A couple of months ago, Hugh Macleod created a bit of buzz with his blog post The Cloud's Best Kept Secret. Hugh's argument: that cloud computing will lead to a huge monopoly. Of course, a couple of weeks ago, Larry Ellison made the opposite point, arguing that salesforce.com is "barely profitable", and that no one will make much money in cloud computing.
In this post, I'm going to explain why Ellison is right, and yet, for the strategic future of Oracle, he is dangerously wrong.
First, let's take a look at Hugh Macleod's argument:
...nobody seems to be talking about Power Laws. Nobody's saying that one day a single company may possibly emerge to dominate The Cloud, the way Google came to dominate Search, the way Microsoft came to dominate Software.
Monopoly issues aside, could you imagine such a company? We wouldn't be talking about a multi-billion dollar business like today's Microsoft or Google. We're talking about something that could feasibly dwarf them. We're potentially talking about a multi-trillion dollar company. Possibly the largest company to have ever existed.
I imagine many of my friends who work for the aforementioned companies know all about this, and know how VAST the stakes are.
Windows vs Apple? Who cares? Kid's stuff. There's a much bigger game going on... And for some reason, its utter enormity seems to be a very well-kept secret, at least to non-combatants like myself.
The problem with this analysis is that it doesn't take into account what causes power laws in online activity. Understanding the dynamics of increasing returns on the web is the essence of what I called Web 2.0. Ultimately, on the network, applications win if they get better the more people use them. As I pointed out back in 2005, Google, Amazon, ebay, craigslist, wikipedia, and all other other Web 2.0 superstar applications have this in common.
Cloud computing, at least in the sense that Hugh seems to be using the term, as a synonym for the infrastructure level of the cloud as best exemplified by Amazon S3 and EC2, doesn't have this kind of dynamic. (More on different types of cloud computing later.)
Of course, it is true that the bigger players will have economies of scale in the cost of equipment, and especially in the cost of power, that are not available to smaller players. But there are quite a few big players -- Google, Microsoft, Amazon -- to name a few, that are already at that scale, with or without a cloud computing play. What's more, economies of scale are not the same as increasing returns from user network effects. They may be characteristic of a commoditizing marketplace that does not actually give outsize economic leverage to the winners.
I can't vouch for the authenticity of the following remark, since I heard it secondhand, but it was from a thoughtful, informed source: Jeff Bezos is reported to have said that he welcomes cloud competition from Google and Microsoft, because they'll subsidize their cloud services with profits from other part of their business, while Amazon will always have to make it pay. "We're good at commodity businesses," Jeff is reported to have said, and the facts bear him out.
If cloud computing is a commodity business, then the outsize profits that Hugh envisioned are not going to be there. This is a business that will be huge, but it may be more similar to the web hosting and ISP markets, which are also huge, but not hugely profitable. (See Rackspace's numbers for a taste.)
But because one of my goals at Radar is to help people think about the future, I wanted to spend some time on the possible futures and strategies that could turn cloud computing into the kind of massive monopoly that Hugh envisioned.
Types of Cloud Computing
Since "cloud" seems to mean a lot of different things, let me start with some definitions of what I see as three very distinct types of cloud computing:
Utility computing. Amazon's success in providing virtual machine instances, storage, and computation at pay-as-you-go utility pricing was the breakthrough in this category, and now everyone wants to play. Developers, not end-users, are the target of this kind of cloud computing.
This is the layer at which I don't presently see any strong network effect benefits (yet). Other than a rise in Amazon's commitment to the business, neither early adopter Smugmug nor any of its users get any benefit from the fact that thousands of other application developers have their work now hosted on AWS. If anything, they may be competing for the same resources.
That being said, to the extent that developers become committed to the platform, there is the possibility of the kind of developer ecosystem advantages that once accrued to Microsoft. More developers have the skills to build AWS applications, so more talent is available. But take note: Microsoft took charge of this developer ecosystem by building tools that both created a revenue stream for Microsoft and made developers more reliant on them. In addition, they built a deep -- very deep -- well of complex APIs that bound developers ever-tighter to their platform.
So far, most of the tools and higher level APIs for AWS are being developed by third-parties. In the offerings of companies like Heroku, Rightscale, and EngineYard (not based on AWS, but on their own hosting platform, while sharing the RoR approach to managing cloud infrastructure), we see the beginnings of one significant toolchain. And you can already see that many of these companies are building into their promise the idea of independence from any cloud infrastructure vendor.
In short, if Amazon intends to gain lock-in and true competitive advantage (other than the aforementioned advantage of being the low-cost provider), expect to see them roll out their own more advanced APIs and developer tools, or acquire promising startups building such tools. Alternatively, if current trends continue, I expect to see Amazon as a kind of foundation for a Linux-like aggregation of applications, tools and services not controlled by Amazon, rather than for a Microsoft Windows-like API and tools play. There will be many providers of commodity infrastructure, and a constellation of competing, but largely compatible, tools vendors. Given the momentum towards open source and cloud computing, this is a likely future.
Platform as a Service. One step up from pure utility computing are platforms like Google AppEngine and Salesforce's force.com, which hide machine instances behind higher-level APIs. Porting an application from one of these platforms to another is more like porting from Mac to Windows than from one Linux distribution to another.
The key question at this level remains: are there advantages to developers in one of these platforms from other developers being on the same platform? force.com seems to me to have some ecosystem benefits, which means that the more developers are there, the better it is for both Salesforce and other application developers. I don't see that with AppEngine. What's more, many of the applications being deployed there seem trivial compared to the substantial applications being deployed on the Amazon and force.com platforms. One question is whether that's because developers are afraid of Google, or because the APIs that Google has provided don't give enough control and ownership for serious applications. I'd love your thoughts on this subject.
Cloud-based end-user applications. Any web application is a cloud application in the sense that it resides in the cloud. Google, Amazon, Facebook, twitter, flickr, and virtually every other Web 2.0 application is a cloud application in this sense. However, it seems to me that people use the term "cloud" more specifically in describing web applications that were formerly delivered locally on a PC, like spreadsheets, word processing, databases, and even email. Thus even though they may reside on the same server farm, people tend to think of gmail or Google docs and spreadsheets as "cloud applications" in a way that they don't think of Google search or Google maps.
This common usage points up a meaningful difference: people tend to think differently about cloud applications when they host individual user data. The prospect of "my" data disappearing or being unavailable is far more alarming than, for example, the disappearance of a service that merely hosts an aggregated view of data that is available elsewhere (say Yahoo! search or Microsoft live maps.) And that, of course, points us squarely back into the center of the Web 2.0 proposition: that users add value to the application by their use of it. Take that away, and you're a step back in the direction of commodity computing.
Ideally, the user's data becomes more valuable because it is in the same space as other users' data. This is why a listing on craigslist or ebay is more powerful than a listing on an individual blog, why a listing on amazon is more powerful than a listing on Joe's bookstore, why a listing on the first results page of Google's search engine, or an ad placed into the Google ad auction, is more valuable than similar placement on Microsoft or Yahoo!. This is also why every social network is competing to build its own social graph rather than relying on a shared social graph utility.
This top level of cloud computing definitely has network effects. If I had to place a bet, it would be that the application-level developer ecosystems eventually work their way back down the stack towards the infrastructure level, and the two meet in the middle. In fact, you can argue that that's what force.com has already done, and thus represents the shape of things. It's a platform I have a strong feeling I (and anyone else interested in the evolution of the cloud platform) ought to be paying more attention to.
The Law of Conservation of Attractive Profits
A lot of my thinking about web 2.0 grew directly out of my thinking about open source. My argument in The Open Source Paradigm Shift was that what we learned from the history of the IBM personal computer -- a commodity platform built from off-the-shelf parts -- was that it drained value out of the hardware ecosystem, turning it into a low-margin business. But profits didn't go away. Instead, through something that Clayton Christensen calls "the law of conservation of attractive profits," value migrated elsewhere, from hardware to software, from IBM to Microsoft. Christensen:
When attractive profits disappear at one stage in the value chain because a product becomes modular and commoditized, the opportunity to earn attractive profits with proprietary products will usually emerge at an adjacent stage.
I believe strongly that open source and open internet standards are doing the same to traditional software. And value is migrating to a new kind of layer, which we now call Web 2.0, which consists of applications driven not just by software but by network-effects databases driven by explicit or implicit user contribution.
So when Larry Ellison says that cloud computing and open source won't produce many hugely profitable companies, he's right, but only if you look at the pure software layer. This is a lot like saying that the PC wouldn't produce many hugely profitable companies, and looking only at hardware vendors! First Microsoft, and now Google give the lie to Ellison's analysis. The big winners are those who best grasp the rules of the new platform.
So here's the real trick: cloud computing is real. Everything is moving into the cloud, in whole or in part. The utility layer of cloud computing will be just that, a utility, without outsized profits.
But the cloud platform, like the software platform before it, has new rules for competitive advantage. And chief among those advantages are those that we've identified as "Web 2.0", the design of systems that harness network effects to get better the more people use them.
If Oracle isn't playing that game, they will one day be doomed to irrelevance. Perhaps, like hardware giants of the past - Compaq, say - they will be absorbed by a bigger company. Or perhaps, like Unisys, they will linger on in specialized markets, too big to go away but no longer on the cutting edge of anything. Or they will understand that it's not the database software that matters, but the data that it holds, and the services that can be built against that data.
The company that creates the right platform for network effects in data may well achieve the scale that Hugh Macleod envisioned.
P.S. I will be doing two panels on cloud computing at the Web 2.0 Summit in San Francisco the week after next, one on the application layer, and one on the infrastructure layer. Panelists include Paul Maritz (CEO of VMware, who, by the way totally gets what I'm talking about here), Russ Daniels (CTO for cloud services at HP), Padmasree Warrior (CTO at Cisco), the inimitable Marc Benioff of Salesforce.com, Kevin Lynch, CTO of Adobe, and Dave Girouard, who is in charge of Google Apps for the Enterprise. Should be some interesting conversations on the subjects raised in this post!
http://radar.oreilly.com/2008/10/web-20-and-cloud-computing.html
Tuesday, October 28, 2008
Google's HTC Dream phone -- That's it?
It's been a little more than a year since Google Android was announced and rumors of a little device called the HTC Dream started to leak onto the Web.
The G1 does not support stereo Bluetooth, Microsoft Exchange, or video recording.
We think it's fair to say that the Dream stirred up as much anticipation and hype as the Apple iPhone, not only because it would be the first smartphone to run Google's mobile platform but also because of the potential to overtake Apple's darling.
(Hey, like it or not, the iPhone set a new bar for handset design and convergence, and serves as a sort of benchmark for touch-screen smartphones these days.)
On September 23, the world was officially introduced to the HTC Dream, now known as the T-Mobile G1, and the initial reaction ranged from "That's it?" to "I have to have it!"
Unfortunately, we fell more into the "That's it?" camp. The G1 definitely offers some functionality the original iPhone and the current iPhone 3G do not, including copy-and-paste capabilities, multimedia messaging, a better camera, and Google Street View.
However, there are some serious design flaws and at this time, the G1 does not support stereo Bluetooth, Microsoft Exchange, or video recording. While these features may (and probably will be) added in the future, we feel like HTC, Google, and T-Mobile had the opportunity to really come out swinging and raise the bar, but didn't take full advantage of the opportunity.
Despite these complaints, we did come away impressed with the Google Android operating system. There's huge potential for the G1 (and any Android devices after it) to become powerful minicomputers as developers create more applications for the open platform. Right now, there are only about 35 apps in the store, so we feel the G1 is a bit limited.
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Obviously, there's enough curiosity about Google Android to attract buyers; and in fact, preorders for the G1 have already sold out. However, it doesn't quite offer the mass appeal and ease of use of an iPhone, so the G1 isn't a good fit for anyone making the jump from a regular cell phone to their first smartphone.
Power business users also might want to hold off until more corporate support and productivity applications are added. We'd say the T-Mobile G1 is best-suited for early adopters and gadget hounds who love tinkering around and modding their devices.
We'll continue to test the G1 and applications as more are added, and though we hope for better hardware in the future, we're excited about Google Android and feel it could change the way we use smartphones. The T-Mobile G1 will be available through T-Mobile on October 22 in black or bronze and will cost $179.99 with a two-year contract.
Design
The T-Mobile G1 is manufactured by HTC and has a similar look and feel to the company's other Pocket PC smartphones, such as the T-Mobile Wing and the Sprint Mogul. Measuring 4.6 inches tall by 2.1 inches wide by 0.6 inch deep and weighing 5.6 ounces, the G1 is definitely not the sleekest device, and we certainly wouldn't call it sexy.
Instead, the words "interesting" and "weird" come to mind. This is mostly because the bottom section of the phone juts out at a slight angle. We asked HTC about this design decision but have yet to hear from them as of press time. Presumably, it's to get the phone's speaker closer to your mouth, which isn't a bad thing but consequently, it affects the ergonomics of the keyboard, which we'll touch on later. In a battle of pure looks, the iPhone would win hands down.
Product summary
The good: The T-Mobile G1 features a full QWERTY keyboard, 3G support, Wi-Fi, GPS, and Bluetooth. The Google Android operating system offers good integration with Google applications as well as access to the Amazon MP3 Store and YouTube.
The bad: The G1 doesn't include a standard headphone jack and lacks stereo Bluetooth and Microsoft Exchange support. There are some annoying design quirks that make the smartphone uncomfortable to hold and difficult to use. The GPS tracking was disappointing, and speakerphone quality wasn't the greatest.
The bottom line: It's not quite there yet, so for now, the G1 is best suited for early adopters and gadget hounds, rather than consumers and business users.
Specs: OS provided: Android; Installed RAM: 192 MB; Processor: QUALCOMM 528 MHzMSM7201A
Keyboard
That said, the G1 has solid construction and features a soft-touch finish on the back that provides a nice rubberlike texture, making it easy to grip the phone and comfortable to hold.
Also, there's a good reason for G1's larger size: a full QWERTY keyboard. There are a number of users who are reluctant to switch to a full touch-screen smartphone because of the lack of a tactile keyboard, so the G1 is certainly an attractive option for such customers.
To access the keyboard, just push the screen to the right. The sliding mechanism is fairly interesting in that it's not a straight up-and-down motion; the screen actually swings out slightly to the left before snapping into place. We were indifferent to this design quirk; we didn't find any particular advantage or disadvantage, just something to note.
The sliding motion was smooth, but after a few days of use, we started to notice a creaking sound whenever we nudged the screen--not good.
The keyboard itself is a reminiscent of the T-Mobile Sidekick, as many observers pointed out during our review period. That's not necessarily a bad thing, since we like the Sidekick's keyboard. The buttons are a bit small, but overall the keyboard feels roomy and there's enough spacing between the keys that we think it shouldn't give too many users problems.
If anything, we wish the buttons were raised a bit more, since right now, they're set flush with the phone's surface. The bigger issue is that the bottom section of the G1 makes it awkward to hold the phone when typing messages, since your right hand doesn't quite have the full range of motion. It definitely affected the speed and accuracy of typing.
Touch screen
When you slide open the phone, the screen orientation automatically switches from portrait to landscape mode. That said, while equipped with an accelerometer, the screen doesn't change when you physically rotate the phone in its closed state.
According to T-Mobile, during testing, people preferred that the screen only change when using the keyboard, which may be so, but we see the benefit of having automatic screen rotation in some instances, such as viewing pictures. This is not to say that this functionality won't be added in the future, and in the future, there will be applications where orientation will rotate with the phone's position, even when the screen is down.
The actual display measures 3.2 inches diagonally and has a 320x480 resolution. It's vibrant and sharp, and like the iPhone and RIM BlackBerry Storm, the touch screen is capacitive, so it will only respond to the touch of your finger and not your fingernail or other objects like a stylus.
The G1 provides haptic feedback, but only for certain actions and not with every touch. First, you'll feel a slight vibration when performing a long press on an icon. Overall, we thought this was fine, but there were times when the G1 didn't register our actions, so some kind of confirmation would have been nice.
To access various functions within an application, you can perform another long press and a window will pop up with your options. It's contextual, so the menu items will always be relevant to the program you are in. You can swiftly navigate through lists with a quick flick, or you can drag your finger for a slower, more precise look.
In addition, you can pan and move Web pages and other documents by holding and then moving your finger around the screen. Unlike the iPhone, however, the G1's touch screen isn't multitouch, so you can't zoom in and out of pages by pinching your fingers apart. Admittedly, we really missed this feature, since it makes viewing Web pages and pictures easy, but it's not necessary.
User interface
Overall, the T-Mobile G1's interface is clean, fun, and easy to use. You have the freedom to customize the Home screen with your favorite apps, and you can do this in a couple of ways. For example, you can do a long press on the Home page, which will bring up a menu where you can add shortcuts, widgets, or change the wallpaper. Alternatively, there's a little tab along the bottom edge of the screen that you can touch and then pull up, which will reveal a full menu of applications.
From there, you do a long press on an icon and then drag it to the Home screen. To remove it, perform the same touch action and then drag it to the trash can. Note that this action simply removes it from the screen and doesn't delete the application from your device.
There are also sliding panels to the left and right where you can add more shortcuts, and there's a notification bar at the top, which you can pull down like a window shade and view missed calls, new messages, downloads, and more.
