Future of the Web coming fast and furious

Tim Berners-Lee and Wendy Hall of WSRI visited HP Labs in Palo Alto.

(Credit: Erica Ogg/CNET News.com)

“Lots of people are doing research around the Web…and there are interesting results, but a lack of a core curriculum in the universities,” Tim Berners-Lee told a gathering of scientists at HP Labs and other Silicon Valley executives here. “I’ve been told the Web has 10 to the 10 to the 11 (number of) Web sites. The brain we study as a complex system.” So why not the Web?.

 

What millions of Internet users take for granted every day–using the Web as a means to download movies, read the news, or check Facebook–will look drastically different five years from now, and that calls for study of it as a science, according to Berners-Lee and his colleagues at the Web Science Research Initiative . Launched a year ago, WSRI is a partnership between the Massachusetts Institute of Technology and University of Southampton in England, and is encouraging the study of both the social and technological implications of wide-scale use of the Web.

On a tour to encourage the adoption of Web science as a course of study at local universities, Berners-Lee spoke about what kind of challenges the increasingly social Web presents. Corralling the information about us out on the Web, identifying where it came from and who is allowed access to it are major issues that come up every day. Facebook’s decision to combine user profiles with advertising is just one example.

But there are even more serious implications of a Web that is a growing collection of our personal information. Who owns it? And how do we determine how our information is used?

One example Berners-Lee gave is hospital records. It’s still unclear how to be sure that doctors can have access to patient information to identify and treat you, but at the same time keep that information hidden from, say, your employer. There is no answer yet. “It’s about building systems and understanding where data is coming from,” he said. And though that will take time to come up with a new way of storing and organizing information on the Web, he and others are already working on it.

Phishing scams, spam, an overload of our current Web infrastructure, as well as the democracy of online communities, are each major ideas that need to be looked at with an academic eye, said Berners-Lee, rather than from a closed, proprietary, or corporate perspective. Berners-Lee has long advocated a universal and open Internet, and is one of the founders of the World Wide Web Consortium, the organization that supports open Web standards.

Though much of the future of the Web is wide open, one thing that will happen is that we won’t be inputting our personal information into separate social networks, he said. In other words, we’ll have one profile that compiles all information related to us and our social networks. “Right now, so many people are complaining that they have told one Web site who their friends are, and another one who their friends are…In five years time, I hope people will be programming not at the document level, but at the application level,” he said. “You will have something which is an application which is consistent for looking at different aspects of people. It (will use) your role as their friend for putting together a very powerful, all-encompassing view of them (online).”

Source

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Google’s Secret 10GbE Switch. A Game Changing Strategy

It is our opinion that Google (GOOG) has designed and deployed home-grown 10GbE switches as part of a secret internal initiative that was launched when it realized commercial options couldn’t meet the cost and power consumption targets required for their data centers.

This decision by Google, while small in terms of units purchased, is enormous in terms of the disruptive impact it should have on 10GbE switching equipment providers and their component supply chains. It is as if a MACHO just arrived in the Enterprise networking business and the orbits of the existing satellites have begun to shift without observers knowing why – until now.

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Through conversations with multiple carrier, equipment, and component industry sources we have confirmed that Google has designed, built, and deployed homebrewed 10GbE switches for providing server interconnect within their data centers. This is very similar to Google’s efforts to build its own server computers (excellent article here). Google realized that because its computing needs were very specific, it could design and build computers that were cheaper and lower power than off the shelf alternatives. The decision to do so had a profound impact on server architecture and influenced the market’s move to lower power density solutions that Sun (JAVA) , Intel (INTC) and AMD (AMD) now embrace.

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Through our[Nyquist] investigative research, Nyquist Capital reached the conclusion  that 12 months ago Google took a look at the state of the art in 10GE switching equipment and decided that it could do better. The reasons behind this decision will have a large impact on how the small but rapidly growing 10GbE equipment and component market evolves.

Continue Here

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Are Indian Business Leaders Different?

