Tom Foremski: IMHO

May 11th, 2008

Informatica is on the block say senior sources

Posted by Tom Foremski @ 2:59 pm

Categories: Uncategorized

Tags: Informatica, Oracle Corp., Pricing, Tools & Techniques, Business Intelligence, Databases, Enterprise Software, Marketing, Management, Software

I have heard from two senior sources in the software industry that Informatica [INFA] is on the block and it has approached Oracle [ORCL]. I don’t know what the possible acquisition price would be or any further details.

Informatica’s share price closed at $16.45 on Friday May 9. It’s market capitilization is $1.45 billion.

Informatica is located in Redwood City, very close to Oracle’s headquarters. It is in a software sector that has seen a lot of M&A activity. In an interview last week, Rob Ashe, head of IBM’s business intelligence group, told Larry Dignan, Editor-in-Chief of ZDNet, that the Business Intelligence market has seen a lot of consolidation and will likely see more.

SAP bought Business Objects, Oracle picked up Hyperion and IBM acquired Cognos. “The consolidation we have seen is a manifestation of the importance of BI to companies both large and small,” says Ashe. The rub: Customers are “expecting more from vendors in this space.” Ashe wouldn’t discuss what other BI players (think Informatica) may be acquired, but did note that it’s difficult to see a big consolidation round given many of the large players have already been gobbled up. “There are fewer targets, but I wouldn’t say the consolidation is over,” said Ashe.

It is more than a year since Oracle acquired Hyperion and Informatica’s technologies look to be compatible with those of Oracle. Also, there is synergy in Informatica’s executive ranks.

Informatica’s Chairman and CEO Sohaib Abbasi joined the company in July 2004. He is a 20 year veteran of Oracle.

Informatica’s board of directors includes Geoffrey Squire, a former CEO of Oracle Europe. Also: Godfrey Sullivan, the former CEO of Hyperion sold to Oracle. There is plenty of expertise n hand for Informatica to negotiate a deal with Oracle.

May 9th, 2008

Why MSFT must make an acquisition in online media

Posted by Tom Foremski @ 1:30 pm

Categories: Business strategy, Microsoft

Tags: Acquisition, Advertisement, Online Media, Microsoft Corp., Online Advertising, MSFT, Tom Foremski

Businessweek’s cover story is: “Inside Microsoft’s War Against Google - With Yahoo off the table, Microsoft plans to challenge Google’s online-ad juggernaut alone. A behind-the-scenes look at its provocative strategy.”

This behind the scenes look isn’t very deep. It mostly centers on MSFT’s “top U.S. salesman for online advertising, Keith Lorizio.” He is trying to convince large online ad buyers such as E*Trade to put more money into display ads and other online ads rather than search ads.

Fair enough. But how is that going to help Microsoft?

What is missing from this wafer-thin analysis of Microsoft’s battle with Google is a look at the business of online ads.

It’s wonderfully ironic that BusinessWeek misses the key issue that frames Microsoft’s strategic problem: it can’t grow its advertising business organically to match the deluge of ad money pouring into online advertising.

Microsoft spelled this out when it launched its acquisition bid:

The online advertising market is growing at a very fast pace, from over $40 billion in 2007 to nearly $80 billion by 2010. The resulting benefits of scale along with the associated capital costs for advertising platform providers make this a time of industry consolidation and convergence.

“The resulting benefits” are for Microsoft because there is no way it can organically grow its online ad business at a rate that can soak up $40 billion flooding into online markets in the next three years. No way.

It has to acquire online media properties otherwise it will miss out on an incredible bonanza–the richest gold rush in advertising since the radio was invented, imho.

May 7th, 2008

Facebook is the new Google as exodus of top xooglers continues

Posted by Tom Foremski @ 1:40 pm

Categories: Google

Tags: Google Inc., Facebook, Public Relations, Business Ethics, Recruitment & Selection, Team Management, Marketing, Corporate Communications, Leadership, Management

The latest high-level executive to leave Google for Facebook is Elliott Schrage, who headed the corporate communications team. When the top person responsible for Google’s messaging across all products and for its international policy leaves this points to a serious change within the company.

Facebook has been steadily recruiting top Googlers for a while now, such as Sheryl Sandberg COO, and Gideon Yu, CFO. John Battelle over at Searchblog estimates that ten per cent of Facebook used to work at Google. That’s not too shocking given that both companies are fairly near each other and that most Silicon valley companies are made up of former employees of other Silicon Valley companies.

What’s shocking about this particular hire is that Mr Schrage held a very important strategic position within Google. He was far more than a PR guy, his training was in law, corporate responsibility and foreign policy. He campaigned vigorously against child labor.

