Last February, I was in Silicon Valley for a week thanks to a course I was taking. Here’s a summary of what happened there.

UC Berkeley: Center for new Music and Audio Technologies.

Prof. David Wessel showed us a new instrument that was basically 32 touchpads. Each was connected to a sample loop and the x- and y-axis and pressure modified that loop. It was an interesting idea, because it didn’t look like just pushing buttons to make sound.

Fail whale at LHS

UCB: Raymond Yee, “Mixing and Re-mixing Information”

A lecture from a course on web mashups. Yee has written the book, Pro Web 2.0 Mashups. The students need to plan and work on a mashup project. There were lots of interesting ideas, but I was worried that most of them were remixing for remixing’s sake and didn’t add value along the way.

Lawrence Hall of Science

Our contact at UC Berkeley had warned this place was mostly for children, and sure enough, this is a place to avoid unless you’re 7 years or less. Almost as complete waste of time as our Google visit.

We had also pizza available for but no-one from UC Berkeley came (we were too scary). Except one guy, whose name I forget. But he took some of us for drinks downtown, so that was great.

Digital Chocolate / Trip Hawkins

Hawkins really loved "Bowling alone"

Trip Hawkins talked a lot about how leverage is the key to successful business and what are the differences between the supply chain in when he was at EA and in operator-controlled world of mobile gaming. He told how he built EA so that it was NFL who wanted them to use their brand, not the other way around. This is why he sees that his competitors who just put out license games based on movies will ultimately be driven off the market, because they do not control the IP.

He thinks that the iPhone is the coolest thing in all time and how the rest don’t get it: “If you’ve played around with Storm or Android you know, wow, these suck”. In his view, the others had focused in Features (“What it is”) and not on Advantages (“What it does”) and not at all at Benefits (“Who cares?”).

Digital Chocolate’s game development doesn’t depend on the device, because they change all the time and they can publish all their games in every device. This is the only way to make the business work in the mobile space. Hawkins doesn’t see that there will be any standardization, because that would move the leverage away from mobile operators to handset manufacturers.

He also believes that the social starving that began around 1950’s because of TV is the reason people are so keen on the social gaming and internet services and is the driver for “omnimedia”. His suggested reading are The Innvator’s Solution and Bowling Alone. Even in the old days, he didn’t see gaming as waste of time. When playing, he said that “I was thinking, learning and motivated”.

He recommended that we try Tower Bloxx, their Facebook game. I was a bit disappointed, the game itself isn’t that bad if you want to kill time, but it is really spammy. Not only is more screen real estate spent on questionable ads than on the game, not only does it notify your timeline every time you play the game, not only the “social aspect” is just a high score table of your friends, but it also spams your friends every time you play to add the game. Not exactly what I’d expect from the guy who’s partly responsible for the great games EA pushed out in the early days. I asked why is it that as a former hardcore gamer, the only interesting game I played last year was World of Goo. In his opinion this down to how big corporations work and can’t innovate. If Tower Bloxx is Digital Chocolate’s answer to this, I don’t think it’s just big corporations.

Sun Microsystems / Mårten Mickos

FAQ: "If heating is a problem, why is it black?"

We were given the tour at Sun’s Executive Briefing Center. They showed the SunRays and other stuff and it was pretty nice to see up close the Black Box.

Afterwards, Mickos gave us a presentation about open source development and MySQL. He said that MySQL is like “New Orleans” of web apps in that if you want to control an important river, you need to control the important cities and this was the reason Sun acquired them. He also anticipated the question about superiority of Postgres, which is probably asked from him all the time. “When I joined MySQL, Postgres was better. Some say it still is. But who cares?”

He also started a discussion about “Why are web companies so closed?” – a poke directed among others Google, who benefit a lot from GPL software, but due to a loophole in the agreement can get away without publishing their improvements because the software isn’t redistributed. This is what he calls the hypocrisy of open source: “People just want to get stuff for free”.

Like Hawkins, he said that the most important thing for startup business is category-leadership. One advice he gave for Finnish start-ups was “not to be Finnish”: MySQL didn’t have sales offices in Nordics, only in the US. Other thing was that if something sounds good in Finland, it takes 10-15 years for until it’s widely accepted as a good thing, so don’t go to market too early. “There’s still time to make a Google-killer”, he said.

This was one of the best sessions we had, not only because Mickos isn’t there anymore and looks like Sun won’t be either but also because we got vodka and swag. You could see there was an economic crisis, because elsewhere we didn’t get anything.

Nexit Ventures / Michel Wendell

Wendell, from Nexit Ventures, a VC firm interested in Nordic IT startups, told how the VC market works and what kind of mistakes Finnish companies usually make. He told how he ended up in the business of helping Nordic companies make it in the US. Being a VC has lot to do with knowing people.

Lots of interesting discussion, but it was late in the evening and it’s pretty hard to upstage either Hawkins or Mickos.

IDEO

We got a standard theme park tour at IDEO. If you have seen the documentaries on TV or at YouTube, there’s not much to see. I was surprised that they actually avoid any systematic or analytical approach to design and focus more on a holistic, iterative and therefore probably pretty expensive (to the client) approach. As a case study they presented Nokia N-Gage platform they did concept work for. A surprising choice, because not only being old was also a spectacular flop. I guess they thought that being from Finland and the course given by ex-CTO of Nokia, we’d be interested in Nokia or something. If we were, we probably didn’t need to come all the way to Palo Alto for that.

Stanford University / VHIL

At Stanford, we got a nice presentation from Jeremy Bailenson from Virtual Human Interaction Lab. He was talking about the Proteus Effect, or how avatars change humans and their behaviour. For example, even though Blizzard has nothing in World of Warcraft code that gives advantage to taller avatars, they nevertheless level up faster than shorter ones. Also, taller avatars get better results in the Ultimatum Game, the real world height of the human is irrelevant. As I’m interested in behavioral decision making, it was nice to see that it might be possible to do empirical studies in virtual worlds, where we can control many variables that social sciences haven’t been in the real world.

Nokia Research Center at Palo Alto

First NDA of the tour. They showed us some research projects they were working on and had the worst slides of the tour. Most of us came out there frightened how out of touch Nokia can be.

Stanford University / Entrepreneurship Week / “Next Big Thing” Panel

Tim Draper, Tony Perkins and Michael Moe talked mostly about Twitter and iPhone and how making revenue is irrelevant. Draper really loves the free trade. Apparently ad-supported business model is the next big thing.

These guys were either drunk or lived in a bubble of their own. Probably both.

IBM Almaden Research Center / Ray Strong

There's pr0n in it, I'm sure.

