By opening the PDF file with a text editor it is possible to see that there are some encrypted objects. The first circle, object 11, is a command to execute Javascript in object 12. The second and third circles, are a command for object 12 to filter the Javascript with AsciiHexDecode. The main reason for this filter is to hide malicious code inside the PDF and avoid anti-virus detection. This is our first red flag.



This second image shows how the stream is decoded, but additional analysis is required to make sense of it. Again, we will open this code with a text editor to understand its purpose.

Opening this code as text, can see some Javascript, which is another red flag. We will now work to determine its intent.

By using a utility called Malzilla, we can analyze the Javascript. We input the Javascript in the top box and decode it with the circled button. A closer look at the second circle indicates that this Javascript contains shellcode, yet another red flag.

This is a closer view of the shellcode. Shellcode is typically used to exploit vulnerabilities while avoiding detection. Shellcode has earned its name for launching a command shell for the attacker to control.

Again, we run a utility, this time to convert the shellcode into an Executable file, which we save, so that we can take an even closer look at its function.

Here, we run yet another utility, IDA, which enables us to disassemble and debug the commands of the Executable file. As we have highlighted, this file contains multiple Nop slide functions, which are used in Shellcode attacks since the location of the Shellcode is not precisely known. This raises another red flag. From here, we should see if there are any interesting binary strings.

Here we have circled multiple binary strings that should raise concern. One of the circled items, URLDownloadToFileA, is a Windows API function to download a file from a remote server and to save it on the user's PC. In this infected PDF, the shellcode uses it to point the PC to an infection point, which is the IP address we have circled (by the way, don't visit that IP address). Once the infected file is downloaded, the shellcode will execute it, infecting the computer.

There you have it! You have to go deeper to find what is truly at the heart of this infected PDF. Hackers are intelligent about wrapping executable files in shellcode, encrypting it and hiding it in Javascript within PDF files, but by reverse engineering their techniques, we gain a better understanding of our vulnerabilities and can work to strengthen your security posture.

Latitude Research (which partnered with ReadWriteWeb last year on a study about kids and future Web technology) has launched a new study on The Future of Gaming - they want to hear fresh perspectives from both game enthusiasts and non-gamers. What do you think the role of games will (or should) be in the future? Can they motivate and inspire people to reach personal or societal goals? Can they bring together online and offline experiences in meaningful ways?

]]> Sponsor

So far, we've heard people talking about games in terms of social discovery and community, as a means to improve on traditional education techniques, and as a civic engagement tool. People also want games to motivate and enable - to help them reach their ideal selves - by making things like healthier habits or better money management seem more attainable and enjoyable.

Here's how a few of our The Future of Gaming participants have told us they have or would like to see games applied:

• Social Networking & Community

  • "I recently read that some people are reaching out to other players within games in an attempt to garner support for Japan in the wake of the earthquake/tsunami/(possible) nuclear disaster. In this way, games are becoming just another way we are able to interact with others be it friends or strangers across the globe." - Will E., Associate Staff Scientist at Avedro

  • "Xbox is my generation's golf. It's how I met a comic book writer and an iOS developer." - Michael C., Designer

• Health

  • "I would love for games to improve my performance. Track my inputs and set goals for them and alert me of how I am doing compared to others. One major goal I would love to gameify would be fitness." - Christian A., Studio Director at Toy Studio

  

  Screenshot of Health Month, an online social health game.

• Finances

  • "Right now having games help with health, activity, and entertainment in general is working well for me. Going forward I'd love to have games track progress with money management and stress relief." - Jon R.
  Guest author Kadley Gosselin is a writer for Latitude Research (@latddotcom), an international research consultancy helping clients create engaging content, software and technology that harness the possibilities of the Web.

• Politics

  • "Politicians are even using games to communicate. North Carolina governor Beverly Perdue, in the midst of controversy over state budget cuts, posted a game on her website that asked players to decide what jobs and services to cut, or what taxes to raise, in order to balance the budget. (Of course, the game didn't include any modeling of the possible effects of those cuts or taxes beyond the immediate balance sheet!)." - Caroline R.

• Education

  • "I really think that, as education moves online, we need to be harnessing the power of computers to provide immersive interactive experiences for students. Gaming has really pushed my thinking forward in that regard." - Ted C., Instructional Designer at Samuel Merritt University

  What are your thoughts? Click here to participate in Latitude's 10-minute survey on the future of gaming.

  *Winners are determined by Latitude. Gift cards will be issued to winners by email within 8 weeks of entry, via the contact information collected at the end of the survey. One entry per person; duplicate entrants will be disqualified.

  ---

  To learn more about working with Latitude, contact: Brian Conry, Director of Sales, at bconry@latd.com, and visit us on the Web here. For general inquiries, contact: life-connected@latd.com.

  Creative Commons-license photo by enfad.

  ]]> Discuss]]> http://www.readwriteweb.com/archives/what_is_the_future_of_gamification_survey.php http://www.readwriteweb.com/archives/what_is_the_future_of_gamification_survey.php Gaming Thu, 14 Apr 2011 11:00:00 -0800 Guest Author On Jan. 12, 2010 an earthquake of catastrophic proportions struck Haiti's capital, Port-au-Prince. Among the buildings that were leveled was a school. In spite of the roof caving into the classroom, some of the children survived and one of them managed to send an SMS message. Relief workers, however, were unable to find the location of the school. Volunteers in Boston with Ushahidi were able to locate the source of the text message and sent that information back to the relief workers, who rescued the children.

  This rescue was possible only due to the use of disruptive, community-driven Web 2.0 technology by volunteer and technical communities (VTCs) working on disaster and conflict management. VTCs such as OpenStreetMap, CrisisMappers, Crisis Commons, Sahana and Ushahidi have contributed greatly to disaster management. VTCs have used SMS, social media and satellite imagery; built communities around humanitarian efforts; and created technology tools and wikis, using open source software, hardware and platforms, as well as free cloud based services in affected countries such as Haiti, Libya and Japan.

  Despite their successes, it has not been an easy ride.

  ]]> Sponsor
  
  ]]> Guest author Tanya Gupta is an international development professional by day and blogger by night. Her day job is in the Corporate Finance unit of the World Bank. At night, she reflects about development, technology and her past life in academia, as she writes.

  VTCs continue to face major challenges, such as language and coordination. Many disasters occur in countries that are not English speaking, while much of the volunteer community is Angolophone. Coordination can be a problem too. Established development organizations such as the UN have been dealing with crises for many years and have a rich knowledge base, but are also challenged by data silos, proprietary systems and bureaucracy. VTCs are more agile and technically adept, but can be uncoordinated.

  Disaster Relief 2.0: The Future of Information Sharing in Humanitarian Emergencies, a report produced by the UN and partner organizations, examines these issues in detail. It identified a host of additional challenges facing VTCs

  1. The need to build a reputation for reliability, trust, professionalism
  2. Lack of resources
  3. The technical challenges of geolocation with partial information and verifying accuracy of reports
  4. Building local capacity to manage disaster and conflict situations
  It is true that this presents privacy concerns. However this may be a bigger issue in the West. [...] In countries where privacy is not a cultural norm or expectation, geolocation software installed on the cheapest phones could provide enormous help during disaster relief efforts.

  Despite these challenges the VTCs will play an increasingly important role in the future disaster management, thanks a to a growing number of volunteers and the power of Web 2.0 technologies.

  So, what's next?

  Geolocation

  We may see better methods of locating people during an emergency. Perhaps a Foursquare type check-in, or even better, an automatic check-in technology, where you don't have to press a button to enter where you are, could be included in low-cost cell phones.

  It is true that this presents privacy concerns. However this may be a bigger issue in the West. For example, the Singapore constitution does not contain any explicit right to privacy. In countries where privacy is not a cultural norm or expectation, geolocation software installed on the cheapest phones could provide enormous help during disaster relief efforts.

  The countries with the highest number of people affected by disasters in 2010 include China, Pakistan and Thailand. These are countries where privacy protections are low, and where privacy is not a strong cultural value. They also score low on "individualism" in a framework developed by Greet Hofstede as a way to evaluate a country's culture.

  If we are to postulate that a lower score in individualism for a country also indicates that its people place a low importance on privacy, then it seems plausible that some disaster-prone countries could implement geolocation on cell phones without violating societal norms and save thousands, if not millions of lives.

  Mapping

  A recent trend in VTC disaster management has been to use social media data as a layer on crisis maps. For example, a Hypercities project maps live Twitter messages on a map of Egypt, showing the location and picture of the Twitterer. This is helpful but some of the messages are clearly not relevant to crisis mapping. The challenge in using social media as a crisis map layer is that the data is huge, chaotic, free, and collectively good, but individually unreliable. To improve the social media data for inclusion on crisis maps, we need to focus on quality and relevance.

  To determine quality in a Twitter stream, we can assume that source-quality equals information-quality. To identify quality sources for a given topic, we could use Twitter sources via curated lists from Listorious or established news media outlets and non-profits like Ushahidi. For instance Listorious has a list of reputable sources for the Haiti Earthquake curated by The New York Times.

  To further refine the source-quality measure, we could also look at the number of followers of sources and the number of retweets that contain a relevant hashtag. For example, a tweet containing #civ2010 #IvoryCoast #civsocial #ict4d about the Abidjan crowd-sourced crisis map:http://is.gd/7IUkix was retweeted extensively in April.

  We can assume that when we get higher quality tweets, the tweets are more relevant. Once the parameters for source and content quality are set, a program could read the Twitter stream and filter the quality tweets based on the selected parameters. In addition to improving the quality and relevance of the social media layer of crisis maps, perhaps we could also focus on improving the quality of the sources of the crisis map, through crowd sourcing methods such as incorporating Google's +1 or a like-type function on information contained in the collaborative disaster maps.

  Finally, improved matching between people needing assistance in a disaster and those who can help would add value. A service could be set up to match people affected by natural disaster with those who have the funds, goods, time or know-how to assist them. For example, Kiva partners entrepreneurs with lenders via existing microfinance institutions that facilitate the loans. DonorsChoose.org matches American public school teachers who need classroom supplies with "microdonors."

  This kind of a matching service could be set up for organizations, groups, individuals and families affected by natural disasters. Some of the elements that would include skills, available time, specialty, needs (goods and services) and urgency.

  The future of Web 2.0, social media and their applications are as unpredictable as the people they connect. But from what we have seen and and what we can reasonably postulate,  it is clear that these technologies have a profound positive impact in disaster management. I am sure the best is yet to come.

  Photo by connor212

  ]]> Discuss]]> http://www.readwriteweb.com/archives/mapping_geolocation_and_the_future_of_scalable_disaster_response.php http://www.readwriteweb.com/archives/mapping_geolocation_and_the_future_of_scalable_disaster_response.php Location Wed, 13 Apr 2011 13:00:00 -0800 Guest Author Data.gov is a recent example of our ability to gather, store and analyze enormous, unprecedented quantities of information. Projects like these have the power to change our lives by driving transparency, accountability and collaboration. Data.gov is a testament to the times we live in and what we can do with big data technologies. But, perhaps more importantly, it is a testament to the big data community and the talented people behind the data who are dedicated to making it meaningful to the rest of us. It's time to bring these folks out of the shadows.
  ]]> Sponsor
  
  ]]> Guest author Scott Yara is co-founder Greenplum and VP Products, EMC. Prior to Greenplum, Scott served as VP for Digital Island, a publicly traded Internet infrastructure services company that was acquired by Cable & Wireless in 2001. You can find more of his writing at The Huffington Post.

