Bruno Fernandez-Ruiz

Yahoo!’s new search platform, project Panama, is already showing a win over the last month. A study by comScore shows significant increases in Yahoo’s click through rates, and ad effectiveness when compared to normal links. But to me what is more important, is that Yahoo! is showing due transparency to publishers. Google’s lack of visibility is an abuse to 99% of publishers who have absolutely no idea of what goes on with click-through revenue sharing. And Google it’s not only a black box: it’s an abuse (don’t be evil!??). Yahoo! is certainly hitting Google right where it hurts with YPN.

Google Apps is already grabbing corporate attention. It’s not the Google apps’ themselves, but the APIs to allow ISVs and other power software houses can use to write applications that extend or integrate with Google Apps. Whereas security was already a known concern about Google Apps, and Postini is certainly betting on the right horse, Avaya is being innovative and extending its IVR portfolio into the SaaS space. The full article is here.

It seems like the SaaS media relationships departments have been busy since last night. Microsoft and BT are talking about BT Application Marketplace, Salesforce is hinting about its 25,000 user customer and Google is in fanfarre-mode with Apps Premier Edition. It’s a busy today for Software-as-a-Service (SaaS), but I am not sure it’s a coincidence but a follow up on last night’s rumour, now confirmed, about Google’s launch of Google Apps Premier Edition.

Besides the news fanfare, I am afraid there isn’t much new technology onto Google’s announcement, but a rebranding of the existing Google Apps for your Domain (GMail, Google Calendar, and Google Talk) joined with Google Spreadsheet and Docs.

But there is a significant point to take into consideration with Google’s announcement, and that is price, with the Premier Edition account being offered at $50/year subscription for 10Gb and a 99.9% SLA for email.

As we discussed back in August when looking at the SaaS pricing models, the SaaS model addresses the challenges small and medium businesses IT departments face to provide cost-competitive secure and reliable infrastructure to the business. As such, the low-cost, enhanced mobility, enforcable SLA, and improved security present in SaaS are very attractive factors to the business, to the extent of possibly threatening IT departments with closure.

Taking cost into account, Google is pricing Apps Premier at $50/year/user account, which is just over $4/month, significantly under what other SaaS are currently charging. As we discussed then, the current pricing model of other providers, resulted in a magic number of roughly 500 employees upto which SaaS is more attractive than inhouse hosted software. But Google’s pricing model highly undermines that, and pushes that boundary all the way up to almost 15,000 employees. It’s this aggressive pricing which is likely to make this offering succesful, and where Google will leverage economies of scale to make a good profit.

We know Google Apps is competitive against inhouse software for businesses upto 15,000 employees, but how does it leave its competitors?

Let’s first look at the storage costs, by comparing it with the best online secure storage infrastructure, Amazon S3:

• $0.15 per GB-Month of storage used.
• $0.20 per GB of data transferred.

Typically in a hosting business you oversell, and you don’t actually need all the storage you sell since most users never consume their quota. I don’t expect users of Google Apps to be any different. Assuming a utilisation of 50%, which means an actual use of 5Gb per month per user, and a data transfer of 1Gb/month/user, the total yearly cost with S3 would be $11.4/year/user, or $11,400 for 1,000 employees.

That’s for storage alone. In terms of servers, using this time Amazon’s EC3 virtual hosting, at $0.10 per instance-hour consumed, the CPU cost of a 24×7 server would be $876/year. EC3 VPS is equivalent to an 1.7Ghz x86 processor, and assuming we can host 10 users on each server, an organisation of 1,000 employees should be able to run on a $87,600 budget.

Considering only infrastructure costs, and taking application costs aside, a 1,000 employee organisation would spend almost $100,000 on an outsourced hosted model, versus $50,000 with Google, but this time application included. It’s hard to arguee that Google’s is not a very interesting proposition thanks to its extremely aggressive pricing.

It should not be a surprise by now to see lawyers and politicians arguing bizarre things about the Internet. First, it was the infamous Senator Ted Stevens and his “series of tubes“, and now it is the Spanish Authors Association (SGAE) proposing to charge the ISPs and operators for illegal P2P downloads. Sort of a road-tax, but on the ISPs.

The challenge with SGAE’s proposal is that it is highly short-eyed and not understanding of the nature of the internet. It sadly follows the current trend across Europe, which makes our politicians think that they can fix any problem by imposing additional regulation.

