Occam's Razor

Paris BarCamp is on

It's now official, the Paris BarCamp will be on on Saturday June 10 2006. All registration and information can be found here.

I was one of the participant  in the KinnerNet2006 un-conference last March, where I had some of the best time and most interesting conversations.

I hope that we can create something of the same quality and level in Paris, and look forward to June 10.

OSS reading for reboot8

Preparing for reboot8, I’m Browsing the speaker list, I ended up on JP Rangaswami blog and a link to an Inspiration reading from Making a New World (Doc Searl).  This is a must-read for anybody with is trying to understand how to shape business strategy for a software-centric business today.

Linux and open source are demand-side developments. They are all what the demand side does to supply itself. Nearly all of these tools and building materials were created by the demand side of the marketplace, to solve practical problems, and to provide useful infrastructural support for similar activities. The free and open way they contribute to the world is good for business.

In World of Ends, David Weinberger and I initialized three principles as NEA. (Nobody owns, Everybody can use, and Anybody can improve).

The architecture of this world was first described in 1983 by J.H. Saltzer, D.P. Reed and D.D. Clark in End-to-End Arguments in System Design. Fourteen years later, The Rise of the Stupid Network, by David Isenberg, delivered a death sentence to the conceits of network centralizers. The Stupid Network was an end-to-end argument against AT&T's cherished belief in The Intelligent Network. David wrote, "A powerful leading indicator of the Stupid Network will arrive when entrepreneurs who have no vested interest in maintaining telephone company assumptions begin to offer profitable, affordable, widely available data services." A prophesy now fulfilled. Craig Burton combines both ideas — end-to-end and stupid — by describing the Internet as a hollow sphere, comprised entirely of ends.

In fact, it was an interest in supporting business that caused the open source movement to break off of the free software movement. That break took place on February 8, 1998, when Eric Raymond wrote Goodbye, "free software"; hello, "open source". And grow it has. The selection of commodity open source building materials is now so complete that most businesses no choice but to use those components — or, in many cases, to recognize that IT personnel in their enterprises have been building their own open source "solutions" for some time.

Several years ago, when I showed this diagram to Rob Glaser, founder and CEO of RealNetworks, he made a remarkable observation: that the Internet revolution rocked the business world because for the first time in history Infrastructure changed faster than Commerce. "It was like the rug got pulled out from under everybody."

The similarities between software and construction are so close in some ways that we can't help making sense of the former in terms of the latter. As cognitive science puts it, construction is a conceptual metaphor for software development and use. (Lately George Lakoff, the father of cognitive linguistics, has also done some borrowing from the same source. Rather than talk about "conceptual metaphors", he now talks about "frames" and "framing".) In Patterns of Software (Oxford Paperbacks, 1996) Richard Gabriel says "Habitability is the characteristic of source code that enables programmers coming to the code later in its life to understand its construction and intentions and to change it comfortably and confidently."

Before the Net, and before a sufficient abundance of open source building materials appeared, there was often no choice. For some activities inside large enterprises, there still isn't much choice. If you're doing big-time Enterprise Resource Planning (ERP) or Business Process Management (BPM), there are no open source solutions out there. Still, the same used to be true of Customer Resource Management (CRM) and office Private Branch Exchanges (PBXs) — to name two among many categories — but now that's changing with SugarCRM and Asterisk.

Smart software vendors who want to maintain their silos will still have to base them on free and open source infrastructure. That's what IBM is doing with Linux, which supports the company's proprietary DB2, Tivoli and Websphere products. I'ts what Apple did when it moved its whole silo from the decrepit MacOS to Darwin, which is Appleized FreeBSD. It would be a mistake, however, to dismiss Apple as a "proprietary" company. They are, but they also are not. Apple has an open source strategy. So do IBM, HP, Oracle, RealNetworks, Novell, Sun, SAP and other large vendors who use open source strategies to support their proprietary offerings.

All their strategies are different; but they are all based on an acceptance of open source as foundational infrastructure, on participation in open source development projects, and pm an appreciation for what open source provides to the world.