There's a lot to like about the G1 interface, with its glass touch-screen display, the slide-out QWERTY keyboard (although we don't like the small keys), and the Pearl-like trackball for navigation.
We would even say that the responsiveness of the touch screen is on a par with that on the iPhone's. But we have to say its overall interface just isn't as intuitive.
For example, as with most every other phone, the need to dip into the menu layout every time we wanted to access something can get a bit clunky. Yes, it's possible to drag out your favorite applications as shortcuts, but that means you need to spend quite a bit of time setting that up.
With the iPhone, there is no home screen at all; you're brought directly to the menu. We realize that the iPhone is a very unique phone in this sense, but in a strict comparison between the G1 and the iPhone, the iPhone's interface wins out.
Also, though we like the aforementioned trackball and menu bar, it just isn't quite as smooth as the multitouch gestures on the iPhone, especially for zooming in and out of pictures. This is even more apparent in the browser application, which we'll explore later.
Exterior features
Below the display, you get some tactile navigation controls, including Talk and End/Power buttons, a Home shortcut, a back button, a trackball navigator, and a Menu key. Similar to the touch screen, the Menu button is contextual to what application you're in at the time. For example, if you're in the Web browser and press Menu, you will get options to open a new window, go to a URL, bookmark a page, and so on.
It's a minor issue, but we're a bit annoyed that pressing the End/Power key automatically locks the handset; we're used to having the End/Power key as a shortcut to exit the application. Because of this, we ended up having to unlock the screen frequently, which got annoying.
The left spine holds a volume rocker and a microSD expansion slot. To access the latter, you have to push the screen open in order to remove the protective cover. On the right side, you will find a camera activation/capture button, though you can also press the trackball to take pictures. We actually preferred this method, since the dedicated camera key was a bit small. Plus, when holding the phone horizontally, our thumb had a tendency to keep nudging the screen upward while trying to take a picture.
On the bottom of the unit, there is a mini USB port, which is protected by an attached cover. This is where you can connect the power charger and sadly, this is also your only option for connecting a headset. There's no dedicated headphone jack, 3.5mm or otherwise, which is really disappointing.
We've asked HTC about this decision, but again, have yet to hear back from them as of press time. Yes, there's a headset included in the box, but you don't get the same comfort and quality as you would with a nice pair of headphones. If you want the privilege of using your own 'phones, you'll have to spend extra money to buy an adapter.
Last but not least, the camera lens sans flash or self-portrait mirror is located on the back, and the G1 offers a user-replaceable battery.
Accessories
The T-Mobile G1 comes packaged with a travel charger, a USB cable, a wired headset, a 1GB microSD card, a soft protective case, and reference material. For more add-ons, please check our cell phone accessories, ringtones, and help page.
Features
As the first smartphone to run the Google Android operating system, what does the T-Mobile G1 offer? Well, it delivers a lot of the basic core functions and of course, tight integration with Google's products, including Gmail, Google Maps, and Google Calendar. Wireless options and multimedia capabilities are also well represented on the G1, but there are also some glaring omissions and restrictions that need to be called out.
Voice features
The T-Mobile G1 is a quad-band world phone and offers a speakerphone, voice dialing, conference calling, and speed dial. There is not support for visual voice mail; that's not a service T-Mobile offers anyway.
The address book is limited only by the available memory, while the SIM card can hold an additional 250 contacts. One nice convenience is if you have a Gmail account; all your contacts will automatically be synchronized to the phone book.
Each entry has room for multiple phone numbers, e-mail addresses, IM handles, postal address, and more. For caller ID purposes, you can assign a photo to a contact as well as a group ID and one of 33 polyphonic ringtones.
There's even a setting to send a contact's phone call directly to voice mail every time -- good if you really don't like someone, we suppose. The G1 supports T-Mobile's MyFaves service, giving you unlimited calls to five contacts, regardless of carrier. Individual plans for MyFaves start at $29.99 a month.
Bluetooth is onboard, but the supported profiles are limited to wireless headsets and hands-free kits. However, as with the iPhone 3G, there's no love for stereo Bluetooth or tethering, so you can't use it as a modem for your laptop. The latter is a lesser issue for us, but if we can't get a 3.5mm headphone jack, we'd at least like stereo Bluetooth support.
Wi-Fi and 3G
The T-Mobile G1 is the carrier's first 3G-capable smartphone, operating on the 1700/2100MHz bands. As of this writing, T-Mobile has rolled out 3G to 20 markets. The carrier plans to expand coverage to a total of 27 markets by the end of 2008. And as we know, T-Mobile has now backed off its initial 1GB data usage cap, after numerous complaints.
As we noted in our iPhone 3G review, the 3G experience is all relative and depends on a number of factors, such as the number of people on the network at a given time, the type of Web pages you're trying to load, and so forth.
Before buying and investing in a 3G handset, it's always a good idea to ask any friends and family with T-Mobile service and a 3G-capable phone about their experiences to get a better idea of what to expect. Also, make sure you have adequate T-Mobile 3G coverage in your area. T-Mobile won't be selling the G1 in stores in areas outside of its 3G coverage. In those places you'll have to buy it online.
The 3G speeds were good during our preliminary testing. As we did with the iPhone 3G, we checked out graphic-intensive sites like WorldofWarcraft.com, which loaded as quickly as 32 seconds, while CNET.com took about 50 seconds to fully load.
Downloading applications from Android Market was also swift, with each application taking no more than 10 seconds. Meanwhile, YouTube clips over the 3G network took some time. We'll continue to test in our labs and will update the review as we get results.
As an alternative to 3G, the G1 has integrated Wi-Fi and it can seamlessly transfer between 3G and accessible Wi-Fi networks. In fact, the smartphone's YouTube application will only present videos in high resolution when you're using Wi-Fi and play the low-res version when using the cellular network, in order to optimize the load times.
Note, however, that to download songs from the Amazon MP3 store, you need a Wi-Fi connection (same as on the iPhone).Unfortunately, the G1 does not support T-Mobile's HotSpot@Home service. There is an application in the Android Market called iSkoot for Skype, which allows you to make Skype calls via the phone's radio rather than Wi-Fi, but we imagine there will be VoIP clients added to the database.
There's also a wireless manager under the Settings menu where you can turn on and off all the radios and set up connections. To save battery life, you can turn off 3G and revert to the EDGE network--a good idea if you don't need to surf the Web or download apps or music.
Web browser
The T-Mobile G1 uses Webkit as the basis for its browser, which is also the core of the Safari browser found on the iPhone. It uses full HTML browsing, plus it has Java support, and you can surf almost every Web site--except the ones that use Flash. You can pan across the screen by using your finger, and even though you can't zoom in via pinching as you can on the iPhone, you can bring up onscreen zoom controls at the bottom of the display.
Similar to the iPhone, you can also double-tap on a Web page to zoom in on a particular section. Of course, you're not limited to the touch screen when navigating the browser; in fact, we preferred to use the trackball to scroll around pages at times. You can also tab between multiple browser windows, and we like the fact that the browser settings are easily accessible via the browser menu itself.
With the iPhone, you have to dig into the Settings menu to find the Safari settings. As with the iPhone, you can view the browser in both portrait and landscape modes.
But there are a few hiccups with the G1 browser that keep it from being a totally seamless experience. For example, we didn't like that we had to go in and out of the browser menu to do basic browser navigation such as Back and Forward. Yes, there are keyboard shortcuts for these functions, but we don't want to have to remember shortcuts all the time.
And even though we like having the physical QWERTY keyboard, we wish there was some kind of onscreen keyboard so we can enter text when holding the phone in portrait mode. And though this is more of the fault of the hardware than the browser itself, we found the G1's smaller display makes browsing a bit more troublesome since you need to scroll around a lot more.
While the interface for the browser leaves a bit to be desired, we like that it has quite a number of customizable settings. They include text size, the ability to block pop-up windows, the option of turning off image loading, the option of auto-fitting the pages to the screen, the capability to enable or disable JavaScript, the option of not accepting cookies, and of course, the option to clear out the cache, history, cookies, and passwords.
Perhaps the most intriguing browser option is that you can enable "Gears," which are potential future applications that can extend the browser functionality. What this means is that Google might develop a way for you to take some of your Web stuff offline--imagine being able to edit your Google Docs without a signal, for example, and then sync it back online when you do have a signal. This isn't available yet, but we think it has quite a lot of potential.
Android Market
Perhaps in a move to compete against the built-in App Store on the iPhone, Google has also come up with a mobile application store of its own, called Android Market. It's laid out a bit differently than the iPhone's App Store.
For example, instead of having a page to themselves, the Featured applications are lined up at the top of the Android Market front page. Underneath that are shortcuts to the full list of applications, games, a search function, and a page of your downloaded applications called My Downloads. However, there doesn't seem to be a place where you can download updated versions of your applications as on the iPhone, but perhaps that might not be necessary.
When you go into the Applications list, you will find them arranged in categories, like Productivity, Lifestyle, and so forth. There's also a category called Demos, which will presumably feature demo versions of paid software, which is certainly lacking in the iPhone App Store.
At the time of this review, all the applications in the Android Market are free anyway, so the issue is moot for now. But hopefully the Demos category will be put to use when for-pay applications appear in the future, since it would be nice to try before you buy. Each category then lists the applications by popularity and by the date they were released. We like this a lot, especially since the applications in the iPhone App Store can't be listed by date.
Another nice feature of the Android Market is that each application has a list of warnings stating whether or not it'll have access to the Internet, the phone's GPS functionality, or your personal data.
We downloaded a few applications from the App Store. Since the App Store isn't tied to a program like iTunes, you don't need to enter in any log-in or password information to download the applications. This is a huge plus in our opinion.
Downloading applications was a breeze on both Wi-Fi and over T-Mobile's 3G network--we didn't have a chance to download them over EDGE. After downloading them, the applications will appear in the menu as well as the My Downloads folder.
Since the Android Market is so new, it's hard to compare the applications available with the ones on the iPhone. However, we think it shows a ton of promise. Already there are applications like ShopSavvy that lets you scan bar codes for comparison shopping, and BreadCrumz, which allows you to create routes for your friends using photos as visual aids. We'll update this section as the Android Market develops.
E-mail and messaging
The G1 offers support for several e-mail account types. As a Google product, Gmail, of course, gets top billing, but you can also configure the smartphone to access POP3 and IMAP4. There's full HTML support, so you'll be able to view photos and graphics along with the text. You'll have access to all of your folders and any action that you perform on the smartphone, such as deleting an e-mail, will be reflected in your real account.
To the delight of many, we're sure, you get copy-and-paste capabilities, and there's an attachment viewer to open Word, Excel, PowerPoint, and PDF documents, but note, you can't edit said files (the iPhone is also view-only). We successfully set up our review unit with both our Gmail and Yahoo accounts simply by entering our log-in ID and password. Our Gmail contacts seamlessly transferred to the G1, and mobile e-mail delivery was sometimes faster than on our PC, but attachments took a while to download.
Bad news for business users
Sadly, there will be no Microsoft Exchange Server support at launch, so no synchronization with your Outlook e-mail, Calendar, Contacts, and so forth. You can check Outlook e-mail via OWA (Outlook Web Access), but we would have liked full support from the get-go. We think this is a pretty glaring omission.
We assume all parties involved would want to attract both consumers and business users, and given the inclusion of a full QWERTY keyboard, the G1 would make a good messaging-centric device for the mobile professionals. However, without that Exchange support, it could be a turnoff for a lot of those customers.
The G1 comes preloaded with four instant-messaging clients, including Google Talk, AIM, Windows Live, and Yahoo Messenger. You can keep IM chats in the background while working in other applications. The smartphone also offers threaded text messaging and yes, multimedia messaging.
Productivity and PIM tools
The T-Mobile G1 offers basic PIM (personal information management) and productivity tools. You get Calendar, Contacts, a calculator, and an alarm clock. The advantage of the T-Mobile G1 is that Contacts, Calendar, and Gmail are updated over the air, so you don't have to synch up with your computer every day.
Aside from the e-mail attachment viewer, Google Docs is supported for view only, but we couldn't access a shared Google spreadsheet. Again, the T-Mobile G1 might not be the best choice for corporate users given that you can't really edit Office documents. We're sure as the Android Market expands more productivity applications will become available.
GPS
The G1 offers assisted GPS and network-assisted location. Of course, Google Maps is preloaded on the device with standard map, satellite, and traffic views. In addition, you get Google Maps Street View, and there's a compass mode that provides a 360-degree view of the street by simply moving the phone around (no other phone currently supports this feature).
Basically, you just tap any point on a map and then touch the bubble to get a full-screen view of the street. You can then move the phone in any direction (up, down, left, or right); you can even spin in circles and the view will move with you (check back soon for a video demonstration).
You can search for various businesses and plan trips by entering start and end points. The G1 provides turn-by-turn driving directions, but not in real time like a standalone portable navigation device. Instead, you consult a list of text-based instructions or view the route on the map with step-by-step directions. Again, we suspect a navigation app will appear in the Android Market sooner or later.
GPS performance was mixed during our initial tests. While it was able to provide us with accurate text directions, we found that, more often than not, the G1 was slow to get a fix on our location and we were often greeted with the message, "Your location cannot be determined. We will keep trying but you can also try moving your position." There were also a few times where the G1 placed us in the middle of the San Francisco Bay--yikes. We're still continuing our GPS testing, but this definitely isn't a good start.
Music and video
While Apple had the unenviable task of incorporating a full-blown iPod-like music player into the iPhone, the T-Mobile G1 is made to be more cell phone than music player and does not have that burden to carry. That said, the music player on the G1 is robust for what it is, and will satisfy most casual listeners.
Songs are organized by Artists, Albums, Songs, and Playlists, as you would expect. You get the typical music player functions like shuffle, repeat, and the ability to create playlists on the fly. And even though there's no CoverFlow, you can still view album art in a list format. We especially liked that you can instantly convert any song to a ringtone directly from the music player by hitting the "Use as ringtone" button.
But perhaps the most interesting part of the music player is its ties to the Amazon MP3 Store, Android's answer to the iTunes Music Store. Unlike the iTunes Store, all the songs from the Amazon store are DRM-free, meaning you can do whatever you want to them--transfer them from computer to computer, edit them into shorter tracks, and more. Unfortunately, just like the iTunes Store, you can only download songs over Wi-Fi, and not over the 3G network.
To buy a song, all you need to do is use your Amazon account and then hit the buy button. Songs and albums are typically cheaper than those from iTunes--on Amazon a song is around $0.89 and an album can be anywhere from $5 to $9 (A song on iTunes is typically $0.99 and an album is around $9.99). You can browse the store by Top 100 Albums, Top 100 Songs, by genre, or just search for your favorite song or artist.
Of course you don't have to buy songs from the Amazon MP3 Store if you don't want to. You can upload any of your own music files into the G1. The G1 supports MP3, M4A, AMR, WMA, MIDI, WAV, Ogg Vorgis formats and has 192MB RAM and 256MB ROM. As we mentioned, the G1 comes with a 1GB microSD card, which comes preloaded with 11 songs. The expansion slot can support up to 8GB cards.
Perhaps the most disappointing thing about the G1 music player is hardware related. The G1 doesn't have stereo Bluetooth, and it doesn't have a 3.5-mm headset jack. These are absolutely glaring omissions in our opinion, and it certainly means the G1 is not meant to be a music player replacement.
In addition to the Amazon MP3 Store and music player, the T-Mobile G1 includes a dedicated YouTube application. The clips took quite a while to load via 3G, and quality wasn't the greatest. Though images and audio were synchronized, it was quite blurry, but we were also watching a low-res version since we were using T-Mobile's network instead of Wi-Fi. The screen orientation will go from portrait to landscape mode for videos.
Camera
The T-Mobile G1 is equipped with a 3.2-megapixel camera, which beats the iPhone's 2-megapixel camera, but you can't record video. (Did we learn nothing from the Sidekick or iPhone, people?) Even worse, there are no camera settings, such as white balance, effects, and shooting modes.
We recently reviewed the Motorola Krave, which also stripped these camera features, and Motorola said it was because its customers did not want this feature. We hope this doesn't become a trend as we like having those editing options.
Taking pictures with the G1 was a challenge. You have to have a steady hand to get a clear shot, as the slightest movement will result in a blurry image. We took about 10 to 12 pictures before we could get a satisfactory shot, and by the end, we were fairly frustrated with the experience. Picture quality was mediocre. We found that objects on the outside had sharp definition, but got a bit soft in the middle. There was also a bit of a yellowish hue to the image.
Performance
The T-Mobile G1 does not require extra steps in the activation process like the iPhone 3G. You should be able to pop in your T-Mobile SIM and start using the smartphone right away. We tested the quad-band (GSM 850/900/1800/1900; UMTS/HSDPA 1700/2100) T-Mobile G1 in San Francisco using T-Mobile service, and call quality was good. We enjoyed good sound with minimal background noise, though audio was a bit blown out when the volume was set to the highest level.
