Apple Surpasses Microsoft

By Barbara Gengler

Microsoft, which has been slow in responding to Apple’s advances, was recently taken by surprise as Apple edged past the software giant in market capitalization.

Recently, Apple emerged with a market value of roughly $222 billion compared with Microsoft’s $219 billion. Apple spearheaded into the second highest-valued American company directly behind Exxon Mobile, which was valued at $278.6 billion.

Enderle Group analyst Rob Enderle says against Microsoft, Apple funded better, executed at a higher level and marketed the benefits of the product more successfully.

“Microsoft actually had what should have been a more attractive service, retailers liked them better and Microsoft had a more robust product, but Apple out executed them on marketing to an incredible level,” Enderle says. “Oh and Microsoft chose to fight Apple on Apple’s turf by bringing out a hardware device and that is always a really bad idea.”

The Mac vs. Windows campaign directly targeted the Vista launch problems, kept them front of mind even after they were fixed, Enderle claims, adding that Microsoft’s failure to market the improvements drove the positive result for Apple.

“Apple’s marketing program took reports of problems with Microsoft Vista and blew them out of proportion in an attack worthy of a first-tier political campaign,” Enderle says.

The Mac vs. PC campaign ran directly into the Vista launch and is recognized as being one of the most effective of its type. Apple not only helped slow sales for Windows, but Vista also never really recovered while Apple tripled their market share, according to Enderle.

Apple competes hard, likely knows more about many internal programs going on in competitors’ firms than related executives do and has the ability to develop and execute a strategy that is repeatedly successful against these competitive threats, he says.

“The iPod, AppleTV, iPhone and iPad were all big risks and only the AppleTV didn’t meet expectations and they haven’t stopped funding or developing it,” Enderle says. “Microsoft, on the other hand, takes few big risks, tends to under resource those it does and then wonders why these smaller risks are unsuccessful.”

He pointed out Mira was ignored, Origami was unfinished and Windows Media Server was crippled and underfunded as was Media Center, Media Extenders, Portable Media Center, Windows Mobile, Zune and Chrome Effects. And while Microsoft has often come up with ideas first, Apple generally executes better and walks away with the benefits.

“Apple enjoys lower customer churn, higher margins and owns the most profitable segment in the PC market,” Enderle says. “When Steve Jobs brought out the iPhone, retained control and drove the same customer focus, subordinating the needs of the carriers to the needs of the phone users, Apple became the most profitable vendor in this segment.”

Microsoft has increased the complexity of its customer mix and often seems unable to differentiate between the conflicting needs of users, IT shops, retailers, OEMs and government buyers, Enderle says, adding the end result is that the related products have a tendency to miss the needs and expectations of all groups because there is no real focus on any one group and users’ needs and expectations are often in conflict.

“If Microsoft wants to move ahead of Apple again, they have to cease accepting failure as an acceptable outcome and either resource efforts to levels where they can’t fail or recognize that if you aren’t going to play to win, there isn’t much point in taking the field in the first place,” Enderle says.

Separately, he gave the example of how Apple actually torpedoed the HP MP3 player by licensing the iPod to HP and then reneging on all of the promises they had made.

“They underpriced the HP product, wouldn’t let HP use any color but white, and wouldn’t allow transcoding even though they had indicated all of these were possible initially to close the deal and the contract locked HP out of doing their own player until Apple had locked up the market,” Enderle says, adding it was “one of the dumbest things I’ve ever seen HP do and one of the smartest from Apple. If Apple were to do something similar today they’d have anti-trust problems up the wazoo (technical term).”

While Microsoft still leads Apple in sales, there is every likelihood that Apple’s income could surge past Microsoft’s in the next few years.

Apple CEO Steve Jobs took the stage during the company’s Worldwide Developers Conference in early June. Jobs previewed the successor to its smart-phone line, the iPhone 4, which features a faster processor and videoconferencing, which the company calls FaceTime and includes a bigger battery and two cameras. As it continues to deliver its innovations, Apple has become the dominant technology company of this decade.

