5 New Year's Resolutions and Predictions for 2012

Let me just jump straight into them. No prologue.

1. Rick Perry: Yes, he tops my list. I will vote for him if, and that's a big Texas sized if - he promises to stop massacring English language. I think we need to have TOEFL (Test of English as a Foreign Language) requirement not just for foreign student visas but also presidential candidates.
2. Nokia Windows Phone: Nokia will unseat Apple and Android and the prophecy of the chosen one will come true. After all jumping from a burning platform to the winning new platform was "clearly" the wisest move. I was hoping to become CEO of a troubled company in EMEA one day, those hopes are now dashed for me and my fellow Americans.
3. Social Security Number goes Social: Whatever little privacy I have, I will voluntarily keep losing. I predict a new website called www.shareyourSSN.com - real friends just don't "Like" your status and "Share" the latest embarrassing article they read on Social News Reader, they share their Social Security Numbers in exchange for upto 10% off on most purchases made on your behalf by your friends. There is already very little "security" in social security so we will just end up with Social Numbers!
4. A Cloud in Every Box: You will be able to buy private clouds and install them, wire them up, hire consultants to integrate them, upgrade them, tune them - it will be amazing. The future will look just like the past except you will have to be willing to spend more and suspend your new learned concepts of what a cloud is supposed to be - no hardware, no software, automatic upgrades. The marketing budgets and ad campaigns will allow you to be able to say phrases like "We just bought a cloud and installed in our data center for $4M" or "We should have the cloud installed and working in 6 weeks" without feeling like you need therapy or medication.
5. Doctors with iPads: Yes, the super educated will finally catch up to 4 year olds when it comes to willingness to use technology to get their "homework" done. As Vinnie points out in the Rise of Digital Doctor, doctors are getting more comfortable with technology. Given the pressure from insurance companies, government incentives and patients - we will finally get closer to having an experience in a doctor's office that is more automated than the DMV!

Happy New Year!

The Entropy of Social Networks: Google Plus vs Facebook?

Yes, we have a new social network and I am a proud profile carrying member of the new elite created by an artificial scarcity of invites. A technique now pretty much a requirement for launching anything new that's social with 2 benefits, the obvious buzz factor and the ability to iterate and learn before you expand.

But this post is about history of civilizations on the internet.  While Google Plus is launched, MySpace was sold in last few days for a puny $30M and Friendster for $100M. Not to mention the once acclaimed AOL that was spun out of Time Warner in last few years. A $100B+ write down?

So why do social networks keep dying? 


I think the answer lies in history of cities, and entropy of private information. Allow me to explain:

1. History of Cities: Social networks are like cities. They are born when small villages (Facebook at Harvard) expand due to a whole host of factors ranging from better cleaner layout, availability of resources (upload your pictures), ability to mingle with new kinds of people (dating & business relationships), etc. While all this is somewhat obvious - these social network cities need to be viral to expand. As more people join, we all derive more value --- hence, most of them are designed to be viral. However, this virality means over time our social network cities become crowded, cluttered and polluted with noise that makes them less valuable. Many of us intuitively feel this - how many of us have had that moment where you go from - I love my new social network city to I don't how all these people ended up being my friends? This extends beyond social network cities to many other communication tools - Yahoo! and AOL IM - small clean lists of people I wanted to talk to to a list of everyone who wants to bother us.

This happens to great cities too - London, New York, Calcutta, Mumbai - all have gone through there a growth spurts followed by the years/decades of being terrible places to live in. But the cost of building a new New York often outweighs the cost of cleaning it up and fixing it up. Where we can, we cheat and build a New Delhi (yes, New Delhi is literally a new Delhi built outside of Delhi; ditto for Jerusalem, and many other cities where you could geographically move out). Cities like New York, London, San Francisco end up spending money to fix the cities enacting laws to keep it livable and make it better over time.