Take a look at his bio:

Schrage has served as Adjunct Professor at Columbia University Business School, where he teaches a seminar that explores the intersection of international human rights law and multinational business practices. It was the first, and, to date, only such course offered by a business school in the United States. He has written and spoken widely on this and related topics before human rights advocacy groups, corporations, foundations and trade associations, including Amnesty International, the Carter Presidential Center, the Ford Foundation, Business for Social Responsibility and the World Federation of the Sporting Goods Industry.

If anyone could enforce and interpret GOOG’s “Don’t be evil” policy it was certainly Mr Schrage.

It took ten months to find and hire Mr Schrage in November 2005. It could take just as long to find someone with his skill set.

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Please see: Danny Sullivan’s analysis and chart of Google management changes 2000 to 2008.

May 1st, 2008

Tibco Software And Silicon Valley. . .

Posted by Tom Foremski @ 12:41 am

Categories: Culture, Silicon Valley

Tags: TIBCO Software Inc., Service-Oriented Architecture (SOA), Financial Accounting, Pricing, Strategy, Enterprise Software, Web Services, Software, Finance, Marketing

I rarely get to write about Tibco Software, one of the oldest Silicon Valley companies, and one of my favorite companies. The reason I rarely write about Tibco is that Tibco has been my most loyal supporter and sponsor for what I’ve been doing the last three plus years, publishing Silicon Valley Watcher.

This is a frustrating situation because if I write about Tibco it might very well be seen as my payback for their support over the years. Tibco’s support has been substantial and it has also come with absolutely no strings attached. Which has allowed me to write about whatever I want whenever I want. Which is why I shouldn’t feel self-concious about writing about how much I admire the people I meet at Tibco and its unique Silicon Valley culture.

But I do feel self-concious about writing about Tibco because of our relationship. I wish I could write about Tibco the way I see Tibco, as a unique island within Silicon Valley: a large company yet one that embodies a startup culture; a company with a maverick CEO in Vivek Ranadive, and a C-level plus senior exec team that has some of the savviest people I’ve ever met.

I meet a lot of smart people in my job. Smart people are a commodity around Silicon Valley. It’s the people that have something extra that stand out. A lot of Tibco people have that extra quality, and they tend to stay at Tibco. Low turnover is a key measure of any organization.

I don’t know what makes Tibco tick, how Tibco manages to continue to thrive in the very competitive enterprise IT market, against giant competitors such as IBM. I just see the results, the quarterly numbers, the customers that use Tibco products.

After all, as a journalist covering the business of Silicon Valley, I and my colleagues have no idea if a company’s products do what they say they do. How can we check? We don’t use the products and it is difficult to find unbiased users.

The only way to check if any company is performing is to look at its financial performance over a long period of time. If a company is relevant in its industry it will be seen in its quarterly financial reports and in its profit–and that’s what Tibco has been proving quarter over quarter.

And what Tibco does is not easy, it is heavy lifting. It is pioneering new concepts, new technologies and educating markets in advanced IT concepts in SOA and Business Intelligence.

Plus Tibco gets to see the future a little bit ahead of other people and we often get to talk about things that aren’t quite here yet–and that’s what makes Tibco interesting. I wish I could write about Tibco more often.

April 28th, 2008

Where’s the next new thing in Silicon Valley?

Posted by Tom Foremski @ 6:08 pm

Categories: Silicon Valley

Tags: Silicon Valley, Innovation, Web, Venture Capital, Web 2.0, Leadership, Investment, Strategy, Finance, Financing Startups

Excellent article by Jeff Nolan, an ex-VC, writing in SandHill.com on venture capital investments and locating the next big thing.

Incrementalism and “The New New Thing” - With all the venture capital moving around in the Silicon Valley, where is the real innovation?

He makes many good points especially that there is a lot of money flowing into companies that only offer incremental improvements over what is already available.

The situation may leave the technology industry in another downward spiral if none of the “incremental” ventures hit it big and no other genuine innovation appears soon.

Incremental innovation just won’t cut it. In my opinion innovation has to be disruptive otherwise it won’t succeed, because there is little incentive to change.

I certainly agree with the Web 2-point yawn factor:

In my opinion, the worst thing that happened in these last couple of years is that damn versioning of what is a simply the broader continuum of the evolving Web. Define Web 2.0… just try it and you will see the futility.

And I totally agree with Mr Nolan on this point:

I am waiting for venture investors to once again discover that there is money to be made in enterprise software.

But what is next?

