• Open source
• Targeted to appear in netbooks in the second half of 2010
• Google Chrome browser + new windowing system + Linux kernel
• Minimal user interface
• Data stored or at least backed up in the cloud, and hence available on any computer
• Hardware compatibility hassles allegedly eliminated
• Ditto for software update hassles
• Ditto for security problems
• Apps apparently assumed to run inside the browser. (Not clear if this is required or just recommended.)

Obviously, Google Chrome OS is a direct attack on Microsoft — even more so than Google Wave, which I’ve predicted will “play merry hell with Microsoft Outlook, Microsoft Word, Microsoft Exchange, Microsoft SharePoint, and more,” or for that matter than Google Mail and the rest of Google Apps. Taken together, Google’s initiatives suggest that an all-out Google-Microsoft war is coming, in a conflict that many people have been expecting — and analyzing — for years.

So how will this all shake out? Well, let’s start with some basic points:

• Google Chrome OS Release 1 is expected over a year from now, and then only on a limited subset of PCs, namely netbooks.
• Google Chrome OS Release 1 is supposed to have great performance and be bullet-proof. Hmm …
• Google is evidently assuming that the apps people want to run will either be browser-based, or else be new ones written for Chrome OS. Hmm …
• Google is signaling that Chrome OS will be very limited in features. That makes sense for Release 1 — but what will be missing?
• Consumers have proven their willingness to buy non-Microsoft computers, especially Apple ones, specifically in the Mac and iPhone/iTouch product lines.
• A lot of people would have compatibility issues replacing Microsoft Excel or PowerPoint with partially-compatible alternatives. I’m not so sure about Microsoft Word, however. Other than those three, Outlook, and the Windows family itself, I’m not aware of any Microsoft client products that have much lock-in. (Well, maybe Xbox, but that’s not in the main stack.)
• Open source software often gets most of its community support in a couple of areas, namely compatibilities and language translation. Google probably doesn’t need the help in languages, but letting other people fix Chrome OS compatibility issues whose importance it didn’t recognize is potentially valuable.
• Google probably won’t make any direct revenue from Chrome OS. So how much will it invest in the project?
• Notwithstanding Danny Sullivan’s concern, there isn’t much of an antitrust issue here. Google’s search can’t easily be used to favor Chrome, Chrome OS, or Google Apps. And the other way around — e.g., using Chrome OS to favor search — Google clearly isn’t a monopolist.

So while Google may kill Microsoft’s client business some day, it clearly won’t happen for quite a while, Techcrunch’s excitement notwithstanding. We’re talking a multi-year effort before there’s any realistic chance of Microsoft being toppled. On the other hand, it’s hard to think of major software compatibility issues that won’t quickly be addressed, except Microsoft’s own product and, probably, MMO games — assuming, of course, Chrome OS gets enough initial traction for anybody to care. So intermediate- and long-term, Microsoft’s PC business is very vulnerable indeed.

The bulk of Google’s announcement follows (emphasis added):

Google Chrome OS is an open source, lightweight operating system that will initially be targeted at netbooks. Later this year we will open-source its code, and netbooks running Google Chrome OS will be available for consumers in the second half of 2010. Because we’re already talking to partners about the project, and we’ll soon be working with the open source community, we wanted to share our vision now so everyone understands what we are trying to achieve.

Speed, simplicity and security are the key aspects of Google Chrome OS. We’re designing the OS to be fast and lightweight, to start up and get you onto the web in a few seconds. The user interface is minimal to stay out of your way, and most of the user experience takes place on the web. And as we did for the Google Chrome browser, we are going back to the basics and completely redesigning the underlying security architecture of the OS so that users don’t have to deal with viruses, malware and security updates. It should just work.

Google Chrome OS will run on both x86 as well as ARM chips and we are working with multiple OEMs to bring a number of netbooks to market next year. The software architecture is simple — Google Chrome running within a new windowing system on top of a Linux kernel. For application developers, the web is the platform. All web-based applications will automatically work and new applications can be written using your favorite web technologies. And of course, these apps will run not only on Google Chrome OS, but on any standards-based browser on Windows, Mac and Linux thereby giving developers the largest user base of any platform.

Google Chrome OS is a new project, separate from Android. Android was designed from the beginning to work across a variety of devices from phones to set-top boxes to netbooks. Google Chrome OS is being created for people who spend most of their time on the web, and is being designed to power computers ranging from small netbooks to full-size desktop systems. While there are areas where Google Chrome OS and Android overlap, we believe choice will drive innovation for the benefit of everyone, including Google.

