Larry Ellison had some interesting thoughts on the on-demand model, especially intriguing as he retains his interest in NetSuite, the on-demand ERP provider. His ownership stake, which might appear to be a conflict since Oracle competes with NetSuite, is in some sort of blind trust.

Oracle’s CEO said the company’s on-demand business posted 25% growth year over year but seemed to agree with a questioner that it had been hovering at about 3% of overall revenue for some time.

“We’ve been in the on-demand business for almost a decade. We’re the second largest provider of sales automation software behind Salesforce.com and Q4 was the first quarter we actually made money [at it],” he told analysts on the fourth quarter and fiscal year ‘08 earnings call Wednesday night.

Read more »

This year’s Microsoft Worldwide Partner Conference will be in Houston. In July. One word: Ugh.

And, interestingly, insiders say preliminary numbers show that more than half (60%) of attendees will be from outside the U.S. That’s a first, to my knowledge and is at least partially attributable to the incredible shrinking dollar.

Note to vendors: If you’re gonna drag people into triple-digit heat and humidity, make it cheap.

As for news: Look for Microsoft to talk up repeatable solutions in SMB markets. And don’t forget SaaS and the mega-billion dollar question of how partners fit into Microsoft’s software plus services game plan. That’ll be a big theme.  Read more »

For many VARs, cloud-based computing is a worrisome prospect.

The notion of functions served up direct to users from a vendor-owned-and-operated cloud poses a huge disintermediation threat to partners, as Richard Warren, of North Carolina Technologies told SearchITChannel.com, earlier this week.

 But the cloud vendors still need to prove themselves able to fully compete in a world where 99.9% of users need remote or offline capabilities. They need to work on their data and apps even if they’re not (gasp) connected to the Web.

Google execs say they will prove their technology worthy of the enterprise, blazing the trail with the Google Appliance. Google Gears is starting to bring offline capability to the company’s consumer and business services — Google Reader is “Gears enabled” as is Google Docs. (The spreadsheet and presentations so far  support just view-only offline access.) Read more »

Bill Gates just finished what Microsoft has billed as his last public speech as a company full timer. Gates is stepping down from day-to-day involvement as of July 1.

At TechEd 2008 part one (for developers) Gates hit on some familiar themes and presided over demos of upcoming modeling, database, and development technologies. Read more »

Google has said it wants developers to write apps to run in its “cloud.” Now, on the eve of the Google I/O conference, it disclosed how it will charge developers for the use of its server- and storage-farms and related infrastructure.

Developers can use Google App Engine free for up to 500MB of storage and enough CPU cycles to power five million page views per month. Google says 150,000 developers have already signed up.

Above and beyond the 500MB, five-million-page-view cut off, Google will charge ten cents to 12 cents per additional core CPU hour; 15 cents to 18 cents per GB storage; 11 cents to 13 cents per GB of outgoing bandwidth; and 9 cents to 11 cents per GB of incoming bandwidth.

That might sound confusing, but the race is on among vendors to lure developers into their own ecosystem with a pay-as-you-go model. eBay, Amazon.com, Google are among the Web 2.0 giants vying for developers’ attention. Meanwhile, Microsoft is trying to balance its existing .Net development dominance in the on-premise software world with a more Web-savvy Live efforts.

For its part, Google will also soon furnish the new Google Web Tookit 1.5 as well as two new APIs. The first API promises to enable developers to scale, rotate, and crop images on the server. The second, a memcache API , a high-performance caching layer to speed up page rendering.

Barbara Darrow can be reached at bdarrow@techtarget.com.

VMware’s “cloud computing” strategy set me off on a little rant last week. I wrote that VMware was likely getting into SaaS because it was either inspired by or jealous of Google’s success in the “cloud.”

Now it turns out that VMware is following Google’s footsteps in another area as well. And luckily, someone else has taken care of the criticism this time.

If you haven’t noticed, nearly all of Google’s services — including GMail, Google News and Google Apps — are still in beta, even though they’re years old. Andrew Kutz, who writes on our sister blog Virtualization Pro, points out that several new VMware features — including Storage VMotion and Virtual Machine High Availability — are also in beta or labeled “experimental.” Kutz writes:

Excuse me for being old fashioned, but it isn’t enterprise-ready if it is beta or labeled experimental. And VMware makes no bones about this; they plainly state that these features should not be used in production. However, on the other hand they make a big show about the same set of features, whipping the crowd to a fever pitch of excitement. You can’t have it both ways, guys.

… VMware needs to make sure that features that are experimental should be announced with an asterisk next to their headline.

VMware should be doing a better job separating hype from reality when talking about these products. But it looks like that job will instead fall to VMware partners. When your customers ask about Storage VMotion, for example, tell them it’s promising, but also point out that it doesn’t yet have a GUI option. You’re the last line of defense to keep customers from heading down the dead-end road of hype.

Bad news for people who hate buzzwords: Another big-time IT vendor is getting into “cloud computing.”

This time it’s VMware, whose president and CEO Diane Greene talked up cloud computing during a speech yesterday in Boston. My colleague at SearchServerVirtualization.com, Bridget Botelho, was there, and she reports that VMware will use the “cloud” to differentiate itself among increasing competition in the virtualization market.

“The dream of cloud computing is fast becoming reality,” Greene said during her keynote at the JP Morgan Technology Conference.

VMware becomes the latest traditional IT vendor, inspired by — or jealous of — the success of Google and Salesforce.com, to get into cloud computing.

