Facebook is the next Google

I have been quietly collecting Facebook shares in the past few days. At $31 – 32 they are reasonably priced. Never mind how the IPO went. Yes, at $38 the shares were a bit expensive, but then Facebook is no ordinary company. 

Facebook is a big thing. Bigger then Google was ten years ago when it went public. In number of users, Facebook is the third biggest country in the world. And it reached that number in a just a few years. Extrapolate that - and a few years from now, Facebook delivers the single biggest “market” - on a plate. A global market. A way to deliver your product to the world, without having to develop a media and PR strategy for each country. 

Facebook delivers another holy grail in marketing: Targeting. Facebook knows the sex and age of most of its users, plus their interests. And this makes Facebook unique. Google, by contrast, offers almost no targeting at all.

Facebook engages – in the US, people spend 20% of their time on the internet on Facebook. Users come back on a daily basis. Yes, the current advert format does not engage users, but the point is that the users are there. Now Facebook just needs to come up with a better advertising format. And it has many options to choose from. 

Then there is the hosting of games and pages. Companies attract visitors to their page and are increasingly hosting their content there. Gaming companies target Facebook users and pay Facebook a fat commission. Facebook controls content and apps on its network and can make money of that.

And last but not least Facebook has an absolutely massive brand. Pretty much anything that’s human and alive and breeding has heard of Facebook.

So Facebook is a no – brainer. At least in my brain. Yes, shares are currently at approximately seventy five times profit. But with its potential, even the dimmest of management teams can triple profit overnight and grow it tenfold in just a few years. And then Facebook will be a bargain. Google IPO’d at $85 back in 2004. Its shares are now at $600. My guess is that Facebook will easily out perform that. So go and buy Facebook shares? Well, maybe, just maybe... 

Google buys Motorola and secures android market growth

Google just bought Motorola for 12,5 billion, and in my view this is a very good thing for the entire industry. The mobile device market has been growing at an amazing pace, and this largely because of the innovation that iPhone and Android based devices are delivering. In time, mobile devices powered by iPhone/iPads and Android devices will replace the traditional desktop and reshape the IT landscape. A whole host of new products and opportunities for IT vendors and resellers.

And this innovation and growth could only be blocked by one thing – the US patent system. Supposedly it protects innovators but it does exactly the opposite. Android already faced significant lawsuits which could deter device makers of using the platform. However, with Googles Motorola buy, Googles has a huge patent portfolio that can be used to defend itself against Apple and others. With google protecting Android and companies developing for Android, the market is suddenly a lot safer. And thus market growth and innovation has been secured. Heads up to Google!

Microsoft and Nokia to marry?

There is a rumour going around that Microsoft and Nokia are courting each other. A partnership would make perfect sense. Microsoft and Nokia are both loosing the battle for the Smartphone / Tablet market. Apple iPhone is the cream of the crop, with a far superior product. Android is rapidly gaining market share because it more or less does what iPhone does (without the finesse, style, and class) but at a much lower price tag. These top two are followed at a distance by Nokia and Microsoft. Nokia still has a name and significant market share. But its on death row with its hopeless Symbian Operating System. Its having its head shaved and soaped without making as much as a peep. Their Symbian OS has little developer support. In fact little support at all. But Nokia still has market share. Significant market share.

At the same time, Microsoft’s Windows Phone 7 is too far behind and not significantly better enough to really bridge the gap to Apple and Android. It works, but that’s about it. That said, Microsoft has a significant developer community behind it. And developing for Windows Phone 7 is going to be easier for most developers then developing for Apple or Android. But there is no significant market.

Now take Microsoft Windows Phone 7 with its huge Microsoft developer community and marry that to a still powerful mobile brand name with still significant market share, and, hey presto, you have a serious contender. A serious number 3 that with the right moves could potentially do some damage. Sure, it might anger some of Microsoft’s hardware partners. But none of them are committed to Microsoft themselves? Samsung does it with anybody and messes with just about any OS, including its own self made ‘Bada’ OS. Surely a strong and loyal partnership with Nokia might be worth it for Microsoft.

