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Led by its blundering chief executive Steve Ballmer, software giant Microsoft has “lost a decade” in its competition against rivals; Apple, Facebook, and Google have roared by it with more relevant offerings, leaving Microsoft in the dust suffering from a stagnant stock price and old-fashioned products.

That’s the argument made in a long piece in Vanity Fair published last week, and one that’s been widely debated in recent days.

But while so much fuss is being made about what’s in Microsoft’s rear-view mirror, the big test for Microsoft is the cornucopia of opportunity in its future. The company’s fate really depends on Windows 8 and the host of other products rolling out over the next year.

Windows 8 is the company’s new operating system, due in October, though it’s already being tested by developers. It’s Microsoft’s line in the sand. It’s so ambitious that it aims to cater to both touch-screen (tablet) and non-touch screen (PC) interfaces. Either companies and consumers buy it, or they don’t. True, some big players have been very critical of the OS already, calling it a “catastrophe” because of its code complexity. Its Metro touch-oriented UI, kitchen-sinked with everything else will create hassles for developers, according this line.

The critics include, most recently, executives at Valve and Blizzard, two of the biggest companies in PC gaming. Others have praised Microsoft’s ambition, however. Still others have decided to work with it, simply ignoring the pieces they want to. But Microsoft has so much more on the line right now than ever before.

Microsoft’s stock goes sideways

In addition to Windows 8, the company’s getting ready to roll out Office 2013, Windows Phone 8 for smartphones, Xbox 360?s ambitious SmartGlass software, and an updated Windows Azure with IaaS support. Then there’s Microsoft’s Surface tablet, which could spur a whole new product line, but which could also alienate the company’s tablet partners. The list goes on. To call the company sclerotic, as the Vanity Fair piece does, is unfair. The company is on the move, and placing huge bets all over the place.

Contrast this with many other big companies, which look like one-trick ponies by comparison. Microsoft’s value has moved sideways over the past decade (see image at right). But look at RIM or Nokia, which have lost way more than half of their market value over the past three years alone. Or in a fairer comparison, Cisco, another Internet-era bellwether, which has lost a lot more of its value than Microsoft has (see chart below). RIM gets hardware, but fails when it came to thinking about software. Cisco has routers, and fumbled elsewhere. Intel, which also hasn’t done well, has only chips.

Cisco’s stock has faired worse

Microsoft has stayed relevant all over the place.

Back to the Vanity Fair piece for a minute. The story added little new to the record, one reason we didn’t point to it when it first appeared. And Microsoft spokesman Frank Shaw hit back hard against the piece, blasting Vanity Fair for getting so many things wrong that “I don’t even know where to start.” Among other things, Shaw took issue with Vanity Fair’s criticism of its internal employee grading system (uh, every company with tens of thousands of employees requires some sort of performance system), and its dismissal of products like Xbox (it’s the leading games console in the industry right now).

Of course, both viewpoints are right. It’s true that Microsoft has been surpassed in market value by its younger, more fleet-footed rivals. But it’s also true that Microsoft continues to fight grittily in the trenches and has made valiant investments of time and money to modernize its products or launch new ones, from search technology to interface technology like Kinect. If you’ve got the world’s biggest technology offering and it relies on software downloads, and the Internet comes along, well, of course you’re going to have scramble like crazy merely to stay alive. Sure, Microsoft didn’t get social, but it allied quickly with Facebook. And even Apple has had a hell of a time with social.

Source: http://www.flickr.com/photos/orcmid/5082663013/

Microsoft’s Steve Ballmer

Yes, Ballmer has been bombastic, foolishly saying in 2007, after the iPhone first appeared: “No chance that the iPhone is going to get any significant market share,” and in 2005: “Google’s not a real company. It’s a house of cards.” And Vanity Fair’s citation of the late Steve Jobs in pointing out that Microsoft’s problems would continue as long as salesman Ballmer was leading it, is spot on. According to Jobs: “The company starts valuing the great salesmen, because they’re the ones who can move the needle on revenues, not the product engineers and designers. So the salespeople end up running the company.… [Then] the product guys don’t matter so much, and a lot of them just turn off.”