For some time now, the world has watched as Indian companies — once relatively unknown outside the country — have grown by leaps and bounds to become world-class competitors in many industries. It was high time that someone asked the obvious questions: Do Indian CEOs and business leaders operate in a way that is markedly different from those in other parts of the world? What is the source of their competitive advantage? Can other managers learn from their experiences?

 

Four Wharton professors set out to answer these questions in a new study titled, “The DNA of Indian Leadership: The Governance, Management and Leadership of Leading Indian Firms,” co-sponsored by India’s National Human Resources Development Network. Based on interviews with 100 chief executives of leading Indian companies, the researchers –management professorsPeter Cappelli, Harbir Singh, Jitendra Singh (now dean of the Nanyang business school in Singapore) and Michael Useem – concluded that while top Indian leaders do share several attributes with their U.S. counterparts, they also have distinctive characteristics.

 

In contrast to U.S. business leaders, Indian CEOs tend to be more preoccupied with internal management, long-term strategic vision and organizational culture. Financial matters, on the other hand, are not at the top of their agendas. In addition, the research showed that Indian leaders seem to care a good deal more about motivating employees and setting an example than about currying favor with shareholders or the markets.

 

Advantage: Leadership?

 

In defining the scope of their research, the professors describe their objective as follows: “Our ultimate goal for the project is to see whether the practices and priorities of the [Indian] CEOs in our study suggest something like a different or distinctive model for leading and managing business enterprises. Since World War II, the study of business and especially of leadership has been dominated by models from the U.S. This reflected in large part the dominance of U.S. multinational companies. In the 1980s, the strong performance of the Japanese economy, particularly in international markets, led to greater interest in, and teaching about, a ‘Japanese’ model of management that was distinctive in its management of employees. The rise of the Indian economy, and especially the international competitiveness of Indian businesses now, raises the question as to whether there is a distinctive Indian model and, if so, what that model might be.”

 

Each CEO in the study was asked a set of questions about leadership competencies, competitive advantage and governance. When asked what they thought were the competencies most important to their success in the past five years, the Indian executives felt that shared values and vision, as well as building the top team, were some of the most important capacities.

 

For example, B. Muthuraman, managing director of Tata Steel — a company that has become widely known after its acquisition of Britain’s Corus Steel last year — talked about “being a visionary” as an important capacity: “By being visionary,” he said, “I mean somebody who is able to make people envision their future [as well as] energize, enthuse and empower them.” Such answers revealed a common interest in strategic thinking and talent management. The respondents also noted that leading from the front and leading by example were important personal characteristics.

 

In this respect, leaders like Muthuraman are like U.S. CEOs, who also emphasize the importance of vision to leadership. According to the report, “This is consistent with the views of their Western counterparts, such as IBM CEO Lou Gerstner and GE CEO Jack Welch, who placed great emphasis on company culture. A number of the Indian business leaders also stressed that their vision for the company should be rooted in its underlying values, and that the vision in turn should energize and excite the company’s employees.”

 

The researchers also asked how Indian leaders might be different from their Western counterparts. The CEOs responded that Indian business executives were marked by flexibility, being in a family ownership structure and entrepreneurship/risk-taking. The leaders noted that the strict regulatory climate and challenging infrastructure environment in India necessitated a capacity to be resilient, adapt and move forward in the face of adversity.

 

Subhash Chandra, chairman of Zee Entertainment Enterprises, believes that Indian leaders are “more flexible” than those in the U.S. “We can bring our level of thinking down and meet with a truck driver and deal with him at his level, and at the same time we can also bring ourselves up to the level of the head of the state if required and then deal with him at that level,” he told the researchers. (Of course, this trait is not unique among Indian CEOs; U.S. business leaders, such as Herb Kelleher of Southwest Airlines or Jon Huntsman, founder of Huntsman Industries, demonstrate the same ability in their dealings with people around them.)

 

Anu Aga, former chairperson of Thermax India, an energy and environment management firm, pointed to the many obstacles Indian companies have to deal with, such as “roads in terrible conditions” and “ports in terrible conditions.” Family ownership stakes sometimes helped leaders have a more long-term approach to strategy, reported the respondents. In addition, they noted that being entrepreneurial was important in order to get large companies to act nimbly and take advantage of the changing marketplace.

