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Publishing 2010: The Beginning of the End or the End of the Beginning?
(via - Evil Genius Chronicles )
I read it on 03/02/10 at 09:00 AM
Posted on 03/02/10 at 12:23 PM

This post is my attempt to distill together many different threads into a common tapestry. There is a lot of turbidity in the publishing, podcasting, music, film, television worlds right now. I have these feeling that every bit of this is all part of a larger whole and I'm going to take a stab at defining it. This post will either be awesome because it succeeds or a miserable failure. There is no middle ground. Off in to it. This will be long, you have been warned.

First, let me inventory the raw materials that got me thinking this way. Recently JC Hutchins posted that he had been dropped as an author by St. Martins Press and that they would not be publishing the 7th Son sequels. The post lives between a gut-check and a crisis of faith from one of the pioneering new media creator/ novelist hybrid guys. He also posted about monetary realities of writers pubishing via ebooks. Not that long before this, I had listened to JC's Hey Everybody interview with Pablo Defendini and Ami Greko from The New Sleekness blog. It's a really interesting discussion about the future of book publishing by industry professionals young enough in their careers to be less invested in the status quo and more willing to help a new future emerge. (Side note 1: I met Pablo and Ami at last year's Dragon*Con in the classic SF con fashion I wanted to meet them, saw them in a hotel bar, asked if I could sit with them, introduced myself and hung out for an hour. Try it, it works! ) Much in my thinking was informed over the last month by the Amazon/Macmillan ebook pricing wars of far too large a trail to link to anything. In that debate I did first run across Joe Konrath, his fiction and some of his posts with amazingly open and detailed statistics of what he sells and what he makes from digital publishing. (Side note 2: I bought, read and enjoyed his book Whiskey Sour as fallout from the debate).

There are many other bits of thought in the mix, such as my feelings about beginning my own novel during NaNoWriMo and thinking about hiring my friends at Sterling Editing to work on it and what I might choose to do with such a book when)it is finished. That's enough of a prelude, though. Time to hit it.

JC Hutchins struck a nerve when he basically waved the white flag on his current way of working.

Creating podcast fiction does does not generate direct revenue for me. Based on anecdotal and statistical data, very few people are willing to pay for general podcast content, much less podcast fiction. Since my goal is to make a living wage with my words, the current monetization models including in-show advertisements will not deliver this. Dedicating time and effort to my non-fiction podcast projects will deliver equally underwhelming monetary results.

It is also apparent to me that using the Free model to promote a tangible product, such as I did with 7th Son: Descent and Personal Effects: Dark Art, does not deliver sustainable sales results. I have friends some of whom are my best friends, the most talented people I've had the privilege to know and work with who have absolute faith in this model. I treasure their trailblazing efforts and enthusiasm. My faith, however, has been fundamentally rattled.

Put simply: The new media model viably supports only the most blessed and talented of authors. The time, effort and money I invest in entertaining you for free pulls my attention and talent away from projects that can generate revenue. While podcasting, podcast fiction, and most importantly your support and evangelism has positively impacted my life and career in ways I'll never be able to fully express, I cannot continue to release free audiofiction if I wish to make a living wage with my words.

This is pretty big stuff in the world of podcast fiction. Hutch was one of the pioneers of the form and his getting picked up by St. Martins was considered a watershed and a validation for the medium. So if he can't make it in this world, what does that say about all the other podcast novelists who are less engaged, have less of a fan base, less sheer horsepower? Does it mean this medium is screwed?

I am positing that Hutch had a terrible misfortune of timing, that he arose as a viable author at exactly the wrong moment in publishing history. As he started down his path it seemed like the end game was to get a book deal with a major publisher. For writers of the last 100 years, this was the reasonable career success path for authors, and practically the only one. In the last few years though a sea change has happened so rapidly and thoroughly to flip that Hutch got his boat capsized in the process and he will be far from the only one. As crazy as it may sound, for a certain kind of author at this point I think a major publishing contract may seem like winning the game but is in fact losing it.

The red flags I got from the JC Hutchins post started here:

Examining the lead up to, and release of, the novel, I cannot see how I could have promoted it any better than I did. I literally went broke promoting this book and Personal Effects: Dark Art (another novel that will not have a sequel; it also underperformed). I conceived numerous brand-new online marketing campaigns that dazzled you and others. I asked you to purchase the novel, and many of you did.