We had no problems interacting with an airline's voice-automated response system and didn't experience any dropped calls during our review period. Our friends also reported positive results, saying the sound quality was quite good. Unfortunately, the speakerphone wasn't as pristine. On our end, the voices sounded tinny and garbled at times; meanwhile, our callers said that we sounded far away. We were able to pair the T-Mobile G1 with the Logitech Mobile Traveller Bluetooth headset.
We were impressed by the snappy performance of the smartphone. The G1 was very responsive during our testing period, and we didn't experience any system freezes or crashes. The T-Mobile G1 has a rated talk time of 5 hours and up to 5 days of standby time.
We are still conducting our battery drain tests, but will update this section with a full range of results. Anecdotally, on an average day of using the phone, Web, GPS, and multimedia applications, we noticed that the battery life dropped anywhere from 40 to 50 percent. According to FCC radiation tests, the G1 has a digital SAR rating of 1.11 watts per kilogram.
http://www.cnn.com/2008/TECH/ptech/10/27/cnet.tmobile.g1/
The G1 does not support stereo Bluetooth, Microsoft Exchange, or video recording.
We think it's fair to say that the Dream stirred up as much anticipation and hype as the Apple iPhone, not only because it would be the first smartphone to run Google's mobile platform but also because of the potential to overtake Apple's darling.
(Hey, like it or not, the iPhone set a new bar for handset design and convergence, and serves as a sort of benchmark for touch-screen smartphones these days.)
On September 23, the world was officially introduced to the HTC Dream, now known as the T-Mobile G1, and the initial reaction ranged from "That's it?" to "I have to have it!"
Unfortunately, we fell more into the "That's it?" camp. The G1 definitely offers some functionality the original iPhone and the current iPhone 3G do not, including copy-and-paste capabilities, multimedia messaging, a better camera, and Google Street View.
However, there are some serious design flaws and at this time, the G1 does not support stereo Bluetooth, Microsoft Exchange, or video recording. While these features may (and probably will be) added in the future, we feel like HTC, Google, and T-Mobile had the opportunity to really come out swinging and raise the bar, but didn't take full advantage of the opportunity.
Despite these complaints, we did come away impressed with the Google Android operating system. There's huge potential for the G1 (and any Android devices after it) to become powerful minicomputers as developers create more applications for the open platform. Right now, there are only about 35 apps in the store, so we feel the G1 is a bit limited.
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Obviously, there's enough curiosity about Google Android to attract buyers; and in fact, preorders for the G1 have already sold out. However, it doesn't quite offer the mass appeal and ease of use of an iPhone, so the G1 isn't a good fit for anyone making the jump from a regular cell phone to their first smartphone.
Power business users also might want to hold off until more corporate support and productivity applications are added. We'd say the T-Mobile G1 is best-suited for early adopters and gadget hounds who love tinkering around and modding their devices.
We'll continue to test the G1 and applications as more are added, and though we hope for better hardware in the future, we're excited about Google Android and feel it could change the way we use smartphones. The T-Mobile G1 will be available through T-Mobile on October 22 in black or bronze and will cost $179.99 with a two-year contract.
Design
The T-Mobile G1 is manufactured by HTC and has a similar look and feel to the company's other Pocket PC smartphones, such as the T-Mobile Wing and the Sprint Mogul. Measuring 4.6 inches tall by 2.1 inches wide by 0.6 inch deep and weighing 5.6 ounces, the G1 is definitely not the sleekest device, and we certainly wouldn't call it sexy.
Instead, the words "interesting" and "weird" come to mind. This is mostly because the bottom section of the phone juts out at a slight angle. We asked HTC about this design decision but have yet to hear from them as of press time. Presumably, it's to get the phone's speaker closer to your mouth, which isn't a bad thing but consequently, it affects the ergonomics of the keyboard, which we'll touch on later. In a battle of pure looks, the iPhone would win hands down.
Product summary
The good: The T-Mobile G1 features a full QWERTY keyboard, 3G support, Wi-Fi, GPS, and Bluetooth. The Google Android operating system offers good integration with Google applications as well as access to the Amazon MP3 Store and YouTube.
The bad: The G1 doesn't include a standard headphone jack and lacks stereo Bluetooth and Microsoft Exchange support. There are some annoying design quirks that make the smartphone uncomfortable to hold and difficult to use. The GPS tracking was disappointing, and speakerphone quality wasn't the greatest.
The bottom line: It's not quite there yet, so for now, the G1 is best suited for early adopters and gadget hounds, rather than consumers and business users.
Specs: OS provided: Android; Installed RAM: 192 MB; Processor: QUALCOMM 528 MHzMSM7201A
Keyboard
That said, the G1 has solid construction and features a soft-touch finish on the back that provides a nice rubberlike texture, making it easy to grip the phone and comfortable to hold.
Also, there's a good reason for G1's larger size: a full QWERTY keyboard. There are a number of users who are reluctant to switch to a full touch-screen smartphone because of the lack of a tactile keyboard, so the G1 is certainly an attractive option for such customers.
To access the keyboard, just push the screen to the right. The sliding mechanism is fairly interesting in that it's not a straight up-and-down motion; the screen actually swings out slightly to the left before snapping into place. We were indifferent to this design quirk; we didn't find any particular advantage or disadvantage, just something to note.
The sliding motion was smooth, but after a few days of use, we started to notice a creaking sound whenever we nudged the screen--not good.
The keyboard itself is a reminiscent of the T-Mobile Sidekick, as many observers pointed out during our review period. That's not necessarily a bad thing, since we like the Sidekick's keyboard. The buttons are a bit small, but overall the keyboard feels roomy and there's enough spacing between the keys that we think it shouldn't give too many users problems.
If anything, we wish the buttons were raised a bit more, since right now, they're set flush with the phone's surface. The bigger issue is that the bottom section of the G1 makes it awkward to hold the phone when typing messages, since your right hand doesn't quite have the full range of motion. It definitely affected the speed and accuracy of typing.
Touch screen
When you slide open the phone, the screen orientation automatically switches from portrait to landscape mode. That said, while equipped with an accelerometer, the screen doesn't change when you physically rotate the phone in its closed state.
According to T-Mobile, during testing, people preferred that the screen only change when using the keyboard, which may be so, but we see the benefit of having automatic screen rotation in some instances, such as viewing pictures. This is not to say that this functionality won't be added in the future, and in the future, there will be applications where orientation will rotate with the phone's position, even when the screen is down.
The actual display measures 3.2 inches diagonally and has a 320x480 resolution. It's vibrant and sharp, and like the iPhone and RIM BlackBerry Storm, the touch screen is capacitive, so it will only respond to the touch of your finger and not your fingernail or other objects like a stylus.
The G1 provides haptic feedback, but only for certain actions and not with every touch. First, you'll feel a slight vibration when performing a long press on an icon. Overall, we thought this was fine, but there were times when the G1 didn't register our actions, so some kind of confirmation would have been nice.
To access various functions within an application, you can perform another long press and a window will pop up with your options. It's contextual, so the menu items will always be relevant to the program you are in. You can swiftly navigate through lists with a quick flick, or you can drag your finger for a slower, more precise look.
In addition, you can pan and move Web pages and other documents by holding and then moving your finger around the screen. Unlike the iPhone, however, the G1's touch screen isn't multitouch, so you can't zoom in and out of pages by pinching your fingers apart. Admittedly, we really missed this feature, since it makes viewing Web pages and pictures easy, but it's not necessary.
User interface
Overall, the T-Mobile G1's interface is clean, fun, and easy to use. You have the freedom to customize the Home screen with your favorite apps, and you can do this in a couple of ways. For example, you can do a long press on the Home page, which will bring up a menu where you can add shortcuts, widgets, or change the wallpaper. Alternatively, there's a little tab along the bottom edge of the screen that you can touch and then pull up, which will reveal a full menu of applications.
From there, you do a long press on an icon and then drag it to the Home screen. To remove it, perform the same touch action and then drag it to the trash can. Note that this action simply removes it from the screen and doesn't delete the application from your device.
There are also sliding panels to the left and right where you can add more shortcuts, and there's a notification bar at the top, which you can pull down like a window shade and view missed calls, new messages, downloads, and more.
There's a lot to like about the G1 interface, with its glass touch-screen display, the slide-out QWERTY keyboard (although we don't like the small keys), and the Pearl-like trackball for navigation.
We would even say that the responsiveness of the touch screen is on a par with that on the iPhone's. But we have to say its overall interface just isn't as intuitive.
For example, as with most every other phone, the need to dip into the menu layout every time we wanted to access something can get a bit clunky. Yes, it's possible to drag out your favorite applications as shortcuts, but that means you need to spend quite a bit of time setting that up.
With the iPhone, there is no home screen at all; you're brought directly to the menu. We realize that the iPhone is a very unique phone in this sense, but in a strict comparison between the G1 and the iPhone, the iPhone's interface wins out.
Also, though we like the aforementioned trackball and menu bar, it just isn't quite as smooth as the multitouch gestures on the iPhone, especially for zooming in and out of pictures. This is even more apparent in the browser application, which we'll explore later.
Exterior features
Below the display, you get some tactile navigation controls, including Talk and End/Power buttons, a Home shortcut, a back button, a trackball navigator, and a Menu key. Similar to the touch screen, the Menu button is contextual to what application you're in at the time. For example, if you're in the Web browser and press Menu, you will get options to open a new window, go to a URL, bookmark a page, and so on.
It's a minor issue, but we're a bit annoyed that pressing the End/Power key automatically locks the handset; we're used to having the End/Power key as a shortcut to exit the application. Because of this, we ended up having to unlock the screen frequently, which got annoying.
The left spine holds a volume rocker and a microSD expansion slot. To access the latter, you have to push the screen open in order to remove the protective cover. On the right side, you will find a camera activation/capture button, though you can also press the trackball to take pictures. We actually preferred this method, since the dedicated camera key was a bit small. Plus, when holding the phone horizontally, our thumb had a tendency to keep nudging the screen upward while trying to take a picture.
On the bottom of the unit, there is a mini USB port, which is protected by an attached cover. This is where you can connect the power charger and sadly, this is also your only option for connecting a headset. There's no dedicated headphone jack, 3.5mm or otherwise, which is really disappointing.
We've asked HTC about this decision, but again, have yet to hear back from them as of press time. Yes, there's a headset included in the box, but you don't get the same comfort and quality as you would with a nice pair of headphones. If you want the privilege of using your own 'phones, you'll have to spend extra money to buy an adapter.
Last but not least, the camera lens sans flash or self-portrait mirror is located on the back, and the G1 offers a user-replaceable battery.
Accessories
The T-Mobile G1 comes packaged with a travel charger, a USB cable, a wired headset, a 1GB microSD card, a soft protective case, and reference material. For more add-ons, please check our cell phone accessories, ringtones, and help page.
Features
As the first smartphone to run the Google Android operating system, what does the T-Mobile G1 offer? Well, it delivers a lot of the basic core functions and of course, tight integration with Google's products, including Gmail, Google Maps, and Google Calendar. Wireless options and multimedia capabilities are also well represented on the G1, but there are also some glaring omissions and restrictions that need to be called out.
Voice features
The T-Mobile G1 is a quad-band world phone and offers a speakerphone, voice dialing, conference calling, and speed dial. There is not support for visual voice mail; that's not a service T-Mobile offers anyway.
The address book is limited only by the available memory, while the SIM card can hold an additional 250 contacts. One nice convenience is if you have a Gmail account; all your contacts will automatically be synchronized to the phone book.
Each entry has room for multiple phone numbers, e-mail addresses, IM handles, postal address, and more. For caller ID purposes, you can assign a photo to a contact as well as a group ID and one of 33 polyphonic ringtones.
There's even a setting to send a contact's phone call directly to voice mail every time -- good if you really don't like someone, we suppose. The G1 supports T-Mobile's MyFaves service, giving you unlimited calls to five contacts, regardless of carrier. Individual plans for MyFaves start at $29.99 a month.
Bluetooth is onboard, but the supported profiles are limited to wireless headsets and hands-free kits. However, as with the iPhone 3G, there's no love for stereo Bluetooth or tethering, so you can't use it as a modem for your laptop. The latter is a lesser issue for us, but if we can't get a 3.5mm headphone jack, we'd at least like stereo Bluetooth support.
Wi-Fi and 3G
The T-Mobile G1 is the carrier's first 3G-capable smartphone, operating on the 1700/2100MHz bands. As of this writing, T-Mobile has rolled out 3G to 20 markets. The carrier plans to expand coverage to a total of 27 markets by the end of 2008. And as we know, T-Mobile has now backed off its initial 1GB data usage cap, after numerous complaints.
As we noted in our iPhone 3G review, the 3G experience is all relative and depends on a number of factors, such as the number of people on the network at a given time, the type of Web pages you're trying to load, and so forth.
Before buying and investing in a 3G handset, it's always a good idea to ask any friends and family with T-Mobile service and a 3G-capable phone about their experiences to get a better idea of what to expect. Also, make sure you have adequate T-Mobile 3G coverage in your area. T-Mobile won't be selling the G1 in stores in areas outside of its 3G coverage. In those places you'll have to buy it online.
The 3G speeds were good during our preliminary testing. As we did with the iPhone 3G, we checked out graphic-intensive sites like WorldofWarcraft.com, which loaded as quickly as 32 seconds, while CNET.com took about 50 seconds to fully load.
Downloading applications from Android Market was also swift, with each application taking no more than 10 seconds. Meanwhile, YouTube clips over the 3G network took some time. We'll continue to test in our labs and will update the review as we get results.
As an alternative to 3G, the G1 has integrated Wi-Fi and it can seamlessly transfer between 3G and accessible Wi-Fi networks. In fact, the smartphone's YouTube application will only present videos in high resolution when you're using Wi-Fi and play the low-res version when using the cellular network, in order to optimize the load times.
Note, however, that to download songs from the Amazon MP3 store, you need a Wi-Fi connection (same as on the iPhone).Unfortunately, the G1 does not support T-Mobile's HotSpot@Home service. There is an application in the Android Market called iSkoot for Skype, which allows you to make Skype calls via the phone's radio rather than Wi-Fi, but we imagine there will be VoIP clients added to the database.
There's also a wireless manager under the Settings menu where you can turn on and off all the radios and set up connections. To save battery life, you can turn off 3G and revert to the EDGE network--a good idea if you don't need to surf the Web or download apps or music.
Web browser
The T-Mobile G1 uses Webkit as the basis for its browser, which is also the core of the Safari browser found on the iPhone. It uses full HTML browsing, plus it has Java support, and you can surf almost every Web site--except the ones that use Flash. You can pan across the screen by using your finger, and even though you can't zoom in via pinching as you can on the iPhone, you can bring up onscreen zoom controls at the bottom of the display.
Similar to the iPhone, you can also double-tap on a Web page to zoom in on a particular section. Of course, you're not limited to the touch screen when navigating the browser; in fact, we preferred to use the trackball to scroll around pages at times. You can also tab between multiple browser windows, and we like the fact that the browser settings are easily accessible via the browser menu itself.
With the iPhone, you have to dig into the Settings menu to find the Safari settings. As with the iPhone, you can view the browser in both portrait and landscape modes.
But there are a few hiccups with the G1 browser that keep it from being a totally seamless experience. For example, we didn't like that we had to go in and out of the browser menu to do basic browser navigation such as Back and Forward. Yes, there are keyboard shortcuts for these functions, but we don't want to have to remember shortcuts all the time.
And even though we like having the physical QWERTY keyboard, we wish there was some kind of onscreen keyboard so we can enter text when holding the phone in portrait mode. And though this is more of the fault of the hardware than the browser itself, we found the G1's smaller display makes browsing a bit more troublesome since you need to scroll around a lot more.
While the interface for the browser leaves a bit to be desired, we like that it has quite a number of customizable settings. They include text size, the ability to block pop-up windows, the option of turning off image loading, the option of auto-fitting the pages to the screen, the capability to enable or disable JavaScript, the option of not accepting cookies, and of course, the option to clear out the cache, history, cookies, and passwords.
Perhaps the most intriguing browser option is that you can enable "Gears," which are potential future applications that can extend the browser functionality. What this means is that Google might develop a way for you to take some of your Web stuff offline--imagine being able to edit your Google Docs without a signal, for example, and then sync it back online when you do have a signal. This isn't available yet, but we think it has quite a lot of potential.
Android Market
Perhaps in a move to compete against the built-in App Store on the iPhone, Google has also come up with a mobile application store of its own, called Android Market. It's laid out a bit differently than the iPhone's App Store.
For example, instead of having a page to themselves, the Featured applications are lined up at the top of the Android Market front page. Underneath that are shortcuts to the full list of applications, games, a search function, and a page of your downloaded applications called My Downloads. However, there doesn't seem to be a place where you can download updated versions of your applications as on the iPhone, but perhaps that might not be necessary.
When you go into the Applications list, you will find them arranged in categories, like Productivity, Lifestyle, and so forth. There's also a category called Demos, which will presumably feature demo versions of paid software, which is certainly lacking in the iPhone App Store.
At the time of this review, all the applications in the Android Market are free anyway, so the issue is moot for now. But hopefully the Demos category will be put to use when for-pay applications appear in the future, since it would be nice to try before you buy. Each category then lists the applications by popularity and by the date they were released. We like this a lot, especially since the applications in the iPhone App Store can't be listed by date.