Strong talked about how IBM tries to predict the future. First of all, the Almaden Research Center looks like a super-villain’s secret lair from Bond movies (it didn’t help that the guy we met had a Bond-esque name). Forget Google, this is the place to visit. There was the world’s first hard drive in the lobby, which was a nice monument to how long IBM has been in the game.

The main thing Strong told was that it isn’t possible to predict technology in to deep future, only in to the business horizon of up to 5 years. This is what they told to an unnamed government agency that wanted them to do so. As government usually gets what it wants, IBM decided to find a way to do it. They brought in people from academy, futurologists and social scientists. Their approach is half scenarios and half technology landscapes, but their ideation emphasizes backcasting from deep future (>50 years) using trends that can be with high probability assumed to continue.

One problem with scenarios has been that it’s really hard to transform them into strategic actions a company should take. IBM tries to close this gap between scenario planning and strategy by using what they call signposts. These signposts are future events that are both recognizable (when they happen) and actionable.

Strong also talked about how predicting future, it’s important to stay in the qualitative side of things, not only because quantitative side of things usually doesn’t work and might be harmful because of the tendency to use numbers to calculate expected values or other figures, even though they are full of uncertainty and can be harmful.

This was by far the best visit during the tour.

Google

NDA. It was a standard theme park tour. It was pretty clear that Google is exactly as “open” as SEC demands it to be, not an inch more. I guess many for many of us the myth of Google was totally burst.

To be fair, this was the only place where our contact wasn’t executive level so we might have gotten a better experience with a more suitable contact. Even though our host was great and all that, he probably wasn’t the right one for our group.

HP Labs

Runner-up in best architecture for a research lab.

NDA, but they mostly showed published academic research about nanophotovoltaics or something to that end. Our guess is that they didn’t want to tell us anything but out of courtesy showed something. When they talked about things I could understand, they talked about MagCloud and how HP is transforming from a printer and computer company into printing and computing company.

Next day, couple of us went to see the garage (more like a shack) Hewlett and Packard started from and what is considered as the “Birthplace of Silicon Valley”. Not much to see, but at least it had some historical value.

All pictures by me. All rights reserved. Originally published in my private blog, but I decided to get rid of it so I republished this thing here for people interested.

Since last September, I’ve been taking a Ph.D. level course on the future of internet, IT and related fields called Bit Bang at Helsinki University of Technology’s Multidisciplinary Institute of Digitalisation and Energy. The students are all Ph.D. students from either TKK (HUT), University of Art and Design Helsinki or my own Helsinki School of Economics. The course is given by a former CTO of Nokia, Yrjö Neuvo. So, the course is a kind of a dream team of Finnish education system…

During the fall, we were divided into groups and my group’s task was to write about the implications of carbon nanotechnology until 2025. The other groups wrote similar papers on other technologies such as Processors & Memory, Telecommunications and Printed Electronics. Now, during the spring, we’ll do similar papers but on much broader topics: intelligent machines, globalisation, future of media and future of living. These papers will be combined into a book at the end of spring term (thanks to the Sitra, the Finnish Innovation Fund). To get a feeling of what we are writing, here’s an excerpt of our nanotechnology report’s introduction (PDF).

But, now to the more important part. As a part of this course, we’re going to a week-long study trip to California at the end of February, between 23th–28th. We’ll be visiting Berkeley, Silicon Valley, Palo Alto, and some other places and most of us will spend the week-end at San Francisco. If this sounds familiar, long time readers of this blog might remember Jeremy’s original Tech IT Easy SV trip in 2007.

The program for the trip is starting to form and these are some of the places and people we’re probably going to visit. The official program isn’t out yet, but this is what I quickly jotted down.

• University of California, Berkeley; David Messerschmitt
• Stanford University, and coincidentally, Stanford Entrepreneurship Week (We’ll also be attending the Fair on 24.2.).
• Trip Hawkins at Digital Chocolate (he’s probably more better known as the founder of Electronic Arts)
• Mårten Mickos at Sun Microsystems (was CEO at MySQL)
• The Google
• Ideo
• IBM (most likely one of their research centers somewhere in Palo Alto)
• HP Labs
• Nokia lablet & Nokia Research Center at Palo Alto
• Michel Wendell at Nexit Ventures
• And probably some others that I already forgot about

It’s starting to look like a busy week (perhaps not as busy as Jeremy’s, though.) and the guys we’re meeting with aren’t exactly small players. So, here’s my question to you: What should we/I ask from these guys? We have the amazing opportunity to talk with these guys and it would be nice to know what the Tech IT Easy crowd would be interested to know.

This is my second trip to USA and first to San Francisco, so another question from me is: What should I do and see at SF? Basically we have four days of official program and two “vacation” days.

The above program is just the official program, and there’s a group of us eager Ph.D. students from Finland’s top universities who would probably want to see more of what’s going on in SF. All ideas are welcome, but keep in mind our strict time constraints.

Checking out the HP Touchmark PC demo on YouTube. Watch it and then let’s discuss it.

[youtube=http://www.youtube.com/watch?v=Scs7DZhQ72E&hl=en&fs=1]

The question on everybody’s lips is, why didn’t Apple do this? Your first hint: look at the way the guy is standing. Few people use their PCs in that position.

I tried emulating the feeling a little, by making stupid gestures in front of my laptop. I’m pretty fit, but it did get annoying after a while. Having a touch-screen at 90 degrees, half a meter in front of you, is inelegant.

The reason the keyboard + mouse combo work so well is because it’s actually within perfect and comfortable reach by the human body. You sit, your arms bend, and you use. Like the picture below, which is the ideal typing position, as taken from Yale’s Ergonomics website. Vs. the Touchscreen, where you would sit, extend your arms and use.

The perfect touch-screen would actually be similar to an architect’s table, like on the picture below. Note that Jeff Han, godly inventor of all things multi-touch-screens, also has a similar set-up.

Why doesn’t Apple do something like this? My guess is three-fold.

1. The market is still pretty small (designers, etc.?).
2. It’s not really that amazing an innovation—as an average user, can you really do that much more with a touch-screen, vs. a keyboard + mouse?
3. And where are the manufacturing economies of scope? I made this point before, when I noted how many overlaps there on the component level for different Apple-products: a big e.g. the 13″ screen, which is now used by 3 product-lines. If Apple did this for one product-line, it would probably want to translate it to the other ones as well… but how would that work?

What do you think? Will we be seeing an Apple touch-PC (note: I say PC, not iPhone XL, which is more probable), and, if so, in what format? Also state if you’re thinking as a consumer or as a prosumer!

Vincent

P.S. don’t forget to answer our poll !!!

Context: I’m currently in discussion with a number of companies that are involved with SOA-vending & -consulting. As a result, I’ve been studying up a little on this market and hope to learn more by writing about it. Note: Since I know, judging by the response to other articles on enterprise-software, this isn’t exactly the most sexy of topics, I expect the number of comments to be minimal.

