A conversation with Dan Farber. Recorded Monday, June 23, 2008.
Steve Gillmor: Hi, this is Steve Gillmor, welcome to the Gillmor Gang, it is Monday, some day in June and we have got Dan Farber.
Dan Farber: Hello Steve, are you in your car?
Gillmor: I am, I just ran a red light as a matter of fact.
Farber: OK. Well maybe we should hold off until you are parked somewhere.
Gillmor: No, no, it is fine. Now that I am so busy, I actually have to get somewhere in a certain small amount of time.
Farber: It is good that you are busy, we like that.
Gillmor: Yes we do. So, what do you think of the Marc Benioff announcement?
Farber: Well I thought that it was a good addition to what they have already done with Salesforce.com and Google Apps where they have integrated those and now they are integrating the data APIs, so that on the Force.com cloud platform you can integrate services from Google within application. That is a very good step in the right direction, but it is also kind of an interesting political… [call tone]. Oh got a call.
Gillmor: No, that is Nick actually, go ahead.
Farber: …but it is also an interesting political battle that Benioff is drawing a kind of line in the sand where it is Salesforce.com and Google versus Microsoft and as well as unnamed vendors, partners, journalists and other parties on his list who he thinks are holding on to the past and getting in the way of innovation.
Gillmor: Yeah, he seems to still be selling that idea that Microsoft has somehow retarded innovation and…
Farber: Well he has been using that for quite a while. It has worked very well. You can think of him as a politician or as a comic and he has got this stick that seems to work and pitting himself up against the big bad Microsoft and until they do something, you know, he can be getting away with it.
Gillmor: Yeah, but I don’t that that encompasses the idea that Microsoft has to come to the party in the online space with an open strategy of their own.
Farber: Yes, I think, it is just a matter of time. I think, two things, one is Microsoft is slower to move than other companies because they have so many moving parts and so many conflicting strategies such as trying to preserve the cash cows like the Office business. And then secondarily, they are really trying to figure out what is the best time to do this because financially they are not really getting hurt by Google Apps at this point.
Gillmor: Yeah, I don’t think they are getting hurt, but they certainly aren’t being helped in terms of holding their margins up.
Gillmor: So, I mean there is definitely effect there, but more to the point, this seems like a classic kind of developer evangelism play of the type that Todd Nielsen used to do at Microsoft.
Farber: Right. Well, I think, that we have seen over the years that the battle is always for developers because if you have developers, they are creating the kinds of applications that generate revenue for your platform. And in this case for Salesforce.com, they have platform where they get [inaudible]. You pay a toll for them every time you build an application on their platform which is the same for Windows, the same for Facebook and others, although it is obviously the economic turn is well established. But, it is fundamentally a battle for developers and platforms. And I think that Google and Salesforce.com obviously are the future and Microsoft the past, but the gap is not that wide.
Gillmor: I also think that Microsoft is becoming the future as well. And I think, they are going to have a similar problem to the one that Facebook had with Friend Connect. When Google basically presented a use of their APIs in such a way that it followed the rules and unfortunately was threatening to Facebook’s business model, they basically had to shut it down with no real logic behind it. I mean the APIs were just created for a certain purpose.
And you know, in talking to the Salesforce people after the keynote, I kept asking them this question which is what do you think is going to happen if Microsoft presented itself as a partner, not as a competitor. And he says this is great, we’d like to stream off of your APIs and be able to maybe provide more value-added service like using Mesh to bring all of this architecture to machines. And most of the Salesforce people say: yeah that is not a problem. I am not so sure that that is…I don’t think that really resonates with Marc’s anti-innovation idea.
Farber: I am not so sure on that one. I think that this continuing relationship between Google and Salesforce people are saying, well maybe Google will buy Salesforce or I think, you ask Benioff whether Oracle was going to buy or interested in acquiring Salesforce. And he said, he cannot comment on rumors or anything, so everybody is being very coy. But, I think, that the longer that Salesforce continues to have success and binds itself to companies like Google, the more desperate large competitors get to be in that space that the more attractive Salesforce becomes as an acquisition target.
Gillmor: Yeah. You are trying to look at the numbers around it. Interestingly Nick Rourke is provider of our new site TechCrunch IP. He pointed out that Sun and Salesforce’s market cap are about the same now, some 8.7 billion.
Farber: Yeah, although that is rather meaningless. For example, the market cap of companies even like CNET whatever are close to the New York Times market cap, so it is all very relative and nonsensical in a lot of ways. It is basically how people value the company as a stock not in terms of revenues. Microsoft’s stock has been flat. So, what does it all denote?
Gillmor: Well in terms of acquisition though that factor into what the strike price is.
