Recently in Financial Category

Some tech and political discussions from Day two of the show but really day one for me

I had a great set of meetings at Interop today and the energy at the show was quite inspiring. Talk of sales gains and the potential for acquisitions were common. In many of my discussions there was concern over the current administrations direction in terms of burdening small business owners. A repeated theme was doesn't the Obama team realize small businesses do most of the hiring n this country. Why are they trying to hurt them?

A few small business owners confided in me that they aren't growing as fast as they like because their financial people have told them to set money aside for increased taxes next year as well as potential increases in healthcare and energy costs due to cap and trade.

Trends which have been consistent as of late are cloud computing, virtualization, bandwidth increases, Ethernet, and a new one, solid-state storage - an area where a few new companies have entered into.

I won't mention specific companies in this post as I don't want to correctly or incorrectly link them to political comments they don't want on the record.

Still, with all the headwinds being created by politicians, the increasing need for technology by the marketplace coupled with massive amounts of mergers and acquisitions have led us to a point in tech where companies are performing better than they have in a long time because they could be the next to get acquired and "cash out" so to speak.

In addition, VC money is beginning to flow once again and the balance of power is now heading in the direction of the entrepreneur meaning more of them will hopefully come up with ideas and start new and innovative companies.

Based on what I have heard, I am optimistic about tech in 2010 but some of my major concerns are: Will the administration continue with policies that business owners consider hostile? Will there be a war with Iran (even if the US isn't involved in it)? And will the US government continue to spend/print money until the US dollar is worthless?

I just came across this web page with some important details on ITEXPO. I mentioned the keynoters in a recent post and I still think they are one of the best combinations of thought leaders in our space. Google Voice, Sprint, Digium, Polycom, Skype and Verizon Wireless are some of the companies you will hear from at the show.

In addition there are a full eight conference tracks you cannot find anywhere else:

• Business Communications Delivery Options
• Call Center
• Developer
• Enterprise
• HD Voice
• Service Provider
• Unified Communications
• Video Communications
• TMC University Microsoft OCS

As always, we poll the collective minds of the entire TMCeditorial team and industry when we put together the conference program for TMC events and I believe this is a major differentiator. It seems like just yesterday when TMC launched our first telecom event in Atlanta, GA but it was really 1986!

What I have learned in running communications and tech conferences for 20 years is that if you continue to give your customers unsurpassed value, they come back again and again for more conferences and bring others with them.

To all of you who have attended TMC events over the years - thanks.

I really think this next show in Miami - ITEXPO East 2010 will be our best to date and I am looking forward to welcoming you personally.

Here are more details on this can't miss conference.

The netbook craze continues and as the devices proliferate, they can be found in places like superstores and perhaps even some local supermarkets in high tech areas of the country. San Jose, I'm looking in your direction. But does it make sense to take a computer which is really designed for thrifty consumers and stick it in an office? My vote is probably not because for a little more money you can go out and get a full-fledged laptop and in many cases this will give you more performance or as we like to say in the tech world, increased bang for the buck.

But if saving money today is paramount and you aren't as concerned about having to upgrade more quickly tomorrow, check out this article from Lance Whitney, one of the latest additions to the TMCnet team of writers. Lance describes some of the things to consider before plunging into the world of corporate netbooks.

Two other items worth mentioning are the fact I know a few people using netbooks in their offices and they are all satisfied. Furthermore, TMCnet writer Doug Mohney is a huge fan of netbooks and TLNs. Did we seriously need YAA or Yet another Acronym? What does it stand for? Why Thin and Light Notebooks of course. By the way, when I first spotted Doug with a netbook about a year ago he mentioned to me the devices are almost disposable in nature. Of course he was referring to the fact you could just pick one up at the local electronics store if yours breaks.

So the next time you are in that local grocery store in San Jose and looking for a way to save money on IT and getting rid of that five o'clock shadow, just pick up a few netbooks to go with those razor blades you just threw in the carriage.

We are in the midst of a violent transformation of our communications networks which involves an immense amount of control being wrestled away from carriers and given to developers and end-users. Visit the iTunes App store or check out what is happening with free turn-by-turn GPS on an Android 2.0 device to get an idea of what I mean. The trend is not new by any means; the first time communications systems were allowed to interoperate with computer systems was in the eighties when the first Rockwell Automatic Call Distribution (ACD) systems started to communicate with IBM mainframes to give us CTI or computer telephony integration. This allowed screen pops which dipped into CRM databases allowing contact center agents to know who was calling and more than likely why. Moore's Law coupled with telephony hooks like TAPI and TSAPI from Microsoft and Novell respectively meant this capability went from costing around a million dollars to tens of thousands of a dollars just a decade later.