If JC is literally going broke promoting 7th Son and Personal Effects book, I think a reasonable question to ask is What is St. Martins Press' role in this? If JC is willing and able to put so much of his own time and money into the promotion of the books, what value is he getting from the big publisher that is worth giving away 90% of the sale of the book to them? 50 years ago, and 20 years ago and 2 years ago, this made sense. It was pretty much impossible to get a book published and into the hands of the world in any significant way especially in a way that a writer could make a full-time living without a major publisher contract, especially one paying advances at a level to be a livable wage. Nowadays, especially due to the markeplace enabled by the Kindle, Nook, Sony Reader et al, that's a different equation.

Joe Konrath's post about the money he makes from the Kindle store shows a really clear pattern that he summarizes with:

My five Hyperion ebooks (the sixth one came out in July so no royalties yet) each earn an average of $803 per year on Kindle.

My four self-pubbed Kindle novels each earn an average of $3430 per year.

If I had the rights to all six of my Hyperion books, and sold them on Kindle for $1.99, I'd be making $20,580 per year off of them, total, rather than $4818 a year off of them, total.

So, in other words, because Hyperion has my ebook rights, I'm losing $15,762 per year.

For a writer with an engaged audience, like JA Konrath has and like JC Hutchins has, there may well be more money in their books self-published primarily through the Kindle and other ebook stores. An interesting bit from the Konrath numbers above, that's from making 35% of the sales price for his direct books. When it changes to 70%, he'll be making twice as much per book as he posted above for the self-published ones.

Let me say it again: for a writer who is engaged with their audience and reasonably prolific (because you need new books to keep this engine turning), we may be at the turning point where a better living is available through self-publishing than a big New York publisher book deal.

There are certainly authors that this model will not work for. During my preparation for last year's Podcasting for Working Writers panel at Dragon*Con I talked to both James Patrick Kelly and Kelley Eskridge on this topic and they both raised the point that for a number of old school writers, the idea of engaging at the level of podcasting and doing large parts of their own publicity is anathema. A reasonable chunk of authors don't want to get out in the limelight and picked this career specifically so they don't have to engage. They write their books, maybe do a few conventions a year, do some bookstore events and that's it. Back to the keyboard where the serious work happens. That's fair enough and those writers will always need a publisher to do the parts of this business that would make them unhappy to pursue.

I think of the classic big publisher and big record label model as basically serving the function of the bank or maybe as VC. The manufacturing and distribution of the creative work was too capital intensive for an individual so this company would lend that money to the process, make the books or records show up in the store, do some publicity and keep most of the money. They insulate the creator from the process and from the retailers and fans. What publicity efforts exist, the big media company acts as a semi-permeable membrane to let a little of the public through, but not a lot. Ultimately in this model, the relationship with the fans of the buying public is owned mostly by the retailer and the publisher or label, very little by the writer or musician. For the author that doesn't want to feed and water that relationship, that's perfect.

For the other kind of author, a JC Hutchins or Mur Lafferty or Scott Sigler, going with a major publisher outsources to a third party a relationship with their fans that these writers are really really good at maintaining. When Hutch is paying his own money to publicize his books and his his own direct line into his own fanbase, what can the big publishers do for him? They could give him large enough advances to keep his bills paid while future books are written, but obviously they aren't willing to do that because sales aren't high enough. JC's books earn money, but not enough money to keep him in that system. For me, the real question is Did St. Martins Press do 9 times the work than JC did to get the work promoted? If not, what did they do to deserve a 90/10 split?

Last November for NaNoWriMo I began a novel that I have literally been thinking about since 1991 when I was 23. While I came nowhere near finishing it that month and am nowhere near finished now, I have a goal to finish this novel in 2010. I've already been thinking about what happens when I finish the book. Do I try to find an agent and then try to have them place it with a major publisher? Since I don't have any plans beyond that one book and thus don't necessarily have a writing career in mind, how does that affect my decision making? At the moment I'm leaning towards not bothering to place the book with any publisher at all. I'll pay Nicola and Kelley at Sterling Editing to work with me to get it publishable and hire a book designer and/or artist to hone the final product and then publish it to the Kindle store, Smashwords, the Nook store and whatever else seems reasonable at the time. I'll probably release it via Podiobooks.com at the the same time, do my publicity via that and the other usual online suspects and let it ride. The key point to me is that the energy I could spend in placing my book at a big publisher could be spent selling the book to readers and I'll probably make more money that way in the long run. This isn't the way things worked for the 19th and 20th century and it may not be the way it works in the future, but March 2010 it is the way it looks to me now. The validation of having a major publisher decide I'm their sort of writer doesn't do anything for me. I don't need the book contract to pay my living, I'd end up doing mostly my own publicity anyway so what the hell does the publisher have to offer me anymore? Rather than have them put out a $15 Kindle book that I see a buck or two from and no one buys with a print version that is on and off the shelves in head-swimming time on a death march to the warehouse remainder store, I'd rather put out a $5.99 ebook version that I see $4 from each one and more people buy. I have a whole rant on how the true function of ebook platforms is to enable impulse buys, but this current post is already too long. That must come later.