Alas, with social network cities of MySpace and Friendster - no such luck. Its easier for the residents to move out gradually and live in the new suburbs of Facebook and Google Plus. And if your friends move with you, the move can be sudden and quite painless. You can live in 2 cities at once - and over time stop visiting your old city. This holds true for your old email and old IM too. Remember, Hotmail and Yahoo! Mail, or AIM - you don't call her any more, do you?

2. Entropy of Privacy
Over time, private information that is shared becomes less private. Think about your Social Security Number, when you first got your SSN - it was a rather private number. If you have been using it for a while though, its probably in the databases of dozens of banks, mortgage issuers, insurance companies, employers, payroll managers, your dentist's local office, and so on. This means its much more likely to have been disclosed to more people and therefore less private. Same is true for a new email address you acquire. For a while, very few people know your email address but as you start using your email address for its intended purpose i.e., email people - over time, email address gets shared by more and more entities and eventually is effectively public.This concept has been studied by academics with more precise definitions (see here).

The analog of this is your social network and how well managed it is. Disorder increases in your social network over time - you add more and more people, trust goes down, unless you manage your accounts as it were a full time job your social and business friends and acquaintances all get mixed - and sometimes you add strangers just to avoid offending someone.

So what do we do? We don't have to live in the mess we co-create! Rather than clean house, we move. Of course, over time - we re-create the same mess. But for the first few months, may be even years you will get a lot of value from having your clean new Google Plus Circles which is a smart innovation but hardly path breaking. Facebook could easily help us manage our friend lists by creating 5 prepopulated lists with privacy settings and auto suggesting who goes where - they have plenty of data on my social graph to help partition it which is a nerdy way of saying they can help me create my 'circles' using information such as who do I chat with, share pictures with etc.

Fundamentally, Google Plus so far is just Facebook (Circles) & Twitter (Stream) rebuilt from scratch with certain solutions that are cleaner (by definition) and better integrated with rest of my Google life especially Gmail.

There are however new kinds of social networks that are fundamentally different. Yatown.com is focused on the opposite of a global social network - they are creating a local social network, a way for you to talk to, collaborate with and discuss with your neighbors. While Facebook and Google Plus help me connect with my family in Australia and India - Yatown does it for my neighborhood in San Francisco. This is different and interesting.

Similarly, Quora is focused less on social networking and more on being a repository of the best answers on questions ranging from what cars to buy to how did company X get started. Its singularly focused on solving this problem with social being a side effect. Facebook Answers is somewhat similar but lacks the focus of Quora.

Summary
The mega trends towards people spending more time on social networks (Facebook, Facebook, Facebook) is a fundamental threat to Google. And Google Plus is a worthy response except it solves a problem that Facebook has already solved. It will be an interesting few months to see how this works out. In the meantime,  I am much more keenly watching what's not been solved yet ranging from local social networks, Q&A networks to enterprise collaboaration.

In the enterprise world, Salesforce.com's Chatter is bringing private social networks to enterprises enabling Facebook like collaboration in a secure manner within the enterprise.

Exciting times to live and collaborate in.

(Disclosures: I am affiliated with Yatown and my opinions are therefore likely biased. My affiliation to Salesforce.com is also disclosed on my blog.)

I Was Wrong: The Next Big Thing is NOT Cloud Computing

Yes, after 5 years of being a big fan of cloud computing. I admit defeat. I am, as of today, changing my worldview. Cloud Computing is no longer the future. And that's the bad news.

But the good news is that Cloud Computing is now an accepted reality - its the present - the market has tipped. The big server hugging companies of the past are "all in" with cloud, or are building next generation "in memory" cloud systems, or rolling out "cloud boxes" that you can take to go. While the false clouds proliferate, the customer is getting savvier.

More importantly, just 2 years ago, most CIO conversations I had started out with trying to convince them the value of cloud computing - especially the 'real cloud' which has been summarized perfectly by my friends at Heroku as 'no software, no private cloud', 'multi-tenancy' and 'abstraction=value'. Today, CIOs are no longer asking what is cloud computing? They are no longer asking do I need to do cloud computing? Is cloud computing a fad (based on generous free education by their existing leading vendors)?

The Conversation for the CIO has Shifted: How can I best leverage the Cloud?

