Thursday, September 19, 2013

Microsoft Isn't Axing Windows 8.1 System Builder SKUs After All

Yesterday Microsoft announced the pricing scheme for Windows 8.1 and stated that, instead of selling “upgrade” and standalone versions of its operating system, all purchases of the new code will be complete. Therefore, if you want to move a non-Windows 8 PC to Windows 8.1, or want to build a new PC from scratch, the same software will work in each case. This led to confusion, as it appeared that Microsoft was halting sales of its “System Builder” builds of Windows, at least to consumers. After much digging (I was not the only confused party), I’ve managed to figure out that I was wrong yesterday and that Microsoft isn’t killing System Builder SKUs entirely. Instead, Microsoft is shifting gravity away from System Builder builds except for OEM partners and others that buy its operating system in bulk from distribution partners. For the average person, Windows 8.1′s two normal SKUs (regular, and “Pro”) will replace what System Builder SKUs provided previously: the ability to build a new PC from scratch and install Windows on it. I apologize for the error. So you will be able to buy a System Builder copy of Windows 8.1 in certain locations, such as Amazon. However, you will not find that code at Best Buy or any other normal retailer. There you will only find the two normal versions of Windows 8.1. The question now becomes why you would want to buy a System Builder copy of Windows 8.1 when the regular build will do what you need? Perhaps a minor cost differential, or you just really don’t want support from Microsoft with your operating system. What matters here is that Microsoft has killed System Builder SKUs of Windows — in spirit — for everyone but OEM partners, though the enterprising will still be able to dredge up a copy. The more important news here is that Windows 8.1 won’t be sold as an upgrade, but I wanted to correct the record after my mistake.

Free Apps And Games On The App Store Are About To Test Your Data Caps

Apple has increased the size of its download limits on cellular networks to 100MB from 50MB. The change comes as iOS 7 launches to the public as a ~700MB over-the-air upgrade to iPhone and iPad users. The increase in size was first reported by MacRumors and we subsequently confirmed the new, higher limit. Apple’s initial download limit for apps was 10MB while not connected to WiFi networks, forcing developers to take extensive measures to ensure that apps scooted in just under the line. This has become especially prevalent among developers of free apps and games. The thinking was that free apps acted as an ‘impulse download’. You are far more likely to get downloads of your app if you make it accessible anywhere, not just on WiFi connections. If you take a quick poll of the App Store’s top and featured free apps, you’ll see a remarkable similarity in their download sizes: 43.6MB, 45.8MB, 46.4MB, 43.9MB. These are all apps like Battle Camp, CastleVille, Dragon Flinga, Deer Hunter, basically crap that you download on the fly to waste time. What this means is that all of these apps are going to balloon right up to the maximum 100MB limit as soon as they can. These are not coincidental sizes — at just under 50MB each they use every last scrap of data that Apple will allow them to ship over the wire. The side effect of this, then, is that downloading these impulse apps is going to have a big effect on your data plan. I’m not saying you do, but if you downloaded 5 of these apps a month, that’s 500MB. That’s more than double the lower limit of AT&T’s lowest data plan allowed for the iPhone. You could obliterate your cap with just 3 downloads a month if you’re on the lowest plan. All of this comes as carriers get more skimpy and anemic with data, not more generous. Though some carriers like T-Mobile and Sprint are attempting to use ‘unlimited’ data plans to buy market share, the majority of users in the U.S. are on terrible data plans that parcel out the megabytes like gold. All of you international users with your twenty quid unlimited plans I don’t want to hear it. Anyhow, this isn’t a wave your hands in the air and scream moment, but it’s definitely interesting to see Apple loosening these restrictions and how they run up against the carrier agenda when it comes to data plans. And it’s something to be aware of because these free apps will likely double in size very quickly. Gives First Hard Numbers On Its Impact On Immigration So Far