When I interviewed Cory Doctorow in 2006, one of the things he said is that the generation coming of age now is the first one to arise without a stigma attached to self-publication. Since I've been paying attention to the world of science fiction and writers in general, a giant shift has happened. When I joined GEnie in 1992, the notion of self-publishing your work meant that it was unreadable tripe and the very thought of it was risible to any serious author. Nowadays, it might well be the most rational economic choice available. If you aren't already in the system and earning livable wages from advances on your books, and you are the sort of writer and person with that drive a JC Hutchins, a Scott Sigler, a Tee Morris, a Mur Lafferty, an Alec Longstreth, someone willing to do more than thrown the manuscript over the wall and wait for finished copies to return it might be time to take the reins yourself and just do this. The costs are low which means the cost of failing is low. The traditional publishers aren't paying that much anyway so the opportunity costs are low. Just do it. Lynne Abbey, CJ Cherryh and Jane Fancher did. The writers at Book View Cafe did. I will. Don't pin your hopes on a big publisher with economic drivers that are different than yours. Just do it yourself, work the people yourself and keep as much of the money as you can.

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Tags: book  publisher  money  jc  books  
 
 

RockOn Music Player
(via - Android Tapp )
I read it on 03/01/10 at 01:00 PM
Posted on 03/01/10 at 03:28 PM

RockOn is a music player with cool album-art navigation UI, auto art dl and concert info. You can download the full version from the website (free) but if you do like the concept and wish to support further development please consider buying it from the Market (1.33 ).

Price: Free

AndroidTapp.com Android App Review:

Pros & Cons:

Pros

  • Unique twist in the interface and navigation
  • Find and download album artwork automatically
  • Save and share playlists
  • Multi-task. Play music in the background and launch other Android apps

Cons

  • Often glitchy
  • Although the UI is cool, there could be more finesse regards to smoothing out the edges versus jagged edges on albums
  • Automatic album art discovery needs manual tweaking to get the best results
  • Processor intense, better use on Android phones with higher processing capabilities or more internal memory storage

Features:

RockOn Music Player is an Android music player with a unique twist in the interface and navigation it displays music 2D perspective. On the left pane is the current track playing with music controls, on the right is a list of albums on your SD card. Swipe the right pane to bring albums only to front view. Amongst playing MP3s you can save and share playlists.

Rockon Music Player Rockon Music Player Albums Rockon Music Player Change Album Art Rockon Music Player Track List Rockon Music Player Search Your Music Rockon Music Player Menu Options

Usefulness:

RockOn Music Player allows you to find and download album artwork automatically, even if it is not saved with albums on your SD card (a cool resource to have). However some manual intervention is needed for some album covers.

Ease of Use:

Its nifty UI brings everything all on one screen, so operation could be any easier.

Frequently Used:

Dependant on how often you listen to music on your Android phone.

Interface:

The user interface has a different twist, though it's no TAT Home experience it has room for improvements!

AndroidTapp.com Rating

AndroidTapp.com Rating!AndroidTapp.com Rating!AndroidTapp.com Rating!AndroidTapp.com Rating!AndroidTapp.com Rating! (3.7 out of 5)

Should you Download RockOn Music Player? Yes! Rock-On with RockOn Music Player!

Algadon Free Online RPG. Fully Mobile Friendly.




Tags: music  player  rockon  album  android  


 
 

Apple Stacks The Deck Against Amazon's Kindle App
(via - www.businessinsider.com )
I read it on 02/28/10 at 04:22 PM
Posted on 02/28/10 at 09:20 PM

Shared by Kristopher
app, ipad application, ipad app, apple app, kindle app

Apple Stacks The Deck Against Amazon's Kindle App

Jay Yarow | Feb. 26, 2010, 11:00 AM | 5,634 | comment 34

steve iBook
AAPL Feb 26 2010, 05:20 PM EST
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+2.62 +1.30%
AMZN Feb 26 2010, 05:20 PM EST
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+0.20 +0.17%

When Apple's iPad goes on sale in a few weeks, its iBookstore will have a distinct user-experience advantage over e-book competitors like Amazon's Kindle App.