  Data.gov launched in May 2009 with the goal of increasing public access to non-sensitive data generated by the U.S. government. It went from storing 47 datasets at its initial launch to more than 250,000 datasets one year later. Despite its success, it's likely that it will loose up to 75% of its funding as part of the new federal budget. Its fate is now up to the federal CIO office, which will decide how to implement those cuts - along with cuts to multiple transparency projects like USASpending.gov, Apps.gov/now and Paymentaccuracy.gov - later this year. A campaign to "Save the Data" has been launched, and numerous folks have spoken up against the decision, including more than 50 startups that plan to continue to make the data accessible.

  Data.gov is a high-profile big data project, and there many, many projects like these going on all the time, all around us. Talented information alchemists work quietly in the shadows of data centers and corners of computer labs at some of the world's most innovative enterprises, solving mankind's most challenging problems, and uncovering new opportunities based on startling new insights from mountains of ones and zeros.

  Data Hero Awards 2011

  
  If you're reading this on or prior to Friday, April 22, 2011, there's still time to submit a nomination for the Data Hero Awards 2011. Supporting documentation is optional, but you're welcome to send us research papers, examples of media coverage and testimonials from third-party sources or customers.
  
  Winners will be selected by an independent panel of judges drafted from the big data world. The judges will assess candidates based on how well their innovations break with conventional ideas or processes, whether they went beyond marginal improvements on something that already existed, if they have made a long lasting impact on future innovations and, of course, whether they are able to leap tall data warehouses in a single bound. The honorees will be announced at the EMC World Conference in Las Vegas, May 9-12, 2011 and online at EMC.com.

  These professionals are the new heroes of the big data era. They're engineers, programmers, statisticians and other information professionals with a seemingly supernatural ability to survey, scrutinize, process and make magic with massive caches of data. They examine data under a virtual microscope with a sharp, technology-enabled eye, and they discover insights that inspire new opportunities. They are deeply engaged in an emerging new big data discipline that we refer to as "data science."

  Our team at EMC Greenplum wanted to bring these information heroes out of the shadows and into the spotlight. We created the Data Hero Awards 2011 to honor the individuals, companies, organizations and government agencies worldwide that are setting the pace for our industry through their use of next-generation data analytics to create current-day innovations.

  We're searching for big data breakthroughs at Internet and e-commerce companies, Web and new media, high tech, clean tech/green tech, consumer products, life sciences, health care, government, social services, education, energy, oil and gas, manufacturing and anywhere that truly great data science has erupted organically.

  I urge you to take this opportunity to recognize the data heroes in your life. Let's rally behind these under-appreciated heroes and give them the same support being shown to Data.gov.

  ]]> Discuss]]> http://www.readwriteweb.com/archives/help_recognize_the_heroes_behind_big_data_projects_like_datagov.php http://www.readwriteweb.com/archives/help_recognize_the_heroes_behind_big_data_projects_like_datagov.php Data Services Wed, 13 Apr 2011 11:00:00 -0800 Guest Author Early last year, "checking in" was the cool new craze. No visit to your favorite tech news site could be had without getting buried in an avalanche of articles about Foursquare, Gowalla, Loopt, BriteKite or a myriad other startups. The big guys quickly followed suit: Yelp introduced "Check-Ins" while Facebook launched "Places" and most recently, Google Latitude updated to incorporate check-ins and check-outs. But here's the thing: the trends aren't actually that good.

  Let's look at Foursquare and Facebook. First, there's no doubt Foursquare is throwing off some impressive numbers (e.g. the company's recent announcement of 8.5 million users). It typically announces total, rather than active, users and that number is roughly growing linearly at present. Total users, by definition, of course, only goes up - yet according to compete.com, Web traffic has declined for five consecutive months, amounting to a 50% reduction in traffic over that period. And while traffic isn't the best indicator of usage, Web visits should be just as likely now as five months ago, and it's certainly not a positive sign of rapid growth in usage.

  ]]> Sponsor
  
  ]]> Guest author Mark Watkins is the CEO and co-founder of Goby, an inspiration engine for finding fun things to do. Prior to Goby Mark led R&D at Endeca, a search and business intelligence software company. You can follow him at @viking2917.

  In July 2010, Foursquare had 2 million users performing 1 million check-ins per day. By the end of the year, that number had risen to 5 million users performing 2 million check-ins per day. Impressive growth, yet this means check-ins per user declined from 0.5 per person to 0.4. It also suggests that many of those five million users aren't active.

  The trend for Facebook Places is even worse. Facebook had at least 30 million members check in at least once in a shorter time frame as a newer service with a larger built in user base. Yet Facebook Places offers even less value than a Foursquare check-in. There are no points to win and no discovery element like tips; it's just a flat statement that, "I am at Starbucks." As a result, early indications are that Facebook check-ins strongly lag Foursquare check-ins.

  The other day, I checked in for lunch at the Ace Hotel in New York City, an epicenter of the digital elite, and, according the Foursquare, the single most checked-into hotel in the world. The place was packed and I could barely get through the door, much less find a place to sit down. Yet, over the course of my two-hour stay, only three other people checked in.

  Why Check-ins Are Going to Falter

  In 2011 check-ins are going to go the way of the eight-track tape and disappear. You probably already see this happening. How many of your friends are consistently checking in and broadcasting? How many "I just ousted Fred as the mayor of Starbucks" messages do you see in your stream? Across my network - a large and tech-savvy network - I see less than 1% of people checking in on any service, and the trend is down. Some people are undoubtedly checking in privately, but that has major (negative) implications for how a service can spread.

  People are creating a personal online identity for themselves, showcasing who they are by telling everyone what they're doing. (Less charitably: they're bragging, and I'm just as guilty of it as most).

  Both Yelp and Facebook have the advantage of huge audiences who visit the services with a clear purpose. People are on Facebook to socialize, and on Yelp looking for a great restaurant. Check-in services aren't going to replicate this scale or focus of audience in the short run, making it hard to make check-ins a mainstream activity. A number of check-in services have effectively already thrown in the towel; BriteKite abandoned its check-ins entirely and Gowalla integrated itself with Facebook and Foursquare check-ins.

  All of this doesn't mean, however, that Gowalla, Foursquare, MyTown, Loopt and all the services with check-ins at their core are necessarily going out of business. It does mean they need to find a way to deliver deep value to people beyond the check-in. And unless Facebook and Google provide more value than they currently do, their check-in services will languish as well.

  Let's take a look at why check-ins are going to falter and then explore some areas for delivery of deep, lasting value.

  Why do people check in? Why should they?

  
  
  • Finding people near you, a.k.a. serendipity: When your friends happen to be at the same location, it's like magic. Especially useful at conferences, this is check-ins at their best.
  • Points and the hoped-for rewards: Whether it is rewards on SCVNGR or deals on Foursquare, people hope to get a discount: a free appetizer, a dollar off coffee. These deals are in their very early stages on location-based services.
  • To remember things: In new cities or new venues, I'll often check in (privately) just to remember the place I went. Marshall Kirkpatrick has discussed this use case as well.
  • Personal branding: While most people wouldn't use this term, it is what's going on. People are creating a personal online identity for themselves, showcasing who they are by telling everyone what they're doing. (Less charitably: they're bragging, and I'm just as guilty of it as most).

  Here's why none of these are going to lead to significant growth for the LBS players.

  • The serendipity factor is very much a creature of big cities, certain demographic segments, and New York in particular. If you're in New York, where all your friends are within 10 blocks of you and can quickly get from one location to the next, this is actually awesome. But it's not so hot in big cities like Los Angeles that are too spread out for these serendipitous moments to happen.
  • Games are fun for about two weeks, but most don't have staying power. Like a lot of folks, I really dig Call of Duty: Black Ops, but I can only kill so many zombies before it's time to do something else. Games are a novelty and have a very finite shelf life. So long as check-ins are "just a game", they'll be subject to the short life cycle of a game.
  • Remembering things holds promise of long-term value; a digital memory bank of places I've been could be really handy. It's just not clear that most people really need it. Unless you spend all your time traveling and going new places, there's just not that much to remember.
  • Personal branding is most common amongst the digital elite - the bloggers, social media mavens, tech execs (ok, I plead guilty). Outside a niche set of people who want the personal branding (or ego boost) of the check-in, most people not only don't want to check-in, but they don't know why they should. Most women I talk to are creeped out by broadcasting their location.
  Next page: How do check-in services go mainstream?

  Photo by KecMec

  How do check-in services go mainstream?

  Today, check-ins are mostly the purview of the tech savvy. What would drive the general population to engage on a sustained basis?

  1. Socializing. If I see my friends doing it consistently, I might do so as well. Yet (at least on Foursquare), more and more people are checking in privately, choking off a key viral loop. Finding a way to socialize where you are or where you'll be in a way that isn't simply annoying, and has the right privacy model, is key.

  2. Deals. If I can regularly and repeatedly get some kind of economic value from checking in, I'll probably continue to do so. But there are big challenges for location-based deals. Groupon has a reach to local businesses (through their sales force) that far outstrips anyone except possibly Google or Facebook. A lot of businesses have broken their pick trying to sell direct to hyperlocal businesses at national scale. The deals also have to be substantive enough to change behavior.

     The power and the limitation of check-ins is that they're after the fact. It's powerful because you, the system and the local merchant know exactly where you are, in the moment. The downside is that check-ins don't really help you decide anything.

     If I'm a Dunkin' Donuts zealot, for instance, I'm probably not going to change my behavior and go to a Starbucks just to save $1. Location-based deals reward decisions already made. If I'm already at Starbucks, why do they want to offer me a deal? It may reward behavior, but doesn't incentivize it.

     Having to be on-location to get a deal limits the reach of a deal, and doesn't drive foot traffic. I just got the world's best Groupon (for a book lover like me): $10 off $20 at Barnes & Noble. This is going to drive me into a store. But I can't find that deal on Facebook or Foursquare because I'm not anywhere near a store right now! The brilliance of Groupon is surfacing the deal before you've made a decision, and generally only costs the business money when it has product additional foot traffic to the store.

  3. Photos. Photos being shared in the moment by location could tap into one of the key early drivers of Facebook growth photo sharing, and seeing what you're friends are up to. A photo is way more powerful than a cryptic Twitter post about a check-in. Foursquare's new photo capability will be interesting to watch. But, with Facebook I can already share photos in the moment and don't really need Places to do that.

  4. Discovery. The power and the limitation of check-ins is that they're after the fact. It's powerful because you, the system and the local merchant know exactly where you are, in the moment. The downside is that check-ins don't really help you decide anything - they simply recognize and broadcast a decision you've already made. If you're trying to decide where to eat or what concert to go to, a check-in doesn't help. If you are an advertiser trying to influence behavior, you want your message presented before the decision is made, not after, which is when the check-in occurs.

     The larger check-in services have yet to empower real discovery. But if Foursquare's app was encouraging me to broadcast where I will be checking in this weekend, or showing me which sushi spots had the most check-ins, that could be extraordinarily powerful. But they've not really done that yet.

     Facebook Places is even more limited. Have you ever tried to find a "Place" in Facebook? The mobile apps will let you broadcast your location and not much else - there's no way to explore or find new locations or get recommendations from your friends. Nor does Facebook Places give you a way to let your friends know what you will be doing, only where you are now. It is all after the fact.

