Windows Social OS could kill Facebook

Everyone talks about the social “efficiency” of Facebook but the reality is Facebook isn’t efficient at all. It’s just more efficient than what we’ve had in the past.

And the reality is if Microsoft was to re-think its operating system strategy and go down the social path it could whack Facebook good and proper.

Every body in the blogosphere is talking about Steve Ballmer’s comments that Facebook might just be a fad. A lot of people are getting up in arms over this saying Microsoft “doesn’t get it” - gosh, where have I heard that before. Although I do lend a certain amount of credence to Robert Scoble’s blog on the topic given that he’s been inside the operation and therefore has a more sophisticated understanding of how Ballmer and co. might be thinking, then I could ever pretend to.

However, since I’ve been covering the tech industry as a reporter and blogger for the last dozen years or so, I’ve heard people say “Microsoft doesn’t get it”, a thousand times before. The fact is Microsoft’s operating system advantage is such a massive factor that Microsoft can come late to the party and then deliver a king-hit that knocks the opposition for six. Netscape anyone?

If Facebook should be scared of anyone, it should be scared of Microsoft because if Microsoft was to build social functionality into its Windows operating systems it could deliver an ecosystem a thousands times more effective than what Facebook is.

Let’s remember that Facebook has been positioned as a platform. And it’s doing alright on that front with 40 odd million users. However, as a platform its a minnow when compared to Windows.

So what happens to Facebook if Windows gets social? Facebook dies. And Mark Zuckerberg starts to think that he probably should have snapped up that $15 billion valuation.

So what do I mean by this? We come back to this concept of “social efficiency”.

Right now, I’m required to go and visit Facebook when I want to keep up with what my friends are doing. Which means that when my friend updates his status to say ‘… is in Sydney for 2 days’ and I don’t log into Facebook during that time, I miss out on catching up.

In fact, most of the methods of interacting with Facebook are a chore. Uploading pictures, updating my status, etc, etc all require me to log back into Facebook whereby I typically spend another 15 minutes catching up with everything that has happened since I was there last. Facebook is still a time sink.

If on the other hand, my computer itself becomes social then the ‘efficiency’ is greatly increased. I upload pictures from my camera directly into my social drive which automatically shares them with my friend. Infact, while I’m working away, it’s making use of my PC’s significant processing power to do facial recognition in the background and automatically tagging all my photos with my friends identities and then IMing them to let them know I’ve posted the pics. I’m getting desktop alerts of all the updates my computers deems important enough and everything else is running through my Vista sidebar. I’m using new desktop apps that suddenly have new P2P collaborative abilities because they’re tapping into the social graph that is now a part of every Windows PC. My Media Player is automatically updating my friends on what I’m listening to and they can use P2P to share that song in a Zune-like fashion. 

You tell me that’s not a Facebook killer?

Now, the first objection will be that if you don’t run Windows you’re locked out but Microsoft can have an online version for the Mac and Linux fans that let’s them participate, just not as efficiently.

That’s Microsoft 101, embrace but then extend via Windows.

Facebook have already shown that they’re not oblivious to this threat. They’re only acquisition has been Parakey - a technology that is about synching your computer and your online experience. Facebook is clearly looking at evolving into a social platform that sits between the operating system and your web applications - but the problem with that is its not efficient as it can be - it can always be done more efficiently in the operating system.

However, while I think Microsoft is the vendor who can overthrow Facebook, the question is will they? I’ve blogged before how Microsoft’s next operating system needs to be web-native. It needs to assume that every PC is connected and leverage the incredible advantages that affords. Vista should be the last desktop operating system - the next Windows to use Microsoft’s own terminology should be live but it should also be social

Why Microsoft would love to identify with Facebook

The one thing Microsoft gets better than any other company is the concept of ‘ecosystems’. It hasn’t been any particular product that has made Microsoft what it is today, it’s been their ability to foster and support self-perpetuating ecosystems around their platforms.

What’s the one thing that Facebook has done better than any other Web 2.0 company to date - foster and support a self-perpetuation ecosystem around their platform.

So is it surprising that Microsoft is keen to get in bed with Facebook, as reported by the Wall Street Journal today?

There’s the obvious partnership arrangements that would probably follow in terms of advertising but any deal could come with some interesting developments in terms of Live platform support.