That is, the iBookstore will let you seamlessly buy books from within the iBooks reader app, with the iTunes account it's already aware of.

Meanwhile, rivals like the Kindle app and Barnes & Noble e-reader will require you to boot up their apps, then click a button to boot up the iPad's Web browser, shop for e-books in a Web store, sign in and pay with a non-iTunes account, relaunch the e-reader app, and sync up your new e-book. Not as elegant.

It's not a huge difference, but it's the kind of small simplicity advantage that has helped Apple's iTunes music store maintain a lead over its rivals, including Amazon.

People who use the Kindle app on their iPhones today will know that this isn't a new thing: Since the Kindle iPhone app launched last March, users have had to leave the app to buy e-books.

Amazon didn't built the app this way from the beginning. We have learned that when Amazon first submitted its Kindle application for the iPhone to Apple, Amazon included its own payment system within the app, so customers could just pay for e-books and download them right in the app.

When Apple spotted the payment system, it told Amazon to get rid of it, according to a source familiar with Amazon's operations.

Why? It's a rule Apple smartly instituted at the App Store's beginning, forbidding third-party e-commerce of digital goods within apps.

That is, it's okay to use an iPhone app to buy physical goods -- as you can in Amazon's main iPhone app, or the Fandango app, etc. And developers are welcome to use Apple's in-app purchasing system -- and give a 30% cut of revenue to Apple -- to sell digital goods within apps.

But Amazon, Barnes & Noble, and other vendors are prohibited from using their own e-commerce systems within apps for virtual goods. Thus the trip to the Safari browser to buy books.

It's obviously a rule Apple itself is allowed to break -- it's Apple's iPhone, and it can do whatever it wants, as we've seen recently with Apple's recent raids on thousands of sexy apps. But it does put competitors like Amazon on uneven footing.

Obviously, Amazon is never going to want to give Apple a 30% cut of e-book sales, so it's not going to implement Apple's in-app purchasing system. So it's indefinitely stuck sending its customers into the browser to make purchases. (Meanwhile, on the new BlackBerry Kindle app, you can buy e-books directly within the app.)

Assuming the iBooks app and the iBookstore have similar selection, pricing, and e-reader features, this one simple step could give Apple a substantial advantage over Amazon.

See Also: 10 Burning Questions About Apple's iPad




Tags: app  apple  amazon  e  kindle  
 
 

One in Six iPhone Owners Intend to Buy an iPad
(via - The Magical Tablet )
I read it on 02/27/10 at 12:30 PM
Posted on 02/25/10 at 09:25 PM

iPad Purchase Intent - AdMob January 2010AdMob, the hotly contested mobile advertising company that was eventually acquired by Google in November 2009, published its monthly mobile metrics report. In addition to the report, they included survey results of existing iPhone users about their fondness for the iPad.

One in six iPhone owners intend to purchase an iPad much lower than Palm owners (one in nine) and even lower still for owners of Android phones (one in seventeen). Does this mean that Stevie J. is right that there is a need for a device in between a laptop and a smarthphone or are we iPhone owners just a bunch of fanboys/girls?

Probably a little of both.

Regardless, it does indicate that there is a preliminary market for the iPad that numbers in the millions of units.

Are you going to buy an iPad? What kind of phone do you own?

[Press Release] [AdMob Blog]

Disclosure: http://dsclzr.us/0

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Tags: mobile  ipad  iphone  owners  advertising  
 
 

French Courts Fine eBay For Buying Typo Keywords
(via - Techdirt )
I read it on 02/16/10 at 08:30 AM
Posted on 02/16/10 at 06:05 AM

For years, various luxury brands have been furious that others can buy text keyword advertising based on their trademarked terms, leading to a series of lawsuits. In most place, the courts have realized that just buying a trademarked term as a keyword alone is not infringing on someone's trademark. France, however, is the one exception, having ruled against Google. Now, it's also ruled against eBay for supposedly having ads that pointed to eBay whenever anyone searched on a typo/misspelling of any of LVMH (Louis Vuitton Moet Hennessy). Apparently, in France, you're not even allowed to misspell a trademarked brand name without official permission...

