business2blog

E-Filing Inflation

Owen Thomas — 2004-03-27T17:23:02-08:00

This year, I filed my taxes online with H&R Block, for the third year running. I have to admit, they've got me hooked: Switching to another online-tax provider would add too much time to the already burdensome task of doing my taxes.

My employer's parent company, Time Warner, used to have a sweet deal where we got free online tax preparation; all I had to pay was $9.95 for e-filing my state taxes. The regular online price was $29.90 for both. Well, this year, I was hit by clicker shock: The discount was gone, and the total came to $44.90. The website was just as convenient as last year -- by no means was it 50% better. If anything, I'd expect H&R Block could cut the price and still profit, since it can amortize most of the set-up cost and negotiate lower hosting and bandwidth fees.

But that's not the point, really. H&R Block knows I'm unlikely to switch now that they have my records, so they'll see how much they can get out of me. There's a company that knows how to maximize its tax benefits.

Truly a Hardhat ASP

gigaom — 2004-03-25T10:24:19-08:00

With all the buzz around Salesforce.com, someone brought to my attention a little-known but fast-growing company called ConstructWare. It has a hosted solution -- what's known in the business as the "application service provider," or ASP, business model -- that helps with management of non-residential construction projects. Sales in Q4 2003 were around (PDF) $4.7 million. It's been around since 1997, and has recently signed up some major customers:

Hudson River Park Trust, a $328 million project to develop a 5-mile, 550-acre park on Manhattan’s westside from Battery Park to 59th Street
Memorial Sloan Kettering Cancer Center, a $600 million, multiyear building program in New York
Bovis, which has a $600 million contract to renovate 10,000 BP gas stations and convenience stores
The Clinton Presidential Library, a $110 million project in Little Rock, Arkansas
Abbott Laboratories, a $350 million pharmaceutical facility in Puerto Rico

All Quiet on the Password Front

Owen Thomas — 2004-03-24T21:54:37-08:00

Someone must have called a ceasefire in the cosmic struggle over online users' identities. Just a few years ago, AOL and Microsoft were duking it out to be the middlemen who controlled every online transaction, through their warring identity services. AOL already had tens of millions of email addresses and credit card numbers; Microsoft was trying to build a similar database through its Passport service -- the same one you use to log into your Hotmail account.

But as News.com smartly points out, Passport is moribund. Microsoft got such bad PR for trying to sign up businesses to use the online login and wallet services that it appears to have given up on using it for anything but its own network of sites.

Passport came out of Microsoft's 1998 acquisition of Firefly, an amazing little startup. Few people remember this, but Yahoo actually used Firefly technology to develop its famous "My Yahoo" page. Though Yahoo continued to refine the technology on its own, the fact that you can log into My Yahoo, then surf to a personalized Yahoo Finance portfolio, then buy something on Yahoo Shopping without retyping your credit card, you owe in part to Firefly. The same is true when you use Passport to go from Hotmail to a personalized MSN news page.

But neither Yahoo nor Microsoft succeeded in implementing Firefly's true vision -- one secure place where you could log in and personalize the entire Web. The problem is that businesses and consumers alike distrust a single entity possessing too much customer data. Microsoft may take another swipe at the online-identity challenge when it introduces its Longhorn operating system -- but that's years away. For now, we'll have to remember a lot of different passwords. Such is the price we pay in the cosmic struggle.

A PC-Free Zone in Salt Lake

Owen Thomas — 2004-03-22T14:32:29-08:00

Since acquiring Linux firms Ximian and SuSe, Novell's been trying to wean itself off Windows. At his Monday keynote, CEO Jack Messman outlined plans to move all of his employees off Microsoft Windows and Office and onto Ximian Linux Desktop and OpenOffice. He also proudly declared that the PCs sited around the convention center were all running Linux. "We don't need no stinkin' Windows!" he proclaimed.

Which explains why I'm typing this blog entry onto a Novell-provided Compaq desktop in the press room that's running Microsoft Windows XP. Ooops.

Have Some E-Respect

gigaom — 2004-03-22T10:56:51-08:00

Customer respect is not part of the popular business lingo, but is going to play an increasing role in the future, according to The Customer Respect Group, a Bellevue, Washington-based research firm. As more and more consumers get comfortable doing business online, the companies will have to start treating them with more e-respect. The firm's Spring 2004 Online Customer Respect Study study looked at the top 40 telecommunications and networking companies and ranked them according to the e-respect they accorded to their customers.