Microsoft could buy Nokia, or it could simply ‘incentivize‘ them. Microsoft is still a huge cash machine, and sitting on a sickeningly large pile of cash. Steve Ballmer has been known to spend money on sillier things (Search and online ads for example). But who knows, maybe it doesnt even have to go that far.

I for one believe the Smartphone/tablet market is strategic to Microsoft. And one that it has ignored for a long time. Seeing the development of Microsoft share value in the last 12 years its not like the stock market is overly excited by Microsoft’s ‘Vision’.

So its really time for Steve Ballmer to do something. Crack open the wallet and spend where it matters….

MS CEO Steve Ballmer on the iPad

I should have posted this video with my last blog post, but seeing it again its crystal clear to me that Steven Ballmer is not seeing the threat of tablets and smartphones to the PC. Clearly Steve Jobs lost the 'battle of the PC', so what he is doing now is obsoleting the PC.... A process that will take quite a few years but its well underway. The Windows client needs to get mobile and fast!

Windows is Back!

As a long time Windows user, I remember the early versions - Windows 3.1 was a real breakthrough not only for Microsoft, but also for the industry. It brought a visual interface within reach of ‘the masses’ and spurred on the software industry. Four years later another giant step forward was made with the multi-tasking and ultra stable Windows NT 3.51/4.

Since then the progress has been down right disappointing. Microsoft got side tracked into pointless products, trying to compete in every market space imaginable, and as a result its core products got neglected.

Windows XP was OK, Windows Vista was disappointing. Enter Windows 7…..

Windows 7 feels fast, stable, looks good, is functional. Windows 7 can confidently and proudly walk in the footsteps of its revolutionary ancestors, Windows 3.1 and NT. Windows 7 is far ahead of its competition in terms of looks, compatibility, and manageability. It runs on any half decent computer. I even installed it on a 6 year old notebook and it runs fine.

Microsoft critics might talk about ‘open source’ and free Linux, or the expensive and proprietary/closed Apple (in the sense of API's and control by Apple). No chance.

Windows 7 will re-establish Microsoft leadership as the consumer and desktop OS of the future. I wrote a post about the danger of Chrome OS for the future of Microsoft and calling them to action. I believe Windows 7 is a good response to the Google Chrome OS threat. Sure, Google Chrome might do well on Netbooks, but I don’t give it much chance in the corporate world, as well as with consumers who want more then a browser.

I like Windows 7. I’ve decided. I will be holding on to my Microsoft shares :-) !

Tweeting is for birds

Twitter is becoming ever more popular, but I for one am not a fan of twitter. Millions of Twitterers (I am resisting the temptation to shorten that to “Twits”) just chirping mostly pointless “tweets” every day, or re-tweeting other tweets. But to me the verb tweeting is linked to a bird (and in fact it’s the twitter logo) – not the most intelligent of animals. Granted I do not know much about birds, but as far as I know they just ‘tweet away’, and there is little communication going on between the birds. And this bears a striking resemblance to Twitter.

‘Followers’ are supposed to read your tweets, but seeing the sheer amount of tweets I can not see how. Many of the followers are network marketers who never take any notice of your tweets. They are busy following people to boost their follower count and send marketing messages when you follow them back. Twitter is great for teenagers to follow every move of their pop idol, but for business communication or marketing I fail to see the point.

Oh, and please follow me on twitter.com/ngalea :-)

Google Chrome OS – Mr Gates, please come back?

The announcement by Google of its new OS has the industry buzzing - and it will certainly be interesting to see the clash of these titans. Google will strike Microsoft right in its heartland– the Windows desktop system and its accompanying office package. Of course, the OS is still very much 'vaporware', but the threat is real.