If European ISPs were charged such levies on P2P downloads, it would be naïve to think that they would stand still looking at their decreased margins. First, the ISPs would certainly pass the cost onto the end consumer by increasing monthly broadband fees, with the terrible and unfair side-effect of making lawful citizens pay for committing no sin.

Secondly, every single ISP would start charging content providers for the usage of their networks. The media groups would not only need to pay their normal hosting and data centre fees as they currently do, but they would also have to pay every single other ISP in the country for the bandwidth used to connect end consumers to content.

The interesting thing is that those big media groups are the likes of Universal/Vivendi, Sony Music, EMI, which all co-share production costs with the news groups of CBS, CNN, Canal+ and Prisa. So at the end of the day, SGAE would end shooting itself on the foot.

In summary, the suggestion made by Pablo Hernández of SGAE is ill-conceived and hopefully will not see the light.

Surely performance is not the prime criteria for selecting a framework. Most people will say developer productivity, ease of maintenance, security and scalability are the most important factors.

I love the Ruby language and its expresiveness. And Rails has been a truly inspiring web framework. This is why I think the web frameworks performance test results run by Alrond (and an update here) are highly disappointing for Rails. In Alrond’s tests we find that Django giving up to 4x faster response times, and 2x more throughput. But I guess this is not a surprise, we always knew Python was faster than Ruby by just looking at Debian’s language shootout.

I would add a couple of remarks to Alrond’s results:

• Most shared web environments only offer PHP. Some hosting providers offer an old version of Python that will not support Django. So when using shared hosting, PHP is likely to be your only choice. PHP is a useful and proven language if you need to integrate with C/Java/whatever, but perhaps not as expressive nor OO as Ruby and Python. On the performance results side of things, CodeIgniter/PHP tests using a bytecode cache (APC) improve performance by 10x, and make them comparable to Django/Python. Plus CI runs on PHP4, which is what most web hosts out there are running today.
• If you want/have to avoid PHP, you are probably looking at Rails and Django as your main options. These will require you to use a Virtual Private Host or a dedicated server. Rails and Django don’t work well on shared hosting. And if you are like me, on a tight hosting budget, you really want to get that extra performance and be on a framework where it’s really cheaper to scale out. This is where Django/Python will shine.

At the end of the day, choosing between one of these web frameworks is actually a language choice. And right now, the only real language contestants for people looking for raw speed and stability are PHP (with opcode cache) and Python. And both seem to deliver comparable performance.

But I would not rule out Ruby completely just yet. JRuby is making a lot progress, and you can even now run Rails with JRuby in Sun’s JEE container (glassfish). On the other hand, another interesting similar development which might rock Python is IronPython, which runs Python on the .NET runtime.

Eweek reports about Microsoft’s architecture guidance on SaaS (Software as a Service). There is code, a video and a screencast released on MSDN which I highly recommend watching. Well done, Microsoft.

Any small startup that succeeds and grows to become a big corporation will suffer from technologitis, this is, the inflamation of technology and detachment from the business body.

Seriously, the startup mode, where technology governance is not necessarily as important as time-to-market, allows for dynamic environments that allow quick growth. But at the cost of increasing operational costs due to technologitis: most of the IT budget being spent in operations, in keeping the power on, and only a little fraction of the budget is actually spent in new business initiatives. Certainly not the place the business would like to be in.

Over the last couple of years, a lot of folks have been switching their strategy in chip technology, going from Sun SPARC to Intel Xeon, IBM Power5 to AMD Opteron, Intel Xeon to SUN Niagara, and what else. The end result is that as much as they might have solved a point problem, on the long term they have increased their operational complexity.

There is nothing wrong in switching technology, but one must be aware of the technology cycles inherent with any technology. Whereas changing an application framework is something that theoretically one can do every 12 to 18 months, given that major version upgrades tend to be quite dramatic it would not be that much additional cost to ditch the framework altogether (but beware, project managers will tell you otherwise).

