Is AppleTV accounted for as a subscription product?

Somewhere along the way, Apple mentioned that iPhone sales are accounted for on a subscription basis. Apparently, their lawyers believe that they have to charge for new features if something is not sold on a subscription basis. Besides, Apple reportedly makes $18 per month per iPhone (that’s up to $72 million per month… not a bad little revenue stream!)

OK, so that explains why Apple continues and will continue to push out new features for the iPhone for free.

That’s also the rationale presented for the $20 upgrade charge for the new iPod touch software. In my opinion, the iPod touch should have been closer to parity with the iPhone from day one, so it’s nice to see them fill in the gaps. But, the $20 charge seems like a cash extraction ploy rather than something being done for legal/accounting reasons.

This seems especially true given the free update to the “Take 2” release of AppleTV. From the whole legal/accounting perspective (IANALOCPA), the only difference I can see between the iPod touch upgrade and the AppleTV upgrade is that the AppleTV upgrade can result in new, direct revenue based on movie rentals and music sales. Arguably, the new iPod touch software also can help lead to more revenue because it supports the rented movies.

From a business perspective, charging $20 to previously happy iPod touch owners seems like a way to bring in some cash. The AppleTV move is happening to bolster a product that is performing below expectations.

Personally, I don’t mind paying for software updates that bring new features and all that, but usually such updates come after a reasonable amount of time and bring features that go beyond what you would’ve expected from the product in the first place. I don’t think the iPod touch update warrants a $20 price tag.

Update: I must’ve been tired or something last night when I posted this. A quick Google search reveals many sites talking about how AppleTV is indeed accounted for on a subscription basis. CNet has some background about the accounting nonsense.

This would seem to have implications for anyone that creates software and provides a free update that includes new features. Something to keep an eye on.

Installable vs. Hosted

37signals doesn’t want to do installable software, Ask 37signals: Installable software?:

If we built installable software we’d have to spend a lot more of our time on technical support, write a lot more documentation, slow down our development process, and lose a fair bit of control over our customer experience. For some companies this wouldn’t be a big deal, but for us it would be a real drag.

Of course, I recommend you read all of Jason’s commentary before continuing. Done? Okay…

I think that Jason is overestimating how hard it can be to produce an installable version of a hosted product. I say “can be”, because how an application is built can certainly make it harder. Many small companies (too many to name!) are building nice, installable web-based apps.

Offering a hosted webapp is a great business model for the reasons Jason cites. It’s also good for customers, because they can be up and running in an instant. I wanted to try out FogBugz and had my own instance within minutes. And, of course, 37signals doesn’t have to worry about Basecamp showing up on warez sites. Or the fact that everyone can read their uncompiled Ruby code.

However, I think for a many apps, quite a few potential customers will be left behind by only offering a hosted version. One criticism of Google Apps that I’ve seen mentioned is that not everyone wants to entrust all of their private documents to Google. I think Campfire looks like an interesting product, but I wouldn’t want to store company confidential exchanges in there.

I’ve seen a number of products start off with one approach and then add the other. I can name two off the top of my head that started off installable and added a hosted option. In some ways, that’s easier because you don’t have to worry about supporting the service 24×7. There are always tradeoffs in product management, aren’t there?

I should also mention the middle ground: selling an appliance. This is what Arbor Networks does. Ship a computer, preconfigured and ready to run, to the customer. They plug that in, do a small bit of configuration (IP address setting, for example) and they’re up and running! I’ve predicted before that Google Apps will eventually be offered this way. We’ll see…

Also, you can be just as agile with an installable app if you wish to be… There has been an update to OmniFocus just about every day (including weekends!) since I installed it. If you make it easy for people to install and upgrade, there’s no reason you can’t ship minor updates as frequently as you wish.

Seth Godin’s The Dip

This past Tuesday, I had the pleasure of attending Seth Godin’s The Dip talk at the Michigan Theater. Here’s a photo from Seth’s blog:

It’s been a busy week, so I haven’t had a chance to write about this until now.

The first thing I want to say is this: if you’re still doing presentations with bullet points, you need to see someone like Seth Godin speak. It will give you a whole new appreciation for how best to present material. Bullet points ain’t it. If you’ve ever seen me present, you’ve probably noticed that I don’t use bullet points. I’m definitely still honing my technique, but Seth has achieved master level. If you can’t catch Seth live, I’d recommend checking out An Inconvenient Truth. Al Gore’s presentation in that movie is bigger budget and less readily attainable than Seth’s technique, but it will still give you an idea of what to shoot for.

