Google Launches App Engine Into The Cloud

Google on April 7 launched its highly anticipated development infrastructure called Google App Engine. App Engine is Google’s fully integrated hosted application environment that allows developers to run their web applications on Google’s infrastructure.

Announced at Campfire One, App Engine is currently in preview release and is limited to an initial pool of 10,000 developers. (The first 10,000 developer accounts were fully allocated on April 7th) Google App Engine initially only supports Python but will roll out other popular development languages over the next few months.

Google App Engine will provide 500MB of storage, 10GB bandwidth per day and 200M megacycles of CPU per day during the preview period.

The preview development environment includes the following features:

While not direct competition to Amazon Web Services or Salesforce’s Force.com, Google App Engine will allow developers to create an entire web application stack on the Google App Engine infrastructure. This will work great for developers for example who are new to ondemand cloud computing and will help them scale as the use of their applications grow.

Google has a number of applications in its appspot.com application gallery that were created with the first iteration of Google App Engine. Although their are only a couple of enterprise applications (versus the normal glut of Web 2.0 applications) listed in the gallery so far, I would expect the number of enterprise applications to grow quickly.

Social Networks Are Not A Business

One of my favorite financial magazines; the Economist, published an article that convincingly argues that social networks are not a business.

This is probably not news to the management and investors of most social networks but should serve as additional fodder for those who see an end to the Social Networking/Web 2.0 valuation & funding gravy train.

The Economist article equates social networks to free email such as Hotmail or Google mail and predicts that social networks have quickly come to be an expected and free part of any internet portal.  In this context social networks such as LinkedIn and Facebook should not be a destination in themselves, but the components of the social networking sites should be part of a users everyday internet experience.

I agree in that in these trying economic times the advertising model that most if not all of these social networks are built upon is not a sustaining business model. Advertising revenue for established media companies is and has always been cyclical in nature and even with the lower cash burn rates that today’s Web 2.0 companies have compared to their Web 1.0 predecessors, wont provide enough recurring revenue to stay in business after the venture funds runs out.

Venture funding in itself is a bit faddish and indications are that Social Networks/Web 2.0 are no longer the VC flavor of the month as VC’s move to investing in Green/Clean Energy and Renewable Technologies.

Will be interesting to see if some of the venture funding that was wildly invested in Consumer Social Networks/Web 2.0 will now invest in Enterprise and Enterprise 2.0 Software firms. Most of these firms actually have a real revenue producing business model and are;  in the case of Enterprise 2.0 software firms, in the process of rearchitecting packaged solutions to Software as A Service.

How Tech Firms Can Give Back to Community

2008 TED Prize winner David Eggers wish at the recent TED 2008 conference in Monterey was to ask anyone in a position to help “to find a way to directly engage with a public school in your area” and then share the story of their involvement with the public school on the OnceUponASchool.org website.

826 National, TED & Hot Studio stepped up and helped make the first part of David’s wish come true by creating the Once Upon A School website.

In the 2 weeks that the website has been live there have been a number of potential project ideas created where technology companies could pledge to help. Once Upon A School is seeking 1000 pledges nationwide from individuals and or companies ready to help their local public school.

A few of the recently listed project ideas that would make excellent pledge projects for Enterprise 2.0/Web2.0 companies include:

• Scaling up the OnceUponASchool.org website site so that it includes social networking functionality.
• Building out a robust tracking system for projects/ideas/stories.
• Institute an internship program that actively recruits from the nearest struggling public school.
• Help a school develop a useful website presence.

At Applation we are discussing making a pledge to start an internship program with a local Phoenix Area High School in the fall.

This is a very worthwhile cause and effort that hopefully will gain traction nationwide.  The OnceUponASchool.org website mentions that there have been 100 pledge committments so far but there is still a gap to get to the goal of 1000 pledges.

Preview of SAP Business ByDesign

SAP last September announced the early adopter roll-out of SAP Business ByDesign.  Business ByDesign is SAP’s entry in the On Demand Business Applications space and is being marketed to SMB customers with 25 to 500 users.

Business ByDesign will allow SAP to cover the entire gamut of customers sizes and will complement SAP Business Suite, SAP Business All-in-One and SAP Business One.

Business ByDesign will be priced at $149 per month per user with a minimum of 25 licensed users. The monthly subscription pricing is all inclusive and includes infrastructure, product support service and upgrades.  

Business process functionality includes financials, CRM, executive management support, financials, human capital management, project management, supplier relationship management, supply chain management, compliance management and integration with Microsoft Office.

Business ByDesign runs Netweaver; a smart move in that SAP partners and customers can access all the SAP Enterprise Repository.  Netweaver will also allow SAP partners to extend Business ByDesign by developing vertical industry applications utilizing SOA and technologies such as IBM WebSphere, Java EE and Microsoft.Net.

Just like SAP Business All In One and SAP Business One; Business ByDesign utilizes T-Rex and Max DB, thus eliminating dependence on SQL server, Oracle or DB2 databases.

Business ByDesign is a pure On Demand solution; but is not multi-tenant, unlike Netsuite, Salesforce or the smaller On Demand ERP competitors. Also the early versions on Business ByDesign are a bit short on Enterprise 2.0 features such as Mash-Up support and Web 2.0 User Interface features.

Business ByDesign is expected to have general availability in the first half of 2008 and SAP estimates 1000 customers will be live by mid 2009.

Update 8 May 2008 - Since I posted this review of Business ByDesign there have been a number of announcements relating to the availability date of the product…..

Venture Capital begins to understand SaaS

A recent article in the Wall Street Journal outlines how some VC firms are slowly beginning to understand the business model of On Demand Software as a Service Companies.

Most VC’s have traditionally concentrated on investing in companies after the seed stage of funding. VC’s normally look for a seat on the board, preferred stock and control of a firms operations in exchange for a multimillion dollar later round investment.

The catch with todays Enterprise 2.0 - Web 2.0 - SaaS companies is that with a dedicated team and a great idea, $500,000 is in most cases plenty to get a beta product introduced via the internet. With OpenSource development tools low cost storage options like Amazon S3 and SaaS delivery models it is much easier in 2008 to develop a software solution than it was 5 years ago. 

Also having heard stories of how Facebook and other Web 2.0 - Enterprise 2.0 companies were able to get a successful beta product developed without the overbearing presence of a traditional VC firm, many of the current crop of SaaS companies are for the first time NOT considering spending a substantial amount of time and effort seeking VC funding.

Investments in the $100,000 to $500,000 range were until recently the sole province of Angel Investors. But many VC’s; fearing that they will be shut out completely from some of the up and coming Enterprise 2.0 and Web 2.0 companies, have changed tack and now consider the smaller investments worth their time. 

These developments bode well for most SaaS entrepreneurs as they will conceiveably have access to additional sources of funding that were until recently not available to their firms.