In case that was way too complicated for you to understand, here’s my web 2.0 business plan in three easy phases:

This was pretty much the plan for everyone from Digg to FriendFeed, Twitter to Facebook.  And despite the obvious flaw of not really having a phase two, these companies still exist and are still fully operational.  Granted, several web 2.0 companies have entered the deadpool (Pownce, for example), but a lot of the ones you might have thought would be dead and out of money by now are still up and running, which is pretty darned amazing considering that they lack any publicly known business plans.

Twitter is already trying to figure out exactly what their business plan is, and in fact they’ve recently hired someone to help them figure out how they’ll make money – Twitter recently hired Kevin Thau who hails from past ventures Buzzwire and Openwave.  It’s hard to imagine what Twitter might do even just to cover what are likely to be increasingly expensive costs to run and maintain their infrastructure.

But that doesn’t explain one small, minor detail that I still can’t figure out: how is it that these companies got any VC funding without presenting any real business plans?  And furthermore, why is it that companies like Yammer, Present.ly and even IBM are taking concepts directly from Twitter and already making real money on them before Twitter ever even turns over a single dime?  I’m not criticizing these companies for creating similar functional offerings – to the contrary, the fact that they seem to have a good business a plan speaks highly of their possible futures.

Upon reflection, I think it’s probably wrong of me to include Facebook in the list of web 2.0 startups that don’t really have a solid business plan.  I do believe they had always intended to advertise to their users, and that they could do this more effectively by selling ad space on profiles that matched demographics that their marketers are after.  I had also written last month that I do believe they have enough momentum going to find a steady revenue stream before going under.

But that doesn’t explain what Twitter, Digg or FriendFeed or similar services will do if the costs of running their infrastructure outpace their funding.  They’re all great tools to share and discover content (and generate endless memes), but if push came to shove I think I could probably give up most of them and rely on Facebook to provide the same or similar functionality.

That’s enough for now.  I’d better get back to enjoying my favorite web 2.0 sites while they last.

I would say it is a bit unlikely that they decided to purchase either due to the downturn. I believe both companies would spend a long time in doing due diligence before announcing that they would be looking to acquire any company. This would mean the idea most likely would have germinated pre-financial crisis. Unless the two companies had the foresight that the rest of the world seemed to lack.

I completely agree with this.  Although I do wonder about the timing involved of the Oracle-Haley acquisition.  SAP purchased Yasu, another BRMS vendor, back in 2007, long before IBM announced its purchase of ILOG.  My suspicion is that Oracle didn’t really care until they heard about the IBM-ILOG purchase, and at that point fast-tracked a replacement for their own under-resourced BRMS offering.

They probably realized at that point that two of their products were at risk of losing a strategic advantage: their BPM offering and WebLogic.  If IBM is able to integrate ILOG into their WebSphere J2EE platform, it would strengthen both their BPM solution and their WebSphere offering.

And then there’s the whole issue of how long it’ll likely take to ever fully integrate Haley and ILOG into Oracle and IBM respectively.  Although the company entities can be integrated quickly, the work to do real software integration may take years.

Again, this is all my own personal speculation and conjecture, but I still find Oracle’s public explanation a little curious.

MySpace is now following Facebook’s example, and has blocked access from Power.com for almost the exact same reasons.

Power.com failed to do a few key things that would’ve saved themselves from this embarrassing situation, both technical and non-technical:

• First, Power.com really should’ve engaged with the social networking sites they wanted to support as business partners first, rather than trying to go the renegade route and writing their own interfaces.
• Assuming that worked, they should’ve worked with those sites to come up with solutions for single sign-on rather than storing user credentials in their own database – storing the user credentials puts undue responsibility on Power.com to keep additional sensitive data secured.
• If the partnering approach didn’t work, and companies like Facebook ignored Power.com’s requests, Power.com could’ve used the opportunity as a way to promote the idea of the "openness of social networks" and pointed out how companies want to monopolize your social data, etc.  Instead they’re now going to need to fight the possible misconception that they are just a rogue site that shouldn’t be trusted with user credentials.

As someone that uses a lot of emerging social networking sites, I would love to have something that gives me a single dashboard to all of them.  So I would like to see the idea of Power.com succeed.  But having them be an aggregator means they must be trusted to perform that function securely.