“Cloud computing” is less annoyingly known as “Software as a Service,” although that term opens up a whole new can of buzzword worms. I’ve heard people refer to “Platform as a Service,” “Hardware as a Service,” and someone I recently talked to actually used the term ”Service as a Service.” Um, excuse me?

Anyway, back to the VMware news. I’m not even sure how “virtualization in the cloud” or “Virtualization as a Service” or whatever you want to call it would work. Virtualization stores information and applications in a data center and recreates an image of that data on a server, endpoint or other appliance. So in that regard it’s similar to cloud computing, which stores information and applications in a data center for users to access through a Web browser on a PC or mobile device.

Other recent examples of vendors getting into SaaS include Microsoft, which is now pushing its Dynamics CRM Online, and Symantec, which released its Online Backup Service. It remains to be seen if the model will work for these vendors who are giants in the on-premise software world — or even what the model is, in VMware’s case. But for now, the buzzwords work, and apparently that’s all that matters.

All the papers are reporting that epic green mailer Carl Icahn is forging ahead with plans to nominate a clean slate of Yahoo board members. The goal is to force the company back to the bargaining table with Microsoft and eventually into Microsoft itself.

The deadline for board nominations is Thursday.

Icahn apparently thinks Microsoft is still jonesing for Yahoo, although it’s unclear to others whether Microsoft’s rejection of a deal is final.

When the Microhoo talks calmed down a couple of long-time Microsoft resellers said it was time for the company to reevaluate its priorities.

Microsoft’s consumer push and it’s growing cloud computing/SaaS fever have distracted the company from core businesses, they say.

“Microsoft has been spread miles thin,” said one long time partner who specializes in database and business intelligence work. “They have hurt themselves on Vista and business apps while they’ve been chasing Google,” he noted.

Barbara Darrow can be reached at bdarrow@techtarget.com.

Microsoft has abandoned its hard-fought — and expensive — bid to buy Yahoo.

A post to the company’s website Saturday includes a letter from Microsoft CEO Steve Ballmer to his counterpart at Yahoo: Jerry Yang.

For some, this is a sign of sanity. Last week Microsoft raised its offer to $33 per share from $31. But Yang, held out for more. That last bit of intransigence may have given Ballmer & Co. what they needed: A good reason to walk away.

In his letter, Ballmer said taking the battle to Yahoo shareholders would have made it hard for a combined company to retain Yahoo technologists and engineers. The Wall Street Journal online reported that just hours earlier Ballmer and platform & services division president Kevin Johnson met with Yang and Yahoo co-founder David Filo in Seattle. Yahoo dropped its price to $37 per share, but Microsoft wouldn’t budge above $33.

While Microsoft’s willingness to spend more than $45 billion on Yahoo proved, to some, the company was bound-and determined to get relevant in the ad and search business. To others it was a huge distraction that would have resulted in a huge overlap in staffing and R&D. They feared massive layoffs and period of uncertainty while the convergence was worked out. Blogger Mini Microsoft, who had railed against the deal for some time, is already celebrating.  ”Hot damn and Yahoo!,” he wrote

Some Microsoft partners felt that the purchase attempt kept the company from concentrating on core efforts  that it can ill afford to screw up. (Office and Windows anyone?). They maintained the company should use its own in-house smarts to negotiate the road to software-as-a-service rather than spend $50 billion on Yahoo.

True, Yahoo would have brought some interesting stuff to the table even besides its successful portal. But how long has Microsoft been boasting about all the billions it’s been spending in R&D? Face it, many of us have been underwhelmed with the results thus far. So now would be a good time to wow the world with Microsoft’s home-grown tech, no?

In his letter to Yang, Ballmer still defended the purchase idea as the best option for both parties, “but clearly a deal is not to be.” (Update: Yahoo’s response here.)

That may very well be the best thing that’s happened to Microsoft in a long time — no disrespect to Yahoo.

The key now will be for Microsoft to focus on its own priorities — and maybe re-think whether fighting Google should remain job one.

Barbara Darrow can be reached at bdarrow@techtarget.com.

Last week’s Microsoft Live Mesh announcement had many observers dreaming of the day when their PCs, cell phones and other devices would all communicate and share data with each other.

At least one Microsoft partner had an even grander vision — one in which Live Mesh would promote truly open interaction among different devices and platforms. But Microsoft is still stressing how Live Mesh will work with Windows and Windows Mobile (even though it will be able to run on any device). And now that partner, Digipede Technologies CTO Robert Anderson, is calling that strategy “disappointing.”

“… it is a little disappointing that there is such a heavy emphasis on Windows and Windows Mobile,” Anderson writes on his blog, Expert Texture. “I discount the coming Macintosh support because support for non-Windows mobile devices is really the issue. If iPhones and Blackberrys are out of the equation, then the synchronization story isn’t so compelling.”

Live Mesh will run, as Anderson describes it, “as a set of open protocols that anyone can implement.” He had hoped that Live Mesh would run on a modified version of Silverlight — Microsoft’s .NET runtime for Internet applications — which would make it available on any device without the need for third-party development.

As my editor Barb Darrow pointed out during last week’s Partner News Podcast, Live Mesh is starting off as a consumer-oriented strategy, but it will sooner or later have ramifications for business users, the VARs who sell to them and the ISVs like Digipede who develop additional software for them. And if Microsoft plans to use Live Mesh to help compete against Google in the SaaS and Web-based applications markets, more partners should be like Anderson and start paying attention now.