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Chinese E-Commerce Tops $38.5 Billion; What Comes Next?

cgseo — Tue, 20 Apr 2010 00:30:00 +0000

Last September, China's most successful consumer-to-consumer online marketplace, Taobao.com launched a massive online promotion. By offering exorbitantly low prices on a series of brand name consumer electronics by Lenovo, HP, Philips and others, the site attracted 1.8 billion visitors (non-unique) - the equivalent of every single person in China visiting the site at least once. With 145 million online shoppers expected by the end of 2010, e-commerce in China has come a long way since it began about a decade ago. What types of business models exist? Who's shopping online and what are they buying? And where do we go from here? Sponsor Guest author Joel Backaler writes The China Observer , an award-winning blog focused on Chinese technology trends and consumer culture. His writing has appeared in and he has been quoted by the Wall Street Journal China Journal, BusinessWeek, and Seeking Alpha. Joel is a Mandarin-speaking former Fulbright Fellow who has worked and lived in Taipei, Beijing and Singapore with Frontier Strategy Group. Follow Joel on Twitter . How did it all begin? Jack Ma and his partners launched Chinese e-commerce in 1998 with Alibaba.com , a business-to-business online platform. Like the Web firms of Silicon Valley, Chinese firms felt the shockwaves of the Internet bubble bursting in early 2000 - but in China the Internet industry continued to grow. 2003 was a turning point for Chinese e-commerce with the release of Alipay, Alibaba's version of PayPal, which provided a secure means for online payment. 2003 also marked the first entry of Western multinationals in the Chinese e-commerce market - first by Ebay taking a controlling stake in Eachnet, and then with Amazon subsequently doing the same with Joyo.com in 2004. Roles reversed in 2005 when Alibaba Group gained control over Yahoo!'s Chinese search platform. A period of explosive growth began in 2008 as China's e-commerce market grew to 100 billion RMB, with 80 million online shoppers. Where are we today? In 2009, China's e-commerce market totaled 263 billion RMB (approximately $38.5 billion) with growth equivalent to about 105% increase year-on-year. Currently, consumer-to-consumer (C2C) represents the largest segment of China's e-commerce market; however, business-to-consumer (B2C) is increasingly growing in importance due to two trends. Traditional Retailer to Online Retailer : Traditional retailers are developing e-commerce platforms as additional channels to get consumers to buy their products. From brand name domestic retailers to state-owned enterprises, there is a major push to go online. It has even been reported that Wal-Mart is set to release its own e-commerce platform for the Chinese and Japanese markets . Individual Seller to Online Retailer : Due to the extreme success of particular sellers on existing C2C sites like Taobao.com, online shops that began with a single college student or a small family have been forced to seek out additional support to satisfy market demand. As a result, these one-time, single-person operations have been incorporating into formal enterprises stepping into the B2C space. What types of business models exist? China's e-commerce platforms can be classified by the following three models: marketplace model, online retail model and traditional retail model. Marketplace Model : The marketplace model connects buyers and sellers, whether it is business-to-business or C2C. The company provides a platform to facilitate business between two parties but has no products of its own to offer. It maintains a searchable database of information for buyers and seller to connect, and a secure means to facilitate payment between both parties. Top B2B players : Alibaba.com, HC360.com, Myekoo.com Top C2C players : Taobao.com, Paipai.com, Eachnet.com Online Retail Model : The online retail model is where a company has no formal real-world storefront. It provides both products and a channel to sell directly to end customers. Top B2C Online Retailers : 360buy.com , Joyo.com, Dangdang.com Traditional Retail Model : The traditional retail model is similar to the online retail model; however, in addition to the online website the company also has real-world retail outlets. Top B2C Traditional Retailers : Gome (electronics), COFCO (state-owned: food and beverage), Lining (athletic apparel) Who's shopping online and what are they buying? Shanghai-based iResearch estimates that by the end of 2010 there will be 145 million online shoppers in China. Online shoppers are relatively young - the majority are between the ages of 18 and 35. While this number is split roughly evenly, slightly more women shop than men. In the early days of Chinese e-commerce, products such as software and DVDs were the top purchases. Currently clothing, books and cosmetics are the top sellers. Additionally, as we have seen in the U.S. with sites like Etsy, companies that focus on niche markets are also sprouting up. For example, 21Cake.com is a popular made-to-order online cake company that sells custom-made cakes online and delivers to China's major cities. Where do we go from here? China's e-commerce market is yet to fully mature, but it is entering a period of high-speed growth. C2C sellers that are growing more successful will begin to establish more formal companies, leading to an increase in the number of companies in China's B2C space. While many view the Internet as a sensitive area subject to regulation by the Chinese government, the government supports e-commerce due to its economic benefit and potential for job creation. One example is Xinjiang, a remote province in western China which recently experienced social unrest. Most websites and email there are blocked - but you can still access Alibaba.com and Taobao.com. Of China's e-commerce companies, Alibaba Group will remain the company to watch in this space for many years to come. However, there is still a lot of room for niche operators to capitalize on the growth potential of China's e-commerce market. Image by Kim2402 . Discuss