  In 2011, a service that's just about check-ins is going to struggle (best case) or die (worst case). Those that succeed need to find a stronger motivation than badges and self-branding to thrive. That might come in the form of coupons and discounts, but that will run into trouble with the likes of Groupon and Facebook, both of which have far larger distribution. It might also come in the form of some kind of recommendation or discovery service, or personal journaling. Foursquare's new Explore feature is a step in this direction.

  There's real opportunity here, and the check-in services have a lot of data they could harness for this. But unless "normal" people find direct, personal value in the service, they're not going to adopt it and the service will remain as a toy for the tech-obsessed.

  ]]> Discuss]]> http://www.readwriteweb.com/archives/2011_the_year_the_check-in_died.php http://www.readwriteweb.com/archives/2011_the_year_the_check-in_died.php Location Tue, 12 Apr 2011 10:00:00 -0800 Guest Author More and more companies are moving from traditional servers to virtual servers in the cloud, and many new service-based deployments are starting in the cloud. However, despite the overwhelming popularity of the cloud here, deployments in the cloud look a lot like deployments on traditional servers. Companies are not changing their systems architecture to take advantage of some of the unique aspects of being in the cloud.

  The key difference between remotely-hosted, virtualized, on-demand-by-API servers (the definition of the “cloud” for this post) and any other hardware-based deployment (e.g., dedicated, co-located, or not-on-demand-by-API virtualized servers) is that servers are software on the cloud.

  Software applications traditionally differ from server environments in several key ways:

  ]]> Sponsor
  
  ]]> Guest author Joe Masters Emison is VP of research and development at BuildFax, the only national provider of building, remodel, and repair records on homes and businesses. He designed BuildFax's cloud infrastructure and Pragmatic Extract-Transform-and-Load (PETL) data-processing pipeline.
  1. Traditional servers require humans and hours–if not days–to launch; Software launches automatically and on demand in seconds or minutes
  2. Traditional servers are physically limited–companies have a finite number available to them; Software, as a virtual/information resource, has no such physical limitation
  3. Traditional servers are designed to serve many functions (often because of the above-mentioned physical limitations); Software is generally designed to serve a single function
  4. Traditional servers are not designed to be discarded; Software is built around the idea that it runs ephemerally and can be terminated at any moment

  On the cloud, these differences can disappear. The operative word is “can”–a look at the current mainstream discussions and advertisements of cloud services shows a distinct lack of interest in taking advantage of the crumbling wall between server and software.

  Many hosting services that provide “cloud servers” have IT support staff who have to allocate the servers. Others have pricing plans (e.g., large monthly minimums) that essentially force the cloud servers to have the same physical limitations as traditional servers. And finally, very few triumphal case studies for the cloud focus on how the ephemeral or single-function possibilities of cloud servers have led to better, cheaper, faster, more fault-tolerant, and more secure infrastructure designs.

  (Of note, when considering the above definition of the cloud, Google had the first cloud and the first cloud-enabled infrastructure with its essentially unlimited white-box, cheap servers and revolutionary MapReduce and BigTable technologies that enable ephemeral, single-function applications.)

  Why Servers are Better as Software

  Servers as software are better: cheaper, faster, more fault-tolerant, and more secure than traditional servers. Much of why servers as software are better goes to the two most commonly-named benefits of the cloud: the cloud is cheaper, and the cloud has virtually-unlimited resources (i.e., it’s easy to scale).

  The cloud is cheaper in theory because payment is per resource used, but may not be cheaper in practice–because you may be using resources inefficiently. For example, if you have a server that gets used heavily during weekdays, but rarely during the night or on weekends, then if you are paying for a cloud server to handle the heavy traffic 24/7, you’re not paying just for real usage; you’re paying for idle as well. On the other hand, if your server is software, it can relaunch with less resources at night and on weekends and with more resources on weekdays.

  The cost benefits increase beyond the above day/night example when one considers the single-function paradigm: if each server-as-software only exists to serve a single function, both the resources and the run-time allocated to that function can be limited to the bare essentials. Also, in a single-function server-as-software environment, resources can be scaled up to make the one function run faster without having to worry about having to keep those resources around for other functions.

  In case it is not wholly obvious, an architecture designed around ephemerality will be more fault-tolerant. Finally, single-function, ephemeral servers can be more secure than traditional servers because they are limited in their access to data and resources (being single-function) and they are built to disappear (being ephemeral).

  Next page: Taking Advantage of the Cloud Infrastructure: Database Servers

  Photo by Manthy

  Taking Advantage of the Cloud Infrastructure: Database Servers

  So how will the server-as-software nature of the cloud change infrastructure design? The biggest advantages should be realized in uses that write critical data (as opposed to read-only or temporary-data write uses), because those are the hardest to change and scale.

  Take, for example, the database server. In many ways, the place and design of a database server in system infrastructure is much the same as it was at the beginning of the personal computer revolution: a beefy machine that handles all data-related writing and retrieval, perhaps with a backup waiting in the wings. An Oracle database server circa 1995 in a LAN client/server architecture looks very similar to a cloud-hosted MySQL instance serving a web application frontend: humans are required to launch or fail over, physical resources are limiting (prohibitively expensive, humans required, and–in the cloud–slow I/O), and dependent clients require the database server to have 100% uptime.

  And perhaps the only software-like aspect that a database server might have–a single function–is usually untrue, as database servers often handle many different functions (e.g. authentication, storage and retrieval of user data, storage and retrieval of global data, exact record retrieval, full-text searching, and BI-like aggregation and number-crunching).

  However, by embracing the software-like aspects of the cloud, database servers can be redesigned, getting better, cheaper, faster, and more secure. One step in redesigning the database server can be to split out its various functions to different servers: a cache server for frequently-read items (e.g. Memcached), an OLAP database server for business intelligence (e.g. Mondrian with a local MySQL database), a full-text index database for text-based searches (e.g. Apache Solr), and different relational databases for other purposes (e.g. PostGIS for geospatial data and MySQL for typical structured transactional data).

  By breaking out these various functions, the infrastructure designer can allocate exactly the right amount of needed resources to each function, each function will be running on a platform designed to deliver optimal performance, and the security settings can admit only those authorized for the particular function into each server.

  However, the above functional breakout does not harness the cloud’s essentially-unlimited resources and ephemeral nature. To get the full cloud benefit, one must abandon all traditional databases and move to a database built for the cloud; something like HBase. HBase, based on Google’s BigTable, is probably the most well-known open source database that takes advantage of the unlimited and ephemeral nature of the cloud.

  Although the most dramatic cloud-driven infrastructure changes may be with respect to database servers, other types of servers may also benefit from the advantages of the cloud.

  HBase is meant to hold lots of data and be run across many servers in many data centers, and the underlying data can be replicated to clusters of other servers in many data centers with easily automated fail-over. HBase can dynamically scale up and scale down to more or less servers. In other words, if HBase’s single function can serve your database needs, then HBase takes advantage of all four of the server-as-software characteristics of the cloud.

  Taking Advantage of the Cloud Infrastructure: Other Servers

  Although the most dramatic cloud-driven infrastructure changes may be with respect to database servers, other types of servers may also benefit from the advantages of the cloud.

  For example, application servers on the cloud may not be as “single function” as they may appear on traditional servers.

  An application server might have both customer-facing and administrative functions, where the administrative functions (such as running complex reports or extracting and compressing massive amount of data for download) are both rarely used and a drain on resources for customers. In a properly-designed cloud architecture, the administrative functions could run on a separate, more powerful server that is launched on demand and terminated automatically after some period of idleness.

  An application server might also serve a website and an API, where web site traffic is more consistent, can be cached, and must return within a second, whereas the API results cannot be cached and must be able to handle huge influxes of requests. In a traditional server environment, these functions would likely be combined onto web application servers, but in the cloud they should be divided onto separate servers with different hardware profiles and auto-scaling plans.

  Servers used for internal data processing can also benefit from the advantages of the cloud. For example, restoring a large compressed database from online storage can be very taxing on server resources in the cloud; simply un-gzipping a few multi-gigabyte files can bring regular operations to halt. This is the perfect time to spin up a separate cloud server to handle the decompression and restoration tasks. Or, another internal example: database backups can also be resource-intensive and slow down database operations; instead, launch a replication slave, sync up the database, and then lock tables and back up from the slave.

  Final Thoughts on Cloud Architecture

  In general, architectures that take advantage of the cloud should break down work into jobs that can be run separately on servers that are designed to terminate when not needed. This architectural move from traditional servers to the cloud may be seen as roughly analogous to the move from functional programming to event-driven programming in software design: react specifically to only what is needed, and do not design around waiting or idle time.

  If you can achieve this in your cloud-based architecture, then you will truly have a faster, cheaper, more fault tolerant, and more secure deployment.

  ]]> Discuss]]> http://www.readwriteweb.com/cloud/2011/03/the-advantage-of-cloud-infrastructure-servers-are-software.php http://www.readwriteweb.com/cloud/2011/03/the-advantage-of-cloud-infrastructure-servers-are-software.php Cloud Computing Mon, 28 Mar 2011 13:30:00 -0800 Guest Author This post originally appeared on guest author Jeremiah Owyang's blog. Social Media Management Systems, like CMS systems for websites, help companies manage, maintain, and measure thousands of social media accounts. Although the nascent SMMS space is only one year old, 58% of corporations have adopted at least one of these 28 vendors. Altimeter is conducting a formal research report on the SMMS topic (see research agenda for 2011), However, I wanted to give a year-end state, after coining this category 12 months ago and listing out vendors.

  SMMS systems are the next growth market for the social business category. While saturation is at 58% of corporate buyers, the average deal size is a meager $22,000 but will expect to grow to six figure annual deals in coming quarters to meet market demand. This growing space has low barriers to entry, which result in a flood of clones, but expect only a handful to remain after a shakeout to serve enterprise-class buyers.

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  ]]> Buyers and investors should focus on vendors that understand business, not just technology, offer services and reliable SLA, and deep integration with other social systems. In the future, this technology set will mature to grow into a data company that will extend it's scope beyond simple Facebook and Twitter and impact how marketers approach the market, product innovation, and supply chain.
  Market Saturation and Average Deal Size of the Social Media Management Systems (SMMS) by Corporate Buyers in 2010-2011
  
  

  Year One in Review: New Entrants, Acquisitions, and Growing Deal Sizes

  Just a year ago, we saw the rise of the new category Social Media Management Systems, (I must give credit to Cisco's Social Strategist LaSandra Brill for giving me the kick to start it). To understand the macro trends of this industry, read with the Social Business Stack, which shows SMMS as only a component of the overall purchase set for corporations. Here's a breakdown of what's occurred in the past 12 months:

  Guest author Jeremiah Owyang is partner of customer strategy at Altimeter Group. He's the author of the popular blog Web Strategy, and is @jowyang on Twitter.