We hear a lot from our users and their message is clear — computers need to get better. People want to get to their email instantly, without wasting time waiting for their computers to boot and browsers to start up. They want their computers to always run as fast as when they first bought them. They want their data to be accessible to them wherever they are and not have to worry about losing their computer or forgetting to back up files. Even more importantly, they don’t want to spend hours configuring their computers to work with every new piece of hardware, or have to worry about constant software updates. And any time our users have a better computing experience, Google benefits as well by having happier users who are more likely to spend time on the Internet.

We have a lot of work to do, and we’re definitely going to need a lot of help from the open source community to accomplish this vision. We’re excited for what’s to come and we hope you are too. Stay tuned for more updates in the fall and have a great summer.

• Offers the possibility to improve upon a broad range of communication, collaboration, and/or text-based product categories, such as:
  • Search
  • Word processing
  • E-mail
  • Instant messaging
  • Microblogging
  • Blogging
  • Mini-portals (Facebook-style)
  • Mini-portals (Sharepoint-style)
• In particular, allows these applications to be both much more integrated and interactive than they now are.
• Will have open developer APIs.
• WIll be open-sourced.

If this all works out, Google Wave could play merry hell with Microsoft Outlook, Microsoft Word, Microsoft Exchange, Microsoft SharePoint, and more.

I suspect it will.

And by the way, there’s a cool “natural language” angle as well.

For starters, here are some basic links:

• Google has naturally set up a home page for the Google Wave project.
• Featured on that page but also separately available is an 80-minute video introducing Google Wave.
• Techcrunch has two highly detailed posts on Google Wave, one summarizing what’s in the main Google Wave video and one reporting on a Google Wave Q&A.

Here are some reasons I think Google Wave could actually live up to its promise:

• The email problem Google Wave purports to solve is real and critical. The email paradigm assumes linear conversations, and what actually happens is that they branch. Google Wave’s message-board-like paradigm is simply better, and more flexible (e.g., not limited to a single enterprise!) than Microsoft Exchange or Lotus Notes.
• The instant messaging problems Google Wave purports to solve are also major. Instant messaging is slow, tedious, disjointed, and ephemeral. Fully integrating IM with email solves most of those problems. And Google Wave’s UI interactivity solves most of the rest.
• Twitter needs to be integrated with other forms of communication. What’s more, Twitter’s functionality needs to be drastically extended. Google Wave is the best hope I know of to meet those needs.  Enterprise Twitter is just a special case of that.
• Workgroups (enterprise or otherwise) need light-weight mini-portals that can be created on the fly by non-technical users, to ease collaboration. Microsoft SharePoint, SAP Rooms, et al. don’t really meet that need.  Google Wave could.
• In particular, collaboration on documents, presentations and so on needs to be more cloud-based and generally easier than is the case in Microsoft Office. Google Wave has the potential to provide that.
• Google + open source is a potentially potent combination, especially versus Microsoft.

One note: Google of course needs to improve the reliability and customer service of its cloud-based offerings to make a huge dent in Microsoft’s market. But even with its flaws Google has already been a good alternative for a while.

As for the “natural language” angle: At the 44:30 mark of the main Google Wave video is a demo of some cool, very grammar-sensitive spell-checking technology. Google’s spell-checking technology is further discussed in a separate, short video.  The basic idea is that Google uses its vast library of web pages — and email and chat? — not just to model intended word usage but also kinds of mis-spelling behavior as well.

I’d like to make a more general comment about Microsoft: its online stuff is awful, and Encarta is no different. There are already plenty of people musing on why Encarta died, but I’d say one good reason is that it’s hard to access and get your mind around as pretty much every Microsoft online property.

Coveo, Exalead, ISYS, Recommind, Vivisimo, and X1 are a few of a select group that are marking a mark in their respective niches, as products ready for action with a short implementation cycle (weeks or months not years).

By way of contrast, Lynda opines:

Autonomy and Endeca continue to bring value to very large projects in large companies but are not plug-and-play solutions, by any means. Oracle, IBM, and Microsoft offer search solutions of a very different type with a heavy vendor or third-party service requirement. Google Search Appliance has a much larger installed base than any of these but needs serious tuning and customization to make it suitable to enterprise needs.

In particular, her views about FAST (now Microsoft) are scathing.

What this boils down to, mainly, seems to be a major win in spidering speed for Google vs. Microsoft Live Search.

And yes Seth — I like you too.

Text analytics vendors participate in the same trends as other software and technology vendors. For example, relational business intelligence and data warehousing products are increasingly being sold to departmental buyers. Those buyers place particularly high value on ease of installation. And golly gee whiz, both parts of that are also true in text mining.

But beyond such general trends, I’ve identified six developments that I think could radically transform the text analytics market landscape. Indeed, they could invalidate the neat little eight-bucket categorization I laid out in the prior post. Each is highly likely to occur, although in some cases the timing remains greatly in doubt.