Another nice feature of the Android Market is that each application has a list of warnings stating whether or not it'll have access to the Internet, the phone's GPS functionality, or your personal data.
We downloaded a few applications from the App Store. Since the App Store isn't tied to a program like iTunes, you don't need to enter in any log-in or password information to download the applications. This is a huge plus in our opinion.
Downloading applications was a breeze on both Wi-Fi and over T-Mobile's 3G network--we didn't have a chance to download them over EDGE. After downloading them, the applications will appear in the menu as well as the My Downloads folder.
Since the Android Market is so new, it's hard to compare the applications available with the ones on the iPhone. However, we think it shows a ton of promise. Already there are applications like ShopSavvy that lets you scan bar codes for comparison shopping, and BreadCrumz, which allows you to create routes for your friends using photos as visual aids. We'll update this section as the Android Market develops.
E-mail and messaging
The G1 offers support for several e-mail account types. As a Google product, Gmail, of course, gets top billing, but you can also configure the smartphone to access POP3 and IMAP4. There's full HTML support, so you'll be able to view photos and graphics along with the text. You'll have access to all of your folders and any action that you perform on the smartphone, such as deleting an e-mail, will be reflected in your real account.
To the delight of many, we're sure, you get copy-and-paste capabilities, and there's an attachment viewer to open Word, Excel, PowerPoint, and PDF documents, but note, you can't edit said files (the iPhone is also view-only). We successfully set up our review unit with both our Gmail and Yahoo accounts simply by entering our log-in ID and password. Our Gmail contacts seamlessly transferred to the G1, and mobile e-mail delivery was sometimes faster than on our PC, but attachments took a while to download.
Bad news for business users
Sadly, there will be no Microsoft Exchange Server support at launch, so no synchronization with your Outlook e-mail, Calendar, Contacts, and so forth. You can check Outlook e-mail via OWA (Outlook Web Access), but we would have liked full support from the get-go. We think this is a pretty glaring omission.
We assume all parties involved would want to attract both consumers and business users, and given the inclusion of a full QWERTY keyboard, the G1 would make a good messaging-centric device for the mobile professionals. However, without that Exchange support, it could be a turnoff for a lot of those customers.
The G1 comes preloaded with four instant-messaging clients, including Google Talk, AIM, Windows Live, and Yahoo Messenger. You can keep IM chats in the background while working in other applications. The smartphone also offers threaded text messaging and yes, multimedia messaging.
Productivity and PIM tools
The T-Mobile G1 offers basic PIM (personal information management) and productivity tools. You get Calendar, Contacts, a calculator, and an alarm clock. The advantage of the T-Mobile G1 is that Contacts, Calendar, and Gmail are updated over the air, so you don't have to synch up with your computer every day.
Aside from the e-mail attachment viewer, Google Docs is supported for view only, but we couldn't access a shared Google spreadsheet. Again, the T-Mobile G1 might not be the best choice for corporate users given that you can't really edit Office documents. We're sure as the Android Market expands more productivity applications will become available.
GPS
The G1 offers assisted GPS and network-assisted location. Of course, Google Maps is preloaded on the device with standard map, satellite, and traffic views. In addition, you get Google Maps Street View, and there's a compass mode that provides a 360-degree view of the street by simply moving the phone around (no other phone currently supports this feature).
Basically, you just tap any point on a map and then touch the bubble to get a full-screen view of the street. You can then move the phone in any direction (up, down, left, or right); you can even spin in circles and the view will move with you (check back soon for a video demonstration).
You can search for various businesses and plan trips by entering start and end points. The G1 provides turn-by-turn driving directions, but not in real time like a standalone portable navigation device. Instead, you consult a list of text-based instructions or view the route on the map with step-by-step directions. Again, we suspect a navigation app will appear in the Android Market sooner or later.
GPS performance was mixed during our initial tests. While it was able to provide us with accurate text directions, we found that, more often than not, the G1 was slow to get a fix on our location and we were often greeted with the message, "Your location cannot be determined. We will keep trying but you can also try moving your position." There were also a few times where the G1 placed us in the middle of the San Francisco Bay--yikes. We're still continuing our GPS testing, but this definitely isn't a good start.
Music and video
While Apple had the unenviable task of incorporating a full-blown iPod-like music player into the iPhone, the T-Mobile G1 is made to be more cell phone than music player and does not have that burden to carry. That said, the music player on the G1 is robust for what it is, and will satisfy most casual listeners.
Songs are organized by Artists, Albums, Songs, and Playlists, as you would expect. You get the typical music player functions like shuffle, repeat, and the ability to create playlists on the fly. And even though there's no CoverFlow, you can still view album art in a list format. We especially liked that you can instantly convert any song to a ringtone directly from the music player by hitting the "Use as ringtone" button.
But perhaps the most interesting part of the music player is its ties to the Amazon MP3 Store, Android's answer to the iTunes Music Store. Unlike the iTunes Store, all the songs from the Amazon store are DRM-free, meaning you can do whatever you want to them--transfer them from computer to computer, edit them into shorter tracks, and more. Unfortunately, just like the iTunes Store, you can only download songs over Wi-Fi, and not over the 3G network.
To buy a song, all you need to do is use your Amazon account and then hit the buy button. Songs and albums are typically cheaper than those from iTunes--on Amazon a song is around $0.89 and an album can be anywhere from $5 to $9 (A song on iTunes is typically $0.99 and an album is around $9.99). You can browse the store by Top 100 Albums, Top 100 Songs, by genre, or just search for your favorite song or artist.
Of course you don't have to buy songs from the Amazon MP3 Store if you don't want to. You can upload any of your own music files into the G1. The G1 supports MP3, M4A, AMR, WMA, MIDI, WAV, Ogg Vorgis formats and has 192MB RAM and 256MB ROM. As we mentioned, the G1 comes with a 1GB microSD card, which comes preloaded with 11 songs. The expansion slot can support up to 8GB cards.
Perhaps the most disappointing thing about the G1 music player is hardware related. The G1 doesn't have stereo Bluetooth, and it doesn't have a 3.5-mm headset jack. These are absolutely glaring omissions in our opinion, and it certainly means the G1 is not meant to be a music player replacement.
In addition to the Amazon MP3 Store and music player, the T-Mobile G1 includes a dedicated YouTube application. The clips took quite a while to load via 3G, and quality wasn't the greatest. Though images and audio were synchronized, it was quite blurry, but we were also watching a low-res version since we were using T-Mobile's network instead of Wi-Fi. The screen orientation will go from portrait to landscape mode for videos.
Camera
The T-Mobile G1 is equipped with a 3.2-megapixel camera, which beats the iPhone's 2-megapixel camera, but you can't record video. (Did we learn nothing from the Sidekick or iPhone, people?) Even worse, there are no camera settings, such as white balance, effects, and shooting modes.
We recently reviewed the Motorola Krave, which also stripped these camera features, and Motorola said it was because its customers did not want this feature. We hope this doesn't become a trend as we like having those editing options.
Taking pictures with the G1 was a challenge. You have to have a steady hand to get a clear shot, as the slightest movement will result in a blurry image. We took about 10 to 12 pictures before we could get a satisfactory shot, and by the end, we were fairly frustrated with the experience. Picture quality was mediocre. We found that objects on the outside had sharp definition, but got a bit soft in the middle. There was also a bit of a yellowish hue to the image.
Performance
The T-Mobile G1 does not require extra steps in the activation process like the iPhone 3G. You should be able to pop in your T-Mobile SIM and start using the smartphone right away. We tested the quad-band (GSM 850/900/1800/1900; UMTS/HSDPA 1700/2100) T-Mobile G1 in San Francisco using T-Mobile service, and call quality was good. We enjoyed good sound with minimal background noise, though audio was a bit blown out when the volume was set to the highest level.
We had no problems interacting with an airline's voice-automated response system and didn't experience any dropped calls during our review period. Our friends also reported positive results, saying the sound quality was quite good. Unfortunately, the speakerphone wasn't as pristine. On our end, the voices sounded tinny and garbled at times; meanwhile, our callers said that we sounded far away. We were able to pair the T-Mobile G1 with the Logitech Mobile Traveller Bluetooth headset.
We were impressed by the snappy performance of the smartphone. The G1 was very responsive during our testing period, and we didn't experience any system freezes or crashes. The T-Mobile G1 has a rated talk time of 5 hours and up to 5 days of standby time.
We are still conducting our battery drain tests, but will update this section with a full range of results. Anecdotally, on an average day of using the phone, Web, GPS, and multimedia applications, we noticed that the battery life dropped anywhere from 40 to 50 percent. According to FCC radiation tests, the G1 has a digital SAR rating of 1.11 watts per kilogram.
http://www.cnn.com/2008/TECH/ptech/10/27/cnet.tmobile.g1/
Azure
Microsoft hinted at a cloud platform a few weeks ago -- now they have revealed all of the details. Strangely, while the new Website provides plenty of details about Azure, the downloadable tech preview sign-up just says "coming soon" for now. I suppose they figure all the elite developers are at PDC watching the first demo of Azure.
Update: The Azure trial sign-in is now available.
So it's a cloud OS, but what does that mean? Essentially, Microsoft is taking on Amazon and Google with a developer environment that runs on the Web. It means apps scale according to your customer needs, and you can tap into Microsoft data centers instead of expanding your own.
There are five main components: Live Services (data and user resources), SQl Services (for a distributed and relational Web database), .NET for security and communication between apps, plus SharePoint and CRM services (for tracking customers -- a module that will not be available right away with the tech preview download).
The key advantage to Azure, is, of course, that it integrates with current developer workflows. You can use Visual Studio 2008 to write apps, deploy them, test them, and maintain them. Azure is also a good platform for experimentation because it means companies can create test apps and see how they perform in the real-world without having to build the infrastructure to actually support them.
The one missing ingredient to all of this is the pricing. There are scant details about how much it will cost to scale apps. Without that info, it's impossible to know how Microsoft has positioned Azure -- is it primarily an enterprise product, for Web 2.0 start-ups, or for two guys in a garage? At least with Google Apps, it's pretty clear Google has the SME market in mind, say a small insurance company that is growing quickly and needs to constantly add corporate services to remote offices.
Another unknown: while Google Apps supported Python out of the box (so to speak -- can we even talk about "boxes" anymore?), Azure will only support Visual Studio. They are promising Python support, along with PHP and Eclipse support, down the road.
If I worked at a medium-sized company or a Web 2.0 start-up with a brilliant idea, I'd be leery of using a tech preview to do anything even remotely like running your mission critical Web apps. It's a good way to test the cloud, to experiment, and to find out if Azure is a good long-term strategy. Amazon has a big lead, but the first rule of tech is" never overlook Microsoft.
Update: The Azure trial sign-in is now available.
So it's a cloud OS, but what does that mean? Essentially, Microsoft is taking on Amazon and Google with a developer environment that runs on the Web. It means apps scale according to your customer needs, and you can tap into Microsoft data centers instead of expanding your own.
There are five main components: Live Services (data and user resources), SQl Services (for a distributed and relational Web database), .NET for security and communication between apps, plus SharePoint and CRM services (for tracking customers -- a module that will not be available right away with the tech preview download).
The key advantage to Azure, is, of course, that it integrates with current developer workflows. You can use Visual Studio 2008 to write apps, deploy them, test them, and maintain them. Azure is also a good platform for experimentation because it means companies can create test apps and see how they perform in the real-world without having to build the infrastructure to actually support them.
The one missing ingredient to all of this is the pricing. There are scant details about how much it will cost to scale apps. Without that info, it's impossible to know how Microsoft has positioned Azure -- is it primarily an enterprise product, for Web 2.0 start-ups, or for two guys in a garage? At least with Google Apps, it's pretty clear Google has the SME market in mind, say a small insurance company that is growing quickly and needs to constantly add corporate services to remote offices.
Another unknown: while Google Apps supported Python out of the box (so to speak -- can we even talk about "boxes" anymore?), Azure will only support Visual Studio. They are promising Python support, along with PHP and Eclipse support, down the road.
If I worked at a medium-sized company or a Web 2.0 start-up with a brilliant idea, I'd be leery of using a tech preview to do anything even remotely like running your mission critical Web apps. It's a good way to test the cloud, to experiment, and to find out if Azure is a good long-term strategy. Amazon has a big lead, but the first rule of tech is" never overlook Microsoft.
More colleges and university signed up!
Thirteen more colleges and universities have signed up to use Google Apps Education Edition on campus, the search engine giant announced Wednesday.
Apps Education, which debuted in October 2006, provides web-based access to features like Gmail, Docs, Spreadsheets, Presently, Talk, Calendar, and Sites.
The schools that signed on to Apps include Collin County Community College District, Francis Marion University, George Washington University, Indiana University, Kean University, Kent State University, Kishwaukee College, Loyola Marymount University, Montgomery County Community College, New Jersey Institute of Technology, University of Florida, University of San Diego, and the University of Virginia.
How these schools integrate the program depends on their needs, according to Google.
"Technically Google Apps can be up and running in a matter of minutes," according to a spokeswoman. "Some universities offer services to just students and others offer to students, faculty, and staff."
"Since launching Apps Education Edition, we've had great conversations with CIOs at leading universities about the benefits of bringing Google technology on campus," Jeff Keltner, Google business development manager, wrote in a Wednesday blog post. "Google Apps Education Edition is gaining momentum: more than a million users worldwide have adopted it to embrace the possibilities of technology in education."
In an effort to continue those conversations, Google in September will launch an "App to School" cross-country road trip to introduce students and faculty to Google Apps.
Among those universities that have embraced Google Apps is Abilene Christian University in Texas. The school dumped its own e-mail program in exchange for Google Apps in 2007, a move that has enabled the school to experiment with more advanced technology.
The incoming freshman class this year will receive Apple iPhones or iPod Touches, a project that would not have been as easy had it not been for Google Apps, Kevin Roberts, ACU's chief information officer, said in an April interview.
Compared with an Exchange-based e-mail system, the open nature of the Google Apps, which provides students Web-based access to e-mail, chat, documents, spreadsheets, and personalized Web sites, made it easy to add iPhone capability to ACU's system, Roberts said. "It freed us up to concentrate on classroom applications," he said.
ACU and Arizona State University, another Apps adopter, were honored this week at the Campus Technology Conference in Boston for their implementation of cutting-edge technology, Google's Keltner wrote in his blog post.
http://www.pcmag.com/article2/0,2817,2326853,00.asp
Apps Education, which debuted in October 2006, provides web-based access to features like Gmail, Docs, Spreadsheets, Presently, Talk, Calendar, and Sites.
The schools that signed on to Apps include Collin County Community College District, Francis Marion University, George Washington University, Indiana University, Kean University, Kent State University, Kishwaukee College, Loyola Marymount University, Montgomery County Community College, New Jersey Institute of Technology, University of Florida, University of San Diego, and the University of Virginia.
How these schools integrate the program depends on their needs, according to Google.
"Technically Google Apps can be up and running in a matter of minutes," according to a spokeswoman. "Some universities offer services to just students and others offer to students, faculty, and staff."
"Since launching Apps Education Edition, we've had great conversations with CIOs at leading universities about the benefits of bringing Google technology on campus," Jeff Keltner, Google business development manager, wrote in a Wednesday blog post. "Google Apps Education Edition is gaining momentum: more than a million users worldwide have adopted it to embrace the possibilities of technology in education."
In an effort to continue those conversations, Google in September will launch an "App to School" cross-country road trip to introduce students and faculty to Google Apps.
Among those universities that have embraced Google Apps is Abilene Christian University in Texas. The school dumped its own e-mail program in exchange for Google Apps in 2007, a move that has enabled the school to experiment with more advanced technology.
The incoming freshman class this year will receive Apple iPhones or iPod Touches, a project that would not have been as easy had it not been for Google Apps, Kevin Roberts, ACU's chief information officer, said in an April interview.
Compared with an Exchange-based e-mail system, the open nature of the Google Apps, which provides students Web-based access to e-mail, chat, documents, spreadsheets, and personalized Web sites, made it easy to add iPhone capability to ACU's system, Roberts said. "It freed us up to concentrate on classroom applications," he said.
ACU and Arizona State University, another Apps adopter, were honored this week at the Campus Technology Conference in Boston for their implementation of cutting-edge technology, Google's Keltner wrote in his blog post.
http://www.pcmag.com/article2/0,2817,2326853,00.asp
Wednesday, October 22, 2008
Google's approach
Google has been one of the most influential companies of the past 10 years. The name Google has been synonym to search engine,web services, web 2.0 and many other IT buzz words of the last years. Nobody says phrases like, I will search it on the internet. The term used is, “I 'll google it”. This alone can tell you a lot about the company's influence on everyday user tasks and habits. Some of them even think of Google as God or something that is close to a god anyway.
Google's approach is very different that the IT giants of the past and many of the IT giants of the present. Users appreciate that, while on the other hand the rest of the big players find a hard time to compete. I do not know, it may be their board of directors that find it hard to swallow to give everything for free.