Enterprise communications systems have continued to open up and hosted IVR systems, application generators and APIs for DSP resource boards from companies like Dialogic and Aculab allowed greater and greater telephony transformation allowing migration from fixed-function communications systems to more open software-controlled components which could be mixed and matched in a best-of-breed fashion.

The Internet accelerated this trend with its ability to allow cloud-based solutions to be easily accessed and mashups has been a great catalyst - allowing complex data to be represented in new and more interesting ways. Today we can combine the power which we were given by companies like Dialogic and marry them with the cloud and this means anyone can now develop sophisticated applications which leverage all internet and corporate data.

And when you combine open APIs, mashups, communications and social networking in a well thought-out and integrated fashion you are able to provide levels of productivity and customer service heretofore not possible. Any corporate or government process which has friction due to communications delays between people can be lubricated by the effective use of communications technology as it intersects with APIs and rich information sets which can live anywhere.

Perhaps the most respected name in the business of voice mashups is Thomas Howe, CEO, Light and Electric. If you want to know the past, present and future of communications - especially as it pertains to the cloud, you want to speak with Thomas and get his thoughts. If you are a carrier, large enterprise, integrator or government organization, you need to pick his brain to position your organization to take advantage of the ongoing evolution of communications.

Thomas and I have spoken over the past years about how TMC would love to partner to bring his visionary thoughts (all the good stuff locked up in his grey matter) to our audience of millions of global communications and technology decision-makers.

I am happy to announce that at the next ITEXPO which takes place January 20-22, 2010 in Miami, FL you will get a chance to come and hear Thomas speak. In addition you will soon be able to benefit from webinars and screencasts which our companies will jointly participate in.

I hope to see you at the show and as always, at TMC we are looking to provide you with the absolute best information on communications and technology - allowing you to quickly learn whatever you need to further your career and meet your organization's evolving needs.

• See how British Telecom is ahead of the curve as it relates to this transformation and bought Ribbit for over $100 million to make it so.
• Here is a past podcast I had with Thomas Howe for more on his ideas.

The pace of tech acquisitions is not slowing and one area worth watching is the testing market where Ixia has recently picked up Catapult Communications to further its wireless IP performance testing strategy - especially as the company positions itself to be a leader in the LTE space. In a meeting in Ixia headquarters in southern California the company explained to me that they continue to focus on a broad range of testing areas such as Ethernet, 40/100 Gb Ethernet, devices, fiber channel, storage area networks and virtualization. And don't forget about some of the other areas the company plays in such as voice, video and data.

One area discussed by Kelly is the fact that this acquisition allows Agilent's customers to purchase a suite of complimentary testing equipment and moreover, through this move - Ixia becomes a far more international company and furthermore has a much larger focus on the carrier space. Also, Ixia Fusion allows customers to use open APIs to access Agilent and Ixia testing solutions. This by the way is pretty similar to how Oracle is integrating many of the companies it acquires - they also call their middleware Fusion.

In January of this year I asked if Eric Schmidt is cozying up to President Obama to protect a Google Monopoly. I took some flak for the post but the reality is the reality - the company seems to be taking over every facet of tech from book readers to voice to video to unified communications to cloud computing to photo sharing to video serving to office applications. Should I go on? How about turn-by-turn GPS?

OK, I'll stop but that won't stop others like the Chicago Tribune from picking up where I left off and asking serious questions such as whether Google's ability to use its revenue from its monopoly position in search to wipe away competition in other industries is fair or not.

HP is acquiring 3Com for $2.7 billion and there are a number of reasons for this move. First of all, it is obvious the tech market is hot and Cisco and other companies are optimistic about the future as evidenced by the pace of tech acquisitions which is reaching the pace of the glory dotcom days. Moreover, large companies with strong balance sheets are able to access capital if they need it, allowing them to more easily acquire.

3Com for its part is a company with a broad range of networking gear which HP needs to go head-to-head with Cisco. Specifically, 3Com focuses on the SMB space while the TippingPoint division focuses on Security and H3C focuses on large enterprise and is very strong in Asia. I was at 3Com's headquarters about five weeks ago and spoke with Anna Dorcey and John Vincenzo who were very high on the company's future.