As long as we insist on treating open source and proprietary as polar opposites, we won't understand how complementary they can often be. Nor — if we are a company trying to succeed in a business world supported by open source — will we be able to come up with a useful understanding of how open source supports business, much less a strategy for putting that support to use. There are issues with the notion that open source and proprietary are opposites. "The opposite of open is not proprietary, but closed. The opposite of proprietary is not open, but public domain." If you "uncollapse" those distinctions, and lay them out orthogonally, you get The Burton Matrix (proprietary – public domain vs. Open – closed), with the moral belief that open/Public Domain is good and Proprietary – Closed is bad. if we remove morality as an issue, and spread out the two other distinctions that are collapsed, you have a good strategic framework for businesses to work with." To really take advantage of open source, he explained, you need to value ubiquity in your marketplace at least as much as you value scarcity in your product portfolio. In fact, your smartest move may be to take some of the products you're selling, and make them ubiquitous by moving them from proprietary/closed to open/public domain — literally, from scarcity to ubiquity. This is, literally, a form of commoditization.

It's not the only one, of course. Most open source commodities are created from the start with the intention of putting them in the upper right quadrant. But for businesses that want to create infrastructure, and grow markets, this is one useful open source strategy. It's one of several a company can practice at the same time. In IBM's case, the company adopted Linux (helping make it more ubiquitous), while also open-sourcing Eclipse, moving it into the upper right quadrant. In Apple's case, the company open-sourced nothing of its own, but used one of several other strategies: creation of a new standard (FireWire), adoption of an existing standard for the purpose of ubiquitizing it (USB, Wi-Fi, ZeroConf/Rendezvous, MP3) and appropriation of an already-developed code base to save itself a lot of R&D work (FreeBSD, KHTML). Meanwhile, they have kept QuickTime and their growing portfolio of "i" applications on the proprietary side, even while opening them to free usage, essentially putting those in the upper left quadrant. When the Burton Matrix was show to Rob Glaser and Brian Behlendorf (Apache Foundation leader and founder/CTO of Collabnet), they helped draw up this diagram to explain how they were working together to open and ubiquitize many of the company's proprietary offering (while also creating a development community) . Real's strategy, was to move as much as possible from the lower to the upper left, and from the upper left to the upper right.

Getting ready for reboot8

I'm getting ready for the reboot8 conference that will start on Wednesday evening in Copenhagen. Let me know if you plan to attend so we can meet there.

I'm also very interested in any feedback/question/idea to prepare for a workshop that's hosting on Building profitable OSS business. 

I plan to review and organise a discussion on how Profitable Businesses have been build on scalable OSS operation (MySQL, JBoss, RedHat etc...) . How do we move up the stack and build profitable un-scalable OSS businesses. The workshop will reflect on what happen as we move up into application areas (SugarCRM and up the food chain) and if/how/what can be done to build profitable un-scalable vertical OSS businesses.

Update 1: good pre-reboot8 post from Dannie Jost:

1. who we are: reboot is a gathering of 400 or so people all with a vested interest to some degree or another in internet technology, software, social software, technology itself, society. the kinds of people whom we are so fond of calling geeks. that is, those rare souls that dare to break a few old worn out patterns and to explore new territory.
2. the world that we live in: whatever it is that we want to call our age - information, digital, knowledge, techno-freaked-muddled, post-industrial, web 2.0 - it is an age where resources are plenty and easily sourced. logistics and knowledge do play

a major

role. part of the logistics is the communication, and that is where most information technology finds itself.
3. my observation/assertion: there is a paradigm shift currently taking place in what concerns creating a thriving business.a thriving business is a business that is sustainable. to me a business is sustainable when it makes its community prosper (read, happy, fulfilled, satisfied, peaceful). note that for a community to prosper, maintaining the status quo is not a requirement. all to say that business is about people.business is not  about goods or money, but about people making their world - this world now - work for them and allowing all to live in dignity.
4. my inference: in a world where resources are abundant and that is dependent on both logistics and communication, the key resource is intelligence. if

the crown

jewels of our age are intellectual assets, how are we going to deal with intellectual property rights?

CleanTech winds are blowing strong

My ScienceBusiness article no 3, can be found here or below:

Last Week Innovate2006 conference in Zaragoza included a pre-conference tour of the region with an interesting visit of Endesa and one of the largest spanish windmill farm located just a few miles north off Zaragoza. At the end of 2004, Endesa participated in operational wind farms delivering 1,124 MW with a further 250 MW under construction, which signifies a share of 20% in the Spanish wind power mark.

This visit resonated for me with all the recent interest in cleantech funding, and the slew of IT-CleanTech companies that we at Occam have looked at in the past few months.

