Microsoft Alleges Google Apps Carry Hefty Hidden Fee

May 9, 2011

“Microsoft Attacks Google Apps with “Google Tax” marks another 22 caliber shot in the skirmish between Microsoft (the new IBM) and Google (the new Microsoft). Yep, the 22 slug is an allegation that Google imposes a “tax” on users. Interesting but many companies impose a tax on users. Some achieve the revenue with a partner fee, some with training costs, and others with strongly recommended engineering and consulting services.

After interviewing “more than 90 small and medium sized organizations using Google Apps,” Microsoft discovered that:

…For 9 out of 10 companies surveyed, Google Apps are used in parallel to Office.

Additionally, the majority of companies surveyed:

will continue to standardize on Microsoft Office, while they only evaluate free trials of Google Apps, and do not intend to spend money on deployments.

Among the small and medium sized businesses surveyed, I learned that “Only two in five adopted Google Docs and two out of three companies still use Office as their primary productivity solution.”

Microsoft, the article asserted, “has created an iceberg info-graphic that reveals Google’s hidden costs.”

There is a much recycled graphic metaphor depicting the tip-of-the-iceberg up front costs of $50 (per user), and the annual costs and one-Time costs as the unseen base of the iceberg. How hefty are these charges? The article suggests that these fees amount to almost ten times the “visible” costs, in addition to unknown costs for end-user training, staff training, and lost user productivity. I think the “lost productivity” means a person familiar with Word has to waste time trying to make Google Apps deliver the same functionality.

The bottom line is that user prefer Word. Is there a tax for using Microsoft Office? The article sidesteps this issue. In Enterprise Technology Management, a publication of ISIGlobal.com, Stephen E Arnold summarized Google’s pricing of its Google Search Appliance. The Google “tax” may be evident in those data as well. To see the US government’s Google Search Appliance fees, navigate to www.gsaadvantage.gov and search for “GB 7007″ or “GB 9009″.

Jane Livingston, May, 9, 2011

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Google and Cost Control: Work for Its Accountants Ahead

May 3, 2011

In the midst of the Twitter-changes-news information flood, I wanted to document an item I found important and directly related to search. The article that caught my attention was “Google Australia Claims 2010 Financial Loss.” The title is a good one, conveying the key factoid. The numbers reported by ItWire were interesting in themselves:

  • Revenue of $151 million Kangaroo bucks
  • Loss of $3 million KB
  • Tax payments of $7 million KB.

Accountants can turn water into wine and lead into gold. But the point that hit me was:

Google’s biggest local cost was its 434 employees – which soaked up some $111.6 million in the period, meaning their average salary was a whopping $257,000. However, the company also spent a great deal on advertising and promotional expenses — $10.53 million in 2010. Other major expenses included travel and entertainment – which was $7.13 million. he company’s basic profit and loss statement only listed tax costs of $1.1 million, although the company was actually slated to pay some $7.4 million in taxes in 2010. However it balanced that figure out with deferred tax payments and adjustments. At the end of the year, Google Australia was holding some $21.3 million in cash and cash, as well as $34.2 million of what it said were ‘trade and other receivables’. It had some $16.1 million worth of property, plant and equipment.

Yep, costs. Employee costs are hefty, but the Google is spending for advertising and promotion. Isn’t Google one of the world’s most recognized brands? Isn’t Google the owner of the most potent online advertising system in the world?

So, the key to the future of Google is not just good accounting. Good old fashioned cost controls are going to be the key to the company’s success in Australia and elsewhere. Outfits like Facebook want to slam on the Google advertising revenue brakes if possible. If ad revenue softens, costs loom even larger than they do at this time. Even accountants run out of angles when the revenue flags.

Stephen E Arnold, May 3, 2011

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A New CRM? Search Vendors Scramble

January 22, 2011

“The New CRM Will Drive Revenue” is a posting from one of the new type of consulting firms. Individuals sign up as experts. Then the 20 somethings beat the bushes for clients who can’t pay or don’t want to pay the fees for a McKinsey, Bain, or Booz grade firm’s services. I enjoy these write ups. I also subscribe to Funny Times.

If there ever was such a thing as a “duh” statement, this would be it. Companies with better customer relationship management systems (CRM systems) will do better and attract more revenue as the economy begins to improve. Okay.