 

The CEOs believed that their firms’ competitive advantage lay in their high-performance culture, customer focus, innovation and entrepreneurship, and low cost. Even when asked how their roles are changing, they overwhelmingly noted that they spend more time these days setting strategy and dealing with customers rather than worrying about shareholders.

Continue.. Are Indian Business Leaders Different? @ Knowledge Wharton

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Real Revolution Isn’t Facebook’s Ad Plan

Facebook CEO Mark Zuckerberg last week unveiled the social network’s new ad program to 250 marketers at a much-hyped Manhattan event with this bold proclamation: “The next hundred years will be different for advertising, and it starts today.”  Total hype — or at least hyperbole.

Photo: Steve Maller

Facebook CEO Mark Zuckerberg has unveiled a new ad program that relies on user recommendations.

Like any new advertising venue, Facebook’s ad system merits a look. But don’t be fooled by the grandiose rhetoric around its revolutionary powers. In fact, out of everything Facebook unveiled last week, the part that’s most interesting may not be the advertising at all. Instead, it’s the way the site is amplifying the myriad unpaid user recommendations and brand affiliations that already go on inside the social network.

“The more you enable person-to-person communication, the more opportunities there are for individuals to influence each other,” said Rob Norman, CEO of Group M Interaction. “This phenomenon already existed. [Mr. Zuckerberg] just poured gas on the fire.”

Peer review
That “new way to advertise online,” as the unveiling of the ad system was billed, is a user-recommendation system and hyper-targeted advertising play that, when combined, creates something Facebook is calling SocialAds. Under the system, actions users take when they’re not on Facebook, such as renting movies on Blockbuster.com or selling products on eBay, can be broadcast to their Facebook friends. Brands also can create Facebook pages users can interact with, and those interactions are relayed to their networks.

Smart marketers are already starting to recognize the frequency with which people report their affinities for brands on social nets, blogs and personal web pages — and they understand that consumer reviews and trusted recommendations are increasingly important marketing factors. (This has not been lost on the application developers who have been innovating on top of the social network; already there are Facebook applications devoted to displaying people’s favorite brands, purchases and tastes.) And whether or not Facebook is the advertising game changer many thought it would be, its recent moves only amplify that trend.

Facebook has managed to “put the power of recommendation and referrals into a systematic environment,” said Chamath Palihapitiya, VP-product marketing and operations at Facebook. That’s a pretty interesting proposition for marketers but not one they have to purchase. (And that’s perhaps worrisome for Facebook, which needs to prove it can make money through ads to justify its recent $15 billion valuation.)

Meanwhile Facebook’s plans for hyper-targeting paid ads based on user interest and activities were received as, well, kind of obvious. MySpace is sorting its users into interest and activity categories marketers can buy. Both sites introduced self-serve ad systems last week that could greatly expand advertising to smaller, more local businesses. Unlike MySpace, Facebook plans to marry its targeted ads with user-initiated brand references.

Article from Advertising Age, Read More…

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is GBrowser Comming ?: as Firefox Contract Expires With Google next year

 

The concern about the Mozilla-Google relation is more focused on what would happen if Google walked away and chose to create its own browser, or back another. Their agreement is set to expire next November, the foundation announced within its financial statements

Only a couple of years ago, Firefox was the little browser that could – an open-source program created by thousands of contributors around the world, without the benefit of a giant company like Microsoft to finance it.

 

Today, Firefox, which has prospered under the nonprofit Mozilla Foundation, has grown to be the largest rival to Microsoft’s Internet Explorer, with 15 percent of the browser market worldwide and higher percentages in Europe and among tech-savvy users. It has about three times as many users as the Apple Safari, whose new version is the first to work on PCs.

 

In trying to build on this success, the Mozilla Foundation has come to resemble an investor-backed Silicon Valley start-up more than a scrappy open-source project. Using a for-profit subsidiary, the Mozilla Corporation, the foundation has generated tens of millions of dollars in revenue in royalties from search engine companies that want prominent placement on the browser. As a result, the foundation has built a war chest to compete against the giants and has, at least temporarily, moved away from the typical activities of a nonprofit organization.