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Tags: ebay  trademarked  having  ruled  against  
 
 

Apple iBooks To Be Wrapped in FairPlay DRM
(via - The Magical Tablet )
I read it on 02/16/10 at 08:16 AM
Posted on 02/16/10 at 03:48 AM

Apple FairPlay DRM on iBooksDid you really think book publishing would go the way of the music industry and publish eBooks without DRM? Amazon already wraps their eBooks in DRM for the Kindle and now, Apple will do the same for publishers in its iBookstore.

According to the Los Angeles Times, sources in the book publishing industry have indicated that Apple's FairPlay DRM the same DRM used for its apps and its audio and video content will be made available to any book publisher who'd like to use it.

While there hasn't been an official announcement on its use, it's unlikely that many publishers will decline to use it except for maybe O'Reilly who is outspokenly against DRM.

Has DRM stopped you from buying eBooks?

Disclosure of Material Connection: http://dsclzr.us/0

[Los Angeles Times]

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Tags: drm  amazon  publishers  apple  book  
 
 

Verizon going BOGO crazy, launching Buy One, Get One promo on six phones tomorrow
(via - MobileCrunch )
I read it on 02/16/10 at 12:22 AM
Posted on 02/16/10 at 03:05 AM


We just got a hot tip from one of our Verizon buddies. Apparently Verizon Wireless is starting a new BOGO campaign tomorrow that includes both of its Android handsets the Droid and Eris both Palm phones the Pre Plus and Pixi Plus along with the LG Chocolate Touch and Samsung Alias 2 features phones. We hear the promotion will allow you to mix and match any of the eligible handsets or even a Winmo/feature phone of equal or lesser value. Of course the buyer will be required to sign a two year contract but that's par for the course on these types of deals.

Our tipster says the stores have been prepped and the promo is set to begin tomorrow. No word on how long it will run so you better get your new phones soon.

Scammers beware though, remember Verizon recently hiked its ETFs on most advanced devices to counter those that were taking advantage of Verizon's genius nature. It's no longer worth it to simply get two new phones, pay the ETF and hawk the other one on eBay for a quick profit.




Tags: phones  verizon  course  handsets  promo  

 
 

All the wrong reasons for Stack Overflow's VC chase
(via - Signal vs. Noise )
I read it on 02/15/10 at 11:00 PM
Posted on 02/16/10 at 12:49 AM

Joel has decided to chase venture capital for StackOverflow, but I can't exactly figure out why. He lists six benefits that just don't compute under even light scrutiny:

1. The Answers market is in a land grab mode
Unlike eBay, where there's a general market for goods and you get huge network effects from having a critical mass of buyers and sellers, StackOverflow is all about niches. People who are searching for how to make sql server not go slow? aren't likely to bleed over to how to make swedish meatballs?.

This means that you'll have to fight for every niche. Similar to how general forums would have to fight for every niche. Just because you have a forum site that's big for gamers, you won't have much of an edge attracting foodies.

Finally, it's not like this is a new idea with no other entrants. Look at Yahoo Answers for a site that's still up with a similar model and look at Google Answers for another that couldn't be turned into a worthwhile business and closed.

2. Stack Overflow is like Starbucks
It really isn't. Starbucks can use capital efficiently because they have big capital expenditures securing land, building out stores, and purchasing coffee machines. Where's the capital intensity part of starting another answers site? Adding another server? Coming up with a new design?

It doesn't seem like Stack Overflow can efficiently use big money for anything but advertising itself. Which is kinda funny when the whole business is about getting page views to sell for ad crumbs. It also rings very much like dot-com. Remember when all you had to do was get eyeballs? Oh, it's free? Who cares, let's make it up on volume!

3. Stack Overflow wants to get on Techcrunch
If you're listing the publicity of Stack Overflow raises $10M in Series A by Fancy Schmancy VC as the 3rd pro for taking money, you're bound to be in trouble. The Techcrunch post you're going to get from this is going to scroll off the front page in 4 hours and nobody who's actually going to use your service is going to care.

Do you think people looking for an answer to how do I get the three gold rings in zelda? is going to give a hoot who's money you're burning to provide that forum? Or even that the advertisers you're hoping to attract is going to look at anything else than CPM and demographics for a clue on whether to invest? No.

