I went to Scoble’s blog on the recommendation of some retweet and found myself watching a realtime updating Twitter list of Tech Smart Guys or something of that nature. Scoble evidently has spent considerable time compiling these lists, running into limits like 500 geniuses on any one list. There are problems with lists, I’ve heard, but none more pronounced than the question of why one would like to produce multiple Twitter home pages to navigate between when the Home page is already useless.

I’ve certainly read numerous explanations of why lists get around the Follow problem by allowing you to create imaginary follow lists (hat tip to the late great FriendFeed’s imaginary friends concept.) Indeed, without Track all Follows are imaginary in that you are stuck waiting around for people to randomly say something interesting on a freakin’ Web page. These are the same Web pages we ran away from when RSS gave us the opportunity to request updates of blog posts when they were published.

But RSS has no social metadata to speak of, and no business model to keep the pipeline flowing. And if RSS detractors are to be believed, the technology never got significant adoption anyway. In fact, RSS scraped the cream of the attentionrati off the top of the Web page model and forced publishers into a race for space in a diminishing window of consumption time. Thus micro-messages were invented as a hybrid of the 10-second spot and texting crowd. Besides, most RSS posts wrapped 1 or 2 seconds of information in a stream of self-promotion — like this one.

It turns out that we missed the good ole Web pages more than we thought, because as information junkies we actually enjoy noise as much as signal. The noise surrounding an RSS item is stripped of the kinds of metadata cues that help us understand not just what is being fed us but by whom and for what reason. Jumping briefly to the so-called present, Twitter’s new house retweet destroys the messy noise surrounding multiple cascading citations that emanates the acrid smell of smoke and lurking fire.

RSS makes Twitter look positively Studio 54-ish with its Bianca, Grace, and Andy avatars flashing down the non-updating page. RSS tells you nothing about what sub-group of the A-List subscribes, nothing about what the cloud thinks about the stream to date, nothing about anything other than what you already knew when you subscribed in the first place. And Twitter lists are an updated version of the same lousy deal, taken out of the famous River of News or email-style reader and dumped back on the freakin’ Web page.

How do these Web pages work again? Lessee, if I get bored I can click on a link and go to some other page. Or I can hit the back button and — oh wait, there is no Back because the list opens another tab or page instance. At least I’m not just sitting here waiting for some factoid to scroll down on Scoble’s auto-updating list widget, or worse yet clicking on the new all-improved click me something’s happening text on Twitter Web pages.

If RSS sucks (there is no back button at all because you can’t address RSS items by URL except through a reader) and lists suck because they also strip away social cues, then why are we so happy to be back in Web page land and its sea of comments, ads, come-ons, opt-outs, identity honey pots, etc. We’re not; we’re looking for some safe haven which respects the noise for its social acuity while allowing group dynamics to accrue. Put simpler, give me clues as to what people I care about think about what’s going on Now.

That is the reason realtime is important: not the aggregate value of the stream, not the authority mapping of lists or retweets or location, not the personal garden of Facebook, the professional business district of LinkedIn. Realtime is important because we are still wired up to make decisions with the most amount of information at the last possible second.

Is Twitter realtime? No, because it doesn’t support Track which allows people to alert people in realtime. If we are more or less confident that we will be alerted when something game-changing has or will happen, we don’t need to sit around watching Web pages not update. Track is social alerts, and Twitter has disabled it for a very long time. Can Microsoft or Google provide alerts under the terms of their firehose deals? We don’t know nothing except to assume that the terms of the deals prohibit us knowing that answer.

But for Track to work it needs an unencumbered micro-bus where anyone can jump in in realtime and engage with any node or group of nodes. A dynamic list if you must. That’s why FriendFeed got its hose cut off when Facebook bought them. If there’s no apparent latency between Twitter and a third party (we are the second party) then there is no perceived value add for either service. Result: an effectively unencumbered micro-bus where gestures can be transmitted and received in realtime. This is the only real stream filtering possible.

Stop and think about that for a micro-second. If semantic analysis, location constraint, and relevance farming are the primary tools for filtering, the results will inevitably fall apart in competition with social mining of affinities. Adding hashtags and other codes serves only to provide SEO-like gamers the tools to tarnish the value of the system. Traditional journalists fall back on the priesthood of editorial liturgy, which is endlessly vulnerable to new and exciting voices. Witness the Beatles and the Nixon administration. One generation’s insolence becomes the next’s anthem.

Do we have any reason to expect Facebook will harness realtime any more than Twitter has failed? Could happen, but more likely is something coming up from below. Foursquare has a whiff of this insolence, but depending on going out every night to get “on the map” skews the sample in ways Twitter avoided. There are new streamreaders checking in every day, but who will become the Mayor of Realtime is not so much the question as if it’s anybody at all.

Ever since RSS took hold, we’ve had an ongoing joke that the winner will be the first application to most quickly confirm that nothing is going on. Google Reader held that title for years, then gave way to the onslaught of the micro-bus and url shorteners. Now every startup and platform is busy reinventing the same dumb wheel, spinning and twisting to avoid looking like they’re building the Next Big Ping Server.

In fact, that is the business model for every single service out there. Scrape away all the shiny promises and what you’re being pitched is something that does not include unencumbered Track. That’s because if it’s open (anybody can ping anybody in realtime) then anyone can mean a competitor. If you get multiple competitors working off the same backbone, then the carriers become the owners of the NBPS.

That’s why who controls mobile controls the micro-bus, because mobile is where business gets away with micropayments. They’ve got this SIM chip with your name on it, tied to a credit card, and when the credit runs dry, you’re done. If the carriers own the NBPS, then what does Twitter or Facebook or even Google have to offer you if you run out of credit?

Working backwards, unless you’re independently wealthy, your network access is controlled by whatever entity pays you enough to cover rent, food, medicine, and phone. What starts to become clear is that a microcommunity has a small but real chance of looking like a small business, which in turn can establish its own currency and create enough wealth to put up its own ping server/identity hub. That would be great if every single social media play wasn’t trying to get in the middle between you and access to your phone.

So far, Facebook has done the best job of being our Ping Server buddy, but they’ve made a huge mess of understanding how to unbundle the news stream. Every time I talk to a Facebook executive, they say how difficult it is to do this without threatening the privacy of their existing customers. So what you’re saying is that it makes no sense to offer a service just like Twitter except that we’ll guarantee no rate limiting or metadata quarantining or list camp.

That would be because why? There’s no money in the stream? [Wrong buzzer sound] People don’t want to aggregate power by banding together in microcommunities where the group owns the keys to the ping server? [Buzzer] Grandma will get confused. We’re doing fine thanks. We’re working hard to get there, here’s a lollipop in the meantime.

Bottom line: we’re never going to get there, just like Twitter will never restore Track. We’ll go through wave after wave of third party hacks on these fundamentals, with each vendor performing the ball and three cups trick explaining how it provides what we want without giving us control over how we configure the engine. Again, these companies do not want to give us access to our own social identity for fear that we are in fact competitors looking to own the ping server.

This is an immutable fact: we absolutely do want to own the ping server and enable Track. We just don’t want to front the money for the server. Interestingly, cloud computing means we don’t have to. The app we’re building runs on several clouds, in fact — App Engine, Amazon, and Facebook/FriendFeed — with Rackspace and Azure coming online as well. Each of these clouds has its own terms and conditions, but in aggregate they provide an unencumbered simulcrum of Track and gestural integrity.

But why believe me or Dave Winer or anybody who promises an open federated architecture where identity will flow freely across silos? You shouldn’t. Like everybody in realtime, we’re hoping you just make a choice because things are moving so quickly you want to cut your losses on what you’re missing. The truth is that realtime is no different than any other preceding era. No matter how deliberative you might be, following time-tested rules of journalistic process and tenured argument, you still have to make that last leap into the unknown where you put your chips on red or black. Those who suggest this is not a job for amateurs are just trying to own the ping server.

Finally, much is made of the devious lock-in of the url shortener, that it inserts another layer of possible breakage, that it’s a stealth ping server. All that is true, especially that it is another ping server. But in a realtime world, if one piece breaks, you route around it. If Twitter goes down, we move to FriendBook. What begins to scale is not the individual service but the fail-over system of competitive nodes. Blaming the url shortener is like realtime for all the bullshit written every second on the net, professional or otherwise.

Url shorteners exist because the url is the real payload of the micro-bus. The rest of the 140 characters are metadata about the link; if there’s no link then the url defaults to the page you’re currently on. Urls are a trigger for the next realtime fork, the moment when we deliver our most valuable contribution. Of all the gin joints in the world, you had to walk into this one.

Url shorteners go by many different names: Bit.ly, FriendFeed, Silverlight, Java, Wave, Techmeme, YouTube, Url shorteners are ping servers. We want to run Track on them to alert us in realtime. Behind every link is a url shortener. What’s valuable is recording the moment when they expand into something. Those who honor that implicit contract with users will prosper.

Crunch Network: CrunchGear drool over the sexiest new gadgets and hardware.

The New York Times’ Saul Hansell provided context at the telecom level, while ex-monopoly telecom BT’s JP Rangaswami placed his and BT’s bet on the future of open platforms such as Android. JP’s partner in crime at BT and subsidiary Ribbit, Kevin Marks, supported Arrington’s vision of a game-changer in voice, while Robert Scoble was happy to defend the iPhone with faint praise just so he could have something to argue about with Arrington. He also elicits some new CrunchPad details from Mike.

Of course, my perspective is the true correct one, that the iPhone will continue to dominate as Android devices demolish RIM, partner virtually with Windows Mobile over the Silverlight bridge to carve up the volume play, and batter the telecoms into submission so that Apple can ride through the big gaping hole and launch the iBook. A great conversation that will continue.

Crunch Network: CrunchBoard because it’s time for you to find a new Job2.0

[Video of the second half of the conversation embedded below]

We began our chat with Bob asking me about a video I shot with then-Sun CEO Jonathan Schwartz:

BOB MUGLIA: I want to tell you that your Open Source ponytail is one of the funniest things I have ever seen. It really — it was hysterical.

STEVE GILLMOR: Yes, well, I’m afraid it may have driven Jonathan out of the business, but –

BOB MUGLIA: I actually think that he did that himself.

STEVE GILLMOR: I think so, but, you know –

BOB MUGLIA: You don’t think it was –

STEVE GILLMOR: He’s a friend, so it was a little difficult, but — a lot of people inside Sun would come up to me privately and say, you know, that was really wonderful.

