Any debate over open vs. closed systems has to touch on open-source software and the ways in which companies are attempting to build code as a community effort, while still profiting from it in some way. So I chatted with Mark Shuttleworth, CEO of Canonical, the company that supports Ubuntu, about how it walks the line between spending to support open-source software and finding a business model that works.

Canonical’s 330 employees are responsible for maintaining, supporting and selling service for Ubuntu, an open-source version of the Linux operating system for servers, desktops and computer manufacturers. Some 120-150 of the Canonical employees contribute directly to the new releases of the software that come out every six months, and most of the company’s revenue comes from supporting enterprise server customers and makers of computers that want to put Ubuntu on desktops. Consumers also download the software, but few pay Canonical for support. The company is not yet profitable.

Shuttleworth believes that in order to develop a strong business model around an open approach, one has to create an open option early, ideally through a strong standardization process and one also needs to have a lot of different open-source projects fighting it out.  For example, in the operating system world there wasn’t a strong history of open alternatives, which meant that Ubuntu had to out-open its proprietary competition, which has high costs.

In that way it has pushed Canonical perhaps further out toward open on the spectrum. Shuttleworth calculates the direct costs of being so open as bringing people together in ways that empowers them and makes them feel like members of a community, as well as reaching out and putting in place the infrastructure to create a company. However, there are indirect costs as well.

“There is a myth that being open is necessarily more efficient and cheaper, but there are no hordes of people showing up to do the hard stuff,” Shuttleworth says. “Occasionally wonderful, magical things happen — really incredible things do happen, like people show up unexpectedly with brilliant ideas — but it’s still hard and expensive and you still have to be willing to do all the hard and expensive things and do it in an open fashion. And you’re still likely to be accused of being open only when it’s convenient.”

He points to the cloud computing market as one that tends to give a lot of lip service toward openness but where a lack of a big standardization effort and robust open source competition could lead to a relatively closed ecosystem.

“The basic story there is pretty bad at the moment,” Shuttleworth says. He notes that proprietary infrastructure, hypervisors and even the APIs and ways data is stored can lock folks into one cloud for life. “We need real open alternatives early in the process, making it possible for people to build own cloud infrastructure that responds to the same APIs that Amazon’s do.”

He’s accepted that Amazon Web Services’ APIs for its web services, while not created through an open standards group, have become a de facto standard and said that it’s more efficient to build open-source code around Amazon APIs rather than try to develop new ones for accessing the cloud. Canonical has a partnership agreement with Eucalyptus, which offers open-source software to create an AWS-compatible cloud, where people can use Ubuntu  and Eucalyptus to create their own cloud computing platform. But Shuttleworth would like to see more open-source options other than Eucalyptus  for building out a cloud computing service of your own.

At the platform-as-a-service level, the issue around openness will be around moving data from cloud to cloud easily. There’s room there for an open standard or open databases, he said. But at every level, when considering building a business around open source software, he he believes that “you want a common and clear standard with competing open source versions using that standard.”

That keeps proprietary vendors at bay, and gives the companies building a business around the open-source software a chance to decide where they want to be on the open-to-closed spectrum. But it also introduces the prospect of fragmentation, which we’ll leave for a later post.

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I don’t have an iPad, but watching this amazing video (embedded below) demonstrating the Alice in Wonderland app made me want to run out and get one — and if I had a young child, it would make me want to get one even faster. I know that many people believe reading should be a quiet and relaxing activity, and that there’s nothing quite like communing with the pages of a well-read classic, but this video makes reading “Alice in Wonderland” look like…well, it looks like a lot of fun. And I have a feeling if Charles Lutwidge Dodson (i.e., Lewis Carroll) could see his story represented like this, he would probably think it was kind of fun as well.




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The app comes from Atomic Antelope, which makes iPhone apps, including one called Bauble that lets you turn your iPhone into the world’s most expensive Christmas card. The Alice app brings an interactive element to the pages of this children’s classic, with features that are based on the original illustrations and allow readers to stretch Alice’s body when she comes to the table with the “Drink Me” bottle, to throw tarts at the Queen of Hearts and watch them bounce off her, and to rock the baby that turns into a pig. The app costs $8.99, although there’s also a free “lite” version. Chris Stevens, one half of Atomic Antelope, wrote about creating the app here.