I remember the ‘attacks’ by IBM (OS/2), Novell (Dr DOS), Corel & Borland (on Office), as well as Linux in more recent years. Each time Microsoft prevailed simply because it had the better product, the better marketing and the competing product was just not ‘different’ enough. So Microsoft has the track record to shake off Google - only things are little different now.

The market parameters have changed and so has Microsoft. Microsoft is no longer the lean, mean and focused company that it was in the nineties. It has not focused on its main stay products – Windows XP/Vista and Office. There has been little innovation for those products whilst the market has been demanding faster and more manageable versions.

Instead, Microsoft has been messing about making Financial and CRM software (Dynamics), VoIP / Conferencing software (OCS/Response point), Firewall software (ISA server), Xbox, Zune, Online Search, Online ads - and not been very successful at it! Does Microsoft need to be in those businesses? I think not. The stock market does not think so either. Luckily Google has been kind enough to give Microsoft a headstart (Chrome OS will not come until 2010)

Windows is an excellent operating system and Microsoft has the credentials to come out victorious against Google. But it will require focus and commitment.

Who better then Bill Gates to lead such an effort? He has done it before in 96 when he embraced the internet. He has the vision to do it. Build a brand new netbook OS!

As a Microsoft Shareholder: Mr Gates, please consider a come back to head up this effort!

Crisis courtesy Microsoft Excel

Microsoft Excel is a dangerous tool. Although excellent software, Microsoft Excel has some part in the current recession. Back in the early nineties when I was sitting for my MBA, I used it to calculate the potential of a new business idea. ‘Navigator’ was to be a piece of software distributed by travel operators interactively selling holiday destinations in sound and motion. Of course the business plan accompanying it was made in Microsoft Excel. In just a few hours, we had projected how the business would grow. We’d see fat profits. This time next year we would be millionaires! Microsoft Excel said so! After investing ALL my savings into the project, I quickly found out that calculating yourself rich in Excel was just way too easy. Excel was deleted from my PC and the network.

Over the years though the use of spreadsheets became increasingly popular. Accountants and investors projected (and expected) infinite growth based on its formulas. Business managers, blinded by fat profits displayed in numerous different colorful charts, made the corresponding investment decisions. Excel operators even started making it into decision making positions – and competing with their excel operator friends for the biggest and most ‘profitable’ spreadsheet.

Even BANKS, notoriously slow, and conservative, succumbed to the Excel bug, and so things multiplied and we now have the biggest recession since the 30’s.

I have always ignored the content of spreadsheets, preferring that projected growth be explained in words. It’s a lot harder to do, and it sifts out quite a bit rubbish from the get -go. Business decisions should be based on intuition, not on spreadsheets.

Data, Data….. Where are you? Gdrive is calling…..

Considering the flurry of news about the rumored Gdrive today, it would appear that the much awaited Google Gdrive data storage is just around the corner. And this is good news for Google fans like myself. Although there are several free data storage services available, I prefer to have it all tied to my google account.

I am assuming the new Gdrive service will be free, though I don’t see how they will be getting ad revenue out of it. Wait… maybe they will insert ads into the documents you store on the free space? :-)

Together with the Gdrive rumors are the forecasts of the death of the PC and as always Microsoft. I really cant see how an online data storage service means the death of the PC or Microsoft for that matter. We are going to need a user friendly OS, and therefore Windows, to keep running our applications, and access our shiny new online data storage.

Nortel bankrupt!

A few months ago i wrote about how i questioned the future of Nortel, the biggest
telecommunications vendor in North America. Nortel just filed for bankruptcy! Even I didn't think it was going to go this fast!