As everybody knows, Google's approach has worked beyond anybody would have imagined some years ago. They have managed to be in less than 10 years one of the, if not the, biggest player in IT. Someone would just might accuse Google of doing everything for the advertising namely adsense/adwords and this just might be true. Some even say that the new android mobile platform is just a Trojan horse to sell more advertisement places through whole new marketing medium: the mobile phone. Blogger is an excellent tool for everybody to speak their minds. In addition it is also a very effective way for Google to dramatically increase the advertisement space, with all those blogs that were created and use adsense. The truth though, is that the consumer (this is us) has benefited from this. At the end of the day, it all just might be a way to create everything for your digital life in order to be the sole player on online advertisements. I do not know if I would mind that and I certainly wont go into that now, but I definitely enjoy all the cool free services. They continually improve everything from iGoogle, to Gmail, to Google Documents. That practice is appreciated by the end user that is seeing the quality of his digital life to be improved.
http://www.allroundgeek.com/2008/10/
Google's approach is very different that the IT giants of the past and many of the IT giants of the present. Users appreciate that, while on the other hand the rest of the big players find a hard time to compete. I do not know, it may be their board of directors that find it hard to swallow to give everything for free.
As everybody knows, Google's approach has worked beyond anybody would have imagined some years ago. They have managed to be in less than 10 years one of the, if not the, biggest player in IT. Someone would just might accuse Google of doing everything for the advertising namely adsense/adwords and this just might be true. Some even say that the new android mobile platform is just a Trojan horse to sell more advertisement places through whole new marketing medium: the mobile phone. Blogger is an excellent tool for everybody to speak their minds. In addition it is also a very effective way for Google to dramatically increase the advertisement space, with all those blogs that were created and use adsense. The truth though, is that the consumer (this is us) has benefited from this. At the end of the day, it all just might be a way to create everything for your digital life in order to be the sole player on online advertisements. I do not know if I would mind that and I certainly wont go into that now, but I definitely enjoy all the cool free services. They continually improve everything from iGoogle, to Gmail, to Google Documents. That practice is appreciated by the end user that is seeing the quality of his digital life to be improved.
http://www.allroundgeek.com/2008/10/
Gmail Gives You More Control of Your Contacts [Gmail]
Used to be that every time when you emailed someone five times from Gmail, that recipient automatically got added to your contacts list—but no more. The Official Gmail Blog explains that now message recipients who you haven’t explicitly added to your Contacts list yourself go into a separate “Suggested Contacts” list. Suggested contacts still show up in the To: field’s auto-complete, but still separate “people who you cared enough to edit or add by hand” versus “people you replied to a few times.” The update will be retroactive, too:
As part of this change, we’re moving previously auto-added contacts back into Suggested Contacts. Only contacts that you’ve edited, imported or added to a group will remain in My Contacts. This will provide everyone with a clean slate and, we hope, a better point for syncing contacts with mobile devices (for example with Android). We’ll be rolling this change out to everyone over the next few days.
Minor but helpful upgrade. What other updates do you want to see to Gmail’s contacts? Shout ‘em out in the comments.
As part of this change, we’re moving previously auto-added contacts back into Suggested Contacts. Only contacts that you’ve edited, imported or added to a group will remain in My Contacts. This will provide everyone with a clean slate and, we hope, a better point for syncing contacts with mobile devices (for example with Android). We’ll be rolling this change out to everyone over the next few days.
Minor but helpful upgrade. What other updates do you want to see to Gmail’s contacts? Shout ‘em out in the comments.
More changes to Gmail contact manager
More changes to Gmail contact manager
Tuesday, October 21, 2008 10:32 AM
Posted by Benjamin Grol, Product Manager, Google Contacts
After hearing consistent feedback that you wanted more control over your contacts, we've changed the way Gmail suggests contacts to you. Up to this point, if you emailed someone five times, we'd automatically move them into My Contacts. Now, we'll no longer automatically add contacts to your My Contacts group. Instead, you can go to Suggested Contacts, select the contacts you'd like and move them into My Contacts. All of your contacts -- whether they're in My Contacts or Suggested Contacts -- will continue to show in auto-complete as you're composing messages.
As part of this change, we're moving previously auto-added contacts back into Suggested Contacts. Only contacts that you've edited, imported or added to a group will remain in My Contacts. This will provide everyone with a clean slate and, we hope, a better point for syncing contacts with mobile devices (for example with Android). We'll be rolling this change out to everyone over the next few days.
We realize there's a lot we can do to make Gmail contacts even more useful, and the feedback we received last time we updated the contact manager was helpful, so keep letting us know what you think.
Tuesday, October 21, 2008 10:32 AM
Posted by Benjamin Grol, Product Manager, Google Contacts
After hearing consistent feedback that you wanted more control over your contacts, we've changed the way Gmail suggests contacts to you. Up to this point, if you emailed someone five times, we'd automatically move them into My Contacts. Now, we'll no longer automatically add contacts to your My Contacts group. Instead, you can go to Suggested Contacts, select the contacts you'd like and move them into My Contacts. All of your contacts -- whether they're in My Contacts or Suggested Contacts -- will continue to show in auto-complete as you're composing messages.
As part of this change, we're moving previously auto-added contacts back into Suggested Contacts. Only contacts that you've edited, imported or added to a group will remain in My Contacts. This will provide everyone with a clean slate and, we hope, a better point for syncing contacts with mobile devices (for example with Android). We'll be rolling this change out to everyone over the next few days.
We realize there's a lot we can do to make Gmail contacts even more useful, and the feedback we received last time we updated the contact manager was helpful, so keep letting us know what you think.
Sunday, October 19, 2008
Gartner to IT business leaders: Have courage and drive innovation during tough economic times
Orlando, Fla. - Global leaders met all weekend to avoid a total economic disaster while business leaders found it easy to be overwhelmed by the speed, scale, and far-reaching impact of this crisis.
IT leaders need to find courage to look beyond the immediate threat and continue to advocate IT-based innovation, according to presenters at the Gartner Symposium/ITXPO 2008.
“IT will be critical during these times,” said Gene Hall, chief executive officer for Gartner.
Kicking off the annual symposium, which is being held in Orlando, Hall asked the audience of 6,000 attendees a pointed question: how do you IT executives reduce IT spending and IT costs and improve performance metrics?
For some, he suggested that they look at global growth and, if possible, capitalize on that; other organizations should concentrate on projects that can impact future growth.
Advertisement
Define your future
Gartner's senior analysts told attendees that their decisions and actions today would define their future. They recommended some of the projects IT leaders should focus on now:
Approach each project as if it had had never existed before. Ask what it does, why you need it, and how many people you'll need to run it? Then ask: can you do it with less?
From the freshly drawn inventory, make a wish list of what still maters and rank it. Not everything on the list will survive in 2009.
Conserve as much of your budget as you can. Nothing compares to the power of cash on hand as IT leaders seek to aid the business in defending its heart.
Protect your people. Reassure your people. Reassure the people who are most important to you - those who make the greatest contribution.
“A financial era is ending. This age of conspicuous consumption is over, and the age of conspicuous frugality starts now,” said Whit Andrews, vice president and distinguished analyst at Gartner. “The world has changed, and your role as IT leader must change as well.”
Innovation is more about people
There is a tremendous amount of hype about innovation compared to the reality of real innovation, and IT leaders need to change, said Kathy Harris, vice president and distinguished analyst for Gartner. They have to innovate to close the expectations gap of management. If they move slowly, she said they would miss the opportunity.
The time between innovation and when the benefits are realized is shrinking; if IT leaders only focus only on technology at the expense of human resources, they will lose credibility within the enterprise, according to Harris.
“Innovation is about human activity, and it's not always about new technology, she said. “Often, it's just about delivering faster to get IT leaders to focus on speeding transactions. Maybe they should invest in connecting people to speed decisions.”
Workers drive IT innovation
Gartner surveyed more than 400 companies on corporate usage of consumer devices and Web 2.0 technologies. It found that two out of five users reported using non-company owned devices on company systems. Seven times more end-users were using mash-ups than their IT departments estimated, and one out of three end-users were using Google Apps - more than three times the IT estimate.
“IT leaders must create a culture of innovation; change the assumptions about how IT is managed; increase participation by users and business customers; eliminate the barriers to technology; and discover the innovators all around you,” said Harris.
IT leaders need to find courage to look beyond the immediate threat and continue to advocate IT-based innovation, according to presenters at the Gartner Symposium/ITXPO 2008.
“IT will be critical during these times,” said Gene Hall, chief executive officer for Gartner.
Kicking off the annual symposium, which is being held in Orlando, Hall asked the audience of 6,000 attendees a pointed question: how do you IT executives reduce IT spending and IT costs and improve performance metrics?
For some, he suggested that they look at global growth and, if possible, capitalize on that; other organizations should concentrate on projects that can impact future growth.
Advertisement
Define your future
Gartner's senior analysts told attendees that their decisions and actions today would define their future. They recommended some of the projects IT leaders should focus on now:
Approach each project as if it had had never existed before. Ask what it does, why you need it, and how many people you'll need to run it? Then ask: can you do it with less?
From the freshly drawn inventory, make a wish list of what still maters and rank it. Not everything on the list will survive in 2009.
Conserve as much of your budget as you can. Nothing compares to the power of cash on hand as IT leaders seek to aid the business in defending its heart.
Protect your people. Reassure your people. Reassure the people who are most important to you - those who make the greatest contribution.
“A financial era is ending. This age of conspicuous consumption is over, and the age of conspicuous frugality starts now,” said Whit Andrews, vice president and distinguished analyst at Gartner. “The world has changed, and your role as IT leader must change as well.”
Innovation is more about people
There is a tremendous amount of hype about innovation compared to the reality of real innovation, and IT leaders need to change, said Kathy Harris, vice president and distinguished analyst for Gartner. They have to innovate to close the expectations gap of management. If they move slowly, she said they would miss the opportunity.
The time between innovation and when the benefits are realized is shrinking; if IT leaders only focus only on technology at the expense of human resources, they will lose credibility within the enterprise, according to Harris.
“Innovation is about human activity, and it's not always about new technology, she said. “Often, it's just about delivering faster to get IT leaders to focus on speeding transactions. Maybe they should invest in connecting people to speed decisions.”
Workers drive IT innovation
Gartner surveyed more than 400 companies on corporate usage of consumer devices and Web 2.0 technologies. It found that two out of five users reported using non-company owned devices on company systems. Seven times more end-users were using mash-ups than their IT departments estimated, and one out of three end-users were using Google Apps - more than three times the IT estimate.
“IT leaders must create a culture of innovation; change the assumptions about how IT is managed; increase participation by users and business customers; eliminate the barriers to technology; and discover the innovators all around you,” said Harris.
Proctor & Gamble uses Google Apps (P&G)
Does Google Apps pose a threat to Microsoft? No way, said Microsoft CEO Steve Ballmer in April 2007. He made his point clear to attendees at the USA Today CEO Forum: "[Google has] come out with what I might call—what's the politically correct way of saying it?—they've come out with some of the lowest functionality, lowest capability applications of all time."
The room filled with laughter.
Ballmer—for one—is not laughing now. That hubris and short-sightedness is coming back to haunt him.
Microsoft is now taking the threat from Google quite seriously: In July 2008 COO Kevin Turner was dispatched to consumer-products giant Procter & Gamble to dissuade P&G from moving to Google Apps—and ditching Microsoft.
Back in February 2007, Google launched the Google Apps edition for businesses. Executives told media outlets that initial customers included a unit of Procter & Gamble. At some point in 2008, hundreds of P&G employees were testing Google's e-mail, word-processing and spreadsheet applications as potential replacements for Microsoft products, according to a recent Bloomberg article about the P&G incident.
P&G execs viewed Google's new tools as cheaper and more Internet-capable options than what Microsoft was delivering.
P&G, of course, is a massive consumer products goods company, with US$84 billion in annual revenue this past year. To lose that kind of a customer—especially to Google—would have been catastrophic for Microsoft.
"Losing a Procter & Gamble would be something where I don't think I'd sleep well," says Turner, in the Bloomberg article. "I want to make sure that anybody that knows anything about it would also not sleep well."
So Turner flew to P&G's headquarters in July, spent a day wooing P&G CIO Filippo Passerini, and left with a three-year contract, according to the Bloomberg article. How'd Turner do it? He "kept the contract by giving Passerini an early look at plans for Web-based systems and promising P&G the flexibility to shift between those and standard applications," notes the article. (P&G confirmed the deal to Bloomberg, but declined to comment.)
So the day was saved, but what about the future? Microsoft's sales growth may wind up slowing to 12 percent in 2008, from 18 percent last year, according to estimates by Bloomberg News. Competitors, from Google to Oracle to SAP, abound. And with the economy in turmoil and a looming corporate tech spending nosedive, cross-country flights to save accounts by Turner or other Microsoft execs appear more portentous.
Still there is a bright side if such emergency cross-country flights become common: At least Turner will be able to count on getting plenty of frequent-flier miles.
The room filled with laughter.
Ballmer—for one—is not laughing now. That hubris and short-sightedness is coming back to haunt him.
Microsoft is now taking the threat from Google quite seriously: In July 2008 COO Kevin Turner was dispatched to consumer-products giant Procter & Gamble to dissuade P&G from moving to Google Apps—and ditching Microsoft.
Back in February 2007, Google launched the Google Apps edition for businesses. Executives told media outlets that initial customers included a unit of Procter & Gamble. At some point in 2008, hundreds of P&G employees were testing Google's e-mail, word-processing and spreadsheet applications as potential replacements for Microsoft products, according to a recent Bloomberg article about the P&G incident.
P&G execs viewed Google's new tools as cheaper and more Internet-capable options than what Microsoft was delivering.
P&G, of course, is a massive consumer products goods company, with US$84 billion in annual revenue this past year. To lose that kind of a customer—especially to Google—would have been catastrophic for Microsoft.
"Losing a Procter & Gamble would be something where I don't think I'd sleep well," says Turner, in the Bloomberg article. "I want to make sure that anybody that knows anything about it would also not sleep well."
So Turner flew to P&G's headquarters in July, spent a day wooing P&G CIO Filippo Passerini, and left with a three-year contract, according to the Bloomberg article. How'd Turner do it? He "kept the contract by giving Passerini an early look at plans for Web-based systems and promising P&G the flexibility to shift between those and standard applications," notes the article. (P&G confirmed the deal to Bloomberg, but declined to comment.)
So the day was saved, but what about the future? Microsoft's sales growth may wind up slowing to 12 percent in 2008, from 18 percent last year, according to estimates by Bloomberg News. Competitors, from Google to Oracle to SAP, abound. And with the economy in turmoil and a looming corporate tech spending nosedive, cross-country flights to save accounts by Turner or other Microsoft execs appear more portentous.
Still there is a bright side if such emergency cross-country flights become common: At least Turner will be able to count on getting plenty of frequent-flier miles.
Google CEO: Internet search is actually benefiting from recession
Google announced a 26 percent rise in third quarter profits on Thursday, while also dropping strong hints that even the phenomenally successful search engine giant has concerns about how to keep thriving during the tougher economic times ahead.
"Thanks to everybody's hard work. Google had a good quarter. Traffic and revenue were both solid and we kept tight control on costs," summed up Google CEO Eric Schmidt, during a conference call with analysts today.
Google wasn't the only technology company to show good profits during the economic slowdown between July of September of this year. But in a way, Google actually benefited from the slowdown, Schmidt suggested. "Year-on-year, for example, search query traffic is growing in almost every vertical," according to the CEO.
"We believe that these results reflect the fact that as marketing budgets are squeezed, targeted, measurable ads are becoming more valuable to advertisers. As consumer budgets are squeezed, people use the web for comparison shopping to hunt for bargains online and in stores."
Nonetheless, Schmidt also acknowledged during today's call that achieving profitability over upcoming quarters might well be harder.
"I think everybody on the call and listening understands that it is pretty clear the economic situation today globally is worse than people were predicting just a month ago," he told analysts.
Aside from a 26 percent increase in year-over-year third quarter profits, Google this week announced quarterly revenues of $5.54 billion, representing a 31 percent gain over the third quarter of 2007 but only a 3 percent increase over the second quarter of 2008.
How will Google manage in upcoming financial quarters? Google, Schmidt said, will continue to funnel most of its investments into its core business of search -- the same area he pointed to as showing itself rather recession-proof during the third quarter.
"Our user experience is getting much better. Index size is getting much larger, greater personalization for better results globally for every user, lots and lots of language support, more highly relevant ads against as many queries as possible and using more sophisticated tools for advanced bidding and measurement and optimization," according to Schmidt.
"Advertisers, who understand that advertising is directly correlated with revenue, can use those tools to maximize revenue based on the terms that they set and based on the budgets, which is what they care about."
At the same time, Google will continue a current trend toward internal cost containment. "Along the way, we are going to stay very close, keep a very close eye on costs. It makes sense given everything we read in the papers and we have done that effectively in this quarter," the analysts were told.
But Schmidt also suggested another way in which the future cost-cutting measures of other companies might present opportunities for Google. Google Apps can help fill the need for lowered IT expenditures, he noted.
"In apps, [companies are] going to cut IT costs and increase productivity with greater collaboration. Well, we are there for them. Our enterprise applications really add value there."
"Thanks to everybody's hard work. Google had a good quarter. Traffic and revenue were both solid and we kept tight control on costs," summed up Google CEO Eric Schmidt, during a conference call with analysts today.