Back in July of 2008, IBM announced their plans to acquire ILOG.  Most of the buzz was around IBM integrating ILOG, a Java business rules engine, into their IBM WebSphere J2EE application server.  It seemed like maybe IBM’s aim was to improve their BPM offering by extending BPM with a full blown BRMS engine.  That would allow for some hyper complex routing rules in BPM, and also strengthen IBM’s position against Oracle’s recently acquired BEA WebLogic Server (now Oracle WebLogic Server).

Around October of 2008, Oracle announced that they were planning to buy Haley.  Haley was originally a small US-based BRMS vendor, but was purchased by RuleBurst, an Australian company, back in November of 2007.

Oracle has said publicly that their intentions in buying Haley were to help develop software in a highly regulated financial market, and in fact InformationWeek speculated on that idea just yesterday.  They seem to be betting on the notion that the financial markets will become more regulated to prevent the kind of credit default swap madness that we’ve been hearing about over the last few months.

But I believe the real story is a tiny bit different, and it probably goes something like this:

• Oracle has long competed against IBM and SAP as a leader in business applications – in CRM, ERP, and other middleware categories
• The BPM (business process management) market was predicted to grow between 29 to 44% through 2011, for a total market size somewhere around $4 billion USD (according to Gartner, IDC and Forrester – source)
• Oracle had acquired a ton of middleware, an additional BPM engine (Fuego, later known as AquaLogic BPM), and a robust J2EE application server – in fact they ultimately dropped their own Oracle iAS J2EE server in favor of WebLogic Server
• Oracle’s primary intention in acquiring BEA was to both have less competition in the SOA/middleware market, but also to compete more strongly against IBM with a better J2EE platform
• IBM also has a J2EE application server, perhaps arguably the only one that stands in the way of total market domination for Oracle, as well as a BPM engine
• IBM wanted a larger share of the BPM market, so they bought ILOG with that intention, but also planned to put WebSphere ahead of WebLogic Server strategically
• Oracle decided to dump their own home grown rules engine in favor of Haley

The way it all works out, though, is really rather interesting.  Both vendors are now strategically in a healthy position to react to any need for complex software that can handle new and evolving financial regulations.  And it’s a good way to explain the decision to the market, even though it seems like the Haley acquisition may have actually been more of a response to IBM than to the possibility of a heavily regulated financial market. 

It should be interesting to see how this story continues to progress.

The thing that came to mind was pretty short and simple, and that is:  Apple will still be the same company it is today without Steve Jobs, perhaps for as long as a decade.  Despite investors’ fears that Apple will not succeed without Steve Jobs, I believe Apple will still bring fantastic products to the consumer market and continue to innovate for a long time to come.  Why am I so optimistic about this?  Well, despite the fact that I am a notorious optimist, the reason is fairly straightforward.  Jobs’ significant influence on Apple means he has built a company culture that will survive past his time as CEO.  As wise and inspiring of a leader as Jobs’ might be, he is just one person.  Apple is a company of thousands of people, all of whom own some responsibility for the success of the company.

It’s true that Jobs helped re-focus and re-vitalize Apple after they strayed from the core principles in the late 1980s and early 1990s, but it was his influence and direction that helped develop the culture that exists at Apple today.  And, perhaps arguably, it wasn’t until recent years that Apple has really perfected their company culture of well thought out, high-quality product designs that have propelled all of their recent ventures, such as the iPhone and iTouch, to such brilliant successes.

There is little question that having strong and outspoken leaders within an organization is one of the single most important factors for success.  But great leaders build a culture of success, and dismantling a dynamic and healthy company culture will likely take just as long as it took to build it up.  Will the folks at Apple who are equally as influential in creating the environment at Apple that exists today flee the company just because Jobs is stepping down for a short period?  It’s unlikely.  Even if Jobs’ departure is permanent, the best and brightest at Apple will likely stick around to keep doing what they have already been doing for the last 5-10 years.  Those most influential people in the company are likely to be fans of their workplace, and abandoning ship is not an option for them.

Any of us who have worked for great company environments (or even bad ones) know how hard it is to shift the working environment in either direction.  Changes in company culture don’t happen overnight, although an organization can eventually collapse when enough of the key people leave at the same time.  But, at least for the time being, it would appear that Apple is in no risk of that happening.  For that reason, Apple will likely remain successful and innovative.