It comes as no surprise that IT professionals are going to be needed more and more as companies begin to rely more heavily on the internet in order to attract business. Basic CRM and knowledge management skills are still going to be needed but now it’s on a whole new level.

Not only are systems going to be forced into automation they will also have to create full-time mobile support because of the new age of smart phones; applications for iPhone, Droid, and Blackberry will have to be created and supported. Social networking sites such as Facebook, Myspace and Linkedin will have to be created and maintained as well in order to maximize consumer consumption.

What would have made the write up more on point for Beyond Search was a comment about the mad scramble some search and content processing vendors are now undertaking. Companies like Vivisimo are now in the customer support game, and there are others. Why?

I am not sure “customer support” is the point of the exercise. The goal is reduce costs and keep the pesky customers away. What better way to achieve this than replace humans with software created by folks who are mostly into code.

The new CRM will drive revenue? No, the new CRM reduces costs and does little to help some “customers.” Great idea.

Stephen E. Arnold and Leslie Radcliffe, January 23, 2011

Freebie unlike the repackaged search systems that improve customer support.

Mainframes Still Necessary

October 31, 2010

The last time I was in a data center was 48 hours ago. It was a big one. The racks were filled with tiny little things. There was no easy way to count the blades in the lousy light. I knew after the tour that there was no mainframe in the data center. I do run across mainframes at big companies. Earlier this year I visited an insurance company, and it had a traditional data center. Most of the machines in that data center were Dells of one sort or another. Off in one corner was a room within a room. I asked, “What’s the mainframe doing here?” The answer was, “It does some stuff. That was before my time. Let me ask one of the old timers.”

I said, “Nah.” Legacy. Old timers. Got it.

For kicks I read “Mainframes Still Essential for Hybrid Data Centers.”

http://www.techeye.net/hardware

The article points out that when you have mainframe programs to run, you better have a mainframe. No argument here. The report, as Techeye points out, was created and distributed by a mainframe centric company. Nevertheless, the write up disclosed a juicy detail:

The most important priority for mainframe users in 2010 has been reducing costs, with 65 percent picking that answer. Disaster recovery came in second at 34 percent, while application management and business/IT alignment came in at 30 percent and 29 percent respectively.

No big surprise about costs. Most recent computer science grads close dance with mainframes briefly in their love affair with technology. The disaster recovery point is also understandable. When a Web 2.0 type mucks around with a mainframe or even an AS/400, it doesn’t take long to learn that the big honkers don’t work like a Macbook.

But the killer phrase is “application and business/IT alignment.” One third of the respondents want to get the mainframe to work like more tractable systems. The “alignment” hints at getting those honkers out of the work flow.

I admire the authors of the report and even IBM for spinning PR that pumps mainframes. These machines can be little gold mines today.

The “essential” is understandable, but let’s face it. The future is miniature gizmos and energy efficiency, ease of use, and Webby stuff. A hybrid data center has no choice. Then there are the costs.

Stephen E Arnold, October 31, 2010

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KlickOut: Curation from the Users

September 11, 2010

In this age of information, KlickOut provides a platform where content is available for free, can be shared with the world, and even managed by the users themselves in a democratic fashion. For the content it receives from the people world over, the website says, “You are the editor and you are the reader here. We’re here to provide a place where people can collectively determine the value of content.”

Users upload their content as ‘Upcoming Stories’, which viewers add as favorites if they like it, and on gaining popularity the content is shifted to the home page of its respective category, on the basis of receiving a critical number of favorite counters. The best of each category makes it to the front page of the website, and the content varies from news to videos to images. Users can even login through their Facebook account and view or submit content in categories like movies, TV, celebrity, music, lifestyle, gaming, business, health, sports, world, and technology.

Curation is useful. Low or zero cost curation could be a solution to the laundry lists of baloney that are now delivered with Alacrity.

