Can Yahoo! do it?

Yahoo is struggling to keep up with the current Web trend. Carol may sound more optimistic in the above video, but the latest news suggests that Yahoo is planning to cut 5% of workforce. Nevertheless, she does has a point about the Microsoft-Yahoo search deal. The ten year deal allows Bing to power Yahoo search and allows Yahoo to keep 88% of the search ad revenue. Microsoft gets remaining revenue and gains access to the user info and preferences thereby helping in more targeted ads. This might add additional $500 million revenue for Yahoo.
But this still is not enough to stop the other businesses from faltering. Before the Y2K boom Yahoo was the trendy web and search company attracting most of web traffic. Its failure to innovate in search and missing the Social Networking wave has cost it dearly. I am afraid Yahoo shouldn't become the next Sun Microsystems or Novell.

Oracle and Open Source

Oracle's War on Open Source
Oracle has been in the news for the past few weeks not only because of its  stunning quarterly results but also its dealing with the opensource products it  bought along with Sun. Oracle claims it is world's largest OpenSource Company and does offer numerous Opensource products. Though Redhat rebuts the claim, based on number of products and sales, the claim is atleast in theory true. But again Redhat is right when it says, Open is not just seeing the code, but having a community of developers and not keep some part open and some part closed. Redhat goes further to say that Oracle doesn’t even qualify as an Open Source Company. Oracle's recent moves some how is substantiating Redhat's claim.
Opensolaris
initially MySQL was feared to be the FOSS product that  will receive Oracle’s axe or indifference. Though MySQL seems to be safe atleast for now, Opensolaris is not. It is official and has ended months of speculation   and uncertainty. Opensolaris is dead. Oracle has made it clear that Solaris  will be its mainstay product to get the latest feature updates. The Solaris source code  will be released to “partners” after the product release itself and the brand  Opensolaris will cease to exist.
Java and Google
Then Oracle sued Google claiming its Dalvik VM implementation in Android infringes several of Oracle's Java copyrights and IPR. In oracle's words, Google "knowingly,  directly and repeatedly infringed Oracle's Java-related intellectual  property." Now in this case it seems Oracle has chance of winning the suit or Google will take the route of out-of-court settlement. Either way Oracle is going to squeeze good amount of money from Google. This case has indeed rattled many other IT biggies who have invested in Java as their  choice of platform for their products. They are slowly falling in line with Oracle. Take the case of IBM, which Oracle says its enemy number one, shifted gears and decided to collaborate with Oracle on the OpenJDK project thereby abandoning the Apache Harmony project. Looks Redhat and Canonical are on their own to back Harmony now, may be they too will choose to fall in line with Oracle eventually.
OpenOffice.org
The other product that has been making news is OpenOffice.org or OOo, as the  Document Foundation has forked it into LibreOffice. Though Oracle has not done  anything from its side to result in this fork, the Foundation has decided that  this route is safe seeing the indifference from Oracle. I see the Document Foundation's point here but can LibreOffice survive on its own given the reach of OOo's brand name reach? Only time will tell.
Linux and Redhat
Finally Oracle stunned the world with its announcement in OpenWorld 2010. Going to extreme, Oracle has announced that it is forking the Linux kernel itself and has come up  with Unbreakable Linux kernel optimized for Oracle Database. This is perfectly  valid in Opensource world but it kind of hints what Oracle's intentions. It is clearly taking shots at Redhat. Its earlier attempt to undermine Redhat Linux with its offering of Oracle Unbreakable Linux never worked. Now Oracle will arm twist its customers saying the new Oracle kernel is better than one in Redhat's.
The above developments has sent shock waves across FOSS communities,  although not surprising, bringing in the question of what will happen to MySQL  eventually. It is very clear that Oracle wants to invest time and money only in  projects and products that will add value to both to its topline and bottomline. It wants to squeeze money out of all OpenSource products it owns, by all means. Though that’s understandable as a corporate responsible for provding value to its Shareholders, it should also should embrace the communities behind the projects rather than act as big brother dictating terms. But the question still remains, is this what always happen when a proprietary software company buys an  opensource company or product..? Especially when companies like Novell will be eventually up for sale and the industry heads towards consolidation. Not always true, but in most cases  unfortunately the answer is yes.