As I survey the landscape of consumer- and business- focused software and service providers I am struck by how much incrementalism there is at the moment. Something like Twitter is ground breaking in terms of breakout adoption, but what about the other 10,000 startups? There are few bold “aha” ideas, lot’s of social “-this or -that”, and mostly a bunch of companies hoping to draft on the perceived success of a few gorillas. . .

. . .The venture capital will no doubt continue to flow to these companies in the hopes that a few will rise to the top and get acquired. With the melt down in non-VC private equity I am sure that institutional investors will surge back into VC with abandon and this will prop up the Valley for the foreseeable future.

But I’m still left with the uncomfortable question of “What’s next?” When Facebook doesn’t deliver world peace, and FriendFeed fails to be better than sliced bread, what will we do?

SandHill.com | Opinion : Incrementalism and “The New New Thing”

I know when the next new thing will emerge…

It will emerge from this coming recession. The next new/big thing has always emerged from the bust cycles in SIlicon Valley.

This last one produced a two-way communications technology platform based on RSS (a blogging platform) that led to the flood of collaboration apps known as Web 2.0.

April 21st, 2008

Open letter to Steve Jobs: Apple should have a first adopter network program and give discounts to loyal customers

Posted by Tom Foremski @ 6:37 pm

Categories: APPL

Tags: Apple iPhone, Steve Jobs, Network, Apple Inc., Corporate Communications, Desktops, Marketing, Hardware, Tom Foremski

Dear Mr Jobs,

I’ve had my iPhone since day dot–the day it came out. It is from the Palo Alto Apple store, you and your wife were there, and so were a hundred odd-people that had waited outside all night.

I’ve had a Macintosh since year dot. I used one with a laser printer to layout and publish a newspaper in the Haight/Ashbury from 1987 to 1989. I’ve used PCs too but I’ve always had a Macintosh and in the past year I’m back on Mac so that I can do video editing.

Loyal Apple customers have been your strongest evangelists. And they usually pay top dollar for Apple products when they first come out. Yet they also have to put up with lots of criticism from non-Apple users, being called zealots, fanboys, etc.

For example, when I first started using the iPhone I had to endure countless numbers of people that would come up to me and tell me why they would never get an iPhone. It was interesting how some people reacted to the iPhone in a negative way. I spent a lot of time showing them why they should get one.

Times have changed and I see lots more iPhones these days, especially in the media/public relations industry. The iPhone is a great media delivery platform and I carry my interviews and other video projects I’ve been working on. The H.264 MP4 video format is crystal clear with a small file size and the video looks great on the iPhone.

[The only part I don’t love about the iPhone is the phone part. You still haven’t delivered on the promise of a great phone, the “i” part is fine but that’s not enough.]

There are a lot of other fans of Apple products out there, and most of them are far more passionate about Apple than I am.

It is high time that Apple recognized this demographic and offered discounts on new products, such as the coming G3 iPhone to its most loyal customers first. Why should the Johnny-come-latelies get the discounts? It doesn’t make sense.

Which is why Apple should have a first adopter network (FAN) program–with discounts and services for this prime demographic. If Apple doesn’t grab this mailing list then someone else will. A free new 3G iPhone for current iPhone customers would be nice way to launch it, imho.

Yours Sincerely,

Tom Foremski

PS: I set up a Facebook Group: “Apple Should Reward Loyal Customers With FAN Discounts.”

April 17th, 2008

Wish everybody well . . . the market will take care of dumb competitors

Posted by Tom Foremski @ 12:48 am

Categories: Disruptive

Tags: Competitor, Tom Foremski

I meet with a lot of people, a lot of startups, and many many times they will tell me how their competitors are messing up, how f*!d they are. Often I get to hear about their competitors more than they tell me about themselves.

My advice is to stop looking over your shoulder. If you are right about how dumb your competitors are then the market will take care of it. Tell me what you are working on…

Wish every one well and take care of what is on your plate, imho.

April 16th, 2008

The future battle between ad networks and publishers…

Posted by Tom Foremski @ 1:48 am

Categories: Disruptive

Tags: Advertisement, Network, Ad Network, Tom Foremski

Earlier I was writing about Jared Kopf’s AdRoll, a new advertising network. I was thinking about the economics of the online advertising market.

Advertising networks get to charge a healthy cut of total advertising revenues. This is typically between 20 to 40 per cent but in many cases, especially with small publishers, it can be as much as 60 per cent.

That’s a healthy margin for the ad publishers. And that’s one reason I haven’t been a fan of advertising networks such as Google AdSense, FM Publishing, AdBrite, BlogAds, etc.

I’d rather not use them than sell my readers so cheaply.