A Mind of Its Own: Search Engine Technology Ever Pervasive

By James Zipadelli

Americans performed more than 15 billion searches in January, which is up 3 percent from the month before, the audience measurement service comScore says. The latest search engine rankings show that Google is still king when it comes to search engines. “Google Sites accounted for 9.9 billion searches, followed by Yahoo! Sites (2.6 billion), Microsoft Sites (1.7 billion), Ask Network (574 million) and AOL LLC (375 million),” the release says.

Although Google spokesperson Nate Tyler declined to comment on Google’s numbers, he did say that Google Suggest Technology is an effective way to help users search for what they are looking for.

“As you type into the search box on Google Web Search, Google Suggest offers searches similar to the one you’re typing. Start to type [ new york ] — even just [ new y ] — and you’ll be able to pick searches for New York City, New York Times, and New York University (to name just a few). Type some more, and you may see a link straight to the site Google thinks you’re looking for — all from the search box,” Google’s Help Forum says. (Ask.com and Microsoft were not available for comment at press time.)

Kevin McFall, co-founder of the vertical search engine RushmoreDrive.com, says the level of difficulty “is pretty high” for anyone trying to gain a share in the search engine market because established search engines spend large amounts of money on marketing and advertising. However, he says there are ways a new search engine can differentiate themselves from their competition. RushmoreDrive.com was a sister site of Ask.com and was shut down in June 2009 due to the recession.

“One must position the value of one’s search in such a way as to change existing behaviors and habits of those who already use Google, Yahoo, AOL or Bing by offering them a reason to change and then delivering a rich enough experience to warrant their frequent return,” McFall says. “One must also realize that instead of taking on the major search players head on, one must find a way to backdoor them to get a slice of the market share instead of trying to compete directly.”

According to McFall, he was able to do this with Rushmore Drive.com by marketing his website as a discovery engine and a search engine. “We achieved the ability to deliver a richer and more relevant set of results through our unique index and page ranking algorithm, along with a distinguished universal results page, which delivered text, image, video and blog results all in one page,” McFall says.

He also suggested search engines that have a social component would be more successful long-term.

There are also specialized websites that find search engine technology useful. For example, Healthline Networks uses search engine technology to help customers with health and drug information.

Healthline Networks CEO West Shell says, “We’ve found out that consumer search can be complicated when it comes to health. Consumers and doctors speak different languages, and often consumers don’t know what to look for when they start.”

Shell says the technology Healthline Networks uses is based on “semantic taxonomy,” or classification, of health information. He also says the technology is always being updated to ensure customers have the latest information available and that they are partners with health carriers like Aetna.

Rich Kahn, CEO of the search engine eZanga.com, says his search engine is being redesigned and should be finished by late 2010.

The redesign allows eZanga.com to “significantly increase the number of sources we pull information from, improve our relevancy algorithm so that our results will be more accurate to the queries performed by our users [and] designing new technologies, that are not used by any other search engine at present, that will improve how we display our results to users in a way that will be more useful to our users,” Kahn says.

2010 API Developers’ Conferences Round-Up

By Ron Callari

This year API developers’ conferences are flourishing as Web and Mobile Platforms are expanding the playing field. From well-attended repeat events like MacWorld and Apple’s WWDC to first-time events like Twitter’s Chirp event, official conferences for third-party developers will cover mobile devices, OAuth, geolocation, enterprise applications and much more.

In layman’s terms, to understand Application Program Interfaces (API) in its simplest form - it’s analogous to relying on others to perform functions that you may not be able or permitted to do by yourself, such as opening a bank safety deposit box. Similarly, virtually all software has to request other software to perform some functions to extend its usage potential.

The practice of publishing APIs has allowed web communities to create an open architecture for sharing of content and data between communities and applications. In this way, content that is created in one place can be dynamically posted and/or updated in multiple locations on the Web.