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Chinese E-Commerce Tops $38.5 Billion; What Comes Next?

Comment Innovation: An Open Door of Startup Opportunity?

cgseo — Thu, 15 Apr 2010 17:00:00 +0000

Back when I was in graduate school getting my masters in journalism and mass communication, I worked on various "lab projects" which were challenges faced by media organizations that they wanted to tackle but didn't have the means or the resources to do so. So basically, the students at my school were a think tank for the local media. One of the first issues we were tasked with investigating was finding a new way to allow comments for online news stories to be more efficient and less offensive. Sponsor The problem faced by most online news sites is that the anonymous nature of the Internet makes it very easy for vulgarity and off-putting comments to be posted, and for some sites, these types of comments pervade their site. Many of today's popular sites with comments have integrated systems to where readers can vote down bad comments while promoting good comments, which helps the bad stuff to be filtered out. Others have tried blocking fowl language with asterisks or by deleting the comment automatically, but this has only lead users to find unique ways of spelling their beloved curse words. Some startups, like Disqus , have made it much easier to manage comments, and identity tools like OpenID and Facebook Connect have helped to lower the amount of anonymous commenters on the web, but anonymity is a fundamental cornerstone of Internet culture. Or is it? In a recent New York Times article about how many news sites are starting to remove anonymous commenting, Arianna Huffington of The Huffington Post said she thinks that anonymity is losing its once exalted position atop the foundation of the Web. "Anonymity is just the way things are done. It's an accepted part of the Internet, but there's no question that people hide behind anonymity to make vile or controversial comments," says Huffington. "I feel that this is almost like an education process. As the rules of the road are changing and the Internet is growing up, the trend is away from anonymity." Fred Wilson of Union Square Ventures says there is plenty of room for innovation within comment boards. Wilson uses Disqus on his blog and has some suggestions for features they could include to make the commenting experience better, but he believes one of the ways to innovate in the space is to introduce game mechanics into commenting. "Game mechanics will reward the kind of behavior the community wants and will punish the kind of behavior the community does not want," writes Wilson on his blog. "The anonymous commenter who has valuable information but can't publish in their own name will be rewarded. The anonymous commenter who leaves a hostile name calling piece of crap will be punished. And the comment thread and community will be better off for it." Entrepreneurs that strive to create a truly innovative product usually first start with a problem that needs solving, and comment systems are certainly a problem that needs solving. Therefore by some transitive property, innovation in the commenting space seems to be an open door of opportunity for startups to walk through and offer a solution. Are there other companies like Disqus that may be looking to disrupt the traditional comment system, or do you have an idea for making the process more user friendly? Let us know your thoughts on the state of comments and how you would change them in our very own comments section below! Disclosure: The New York Times is a syndication partner of ReadWriteWeb. Discuss

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Comment Innovation: An Open Door of Startup Opportunity?