  SMMS By the Numbers:

  • Growth rates rose 11% from corporate buyers. In 2010, adoption of SMMS systems by corporate buyers was already at the 52% and in 2011 buyers indicated they will be at the 58% adoption rate.
  • Deal sizes grew 57% in last year. While there was significant relative increase in deal sizes the overall average annual deal size per corporate was $14,000 in 2010 and
  • Large corporations spend $68,000 per year. For corporations with over $10 billion in revenues, the deal sizes ballooned to $68,000 per year on average, demonstrating that the larger corporations need these tools in order to manage their hundreds of accounts. (more data here)
  • 65% Increase in vendors in last 12 months and growing. When I started this list, there was 15 vendors after launching the list after the first week. Today, the list has grown to 23 vendors (and I'm continuing to add vendors, with a market growth rate of 65% increase in new entrants, this will only continue this year.
  • Growth markets in consumer facing and large corporations. While I noticed that Telecom and Tech were early adopters, I'm seeing growth opportunities in Retail, Hospitality, Restaurants, Consumer Tech, CPG, and all Regulated Industries.
  • Consolidation: at least three acquisitions. CoTweet was recently acquired about a year ago by marketing platform ExactTarget, months later Objective Marketer was acquired by Email Vision, and just in this past Feb Constant Contact acquired SCRM company Bantam Live which has some SMMS features, all which are email/direct marketing solutions. Among all these acquisitions, we're seeing these tools tie into greater marketing platforms for additional value.
  • Some early forerunners --but don't expect a clear winner. I'll do more detailed analysis on these vendors later, but right now I'm hearing from buyers the following vendors: CoTweet, Hootsuite, Spinnklr, Spredfast and newer entrant Expion. Interestingly, former Community Platform vendor with enterprise experience Awareness Inc has double downed on this market and shifted away the saturated community platform market by launching Hub.
  • Early vertical focuses have emerged and partnerships. We've already started to see verticals appear, such as GOSO for the Automotive dealer space, and expect this to continue in specific markets like hospitality, restaurants, travel, CPG, and Retail. Another new entrant was an entry by initially a consumer tool Seesmic, who received funding by Salesforce --the first enterprise vendor now with integration with social aggregation tool Chatter, and now Yammer. There was only misfire, as KeenKong changed their product strategy and never launched in this market.
  
  

  Market Demand: Six Forces Spur On This New Category

  There are a handful of forces that are increasing the demand for this year old category, among them (but not limited to) include:

  1. Corporations Struggle to Manage Hundreds and Thousands of Accounts
     The target market is hospitality, retail, and CPGs. Each of these corporations has dozens to hundreds of unique brands, and then regional rollouts. For example, some hotels could have up to 15 brands, and each having 4,000 hotel locations (half being distributed franchises), each with 10 social media accounts (there's more to the social web that Facebook and Twitter, across a variety of languages. Furthermore, there's high turnover in the localizes marketing and sales manager, who also lacks a background in online communications.
  2. Kenneth Cole and Chrysler Debacles Prove Need for Parental Controls
     In the last few months, we've seen some severe examples of mis uses of corporate social accounts which could have been prevented by having a process and toolset to support (see the long list of "punkings"). In particular, Kenneth Cole's ill-fated tweet tying the Egypt situation with spring sales was met with a riotous reaction, and last week's Chrysler's F-Bomb tweet resulted in firing of an entire agency. As a result, expect that many regulated companies will demand compliance regulations with social media, and be mandated to invest in SMMS systems to preview, flag, an process content before it's published. Of course, this brings forth a few challenges such as less real-time approach, and a more sanitized corporate approach to discussions that will ultimately decrease credibility as authenticity may waver.
  3. Expect Regulatory Industries to Require This Safeguard System
     Similar to the mess-ups listed above by Kenneth Cole and Chrysler will cause regulatory industries to give pause on how employees will use these technologies. As a result, expect healthcare, pharma, insurance, auto, finance and beyond to start looking at using these tools for all employees and even corporate accounts. Expect a keyword filtering system and workflow to be put in place to monitor then recommend a course-of-action to correct deviant tweets and Facebook messages. The downside? The rapid pace of the real world conversation will be slowed for many, but expect seasoned veterans to unleash the SMMS shackles for open conversations.
  4. Direct/Email Marketers Want a Piece of Social Marketing to Blast in New Channels
     This toolset is an attractive addition to existing direct marketing platforms like email marketing suites that are used to publish thousands of emails to customers on a daily basis. Direct marketers, who want to get on the social bandwagon are finding religion and are now blasting content on social channels to networks comprised of news, deals, and offerings with mixed engagement and interaction.
  5. Agencies Know SMMS Provides Client Lock-in and Recurring Revenues
     The social media service industry knows they must be value added beyond strategy and community management. They are seeking recurring revenues for accounts on a monthly basis in order to glean the hundreds of thousands per client, see data to learn more. By using SMMS systems, often coupled with brand monitoring and reporting services, they are now able to be full-service to listen, engage, and measure how companies are interacting with their customers on social channels. By partnering with SMMS systems some are white labeling the service, and using this in front of clients as a value added software, suggesting a perceived lock in with data and reporting --giving agencies the opportunity to become the Social Media Agency of Record (SMAoR).
  6. A Complementary Toolset for Social Platforms, Social Commerce, Brand Monitoring Vendors, Marketing Automation
     First, understand how SMMS fits into the overall Social Business stack. You'll notice it's a sister technology to the technology "aggregation" displayed to the left of it. You'll also notice that it's below brand monitoring firms, and sits on top of Social Platform technologies. To the left of it you'll find it is part of the data story in infrastructure and to the right of it services. Other places to watch for acquisitions will be social commerce platforms, as well as marketing automation platforms as they must spread into this space at a rapid pace to glean the revenues.
  
  

  Next page: Predictions: Vendors Move-out-of-Garage to Meet Buyer Needs

  Predictions: Vendors Move-out-of-Garage to Meet Buyer Needs

  These companies are young and early, and lack maturity like the established community platform space, here's a few closing thoughts:

  • This One-Year Old Space Shows Parallels to the 5 Year Old Community Platform Space Similar to how in 2007, how we saw trends for the Community Platform market, labeled it, and went on to research the space, I'm seeing similar trends (entrepreneur styles, deal sizes, market saturation) in this early SMMS market, just one year in.
  • Vendors startup mentality clash with real buyers needs. Many of these garage startups lack understanding of corporate buyers. Not uncommon to seed, angel, and A round vendors, a majority of these vendors lack corporate buyer perspective. To learn more about the buyers of SMMS read the report about the Career Path of the Corporate Social Strategist.
  • Vendors will finally offer and enterprise class service level agreements. Mainly focused on platform development, and also being discouraged by investors to add services to the mix, most of these vendors lack the staff to serve a corporate buyer who needs a high degree of hand holding in social business. Better yet, read Petra Neiger, one of Cisco's Corporate Social Strategists perspective on what's needed for buyers.
  • Analytics and reporting to be a core focus on 2011-2012. These early platforms are focused on management of the social channels, and most do not have strong analytics and reporting technologies. Furthermore, they are often not connected to other reporting systems, and are data silos.
  • Expect corporate adoption to reach 90% within three years . Expect market saturation to hit 90% range in three years, and average deal sizes to exceed $100k per year on average corporation --just as the Community Platform space have experienced over the past five years. Vendors that can align their product roadmap to the SMMS maturity roadmap stand to be one of the standing contenders.
  • Deal sizes will reach six figures on average. I saw this trend before with the $25-50k deal sizes with community platforms about 5 years ago and have watched them balloon to $200k-300k for advanced and larger corporations on an annual basis. I expect similar patterns to emerge here as new functionality is offered and as the SMMS connects to other systems for lock in. Right now the average SMMS deal size is a mere $22k, yet as we segment out corporations with high revenues (over 10 billion, annually) they are already clinching $68,000 deal sizes --remember it's only year one. Read more about how corporations should spend on social business.
  • Market will reach over 100 vendors. Just like the crowded brand monitoring space (150 vendors) and community platform space (125+) vendors expect this category go balloon due to low barriers to entry, VC funding, and commodity technologies. In the long run, only a half of dozen will matter to the enterprise, as market consolidation will occur. Expect the 90+ that don't become first of mind to corporate buyers to head into specific market verticals and SMB focus.

  Well that's my perspective after watching this space for the last 12 months, while I'll continue to give updates, expect another wrap-up next March in 2012.

  Image by boroda003

  ]]> Discuss]]> http://www.readwriteweb.com/archives/the_state_and_future_of_the_social_media_management_system_space.php http://www.readwriteweb.com/archives/the_state_and_future_of_the_social_media_management_system_space.php Analysis Fri, 18 Mar 2011 12:50:00 -0800 Guest Author Editor's note: This is the second in a two-part series on the advantages that cloud computing brings to the machine-to-machine space. It was first published as a white paper by Ken Fromm. Fromm is VP of Business Development at Appoxy, a Web app development company building high scale applications on Amazon Web Services. He can be found on Twitter at @frommww.

  Once data is in the cloud, it can be syndicated - made accessible to other processes - in very simple and transparent ways. The use of of REST APIs and JSON or XML data structures, combined with dynamic language data support, allows data to be accessed, processed and recombined in flexible and decentralized ways. A management console, for example, can set up specific processes to watch ranges of sensors and perform operations specific data sets. These processes can be launched and run on any server at any time, controlled via a set schedule or initiated in response to other signals.

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  ]]> Data can also propagate easily throughout a system so that it can be used by multiple processes and parties. Much like Twitter streams that make use simple subscription/asymmetric follow approach, M2M data streams can be exposed to credentialed entities by a similar loosely coupled and asymmetric subscription process.

  The model is essentially a simple data bus containing flexible data formats, which other processes can access without need for a formal agreement. Data sets, alarms and triggers can move throughout the system much like status and other federated signals are flowing within Consumer Web 2.0.

  Low-Cost Sensors and Reliable Data Transmission

  Because screen interfaces can be separated from data collection, inexpensive and remote devices can be used as the interfaces. Separating views from data from application logic means that widely available languages and tools can be used, making it easier and faster to add new features and rapidly improve interfaces.

  The cloud benefits outlined here are predicated on low-cost sensors being available (and low-power for a number of uses) as well as inexpensive and high availability data transmission.

  The first assumption is a pretty solid bet now and will only become more true in the next year or two. And with mobile companies looking at M2M as important sectors and wireless IP access extending out in both coverage and simplicity (and bluetooth to mobile for some instances), being able to reliably and pervasively send data to the Web is also becoming more of a certainty.

  Flexible and Agile App Development

  Another core benefit of the cloud is development speed and agility. Because screen interfaces can be separated from data collection, inexpensive and remote devices can be used as the interfaces. Separating views from data from application logic means that widely available languages and tools can be used, making it easier and faster to add new features and rapidly improve interfaces. Device monitoring and control can take on all the features, functions and capabilities that Web apps and browsers provide without having to have developers learn special languages or use obscure device SDKs.

  Developing these applications can be done quickly by leveraging popular dynamic languages such as Ruby on Rails, Python and Java. Ruby on Rails (Ruby is the language; Rails is an application framework) offers many advantages when it comes to developing Web applications:

  • simple dynamic object-oriented language
  • built-in Web application framework
  • transparent model-view-controller architecture
  • simple connections between applications and databases
  • large third-party code libraries
  • vibrant developer community

  Here's Mark Benioff, CEO of Salesforce explaining his purchase of Heroku, a Ruby on Rails cloud development platform from ComputerWeekly in December 2010:

  "Ruby is the language of Cloud 2 [applications for real-time mobile and social platforms]. Developers love Ruby. It's a huge advancement. It offers rapid development, productive programming, mobile and social apps and massive scale. We could move the whole industry to Ruby on Rails."

  Developing applications in the cloud provides added speed and agility because of reduced development cycles. Projects can be developed quickly with small teams. Cloud-based services and code libraries can be used to so that teams develop only what is core to their application.