Nortel lost a whopping C$3,4 billion in the third quarter. Its shares were down to 11 canadian dollar cents, making its market cap a mere C$57 million. In 2000, its market cap was $350 billion. Hows that for loosing value? :-)

Blame it on the economy, if you want, but the fact is that Nortel just didn't have a future. Consequently it filed for Chapter 11. Probably the credit crunch was just a catalyst. Businesses are increasingly looking for communication tools that help them cut costs and become more productive and efficient, and this is something that in the PBX world only software-based phone systems like 3CX can offer.

I've always said that in the near future, we will see a strong consolidation trend across the VoIP & PBX industry. There will be more price competition, better quality and more innovative products and only those with the best offer will survive.

A happy new year to all and for VoIP!

First of all happy new year to all of you! I believe 2009 will prove to have many positive sides to it. Out with the old, in with the new as they say! The shake up of the financial world will undoubtedly continue, but as with every shake up, a great many new opportunities will be created for those that can act swiftly, nimbly and more cost effectively. Shake ups create an even playing field as it allows new companies to challenge the old established ones. It forces companies to change.

Being swift and nimble requires state of the art communications and mobility - empowering your users to work from anywhere. And all this must happen whilst making your company communications more cost effective. There is only one technology that can make this happen and its VoIP! VoIP is inexpensive to deploy and could make the difference between ‘being shaken up’ as opposed to ‘doing the shaking up’

VoIP technology is ready for prime time and I believe 2009 will be a great year for VoIP!

Nortel to cut another 5000 jobs?

The rumor mill has it that Nortel will cut another 5000 jobs. See article here (in german). One wonders what the long term plans are of this company. At its high point, the networking and PBX vendor employed over 90,000 staff worldwide. Today it employs 32,000 and this might become quite a bit less, quite soon. One can only conclude that the traditional, non software based PBX is on the way out.

Cisco buys Jabber – The future of XMPP looks bright….

Last week Cisco bought Jabber, the maker of Instant Messaging products and the company behind the XMPP standard for Instant Messaging. The XMPP standard has already gained a lot of traction – it's the technology behind Google talk and many chat servers including Openfire, ejabberd and more.

Cisco will be integrating Jabber technology into all its unified communications products and making XMPP the de facto standard for CISCO products. Cisco is a pretty nice name to have on your list of 'Allies' and this is a tremendous shot in the arm for the XMPP standard and for Internet Messaging in general.

Internet Messaging needs a strong, ubiquitous open standard and it looks like XMPP is going to prevail. Is the death bell ringing for proprietary internet messaging servers such as Office Communications Server (OCS)...?

Virtual Desktop Infrastructure – 2X release missing piece

There is a lot of talk about Virtual Desktop Infrastructure – the ability to move desktops to virtual machines. However what’s often omitted from the discussion is how users will access their ‘new’ virtual desktop. Obviously using a fat client to access a virtual desktop is pointless. In order to benefit from Virtual Desktop Infrastructure, the old desktops need to be converted to easily manageable thin clients using a Thin Client Infrastructure product. 2X’ Thin Client Server new version 6 does just that. Press release this way

Whats all the hype about Google Chrome?

Just another another browser, yet much of the media has it as a Microsoft Killer. I can't see how. Google Chrome is probably better then IE, but so is Firefox, and it took years for Firefox to get the market share it has now.

Googles track record in developing software is not very good - it takes Google a long time to finish applications and they are slow in adding features. So why all the hype around Google Chrome? (yes i saw the comic and yes there are some neat concepts, but nothing Firefox couldnt adopt)

For now, the main upshot is that webmasters and software developers have another web browser to test and fix display issues on. Great.

Mr Ballmer! Two times zero still makes zero....!