Leena Singh, September 11, 2010

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Facebook Pages Become Customer Support Centers

August 17, 2010

Consumers are the driving force behind any successful business. Many companies are behind when it comes to their CRM (customer relationship management) and though they may have excellent products customers are unable to get the quality support they need and deserve. Issues with customer service can lead to customers jumping ship and taking their money elsewhere. Many businesses have Facebook pages aimed at consumers. Facebook is improving by “brining customer service software to businesses living inside the world’s biggest social network.” “Facebook Pages Become Customer Support Centers” provides a little insight on the new support system designed by Parature. Customers will be able to choose from several different options and find the answers they need quickly. Users will no longer be a victim of the dreaded phone tree Hades. A language processing vendor will become one of the first to use the new service. Time will tell if this customer service software is effective but sometimes talking to a real person is the best fix. We think this repurposing of Facebook has significant implications for the hapless customer support search sector.

April Holmes, August 17, 2010

Progressive Camden, NJ to Close Libraries

August 11, 2010

Want to read a library book in lovely Camden, New Jersey? Too bad. Libraries are closing. Point your browser at “Camden Prepares to Close Library System.” No quotes because the source is from the litigious Associated Press. I heard that someone in Utah wanted to eliminate the senior year in high school. With libraries closing and possible elimination of one fourth of a high school education, Americans will be the content consumers publishers know are out there toting an iPad, buying news, and consuming books at a prodigious rate.

Stephen E Arnold, August 11, 2010

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eBook Sales to Grow

April 15, 2010

In a report from Goldman Sachs, analysts predicted growth in book sales. “U.S. Book Sales to Increase on E-Books, Goldman Says” included this statement: “Apple’s share of the e-book market will surge to 33 percent in 2015 from 10 percent this year.” Amazon, it seems, will see its share of e-book sales decline to 28 percent from 50 percent. Will e-books remain books, or will e-books morph into interactive media? Will authors of books be able to create products that will appeal to users of new devices like the Apple iPad? If publishers have to invest in software development, will increased costs of production put further pressure on author royalties?

Stephen E Arnold, April 15, 2010

Unsponsored post.

HP: Ink or Information?

March 30, 2010

I have commented about Hewlett Packard’s push into content centric activities. The deal that made me sit up and take notice was the purchase of Exstream Software for more than $1.0 billion a year or two ago. There have been moves in other content areas, including records management. Seeking Alpha caught my attention with its article “Hewlett-Packard: Printers More Valuable Than PCs” and its nifty interactive graph. The main point of the write up is that HP, despite its efforts to make its bottom-line as fat as a French-government, certified goose destined for paté, HP is a printer and ink/toner company. With much of its printing technology influenced by Canon, I wondered about HP’s innovation as well. For me, the most interesting comment in the write up was:

HP’s stock is more sensitive to changes in its printer business than changes in the notebook business. A 5% increase in HP’s printer market share will lead to a 4% upside to $53 Trefis [analyst outfit] price estimate for HP’s stock, while a 5% increase in HP’s notebook share will result in less than a 3% upside.

HP may be big but the company has to find a way to generate more bottom-line impact from its other businesses before the printer and ink business softens.

Stephen E Arnold, March 30, 2010

No one paid me to write this about HP.

One UK Media Companies Pays Tribute to Two US Media Companies

March 18, 2010

Read “How the New York Times and CNN Try to Keep Up with the Tech Companies.” No, not the article. The title. First, the notion of “try”. The write up makes clear that the NYT and CNN are in try mode. Calvinistic? A less gifted pair trying to cope with Sergey and Larry? In French, “to make an often tentative or experimental effort to perform”.
Second, notice the phrase “keep up with”. Not “lead” or “change the game.” The notion is that a couple of 40 year old former high school stars are in fantasy camp with a bunch of retired pros and some college players. Yep, “keep up with”, not go “toe to toe” or “push the boundaries.”  The details of the write up are interesting, but what is omitted are:

  1. Explanation of what Facebook has done to become one of the largest sites on the Web and a preferred source of news for lots of folks in some tasty demographics
  2. How these two sites plan to leapfrog Google and Yahoo
  3. Where the money will come from when it becomes necessary to build software, implement enhancements, and do big time research.
  4. What about that traffic challenge? Eyeballs are needed, then more eyeballs.

I think these questions make clear the challenges traditional publishing companies face as they try to learn new tricks, make them work, and find ways to pay for the costs that software and systems for the Web bring to the party.

Stephen E Arnold, March 18, 2010

Free, uncompensated information. I will report this writing for no money to the Jefferson County shelter manager.

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