This year’s round-up of developers’ conferences is listed here chronologically.

360|iDev
April 11-14
San Jose Convention Center
San Jose, Calif.

360|iDev started in San Jose, March of 2009, and will be back in April of 2010. The Silicon Valley is exploding with iPhone development companies and iPhone related startups. After the initial success of their first 360|iDev, 360|iDev San Jose plans to build and expand on that momentum this year. The intent of the conference is to bring the best and brightest minds in the development community together for 3 days of intensive sessions, social interaction, best practices and innovative new ideas.

TWITTER Chirp
April 14-15
Palace of Fine Arts Theatre
Herbst Pavilion, Fort Mason Center
San Francisco, Calif.

Twitter’s first official conference for developers, Chirp was just scheduled for April 14-15 and will cost developers $469. It’s a two-day event with a conference covering OAuth, geolocation and streaming, among other topics, and then a 24-hour hack day for first-time developers to work with seasoned pros. There are only 800 seats available, so developers who have not signed up yet, are encouraged to do so at the earliest.

FACEBOOK f8 2010
April 21-22
San Francisco, Calif.

According to their fan page, on May 24, 2007, Facebook launched their Facebook Platform alongside 800 developers and entrepreneurs at their first f8 conference in San Francisco. Many developers built the innovative applications which paved the way for future development. Today, there are over 500,000 applications on Facebook.com, and over 300 of those have more than one million users each.

This year will be Facebook’s third f8, to be held in San Francisco on April 21-22, 2010.

Become a fan of their f8 Page on Facebook to get updates and information (including how to register) as they make these announcements. Check out the videos and photos from prior f8 conferences and developers can also share their stories and experiences from the past.

GOOGLE I/O
May 19-20
Moscone West
San Francisco, Calif.

Google I/O brings together thousands of developers for two days of deep technical content, focused on building the next generation of web, mobile, and enterprise applications with Google and open web technologies such as Android, Google Chrome, Google APIs, Google Web Toolkit, App Engine, and more.

I/O will feature over 80 sessions ranging from introductory talks to deep dives on the nuts and bolts of a particular technology or product. Fireside chats will also return this year, where you can ask questions to Google engineers in an informal, intimate setting.

The Developer Sandbox, first introduced at I/O 2009, returns this year. The Sandbox will feature over 100 developers who have built applications based on technologies and products featured at I/O. These developers will be on hand to demo their apps, talk about how they built them, answer questions, and exchange ideas.

WEBAPPS ‘10
USENIX Conference on Web Application Development
June 23-25
Boston, Mass.

Since 1975, the USENIX Association has brought together a community of engineers, system administrators, scientists, and technicians working on the cutting edge of the computing world.

Join them for the first USENIX Conference on Web Application Development. WebApps ‘10 is a new technical conference designed to bring together experts in all aspects of developing and deploying Web applications. Web-based applications are revolutionizing both the features that can be delivered and the technologies for developing and deploying applications.  The full program will be available at their Web site some time in March 2010. Check out their Web site for announcement details.

APPLE
World Wide Developers Conference 2010
Moscone Center, San Francisco
June 28-July 2

According to a Wikipedia listing, the WWDC 2010 venue is unknown at the present time, but the conference will, in most likelihood, be held in California as an Apple “corporate event” has been scheduled at the normal WWDC venue, the Moscone Center, for June 28 through July 2.  Information on last year’s event can be found at their 2009 event website.

MICROSOFT
Microsoft Professional Developers Conference
(No venue or date scheduled at the time of this posting)

Microsoft’s Professional Developers Conference (or PDC) is a conference for Windows developers.

It covers new and upcoming technology from Microsoft, and so only occurs in the years when there is something new to talk about. The conference is typically hosted by the Los Angeles Convention Center in Los Angeles, Calif.