Is Flying Under the Radar Better Than Being Stealth?

cgseo — Thu, 08 Apr 2010 17:00:00 +0000

They seem to be becoming less popular lately, but not too long ago "stealth" startups were a growing fad in the Internet entrepreneurship sector. A team with a big idea would insist on keeping their business a secret from the public and even from investors until the last possible moment in an effort to ward off any fast moving idea vultures that might swoop in and copy their idea. Others went stealth to create a buzz around their mysterious and unknown project. Some argue, however, that being stealthy limits a startup's opportunities for funding and feedback, among other things, so is there a better way to go about this? Sponsor Investor and Hunch co-founder Chris Dixon wrote Tuesday about his idea that instead of going into "stealth mode," startups should instead just try to "underhype" themselves , a process I'm going to call "flying under the radar." I call it this because "stealth," like "stealth bomber," implies the ability to be undetectable and virtually invisible, while "flying under the radar," means you are perfectly visible, but are strategically flying in a manner as to go unnoticed. "The companies I'm referring to ... are publicly launched, acquiring users and generating revenue," writes Dixon of "underhyped" startups. "They are modeling themselves after Groupon, where the first time the VC community / tech press gets excited about them, they are already so successful that it's hard for competitors to jump in." Startups that can fly under the radar get all of the benefits of stealthiness but without the costs. By quietly building a stellar product and garnering a loyal audience without tipping off the press or major VCs, startups can be assured that they are providing the best product while protecting themselves from a quick copycat company. Instead of closing your company off to a select group of individuals, these startups can be completely open to public feedback and user testing, as well as VC scrutiny, something most stealth startups can't do. "Unless you are extremely lucky or extremely brilliant your product won't be a great match for your customer's needs until you have spoken to them about it and iterated a bunch of times," wrote Nic Brisbourne of DFJ Esprit last December . "With regard to VCs in particular, being stealthy stops them from letting you know if they have seen many other startups in your space and the extent to which your plan might or might not need to morph to become an attractive investment." It would seem that the costs outweigh the benefits when it comes to going stealth. In a 2006 OnStartups post , Dharmesh Shah argued that going stealth could unintentionally convey to investors that the company lacks focus, commitment, solutions, or direction. So before you decide to keep your super secret project under lock and key, think about hiding in plain sight by flying under the radar instead. Discuss

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Is Flying Under the Radar Better Than Being Stealth?

