2008
Microsoft Search Executive: Scorecard Update
August 22, 2008
I have a tough time keeping track of Microsoft “search” executives. Imagine my surprise when I read in Network World here the following:
Microsoft has appointed former Multimap CEO Jeff Kelisky to be the general manager of a new business unit focused on commercial search
I’m not sure what this means, “commercial search”. Elizabeth Montalbano, who wrote the story that caught my attention–“Microsoft taps Multimap CEO to Steer Commercial-Search Unit”–is a pretty clear writer. She clarified my understanding (a little, I think). She writes:
the new unit would be a part of Microsoft’s larger Search Business Group, the general manager of which is Brad Goldberg.
Ms. Montalbano includes Microsoft “search” guru, Satya Nardella, the boss of Microsoft search and portal advertising. She mentions Chris Liddell. She does not mention Gary Flake, former Yahoo search guru.
Please, read the story yourself and let me know if you can help me answer these questions:
- What happened to the top dogs at Fast Search & Transfer and Powerset?
- Who is in charge of SharePoint “commercial” search?
- Who is in charge of search in other Microsoft products like Dynamics?
- What is “commercial search”?
I guess I’m not smart enough to understand who these folks are or what their plan is to close the modest market gap between Google and other search engines, including those available from Microsoft. Help me out, please.
Stephen Arnold, August 22, 2008
Business Intelligence Consulting Crib Sheet
August 22, 2008
If you want to sell business intelligence, you want to learn how to spin from a grandmaster. Industry Week’s “Business Intelligence: Distilling Raw Data into Useful Information”. You can read the file here. The author is consultant Chris Rafter of Logicalis. I find it useful to review how different people explain the value of a fuzzy wuzzy service like “business intelligence”. This write up covers:
- What’s the “make up” of business intelligence
- The three components of business intelligence
- Leveraging business intelligence
- A “self help” test.
Armed with this information, an MBA can nail a big dollar consulting engagement. The one omission in the write up is that it does not have those nifty PowerPoint diagrams. If you want a cook book recipe for selling business intelligence, this article is for you.
Stephen Arnold, August 23., 2008
Patent Sense: Understanding Risk with Legal Eagles and Black Swans
August 21, 2008
Intelligent Enterprise publishes a Web newsletter. Curt Monash, a highly regarded wizard, tackles “Patent Nonsense in the Data Warehouse DBMS Market.” You will want to read this essay here.
The topic is two recent patent lawsuits in the data storage sector.
Teh key point to me is this statement:
Perhaps I’m getting senile, but I can recall only one software patent case in those 27 years that wound up having any material effect on enterprise software users — Marcam/Ross Systems, about process manufacturing ERP software.
I agree for the most part with the practical impact of legal eagles’ squabbling.
I’ve been touched by a couple of legal matters as an expert witness (a pretty tough bit of work). Here’s what I have concluded based on my experience in matters regarding patent documents.
First, litigation is expensive. Companies that embark on a legal matter have to [a] have lots of money, [b] a belief their interests have been in some way affected, and [c] are likely to be pretty consistent in those beliefs–regardless of the outcome of the legal matter.
Second, the wacky approach to patent applications and their kin in the United States is confusing to amateurs and professionals alike. When there is considerable confusion, boundary conditions can look like islands of stability only to dissolve in chaos. Chaos is tough to manage. Just ask Research in Motion whose management found out that beliefs, no matter how strongly held, may be meaningless.
Third, if the parties in the squabble don’t settle, think jury. A jury trial is a very risky operation for both sides in the matter. What pops out of a jury deliberation can be surprising. Judges and tribunals can be almost as startling when required to adjudicate.
My View
For that reason, when I am working for an organization and the issue of litigation comes up, I follow these practical guidelines, which you may find silly or useful depending on your mental stance.
First, I read the patent documents and try to learn something about what systems and methods are in operation or dispute. I’m no attorney, but those claims provide useful hooks for analyzing the system and methods disclosed, particularly in software.
Second, I want a back up plan. In some procurement environments, risk is an issue. Therefore, assuming that because something didn’t happen in the past is meaningless, when a black swan settles on the contracting officer’s desk or becomes known to the money mavens writing checks for an organization.
Finally, when a patent issue comes up, I try to look for other brush fires. My approach is to assume that the specific matter is one of an inter related activity. For example, a company hires a reasearcher away from a competitor, “invents” something, and then finds itself in the midst of a legal matter. The issue is not the invention; the issue is the management judgment that triggered the sequence. For my analytic approach, that’s the key to understanding some activities. I want to look under the hood, poke the innards, and try to find more interesting ways to understand a particular situation.
Net Net
For me, patent documents, hiring practices, and issues that are often off the radar become windows into the organizations involved.
Not surprisingly, I take any patent related litigation at face value and dig to learn more. For that reason, certain types of generalizations and placebos like “don’t worry” are of zero interest to me.
Agree? Disagree? Let me know.