The real surprise is that Microsoft has hung on as long as it has, even as the Web transformed its old business. Micrsosoft looks constantly ready to fight. Each time it looks down for the count, it gets up again and takes another swing. Microsoft hasn’t lost a decade. But the next year, more than any other in recent memory, will test whether Microsoft still has the goods to remain vibrant into the future. That’s because it has Windows 8 and a slew of other critical mobile and UI products coming out — and they all have a chance. The bigger question: Is Ballmer really the one to lead the way?

Filed under: dev, enterprise, mobile, VentureBeat

Netwerkapparatuurfabrikant Cisco Systems vertelde gisteren dat het van plan is om ongeveer 1300 banen te schrappen, als gevolg van een herstructurering van het bedrijf. Volgens een statement via…

API-management startup Mashery announced $10 million in new funding today to expand its part in what it calls the “post-website era.” The firm’s API Management platform is now used by Fortune 100 companies such as ABC News, ESPN, and Cisco.

API management is now a “business-critical technology,” argues Scott Maxwell, senior managing director for OpenView Venture Partners, which led the funding. Others taking part include existing Mashery investors Cisco, Formative Ventures, First Round Capital, and .406 Ventures.

The growth of APIs as a ‘glue’ to hold together everything from operating systems to iPad apps is evident in Mashery’s latest numbers. It’s API Management platform saw a 272 percent increase in traffic, compared to the previous year. The company’s network of API developers expanded by 30 percent to 160,000 members in the past year. Applications built with Mashery-powered APIs increased by more than 75 percent to 50,000.

This “confirms that APIs have crossed over from a software component to a core strategy of how companies do business in the post-website era,” Mashery chief executive and co-founder Oren Michels said.

Mashery is based in San Francisco and was founded in 2006.

Filed under: deals

It was just over a year ago that API management company Mashery was touting its $11 million Series D. Today, the company is announcing $10 million in new funding, led by OpenView Venture Partners, with participation from existing investors Cisco, Formative Ventures, First Round Capital, and .406 Ventures.

As a reflection of the growth of web-based businesses, the number of developers using Mashery’s service has been booming. In 2010, there were just 35,000 developers in Mashery’s network. A year later, there were 100,000. And today, Mashery says its network now has 160,000 members.

That’s equivalent of 30% growth over the past year, the company reports this morning. Also growing, its SaaS-based API management platform which has seen 272% growth in traffic year-over-year. The number of applications built on Mashery-powered APIs grew over 75% year-over-year, currently totaling 50,000. That’s double what Mashery was seeing last May, for comparison purposes.

Alongside news of the funding, the company highlighted the massive growth in APIs over the past year in general, which it called the “most aggressive growth to date.” According to API catalog ProgrammableWeb, API volume doubled three times faster in 2011 than in 2008. By May, it reported a 15% increase in enterprise APIs alone. Mashery notes that it works with many of these companies, including 10% of the Fortune 100, and 150 brands like ABC News, Choice Hotels, Cisco, ESPN, Harper Collins, Intercontinental Hotels Group, USA TODAY, Expedia, Travelocity, Klout, Rdio, Comcast and more.

As before, it’s not only the growth in “desktop-sized” web businesses that are fueling Mashery’s growth – mobile plays a big factor here as well. Apps, and particularly those on iOS and Android are creating demand for more APIs.

“When we started, there was no iPhone or App Store or Facebook platform – and although I’d love to say we were eerily prescient and predicted all that, we didn’t,” Michels admits. “But we did know that companies need to work in partnership with others to grow, and that there was a better, faster, and more frictionless way to do that, through APIs. We see similar evolution in adjacent areas, and we’ll be investing this capital to capture that market as well,” he adds.

And, as he points out, it’s very hard and expensive to grow and succeed if you don’t have an API platform.  ”Being a platform allows you to leverage services and/or distribution built by others, he says. “If you’re not a platform, you need to build all those services and fund that distribution yourself.”

Mashery says it’s planning to use the new funding to expand its platform, operations, sales and marketing forces. So, everything. And yes, that means it’s hiring.

I think Michels’ earlier quote (which I loved) also still holds true, and even more so today than ever before: “People used to sit at a desk to ‘Internet’. Then they would get up and stop Internetting. Now they Internet wherever, whenever — even when they don’t think they are doing it.”

Note: Updated with more comments from Michels, following initial publication. Mon. 11 AM ET.

