Our list of the most innovative executives of the year spotlights the people that are pushing the envelope with new products and channel programs to bring solution providers to new heights.
Find out which executives made the grade and held their own, despite the great IT downturn of 2009.
Most everyone loves Thanksgiving turkeys. But IT industry turkeys? Not so much. We look at 10 examples of 'turkeys' that have disappointed the tech industry this year.
Here's one I started last week: I filled a hypothetical market basket of stocks in six companies with significant cloud computing strategies to see how they would do. I invested a hypothetical $1,000 (or thereabouts) in each of those six companies.
The market tends to vote with its dollars. I wanted to know if it's casting any votes for cloud computing.
The stocks in the basket include Google, Rackspace, Terremark Worldwide, Qwest, Equinix and Salesforce.com. Each was chosen because a significant part of their business and strategy includes cloud applications, cloud hosting or cloud infrastructure. The selected stock price was their opening price on Nov. 13.
Through Monday morning, those stocks had risen by as much as 5.4 percent. That's 5.4 percent in a day and a half, although there was a slight pullback to about 5 percent as the morning wore on. (Rackspace and Terremark, which both made presentations last week at a Goldman Sachs conference in New York, were up by 10 percent and 11 percent, respectively, since Friday.)
To put it into perspective, consider this: For the Dow Jones Industrial Average to have advanced by as much as those cloud stocks, it would have had to have gained 500 points since Friday. So even though the Dow was up by about 130 points on Monday morning, over the last couple of days it's seeing nowhere near the enthusiasm of these six cloud stocks.
Time will tell if the financial market's investments in cloud computing will continue. As the stocks rise, there will be closer attention paid to things like debt load, price stability, P/E ratios -- items that hype can't cover. But for now, investors seem to like what they see. At 5 percent returns in a couple of days, who can blame them?
Forget about the million users booted from Xbox Live for modding their devices.
Microsoft is on track to integrate Facebook, Twitter, Last.fm and Zune video into its Xbox Live platform on Nov. 17 -- a move that will marry social networking with gaming. While interactive games have been bringing people together for years online, and Twitter and Facebook have enjoyed wild success over the past two years in creating social networks, the market has yet to see what happens when such platforms are mashed up.
Xbox Live has more than 17 million users; Facebook and Twitter have tens of millions each according to conservative estimates.
According to Microsoft, "Stay in the know by discovering, posting and replying to Tweets (on Twitter) right on your Xbox 360. You can even view friend profiles, trends and conversations, or search to see who's tweeting about your favorite game."
With Facebook, Xbox Live users can update their status and invite Facebook friends into the same games they're playing on Xbox Live.
Microsoft, which has an ownership stake in Facebook, reported that its Entertainment and Devices Division (that includes Xbox and Xbox Live) was a $7.8 billion business in its most recent fiscal year -- although that number declined from the previous year due to what Microsoft said was a decline in revenue per user. If integration with social networking services can keep users online more, it's plausible they'll also spend more as well.
Now remember Call of Duty: Modern Warfare 2? Well players of that game this week spent an estimated $310 million to buy the game as it went on sale -- meaning they are, in fact, willing to open their wallets.
Now remember those million users that Microsoft expelled from Xbox live for modifying their systems? Why would any company willingly get rid of a million users? In the case of Microsoft and Xbox Live, because it can.
It also shows an enormous amount of confidence in Xbox as a platform. With Xbox Live already Microsoft's most successful cloud computing offering to date, and with it set to become the central computing hub for millions of people with the addition of Twitter and Facebook support, the technology market may want to look at the platform in a new light. And competitors in cloud and social networking like IBM, Google and others may find their own version of Modern Warfare in the marketplace with their rival in Redmond, Wash.
Earlier this week, Rackspace, of San Antonio, Texas, announced its third-quarter earnings which gave investors and analysts a lot to cheer. For one thing, the company reported 17 percent top-line growth from the same quarter a year earlier, as well as cloud-specific revenue growth from $13.1 million to $15.3 million, year over year.
While the news was all good, and the numbers move in the right direction for Rackspace, the quarterly report also presents a somewhat bracing reality check against all the hype this industry has been hearing around cloud-based computing.
For starters, while Rackspace's cloud business is growing, it still only represents about 10 percent of its entire revenue -- revenue that is still primarily focused on more traditional managed hosting. And, while Rackspace is one of the top cloud companies in the business right now, $15.3 million is equal to about one good hour of revenue for a company like Hewlett-Packard.
But, from Rackspace's earnings press release, here's a nugget that bears attention:
"Total server count (in the quarter) increased to 54,655, up from 52,269 servers in the second quarter of 2009, and total customers increased to 80,944, up from 70,803 in the second quarter of 2009."