Jeremy has already written about this topic (primarily in terms of Software-as-a-Service (Saas) and Software + Service (S+S)) before (here, here, and especially here), so I won’t go very deeply into it, but SOA is roughly defined as:

“guidelines that allow software developers to design systems in stand-alone chunks of computer code, each specifying the critical outcomes, performance metrics, and interfaces between a discrete activity and other services.” (Src: HBR, June 2008)

If that’s a little abstract, I see it as a selling you a ticket to Lego-land, where you can play with legos all you like, those lego-blocks representing individual applications that can be used by businesses through a web (SaaS) or hybrid (Software+Service) interface, and Lego-land being the SOA-system that integrates all of them for you. This is opposed to the historical approach of buying a lego-box, which you eventually replace by another and another (side-prediction: we will eventually see Lego-world online).

SOA’s value-proposition

While traditionally it has been so that in order to compete in a technological world, you have to be technological, the idea of SOA is to remove that element, instead allowing individuals and businesses to focus on what they do best. I, personally, like that very much.

Other, more measurable advantages are that it is dramatically more cost-efficient. If you imagine that 5+ years ago, every company had to either invest into a powerful wide-area network (WAN) to be able to centralise IT-services, or replicate islands of IT-systems for each business-location, SOA removes that idea entirely, using a freely available infrastructure, the internet, and removing the need to build IT anywhere, instead paying-as-you-go for singular services that an external provider hosts and distributes. Added to this is the idea that performance now becomes accountable, in the sense that it is covered by contracts (e.g. QoS or SLA), something that was much harder to do with a permanently employed IT-staff.

With all these advantages and several more, it is no surprise that, in 2007, over 50% of mission-critical IT-projects were estimated to be SOA-based, a figure which is believed to increase to 80% in 2010 (these figures are from Gartner and may be US-only).

SOA’s hurdles

While this sounds pretty great, anytime you’re talking about system-wide change, you have to consider that this will meet resistance and involve a great many stakeholders, i.e. take a lot of time. And the question is here, who will you talk to as an SOA-vendor? Will it be the business-side of your client, as you are selling easy-to-understand lego-blocks, or will it be the technology-side, as you are selling technology? This is a serious question, so please answer it in the comments!

Added to this, a SOA-deployment is a strategic issue for your customer, meaning that your selling-proposition will also need to include the option of strategic support, aka consulting-services. This means that technology-only SOA-providers (vendors) will likely have to work with third-party consultants that pick-and-choose the best SOA-package for their client.

Related to this, the lego-like quality of SOA, which promises values like agility, flexibility, price, and reuse, and several more, all very important in this recession-prone time, also mean that someone can quite easily replace your service with someone else’s legos. Arguably this is much less the case if you provide an architectural framework and focus on building ecosystems (create lock-ins). But that is easier said than done, and as such this is a field dominated by few big players that buy up smaller ones.

Some more things, which I haven’t researched, are the degree that open source is a factor/issue here, and different revenue-models.

Grasping the paradigm-change

On the customer-side, there’s two ways of seeing this trend. On the one hand, extreme efficiencies, which also follows Nick Carr’s view that IT is no longer a competitive advantage. On the other hand, you’re giving away a lot of responsibility, which can be bad in two ways.

One, you’re giving away a lot of power to an industry, which will continue to consolidate. It’s something that may not be a problem now, but may become one.

Two, delegating a problem does not necessarily solve it. Taking the retail-industry, the biggest problem here is logistical inefficiencies, caused by delays, unnecessary replication of processes, or otherwise. Here, SOA, as long as it spans across the value-chain of manufacturers-transport-retailers-customer, is clearly a good thing. But it still requires a solid understanding of how IT does and can help your supply chain reap better results, something an independent SOA-vendor may not do as well. My opinion here is purely hypothetical, but it may be worth investigating how the masters of retail (Wal-Mart, Tesco, Carrefour, etc.) solve it. And if this is a problem, I imagine it is elsewhere too.

The SOA playing field

This post is getting a little long, so I’ll briefly go into this. Following Forrester-graphs show the players in the integrating corner of things (consultants) and, on the right, the vendors (also note the time-difference (the second one is Q4 2007) and region). You can find the originals here and here.

Clearly this industry is very layered, with some offering the complete package, including strategic assistance, and others providing either the SOA or a part of it (SaaS or similar). There is a lot of movement in this field with players buying each other out or moving into related industries, either on the hardware or software-side.

Final thoughts

Because I’m not a soft-/web-ware guy, I’m still very much undecided whether to head in the software-only direction myself, though I see much merit for an integrated business-consulting + software-deployment approach, and I also prefer selling Lego-blocks to rubber-trees. Feel free to convince me of your points of view.

All of this was initial thinking of course, and as such I’m happy to hear if you have anything to add or if I made some obvious mistakes. Again, considering the relative unsexiness of this area, I don’t expect too much

Vincent

This is once again a post “back to the community”. When I encountered this problem, I looked aroung the net and I found many discussion in different forums, but couldn’t find any solutions. This is how I got things working, your mileage may vary.

I recently got a new computer, but I totally forgot that the printer I use (HP LaserJet 1100) only has a parallel connection while the new computer only has USB ports. Okay, you can get new black/white laser printers for less than 100€, but I happened to have a spare print cartdrige for that too so I’m not in a hurry to get rid of this rather nice printer, which was discontinued by HP in 1998 and which has this really lousy paper tray so that half of my prints end up with noticeable skew. Also, I noticed that there was several different kinds of USB-adapter cables available, which could solve my problem for just 20 – 30 euros!

After a long Google exploring session, I found out that there were some problems and lack of sure knowledge if this worked, especially on Mac OS X.

The Cable

I ended up getting Aten/Deltaco USB-parallel-adapter with DB25 female to USB connections. This cable probably is sold under different names around the world, but I guess the main thing is that most (all) of them has the Profilic Technologies’ IEEE-1284 controller in them. In addition to the old HP LaserJets and DeskJets, it also supports many other printers from other manufacturers (like Epson, Canon and Lexmark).

This is the cable you’re after if you’ve got one the HP printers with just a small connector in the back

This cable goes between your current cable and your computer’s USB port. Because my printer is LaserJet 1100, which doesn’t have the normal-sized connector coming out of it, but a smaller version (like many other HP’s printers of this time), you can’t use a a bit cheaper cable that connects your printer directly to USB. Of course, it doesn’t matter.

If your printer has it, the huge thing in the printer’s back is called Centronics-36 or Cen36 (also known as IEEE-1284A) connector. HP has instead used the smaller version, Mini-Centronics. I’ve no idea if there is a Mini-Centronics <-> USB cable, but because you can extend the Mini-Centronics <-> DB25 (the normal cable, that you used to connect the printer to your computer) with the DB25 <-> USB -cable, I don’t think so.