Framework: Rings of Infuence

cgseo — Mon, 05 Apr 2010 13:25:07 +0000

Recently, I spoke to a crowded room of senior marketers at a CPG retailer, one of the executives asked “What’s an indicator a company is advanced in the social space?”. I gave three answers, and one of them was “Developing a thriving advocacy program to fight your battles”. The executives, which were used to traditional advertising and direct marketing had a lightbulb go off as I showed them this framework. Companies unable to scale into social channels –hindered by traditional thinking Companies are unable to respond quick enough to the masses of customers complaining on social channels, they simple can not hire enough community managers and Social CRM systems are still being developed. The old school thinking of traditional marketing putting the sole focus on voice of corporate communications, and sanctioned executives only. Yet now, as social tools are pervasive (take a look at all the people accessing Facebook from their mobile phones) the gateways of public communication have been opened. Brands must extend their strategy to the outside rings. In order to scale in both time and mass, corporations must now extend their communication strategy beyond just corporate communications and sanctioned ‘company representatives’ to include others in the mix. In the following graphic of the “Rings of Influence” I’ve mapped out how other individuals can and should be used in the communications strategy. I’ve worked on trust research at my former employer, and found that in most cases the closer in the rings (corporate) there’s less trust. Independent studies, like Edelman’s 2010 trust barometer indicate similar findings, figures 7 & 8 are telling in this PDF . Inversely, the further out in the rings (prospects and customers) the greater the levels of trust. Framework: Rings Of Influence As brand embrace the larger circles, the greater opportunity for reach, trust –and risk. I hope you use this graphic in your planning docs and presentations, it’s licensed under creative commons as Attribution-NonCommercial-ShareAlike Creative Common. Graphic assistance by Christine Tran, @christineptran Role and Description The Opportunity: Who’s Doing It Right: What no one tells you: Prospects : Those that are not yet customers. Engaging soon-to-be-customers during their problem and pain stages and focusing them on your solutions is the goal. Build lifestyle communities to engage them in a ‘bigger-than-brand’ discussion such as CVS’s community for caretakers . You’ll really need to let go of hard marketing styles and focus on what IBM’s senior marketer Sandy Carter calls “light branding”. Make sure you have a community kickstart plan. Customers : Existing buyers, some which are super engaged and vocal in the space. Enabling the voice of the customer has been a mainstay belief for product development, but most companies have not harnessed them for marketing and support. Build an active advocacy program that encourages them to fight your own battles like Intel Insiders , Microsoft MVP , Wal-Mart’s 11 moms program. Bazaarvoice enables companies like BestBuy to have ratings and reviews on their site –increasing flow through funnel Customers will love and hate you alike. If you harness their voices, expect to let both types of information come through in a strategic way. The trick? Use complaints as an opportunity to show openness and customer response in public. The savvy brands will trigger advocates to deal with detractors, use this checklist to get started . Employees : Rank and file as well as ‘approved employees’ who are enabled to use social. Regular rank and file customers that are knowledgeable about products and are close to customers are likely to be more trusted than veneered executives. Give your own rank and file the opportunity to voice their opinion like Premier Farnell gave many of their employees the ability to publish their own videos on a community like Element 14 . Employees need guidelines, training, and processes. Don’t leave your company or your employees exposed, develop internal training programs, regular communications, and a place to share. See how Intel has created a light weight ‘certification’ program for employees who participate in social Corporate : The traditional and centralized communications group and sanctioned company representatives Corporate comms can benefit from social tools that allow the spread and sharing of company messages, and they can also build a social platform to stand on in order to fend of critics See how SouthWest Airlines has built a corporate blog for years, which gave them the standing power to fight back against detractor Kevin Smith. Also, see how Domino’s President used online video to respond in a human and more trusted way during an employee health crises. Lots of retraining when it comes to rethinking the approach in this space. Stop and breath, develop a measured set of steps a framework, control is not completely lost if you have a balance. This is an opportunity more than a threat. Harness All The Voices In Your Ecosystem –Not Just Corporate Communications Brands should stop focusing on the corporate ring alone –and benefit by using all the rings in a coordinated fashion. I’ve broken down the roles into subsets in the above matrix, yet there are some key baseline considerations as your deploy, remember to: Recognize that greater opportunity is abound at outer rings –but comes with increased risk. Brands are most comfortable operation in the inside rings, like ‘Corporate’, yet the greatest opportunity to leverage trust and reach happens at the outer rings of influence with ‘Customers’ and ‘Prospects. Map the rings to your existing customer experience timeline. These rings aren’t unlike traditional marketing funnels, except that there’s a focus on role and trust, over cycle. In most cases, prospects are in the outer mouth of a funnel, but customers, employees, and corporate can also participate in every step of the marketing funnel. Analyze which roles are needed in what aspects of the customer timeline –and map your strategy accordingly Be pragmatic, and develop a roadmap: start with smallest ring and move out. Don’t jump on the largest ring of prospects without first getting grounded. Start at the inner circle and work you way out, building a foundation at the core and building on success and safety in experience. Companies that try to address prospects but lack the internal resources and ethos to deliver may find themselves offering false promises. This single graphic represents an entire presentation I’m developing for internal client workshops or keynote presentations at marketing and business conferences. I love to share, and want to get your feedback in the comments below. Update: Mitch has also extended the conversation in the Social CRM pioneers Google Group, watch it unfold and participate in the group.

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Framework: Rings of Infuence

Google Introduces Search Funnel, Ad Innovations

cgseo — Thu, 01 Apr 2010 03:00:00 +0000

Today Google introduced two new elements to its popular advertising system, a Search Funnel and something it is calling Ad Innovations . The company's VP of product management, Susan Wojcicki, described the Search Funnel as a "set of reports describing the Google.com search ad click and impression behavior leading up to a conversion." Sponsor The idea is that users of the Sales Funnel will, over time, tighten and focus their use of Google Ads to such a degree that they will be able to sell a grommet to an Albanian from outer space. "The data you see in Search Funnels can help you understand how users search for your products before converting so that you can optimize these conversion paths." Ad Innovations is a specialist website Google has set up to "work closely with advertisers on what comes next." They intend to use the space to debut ad-tech ideas and solicit user feedback. Photo by Danny Sullivan. Discuss