Farber: I don’t think it would have any – I don’t think Sun would be interested because Sun is only interested in open source at this point.
Gillmor: What do you think of Jonathan Schwartz’s comments on open source last week?
Farber: Well, I don’t disagree with his notion that open source really drives value in terms of – because it is so easily available that you get more tryout. He showed a map with lots of little dots showing all the downloads of DFS or downloads of MySQL to prove that the available markets that you can get through open source is vastly bigger than what you potentially get in terms of your cost to deliver a lead is going to be a proprietary software marketing. And that is true, but then you got to be able to sell hardware into those customers as well as the support license. At this point, Sun still has, you know, home run around that.
Gillmor: So you don’t see any – I mean I found what was interesting about Jonathan’s talk, frankly for the first time in a long time, was that he was actually talking about harvesting the data that is collected by not just in terms of leads but in terms of behavior, what code is being downloaded, how often it is updated, in other words how active is the technology being used etcetera, etcetera. That seems to be the beginning of certain behavioral mapping of the ecosystem that can then be turned into a very efficient way of upselling what Sun actually sells.
Farber: Yeah. There is that possibility that they end up having this stack of software and the hardware capabilities where if you need kind of to plug in a data center, they can do it for you very easily, cheaply, efficiently.
Gillmor: It is kind of like an EKG of their customer base.
Farber: Yeah, although I think that all these big data centers who are doing EKGs are trying to figure out how they can optimize, install that optimization to the [inaudible].
Gillmor: So the other thing that I noticed about today’s discussions at the Salesforce event was the speed with which Salesforce is grabbing so much of the developer ecosystem. They got this sort of SourceForge or sort of – I forget what they call it – but it is essentially a capturing of collaborative communications between developers. They are just basically creating this kind of one-stop cloud where developers enter and they just really don’t need to go anywhere else.
Farber: Yeah, except that is only if you are satisfied with developing applications on their platform. And if you look at the app exchange and you see what are the top downloaded applications, most of them at this point are kind of smallest applications to do something that is optimizing for Google Ads or Google this or other things.
Anyhow most of their customers or core customers are actually integrating with Microsoft’s products, Microsoft Talk, which is something they really didn’t talk about today but I sent an email, I got an email back from Benioff and I quote “Oh yeah, lots of our customers are using Microsoft, which is not part of the App Exchange because it comes with the product. So, you are not going to find it by having App Exchange.”
Gillmor: Well, certainly they have been connecting up to SAP and Oracle and all those kinds of things on the backend, but today with the announcement with Codo was about an accounts package that was being ported from I believe the Microsoft environment over to the Salesforce environment.
Farber: Right. I would like to know if Salesforce is helping to pay for that.
Gillmor: Yeah – well you should have been there Dan, but you know…
Farber: I did watch your 13-minute interview and I thought most of it was a big commercial, but it is very hard to get Benioff off this game.
Gillmor: Yes. I don’t know how it was; the tried and true talk about the iPhone produces good results as always.
Farber: Yeah, are you going to get an iPhone? No, I have to test out all my customers’ wares, so I am going to use RIM and iPhone and whatever else.
Gillmor: Yeah, I was looking and I don’t think I saw a [inaudible] commensurate with a BlackBerry in his suit but I am pretty sure there was room for an iPhone.
Farber: Or if you ask him, I said OK we did a presentation today, did you use Google presentations. I doubt it.
Gillmor: It sounds like you have got some misgivings about the reach of Google Apps at this point?
Farber: No, I think, Google Apps is getting some traction. I think, that for a lot of the Salesforce customers, it is free, more or less free, a good deal, about $50 a year per user, so it is something very tolerable and I think, it will continue to get some traction, but it is a big universe and they really haven’t tapped much of it at this point.
Gillmor: After the lunch I was suggesting the idea that we are going to see a bunch of certain middle-layer aggregators who specialize in orchestrating multiple services, cloud services, not just Google, but Amazon, companies like Matzo and others.
Farber: Well, we will see a lot of them very soon at the Structure event this week.
Gillmor: Exactly. Well that is a good segue, so what is on your calendar; what is interesting you other than the Salesforce stuff today?
Farber: Well, I will be going to the Structure event; it is all about infrastructure, this week. Also I interviewed Jonathan Heiliger, who is the Vice President of Technical Operations at Facebook. So, I got some insights into what they are up to in terms of dealing with the fact that they are growing about 250000 users per day.
Gillmor: But he is not an attorney, so he couldn’t tell you about the Friend Connect issue?
Farber: Yeah no, I didn’t want to probe him on that subject matter.