So is this the future of e-books — every book its own app? It’s certainly a great example of the kind of full-color and interactivity and motion (using the accelerometer) that isn’t possible on other e-readers. These kinds of apps could certainly help the tablet app market hit the $8 billion-mark that GigaOM Pro analyst Mike Wolf forecast it would in a recent report on the sector (sub req’d). It’s also a sign of the creativity that traditional publishers seem to lack, as they try to maintain their traditional stranglehold on book prices in the online world, as Paul Sweeting detailed in this recent GigaOM Pro analysis. Now I’m trying to imagine what a Dr. Seuss book would look like as an iPad app.

Microsoft today launched a line-up of mobile devices called Kin. Built by Sharp and going on sale through Verizon Wireless starting next month, the phones are targeted at young people — mostly teenagers — and are the handiwork of members of the Danger team, which Microsoft acquired in February 2008 for $500 million.

I attended the Kin launch largely because I was curious as to what Microsoft’s response to the Apple-Android assault on the smartphone market would look like. After all, it’s not like anyone will be able to buy a Microsoft-branded Windows Phone anytime soon. Apparently I wasn’t the only one who was curious — the event was packed to the gills. So like everyone else there, I gave the first two models to be launched — the Kin One and Kin Two – a try, only to find myself quickly overwhelmed by all the things taking place on the screen.

But I’m getting ahead of myself.

Let me start by accentuating the positive: The two devices are extremely well built and are exceptionally fast, with touchscreens that are positively spritely compared to their Android-based rivals. In fact, I would go as far as to say that the company has done a great job of cobbling together solid hardware that’s chock-full of features. The Kin Two in particular felt nice and sturdy; its slide-out keyboard was comfortable and its overall look was as appealing as the Palm Pre. OK that last bit was a joke, but it does look very much like the Palm device.

Marry that hardware to a superb 3G network like Verizon’s and you are in for a great experience, especially when accessing Internet-based services, whether they be photos, videos or contacts. Snapping photos or videos and loading them to the web using the Kin phones is dead simple.

Another excellent feature of the Kin phones is their tight integration with Microsoft’s Zune Music Service. Accessing music through the service was a totally mind-blowing experience — fast, responsive and easy to use. Whether that’s due to Verizon’s network or some under-the-hood trickery, I don’t know, but in the future I will expect all music services to be as good as this one.

Unfortunately all this goodness doesn’t add up to a great phone, because the user experience was cluttered and confusing. The opening screen, which is a grid divided into squares, is so busy it reminds me of Times Square on a Friday night.

Microsoft’s Kin can be divided into three components — the Loop, the Spot and the Studio. The Loop is essentially a social aggregation service that is very much like Motorola’s Blur except a tad more polished. It allows you to get updates from Facebook, Twitter, MySpace, etc.

And as with the Moto Blur, it’s a good idea but one that causes visual dissonance — which is even more profound if you’ve ever experienced the picture-perfect serenity of an iPhone OS-based device. The lack of visual polish extends to the Spot, a sharing service that allows you to share  photos, texts and web pages with almost anyone by simply dragging them to a “spot” on your phone.

Again, a great idea, but one that needs some spit and polish.

Photo of Kin Studio By Microsoft

The most stunning part of the package is the Kin Studio. I absolutely love this feature, which offers a visually delighful way to save everything you’ve created on the phone to the Internet and then access it from any web browser. Use it in concert with a Facebook account and suddenly you have a whole new way of managing information. If Microsoft is smart, it’ll turn this into a freestanding service. Think of this as Microsoft’s version of Apple’s MobileMe, albeit one that works with all devices, regardless of their operating environments.

As you might have guessed by now, there’s a lot I like about the Kin line of phones and yet they left me feeling as satisfyied as I do after eating a quick Chinese meal at the food court. I found the overall experience to lack a certain coherence, and ironically I think the problem with the Kin line as it stands now can be summed up by this bit from the Microsoft press release:

With KIN, social networking is built into the fabric of the phone. KIN has a fun, simple interface, which is designed to help people publish the magazine of their life by making the people and stuff they love the focus rather than menus and icons.