Venture capitalists continue to energize clean technology companies with fresh capital.
Financing for companies attempting to develop new sources of renewable energy, new processes and materials for manufacturing, and new technology for managing energy use, rose to a six-year high of $513 million in the first quarter of 2006, according to data from Cleantech Venture Network LLC. The figure is up from $502 million in the fourth quarter of 2005 and over 50% above the $336 million invested in the first quarter of 2005.  Again, it was new energy investments that led the way. Companies developing new technologies for energy generation raised $357 million in the first quarter, more than the total invested in all clean technology sectors in the first quarter last year, according to data from the Ann Arbor, Mich.-based industry tracker.

Jefferies analyst recently produced a CleanTech industry overview which is very good and can be found here, while the full report can also be found here.

Interesting IT4Cleantech  companies to watch:

• Ergelis           

Forget technology, focus on attention attractors.

My ScienceBusiness article no 2, can be found here or below:

I had an interesting meeting with a senior executive in charge of strategy and business development at one of the major European media group last Friday.

My friend is one of the smartest and most articulate media executive. I spend one hour telling her about the interesting infrastructure and technology play I was looking at, and she spend one hour telling me that she count not care less for super-encryption technology, or smart-delivery video infrstructure, but how she was looking for low-tech, mass-market services that would drive customer attention in the key customer segments market where her group was active.

Yesterday, Umair Haque in one of his well articulated post made exactly the same point:

The investment thesis behind infrastructure plays is simple - and too simplistic. It is often simply that demand is racing ahead of supply - and so it pays to invest along in those segments of the value chain which make production technically and marginally more efficient. Of course, the key hidden assumption is that dominant design of the value chain (the sum of business models, the way value is created and captured) is still valid; still in sync with industry economics.

Now, this is an investment thesis that has doomed most VCs to watch a disproportionate number of their highest-geek-quotient investments continue to go sideways - while puzzling over the accelerating success of of largely anti-technological plays like flickr, delicious, Skype, Habbo Hotel and MySpace.

Fox's acquisition (Scout media, Newroo, Ksolo, WhatIfSport, MySpace) thesis is a bit more complicated - but predicated on a much deeper understanding of the new media value chain. Fox invests in domains which are hypersocial (discontinuous shifts in social connectivity) or hypercultural (discontinuous shifts in cultural specificity): sports, karaoke, music. Further, Fox invests at the edge of the new value chain: at the interface with consumers. Further, Fox invests in the three roughly distinct models which live there : markets, networks, and communities.Why? Because Fox understands the deep economics of new media. Value capture in the new media value chain is a function of market power. And market power is a function of attention. And attention is allocated most efficiently by markets, networks and communities. Consider MySpace. MySpace's success is driven by it's proprietary music and now video player - the deepest social widget in the new media world. It is what lets fans connect to bands they might love - it is what allocates their attention hyperefficiently (more efficiently than Top 40 charts, corporatized radio robo-DJs, or even next-gen corporobots, like Pitchfork Media).

Infrastructure driven investments are nearly flawlessly discovering the wrong future. It's the future where infrastructure lays the pipes for scores of generic markets, networks, and communities. Of course, this is the future that already happened, which consumers thought sucked, and so they stopped using the www

What's different about today is that visionaries like Fox (surprisingly enough) understand that what drives attention allocation is the hypersocial and hypercultural; and what drives the hypersocial and the hypercultural in, for example, music and sports, is marginally, but deeply, different.

…If recent history teaches us anything strategic, it's that the Cambrian Explosion in media is about radically redefining the economic essence of media; redefining media production and consumption for an attention and interaction economy; redefining how media shapes the social and the cultural to allocate attention, exploding value creation and value capture.

3 Companies to watch that illustrated this :

• VPod.TV (who just announce a 4M€ A round last Friday)
• Zilio
• Wikio

My new syndicated column in ScienceBusiness

ScienceBusiness is a great new online magazine covering Europe and how IP is turned into winning SMEs. Richard Hudson who is one ScienceBusiness founder convinced me to produce a bi-weekly colum on what we at Occam see happenidng on the groun here. The first installement can be found here or below in the post.

Online, down the line
I had the opportunity to take part as a speaker on an investor panel at the recent Total Telecom World Telecommunications Congress in Geneva. The panel was interesting - a strange dialogue between happy VCs funding disruptive telecommunication technologies (VoIP, IP convergence etc…) and troubled telecom executives. The key lessons from the conference can be structured as follows (those note are based on the minutes/comments taken by E. Jouanne from Occam Conseil).