Gillmor: No, that Irving seems to have reached a dry hole with – what is that guy’s name – Dave Morin the other day, he seemed to be constrained to what he could say about that.
Farber: Yes, I think, it was not the best day when people have to quote representatives are talking [background noise] that’s as much as you can say.
Gillmor: And what about Friend Feed? Are you a Friend Feed user yet?
Farber: I am a Friend Feed user, but I wouldn’t say I’m living on it. I’m more kind of between mail systems and Twittr and I still find Friend Feed a little too overwhelming.
Gillmor: And Twittr, is it meeting the civility test, yet?
Farber: Ah, it doesn’t really bother me too much. I think one of the bigger challenges is that: how do you consume all this information and have all these people commenting on these different sites.
Gillmor: Yeah, I find that… that’s one my biggest problem with Friend Feed is that not only is it a comments soloing of itself, but individually, comments that live across identities, inside the system, you can’t really relate to any, except by search.
Farber: Well, that’s on purpose at this point, because they believe that people commenting… You don’t want to have your mother reading the same comments on something, as your business partners or something like that.
Gillmor: But you want to be able to follow threads and swarming of ideas.
Farber: Well, that’s where the search comes in, I guess.
Gillmor: Well, I think, as Cliff Garas pointed out, in comments which I haven’t fully read yet, the idea of Track as the future search is really the next big model. And specifically, if you marry that with a social graph, then you’ve got an advanced formula of what some people are calling “social search,” which I think, is the next high ground.
Farber: And what’s going on with Track and Twittr?
Gillmor: I ran into, literally, Kevin Williams walking out of his session at…
Farber: I saw you. I saw you and he wouldn’t talk to you.
Gillmor: That’s right. Do you remember what he said? I said, “Well I really like to be able to ask you a couple questions.”
He said, “Well, I can’t do it right now.”
Farber: “Here’s my email address.”
Gillmor: Yes, he gave me his email address and I sent him an email, not only to the address he gave me, but to the one that I also have for him. And he hasn’t replied to either of them. So, I don’t know. I’m thinking the best, but I’ll probably [inaudible] to wait a day or two and then go back to my tried and true method of publicly pinging [inaudible] and ask him to relay the message.
They seem to have re-enabled IM about half way in one direction and then left us to use Surmise and a combination of that and Pleural, in my case, in order to be able to simulate what they used to have working. I mean, it seems that they are pretty stable now with the services that they have re-instigated.
So, I hate to say it but I think, I was right when I jokingly implied that the only thing that was [inaudible] could take Twittr to its knees was Implan and Track.
It seems now; with everything else back up and running, for the most part, that that’s probably what is too hard for them to do. So, on the other hand, they have the captive audience, so I don’t think anybody is going anywhere.
So, I think, they’ll [inaudible] continue not to provide it, not continue to complain. Essentially there will be some day… I mean, did you notice how quickly the news of George Carlin’s death traveled on the network?
Farber: Yes. Whether it’s also that that person on Wikipedia, who posted about Tim Russert, was supposedly fired.
Gillmor: I’m sorry I didn’t hear you.
Farber: Someone who posted about Tim Russert’s death, before supposedly the family was notified, was fired.
Gillmor: Really? Well, as I wrote in a post about a week ago, somebody sent me an ad message from inside NBC saying that there was [inaudible] but I hope that wasn’t the guy who got fired.
Farber: Whatever the case, it’s been a very emotional period with….
Gillmor: Well, it just underlines for those of us who are above 20 that we have to take what we can get, while the getting is good. And I am happy to report that Doug Pearl seems to be on the mend and is eating solid foods.
Got a nice note from Nick Carter today about the launch of the new site, so we’re starting to hear from the members of the Gilmor Gang and all is well.
Farber: Well, that’s good news. And on that note, I want to thank Steve for having me on the Gilmor Gang show. I want to congratulate Steve and Nick on Tech Crunch IT. It should be a good site for people who want to really figure out what’s going on outside of the consumer Web 2.0 blah blah.
Gillmor: Yeah, [inaudible] part of it needs some stiff competition in the worst way.
Farber: I need what?
Gillmor: You need some competition. I mean, you’re out there nailing the enterprise space, authoritatively, on a daily basis. And somebody’s got to step…
Farber: Well, that’s more my old job which was the ZBnet team. Between ZBnet and New.com, yeah, we do have a lot of good coverage and we welcome you to this space. And we will see you on the battlefield.
Gillmor: Excellent. And we’ll see you tomorrow at some time on the Gilmor Gang. This is Steve Gilmor and Dan Farber, saying thanks a lot. Thanks to everybody who showed up. Dan, and everybody at and everybody else. See you again tomorrow. Bye-bye.