Why Vendors Can’t Solve Your Social Networking Problem

Michael Hickins

Editor

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Good morning. Tell software vendors you want happiness, and they’ll assure you they’ve got an app for that. And so it goes for social networking.  After watchingSalesforce.com and Google make plays for vendors in the social networking space Monday, Oracle announced a deal of its own Tuesday (more details below). The acquisitions involve tools for managing brands and participating in conversations on consumer social networks like Facebook, and are part of a larger suite of applications intended to help businesses develop their own social networks.

There’s a lot of merit to the idea that enterprise social networks can facilitate collaboration among employees, or even with external stakeholders, and solve difficult problems such as knowledge management or connecting customer-facing employees with those involved with internal processes. As Forrester analyst Ted Schadler tells CIO Journal, “in 10 or 15 years, we’ll be shocked we worked any other way.”

He added an important caveat: “getting there is not going to be a straight path.” Enlightened executives like AstraZeneca CTO Angela Yochem and Energy Plus CIO Hugh Scott have seen social networks grow and evolve under their respective watches, but while they’ve given those initiatives a little push here and there, the success of those networks is due to the how, and not the what. Scott explains that the company’s social network wasn’t introduced as “the next savior of enterprise communication.” But he leads by example, using it to publish the agenda of his weekly meetings, “to show it’s there and it’s being used.”

There’s a long trail of failed enterprise social networking initiatives; a productive social network won’t emerge thanks to technology — no matter the vendor. But a lot will depend on your willingness to let the network evolve organically, and to work with your peers in marketing and HR to ensure their needs are met.

CIOs should wait before migrating to Windows 8. Windows 8, scheduled for release this fall, will be a radical re-imagining of Microsoft’s traditional operating systems — so radical, in fact, that CIOs are being advised to wait as long as a year before they deploy it across their networks. Analysts at Gartner and IDC told CIO Journal Tuesday that early corporate adopters will face two major hurdles, including a lack of security softwareand other support applications, which won’t be available right away.

Chevron explores for oil using Hadoop. Chevron is hoping to make deepwater drilling efforts more productive by analyzing “ridiculous amounts of data,” according to Steve Walker, who works in data research, analytics and data warehousing at Chevron and spoke at a conference Tuesday. The company collects five dimensions of seismic data (that’s not a typo) and converts it into pictures of what the terrain looks like at the bottom of the ocean. In addition to minimizing the cost of fruitless drilling (it costs $1 million per day to operate one of those drillships), the use of open source Hadoop for data analysis is cutting the compute cost of analysis by a factor of 10.

Mobile will bridge the digital divide. Digital money carried electronically on mobile devices is coming–over time–to every individual in every corner of the world, writes CIO guest columnist Irving Wladawsky-Berger. “Businesses that understand and leverage these changes will be massive winners in the race for global growth, while those that ignore them do so at their own peril.”

TECHNOLOGY NEWS

Whitman outlines H-P’s future. H-P CEO Meg Whitman promises the company will “move faster” on tablets and calls herself “bullish” on the prospects for printers. In an exclusive interview with the WSJ’s Ben Worthen, Whitman also discusses the PC maker’s troubled relationship with Oracle, the challenge it faces on the morale front with massive layoffs imminent and her plans for exorcising the demons spawned by years of poor H-P leadership at the CEO and board levels.

Cisco has a router for the mobile age. Hoping to stay relevant as more Internet traffic moves away from the desktops to mobile devices, Cisco is banking on a new type of router that uses software and virtualization technologies to improve how it handles data.Quentin Hardy of the New York Times reports the mobility explosion has crippled Cisco’s older routers with “billions of tiny ‘pings’ of information,” and says the new router will manage the data demands of mobile apps differently. Cisco also hopes to fend off potential market disruptors Arista and Nicira, that sell less expensive software-defined networking products.

Google ups play for mobile enterprise users. Google is buying Quickoffice, a maker of productivity software for Android and iOS. “Quickoffice has an established track record of enabling seamless interoperability with popular file formats,” writes Google Engineering Director Alan Warren in a blog post, “and we’ll be working on bringing their powerful technology to our Apps product suite.” On Monday Google announced that it was buying social messaging and advertising company Meebo.