Exactly — it’s trying to do too many things at once. And in the process, it’s defying what has become standard user behavior among young people: trying and buying applications. As AdMob CEO Omar Hamoui once told me: Apps are the new entertainment. From that perspective, Microsoft may have missed a step here, especially given its odds. Indeed, at least one analyst suggests that nearly 31 percent of American teenagers want an iPhone in “the next six months, up from 22% last fall and nearly double the 16% who wanted one a year ago.” From Fortune:

“We believe that the teen demographic is a critical component of long-term growth in the digital music and mobile markets,” wrote Piper Jaffray analyst Gene Munster. “And Apple is taking its leading position in music and mobile markets.”

Well the good news is that Microsoft is at least is playing in the right market now.

Before a dramatic split last August that saw Google CEO Eric Schmidt booted from the Apple board, Apple and Google had been the best of friends. Now that the two titans are broken up, it’s looking increasingly likely that Apple will buddy up with Facebook.

Apple and Google once shared a common enemy — Microsoft — and had different enough products and goals to coexist symbiotically. But with Google creating and selling Android devices as a direct competitor to the iPhone, swooping in to buy companies like AdMob under Apple’s nose and bringing the FCC in over anti-competitive maneuverings in iPhone app rejections, Apple CEO Steve Jobs has rallied his troops by calling bullsh*t on Google.

See our infographic on the chronology of the Google-Apple breakup

The situation poses a promising opportunity for other existing and emerging technology powerhouses. Who will be Apple’s new most-favored nation? It probably won’t be Amazon, given that little issue of the iPad and the iTunes Store. It could potentially be Microsoft, which is ironically looking for friends as it faces up Google in search and productivity products. But it’s clear that Apple holds grudges. How about Yahoo or AOL for their reach? They may have more baggage than assets. At this point signs and logic are pointing to Apple’s new best friend being Facebook.

TechCrunch reported earlier this week based on uncited sources that Apple will soon add Facebook Connect integration to iTunes. I’ve heard the same thing, and further that Facebook could become the social layer on top of the Apple experience. It would be similar to but broader than the way Google Maps is integrated into location information across iPhone applications — with deep implications for personalization and easy authentication across the user experience and for app developers. Instead of that crappy experience of leaving every app to go to the web to log in to Facebook Connect, you could integrate your Apple and Facebook accounts once, directly.

Apple, which has completely missed out on the social web, would get a huge leg up with the web’s premium social service. And the partnership could be just as helpful for Facebook (which, of course, has positioned itself squarely against Google as well), in terms of enabling commerce.

Facebook Connect on the iPhone today

That’s because the real prize here, for both Facebook and Apple, is authenticated payments for digital and real-world goods. Probably the single most important alliance to be brokered today is the connection between users’ online identity and their bank accounts. Spending money online and encouraging your friends to follow your lead is a huge market (here’s the obligatory call-back to the problematic but perhaps just before-its-time Facebook Beacon product). The Facebook social graph plus iTunes’ 125 million credit card accounts would be formidable. With their powers combined it would be much harder for PayPal, Google and Amazon to compete.




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 Facebook and Apple have long been chummy, with some of the earliest corporate participation on the site being the “Apple Students” group, which dated back to at least 2006 and foreshadowed the current Fan Page product. And funnily enough, just like Apple has lagged on social, Facebook has lagged on music.

Facebook already has the beginnings of an alliance with PayPal to allow international advertisers to pay without credit cards (PayPal says it has more than 81 million active accounts). But as TechCrunch points out, Apple’s Lala acquisition could help be the connector between the two companies, given the music startup’s previous experience working with Facebook on allowing users to gift songs.

Still, there’s one indicator that Facebook and Apple are definitely not on the same page yet. At launch, there was no Facebook iPad application — an obvious fit for the device — and someone on Apple’s crack app review team let through a paid Facebook rip-off app that fooled and confused customers last weekend until Facebook had it shut down for trademark infringement.

Photo of Steve Jobs by Curious Lee. Mark Zuckerberg by Deney Tereio via Flickr, Under CC License.

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Please see the disclosure about Facebook in my bio.

