Thursday, December 21, 2006

BAIA invited post on the Funambol model

The guys at BAIA - Business Association Italy America - asked me to write a post on their blog ("The Voice of the Italian & American Business Community") to explain the Funambol model and how I feel it could be replicated.
BAIA is an independent, nonprofit, member-based network whose mission is to create tangible business value by establishing a professional forum through which information, knowledge and opportunities can openly and effectively be exchanged between the business communities operating in the United States and Italian business interests. BAIA's new approach to business networking is based on an Open Source Governance model. BAIA aims to enjoy the support of anyone who shares the BAIA vision of an open exchange network.
I share the vision and I like the people running it (and I am not really a shy individual...), so here you have my post.

The Funambol model: US capital and Italian heart

Life as an emigrant is tough... You look back at your native country and you struggle between love and hate. Emigrants flee home because they go looking for something they could not find where they were born. They leave their heart in their home country, hoping to come back one day to find that everything has changed.

I left Italy for California in '99 and I go back home quite often. Not that much has changed, but I am not planning to give up that fast...

After founding a couple of companies in Italy and working for a public US company, I founded Funambol in 2002. Funambol is the mobile open source company, bringing BlackBerry-like capabilities to the masses. A Red Herring 100 company and the largest open source project in mobile with almost one million of downloads, Funambol has been funded mainly by US Venture Capitalist. The headquarter is in Silicon Valley, but the R&D is in Italy. In Pavia, close to the local university.

US capital and Italian heart.

Italy is a beautiful country, but in a state of crisis. The economy is suffering. Globalization is killing our small manufacturing companies. Competing with China in these markets is simply not doable. Protectionism attempt will fail. We need to move on.

Italy can compete on high tech and software in particular. Our labor cost in this sector is highly competitive. It might sound strange to many, but Italy has the lowest cost of software in Europe (35K/year Euro per engineer). That's extremely competitive with respect to Silicon Valley (the weather is still better here, sorry) and also with India or China, where wages keep appreciating every year.

In particular, if you compare the Intellectual Property protection Italy enjoys. I know of a few examples of outsourcing companies in India, where a group of employees took a product they were developing for a third party and started a new company... Outsourcing saves money and it is necessary, but can be risky in a country where the legal system does not support you. On top of it, Italy is the best with respect to loyalty of the employees (a key element in software, which is all about people)

When it comes to education, Italy ranks high. In my experience, the competence of Italian engineers is comparable if not better than American peers. Italy is the country of creativity. It is in our DNA. Software is creativity. Add some rigorous engineering and you have Ferrari, the most beautiful car on the planet, but also a technological jewel.

Software is great for Italy. It requires limited capital to start. If you use open source as a distribution model, it is even better. You can take advantage of globalization and reach markets anywhere on the planet.

When you are ready to go to the next step, however, risk capital is missing in Italy. The ability to manage risks of Silicon Valley VCs is unrivalled. All your connections are here, if you want to grow your company or find an exit via M&A. This is the place to be if you want to go big. Not just for cash, but for the mentality. Things move at a different speed in the Valley. And I do not believe it is going to change any time soon.

For now, I see a great opportunity for Italy to be a center of excellence for software outsourcing. Becoming a new Silicon Valley is the next step. We are not ready for that yet, but the Funambol model is a start. US capital and Italian heart. I hope many more companies will follow. It is simply the best of both worlds.

Monday, December 18, 2006

About Palm and buying back your own OS

I have tried to analyze the last move from Palm for a few days and I have found it an interesting challenge...

The story is quite complex, if you are not a Palm follower. Palm spun off PalmSource (their operating system) some time ago and launched a Treo with Windows Mobile. Then Access bought PalmSource for
$324 million and pushed it even further towards Mobile Linux. Now Palm is paying Access $44 million for the license of Palm OS Garnet (the old version 5, the one that was supposed to be a transition to the version 6 that never saw the light of day, nothing to do with Mobile Linux).

So... You own an OS that everybody loves. You throw it into a separate company. You embrace a different OS that everybody hates (but you still launch a lot of devices on Palm OS, like the recently announced 680). Now you buy back an OS that is pretty much dead...

It sounds stupid, however:
  1. $44M is a steal if you look at the $324M Access paid for PalmSource (THAT was crazy)
  2. It protects your investment on the Palm OS Treo (650 and 680) and buys you time to move to a full Mobile Linux (which is a must to survive)
  3. It puts you in a better position to negotiate with evil Microsoft if you are thinking to add another Windows Mobile device (please don't ;-)
Overall, I personally believe it was a smart move from Palm. However, the more I look at this and the more I am getting convinced that the need to get rid of Access means something: they can't work together. Therefore, I am ready to bet that Palm will announce a Mobile Linux device in the near future BUT it won't be based on ALP, the Access Linux Platform.

That's quite interesting. I look forward to seeing where they go with this...

