Ryan McIntyre writes:

The cost to deliver an application to an end-user has dropped dramatically for these companies and the cost to operate their data centers therefore has much less of an impact on their costs of operations and capex budget than it used to, which means their gross margins for delivering their product have improved significantly since 1995. For companies like Yahoo, Google and more recently, Technorati, this means the cost to deliver a page view or search results page has gone down dramatically, while the average size of a search-results page is perhaps only marginally larger since 1995. Even considering the size of a search index (Google's 8B pages today vs. Excite's 10M in 1995) has grown nearly one thousand-fold, the costs of computing power and storage have accommodated this expansion while bandwidth costs and rack space have fallen nearly tenfold.

For enterprise-focused companies like Salesforce.com, Postini, Quova and Rally, the story is similar. Add in a subscription-based recurring revenue stream and you have a business model that has all the benefits of a dependable revenue stream and profit margins that can approach those of a traditional software company. Thanks to the low cost and high performance of today's hardware coupled with an elegant service architecture, Postini is able to process several hundred million email messages per day for its customers with an extraordinarily light hardware footprint and does so quite profitably as a result.

Om Malik writes: "A handful of blog-evangelists, a couple of key buys and some libertarian friendly moves have turned Yahoo from a dot.has.been to the new darling of the chattering classes. It is only a matter of time when mainstream media rediscovers Yahoo, and a stock market resurgence follows…."

SandHill.com has a list of trends with implications for software companies. One of them:

10. Enterprises Increasingly Demand Flexible Solutions
"We are about to enter the age of the ASP where software - nearly any kind of software - is available as a service. Not a service you buy and pay for by the enterprise, by the year, but rather a pay for usage model, where a user can buy as little as a single picture or the one-time use of a special font - or budget software for his 20-person company for the next three months, extendable at will." Amy Wohl, President, Wohl Associates

"Companies that invest in technology solutions will increasingly order ala carte and/or on an as-needed basis. The technology vendors that create pricing models that meet these requirements will win business from the competitors who do not." Glenn Gow, President & CEO, Crimson Consulting Group, Inc.

"More companies will implement Open Source solutions." Vamsee Tirukkala, Co-Founder & EVP, Zinnov

Implications for Software Vendors:
1. Deliver a la carte, pay-as-you-go solutions
2. Utilize best-of-breed solutions incorporating Open Source
3. All things are becoming digital – think about how your product can incorporate them (e.g. telecommunications, scheduling [PDA], entertainment [Ipod], etc.)

Dave Pollard answers the question: "What do you do if you need or want to collaborate, but you can't do so in person? What purposes are best served by weblogs, wikis, and other types of online collaboration tools, spaces and media?"

Ideally, using a combination of

1. Skype (free global VoIP telephony),
2. White-boarding (everyone online can see what anyone posts to the white-board),
3. Document-sharing and
4. Mindmapping or some similar session annotation tool (everyone can see what the group's 'scribe' has documented as the findings, decisions and next actions from the collaboration)

would be a close approximation to an in-person collaborative session.

Forbes.com: writes:

Jeff Hawkins and Donna Dubinsky, creators of the Palm and Handspring personal digital assistants and the Treo smartphone, have formed a software company built around a powerful and unorthodox vision of how the human brain works. In its early stages, they hope to create predictive machines useful for things like weather forecasting and oil exploration. Further out--much further, says Hawkins--they plan to lay the basis for cosmologically attuned robots that conceive and reflect on the universe itself.

Okay, it is a big idea. And so far the Menlo Park, Calif.-based company, called Numenta, has built what the creators say is a set of tools for creating pattern-recognition software capable of "learning" shapes and events, with a goal of foreseeing what the pattern will next create. Yet these tools draw on decades of work that Hawkins has done on how the brain works. If it pans out--and there is an attractive logic to much of his thinking--Numenta may certainly oversee the creation of embedded software that adapts and improves its own performance.

Let us start by considering what Adam Bosworth wrote recently, describing a web John Battelle termed as the “Messy Web.” Here is what Adam Bosworth had to say:

I've been complaining about two things on the web for years. Think of the web as the worlds best communication machine. Then the promise should be that anyone can connect to any information or application or anyone else and that any application can connect to anyone or any application or any information. We got anyone to anyone early in the form of email and more recently in the form of IM and of Blogs. IM adds real time communication and presence and Blogs add broadcasting to the world along with a dialog with the world. We got anyone to any application from the esteemed Tim Berners Lee in the form of HTML, HTTP, and URL's which changed our world. I say applications because there wasn't any standard way to ask for information. We got, unfortunately, any application talking to anyone (we call this spam). Web services in one form or another are letting applications access other application although, as I've said elsewhere, I think that the standards are too prolix and that a lot of the action will come out of REST and RSS.

But we didn't get two things. We didn't get a standard way to get information (e.g. a standard query model for sites). And we didn't get people working together in communities to create and construct things with one interesting exception, message boards/groups. Mail was the interface, not the web and not IM.

With [Amazon’s] Open Search the lack of standard ways to get information is, for the first time, beginning to change. There is now a simple but de-facto standard way to start querying sites for information. That's hugely exciting. The current standard is limited, but a great start. And the web is now rapidly becoming the place for people to collaborate. Wiki's are growing like wildfire. Folksonomies(tagging) are causing people to quickly and in an emergent bottoms up way, come together to build taxonomies that work for them and surprisingly rapidly become stable.

Tomorrow: Yahoo 360