The inner workings of the iPad reveal that Apple has learned much from its iPhone development, using many of the same components and cramming those chips onto a pretty small board behind the device’s 9.7-inch screen. Today, I managed to snag a few minutes with David Carey, VP of technical intelligence at UBM TechInsights, to talk about his experience tearing down the iPad.

He said that so far, the only big surprise was the new processor inside, but he couldn’t yet tell me if it was a new CPU using engineering that Apple acquired via its PA Semi acquisition or a a souped-up ARM Cortex A-8 processor. But he did point out some interesting design choices that Apple has made with its machining, and showed off all the insides. Enjoy.

With the launch of the Apple iPad just days away, magazine and newspaper companies are putting the finishing touches on their apps for the tablet, hoping to lure both new and existing readers to this new format of multimedia device, and possibly even get them to (gasp!) pay for digital content. As the Wall Street Journal has described, magazine publishers are falling all over themselves to create iPad apps, in part because advertisers are eager to get on the device, and also because a comScore survey showed that a surprisingly large number of potential iPad buyers were actually interested in paying for content on it. So what would you most like to read on the iPad? Take our poll, which is embedded below, or leave your thoughts in the comments:


View This Pollsurveys


Magazine giant Conde Nast has apps for Wired, GQ, Vanity Fair, Glamour and The New Yorker in the works, and others to come soon. But probably the most eagerly awaited magazine in that group is Wired, which showed off its iPad prototype at the TED conference.

VIV magazine also came up with a prototype of an interactive feature spread, as described in the New York Times Bits blog:

And one designer came up with a mockup of what a magazine cover could look like on a multimedia device like the iPad, as described at TUAW:

Whether the iPad will in fact be a game-changer for the media industry remains to be seen, but even Dan “Fake Steve Jobs” Lyons has changed his mind as to whether he wants one or not — although former Engadget editor-in-chief Ryan Block says the iPad probably won’t change your life. Meanwhile, GigaOM Pro research analyst Michael Wolf estimated in a recent report (subscription required) that the launch of the Apple device could kickstart an $8 billion tablet app market (that report is just one of several iPad-related GigaOM Pro reports you can find here).

The iPad may be Apple’s next gold rush, but it’s also positioned to pay dividends to mobile developers in a big way. Applications for the much-hyped device will generally cost more than similar offerings on the iPhone, developers said in a story from the BBC this morning, due to unknown demand for the iPad and the extra work required to design to create feature-rich offerings that take advantage of the gadget’s high-tech screen. That presents a lucrative opportunity for developers who can entice users by fully leveraging the device’s capabilities.

Just how many people will want an iPad (or any other tablet) is uncertain, but GigaOM Pro VP of Research Michael Wolf predicts the tablet app market will reach $8.2 billion by 2015 (sub req’d). The increasing demand for mobile applications is crystal clear, however, according to data released today from Mplayit. The app discovery and merchandising startup said that 35 percent of iPhone, Android and BlackBerry users are interested in paid applications, with BlackBerry users willing to pay the biggest premium of all, with a medium price point of $5.99.

Those figures should be especially encouraging for developers targeting users of the iPad, which promises to offer a more interactive experience than is possible on even the best smartphones. Consumers who have grown accustomed to shelling out a couple of dollars for an iPhone game will surely pay a premium for titles that leverage the iPad’s 9.7-inch, high-resolution screen and its multitouch functionality. So if the iPad is a hit, developers who can deliver the goods on the impressive device will benefit as much as Apple will.

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Image courtesy Flickr user Johnny Vulkan.

There’s no point in worrying about your reputation anymore, TechCrunch’s Mike Arrington has decided; everything will eventually find its way into the public sphere anyway. Union Square Ventures investor Fred Wilson, however, thinks there is a way to manage your reputation, namely having your community of friends and those who know you through social networks defend you. Pete Kazanjy says his new service Unvarnished, a social network for reputation management that launched yesterday, takes something from both of those ideas.

Unlike LinkedIn, which gives a user ultimate control over what appears on their profile, Unvarnished takes the same approach as Yelp does to restaurants: Anyone can create a profile for any person and then review them, at which point the person being reviewed can “claim” their profile. They can’t delete or vote on negative reviews they’ve received, but they can respond to them — and they can encourage their friends, coworkers and social network followers to vote on them or provide their own.

