November 16, 2009
Volume XXVIII, Issue 8
CES Partner Program Spotlight: P2P MEDIA SUMMIT
Excerpted from CES International News Report
This seminal industry event from the Distributed Computing Industry Association (DCIA) features keynotes from top peer-to-peer (P2P), social networking, and cloud-computing software companies; tracks on policy, technology and marketing; and panel discussions covering content distribution and solutions development.
If commercial development of this rapidly evolving channel for content distribution is your focus, then don't miss the P2P MEDIA SUMMIT at CES. Enterprise deployment as well as consumer adoption trends will be covered. Register for CES, and sign-up for this partner program, scheduled for January 6th.
A key theme will be the use of P2P and cloud computing for games. DCINFO readers can now view Abacast's archival video of the DCIA's first special event on this topic here.
P4P May Be Coming to a Network Near You
Excerpted from GigaOM Report by Stacey Higginbotham
Several Internet service providers (ISPs) in the US and around the world (including a large Chinese ISP) are currently implementing P4P technologies on their networks to help improve the efficiency of P2P file transfers, and they will soon be joined by other ISPs doing the same. Indeed, P4P activities that were showcased in August 2008 are taking on more relevance as broadband demand escalates and the FCC tries to regulate the principles by which carriers can deal with traffic on their networks.
In the August 2008 tests, which were performed by Comcast, Verizon, Yale, and Pando, users reported seeing see an 80% improvement in speed for P2P files using the technology, while it reduced traffic on the ISP network by 34%. That's nothing to scoff at considering P2P traffic accounts for 38% of global Internet traffic. So after more than a year of relative quiet, I checked in to see where the P4P efforts currently are.
The good news is that P4P is alive and well and several researchers and ISPs are testing its use for P2P downloads such as BitTorrent as well as for live P2P streaming, which could help alleviate two of the largest anticipated sources of increased traffic on the web. Some popular P2P streaming applications consumers may have encountered are Spotify, the EU music service, and Octoshape, the company that streamed the Obama inauguration and works with CNN. Abacast offers live P2P streaming solutions to commercial broadcasters.
The standards-setting process that involves P4P and related proposals from other parties is still underway at the IETF (the topic was on the agenda at a meeting in Hiroshima this week) so there's no official protocol to report on yet, but we're "halfway through a 2-to-3 year process," said Marty Lafferty, CEO of the Distributed Computing Industry Association (DCIA), which works with the P4P Working Group (P4PWG).
There is a common goal to develop a protocol that provides P2P applications information from ISPs that can help use their networks more efficiently and improve application performance. The other approaches suggest alternative methods for providing such guidance to applications and extensions to allow for a wider array of usage scenarios (e.g., resource-constrained devices like mobile-phones).
The lack of an industry standard isn't stopping anyone from testing out P4P technology in their own networks, however. Robert Levitan, CEO of Pando Networks, which participated in the August trials, says companies are already coming to Pando to implement P4P-like technologies. One large US and one international ISP are using P4P technology commercially on their networks, he said, and a Chinese ISP is testing it as well.
The technology does have challenges to overcome. P2P file sharing can be abused for infringing copyrighted works, and rights organizations aren't keen on losing ISPs as an ally in their fight against unauthorized content distribution.
Another issue is the coming net neutrality debate in the US. Lafferty says that if the FCC codifies rulemakings prematurely, compliance efforts by both ISPs and software developers with these rules could divert resources from collaborative efforts such as P4P, and that would be unfortunate. Participation by ISPs in the P4PWG has been tremendous to date, but there's a question as to whether prioritizing P2P files by using P4P would violate future net-neutrality rules.
However, at a time when network congestion is already a topic of federal debate, getting more information out about ways to relieve it can only be a good thing.
Report from CEO Marty Lafferty
 This week, Bessemer Venture Partners released its Top 10 Laws for Cloud Computing, which provide important principles for practitioners at all levels of distributed computing, including those who specialize in P2P, grid computing, file sharing, and other related technologies, including those that support advanced social-networking architectures.
Software-as-a-Service (SaaS), Platform-as-a-Service (PaaS), and Infrastructure-as-a-Service (IaaS) - the three levels of cloud computing - are rapidly changing the basic economics of the multi-billion dollar software industry.
SaaS, the largest and most mature segment, is comprised of end-user applications, including many P2P and hybrid peer-assisted solutions. PaaS is evolving rapidly in the areas of intelligent provisioning and network management. IaaS serves as the foundation layer for such aspects as storage, compute, back-up, database, and security; and is also experiencing dynamic growth. Following are Bessemer's top-ten laws to help drive software success in the cloud.
#1: Less is more! Leverage the cloud everywhere you practically can, both for your internal systems as well as for your own product offering(s) and "just say no" to on-premises deployments! This will not only give you a direct understanding of the customer experience and best-of-breed strategies of cloud businesses, but it will free-up your technical resources and balance sheet to focus on your core product and customers. (Read more on Bessemer's Cloud Law #1.)