Here are the top 5 conversations I am seeing in the industry.

1. What applications can or should I run in the Cloud? The answer here depends on the individual customers needs but the shift is quite radical. They want to find the best cloud computing app to meet their needs and then look for reasons why there needs cannot be met by that cloud app. This is a bias - and its based on good reason. When you buy a good SaaS app, you are not just getting functionality and performance that you see today - but most SaaS apps are continuously improving with every new release. You don't have to wait 5-15 years to have a massive upgrade/re-write project just because you want the new improvements in your app - features or architecture. For example, when a SaaS app makes the UI better, you can just turn it on. When a SaaS app adds new APIs or new protocols (REST), you simply start using it. You don't have to buy half a million dollars worth of middleware so you can send and receive XML messages. This aspect of cloud apps while subtle is a game changer - and once a CIO understands this by experiencing it first hand, he's much more willing to buy a cloud app that will likely keep pace with innovations than an on-premise app that will require major re-work to just make simple changes.

2. Which Cloud Platform should I standardize on? This is not a question I was hearing a few years ago. Thanks in part to the proliferation of cloud platform choices ranging from Force.com and Heroku to Amazon Web Services to Google App Engine to Azure, customers are looking to make a few strategic bets. CIOs want to validate, verify and then approve the use of a select one or few platforms. The answer often depends on what kind of applications you are looking to build and what level of security and open-ness you want. Salesforce.com is offering its customers (and please read my disclaimer) an open, social and mobile platform which is proven and built on technology running the world's leading enterprise cloud database for over 10 years. But no single platform will meet the needs of all your applications - hence an open platform that interoperates is a key consideration.

3. How do I get started? The most important question is the getting started question. Unlike a few years ago, there is a wide array of choices in how to get started. If you are looking for a packaged app, application stores like Salesforce.com AppExchange or Google App Marketplace are good places to look. If you are looking to build an application, if its a business application you want to pick a platform. The key to getting the value out of a platform is abstracting the underlying infrastructure and servers - a true Platform as a Service. Infrastructure as a Service is a reasonable choice if what you are building is so unique that you want to take the DIY approach.

4. Who can help me with Cloud adoption? There is a vast array of resources and partners now with dedicated cloud practices (much more so than just a couple of years ago) ranging from Accenture & Deloitte to Appirio & ModelMetrics and many, many more. These companies have not only taken the time to learn the new cloud technologies but can help with implementation, change management and be a guide in understanding what apps to move or build in the cloud first.

5. What about Security? This still comes up but less so as an objection but much more as a requirement for the business applications. They want to run their apps on a cloud they can trust. And they want to get the information that has made 10s of thousands of other customers rely on the cloud. Security and trust have to be earned daily by the cloud providers. But the FUD from the on-premise vendors that was working a few years ago is no longer working - customers want information on how the cloud providers ensure security. A very valid request that all of us should make from anyone we do business with.

This shift had taken place in silicon valley a few years ago where VCs would almost require you to build on the cloud and not 'burn' your money on building out your own. And now I see a similar mindset taking hold with many of the forward looking CIOs.

And yes, there are always a few that don't want to do anything with the cloud. But then there is a significant minority of people who have never and probably will never deposit a check or cash via an ATM.

India Revolt is Finally Here. Hello, Egypt and Tunisia.

This is my shortest blog post.

I have written about how India and its economy faces some grave challenges. The country was ruled by Socialist elites after independence from the British for 50 years. Then it has been ruled by the same set of people under a false Capitalism - where corruption runs rampant, black money (unaccounted for, untaxed) is in the hands of a few who continue to live in two Indias (New York Times Letter).

This is the beginning of the end of the cancer at the core of India. The citizens are finally energized and engaged having seen fellow global citizens in Egypt, Libya and Yemen - they want their revolution but not for democracy. Its a fight for real corruption free self government.

As always, it starts with a Facebook page these days: India Against Corruption

UPDATE: Here is a video that explains the issues. And Tom Friedman wrote an article that explains "Theory of Everything".

