Business Model of Waze, sell for big bags of Google cash

Next week is GigaOm Structure.  I have gone from attending as a blogger, to working freelance as a GigaOm Pro Analyst, to speaking at the conference.  This next one I am moderating a panel discussion on a Private Cloud with Revlon and NetApp.

HOW INFRASTRUCTURE CAN TRANSFORM BUSINESS SUCCESS

 

In this session we focus in on how the right IT infrastructure can create significant competitive advantage. Understanding that IT’s job is to make systems work for people rather than people work for systems, Revlon sought to align IT to the business with the successful implementation of a private cloud. Its resulting infrastructure turned 3.6 PB of data into a business driver and runs more than 500 applications in a virtualized environment. Its initiative has demonstrated clear ROI.

Moderated by:Dave Ohara - Founder, GreenM3 and Analyst, GigaOM Research
Speakers:David Giambruno - SVP and CIO, Revlon

 

Cynthia Stoddard - SVP and CIO, NetApp 

You could look at what I did as like coming up through the mail room, but another way is I was spending time in various roles to get a better understanding.  The folks at GigaOm eventually figured out how much I knew and started using my skills more.  One of the latest insights on GigaOm was when I was talking to one of my old bosses at Microsoft Frank Artale.  Frank is a partner at the VC firm Ignition Ventures.  Besides working for Frank on Windows 2000 he is also on Lake Sammamish and he likes to cook.  Next time I see Frank we need to talk about his kitchen vs. my woodstone oven.  But more relevant is the last time I saw Frank at GigaOm Structure Data he mentioned how many VCs are at the show.  I paid more attention and have gone through the attendee list and 2nd after the the technology companies (which have the highest attendee) is the VC community.  There are more VC than press.  There are more VC than infrastructure or cloud people.  And when I started hanging out with a few folks their most often side conversation was with another VC.

GigaOm's Om Malik posts on the Waze business model of selling to Google for $1 bil and cuts to the point of the challenge for Waze's business model.

Actually, selling to Google (or anyone else) was actually the only outcome for this company — even though it had tens of millions of people using the software in dozens of countries worldwide, it would have been pretty hard for them to turn social commuting into a real business. Google, on the other hand, can simply layer this on its maps and try and use the data to drive more real world transactions.

As I pointed out in a post about the new Google Maps, Google will ultimately create more natural advertising formats for maps-driven interfaces and Waze helps them towards that objective. That said, it is a great exhale for Waze’s investors, who were facing the prospect of building a real business — a much harder proposition than most in Silicon Valley understand or are willing to admit.

I've had chances to chat more with Om and shared cab rides in NYC.  Om knows lots of stuff including how the VC community works and how to look at start ups.  The #1 issue for selling a company is whether the VCs who supplied the money approve of the sale.  If they don't, you can't sell.

The big winners in this deal are investors that include Magma Ventures, Blue Run Ventures and Vertex Ventures, who were earliest backers of the company. Sources say they each made well north of $100 million from the deal. The surprise (and ironic) winner might be Microsoft, which is rumored to have invested in the company as a strategic investor.

Google's Emerging Market plans leaked, WSJ covers wireless efforts

Back in Sept 2012 Google announced its fits data center build in LATAM.  Making the jump from NAP of Americas to South America and being in co-location sites can only work for a limited audience.  At some point you'll need MWs of data center space.  

I have long said to my clients that there is an world wide race to provide sub 100ms latency to everyone in the world.  Google is a player and Equinix.  Digital Realty Trust is building out wholesale space.  Carriers are building relationships and capabilities to span the world.  Netflix is expanding in emerging markets which drives demand for AWS globally as well.

The WSJ covers Google's efforts in Africa and Middle East and Southeast Asia.

Google to Fund, Develop Wireless Networks in Emerging Markets

Google Inc. GOOG -1.07% is deep into a multipronged effort to build and help run wireless networks in emerging markets as part of a plan to connect a billion or more new people to the Internet.

These wireless networks would serve areas such as sub-Saharan Africa and Southeast Asia to dwellers outside of major cities where wired Internet connections aren't available, said people familiar with the strategy.

The networks also could be used to improve Internet speeds in urban centers, these people said.

Google plans to team up with local telecommunications firms and equipment providers in the emerging markets to develop the networks, as well as create business models to support them, these people said. It is unclear whether Google already has lined up such deals or alliances.

One of the areas I have been watching for is when servers will show up in cell tower installations to improve the performance and latency of mobile devices.  With Google's acquisition of Motorola they can create a wireless data center solution.  And there is even speculation Google will launch an airborne wireless fleet.

