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Archive for February 20th, 2009

Why You Want to Eliminate Middlemen in the Cloud

Posted by Bob Warfield on February 20, 2009

Hulu’s decision to cut off Boxee from being able to display Hulu content is driving some consternation in the blogosphere.

Fred Wilson, an investor in Boxee, thinks people just don’t understand and that Hulu should come back to the table.  Understandably its a blow for Boxee that is tough to take early on when momentum is everything.  Fred has long been a lover of streaming media and predicts the ultimate demise of owning your own media.  He and I have gone back and forth on this issue in the past, and what’s happening to Boxee is a bit ironic, because it proves my point.

Meanwhile CBS is going to go after Hulu for shutting off TV.com which is ironic given the Boxee situation.

Techcrunch writes an amusing post entitled Free Fred Wilson.  Fred needs “freeing” because he is caught between the rights of a user to view content the way they want to and the rights of the content owner to control how that content will be displayed.

What does all of this have to do with Middlemen in the Cloud?

O’Reilly Radar comes closest to my thinking with this quote:

The real insult, though, is calling the people who made them cut Boxee off “content providers.” They might as well have told the studios they are the moral equivalent of the guy schlepping reels around the projector booth.

Did you catch it?  Hulu and Boxee are the Middlemen.  They have no power, no control.  You can think you’re buying something from them, but the real power is with the Content Providers, and you don’t have a deal with them.  Unless you bought the media.

This applies to other types of virtual goods and service available through the Cloud.  If you go to some organization that’s trying to arbitrage Cloud Computing resources, but doesn’t actually own any computers, they’re just Middlemen.  They are resellers.  Their margins are thin and the value they can add is limited.  Worse, if the owner of the real value add, the guys like Amazon that have the servers, want to change the deal, they can do so.

To be sure, you can make a deal with the Content Providers or original owners of the physical goods such as servers and still get into trouble, but at least you only have to wade through the terms of one deal.  When dealing with Middlemen, you usually have no idea what deal they have with the ones really creating the value.  You have no idea whether they can deliver on the deal you think you have with them.  There is a cutout that allows the Originators of Value to do as they please.  BTW, Hulu is an instrument of the Content Providers.  Read that O’Reilly article to see more detail.

The other problem at work here, and vaguely implied in the O’Reilly article, is that ever since William H. Gates III got the better of IBM, big companies have been afraid the nerds would steal their treasure and make them look foolish.  They work overtime on Draconian Measures to prevent that.  They’re certainly not about to let both a Middleman and a Nerd get hold of an actual Golden Goose, or likely even a whole Golden Egg.  If there is one thing Content Providers can never ever let happen, it’s being made to look foolish.

Hmmm.  I wonder what the content providers think about the idea that the URL for O’Reilly is radar.oreilly?  One of my startups hired Radar O’Reilly one time to help us promote a service called PriceRadar.  He was very clear that he couldn’t even call himself Radar because he was just a Middleman for his own character.

Hate when that happens!

Posted in cloud, strategy | 1 Comment »

Coghead Shuttered: Another in a Long Line of Non-Developer Developer Tools

Posted by Bob Warfield on February 20, 2009

Coghead has shut down.  Techcrunch has a copy of the letter sent to customers announcing the shutdown.  Customers will be able to run their apps without support until April.

Meanwhile, SAP of all places has acquired the technology.  I can’t imagine anything further removed from SAP than a tool for non-developers to use to create low end database and form apps.  After all, SAP is known for unbelievably flexible but costly to implement and extremely complex high end enterprise apps.  But, I assume a Grand Plan will be revealed in the fullness of time.  Maybe they just wanted to hire the developers as a team.  Intuit Quickbase have extended an offer to try to bring Coghead’s customers over.  It’s a generous offer, but transitions like this are not easy.  Coghead was a proprietary tool as most of these are and so the apps will have to be rewritten.  Still, presumably there are folks dependent on those apps who will have to do something.

The market for tools for non-developers to build software with is littered with interesting remnants.  They range from things like BASIC (still successful, but not clear VB is as simple as the original BASIC people were using to write Lunar Lander games with) to dBase/MS Access to the brief Renaissance of 4GL tools from companies like Powersoft that marked the early part of the Client Server era.  Many of these tools have vanished without a trace, or at least gone off to niches where they’re much loved but seldom heard about.  Lots of fancy names have been bandied about for this breed.  Coghead calls itself a “declarative application” for example.

In general, these tools are really difficult to get right.  Developers are expensive, and there is often a need for a little app that doesn’t warrant the expense of hiring the developers.  It seems so tantalizing to many that an app can be created that suddenly makes it possible for non-developers who understand their business problem to crank out the apps like crazy.  Alas, mostly it doesn’t happen so easily.  The products demo well, but programming in the end is, well, programming.  It ain’t easy if you’re not really a programmer at heart.  Probably the best example of a successful product for non-programmers is the spreadsheet.  But look at why it succeeds: 

–  They completely broke the mold.  There was nothing remotely like spreadsheets before Visicalc arrived on the scene.

–  They limited themselves to a particular domain–accounting and financial statements.  And that domain gave them a ton of elbow room because there were a lot of “apps” (spreadsheets) that needed creating there, and they were all highly custom.

–  The availability of this new invention intersected and rode on the back of a major paradigm shift that was underway:  the PC.  Spreadsheets, together with Word Processing, were the “killer apps” that made PC’s important to business.

This other genre of products doesn’t benefit from any of those qualities.  They mostly don’t break the mold enough to really make programming easier.  Instead they borrow ideas from lots of places and wind up complex grab bags of ideas.  Their domain, simple apps that need forms and databases, often just don’t have enough compelling apps to sell.  And lastly, that paradigm shift hasn’t been there to help much.  In a world where you had a choice of BASIC or dBase to build a custom accounting system, life was easy.  Today you could use so many different choices, and all the existing accounting systems are so much more customizable, that it’s hard to argue for this class.  Coghead was at least SaaS, some called it a Platform as a Service, but I just don’t think the paradigm shift was favorable enough given other available choices.  I also agree with Sinclair Schuller that the highly proprietary nature of a lot of these tools makes adoption a lot harder.

An adjacent space that I think is much more viable would be the easy-to-use “P” languages:  Pearl, Python, and PHP.  Ruby on Rails counts too, even though it doesn’t start with “P” and may be a little more cerebral than the other 3.  I’ve seen non-programmers do some pretty amazing things with these tools.  They have huge communities, and the languages are amenable to the sort of copying-and-pasting-of-examples-barely-understood.  At least they’re not proprietary and its easy to get lots of help, whether in the form of books available everywhere, online help, lots of finished examples, or even meeting someone pretty easily who is an “expert.”  Another I would throw into this category is Adobe’s Flex, which lets you do some very cool things indeed, though it is a touch more proprietary.

Other players still standing in this space:  Caspio, Bungee, Longjump, and probably others I have missed.  Best of luck to you guys!

Posted in cloud, user interface | 19 Comments »

 
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