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Memorandum Excerpt, Alleged

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From: Bill Gates
Sent: Sunday, October 30, 2005 9:56 PM
To: Executive Staff and Direct Reports; Distinguished Engineers
Subject: Internet Software Services

“… Ten years ago this December, I wrote a memo entitled The Internet Tidal Wave which described how the internet was going to forever change the landscape of computing… Five years ago we focused our strategy on .NET making a huge bet on XML and web services… We will build our strategies around internet services and we will provide a broad set of service APIs and use them in all of our key applications… This coming ‘services wave’ will be very disruptive… This next generation of the internet is being shaped by its ‘grassroots’ adoption and popularization model, and the cost-effective ‘seamless experiences’ delivered through the intentional fusion of services, software and sometimes hardware… I’ve attached a memo from Ray which I feel sure we will look back on as being as critical as The Internet Tidal Wave memo was when it came out…”

–Bill

PS:
?
From: Ray Ozzie
Date: October 28, 2005
To: Executive Staff and direct reports
Subject: The Internet Services Disruption

“… This isn?t the first time of such great change: we?ve needed to reflect upon our core strategy and direction just about every five years… In 1990, there was actually a question about whether the graphical-user-interface had merit… When we reflected upon our dreams just five years later in 1995, the impetus for our new center of gravity came from the then-nascent web… In 2000, in the waning days of the dot com bubble, we yet again reflected on our strategy and refined our direction… It is now 2005, and the environment has changed yet again- this time around services…

The Landscape:

… In the US, there are more than 100MM broadband users, 190MM mobile phone subscribers, and WiFi networks blanket the urban landscape… We should?ve been leaders with all our web properties in harnessing the potential of AJAX, following our pioneering work in OWA [Outlook Web Access]. We knew search would be important, but through Google?s focus they?ve gained a tremendously strong position. RSS is the internet?s answer to the notification scenarios we?ve discussed and worked on for some time, and is filling a role as ?the UNIX pipe of the internet? as people use it to connect data and systems in unanticipated ways. For all its tremendous innovation and its embracing of HTML and XML, Office is not yet the source of key web data formats- surely not to the level of PDF. While we?ve led with great capabilities in Messenger and Communicator, it was Skype, not us, who made VoIP broadly popular and created a new category. We have long understood the importance of mobile messaging scenarios and have made significant investment in device software, yet only now are we surpassing the Blackberry… The same is true of Apple, which has done an enviable job integrating hardware, software and services into a seamless experience with .Mac, iPod and iTunes, but seems less focused on enabling developers to build substantial products and businesses.

… Only a few years ago I?d have pointed to the Weblog and the Wiki as significant emerging trends; by now they?re mainstream and have moved into the enterprise. Flickr and others have done innovative work around community sharing and tagging based on simple data formats and metadata. GoToMyPC and GoToMeeting are very popular low-end solutions to remote PC access and online meetings… VoIP seems on the verge of exploding- not just in Skype, but also as indicated by things such as the Asterisk soft-PBX. Innovations abound from small developers- from RAD frameworks to lightweight project management services and solutions…

Key Tenets:

… 1. The power of the advertising-supported economic model… 2. The effectiveness of a new delivery and adoption model… 3. The demand for compelling, integrated user experiences that ‘just work’…

The Opportunities:

Seamless OS… Seamless Communications… Seamless Productivity… Seamless Entertainment… Seamless Marketplace… Seamless Solutions… Seamless IT…

Moving Forward:

… Platform Products and Services Division- a. Base v. Additive Experiences… b. Services Platform… c. Service/Server Synergy… d. Lightweight Development- The rapid growth of application assembly using things such as REST, JavaScript and PHP suggests that many developers gravitate toward very rapid, lightweight ways to create and compose solutions. We have always appreciated the need for lightweight development by power users in the form of products such as Access and SharePoint… e. Responsible Competition…

Business Division- a. Connected Office… Should PowerPoint directly ?broadcast to the web?, or let the audience take notes and respond?… b. Telecom Transformation… c. Rapid Solutions- How can we utilize our extant products and our knowledge of the broad historical adoption of forms-based applications to jump-start an effort that could dramatically surpass offerings from Quickbase to Salesforce.com?…

Entertainment and Devices Division- a. Connected Entertainment… b. Grassroots Mobile Services… c. Device/Service Fusion…

What’s Different?:

… Complexity kills… Another simple tool I?ve used involves attracting developers to use common physical workspaces to naturally catalyze ad hoc face-time between those who need to coordinate, rather than relying solely upon meetings and streams of email and document reviews for such interaction…”

–Ray

Related:
* “Building a Better Boom: …The Internet is exciting again, and once again folks are rushing in. In some categories – like search or social networking, for example – there are scores of start-ups vying for pretty much the same market, and it’s certain that, just like last time, most of them will fail.

But regardless of all this déjà vu, we are not in a bubble. Instead we are witnessing the Web’s second coming, and it’s even got a name- ‘Web 2.0’, although exactly what that moniker stands for is the topic of debate in the technology industry. For most it signifies a new way of starting and running companies – with less capital, more focus on the customer and a far more open business model when it comes to working with others. Archetypal Web 2.0 companies include Flickr– a photo sharing site; Bloglines– a blog reading service; and MySpace– a music and social networking site…

Start-ups are leveraging nearly a decade’s worth of work on technologies that are now not only proven, but also free, or very nearly so. Open-source software can now do nearly everything that Oracle, I.B.M. and Microsoft specialized in back in the 90’s. And the cost of computing and bandwidth? You can now lease a platform that can handle millions of customers for less than $500 a month. In the 90’s, such a platform would have run tens of thousands of dollars or more a month…

Or just ask Joe Kraus– a founder of the once high-flying Excite portal. Excite ran through millions in venture capital, then tens of millions of I.P.O. money, before its spectacular demise [Mr. Kraus had left before then]. His latest start-up- JotSpot, is built on open-source software, and cost less than $200,000 to begin.

Mr. Kraus exemplifies the second reason I believe we are not in a bubble: this time, the financiers aren’t driving. Instead, the entrepreneurs and geeks – often one and the same – are. The lessons of Web 1.0 are never far from their minds, and the desire to create something cool that might foster some good in the world is often equally paramount with the desire to make money. The culture of Web 2.0 is, in fact, decidedly missionary – from the communitarian ethos of Craigslist to Google‘s informal motto- ‘don’t be evil’.

Ah, yes, Google. That brings us to the third reason we are not in a bubble: vastly improved search technologies. Recall that the demise of Web 1.0 was predicated in large part on the collapse of the Internet advertising business – people were spending millions buying billboard-like ads that, it turns out, nobody was paying attention to…”

John Battelle; Co-producer, Web 2.0 conference; Author, “The Search: How Google and Its Rivals Reinvented Business and Transformed Our Culture”
* “What is Web 2.0”: Design Patterns and Business Models for the Next Generation of Software
* NYT Article
* Memorandum Excerpt, Alleged

Written by Harsh

November 18th, 2005 at 7:01 pm

Posted in Technology,Web

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