Network infrastructure
The industry in experiencing cycles of maturation with similar patterns:  “Invest → chase volume → price down → competition eliminated → consolidation”,  today the number of “Baby Bells” is down to 2.5. The price of bandwidth is continues to fall, even if we are now for the first time seeing price stabilisation in some areas. The “must-haves” in the environment are Service Level Agreements and secure/reliable networks. Key stats: +65%  - IP traffic last year +100% - forecast for this year’s IP traffic, based on +25% this quarter. raffic structure “95% of the traffic is data. Video. Flat rate ”

P2P impact on biz models

Video bandwidth, Services entertainment, “5% is voice. VoIP accelerates changes (main driver in Business: to replace PBX)”, Value-added managed services, Tech to monetise and measure “what customers use”, customer centric measurement.

Access

Evolution in the mid term: Dynamic Frequency Allocation. Convergent networks: Intelligent Management Systems.

VoIP

“Voice revenue will disappear for sure. The only question is when will it be 18 months or 5 years?”. In the future three main areas of concern for the customers: “Quality of service: pricing will be key” Quality for pay: right lane, left lane.  Internet Service Providers will have to be forced by local regulations to disclose any IP delay management (used to slow down VoIP applications) “Security issue”

Mobile operators

“Today turnover for mobile is 80% voice, 14% SMS, 6 % data “→ “Ultimately it will be like fixed access turnover”. “There will more Instant Messaging usage (IM is the killer app for teenagers. IM will be bundled with VOIP), therefore more data traffic.”

TV/Quadruple play

Huge potential, could be called not quadruple play, but infinite play . Pricing. Flat rate vs. pay: you need to measure whether you charge or not, because there are costs associated to those events. Video on Demand most disruptive for the content industry and small TV stations. Digital Rights Management, secure network, quality

So what? Three cool innovative companies to watch

Checkpoint (VoIP security)
Baracoda (telecom churn management via Bluetooth-based services)
Zenops (mobile gaming)

Voice revenues are melting fast

Over the next five years, VoIP usage should drain $100 billion from carriers' PSTN revenues, according to U.K. research house Informa Telecoms & Media.

• By 2010 PSTN revenues should no longer be carriers' primary source of revenue,
• In the developed world, carrier PSTN revenue will drop 16.7 percent by 2011.
• Because carriers have invested heavily in broadband, VoIP revenues should help to offset PSTN losses.
• Because VoIP services tend to be priced lower than PSTN-based services, carriers may still face a net revenue loss as VoIP.
• Carriers will face fierce competition from dedicated VoIP services such as Skype and Vonage.

For more information on VoIP/PSTN usage trends, read the InformationWeek article.

Mapping technologies

Interesting mapping technologies can be found here . Smart waysto map complex data-sets into geographic representations illustrated in the following two examples:

• future global polution in 2300:

By 2300 the United Nations forecasts that the global population will be just under 9 billion. World population is expected to rise, peak and then decline slightly between 2050 and 2300. The highest long term population growth is predicted for Africa. Africa is currently underpopulated and has the lowest life expectancies. Other regions' populations are predicted to stay level or decline. Between 2050 and 2300 the areas currently known as India, China, the United States and Pakistan maintain their ranked order as having the world's highest populations. The numbers shown here are estimates - based on predicted future behaviours.

• current royalites and licence fee export :

Only 18 (out of 200) territories are net exporters of license fees and royalties. This means that a few people living in less than a tenth of the territories in the world between them receive the US$30 billion of net export earnings for these services.

The International Monetary Fund explained that royalties and license fees include "international payments and receipts for the authorised use of intangible, non-produced, non-financial assets and proprietary rights ... and with the use, through licensing agreements, of produced originals or prototypes ...". Thus these export earnings are payments for past ideas.

[Source B Giussani]

Total immersion raises 4.5M€

Total Immersion raises new 4.5M€ round led by Elaia partners, with returned investors Partech and ISource. For the last  5 years the company  has invested in delivering D’FUSION, an Augmented Reality solution : .

RFID demand acceleration

Following the recent Viagra-RFID tagging news, here is another proof of the dramatic RFID demand acceleration:

US Agriculture Secretary Mike Johanns this month released a government road map that would see most farmers voluntarily tag their animals with wireless radio chips by 2008 as part of an ambitious electronic disease control system to prevent outbreaks of hoof and mouth disease and avian flu, among other things. The system will not address the spread of "mad cow" disease, as it is transmitted through feed rather than animal commingling. By 2007, the program will ask farms or households that house chickens, ducks, turkeys, cows, pigs, goats or horses to register with a database and obtain a 15-digit identification number and GPS coordinate. Beginning in 2008, animals under the proposal would carry a radio frequency identity, or RFID, tag.

It will be interesting to watch how this influence the Alien Technology on-going IPO filling.