Private Equity Firm bids for Novell

Novell has announced that it is considering a bid by Private Equity Firm Elliot Associates to acquire it. At a price of $5.75 /share it will be an acquisition worth $1.8 billion. The price is almost 21.1% premium of what Novell's share was selling earlier. The news has sent Novell's share sky high in latest trading.
If this deal goes through Novell will become a private company.
Novell has been struggling to prop its legacy Netware based business with Suse Linux portfolio. Though it has not been completely successful in doing so, as evident from its falling sales quarter-on-quarter, the Linux division has shown some impressive growth. It has break even in the last quarter. But still Novell ranks a distant second in the Enterprise Linux market behind Redhat which sure is leader in that area.
Though the overall revenue of Novell might not be attractive, it still has a cash flow of around $981 million in its hands which might have attracted Elliot Associates. Can the equity firm turnaround the struggling company after takeover without burning the cash? The possibilities look  grim. But if Elliot is able to spun off Novell's struggling divisions out and concentrate on it Suse Linux based offerings then it will still might squeeze out profits from Novell.
Elliot might not be alone in its bid soon. Most analysts expect Dell or Cisco or VMWare or even Microsoft (though highly unlikely) to offer competing bid to takeover Novell soon. That might make sense for those companies as they have enough cash and a Enterprise Linux product in their offering will sure add up to their top line.
For me the only concern is the takeover might have significant impact on the community based development of Suse Linux. If Novell is to go down, that will make Redhat a monopoly in Enterprise Linux arena which is not good for innovation. Also the efforts for interoperability between Windows and Linux done by Microsoft and Novell might also be jeopardy. That might affect the customers as well.

Open Source Business Model - Part I

Open Source Software is the most disruptive business model in tech industry in the last decade. Still there are lot of myths, confusion, skepticism around it among developers,enterprises, software companies, channel partners etc. That includes me too. This is true especially when we see an Open source company clocking double digit growth in recession (Redhat) whereas another behemoth opensource company fails(Sun).So in an attempt to better understand opensource I am planning a series of blogs profiling opensource business model, its strategies, weaknesses, commercial open source companies, community opensource projects in the coming days. This blog is part 1 of the series. Here I introduce what is publicly understood agreed definition of Closed Source and OpenSource business model

Any computer software that is available with its source code in public is termed Open Source software. Where as proprietary or closed source software doesnt come with its code and the developer/company who came up with the software usually retains the source code and doesnot share it with the public.

The closed source model has been greatly successful for decades and is still the by and large the main business model in software industry. The general practice is, any company which creates the software, charges a premium for buying/using it. This doesnot include support,training, upgrades. It might charge for the additional services but the software as such comes with a price tag and without source code. Any patch or bug fixes will be done by the company that created the software because the source code is not shared.

Whereas a typical Open Source company doesnt usually charge for the product and it gives it free. So what is the revenue source for the company...? It charges for the documentation, bug fixes, and other attached services like system integration.

In the upcoming blog posts I will further deep dive into the OpenSource Business model which covers the licenses, community based development, revenue stream, Opensource Enterprises, etc.

My Write-Up published in Rediff.com

Rediff.com recently published my write-up about iPad. It is available here. I am also pasting it below...

________________________________________


Apple's other iProducts are usually an improvement over existing products in that category and usually revolutionises the way people use them. A good example is the iPod which was not a brand new product in that category but it changed how people use it as part of their lifestyle. iPhone too is a good example.
But iPad's story is different. Though there are tablets/ handhelds/ pdas/ gaming consoles/ MIDs/ ebook readers already available, this machine doesn't fit any of the categories. It is a new product and is trying to create a new category of its own with all the above usages in mind. The usability and satisfaction should be seen in that context. In this regard, Apple's bold decision to introduce a new product is welcome.

It is a fine product just as any other Apple product. But there some quirks that needs to be mentioned.

One good example is how to hold this device? Whatever is the target purpose of this new device, either gaming or ebook or business device, the lack of a good holder/ handle to hold the device is a big disappointment. With a device of this size and with the glossy finish, I would have expected a way to hold the device safely, especially when the target audience of this device is frequent travelers.

Lack of camera, less pre-installed apps, flash are few other concerns.

Other major concern is Apple's proprietary attitude. The processor is Apple's own, OS is iPhone OS, app store is again totally Apple governed and the list goes on. If Apple expects it to be adopted widely, it sure might want to think about opening up some of these areas should not be hurting.

Otherwise this product looks awesome and might be a hit in India [ Images ] too. But wait, what I am saying? Apple had its flop products too.

-- Balaje Sankar, 28, Minneapolis, US


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How to Start a limited liability Company in India..??

Here is a nice blog entry which details how to establish a Limited Liability company in India. Click on the link below.