Editor’s Note: The following is a guest post by OpenDNS CEO David Ulevitch. OpenDNS is web-based DNS management software, offered as an alternative to using a given ISP’s DNS servers. 

Disruption doesn’t happen in a vacuum, it happens in context. And there is no greater example of disruption than what’s happening to enterprise technology market right now. Much of this is largely thanks to changing enterprise landscapes (consumerization of IT, cloud apps, mobility), new sales models and innovative go-to-market strategies (SaaS, Yammer d’état, land-and-expand) that leave the entire space ripe for disruption.

We’re seeing it happen right now in a number of business-critical spaces: CRM (SFDC), Storage (Box), Compute (Amazon), Collaboration (Google Docs) and others. Security, one of the largest budgeted areas in enterprise IT spend, is next.

The enterprise worker of 2012 looks wildly different than she did in 2005 (which isn’t so long ago!). Today, her applications are Salesforce, Google Apps, Box, and many other cloud-based services – the latter two didn’t even exist before 2005. She uses these services on myriad devices like her iPhone, iPad and laptop. Moreover, she does this from her office, her home, cafés, airport lounges and more. She is a digital nomad, fully embracing the idea that work is a thing you do, and not a place you go. Unfortunately, enterprise security missed the boat.

Much of this change has created a void that enterprise security vendors have ignored. When the work happens outside the network, on consumer devices, and the applications live in the cloud, the expensive legacy security appliances with no traffic running through them act much like the silent tree felled in the forest. This is happening, and as it turns out, this has created a massive window of opportunity for disruption.

Enterprise security today is at a crossroads. CSOs have been outflanked by the proliferation of mobile devices and cloud services, whereby many security best practices are being ignored in the interest of embracing access and collaboration. Simultaneously, the threat landscape is becoming increasingly more sophisticated and nefarious. The security market leaders (Cisco, Symantec, RSA, Checkpoint, Blue Coat, etc.) are having a hard time staying relevant as their historical “speeds and feeds” style of security ceases to address market pain. In fact, a Gartner report recently pointed out that while the overall security market is growing nicely, the share of the pie held by the big 5 security vendors is shrinking year over year, a scary thought for their long-term shareholders.

So if the paradigm of forcing all Internet traffic through an appliance at HQ doesn’t make any sense when the employees are out of the office, working on personal devices the company doesn’t control and using cloud applications, then what do we do? Where do we go from here? Companies have compliance, fiduciary and regulatory requirements to protect their employees, their data, and often their customers from security breaches and threats. Should every company ban iPhones? Facebook? Dropbox? Should employees be required to use a VPN to headquarters just to use Salesforce.com? None of those sound good, but there is a path forward.

First, companies need to recognize that a firewall and a VPN no longer cut it for security. To paraphrase The Matrix, there is no perimeter. Second, organizations need to embrace reality – I still see debates about whether or not employees should be allowed to “Bring Your Own Device” into work. It doesn’t matter if BYOD is a right or a privilege; that’s the wrong question. BYOD is a reality. Smartphones are here to stay. Cloud services are only becoming more and more entrenched.

The security company of the future will focus on how to help these new nomadic workers securely access data and how to do it while protecting employee privacy and allowing them to get work done.

So why are the legacy vendors screwed? In order for a big security company like Cisco or Blue Coat to offer a service that actually provides protection for an enterprise, across all of their machines and devices, they’d first need to have a fundamental business model shift from selling boxes to selling services. Sales goes from selling boxes to selling subscriptions. Engineering goes from shipping metal to running a 24×7 service. Finance changes revenue recognition models. Everything changes, and that’s really, really hard. That’s a shift no enterprise company I know of has successfully made to date, which is why other enterprise markets are disrupted by new players like Box and Yammer – nimble startups that built cloud- and mobile-first solutions from the ground up, and aren’t bound by their legacy business models.

So is this happening? Yes. Security companies that have historically owned the lion’s share of the enterprise market are losing deals to newer players like ZScaler and my own company. These new companies aggressively target the big guys’ banner customers and have a lower cost to serve and easier onboarding which enables them to pass a savings on to customers. Additionally, because today’s threats are becoming more sophisticated and the incumbents are proving ill-equipped to provide sufficient protection, we’re seeing very large companies taking chances on startups’ services, a trend we haven’t seen often in the past. For enterprises, it’s simply a question of risk versus reward, and the risk of betting on a startup far outweighs the risk of not maintaining a secure enterprise.