Identity is one area I’m sure Microsoft would be very keen to strike a partnership agreement in. They have already stitched up a deal with social networking site Bebo and adding Facebook to the list of companies supporting Microsoft Live ID would be a great kicker to their hopes of establishing it as an identity platform with enough critical mass that other developer’s can feel comfortable supporting it. While OpenID kind of flounders around, I think Microsoft has a reasonable hope of getting some traction with LiveID. It has that massive developer base behind it and if they can have confidence that most every user owns a Live ID then it should pick up some steam pretty quickly. If part of a deal with Facebook came an agreement to support LiveID and other Live platform components, they would be well on the way to achieving the kind of critical mass they need in this regard.

I’ve heard some interesting ideas from Microsoft folk around the area of identity. I think they’ve learnt a lot from developing Xbox, about the power of knowledge and functionality that you can harness when the user is always authenticated with you.

The clearest advantage is in terms of profiling. If Microsoft can track and record more user attention gestures; ie what they click on and the websites they choose to visit - it can build better and more accurate user profiles, which I’m sure not too far down the track is going to become an important, if not dominant, ad-serving model. Facebook clearly tells you a lot about people, what they’re interested in and doing with their lives. As valuable as that data is to Facebook if you can take that attention stream out of Facebook and apply it to your ad-serving choices elsewhere then it becomes REALLY valuable.

To demonstrate. Say I join the group ‘Volkswagen drivers’ in Facebook, then it makes sense to use that knowledge to serve me ads related to Volkswagens or like cars, whenever the opportunity presents itself. Such a profile-based ad-serving model opens up far greater revenue opportunities for the majority of sites whose content isn’t particularly product-oriented and therefore not likely to generate big CPMs.

Then there is also the advantages of federated identity. The ability to jump between disparate web apps and share information between apps without the headaches of authentication is one of the main things missing from the Web 2.0 experience and again Microsoft will see itself as the company, which given its experience, can provide such an environment for both developers and users.

Given the level of lock-in with online applications right now, I can see federated identity as being absolutely key in providing a compelling ecosystem of online business tools and solutions. The only company really succeeding on this front right now is Salesforce, although Google has made some tentative steps with Google Apps single sign-on.

On the social front, Facebook has done pretty well on this front, even though some application developers have opted not to leverage the Facebook identity system.

So if Microsoft does invest in Facebook, I would see it coming with support for the Live platform. I’m sure Microsoft would dearly have loved Facebook to have been a .Net application, which would have made it a bit of a no-brainer but I can just see Steve and Bill salivating over the ecosystem that is starting to emerge at facebook.com.

Banks need dual-level access for Mint-like apps

Have really enjoyed following the TechCrunch40 coverage on TechCrunch (which has made me realise for one, that we need to do a much better job of covering our own events like our recent Influence Forum).

And I couldn’t have agreed more with the decision to give Mint, the grand-winner prize. It’s a hugely impressive application and that’s even without being able to properly test it out because I couldn’t import any of my Australian bank accounts.

However, a lot of the comments on the TechCrunch website point out that you’d be crazy to hand over all of your online banking passwords to a Web 2.0 site. I’m ultra relaxed about such things - maybe I’ve just led a charmed life and I’ll get bitten in the bum one day - but even this gave me pause for thought. If you were a hacker, this would be the greatest hacking target you could possibly think of. And experience has shown that where there’s a will, there’s a hack.

In Australia, we just had a big credit card hack case with an online retailer called Roses Only being the victim.

A few of the TechCrunch comments suggested banks should ban such financial aggregators as Mint but I can’t see that happening, nor should it. However, banks should probably started thinking about this because if applications like Mint take off, it’s certain to cause problems somewhere, sometime down the track.

What banks need to do is have two levels of access. One for the user of the account which enables them to do transactions and so-forth and another level of access for applications like Mint, which allow access to a user’s financial records but doesn’t enable them to make any transactions and is accessed with a different password.

I’m quite confident Mint is going to be a monster success and I can see a plethora of copycats hitting the market.  Banks need to be planning to work these applications without forcing user’s to give up details to full-access to their accounts.

Whirlpool case dropped - don’t sue, respond

So next time a company is thinking about suing a Forum or blog over comments made by users, maybe it should take a good look at the 2Clix versus Whirlpool case, first.

News has just broken that 2Clix has dropped the case against the Australian broadband community site and forum. In fact, according to the SMH.com.au report it did so last Thursday, only days after it initially filed the action.