BOB MUGLIA: But never publicly, I’m sure. I’m sure. Yeah, no, it was very funny. It was very funny. It’s been fascinating watching, so we’ll see where things go.

STEVE GILLMOR: What’s been fascinating about it?

BOB MUGLIA: Oh, just — it’ll be interesting to watch what happens with — you know, assuming the acquisition of Sun by Oracle goes through, what really winds up happening there. The hardware business is an interesting business for Oracle to be taking on, and if they really ultimately do take it on, it’s hard to know — and Larry’s said a couple of times that they will, but it’ll be interesting to see where it goes.

STEVE GILLMOR: Yeah, he also said the cloud computing is a joke. Last time I looked, Sun is — they’re doing a lot of stuff in that area.

BOB MUGLIA: Yeah, they have a lot of investments, certainly. I mean, the challenge is, when you look at these hardware architectures, SPARC is below critical mass, in terms of an investment stream, to be able to maintain viable, on a long-term basis, and I think almost all the customers know that, and so there will need to be a transition off of that, in one sense or another, and it will be interesting to see how they do that.

But I mean, it’s sort of just I think generally part of the dynamic. I mean, this is actually one of the more interesting times right now. Cisco entering the server market’s been very interesting.

STEVE GILLMOR: How does that impact on what you’re –

BOB MUGLIA: Well, mostly in the context that it really has galvanized HP as changing their view about Cisco much more as a competitor than as a partner, and in that context it helps. I was just down at HP yesterday and — I meet with Cisco, I meet with HP, I meet with all these guys, right, they’re all partners of ours, and there’s just — I mean, I think there’s a great opportunity for us to do more and more together, with companies — with the other vendors in the marketplace because they see — whenever you see new people coming into the server market, I mean, you could sit back and see Oracle coming into their server market. We’ll see if that’s actually the case in the end. Sun does have an X86 business.

And so whenever you see new players coming in, it changes the relationships between the existing folks that are there. And the server market has been pretty dynamic in terms of new folks coming into it, with Cisco, you know, we’ve seen Sun come in. You see new entries — Verari and I guess it’s Rackable/SGI. So, seeing some new entrants in there, and some of those guys are doing some really, really, really interesting stuff. Rackable in particular has done some fantastic work on containers. A lot of these guys, they’re all doing container work, so there’s been a lot of good things that have happened across the board.

But it’s fun to see — and when you talk about clouds, there will be a connection between those sets of things. I mean, I guess our sort of high order view is that we see that there’s a continuing shift and the world’s a — the economies are sort of on everybody’s mind right now, and no one’s really sure when we’ll see the pullout and how steep the pullout will be. Another reason to not be on video at the beginning, so I can have my cup of coffee in the morning. Thanks.

And yet one of the fundamentals that I’ve heard again and again from IT managers is that they definitely view technology as part of the solution, not part of the problem, and so there will be continued investment in this. It’s not clear how fast things will come back. It’s been a pretty dismal first quarter. We’ll see how second quarter comes out. I mean, I see having the server market down 26 points year over year, after growing about seven points in the previous first quarter. So, it’s a pretty — over 30 percent drop, year over year, is pretty –

STEVE GILLMOR: You expected that, do you think?

BOB MUGLIA: We were planning for a drop. It’s probably steeper than we had anticipated. What we found is, is that we have not dropped that much. I mean, we did better than that in the first quarter, so we’re actually — we’re gaining — that just — when the market’s doing that, that means we’re gaining share.

But it’s — it hit everybody very hard. Everything off course began in the fourth quarter of last year, and then it got very steep. And the question on everybody’s mind is when do things start to pull out. But I think the one thing I do hear again and again from IT is that they do plan to continue to invest, and continue to look at ways that they can come out of where we’re at with differentiation. So, people are looking forward as much — they’re looking to save money, which works well for us, because we have a very strong message associated with how our platform can save companies money, compared to Oracle and IBM, and even in a lot of senses compared to Open Source, because we provide a more complete solution with us and our partners, for a good cost.

But then there’s probably more interesting the side of what set of innovations can people take, and what set of investments can people make, so that their systems are well positioned to enable companies to differentiate when they come out. You know, and at the same token, we see all the — with the generation of people coming in to companies that are much more technology-savvy, we see great opportunity for IT to change its role from where today IT has always and historically always focused on building solution for less technically-savvy end users, now you have people who can do an awful lot, and there’s a multiplier effect.

So if IT can provide — think about moving from providing solutions to providing frameworks that the businesses are able to build into complete solutions, and putting it in the hands of end users, I mean, that’s a fairly big deal.

You know, and the third thing that I’d sort of say that’s kind of interesting right now is it’s probably one of the most interesting times ever, in terms of how technologies are going to change the way people work with information. Because we now see vast amounts of information being able to be stored in memory, and Moore’s Law has moved to the point where you can take what used to only fit on disk, and now fit the whole thing in memory. I mean, you see it with these things, but you see it also inside IT systems as well, with solid state disks appearing. And the characteristics of solid state disks are just fundamentally totally different than rotating media, and so the way databases are going to work are totally changed.

But perhaps even more dramatic is that you can now put entire databases in memory, and all of a sudden, everything about it changes, I mean, about the way you’re able to work with information, and you get 100 — you get somewhere between 100X and 1,000X performance improvement, and that’s — we see performance improvement coming through Moore’s Law, but that’s 15, 16, 17 years of Moore’s Law, performance improvement, happening in a single product cycle.

I’ve never seen anything like that, I mean, not in the 20-some-odd years I’ve been here, I’ve never seen anything where — we always see Moore’s Law give us 35 — on average, 35 or 40 percent a year of roughly performance improvement that we get in the underlying systems, which lets us do more and more. All of a sudden, at least for data-intensive things, you get this 100X improvement in one generation. It’s kind of interesting what you can do with it.

STEVE GILLMOR: So how does that — you said two areas here, efficiently the servers, and then also this new Azure thing. How does that particular data point impact on –

BOB MUGLIA: Well, it’s going to change — I mean, I think what that will have a massive impact on is the way people work with information. Because it only actually matters when you’re working with lots and lots of information. I mean, if you were trying to do a numerical calculation on a table that was only 100K in size, it doesn’t really matter, because that fit in memory yesterday. But if you’re trying to work with business information that was multiple gigabytes in size, or even terabytes in size, all of a sudden now you can start doing things a bit differently.

And a very specific thing that you’ll see is in the BI space, people being able to build in-memory BI systems. And what we’ll be doing next year is coincident with Office 14, shipping next year. We’ll ship a version of SQL Server with an add-in into Excel that empowers end users to basically take massive amounts of business data and put it inside Excel and work with it.

And I mean, I’ve got a demo I’ve done a number of times where you take 100 million rows of data — I mean, in comparison to Excel, used to only be limited to 64,000 rows. Today it’s limited to 1 or 2 million rows. But if you try and do a sort on 2 million rows it’s going to take an hour. With this new technology, we can take 100 million rows or even more, on a laptop, on a $1,000 laptop, and do microsecond-level sorts. I mean, the sorts are almost instantaneous, and views, and queries and everything else against it.

So all of a sudden, end users will be able to do things with business information that they just never could do before. It’s pretty interesting that — I mean, no one’s really sure how broad of an impact that will have, but I think it’s kind of phenomenal to think about a query that used to take minutes or hours on a backend IT system, that took months for IT to set up, now being able to be put together in a few minutes by an end user as they build their spreadsheet and their pivot table, and then have results come back in just a couple seconds. You know, the questions that can be answered that couldn’t be answered before, whether that’s scientific investigation, whether that’s drug research, whether that’s analysis of marketing data, whatever it might be.

So those are the sorts of things — because there’s so much information in these systems today, one of the things that our systems are doing is they’re generating vast, vast, vast amount of information — logging transactions, logging things. And most of that’s getting stored. I mean, it’s largely stored, because storage doesn’t cost that much, but what does cost a lot is being able to actually — and is awkward — is being able to get that data, and putting it in a form that’s useful for people. And this will change that.

And I think that will accelerate, by the way, I think that will very much help to accelerate — whenever we come out of this, whether it’s later this year or early next year, whatever it might be, whenever we come out of this, I think it will accelerate.

STEVE GILLMOR: So how does this change your understanding of the business that you’re in, I mean, specifically?

BOB MUGLIA: Well, all of this, I think, it just speaks to the substantive opportunity that we have. I mean, our fundamental thing has always been to put — to take things that are hard and make them easy for people, to take things that are expensive and available to a few and make them less expensive and available to many. And the business models that we fundamentally have, and the way we structure what we do, have always been built around that. And I’ve said a number of times, I mean, our playbook, our core playbook at Microsoft and the one I live by every day is, you know, understand your customers, build a great product, price it cost effectively, sell it in volume and work with partners to build the complete solution.

And that model, I think, plays well both in terms of the economic times we’re in, as well as some of these transformative changes that are happening. And so we’re in a world where the business that I’m in, you know, 12, 13 billion was what we have — customers today spend about 80 to 90 billion on this software that — the space that we’re in. So, we’re 15 percent, 15, 18 percent of the market.

There’s a substantive — as these shifts happen, as industry standard technology becomes more and more viable for solving these sets of problems that it couldn’t solve before — we’re going to see scale-up, amazing scale-up, X86 systems, and of course with four cores, six cores, eight cores, 12 cores, whatever you might have on a single system, these machines are so powerful now and they’re mature, and our software is maturing to the point where business problems that people wouldn’t have us solve in the past, they will now have us solve. We have a substantive opportunity to continue to gain inside the space that we’ve traditionally played.

And then that’s one whole set of things. The other whole set of things that I think is really interesting is if you look at total IT spend, and you break up — you can just be sort of simplistic. I’ll just make life simple and say IT spends about $3 trillion a year globally, and of that $3 trillion, $1.5 trillion is communications. So, we’re not in that space. That’s the Telcos and everything else. The other is in business systems in one form or another, and that includes everything. If you start breaking it up, software spend is a few hundred billion a year — not a small number, but a few hundred billion. Application development is about $400 billion a year, something like that, people writing apps. We’re really not in that business. I mean, you’ve got your Accentures and your (inaudible). Those guys are in that business. We work with our partners to do those things, and of course a lot of that spend is internal. People spend (inaudible), a bunch of it is outsourced.

But the actual single biggest number of that $1.5 trillion is about $600 billion, which is spent in operations, and running systems and maintaining existing systems. Everybody knows that IT spends about 70 percent of their dollars on running existing systems, and only about 30 percent on new development. And so whether it’s new development and operations against those, or old legacy systems that they need to maintain, there’s this vast amount of spend that’s associated with people cost for running these systems.