Here’s what I predict that we’ll see happen: Each of the big security players will soon reveal its strategy for staying relevant. Some may go to market with some frankenhybrid cloud solution that sticks their boxes in the cloud. Some may try to build a network of their own to offer cloud-based security services. Others may stick their heads in the sand and deny that the world is changing, just as Siebel did for years as Salesforce gained increasing amounts of market share. Though, true to the nature of disruption, it’s unlikely that any of those approaches will be very successful as the changes in the enterprise landscape are simply too dramatic to just iterate a product to cover. We will also see a major catalyzing event in mobile security – something on the order of magnitude of the Melissa worm, or Code Red. Something that forces companies to realize the exposure they have created by enabling such open access to their most sensitive information and requires them to quickly adapt to the new reality.

I may be the biased CEO of a security company competing with the likes of Cisco and Symantec, but industry experts are taking notice of this trend, too. Just last month Gartner, the analyst firm whose opinions dictate many tech buys in the enterprise space, published its Magic Quadrant for security. Websense, a current market leader with a long-standing relationship with Gartner, was – no surprise – positioned in the top right corner. But in the “threats” section about Websense, Gartner calls out just one company that critically threatens the industry giant: OpenDNS, which has no current or past financial relationship with Gartner.

Security is always a moving target, so the good news for customers is that the shift to cloud-based security solutions that operate as a true, ongoing partnership between vendor and customer will be far more effective than the one-time security appliance purchases of the past. But change is coming, and it’s going to be ugly for the old guard.

Image: Getty /Gary S Chapman

Apple uses the ARM architecture for its chip sets on its iPhones and tablets. Now we are seeing the first uses for ARM-powered architectures on servers to power cloud environments.

Contributors to OpenStack have developed the first ARM powered OpenStack cloud as a zone in TryStack.org, the free sandbox for exploring and testing OpenStack.

The ramifications are evident in a few ways:

• It shows the depth of the OpenStack ecosystem in its ability to attract engineers from the ARM ecosystem to make the project happen.  Contributors included engineers from Calxeda, Cisco, Core NAP, Dell, Equinix, HP, NTT and Rackspace Hosting,
• It demonstrates OpenStack’s drive to grow its community and diversify the architectures it can run on. For instance, TryStack cloud was developed to test software on the architectures supported by OpenStack.  According to OpenStack, users now have the choice to launch instances in two TryStack zones: an x86 zone running standard hardware and a new ARM-powered zone, both running the latest OpenStack Essex software release.
• And it signals that ARM-powered infrastructures are here to say, which could be a threat to Intel and its dominance in the market with its x86 technology.

The high costs of managing energy hungry servers will drive ARM adoption. Power and cooling costs dominate a server’s cost of ownership. It is more than the cost of the hardware itself by a factor of seven. According to ARMdevices.net, IDC reports that all servers worldwide consumed $44.5 Billion of electricity in 2010 and required ten additional Gigawatt power plants to be constructed.

The Calexeda blog frames the issue well:

In today’s cloud architectures, virtualization is used as a means to provide elasticity, dynamic workload management, and multi-tenant security, all while sharing the same underlying physical systems (which tend to be very large servers).  What if, however, we took an opposite approach and were able to provide the same benefits through the use of many smaller servers – a phrase some  have coined as physicalization.  Suddenly, we move back to a model of dedicated hosting and guaranteed performance, but with the same on-demand access and cloud-based pricing customers are accustomed to.  As long as the end-user gets access to a compute resource, and the economics of the infrastructure make sense for the cloud provider, this could ultimately be a win-win for the future of cloud computing.

OpenStack is experimenting with these bare metal servers. The work points to the rise of the ARM-powered cloud and a coming move away from clouds dominated by high-end servers.

AT&T revealed their intention to jump on the bring-your-own-device enterprise bandwagon with their business-friendly Toggle service last October, which thoughtfully allowed users to segregate their personal and work content on their smartphones or tablets.

Now the company has announced a handful of new updates to the service to make it a more appealing option for companies and IT departments looking to ride the BYOD wave.