The box my cable was packaged said that this cable was supported on Win 98 to Win XP and on Mac OS 9 (and it came with one of those annoying tiny-format CD with drivers for Win 98). So, no mention of Mac OS X, but I figured that it would be really odd if a USB-thing would work on Win XP and an earlier version of Mac OS, but not on Mac OS X, so I took the risk. At home, I connected the cable to my printer cable and my computer and everything seemed to work, OS X recognized instantly the “new” printer. This was too easy!

The Problem and a Work-around

There is, unfortunately, one problem. For some unknown reason, after you’ve connected the printer you can only print once on Mac and. After that your jobs won’t get through and you’ll get an interesting error message “GenericClass: Waiting for device” instead. The only known workaround on the net was to reconnect the printer after printing (or restart your computer). The whole thing might be a problem with CUPS USB backend or somewhere (that’s the last operation CUPS logs in Console show before the job gets stuck), Google search doesn’t give a consensus.

Anyway, this isn’t really an acceptable workaround – especially, because it looked like every time you reconnect the USB cable, Mac OS X finds another instance of your printer, which is rather annoying, and you still can print only once. Also, if you have the printer manufacturer’s drivers for Mac OS X, try those instead of using Gutenprint-drivers or some others. The problem with LaserJet 1100 is that HP discontinued the printer way before Mac OS X was released so there aren’t any drivers on HP’s website for it.

Anyway, after a burst of reconnecting madness, I noticed that I had three devices (see image below) listed in the printers. One of them is the Printer-USB-cable controller and you definetly can’t print to it (in a moment on desparation, I tried). I’ve not tried what happens if I print to LaserJet 1100-1 printer, because, for some strange reason, I can print as much as I want with the first, LaserJet 11000! I’ve no idea what happened, but it works and I’m not going to touch in case the voodoo wears off.

This is probably a problem that could be fixed in a later version of CUPS (and some people say that things worked fine before Mac OS X 10.5), which means you might have this exact same issue in other OS running CUPS, like Ubuntu. I wouldn’t hold my breath, though, because we’re talking about 10 years old not-that-well-working-anyway hardware with a mystical adapter. New printers are cheap, but the old HP LaserJets seem to be made to last.

So, I hope this works for others, just reconnect the cable couple of times and don’t mess with the printer setup screen. It’s stupid, but so far I’ve not had any problems in over a month. Please let me know in the comments if you have some suggestions or improvements.

One way to easily fix this problem, I guess, is to get your hands on an old HP JetDirect-printer server (or any other pinter server with parallel connectors). This way you could add the printer directly to your LAN using Ethernet, which is a nice bonus. You should be able to get them off eBay or something or your company’s IT departments closets. The only thing is that these things probably cost more than a new printer, so they probably aren’t worth your while.

PS. I know it’s a miracle in itself that I got a working LaserJet 1100. Many of those didn’t last a year before breaking. HP printers before and after it, though are good, but my earlier LaserJet 6P was just way too slow. The good thing about that one, though, is that it’s network-able with the right, HP first-party-accessory, cable (which I believe is really, really hard to find these days). It is also rumoured that you could shoot a 6P with a shotgun and it still would work.

PPS. If someone has done this same thing by connecting an old printer using this USB-parallel-adapter to a Airport Express/Extreme’s (or other WLAN router’s) USB port and got it working, my congratulations. I’ve not tried it, but I don’t see why it wouldn’t work.

This post is aimed at helping friends bootstrap projects (although they certainly don’t need me to turn everything into gold, especially these ones). I apologize for the inconvenience caused to readers coming for content, not announcements, but these are 2 AMAZING projects that definitely deserve exposure. Unfortunately, a number of readers won’t be able to be part of the game since #1 is for French companies only, and #2 is for French speakers only. There we go:

1. Sheirin Iravantchi, Aymeril Hoang & Paul Degueuse, three people who have been instrumental in the success of the study trip to Silicon Valley (full quality debriefing in French by Olivier Ezratty here)I organized back in November 2007, are organizing what they call a (French)TechTour between May 19th & May 23rd 2008. The concept is pretty clear and very appealing: a sample of 10 startups will be selected to go to Silicon Valley & meet with corporate development departments of major large corps. Here’s a list of planned meetings (note the diversity of industries considered):
   1. Google David Lawee, VP corporate development
   2. Ebay Erik Stuart, Director, Corporate Strategy
   3. Cisco Didier Moretti, VP Business Incubation, Emerging Technologies Group
   4. Microsoft Beti Cung, Director, Emerging Business Team - I met Beti before, and an hour with her is worth the return trip: super smart girl, if all meetings are planned to be of such quality then becoming a TechTour participant is what you should be desperate working on
   5. HP Damien Henault, Director, Strategy & Corporate Development
   6. AT&T Rupert C. Young, Director, Strategic Business Development
   7. Intel Capital Eghosa Omoigui, Director, Strategic Investments
   8. Symantec Hans van Rietschote, Senior Director, Office of the Chief Technology Officer

Assuming that the agenda speaks for itself, impressive uh?, my bet is that you should take a look at the following links and apply:

(French)TechTour, the blog here; details on the tour here; application file here; the launch post here. Enjoy!

2. Thomas Faivre-Duboz, a former classmate of mine & Raphaël Fétique are 2 very active entrepreneurs in Paris. They run a consultancy aimed at helping website owners with a conversion rate enhancement methodology. The name of their company? Converteo. The good news is that Converto recently launched an Error404 competition: design the most appealing Error 404 page and you’ll win a one week conversion rate optimization audit worth 4000 euros HT (1 million US dollars – just kiddin’, around 6000 USD). I believe this is a great initiative: some Error 404 pages can be such a shame that they might never make you feel like coming back on a site; on the other hand, some display a message like ‘our teams are now aware of the malfunction, thank you for helping us improve our service and sorry for the inconvenience’, a sort of message that may improve user stickiness at the end of the day. Here’s the link to the Error 404 Converteo competition.

Wanna jump on one or the other, or both competitions? Please be their guest. Feel free to keep me posted on the outcome of your applications.

Here’s a quick question to all people used to either interact with or being part of software development teams.

Consider a software vendor, a good one, and its technical headcount. It is no secret that R&D teams aren’t made of software developers only. In order to be deployed successfully, architectures and code need to be tested by a QA department (QA = quality assurance) where professional testers run through thousands of automatized-or-not scenarii; documentation; technical support staff help the install base with potential regressions occuring during updates and coping with changing information system environments; localization project managers monitor translations of the software: and last but not least, application engineers actually parameterize the software at clients.