#2: Get instrument rated, and trust the 6Cs of cloud finance. Any good pilot (CEO) knows that you can't fly in cloudy weather without an instrument rating, yet many CEOs are attempting to do exactly that. Build and trust your CEO dashboard. Your key business metrics must include: 1) Committed Monthly Recurring Revenue (CMRR), 2) Cash Flow 3) CMRR Pipeline (CPipe) 4) Churn, 5) Customer Acquisition Cost (CAC), and 6) Customer Life Time Value (CLTV). (Read more on Bessemer's Cloud Law #2.)
#3: Study the sales learning curve and only invest behind success. Years ago, Bessemer was fortunate to invest behind Mark Leslie at Veritas, and as a result became a big believer in the Sales Learning Curve (SLC), a concept Mark helped pioneer. The core concept is that software organizations often fail because they staff-up their sales efforts too quickly, before the sales model has been refined. This concept is even more critical for cloud businesses, given the large upfront investment required to acquire customers. Ramping up too quickly will burn precious cash reserve and could sink the business. This typically means you should hire sales reps slowly upfront, only focus on your core geography until your business starts to scale considerably, and separate your "hunters" and "farmers" as you start to ramp. (Read more on Bessemer's Cloud Law #3.)
#4: Forget everything you learned about software channels. The Internet is your new channel and technology-enabled service providers are among the few partners that actually care if you succeed. It is now possible to reach customers in a 1:1 fashion as never before, with freemium models, limited trials, access-based pricing, and very low friction processes overall, giving the nimble start-up a sizable advantage over many of the traditional incumbents. (Read more on Bessemer's Cloud Law #4.)
#5: Build Employee Software. Employees are now powerful customers, not just their managers! We're witnessing the "Consumerization of Software" so focus on ease-of-use. The gig is up. Pandora's box is open. Your customers all now know that software doesn't have to suck anymore. They use rich Internet applications including Facebook and Skype to communicate with their friends; they use LinkedIn to manage their business networks, Google or Wikipedia/Wikia to find accurate online content, Yelp to find restaurants, and Travelocity to book flights. Products will now see rapid adoption by virtue of being intuitive, aesthetically appealing, and dynamic as opposed to deep and complex. (Read more on Bessemer's Cloud Law #5.)
#6: By definition, your sales prospects are online - Savvy online marketing is a core competence (sometimes the only one) of every successful cloud business. You sell a product that requires an Internet connection and a web browser for access, which means your prospects are online! Numerous studies show that your customers are now doing most of their primary research online, and this should not surprise you. In this new era, the creative elements of marketing are becoming secondary and quant jocks and analytical wizards are starting to take over the CMO and VPM positions. At the marketing executive's fingertips should be detailed reports showing pipeline sources, costs per lead, funnel conversion rates by stage, costs per acquisition by source and campaign, effectiveness by channel, and so on. The most advanced marketing executives are also starting to embrace social media and to do multimodal attribution analyses. (Read more on Bessemer's Cloud Law #6.)
#7: The most important part of SaaS isn't "Software" it's "Service!" Support, support, support! The only acceptable reason to lose a customer is death (bankruptcy) or marriage (acquisition). Every cloud company is in the service business, and therefore your customer service can be the difference between failure (churn) and huge success via high retention and up sells. Given the growth of employee software and the fact that many customer orders are starting very small and growing very large over time, you may find that up sells from account management become more critical to your long term business model than the initial sale itself. (Read more on Bessemer's Cloud Law #7.)
#8: Leverage and monetize the data asset. While cloud computing is about providing a subscription service to your customers, one of the happy consequences is that you end up hosting their data. This becomes a critical asset that you can monetize by increasing the value of your offering; by leveraging it across your customer base in the form of benchmarks; or for specific businesses, by using the data to generate leads (within the contracted obligations). In these difficult economic times, where prices are under pressure and customers are tightening their budgets, data can be a difference maker. (Read more on Bessemer's Cloud Law #8.)
#9: Mind the GAAP! Cloud accounting is all about matching revenue and costs to consumption as well, except for professional services! For a recurring revenue model, even if the cash is collected upfront, the revenue needs to be recognized ratably over the lifetime of the contract. In addition, the revenue recognition cannot start before the service goes live, to ensure that revenue will match consumption. According to GAAP, professional services for recurring revenue businesses are also tied to the subscription service, and therefore cannot be accounted for separately. In this respect, even if the professional services are delivered only over the first few months of the contract, the revenue recognition needs to match at least the length of the contract. (Read more on Bessemer's Cloud Law #9.)
#10: Cloudonomics requires that you plan your fuel stops very carefully. There is no denying that the cash flow characteristics of a cloud business are wonderful in the long term, but can be lousy in the short term. Cloud companies require you to fund research, development, sales, and marketing upfront in return for a multi-year stream of revenue. This typically demands enough investment capital (over stages) to fund 4+ years of runway before a company can achieve positive cash flow (GAAP profit is even longer). Imagine you are flying a private plane from Silicon Valley to Wall Street (which sometimes is the figurative or literal goal), and you need to stop a couple of times for fuel (investment capital) for the trip. It is critically important that you plan your equity and debt financing events in advance to maximize value and minimize dilution. (Read more on Bessemer's Cloud Law #10.)
BONUS LAW: You can ignore one or two of these rules, but not more - Great companies innovate, but pick your battles! (Read more on Bessemer's Bonus Cloud Law.) We hope that most or at least some of these "Bessemer Cloud Laws" will be of value to your work in the distributed computing industry. If you have questions or comments, please send them to cloudvc@bvp.com. Share wisely, and take care.