Is really making a difference? Today it released its first quantified stats on its contribution to immigration reform, announcing that it drove 33,500 calls to Congress this summer and a total of 110,000 actions including social media shares. That’s not a stellar call count, but it represents solid work by the political action group founded and funded by tech leaders like Mark Zuckerberg. In passing immigration reform, every little bit counts. The quantifiable look at FWD’s impact comes after sustained criticism of its strategy to do whatever it takes to pass immigration reform. It’s been most maligned for buying campaign ads for right-wing Republicans, such as Paul Ryan, who commend them for supporting scorned initiatives like the Keystone XL pipeline. FWD defends the practice as necessary to convince GOP members that if they vote for immigration reform, they’ll have help retaining their office. But FWD also focuses on direct lobbying and grassroots efforts like pushing people to call their House representatives. That’s where the tech know-how of its team comes in. Unlike many campaigns where organizations ask volunteers to look up their local representatives’ phone numbers and call, FWD simplified the process by simply asking supporters to enter their own numbers. FWD would then call them, give them a quick brief about what to say to their rep’s office, and then instantly patch them through. It’s not brand-new technology, but that tool helped it route 33,500 calls to members of Congress between August 1 and September 10. FWD tells me 110,000 total people have taken action on behalf of the group, including making calls, tweeting at or emailing Congress, or sharing resources to social media. During Congress’ August recess, FWD drove a total of 125,000 actions. FWD’s president Joe Green tells me “We’ve been inspired by the response.” However, in the grand scheme of political call drives, 33,500 isn’t as impressive. Now to boost the number in the future, FWD is launching a formal membership program aimed at keeping supporters engaged. It asks members to take two actions per week to support immigration reform. In return it’s offering access to strategy briefings, special events, prizes and meetings with FWD founders. Is all this grassroots activity actually bringing immigration reform closer to passing in the House? That’s more complicated. FWD’s stance is that all of its efforts are steps on the road to reform, and it assures me that people in Washington believe it’s succeeding. Others are more skeptical. For immigration reform to go in effect, it doesn’t need to necessarily win hearts and minds. It needs to persuade hold-out representatives in heavily white, gerrymandered Republican states to actually vote for it. Virginia Republican Representative Bob Goodlatte, the Congressman assembling immigration reform in the House, gave TechCrunch writer Gregory Ferenstein a flat-out “no” when asked if was having an influence on Republicans blocking the bill. Calls to Congress about policy are also believed to be most impactful when they’re about issues flying under the radar than big, salient topics like immigration reform. FWD insists it drove calls to the right hold-out representatives, but many were surely directed to Democrats who already support reform. While social media support and calls to representatives around the country may be helping some, it might be FWD’s most controversial tactics that help get the job done. If Republican reps are afraid they’ll be booted from office by their constituents for voting for immigration reform, they won’t do it. That’s where the Silicon Valley piggy bank could come in handy. If FWD can assure that the representatives will have plenty of campaign ads extolling their other accomplishments to their districts so they keep their seats, they might be willing to stick their neck out for immigration.

Posthaven Rises From Posterous' Ashes To Launch “E-Mail To Post” As It Reaches Financial Sustainability

Posthaven, the blogging platform co-created by Y Combinator partner Garry Tan after his previous startup Posterous was bought and shut down by Twitter, has reached financial sustainability. They’re also launching the feature that effectively made Posterous a serious competitor against Tumblr in the early days of micro-blogging — e-mail-to-post. Posthaven is a basic blogging platform that’s meant to last forever. That’s because it is member-supported at a cost of $5 a month and not venture backed. The product is a labor of love that Tan and his old co-founder Brett Gibson started furiously working on once their old company was bought by Twitter. Tan had left Posterous for Y Combinator in January of 2011, more than a year before Twitter acquired the company in March of 2012. It was a classic founder’s disagreement over the direction of the company. Once Posterous was sold, Tan deliberated over how to keep the service alive. When it became clear that he couldn’t buy back the product, he decided to go down a different route by launching Posthaven, a place where old Posterous users could migrate all of their work. Instead of raising venture funding, Tan’s keeping Posthaven as a permanent side project that co-exists with his day-to-day work as a partner advising Y Combinator startups. “Posthaven is like the anti-rocket ship,” Tan said. “We’d certainly like it to be something that a lot of people use, and if we keep working to make it a great product that will happen. But we don’t want to trade off stability and the ability to stay online in exchange for faster growth. That’s really what outside capital is — a lot more growth, but with some expectation of return.” Now the company’s picked up enough paid users to reach profitability, he says. That will fund the server space and development of new features like multiple contributors, email subscriptions and theme customization. The big feature this week, however, is e-mail to post. That was what jumpstarted Posterous’ traction to begin with about five years ago. “It resonates with non-technical people because it doesn’t require learning any new behavior,” Tan said. “It was really something ‘normals’ could use.” Back in 2008 when Posterous was founded, smartphones and apps were also new, so people were more familiar with e-mail as a way to post content off their phones.