Google wasn't the only technology company to show good profits during the economic slowdown between July of September of this year. But in a way, Google actually benefited from the slowdown, Schmidt suggested. "Year-on-year, for example, search query traffic is growing in almost every vertical," according to the CEO.
"We believe that these results reflect the fact that as marketing budgets are squeezed, targeted, measurable ads are becoming more valuable to advertisers. As consumer budgets are squeezed, people use the web for comparison shopping to hunt for bargains online and in stores."
Nonetheless, Schmidt also acknowledged during today's call that achieving profitability over upcoming quarters might well be harder.
"I think everybody on the call and listening understands that it is pretty clear the economic situation today globally is worse than people were predicting just a month ago," he told analysts.
Aside from a 26 percent increase in year-over-year third quarter profits, Google this week announced quarterly revenues of $5.54 billion, representing a 31 percent gain over the third quarter of 2007 but only a 3 percent increase over the second quarter of 2008.
How will Google manage in upcoming financial quarters? Google, Schmidt said, will continue to funnel most of its investments into its core business of search -- the same area he pointed to as showing itself rather recession-proof during the third quarter.
"Our user experience is getting much better. Index size is getting much larger, greater personalization for better results globally for every user, lots and lots of language support, more highly relevant ads against as many queries as possible and using more sophisticated tools for advanced bidding and measurement and optimization," according to Schmidt.
"Advertisers, who understand that advertising is directly correlated with revenue, can use those tools to maximize revenue based on the terms that they set and based on the budgets, which is what they care about."
At the same time, Google will continue a current trend toward internal cost containment. "Along the way, we are going to stay very close, keep a very close eye on costs. It makes sense given everything we read in the papers and we have done that effectively in this quarter," the analysts were told.
But Schmidt also suggested another way in which the future cost-cutting measures of other companies might present opportunities for Google. Google Apps can help fill the need for lowered IT expenditures, he noted.
"In apps, [companies are] going to cut IT costs and increase productivity with greater collaboration. Well, we are there for them. Our enterprise applications really add value there."
Google Beats Third-Quarter Profit Forecasts
Google just reported third-quarter results, and it managed to defy skeptics who thought it might finally fall victim to the poor economy. Net revenues of $4.04 billion were dead-on with analysts’ estimates, and profits before special items was $4.92 a share, handily beating expectations. The big reason: It reined in expenses, hiring fewer people and actually cutting capital expenses from a year ago.
Analysts had forecast $4.80 in earnings per share, minus special items such as stock option expenses, on net revenues of $4.05 billion after payments to partners that run Google ads on their sites. However, many analysts were informally assuming Google might come in slightly below their stated estimates and have been reducing estimates and price targets in recent weeks. A year ago, Google earned $3.92 a share.
In after-hours trading, Google’s stock, which closed up 4% today in a late rally along with the broader market, to $356.50 a share, was rising 10%, though that will likely vacillate after the earnings call. The stock had fallen 11% in the last three sessions for before today.
More from the release after the jump. And here’s CEO Eric Schmidt, which at the outset doesn’t indicate much about the future to my reading, except that he’s acknowledging the poor economy. However, he has done that before as well.
“We had a good third quarter with strong traffic and revenue growth across all of our major geographies thanks to the underlying strength of our core search and ads business. The measurability and ROI of search-based advertising remain key assets for Google. While we are realistic about the poor state of the global economy, we will continue to manage Google for the long term, driving improvements to search and ads, while also investing in future growth areas such as enterprise, mobile, and display.”
Google third-quarter results are less important as a sign of the times than what’s coming next. And partly because Google doesn’t provide earnings guidance, analysts are somewhat pessimistic. “There’s a lot of doubt about whether the 2009 estimates are too high,” says John Aiken, managing director of Majestic Research. Currently, the consensus is for 23% growth, but Aiken thinks 20% is more likely, and even 15% is possible.
Although Google has been largely shielded from the downturn so far, the now nearly certain prospect of a protracted recession seems likely to affect even search advertising, especially since it is driven significantly by small and medium-sized businesses. Perhaps to an even greater extent than their larger brethren, they face dropping consumer demand and a scarcity of capital thanks to the credit crunch.
And even if they keep spending on search ads, it’s possible consumers who click on them will end up deciding to buy less often, which would make them less effective for advertisers. A third-quarter study from SearchIgnite this week, for instance, did find one trouble spot: Retailers in particular are starting to reduce their search ad spending, down 10% in September.
So Google’s third-quarter results aren’t nearly as important as the prospects for the fourth quarter and 2009. We’ll hear more about this from the earnings call, which starts shortly. I’ll add what I hear after the jump.
Tidbits from the conference call:
Schmidt says traffic and revenue were "solid" and search query traffic rose in all vertical markets.
"The economic situation today is globally worse than what people were predicting just a month ago. ... But we're optimistic about Google's future."
New CFO Patrick Pichette noted that most geographies were strong, but mentioned the U.K. showed some weakness, up only 17% including currency adjustments. "Our core business continues to demonstrate strength despite a challenging economic environment."
Now cofounder and President of Technology Sergey Brin is talking about improvements in search, YouTube's various experiments in ads, and Android phones. Not much news you haven't heard yet.
He says more than 1 million businesses are using Google Apps.
Now on to analysts' questions. First, on the economy: Schmidt: "We see fluctuations, which are more complex than they may seem. Some things go up, some things do down." OK, Eric. He calls on Google economist Hal Varian: "It's very hard to tell what things are going to look like on a going-forward basis." OK, Hal. Now Jonathan Rosenberg mentions results may vary according to specifics on Google's quality adjustments on search ads. So, no real answer here.
Will economy prompt Google to cut costs, or delay investing in opportunities such as mobile. Schmidt: Google has shown courage when we need to ... as well as expense containment." Pichette talks about how Google will show discipline, but no specifics.
Question about whether Google is surprised at the reaction of advertisers to the Google deal. Sounds like they were, because Schmidt says, "Many of the complaints are based on the fact that many people don't understand how auctions work, or the benefits."
Question about whether advertisers are changing behavior because of the economy. Not really, says Varian: "Advertisers are willing to take all the clicks we can give them at the current CPCs (cost per click)," and he thinks that will continue regardless of the economy.
Question about impact of economy on retail given eBay's bearish outlook: Varian, as he did last quarter, still think Google could actually benefit as people are careful about shopping and search even more for better deals.
Question about improvement in margins--from cost cutting or change in advertising arrangements? Pichette: "Across all categories of expenses, people have been very diligent" in watching expenses. Hiring was less than in previous quarters. Capital expenditures were lowest since Q1 2006, another analyst notes.
Stock's still up about 9% in extended trading, so nothing on the call changed people's minds that this was an upside surprise.
Here's the earnings release:
Google reported revenues of $5.54 billion for the quarter ended September 30, 2008, an increase of 31% compared to the third quarter of 2007 and an increase of 3% compared to the second quarter of 2008.
Google reports its revenues, consistent with GAAP, on a gross basis without deducting traffic acquisition costs (TAC). In the third quarter of 2008, TAC totaled $1.50 billion, or 28% of advertising revenues.
Google reports operating income, net income, and earnings per share
(EPS) on a GAAP and non-GAAP basis. The non-GAAP measures, as well as free cash flow, an alternative non-GAAP measure of liquidity, are described below and are reconciled to the corresponding GAAP measures in the accompanying financial tables.
l GAAP operating income for the third quarter of 2008 was $1.74
billion, or 31% of revenues. This compares to GAAP operating income of $1.58 billion, or 29% of revenues, in the second quarter of 2008.
Non-GAAP operating income in the third quarter of 2008 was $2.02 billion, or 37% of revenues. This compares to non-GAAP operating income of $1.85 billion, or 34% of revenues, in the second quarter of 2008.
l GAAP net income for the third quarter of 2008 was $1.35 billion as
compared to $1.25 billion in the second quarter of 2008. Non-GAAP net income in the third quarter of 2008 was $1.56 billion, compared to
$1.47 billion in the second quarter of 2008.
l GAAP EPS for the third quarter of 2008 was $4.24 on 318 million
diluted shares outstanding, compared to $3.92 for the second quarter of 2008 on 318 million diluted shares outstanding. Non-GAAP EPS in the third quarter of 2008 was $4.92, compared to $4.63 in the second quarter of 2008.
l Non-GAAP operating income, non-GAAP operating margin, non-GAAP net
income, and non-GAAP EPS are computed net of stock-based compensation (SBC). In the third quarter of 2008, the charge related to SBC was $280 million as compared to $273 million in the second quarter of 2008. Tax benefits related to SBC have also been excluded from non- GAAP net income and non-GAAP EPS. The tax benefit related to SBC was
$63 million in the third quarter of 2008 and $48 million in the second quarter of 2008. Reconciliations of non-GAAP measures to GAAP operating income, operating margin, net income, and EPS are included at the end of this release.
Q3 Financial Highlights
Revenues – Google reported revenues of $5.54 billion for the quarter ended September 30, 2008, representing a 31% increase over third quarter 2007 revenues of $4.23 billion and a 3% increase over second quarter 2008 revenues of $5.37 billion. Google reports its revenues, consistent with GAAP, on a gross basis without deducting TAC.
Google Sites Revenues - Google-owned sites generated revenues of $3.67 billion, or 67% of total revenues, in the third quarter of 2008. This represents a 34% increase over third quarter 2007 revenues of $2.73 billion and a 4% increase over second quarter 2008 revenues of $3.53 billion.
Google Network Revenues - Google’s partner sites generated revenues, through AdSense programs, of $1.68 billion, or 30% of total revenues, in the third quarter of 2008. This represents a 15% increase over network revenues of $1.45 billion generated in the third quarter of
2007 and a 1% increase over second quarter 2008 revenues of $1.66 billion.
International Revenues - Revenues from outside of the United States totaled $2.85 billion, representing 51% of total revenues in the third quarter of 2008, compared to 48% in the third quarter of 2007 and 52% in the second quarter of 2008. Had foreign exchange rates remained constant from the second quarter of 2008 through the third quarter of 2008, our revenues in the third quarter of 2008 would have been $59 million higher. Had foreign exchange rates remained constant from the third quarter of 2007 through the third quarter of 2008, our revenues in the third quarter of 2008 would have been $168 million lower.
In the third quarter, we recognized a benefit of $34 million to revenue through our foreign exchange risk management program.
Revenues from the United Kingdom totaled $776 million, representing 14% of revenue in the third quarter of 2008, compared to 16% in the third quarter of 2007 and 14% in the second quarter of 2008.
Paid Clicks – Aggregate paid clicks, which include clicks related to ads served on Google sites and the sites of our AdSense partners, increased approximately 18% over the third quarter of 2007 and increased approximately 4% over the second quarter of 2008.
TAC - Traffic Acquisition Costs, the portion of revenues shared with Google’s partners, increased to $1.50 billion in the third quarter of 2008. This compares to TAC of $1.47 billion in the second quarter of 2008. TAC as a percentage of advertising revenues was 28% in the third quarter, compared to 28% in the second quarter of 2008.
The majority of TAC expense is related to amounts ultimately paid to our AdSense partners, which totaled $1.33 billion in the third quarter of 2008. TAC is also related to amounts ultimately paid to certain distribution partners and others who direct traffic to our website, which totaled $167 million in the third quarter of 2008.
Other Cost of Revenues - Other cost of revenues, which is comprised primarily of data center operational expenses, amortization of intangible assets, content acquisition costs as well as credit card processing charges, increased to $678 million, or 12% of revenues, in the third quarter of 2008, compared to $674 million, or 13% of revenues, in the second quarter of 2008.
Operating Expenses - Operating expenses, other than cost of revenues, were $1.63 billion in the third quarter of 2008, or 29% of revenues, compared to $1.64 billion in the second quarter of 2008, or 31% of revenues. The operating expenses in the third quarter of 2008 included $859 million in payroll-related and facilities expenses, compared to $810 million in the second quarter of 2008.
Stock-Based Compensation (SBC) – In the third quarter of 2008, the total charge related to SBC was $280 million as compared to $273 million in the second quarter of 2008.
We currently estimate stock-based compensation charges for grants to employees prior to October 1, 2008 to be approximately $1.1 billion for 2008. This does not include expenses to be recognized related to employee stock awards that are granted after October 1, 2008 or non- employee stock awards that have been or may be granted.
Operating Income - GAAP operating income in the third quarter of 2008 was $1.74 billion, or 31% of revenues. This compares to GAAP operating income of $1.58 billion, or 29% of revenues, in the second quarter of 2008. Non-GAAP operating income in the third quarter of
2008 was $2.02 billion, or 37% of revenues. This compares to non-GAAP operating income of $1.85 billion, or 34% of revenues, in the second quarter of 2008.
Interest Income and Other, Net – Interest income and other was $21 million in the third quarter of 2008, compared with $58 million in the second quarter of 2008. The decrease was primarily related to an increase in expenses substantially due to more activity under our foreign exchange risk management program. The cost of the options used to manage our foreign exchange risk is amortized on a mark-to-market basis. As a result, the amount of amortization expense we recognize in any particular quarter is impacted by how much the option moves into or out of the money, as well as the underlying currency's volatility.
Net Income – GAAP net income for the third quarter of 2008 was $1.35 billion as compared to $1.25 billion in the second quarter of 2008.
Non-GAAP net income was $1.56 billion in the third quarter of 2008, compared to $1.47 billion in the second quarter of 2008. GAAP EPS for the third quarter of 2008 was $4.24 on 318 million diluted shares outstanding, compared to $3.92 for the second quarter of 2008, on 318 million diluted shares outstanding. Non-GAAP EPS for the third quarter of 2008 was $4.92, compared to $4.63 in the second quarter of 2008.
Income Taxes – Our effective tax rate was 24% for the third quarter of 2008.
Cash Flow and Capital Expenditures – Net cash provided by operating activities for the third quarter of 2008 totaled $2.18 billion as compared to $1.77 billion for the second quarter of 2008. In the third quarter of 2008, capital expenditures were $452 million, the majority of which was related to IT infrastructure investments, including data centers, servers, and networking equipment. Free cash flow, an alternative non-GAAP measure of liquidity, is defined as net cash provided by operating activities less capital expenditures. In the third quarter of 2008, free cash flow was $1.73 billion.
We expect to continue to make significant capital expenditures.
A reconciliation of free cash flow to net cash provided by operating activities, the GAAP measure of liquidity, is included at the end of this release.
Cash – As of September 30, 2008, cash, cash equivalents, and marketable securities were $14.4 billion.
On a worldwide basis, Google employed 20,123 full-time employees as of September 30, 2008, up from 19,604 full-time employees as of June 30, 2008.
http://www.businessweek.com/the_thread/techbeat/archives/2008/10/googles_third_q.html?chan=top+news_top+news+index+-+temp_news+%2B+analysis
Analysts had forecast $4.80 in earnings per share, minus special items such as stock option expenses, on net revenues of $4.05 billion after payments to partners that run Google ads on their sites. However, many analysts were informally assuming Google might come in slightly below their stated estimates and have been reducing estimates and price targets in recent weeks. A year ago, Google earned $3.92 a share.
In after-hours trading, Google’s stock, which closed up 4% today in a late rally along with the broader market, to $356.50 a share, was rising 10%, though that will likely vacillate after the earnings call. The stock had fallen 11% in the last three sessions for before today.
More from the release after the jump. And here’s CEO Eric Schmidt, which at the outset doesn’t indicate much about the future to my reading, except that he’s acknowledging the poor economy. However, he has done that before as well.
“We had a good third quarter with strong traffic and revenue growth across all of our major geographies thanks to the underlying strength of our core search and ads business. The measurability and ROI of search-based advertising remain key assets for Google. While we are realistic about the poor state of the global economy, we will continue to manage Google for the long term, driving improvements to search and ads, while also investing in future growth areas such as enterprise, mobile, and display.”
Google third-quarter results are less important as a sign of the times than what’s coming next. And partly because Google doesn’t provide earnings guidance, analysts are somewhat pessimistic. “There’s a lot of doubt about whether the 2009 estimates are too high,” says John Aiken, managing director of Majestic Research. Currently, the consensus is for 23% growth, but Aiken thinks 20% is more likely, and even 15% is possible.
Although Google has been largely shielded from the downturn so far, the now nearly certain prospect of a protracted recession seems likely to affect even search advertising, especially since it is driven significantly by small and medium-sized businesses. Perhaps to an even greater extent than their larger brethren, they face dropping consumer demand and a scarcity of capital thanks to the credit crunch.
And even if they keep spending on search ads, it’s possible consumers who click on them will end up deciding to buy less often, which would make them less effective for advertisers. A third-quarter study from SearchIgnite this week, for instance, did find one trouble spot: Retailers in particular are starting to reduce their search ad spending, down 10% in September.
So Google’s third-quarter results aren’t nearly as important as the prospects for the fourth quarter and 2009. We’ll hear more about this from the earnings call, which starts shortly. I’ll add what I hear after the jump.
Tidbits from the conference call:
Schmidt says traffic and revenue were "solid" and search query traffic rose in all vertical markets.
"The economic situation today is globally worse than what people were predicting just a month ago. ... But we're optimistic about Google's future."