Perhaps the most controversial aspect of Unvarnished is that the reviews are anonymous (Kazanjy prefers to say that the reviewer’s identity has been “obscured”) so that you never know, for example, who exactly provided that two-star rating. Although it seems like the kind of thing that no one in their right mind would want, Kazanjy says such anonymity is a crucial part of what makes Unvarnished different from LinkedIn. Human nature, he says, means that the reviews on a LinkedIn profile are almost always positive, and are often so banal and vague that they convey virtually no real information whatsoever.




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In some cases, those reviews may even be flat-out wrong. But no one will actually say what they really think because they don’t want to offend the person they’re reviewing — and besides, no one would ever authorize anything less than an enthusiastic review on their LinkedIn profile. Which, Kazanjy says, is like letting the owners of restaurants control what reviews appear on their Yelp pages — it ensures that nothing bad ever appears, and thus that no one ever gets a completely objective summary of all the information about that restaurant.

Even though you don’t know the identity of the person who left that bad review on Unvarnished, Kazanjy says the system is designed to track their behavior throughout the site, and that over time it creates a kind of persistent identity that’s almost as good as knowing who the person is (and users can reveal themselves in a comment or review at any time if they want to). Reviewers gain trust within the system by providing more reviews, and the service has an algorithm that looks at how long they’ve been a member, how many of their reviews are one-star vs. four or five, and so on. Users are awarded badges — new, novice and trusted — based on their activity, that others can view.

The bottom line is that the principle behind Unvarnished is a very real one: Your reputation is already being outsourced, whether you like it or not. All you can do is respond to criticism wherever it appears, and to get your friends and coworkers to do the same. Unvarnished offers a way to do that all in one place. It’s a valiant effort — but will it take off? The biggest issue for the service is that not everyone is going to want to confront those negative reviews, and/or hustle their friends to review them positively to counterbalance them. Of course, people already do that to some extent with LinkedIn, so what Unvarnished has to do is show that there is more value in the way it approaches online reputation.

Post and thumbnail photos courtesy of Flickr user seeveeaar

Addicted to Groupon, LivingSocial, YouSwoop and TownHog (and the many other Groupon groupies), where the appeal of an amazing expiring deal snags you — but then you get busy and forget to ever print or use the coupon you bought? It happens to all too many of us. But now there’s a site — DealsGoRound — where you can buy and sell daily deals rather than let them go to waste.

DealsGoRound is a side project of Chicago entrepreneur Kris Petersen, and since beta-launching in 52 cities on March 1 has hosted just 30 transactions. Petersen tells us that he came up with the idea after letting a $160 pair of Segway tours of downtown Chicago expire because he was too busy with work and training for a marathon. “I realized my impulses didn’t always coexist with my calendar,” he said. The site doesn’t verify deals but it doesn’t take a cut of them, either; Petersen wants to monetize through advertising.

DealsGoRound bears a parallel to sites like Cardpool (our profile) and Plastic Jungle, which have emerged recently to buy and sell unused purchases in the $100 billion gift card market. Though interest (and venture funding) in Groupon-type businesses is exploding, it’s not there yet.

But other sites like 8coupons and Yipit have launched side services for daily deals too — aggregating and repackaging them on a map or an email, respectively. In a sense, these sites help grow the Groupon economy in that they increase distribution for deals, which are ultimately monetized by the companies that set them up when people purchase them.

Yipit, for example, sends a very nicely formatted email newsletter of all the deals in your local area, giving top billing to the ones in categories you’ve indicated you like. It’s the kind of thing that makes you unsubscribe from Groupon, losing their tight connection with you and their quantifiable recurring email recipient. After all, being a deal seeker isn’t about brand loyalty; it’s about finding the absolute best and most relevant deal as quickly as possible!

But these are young and evolving concepts. The folks at Yipit told me they’re trying to put together a local advertising network to sell highly targeted deals ads on local blogs and news outlets. As far as new businesses go, that certainly seems like a better and more scalable idea than creating yet another Groupon groupie with its own local ad sales team in every city.