Archive for January, 2009

Fundamental Reason for Current World Economic Turmoil

What is the fundamental reason for current world economic turmoil?  It is a quadrillion dollar question. Contrary to popular perception, the answer is not US housing crisis or exotic derivatives such as CMO’s and CDO’s or high oil prices or cheap dollar.  The fundamental reason is lack of trust. People don’t trust the banks with their hard earned money. Banks don’t trust people to lend money. Investors don’t trust  the CEO’s and CFO’s of public companies to invest in them . Business leaders don’t trust the political establishment and political leaders don’t trust private enterprises.Finally people don’t trust their elected officials and public institutions. It is a evil cycle: Classic chicken Egg problem.

So who is responsible for it? It is my view that everybody played a part in creating this mess. No one group is individually responsible for it.  As People, we didn’t do due diligence of our personal finances before buying an expensive home.Bankers didn’t do due diligence of risks associated with complex derivatives before hoarding them.Public institutions  didn’t do due diligence in monitoring wall street and private enterprises. Business leaders didn’t do due diligence of shareholders interest before awarding million dollar bonuses and back dated stock options to employees.

The direct analogous to financial crisis is silently happening in the internet world. Without understanding the risks associated with storing our private data in the servers of Google and Facebooks of the world , we are happily uploading our photos, documents and other intellectual assets  to these Web 2.0 providers. People need to perform due diligence and understand the risks before uploading thier data to web service providers. What if they shut down their business tomorrow? What happens to your data? Please for your sake don’t be naive or have a belief that Google or facebook won’t shut down thier services. They might if the services are not profitable enough for them. Click here to know more. You can  also check out the related article in Ars Technica. Codelathe’s soon to be unveiled software Tonido will allow the user to have absolute  control over thier data rather than conceding control to web Goliaths such as Google and Facebook.  If you are curious please sign up for the private beta release for early preview.

Look there is a Web App. Look again and it is gone.

The central theme and the reason for existence for Tonido is the fact that relying completely on Web Applications is fraught with danger. Here’s one more evidence. Google has decided to shutter several of their Web Apps. The apps include Google Video, Jaiku, Mashup Editor, Dodgeball. Development will also stop on Google Notebook. While I can’t say that these apps are real popular applications, it does speak about the real possibility of any application that is not “popular” being on the chopping block.

It also makes me wonder, what is the rationale behind the decision? It has to be financial I am sure. The cost of running the servers for that app doesn’t match the income generated or the income generating potential from that app. There simply can’t be any other reason behind it. I can’t see why Google would close a service which is profitable or at least breaking-even. But this is a frightening thought, if a service is on the chopping block once it becomes unprofitable, no application is safe. A profitable application today can become unprofitable tomorrow. What happens then?

You could argue that companies work on applications and stop working on them when they think that it is unprofitable. And that this has been happening since computers were around. But the crucial difference is that when a company stops working on a product before, the customers that used the product were still able to continue using it. The products did not simply stop working when the company snapped their fingers.

For example, I am sure Microsoft Word would continue to work if Microsoft suddenly decided to discontinue MS Office tomorrow. (Although, the odds of that happening are pretty small 🙂

Web Applications by their very nature exist only if the company that runs the server wants them to. They can disappear overnight. They can disappear if the accounts start showing a little bit red. They can disappear if a competitor appears or the signup rates decreases. They can disappear if the economy starts heading south. This is the reason Web apps are particularly insidious. Application users can never be sure their application will still be there tomorrow when they login.

If Google can do this, anyone can and it is kind of surprising in one way that Google doesn’t get much flak for this. People still think of Web Apps as traditional software applications and generally don’t care when one goes under as long as they are not affected. The only app that I use in the above list is Google Notebook and development stopping on it is not a big deal, but I just wonder if this is just an ominous sign about the direction Google Notebook is going. Cue to backup my data from Google Notebook.

It is a pity, I liked Google Notebook.

Tonido Release Update

As you might know, CodeLathe is working on a software product called Tonido. Just wanted to give a quick update on where we are with it.

Tonido is a cross-platform software that combines the power of the desktop and the web, which we refer to as a Personal Web Application Platform. It allows you to do many of the things you do on the web today, securely and safely without worrying about about the privacy of the data as well as whether your data will be always available.

Tonido is an extensible platform and for the beta, there will be four applications that will be available. These four applications each showcase some of the unique features available in Tonido. More applications are in the pipeline.

We are happy to report that Tonido is running almost on schedule. Tonido is now feature complete and testing is in full swing. Tonido now runs natively on all 3 main operating systems, Windows, Linux and Mac OS X. If everything goes to plan, we are expecting to release the Tonido Private Beta sometime next month (Feb 2009).

Over the course of the next month, we will talk some more about Tonido as well as about the applications that are in the first release.

Sign up to get notified when Tonido launches and to get invited for the private beta.