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Google Introduces Search Funnel, Ad Innovations

Augmented Reality Among Time’s 10 Tech Trends for 2010

cgseo — Thu, 25 Mar 2010 10:00:00 +0000

Thanks to the growing popularity of mobile augmented reality (AR) applications such as Layar and Wikitude , as well as countless advertising campaigns from corporate giants, AR is beginning to make its way out of the shadows of obscurity and into popular culture. Once an experimental technology left for expert engineers, AR is becoming more and more accessible to both developers and consumers of the experiences. Now, the greater AR community has another feather for its cap as Time Magazine has recognized it as one of its 10 Tech Trends for 2010. Sponsor "One challenge for 2010 will be harnessing the growing ubiquity of webcams and smart-phones to make augmented reality useful as a tool in day-to-day life," writes Time's Dan Fletcher, pointing out the U.S. Postal Service's virtual box simulator that helps customers determine what size box to use by holding the item they are shipping up their webcam. Unfortunately, Fletcher merely skims the surface of AR in his 10 part article published Monday, and in doing so he unintentionally labels players in the mobile AR space as "gimmicky." I can see how it would be easy for someone investigating AR iPhone apps to be overwhelmed at the plethora of apps that let you shoot things in an augmented first-person perspective, but it is still disappointing that he failed to notice the quality apps in the space. But hey, it's still great for us augmented reality fans to see our beloved emerging technology receive national notoriety in a publication such as Time, so we'll take what we can get. AR snagged the #4 position on Time's list, but when you look at some of the other trends listed, you notice that AR is already taking advantage of most, if not all of them. Time's #1 tech trend for 2010 is location, and it points out the growing popularity of services like Foursquare and Gowalla . Mobile AR applications have been taking advantage of location data since day one and it continues to play a crucial role. After location comes "building platforms, not websites," which Layar has been developing with their third-party POI data-sets and their upcoming layer marketplace . Good thing "frictionless payments" is another trend to watch for in 2010, otherwise Layar's marketplace would be ahead of its time. Also on Time's list is social gaming, and social objects, immediately reminding me of Tonchidot's Sekai Camera app which lets users leave AR objects in physical space for people to interact with through the application. One could argue that AR uses all of the other nine technologies featured on Time's list with the exception of the iPad, which unfortunately has no camera with which to augment our realities. On a related note, Layar co-founder Claire Boonstra was named to Laptop Magazine's list of the most influential women in technology . Alongside Boonstra was Google 's Marissa Mayer, Caterina Fake of Flickr and Hunch fame, and Melinda Gates. This, as well as Time's inclusion of AR on their tech trends list, is great exposure for augmented reality. If you'd like to learn more about how companies are using augmented reality for marketing in both desktop and mobile-based experiences, be sure to check out our latest premium report on the subject which was released earlier this week. Discuss

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Augmented Reality Among Time's 10 Tech Trends for 2010