LimeWire Appoints Two Vice Presidents
LimeWire has named John Pavley as Vice President, Engineering and Shoshana Winter as Vice President, Marketing; it was announced this week by George Searle, LimeWire CEO. Both positions report directly to Searle and are effective immediately.
As VP, Engineering, Pavley will develop and lead LimeWire's world-class engineering team. Pavley comes to LimeWire from Conductor, where as Chief Technology Officer (CTO), he led R&D, development, technical operations, and IT for the company.
Prior to Conductor, Pavley was CTO of ContextWeb, where he managed R&D, development, technical operations, QA and IT with both local and offshore resources. He joined ContextWeb after a term as VP Business Systems Engineering for Yahoo Search Marketing. At Yahoo Search Marketing, Pavley oversaw a team of over 120 engineers responsible for building user interfaces, reporting systems, data pipelines, and optimization applications.
In the newly created position of VP, Marketing, Winter will develop and lead LimeWire's brand strategy, marketing, and public relations, and evaluate new opportunities for the company.
Winter comes to LimeWire from Motionbox, where she was Chief Marketing Officer (CMO). There, she developed and executed brand positioning for the online personal video sharing service, helping to differentiate its market position from other online video providers. She created a multichannel acquisition program to support the subscription service and helped develop a partner marketing strategy to increase product distribution.
Prior to Motionbox, Winter was SVP/GM, Marketing for Audible, the leading provider of subscription-based digital audio content. There, she was directly responsible for the complete rebranding, repositioning, and redesigning of the content service, which resulted in quarterly double-digit subscriber growth.
QTRAX Names Schulhof to Advisory Board
QTRAX, the free-and-legal, ad-supported P2P music download service, announced that David Schulhof, Co-Founder & Co-CEO of Evergreen Copyrights, has joined the company's Advisory Board.
Evergreen Copyrights publishes and administers more than 65,000 copyright titles across diverse music genres including Michael Jackson, Eric Clapton, Tupac Shakur, Dr. Dre, MC Hammer, Bill Monroe, Snoop Dogg, Alison Krauss, Joey Ramone, and Third Eye Blind among others. Schulhof formerly was Vice President of Motion Picture Music for Miramax and Dimension Films where he produced or executive-produced over 100 soundtracks.
"I am very pleased to be part of QTRAX's Advisory Board as the company works on rolling out the first free-and-legal music downloads," Schulhof said. "QTRAX's mission represents a great step forward for the industry."
"We are very gratified to welcome David to the QTRAX Advisory Board. His counsel will be invaluable as we pursue our global rollout and continue to bring QTRAX to market for fans looking for a free-and-legal music alternative," said Allan Klepfisz, QTRAX CEO.
Playdom Raises $43 Million for Social Online Games
Excerpted from Digital Media Wire Report by Mark Hefflinger
Playdom, a developer of online games for social networks whose titles include "Mobsters," has raised a $43 million first round of funding, led by New Enterprise Associates, TechCrunch reported.
Lightspeed Venture Partners, Norwest Venture Partners and Playdom Chairman Rick Thompson also participated in the round, which values Playdom at $260 million.
Mountain View, CA based Playdom competes in the social games space with Zynga and Playfish - the latter of which was acquired this week by Electronic Arts for $400 million.
The company claims 28 million monthly gamers, more of whom are currently playing on MySpace than Facebook. Playdom said it plans to use the funds for acquisitions and to expand game development.
Activision's MW2 Sells 7 Million Copies in 24 Hours
Excerpted from MediaPost Report
Beth Snyder Bulik writes in Ad Age that it "looks like a marketing mission accomplished for videogame publisher Activision and its agency, TBWA/Chiat/Day, Los Angeles."
That's because more than 7 million copies of Modern Warfare 2 (MW2), which features a P2P-based multiplayer component, sold within 24 hours, according to VGChartz. It also estimates that sales will go over 10 million for the week, surpassing the record 5.9 million copies of "Grand Theft Auto 4" that sold last year.
TBWA won a creative shoot-out this summer that asked agencies to create a campaign that would make the game the "biggest entertainment launch of all time." Snyder Bulik points out that "Harry Potter and the Half-Blood Prince" holds the title for an opening weekend with $302 million in worldwide box-office sales.
Unaided awareness of the launch date for "MW2" among gamers was 12% vs. 2% for that of an average video game release, with 46 reporting seeing an ad on TV, according to Nielsen. Another 30% said they heard about the game via word-of-mouth, and 28% saw an online review or preview.
Gaming Network Playfire Financing Led by P2P Pioneers
Excerpted from Gamasutra Report by Chris Remo
Playfire, a multi-platform gaming social network, has raised $2.1 million from several gaming and tech notables, including investment firm Atomico Ventures and Atari CEO David Gardner.
The site allows gamers to register the titles they own for Xbox 360, PlayStation 3, PC, or other platforms, and interact with other gamers. It was founded in 2007 by Kieran O'Neill, a self-described "serial web entrepreneur" who sold the online video HolyLemon.com that same year, and also co-founded the platform-specific site PlayStation Universe.