4. The investor will give you advice, connections, and introductions
They may, but most of the introductions your typical investor is going to give you is how to get you out in 3-5 years. You can find a lot of advice in many places. Rarely is the quality of the advice associated with having money involved of largely superior quality.

And if you end up building something of considerable value, then the connections and introductions will come all by themselves. You usually have to work to fight them off with a stick when things are going great. And getting an intro to Mr. Very Important Person before you have anything of material value is usually not going to give you much anyway.

5. Taking money means big exit or IPO
I'd argue the opposite. When you take money, your exit is bound to be smaller unless you're playing the Web 2.0 lottery game (where a few lucky contestants gets bought for sums completely uncorrelated to business fundamentals). Taking money means giving up equity, which means there'll be less left over if you happen to build something that's valuable enough for others to buy.

And I don't know if you've heard, but the IPO markets aren't all that interested in eyeball companies without the numbers to back them up any more. Doesn't matter how many letters of the alphabet you've used for series whatever funding before you got there.

If you can build a great, profitable business, you'll have all the options to sell or go IPO. Taking VC only complicates that.

6. Taking VC will make your company successful
This one is funny. So if you're not looking to take VC and play the Web 2.0 lottery or aim for an early exit, you're just in it for personal aggrandizement. If you take the money, you just want the best for your business. Spot the disconnect here.

Now even given all this, there's actually still an argument for why Joel should take the money. It'll probably lower the chances of Stack Overflow ultimately succeeding as a long-term sustainable business, but if he has eyed that he has a hot property right now, it'll be a good time to take some money off the table.

A fool and his money will soon be departed applies equally to venture capitalists as it does to everyone else. If Joel and co. can negotiate a deal with Sand Hill road to give them a nice payout as part of the deal, this might well be even better than trying to shop around Stack Overflow for a sale that it's probably premature for.

Much better to take a small slice of the proceeds from a if this just get 1% of the billion dollar advertising market than to take the slice from how much money did you make for the past 12 months? of a strictly look-at-the-books sale.

Go cherries, go!




Tags: money  overflow  stack  business  taking  
 
 

Why did Southwest apologize?
(via - AMERICAblog News )
I read it on 02/15/10 at 11:00 PM
Posted on 02/16/10 at 12:15 AM

It's easy to sympathize with many people who struggle with their weight. But in this specific case, this actor has no business slamming Southwest when he knew he was too large for one seat. He purchased two seats for another flight but wanted to jump on a different flight that only had one seat available.
In accordance with Southwest's "customers of size" policy, Smith had purchased two tickets but then stood by for an earlier flight, which had one seat remaining. That is when the airline forced him off the plane.
This isn't discrimination at all. The only person being discriminated here would have been the passenger sitting next to Smith who paid full fair but had less space. It's true that most airlines have reduced the available space for passengers and at the same time, the size of Americans has increased.

If he already knew he needed to buy a second seat, his tantrum makes no sense. His twitpic attempt at humor noticeably avoids showing how he fit into his seat. For his neighbor on the flight, I doubt they would receive a discount due to the over sized passenger spilling into their already cramped space. Average sized people or small people don't receive any special benefits for taking up less space, do they? Even after Southwest apologized, Smith still blasted them. They'd be better off without this guy as a customer.

So what do you guys think?

NOTE FROM JOHN: I fly a good deal, and have sat next to someone obese before. I had to pull my left arm over to the right, with my elbow half way to my navel, the entire flight, so as not to be playing snugly with the guy to my left. It was very disconcerting, and physically uncomfortable, having someone else basically sharing your seat. I appreciate that we should not judge people by their weight. But I'm also not so sure that treating obesity as if it's a minority status is correct either. If your metabolism is screwed up, fine. If you eat too much crap, then I have less sympathy for you.




Tags: seat  flight  space  southwest  smith  
 
 

Will One Company Become the Dominant Player in Cloud Computing?
(via - ReadWriteWeb )
I read it on 02/16/10 at 12:02 AM
Posted on 02/15/10 at 11:42 PM

OneCloudRing.gif

With each new milestone in technological evolution we've seen a company emerge as the clear leader. In the current landscape, we observe this happening in several key parts of the marketplace including networking, search and operating systems.

Cloud computing is a new disruptive force that makes us ask the question whether we'll see the future of the cloud dominated by a single company. In this multi-part series, we'll take a look at a handful companies and envision what the world might look like, if, in fact, they win it all. We'll also analyze what it will take for a new company to rise up and claim the leadership role in this chapter of computing.