 

Looming over all of this competitive planning is Google, the search engine giant that has been writing most of the royalty checks that finance Firefox. That contract expires next year and no one knows whether Google will continue as an ally – or possibly emerge as a challenger.

 

There are many examples of businesses that have been created to help service open-source projects – like Red Hat was for Linux – but Siobhan O’Mahony, an assistant professor at the University of California, Davis, School of Management, calls Mozilla “the first corporate open-source project.”

 According to Mozilla’s 2006 financial records, which were recently released, the foundation had $70 million in assets, largely invested in mutual funds, and last year collected $66 million in revenue. 85% came from a single source – Google. But, despite a pledge to use Firefox revenue to support new open-source projects, the foundation gave away less than $100,000 in grants, according to the audited statement, or $287,000, according to Mozilla, in 2006. In the same year, it paid its chief executive, Mitchell Baker, more than $500,000 in salary and benefits.

 

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The rise of Firefox can be seen as an extension of the Netscape-Microsoft battle of the mid-1990s. After Microsoft had largely wrested control of the market, Netscape decided in 1998 to release its code to the public, and immediately developers took up the challenge.

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When the extent of the financial connection between Mozilla – which proudly points to its community of tens of thousands of voluntary developers, testers and “evangelizers” – and Google was first revealed about a year ago, the question was whether Mozilla was acting as a Google proxy in its larger wars with Microsoft and others.

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 Wladimir Palant, a longtime contributor to Firefox who administers the popular Adblock Plus add-on that removes ads from Web pages, said he was pleased that the foundation had so much money saved up. He advised that it “save some of the money for later.”

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A Google spokesman issued a statement saying: “Mozilla is a valued business partner because many users utilize Firefox to access Google products and services.”

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“We’re living in a cold war between open and closed systems, and Google is happy to lend support to entities that it sees as allies,” he said.

Source(IHT)  via Slashdot written by eldavojohn.

 

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Learn Leadrship from India’s Retails Czar: Kishore Biyani

Born into a small trading family, India’s retail czar, Kishore Biyani, replaced conventional wisdom with “guts and instincts” to create Future Group, a $1 billion company that includes Pantaloon Retail, a department store group; Big Bazaar, the company’s name for hypermarkets; Food Bazaar supermarkets, and Central Mall, a more upscale aggregation of merchandise. Known for his insights into Indian consumer behavior, Biyani also represents an enigma to the country’s emerging retail players, both domestic and foreign. He offers some glimpses into what makes him tick in his recent biography titled, It Happened in India: The Story of Pantaloons, Big Bazaar, Central and the Great Indian Consumer, co-authored with Dipayan Baishya. The book has sold some 100,000 copies, more than any other business book published in India so far. In an interview with India Knowledge@Wharton, Biyani, who has often been called “the Sam Walton of India,” talked about leadership, the Indian retail market and why he would never consider collaborating with Wal-Mart, among other topics. Excerpts from the interview follow.

India Knowledge@Wharton: What does leadership mean to you?

Biyani: In the last six months, I have read many articles on leadership and met a couple of experts on that subject. But I still could not find an answer to what, exactly, leadership means.

There are two types of leadership. The first is all about thought leadership, which is original thought, believing in it and making things happen based on those thoughts. The second type is skills leadership, which refers to doing things consistently and in your own style.

India Knowledge@Wharton: What part of leadership is inborn and what can be developed?

Biyani:For me, leadership is all about thought leadership, not skills leadership.Skills leadership can be developed even after the age of 24 or 25, but thought leadership cannot be developed after a certain age.

India Knowledge@Wharton: How do you define thought leadership?

Biyani: Thought leadership is about building scenarios and making them happen. I believe everybody is a victim of systemic thinking and has their own mental syntax. First things come first, and everything else is a reflection of where you started on that first thing. If you change that syntax, things change. If you have a business school orientation, your syntax of thinking will be in a particular direction. I am a businessman and entrepreneur, so my syntax of thinking will be in a different direction. Each has a unique method of sequencing to arrive at answers.