First there was VMWare and Microsoft Virtual Server (VHD) virtual machine images to demonstrate software.  The problem there was always: who wants to download a 600-900mb VMWare image and deploy it on their personal laptop?  And furthermore, who has the local computing resources for it? 

Now Adobe has taken it one step further, offering 10 hours of runtime on an Amazon EC2 hosted image that includes LiveCycle ES Solution Components for customers of the Adobe Enterprise Developer Program.

Additional details from Adobe:

• Provides pre-installed, pre-configured virtual instances of LiveCycle ES.
• Reduce time required to download, install and boot new server instances.
• Develop LC ES applications in a fraction of the time.
• Virtual instances can be used as to build proof-of-concepts

Using virtual machines hosted on the cloud is a good way to let customers play around in a sandbox environment.  If you’re not already a pure-play SaaS provider, and you don’t have a sandbox datacenter of your own that you want to maintain, this could be a good alternative.

[Adobe LiveCycle ES Developer Express c/o InformationWeek]

If Google likes your idea and makes oodles of money off of it, they’ll thank you by giving a shout out on their blog.  It’d be nice if they at least offered you an Android phone (personally I’m still hoping the Kogan Agora comes over from Australia, but the HTC G1 would be fine, too), along with a pre-paid two year contract.

The folks over at Giz seem to think this is a sign that Google is hard hit by the economic turndown, but I’m not so sure I agree.  It sounds more like Google is trying to find other ways to promote Moderator, and at the same time harvest the wisdom of the crowd.

[Google Product Ideas c/o Gizmodo and Slashdot]

Palm will be getting a much needed injection of cash from Elevation Partners, in the amount of $100 million USD.  In details disclosed in a Palm company press release on Monday, Elevation Partners will buy shares of Palm’s stock at a 31% premium over current market prices.  News of Elevation Partners’ investment has sent Palm’s stock price up, currently trading at $3.57, up from a low of $1.42 just earlier this month.

Will the injection of cash be enough to keep Palm from going under?  It certainly wouldn’t be impossible, but it’s definitely going to be a challenge.  Palm had a miserable Q2 FY09, selling just under 600,000 total smartphones, with a pre-tax loss of $97.7 million USD, and a total gross profit decrease of over 60%.  The smartphone market got a lot more company with Google releasing their Android OS, and Apple’s iPhone continuing to dominate sales of new smartphones.

Is the next generation of Palm a no-go?

Palm’s hopes are now centered around the release of its Nova operating system with a new smartphone to match.  The ironic thing, though, is the name “Nova” itself.  It’s already got a stigma attached to it – those old Chevy Novas weren’t exactly known for their reliability, safety or utility.  And I’m sure most people have heard the urban legend that “Nova” didn’t sell in Spanish-speaking countries because “no va” means “it does not go,” or “it does not work.”  Despite that being debunked, the fact that the urban legend itself persists lends insight to how people think about the name “Nova.”

Palm’s Nova is supposed to be filled with Web2.0 goodness.  Lots of Internet connectivity, and a good web browser.  All of that loveliness.  But where it begins to get messy is Palm’s tri-pronged focus: Nova for the consumer market, Palm OS for consumers and “prosumers” (Palm sold the Palm OS, but still owns a license to use and modify it), and Windows Mobile for the enterprise users.  Yes, that’s right: three operating systems, all targeted at different markets.

Looking to Apple as an example of a technology company rebirth.

Palm could learn a lot from Apple.  The ironic thing about that statement is: they already have.  The original Palm Pilot was a huge step up from Apple’s failed Newton PDA.  The Newton was too bulky, and was very bad at recognizing handwriting.  Palm solved this problem by inventing their own text entry system with custom gestures for letters.  It took a while to get the hang of entering text with the Palm, but the pros could write in text just as fast as scribbling it down on a notepad, and the Palm devices were more compact and lighter than the Newton.

Apple was once on the verge of entering the technology dustbin.  Before Steve Jobs returned to the company as CEO in 1997 (after having left in 1985), Apple was slowly dying.  They were losing market share, and they had lost touch with what made them successful.  One of Jobs’ first actions as CEO was to cut the Newton, amongst other projects.  Jobs helped to usher in the new iMac in 1998, which re-invigorated Apple’s sales.