Tuesday, December 12, 2006

The next SMS

I read an interesting article about text messaging today. For the lazy web link clickers out there (I subscribe to that list), here's a summary of the content:
Text messages sent to and from mobile phones will more than double over the next five years to 2.3 trillion messages sent by 2010, a survey said on Tuesday. [..] Total revenues from text messaging is forecast to grow to $72.5 billion in 2010 from $39.5 billion in 2005. [..] Gartner predicts the level of SMS messages will top 1.8 trillion in 2010" [adding that] "Wireless messaging is the most successful mainstream mobile data service to have emerged during the 30-year history of the cellular telecoms industry"
In a nutshell: mobile messaging rules when it comes to data and it will keep ruling for the next five years. Forget about mobile TV, games, picture sharing and such. Messaging is king.

I have a small question, though. If messaging is the driver of future data revenues, is SMS going to be adequate for the user needs? My answer is no...
  1. SMS is limited in size of messages. It is not a problem when sending (people send Short Messages... fast and long SMS-typers are rare, although amazing to watch) but more when receiving. Screens are getting bigger, reading is not a problem. You can easily read a message sent from a PC on a mobile phone. Not with the current SMS. Combining more than one SMS is a horrible solution.
  2. SMS just allows a single recipient. You cannot send a message to more than one person (and you pay for each message...). You cannot do reply-all (although there are some cool companies working on it). That's very limiting in this new age of social networking.
  3. SMS does not support attachments. I am not talking PowerPoint here. That's power users. I am talking pictures... Every phone now has a camera. People want to send the pictures out. MMS has been a failure for the cost, configuration and clumsiness (in this order). The concept is still very valid. And a clear need is there.
We need messaging and SMS is not adequate. But it is pre-installed AND a standard working on every phone. That's the beauty of it. If you are in Europe, you know that half of the phones in a carrier network were not bought through that carrier. You take a SIM card, put it in. What works right away? Voice and SMS. Pre-installation and standard-based messaging is necessary.

So... that leaves you with the only option: the next SMS. Push-messaging (yep, SMS is push) based on standards, pre-installed on devices, capable of supporting attachments, reply-all and receiving your email. Your mobile life integrated with your web life. It's a SyncML client, or p-Imap or Lemonade. I do not really care. But I am convinced that is the future of mobile messaging for the three billion mobile users out there.

Not really a novelty, I know, but
"Wireless messaging is the most successful mainstream mobile data service to have emerged during the 30-year history of the cellular telecoms industry". The funny thing is that it is not going to change any time soon...

Monday, December 04, 2006

It's the usability, stupid

In one of my past lives (I have plenty), I did a Ph.D. in usability. Since then, I can't resist from looking and playing with things, asking myself: why? Why are you asking me to do this? Why? Who designed this thing? How many real people (engineers belong to a peculiar species) ever looked at this stuff? Why?

A few weeks ago, my TiVo froze while playing. I called DirectTV and they made me re-format it. It froze again. They told me they were going to send me a new one for free.

They sent me the new DirecTV DVR instead.

I decided to give it a try.
Although it was not built on open source as TiVo, all TiVo features were there. Actually, they even had a few more than TiVo. It was perfect from the requirements standpoint. The product manager checked all the boxes, QA did not find any bugs.

However, from a usability standpoint, it just sucks.

Nobody at DirectTV ever used it to watch a game. It is slow to respond to commands. It does not jump from one speed to another smoothly. You can just use it to watch a program as you would watch a tape on a VCR. Do not try to move around the program... All the features are there, but the consumer experience is just plainly bad.

What's the story here? The usability factor is key. Always key. Forever key. If you do not look at things with the eye of the user, you will build a perfect product that nobody will like to use. Emotions are everything.

When you look at mobile, the usability factor goes up an order of magnitude. You are dealing with a very small thing, that you carry around with you. Your attention span is measured in fraction of seconds, not minutes. You are not sitting on a couch or on a comfortable chair waiting. You are standing. You have people around you. It rains...

Still, so many products fail the usability test. Companies keep pushing the web paradigm to mobile users and complain about the network or the operators when their applications fail. They can't be used, they won't be used. Give me WAP a million times faster, I won't use it. Do not ask me to scroll and click. I won't. It should be simple but it is not. How many failures are we going to need for people to realize this?

I tried to send this message to DirecTV. I called them and told them their DVR sucked and I wanted my TiVo back. They said "Sorry, Sir, we do not have them anymore. And you just signed up for two
additional years with us because you requested a new DVR. If you want, you can return it." That's interesting... My TiVo breaks. They send me a fake replacement "for free" and I am signed up for two more years... Or I can go back to VCR.

I went online, found a hacker TiVo site. Ordered a replacement hard drive. Assembled it. Put the TiVo back with double capacity. Sent the DirecTV DVR back to them.

I am back in TiVo heaven, smiling at how quick it is to respond to my commands and how well thought it is from the consumer standpoint. And I am now ready to move away from DirecTV directly to their competitors...

So much for usability. Believe me, I am not alone.