And to transition to services and the cloud, to me, if you really ask what is the cloud about, it’s taking that $600 billion number, and helping IT cut $100 billion off of it, $200 billion off of it, $300 billion off of it, something like that, allowing them to open up that spending, and enable it to do new things. In a perfect world, if they could cut it — I mean, I’ll just say, suppose they could cut that $600 billion in half, spend $300 billion on maintaining existing systems, and throw $300 billion into new investments, it’s a good tradeoff from a business perspective, because the return on investment could be so much higher, associated with that.

You know, that really is what the cloud, to me, is all about, is how you take and save IT money, and enable them to reinvest it in other things. Whether that’s private clouds that they’re building internally within their own organizations, making them more efficient, associated with the way they run their systems, whether it’s using a public cloud like Azure to help drive those sorts of things, it’s driving those — or the other thing that I think is interesting is cloud services, finished services that people can buy that will lower their cost, whether it’s systems like messaging or collaboration, SharePoint Exchange, where we can supply — we can run those services for our customers, and save them money by doing that, because we run it at scale, we run it at best practice. We have ways that we can cut our own operations cost and pass a substantive amount of that on to our customers.

Whether it’s doing those sorts of things, or whether it’s helping them to save money in the new applications they built, which is really more what Azure is about, is about custom apps and ISP-based apps, and those sorts of things are really — that’s where I see massive opportunities, taking — let’s put it this way. It’s like taking the marketplace and changing the view that we have of our marketplace from being, say, an $80 billion worldwide spend and what is our share of that, relative to now $600 billion. Now to be fair, my business doesn’t cover all that $600 billion. Some of it is Stephen’s business, some of it’s other parts of Stephen Elop’s business, some of it is other parts of Microsoft. Some of it we’re not in at all, I mean, because custom apps, et cetera, there’s a substantive amount of that, and we’re not in vertical apps by and large, with the exception maybe of health care.

But if you look at it, there’s a much bigger pie. The net of it is there’s a much bigger pie to look at, and again, it’s all about how to save customers money and let them return that investment into, and spend it on other things.

STEVE GILLMOR: So how is that going, getting people aware of and — what’s the timing of Azure? Obviously it’s supposed to ship in November.

BOB MUGLIA: Yeah, we’ll be releasing it this year. I mean, we’re on track for public availability this year. Things are going well. The one thing I will say about all the cloud stuff, and it’s just — I can’t emphasize this enough — is how early all of it is. I mean, the amount of global IT spend on all cloud services worldwide, I doubt — I mean, it’s definitely under $1 billion. I mean, it’s a small, small number on a global basis, when you consider — I got $1.5 trillion, let’s put it in that perspective, or even any perspective you want to take. Even if you compare it to my businesses, it’s a small percentage, it’s still very nascent and early. And I think like anything else, what we’ll see is we’re in a period right now of great enthusiasm, and as people begin to implement these systems, some of the nascence of the systems will become apparent, and it will take people some time to be able to adopt them.

And then over time, as the systems do mature, the savings will begin to appear. I mean, I don’t view this as a one or a two sort of year journey. I mean, I view this as more of a five to 10 year journey. But that’s really the way I have to think, because the truth of the matter is, from a product development and R&D perspective, let’s sort of put it this way: my R&D is — for the revenue from my business, the R&D is already done, over the next two to three years. The R&D is basically done right now. I mean, when there’s (2008 R2 ?), I mean, there’s a few things that are still coming that will have some impact in what we’re doing, but fundamentally, that work was done last year, and the work I’m working on right now, my teams are working on right now, are two to five years out that we’re doing, and in the case of the cloud sorts of things, that stuff is in the early stages of its maturity, so the impact in terms of the business, and that translates to customers, right? Customer usage and everything else is probably five to 10 years out. So, I think people have a slightly invalid horizon on the cloud, in terms of how fast it’s going to hit, but I don’t think it changes the long-term impact that it will have.

It’s one of those classic things where people often over-anticipate the short-term impact and under-anticipate the long-term impact, and I think that could be the case here.

STEVE GILLMOR: So I mean, your units and your businesses mushroomed substantially over the last, what, 15 years?

BOB MUGLIA: Well, yeah. I mean, if you go back — when you start — I often say that I joined Microsoft 21 years ago. I was the first program manager on SQL Server, and at the time, we could handle precisely zero percent of customer business applications, so now we’re at a much higher percentage than that, and so we’ve been able to go. As — we followed — I always go with the flow, right? You never want to be swimming upstream. It’s really tiring to do that. So, what is the technology flow? The core technology flow is following what Moore’s Law has done and the move to industry standard computing. So, we followed that.

If you look back — my first — I remember it very well. My first server that I had was an OS2 in my office, because I was a program manager/developer back then, and I was writing some code, and it was in 1988 on SQL Server, and I mean, I had this IBM PS2, if you recall the PS2, and it was a 386 system. So, it had 32-bit. OS2 didn’t take advantage of 32-bit back then. It was a 16-bit system, but I mean, if you look at that, and you look at that computer as a state of the art industry standard server — someone might have said a compact server was state of the art back then — but nonetheless, the idea that a 386 was — with, I don’t know, I think it had two megabytes of memory in it at the time, something like that, maybe four — that that machine was state of the art, you compare that to where we are today, that’s the trend that’s enabled all these other things. So, –

STEVE GILLMOR: Right, but inside Microsoft, I mean, the servers was considered to be a reach.

BOB MUGLIA: Fifteen years ago.

STEVE GILLMOR: Yeah, so what happened?

BOB MUGLIA: We kept working at it. I mean, it’s really — I mean, what happened is basically — I mean, it’s really following the playbook and following the industry. What happened is the industry matured, and the availability of high-end — of low-cost and yet very powerful and very reliable computers enabled a generation of software to take advantage of that. And it’s just a constant application of the playbook. It’s just a constant saying, okay, it’s 1998 right now. What can you do with a server in 1998? What are our customers trying to do? Well, in 1998, our operating system that we had out was NT4. I look back at NT4, it had a lot of problems, but at the time it was actually a fairly major leap forward, and it was really our first generation of Windows Server, Windows NT Server it was called back then, that really allowed customer to solve a whole set of business problems.

So — and all of a sudden you start having people do things. Roll forward, 2000. Okay, Windows 2000, (inaudible) directory, et cetera. That was where customers were, distributed systems, et cetera. 2003, well, people will look back on 2003 as being the release of Windows Server that really broke through into the mainstream. I mean, that was the release where the operating system became very viable, highly reliable, it worked really well. People could solve a broad set of business problems. I mean, I’d say prior to that, there were enough issues that it wasn’t what it would call truly and completely mainstream in terms of the usage. With 2003, it — 2003 is still the most popular server operating system ever shipped. 2008 will replace that over a period of time, but 2003 has a few more years of existence.

So that was that breakthrough, and then since then, it’s really been a constant application of focusing on what customers care about. I mean, when we think about the server business, the way I fundamentally run the business is I think about what we call workloads, which is really how customers view business problems they have. That’s what a workload is. It’s I have a business problem, I need to build a — I need to run my network, I need to have — I need to be able to have an application server. I need to run a database system. I need to run a messaging system. I need to run terminal services for users and task workers. Those are all examples of business areas, problems customers face.

So we say, hey, what can we do to build the best system? If you go back to, say, 2003 — I took over Windows Server in I believe 2004, 2005. If you go back to 2003, generally speaking, the world viewed that this operating system called Linux was going to take over the server world, and make Windows sort of irrelevant. What’s happened there is we said, look, there were a set of views of Linux that customers had that there was education needed on, but fundamentally I came from a perspective that customers make rational business decisions, and they will choose Linux and Linux-based solutions if that better suits their business needs, and they will choose Windows if we can provide a better value and better suit their business needs.

There was a belief that Linux was free. That was the one thing that people had to be educated on, because for what most customers do, it’s not free, because people built by service agreements, and I mean, there’s an ecosystem that has to exist around it. Nothing is really free. So, it turns out cost is not that substantively different. We always — you know, we’re willing to drive our prices down. It’s part of our playbook to drive our prices down to get share. So, the cost difference wasn’t that big a deal, and really it came down to a value proposition and what customers could do.

And so we did this workload analysis in, say, 2004, so — and we went through and we said, okay, of all the workloads, and we tracked about 35 of them for servers — we said of all the workloads, where is Windows strong, and where is Linux strong? It turns out, you know, Linux is strong predominantly in three workloads, where it has real strength. That’s not to say — it has existence in all workloads, but it’s really strong in three — HPC, Web, and security.

There are different issues associated with each one of those. Security largely was a perception issue with Windows, particularly because we were coming off some nasty viruses way back then. Frankly, we don’t have a solution based on security at the moment, although we’re building it up, that makes — that truly competes there. But if you look at HPC and Web, what you discover is that we didn’t have a product in HPC. So, if you wanted to build a scientific computing — technical computing system — you pretty much needed to go to Linux because there weren’t any solutions in Windows. Hard to beat something –

STEVE GILLMOR: Or Solaris or –

BOB MUGLIA: Or Solaris, or — but it turns out though that if you look at the market, it’s about 90 percent Linux, right. It’s so dominant — you’re right, Solaris and the various versions of UNIX also had — and back in 2003, they had a larger share. Linux has continued to suck more and more of that up, over the period of time, but it was all UNIX and/or Linux, with Linux predominating. So, we didn’t even have product there, and in the case of Web we did the analysis, and honestly, Apache and Linux were a better product than we had. So, customers were making good business decisions, because they had a better solution on the Linux platform than we had.

So, the way we focused on being successful is to say, okay, let’s look at every single workload, and look at what customers need, and let’s just make sure we build a better product, and price it effectively, and give customers a better solution. And what we find time and time again is, guess what? When we do that, customers choose Windows, and when we don’t, customers choose a competitive solution. And I mean, I think this is pretty sort of 101 Business. I don’t think there’s anything new to it in any place. The only difference, I would say, is that the IT audience is probably a more — they are probably have the time to do more research on their purchasing than, say — consumers are perhaps more influenced by marketing and a set of other things, whereas IT is probably more influenced by — they actually run tests, they bring things in, I mean, they do a whole set of things, particularly larger IT.

And so in that context, it just reinsures that in fact they’re once again making solutions that are appropriate for their business. And so if you look at those things, we’re gaining share now in HPC, slowly, from a tiny base, a tiny little base, but we’re gaining share because we have a very competitive product there. We continue to just sort of struggle along on Web, but what I learned there is we built a competitive product — great learning in this one — we built a competitive product in IS7 and Server 2008. We went, hey, we had a bad — we had not such a good product, now we got a very competitive product, we should be in great shape.