Interestingly, Whirlpool hasn’t updated its website or told its users that the action has been dropped. Perhaps, letting 2Clix stew in its own legal juices for as long as possible?

As reporter Asher Moses points out: “Ironically, the negative word of mouth and worldwide media coverage criticising 2Clix for trying to silence its critics seems to have damaged the firm’s reputation far more than the forum threads that were the subject of the lawsuit.”

Unfortunately for 2Clix, the case won’t be dropped from Google or any of the web’s various search engines. In fact, seven of the first ten results related to 2Clix now reference the original Whirlpool post and the subsequent legal action. 2Clix’s reputation on the web will for a long-time be defined by this action and the Forum complaints that prompted the whole thing in the first place.

In circumstances like this, the only way to fight information you believe is defamatory is to fight-fire-with-fire. Respond to comments, write your own blog response, take your story to the press and other bloggers. Getting lawyers involved will only ever make you look like a bad guy and they’re almost impossible cases to get up anyway.

Thumbs up for Google presentation app

I’ve taken Google’s new presentation offering for a spin and I already really like it.

So what do I like:

1. Consistent user interface with the rest of the Google Apps products makes it nice and comfortable to use
2. Very simple to create a basic slide and apply various themes
3. The online presentation system is awesome and I can see us using this immediately for the sales calls we do
4. The editing tools work really well and I had no issues laying out my slides
5. The ability to access a slideshow by URL rather than having to send files back and forth is magic
6. The ability to save the presentation as a Zipped HTML file
7. Import of Powerpoint files

What don’t I like:
1. You need to have a GTalk address to be a part of the “audience”
2. Although it uses GTalk to let users “chat” we’re talking text exchanges with no VoIP abilities
3. Can’t seem to be able to embed the presentation into a webpage. That’s a big negative
4. There’s only 15 themes and no-way to create new ones. That pretty much means all Google slideshows are going to look similiar
5. No auto-navigation controls or ability to record a voice track so it’s no good for self-service style presentations
6. Surprised there aren’t a few more AJAX frills like dragging and dropping slides into place
7. No ability to export as Powerpoint (another biggie)

However, as is the case with all of Google’s online applications, there’s always more you’d like to see in them but they do the basics very well. The presentations app is very much the same. It’s good news though that an email that Google sent out which is reproduced on Read/Write web shows that Google has a lot more planned for this app.

Users will see that these features are still in simple, early stages; the Google Docs team is making them available today in response to strong user demand for presentation-sharing, and updates and improvements will continue to roll out over the coming months.

Given that Google is basically admitted this is a first pass, it’s definitely promising and as a heavy Google apps user I’m pretty pleased with the addition.

Online email is fast becoming an island

Let’s face it up until now the online apps race has been all Google, with Zoho doing a great job but always behind the eight ball because of its relative size. Microsoft has stayed out of the race and Yahoo! has been a bit-player in the email stakes.

Well, today, the market just might have heated up with news breaking that Yahoo! had acquired AJAX mail and collaboration suite Zimbra.

I’ve always been a big fan of Zimbra. It’s fantastic software, probably the best-in-town and so represents a great way for Yahoo! to kickstart an online office push. Or so I thought. On the ZDNet Betweeen The Lines blog, Yahoo!s Brad Garlinghouse  is asked whether the Zimbra purchase represented a push to go after Google Apps or Zoho. To which Garlinghouse replied:

“We are focused on extending our core strength with email. The document and spreadsheet applications are not a priority at this point. We are focusing on what Zimbra has gone head-to-head with and is winning at”.

You can read this too way. ‘Not a priority at this point’ indicates that Yahoo! is definitely going to play in the online office space. But if he is  genuine about documents and spreadsheets not being a priority I wonder how long Yahoo! can sit back on this.

As I’ve stated before, online applications come with a heavy degree of lock-in. It’s not easy to switch suites, certainly much harder than moving from say Microsoft Office to OpenOffice. Yes, it’s early days but there is a network-effect with these apps as well. You all need to be on the same platform to collaborate, which is the single greatest advantage of online productivity applications, so it’s not a market you want to give a start in, IMO.

I’d be surprised in Garlinghouse’s response isn’t a smokescreen and I agree with Michael Arrington’s suggestion that a Zoho acquisition would be next, indeed it’s a move I’ve tipped any numbers of time here on Squash. But again, the longer Yahoo! waits the harder it’s going to be to integrate everything together for when this market real takes hold.