LLP in India

bJargons - I Marginal Revenue

It is the revenue per additional unit of an item sold. For eg lets say the price of an item A is 10$. And a company C sells 100 units on an average. So the revenue is 1000$. To sell an additional unit the company might have to reduce the price of the item. Why..? Since the item is priced at 10$, consumers are buying the product and the consumption is 100 units. To make the consumers to buy one more unit, the company needs to reduce the price for eg by .05 dollar. So the the price is 9.95$ now. Now the

Marginal revenue = Change in revenue/Change in units
which is
(101 * 9.95) - (100 * 10) / 101-100 = 4.95.

So the Marginal revenue is 4.95 against 9.95 that you might have expected.

Oracle hints on Sun SParc Assets Part II

With US DoJ approving Oracle-Sun deal, Oracle is slowly revealing its plans for Sun H/W assets. Here is another teaser/advt that Oracle runs about Suns hardware assets. I have seen this on most prominent web sites. It looks Oracle is willing to keep the Sun's Hardware business with itself and is ready to invest more on developing the same.
There is another angle to these teasers. The recent decision by EU to investigate possible antitrust issues in the deal has delayed it. It might take till mid January to complete the investigation. Already IBM and HP are grabbsing Sun's customers utilizing the uncertainity of the deal. The antitrust scrutiny can be dealt by either selling out MySQL or promise future development of MySQL. (I really love the words used by the Eurpean commissioner in his statement "The commission has to examine very carefully the effects on competition in Europe when the world's leading proprietary database company proposes to take over the world's leading open source database company" Oracle wants to thwart customers jumping ships and hence trying to clear the uncertainity by promising that it is still committed with Sun's Hardware.

Its not me alone but most of the experts still feel that Oracle might sell Sun's Hardware business to HP. And that makes real sense.

Oracle hints on Suns Sparc Assets

Here is a teaser that Oracle runs on its site. It might be a hint on what Oracle is planning with Suns Hardware assets.

Lets just wait till Oct 14 on the real intentions of Oracle.

VMWare acquires SpringSource

VMWare is acquiring SpringSource for around half a billion dollars.For the people who wonder what is a Virtualization/Datacenter has to do with a Java Enterprise application software company, you are not alone. I was too puzzled when I heard the news. Whatever the explanation CEO of VMWare gives or SpringSource's CEO gives it doesnt somehow add up. Yaa, these kind of acquisitions are not uncommon nowadays. Oracle's ongoing acquisition of Sun is one such example. Whereas Oracle is a Enterprise Software company, Sun is primarily a Hardware company. What on earth is Oracle going to do with Sun's RISC based assets...? Word is that Oracle has already decided to shelve Sun's ambitious ROCK processor project. Now will same sort of thing will happen with some of the assets of Spring Source. We will eventually see. For me, I would be happy someone buys redhat and keep a check on the self proclaimed guardian of Open source movement.

Back again

After a very long time I am back to business facts blogging. I will
try to be regular in writing new interesting business posts. Keep
watching this area.

--
Cheers,
Balaje Sankar
http://balajesankar.wordpress.com

Deals2buy stats

Deals2buy.com which I (most indians) visit to see latest deals has been following cheap tactics of claiming to give away free laptops if you subscribe to their alert emails. I was wondering why they suddenly started decieving people of giving away stuff for free. Going thru the traffic details of this site gave me the correct cause. Their hits have been falling drastically and continously.The following I have pasted from Alexa.com. The same is available here

Reach for Deals2buy.com: 

Percent of global Internet users who visit this site 

Yesterday	1 wk. Avg.	3 mos. Avg.	3 mos. Change
0.023%	0.0191%	0.0197%	19.1%

Traffic Rank for Deals2buy.com: 

Alexa traffic rank based on a combined measure of page views and users (reach)

Yesterday	1 wk. Avg.	3 mos. Avg.	3 mos. Change
4,148	5,275	5,085	642

Page Views per user for Deals2buy.com: 

The number of unique pages viewed per user per day for this site

Yesterday	1 wk. Avg.	3 mos. Avg.	3 mos. Change
2.5	2.45	2.55	9%

Its time to quit

This business blog speaks more about Sun than any other company though thats not its intention. Lets put aside the reasons behind that. Sun has posted record loss this quarter. Nobody has any clue that how is Sun going to make any money in the already troubled market. Jonathan with all his love for Open Source havent satisfied the investors who have seen their investments melt like snow in the last few months. Is it time for him to quit...?