With 1M Users Now On Board, Learnist Brings Its “Pinterest For Learning” To Android

When Grockit first emerged back in 2008, it had set its sights on building a full-service, social learning service that would give students a better way to study for standardized tests, among other things. It enabled students to study solo or in groups by connecting with live instructors or perusing its library of video content. Yet, five years later, Grockit found itself in survival mode, never quite finding the explosive adoption that could justify the $25 million in capital had raised over the years from big-name investors like Mark Pincus and Reid Hoffman. Last year, the team began to experiment with new tools, chief of which was Learnist, a digital clipboard that was later dubbed its “Pinterest for education.” Over the next six months, Learnist took off and, eager to ride the wave, Grockit put all of its efforts behind the new product, selling off the Grockit name, test prep business, technology and platform to Kaplan in July. Today, as it looks to expand its international reach and support the fastest-growing mobile platform, the team is bringing its learning network to Android. With the launch of its new Android app, users will be able to find multimedia learning experiences and expert knowledge in areas that interest them, collaborate with like-minded learners, and connect and share content across social networks. Backed by a fresh $20 million from Discovery, Summit, Atlas, Benchmark and others, Learnist is eager to ride the growing adoption of mobile learning tools both in and outside of the classroom and bring its network to a wider audience. Learnist was initially developed for K-12 teachers and students, allowing users to create “learn boards” for everything from reading assignments to Common Core-supported Math lessons, but the founders have since expanded that scope in an effort to attract a wider set of life-long and casual learners. In much the same vein as Coursera, Learnist is looking to create a network that applies to both formal and continuing education and can be used alongside classroom tools like Schoology and Edmodo to create a more holistic classroom learning experience, for example, while giving casual learners a place to store and view their various learning projects. Since launching its iPhone and iPad apps last year, the knowledge-sharing network has attracted more than 1 million users who are now using the platform to aggregate and share their projects across a range of topics. Grockit/Learnist co-founder Farb Nivi says that, long-term, he wants Learnist to become a “smart RSS feed for learning,” allowing anyone and everyone to share pieces of content and discover topics and lessons that are relevant to them. The goal, he says, is to build a library of quality crowdsourced content, surfacing content that matches users’ browsing patterns and areas of interest. In the day or so that Learnist has been on Google Play, China has quickly become the largest source of downloads (outside of the U.S.) for the app. It’s this kind of international reach that Learnist hopes to tap into, adding to the 40 countries that its users represent today. Nivi believes that Learnist is now well-suited to provide a solution in regions where the demand for online learning is being pushed forward by growth in digital publishing and distribution tools and the rapid adoption of smart mobile technology. With its new Android app, Learnist users can embed 40 different types of media in their learn boards, and with the recent launch of “Learnist SmartRSS,” users can now tap into content uploaded from the hundreds of media companies that have created profiles and are now publishing to Learnist. Looking ahead, users can expect Learnist to continue to hone its search and discovery tools, as it quietly becomes yet another entrant (see Noodle, for example) into the race to build a better search and discovery engine — with, in Learnist’s case, a digital clipboard in tow.

Gartner: 102B App Store Downloads Globally In 2013, $26B In Sales, 17% From In-App Purchases