Atomico Ventures was co-founded by Niklas Zennstrom and Janus Friis, the creators of successful P2P-based web services Skype, Joost, and Kazaa.
Gardner has been the CEO of publisher Atari since 2008. Prior to that, he served in various executive roles at Electronic Arts, where he worked for over 25 years. More recently, he has been involved in his own investment activities, including participating in the latest funding round conducted by Unity engine developer Unity Technologies.
According to Playfire's official site, the service is in beta and tallies 245,000 users and 40,000 games. Interestingly, it seems to be disproportionately populated by PlayStation 3 gamers, likely a partial product of its co-founder's PlayStation Universe site as well as Playfish's proprietary PlayStation Network "Trophycard" widget.
Consoles Morph Well Beyond Their Gaming Roots
Excerpted from US Telecom Daily Report
Videogame consoles, such as Microsoft's Xbox 360 and Sony's PlayStation 3 are, according to a Wall Street Journal report, morphing beyond their gaming roots and becoming full-fledged distributed computing entertainment platforms.
Later this month, for instance, Microsoft will add a number of key features to its Xbox Live online service that will allow users to stream music, download movies, and access social-media networks.
Game Developer Redlynx Promotes Game via BitTorrent Sites
Excerpted from ZeroPaid Report
Redlynx, a multi-platform game developer based in Helsinki, Finland, is uploading a scaled-down promotional version of Trials for the PC to BitTorrent tracker sites.
CEO Tero Virtala says the promotional version lacks support for leader-boards, a crucial game element. He hopes that users will want to purchase the full-featured version after trying the scaled-down trial version.
"File sharing is here, so how can we take advantage of that? What we did actually, on day one, was to put our game immediately on all the torrent networks ourselves," said Virtala, during a recent panel discussion at Develop Liverpool, according to Game Industry.
It's an interesting move by Redlynx, and should serve as a lesson to others trying to figure out how to harness file-sharing networks.
File sharing is here to stay, and so content creators need to figure out how to maximize the exposure it can generate for their work while simultaneously creating a revenue stream. Redlynx seems to have developed a perfect middle path.
File Sharing Leads Developers to Consider New Business Practices
Excerpted from Edge Report by Alex Wiltshire
A new survey from The Independent Game Developers' Association (TIGA) suggests that 50% of UK game developers are looking to new practices, while only 10% view the actual threat from file sharing to their businesses as high.
60% of respondents, each a member of the UK trade association, see infringement as a problem for their businesses, and 90% see it as a rising issue. But 60% regard the actual threat of infringement - in the form of file sharing - to their businesses as low, with just 20% assessing it as medium and only 10% as high.
Still, 50% of the developers are considering different ways of doing business as a result of unauthorized file sharing, with 75% of these considering digital distribution, subscription-based services, or ad-supported free games, and 25% considering working with publishers to address the issue.
The reaction spurred TIGA CEO Richard Wilson to state that it shows how pragmatic the UK industry is proving in the face of infringement: "The results of the TIGA survey clearly demonstrate that UK developers are taking the initiative when dealing with the issue of infringement and looking for new ways of delivering content and communicating directly with their consumers."
"Developers are not complacent in dealing with this problem and are mostly seeking to find solutions for themselves rather than simply relying on the government to solve the problem."
Digital rights management (DRM), however, proves a contentious issue, with 50% of respondents regarding it as irrelevant, 30% as the solution, and 20% as the problem. And so does government intervention by slowing or cutting off broadband of unauthorized file sharers - respondents were split equally down the middle in agreeing and disagreeing that this was a good idea.
The Direct Effect of In-Game Advertising
Excerpted from Adotas Report by Gavin Dunaway
In-game advertising has been a multimillion dollar industry for several years - brand awareness was evident, but a new partnership between comScore and Massive, a wholly owned subsidiary of Microsoft, will show advertisers the direct effect of their advertising efforts.
Ad Effx Action Lift for Gaming will combine in-game console ad-serving data from Massive with comScore's post-campaign panel data to determine if viewers of ads subsequently visited a brand's website, searched for a brand through related terms, or engaged with the brand in some other online fashion such as social media. The measuring is akin to ad tracking in other digital media and ensures consumer anonymity and privacy.
"We know from 80-plus independently verified post-campaign studies that in-game advertising increases brand engagement," said JJ Richards, general manager of Massive. "But what we didn't know was the correlation between in-game ads and consumer action. Through this partnership with comScore, we will also now be able to measure those consumer actions that result from in-game ads."
ComScore reported some impressive numbers with its preliminary data, including a 280% increase in visits to a TV channel's website after users were exposed to an in-game ad. In addition, the company discovered a 125% increase in searches for a movie rental brand and 57% hike in visits to its website. There was also a 17% jump in visits to entertainment websites after players saw ads for certain films.
Microsoft Bans a Million People from Xbox Live
Excerpted from IT Chuiko Report
Microsoft blocked access to a million Xbox Live players around the world. The reason for this decision was the presumption that those users modified their game consoles so that they could run unlicensed copies of games - for example, downloaded from file-sharing networks.