While Rackspace picked up 10,000 new customers, it only added about 2,400 new servers. Looking at that formula, it's easy to see why the likes of HP, IBM, VMware and Citrix are paying such close attention to the cloud model. What will also bear attention is customer satisfaction with this model. So far, so good, as far as Rackspace is concerned. However, businesses that have to share servers with other businesses may start asking questions about application response time, latency and other performance issues.
A business that has to wait three minutes to bring up a customer's data in a CRM application may find that to be two minutes and fifty-five seconds too long to retain the customer.
That doesn't seem to be a problem for Rackspace, nor would it be for any company that can pick up 10,000 new customers anywhere in a sluggish economy.
The math works out great for a company that is attracting thousands of customers. Over the next several quarters we'll see if it works for the same company trying to keep them happy.
But this is not just a story about one company cornering the market on eBooks. This is a story about Amazon.com making data available across access platforms: the PC, the iPhone and the Kindle device it self. Once downloaded and installed on a PC, it just works. You can open up a book on Kindle for iPhone, for example, and close the book when you're finished reading. Click on your desktop, open up Kindle for PC, and boom, there it is: The same book opens up to the same page you left off on your iPhone.
Turn off your desktop and grab your tablet PC and the same thing happens: Open you Kindle for PC on the tablet, and it opens the book to exactly where you left off.
The tablet PC is especially nice to use with Kindle software to read books, given the form factor is close to book-like itself. I took a ride on it using a Fujitsu Lifebook tablet PC running Windows 7. In under two minutes, I had my copy of Andrew Ross Sorkin's "Too Big to Fail" up on the screen, holding it like a physical book, at exactly the same page where I left it off on the desktop PC. Amazon.com's Kindle franchise has become the very definition of portable data. Where ever you go, there it is.
While it's not yet available for the Mac or Linux, Amazon.com has made it a snap for Windows PCs. All you need is a PC with a 500 MHz (or faster) Intel or AMD chip, 128 MB of RAM, screen resolution of 800 by 600 or better, and Windows XP SP 2 or later, Windows Vista or Windows 7. Amazon.com also feels it necessary to tell us we need at least 100 MB of available disk space.
In under a year, Amazon.com has transformed the process of making data portable, mobile and highly available across a variety of mobile and desktop devices. It already has the world's largest marketplace of books online, and its Kindle book store is growing daily. With a presence on its own device, the iPhone and now just about any PC that runs Windows, Amazon.com can now call game, set and match in the eBook space. And, if other tech companies are watching, they will see a new leader in the drive to make data truly portable and cross-platform.
One needs to look no further than Google's most recent quarterly report filed with the U.S. Securities and Exchange Commission, in which it spells out potential risks ahead in its business:
As we have limited experience to date in operating versions of our products and services, including Google Mobile and Android, developed or optimized for users of alternative devices and as new devices and new platforms are continually being released, it is difficult to predict the problems we may encounter in developing versions of our products and services for use on these alternative devices and we may need to devote significant resources to the creation, support, and maintenance of such devices. If we are unable to attract and retain a substantial number of alternative device manufacturers, distributors, and users to our products and services or if we are slow to develop products and technologies that are more compatible with non-PC devices, we will fail to capture a significant share of an increasingly important portion of the market for online services, which could adversely affect our business.
The key phrase is "difficult to predict the problems we may encounter." Google's never really been in the volume smartphone business before. One key factor with the launch of Android 2.0 is it marks the first time Google may face challenges with post-sales support of smartphones.
By contrast, with the Droid's launch in the offing, Apple said this in its most recent SEC report:
The Company is focused on expanding its market opportunities related to mobile communication devices including the iPhone. The mobile communications industry is highly competitive and includes several large, well-funded and experienced participants. The Company expects competition in the mobile communication industry to intensify significantly as competitors attempt to imitate some of the iPhone's functionality and applications within their own smart phones or, alternatively, collaborate with each other to offer solutions that are more competitive than those they currently offer. This industry is characterized by aggressive pricing practices, frequent product introductions, evolving design approaches and technologies, rapid adoption of technological and product advancements by competitors, and price sensitivity on the part of consumers and businesses.
With its back to the wall in the mobile device market, facing its stiffest challenge to date, Apple says it is "focused on expanding its market opportunities." This is a company with swagger.
Apple has what Google doesn't: experience in post-sales support. With millions upon millions of iPhone customers and users of various iterations of its iPhone software operating system, Apple has a mountain of data that probably gives it a good idea of what Google and Motorola are in for with customer problems, issues and complaints. While the guys in Schaumberg, Ill., and Mountain View, Calif., are grappling with the inevitable bug fixes, compatibility concerns and "known issues," Apple is planning on its expansion.
Today for Apple, the competition has never been stronger. So is its opportunity.
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