"Super Angel" Firm Maples Investments Rebrands as FLOODGATE

cgseo — Wed, 24 Mar 2010 22:55:00 +0000

Silicon Valley angel investor Mike Maples Jr., known for his early investments in Digg and Twitter , announced recently that his firm Maples Investments has rebranded as FLOODGATE in an effort to fulfill his experiment of becoming a "super angel" firm. The term "super angel" mostly speaks for itself: instead of carefully picking a few select companies to invest in each year, super angels broadly place more money in a larger number of early-stage startups. Sponsor By making the shift from Maples Investments to FLOODGATE, Maples is jumping into the super angel game with both feet in attempts to take the firm to "the next level." He hopes that the creation of FLOODGATE will "address a big gap in venture capital" between seed level angel investments and larger rounds from traditional VC firms. According to the newly rebranded homepage, the super angel strategy is a response the growing number of startups, the falling number of IPOs, and the rising level of VC investments - all of which make finding early-stage funding more difficult. Additionally, the site offers that super angel investments can provide more exit options. "If a business raises a small amount of initial capital, then exceeds its early milestones and decides to swing for the fences, it can then raise a larger sum at a higher price, while preserving ownership," the site says. "If the business is not ready for rapid growth, it preserves the option for an exit at around $50 million, while still delivering a high return for investors. This dual-track model is less available to companies that raise large amounts of money early." Are we witnessing the birth of a new branch of venture capital? It is interesting to consider the gap that Maples is attempting to fill; smaller individual seed level angel investments at one end, and the hundreds of millions of dollars that VC firms have been known to invest at times. It certainly seems that there is an opportunity for endowed individuals to invest at a higher level than a typical angel would, but at the same time there are smaller VC firms that focus smaller investments on young companies. Can super angels sit in the space between angels and firms that target smaller amounts at early-stage startups? Will more of the larger firms begin to invest smaller amounts instead of waiting for the companies worthy of a nine-figure investment? Will angels start investing more of their own money closer to super angel levels? Is FLOODGATE's method of casting a wide net in hopes of catching one or big fish a wise choice? Will their approach put pressure on other angels to invest more or at a higher level? It is unclear what, if anything, will happen, but what is clear is that FLOODGATE plans to push more money into the early-stage startup market, which is great news for the entrepreneurs out there looking for funding. Let us know how you feel about the idea of super angels and their effects on the VC industry in the comments below. Discuss

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"Super Angel" Firm Maples Investments Rebrands as FLOODGATE

SenderOK: Email as a Facebook Connector and Social CRM Catalyst

cgseo — Wed, 24 Mar 2010 00:19:21 +0000

The effort to bring Facebook into the enterprise continues with more services using Outlook as a gateway to extend a contact network and use as a foundations for a CRM environment. SenderOK is one of the latest effiorts to give more context to email by showing a picture of the sender in an email message. Too bad it only works on Windows XP or Vista. Ugh. Sponsor But let's take a look at the service as we are seeing more services that use email as a foundation for a social CRM environment. SenderOK compares itself to Microsoft's Outlook Soclal Connector and Xobni , an email plug-in that provides a search and profile element for Outlook. But we hear a lot of criticism that Xobni is a memory hog and slows down computers. As one reader said about Xobni in our last post concerning Outlook plug-ins : "Interesting article, although I have my doubts about Xobni which I used for several months but had to uninstall as it had gotten to the point where it was nearly impossible to use (too slow). Harmony sounds promising; sharing documents in place of merely sending them as attachments (hence overloading the network) is becoming critical if one wants to keep only one copy and not scatter several around." To be fair, Xobni is the leader in this space compared to other services. They have a loyal following. It makes sense that companies like SenderOK would go after this sector of the market. SenderOK features include a smart mapping capability to give a view of the person's unread email across multiple accounts. It will also prioritize the email. Our interest stems from the SenderOK "business card" feature. Email includes an image of the person and their profile information in the header of the message. In Outlook Social Connector, the image of the sender blocks out the message. In Xobni, the image and contact information appears in a widget. We expect these services to proliferate as more startups turn their attention to Outlook as a way to build a user base. Xobni has proven that this approach works. Further, Google Apps now integrates with third party applications. Services such as Zoho CRM and Intuit are leveraging GMail integration to offer hybrid applications. Perhaps 2010 will be the year email is viewed more as a foundation than a nuisance to be eliminated. Discuss

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SenderOK: Email as a Facebook Connector and Social CRM Catalyst

