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CEO Eric Schmidt at World Mobile Congress: Google’s Future is in the Enterprise

Google CEO Eric Schmidt said in his address to the World Mobile Congress on Tuesday that Google’s future is not to compete with mobile operators. Instead, he pointed primarily to search advertising as Google’s focus. But notably, Schmidt also mentioned Google’s interest in enterprise software to deflect operator’s concerns that the search giant wants to compete with them.

Schmidt’s address to the world’s leading mobile executives came as Google treads a delicate path. Google entered the mobile market in January. Instead of working through carriers, Google decided to sell its Nexus One directly to consumers. Last week, Google announced it would be offering Internet connectivity to select communities. That’s another sore point for operators who wonder if Google is planning to enter the networking business.

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Talking about the enterprise makes it seem like Google’s business is entirely different than that of mobile operators. How could a focus on enterprise applications corollate to complex mobile networks? Well, who would have ever imagined that Google would be offering free WiFi to communities or 1 Gigabit connections to 50,000 homes?

Google plans to offer high-speed fiber to select communities is in part designed to pressure operators to offer high speed Internet access. The idea being that the ISP’s could offer far faster Internet access than they do now.

Google knows that super high speed access would mean people spending more time online, more time using Google Apps in a far more fluid manner. It would mean that Google’s investment in cloud computing would have considerable additional returns.

Google is also in favor of net neutrality. Mobile operators and ISP’s are in favor of tiered networks. A tiered network could disrupt Google’s cloud computing business and its enterprise strategy. If the U.S. Congress permitted tiered networks it would force Google to decide if it really should be reliant on the carriers. The carriers and the mobile operators could in effect dictate the price and the type of content in the packets traveling over the network. If that happened, Google would have to consider building out its own network.

Schmidt’s reference to the enterprise is not ground shaking news. But it is noteworthy in its mention at an event as significant as the World Mobile Congress. Google may have offered an olive branch to the mobile operators but in the background are a number of issues that could have ramifications for Google’s strategy to be the king of the enterprise.

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Rackspace Says it’s Closing the Gap with Amazon

The chief executive of Rackspace says the company has closed the gap with Amazon, gaining significant market share in its cloud computing compared to a year ago.

In an interview with Reuters, Chief Executive Lanham Napier said a year ago Amazon was “incredibly far ahead,” of Rackspace in the cloud computing market. But this year he said Rackspace has closed the gap with Amazon’s web services business.

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Napier did not provide details about the gap nor how much Rackspace has gained on Amazon.

He did say the Rackspace cloud business contributed 10 percent to the company’s revenue in the third quarter. Business for cloud computing services has been growing in excess of 100 percent per year. In the second quarter, the Rackspace cloud business grew 17 percent.

The cloud business does have its pitfalls, in particular in respect to the tight margins that come with offering the service. Napier said those tight margins have been offset by its hosting business. Rackspace provides hosting to large enterprises. Cloud computing services are primarily provided to customers for hosting websites and renting servers that can be scaled up and back down at any time.

But can this scenario continue? Competition is only starting in the cloud computing market. Rackspace competes with other cloud computing providers such as Joyent. Microsoft will soon enter the game.

The key will be in how to add margins to the cloud business. Depending on traditional hosting business may get tricky if more of that business goes to the cloud, too.

Amazon seems to be fighting that battle on a daily basis. They continue to add features but have to respond to market pressures with competitive pricing. The company recently announced it was dropping prices for its EC2 service.

Disclosure: Rackspace is a RWW sponsor.

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Rackspace Says it Is Closing the Gap with Amazon

The chief executive of Rackspace says the company has closed the gap with Amazon, gaining significant market share in its cloud computing compared to a year ago.

In an interview with Reuters, Chief Executive Lanham Napier said a year ago Amazon was “incredibly far ahead,” of Rackspace in the cloud computing market. But this year he said Rackspace has closed the gap with Amazon’s web services business.

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Napier did not provide details about the gap nor how much Rackspace has gained on Amazon.

He did say the Rackspace cloud business contributed 10 percent to the company’s revenue in the third quarter. Business for cloud computing services has been growing in excess of 100 percent per year. In the second quarter, the Rackspace cloud business grew 17 percent.

The cloud business does have its pitfalls, in particular in respect to the tight margins that come with offering the service. Napier said those tight margins have been offset by its hosting business. Rackspace provides hosting to large enterprises. Cloud computing services are primarily provided to customers for hosting websites and renting servers that can be scaled up and back down at any time.

But can this scenario continue? Competition is only starting in the cloud computing market. Rackspace competes with other cloud computing providers such as Joyent. Microsoft will soon enter the game.

The key will be in how to add margins to the cloud business. Depending on traditional hosting business may get tricky if more of that business goes to the cloud, too.

Amazon seems to be fighting that battle on a daily basis. They continue to add features but have to respond to market pressures with competitive pricing. The company recently announced it was dropping prices for its EC2 service.

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Barack Obama Loves Startups: New Federal Office for Early-Stage Entrepreneurs

According to a Bloomberg report this morning, early-stage startups have a new friend in very high places.

The U.S. Commerce Department is establishing a new Office for Entrepreneurship and Innovation specifically to help entrepreneurs develop great ideas into workable business plans by giving them training, funding, advisement, access to data, and a big pair of federal-sized scissors for cutting through the red tape of starting a new business.