Oracle invests in ‘complete gibberish.’ Oracle unveils today its first cloud service suite, Oracle Public Cloud, a milestone as the company moves to catch up, cloud-wise, with a  field that includes Salesforce.com, which helped introduce software-as-a-service in the late 1990s, and business software maker SAP. The cloud strategy comes after a six-year overhaul of the company, reports the Journal’s Steven D. Jones, culminating in a string of high-profile acquisitions of cloud-based vendors, including the $1.9 billion Oracle spent for human resource software vendorTaleo and the $1.5 billion acquisition of customer service software vendor RightNow Technologies. Four years ago, Oracle CEO Larry Ellison called the hype surrounding cloud computing “complete gibberish.”

Intel, competitors in ARM(s) race for Microsoft 8. Microsoft’s next-generation operating system has the potential to stoke the competitive fires between chipmakerIntel and ARM Holdings, a designer of chips running on most smartphones and tablets. Intel is counting on Windows 8 to drive demands for Ultrabooks and other PCs, theWSJ’s Lorraine Luk reports, while ARM hopes an ARM-friendly version of Windows 8–Windows RT–will give it entry into the traditional PC market.

Facebook goes after mobile ads. Facebook is expanding ways for marketers to buy mobile ads. In one of its first major business moves since its IPO, the Menlo Park, Calif., social network said Tuesday that marketers can now pay individually for “sponsored stories,” the company’s only mobile-ad product. With “sponsored stories,” marketers pay Facebook to republish positive messages that users post about their brand, reports WSJ’s Shayndi Raice.

Will Facebook fallout hurt entrepreneurs? An influential start-up guru sparked a debate Tuesday on whether Facebook’s botched IPO will ultimately make it harder for entrepreneurs to raise money, report the Journal’s Amir Efrati and Pui-Wing Tam. Paul Graham, who runs Y Combinator, a tech start-up “incubator” in Silicon Valley, said in an email to start-up founders that they should “lower your expectations for fundraising.” He added that for some start-ups, future investors may place a lower value on their overall worth than earlier, more-exuberant investors, in what’s called a “down” financing round. Down rounds can dilute the start-up founders’ equity stakes, he wrote.

Yahoo and Facebook talk about resolving patent accusations. Yahoo is in talks to resolve a patent dispute with Facebook, Bloomberg’s Brian Womack reports. Yahoo accused the social giant in March of infringing patents that cover a number of functions including advertising and the sharing of information. Facebook counter-sued in April, accusing Yahoo of patent infringement.

Oracle follows Salesforce.com with social acquisition. Less than two weeks after buying social software company Vitrue, Oracle announced another social buy, Collective Intellect, maker of web-based software that helps marketers publish and monitor social media content. The WSJ’s Drew FitzGerald reports the Oracle move is its latest salvo fired against SalesForce.com which earlier this week bought social media marketing toolmaker Buddy Media for $745 million.

H-P bullish on de-duplication. H-P enterprise group head Dave Donatelli tells AllThingD’s Arik Hesseldahl that one storage function the company is banking on is “de-duplication” where a document is backed up only once, no matter the number of copies floating around the enterprise. Donatelli says the cost-saving of de-duplication will lead companies to forgo tape backup for disks.

Microsoft mimics mobile plan, luring buyers with subsidized hardware. Microsoft plans to make its entertainment service more easily affordable, extending a $99 offer for its Xbox 360 game console with a two-year service contract, report the WSJ’s Ian Sherr and Steven D. Jones. The move is seen as a way to spur declining sales for the seven-year-old hardware and gain more interest in Microsoft’s Xbox Live service.

Talking less, paying more for voice. The largest U.S. wireless carriers are working on ways to keep their customers paying up for something they do less and less—making phone calls. Carriers say a move to unlimited-only calling plans would simplify what can be a confusing array of options, reports the WSJ’s Greg Bensinger. But it also would keep a cash cow healthy by depriving customers of the option to trade down to cheaper plans—even as their phone use drops as they spend more time texting and using Internet-based calling services such as Skype.

Apple blesses another prepaid service. Sprint Nextel will soon become the second U.S. mobile carrier to land Apple’s iPhone for a pay-as-you-go service.  The Journal’s Thomas Gryta and Greg Bensinger report that users of Sprint’s Virgin Mobile brand will have the option to buy an iPhone as soon as July 1. Last week Leap Wireless International, which serves smaller markets, announced an iPhone deal for its prepaid service.

Airtime launch hit by glitches. Airtime, the new start-up unveiled Tuesday by the former co-founders of Napster, had a little trouble showing it is ready for prime time. At a celebrity-filled media launch in New York, co-founders Sean Parker and Shawn Fanning took the wraps off their new live-video chat service after a yearlong gestation period, but the launch was marred by a series of glitches that made the technology virtually unworkable. The company said its live service wasn’t turned yet on, so it used a private version of the service to little avail. A bigger issue than technical glitches could be whether large numbers of people will feel comfortable chatting live, via video, with strangers on the Internet, reports the Journal’s Spencer Ante.