New CFO Patrick Pichette noted that most geographies were strong, but mentioned the U.K. showed some weakness, up only 17% including currency adjustments. "Our core business continues to demonstrate strength despite a challenging economic environment."
Now cofounder and President of Technology Sergey Brin is talking about improvements in search, YouTube's various experiments in ads, and Android phones. Not much news you haven't heard yet.
He says more than 1 million businesses are using Google Apps.
Now on to analysts' questions. First, on the economy: Schmidt: "We see fluctuations, which are more complex than they may seem. Some things go up, some things do down." OK, Eric. He calls on Google economist Hal Varian: "It's very hard to tell what things are going to look like on a going-forward basis." OK, Hal. Now Jonathan Rosenberg mentions results may vary according to specifics on Google's quality adjustments on search ads. So, no real answer here.
Will economy prompt Google to cut costs, or delay investing in opportunities such as mobile. Schmidt: Google has shown courage when we need to ... as well as expense containment." Pichette talks about how Google will show discipline, but no specifics.
Question about whether Google is surprised at the reaction of advertisers to the Google deal. Sounds like they were, because Schmidt says, "Many of the complaints are based on the fact that many people don't understand how auctions work, or the benefits."
Question about whether advertisers are changing behavior because of the economy. Not really, says Varian: "Advertisers are willing to take all the clicks we can give them at the current CPCs (cost per click)," and he thinks that will continue regardless of the economy.
Question about impact of economy on retail given eBay's bearish outlook: Varian, as he did last quarter, still think Google could actually benefit as people are careful about shopping and search even more for better deals.
Question about improvement in margins--from cost cutting or change in advertising arrangements? Pichette: "Across all categories of expenses, people have been very diligent" in watching expenses. Hiring was less than in previous quarters. Capital expenditures were lowest since Q1 2006, another analyst notes.
Stock's still up about 9% in extended trading, so nothing on the call changed people's minds that this was an upside surprise.
Here's the earnings release:
Google reported revenues of $5.54 billion for the quarter ended September 30, 2008, an increase of 31% compared to the third quarter of 2007 and an increase of 3% compared to the second quarter of 2008.
Google reports its revenues, consistent with GAAP, on a gross basis without deducting traffic acquisition costs (TAC). In the third quarter of 2008, TAC totaled $1.50 billion, or 28% of advertising revenues.
Google reports operating income, net income, and earnings per share
(EPS) on a GAAP and non-GAAP basis. The non-GAAP measures, as well as free cash flow, an alternative non-GAAP measure of liquidity, are described below and are reconciled to the corresponding GAAP measures in the accompanying financial tables.
l GAAP operating income for the third quarter of 2008 was $1.74
billion, or 31% of revenues. This compares to GAAP operating income of $1.58 billion, or 29% of revenues, in the second quarter of 2008.
Non-GAAP operating income in the third quarter of 2008 was $2.02 billion, or 37% of revenues. This compares to non-GAAP operating income of $1.85 billion, or 34% of revenues, in the second quarter of 2008.
l GAAP net income for the third quarter of 2008 was $1.35 billion as
compared to $1.25 billion in the second quarter of 2008. Non-GAAP net income in the third quarter of 2008 was $1.56 billion, compared to
$1.47 billion in the second quarter of 2008.
l GAAP EPS for the third quarter of 2008 was $4.24 on 318 million
diluted shares outstanding, compared to $3.92 for the second quarter of 2008 on 318 million diluted shares outstanding. Non-GAAP EPS in the third quarter of 2008 was $4.92, compared to $4.63 in the second quarter of 2008.
l Non-GAAP operating income, non-GAAP operating margin, non-GAAP net
income, and non-GAAP EPS are computed net of stock-based compensation (SBC). In the third quarter of 2008, the charge related to SBC was $280 million as compared to $273 million in the second quarter of 2008. Tax benefits related to SBC have also been excluded from non- GAAP net income and non-GAAP EPS. The tax benefit related to SBC was
$63 million in the third quarter of 2008 and $48 million in the second quarter of 2008. Reconciliations of non-GAAP measures to GAAP operating income, operating margin, net income, and EPS are included at the end of this release.
Q3 Financial Highlights
Revenues – Google reported revenues of $5.54 billion for the quarter ended September 30, 2008, representing a 31% increase over third quarter 2007 revenues of $4.23 billion and a 3% increase over second quarter 2008 revenues of $5.37 billion. Google reports its revenues, consistent with GAAP, on a gross basis without deducting TAC.
Google Sites Revenues - Google-owned sites generated revenues of $3.67 billion, or 67% of total revenues, in the third quarter of 2008. This represents a 34% increase over third quarter 2007 revenues of $2.73 billion and a 4% increase over second quarter 2008 revenues of $3.53 billion.
Google Network Revenues - Google’s partner sites generated revenues, through AdSense programs, of $1.68 billion, or 30% of total revenues, in the third quarter of 2008. This represents a 15% increase over network revenues of $1.45 billion generated in the third quarter of
2007 and a 1% increase over second quarter 2008 revenues of $1.66 billion.
International Revenues - Revenues from outside of the United States totaled $2.85 billion, representing 51% of total revenues in the third quarter of 2008, compared to 48% in the third quarter of 2007 and 52% in the second quarter of 2008. Had foreign exchange rates remained constant from the second quarter of 2008 through the third quarter of 2008, our revenues in the third quarter of 2008 would have been $59 million higher. Had foreign exchange rates remained constant from the third quarter of 2007 through the third quarter of 2008, our revenues in the third quarter of 2008 would have been $168 million lower.
In the third quarter, we recognized a benefit of $34 million to revenue through our foreign exchange risk management program.
Revenues from the United Kingdom totaled $776 million, representing 14% of revenue in the third quarter of 2008, compared to 16% in the third quarter of 2007 and 14% in the second quarter of 2008.
Paid Clicks – Aggregate paid clicks, which include clicks related to ads served on Google sites and the sites of our AdSense partners, increased approximately 18% over the third quarter of 2007 and increased approximately 4% over the second quarter of 2008.
TAC - Traffic Acquisition Costs, the portion of revenues shared with Google’s partners, increased to $1.50 billion in the third quarter of 2008. This compares to TAC of $1.47 billion in the second quarter of 2008. TAC as a percentage of advertising revenues was 28% in the third quarter, compared to 28% in the second quarter of 2008.
The majority of TAC expense is related to amounts ultimately paid to our AdSense partners, which totaled $1.33 billion in the third quarter of 2008. TAC is also related to amounts ultimately paid to certain distribution partners and others who direct traffic to our website, which totaled $167 million in the third quarter of 2008.
Other Cost of Revenues - Other cost of revenues, which is comprised primarily of data center operational expenses, amortization of intangible assets, content acquisition costs as well as credit card processing charges, increased to $678 million, or 12% of revenues, in the third quarter of 2008, compared to $674 million, or 13% of revenues, in the second quarter of 2008.
Operating Expenses - Operating expenses, other than cost of revenues, were $1.63 billion in the third quarter of 2008, or 29% of revenues, compared to $1.64 billion in the second quarter of 2008, or 31% of revenues. The operating expenses in the third quarter of 2008 included $859 million in payroll-related and facilities expenses, compared to $810 million in the second quarter of 2008.
Stock-Based Compensation (SBC) – In the third quarter of 2008, the total charge related to SBC was $280 million as compared to $273 million in the second quarter of 2008.
We currently estimate stock-based compensation charges for grants to employees prior to October 1, 2008 to be approximately $1.1 billion for 2008. This does not include expenses to be recognized related to employee stock awards that are granted after October 1, 2008 or non- employee stock awards that have been or may be granted.
Operating Income - GAAP operating income in the third quarter of 2008 was $1.74 billion, or 31% of revenues. This compares to GAAP operating income of $1.58 billion, or 29% of revenues, in the second quarter of 2008. Non-GAAP operating income in the third quarter of
2008 was $2.02 billion, or 37% of revenues. This compares to non-GAAP operating income of $1.85 billion, or 34% of revenues, in the second quarter of 2008.
Interest Income and Other, Net – Interest income and other was $21 million in the third quarter of 2008, compared with $58 million in the second quarter of 2008. The decrease was primarily related to an increase in expenses substantially due to more activity under our foreign exchange risk management program. The cost of the options used to manage our foreign exchange risk is amortized on a mark-to-market basis. As a result, the amount of amortization expense we recognize in any particular quarter is impacted by how much the option moves into or out of the money, as well as the underlying currency's volatility.
Net Income – GAAP net income for the third quarter of 2008 was $1.35 billion as compared to $1.25 billion in the second quarter of 2008.
Non-GAAP net income was $1.56 billion in the third quarter of 2008, compared to $1.47 billion in the second quarter of 2008. GAAP EPS for the third quarter of 2008 was $4.24 on 318 million diluted shares outstanding, compared to $3.92 for the second quarter of 2008, on 318 million diluted shares outstanding. Non-GAAP EPS for the third quarter of 2008 was $4.92, compared to $4.63 in the second quarter of 2008.
Income Taxes – Our effective tax rate was 24% for the third quarter of 2008.
Cash Flow and Capital Expenditures – Net cash provided by operating activities for the third quarter of 2008 totaled $2.18 billion as compared to $1.77 billion for the second quarter of 2008. In the third quarter of 2008, capital expenditures were $452 million, the majority of which was related to IT infrastructure investments, including data centers, servers, and networking equipment. Free cash flow, an alternative non-GAAP measure of liquidity, is defined as net cash provided by operating activities less capital expenditures. In the third quarter of 2008, free cash flow was $1.73 billion.
We expect to continue to make significant capital expenditures.
A reconciliation of free cash flow to net cash provided by operating activities, the GAAP measure of liquidity, is included at the end of this release.
Cash – As of September 30, 2008, cash, cash equivalents, and marketable securities were $14.4 billion.
On a worldwide basis, Google employed 20,123 full-time employees as of September 30, 2008, up from 19,604 full-time employees as of June 30, 2008.
http://www.businessweek.com/the_thread/techbeat/archives/2008/10/googles_third_q.html?chan=top+news_top+news+index+-+temp_news+%2B+analysis
Washington uses Google Apps to power new intranet
Washington uses Google Apps to power new intranet
Washington, D.C., is using Google Apps to power a new Intranet with next-generation capabilities.
Elizabeth Montalbano (IDG News Service) 15 October, 2008 06:38:00
Google Apps begins to find favour in the enterprise
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When it came time for Washington, D.C., to create a new intranet for city employees, spending US$4 million on a site based on proprietary portal software just didn't seem like a good idea to CTO Vivek Kundra. But using Google Apps did, he said in an interview Tuesday.
With its Web-based Google Apps suite, Google is currently trying to fashion itself into a worthy competitor to Microsoft Office in enterprise accounts. Washington, D.C., is an example of where the company is making some inroads, thanks to the thinking of 34-year-old Kundra, who believes technology that is open source or based on open standards -- or both -- is the future for the enterprise.
Google Apps is not replacing Microsoft Office entirely for the 38,000 municipal employees in Washington D.C., as some published reports have implied. However, Kundra said he is seeing more and more government employees "migrating to using Google Docs instead of Microsoft Office," and Google's online applications have advantages as far as ease of use and the ability to build new sites for the city's intranet quickly and easily.
The use of Google Apps to power the city's new intranet has its roots in a decision Kundra made soon after he took his job in March 2007. He looked at current IT projects and decided to eliminate one to build an intranet for millions of dollars based on proprietary portal software from Plumtree.
Washington, D.C., has been piloting the intranet with employees since June 2007. The application, which uses Gmail as its e-mail service and Google Apps for documents and spreadsheets, went live earlier this year and is currently in regular use, Kundra said.
Kundra decided to go with Google Apps as the basis for the new intranet not only because it was less expensive -- the city is paying Google about $475,000 a year in licensing fees -- but because new applications and interfaces can be assembled quickly on Google's platform because of its open nature.
"When we looked at integration and deployment costs, what we decided to do [was use Google because] it was at a lower cost and was a faster way of achieving the same goal," he said.
Take for example a new site the city created for its Fall 2008 Job Fair. On it, Kundra has his managers outlining in YouTube videos the positions for which they're hiring, an example of how easy it is on Google Apps to allow for "voice, video and data integration," he said.
Though Google Apps is not entirely replacing Office, it is eliminating the use of Microsoft's suite for certain jobs, Kundra said.
The city's budget planning and procurement process, the way it conducts internal surveys and, as shown by the Job Fair example, the way it goes about posting jobs and hiring employees are now done via Google Apps, he said. Previously, these tasks were largely based on a paper trail of Microsoft Word documents, Kundra said.
Google isn't the only company gunning for Microsoft, which still has the lion's share of the business market for productivity applications. IBM also has a free office productivity suite, Symphony, that it has built into its Lotus collaboration suite. There also is OpenOffice.org, the freely available, open-source productivity suite, the third version of which was released to the Web Monday.
http://www.cio.com.au/index.php/id;1362705122;fp;4;fpid;21
Washington, D.C., is using Google Apps to power a new Intranet with next-generation capabilities.
Elizabeth Montalbano (IDG News Service) 15 October, 2008 06:38:00
Google Apps begins to find favour in the enterprise
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When it came time for Washington, D.C., to create a new intranet for city employees, spending US$4 million on a site based on proprietary portal software just didn't seem like a good idea to CTO Vivek Kundra. But using Google Apps did, he said in an interview Tuesday.
With its Web-based Google Apps suite, Google is currently trying to fashion itself into a worthy competitor to Microsoft Office in enterprise accounts. Washington, D.C., is an example of where the company is making some inroads, thanks to the thinking of 34-year-old Kundra, who believes technology that is open source or based on open standards -- or both -- is the future for the enterprise.
Google Apps is not replacing Microsoft Office entirely for the 38,000 municipal employees in Washington D.C., as some published reports have implied. However, Kundra said he is seeing more and more government employees "migrating to using Google Docs instead of Microsoft Office," and Google's online applications have advantages as far as ease of use and the ability to build new sites for the city's intranet quickly and easily.
The use of Google Apps to power the city's new intranet has its roots in a decision Kundra made soon after he took his job in March 2007. He looked at current IT projects and decided to eliminate one to build an intranet for millions of dollars based on proprietary portal software from Plumtree.
Washington, D.C., has been piloting the intranet with employees since June 2007. The application, which uses Gmail as its e-mail service and Google Apps for documents and spreadsheets, went live earlier this year and is currently in regular use, Kundra said.
Kundra decided to go with Google Apps as the basis for the new intranet not only because it was less expensive -- the city is paying Google about $475,000 a year in licensing fees -- but because new applications and interfaces can be assembled quickly on Google's platform because of its open nature.
"When we looked at integration and deployment costs, what we decided to do [was use Google because] it was at a lower cost and was a faster way of achieving the same goal," he said.
Take for example a new site the city created for its Fall 2008 Job Fair. On it, Kundra has his managers outlining in YouTube videos the positions for which they're hiring, an example of how easy it is on Google Apps to allow for "voice, video and data integration," he said.
Though Google Apps is not entirely replacing Office, it is eliminating the use of Microsoft's suite for certain jobs, Kundra said.
The city's budget planning and procurement process, the way it conducts internal surveys and, as shown by the Job Fair example, the way it goes about posting jobs and hiring employees are now done via Google Apps, he said. Previously, these tasks were largely based on a paper trail of Microsoft Word documents, Kundra said.
Google isn't the only company gunning for Microsoft, which still has the lion's share of the business market for productivity applications. IBM also has a free office productivity suite, Symphony, that it has built into its Lotus collaboration suite. There also is OpenOffice.org, the freely available, open-source productivity suite, the third version of which was released to the Web Monday.
http://www.cio.com.au/index.php/id;1362705122;fp;4;fpid;21
Google- Q3's 2008 revenue rise
October 16, 2008 (IDG News Service) Google Inc. increased its revenue and profits in the third quarter, and top executives said the results were good and pledged to manage the business with a long-term outlook despite the global economic challenges.
Google reported total revenue of $5.54 billion for the quarter, which ended Sept. 30 — up 31% compared with last year's third quarter.
After deducting the commissions that Google pays to its advertising partners, the final revenue count came in at $4.04 billion, slightly below the $4.05 billion consensus expectation of analysts polled by Thomson Reuters.
Net income was $1.35 billion, compared with $1.07 billion in the third quarter a year ago.
On a pro forma basis, which includes one-time items, income amounted to $1.56 billion, or $4.92 per share — exceeding the consensus expectation from analysts of $4.75 per share.
"Google had a good quarter," CEO Eric Schmidt said during a conference call about the financial results. "Traffic and revenue were both solid, and we kept tight controls on costs."
Schmidt said that as the global economic crisis squeezes marketing budgets, companies are seeking to maximize their advertising spending. That benefits Google, he added, claiming that search advertising — the company's core business — is both highly effective and easy to monitor and analyze.
Economic woes also lead consumers to use search engines more as they evaluate shopping options and compare prices, according to Schmidt.
With so much economic uncertainty, Google will stick to its strategy of focusing on long-term growth and results, investing in its business as it sees fit and not making decisions for short-term gains, he said. That means making investments to improve the quality of the company's search engine for users and the quality of ads for marketers, he noted.