Ongoing trends in smartphone adoption — which this year finally outnumbered the amount of non-smartphones getting purchased — will drive 102 billion app store downloads this year, 90% of which will be on Apple’s App Store and Google Play, according to new research from Gartner. This will lead to global app revenues of $26 billion in 2013, and in the future, growth in revenues will outstrip that of app downloads. With free downloads continuing to dominate the scene — this year, nearly 83 billion downloaded apps will be free, or 91% of all downloads — in-app purchases and advertising will continue to grow in importance for developers’ business models. This year, IAP will account for 17% of revenues — to over $4 billion — but that will rise sharply in the next four years, accounting for 48% of all revenues by 2017. As a point of reference, in 2011, IAP was 11% of revenues. And as another point of reference, the analysts at IHS ScreenDigest believe that we’ve already well passed a tipping point for revenues in app stores. Jack Kent, principal analyst for mobile media, says that this year, 80% of app revenues will come from in-app purchases. Gartner projects that IAP will only overtake paid download sales in 2017. By 2017, Gartner projects that there will be 268 billion downloads annually, amounting to $77 billion in revenue. If accurate, this means that in general app revenue growth is actually going to overtake that of download growth. Downloads will grow 2.6 times in the next four years, while revenues are increasing 2.9-fold. Table 1. Mobile App Store Downloads, Worldwide, 2010-2016 (Millions of Downloads) 2012 2013 2014 2014 2016 2017 Free Downloads 57,331 82,876 127,704 167,054 211,313 253,914 Paid-for Downloads 6,654 9,186 11,105 12,574 13,488 14,778 Total Downloads 63,985 102,062 138,809 179,628 224,801 268,692 Free Downloads % 89.6 91.0 92.0 93.0 94.0 94.5 Source: Gartner (September 2013) Gartner adds that IAPs are in fact popular enough that they are even used effectively in paid apps. “We see that users are not put off by the fact that they have already paid for an app, and are willing to spend more if they are happy with the experience,” writes Brian Blau, a research director with the analyst group. “As a result, we believe that IAP is a promising and sustainable monetization method because it encourages performance-based purchasing; that is, users only pay when they are happy with the experience, and developers have to work hard to earn the revenue through good design and performance.” As for the rest of that revenue in 2013 — $21.58 billion — Gartner notes that most of it, over $20 billion, will come from paid app downloads. The average price of paid apps in 2013 works out to around $2. Advertising, meanwhile, is a marginal driver of revenues for most app makers, not least because traditional display and search ads are formats that (as is the case online) mainly reward only the very, very biggest players. It will bring in only $1.85 billion in revenues this year Gartner notes that the proportion of free apps using advertising is actually falling: it will decline from 88% in 2013 to 86% in 2017. “In-app advertising is not yet an effective means of reaching targeted audiences for advertisers,” Gartner notes. “This is despite slow improvements in targeting, quality and measurement of in-app ads.” Indeed, innovations in ad tech will help make the case better for big brands to buy into mobile advertising, and to potentially mean that consumers respond better to the ads. In any case, the trend away from apps that users need to pay just to download is very clear. It’s already having an effect of how developers are pricing on stores: Blau writes that free apps account for 60% of apps on Apple’s App Store, and 80% on Google Play. Gartner doesn’t break out which of these two oversized app stores are bringing in the most revenue at the moment, but research from Distimo in August indicated that despite Android’s worldwide domination in handset sales right now, Apple’s iOS platform still drives more app revenues. While a lot of people put this down to iPhone (and iPad) users being a more acquisitive and engaged lot, Gartner points to something else: consumers buy more apps when they are new users, and less when they have had their devices for a while. This would partly explain why Distimo, for example, notes that Android app revenues are up 67% in the last several months, while Apple’s are up by only 15%: collectively, Android has been pouncing on iPhone sales in that period. That will also have a converse effect. “We expect average monthly downloads per iOS device to decline from 4.9 in 2013 to 3.9 in 2017, while average monthly downloads per Android device will decline from 6.2 in 2013 to 5.8 in 2017,” Blau writes. “This relates back to the overall trend of users using the same apps more often rather than downloading new ones.” And although Blau did not add this, the other “switchover” to watch is the one that Apple is currently undergoing to iOS 7. More than an upgrade to iOS 6, it’s a complete visual and feature overhaul that has produced a rush of new versions of apps we all know and already use. With developers talking of the massive hustle they’ve had to do to get their new versions up and running, the introduction of iOS 7 has definitely brought a lot of leading app players back into line with Apple. Now, depending on how successful Apple is with its new range of iPhone 5s and 5c devices, and how many users of older devices decide it’s worth the risk trying to upgrade older models to the new OS, it could have a strong knock-on effect on iOS downloads and purchases — and on the bigger apps picture, too. It should come as no surprise that the bigger picture is totally dominated by Google and Apple. Blau writes that iOS and Android app stores combined will account for 90% of global downloads in 2017, in line with these two OSs accounting for 87.5% of the global installed base of smartphones and tablets by that year. And what about other platforms? Not great news today, nor tomorrow: “Other app stores — such as Windows Marketplace, BlackBerry App World and Nokia Store — and many communications service provider stores will account for no more than 10% of the total downloads through 2017,” Blau writes. “This is due to either the small device installed base or device fragmentation.” Unfortunately for Nokia (and, soon, Microsoft) and BlackBerry, it’s almost certainly more do to that “small installed base” (ie no users) rather than the latter reason. But while Google Play is strong, it’s not without lingering fragmentation by way of app stores based on forked Android implementations. That includes stores like the one run by Amazon for the Kindle Fire, but also app stores in China. Gartner notes that Google Play will take 47% of app store downloads by 2017, a decline from today because of the rise of “domestic” app stores from the likes of 91 Wireless and 360 Market in China.