I’d imagine that Seth would consider himself a failure if I just wrote about his presentation style and not the content he was presenting. After all, it’s not a very effective presentation if the flash gets ahead of the substance. I read The Dip before seeing the talk, and the talk was a nice companion to the book. The Dip is a small book (under 100 pages), which I appreciate. Many business books have an idea that can be readily condensed into a 5 page summary, but they carry on for 200, 300 or more pages just repeating the same idea over and over in slightly different styles with or without actual supporting evidence. I often get the feeling from business books that they’re trying to perform “proof by repeated assertion”. At 100 pages, The Dip felt about right in terms of size. The one thing that I felt was missing was personal anecdotes. It’s the perfect kind of book for stories about how Seth himself has tackled “The Dip”, but instead we get stories about how well-known others have successfully tackled The Dip.

So, what is “The Dip”? Don’t worry, I’ll get there. This is one of the other interesting aspects to Seth Godin in general: he likes for his ideas and terminology to spread. Whether it’s a purple cow or an ideavirus, Seth wants people to learn and use these terms. To that end, everyone who attended The Dip (live!) received 5 copies of The Dip (book), to pass around. Each copy of the book includes a page in the back where you can put a list of names to try to get a group of people to pass it around. I have no idea if that technique works, but the 5 copies per person idea certainly does. People will inevitably think of friends and colleagues who might benefit from The Dip and pass it on. Thus, Seth’s ideas and terminology claim some more vic—-, I mean supporters. If you Google “The Dip” or just “dip”, Seth has the #2 link. The idea has spread.

At last we get to the point where I contribute to the spread of the idea. “The Dip” is the point in an endeavor where the going gets rough. Seth makes the point that quitting in The Dip is what most people do, and it’s exactly the wrong thing to do. You should anticipate the Dip. If you’re not going to put forth the effort to get through it, you shouldn’t even start the undertaking. But once you make it through the Dip, you’ll be among the best in the world. And that is what the book “The Dip” is truly about: quitting the things that you aren’t going to master and becoming the best in the world at the thing that matters most.

For me, personally, The Dip’s message about quitting excess things is timely and relevant. I’ve had so many things going on and so many things vying for my time outside of work, that maintaining focus is important. Some post-The Dip reflection has identified a couple of things that I’ve been able to quit. And it feels good.

While Purple Cow remains my favorite among the Godin books that I have read, The Dip is a potentially more broadly useful quick read for stories and thoughts about being the very best. Your investment in time in reading the book will be well worth it. I’d also highly recommend seeing the live show if Seth will be coming to you. (And a big “thanks!” to the folks who organized the Ann Arbor event!)

Ajaxian » Adobe announces that it will be opening Flex under Mozilla License

Ajaxian » Adobe announces that it will be opening Flex under Mozilla License. This is a big move on Adobe’s part, and it will be interesting to see how this shakes out against OpenLaszlo which previously could cite its open source nature as a benefit over Flex. Adobe still catches a lot of flak because the Flash player is closed source. Given their recent open source moves, I would be surprised if they aren’t seriously considering it. Adobe makes no money off of the basic Flex SDK, and the same goes for the Flash Player. If their business goal is to make their money off of the nicer development tools and environments, then open sourcing those things that they’ve been giving away may indeed make good sense.

Ian Landsman’s Mini Site Marketing Experiment

Ian Landsman’s Mini Site Marketing Experiment is one of the best marketing ideas (and implementations thereof) that I’ve seen in quite a while. Check out the Open Source Help Desk List site that he created. This is a genuinely useful roundup of open source help desk software, though the alphabetical listing is not as useful as listings by platform or by relative maturity/usability would be. The site is not so subtly trying to get people to consider Ian’s HelpSpot product as an alternative. You know what? There’s nothing wrong with that. The resource he’s created is useful and highlights one segment of his competition. It seems likely that people perusing his list will check out HelpSpot and, assuming they’re willing to pay at all, may indeed pony up the reasonable price for it.

Good job, Ian!

Socialtext Partners with Dan Bricklin on wikiCalc

Socialtext Partners with Dan Bricklin on wikiCalc is an interesting follow up to the Google Spreadsheet news. I made the prediction that Google’s going to (someday) sell a box that you can drop onto your company network that lets you do collaborative spreadsheets and document editing. Socialtext, it would appear, can do that for you now, and using open source software if you want to manage it yourself! Or, you can get hosted services or buy their hardware/software combo (just like the GOB I was talking about).