If you’re not familiar with the Toggle service, here’s how it works. Once the mobile client is installed and fired up (AT&T is quick to note that it works on devices from all carriers), users will see work-specific web browser, messaging, calendar, and GPS apps meant to keep them productive and undistracted by their multiple versions of Angry Birds. IT departments are also able to sink their fingers into those Toggle-enabled devices to reset passwords, setting up work-related apps, and wiping work mode information if needed.

AT&T notes several times in their marketing materials and on their website that Toggle works for “the top two major operating systems,” including Android 2.2 through 3.X. The company remains coy about what that other OS is, but the updated version of Toggle has indeed been confirmed to play nice with iOS. AllThingsD reports that things won’t stop there — support for Windows Phone and BlackBerry 10 is expected to launch later this year.

Also new to Toggle is the Toggle Hub, an internal app store of sorts that lets admins deploy their own work-related custom apps that can only run in work mode. Those admins are also able to track app usage by user groups, as well as make select documents and media files available to the users that need them.

As personal smartphones continue to grow in power and functionality, the barriers to them pulling their weight as business-oriented productivity tools are coming down. According to a May 2012 report from Cisco, 76% of their 600 senior IT admin respondents consider the growth of the bring-your-own-device trend to be a positive development for their company (though the trend also forced Cisco to kill their Cius tablet project).

It’s little wonder that AT&T has made these kinds of plays — if businesses continue to allow users to bring their own hardware to work, the days of huge corporate wireless contracts may be numbered, and with Toggle, AT&T is trying to position themselves to benefit whether that scenario comes to pass or not.

European startups get a shot in the arm this week with the launch of Silicon Valley Bank in London today. Known for its understanding of the tech space, SVB will target the technology and life science sectors.

It will make loans of between £300,000 and £30 million to tech companies looking to expand. Shazam and The Foundry are already UK clients.

In the US, where it has made $7bn in loans, clients include Cisco Systems, Mozilla and Pinterest. It also as acts as a bank for investors including NEA, Sequoia Capital and Silver Lake. In the UK the bank is working with Index Ventures and Balderton Capital among others.

The problem with existing retail banks is that they rarely serve smaller tech companies which are unlikely to have three years worth of accounts yet or any sales when they start up. SVB aims to bridge that gap.

Phil Cox, Head of UK, Israel and India for Silicon Valley Bank, said: “We have seen a marked shift in recent years in our chosen niche industries’ activity within the UK.” He said the elements of an emerging and effective technology ecosystem were strongly emerging in the UK.

Commenting on the launch, George Osborne, Chancellor of the Exchequer today said: “The news that Silicon Valley Bank is launching a full banking service in London is yet more proof that the UK is fast becoming the technology centre of Europe.”

The new UK branch of SVB is at 41 Lothbury in the City of London.

De Jaarlijkse Cisco VNI Forecast verwacht dat het aantal verbonden apparaten in 2016 bijna 19 miljard zal bedragen, bijna een verdubbeling ten opzichte van 2011.

De Forecast  geeft de groei en de…

Those who belong to Generation Y — teens and twenty-somethings, including myself – are shaking up human resource departments, according to data from Salesforce Rypple. Young professionals born in the 80s and 90s are much more social than previous generations, are obsessed with their laptops, and hold the Internet on a high pedestal.

Twenty-something employees have flocked to social networks to connect with our coworkers and superiors. Seven in 10 Facebook users have friended a coworker or supervisor and 68 percent of Twitter users have followed a coworker or superior. I can attest to this as I’m friends with and follow many of my coworkers and my boss.

One in three college students and young professionals feels the Internet is as important as food, shelter, water, and even air according to a Cisco 2011 Connected World Technology report. We apparently breathe for the Internet and feel it’s a crucial part of our jobs.

While at work, we can’t stay away from our social networks. Checking Facebook ranks third in the top activities done at work, behind checking personal emails and checking company emails. However, 54 percent of businesses surveyed don’t allow employees to check any social networking site while at work at all.

Generation Ys are also drawn to hipper work environments like those in startups from Silicon Valley and beyond. We hope for perks such as free food, laid-back environments, team bonding experiences, and open workspaces in the jobs we go after.

Check out the infographic to enlarge and read more stats on how Generation Y is changing the workforce.

Young professionals on a computer image via Shutterstock

Filed under: VentureBeat