The Professional Developers Conference (PDC) is Microsoft’s premier gathering of leading-edge developers and architects. Attendees come from around the world to learn about the future of Microsoft’s developer platform, exchange ideas with Microsoft technology experts, and network with fellow professionals. This is the conference you need to attend if you want to stay ahead of the curve, and get a head start on planning your company’s products and technology investments.

Microsoft’s PR department has indicated that interested parties can learn more about the future conference dates, industry-leading speakers and registration info by visiting their website.

BLACKBERRY Developer Conference
September 27-30
Marriott Marquis
San Francisco, Calif.

Stay up-to-date on what’s coming up at the 2010 BlackBerry Developer Conference. The conference is a dedicated forum for the developer community to immerse itself in all aspect of creating consumer and business applications for the BlackBerry platform.

What you’ll take home is some of the following:

• The inside scoop on developing for the BlackBerry platform and the very latest in software, hardware and tools from RIM and its partners
• Invaluable information directly from RIM experts who will personally share their expertise
• First-hand experiences from developers who have successfully created, integrated and managed wireless applications
• Best practices from industry leaders to shortcut development cycles and drive new applications to market

For readers who have been involved with any of these conferences, feel free to provide us with your feedback. And if there are any Developer Conferences not listed here that you feel are significant, please comment on that as well.

Cost Factor Cloudy in HP-Microsoft Deal

By James Zipadelli

Editor’s note: This is the second of a two-part series regarding issues relating to cloud-based services. How will this partnership decrease cost for cloud-based services?

The three-year, $250 million pact HP-Microsoft pact raises questions about the cost of providing cloud computing services.

“HP and Microsoft will collaborate on the Windows Azure platform, with HP offering services, and Microsoft continuing to invest in HP hardware for Windows Azure infrastructure,” says a Microsoft spokesperson.

Jeff Carlat, director of marketing for blade servers and infrastructure software, HP Enterprise Business, says the partnership will “lower total cost of ownership as they move to new cloud-based computing models, enabling customers to deploy systems with confidence.” Here is the pricing model for Windows Azure platform on the “Windows Azure Team Blog.”

Windows Azure:O Compute @  $0.12 / instance hour O Storage @ $0.15 / GB / month stored O Storage Transactions @ $0.01 / 10K

SQL Azure:O Web Edition - Up to 1 GB relational database @ $9.99 O Business Edition - Up to 10 GB relational database @ $99.99

.NET Services:O Messages @ $0.15/100K message operations , including Service Bus messages and Access Control tokens

When discussing the pricing model the blog says, “Windows Azure instance hours are charged only for when your application is deployed so while developing and testing your application you may want to remove the compute instances that are not being used to minimize instance hour billing. Windows Azure storage is metered in units of average daily amount of data stored (in GB) over a monthly period. Storage is also metered in terms of storage transactions used to add, update, read and delete storage data. These are billed at a rate of $0.01 for 10,000 (10k) transaction requests. Bandwidth is charged based on the total amount of data going in and out of the Windows Azure platform services via the internet in a given 30-day period.”

Carlat says the HP-Microsoft partnership will provide several ways both companies will collaborate, including on cloud computing.

“Other services available include architecture, design, pilot, global implementation, support for server virtualization and management solutions, client virtualization, data management, as well as cloud computing,” Carlat says.

Blue LotusSIDC’s Bolden says Microsoft gets the better end of the deal. “For HP it’s a niche marketing gimmick - a particular product offering in their total range of product offerings,” Bolden says. “It may help their bottom line a little bit. Microsoft has a 30-year-plus track record on commoditizing hardware. They will treat HP the way they treat all their vendors, so the change that they’re going to allow HP to have something exclusive is zilch. It’s not going to happen.”