  Adding charts and graphs to an application is a matter of including a code library or signing up for third party service and connecting to it via REST APIs. Adding geolocation capabilities involves a similar process. In this way, new capabilities can be added quickly and current capabilities extended without having to develop entire stacks of functionality not core to a company's competencies.

  Here's VMWare's CEO Paul Maritz on the advantages of programming frameworks:

  "Developers are moving to Django and Rails. Developers like to focus on what's important to them. Open frameworks are the foundation for new enterprise application development going forward. By and large developers no longer write windows or Linux apps. Rails developers don't care about the OS - they're more interested in data models and how to construct the UI."

  Monitoring and control dashboards and data visualization are critical to creating effective M2M applications. Having dynamic languages and frameworks that facilitate rapid development and rapid iteration means companies can move quickly to roll out new capabilities and respond rapidly to customer needs.

  Next page: Big Data Processing

  Circuit photo by pawel_231; cloud photo by Rybson.

  Big Data Processing

  Having data stored and available in the cloud makes it far easier to analyze. Distributing data on a sensor-by-sensor basis means simpler access for individual nodes or collections of nodes. Data can be distributed quickly to different entities much like the way Facebook photos or Twitter posts are distributed to each friend or follower. Flatter data formats means applications can be simpler and take less to develop. But big challenges arise when trying to analyze a massively growing data streams.

  Given the large amount of incoming data and the wide range of queries on the data, significant effort needs to go into parsing and processing it so that queries are as responsive as possible. This means use cases for managing data that include optimizing near-term storage for immediate queries, setting up frameworks for analytics across massive data sets and deciding on what data to archive and in what raw, processed and derivative forms.

  With Plaster Networks, for example, Appoxy keeps near-term data available for queries on the current performance of adapters. Appoxy also structured the data model and data flow to quickly respond to queries based on common time frames - performance for the last day, week, month, for example - and node groupings (adapter to adapter and adapter to device). Detecting and flagging unusual performance within a network is also an inherent M2M pattern architecture.

  In addition to near-term data handling challenges comes issues with analyzing large data sets. An example is running queries extending across an entire set of nodes in a system to obtain insight on aggregate behavior and device performance. There could be thousands of sensors each with hundred of thousands of data points. This is no unlike data processing queries within social network sites or other large consumer websites with millions and hundreds of millions of users.

  Just as NoSQL storage options are largely derived from consumer Web needs, big-data data architectures and analytical methods are also making their way from these same efforts. Hadoop, for example, is a set of frameworks used for distributed data analysis. One of its projects, MapReduce, is a basis approach pioneered by Google to process data across many clusters and then propagate the findings up from the nodes.

  Hadoop MapReduce is a software framework for easily writing applications which process vast amounts of data (multi-terabyte data-sets) in-parallel on large clusters (thousands of nodes) of commodity hardware in a reliable, fault-tolerant manner.

  A MapReduce job usually splits the input data-set into independent chunks which are processed by the map tasks in a completely parallel manner. The framework sorts the outputs of the maps, which are then input to the reduce tasks. Typically both the input and the output of the job are stored in a file-system. The framework takes care of scheduling tasks, monitoring them and re-executes the failed tasks.

  Just as smart phone service companies and cloud industries have formed, overtaking established mobile and IT leaders, new M2M companies will arise to supply important cloud-based components to this emerging set of smart-enabled devices, vehicles and machines.

  Using these big data approaches, large sets of M2M data can be analyzed across an elastic and scalable cloud infrastructure. The virtual nature of the cloud along with distributed data models means that jobs can be queued up by the thousands and run in parallel if needed.

  Once results have been reduced and then answers assembled, they'll need effective visualization tools in order to have meaning. This requires charts, graphs, tables and maps and might require a similar level of optimization as handling the analysis at the start of the process. The good part here is that the elastic nature of the cloud processing and the flexibility and agility of cloud development means that these interfaces can be created and extended and control options added in the same manner and with the same speed as other parts of applications.

  Summary

  M2M applications across many devices and industries will have many of the same patterns regarding data collection, processing, visualizing and control. Just as there are patterns to social applications and Web 2.0 cloud services, there are patterns to M2M applications. Smart devices for building efficiency have similar needs as do medical devices, mining and agriculture sensors, truck and automobile diagnostics and most other electronic devices and machines.

  The particular types of sensors used, the data collected, the way it's transmitted to the cloud, the views and reports generated and the actions triggered may be different, but many core application needs, process flows and data approaches will be the same.

  The advantages of the cloud -- in data storage and application development alone -- present a significant inflection point in the cost of operation and the speed of development for M2M applications. Sensor, device and equipment makers are only just beginning to leverage these capabilities but not near there levels where they could be.

  And the opportunities aren't just limited to M2M applications surrounding devices. There are big opportunities to create new M2M platforms and platform services. Just as smart phone service companies and cloud industries have formed, overtaking established mobile and IT leaders, new M2M companies will arise to supply important cloud-based components to this emerging set of smart-enabled devices, vehicles and machines.

  The mobile and cloud industries have made people acutely aware the power that open platforms in combination with rich development tools and vibrant support community have in regards to technology adoption (see Apple iPhone and Google Android vs. RIM, Palm, Symbian and Microsoft). These same insights - and the strategic value of creating and leveraging cloud-based platforms - can be employed to service makers of devices and machines.

  Great products can no longer be great products in isolation. They'll need to be cloud aware in order to be viable in this changing ecosystem. An ecosystem where data matters and monitoring and control of devices can exist anywhere. Cloud computing and the way it impacts M2M applications will touch and transform, every industry in the same manner as has the Internet, email and the Web.

  ]]> Discuss]]> http://www.readwriteweb.com/cloud/2011/03/cloud-machine-to-machine-disruptive-innovation-part-2.php http://www.readwriteweb.com/cloud/2011/03/cloud-machine-to-machine-disruptive-innovation-part-2.php Analysis Fri, 04 Mar 2011 14:00:00 -0800 Guest Author Editor's note: This is the first in a two-part series on the advantages that cloud computing brings to the machine-to-machine space. It was first published as a white paper by Ken Fromm. Fromm is VP of Business Development at Appoxy, a Web app development company building high scale applications on Amazon Web Services. He can be found on Twitter at @frommww.

  The use of cloud infrastructure and cloud services provides a low-cost means to create highly scalable applications. Even better, the cloud dramatically improves development speed and agility. Applications can be developed in much less time with much smaller teams. And as these benefits extend themselves in the machine-to-machine (M2M) space, companies creating M2M applications will see dramatic reduction in the cost of developing applications and provisioning services.

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  ]]> Articles on the Internet of Things (or Web of Things) are increasingly finding their way into mainstream news. Executives of large companies (such as the CEO of Sprint) and even government officials (such as the Chinese Premier) are speaking about the possibilities and opportunities of having ubiquitous sensors connected to the Internet.
  The use of the cloud - in combination with the advent of low-cost sensors and high-availability M2M data transmission - will transform old industries and modify many business models.

  Almost every major electronic device, vehicle, building component, and piece of equipment has the ability to become "smart" by connecting sensors to it. Most devices already do. The difference though is that moving data to the cloud and being able to process it in infinite combinations provides new capabilities in very low cost, transparent ways.

  M2M Business Transformation

  The case for what the Internet of Things might entail has been eloquently made here, here, and here. When devices and machines can send data to the cloud and have dashboards and interfaces on Web browsers, HDTV wallboards, mobile phones, and ipads, the impact becomes large.

  This potential will affect almost every industry - just as the Internet, email, websites, e-commerce, and now Web 2.0 are touching every industry and every business process. The impact will be most noticeable at non-Web companies.

  The change here will be dramatic - from where every device is by itself or controlled through a local device to where every device can be accessed anywhere (by authenticated users), where data streams can be "followed," and interfaces and dashboards improved on the fly to provide new views and device control. Does the concept of "following" a jet engine or a pneumatic thermostat have appeal to equipment makers and airlines or building owners? You bet it does.

  Equipment, automobile, and device manufacturers need to beginning positioning themselves to gather realtime data on the performance of each product and use cloud processing and data storage to do it. Using this approach, they'll be able to rapidly improve their products, build direct connections with customers, and get ahead of customer and product issues. They'll also be able to offer service offerings and develop new revenues sources. Services will become a part of every product. Some as ways to improve customer support and customer connections. Others as revenue sources in and among themselves.

  Want a quick diagnosis on your transmission? Go to CloudAutoDiagnostics.com and check in with your car's data feed. It will compare your data from the transmission sensors against others with similar transmissions. Yup, there's a issue but nothing serious. Want a 10% coupon for the service shop around the corner?

  Below is a short list where the Internet of Things and M2M in the cloud will matter although it really could be just a single line that says anywhere where there is a sensor, an electronic device, or a machine.

  • Personal Health and Fitness
  • Medical Devices
  • Automobiles
  • Shipping, and Transportation
  • Smart Grid and Smart Buildings
  • Retail
  • Architecture
  • Agriculture
  • Mining
  • Natural Resource Management

  The use of the cloud - in combination with the advent of low-cost sensors and high-availability M2M data transmission - will transform old industries and modify many business models. As is the case in each disruptive tech cycle, new companies will arise, existing market share will be threatened, and the separation between industries and channels will become blurred. Those in the M2M space who take advantage of what the cloud offers will not only be able to anticipate these changes but will lead the way into these new opportunities.

  Key M2M Cloud Patterns

  The goal of this paper is not to convince readers of what the future will like or even go through what new devices might look like. ReadWriteWeb and other tech publications will do a far better job there. The goal here is to list out the advantages that cloud computing brings to M2M applications.

  Next page: Separation of Data Collection, Processing, Interface, and Control

  Circuit photo by pawel_231; cloud photo by Rybson.

  Separation of Data Collection, Processing, Interface, and Control

  The use of cloud computing means that data collection, processing, interface, and control can be separated and distributed to the most appropriate resource and device. Current M2M implementations combine data collection, processing, interface, and control. Either chips in sensor bodies or an onsite laptop or desktop PC tied within a local mesh network perform the data processing and determine the control logic.

  Once data collection and processing moves to the cloud, however, most current limitations disappear. One of the more obvious ones is that data limits go away. Storing data in the cloud means that the data buffers within devices (whether its 500 or even 5,000 data points) no longer matter. Cloud storage is near limitless and so historic data can be saved for as long as its deemed valuable.

  Not only is there access to super-fast processors, if there are server or storage bottlenecks, these can be addressed by on-demand launching of more servers or horizontally scaling storage. Using the cloud and dynamic languages and frameworks, the cost of ownership goes way down and the limitations go away.
  The data can be used for showing readings, performance, or status for the last day, week, month, and even year. Individual nodes can be inspected as well as grouped together with similar data from other devices. Analysis can be performed quickly on specific groupings and filters - whether it's product line, region, demographic, or application use. The consumer Web understands the value of data and the many permutations that analysis can take. Once M2M data moves to the cloud, M2M companies begin to have the same realizations.

  Applications are also not restricted by tiny processors, low-power consumption, and special purpose programming languages. Processing in the cloud brings best-of-breed programming capabilities. These include widely popular programming languages and frameworks, flexible data structures, and extensive algorithm libraries.

  Not only is there access to super-fast processors, if there are server or storage bottlenecks, these can be addressed by on-demand launching of more servers or horizontally scaling storage. Using the cloud and dynamic languages and frameworks, the cost of ownership goes way down and the limitations go away. There's also a huge increase in the speed of product development.