You may not know this but 3Com has about 35% marketshare in China and a strong manufacturing base there, meaning their costs are low. Their go to market strategy is customer focus and value. 3Com has been a networking and communications value player for years but at the beginning of the decade, the company left enterprises hanging with a shifting strategy which enraged many resellers and customers.

Over the last few years, the company has improved its management and it seems unclear as why now was the time to sell. Perhaps HP gave an offer which was too good to refuse? Or perhaps company execs realize with the HP brand behind them, the company can raise prices and compete with Cisco and have fatter margins.

The worst part of this deal for Cisco is that we can expect the EDS division of HP to really push 3Com products at the expense of Cisco.

Also, if you are playing chess, you would imagine Dell and IBM are picking up the phone and having conference calls about purchasing Adtran and or Brocade as they are similar in product-line to Cisco and 3Com. Remember Dell just picked up a systems integration firm Perot Systems and the next step for them would be to add more products to their mix.

Other targets with substantial integration value worth watching are Plantronics, Polycom and Avaya.

While I am in the predicting mood, expect Cisco to pick up wireless backhaul vendor DragonWave or Ceragon in the near future as they build out their wireless networking strategy focused on wireless carriers.

But in the end, there are only a handful of tech companies who have shown they can acquire well. Oracle is best, Cisco is second best and IBM is good. HP is also doing pretty well in their area. It is early to predict how Dell will fare.

I am frankly surprised at the absolute pace of M&A activity but I should point out that this is great news for tech and telecom as it is a signal that companies feel confident about the future of the market and the growth in spending they anticipate in the future.

We are thrilled to announce a slew of top notch keynoters for the upcoming ITEXPO which takes place in Miami, FL Jan 20-22, 2010. I will share them with you by first explaining why they were invited:

A keynote picture from ITEXPO East 2009 in Miami

Open Source

One of the biggest trends in tech this last decade has been open source and while you may not know this, I was a UNIX (the Linux precursor) system admin at TMC back in 1982 or so and I am a big fan of this OS which is reliable, stable and the strong basis for cost-effective solutions in a number of fields. Without a doubt, Asterisk is the major force in the open-source communications space and as such, Digium's CEO Danny Windham (the company behind Asterisk) was the perfect choice to address the audience of businesses, carriers and resellers. By the way, Digium Asterisk World (DAW) is collocated at this show and I hear it just sold out of exhibit spaces and my team is looking for ways to get the waiting list
of companies into an expanded DAW pavilion on the exhibit hall floor.

Digium Asterisk World Photos from ITEXPO East 2009 this year

Google Voice vs. AT&T

Google Voice has been one of the most disruptive influences in telecom these past years and this service has single-handedly become a point of public argument between the search leader and Apple and AT&T - with the FCC acting as referee of sorts. The argument revolves around net neutrality - the concept that carriers will apply discrimination to traffic on their networks based upon traffic, application type or source. Google obviously wants their services to run on any network in an unencumbered fashion while AT&T has said since 1995 when they were SBC that they want to charge for their pipes. AT&T actually then pointed out to the FCC that Google Voice does not terminate all calls on its free Google Voice service meaning it is not adhering to the principles of net neutrality. The reason of course as Google points out is traffic pumping and bizarre intercarrier compensation rules which allow some rural carriers to charge exorbitant rates for calls terminating in their areas. Craig Walker founded Grand Central, the company purchased by Google and the basis for Google Voice and as the Group Product Manager for the Real Time Communications Group at Google, he was a natural person to invite to speak with us at the show. It seems his accomplishments have unleashed a firestorm of controversy which should hopefully clean up some of the ugly mess that is telecom policy and regulation.

Exhibit hall pictures from ITEXPO East 2009 in Miami

HD Voice/SIP and Video

Another major trend in our markets is that of HD voice, video adoption and of course SIP endpoints. AT ITEXPO last year, we had the first panel in the world focusing on HD voice (video) and since then I am excited to see other conference organizers throwing their hat in the HD ring. A major player in all of the above spaces is Polycom and they have done an amazing job of working with disparate vendors on interoperability issues which has moved the market forward by reducing the friction caused by proprietary endpoints. In the world of video, the company has been a major player - developing telepresence systems all the way down to video phones. To get a bead on where this market is heading we invited Polycom Co-Founder, and the CTO of the Voice Communications Group Jeff Rodman to join us as a keynoter.