"All customers should be aware that infringement is unlawful and that modifying the Xbox 360 violates conditions of use and will invalidate the warranty and cause the ejection of Xbox Live," Microsoft said in a statement. The health of the videogame market depends on whether customers are paying for genuine products and services, argued the company from Redmond, WA.
Information about blocked access to the service coincided with the release of the highly anticipated "Call of Duty: Modern Warfare 2." Copies of the game appeared in file-sharing networks before the official introduction of sales. Xbox Live, which supports interaction with other players and buying games, reaches a network of more than 20 million people.
Xbox 360 is equipped with digital rights management (DRM) to detect proper licensing of games run on the device. Banned users can still use their consoles, if they do not connect to the Internet.
Vatata Releases Flash Streaming Media Based on New Model
Vatata, a famous P2P streaming solutions provider, has released a new MeshStreaming System, enabling users to directly connect to streaming media content by a standard Flash player or, through a P2P client, change to P2P networks and view relevant content. In this case, a streaming media operator does not have to redeploy a streaming backend system, and the MeshStreaming system can support computing/storage (C/S) and P2P simultaneously by one deployment.
The secret of the mash-up system is this: the MeshStreaming system itself can play two different roles. First, it can act as a standard streaming media server. Second, it can act as a P2P streaming media server.
The advantages for doing so are self-evident. For a streaming media operator, the system can flexibly take the expansion of a whole system into consideration. The operator can either expand the backend streaming media server by a content delivery network (CDN) or turn on the P2P switch to enhance the system performance by adding peer nodes to the whole network. The two methods can also be used simultaneously.
MeshStreaming can support two applications: video-on-demand (VOD) and LIVE. It is compatible with several multi-format media files and transfer protocols. Users can easily visit the backend system by a Flash player and experience the high-definition (HD) VOD and LIVE media files based on H.264 code. As for its one node performance, MeshStreaming can also satisfy applications and application expansions of different scales.
MeshStreaming's simple and flexible deployment makes it easy to meet various needs. Small companies can quickly build their own streaming media systems and provide services to their clients. Moreover, MeshStreaming can also meet the needs of cloud computing service providers of streaming media.
Forget Shaking, New iPhone App Knocks
Excerpted from Online Media Daily by Mark Walsh
Start-up Pointy Heads Software hopes to make "knocking" synonymous with live content-sharing on mobile phones. The Danbury, CT based company has released a new iPhone application that promises to let users share photos with other iPhone owners instantly without having to go through the usual uploading and downloading process via the web.
The company refers to its direct mobile-to-mobile file-sharing technology as "knocking" and plans to launch a series of apps based on the software it likens to screen-sharing tools used online for presentations or video conferencing. "We're not storing any large amounts of data, so where someone may be struggling to send five pictures via e-mail we can send up to 100," said Jim Montalto, Co-Founder of Pointy Heads, launched in March.
After setting up an account and creating a photo album through the company's Knocking Live Pic Sharing app, a user sends an alert through the Apple push-notification service that results in a message and a knocking sound (instead of a ring) on the iPhone of a friend who also has the app installed. The photo-sharing session begins when the other person responds.
In addition to sending up to 100 pictures at a time, the app lets the recipient browse the photos at their own pace while the friend who sent them looks on - simulating sitting together to flip through a print photo album. (A live chat feature is planned for future versions.) People who receive photos can also send ones they want to their own devices.
So far, the Live Pic Sharing app has earned a rating of three-and-a-half out of five stars in the iTunes App Store, based on ratings from 32 users. The 11 reviews were mostly positive, although some suggested the user interface could be improved.
While the photo-sharing app at launch can only be used among iPhone users, Pointy Heads plans to make it available on Android, Symbian, and BlackBerry phones starting early next year, as well as enabling use across different handsets. To help spread adoption, the company is offering the first 50,000 downloads free, but will begin charging $1.99 for each after that.
Pointy Heads also intends to roll out "knocking" apps for sharing other types of content including streaming video. "The knocking suite will expand to other things you might want to share from your phone to others," said Montalto.
Libox Shares Your Music, Movies, and More on a Private Network
Excerpted from Lifehacker Report by Jason Fitzpatrick
For Windows and Mac users, Libox makes it easy to share music, movies, games, and photos with your friends in a private P2P network.
After installing the Libox media browser and importing your media, you can share with friends - they must be using the Libox browser also - as easily as if you were sharing a link to a collection of pictures online.
Your data isn't stored on the Libox servers; their servers just facilitate a connection between your client and that of your friends. You can also use Libox to sync media among your own computers.
A very alpha-feature allows you to browse your collection through a web browser instead of the desktop client, but currently it only works if you're not blocked by a firewall, so it's limited to local network browsing.
Cloud Looking SaaSy
Excerpted from MediaPost Report
Software-as-a-service (SaaS), which has emerged as a key battleground for industry titans like Google and Microsoft, will be a $14 billion industry by 2013, according to new global research from Gartner.
This year, SaaS, aka cloud-computing services, is on pace to grow 17.7% from $6.4 billion in 2008 to $7.5 billion. "I don't find the numbers too surprising," writes Network World's Jon Brodkin, "but the success of SaaS is in stark contrast to many other portions of the recession-plagued IT industry."