Turned out our channel was a mess, our pricing was a catastrophe. I mean, we had so many other problems in the marketplace, because you actually have to provide a full end-to-end solution for your customers. So, this last year or so, we’ve been working through those and have been chopping them down, and getting our pricing right for hosters and everything else. In fact, we have more of that stuff — we have a lot of things coming in July and beyond on that. Just to fix — it’s just mistakes that we’d made for years and years that we just have to fix, and so we’re fixing those things, and I think we’ll start that engine –

STEVE GILLMOR: I know you don’t want to talk too much about the mistakes, but like what?

BOB MUGLIA: Oh, I’m glad to talk about the mistakes. You know, when we did the — when we did the original version of — we have a kind of licensing we provide SPLA, solution-provider licensing, and — or service provider licensing agreement. And it’s a licensing agreement we have for hosters, predominantly, and when we did the original versions of those, we set our pricing very conservative, because we did not really understand the market very well. And frankly, we just never went back and looked at it. So, when you looked at the pricing, it was a lot less expensive for customers to buy Windows Server on premises, and deploy them within their own IT shop than it is for hosters to acquire the equivalent technology. So, our pricing just wasn’t competitive.

And then we had some crazy things in our licensing that were just super confusing, about — it has to do with the fact that our on-premises licensing consists of buying servers, and then client access licenses for usage. So, we tried to put those two things together in one price, and we wrote a license that nobody on the planet could possibly understand when you needed to buy this way high price version, and when you need to buy this low price version. I mean, I couldn’t understand it.

So it just creates all sorts of impedance and friction in being able to make the right things happen. So, we’re changing all of those sets of things.

STEVE GILLMOR: How do you do that?

BOB MUGLIA: Just change our licensing, and then we go back to –

STEVE GILLMOR: So it’s clearer?

BOB MUGLIA: Yeah, basically what we’re doing is making it very clear that in this hosting space, that you can buy the lower cost license if you’re just — if you’re hosting an external Web server that’s facing the Internet. If you’re trying to run a business internally on these servers, then you need to buy the higher price license, because it sort of bundles Cowles in. But that clarity was just not there. It was called “authenticated” previously.

Well, Web sites are authenticated too, right, I mean — and so when did a customer need to buy an authenticated version versus not? So now it’s — the licensing is focused on outsourced — whether you’re using this for outsourcing purposes, okay, or whether you’re using this to host a general purpose Internet Web site.

STEVE GILLMOR: So what’s the value proposition vis-à-vis the LAMP stack?

BOB MUGLIA: The primary value proposition is the ability to take the full set of Microsoft tools and everything, and get a solution together much, much quicker, and to be able to do so in a way that’s more maintainable over a long period of time. I mean, ultimately if people can use LAMP to put together a solution faster and more effectively than .NET and Windows, we’re not going to win. The one thing we have really going for us is a very, very strong set of developer tools, and a very strong developer proposition.

The interesting thing about LAMP is, is that LAMP has — is very simple, so it’s quite often easy to do something quickly to start with. As time goes on and people want to do more and more with LAMP, it becomes more complicated, and our tools — we seek to make it easy for people to do something quickly, but also focus on making it easy for them to continue to enhance it and make things better over time.

STEVE GILLMOR: You just talked about essentially what Scott Guthrie has been doing in the development space, to kind of have rapid Web development sitting on top of the services which could be today on premises and tomorrow in the cloud, or some sort of hybrid combination.

BOB MUGLIA: Yeah, that’s right. I mean, our real goal is to build a development — an application platform that makes developers more productive than anything else on the planet, make it simpler and easier to build applications, and whether that’s being used for customers internally to run their own business applications, or with their own internal systems to run external facing Web sites, or whether that’s in the cloud, running on a public cloud such as Windows Azure, we want those to be very compatible for people, and make it easy for people to build these applications, and make it easy for people to start with an application in-house, and be able to transition it in the cloud, or vice-versa.

STEVE GILLMOR: So do you think that developers are going to take to Azure — or put it this way — what reasons are they going to first approach Azure?

BOB MUGLIA: The biggest reason that people will approach Azure is because it’s Windows, it’s Windows Server. And if you’re a developer that’s familiar with .NET, if you’re a developer that’s familiar with building on the Windows platform, and you have application investments in there, we’re working to enable developers to build that in a public cloud, with Windows Azure. The one thing that Windows Azure brings that’s very important beyond that is it is a place where we are invoking and helping to simplify the next generation scale-out programming model.

I mean, today most business applications, most Web sites, have not been built in a way that makes them easy to scale out as needs increase, and there’s a set of services that a platform, an application platform and development tools, can provide to make that much simpler. That’s what we’re doing with the combination of Azure and Visual Studio. In a lot of senses, it’s what Microsoft does. I mean, if you go back 15 — 15, 20 years ago, it was really hard to write a Windows GUI application. We created Visual Basic to make it easy.

Today, it is possible to write a scale-out application, and companies like Microsoft and Google and Yahoo! and a few others are doing that effectively, but the skill set that’s required to do so is limited, and it’s hard. We’re going to focus on making that easy, easy to write scale-out applications with Windows Azure and Visual Studio.

STEVE GILLMOR: Silverlight I think is an interesting development, for a number of reasons — not only externally, in terms of its bringing rich Internet applications across platform solution, but also internally in terms of the impact that it’s having on — or potential impact that it might be having on product groups inside. You want to talk a little bit about what you see is going on there, or not –

BOB MUGLIA: Yeah, sure, I’m glad to. I mean, Silverlight to me is one of the most exciting things that’s happening certainly in my organization, and I think at Microsoft as a whole. I mean, what we’ve done is we’ve taken all of the learning that we’ve amassed over the years, in terms of building high-productive development solutions, and the learning that we did in terms of how to build a very rich graphical user interface, and compacted it into this little tiny runtime of this four megabyte runtime, that enables this incredibly powerful set of solutions from within the browser, and with Silverlight 3 outside the browser as well, in a cross-platform sort of way.

So enabling people to build solutions that run on the Macintosh, and run on Windows, and then through our relationship with the Moonlight team and Open Source, to be able to run on Linux as well. It’s been kind of fun to help Miguel and his team as they’ve been driving an Open Source implementation of Silverlight, in the form of Moonlight.

STEVE GILLMOR: You think it’s acceptable to have something that trails by anywhere from six months to a year?

BOB MUGLIA: I think it is, especially because what you’re seeing is you’re seeing an Open Source piece of development that’s created, that will allow for Silverlight to move into all sorts of places where we can’t — we can’t see. And I mean, I just met with Miguel out in Boston, oh I guess two and a half weeks ago, and I actually think the period of time is decreasing, and he’s doing a great job of lowering the delta between those two things. And frankly, we’re working hard to help him, too. I mean, there’s a lot of things that Microsoft is doing to help the Open Source community keep up and do things.

I mean, one of the key things we did is for all of the controls that we’re releasing in the Silverlight environment, we’re releasing those with a license that allows them to run in an — we’re providing the source code under an Open Source license and allowing them to run in Moonlight. So, massive, massive amounts of the investment that’s going into the core framework for Silverlight is already written in an Open Source way that Miguel and his team can just make wrong on Moonlight.

But I mean, the thing that’s interesting Silverlight — Silverlight has had acceptance and has generated a very strong amount of leadership in a couple of spaces. You know, sort of the first space where we’ve seen leadership has been in the video space and high definition video, where really it’s a combination of the Silverlight runtime player, the runtime environment, together with the work that’s been done in the server space with smooth streaming, to really redefine the way video is done over the Web. And I’d say I think the impact of this is going to be very dramatic for end users over the next few years, where we’ll begin to see incredibly high quality, over-the-top experiences being delivered directly from a wide variety of Web sites, to end users, on their devices — on their PCs, on whatever device they’re using to surf the Internet — with effectively HD pixel-perfect quality, and the kind of user experience that you’d expect.

I mean, one of the things that I find incredible is this new smooth streaming technology. You know, we now have live smooth streaming working, so that you can have a server — one server feeding the entire Internet from a live video stream, and have that experience being broadcast out in HD, with full record capabilities. Everything is all there. So, if you want to go replay a scene, you can go back — instantly go back to that scene, and then go forward, and it’s all — it works exactly like you’d want it to work, and the only thing is, is you’re sort of looking at this and go, well, what’s the big deal? It works the way you’d want it to work, and then you realize that it just doesn’t work that way anywhere else.

If you’ve ever been — you’ve ever watched Internet on the video, you know, you want to go forward to a frame forward, you see buffering, buffering, buffering. You know, it takes forever. This is instantaneous, and the other aspect of it is, that the design, and this is really work the server team did, that’s part of Scott Guthrie’s group, the IIS team, what they did is they leveraged the entire — the entire HTTP/CDN networks that people already have. So, the CDN vendors, the content delivery vendors, they don’t have to build a separate architecture to support this smooth streaming.

So the servers that exist to do Web caching, standard Web caching on the Internet, that are being used for Web pages, can be used for video. So, to me, that’s one of the exciting things that Silverlight opens up. You know, there are others, as we being to see very rich 3D, high graphics quality applications being built as well.

STEVE GILLMOR: Well, and the big question, of course, is, you know, from the political perspective, pardon the expression, how do you get — will there be a Silverlight Office, something like that?

BOB MUGLIA: What I think you’ll see over time is major parts of Microsoft applications beginning to incorporate Silverlight into their experience. I mean, as — if you look at, for example, the Web companions that Office is doing, they do use Silverlight in a variety of instances. So, we’re seeing that being used there. We’ll begin to see Bing and MSN and our online properties begin to adopt Silverlight inside the set of things that they do. We already see some of that in a limited form in Windows Live.

If you look at my business, which is less consumer-focused, and we focus really on business customers, we are building interfaces that are Web-based interfaces for our business servers, using Silverlight. I mean, it’s become pretty universal that the kind of experience we can provide, in this case, a system administrator, is much, much better, we can write it much faster, by using Silverlight. And as we begin to launch new services — we have a management service we’ll be launching next year that’s System Center Online, that enables people to manage desktops through a cloud-based service — the entire user interface for that, from a management perspective, is all done in Silverlight.

And by the way, it’s incredible — it’s impressive because it’s very fast, and extremely responsive, from an end user perspective. The kinds of apps that can be built using Silverlight have really — they feel like native Windows applications. They have that level of responsiveness to them, and then they’re very rich, and yet they’re browser-delivered.