HD Voice Panel I moderated from ITEXPO East 2009 in Miami

Skype

No matter how you break out the IP communications market, Skype is likely a factor in changing the market in a pro-consumer manner. By giving away global voice calling with quality which far exceeds the PSTN, they have disrupted while getting users used to better voice quality. On top of that, they give away video calling as well, making them a company which excites consumers and scares carriers and anyone else who dares compete with their network of hundreds of millions of subscribers.

Interview I had with Skype's Ian Robin

Skype has been making a major push into the enterprise and is working on enhancing relationships with carriers as well. They are even looking for channel partners who can share in the newly created revenue streams from a number of products like Skye for SIP. When you take all of this into account, it does make great sense to invite Skype Chief Strategy Officer Christopher Dean to speak, doesn't it?

Smartphones, Wireless and Smart Ecosystems

One of the biggest trends in the world of communications is smart devices and ecosystems. What is an ecosystem you ask? Well it is a group of companies who develop products which work with a product or service offered by a host company or companies. The iTunes App Store may be the best example but certainly Avaya's DevConnect or Cisco's Partner Programs are good examples as well. You may know that TMC has focused a tremendous amount of resources on educating the world on smart ecosystems via our new SPEC site. I truly believe ecosystems have a bright future.

In order to bring attendees up to speed on all these topics we invited two top keynoters to present on the matter. Sprint's Mathew Oommen is the vice president of device and technology development at the company and uniquely positioned to share with us his company's view on the future of wireless technology. Oh and by the way, be sure to check out my recent interview with Sprint's Wayne Ward who heads up the company's M2M activities (did I mention there is a collocated M2M conference at ITEXPO?).

To get a handle on wireless devices as they pertain to ecosystems we invited Brian Higgins the Executive Director for Ecosystem Development within Verizon Wireless to join us so we can learn where the company thinks the market is headed. Verizon has been very ambitious in its goal to develop an ecosystem of products and applications which interoperate in the hope of one-upping the iTunes App Store.

We continue to work to add fantastic new speakers to our roster and you can expect this ITEXPO to be the most comprehensive and educational ever and a must-attend. I personally hope to see you there.

Oh and by the way, we have secured great rates this year at the Loews Miami Beach Hotel - you can save $150/night if you book now - the rate is $249 vs. what is typically a $399 rate at prime season. There are many advantages to staying at the show hotel such as networking, etc - and I have always been a fan of the Loews. In fact I was a guest the first day the hotel opened about ten years ago or so.

I got a tip that Adtran was acquiring Objectworld. My take? Objectworld is a company with great UC technology and no brand recognition. Adtran is a company with a product line similar to Cisco but much smaller. Still, with a market cap of over $1.4 billion, Objectworld can really get a boost from Adtran's access to capital, infrastructure, reseller network, carrier relationships  and improved branding.

Here is a link to a cached page mentioning the acquisition. Keep it tuned to TMCnet and my blog for more.

Bill Gurley writes correctly that Google is positioned to take over the world. I am certainly paraphrasing and adding some personal bias - he describes in detail how the company invested great sums of money to assemble a superior turn-by-turn GPS database which includes a street view and in so doing is now able to take marketshare from competing mapping vendors by using advertising to subsidize the cost of acquiring this information.

Advertising revenue in fact will drive the company's operating system, software as a service and just about everything else.

As the company shares part of this revenue with partners you have seen wide adoption of Android by wireless carriers and no doubt hardware vendors installing the Google Chrome OS are next.

Expect the company to continue going after Microsoft products - by giving services away and supporting them through ads.

Any competitor which has an inferior ad network and generates less money from advertising (this is all of them) is pretty much domed.

The only way to stop the onslaught is to build a far superior search engine and hope the world switches. At this point the sheer marketshare Google commands in search allows them to utilize their massive database of user behavior as a massive focus group allowing them to improve by the second.

I just can't see anything stopping this company besides, a scandal, high level departure, illness or something similar. Even then, the company is a monopoly at this point and perhaps momentum will ensure their future success.

Is the company using its power in a way which warrants them being broken up by the DOJ? Possibly, but Google reminds me a heck of a lot of Wal-Mart as the larger it gets, the better consumers do. Giving away free GPS for example is a pro-consumer behavior and as long as the company keeps breaking into new markets and giving things away, it is tough to see how the Google could be considered to be harming customers.

Getting back to the headline of this article -- do I really think Microsoft is doomed? Yes. Immediately? Obviously not. But any time a company with a quality name in the market can make money while giving away good products which you charge for, you are done.