I had heard of Socialtext previously, but I wasn’t aware of the SynchroEdit connection and wikiCalc coming into the fold certainly makes things more interesting.

The business behind Google Spreadsheet

So, Google introduced a spreadsheet. It’s got cool collaboration features, and runs neatly within your browser. Of course, people are starting to be wary of Google potentially holding all of their information, which makes Google Spreadsheet a less likely holding spot for very sensitive information (and quite a few people put sensitive information in spreadsheets). That somewhat limits the number of people that will use the product.

Google currently makes almost all of their money from ads. Gmail’s ads work pretty well, but I don’t think a spreadsheet is going to fit the adword model. So, what’s the business case?

Some have surmised that Google is just drawing people in so that they spend all of their time in Google apps and hit as many ads as possible.

I think the plan is more direct than that. The great thing with blogs is that later we’ll be able to look back and see if I’m right about this.

Google has a collaborative spreadsheet, and they bought a word processor (Writely). They’ve got the beginnings of a database. Yes, they’re building an office suite.

“But”, the proverbial you asks, “who’s going to trust putting all of that data in Google’s data centers? And how do you pay for that?”

Google sells a search appliance. The IT guys buy it, stick it on their network and tell it what to crawl. Voila! Google search for your network.

That’s where I think these apps are going. Google’s going to perfect this software through the unwashed masses (the folks who work at home, like myself :). Then, they’ll release a box that you can drop on your internal network that provides the office suite capabilities for your entire office. The privacy concerns go away. They’d try to replace one half of the Microsoft tax with a more modest Google tax.

Of course, Google’s office suite will not be as powerful as Microsoft’s. But, I think they’ll meet the needs of a great many office workers, and they’ll be adding some excellent collaboration features along the way.

Google’s also good at running Linux boxes. I hear they’ve got a few. I wouldn’t be surprised if they also at some point release a box that helps you manage a bunch of Linux “web terminal” workstations. That would go after the other half of the Microsoft tax. I think that plot is a bit more distant, though, and has a lower probability than the Google Office Box (GOB) notion.

I could definitely imagine Google selling different sized GOBs, and they’d be able to give some really impressive collaboration capabilities to small offices that would otherwise be shut out of the cool stuff.

I hope I’m right about GOB, because it would be really interesting to see the directions that things go in from there.

Don’t write off “traditional publishers”

Ruby on Rails creator David Heinemeier-Hansson spoke out against “traditional” publishers in Shaking up tech publishing. The comments were at least as interesting as the main course. Check out Tim O’Reilly’s comment as a response from an established publisher. Tim puts the whole thing into perspective and makes a good point about the way royalties are paid out for the purposes of apples-to-apples comparisons.
Mark and I chose a traditional publisher, Prentice Hall, for our TurboGears book. I was initially reluctant to write up a response to DHH’s post, because we haven’t gone through the complete process on the book yet. But, Tim O’Reilly’s post backed up what I thought based on my impressions thus far: publishers do offer a service for their cut of the book. Copy editing, support for reviewers, overall project management and guidance, international distribution and sales, cover art, translations and more.

And as for their status as a “traditional” publisher: our book is written in text files stored in SVN, we have a Trac site for it, camera-ready pages will be done in inDesign, Prentice Hall is supportive of us posting parts of the book for public review and they’ve also been known to publish entirely open books (like the Bruce Perens series). And our book will likely be available in some kind of electronic form before it’s available in print. Does that sound “traditional” to you?

One last bit: while I believe our book will be a success and the TurboGears community continues to grow at a good clip, Prentice Hall is taking a calculated risk on our book. Back in December when we signed up with PH, the TurboGears mailing list had under 1,000 members and there aren’t that many useful stats available to predict the total size of the TurboGears community and market for the book. With all of the services they provide, PH has to sell a fair number of books to reach breakeven. To be able to take risks like this, PH needs to have a balance of riskier ventures and less-risky ventures. That kind of portfolio allows them to cover all kinds of technology, but it costs a bit more to do it.

From my experience with Prentice Hall, they’re not at all a dinosaur that’s just waiting for extinction. The moves they’re making seem far bolder than the moves of the music and movie industries. There are lots of publishing options available today, and publishers like Prentice Hall seem well aware of it.