STEVE GILLMOR: You know, the Netflix implementation brings a whole business to the Mac. I mean, that’s a big deal.

BOB MUGLIA: Right. No, that’s exactly — Netflix has been a key customer of ours that has taken and utilized the high definition capabilities that Silverlight delivers, and enabled them to build a very rich experience, not just on Windows, but also in a cross-platform way.

STEVE GILLMOR: I’m sort of backing into a discussion about what we’re trying to do in this so-called real-time space. Do you have any sense that real-time is something that’s emerging, or is it just –

BOB MUGLIA: You mean real-time communications and collaborations? Is that what you’re saying? Well, I mean, I think it’s very obvious that it’s emerging in a lot of different forms, and I think it’s still — it’s such an emerging space that the exact ways in which it’s going to be changing over time are fairly unclear. I mean, we see tons of interest in tweeting and Twitter and what’s gone on there. We’ve built a pretty strong business around real-time communications within our Office business, for business customers, and that is one of our strong growth opportunities.

The interest people have in taking the combination of textual-based real-time, together with voice and video real-time, whether it be conferencing or one-on-one communications, and bringing all of those things together into new experiences — you know, an interesting one for me in this, in a business space, is there’s been these emergence of very high-end video systems, whether it’s telepresence or Halo, and the idea that businesses will have these high-end video rooms that can then connect to end users and work with people that don’t have that level of equipment available, but can have a phenomenally great experience from their PC, from the phone and from the camera and the microphone that they have on their PC, and interact together with those things.

I mean, we recently did a demonstration of that, showing a high-end HP Halo room connecting with a UC system, where people using standard equipment that’s just available as a part of their standard PC, can participate in these telepresence systems. I mean, that’s the kind of thing that is an example of the sort of thing that we’ll see, and I think that will emerge much more in the consumer space, too.

STEVE GILLMOR: You know, the real question for me is whether Microsoft can move aggressively into this space as a sort of center of the desktop type of application. I mean, you’ve got e-mail, you’ve got Messenger, you have a bunch of separate not-particularly-integrated tools, and along comes this sort of mainstream message bus that people are starting to use for a combination of marketing and promotion and internal communications. There are things like Yammer, there are a bunch of ways to take this apparently trivial application and turn it into something that will provide a real business value.

BOB MUGLIA: Well, there’s no question. Like I say, it’s something that’s emerging and is having a massive impact in the way people communicate and work together. I’ll say, though, I mean, I think if you look at communication systems, and usage within business, I mean, Microsoft has had a massive impact with new systems like SharePoint. I mean, the usage of — SharePoint has absolutely exploded within businesses, and has rapidly become the standard.

STEVE GILLMOR: Why do you think that is? I mean, SharePoint, when it started, seemed like a WebDav extension, basically. It didn’t seem like much of anything.

BOB MUGLIA: Because of the versatility of what you can do with SharePoint. I mean, the reality is, it’s a classic Microsoft thing where we put tools in the hands of end users, where they could build a collaborative solution for their team or their environment, and have that together in literally just a few minutes, and very instantly allow people to work together more effectively. And at the same time, SharePoint allows for broad business solutions to be built. I mean, you see two sorts of usages of SharePoint very broadly inside business — one is for broad team collaboration where you have — in Microsoft, there are literally hundreds of thousands of team sites that have sprung up on SharePoint, and that process, where companies begin implementing SharePoint, and these sites mushroom up within the organization, that’s what people find again and again.

And at the same token, people use SharePoint — businesses use SharePoint — as a standardized portal for how business information is shared out. So, whether it’s business data, or whether it’s information about HR or financial things for companies, SharePoint has become the standard way that businesses expose that data to their end users. And you know, it’s this combination of a viral spreading within the organization and the end users, together with the ability for companies to implement it more broadly, that have, I think, made SharePoint so popular.

STEVE GILLMOR: So you think that — I hate to use the term “tweeting” or “Twitter” to sort of summarize something that I think is a lot bigger than that, but do you see that as being integrated through SharePoint?

BOB MUGLIA: I think you’ll see features of that nature going into SharePoint, I mean, over time. I mean, you’ll see much more the ability for people to have these real-time communications, and in these cases these little tweets where they’re creating threads that have short — have a whole set of short comments.

STEVE GILLMOR: And if you take Silverlight and add that to that?

BOB MUGLIA: Well, what Silverlight is, is an enabler. I mean, the way to think of Silverlight is, is it takes what you can do with the Web today and makes it richer, and it does so in a way that’s very broadly available, and is — and can be built very quickly and very effectively. So, I mean, the kind of experience — you can get a certain kind of experience today with the Web browser. With Silverlight, you can get a totally different class of experience, and there’s a lot of value to that class of experience, relative to the way it enhances the way people work with information. And I mean, I think that’s true in the consumer space; I think it’s also true in business.

STEVE GILLMOR: But why are you Silverlight?

BOB MUGLIA: Because I own the developer team, and my team builds platforms, and whether that’s server-based platforms, in the form of Windows Server or SQL Server, or whether that’s the set of developer tools in Visual Studio. In this case, Silverlight is built by the same team that builds .NET, and also builds our Web server. That’s Scott Guthrie’s team, and frankly Scott just does an awesome job of moving his team forward, and really deeply understanding what developers need, and then building solutions that meet those needs.

STEVE GILLMOR: Well I think we’re seeing this — in the last Mix I think it was, and the PDC announcements about APIs and so on, that were being released first for Silverlight, and then followed up with WPF.

BOB MUGLIA: There are a few cases of that. I mean, part of it is WPF is on a release cycle that works with the broader .NET framework, so it’s not quite as fast a release cycle as Silverlight has. We’re trying to keep Silverlight on roughly a yearly cadence, so we’re driving it very, very fast. We’re very close to releasing Silverlight 3, and you’ll begin to see Silverlight 4 before the end of the year. I mean, we’ve been actively working on the next release.

So we literally have two different teams. We have a team working on releasing 3, we’ve got a team that’s already begun on 4, and then they’ll sort of swap and move forward. So, we’re focusing on doing things fast.

STEVE GILLMOR: What are we going to see in Silverlight 4?

BOB MUGLIA: Well, what you’ll see is more improvements along the lines of what we have today, so continuing to make the video experiences better. You’ll see us broaden what you can do with Silverlight in terms of international support and things. I mean, one of — if you talk to people who are trying to build business applications and reach broad sets of consumers, and they want to reach consumers in China and India and Thailand and everywhere else, so being able to easily support a broad set of languages, I mean, the way I sort of view it is Silverlight 3 is the mature, broad platform people can use to implement things with, and we think that that’s where we’ll see very strong application adoption. Silverlight 4 rounds it out. It takes the next step forward and continues that process.

STEVE GILLMOR: What do you think about HTML 5 and the strategies that Google has employed?

BOB MUGLIA: Well I think HTML is — I mean, I’ve always been a very strong believer in standard space browsers and continuing to advance that. HTML 5, it has to get stabilized, I’ll start by saying that, because first of all, there’s no clear definition for HTML 5 right now, but what the world needs a very strong HTML 5 that does get standardized, and we’re going to be investing through our IE team in building a world-class implementation against that. The real key here is because it’s a standard space process, because it’s a process where you’ve got a whole set of browsers that’s building it, the speed at which that innovation happens is somewhat slower than what you can do with something like Silverlight.

STEVE GILLMOR: All right. I don’t mean to end on this note, but I think that Silverlight has this interesting kind of positioning inside Microsoft that is starting to have the appearance of essentially the input to a Web operating system, and that seems to be within Microsoft’s agenda on some level.

BOB MUGLIA: Well, what’s very much in our agenda is to enable people to solve problems that they can’t solve before. To me, the perfect example of that is this Web streaming, where the idea of being able to do over-the-top, HD quality Web streaming, live, delayed, everything, all instantaneous, instantaneous user response — to be able to solve problems like that faster, and get those to market quickly, I mean, that’s to me the kind of thing that Silverlight’s all about.

You know, you’re right in the context that it is a broad platform, and the platform is going to continue to increase in its scope, but you know, the goal here really is to make it easy for people to build solutions that they can’t build today, and to deliver value to their customers, whether that’s business customers or consumers. And I think we’re doing a pretty good job of it with Silverlight. There’s things you can do in Silverlight you can’t do anywhere else. We’re going to continue to advance that lead that we have, and Scott is driving that team very fast to continue to do that innovation.

The key thing that we’ve done with this environment is you’ve got 6, 8 million professional developers that know .NET, and we’re being able to take those developers forward and give them access to customers that they’ve never had before, and that’s why I think it’s pretty exciting.

STEVE GILLMOR: I think that what Azure’s going to do is to sort of make it acceptable for Silverlight to become something that’s reasonably open, and yet aggressive in this real-time space.

BOB MUGLIA: I think the two will work together. You’re right, you’re right. Of course, you can use — I mean, the thing I’d say is you can use a server — first of all, Silverlight doesn’t actually require a Windows server on the other end. I mean, you can actually use a Linux Web server on the other end, it turns out, but of course you can go to any hoster and host — get a Windows server hosted there, or a Web site hosted there, and incorporate Silverlight into your account. So, it’s not just Azure. I mean, that’s one thing people sometimes get confused about is, is that you’ve got — there are literally thousands of hosting providers in the world, and we don’t see those guys going away. We want to help them be more and more successful.

My goal with Azure is to not take their business away, my goal with Azure is to help expand the business overall. You know, I look — in some ways, the reason we do Azure more than anything else, as it turns out, in order for us to make our platform a great hosted platform, we got to host it ourselves. You just don’t get the learning unless you host it yourself. So, when all said and done, we may have 10 or 20 percent of the marketplace for hosted Web things, but the majority of our customers will run still on thousands of different — from thousands of different hosters around the world.

So I agree with you, the idea that as the hosting environment becomes more common, that it does open up opportunities for apps built on Silverlight, but it’s more than just Azure.

STEVE GILLMOR: Yeah, no, I think that’s exactly what will happen. We’ve been working on this project that we’re building on Silverlight, and at a certain point, it becomes sort of second nature to sort of in planning, think about how we can take advantage of the Silverlight platform, as opposed to thinking about it in terms of either a Web application or a native Windows application. It really –

BOB MUGLIA: It becomes very natural.

STEVE GILLMOR: You stop really thinking about that in that way.