Now my question, how many technical staff should you account for every software development engineer? I figured out an average ratio of 1 to 4, that is to say, for every technical team of 100 there should be around 25 software developers actually hacking code.

I know there exists extremes but by and large, from what I’ve seen, I don’t think I’m too far from the reality with a 1:4 developer / all-categories-technical-staff ratio.

What do you think? Feel free to describe what the company does when sharing your experience, because, since there are very large discrepancies between, say, an SAP that manufactures ‘heavy’ enterprise software and any web application designer that may not necessarily run industrialized testing and that has no professional service department, we might not get nuances at first sight.

PS: the ratio will also depend on the maturity stage of the company: at Microsoft, [# of develops]/[develops + Microsoft Consulting Services staff + developer evangelists + localization engineers + testers (1 for each develop) + architects] approximately equals 1/4 (1 to probably 5 ot 6 adding documentation specialists; & 1 to much more if you consider the system integrator ecosystem that actually does the application engineering). But the company is rather mature and therefore can afford to focus on quality of execution rather than productivity in execution. Which probably wouldn’t be the case for an enterprise software startup for obvious resource reasons. Anything to share? Best and worse practices, per specific industry (Web 2 / UGC, Video Games, enterprise, affordable consumer traditional applications, etc.) most welcome. I need to test my own budgeting assumptions

I’m exhausted and it’s only half of the study trip, but I enjoy SO MUCH going with a great bunch of cool guys to amazing companies like OQO, Netvibes, City Council of SF, l’Atelier US, eBay, Box.net, SRI, Stanford, Meetro and tomorrow Twitter, Neocase, Microsoft, Google, Plug & Play, the Churchill Club, XOBNI – & the day after Orb Networks, Orange, SAP, PodTech, Bizanga + great VCs like Jean-Louis Gassée, Vincent Worms from Partech, Matt Lecar from Partech, Sven Strohband from MDV & Jeff Clavier from SoftTech VC + Marylène Delbourg-Delphis, who actually recruited Guy Kawasaki out of Apple & François Laugier, a prominent lawyer in Silicon Valley….that I haven’t had the energy to blog recently. At night, after 7 visits during the day, all I think about is collapsing.

We’re only half way and here’s our program (below). I’ll make sure I blog extensively as soon as I find some time – although I’ll have to blog on TechEd in Barcelona first. I’m late, I know.

 In chess, a gambetto – say it with an Italian accent, consists in sacrificing a piece at the beginning of a game to gain a competitive position on the exchequer – for example through the control of the center of the chessboard or one of the long diagonals.

Getting back to business (we’ll get back to the gambetto later), it is very common to say that the state of an economy is reflected by the strength of its currency when the Euro currency is weak – and hence that the economy of the EU are in poor shape. However, when the Euro gets stronger, companies and officials claim that corporations are constrained in their efforts to export goods and services and that the situation should be reversed or the EU will soon enter an economic turmoil.

I think this is all too easy and bullshit.

God Dollar used to be the only viable currency in international trade, until the Euro came out of nowhere in January 2000 (2001 for actual pocket coins and bills). The European Union is the world’s largest consumer market, and a gateway to the Middle East and Africa for American companies. Although the Dollar still dominates international transactions of goods (slightly) and financial transactions (easily), the Euro has emerged as a tangible alternative considering the political stability of the region.

Consequently, the Euro vs. US Dollar exchange rate has kept growing insanely from 1 EUR = USD 0.85 in mid 2000 (1 EUR = 1.19 USD on January 1st 2000) to 1 EURO = USD 1.47 USD today. Althoug I acknowledge the trickiness of the situation for export businesses, high tech or not, I see very few corporations have implemented hedging strategies or make proper use of forward contracts – which is a shame. Still, instead of lamenting, I believe economic decision makers of both the US and the EU should roll up their sleeves and act in such a way (hell yeah I’m even givin’ lessons now, love blogging…):

For US High Tech companies: go for internationalization. Acquiring hardware, software, telco devices, consumer electronics and services labeled in USD has never been cheaper. So why wait? I’m pretty sure any potential buyer would understand this reasoning. A weak USD is a fantastic opportunity for American exporters to thrive abroad, and win strategic, long-term projects. It doesn’t matter whether the profitability of these projects is low: what matters is to build reputation on new markets, or to highlight your competitive advantage against local players. Remember, the gambetto? Be ready to sacrifice a few cents today (anyways, the dollar rates so low that it’s no big loss whatsoever) to be in the real race when that moment comes.

For European high tech ventures: shop for intellectual property and talents in the US since the Euro has never been so strong against the US Dollar – which will make acquiring quality companies cheap, and build production capability in China and India (or go and get cheap but excellent developers in Eastern Europe, before the Euro comes there, or Israel) to reduce the cost of goods sold, enhance their competitiveness and therefore be ready for a shift during harsher economic times or win back market share on their competitors’ behalf. EU corporations, especially the big ones, find it hard to tear the P&L from the balance sheet and should learn to make better investments. Remember when the VCs said that few large European high tech corporations had a real, sound external growth strategy? Even though making the quarter may seem tough because of a strong Euro, acquiring today technologies that will generate tomorrow’s revenues boils down to ’sacrificing’ a small slice of the pie to weaken the competition, and build a better product offer for tomorrow. Gambetto again.

Now waiting for the Chinese Yuan to offer a third way…

Here’s a little fact sheet mixed with some thoughts on Green IT. Green IT is a truly serious topic that should be thought over and tackled over a long period of time. There is not one answer to the sustainable development challenge. On thing that’s pretty sure though is that Information Technology, an industry that grows steadily, represents a part of the problem and probably has the potential to generate the bulk of the solution.

CURRENT SITUATION

• According to the Gartner Group, 2% of greenhouse gases in the atmosphere are generated by computer networks. Airlines are responsible for the exact same percentage of gas emissions. This figure is bound to increase due to the fact that 3 million new Internet users join the web every month – the bulk of them surfing from their cellular phones; and the huge investments Web players do in datacenters (I noticed something like one third of funds raised by self-hosting SaaS or web startups are aimed at datacenter investments).

• Consider a file. In its entire life cycle, it will consume 10 times more energy than it took to create because: it will be edited, saved, stored on a client hard drive, printed, sent by email, stored on a server, etc. For every new file created, 400 Gbytes of bandwidth need to be added to the Internet (think Video on Demand or advertising banner…).

• Every second that passes sees 24 Kg of PCs produced, 1.8 tons of raw materials aimed at the Information Technology market, half a ton of CO2 generated by hardware heat, 108 Kg. of PC-related garbage.

• Today, there are about 315 million PCs obsolete enough to need a recycling. Huge market! Any creative entrepreneur in the room?

• 2 billion more Internet users will cost 3 times more energy to connect.