One would have to change everything to look at things differently. That is a very difficult thing to do as we have our own mental maps. We are not trained to change mental models. Business schools also have not been trained to do that. Business schools work on creating efficiencies, creating productivity and managing consistency. But life is not like that. Life is chaotic.

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India Knowledge@Wharton: How have you developed leadership in your organization?

Biyani: We have developed a very different style of leadership. We run a seamless organization. We don’t have structures; it is a non-hierarchical organization that works with people coming together to do things.

It is also a very design-driven organization. We believe the structure has to be broken up to change; the design has to be altered to change things. A design-driven organization has flexibility and maneuverability. It is an amorphous organization that can be given any shape and any direction anytime.

India Knowledge@Wharton: Can you give an example of how that works?

Biyani: We can chop and change anything we do, anytime. Nothing is constant for us. Nothing is constant here. We believe in destroying what we have created.

India Knowledge@Wharton: In your book, you have described three types of entrepreneurs. You say your father and uncles were “preservers” and you call yourself a “creator” and a “destroyer.”

Biyani: Most people are trained to be preservers. It is great to be a preserver. But for us, whoever has to create has to destroy. Without destroying, you cannot create anything new.

That is also the law of nature. Look at the seasons. Everything gets destroyed to create something new. But unfortunately, business does not take any cues from nature. None of the business schools takes anything from nature. One cannot go against the flow of nature. In our group, we don’t follow business principles. We follow the principles of nature.

One of the biggest principles we follow, as I have said in the book, is to go with the flow. We never do anything against the flow of nature. And when you follow the principles of nature, ideas will get destroyed and recreated.

If you look at nature, human beings have not changed over a period of so many years. Love, hate and all the other emotions are still the same. But we all complicate things. We create segments, psychographics and other indices. It is a simple world, but we break it up and start looking at it through lenses that are very different. You will find all the answers in nature.

Continue here India Knowledge Wharton.

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The Secrets of Market-Driven Leaders: A Pragmatic Approach

Why does one product succeed while others crash? And why do the second and third products from a successful company almost always fail? The crew at Pragmatic Marketing determined that there are more reasons than features and price when determining the success (or failure) of a product, including “inside-out thinking” and the distractions of running a successful company. Here, they present 7 Secrets to dramatically increase the likelihood of becoming a market-driven success.

Why do some products fail while others succeed? that question keeps many CEOs, venture capitalists, employees, and shareholders up at night. Customers want to know too, because after all, they are spending their money on products.

The 7 Secrets of Market-Driven Leaders :

SECRET #1 = Work as a Trusted Advisor
SECRET #2 = Build from the Outside-In
SECRET #3 = Simple is Smart
SECRET #4 = Leadership is Distributed
SECRET #5 = Stop Being a Vendor
SECRET #6 = Marketing with a Big “M”
SECRET #7 = Measure only what Matters

Download [Must Read] Full Article as PDF Here.

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Why All Media Platforms Must Fragment

The information age where content is 100% free to distribute and basically free to produce. When launching a brand new media platform today you have to flip the old model on its head and first appeal to a niche to gain traction, this is the Bowling Pin method outlined in Crossing the Chasm by Geoffrey A. Moore. Then you build out slowly and eventually try to cross to the chasm to hit the mainstream, then wait around to be bought by Google.However, this is where media’s need to fragment manifests itself again. As the platform embraces the mainstream it loses touch with the initial core user base. These same core users will then flock to another media platform that better understand their needs. However, it is also important to note that the 800 lbs. gorilla doesn’t die it just becomes a Network, and when there is a new mass media platform there is always room for smaller more targeted mini-networks. For example when Myspace came along it was dedicated to music lovers, but quickly out grew the niche. Myspace has the numbers so music lovers will still use it connect to their favorite bands, but there are a slew of niche music social networks and music discovery sites that have smaller communities dedicated to specific bands or genres. Furthermore, these smaller niche sites, much like cable channels, are commanded much higher CPMs. This is supposed to be solved by new targeting systems that will be built into Facebook and Myspace; however, they will never command the prices of a truly dedicated network.