  Lastly, interfaces can move to Web browsers, wallboards, mobile phones and tablets, eliminating the need for either having screens a part of every devices or local computers permanently a part of installations. Medical devices no longer have to come with their own monitors. Separating the data input from the processing from the screen readout not only means lower costs (less components to the devices) but also easier upgrading of diagnostics and far better visualization capabilities.

  An MRI or sonogram sent to the cloud, digitally refined using the latest algorithms distributed across multiple machines, and presented on an iPad or an HDTV screen is going to look a lot better and be more insightful than if displayed on existing monitors, no matter how new the device is. Separating the components and putting the data and processing in the cloud allows devices to keep getting smarter while not necessarily becoming more complex.

  Data Virtualization

  Data storage is one of the biggest advantages of using the cloud for M2M applications. The cloud not only offers simple and virtual ways to run applications, it also offers simple and virtual ways to store data. Cloud infrastructure companies are increasingly offering simple-to-use services to provision and maintain databases. These services even extend to offering databases as a service - meaning offering expandable data storage at the end of an IP address all the while masking or eliminating the management of servers, disks, backup and other operational issues. Examples include Amazon's SimpleDB and RDS service and Salesforce's Database.com offering.

  Once transmitted to the cloud, data can be stored, retrieved and processed without having to address many of the underlying computing resources and processes traditionally associated with databases. For M2M applications, this type of virtualized data storage service is ideal.

  Being able to seamlessly handle continuous streams of structured data from sensor sources is one of the more fundamental requirements for any distributed M2M application. As an example, Appoxy processes the data streams from network adapters from Plaster Networks, a fast-growing leader in the IP-over-power line space. Status inputs are sent by the adapters continuously to Plaster which runs its applications on one of the top cloud infrastructure providers. Appoxy processes these for use with the user dashboard running on the Web.

  This console provides insights to users on the status and performance of the adapters and their networks (allowing users to see whether they are getting optimal performance out of their devices and networks). The data also provides valuable diagnostic information to Plaster, dramatically reducing support calls and improving device usage and customer satisfaction. The information is also invaluable for product development. Data on the performance of new products and features can be assessed in real-time, providing insights that would otherwise be unattainable from devices in field.

  This type of smart device marks the beginning of the trend. It's a fair bet that all network devices will become smart and cloud-aware. Followed by all vehicles, manufacturing equipment and almost all machines of any substance.

  The types of data stores available include SQL, NoSQL and block or file storage. SQL is useful for many application needs but the massive, parallel and continuous streams of M2M data lends itself well to the use of NoSQL approaches. These data stores operate by using key-value associations which allows for a flatter non-relational form of association. NoSQL databases can work without fixed table schemes, which makes it easy to store different data formats as well as evolve and expand formats over time.

  NoSQL databases are also easy to scale horizontally. Data is distributed across many servers and disks. Indexing is performed by keys that route the queries to the datastore for the range that serves that key. This means different clusters respond to requests independently from other clusters, greatly increasing throughput and response times. Growth can be accommodated by quickly adding new servers, database instances and disks and changing the ranges of keys.

  The NoSQL approach play well in M2M applications. Data for sensors or groups of sensors can be clustered together and accessed by an ever-expanding set of processes without adversely affecting performance. If a datastore gets too large or has too many requests, it can be split into smaller chunks or "shards." If there are many requests on the same data, it can be replicated into multiple data sets, with each process hitting different shards lessening the likelihood of request collisions.

  ]]> Discuss]]> http://www.readwriteweb.com/cloud/2011/03/cloud-machine-to-machine-disruptive-innovation-part-1.php http://www.readwriteweb.com/cloud/2011/03/cloud-machine-to-machine-disruptive-innovation-part-1.php Cloud Computing Thu, 03 Mar 2011 14:00:00 -0800 Guest Author

  Over the weekend there has been some controversy surrounding AngelList, the network that connects startup entrepreneurs and investors. Before AngelList, investment dealflow was private and networks revolved around a few connected angels and VC’s. Since the angel network was created, transparent angel investing has exploded and entrepreneurs from any background can get funded.

  To my surprise, VC’ Bryce Roberts, a partner at O’Reilly Tech Ventures, was so concerned about the network that he deleted his AngelList account. In his post, Roberts says he was not turned off by the quality of startups, but by the investment philosophy pushed by the service. The predominate philosophy pushed by the service, he said, favors a light-touch investment style similar to throwing darts on a board, as opposed to a more concentrated approach.

  ]]> Sponsor
  
  ]]> Chris McCann is the co-founder of StartupDigest, the members-only guide to the tech startup world. Every week StartupDigest publishes weekly newsletters about the best events, jobs, and what to read for your industry. Follow McCann on Twitter @Mccannatron.

  Roberts also takes issue with the emphasis on “social proof” on AngelList. Since most companies have little to no revenue, who else has already invested in the deal is heavily weighted to prove value. This, he argues, leads to a herd mentality.

  Other VC’s and Angels such as Jason Calacanis and Dave McClure responded to Roberts and took the opposite stance - McClure and his fund 500startups have done 20-plus deals directly from AngelList and they greatly prefer the “spray-and-pray” approach vs. the concentrated approach.

  There's now a heated discussion in the investor class about AngelList. Based on my experience as the co-founder of StartupDigest, I believe that the startup investing industry is quickly being organized more like the public investing market, and what we are seeing now is a battle of two major investment theses: the index approach and the concentrated investment approach.

  Index vs. Concentrated Investing

  In the traditional stock market an index is a small sample of the market that represents the stock market as a whole. The reasoning behind investing in an index fund is that it closely matches the overall market - and it'’s very hard to beat the efficient market. The most popular traditional indexes are the Dow Jones Industrial Average, the Standards and Poor’s 500, and the Nasdaq composite Index.

  The opposite approach of index investing is an actively managed or concentrated investing approach. In this approach, you take your competitive advantage (your market-specific knowledge) and invest heavily in a few companies you know well. Two famous investors who take this approach are Warren Buffet and Benjamin Graham.

  In Roberts' account of why he deleted his AngelList account, it’s clear that he favors the concentrated approach to startup investing. Roberts would rather not invested on “social proof” alone and would rather take time to find companies that he can actively manage and leverage his competitive advantage with.

  McClure's rebuttal to Roberts is that the index philosophy is not only easier but better than the concentrated investment approach. Instead of investors holding onto proprietary connections and introductions for their portfolio companies, these relationships are being displaced by the dominate social networks (Facebook, Linkedin, Quora). Dave argues that instead of providing connections you should let founders do 95% of the work and offer support with operational areas of expertise like design, data and distribution.

  Think of individuals like McClure, Paul Graham and George Zachary as market analysts. These new super angels are really signals in that marketplace that are causing others to invest or not invest.

  How This is Changing the Startup Investment World

  No matter what investment philosophy ultimately proves to outperform the other, the startup investment world is changing rapidly.

  Services like AngelList are making the startup investment world more organized and efficient than ever. Quickly, startup investing is looking more like the public markets, and power is quickly shifting to the entrepreneur from the investors.

  AngelList is operating very much like the NASDAQ stock exchange of the startup investment world, where deals and angel investors are public. Just look at AngelList’'s new markets feature, where you can break out specific investors and deals by sub-markets. I don't think it will take very long for investors to be able to invest in whole markets and entrepreneurs to pitch a whole group of investors in a certain market.

  Think of individuals like McClure, Paul Graham and George Zachary as market analysts. These new super angels are really signals in that marketplace that are causing others to invest or not invest based on their due diligence and research.

  The big shift is not entrepreneurs getting to choose whether they want money to grow their business, specific functional expertise from their investors, or a combination of both. More and more power is shifting away from the investors to the entrepreneurs and this trend does not look to be slowing down.

  ]]> Discuss]]> http://www.readwriteweb.com/start/2011/03/what-the-angellist-debate-means-for-the-future-of-startup-investing.php http://www.readwriteweb.com/start/2011/03/what-the-angellist-debate-means-for-the-future-of-startup-investing.php Analysis Tue, 01 Mar 2011 13:30:00 -0800 Guest Author On Friday Twitter suspended UberMedia's UberTwitter, Twidroyd and UberCurrent apps for "violating Twitter policies and trademarks." Twitter continued: "We've had conversations with UberMedia, the developer of these applications, about policy violations since April 2010."

  UberMedia's Bill Gross then responded by saying the suspensions "took us by surprise". Huh? Wha-? We're obviously not getting the whole story from either side, but it's clear Twitter had had enough of UberMedia's creative interpretation of its TOS to take a dramatic action to make its point.

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  ]]> Guest author Jeff Pester is the founder of Text Capital, a startup working on custom content delivery solutions for the social Web. He is also co-founder of ThinkInfluence, a group formed to explore the emergence and increasing impact of online influence. He is also the creator and curator of @SocialMedia411 on Twitter

  The blogosphere is preoccupied with the notion that this is proof that Twitter is at war with the developer ecosystem and that it's somehow manipulating the playing field to favor its own homegrown apps.

  But that discussion misses the larger point: Companies like UberMedia are attempting to profit directly at the presentation and consumption end of the stream infrastructure that Twitter has bought and paid for. In my opinion, UberMedia has the right to monetize "consumption environments" (its apps) that add value to end users. At the same time, Twitter deserves to be compensated for the utility it's providing to UberMedia.

  The only issue here should be: Who gets paid and how much?

  Twitter is at an important inflection point. It needs to come out and clearly articulate its position on attempts by outside parties to monetize the stream(s) built on top of its infrastructure.

  My personal opinion is that Twitter should construct a model whereby commercial "rebroadcast" companies like UberMedia can choose to monetize streams delivered on their platform(s) however they want, but they must compensate Twitter on some type of metered basis (API calls or other) for providing the underlying infrastructure that gives UberMedia the opportunity to monetize on Twitter's back in the first place.

  At the end of the day Twitter is an information utility - it's admitted as much on several occasions. It should start acting and pricing its product like one. If not, we can expect more of these types of altercations going forward.

  Image by simiezzz

  ]]> Discuss]]> http://www.readwriteweb.com/archives/dear_twitter_youre_a_utility_-_get_off_the_fence_and_start_acting_like_one.php http://www.readwriteweb.com/archives/dear_twitter_youre_a_utility_-_get_off_the_fence_and_start_acting_like_one.php Twitter Mon, 21 Feb 2011 15:30:00 -0800 Guest Author For almost four years, since the Facebook Platform was launched, I have been involved in delivering Facebook apps for top brands such as CBS, NBC, Lifetime, Universal Music, Visa and more. Here's what we have learned doesn't work, and more importantly, what does work.

  First, deep campaigns don't work. Digital agencies love deep, expensive campaigns on Facebook, with tons of pages, interaction, and art. It fits in with how agencies build microsites and websites, and justifies the $100,000-plus price tag that they like to charge. Examples include lightweight games, prediction contests, treasure hunts where you include friends, and such. Unfortunately for agencies and the brands that drop a lot of cash, Facebook users decidedly don't like deep campaigns.]]> Sponsor
  

  ]]> Guest author Peter Yared is the vice president and general manager of Webtrend Apps, a platform used by top brands to engage their customers on Facebook, iPhone and Android. He has has an extensive background in highly scalable Internet infrastructure and tools, and has authored patents on fundamental Internet infrastructure including federated identity and data marshaling.