The other reason I’m not that keen on advertising networks is that it is not a defensible business. Once publishers grow to a certain size they can sell their own advertising and run their own networks.

Plus, they get an immediate boost because they gain the healthy margin that was going to the ad network.

Ad networks are potentially in trouble. There are many fast growing online sites in tech, fashion, business, and politics. Ad networks will be dumped and have to deal with a long tail of publishers that will eventually dump them too, if any get large enough.

However, right now, I think ad networks have the upper hand and here is why…

April 14th, 2008

A lawyer inside your PC - British software can flag corporate nefariousness

Posted by Tom Foremski @ 1:01 am

Categories: Enterprise IT, Business strategy

Tags: Software, Lawsuit, Document, Autonomy Corp. Plc, PC, Lawyer, Autonomy Information Governance Software, Documents, E-mail, Tools & Techniques

. . . No more corporate scandals?

Autonomy [AUTN], the second largest European software company Monday launched Autonomy Information Governance (AIG), software that can understand in real-time the meaning of email, blogs, and other documents. It can flag illegal communications and also find documents related to a lawsuit against the company, and also destroy documents that don’t require to be saved yet could raise the risk of a successful future legal action against the company.

“Human nature is not going to change because of the Internet,” said Michael Lynch, CEO and founder of Autonomy. “Technology has made it easier for some people within a company do a lot of damage.” He cited the recent case of a French trader who lost billions of dollars in unauthorized trades, and the loss of data on every child in Britain by a UK government agency.

The AIG software has several uses. Customers set the policies they are required by law to enforce and the software monitors compliance in real-time.

This includes inappropriate communications via email or instant messaging. For example, it can warn the user not to send an email because it contains illegal communications, or it is in violation of one of many corporate governance rules in its sector.

Another use for AIG is in e-discovery. When a corporation is sued, it often has just 90 days to produce huge quantities of documents, emails, etc, related to the lawsuit. It faces huge fines if it doesn’t meet the deadline. The software understands the meaning of documents and can reveal which documents should be reviewed by lawyers.

Companies being sued or investigated, must lock-down all their documents so that they can be searched for evidence. This has to be done even if a company has not been sued or investigated but has a reasonable chance of that happening.

“With 14,000 separate records retention regulations out there and the complexities and costs being incurred just trying to comply with legal hold requests, a company doesn’t have the capability to manage this without advanced technology,” said Browning Marean, a top lawyer, and partner at DLA Piper US LLP.

AIG will also make sure that policies on document retention are followed. Documents are flagged for deletion because they no longer need to be kept and they could potentially lead to an unpleasant surprise in the future.

Autonomy’s current strategy is to move into the lucrative multi-billion market for e-discovery with the acquisition of Zantaz, a California based company, and trying to bolster its position against market leader Recommind, based in San Francisco.

Mr Lynch said he expects a lot of business to come from lawsuits around the sub-prime financial credit crisis.

Autonomy’s strength is in enterprise search. It says its AI software can understand the meaning of a document.

- - -

Please see: Mike Lynch on the meaning of meaning based computing.

Please also see: Autonomy CEO says tags don’t work

News.com’s Charles Cooper: What’s interesting is what we say it is. Really?

Last week I attended a briefing by Autonomy, a company based in the United Kingdom and San Francisco. On Monday, Autonomy will announce a product designed to assist companies with governance compliance. This likely will be a big deal for IT administrators and law firms that are scrambling to enact internal information management policies in the wake of the subprime mortgage and credit crisis.

April 10th, 2008

If Black is the new search why not branded search?

Posted by Tom Foremski @ 6:34 pm

Categories: Search, Business strategy

Tags: Google Inc., Brand, Search Engine, IAC/InterActive Corp., Yahoo! Inc., Branding, Search, Marketing, Tom Foremski

My recent post speculating about an Apple branded search site was inspired by Barry Diller’s IAC launching a new search site focused on the Black Community.

Please see: Black Is The New Search: Barry Diller’s IAC Launches Its First Home Grown Business - A Black Search Site

Search is becoming a commodity and so brand is going to be more important in the future.

Study: Good Brand Can Make Search Seem More Relevant

The study showed that when a searcher was given an identical result set across Google, Yahoo, Windows Live Search and an in house search engine, Google and Yahoo came out as more relevant. Why? Because of the brand of the search engine. Despite the results pages being identical in content and presentation, participants indicated that Yahoo! and Google outperformed MSN Live Search and the in-house search engine.

There is no right answer to any single search query, multiple answers can be produced.

Why not an Apple branded search service? Why not a Gucci branded search?