THREATS

• Permalinks urge servers to be connected 24/7/365. Albeit it unleashes positive collaborative energies, Web 2.0 is extremely resource consuming.

• VoIP is a fantastic cost-killing opportunity. But it increases traffic dramatically. This issue will have to be tackled at some point. Again, there is huge a market for a VoIP secure compression standard just in case some genius entrepreneur happens to read these lines. We are still in need of an MP3 or DivX standard for IP voice messages.

• RAID redundancies imply  purchasing 2 hard drives. Which actually increases consumption by a factor of 2.

• Cellphones do more and more things everyday. Will a printer be embedded in every mobile phone in a future?

SOLUTIONS

• Multi core processors (produce less heat, more powerful)

• Grid (calculation resource mutualization)

• Working from home from time to time saves time (you don’t waste 2 hours a day in traffic) to yourself and money to your company (more time to work resulting from commute time saved). Furthermore, leaving the car in the garage lowers CO2 emissions.

• Bicycles to go to work (see the Velib initiative in Paris, designed and operated by JCDecaux & user interface + inventory system built on the Microsoft platform) cf. picture above

• Electricity consumption optimization software solutions like IDEAS program startups KalibraXe (a marketplace that allows your company to lower its electricity bill through lowering sourcing costs by making suppliers compete on price) and DOTVision Streetlight Vision (that help cities reduce their electricity bills: who hasn’t  seen a street lamp switched on during the day?). Both ‘undergo’ severe 4-digit growths and I actually believe there is a huge market for clean tech + software solutions. Most of the time, sustainable development and economic performance constrains are aligned. I don’t think these could ever part ways.

• Creative ways to lower server load: use [RSS + cache] combinations as included in Google Reader or use solutions like FaceBook in consumer environments, or blueKiwi in enterprise environments to lower the number of emails, which reduces storage and bandwidth needs through centralizing all the information within a social entity on one single location (eg Facebook group or blueKiwi topic board).

• This is something we do at Microsoft: every file printed out has its own cover sheet mentioning the author. This way, people save the first page (that mention the author) by putting it in a recycling bin and are bound not to take print outs that aren’t theirs – you know, when you realize you took someone else’s printouts – it’s often too far to go and put it back…

• Use recycled paper for draft printing AND corporate communications AND product brochures. Basically, use recycled paper as much as you can. Some people say the recycling process is more energy-intensive than the process of destroying. I don’t believe recycling has no future: I see it as a very convenient solution to start working in the right direction.

• Server virtualization has turned the tables: running many environments on a single machine made the computer industry paradigm shift from “1 application = 1 server”. In many companies, when there used to be 8 servers used at 10% each, you now find one server used at 80% of its capacities + 1 back-up server. On top of that, it all results in costing less in Air Conditioning to keep the room cool. I therefore bought some VMWare stock recently …

Over the last 6 years, the Oracle has consistently outperformed its arch rival SAP (see chart below: SAP’s in red)

Could M&A be more virtuous than organic growth after all? This is a real, tricky question: Oracle mostly grows through a well-thought acquisition strategy whilst SAP has always preached organic growth. Most people, including my humble self, would tend to answer “no” intuitively: organic growth has to be better than external growth. But isn’t the Oracle example proving us wrong?

Large high tech corporations are famous for acquiring technologies, engineers, and intellectual property rather than market share. In other words, disruptive startup acquisitions (CISCO is probably the best example of a company with a real acquisition integration know-how) rather than larger company mergers. With its bullish-at-utmost approach, Oracle has truly turned the tables: Oracle has kept acquiring large enterprise software publishers like JD Edwards, Temposoft, PeopleSoft, Siebel, Hyperion, Agile. Since 2004, Oracle has acquired 35 companies for a total amount of 25 billion US dollars (average price: US$ 700m). Integrating these companies has been and remains a challenge for Oracle: internal wars between people from different acquisitions are still going on here and there. These could be qualified as counter-productive for Oracle. However, why does its stock do so well? How come Oracle provides such a track record of supposedly ‘worse practices’ while at the same time, it has never performed so well in its history 2007 (revenues: close to US$ 20bn; net profit: close to US$ 5bn; current revenue growth: +20%, largely due to acquisitions; earning per share increase: 25% +)

ex-Oracle entrepreneurs: born or made?

The culture of Oracle is said to be extremely tough, result-oriented – which produces highly aggressive and effective executives, but is no pick for people looking for a mild atmosphere at the workplace. As a result, Oracle as a workplace is one of the most controversial places in the high tech world. I believe it shouldn’t: Oracle has produced some of the best entrepreneurs in the software industry. For instance, Bernard Liautaud and Denis Payre, founders of Business Objects, were Sales executives at Oracle before starting up BO; Charles Ferguson, founder of Vermeer Technologies (which produced Frontpage and was later acquired by Microsoft) had worked 6 months at Oracle before returning to his Ph. D. research; Marc Benioff had spent 13 years at Oracle Corporation between 1986 and 1999 upon founding Salesforce; mBED and NetLedger, later renamed NetSuite, were founded by Evan Goldberg who had priorly worked with Larry Ellison for 8 years at Oracle; and I’m not even mentioning the hundreds of Oracle spin offs or startups ran by former Oracle execs…By the way, I may have forgotten some of these. Which other large high tech corporations are famous for producing (or not producing) executives keen on founding great startups?

I actually learnt what software architecture means something like 9 months – when Jean-Sébastien and Pierre discussed the architecture of CartoReso and I was listening, eyes wide opened not understanding the slightest bit of what was going on. However, it didn’t take long for me to realize how crucial designing a smart and robust architecture is in making the implementation of a software product strategy successful though.

This being said, there’s a number of things one should know when it comes to software architecture design applied to an entrepreneurial context. I acknowledge I’m brand new to this domain, but software architecture has been the one thing I’ve been focusing on in the last 4 months: the sun could rise without me having read at least a few pages on the topic. So, here are my 11 non-technical takeaways. There you go:

1. Think strategy, not technology. Strange? Maybe. The goal of software architecture is to embed you strategy into your product. Keep that in mind. And keep strategic analysis informal: week-long brainstorms between founders will perfectly do. Keeping the strategic analysis informal shouldn’t prevent you from going the extra mile digging deep though. Be tough-as-nails, cold-blooded and if necessary, surround yourself with razor-sharp, nit picky colleagues that will pinpoint what deserves to be pinpointed
2. Think intellectual property, especially if you’re small and weak. You don’t want the big guys to steal from you. Ooosh, I was almost forgetting. See this pizza-and-coke Linux guy in your team unwilling to think of patents as anything else than evil? Yeah, I know, he’s smart, nope, very smart and you don’t want to argue with him. But fight him with words until he understands intellectual property is key in a knowledge warfare industry where some countries (like China) are more equal than others when it comes to IP. The guy’s smart so it will take a lot less time than you expect as of now.
3. Think interface and user experience first, also called Think take your time. Don’t start coding from day one. What you should do is draw the screens of your applications. Each screen. With all the buttons, everything. Think of the human – machine interface first. Paradoxically, the longer you’ll wait, the faster you’ll get it done. Procrastinate. Do actually your best in procrastinating. You’d better walk slow in the right direction than run fast in a dead end. Unfortunately, true geeks can’t help coding. So refrain them from doing so by all means – including, if necessary, use violence and blackmail their families.
4. Think world-class engineers, or don’t think – or even think of thinking ever. Pick up the best – and trust me that’s easier to say than do. One smart develop does the work of ten lame programmers so do it, whatever it takes. And give out stock options, be generous about it: startup developers jump from one failed startup to another. Finding for once a good horse to ride is a rare, unique opportunity to make a home run and stop worrying about money for a while. These guys are the ones who deserve it most.
5. Think division of labour. Software architecture helps you parallelize the work load between developers to make all different groups working on all different parts finish on the same date. Believe me, there’s nothing more beautiful than assembling parts of code processed by different brains, clicking on ‘compile’, and see it run. However, do not believe you can then take a nap: the hardest thing in software isn’t to have a program that compiles properly. I would tend to say the hardest bit lies in packaging your software (never did it so I should just stop here). You’ll come up first with a broad drawing of the different software layers depending on the number of floors of your software (eg data / infrastructure; application; presentation – the SOA trend tends to divide the application layer into two, technical and a functional, subcomponents) – which ease work breakdown structuring. For instance, those with some good taste (or the least bad taste) will deal with the interface, others with the client side, the remaining ones will work on the server side. As an example, in CartoReso, Jean-Sébastien dealt with lower layers hacked in C (he was the most knowledgeable in NMap, the open source brick on which we decided to build on), Pierre with the application engine and with integration / build / project management (since he was in charge of the middle layer) and my humble self with the interface. But a broad drawing isn’t enough. You may then decide to fine tune your architecture and delve into the details of each layer. This work is necessary when dealing with large software development teams: regression risk finds itself lowered when everyone knows what it has to do and each method is clearly owned by a lead someone.
6. Think flexibility. Lay the groundwork for future evolutions: you’re not building a software for today or even tomorrow. Think long term. A fashionable way of implementing flexible architectures is to go for modularity – like Dassault Systems does: you don’t acquire one standard piece of software, you just build your own DS software by picking the modules you need in their catalog. Interestingly enough, Dassault Systems‘ pricing catalog follows the way the architecture was thought, hence creating a perfect alignment between marketing and engineering which I believe is an industry best practice. Why? Well, Dassault Systems happens to fulfill the dream of all software vendors: it sells generic software that matches specific needs.
7. Think lock-in. The new release of Firefox sucks: it crashes thrice a day and every time I try to download something. so I’ve decided to drop it for Safari on my Vista Mac at home and IE7 on my Vista laptop at work. But I find it REALLY hard, as I loved these little del.icio.us taggers or icons to subscribe to RSS readers embedded in the URL bar. Firefox has achieved to lock me in (well, not quite, but so far it did): the number of available plug ins prevent me from dropping Firefox until I find a solution (FYI, there exists IE7 plugins on windowsmarketplace.com). Lock-in has long been the one major issue with Google: it is now solved since Google login eases access to other Google web applications via Ajax menus. The powerful lock-in strategy execution usually reflects the value of the underlying platform – and the value of a platform equals the value of its ecosystem.
8. Think proprietary control of a widespread standard Look at Adobe Acrobat’s .pdf format, or Microsoft Office applications (used to be .doc, .ppt and .xls, and now, with Open XML, it’s .docx, .pptx, and .xlsx). Once you’ve set the standard, the value of your software increases dramatically because it takes long for an installed base to migrate to a new standard. This simple phenomenon is called inertia. The hardest bit here is to become the standard. Which can be achievved running faster than everyone and remain in stealth mode (invisible from the big ones) as long as possible. Easier said than done.
9. Think competition. Don’t mess with large corporations. If they are after you before you’ve proved your architecture is hard to replicate, they’ll make an announcement stating they’re soon to release a similar software, which will slower sales for your software, and come up, probably a little late, with something similar and sell at a loss, which will inevitably kill you. If your architecture is strong, elegant and patented, then the big one will realize it costs a lot to replicate (developers, patent breaking risk, time frame, etc.) and will think of acquiring either you or one of your competitors. This is how big corporations now innovate and trust me, software architecture audits aren’t piece of cake. Should they choose to acquire a serious competitor, sell your company before you get to die. Indeed, once the big one has the same product as you do and i) you’re alone, independent and weak; ii) you haven’t set the standard yet, the usual path followed to reap you off the map is that it will sell a similar product to yours for cheap, probably at a loss, if not for free – and the only thing you can do to compete is do the same too. Right? But think twice: your software product is your only cash cow whilst the big one on the other side of the river generates revenues from a large product portfolio. You’ll henceforth die before your large competitor does, no matter how much money you’ve raised.
10. Think first things first: your project needs an architecture too. “Right” order is: 0) idea + slideware demo 1) quirky demo for funding + recruitment purpose that you’ll throw away as soon as you’ll get seed funding + recruitment + strategic analysis 2) seed funding (angels) + software architecture 3) functional specs + user interface design + feasibility + technical requirements + development schedule 4) prototype started all over again from scratch 5) series A + refined proto + then start the marketing machine (road map, channel, trade shows, PR, buzz, and all that jazz), hand it to the CEO and prepare for release crunch time: documentation, support, help, manufacturing, shipping, etc.. Don’t worry though, things never happen as such. Expect the unexpected: the story never ends up as planned in the scenario.
11. Think interoperability: since you can choose, choose the most appealing role of the play: the white knight. In order to play White Knight, you need to look like a honest broker, even though you’re not. Think of Firefox’s ‘we’re gonna free the web from Microsoft’-approach: they run on all major platforms, support a massive number of external applications (like iGraal) as a platform, is translated in a number of languages by a community, etc. and at the end of the day, Mozilla makes 60 million dollars per year, whilst Google makes much, much more (Mozilla runs Google as a default search engine), and locks you in with little apps like del.icio.us tagger. So, to recapitulate Mozilla Firefox’s set of best practices (I should say right here that Microsoft is very good to at implementing such strategies, I can answer questions on this if you like), your product should be multi platform (start with Windows (90% installed base is convincing enough), then move to Mac OS, then move to Linux), be multi language-ready (it’s not so complicated to support Chinese, Japanese, Arabic and Russian unless you think about it afterwards, and then it’s a nightmare), and opened to external developers through a game of APIs: it will generate a buzz, make your company look sexier and hence ease new hires, and last but not least create value on your software by developing what you don’t have time to develop yourself. If you can use freeware code, do it; if you can purchase code for flat fees, do it; don’t pay flat royalties for source code down (eg US$ 15 per product sold), go for pay-per-deployment revenue % royalties instead – ie 1% of unit price; too risky. Make sure you don’t start depending on a partner though: don’t get locked-in yourself. At the end of the day, a good interoperability execution of strategy will strengthen your bargaining position with potential partners who will then realize you have the ability to choose to support them, or not. And then you’re the one calling the shots.
12. Think robustness. Like Criteo, software with crème-de-la-crème architectures never break because of the load (the post, in French, I’m pointing to basically says their full .NET software resisted torture)

Expect a bunch of technical takeaways this time as soon as I feel ready for it.