  They do not like to spend 20 or 30 minutes on a single brand's page, unless they are consuming innovative, funny, or exclusive content. So a travel site looking for a long time spent on a page should not put up a treasure hunt on a world map where you invite your friends and can together find great prizes after exploring cities. Sounds good in a pitch meeting, but it results in abysmally numbers of active users.

  Facebook users are very sophisticated, and there is no way a single campaign is going to compete on game mechanics with CityVille. If you want to build CityVille, it might work. But, even Netflix pulled their Facebook app. You're better off putting up a bunch of funny videos from around the world and leave it at that.

  Lots of Apps on One Tab Don't Work

  It is easy to think of a Facebook tab like a Web page, and throw a bunch of features on it - such as a poll, gifting, and some videos - all on one tab. However, most users do not show up on a Facebook tab like they do on a Web page. They are usually coming in by clicking on a page's newsfeed posting ("What kind of traveller are you? Take the quiz!"), a friend's newsfeed posting ("I'm a cranky traveller! What kind of traveller are you? Take the quiz?"), or a Facebook ad ("Find out what kind of traveller you are!").

  Now, if after clicking on one of these links a user is dropped into a Facebook Page tab with eight different things on it, they are not going to see a quiz immediately and move on. There should only be one engagement feature per tab.

  Sweepstakes Don't Work

  After an initial onslaught of Facebook sweepstakes promotions, marketers are learning that sweepstakes have very low conversion rates and almost no viral uptake. We're also learning that they attract unengaged users who are there for the prize rather than a relationship with the brand.

  Facebook users like to click around and look at stuff, and absolutely do not like filling out forms. We have run highly promoted sweeps campaigns for major artists that included things like backstage passes and a limo ride to the show that had abysmal conversion rates. There is absolutely no incentive to make sweepstakes social.

  Why would you invite more people to join a sweepstakes? It reduces your own chances. Have you ever seen a "I just entered a sweepstakes and you should to" posting on someone's wall?

  One attempt to increase viral spread in sweepstakes is to offer more prizes when there are more entrants, but all that does is confuse users with conflicting agendas. There is a disincentive to invite people since it reduces your chances of winning, but if enough new people join up perhaps you can win something else... "Ah, too confusing, I'm going to watch videos instead."

  Photo and Video Contests Rarely Work

  A lot of brands like to do photo and video contests, but unfortunately they do not have the user base that likes to submit photos and videos. Travel and photography brands? For sure. Mobile carrier? Beverage brand? Not likely. Even clothing brands can't pull this off.

  Uploading a photo or video is a big investment on the part of the user, and they do not expect to do it for the vast majority of businesses. These campaigns also require the labor to moderate the submissions. If you must run a photo or video Facebook campaign, the best way to do it is actually NOT in an app.

  Instead, have users upload the photos and videos to the brand's page, and moderate them there. Then have users get their friends to Like the photos or videos. This way, the campaign leverages all of Facebook's viral channels around photos - when the user uploads the photo, when they Like the photo, when their friends like or comment on their photo submission, it is all highly likely to show up in their friends' feeds, drawing traffic. The great thing about this is that it is easy to do for free, since using all of Facebook's photo and video features are free, and users get to use the known Facebook photo and video interface, which increases conversions.

  Next page: Like Blocks Rarely Work; Extended Permissions Rarely Work

  Like Blocks Rarely Work

  Like blocking, where a user has to "Like" a Facebook Page in order to access a feature, typically has a 50% or more drop off rate, even when there is something there that is actually worth liking the page to get, such as exclusive content or a great coupon. Putting a Like block on basic content will almost guarantee a 100% drop off rate.

  Be very, very selective about Like blocks and be sure to tell the user that it is worth it to them. A Like is the mailing list opt-in of the Facebook world, so be willing to offer up some goodness and know that most will opt not to Like.

  Extended Permissions Rarely Work

  A brand on Facebook should be like a casual friend or neighbor and not try to suck people into heavy levels of interaction. What do you do with a friend? Comment on their photos, like their status, vote on their outfit.

  Asking the user for a laundry list of access to their profile usually results in a 30% or more drop off rate, and that is for well known brands that they trust. Do you really need to know their relationship status? Generally a brand already knows its demographic - does a youth-oriented clothing brand really need to validate that it is 16 to 25 year-old women that are engaging with the brand?

  So while it sounds good to ask for extended permissions, do the math and monitor the drop off rate to ensure that it is worth it to you, otherwise the overall campaign ROI may not turn out the way you want, especially if the campaign is being graded on number of engagements.

  Unbranded Apps Don't Work

  It's got to look good, and be on brand. In the early days of Facebook, a brand could put up a basic presence with some turnkey apps, and users accepted that. Now that Facebook is all grown up, a brand presence needs to be on par with its website. Facebook users are savvy and will judge your brand in comparison to the best they've seen.

  Dedicated Facebook Storefronts Kinda Work Right Now, But Soon Won't Work

  Dedicated Facebook storefronts are the rage on Facebook right now, but they are unfortunately not integrated with an e-commerce site's existing payment and inventory systems, and are therefore a logistical nightmare. The best bet right now is to list featured products on a Facebook Page with click-thrus off of Facebook to the e-commerce site.

  Now that Facebook is supporting iFrame tabs in pages, an existing e-commerce site can be skinned to fit in a 520-pixel-wide Facebook Fan Page, thereby integrating existing payment and inventory systems into the Facebook Page.

  So What Does Work? Promotions and Consistent, Lightweight Engagement

  Make sure your fans get something in return for liking your page with promotions likes offers for fans that they can easily redeem. The more lucrative the deals offer, the more sharing with friends will happen. Fans want things like exclusive products/services, drastically discounted prices akin to Groupon type deals, and early notification and registration for upcoming events, ideally exclusive to fans. Promotions should make the fan feel like they are a brand insider, not just a standard consumer.

  A big secret of Facebook marketing is that it is easy and cheap to drive promotions using ads targeted only at your fans that link to landing tabs that deliver the offer and encourage fans to share to their newsfeed.

  A brand on Facebook should be like a casual friend or neighbor and not try to suck people into heavy levels of interaction. What do you do with a friend? Comment on their photos, like their status, vote on their outfit. These types of interactions take seconds, not minutes, and definitely not hours.

  A brand on Facebook should offer their users regularly updated, simple to interact with engagement features. Each of the engagement apps should be fully branded, and run in a separate tab with traffic driven from wall posts, newsfeed and Facebook ad units to increase engagement. Start with a personality quiz. Then two weeks later put up a poll. Then try a trivia app. For special events, put up a gifting app for Valentine's Day, or for the holiday season, a holiday song card.

  Some brands, like media properties and well-known consumer brands, get an immediate fan base for this type of lightweight engagement. For the rest, building a fan base on Facebook is no different than building a mailing list in the previous generation of the Internet. It takes consistent engagement, and builds over time.

  Methods to accelerate growth include tying Facebook ad campaigns with engagement apps and driving traffic from the homepage. The apps should still be lightweight and fun, with the conversion goal of getting the user to like the brand.

  The point is to regularly put up new, fresh engagement features that are easy and fun for users to interact with, that they will want to post to their wall and share with their friends. Then users will interact with your brand just like they interact with their friends on Facebook!]]> Discuss]]> http://www.readwriteweb.com/archives/why_most_facebook_marketing_doesnt_work.php http://www.readwriteweb.com/archives/why_most_facebook_marketing_doesnt_work.php Marketing Thu, 17 Feb 2011 13:00:00 -0800 Guest Author The Web is becoming social, and companies are jumping to capture the investment dollars. With business models and advertising effectiveness in question, it's hard to valuate such ventures. Social media economics does just that: it's the social science that analyzes the production, distribution, and consumption of content amongst online social outlets.

  It means treating social networks as if they are countries in the world economy. Each post is equivalent to a good or service, sharing is equivalent to trade or distribution, and clicks/views are the equivalent of someone purchasing or consuming the post.

  Taking this logic, you can then apply the modern economic growth function: Y(f) = L, K, HC, T. Within that equation, Y is GDP or total economic output, L is labor, K is capital, HC is human capital, and T is technology. Together, these factors determine the worth of an economy.

  ]]> Sponsor
  
  ]]> History of the Social Media Economy
  Guest author Mike Vosters is the co-founder of droppn, a knowledge exchange currently in private beta. He is also a weekly contributor for Flyover Geeks, a blog dedicated to covering the startup tech scene outside of Silicon Valley.

  In his book "Cognitive Surplus", Clay Shirky speaks of a spare-time revolution where people shifted their habits from watching mindless television to actively participating on the Web. When that happened, productivity skyrocketed. Instead of sitting back and consuming, people began to blog and create other content (the equivalent of goods and services) such as Wikipedia. In short, they joined the social Web, the labor force of the social media economy.

  As the labor force grew, investors started to invest in startups working to take advantage of the demand. With this capital, the development community was able to learn (increasing human capital) and create new technologies that made it faster and easier for people to share content. These pioneers failed to remain profitable, sparking the burst of the dot com bubble in 2000 - which ultimately triggered a recession throughout the social media economy.

  Although the companies didn't survive, their innovations did, culminating in the creation of MySpace, Facebook, Twitter and all the other social media outlets. This brings us to current day.

  Supply vs. Demand

  With ample amounts of all four components, L, K, HC and T, posting (economic output) is at an all-time high - 5 billion posts per week on Facebook alone. Here is where the problem lies. The social Web is focused on the production of content rather than the consumption of content.

  Look at any interface and you'll notice that the status bar is the most prevalent, typically sitting in the top-middle of the page. In doing so, the outlets throw the market out of equilibrium with supply being greater than demand. For those unfamiliar with economics, when supply is greater than demand, the price of products plummet. This explains why 2/3 of all tweets are ignored, and why determining a profitable business model for social media companies has been so difficult.

  How Social Startups Can Succeed

  Social startups need to focus on increasing the consumption (demand) of the content, rather than the production. To achieve this, they have two options.

  1. Find ways to lower the barriers to sharing in order to improve the distribution and reach of each piece of content. As reach increases, so will consumption, thus restoring the model to equilibrium. With this strategy, the business model will mirror that of print publications, who charge more based on the size of their circulation - CPM in Web terms.
  2. Find ways to lower the cost of discovery, allowing users to proactively search the content within the platform just as they would in a search engine. This strategy would also reset the equilibrium, and would allow the company to implement a paid search business model.

  Just because social media is social, doesn't mean it breaks the laws of economics. All of the basic models still apply, and if companies don't start paying attention, the revolution will end just as fast as it began.

  Photo by hellori

  ]]> Discuss]]> http://www.readwriteweb.com/archives/social_media_economics_the_science_for_social_success.php http://www.readwriteweb.com/archives/social_media_economics_the_science_for_social_success.php Analysis Tue, 15 Feb 2011 13:30:00 -0800 Guest Author

  Guest author Ahmed Zidan lives in Egypt and is the editor of Mideast Youth. The Egyptian protesters have overthrown Mubarak after nearly 30 years. Egypt has come second in row after Tunisia. The two revolutions, the Tunisian and the Egyptian, have succeeded. Egypt has seen its first people's revolution, and over 18 days many things changed until the regime was totally uninstalled.