In a paper, “HP-Microsoft Partnership Will Shake Up the IT Management Market,” Gartner Research analysts David Williams and Ronni J. Colville write that it’s too soon to say how much the Microsoft-HP partnership will benefit IT organizations. “If this one proves an exception, it will be because the combination of tools it offers meets the business demand to optimize and automatically change the IT infrastructure,” they say. “Customers and prospective customers of HP and Microsoft should not change or disrupt their current IT management strategies or decisions until the two companies provide the products and details of their go-to-market strategy needed to understand the partnership’s viability and potential value.”

For more information about the partnership, please visit Microsoft’s Server and Tools Business News Bytes blog, or view their press kit.

HP-Microsoft Merger Promises Upgrades in Cloud Computing

By James Zipadelli

Editor’s note: This is the first of a two-part series regarding issues relating to cloud-based services. First up: How will this partnership increase dependability for cloud-based services?

Hewlett-Packard and  Microsoft agreed on a three-year, $250 million pact to increase cloud-based services to their consumers. The question is, how will this partnership improve the dependability of cloud-based services?

In a paper, “Benefits of HP-Microsoft deal,” Gartner Research analysts Donna Scott and Andrew Butler say both companies have the technology to make this work - but “truly integrated solutions that drive elasticity will take months or years to deliver.”

“Though HP has long touted its Adaptive Infrastructure vision (now called Converged Infrastructure), most IT infrastructures are not very dynamic or optimized in runtime execution outside of mainframe environments. However, UDCFs [unified data center fabric] such as HP’s Matrix and its Flex-Fabric infrastructure enable flexible connectivity among servers, storage and networks. This, combined with virtualization, can achieve real-time infrastructure (RTI), the foundation of cloud infrastructure,” Scott and Butler write.

Both companies are on board with this venture. In this video announcing the partnership, Microsoft CEO Steve Ballmer says, “Over the next three years, we intend to make it simple, fast and cost-effective for our customers to build IT systems that scale quickly as business conditions change and opportunities emerge.” Ballmer also says a deal with HP has been in the works since last April.

Jeff Carlat, director of marketing for blade servers and infrastructure software for HP Enterprise Business adds, “Private and public cloud computing will benefit from this agreement and the forthcoming solutions through the ability to procure complete infrastructure compute solutions from HP that converge the compute, storage and networking infrastructure with the management and application layer of the solution stack. This will provide customers with highly modular and optimized compute platforms that will reduce deployment times and increase service levels for delivering the application to the customer.

“Through this new agreement, HP and Microsoft will deliver integrated virtualization and management across heterogeneous data center and cloud environments,” Carlat says. “Integrated, interoperable management solutions for both physical and virtualized environments enable IT environments to be automatically provisioned, managed and continuously self-tuned. Customers can automate application deployment, system monitoring, power management and server performance while ensuring interoperability in a mixed data center environment. This will result in substantial reductions in management resource requirements and deliver greater ROI.”

Jeffrey Bolden, a partner with Princeton Junction, N.J.-based Blue LotusSIDC, says the partnership “makes sense” because the cloud-based service allows both Microsoft and HP to save money on an internal data center and 24/7 staffing.

“These Microsoft/HP server solutions are not an overwhelming change; what it does is allow a cloud center to roll out the apps and very quickly estimate what it’s going to cost to provide these services,” Bolden says. “They offer Microsoft server-based applications in an appliance platform, which means many more SaaS vendors, ISP and Colo are going to be able to provide them as a SaaS,” Bolden says.

“Microsoft apps tend to be less dependable than many of the competitive applications that cloud-based providers current provide,” Bolden continues.  “However, cloud vendors are vastly more reliable than internal IT departments for small business. So you might see an increase in dependability for a business, which was already going to choose a Microsoft app. But less reliability/dependability than they would have if they went to a cloud-based solution based on Unix applications.”

For more information on Microsoft’s cloud strategy, click here. For more information on HP’s Cloud Assure and consulting services click here and click here.

Google & Microsoft: Top Ad Networks See Double-Digit Increases

By Ron Callari

When audience measurement service, comScore, released its ranking of the top 15 advertising networks among U.S. Internet users, Microsoft Media Networks US and Google were the only two tech companies that posted double-digit growth in 2009 over the previous year.