Markets Collapse

Finally its here. Though I am writing the blog after a gap of around 7 months nothing has changed but it has gone from bad to worse. The markets all over the world has collapsed and they have done so repeatedly for the past few months. The FED and Central banks all over the world has been trying hard to infuse cash to avert this credit crisis. As analysts say, India is still under denial mode and might take a hard lesson soon that she too is not resistant to the global credit woes. Will keep posting on the developments.

Sun says its my SQL

Suns acquisition of mysql didnt surprise me at all. Given Sun's recent flirting with Open Source movement this is a logical outcome. But what surprised me is the cost of this acquisition. A staggering 1 billion dollars. Now how could Sun gets the maximum returns out of it..? Sun might want to convert the popular "LAMP" Linux Apache Mysql Php into SAMP Solaris Apache Mysql Php. But how does it going to monetize the effort and resources its going to pump into the further development of this free database software which is not that popular in large entertprises..? Charging for support and hardware does not seem to increase the topline of Sun in the short term as far as I see. Lets wait and watch.

Recession Looms...?

Is US economy on the verge of plunging into recession...? Now many say this question is insignificant as they feel its already inside one. Now even if its not in middle of one its not so far away. The next quarter will see the industrial output and employment rate getting plunged. Already US economy has shredded 17000 jobs in December. Prime Mortgage is asking for its due and eating into the economy. The recession will pull down the entire global economy engine. US Federal bank has lowered the interest rates twice in two weeks which is unusual and may cause long term issues but in short term it might inject the much needed cash into the system. But shouldnt they be containing the inflation, oh then the US public should bite the bitter bullet of unemployment.Moreover, what would you expect an outgoing government do.?

Now what could be the cause of this catastrophe...? Iraq War...? Subprime Mortgage...? Developing markets...? Rising oil prices..? No body can deny that the above said factors could have bought the dooms day sooner. But the real culprit is the interest rate reduction way in early part of this decade to pull out the economy of the then infamous dotcom bust.

Did you ask who can save us from this...? I would say Miracle.

Crab Fishing in Alaska

Coming back to bfacts after a wide gap. You know why..?Went in hunt for Ethanol industry data hunt. Now I know you wont believe that. But I dont have any other excuse. Jokes aside. This post is about some interesting stuff you wont believe either. You know which is the highest paid job in the world..? Now believe me its Crab Fishing. I know what you feel. But for Gods sake you need to believe that.

Alaskan Crabs are very much famous and costly that it brings in good fortunes for the people who are involved in it. So is the pay for the folks who go in to the Arctic sea in hunt for Crabs. Especially the King Crab which is famous across America and Japan. Though the forutnes are good here so are the perils. You can imagine working in sub zero temperatures and ever howling freezing polar winds.That makes Crab Fishing in Alaska one of the most dangerous jobs in the world. Working in such conditions deserve such huge pay.

Ethanol

The idea of using ethanol as alternate fuel has gained more momentum in this decade. The ethanol industry has grown leaps and bounds in these years. Knowing about it is a curious thing for all. I am preparing for a write up on this in the coming weeks. Soon you can see a detailed blog on Ethanol and its associated industry.

Uncertainty Continues

Not sure whether it is coincidence or not, after I have started bfacts I only get to see adverse situations in global markets. The uncertainity prevails across global markets as a continuation of the US prime mortgage meltdown. CountryWide is struggling to assure its customers over their deposits as they have started knocking its branches and withdrawing deposits, Capital one is closing down its Greenpoint Mortgage Unit which it bought recently, and many more fallouts like these.
The only positive note I made was regarding Sun's comeback, which didnt get consensus either among my friends. But sure there are other fascinating business trends going around the globe which will be of great interest to all of us which I will be updating in coming days.

Sun spreads its Rays

Its always interesting to watch the growth and strategies of Sun Microsystems. One of the biggest successes of Silicon Valley enterpreneurship, Sun has always fascinated me. But the past few years has been miserable for Sun. Its topline fall and the reason....? Low cost intel machines running Linux. The much hyped win of Linux over Windows didnt happened till now. But as somebody predicted way before, Linux has eaten into Unix markets and eventually Suns market share. Investors confidence dropped and Sun started posting lossess. Eventually Scott (McNealy) stepped down as CEO (Continues as Chairman)

Jonathan Schwartz after becoming CEO has brought revloutionary changes. Thanks to John,he (was forced) to Open Source Solaris, I have a machine with a partition having the solaris as Operating System. Recently Sun has joined hands with IBM to offer Solaris on IBM intel Servers and eventually on Mainframes. Sun's "Startup Essentials" package for developing markets like India and China is another initiative to grow into new markets. Sun has started posting profits after she had tough years of lossess. Finally the Sun is spreading its rays again after years of darkness.