  Let's trace the protests back across the Mediterranean. The self-immolation of Mohamed Bouazizi in Sidi Bouzid was the spark for the massive Tunisian protests that overthrew then-president Ben Ali. The Tunisian protests, in turn, were the spark for Egypt's #Jan25. And it's very relevant to name it #Jan25, because it was totally Internet driven. (Other names include the Jan. 25 Revolution, Revolution of Anger, and lately Tahrir Revolution, an Arabic equivalent for Revolution of Liberation.) It's not an overstatement to say that #SidiBouzid is the sole parent of #Jan25, and created a domino effect that will not stop in Egypt.

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  ]]> Mideast Youth was hacked after an attack by anti-Kurdish groups. This came as a result of a video we recently launched promoting the Kurdish cause for human rights, as well as writing about the upcoming Kurdish demonstrations, which was apparently the final straw for these hackers.
  If you know anyone who can help, please get in touch by email, or you can also donate to help us make the move to new servers affordable.

  This is the first organized revolution of its kind in the history of mankind. It began with a Facebook page We Are All Khaled Said that called for this uprising. The social media tools were very critical in sparking these protests; the Internet is unmistakably the origin of the Egyptian protests. And once it broke loose, the Internet proved to be a very important tool for sharing news about the different demonstrations around Egypt.

  However, momentum was already building and the Egyptians already knew their route to the streets. That's why when the Internet was blocked around the country in the early hours of Jan. 28, as well as a total blackout on all mobile networks, it never affected the ongoing protests and actually backfired on the government: netizens marched into the streets instead of checking Twitter trends online.

  

  The freedom of the Internet is a major headache for totalitarian regimes around the world, and that's why they all emulate the same violations against freedom of expression. By and large, it would be very fair to name the Egyptian Revolt as the first Internet Revolution of the era.

  Next page: More #revolutions and the risks of political Islam.

  Lead photo and sunset photo Flickr CC by Omar Robert Hamilton

  The world has been watching Egypt's revolution closely; there were many twists and turning points similar to what happened in Tunisia. The major historic events include:

  Stay tuned to Egypt's voice on CrowdVoice to get updates around the clock about the Egyptian Revolution.
  • Day of Anger, Tuesday, Jan. 25. The warm up to the protests: The day that commemorates the National Day of Police, whose unlimited power was a key point in the unfolding protests. Batons, water cannons and teargas grenades provided Egypt with its most popular sightseeing throughout the day.
  • Friday of Anger, Jan. 28: High pressure point, or I've smelt this odor before!: The day kicked off with a total communication blackout, and didn't end with Egyptians sensitized to teargas. The protesters used a new tactic: demonstrating in many areas simultaneously. It distracted the police forces, who retreated around 6 p.m., leaving behind a state of chaos. The military was deployed and the night-time curfew announced. The different demonstration points lead to the major focal point and the core of the protests afterwards: Tahrir Square. Teargas withdrawal effects were a very common complaint for protesters after the mysterious evaporation of police forces.
  • March of Millions, Tuesday, Feb. 1: Tahrir Carnival. That was really one of the greatest days of this uprising. Hundreds of thousands gathered in the square, singing, chanting, joking, laughing and sharing stories. It was indeed a Tahrir unconference.
  • Battle of Tahrir, Wednesday, Feb. 2: A bloody day in the square. A new turning point, as pro-Mubarak forces, inspired by his speech the previous night, appeared for the first time, along with, according to some reports, thugs hired by the regime. They clashed with the protesters in Tahrir Square, the peaceful protesters outnumbering the pro-Mubarak groups, but the latter were riding horses and camels, and were armed with swords, whips, clubs, stones, rocks, pocket knives, and reportedly, Molotov cocktails, ammunition and and late-night hit men. At the end of the day there were eight dead and dozens of causalities among the protesters. Some commentators have called it the Egyptian Tiananmen Square.
  • Sunday of the Martyrs, Feb. 6: Christian hymns and Muslim prayers side-by-side in the square to honor the martyrs of the uprising. By the end they would number at least 300, according to many reports, as well as six Bouazizi copycats who self-immolated, 13 policemen, and thousands of injured.
  
  • Monday, Feb. 7: Wael Ghonim, an Egyptian Google employee, blogger, and the admin of the page "We Are All Khalid Said" broken into tears on a satellite television channel after he saw the victims of the protests. Wael saw them for the first time after his release following a 12 day detention. Wael's tears provided a big boost to the revolution and begun a countdown for the ruling regime.
  • Day of Egypt's Love, Tuesday, Feb. 8: Another March of Millions: One of the most crowded day in the square. Tahrir to Egypt is definitely like Twitter to the Internet. The double Ts have pushed this revolution miles forwards.
  • Friday of Resolve, Feb. 11: The demonstrators kept their heads high demanding the overthrow of the regime, regardless all the concessions offered. Another call for a March of Millions. Cairo, Alexandria, and others have witnessed large protests. The victorious moment came at 6 p.m. local time. Cairo streets went mad. Celebrations were everywhere for the jubilant protesters: car horns, flags waving, dancing, singing, and fainting in disbelief. The French word dégagé seems to have a magical effect against the autocratic regimes. The word is "trending" in the streets of the Middle East. The Tunisian scenario of implementing democracy by the people has now also occurred in Egypt. And what happened in Egypt, by far, will not stay in Egypt.

  The question now is what comes after? My banner at the first March of Millions was "This is Egypt, not Iran." I'm not an Islamophobe because phobia implies an irrational fear of certain things, which isn't the case with political Islam. I have two fears at the moment. The first fear is at the international/regional level. The peace treaty with Israel is very important to retain, regardless of the orientation of the forthcoming president. It's a pivotal point for a long-term peace in the region, plus, it's a mutual interest for both the people of Egypt and Israel.

  The second fear is a local one: political Islam. Political Islam is the main driving force behind some of the most horrible terrorist attacks in the history of mankind, and also the core base for states like Iran, and groups like Qa'ida, Taliban, Hezbollah and the Muslim Brotherhood. The organization, financing and resources of the Muslim Brotherhood as an establishment in Egypt dates back to 1928, and has paved the way for terrorist groups like Al-Gama'a al-Islamiyya and Al Takfir Wal Hijra.

  The Jihadi school of thought is the world's most challenging danger at the moment - this is not Western media agitprop, but simply a reality. However, I believe that the youth here in Egypt, or there in Tunisia, are aware of this - not all of them, but a significant percentage.

  I'm betting on a new trend of #revolutions in 2011 will sweep across the region. I think that they will resemble the 1989 revolutions that resulted in the dissolution of the totalitarian communist USSR. Tunisia and Egypt were the beginning, but similar uprisings in Iran, Libya, Algeria, Yemen, Bahrain, Qatar and maybe also Kurdistan are highly expected.

  These revolutions will not turn out to reproduce a Lenin-USSR or a Khomeini-Iran, two of the most famous revolutions of the last century that produced more corrupt and totalitarian regimes than pre-revolution. The Internet revolutions are different; the youth who have called for them are very aware of the risks to individual liberties and minorities in the region and the world as a whole and that may accompany the birth of a new Islamist state.

  Here comes our challenge as intellectuals: Analyze, write, explain, and debate with the mainstream, whether in Tunisia, Egypt, or any other country in the region, about the hazards of political Islam.

  Flickr CC photo by M. Soli

  ]]> Discuss]]> http://www.readwriteweb.com/archives/from_jan25_to_tahrir_what_comes_next_for_the_inter.php http://www.readwriteweb.com/archives/from_jan25_to_tahrir_what_comes_next_for_the_inter.php International Mon, 14 Feb 2011 15:00:00 -0800 Guest Author It's easy to fall into the trap of thinking of the app economy as a fully developed and mature space. And while it's not the wild wild West that it was two years ago, the economy is still rapidly evolving - and we're about to see some significant changes in 2011. 

  1. The Virtual Good is God - it's all about in-app purchasing

  Does it seem like everyone and their mother are talking about virtual goods? That's because everyone is. And everyone's mother just spent $200 buying virtual cows for her virtual farm. The virtual currency economy is big and growing - and it's no joke for gaming publishers looking to monetize. Inside Virtual Goods recently published a report predicting that the virtual goods market in the U.S. alone will hit $2.1 billion in revenues this year.

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  Guest author Michael Chang is co-founder and the CEO of Greystripe. He has worked as an associate at Incubic Venture Capital and as an engineer and product manager with SAN pioneer Gadzoox Networks. He has a MBA from Duke University's Fuqua School of Business and a BS from Carnegie Mellon.
  Monetization through virtual goods made a splash in 2010, but in 2011 we'll see the economy grow into a real beast to be reckoned with. This year more iPhone and Android games will move from paid or subscription-based apps to a combination of in-app purchasing and advertising to monetize. 

  2. Mobile ads are about to transform - the formats and placements within apps are going to change

  When mobile ads first hit the market, the online format was simply slapped onto the smartphone. Since the beginning, standard banner ads have been king - placed haphazardly on every screen of an app and each page of the mobile Web. This year will be the year advertisers start to pay as much attention to where and how an ad is placed as they do to the number of impressions and clicks.

  We're going to start seeing more and more large, engaging ads delivered as interstitials - placed at natural transition points in content. The actual ads are evolving too. Rich media will become common.  Video ads will also grow dramatically, which will come as no surprise to any Angry Bird-er who experienced video ads this holiday season.

  3. Regional and local ads will become commonplace - but hyperlocal ads will wait until 2012

  Local was the mobile buzzword of 2010 - and it's not going away any time soon. Throughout the year, local and regional ads are going to be popping up more frequently. BIA/Kelsey predicts location-targeted ads will grow from $400 million in 2010 to over $2 billion by 2014.  Scale is driving better opportunities for targeting, and more advertisers are taking advantage.

  But even though the climate is ripe for local, you shouldn't expect an onslaught of hyperlocal ads. Yes, you'll start seeing more ads for the Best Buy near you. But you won't be overwhelmed with ads for the pizza place downstairs quite yet.

  4. An Android application store will enhance payment and discovery. (It better, if Android wants to win the competition for developers.)

  Last year was the year for Android - Google's Android OS overtook iPhone in the total number of subscribers. But with the iPhone coming to Verizon, Android is going to have to step up its game if it wants to stay on top. In particular, Android's marketplace has proven to be a key limitation.

  Apple's App Store, while hardly perfect, is far superior to Android's for finding and purchasing new apps. Android needs to figure out a way to organize its apps and simplify the checkout process.  Someone will figure it out in 2011. Maybe it will be Google who has announced plans for upgrades. Maybe it will be a third party like Amazon.

  5. The wild cards: Emerging platforms, cross-platform HTML5 apps, non-Apple tablets and interactive TV 

  A few potential app economy game changers need to be watched this year. Windows and Blackberry will make a strong push in 2011 for market share of high-end smartphones. This could increase fragmentation of the mobile app economy but should also contribute to the shift toward cross-platform HTML5 mobile websites that look and feel like native apps. The introduction of iPad alternatives will be an indication of how big the tablet market can be. Google and Apple's TV products will test if the mainstream is ready for interactive TV. It's clear that we're entering an exciting time.

  Disclosure: the author is the CEO of a mobile advertising network.

  Photo by Jorge Quinteros

  ]]> Discuss]]> http://www.readwriteweb.com/mobile/2011/02/5-ways-the-mobile-app-economy-is-evolving-in-2011.php http://www.readwriteweb.com/mobile/2011/02/5-ways-the-mobile-app-economy-is-evolving-in-2011.php Apps Fri, 04 Feb 2011 14:00:00 -0800 Guest Author