"Microsoft, for its part, continues to grow its cloud offerings," notes the Seattle Post-Intelligencer. "Office Web Apps, part of the upcoming release of Office 2010, will take on Google Apps and Microsoft continues to finalize Windows Azure, a platform for developers who want to create cloud applications."
Yet, while "The cloud is a great place for people to work, for technology development to progress and meet the needs of businesses, a much broader way of thinking must be adopted," writes The Next Web. "Businesses will continue to work from the desktop. To be blunt, there is a certain amount of security that having a door which locks and a hard drive which you can close down provides. When you also consider that Internet connections are not guaranteed for 100% of the time, to maximize productivity, there will always need to be a trade-off between cloud and local computing."
Those concerns, however, didn't stop the city of Los Angeles from just recently voting to outsource its e-mail system to Google. LA is the largest city in the nation to make the move, which is a major victory for Google in its quest to become a software provider to the world. Over the coming year, the $7.25-million contract will move all 30,000 city employees to Google's so-called "cloud."
"The adoption of SaaS continues to grow and evolve within the enterprise application markets," said Sharon Mertz, Research Director at Gartner. "Adoption of the on-demand deployment model has continued to grow as on-demand vendors have extended their services through alliances, partner offerings, and more recently, by offering and promoting user application development through platform-as-a-service (PaaS) capabilities."
The content, communications and collaboration (CCC) market and the customer relationship management (CRM) market continue to have the largest amount of SaaS revenue across market segments, with the CCC market generating $2.6 billion in 2009 - up from $2.14 billion in 2008 - and the CRM segment generating $2.3 billion in 2009 - up from $1.9 billion in 2008.
According to Gartner, SaaS has continued to represent a key driver of growth in the CRM market for the past four years, climbing from less than $500 million in 2005 and over 8% of the CRM market to over 20% of the market in 2008, with nearly $1.9 billion in revenue. Gartner expects growth to continue, with SaaS representing almost 24% of the CRM market's total software revenue in 2009.
VODO Embraces BitTorrent to Distribute Movies
Excerpted from NewTeeVee Report by Janko Roettgers
UK-based peer-to-peer television (P2PTV) platform VODO published its second feature film on dozens of file-sharing sites Thursday, hoping that worldwide exposure will bring in donations, subscriptions, and traditional distribution deals. David Miller's documentary In Guantanamo, which is the result of a press tour of the controversial detention facility, has been downloaded around 15,000 times within the first 24 hours, according to VODO Founder Jamie King.
The site's first feature, Us Now, was downloaded around 250,000 times since its release in mid-October. Part of the volume is due to VODO's relationships with a number of well-known BitTorrrent sites, with isoHunt and The Pirate Bay currently featuring "In Guantanamo" on their front pages. VODO hasn't been quite as successful in making money from these downloads, but King hopes that a combination of one-off donations and a subscription level for documentary geeks and movie buffs will help eventually make the site sustainable and provide an additional revenue stream for filmmakers.
VODO is short for "voluntary donations," and King is no newcomer to the idea of giving content away in exchange for contributions from viewers. He is the maker of the pro-infringement documentaries Steal this Film and Steal this Film 2, both of which were released for free online. Viewers donated around $30,000 since the first part of "Steal This Film" was released three years ago.
The new site's first documentary "Us Now" hasn't been quite as successful yet. The film has brought in less than $1,000 in donations since its release in October, according to King. "If we can get it closer to $5,000, we'll be doing well," he told me, adding that he views donations as only one piece of the puzzle for filmmakers. King was able to sell his documentaries to several TV networks around the globe in part because the films were so successful online, and he hopes that others can follow in his footsteps.
VODO passes 100% of its donations directly onto filmmakers, but it also asks viewers to become paying members of the site. VODO supporters who pay around $5 a month get access to a pool of movies that are considered for distribution. "We've got around 15 films we're considering right now," explained King. Paying supporters can vote on which of these movies will get picked up for P2P distribution, and VODO also wants to organize online events with the filmmakers for these members. So far, around 50 people have signed up for this online film club. VODO hopes to grow this number to at least 1,500 in the near future.
King and his collaborators received grants from the Channel 4 British Documentary Film Foundation, the Arts Council England and the Emerald Fund to start VODO, with the total funding being just shy of $250,000. King isn't sure whether VODO will sign up corporate sponsors in the future. Right now, the funding is enough to keep the site and its development going for a year, and filmmakers seem eager to sign up. King told me that he has another dozen movies in the queue, and is talking to a couple dozen more filmmakers who want to get their movies out to P2P sites. "We're building the new world here," he said.
Filmmakers Thank File Sharing for Popularity
Excerpted from JustPressPlay Report by Arya Ponto
A newly released movie is uploaded and spread around on torrent websites. Surely the producers must be furious? Not so much this time. While the typical Hollywood studio frowns on movies being shared on BitTorrent, it's a different story for independent filmmakers. Producer-writer-director Jamin Winans and fellow producer Kiowa Winans are happy and grateful that their movie Ink is being embraced by torrent sites.
It seems that within days of being ripped, the little movie no one's heard of has enjoyed a sudden boom in profile. Case in point, IMDB indicates that the film rose 81,093% on their MovieMeter this week alone. That's a pretty staggering upstream no matter how you look at it.