CYBERSECURITY NEWS

Data firm in security pinch. A Florida company that helps 14,000 financial institutions process transactions and track customer accounts is beefing up security after regulators issued a report critical of its risk practices. Fidelity National Information Services is the latest entrant in the fast-growing financial-processing sector to face questions about how thoroughly it protects data, after major breaches in the past two years at Citigroup, credit-card processor Global Payments and email marketer Epsilon Data Management. Fidelity also suffered a breach last year involving prepaid cards. FIS says it has hired three executives to deal with security issues and is alerting customers to its progress in addressing regulators’ concerns. The company says none of its clients “suffered a financial loss related to the breach,” reports the Journal’s Robin Sidel.

Google warns Gmail users of ‘state-sponsored’ hacks. Google began warning users of its Gmail online email services when it suspects they may be targets of “state-sponsored” attacks. But the company was coy about how it knows whether a specific individual has been targeted by attacks paid for or designed by governments, reports Computerworld’s Gregg Keizer. “You might ask how we know this activity is state-sponsored,” said Eric Grosse, Google’s vice president of security engineering, in aTuesday blog. “We can’t go into the details without giving away information that would be helpful to these bad actors.”

Hackers exploit Google Apps loophole. Hackers hit the infamous 4Chan message board by exploiting a loophole in the two-step authentication process used by Google Apps for Business, InformationWeek’s Thomas Claburn reports.  A Google spokesman explained that hackers were able to circumvent typical user verification processes by accessing the email account of website security firm CloudFlare, which administers the message board. Google said that it has fixed the loophole.

Flame tricks Windows, Microsoft promises fix. The recent discovery of the Flame malware has prompted Microsoft to tighten Windows security, Jim Finkle of Reuters reports.  The company admitted last week that Flame exploited a Windows flaw that tricked PCs into believing it was a verified piece of Microsoft software.

EVERYTHING ELSE YOU NEED TO KNOW

Stimulus is back on the table at the Fed. The Journal’s Jon Hilsenrath says that Fed officials will weigh whether the U.S. economic outlook is deteriorating enough to justify new measures to boost growth when they meet later this month. First, Fed officials will have to decide whether to downgrade their forecasts  – and how much. If they do act, they could take a small precautionary measure, like extending Operation Twist. “Or, policy makers could take bolder action such as launching another large round of bond purchases if they become convinced of a significant slowdown.”

Debt could be double GDP by 2037. The CBO just released a stark report saying that increased entitlement spending and insufficient revenue will make the national debt explode. Under CBO’s most likely scenario, in which lawmakers extend current tax rates and don’t curb entitlement spending, debt held by the public would reach 109% of the economy by 2026, and it would be almost 200% percent of GDP by 2037, the Hill reports. One bright side to going off the fiscal cliff is that under that scenario, debt held by the public moves would only be 53% by 2037.

EUROPEAN DEBT CRISIS: WHAT YOU NEED TO KNOW:

EU outlines bank union plan. The European Commission sketched out initial plans for a banking union in its report on bank recovery and resolution, calling for a regulatory framework which reflects the interconnected nature of the region’s banks, Dow Jones Newswires reports. An EU banking union “will rest on four pillars,” including a single EU deposit guarantee plan covering all EU banks, and a single EU supervisor with ultimate decision-making powers.

Spain cries out for bank aid. Spain is pleading with European institutions to recapitalize the country’s banks as worries spread about its own ability to raise the billions of euros needed on bond markets, the FT reports [registration req'd]. Spanish Prime Minister Mariano Rajoy warned that the country was in a situation of “extreme difficulty,” and he urged Europe to prove that the euro was “irreversible” by agreeing a banking union and embracing euro-zone bonds.

Greece on the brink as taxes dry up. Greece’s government coffers could be empty as soon as July, which could force Athens to temporarily stop paying for salaries and pensions, along with imports of fuel, food and pharmaceuticals, the NYT reports. Greek leaders said they face a huge shortfall because tax revenue and other sources of potential income are drying up.

G-7 presses for action. G-7 finance chiefs pushed Europe for more action, but nothing specific came out of their conference call yesterday. No statement was issued, but a U.S. Treasury official told the WSJ that finance ministers and central bankers “reviewed developments in the global economy and financial markets and the policy response under consideration, including the progress towards financial and fiscal union in Europe.”

Tom Loftus contributed to this article.