But CPUs stay in the data center for at least 3 years, mostly 5 years, and sometimes even 6 or 7 years. A choice of CPU technology should be long-lived (some may argue CPUs are a commodity, but once you start facing bugs traceable to specific architectures, you wonder whether you would not be better off standardising on a single architecture). A particular vendor may not have at all times over 5 years the fastest, coolest, higher bandwidth chip out there, but good vendors will come regularly come back to take the first place

Before the release of Sun Niagara, Sun failed (repeatedly) to meet its own objectives and bring out its Rock processor, up to the point that it cancelled the whole project. The PR impact was damaging, as well as the effect on the books, and the stock plummeted. After the release of Niagara, a lot of folks came back looking at Sun, hoping all trouble was over. The chip is good, but the question is not whether is good, but whether Sun is able to keep innovating over the next 10 years to ensure the chip remains good.

Apple was using the IBM PowerPC chip on their laptop, desktop and server product line. But IBM was focused on its own server business, and engineering the Power5+ chip. Apple needed a low power high clock device that would make the Apple truly competitive with Intel’s and AMDs’ offering, otherwise their laptop sales would never go higher than PCs. The switch to Intel is surely costing Apple a lot of money in development, marketing and lost opportunities (not all software is ready for Intel). This switch it has however also served as a good marketing effort to bring it on front of typical PC users, and the Intel chip is still faster and cooler than a PowerPC. But what is really important as a lesson is that Apple switched vendors, not technologies.

IBM just released yesterday a note on Power6. Power6 chips will be coming up in mid-2007, at clocks reaching 5Ghz, with double the clock, double the bandwidth, and most importantly the same power profile. This is an amazing individual breakthrough, but nothing you would not expect out of one of the best research labs in the world, IBM’s Almaden Research Center.

But while IBM keeps on delivering new technology breakthroughs, Sun has failed repeatedly in the past. Sun will have to prove itself repeatedly to stablish its credibility back. On the x86 side, AMD has shown historically its ability to innovate in the server space, and, to a lesser degree, Intel.

That’s why for servers I will keep on recommending AMD/Opteron (Linux) and IBM/Power (AIX). They are cool, they keep your data center cool, and make you look cool! But whatever you happen to chose, make a good choice of vendor, not just technology, and stick to it for as long as the technology life is. Otherwise you will end up with technologitis.

I have been using Yahoo! IM since 1999, but unable to log onto it over the last couple of years because of my employer’s URL filtering system and firewall settings. It seems like my account has been deactivated by Yahoo! Customer Service:

My trouble is that I have lost all my contacts! Anybody, how do I get these back?

Reading an article about the usual failures of Enterprise Architecture in Skyscrapr I draw the following summary about what successful enterprise architectures have in common:

• Decrease complexity by partitioning problems into smaller non-overlapping problems.
• Increase probability of success by using fast iterations (rather than long iterations focusing too much on quality). The keyword here is fast. The faster the iteration in OOPA (observe, orientate, plan, act) the higher the likelihood of success.
• Create business architecture design, technical architecture design, implementation, testing and deployment for each partition. Don’t move to another partition until the last one was completed. This is what the author calls iterative partitioning.
• Prioritise the iterative partitions considering Time-to-Value, Return-on-Investment. Focus first on “low-hanging fruit” to establish credibility.
• Think big, start small.
• Stay away from application architectures and focus on interoperability (ie don’t try to standardise on the implementation).

I highly recommend the article. Straight to the point — it’s definitely not the typical abstract enterprise framework discussion.

Update (2007-11-19): Microsoft has eaten up the site and it’s not providing the customary HTTP 302 response code, but I could dig the article again here.

Today’s TechnNews article about Nokia’s smart2go brings up an interesting business model competing with GPS navigation devices such as Tom-Tom. Nokia’s German-based Gate5 smart2go is a free map service based on Symbian EPOC for Series 60, although probably we will see across other Nokia phones. smart2go offers free maps, which can be downloaded from a PC (I guess for planned usual routes) or over the air and bluetooth (for unplanned routes — oops, I am lost!) One can store map files to the phone’s MMC (obviously to its storage limit).

Whereas traditionally GPS navigation devices have charged upfront for the hardware device, and provided free mapping and navigation service, smart2go has no starting costs (if you already have a compatible device), and maps and local guides are free. Navigation services however are not free - smart2go offers daily, monthly or yearly subscriptions. I believe it is this flexibility in the subscription model what will make it interesting for a number of people that do not need to use a Tom-Tom every day.