BOB MUGLIA: One of the things you’ll see as we advance Silverlight is continuing to advance the frameworks to simplify the common interactions between a server and a rich client. I mean, with Silverlight, you have a rich client, right, and you’ve got a lot of computational power, everything available there. So, whether it’s getting data down to the client or invoking rules, whatever it might be, making that simpler, and this is the sort of stuff — it turns out that if you look at the amount of time people spend building business apps, or apps of any kind, consumer-based apps, et cetera, there’s a set of problems everybody has to do again and again and again and again. And you know, the kind of stuff Scott and his team are doing is saying, okay, these are the ones we’ll just build into the framework and make real easy for people, and so that’s what you’ll continue to see as we continue to evolve Silverlight.

Crunch Network: CrunchBase the free database of technology companies, people, and investors

Go attempts to combine the development speed of working in a dynamic language like Python with the performance and safety of a compiled language like C or C++. In our experiments with Go to date, typical builds feel instantaneous; even large binaries compile in just a few seconds. And the compiled code runs close to the speed of C. Go is designed to let you move fast.

We like to say that zembly is the development environment for Sun's bold vision—an application development environment that not only targets the web as its native platform, but uses cutting-edge web innovations such as web services, social networking, and Web 2.0, to change the way applications are built, deployed, scaled, and delivered to where users congregate.

This is post was written by TecCrunchIT guest author Rick Nucci, the Co-founder and CTO of enterprise integration technology company Boomi. Prior to forming Boomi Inc., Rick worked for EXE Technologies.

A robust application programming interface (API) has become essential for today’s successful SaaS independent software vendors (ISVs). As a SaaS vendor, you should expect that a majority of your customers are going to require interoperability with other SaaS applications, web services, and legacy systems. As demonstrated by internet pioneers Google, Amazon, and Facebook, an open application strategy facilitates deeper customer usage and enables new revenue streams. Integration is critical for SaaS vendors, and developing a reliable API strategy is the first step toward achieving that goal.

Unfortunately, many ISVs still treat their API as an afterthought or merely a “checkbox” on their project list rather than a core feature of their solution. As a result, APIs are not well designed or properly built and wind up costing both the vendor and its customers tens of thousands of dollars in ongoing maintenance due to infrastructure costs and the drain on engineering resources. After reviewing hundreds of actual SaaS APIs, many up to par and others distinctly subpar, it is clear that there are a number of common mistakes made when developing an API. Fortunately, each of them can be easily remedied by following best practices.

1. Exposing operations instead of objects

Impact: Bloated call proliferation. By exposing operations, the number of calls your API has to support will balloon up to 4-5 x the number of objects in your application. What’s more, if more than one resource is building your API, there is a bad habit of inconsistent naming conventions, i.e. “addCustomer” and “insertItem” will exist in the same API.

Remedy: Consider schemas for each object you support, and a common set of actions that can be performed against those objects, i.e. add(), update(), delete(), query(), and of course upsert(). Don’t forget about this often overlooked action, it will significantly reduce the IO against your API because they ‘check for this, then do this’ logic is inside your API tier vs. invoked by the client. This forces all of your developers to follow a consistent set of actions and think about the implications of those actions against a particular object versus designing arbitrary actions against their objects in a vacuum. Following this advice will also drastically improve the readability of your API.

2. Assuming a WSDL contains everything necessary to describe your API

Impact: To support the dynamic nature of your API, you either end up doing a blended WSDL/meta data API combination, or you contort and stretch the limits of your WSDL such that most web service toolkits cannot support it.

Remedy: Keep in mind that WSDL was designed under the assumption that your API call was static, and not multi-tenant. The reality is the majority of your customers are probably customizing their tenant of your app, and those customizations need to appear in real time in your API. This is, from an integration perspective, one of the huge strengths SaaS apps have over their on-premise enterprise competitors. In the on-premise world, the APIs of those applications were either non-existent or at best completely disconnected from any customizations made to the application itself. Consider offering explicit metadata descriptor calls and in these calls return both your base schema for a given object along with any customizations made by the customer back to the user. Try denoting the custom fields with a consistent naming convention, or a dedicated section within each object.

3. Developing a single version of your API which changes with each release of your SaaS application

Impact: Your customers get on the “API treadmill” which requires that they repeatedly have to test their integrations with each release of your application. This will inevitably lead to push back from the customer base which may result in pressure to reduce the frequency of your product releases.

Remedy: Think of your API as a contract between you and your customer. Once you release it, that specific version needs a SLA guaranteeing compatibility to it for some extensive period of time (years). As you release new versions of your application, version your API also. You can include the version number of the API as part of any URL request made against it.

4. Never batching or throttling the results of query calls against your API

Impact: Your application performance degrades, resulting in a substandard experience for your API users as well as your web users. You will also likely face unexpected increases in infrastructure costs to support unpredictable demands on your usage.

Remedy: Put throttling in front of all of your API calls. There are specialists in this area, such as Mashery, that can proxy all of your API calls and enforce this behavior for you. Typically, experts recommend a time based throttle such as X-thousand calls per hour/day. You can also consider charging for additional throttling needs. However, this should not be viewed as a margin-based revenue source and instead should be viewed as a cost-protection revenue source. By charging a premium, you can offset the cost of the existing infrastructure needed to support their requirements. Fortunately, this is also becoming less of an issue due to the advent of elastic computing capabilities a number of cloud providers now offer because your API infrastructure can expand and contract inline with demands. Additionally, for any API call that can return an unpredictable number of results, consider returning those results in pages or groups of some reasonable number, along with a marker that your caller can use to iterate your pages as they see fit.

5. Maintaining separate schemas for adding, updating, or removing your Customer object

Impact: Creates the perception of inconsistency and complexity in your API. A Customer, Product, Employee, Invoice, etc. is what it is, regardless if you are adding it, changing it, or removing it.

Remedy: Have a single schema for each object type. If you do not allow certain fields to be changed in your application once a record has been added, then either throw an error if the users pass in a value for this field (ideal) or ignore the contents of any field that cannot be modified.

6. Forcing the user to specify the data type of fields being passed into your API

Impact: You are creating an unnecessary dependency on documentation. And the problem carries forward not just to the initial user of the API, but in the ongoing changes to the underlying schemas that result from customization and product enhancements.

Remedy: Provide the most relaxed data type restrictions possible and clearly type fields that restrict format patterns, such as a date/time field. An overarching goal when designing your API is to have to write the least amount of documentation possible and instead expose maximum metadata about your API through the use of explicit descriptor calls.

7. Using session-based security in your API

Impact: By forcing a session to be created and re-used, things like long running queries need to be contemplated and they are typically not, resulting in sessions being terminated mid-transaction.

Remedy: Use a standardized sessionless security model like HTTP basic authentication or WS-Security with Username/Password token. Try to avoid implementing a proprietary authentication model like username/password in the SOAP headers or username/password in the body of the data being sent to the application, as this is not discoverable programmatically. Using sessionless security is a convenience for the user as well as provides easier scalability on the server side. This allows requests from the user to be routed to any server in the data center without needing to share sessions between them. Also, by avoiding any login orchestration it is easier to get other websites to access your API so they can do mashups.

8. Not providing a way for your user to know when a record was modified

Impact: Your users cannot capture “deltas” or changes to your data over time. This forces them to do bulk extracts out of your application, causing significant inefficiencies and detrimental performance impacts on your application.

Remedy: Modification tracking is critical any time data in your application needs to be synchronized with another application. This is almost always a requirement with master data, i.e. Customer, Product, Employee, Vendor, etc., as this information is core to your customers’ business and will almost always be represented across all of the key applications they use. By exposing when a record was changed, and who changed it, external processes can capture this information and only extract the changes since the last sync vs. a full extract.

9. Charging extra for your API and not including it for free as part of your offering

Impact: An API is never viewed as an “add on” feature by your customer, it is viewed as a “get in the game” feature. In most cases it is needed for parity against your competition, not differentiation. As a result of this expectation, you may end up in an unnecessary and risky negotiation with your prospects.

Remedy: Make your API free with every edition of your offering. Tout your commitment to openness and encourage your users to explore your API, even during their trial period. You will earn loyalty points with your customer and the message of confidence you exude with this positioning will make you friend vs. foe in the developer community.

10. Getting caught without an API strategy

Impact: You are likely losing deals to your competitors and worst case you are not even aware that the lack of API is the reason. You will be perceived as “legacy” and “closed” and “proprietary”.

Remedy: Beyond the obvious suggestion which is to “build an API!” and from the outset, treat your API as a core part of your product and not an assignment you give the summer intern. Ensure that the API is represented by product management, and put strong resources on the engineering of that API. Consider this: salesforce.com reports that their API gets more traffic than their application!

Conclusion

Unlike the enterprise application era when applications were kept closed and proprietary, the success of today’s SaaS applications depend upon being open and interoperable. ISVs should view their APIs as not just a means of integration but in fact as a way to syndicate their capabilities to a much broader audience – a channel to market as it were. As such, implementing a well conceived and well designed API is arguably as paramount to the success of your business as developing the base application itself. Following the guidelines above should help in maximizing your success as you design, build and implement your API.

Crunch Network: CrunchBase the free database of technology companies, people, and investors

A few weeks ago, I traveled to Las Vegas to attend IBM’s Information On Demand conference, and took the opportunity to sit down with Big Blue’s Steve Mills, Senior Vice President and Group Executive of the IBM Software Group. In English that adds up to Steve being The Man at the helm of IBM’s embrace of Web Services, with the software group accounting for one quarter of IBM’s $100 billion business. While others have partied down on Web 2.0 and its various social themes in perhaps a more outward facing way, it turns out IBM is very focused in the same areas, albeit with an eye toward leveraging its deep relationships with the enterprise.

If raw information accounts for the lion’s share of useful data, IBM’s investment in analytics and “mining the nuggets” suggests the company’s history of eating its own dog food with early realtime technologies like Notes and Sametime will bear fruit as IBM begins to share its best practices with customers. But what of the TwitterSphere, the social media stream of micromessages — does IBM see what they call sentiment analysis as a different animal than the internal data that runs corporate systems? Mills says yes, citing IT and regulatory concerns about closely held data leaking across the firewall.

But when I cite competitors such as Salesforce who are rapidly harnessing social relatime data with their CRM and SFA applications, Mills says IBM is doing the same thing with its Lotus Connections technology when customers ask for it. “You have to allow these scenarios to exist if the company wants that scenario,” Mills says, noting that some companies would rather enable what they can’t stop and take advantage of the wave without being overwhelmed by it.