Here is an e-mail the Winans sent via their company's newsletter:
"Over the weekend something pretty extraordinary happened. Someone BitTorrented the movie (we knew this would happen) and posted it on every torrent site out there.
What we didn't expect was that within 24 hours 'Ink' would blow up. 'Ink' became the number 1 most downloaded movie on several sites having been downloaded somewhere between 150,000 to 200,000 times.
Knowing there's absolutely nothing we can do about this, we've embraced it and are just happy "Ink" is getting unprecedented exposure.
As a result, 'Ink' is now ranked #16 on IMDB's movie meter and is currently one of the top 20 most popular movies in the world.
This all started as a result of the completely underground buzz that you've each helped us create. We've had no distributor, no real advertising, and yet the word-of-mouth that you've generated has made the film blow-up as soon as it became available worldwide.
So many of you came to see the movie multiple times, bringing friends and family and many of you have bought the DVD and Blu-ray from us. All of this built up and up and suddenly exploded.
We don't know exactly where this will all lead, but the exposure is unquestionably a positive thing."
The download total has risen to more than 400,000 as of this writing.
BitTorrent Hub Advances Next-Gen File-Sharing Network
Excerpted from APC Magazine Report by David Flynn
Two Scandinavian Internet service providers (ISPs) have won the latest round of court battles in attempts to shut-down popular Swedish BitTorrent hub The Pirate Bay (TPB).
A ruling in Norway's district court earlier this week will allow Norwegian ISP Telenor to continue allowing its customers to access TPB, despite efforts by the entertainment industry to have Telenor block the site. Telenor claimed that there was no legal basis requiring ISPs "to act in the interests of digital intellectual-property (IP) rights holders" by blocking individual websites.
The following day, Swedish ISP Black Internet won the right to appeal against a court order to disconnect TPB. Black Internet's CEO Victor Moller said, "This is such a fundamentally important issue as far as ISP responsibility goes. It is not important for us if we can deliver bandwidth to TPB or not - it is about the principle."
Meanwhile, BT hub isoHunt has opened invitations to its new Hexagon social file-sharing service in order to stress-test the system. Hexagon revolves around private and public groups, which users can create themselves and also control who is invited to join.
"These groups can be public, based on interests or made by independent bands, filmmakers, game studios, etc. for promotional purposes," explained the team at isoHunt.
"They can also be made private, so you can very easily and comfortably invite your friends to a private group for sharing your private videos and such. You can do this on YouTube and similar sites, but with BitTorrent, you can share any type of file - not only video - and there's no restriction on file format or size (as much as you can seed). In Hexagon groups, you can also share both torrents as well as Flash videos so you get the best of both worlds."
75% of Students Prefer Downloading to Streaming Music
Excerpted from Music Industry News Network (Mi2N) Report
A recent survey of 10,000 university students by the University of Reading, found that 75% of students download music, rather than buy in stores or pay for online music-streaming sites. Despite the recent popularity of music-streaming sites such as the P2P service Spotify, 75% said they wouldn't pay for a music-streaming service but would rather use download sites to acquire and keep tracks on hard drives or MP3 players.
The industry is in for a shake-up as more students and teenagers are looking at pricing and sites that offer songs without copy-protection technology known as digital rights management (DRM). This prevents customers from being able to copy music or play the MP3 music on devices other than Apple iPods or using iTunes player.
The industry is taking note of the growing demand for cheaper downloads; one such site that has already lowered prices considerably is TunesPro. Launched three months ago, the company has reduced the cost of its tracks already, to attract the younger customers.
A spokesman for TunesPro said, "We have seen a huge surge of younger people using our site, so our pricing must be competitive enough for the younger students with perhaps less disposable income than professionals. We keep our prices low and concentrate of making money through volume sales. Currently we charge 19c per song and offer a further 10% when a whole album is purchased. We believe this will attract the younger users away from iTunes, which charge almost 6 times more than we do."
Recording companies pick the prices, much as they did for CDs sold in stores and online. On day one, songs including "Jai Ho" from the "Slumdog Millionaire" soundtrack, "Single Ladies" by Beyonce and "Chicken Fried" by the Zac Brown Band were bumped up to $1.29. TunesPro has made agreements with a number of record companies and has decided to keep profits on single downloads at reasonable levels. iTunes has become greedy, but things look set to backfire as more and more download sites open for business and, like TunesPro, cash-in on the younger users by keeping prices low.
Spanish Culture Minister - No "3-Strikes" for File Sharers
Excerpted from ZeroPaid Report
The Spanish government has now officially rejected any plans to disconnect unauthorized file sharers from the Internet a la a "three-strikes" graduated response system.
Speaking to TVE1's "TVE Breakfasts" morning TV show, Culture Minister Angeles Gonzalez-Sinde said the government "is not considering punitive measures for the end-user of Internet."
Gonzalez-Sinde said it instead plans to "attack the origin of all these products that are on the websites, as well as those who benefit from them."
It comes after the recent decision by the European Union to drop a crucial amendment (#138) from its much anticipated Telcoms Package that would have prevented member countries from disconnecting file sharers from the Internet.