These six market-transforming trends are:

1. Web/enterprise/messaging integration
2. BI integration
3. Universal message retention
4. Portable personal profiles
5. Electronic health records
6. Voice command & control

I’ll explain briefly.

1. Google and Microsoft are two of the three leaders in web search. Now that Microsoft has bought FAST, they are also two of the leaders in enterprise search. They are also two of the leaders in hosted email. Ditto instant messaging. So there’s a good chance these various disciplines will converge.

2. There are a number of ways text analytics and traditional analytics can and are being integrated:

• Enterprise search and business intelligence are akin; both involve digging information out of the data you already have.
• Text mining is naturally integrated with business intelligence and/or data mining.
• There’s a trend toward using text search to dig up business intelligence documents such as specific reports, spreadsheets, etc.

To date the latter is focused on reports that already exist, rather than queries that could be run on the fly, but I hope and trust the technology will be extended over time. Natural language queries have merit anyway; I’d like to see the search box be extended in functionality to a true data-retrieval command line.

3. One of the big purchase drivers of storage, search, and clustering technology is mandates to preserve information and make it available to auditors, regulators, and/or people who want to sue you. Email in particular is changing from being ephemeral to becoming part of the permanent record. Well, if the information is being retained anyway, then maybe it’s time to see how to get useful insight from it.

Right now, a company’s overall text archives aren’t being leveraged in the same way data warehouses are. That will change.

4. For over a decade, online companies have fought to exploit the fact that users were registered with their sites or services, but not with others. Huge amounts of investment money were wasted in the dot-com bubble because people thought “registered users” was a significant metric, or that ISP subscribers could be directed to proprietary content. Enormous valuations are being assigned to Facebook and LinkedIn on similar theories today.

But as site owners and other marketers get ever more aggressive about exploiting user-specific information, users will get ever more sophisticated about controlling it. The obvious solution is for each internet user to control a sophisticated database of their contact information, presence information, actions, preferences, and writings, and to be very selective about which online services are allowed to see which portions of the data. I think that will come about some day, but I don’t know when. When it does, text analytics will be affected in a variety of interesting ways.

5. Electronic health records are almost unique in IT. What other enterprise app can you think of for which relational DBMS aren’t the default underpinning? (Intersystems’ object-oriented DBMS Cache’ has huge share in the clinical records market.) Normal tabular data, text, images, sensor output streams – health records have it all. What’s more, the health records area is coming upon some very interesting times in the area of data sharing, at least in the US.

Just as retailing went from being an IT backwater (through the mid-1980s), to a sophisticated user of database technology (1990s), to the leader of the internet revolution (rise of e-commerce), I think health care is due to take a leadership role in IT advances. And when it does, search, text mining, and voice recognition will all play important roles.

6. Most people reading this far have probably watched Star Trek. Well, what is keeping us from being able to command computers in a Star Trek fashion? Not really that much. Sure, there are some big missing pieces. We need a mapping from commands to the specific applications that would carry them out. We also need a more structured kind of analytic middle tier so that there’s something to map questions to. But those are solvable problems. And by the way – when everybody wears headphones, voice commands emanating from the next cubicle are no longer the big annoyance they would be today. Mobile/small devices only add to the business case for voice recognition advances.

When voice becomes a primary mode of human/device communication, “text” analytics will be affected in any number of ways.

Related links:

• The introductory post in this series
• 19 possible Microsoft/Yahoo synergies, many of them related to text technology convergence, e.g. between web search and enterprise search
• The compelling case for letting Google handle your enterprise email
• An old post on why BI vendors flocked to integrate with Google OneBox
• A proposal to refactor social networks
• An old post in which I outlined some of the criteria for Profiles 2.0
• Why text technologies are going to recombine (in A World of Bytes)

]]> http://www.texttechnologies.com/2008/06/19/6-trends-that-could-shake-up-the-text-analytics-market/feed/ 1 http://www.texttechnologies.com/2008/04/07/yahoo-indeed-seems-to-want-an-all-cash-deal/ http://www.texttechnologies.com/2008/04/07/yahoo-indeed-seems-to-want-an-all-cash-deal/#comments Mon, 07 Apr 2008 13:17:46 +0000 Curt Monash http://www.texttechnologies.com/2008/04/07/yahoo-indeed-seems-to-want-an-all-cash-deal/ The Microsoft/Yahoo negotiation is in a very public phase right now. In its latest letter, the Yahoo board makes two references to “certainty,” in one case spelling out that this encompasses “certainty of value” and “certainty of closing.”

It’s hard to imagine what the former could mean other than “Please make an all-cash offer (or, better yet, go away).” But I previously noted, Microsoft can indeed afford to buy Yahoo entirely for cash.

The latter part is a reference to the antitrust boogeyman, obviously a non-trivial concern whenever Microsoft is involved.