Network as a Service: Open Source Enables Efficient Cloud Hosting

cgseo — Tue, 09 Mar 2010 19:30:00 +0000

To keep up with the growth of cloud computing and virtualization, networks keep evolving. But unlike Twitter's Trending Topics, IT budgets don't scale up. In fact one of the major initiatives in many IT shops is creatively reduce their own expense. To get to a scalable cloud infrastructure where costs are contained, it sounds like the network industry is going to see a time where a "Linux" arrives on the scene. An open source alternative to building networks may disrupt the networking landscape and give network admins an open source network operating system. Sponsor Virtualization: It's in the Network Too Distributing workload across machines, storage, and environments has required networks to be smarter than ever. Now, the network needs to be intelligent enough to not only route traffic both a bridge and a toll-gate, but to also provision and de-provision all aspects of the environment at a moments notice. Providers like Rackspace are in the business of using the network to optimize the performance of the entire data center. To be effective in keeping up with dynamic system provisioning, technical teams need access to all tiers of the computing environment to reduce operations overhead. In their innovation for efficiency, hosting providers, such as Amazon Web Services and Rackspace start to create new patterns - including ones in the core of the network - to get their job done. Network operating systems that are open, like Extreme XOS enable large scale hosting providers to look deeper into networking gear and start to tune it themselves. And enterprises may follow this trend. Servers Don't Sleep at Night, but Applications and Admins Do For a long time, networks have been used to detect the peers and devices. Many of us use the nearly ubiquitous DHCP (Dynamic Host Configuration Protocol), which is the the thing that automatically assigns IP addresses to a PC when plugging into the network. In an analogy, there is a need for a "super DHCP" is needed that can keep up with the highly virtualized cloud infrastructure per virtual instance. To do this, engineers look deeper to find efficiencies in how the network talks to the hardware and software for the virtual machines. A good example of benefit for this is where a resource has peak loads during the day. Due to natural usage, the applications compute power is not utilized during the night. Using monitoring and provisioning tools, the network can de-provision the extra hardware and offer it to another service. This "freeing up" allocation saves power and money. This is a simple example of where virtual data center solutions are being innovated in the industry to figure out how to further timeshare the computing resources. The network has the ability to help manage the scale down to the moment is enabled by it's reach to everything over IP (Internet Protocol). The Open Network Wins, Developers Rule Extreme Networks is betting IT leaders that have become very familiar with Linux and open source Hypervisors like XEN want to tweak the network. For the data center manager that wants to go into the core network engines innovate, there comes a need for APIs, SDKS, and open access libraries. Extreme's openness is in the form of web services, many offered that are offered as XML or CLI scripting that allow integrate tools into the core of the network via XML, and configure edge ports for security and VOIP access as dynamic provisioning. The company offers a code workbench of its own to download widgets to plug into the network. Designed for the open source developer, it shares the familiar pattern that presides in open source community for application frameworks and operating systems code sharing. Shown in the diagram, Extreme's network offers real-time provisioning of code widgets in the network. Play Nice: the Networks Worse Enemy May be Success Will the network evolve to see an open source player that drives change in pricing and value? In the rush to enable new efficiencies we wonder if this is an Apple A-HA moment in the making. The question seems to be can the giants in the space balance the fine line of better end-to-end experience of managing the environment and whether vendors do it best. If we follow the Apple example of industry success, and end-to-end play for the network may be in the cards. Last month, Juniper announced it has created a new business group and commitment to an Junos ecosystem. Juniper has made a big move towards open source innovation in it's recent re-branding and at least to one analyst, John Furrier from Silicon Angle, seems to be suggesting that Juniper Judo'sing Cisco, like Google did with Open and Microsoft . That probably doesn't feel the least bit nice to the market leader, especially when Cisco is priming it's engines for changing the Internet forever. Cisco Open IOS in 2007 a model towards compartmentalizing and opening IOS, as part of it's overall movement into a more software based organization.With the complex series of network enhancements and feature sets, it will be interesting to see how Cisco views "open" vs. "customizable" and where the control lives for network management and up-time. When visiting the Cisco IOS website today, we see the standard license and no clear mention of open source licensing. Cisco strikes the balance between open and controlled in it's a approach to defining what an open network is and where networks will be encapsulated as services. We wonder if Cisco deliver the capabilities to pull more traffic into it's end-to-end range, while open networking APIs rise as part of the network service stack. With this market, it's likely both. At very least, open networking has a role in determining the fate of the network and where territories are being defined. The Cloud is a Network of Services The cloud is defining a world where service orientation rules - both the software and physical layers. And, it is breaking the rules of workload distribution, where network topologies are changing. The requirements of connecting the layer 2 and layer 3 networks, as well as IT leaders that are building solutions for mass scaling (enterprises or service providers) are evolving and being driven by an ability to be efficient at the workload level. Extreme Networks Technical Brief, Dynamic Network Virtualization Overview , explains the value of plug and play network components in today's topology. "By leveraging Extreme Networks® ExtremeXOS®, a modular, edge-to-core operating system, and our extensibility frame-work including Universal Port Scripting and an XML interface, Extreme Networks is able to tightly integrate the switching network with the virtualization environment to create a virtualization-aware network fabric that automates the network-level virtualization required in next generation data center and cloud computing environments. This unique functionality enables Extreme Networks to provide seamless support of virtualization capabilities across the various hypervisor platforms, including Citrix ZEN, Microsoft and VMware. The highly integrated solution allows the Extreme Networks solutions to trigger responses to virtualization moves as they happen in the network by virtue of a tightly integrated XML-based network management framework." Extreme, and now Juniper, are moving in the direction of offering IT administrators control points in networks and protocols to optimize it opens the market. It looks promising to give administrators vendor leverage in buying services without vendor lock, or waiting for feature releases from the vendor. And, it mirrors the open-source movement in bringing communities together to solve problems and build compatible services. Open APIs may define the cloud's network of the future for large hosting providers. We wonder if for the enterprise. Photo credit: opensourceway Discuss