Once you’ve started playing with an online suite, you’ll never go back to just email. Yes, email is the single most important piece of the puzzle (and which has always been the chink in Zoho’s armour) but as a stand-alone offering it’s going to be increasingly an island. Just as we make desktop suite decisions, we’ll invariably do the same online. Yahoo! has made a great start with Zimbra but if it thinks it can move in typical Yahoo! time to move on this properly, I think it will regret it.

Facebook to make profiles public

Facebook is set top open up its users profiles to the world, as it has started telling users that in a “couple of weeks” profiles will be able to be discovered through search engines like Google.

The Facebook blog has this to say:

“Starting today, we are making limited public search listings available to people who are not logged in to Facebook. We’re expanding search so that people can see which of their friends are on Facebook more easily. The public search listing contains less information than someone could find right after signing up anyway, so we’re not exposing any new information, and you have complete control over your public search listing.

In a few weeks, we will allow these Public Search listings (depending on users’ individual privacy settings) to be found by search engines like Google, MSN Live, Yahoo, etc. We think this will help more people connect and find value from Facebook without exposing any actual profile information or data”

Clearly Facebook is concerned with avoiding another privacy outroar, such as it experienced when it introduced Newsfeeds and RSS feeds.  You can choose as to whether you have a public search page or not as well as what you show on it. So it appears to have these bases followed, although I’m sure many, many people are going to complain that you should be made to turn on these features rather than giving you the option of turning them off.

It will be interesting to see what this means for people search engines like Spock. I’ve already had a thousand times more luck rediscovering people via Facebook than via any search engines, and such is the critical mass that Facebook has achieved, I can see Facebook have similiar traction with people profiles as Wikipedia has with its encyclopedia-style listings, or Google has for web page searches. That said, it will make it far easier for people search engines to index and make use of Facebook data, so maybe they’ll see it as a positive.

Whatever the case it appears the Facebook steam train just keeps on rolling on…

Let’s hope GDrive exposes your files

I have long maintained that the single, most important piece of any online suite is going to be the online storage/file management system.

This is another element that none of the big-guys have yet nailed. GDrive has not made an appearance nor has Zoho’s offering in this space, while Microsoft’s SkyDrive was a massive let-down. However, it’s an area I expect to really hot up over the next 12 months.

However, a Google Blogoscoped article notes that there is definite integration happening between Google Apps and GDrive.

Ironically, the best online storage system would be application independent. Omnidrive is furthest down the track with this, in that you can open files with your desktop tool or use Zoho’s Word and Spreadsheet tools. However, as I like to use Google’s Apps it doesn’t work for me.

As mentioned in a previous blog-post this remains a sticking point in the adaption of online apps. Until documents and data aren’t so tied to applications, users remain locked-in and I wouldn’t blame anyone for putting off adopting online apps based on that difficulty alone.

So what I’d really like to see is that GDrive exposes your Apps files so that they can either be opened directly to your desktop tool, or even with a competing product like Zoho. Chances?

Death of the download?

Interesting post from the Zoho folk about their decision to cease design of their downloadable products.

While mostly known for their hosted applications, Zoho also offered their Virtual Office product and CRM products as downloadable software you could run on your own server. They’ve now canned both those offerings and they also revealed that the delay to their Zoho Mail product was due to the related issue of making the decision to optimise it as a web service.

I’d never really considered that you architect software intrinsically different if you are building it specifically to run as a hosted app. I kind of just figured that it was simply a matter of not wanting to administer the server. So that was a bit of an eye-opener in itself. But more interestin, perhaps, is the direction.

Recently I spoke on an MISaustralia.com podcast which also featured  tlassian’s Mike Cannon-Brooks. He said that Atlassian they did have a hosted offering, most companies preferred to license the downloadable offering to install behind their own firewall. Experience with Wyaworks indicated much the same thing. When it comes to internal knowledge, most businesses still like the ability to run everything on their own server behind their own security systems rather than sticking everything in the cloud.

So it strikes me as a massive issue that Zoho has found developing its platforms as both a web service and a downloadable offering is simply not worth the effort, when its probably turning its back on the main revenue-generating business model. Is it really seeing that big a shift away from the software download? Or is there a more sophisticated business-model answer?