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• Yahoo wants to be the internet “starting point” for ever more relatively naive users.
• Yahoo wants to be an advertising “must buy.”
• Yahoo doesn’t need to excel technologically in its user experience.

This is exactly what AOL tried in the late 1990s, except that they also had the best dial-up connectivity in the world. I know; Linda and I were strategic consultants to AOL then.* And we told them that while the rest of their strategy was excellent, it would be to no avail unless their tools matched the quality of what people could get in the office or elsewhere online. Because if AOL’s technology didn’t catch and keep up, people would just laugh and go elsewhere. (Even my parents, who still use AOL mail, go outside AOL for their web surfing. AOL is getting very little revenue from them, and they’re about as captive as AOL users get.)

*Please note — AOL was a great client, but the people we dealt with are (for the most part) long gone, and our NDAs ran out years ago.

That’s brain-dead. Just consider how far technology has taken Google, how fast gaming technology advances, or how fickle internet users are about switching to the latest and greatest online services. What’s worse, Yahoo seems to mean it, given how many serious technology leader types are out on the street in connection with the recent layoffs.

Pretty much the only remaining hope for the Yahoo brand(s) and services is for the Microsoft acquisition to go through, and for Microsoft/Yahoo to unlock the deal’s huge potential synergies — which, while far from being certain, is at least realistically possible.

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It’s all nonsense. According to Microsoft’s 10-K statements, they have $27 billion in cash and equivalents and have $14-17+ billion/year in cash flow from operations. Assume they have to pay $40/share for Yahoo’s 1.4 billion shares in an all-cash deal (meaning they have to borrow around $30 billion). Assume that building out data centers adds a couple of billion of dollars a years in new capital costs. They can still pay all the debt back in three years. It’s all a non-issue, if they think the acquisition is worth it.

So is it? I see tons of synergies, but I’ll confess to not having quantified them. I’m also more optimistic about post-merger execution than many observers are. I do think Microsoft will have to pay up to complete the deal.

And I think Henry Blodget is proposing a false dichotomy when he suggests Microsoft is wrongly favoring ad-supported online software over subscription online software. Ad-supported personal use and subscription-supported enterprise use can co-exist.

EDIT: I forgot about the FAST deal when I wrote this, which will cost a few billion dollars more when it closes. But there was enough slack in the calculations to cover it. Microsoft could indeed pay the debt off over 3-4 years, although it would surely arrange a somewhat longer term for flexibility.

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Larry Dignan encourages a game theoretic view of the Microsoft/Yahoo merger, following Trip Chowdhry. I actually have a Ph.D. in game theory, so I’ll bite.

In most negotiation games — including pretty much all in which money can change hands — there’s one outcome that makes the most sense for all concerned. They should agree to that outcome, and haggle about nothing except price.* In this case, the best outcome for Microsoft and Yahoo is a quick Microsoft takeover of Yahoo. That’s what I thought all along, due to a whole lot of Microsoft/Yahoo synergies. Michael Arrington reports, in confirmation, that there are no viable alternative bidders.

*A fancy way of saying that is “The feasible set has a continuous and effectively one-dimensional Pareto frontier.”

In such cases, the haggling over price depends a lot on each side’s “threat point” — i.e., their fallback position, and the (un)desirability of that fallback position for each side. Yahoo’s fallback position is probably one or more aggressive deals with other major internet players. Merely outsourcing its search business to Google would be stupid. Selling the search business to Google could fetch a wonderful price, because Google would be even more entrenched — but for exactly that reason, it would surely fail to pass antitrust muster. That’s why the Amazon idea that’s been floated is so crucial; a Yahoo/Amazon merger would actually be synergistic in its own way, and hence could command a price at least somewhat competitive with Microsoft’s offer.

As for Microsoft — despite successes in individual Internet areas, it has consistently failed to build a coherent Internet business. Yahoo has its own issues, obviously, but on the whole it’s maintained pretty decent Internet status even as its technological efforts have been consistently disappointing. If Microsoft doesn’t buy Yahoo, it probably needs to buy somebody else with a consistent record of Internet leadership, such as Amazon. That would also involve paying a large premium. And here’s a twist: If Amazon for any reason wants to sell to fellow Washingtonian Microsoft at a big premium, it’s best move may be to sabotage the Microsoft/Yahoo deal somehow.

One final note: If Yahoo outsources its search business to Google, the possibility of a Microsoft deal is gone forever. Microsoft can not be assured of winning a waiting game, the way Oracle outlasted Peoplesoft.

Bottom line: The Microsoft/Yahoo deal should and probably will happen, and Yahoo should and probably will be able to squeeze Microsoft for more money than has first been offered.

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Technorati Tags: Trip Chowdhry, game theory