Mills says about half the IBM population microblogs today, using incremental additions to Sametime built not on open source but what Mills delineates as open standards. He sees microblogging as a way of triggering people finding people, with swarming around topics and events producing positive collisions. When I suggest he and his troops are real adopters of realtime, he suggests the word “fanatics.” This is a long-time IBM strategy of amortizing its development (and acquistion in the case of Lotus) costs with internal usage, then rolling the results of that experience out to its army of customers.

Mills was not sure companies would be ready for this free-wheeling technology in the face of regulations and data governance, but was pleasantly surprised when it took off like a rocket. “Businesses were more ready for it than we had thought,” and Mills sees a fairly profound shift as RealTime takes hold. “What’s acceptable to people today is probably something beyond anything they thought they would be doing ten years ago.”

As avid users of the stuff, IBM’s view is that the speed of the stream is not so much to be coped with as to allow the interactions to occur. “There is tremendous value if your company has a culture of problem solving…. There are cultures that are very internally competitive… that don’t want to share,” Mills debates. And he knows where Big Blue comes down on this, saying there’s no company in the world more prolific in its use of collaborative technologies.

IBM continues to invest in predictive analytics across structured and unstructured data, and IOD attendance was strong as companies began to flesh their IT muscles as the recession appears to be abating. The efficiencies of information management hold up well in tough economic times, and IOD featured many sessions and demonstrations of SPSS and earlier acquisition Cognos working together to reduce municipal costs by predicting crime and fraud and shifting resources to combat those drains on budgets.

For Mills, the experiment begun 10 years ago formerly known as Web Services has been wildly successful. The mix of service oriented architectures (SOA), Web 2.0, social media, ubiquitous bandwidth, and low cost microprocessor technology allow us to instrument and analyze the world around us as we’ve never done before. Is it good for IBM too? Mills says IT has always made its own market. “This is the most adaptive tool that mankind’s every created…. Who would have thought this would have been a $1.2 trillion industry?” That could double in size in 10 years, he predicts, as operating and capital expense from other unrelated areas get converted over into IT.

Crunch Network: MobileCrunch Mobile Gadgets and Applications, Delivered Daily.

As web-based properties grow and traffic increases, the need for more servers becomes apparent, and with that, server efficiency becomes a priority. Crescendo Networks’ AppBeat DC is a plug-and-play piece of hardware which offloads many CPU intensive tasks which in turn adds more processing cycles available for multiple applications. By doing this, servers are able to handle more users without degrading their experience and the servers needed are reduced.

The AppBeat SC Service Controller monitors these AppBeat DC modules to make sure that they are running as efficiently as possible. This add-on is able to collect and store information from these modules for 18 months which can be used to create trending reports as well as deliver real-time alerts (via Twitter, email, and SNMP) on application delivery and networking. Admins are also available to leverage Crescendo’s support team to monitor the twitter stream to improve assistance.

AppBeat SC Service Controller comes with predefined alerts, but users are able to customize them as they see fit. Users are able to flag certain traffic volumes which exceed a pre-set threshold, thus avoiding premium charges from ISP’s. In addition, the Service Controller can alert the admin of a degradation in alert times to a particular server.

Crescendo was founded in 2002 and began shipping their products in 2006.

Crunch Network: CrunchBase the free database of technology companies, people, and investors

Microsoft’s cloud-based communication and collaboration SaaS, the Business Productivity Online Suite, is adopting a new pricing model, adding more storage, and will be available in 15 additional countries and regions. The suite of products, which include Exchange Online (messaging service), SharePoint Online (intranet/portal solution), Live Meeting (web-based conferencing application), Office Communications Online (unified communications platform), will expand the availability of suite to Singapore and with the ability for trials to take place in Brazil, Chile, Colombia, Czech Republic, Greece, Hong Kong, Hungary, Israel, Malaysia, Mexico, Poland, Puerto Rico, Romania and Taiwan. Commercial availability in India is also expected later this year.

The cost of the suite, which currently has over one million paying users, is being reduced to $10 (U.S.) per user per month, from its former price of $15 per user (thanks to “rapid customer adoption” says Microsoft). The suite is also being updated to increased mailbox storage to 25 GB for users of the standard service.

Microsoft has also added a number of big name clients to its roster of customers using the enterprise suite. New customers include Aon Corporation, Lions Gate Entertainment, McDonald’s and SkyTeam Alliance. Microsoft also got a boost earlier this year when GlaxoSmithKline signed a multi-year contract to use the Business Productivity Online Suite.

Microsoft is steadily moving its productivity software to the cloud, as demand increases for cloud-based online services. We all know that Microsoft’s Ray Ozzie envisions interoperability between the three screens, and cloud computing is a significant part of this strategy. It makes sense for Microsoft to continue to strengthen and broadly distribute its offerings.

Crunch Network: CrunchGear drool over the sexiest new gadgets and hardware.

As social media clouds become more resilient, we are trusting them more. Twitter lists are a robust signal that the company has moved from keeping up to encoding the value of its network. We won’t see many new stars as lists proliferate, but rather a better sense of how to model the new media forms that micromessages enable. Boiled down to vertical niches, lists are the instantiation of a way of looking at the Web, a kind of Yahoo 2.0 based on people aggregation rather than sites or topics.

But what value do these lists have in raw form? It feels like a Wikipedia page, where you learn not to click on hyperlinked words for fear of getting lost in ever-cascading tangents based on ever-more generic topics. Instead, you rely on the intelligence of whoever constructed the page, scanning for clues as to authority, serendipity, social characteristics worth capturing for yourself. Two problems: the list architecture is splayed all over the place, and we have no tools for harvesting the value.

Of course, we’re just seconds away from the onslaught of third party takes on the subject. Surely we’ll see interesting aggregations of the Top 100, the best, brightest, sexiest, etc. We’ll recognize the familiar names and ratify their positions in the new marketplace. It’s a marketplace that will have its own hierarchy, its own Oprah, its own politicians, police, and underworld. And with all that will emerge its own underground economy.

What is the Private Web? It’s the private place only we know about (or think we do.) It’s the place where our deepest fears and instincts combine to produce the hunches that drive our lives. As a parent of a teenager, I’ve seen my hunches evolve to reflect the rapid pace of social media and my daughter’s use of it. Twitter is nowhere on her radar, Facebook serves as a gas station where she pauses for fill ups, and video chat and IM are interrupted only for food, homework, and periodic audiences for the purpose of fundraising for road trips.

All of the most important parts of her life are conducted on the Private Web. This is not a good or a bad thing; it’s just what it is. I can sense her world but only by inference — more by the difficulty in understanding parts of it than any rational tool such as asking questions or withholding permission until information is volunteered. I feel like Steve Wonder, blind but with some heightened power of perception that slowly carves out information from the resiliency of the difficulty of it.

Take this exchange:

When are you going out?

In a bit.

[some narrowing to an hour, say 4]

Who are you meeting?

Uhh, Amy and mumble and whatever. [co-conspirator, someone I don't know, and no mention of whoever I want to know about, usually boys]

So when will you be coming home?

I don’t know I’ve done my homework [usually not] and it’s [whatever day it is] and I just want to have fun with my friends, Dad. Jeez. [Obfuscation of the length of the excursion to allow for audibles at the line of scrimmage to do all the stuff I should be concerned about]

Lengthy negotiation based on the hunches I’ve collected.

What’s important to understand is that my daughter already knows exactly what she wants to do and has modeled it to the best of her ability to predict the future, online and through the social media framework. Facebook tells her where the opportunities lie, texting confirms or augments those clues, voice is only used to ratify plans once the permission map has been drwan and pre-tested for potential disruption. These kids are really good at this stuff, and we are learning more from them than they from us.

Some conclusions gleaned from observations of the Private Web:

• It’s not about Twitter, it’s about what Twitter has triggered.
• Realtime is the best way to get what you want, before defensive measures can be deployed.
• Friends are important, and particularly a deep bench. If one friend becomes overexposed, you switch to a backup.
• Texting is the prime channel, then video, followed distantly by email and IM.

To unpack, last in first out. Texting is tied to a hard coded identity, credit card, device. This provides two-way leverage, where the parent (boss) can monitor and require timely feedback, while the child (you) can meter out pseudo-information to keep you happy while navigating largely unseen on the digital network. It is much easier to project a sense of action, reliability, and strategic positioning via social media when you can downplay the value of moving physically through space and time. Foursquare will hit a wall once adults (companies) discover the existence of these breadcrumbs. Foursquare will counter by virtualizing location.

Just as location will become more editorially enhanced, so too will the role of the team in social hierarchies. It’s much more useful to have interchangeable friends or partners, so that the parent (company) knows there will be some coherent continuity regardless of conditions on the ground. People profess to value collaboration, but the strongest connections in the social graph are between groups of overlapping friends who in aggregate add up to a rational team but don’t require hardcoded roles. Put in nightcrawling terms, it’s “OK, I helped you out last night, tonight you’re my wingman.”

Realtime, of course, just plain wins. You may get away with almost a few times, but once people are onto you, they’ll start serving the ball to the weakest point. Realtime is inexorable because our sense of timing adapts to each generation of realtime and soon gets frustrated with how slow it is. How many times have you interrupted someone’s argument because you know what they’re going to say? How many times have you skimmed a post or even a tweet for some clue that it’s worth whatever miniscule time you’re now tuned to? That’s why video is right there after texting, because a picture is still worth a thousand words. “If looks could kill…”

And first but not least, Twitter is so not the point but what it has created is. The key to the Private Web is notification, not the actual content. The social signals that enable or disable connections are the new PageRank. It’s not a link but the ability to see the metadata that describes a link’s immediate value that’s valuable. My daughter uses speed to get off the phone or out of range before I can pin her down for the next number to reach her at. The data is sitting there in plain sight but where it is is obscured. Understanding her social graph in realtime is what we want to know and what she wants to obscure.

The Private Web operates on deeper emotions and instincts than we are accustomed to acknowledging. Where do I want to go? Who do I want to be? In the case of my daughter, how do I get to be who I want to be? The keys to the Private Web are shared, not at a location but via implicit and dynamic permissions to access the stream in realtime. Those who signal their understanding of this deeper value pool will implicitly advertise their value, and encourage us to request permission to share with them. Those deeper conversations will contain higher value as we trust those who share them to keep them private to the group who values them.

Twitter may not support conversations very well, but it provides clues to where the Private Web exists. These conversations live in the cracks between the public stream and direct messages, hidden either by obscurity or purpose. As they become more useful, the tendency will be to make them public, but in doing so they will lose that unique quality of trust and value. Instead, these private conversations will grow, until everyone is participating.