Of Facebook and Goldman Sachs - Both Too Big To Fail?

"Size, we are told, is not a crime. But size may, at least, become noxious by reason of the means through which it was attained or the uses to which it is put."
                                            -Louis Brandeis, quoted in Tool Big Too Fail.

I just got back from a long nice vacation in India and read the book - Too Big Too Fail - by Andrew Ross Sorkin, one of the best books I have read in a long time. The book talks about the greater than life leadership of men with ordinary human-ness thrust into extra-ordinary crises to play roles too big for even their giant shoes. When men that, as executives at companies like Goldman Sachs and JP Morgan Chase, used to earning Millions of Dollars and dealing in budgets and balance sheets that ran into Billions of Dollars were pushed as CEOs of private institutions or as Treasury Secretary into solving a national crisis requiring over a Trillion Dollars. As you read the book, eventually you become immune to the bigness of the numbers.

In that sense, the $50 Billion number for Facebook while shocking to those that haven't kept up with the recent valuations of companies like GroupOn and Twitter may seem shocking - to other silicon valley watchers now seeing startups getting outrageous valuations, the $50 Billion dollar number seems sane.

Here are my thoughts on the Facebook-Goldman story:

$50 Billion is Low: We already know that Facebook is a viable alternative for companies spending money on online advertising. We also know that Google's revenue was $23B+ last year and that its market cap is close to $200B. And Google is still growing revenue having doubled it in 4 years. The secular shift of advertising dollars to online channels continues. Combine this with the fact that people are spending more time on Facebook than on any other property. And, that Facebook has finally cracked the code on generating some revenue ($1B+ estimates) and you can see that in due course of time Facebook could be as big or bigger than Google. And because the pie is growing, a great outcome for Facebook is not necessarily bad for Google. If we already know that Facebook has surpassed Google in page views, and can combine this with the fact that search is no longer the sole source of most information - and social is clearly where the action is moving to. Given all this, I personally think that Facebook deserves a valuation almost close to Google's. This means there could be a 2 to 4x upside for today's investors - if not even more.

SEC Needs to Smell The Coffee: We either throw away the 500 person rule for everyone or SEC needs to make a call on this. The Goldman deal, while very clever and ingenious (and why wouldn't it be given that some of the smartest people in the world work there) - is clearly not something that's going to fly under the radar. Heck, even I got a note from some company giving me a chance to participate in an "auction" to get Facebook shares. The secondary market and Goldman deal combined are making a mockery of our rules. But rather than crack down on this rule, the government needs to rethink this rule and more broadly the impact and appropriateness of Sarbox - a lot of these kind of things are happening to avoid Sarbox. To be fair, I doubt Facebook can't afford the so called $10-50M Sarbox compliance bill. But Sarbox is still a pain for smaller companies looking to raise funds, and we should fix what we can.

You are Not that much Smarter than your Dad: Google observers, for years, made a big deal about its 20% personal project culture, its ability to attract and retain the best talent etc. And how different it was from the 'Be Evil' empire from Washington State. But just as when you become a parent and start acting like a "Dad", only to realize how all those years of you thinking your Dad was dumb for telling you to do things a certain way or being overly protective - were now coming back and manifesting through you - as you get older you realize the wisdom of your fathers. Similarly, in a twist of irony, Google - much like Microsoft several years ago - had to move from stock options as the primary way of attracting and retaining talent to cash incentives and RSUs (restricted stock units) - an admission of the reduced perceived value of the options in the eyes of the young engineers. And just as Microsoft continues to look for clever ways of competing with Google - Google, for years, shall be judged by how effectively it competes with Facebook. Let's see how it feels now that the shoe is on the other foot.

No matter how this turns out, it's clear that we have now firmly entered the Facebook era - and the Facebook Imperative requires us to think about mobile and social first. And while Facebook and Google are out there competing and innovating with products, the Empire is spending huge amounts of money on Television and Print Ads to convince us consumers that Windows and Office are the cloud. I suppose, they should at least consider moving exclusively to ads on Facebook - at least the ads can be in the real cloud.