Although they account for a much smaller portion of Google's business, Schmidt said that the company's enterprise products, such as its enterprise search tools and hosted applications, also stand to benefit from the downturn as IT and business managers seek lower-cost technologies.
Display advertising, which has traditionally been a minor business for the company, is also growing at Google, thanks in part to the integration of DoubleClick Inc. and to the increased placement of graphical and rich media ads on Google sites such as YouTube, Schmidt said.
"We're very realistic about the economic climate, but we're optimistic about the future," he said.
Sergey Brin, Google's co-founder and president of technology, said that for the second quarter in a row, the company rolled out more than 100 enhancements to its search technology, in areas such as index size, performance, result quality and ad matching.
Google has also beefed up its software and hardware systems so that services such as its online calendar will perform better, Brin said. He added that there are now about 1 million businesses using the Google Apps hosted collaboration and communication suite.
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Google-DoubleClick a done deal House panel miffed by Google's alleged rebuff Google, Yahoo said to be in DOJ settlement talks to avoid antitrust challenge Google in curious alliance with click-fraud detection firm Online ad growth slows in first half of '08
Regarding the deal that calls for Yahoo Inc. to run Google search ads, Schmidt said that when the companies signed it back in June, they were aware that it would be considered controversial and that competitors would oppose it. That's why Google and Yahoo decided to delay its implementation to give the U.S. government a chance to review it, he said. The federal review is ongoing.
Asked about the negative reaction from some large advertiser industry groups, Schmidt said the opposition stems from a lack of understanding of how the auction process for search ads works.
The advertiser groups have expressed concern that the deal will drive ad prices up, but Schmidt argued that the auction model would prevent that from happening. "Auctions provide a clearing price for accurate value," he said.
Google reported total revenue of $5.54 billion for the quarter, which ended Sept. 30 — up 31% compared with last year's third quarter.
After deducting the commissions that Google pays to its advertising partners, the final revenue count came in at $4.04 billion, slightly below the $4.05 billion consensus expectation of analysts polled by Thomson Reuters.
Net income was $1.35 billion, compared with $1.07 billion in the third quarter a year ago.
On a pro forma basis, which includes one-time items, income amounted to $1.56 billion, or $4.92 per share — exceeding the consensus expectation from analysts of $4.75 per share.
"Google had a good quarter," CEO Eric Schmidt said during a conference call about the financial results. "Traffic and revenue were both solid, and we kept tight controls on costs."
Schmidt said that as the global economic crisis squeezes marketing budgets, companies are seeking to maximize their advertising spending. That benefits Google, he added, claiming that search advertising — the company's core business — is both highly effective and easy to monitor and analyze.
Economic woes also lead consumers to use search engines more as they evaluate shopping options and compare prices, according to Schmidt.
With so much economic uncertainty, Google will stick to its strategy of focusing on long-term growth and results, investing in its business as it sees fit and not making decisions for short-term gains, he said. That means making investments to improve the quality of the company's search engine for users and the quality of ads for marketers, he noted.
Although they account for a much smaller portion of Google's business, Schmidt said that the company's enterprise products, such as its enterprise search tools and hosted applications, also stand to benefit from the downturn as IT and business managers seek lower-cost technologies.
Display advertising, which has traditionally been a minor business for the company, is also growing at Google, thanks in part to the integration of DoubleClick Inc. and to the increased placement of graphical and rich media ads on Google sites such as YouTube, Schmidt said.
"We're very realistic about the economic climate, but we're optimistic about the future," he said.
Sergey Brin, Google's co-founder and president of technology, said that for the second quarter in a row, the company rolled out more than 100 enhancements to its search technology, in areas such as index size, performance, result quality and ad matching.
Google has also beefed up its software and hardware systems so that services such as its online calendar will perform better, Brin said. He added that there are now about 1 million businesses using the Google Apps hosted collaboration and communication suite.
Top Stories Related
Two new IRS systems have major security weaknesses, federal report says Opinion: New MacBooks: What Apple got right and what we want Georgian cyberattacks suggest Russian involvement, say researchers Up next: Cellular botnets, cybermilitias Google Apps portal pages malfunctioning Hubble in trouble: NASA's fix for failed computer hits snag
Google-DoubleClick a done deal House panel miffed by Google's alleged rebuff Google, Yahoo said to be in DOJ settlement talks to avoid antitrust challenge Google in curious alliance with click-fraud detection firm Online ad growth slows in first half of '08
Regarding the deal that calls for Yahoo Inc. to run Google search ads, Schmidt said that when the companies signed it back in June, they were aware that it would be considered controversial and that competitors would oppose it. That's why Google and Yahoo decided to delay its implementation to give the U.S. government a chance to review it, he said. The federal review is ongoing.
Asked about the negative reaction from some large advertiser industry groups, Schmidt said the opposition stems from a lack of understanding of how the auction process for search ads works.
The advertiser groups have expressed concern that the deal will drive ad prices up, but Schmidt argued that the auction model would prevent that from happening. "Auctions provide a clearing price for accurate value," he said.
Washington DC's contract on Google Apps
Largely lost among the hype over Microsoft CEO Steve Ballmer's comment this week that a deal for Yahoo still "would make sense economically" was Ballmer's indictment at the same conference of Google Apps, Google's suite of online collaboration tools specifically for businesses, which include web-based e-mail, spreadsheet, and word-processing programs.
"Let's look at the facts," Ballmer said. "Nobody uses those things. And the usage data hasn't grown in seven months. They're just flat, comScore. Just like this," he said moving his hands side to side. "It's just like flat line. Exactly flat line."
Because Google has landed some big contracts for its Google Apps recently, including a $500,000 deal with Washington, D.C. , I decided to check in with Ballmer's source -- tracking firm comScore -- to see if, in fact, usage of Google Apps was flat over the last seven months.
Andrew Lipsman of comScore said he could not share the data publicly but it "looks like the statement was generally accurate."
But Google's David Girouard, who heads the company's enterprise division, says Ballmer's remarks were "flat out incorrect."
"Usage has accelerated if anything," he said, adding that several people had forwarded Ballmer's comments on to him. "Our products have grown every month across different Apps."
He said he was not aware that comScore was tracking usage of Google Apps and therefore could not comment on the firm's methodology.
But he said that Google Apps' "most important metric" -- the number of users who have used Apps in the last seven days -- was "growing constantly."
He did not provide numbers on the growth over the last seven months -- but said there are now more than 10 million active users (Granted, that's the same stat Girouard provided in a May blog post).
But Girouard said that with the start of the new school year there had been "fairly huge growth" in the use of Google Docs.
He said that most of the 10 to 15 universities that sign on for Google Apps each week were signing on in order to outsource their e-mail systems to Google. But he said that many students were also now taking advantage of Google Docs through their universities.
Girouard added that he expected that Microsoft would introduce some sort of Web-based offering allowing users of Microsoft Office to edit documents online soon.
But he said, "We don't find it a really great use of our time to speculate too much."
(Watch Ballmer's remarks here. He talks about Google Apps roughly 24 minutes in).
Source: http://blog.seattlepi.nwsource.com/microsoft/archives/151775.asp?source=mypi
"Let's look at the facts," Ballmer said. "Nobody uses those things. And the usage data hasn't grown in seven months. They're just flat, comScore. Just like this," he said moving his hands side to side. "It's just like flat line. Exactly flat line."
Because Google has landed some big contracts for its Google Apps recently, including a $500,000 deal with Washington, D.C. , I decided to check in with Ballmer's source -- tracking firm comScore -- to see if, in fact, usage of Google Apps was flat over the last seven months.
Andrew Lipsman of comScore said he could not share the data publicly but it "looks like the statement was generally accurate."
But Google's David Girouard, who heads the company's enterprise division, says Ballmer's remarks were "flat out incorrect."
"Usage has accelerated if anything," he said, adding that several people had forwarded Ballmer's comments on to him. "Our products have grown every month across different Apps."
He said he was not aware that comScore was tracking usage of Google Apps and therefore could not comment on the firm's methodology.
But he said that Google Apps' "most important metric" -- the number of users who have used Apps in the last seven days -- was "growing constantly."
He did not provide numbers on the growth over the last seven months -- but said there are now more than 10 million active users (Granted, that's the same stat Girouard provided in a May blog post).
But Girouard said that with the start of the new school year there had been "fairly huge growth" in the use of Google Docs.
He said that most of the 10 to 15 universities that sign on for Google Apps each week were signing on in order to outsource their e-mail systems to Google. But he said that many students were also now taking advantage of Google Docs through their universities.
Girouard added that he expected that Microsoft would introduce some sort of Web-based offering allowing users of Microsoft Office to edit documents online soon.
But he said, "We don't find it a really great use of our time to speculate too much."
(Watch Ballmer's remarks here. He talks about Google Apps roughly 24 minutes in).
Source: http://blog.seattlepi.nwsource.com/microsoft/archives/151775.asp?source=mypi
Friday, October 3, 2008
Washington DC migrate to Google Apps to reduce cost
Vivek Kundra, CTO of the District of Columbia, says he found two compelling reasons to switch the D.C. government over to Gmail and Google Apps: first, its cheap cost would save the taxpayer money by avoiding bloated software contracts. Second, he believes Google technology will help ensure business continuity and the safety of data in the event of a disaster or disruption.
Washington D.C. hasn't been Kundra's first tenure in governmental IT. On September 11, 2001, he took a job as director of infrastructure for technology for Arlington, Virginia. The terrorist attacks at the time made him think how storing all information on premise had its pitfalls.
"That was my introduction to public service," he says. "In Arlington, what we realized after those attacks, was that if we had our one main data center shut down, we wouldn't be able to support government."
So when he took over as the district's CTO in 2007, he decided that "moving to the cloud" would have its merits, because a company such as Google has so many data centers that it would ensure better business continuity and security.
"Their data centers are geographically dispersed," he says. "That was attractive to me from a security perspective."
The enterprise version of Google Apps, a software suite that includes e-mail (Gmail), calendar, documents & spreadsheets, wikis (known as Google Sites) and instant messaging costs a mere $50 per user per year. When Kundra thought of deploying it across the 38,000 employees and 86 agencies his department supported for technology, he saw immense cost savings.
"The average cost of [enterprise] email is 8 dollars per month [per user]," he says. "For half that, we can get more value beyond just e-mail. We're getting Google apps and video for the enterprise. We're getting the ability to share spreadsheets and documents."
The extra value, he says, comes in the Apps. One piece of the Google Apps software that people have been using has been Google Docs & Spreadsheets. As an example, Kundra recently had been working on a performance plan with his deputies. Instead of e-mailing around a document for them to see the objectives that he wanted included, he sent around a Google Doc, which allows his deputies to make suggestions in real time while maintaining a document with one version of the truth.
Kundra also believes that users will be predisposed to using Google Apps because, especially from an end-user perspective, it mirrors what technologies they use at home.
"When employees go home, they have access to more technology at home than they do at work," he says. "I said 'wait a minute, people have this access at home, how can I bring it to the government? It made a compelling reason for us to move that direction."
Many of the agencies have been using Google Sites (built on wiki technology) to share information with the public to create and update procurements, Kundra adds. Google Sites can be used by people with no programming experience to build internally facing websites (intranets) or public websites.
The adoption of Google Apps falls along Kundra's strategy to control bloated IT costs (long a trouble spot in governmental IT) while providing his employees and the citizens they serve with the best technology possible.
"In D.C. government, the schools spent $25 million on Peoplesoft and it failed," he says. "That's $25 million down the toilet. Government needs to start asking the question, are we building an IT organization? Or do we want to move out of the system of owning hardware and get services to deliver solutions to customers faster. We spend far too much on enterprise software roll-outs."
So far, he has rolled out Gmail to 2,000 employees spread across the different agencies. But he says the plan is to roll it out to all 38,000 over time to realize the full cost savings. He also says he plans to pursue more software as a service (SaaS) applications in the future to improve services for employees while curtailing costs.
"Why should I spend millions on enterprise apps when I can do it at one-tenth cost and ten times the speed?" he says. "It's a win-win for me."
Washington D.C. hasn't been Kundra's first tenure in governmental IT. On September 11, 2001, he took a job as director of infrastructure for technology for Arlington, Virginia. The terrorist attacks at the time made him think how storing all information on premise had its pitfalls.
"That was my introduction to public service," he says. "In Arlington, what we realized after those attacks, was that if we had our one main data center shut down, we wouldn't be able to support government."
So when he took over as the district's CTO in 2007, he decided that "moving to the cloud" would have its merits, because a company such as Google has so many data centers that it would ensure better business continuity and security.
"Their data centers are geographically dispersed," he says. "That was attractive to me from a security perspective."
The enterprise version of Google Apps, a software suite that includes e-mail (Gmail), calendar, documents & spreadsheets, wikis (known as Google Sites) and instant messaging costs a mere $50 per user per year. When Kundra thought of deploying it across the 38,000 employees and 86 agencies his department supported for technology, he saw immense cost savings.
"The average cost of [enterprise] email is 8 dollars per month [per user]," he says. "For half that, we can get more value beyond just e-mail. We're getting Google apps and video for the enterprise. We're getting the ability to share spreadsheets and documents."
The extra value, he says, comes in the Apps. One piece of the Google Apps software that people have been using has been Google Docs & Spreadsheets. As an example, Kundra recently had been working on a performance plan with his deputies. Instead of e-mailing around a document for them to see the objectives that he wanted included, he sent around a Google Doc, which allows his deputies to make suggestions in real time while maintaining a document with one version of the truth.
Kundra also believes that users will be predisposed to using Google Apps because, especially from an end-user perspective, it mirrors what technologies they use at home.
"When employees go home, they have access to more technology at home than they do at work," he says. "I said 'wait a minute, people have this access at home, how can I bring it to the government? It made a compelling reason for us to move that direction."
Many of the agencies have been using Google Sites (built on wiki technology) to share information with the public to create and update procurements, Kundra adds. Google Sites can be used by people with no programming experience to build internally facing websites (intranets) or public websites.
The adoption of Google Apps falls along Kundra's strategy to control bloated IT costs (long a trouble spot in governmental IT) while providing his employees and the citizens they serve with the best technology possible.
"In D.C. government, the schools spent $25 million on Peoplesoft and it failed," he says. "That's $25 million down the toilet. Government needs to start asking the question, are we building an IT organization? Or do we want to move out of the system of owning hardware and get services to deliver solutions to customers faster. We spend far too much on enterprise software roll-outs."
So far, he has rolled out Gmail to 2,000 employees spread across the different agencies. But he says the plan is to roll it out to all 38,000 over time to realize the full cost savings. He also says he plans to pursue more software as a service (SaaS) applications in the future to improve services for employees while curtailing costs.
"Why should I spend millions on enterprise apps when I can do it at one-tenth cost and ten times the speed?" he says. "It's a win-win for me."
One million enterprise users migrate to Google Apps.
One million enterprise users have made the transition to Google Apps so far with many more on the horizon. With the addition of features like Google Video and other future enhancement, the future only looks brighter.
Google has been claiming over 500,000 active business customers, primarily small businesses, using at least one of the Google Apps services- with more than 10 million active users combined. In addition, thousands of universities, with more than one million active users, are using Google Apps. So far, Google’s biggest wins are Valeo, a leading automotive suppliers, with 32,000 users, and the District of Columbia, with 38,000 employees, according to CNet News.
The company maintains that “hundreds of thousands” of users are paying the $50 annual fee for the premium service. That may explain the fact that Google Apps only brought in a total of $4 Million in revenue in 2007 compared to Microsoft’s $18 Billion for its efforts. At this point, Google is underplaying the number of Google Apps business customers, the company has been saying that it is adding 3,000 businesses a day, which amounts to over 1 million per year. With those estimates, the reality today is that Google has far more than a million Apps business customers. Why would they want to downplay usage numbers?
At the present time, Google Apps is providing a “good enough” experience to business users, but as the industry moves towards a cloud-based computing environment- in which business users will likely do first- Google Apps will become much more appealing when compared to the proprietary Microsoft Exchange and Sharepoint. When the larger companies begin adding to the “paying customers” list, Microsoft will have a run for its money.
Google has been claiming over 500,000 active business customers, primarily small businesses, using at least one of the Google Apps services- with more than 10 million active users combined. In addition, thousands of universities, with more than one million active users, are using Google Apps. So far, Google’s biggest wins are Valeo, a leading automotive suppliers, with 32,000 users, and the District of Columbia, with 38,000 employees, according to CNet News.
The company maintains that “hundreds of thousands” of users are paying the $50 annual fee for the premium service. That may explain the fact that Google Apps only brought in a total of $4 Million in revenue in 2007 compared to Microsoft’s $18 Billion for its efforts. At this point, Google is underplaying the number of Google Apps business customers, the company has been saying that it is adding 3,000 businesses a day, which amounts to over 1 million per year. With those estimates, the reality today is that Google has far more than a million Apps business customers. Why would they want to downplay usage numbers?
At the present time, Google Apps is providing a “good enough” experience to business users, but as the industry moves towards a cloud-based computing environment- in which business users will likely do first- Google Apps will become much more appealing when compared to the proprietary Microsoft Exchange and Sharepoint. When the larger companies begin adding to the “paying customers” list, Microsoft will have a run for its money.
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