The country's Coalition of Creators and Content Industries, comprised of copyright holders from the music, film, and software industries, had already decided back in June to abandon plans for a "three-strikes" system after earlier government indications that it will refuse to enact legislation permitting them to do so.
"We have no desire to criminalize Internet users for unauthorized downloading," Coalition President Aldo Olcese said at the time.
The courts in that country have also regularly ruled both in favor of P2P as well for those file sharers who use the applications to share copyrighted material with others.
In July, Judge Raul Orejuda Garcia ruled that unlawful distribution requires something "tangible" to exist, like a website, and on which the actual sharing must occur. This doesn't happen in file sharing where the transfer of data occurs between individuals.
He said that simply making a file available is not an act of reproduction and that downloading content from others is not a "profitable use."
That case echoed a similar ruling by Spanish Judge Paz Aldecoa in November 2006 who found that since there was "no talk of money or any other compensation beyond the sharing of material available among various users" then file sharing didn't violate the tenets of the country's copyright laws since it was only about obtaining "copies for private use" which is legal.
In short, both recognized what the entertainment industry has thus far failed to, that file sharing is done for noncommercial gain and this clearly separates it from other forms of infringement.
Now if only France could tell the difference before it begins removing entire households from the Internet, and thus, arguably, society. Stay tuned.
Parting Shot: Cloud Control...
Excerpted from Digital Music News Report by Paul Resnikoff
Imagine, the entire catalog of recorded music (ten million, fifteen million, twenty million-plus songs) resting safely in the cloud, accessible from any net-connected device for a modest fee. Just think Spotify from anywhere - the US, a well-connected iPhone, wherever - and the ability to shift from PC to phone to stereo to automobile without a second thought.
Now, picture this same collection in the palm of your hand, obtained for free and also completely portable. Perhaps in something that resembles the USB stick of today. Or, for a modern-day example, just think about the iPod classic, and its wildly-expanded storage capabilities within five or ten years.
Can these two coexist? Or does free win once again in the cloud?
Earlier, the question posed was whether a locally-stored collection will simply suffice for most music listeners. After all, in 2009, a stuffed iPod classic contains more music than most fans can reasonably digest. And something like 160GB will seem laughably small within a decade. But the shifting variables of storage and accessibility are also ingredients for an ad-hoc cloud that will be just as difficult to monetize and control.
In fact, these ingredients are already getting baked. Think that MP3s will simply be irrelevant at some point in the 2010s? Perhaps, but maybe the question itself is misguided. After all, who cares if MP3s are sitting on a hard drive somewhere - occupying marginal storage volumes - and if that collection is simply replicated in the cloud by a trusted third-party? Or, alternatively, if listeners are simply porting songs directly into the cloud, secure that files are safe and accessible on a remote server for life?
In the end, the details are unimportant, but regardless of the mechanics, it will be tough to put a toll booth in front of the cloud. The reason is that free options remain so easy, and free often goes hand-in-hand with flexibility (files are playable anywhere) and security (no outside company to trust). Again, look no further than 2009, where an application like JukeFly can scan and replicate your collection and make it accessible from any PC. Lala's Music Mover does something similar, and the company is soon enabling collection access from the iPhone or iPod touch.
Outside of this specific discussion, a huge battle is brewing between Hollywood, ISPs, various government agencies like the FCC, and consumer rights advocates like the Electronic Frontier Foundation (EFF). Currently, three-strikes disconnection solutions are getting more breathing room in Europe, but the broader question is whether free acquisition - and portable access - can truly be contained or monetized. So far, the prospects are 'cloudy'...
Coming Events of Interest
Cloud Computing: Business Benefits - November 17th at 2:00 PM US ET. This KMWorld webcast will examine the value proposition and the benefits that flow from locating business applications "off-site" and explore where your organization can fit into that picture.
Future of Television East - November 18th-19th in New York, NY. Join television industry leaders including senior decision-makers from major broadcasters, production studios and cable networks, social networks, producers, creators, mobile companies, online content producers, distributors, technology companies, and association heads - for the industry's most prestigious event.
P2P MEDIA SUMMIT at CES - January 6th in Las Vegas, NV. The DCIA's seminal industry event, featuring keynotes from top P2P, social networking, and cloud computing software companies; tracks on policy, technology, and marketing; panel discussions covering content distribution and solutions development.
2010 International CES - January 6th-10th in Las Vegas, NV. The industry's largest educational forum to help companies expand their businesses and understand new technology. Over 200 conferences and more than 300 expert speakers encompass International CES.
MIDEM & MidemNet - January 23rd-27th in Cannes, France. MIDEM is where music professionals from across the industry meet face-to-face to do business, analyze trends and build partnerships. MIDEM brings together music leaders looking for concrete solutions and insights. MidemNet's renowned digital business conference program is now included free with your MIDEM registration.
P2P MARKET CONFERENCE - March 9th in New York, NY. Strategies to fulfill the multi-billion dollar revenue potential of the P2P and cloud computing channel for the distribution of entertainment content. Case studies of sponsorships, cross-promotion, interactive advertising, and exciting new hybrid business models.
Media Summit New York - March 10th-11th in New York, NY. MSNY is the premier international conference on media, broadband, advertising, television, cable & satellite, mobile, publishing, radio, magazines, news & print media, and marketing.
|