Fragmentation is merely a social screening process.

Fragmentation is the opposite of convergence which still lingers as a popular buzzword, but much like how people don’t want a cell phone/computer/remote/toothbrush/music player, people want their media platforms to remain separated because they serve distinct functions. Personally, I used Facebook to socialize and Linked In for professional networks. I no desire to have those two worlds reside in the same space. New/Social Media overload is a common topic today as well, but it is a problem isolated to a small group of early adopters. The average person isn’t having any issues juggling the 2 or 3 social networks they are members of. Source

Article Credit: Seni Thomas who owns the Blog

Image Credit: Digital Fragment

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The Factors of Entrepreneurship. Must Read

Author: TroutGirl Delinates: I should first say that success means different things to different people. If you’re 20 years old, you might be pleased as punch to build something and get a few hundred grand for it a few months later. And hey, as long as you don’t get all kinds of wacky expectations from the experience — if it’s just a way to get a condo and a nice car and a good job — then more power to you. Go forth and build Facebook apps as fast as you can! But I’m sort of assuming that all these guys I’m meeting are not that realistic — that their aspiration is more YouTube than Reddit — and that in fact they’re pretty much interested in what we call the “venture-backable business”. So please keep in mind that my comments are mostly applicable to the latter case rather than the former.

The bare minimum you need before entrepreneur can found a venture-backable startup:

* EITHER a substantial work history (e.g. you were a key contributor to a very well known product) OR hundreds of thousands of users of your product OR a serious computer science background (think PhD) with major patentage in the relevant area. If you don’t fall into at least one of these three buckets, it will be exceedingly difficult to get initial meetings with any funder much less convince them to invest.

* A core team. These days the initial team must be almost entirely engineers, and they must be willing to work on your product for essentially no money until the demo stage at least. Among other things, this proves that you have sufficient powers of persuasion or management or hypnosis that you can serve as an executive for a little while.

* Some source of “enough to live on” money for you and your core team for about six months. Without this, you are fatally at the mercy of funders and will be unlikely to get a deal on terms that will make you happy for very long. Actually without 6 months of cash, you probably won’t even be able to get through the funding process even if things go spectacularly well.

* Excellent communication skills, both written and verbal. Pitching is no joke — you will need every scrap of ability to convince others (often extremely skeptical others) of your vision. This is one of the most mysterious factors, because you often can’t tell how charismatic a founder really is after they have already been successful — by that point they’re completely hemmed in by legal issues and PR bunnies who prevent them from speaking their minds — but you should assume they had the ability to communicate their ideas effectively.

* A billion-dollar idea. You better be able to say how your total addressable market is multiple billions of dollars, and how your share is going to be at least $100 million a year, and how you’re going to IPO or sell for at least $1b. This is another mysterious factor, because often startups have to change strategies or get bought for a lot less than this before they can really execute on the vision to that level… but believe me, they wouldn’t have gotten VC money if someone early in the process didn’t think that they could be worth a billion dollars someday.

* Friends. Along the way you are going to need dozens if not hundreds of small favors from other people in the community: introductions, blind reference checks, recruiting help, etc. Silicon Valley is a small town, and it’s hard to even buy the necessary goods and services without being introduced to vendors by someone. Hopefully your karma piggy-bank is good and full.

* Mental and emotional equilibrium. This has actually been one of the hardest factors for me, and I suspect is the biggest barrier for most women. It’s so easy to lose perspective — the most common way is by being overconfident and overoptimistic, but it’s also possible to go the other way and give up — that I would say it’s the #1 reason early-stage startups fail.