Apple’s return to success was driven by Jobs, but also by the companies’ return to the principles that made it successful: sell well designed technology for the average consumer that works well.  Despite Apple’s hardware routinely being above-market costs, people willingly shell out the cash because they know what the Apple brand stands for.

With Palm introducing three OS lines, it will be a real challenge for the consumer and prosumer to sort out which model they will be most happy using.  Additionally, Palm’s commitment to the latest Web2.0 craze seems to be at odds with what made Palm successful: making reliable, easy-to-use PDAs that work for multiple applications, whether it be for the ordinary consumer or the prosumer/enterprise user market.

Palm’s decision to release three types of smartphones and personal productivity devices seems risky.  The added engineering cost for all three, plus the possibility that each device will fail to completely reach its intended target, may ultimately prove the decision to be unprofitable overall.  But if the risk pays off in the end, we may be on the verge of witnessing another example of a technology company rebirth.  Whatever the case, 2009 will likely be a make-or-break year for the future of Palm.

Assuming the release date for Windows 7 holds, this would leave just a six month gap between the release of Windows 7 and the end of life for Windows XP for smaller build-to-order manufacturers.  It would be only three months for the larger OEMs.  Many business users may never experience Windows Vista Business, and instead move directly to Windows 7.

A lot of critics have cited the oversized hardware requirements for Vista and the lack of backwards-compatibility for hardware drivers and older software.  At the moment, it’s unclear to me how Windows 7 might solve that problem.  Is Microsoft suffering because Windows XP was too reliable?

Windows NT 3.51, 4.0 and Windows 2000 were all horribly unstable business operating systems compared to XP.  Blue screens after software or hardware installations were common.  Unexplainable missing registry keys were common.  Windows XP, on the other hand, was a robust and (relatively) stable OS for business.  It begs the question: should business software be built like other office hardware is?  Should we all develop software that will intentionally be obsolete within 5 years?  Or should we always build backwards-compatibility into infinity?

Ellison recently made yet another dig against Cloud Computing, this time with a particular brand name in mind.  During a meeting with financial analysts yesterday, Ellison mentioned that Oracle’s most recent quarter’s success was notable for it’s “series of competitive wins versus Salesforce.com [including] our largest deal ever of salesforce-on-demand, or cloud computing, or whatever you want to call it.”

There are several things that are rather interesting about Ellison’s rants against Cloud Computing and SaaS. 

First, there’s no question that Ellison knows that Cloud Computing is not simply a new buzzword.  It’s more plausible that it’s a part of his strategy to continue to drive sales of Oracle applications, including Oracle CRM.  Larry also knows that most SaaS providers have poor margins – it’s generally more profitable for software companies to sell licenses and consulting services than it is to host and rent software.

Second, Ellison owns a large stake in Salesforce.com.  When he’s not winning a fight, he doesn’t hesitate to acquire the challenger.  Witness, for example, the Seibel story.  Tom Seibel was an Oracle executive for a number of years, even helping to build the software that drove Oracle’s marketing department.  When sales of Oracle CRM remained flat against Seibel, Ellison made a wise move to acquire the competition.

Finally, between Microsoft, Oracle, IBM and SAP, Oracle is probably the least experienced and prepared to launch a scalable SaaS offering.  Microsoft, for example, has had years of experience with the consumer web, building out services like hotmail.com and msn.com for over a decade.  IBM can build its own customized servers for scalability, optimized for performance and virtualization.  And SAP already has experience and market exposure with its on-demand offerings. 

Oracle has some limited SaaS offerings, and is partnered with Amazon’s EC2 Web Service to allow customers to deploy Oracle software, including Oracle Database and Oracle WebLogic Server onto Amazon’s EC2 platform.  Oracle could potentially leverage their partnership with HP, but they don’t build hardware themselves, which puts them at a slight disadvantage.

There’s no question that Oracle is preparing to build out SaaS offerings, despite Ellison’s amusing comments that seem to indicate otherwise.  Ellison’s comments are likely a part of his overall SaaS strategy: defame SaaS until it proves profitable, and then acquire the right team to deliver it.