While I’m on Zoho they recently unveiled their new Start page. The lack of this kind of interface was one of the reasons I ended up switching to the Google App suite. There’s nothing earth shattering to the release but it’s definitely an important part of the suite puzzle. I found myself wondering if it was worth revisiting my decision and putting Zoho through its paces in again. Then I started to think about the pain of such a move and quickly realised I’m probably more locked in to Google Apps then I was ever locked into Microsoft’s Office suite because I can’t access my documents using any other application and shifting them all to another service would be a nightmare. Something to think about before you make the leap to relying on an online office suite like I have.

BTW, Zoho is doing a great job with its TechMeme sponsored posts. It’s a fabulous marketing vehicle when done right.

7 Reasons why Microsoft is far from Doomed

I hate responding to crappy, sensationalist blog pieces like ‘7 Reasons why Microsoft is DOOMED‘ but seeing as though I’m hoping to finally write up my thoughts from my recent interview with Microsoft’s local Live guru, Harvey Sanchez, it’s probably a good-way to get the ball rolling.

So here are my seven reasons why Microsoft is far from Doomed

1. Windows is an immovable object

Windows isn’t going anywhere. It’s withstood all competitors and Linux for all the huff and bluster has made almost zero impact. Apple is the IT darling and even though they have better marketing and arguably a better product, the Windows cash cow continues on unabated. As for the Vista sucks, ho hum, I’ve heard it all before. A service pack or so later and everything’s doozy again.

2. Office is immovable in corporations

You’re a CIO. You have 10,000 employees who are all trained and used to using Office. Do you 1) throw out Office and move to something like Google Apps and risk the fact that even if 10 per cent don’t like your decision that means you’ve got 1000 users gang-tackling your help-desk. Get real. Even if it takes a hit in the consumer space, it’s going to take 10,000 forklifts to start moving Office out of corporates.

3. Microsoft is a BizTech company

The afore-mentioned blog is typical head-up-your-own-arse style of commentary you tend to get around the blogosphere. So Microsoft is sucking at Web 2.0. Who cares? Businesses? No. If your one of those CIO folk, you don’t really give a rat’s testicle about folksonomies, microchunks, OPML, blah-dy, blah, blah. You’ve got transactional systems to keep running 24/7, compliance and governance issues. Gonna bet that on a start-up? I don’t think so Sam. Microsoft is more of a biz-tech company than it is a consumer-tech company these days - a fact too many people with too loud an opinion fail to recognise.

4. More opportunities than threats

So while Microsoft’s cash cows continue to tick along, especially at the big-end-of-town, the company is coming from a position of not having anything to really defend in the online advertising and subscription space. It’s all upside in this brave new world and even if Microsoft establishes itself as a strong second player it’s going to make a shitload of money.

5. Potential for move to subscription revenue

Microsoft doesn’t actually like selling software licenses - it much prefers subscriptions, because it means it’s not constantly under pressure to produce a version that’s so much better than the last that people are compelled to upgrade. Web service adjuncts to its software is going to open up huge opportunities for Microsoft to move its customers to subscription models. For example, pay $200 annually and get your operating system, a synchronised online drive, ad-free Live mail and a domain name. That kind of software+services business model will make a killing for Microsoft and it’s better positioned than anyone to offer that kind of software and services bundle.

6. Xbox is a winner

Microsoft is kicking arse with Xbox, thanks primarily to Sony’s poor launch of PS3. (One should note the article linked to in the blog is a 2005 piece and comes even before the launch of Xbox 360). Gaming is massive and getting bigger and Microsoft is now in the box-seat to be THE gaming platform - something I didn’t think was possible even a couple of years ago. In fact, Windows continues to spread its tentacles - when I go into mobile phone shops I see more and more devices using Windows mobile. Windows Surface looks to have huge promise (and of course people haven’t bought it yet, it’s not for prime-time consumption). Windows appear to be more omnipresent than ever to me, even as the number of devices grows and grows.

7. Microsoft has lots and lots and lots of money

Even when it doesn’t get it right, Microsoft has lots of money it can splash out on acquisitions as the recent Aquantive purchase proved. If it wanted to buy Salesforce.com it could. Facebook same deal. It takes a hell of a lot to bring down an industry goliath like Microsoft. Certainly a lot more than seven un-researched paragraphs from a blogger.

All this said, Microsoft clearly has a lot of challenges in front of it, but they’re challenges that are going to dictate how fast the company can grow not whether it can survive or not. Please. More on Microsoft and its challenges with Live very soon. I promise!