If you’re a software-as-a-service publisher (eg Google as far as Google Earth or Google Gear aren’t concerned, SalesForce, Idylis, TellMeWhere, Netsuite, Excentive, Facebook, Zlio, Brainsonic, Microsoft as far as Live or Titan are concerned, U.[Lik],  eBay, Yahoo!, Inspirational Stores Group, Amazon, 37Signals, Neocase, Advance IT, Constellation, blueKiwi, SideTrade, Twitter, etc.), here are 5 reasons you’ll find hiring software developers easier than traditional software companies or, even more true, IT service companies.

1) SaaS developers enjoy faster release cycles. Indeed, go-to-market time frames tend to shrink as new functions may be implemented on a seamless basis (provided all regression tests were performed on a redundant test server or mirror environment).

2) SaaS developers don’t suffer the pain of an heterogeneous installed base (the nightmare of traditional software license vendors like Oracle and SAP). If all users work on the same environment, then it’s easier to innovate (you don’t need to take into account upgrades and regression risks) and even, dare to think about starting all over again from scratch a new version of your software.

3) SaaS developers will enjoy the pressure of having to keep up with client requests and new web technology trends constantly. Actually, since the SaaS paradigm is equivalent, roughly speaking, to a pay-as-you-go business model, then clients may decide to stop using the app and hence paying the SaaS vendor anytime they want. Which puts pressure on the software publisher team in general, and on the develops in particular who will have to keep watching what competitors do, how the market evolves, what their clients need, and what new technologies may allow (eg Silverlight and Apollo definitely open new windows of opportunities).

4) SaaS developer will work in small, agile, commando teams rather than endless product development open spaces. Why? How? Making money per US$50 / month doesn’t leave room for too aggressive recruitment campaigns. It takes a long time to build a sustainable SaaS company. Cash flow stream forecasts may grant visibility, you’re still never 100% sure that you’ll keep your clients until then. In other words, SaaS publishers don’t benefit from the huge upfront fees software license vendors collect as soon as they ship their product and find it trickier to finance their working capital. In a nutshell, viable SaaS publishers are by nature and by design very healthy, well-managed companies with conservative approaches. Software developers are key elements of the engine and this is where the money will go as soon as recruiting will become the current motto. Till then, R&D teams will remain small, agile and commando-style (testing new features, removing some, etc.). Great labs to give new software engineering methods a go for people passionate about such things!

5) SaaS developers have a chance to do the work of graphic designers as well (and modify it more often than with a software license vendor), and may, should they choose to do so, have a true impact on the user experience and general design of their application service. For instance, I heard develops @ Google do the design work themselves, keeping a few principles (simplicity, etc.) in mind, and starting from what they think the mindset of the user will be. Same for Titan (online version of Microsoft Dynamics CRM) Salesforce or Idylis (online ERP company based in Paris). In short, Software as a Service may be the best option for software developers with a strong graphic design acumen, or keen on interacting with users and brushing their design skills up!

Enough for tonight. I’m not even mentioning the possibility for develops to improve their infra- or distributed computing skills thanks to SaaS models but I’m pretty sure you would’ve thought about it. Let me know if you can think of other selling points SaaS vendors may make use of to attract software developers vs. software license vendors. Software publishers are whatsoever all amazing, be they SaaS companies or not. So if you’re a good develop in an IT service company, jump off and if you don’t know where to apply, send me an email and I’ll put you through.

Dubai isn’t dumb when it comes to economic policy. Some economists there have noticed software giants (Google, Microsoft, Apple, Oracle, SAP, IBM, BEA, Yahoo!, etc.) acquired companies on a valuation related to the number of software developers such preys accounted. A few years ago, it was commonly agreed that a software giant would be willing to ‘acquire’ each software developer for something like US$ 1m. In other words, a 12 developers-strong software startup would be worth something like US$ 12m. Nowadays, I would say it gets closer to EUR 1m per developer though (EUR 1 = US$ 1.37).

Dubai has noticed the trend and has started to build gated communities for software developers – very near Dubai Internet City. In terms of ROI, a relatively small initial investment (it is no secret that Dubai employs thousands of slaves from rural India, Indonesia and Pakistan to get the construction job done) for roads and houses that are soon to be refunded by individuals and taxes anyways, plus a massive communication effort in hand with both the software and IT service multinationals willing to invest in the area to attract software development talents from South America, Russia and South East Asia, will mechanically generate tremendous per capita GDP and create value for the local economy.

What if software development was a true booster for the World Economy? I wish more politicians got to know about Dubai’s measures to increase GDP. It all boils down to this: attract and train the best software development talents.

PS: many thanks to Raphaël Fétique, from eCommerce consultancy Converteo, for the info

The difference between these startups and any Web 2.0 parody of brands is that a vast majority of these software startup actually generate cash. On the WWW, eCommerce companies put aside, the bulk of services generate zero revenues. In the so-called Web 2.0 world, only market leaders like Meetic, LinkedIn, Facebook and MySpace are profitable – which is not the case with software publishers in general, software being the one industry amongst its peers with the highest row margins.

A few stats about these startups:

- all segments of the software industry represented (digital entertainment, enterprise software, mobility, robotics, SaaS and…Web 2.0)

- an average growth rate of 300%, some of these startups even topping 1000% figures (Miyowa, Excentive, etc.)

- 2 failures out of 50+ companies (4% mortality ratio: extremely low for early stage companies)

- about half of these software ventures have raised series A for an average financing of 3m euros (4m USD) with top-tier venture capital shops

I’m keeping internationalization figures for myself – but I’m telling you, it’s very impressive. More info about the Microsoft IDEAS program aimed at enhancing the expansion of high potential software startups right here.

Before I wrap this post up, which French software startups are to join IDEAS next? We’re opened to all recommendations and I’ll be glad to answer any question regarding this program.