Stephen Arnold, August 21, 2008
Amazon’s Storage Rain Forest: Google Lost in a Jungle
August 21, 2008
Amazon is behaving more like a hungry group of jungle foragers than a company selling books online. In the last couple of years, Amazon has evolved with some zigs and zags into a store front with a services business. Most surprising to me is that Amazon doesn’t spend Google- or Microsoft-sized billions on its infrastructure if the company’s financials have been interpreted correctly by me. Last year, I recall figuring out that Amazon squeezed by on hundreds of millions for plumbing, research and development, and engineering. Amazon’s spending was interesting to me because Google and Microsoft reported spending billions on these essential activities. My original hunch was that Amazon had some magic blend of herbs and spices that gave its Amazonians super powers. I even explored clever techniques for getting more mileage from every technical potion that Jeff Bezos (arguably the smartest man in the world by some Amazonians’ accounts) and Dr. Werner Vogels (the second smartest man in the world by some of those same cheerleaders) assembled. I found tantalizing hints that graduate students from Europe were engineering on Amazon’s behalf, then sent back to the flatlands of the Netherlands to work outside the spotlights directed at Amazon. One person suggested that Microsoft and Amazon are “collaborating” but a question to me from a well placed Microsoft executive suggested that Microsoft is as curious about Amazon as some Wall Street mavens are.
The Amazon Lightning Stike
Once again, Amazon has sent electrical strikes through cloud computing. The company has introduced what amounts to a low cost Storage Area Network running on Amazon’s servers. An SAN makes it easy to set up a storage space and then forget it. In a sense, a user of this new service gets unlimited storage without the headaches of alternative methods.
A number of technical writers are enthusiastic about this new service. I want you to enjoy the fan raves yourself. Here are several of my favorite write ups that deliver PR manna for the Amazon tech gurus, Messrs. Bezos and Vogels:
- Amazon’s own write up, stuffed full of juicy quotes about fault tolerance, engineering wizardry, and business pragmatics Amazon style.
- Rightscale’s explanation, including useful diagram here. I suggest you snag the images and add them to your cloud storage clipbook. The pricing information is extremely useful too. The “availability zone” is a bit murky to me, but you may find it right for what ails your cloud needs.
- GigaOM’s business analysis here. The key idea is that traditional data centers should be worried. Very worried. This well crafted article could have been crafted by a New York consultant carrying a Harvard MBA and a ThinkPad. As a former consultant, this is unusual in the world of “free” Web logs.
I have a different take on this announcement. Keep in mind that I am offering my opinion based on my research. If you want to read a slightly different take on Amazon’s jungle warfare prowess, stop reading. Proceed at your own risk.
My Take
In my forthcoming KMWorld column, I argue that cloud computing is useful in certain situations, but it is not yet appropriate for most enterprise applications. building a start up on an Amazon service is okay with me. A larger outfit can experiment with any Amazon service, and I will say, “No problem.” Ask me to put a mission-critical, regulated company’s applications and data on these services, and I will say, “Not me, sorry.” The problems are too frequent; the risks insufficiently documented for me. You may have a different view of walking barefoot through the foliage on the banks of the Amazon River. I’ve been there, and I am not going for a stroll no matter how innocuous and inviting the Amazon rain forest looks. My tutor in 1958 did this, and he ended up dead in a week. Reports of the death said, “No apparent cause.” That’s the Amazon rain forest in my view–risks you can’t see.
I have three other concerns as well. Let me mention them and ask you to read my KMWorld column when it appears in a few weeks:
- Stability. Anyone using MobileMe?
- Uptime. Anyone recall the Amazon Xbox ordering glitch or the mysterious all day outage this summer?
- Similarity. Anyone wonder why other vendors with arguably more infrastructure and more technical resources than Amazon have not offered this type of storage service?
For me, a company like Google should be in this business. Google is not. Is it because Google lacks the resources? Is it because Google doesn’t believe in the cloud computing revolution? Is it because Google doesn’t know how to offer this type of simple storage?
The answer to each of these questions is, “No.” Google itself makes use of these functions for its own services now, and it has for a number of years, based on my analysis of the company’s technical papers and patent documents.
Why?
This begs the question, “Why?”
My thought is that Amazon, like Microsoft, is in a hurry to out-Google Google. The path selected by Amazon seems to be to look at what Google is doing for its services and then offering a similar service to the developer world *before* Google takes action. Amazon stays “ahead” of Google. Amazon makes the GOOG look like a sluggish, overly conservative company facing increasing friction when it comes to innovation.
My hunch is that Microsoft is doing more than sitting on the sidelines and cheering Amazon on. Microsoft is learning and getting valuable assistance in the task of making Googzilla lame. I’m looking for more information on this cheerleading now.
Amazon is pointing the way to the way applications and other functions will work in a pervasive computing environment. My concern is that Amazon in its race to be first may find itself vulnerable when larger, better resourced organizations move into this sector as well.
The world’s smartest people at Amazon are confident they can win. I’m not so sure. I will avoid exploring the jungle without making sure of where I’m going and what I will confront. Agree? Disagree? Let me know.
Stephen Arnold, August 21 2008
-
- Subscribe to Beyond Search
Feature archive
News archive
-