Crunch Network: CrunchBase the free database of technology companies, people, and investors

The study, based on a sample of over 130 respondents who had direct involvement with managing IT costs and had IT budgets of over $10 million, showcased the fact that IT organizations have a hard time coming up with ways to manage their IT costs. In particular, those surveyed believe that defining a cost-model and breaking down their IT costs in various manners were the most difficult. Additionally, those polled stated they wanted a better way to identify and assess cost inefficiencies in their IT departments as well as giving their business units more information to control their IT demand.

Digital Fuel, founded in 2000, believes that they have a solution to the problems presented in the study. Their third product, ServiceFlow IT Cost Management, is purportedly able to “capture, track, assess, allocate and analyze all of the direct and indirect costs related to the full range of IT services.” With businesses demanding visibility into their IT infrastructure, coupled with regulatory and taxation pressures, Digital Fuel has come up with a SaaS to give IT managers the power to craft and manage cost-effective planning and operations.

ServiceFlow IT Cost Management lets you know beforehand if you are going to exceed your IT budget on a particular service or function, and will suggest ways to prevent this from happening. In addition, this SaaS automates many manual processes in order to reduce human error and improve efficiency.

Digital Fuel is headquartered in San Mateo, California and competes with the likes of SAP and Oracle.

Crunch Network: MobileCrunch Mobile Gadgets and Applications, Delivered Daily.

Cloud computing is here. The vision of flexible, self service IT infrastructure is now within our reach. The term of cloud computing may be a new term, but the concept has been around for a long time. So what is different now? I would say two things are really allowing this to be a reality: virtualization and industry interoperability standards.

Virtualization has been a real game changer for IT infrastructure. It has changed the processes and the cost points. This has happened with the isolation, consolidation and mobility that virtualization provides. Removing the rigid bonds between hardware and the application systems that run upon them has allowed for quicker and easier deployment and increased mobility of workloads. These capabilities have truly enabled this vision of cloud computing.

Even the US government is now heavily pursuing cloud computing as a means to save cost, in crease agility, while reducing the carbon footprint and energy needed to support government computing. In a recent announcement, Vivek Kundra, the Whitehouse appointed US Chief Information Officer, rolled out another piece of their cloud computing vision with the launch of APPS.gov. Standards will be important for agency and cloud service provider interaction and portability.

Developing Standards that Enable Interoperable IT Management

Although cloud computing exists today, it has not achieved its full potential and has limited the possibility for greater adoption. This is due to the lack of standards which inhibit customers from selecting a cloud vendor without concern for lock-in and huge investments in proprietary tools, formats and infrastructure.

To enable this new paradigm, we need to work as an industry to develop, adopt and deploy interoperable IT management standards. Only when we have these standards, will customers be able to choose cloud technology which will enable that on-demand flexibility that they require. This also allows vendors of IT technology to focus on functionality, reliability and performance improvements rather than focusing on formats, agents and protocol development.

With the ever-increasing need for flexibility, availability and performance in today’s distributed enterprises, management standards for IT professionals are now more important than ever. Deploying systems, tools and solutions that support management standards helps reduce system management complexity and lower overall IT costs.

The Growing Importance of IT Standards

Gartner developed a model that describes five levels of infrastructure maturity that will enable the dynamic IT infrastructure. It starts at level 1, which is focused on centralization and standardization, and then moves through to Level 3 as virtualization and portability. It then goes on to show Level 5 as IT infrastructure becoming the business automation platform that enables Infrastructure as a services.

To get to the last level of business agility, it will take virtualization for portability and standards for interoperability with tools to manage the entire business infrastructure in a holistic view. We can no longer afford to do component-based management of the past. In order to get where IT can provide this level of agility to the business that they support, it will require the entire fabric of the compute infrastructure to be able to be managed, controlled and automated by a single set of tools.

Cloud Computing and Industry Standards

Other key industry standards are emerging including the work that is going on in the Storage Networking Industry Association (SNIA) and their work in the Cloud Storage Technical working Group. Another important cloud standards activity is in the newly created Cloud Security Alliance (CSA) which is focusing on best practices for cloud security.

The many of the industry standards development organizations (SDOs) have begun a dialog to help coordinate the efforts of their members. To that end a new web site was launched called www.cloud-standards.org This web site is actually a wiki that allows for representatives from the various organizations to post links to work they are doing and to list various events that are occurring around the globe related to cloud computing standards. This is turning out to be well utilized and has now over a dozen major organization populating this information. This site also has participation from the folks at NIST with links to there work on setting the terminology and definitions for the cloud computing industry.

Virtualization Standards for Workload Portability

A standard, portable meta-data model for the distribution of virtual machines to and between virtualization platforms has been created called the Open Virtualization Format (OVF). Packaging an application together with the operating system on which it is certified into a virtual machine that can be easily transferred from an Independent Software Vendor (ISV), through test and development and into production as a pre-configured, pre-packaged unit with no external dependencies, is extremely attractive. Such pre-deployed, ready-to-run applications packaged as virtual machines (VMs) are called virtual appliances. In order to make this concept practical on a large scale, it is important that the industry adopts a vendor-neutral standard for the packaging of such VMs and the meta-data that are required to automatically and securely install, configure and run the virtual appliance on any virtualization platform.

Benefits of this new standard include:
• Improves your user experience with streamlined installations
• Offers customers virtualization platform independence and flexibility
• Creates complex pre-configured multi-tiered services more easily
• Efficiently delivers enterprise software through portable virtual machines
• Offers platform-specific enhancements and easier adoption of advances in virtualization through extensibility

OVF and Cloud Interoperability

The Distributed Management Task Force (DMTF), has formed a group dedicated to addressing the need for open management standards for cloud computing. The “Open Cloud Standards Incubator” will work to develop a set of informational specifications for cloud resource management.

A key piece of this new work is to look at how OVF can be extended to support the portability requirements of deploying and managing workloads in the clouds. This includes internal, external and private cloud environments. OVF has great support and is implemented in several products.

Cloud Computing Management Standards

Beyond OVF, agreement on cloud application programming interfaces (APIs) or protocols need to be developed. There are several prominent Cloud APIs that exist today, but the industry should converge soon on a common cloud API. This API should provide management of workloads in the cloud and provide for capabilities such as fault, configuration, accounting, performance and security management. These include things such as Quality of Service (QoS) monitoring and control, as well as standard ways to retrieve billing information. In addition, security requirement definitions and security management are also key pieces that need to be standardized so that customers can have assurances regarding the environment in which their workloads are being deployed.

Earlier this month VMware announced the submission of their vCloud API to the DMTF. This is the first ever industry cloud API specification submitted to a standards development organization. The intent is to get broad industry support and input on this API from its more than 35 companies participating in the Open Cloud Standards Incubator including the 17 Leadership board member companies: AMD, CA, Cisco, Citrix, EMC, Hitachi, HP, IBM, Intel, Microsoft,Novell, Rackspace, RedHat, Savvis, SunGard, SunMicrosystems and VMware.

Reducing IT Complexity and the Cost of Cloud Computing Systems

The ultimate goal is to reduce the overall IT complexity which can only be achieved by implementation of infrastructure management standards. These standards will improve interoperability which will reduce the number of tools required to manage the IT systems. Managing the entire compute fabric as a single entity will greatly simplify the current complexity. Also, cost reductions can also be found by reduced training and specialized product requirements giving customers freedom of choice.

Crunch Network: MobileCrunch Mobile Gadgets and Applications, Delivered Daily.

A new generation of database products and companies is beginning to emerge, and one of the more interesting examples is Swedish-based Neo Technology, the developer and vendor of the neo4j graph based database (graph in the data structure sense). The neo4j product has been in development for over 8 years, and Neo Technology are today announcing a new $2.5M round of funding. The company has been developing the neo4j project as a commercial product, and is now taking it to market with a dual-license model.

A graph database is a more natural method for expressing, storing and retrieving data that does not fit well in a standard relational database schema. The best example is to consider social networking models, or other models with relationship elements that are either not easily expressed in a traditional table structure or where a table and relationship based structure does not scale.

In a demo of the product we saw, a mock social network structure was created where 1,000 users were defined, each with 50 friends. The traditional table based database took 2,000ms to query every friend from every user, while the graph-based neo4j database took 2ms. To demonstrate the efficiency of the database further, with 1,000 times more users at a million (and an order of magnitude magnitude more connections), the total query time was still 2ms. The graph model and the neo4j database are able to easily scale with complex relationships between entities and with a more flexible schema.

Neo Technology are providing a commercial version of neo4j, Neo, along with services, training and support for the product. The product is licensed under the AGPLv3. The company raised $2.5M from Sunstone Capital and Condor Venture Partners. They previously raising a smaller seed round of $300k from the Swedish government. Neo Technology was founded by a small team lead by CEO Emil Eifrém. The team originally developed the neo4j product as an internal database at a previous company, and have applied the technology in commercial environments for almost 10 years.

Neo Technology are closely following in the footsteps of another Swedish database company, MySQL. They not only share the same home country, but both companies started with a solid open source product, both are database companies and both share a similar business model around open source software.

Neo provides the next generation of database, more suited to most common data problems faced in the real world today. Graph databases are part of a group of technologies of non-relational databases commonly grouped under the ‘NoSQL’ name and movement. The NoSQL movement began with a recent conference in San Francisco, and a conference this week in Atlanta where the Neo Tech was represented.

Most application developers today are not farmiliar with non-relational data storage models, since RDMS dominate the market and most frameworks and language environments have little to no support for alternates. This leads to developers squeezing data models that are not well suited for a table based structure into a database such as MySQL, often leading to poor performance, scalability and reliance on code to do the heavy lifting.

The technology around graph databases was previously usually developed in house by companies who identified specific needs, with some commercial options available. With companies such as Neo Technology supporting a very stable and scalable open source product, the technology is sure to now start to find its way into enterprises and become popular with application developers.

Crunch Network: CrunchBoard because it’s time for you to find a new Job2.0

BlueCat caters to network administrators who face a variety of IP-related pressures like the introduction of VoIP networks, wireless devices (including RFID tags), virtualization, and the complexity IPv6 brings to company networks by offering automated solutions that simplify network processes.

BlueCat Networks markets IP Address Management (IPAM), DNS and DHCP platforms in the form of both physical and virtual appliances. All of its solutions are DNSSEC and IPv6 ready.

Bridgescale Partners in the release indicated that it wants to expand more into Canadian territory for investments.

Crunch Network: TechCrunch obsessively profiling and reviewing new Internet products and companies