NewVoiceMedia Picks Up Another $35M Led By Bessemer As Contact Centers Take To The Clouds

With APIs from the likes of Twilio (and emerging Layer) fuelling a new concept of how cloud-based archictecture can be applied to the worlds of telephony and communications, UK startup NewVoiceMedia is today announcing a new round of $35 million to build out its business applying this idea to the world of call centers. This Series C round is led by a new investor, Bessemer Venture Partners, along with participation from existing investors Highland Capital Partners Europe, Eden Ventures and Notion Capital. It’s the second round of funding announced by NVM this year, after a $20M Series B round in January. It brings the total raised by the company to $61.3 million. That past round was raised to help NVM expand to North America, and this is also partly where this latest investment will go. “It will be used for further research and development, expansion throughout the U.S. and APAC, including new offices in New York, building an execution capability in sales, marketing and professional services and developing a global network,” Jonathan Gale, the company’s CEO, tells me. Current customers include Parcelforce, QlikView, DPD, SHL Group and Topcon Positioning Systems. Gale tells me that although NewVoiceMedia has had its eye on North America for a while, the office there actually only opened in August of this year, in San Francisco. This gives it a strategic proximity not just to customers but to partners in the wider landscape of cloud-based business services. “The company’s solutions were already widely used in the U.S., but the new office has brought the company closer to customers in the region, as well as Salesforce,” Gale says. Some 20% of NewVoiceMedia’s seats are in North America currently. The company is still at an early stage of growth. It currently has some 150 employees, and at the end of fiscal year 13 had revenues just under $10 million. “Post investment, we are looking to grow to 100% per annum over the next two years – driven from the U.S.,” he says. And similarly, cloud services are at an early stage in the world of contact centers. While companies like Salesforce and Box, and trends around smartphones and tablets, have done a lot to bring cloud services into more mainstream enterprise discourse, this is still only starting to have an impact on an industry full of legacy, with large, physical spaces invested with millions of dollars of physical equipment. Making the shift to software-based systems, where people can be more distributed and many functions more automated, almost certainly makes better business sense, but retiring the older systems will not be done overnight. NVM hopes, however, that when it happens, it will be the one to be at the forefront. “The contact centre market is realising the power of the cloud and this is bringing rapid change to the industry, mirroring the Salesforce-led transformation of the CRM market,” Gales says. “It’s a very exciting phase and we are pleased to be driving this change. Our true cloud technology is available, secure and scalable, and we’re continually tapping into major developments in social media and mobile devices to make sure every customer interaction is a great experience.” NVM’s early-mover position is also what attracted BVP to the deal. “We have been interested in the potential that an emerging player has to disrupt the massive contact centre market globally. NewVoiceMedia really stood out to us with its full suite of true cloud, multi-tenant, contact centre capabilities, built entirely in-house,” noted Alex Ferrara, partner at Bessemer Venture Partners, in a statement. It looks like this could be the first of other investments for BVP in this space, and specifically around European startups, which have been strong in the area of enterprise and cloud services. “Bessemer Venture Partners believes cloud computing is the most significant trend in the software industry of the decade,” Ferrara says. “We are actively seeking to expand our portfolio of European cloud vendors and consider businesses with a compelling proposition, at all stages, from seed to growth.”