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Dominance Happens: A Bit of Recent History

There has been a love/hate relationship with companies that dominate markets. On one hand, it's us consumers that make it happen. But when they become giants we cheer as governement regulators and competitors knock them down.

courtHouse.jpg

Microsoft has faced this issue perhaps more than any company in the past few decades. When the browser battles were in full swing in the late 1990s, Microsoft was taken to court by the Department of Justice for antitrust violations.

In this note released in 2000 - Technology, Market Changes, and Antitrust Enforcement -Microsoft evaluated the idea of whether it was consistent with public welfare for a company to "win" a technology market, and what it means to have a network effect in technology.

Microsoft makes the point that no technology company will hold a dominant position for long if it doesn't innovate and expand the market definition. Additionally, if a company doesn't find the right balance of trust and pricing between its customers new technologies will find a way into the market and cause customers to defect.

Point: A Dominant Vendor Will Emerge in the Cloud

moutainPeakCloudSmall.jpg

Taking these factors into consideration, we believe there are several points that can support the argument that a dominant player in cloud computing in the future. Due to the nature of market forces a single vendor will emerge as the clear leader in offering cloud solutions.

  • First mover advantage: We're already seeing amazing things happen at first-movers like Amazon that are defining product and pricing. This gives them an advantage in fueling further growth and by learning and iterating the solutions in the market. Being first in an infrastructure-driven business will help them reach scale that others just can not reach easily - and potentially price it where others can't match.
  • Vendor lock: Once you get started with an infrastructure provider it becomes interwoven into business operations. By the current nature of the cloud (e.g. little standards, a lot of innovation) being first with leading solutions adds more momentum to the first-mover that wins strategic customers.
  • Strategic synergies: When we look at the combination of cloud computing and collaboration, we see a natural fit in services that meet more needs and take more market share. It may just work out that bundling works also in the cloud and creates the network effect that Microsoft is famous for. Cisco is also partnering across the landscape, with a focus on preparing the network for the cloud. By making it easier to manage your cloud with Cisco gear, it will provide IT leaders a reason to expand their relationships today, and stay tomorrow.
  • Acquisitions and Partnerships: Companies that buy their way into the market will be a big factor in putting momentum behind their offerings. Companies to watch: VMware, Cisco, Oracle. These companies are already showing that the race is on to win the cloud through aggregation of capabilities. Cisco has a blog dedicated to Cloud Computing, Oracle is going on tour sharing its ambitions for the cloud

Counterpoint: A Dominant Company Will Not Emerge in the Cloud

Perhaps no single organization will have the ability to create a dominant foundation in cloud computing. Instead, we'll see many types of solutions as equal peers in the market.

In a way, this runs against the grain of existing technology landscape and our history with successful innovations. Maybe that is why we love the idea of the cloud itself?

  • It's too big to own: One big reason to doubt a single dominant force in the cloud is that it feels like owning the Internet. Even Cisco with its strengths can't make such a claim. Perhaps the cloud is the perfect market, where the barriers of entry are low enough that continual evolution will occur.
  • It's a movement, not a layer: Another argument against the cloud having a dominant player is its fuzzy definition. There are many parts and pieces to it, and it's not clear today what it would mean to "win" the cloud computing market.
  • Portability will keep vendors in check: If customers demand solutions where they can move from vendor to vendor freely, it will impact the landscape. Companies with cloud solutions in the marketplace could be required by these customers to remove barriers to moving data and services between different entities. Additionally, standards and best practices may emerge that allow companies and individuals to move freely between providers. In this world, it will become a fluid market that prevents vendor lock and promotes pricing and trust as brand differentiators.

A Glimpse at Potential Futures

We've compiled a list of companies worth reviewing as candidates as possible dominant players in cloud computing. We'll be looking at their brand and the available assets that could be leveraged to achieve this position. Finally, we'll take a fresh look at what it might feel like if they succeed and shape the brave new world of cloud computing.

The list of candidates we're analyzing includes: Google, Microsoft, Apple, VMware, IBM, HP, Cisco, Amazon, Salesforce, Facebook, and our favorite, Insert new startup to our list by adding a comment below.

Please let us know what you hopes and fears are with the cloud computing marketplace. Any companies we should we add to our list (or remove)? What's your take: Is there one company today that is best positioned to win the cloud?

Photo credit: reddodo & savingfutures

Discuss




Tags: cloud  market  computing  company  dominant  
 
 
 
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