With a 31-percent increase year over year, Microsoft was the fastest growing ad network according to this analysis. When approached for this article, several executives indicated they “never comment on comScore studies,” and “Microsoft does not have information to share regarding this.”

Neil Strother, practice director for ABI Research, indicates that large players like Microsoft are often reticent about validating or debating these types of stats. So Strother helped DMB by sharing his thoughts on comScore’s stats. He believes that the reason for Microsoft’s success this past year was due to the company “integrating their network across their four platforms: PC, Mobile, Gaming and Digital TV.” This combined synergy helped tit focus and allowed advertisers to dip into any of the company’s media properties such as MSN, XBox, Windows Live, Office Live and others,” without having to strike separate deals with each entity.

Strother also feels that during “economic downturns, advertisers and brands “will seek out the larger networks like Microsoft and Google because they are perceived as ’safe havens’ to conduct their business.” In so doing, while total ad networks increased 8 percent year over year, Microsoft most likely obtained a portion of its increase from “a market share shift from some of the smaller players like ValueClick, Tribal Fusion and AOL Advertising.”

Additionally Strother notes, since all networks showed increases year over year except for Traffic Marketplace and the Adconion Media Group, “Microsoft also benefitted in general by the increase in digital advertising over traditional media,” particularly with legacy newspaper ad revenues estimated to have fallen as much as 12 percent in 2009.

Google, on the other hand, did share some insights regarding the comScore report. And while Rachel Nearnberg, Google’s global communications spokesperson couldn’t “speak to the data point increase [13 percent] listed in the report,” she could report some of the reasons for the growth they have been experiencing. Attracting top line advertisers is a main reason, Nearnberg notes. For the “last 12 months, 94 of the top 100 Ad Age advertisers have advertised on the Google Content Network,” she says.

Google’s strategy is looking to help both brand and direct advertisers reach consumers through several innovative means. According to Nearnberg:

• Google has made recent improvements to its targeting tools on the Google Content Network to help advertisers match ad to content across the Web.
• Over the summer, Google launched contextual targeting that enables advertisers to focus on specific themes.
• Google launched view-through conversions in September 2009 to help advertisers better measure the impact of their display ad campaigns for those instances when an ad is seen, but not immediately clicked on.
• Google also launched a tool called Campaign Insights October 2009 to give advertisers reliable data about how a campaign has raised brand awareness, or active user interest, in a particular product or service. It looks beyond the traditional measures of clicks and conversions to calculate the incremental lift in both online search activity and website visits that result from a display ad campaign.

With the recent controversy in China whether or not Google will be pulling out of the country due to censorship issues and attacks on several of its users’ Gmail accounts, Nearnberg looks favorably on the future growth for Google and China. In another comScore study pertaining to the growth in the global search market, it showed China’s searches at 13.3 billion was second to the United States globally.

According to Nearnberg, “Asia [in general] has over 40 percent of the world’s Internet users and is an important region for Google.” Particularly in countries like China, “we’re excited about the opportunity for Chinese exporters to use Google’s ad tools to reach a global market.” She also adds that “the pace of mobile innovation in Asia is also extremely rapid, and mobile advertising is already a strong business for us, particularly in countries like Japan, which has a strong culture of mobile commerce.”

ABI’s Strother sees a “detente” eventually reached between the search engine giant and the superpower. With public critiques by Bill Gates and others who see this issue as overplayed in the media, Strother feels that both parties will acquiesce and over the long haul solve their differences behind “closed doors in quiet agreements.” According to Strother, “in the advertising space, there is too much at stake with wireless coming on very strong in China.”

While there are a lot of competing interests in play here and the world can applaud Google on taking the moral high ground, after the dust clears, this is “big business,” and Google will take all that into consideration in order to maintain its double-digit ad network increases in 2010.

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