As part of the plan, Google has been working on building an ecosystem of new microprocessors and low-cost smartphones powered by its Android mobile operating system to connect to the wireless networks, these people said. And the Internet search giant has worked on making special balloons or blimps, known as high-altitude platforms, to transmit signals to an area of hundreds of square miles, though such a network would involve frequencies other than the TV broadcast ones.

Google has also considered helping to create a satellite-based network, some of these people said.

Some people may think this is new news, but there have been discussions even back in 2007 that Google was looking at wireless networks.

Sometimes the rumours are both outrageous and true. Google is experimenting with new ways of bringing broadband connections to consumers, by blanketing parts of Silicon Valley with Wi-Fi networks. It is planning to enter an auction for valuable radio spectrum in America, and thinking of radically new business models to make money from wireless data and voice networks, perhaps a free service supported by ads.

The man (men) behind Blackberry's Developer Effort

News.com has an article about Blackberry reaching out to the developer audience.

Saunders has embraced a concept that RIM had long ignored: that developers and a healthy app "ecosystem" can make or break an operating system. He's tried to make the company more accommodating and responsive to developers. It's the touchy-feely stuff RIM execs never thought was important.

Alec Saunders, vice president of developer relations.

(Credit: RIM)

Two years ago I was standing in line for drink at GigaOm Structure and Alec and I were standing next to each other. We were trying to remember where we worked together.  Win95, yeh.  We caught up a bit and Alec said I really need to find a HW Evangelist Director.  Hey how about Bob T from Win95 days.  Alec said Bob would be perfect.  Great, let me call him now.  Bob this is Dave, you looking for a job. yeh. Here talk to Alec he has a job for you.  BoB T works for Alec within a month.

One of the reasons why Alec is doing well is Bob T is building an evangelism team using the Win95 game plan.  

Some things don't change and having people who know how to execute with developers is a skill that doesn't get old, even though we do.

It is ironic that two ex-Microsoft guys are key executives in the Blackberry developer ecosystem.

With the adoption of Mobile, real-time computing is an everyday occurrence

Real-time computing is typically thought of control systems for mission critical computers - airplanes that cant' fall out of the sky, nuclear plants, oil refineries, pharmaceutical manufacturing.

(Electronics & Computer Science / Computer Science) denoting or relating to a data-processing system in which a computer receives constantly changing data, such as information relating to air-traffic control, travel booking systems, etc., and processes it sufficiently rapidly to be able to control the source of the data

The desktop could do real-time things, but it wasn't designed to be a real-time computer.  Sometimes there are long delays where you get hour glass or spinning wheel. A real-time system was used because failure of the system to respond in an accepted amount of time was not acceptable.

With the rapid growth of Mobile and people's expectation of a good UI experience.  What app succeeds that makes users wait? or even worse wait longer at random times.  In the users eye, the app is broken.  That app will quickly lose users and fail.  Guess what users expect real-time response. 

I found this table of user response time.  The 0.1 second is a general rule of thumb.  But, what mobile users would wait 10 seconds?

able 7-1 Maximum acceptable response times for typical events

UI Event	Maximum Acceptable Response Time
Mouse click, pointer movement, window movement or resizing, keypress, button press, drawing gesture, other UI input event involving hand-eye co-ordination	0.1 second
Displaying progress indicators, completing ordinary user commands (e.g. closing a window), completing background tasks (e.g. reformatting a table)	1.0 second
Displaying a graph or anything else a typical user would expect to take time (e.g. displaying a new list of all a company's financial transactions for an accounting period)	10.0 seconds
Accepting and processing all user input to any task	10.0 seconds

And, does even 0.10 second feel too long.  If you are playing a game a 0.10 delay could totally change the game experience.

Guess what users expectations are that systems perform like real time systems.

More Data to get you thinking Mobile, Mary Meeker shares Dec 2012 report

I am still thinking of the 75% 55-65 audience of Uptime's event, and whether understand how big and fast the shift to mobile is coming.  The trouble about most data center building type of people is they have no idea what kind of hardware, let alone software is running in the data center.

Now you may think what's the big deal.  KPCB's Mary Meeker just shared her 12/3/2012 Internet trends and in less than three days there are 400k + views of this presentation.

This is the slide that illustrates the change.

There are 88 slides in the deck.

If you think Mobile means iOS, wake up the rapid growth of Android.  I have iOS and Android devices.  Do you?

With little bitty screens, the mobile devices still are pulling down 13% of the traffic.

And India now has more mobile traffic than desktop.

I made the strategic shift to Mobile a while ago.  Have you?

Along with all this mobile growth is the growth of Big Data.  Mobile + Big Data is the new frontier.

And part of this shift is the transition from an Asset Heavy lifestyle.

To Asset Light.  Which works really well in high growth emerging markets.

Which turn off many of you.  

But, keep in mind.  This asset light approach is driving new flexibilities.