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Network as a Service: Open Source Enables Efficient Cloud Hosting

Weekend Reading: 17 Rules by David Russo

cgseo — Fri, 05 Mar 2010 20:00:00 +0000

For entrepreneurs trying to form a startup, one of the first challenges they face that persists throughout the businesses life is how to find and keep talented partners and employees. From finding that first co-founder to finding the prolific programmers to fill your ranks later down the line, talent acquisition is always a major step in any business. Just look at some of the deals that have gone down in the Valley; Facebook didn't buy FriendFeed for their technology, that deal was mostly about getting FriendFeed's talented employees on the Facebook team. Sponsor A new book from author David Russo, 17 Rules Successful Companies Use to Attract and Keep Top Talent: Why Engaged Employees Are Your Greatest Sustainable Advantage , seeks to make this process more clear for businesses. Russo is the CEO of Eno River Associates, Inc., which is a consulting service that helps business executives build better team relationships. Their portfolio of clients includes American Express, Johnson & Johnson, and the CIA. With his new book, Russo outlines the key strategies he has learned over the years as a consultant and human resources executive that has helped him and others create winning teams. The book doesn't waste any time getting into its 17 rules; after a brief introduction the entirety of the book consists of one chapter per rule. The rules cover a broad base of topics, including the more straightforward rule #4, "Provide Ample and Appropriate Resources," to the more abstract rule #12, "Understand Human Capital." One of the key rules that sticks out to me is #3, "Cultivate Leadership, Not Management, and Know the Difference!" "Whereas managers administrate, leaders have the power to influence, to motivate, even inspire, and those are distinctly different traits," writes Russo. "Indeed, true leadership is the ability to display attributes that make people want to follow." Russo points out that leaders need to have passion, vision, and energy, as well as recognize that each employee has value to the success of the business. He likens this value to a tight end in a football game running "a crisp pattern" and distracting the defense despite knowing before the play that he's not going to be the ball carrier. Another rule which will likely strike a chord with the startup culture is #10, "Make Room for Fun in the Workplace (Nurture Lightheatedness/Levity)." Anyone who has seen the popular workplace movie "Office Space" knows what a bland work environment can do to employees spirits, but I don't think we have to worry about startups not having enough fun on the job. Aside from being passionate about the job they're doing, most startup employees are probably used to everyday being "casual Friday" and taking a brain break in a game room. Granted, not every experience is like this, but we all know that many startups are a very relaxed environment, which Russo says is very important for attracting skilled employees and keeping them happy. Other important rules Russo includes on his list include knowing how and when to "cheerlead," acknowledging and rewarding efforts and contributions, and the lastly, telling the truth. While this book isn't aimed directly at startups, young entrepreneurs looking to lead their team to success should certainly take a look at this book. One of reasons I would suggest it is that at times, young entrepreneurs who have little or no workplace experience are suddenly thrust into a CEO role. If your company takes off, you might be in charge of a lot of people very quickly, and this book will certainly help keep them happy. Disclosure: A review copy of 17 Rules was provided to ReadWriteWeb by Pearson Education, Inc. Photo by Flickr user madebytess . Discuss

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Weekend Reading: 17 Rules by David Russo