Interesting read Continues Here

Ariticle from TroutGirl

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Software’s Future: Melding the WEB and the Desktop

It’s been a busy few weeks for the big technology companies. On October 1, Adobe Systems announced an agreement to buy Virtual Ubiquity, a company that has created a web-based word processor built on Adobe’s next generation software development platform. One day earlier, Microsoft outlined its plans for Microsoft Office Live Workspace, a service that will combine Microsoft Office and web capabilitiesso that documents can be shared online. Recently,Google introduced a technology called “Gears” that allows developers to create web applications that can also work offline. The common thread between the recent moves of these technology titans: Each company is placing a bet on a new vision of software’s future, one which combines the features of web-based applications with desktop software to create a hybrid model that may offer the best of both worlds.

 

Even smaller companies are introducing products to support this hybrid model that bridges the divide between web and desktop software. For instance, the Mozilla Foundation — the organization behind the Firefox browser (a major rival of Microsoft’s Internet Explorer) — said on October 25 that it was launching an initiative called “Prism.” According to Mozilla, a non-profit group that develops open source software, Prism allows web applications to run outside the browser and behave more like desktop software.

“Over time, the current dominance of desktop-only applications, or even predominantly desktop-based apps, will decrease,” predicts Wharton information and operations management professor Kartik Hosanagar. “But I don’t expect desktop apps to completely disappear anytime soon. I see the future as a hybrid with basic apps on the desktop and several apps being downloaded over the web.”

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The Hybrid Software Future: A Realistic Choice

Experts at Wharton decline to put a timeline on this software evolution. Google’s vision of purely web-based, hosted software isn’t likely to play out for years. For that reason, the hybrid software model looks appealing to many.

According to Hosanagar, this model is likely to develop in two phases. “In the first phase, applications will provide essentially the same features as a desktop application, only you will now be able to access them from anywhere. Current web-based apps are good examples of this.” For example, Yahoo Mail looks a lot like Microsoft’s Outlook email program. Google Docs and Adobe’s Buzzword mimic Microsoft Word and add perks like the ability to access your documents from any computer.

In this phase, occurring today, Hosanagar says desktop applications will offer more features than web-based software, but over time that advantage will erode.

In the second phase of this hybrid model, web applications and desktop software will co-mingle, says Hosanagar. “What’s likely to be more exciting is the next phase, where these web-based applications can interact and share data with each other and become platforms [that developers can use to build more software]. Facebook has already become one such platform, as has Salesforce.com on the enterprise side. In the next phase, far more interesting things will happen as these web apps start talking to each other.”

Clemons notes that another critical factor for the evolution of software will be mobile applications. “My bet is that desktop software will be used for home operations, and webtop software will be used for mobile applications,” says Clemons. The key will be synchronizing desktop and web software wherever a person goes. “None of us has a good idea what these mobile applications will be, but they may provide real value.”

Show Me the Money

No matter how software’s hybrid future develops, there is no shortage of possible business models, says Whitehouse. But, as with the issue of which architecture is best, which approach to generating revenue will be the most successful in the future remains to be seen.

Google is generating considerable revenue selling advertising on its free web-based applications. In addition, Google Apps Premier Edition is available for an annual per-user fee. Adobe intends to profit from selling software development tools used to create both web-based and hybrid applications. Microsoft hopes to blend desktop software licensing and subscriptions with advertising. “There doesn’t seem to be any lack of options regarding monetization schemes,” notes Whitehouse.

Following Google’s success, many software vendors are pursuing advertising for their current generation of web-based services. On October 24, Microsoft spent $240 million for a 1.6% stake in social networking site Facebook. The move gives Microsoft a high-profile customer on its adCenter advertising network. Microsoft also paid $6 billion for online advertising firm aQuantive in May. The plan: Become a large advertising player so it can monetize its web sites and online services to protect against potential future trends away from its traditional revenue streams of PC operating systems and desktop software.

“We’re aiming to become one of the major players in the online advertising space, and we are pleased by the progress we are making in putting the building blocks in place,” said Microsoft chief financial officer Christopher Liddell on October 25 after the company reported fiscal first quarter earnings.

Google is advertising throughout its web-based applications, but offers this software ad-free for a fee. In addition to its advertising-supportededition of Google Docs, Google also provides a Premier Edition that offers more storage and support for $50 a year per user. Other companies, such as Salesforce.com, rely primarily on subscription-based revenue. From Knowledge@Wharton
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