Overall, MCI scored highest, while CenturyTel scored lowest. The industry sector's average score was the highest among the five studied to date (out of 14) in 2004 by TCRG. "We applaud the telecom sector for generally high overall scores but note with concern several areas," said TCRG president Roger Fairchild. "The fact that so many firms share personal data displays a very negative attitude towards customers, and ignores valid customer concerns about their online privacy. Moreover, online customers are turned off when they don't get responses to questions. And when website visitors leave because of an unsatisfactory experience, research demonstrates that two out of every three go to a competitor's site."

The sector's Spring 2004 ranking is as follows:

MCI 9.0
AT&T Wireless Services, Inc. 8.8
Cablevision Systems Corp. 8.6
Frontier 8.6
Verizon Wireless 8.6

Geek Star Power (and Jokes) at BrainShare

Owen Thomas — 2004-03-22T10:15:19-08:00

After airing BrainShare 2004's requisite cheesy video -- there must be a law that says you can't have a developer conference without one -- Novell vice chairman Chris Stone brought out a surprise guest, none other than Linus Torvalds. Some Finns in the audience waved their nation's blue-and-white flag (someone must have tipped them off to expect Torvalds). Stone, Torvalds, and Novell CEO Jack Messman had a brief Q&A. My favorite answer from Torvalds, when asked what he thought about the growing adoption of Linux by government bodies: "I don't care who uses Linux. I just want to make it as good as possible."

But Stone had the best sound bites by far. (If this Linux strategy doesn't work out for Novell, maybe he can get another job as a standup comedian.) Here's a sampling:

"Now, when the manual says 'Install Windows 2000 or better,' you can: Install Linux."

"Do you know why Microsoft doesn't do open source? They wouldn't know where to hide the easter eggs."

Buy One OS, Get the Second One Free

Owen Thomas — 2004-03-22T03:15:00-08:00

I'm in Salt Lake City for Novell's annual BrainShare conference, and the buzz is all about Linux. For months, I've been quietly pestering my contacts at the software company for an explanation of how they're going to sell its aging Netware operating system and Linux simultaneously. It's one thing to talk up the wonders of open source; it's another to persuade longtime Netware users to switch.

Well, the answer, due to be announced later today, is breathtakingly simple. Novell will ... sell Netware and Linux simultaneously. When a customer licenses Netware, he'll also get a license for Novell's recently acquired SuSe Linux included in the price. For Novell, it's a sensible move: It's unlikely SuSe will lose many sales through this program, since any customer who's conservative enough to have held on to Netware all these years is unlikely to leap into Linux. Accordingly, Novell's making it easy for customers to switch. All the Novell network services that currently come with Netware will work identically on Linux, and with the new licensing program, customers won't have to buy a new operating system. In essence, they'll just flip a switch when they're ready.

Up until now, Novell's Linux story has been mostly splashy deals. Now, the company's showing that it's got a strategy behind the $250 million its plunked down to buy SuSe and Ximian.

Virgin Mobile Keeps Rolling

Matthew Maier — 2004-03-18T14:55:51-08:00

Virtual networks are the talk of the wireless world these days. The idea is simple: you provide the brand, and someone else handles the wireless calls behind the scenes. Faced with the imminent loss of AT&T Wireless, AT&T is already considering launching a new virtual network. Even consumer brands like Wal-Mart and Disney have expressed interest in branding their own wireless services. Blame it on the recent success of Virgin Mobile USA -- a partnership between Sprint PCS and Sir Richard Branson's Virgin Group. Since we first wrote about them several months ago, the youth-focused Virgin has continued at its breakneck pace, adding nearly 1 million additional customers (to a total of 1.75 million), making it the nation's fastest growing wireless carrier.

The Revenge of Sugar Water

Owen Thomas — 2004-03-17T19:22:59-08:00

Steve Jobs famously lured Pepsi president John Sculley to join Apple as its CEO 21 years ago by taunting him: "Do you want to spend the rest of your life selling sugared water, or do you want a chance to change the world?" Others have noted the irony in Apple's promotional deal with Pepsi, in which certain Pepsi products contained a code that gives sugar-water swillers a free iTunes download.

But here's the real irony: Selling sugar water is trickier than Jobs assumed. In announcing the deal last October, Jobs set a goal of selling 100 million iTunes songs by the first anniversary of the iTunes Music Store in April. So far, Apple's only sold 50 million, so it looks likely that they'll miss that goal by a good 25 million to 30 million songs. The problem is that the Pepsi iTunes giveaway isn't leading to as many additional purchases as either Apple or Pepsi had hoped.

Good Spin

gigaom — 2004-03-16T13:22:02-08:00

Normally, when a startup wins a new customer, they just pop a bottle of bubbly. At Good Technology, they launch a full-blown PR assault. Why the urgent need to publicize a simple deal with a Californian construction firm? Is Good trying to counter Research in Motion's recent buzz? Or is it just a way to keep the company in the limelight before the VCs decide to flip it with an IPO? This strategy reminds me of Salesforce.com -- and surprise, surprise, Good and Salesforce share the same PR agency.