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The office is being announced by Secretary of Commerce Gary Locke, who has a track record of supporting entrepreneurship. Earlier this month, he examined a backlog at the U.S. Patent Office that was holding up many applications for years. “This has a direct, negative impact on America’s economic competitiveness, creating uncertainty for entrepreneurs and inventors,” he said.

And in light of America’s current economic crisis, he echoed remarks made by Obama in a speech given on September 21st. The President cited a need for more federal support of innovation and entrepreneurship at a time when the country is reelying from “cycles of boom and bust.” Lock said, “Instead of working to build a great company or discover a new invention, too many of our brightest minds were busy engineering credit-default swaps.”

Locke will direct the new office in supporting entrepreneurs and startups through the coordinated efforts of many government programs and entities.

We look forward to reporting more on this office as news becomes available; however, we also acknowledge that not everyone agrees with the President’s economic initiatives. As members of the American startup community, how do you feel about the likelihood of more federal involvement in our sphere? Is the government’s help, including possible grants or loans, welcome?

Let us know your opinions in the comments.

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The Top 12 Options for Web Content Management

Gartner has published its Magic Quadrant for Web content management in 2009, to help CIOs and IT decide just what will meet the needs of the enterprise. Web software is now the fastest growing sector of the enterprise content management market, according to Gartner, and was valued at more $3.3 billion dollars last year.

This annual report identifies the leaders in the industry, and we picked out the top dozen vendors aimed at enterprise content management on the Web. Here’s their strengths and weaknesses, to let you get a handle on what’s best for your business.

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Leaders

While there’s some overlap with generally popular offerings — Drupal-based solutions and open source are getting more attention than ever — most of the top dogs in ECM on the Web are specialist vendors who focus solely on the needs of enterprise. Gartner’s choices for who fits inside the Magic Quadrant bear this out.

Oracle remains one of the biggest players in this area, despite being better known in many circles for its databases. What really brought them on the scene was the acquisition of Stellent in 2007, and since then their strength has been integrating WCM into their wide-ranging offerings for content management.

Autonomy, which entered the sector through its acquisition of Interwoven this year, tends to appeal most strongly to the marketing side of WCM. While they offer an ability to deliver content that’s highly targeted, WCM will continue to be a sideline in terms of profit. While Autonomy can deliver right now, they lack a detailed roadmap for the future of the product.

Open Text is one of the most well-known in this space, and is the top pure play vendor for content management. Despite a close partnership with Microsoft, Garner predicts that’s Open Text’s top competitor will continue to be SharePoint and other .NET software packages.

SDL acquired Tridion in 2007, and since then has shown impressive growth. This is the result of solid capabilities in multilingual and multichannel content management, as well as robust SharePoint integration.

Challengers

While the three companies listed at challengers by Gartner hardly seem like underdogs, software from Microsoft, IBM, and EMC are increasing in importance very rapidly.

Microsoft’s SharePoint is growing enormously in market share as a Web content management solution. In addition feeding off of the trust that Microsoft name inspires in just about every CIO, one of the strengths of SharePoint compared to current leaders include the partner ecosystem that is growing like weeds, and how tightly integrated it can be with Microsoft’s other products in e-commerce, Web analytics and search. Of course, as fast as it grows in WCM, SharePoint is hated for its weaknesses as an intranet and document sharing system.

IBM’s greatest strength in content management is also its greatest weakness. The fact that Lotus WCM is vertically-focused and is closely integrated with the entire Websphere Portal makes it appealing to organizations who already use the portal. But for those who don’t, Lotus seems lacking without the rest of IBM’s system.

EMC has been slowly brewing its WCM capabilities since it acquired the fairly popular Documentum in 2003. EMC is especially good in the sense that it works with a broader ECM solution, and can do DAM and records management of Web content too. Its also shown some of the biggest improvements in its latest release, 6.5, through adding technology first used in X-Hive, an XML database and dynamic delivery environment.

Visionaries

A list of honorable mentions shows up in the Visionaries section of the Magic Quadrant. The label might sound fanciful, but most of these up-and-coming vendors are making a real name for themselves.

Sitecore is a Denmark-based company that’s also a Microsoft Gold Certified Partner. Their .NET CMS is unsurprisingly tied to Microsoft in a multitude of ways, which can be either a plus or a minus, depending on where your enterprise stands technologically.

FatWire Software has a Java software package that focuses on collaborative features and analytics, but suffers from what Gartner calls “costly” customization needs to make it play nice with related technologies.

Ektron is especially famous in the SMB market. Its CMS400.NET integrates relatively well with SharePoint Server.

Day Software sells software based on Java EE, and it’s made strides in usability. Despite these improvements sales have lagged, and Gartner predicts that the partnerships with IBM and HP that this Swiss-based vendor has will decline in the future, weakening its position.

Clickability is a pure SaaS vendors in Web content management who is making progress with enterprises fed up with the costs of on-premise WCM, even if SaaS remains on shaky ground.

There are at least a dozen more vendors in enterprise-class Web content management who get short mentions in Gartner’s report. Solutions such as Alfresco’s open source software or Acquia’s Drupal distribution might not warrant inclusion in any list of leaders yet, but they’re making respectable gains. For a detailed account, be sure to read the full report.

Image courtesy Gartner Research

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