These financial ‘analysts’ make me laugh some times. Microsoft’s intended purchase of Yahoo is supposed to ‘loosen Googles grip on ads’, ‘rock the foundation of online search’, to name just a few of the quotes I have seen. Truth of the matter is that both Yahoo and Microsoft have negligible market share in online ads, and for a very good reason: Their platforms are both very bad and have very little presence. No one uses the Yahoo or Microsoft search engine – only first time internet users that use IE's default and basically don’t know what they are doing. Not a great target market. The Adwords platform is light years ahead of Yahoo or Microsoft, has the *entire* market and is backed up by excellent support from a basically excellent company. Just how two losers uniting is supposed to beat Google is beyond me. Or am I missing something? Microsoft is $44 billion down and has just doubled its online market share to Zero. Mr Ballmer, you won’t beat Google on search and ads. Make Windows and Office better, and you might have a fighting chance to survive the Google onslaught and avoid that smart little Apple right behind you morphing into a Windows, Office and ultimately Microsoft killer.

ODF Alliance - Microsoft OOXML 1-0

The ODF alliance, the organization proposing an open standard document format, hit back brilliantly at some "research" performed by the Burton Group (aka the Microsoft Propaganda Department) , in which it claimed OOXML was superior. Not surprisingly this "research" by the Burton group was provided free of charge - of course because it had been entirely funded by Microsoft in advance and is to be used as another piece in the Microsoft FUD strategy.

The answer of the ODF alliance provides a good read, check it out here. Its well written and i think a clear win for ODF! Not surprisingly the Burton Group also published some free "research" in which it warns against Google Domains. What a coincidence. I wonder who paid for that free "research". The Microsoft propaganda machine is obviously busy, but are people still listening?

Sending Exchange & Outlook to the digital trashcan.....

I recently chucked the Exchange / Outlook Fatware combo for Google Apps. And i havent looked back since. Google Apps comes with the best anti spam & anti virus in town, 6 gigs per mailbox (and counting), and is super easy to administer. You can access your mail anywhere and its backed up by Google. No need to worry about a backup mail service or about moving ISP. And its free too. What more can you wish for? Even Santa Claus cant improve on that.

Whats more, now I can actually search for mail efficiently (and find stuff). Truth is, Outlook hasn't really progressed since Outlook 97 - which wasn't very good to start with. But if you want to continue using Outlook, you can - Google recently added IMAP support. So you can replace those cumbersome public folders with Google IMAP enabled mailboxes. To top it off, Google Domains has calendaring too, as well as a neat little user portal.

If you want to start 2008 without mail hassles, check it out! Meanwhile, have a great New Year celebration :-)

Oracle volunteers for a hammering in the virtualisation market

Just read a post by Steven J. Vaughan-Nichols of eweek titled 'Is VMware a dead duck?'. I assume that article was not meant seriously, but in deed last week Vmware shares went down on the announcement that Oracle had 'entered' the virtualisation business. As if VMware with a technology lead from here to the moon and 95% plus market share, should have anything to worry about??

Oracle makes databases and knows nothing about virtualization. VMware on the other hand, has been doing virtualisation for more then 10 years and has fought off attacks on its core market succesfully. Microsoft's attempts have been pathetic (centered around its purchase of Connectix, a second rate technology it bought cheaply years back). Citrix just flushed $500 million down the toilet buying Xen Source (at least it knows its plumbing is OK). Well I'm off to buy some more VMware shares whilst they are still cheap (relatively)......

Patents stifle innovation and competition

Its long been known to most that patents are bad for business. The software business in particular suffers a great deal: Ridiculous patents such as “One click ordering” (Amazon) and other such totally obvious methods can from that point onwards only be done by the company who filed the patent. Patents are relatively easily obtained, since the patent officers are overworked and not particularly smart, leaving the true patent evaluation in courts by opposing patent lawyers, which is obviously really expensive. Consequently, larger companies with dedicated legal staff can easily bully a small company out of business or out of using a key method, rendering them uncompetitive. Simply because fighting a totally ridiculous patent is too expensive. The latest trend is the emergence of Patent Trolls – Companies formed by lawyers that buy a number of old patents and institute proceedings to all and sundry as a business model.

But wait there is hope! The US senate is to discuss and decide about a possible patent reform. Lets hope they see sense… Read more