Making CAN-SPAM Work

Michael Copeland — 2004-03-11T16:48:37-08:00

Got an opinion on spam? Now is your chance to let the Federal Trade Commission hear about it. The FTC wants comments on the federal CAN-SPAM act, which went into effect January 1 and makes common spamming ploys a criminal misdemeanor or civil crime depending on the type and severity. Among other things, the FTC wants to know whether a national Do-Not-Spam list similar to the Do-Not-Call list is a good idea, and generally how to make CAN-SPAM more effective. To make your voice heard, go to Regulations.gov, choose Federal Trade Commission from the menu, then scroll down to the CAN-SPAM Act and select "Submit a Comment on This Regulation." You’ve got until April 12 to spam the FTC about spam.

From Target to La-Z-Boy

Nancy Einhart — 2004-03-11T16:01:53-08:00

An excellent idea: La-Z-Boy is releasing a new line of recliners designed by Todd Oldham. Oldham has already done his home-decorating thing for Target, and if there's any home-furnishing brand that could use an update, it's La-Z-Boy. Recliners are practical and coveted by many couch potatoes, but let's face it, they've always been ugly and deservingly maligned. I'd never allow a traditional recliner into my home decor, but I could get used to these.

Blackberry Everywhere

gigaom — 2004-03-11T15:48:48-08:00

Research in Motion's BlackBerry, despite constant attacks from clones and wannabes, remains the most addictive device for on-the-go-email. The company, based in Ontario, Canada, has been trying to extend its reach by licensing the BlackBerry's software to other hardware makers. It has signed up Nokia, Palm and several others. This "BlackBerry everywhere" strategy got a big boost today with the launch of the Xda II handset by O2, a British wireless phone operator.

As with the BlackBerry, email is delivered directly to the Xda handset, eliminating the need for users to actively download email. The handset features enhanced security, in addition to a color screen, a tri-band mobile phone, camera, games, and Microsoft Windows Mobile software. The device goes on sale later this year.

This is not good news for Good Technology (pun intended), a startup which has been very aggressive in propagating the myth that it is killing BlackBerry. They fail to understand the visceral, addictive appeal of the BlackBerry, which some users have dubbed "Crackberry."

Swiss Army Storage

Matthew Maier — 2004-03-10T09:49:18-08:00

The Swiss Army Knife is about to get a 21st century makeover. Running out of traditional tools to cram into the iconic device, Victorinox is about to launch a new gizmo that's a cross between a knife, corkscrew, and a 64 (or 128) megabyte flash storage device. And here I thought I'd seen it all after seeing their SwissFlame knife.

Bad Wi-Fi Business Model! Bad!

Owen Thomas — 2004-03-09T15:20:54-08:00

Little puppies are cute, but they make mistakes. The same can be said, alas, for entrepeneurs. The only solution is to keep whacking them on the nose with a rolled-up newspaper until they learn.

Linspot is recycling an old, failed business idea: Resell your home Wi-Fi access and split the bucks. There are a host of problems with this idea, but here's the largest one: Who is Jasper Nuyens, and why should you trust him with your home Wi-Fi network? If, like me, you can't think of a single reason, then you've identified the single biggest problem with Linspot and any similar business. Who knows what's really in this software? A program like this could be tracking access and funneling payments to you and Linspot -- or it could be recording your every keystroke and sending it to a hacker.

What else is wrong with Nuyens' approach? For one thing, Linspot only works with encryption turned off. The problems of the WEP encryption found in older Wi-Fi routers are well-documented, but for low-traffic home systems, WEP is actually time-consuming to crack. (Corporate systems with a lot of traffic are much more vulnerable to WEP hacking.) Linspot doesn't ship with the new, more hackproof Wi-Fi Protected Access encryption system -- it doesn't come with any encryption at all.

But here's the largest problem: In my home, I already pick up signals for seven different Wi-Fi systems. If one started selling access, would I consider paying for it? Probably not; I have my own Wi-Fi network already, and if something goes wrong, I can fix it. I don't want my Internet access to be at some random guy's whim. What if his connection goes down and he's on vacation?

But say I do start paying for it. There are six other networks in my building that I can choose from. Why wouldn't there be a ruinous price war that drives the access cost down to next to nothing? At that point, it won't even be worth bothering to charge, and we'll be back to where we started: a bunch of free Wi-Fi networks.

If Nuyens were smart, he wouldn't make this a revenue-splitting service. He'd just sell software licenses at $19.95 a pop, and leave it up to his customers to figure out how to actually make money.