Yesterday, major websites across the US slowed to a crawl when Level 3 Communications, which operates one of the largest internet backbones in the world, experienced technical difficulties.

For knowledge workers, losing internet access is a big deal. (How much of your job would be impossible without internet?) But the internet not only enables our jobs, it also frees us to collaborate globally while working away from our desks and away from the normal 8-5 (should we choose).

The freedom of working from home means we are not forced to leave work. The very technology that’s freed us has become our lifeline. As a result, this fascinating survey shows we now feel guilty if we don’t work during the holidays.

Currently, I’m writing from a friend’s ranch house in the middle of North Dakota. In previous years, my cell phone wouldn’t work, nor would my EVDO modem, and dial-up speeds never topped 30Kbps. Coming here meant zero functional internet–a guilt-free vacation.

But this year my cell modem works. Tonight, I’m able to wrap up some last-minute work. And I’m also faced with a choice–do I unplug for three days as originally planned, or do I check e-mail tomorrow?

Research shows knowledge workers can’t afford to NOT spend time away from work exercising, sleeping, and de-stressing. Continuing to work simply results in feeling productive, rather than being productive.  Personally, I find my creativity withers, my energy tanks, and my planning horizons shrink.

But knowing and doing aren’t the same.
As a co-worker observed, “This is the season when everyone PRETENDS to not work.”

See you in four days.

We’re now in Week at least Two of the great drought of ‘09, where the blogosphere has woken up to the poverty of its attention algorithms and is frantically searching to harness the Gesture model as quantified by Twitter et al. Before I go much further, let me say that this problem has already been tackled and largely solved. But the fact that this hasn’t gotten much apparent traction suggests no one is really happy with a solution.

As I’ve said for perhaps 3 or 4 years, we are in the evolution from an attention model to a gesture model. Twitter represents the latest and greatest instantiation of gestures, where apparently unprovoked statements circulate aysnchronous (or asymetric) overlapping Follow clouds and provide a dynamic DVR control for Web content. Now that rich media platforms are emerging on top of this console (Gmail, Mesh, Flash) the battle has shifted from control to contract.

What people call filtering is the contouring of dynamic systems to reflect the aggregate gestures of affinity groups. Whether it’s the affinity group as modeled by a single individual (Techmeme) or the gestural cloud orbiting individual brands (TechCrunch, Scoble, O’Reilly, Feldman) or even the collective noise of Digg, Google, or Huffington, the power of affiliation continues to trump most every business model of the outgoing generation.

This is most dearly felt by those who pioneered this era, by those who see those leaders as Old and In the Way, by those who try and force this transition into Us versus Them, a generational shift that is incorrectly positioned around age. One of the virtues of age is the lessons of survival, and more specifically the calculation of how many heartbeats to parcel out over which concerns. Today’s noise is about the lack of signal, or the efficiency (or lack of it) of systems to harvest the signal.

Break down the arguments for a new Techmeme: no matter how you atomize it, you won’t find a better car than the one you like the best. W.C. Fields is still a funny guy. Lenny is still the master, Pryor the one who crossed over into the center of the human condition and forever erased the color “barrier.” Will a Techmeme killer come along? No. Techmeme will kill itself before that, because Gabe will move on to something he loves more. And I’ll probably move with him. I like Gabe.

The cry for more, better news is the urge for moving forward, for finding the next hill to climb, the space race, the perfect wave. Believing otherwise seems hopeless, pathetic, angry, unacceptable. Believing something is great does not imply nobody can do better. It does imply that if somebody can also do something great, that will be better because it’s something to add to the pile of great. It doesn’t detract from what’s great; it ratifies what’s great.

So here’s to the Drought of ‘09. Let’s rail against it, debate it, ignore it, shut off our computers, quit Twitter, auto-follow everybody, follow nobody, release track, never offer track ever again, argue about nothing, make lists of authoritative people, call each other stupid, be stupid professionally, get fired, quit while we’re behind, speak only with sarcasm, be completely honest, run for the OpenID board, declare RSS dead, link to everybody, link only to your friends, link never, only take left turns while driving.

In a drought, we conserve. Flush less frequently. Take showers instead of baths. If this is a drought, a lack of value, is that in and of itself valuable to know? If Techmeme says nothing’s happening, do we settle? Dave Winer says let’s block Techmeme so we know it’s not authoritative. I do that all the time, by writing something stupid or boring or incomprehensible. Let’s all write more crap; that way Techmeme will really suck and then we can get rid of it in favor of some other guy’s stupid algorithm. Alright. Here’s my ante. Who’s with me?

Looking back over the big stories of 2008, I’d have to go with the failed Microsoft/Yahoo acquisition as the least surprising and most interesting drama of the technology world. Coming as it did in the wake of Google’s rapid climb to the top, Yahoo’s failure to resonate and Microsoft’s to take advantage of the flattening of the Web 2.0 curve underscored the hard work ahead.

If it weren’t for the economic crisis and the election of Barack Obama, we might be tip-toeing into 2009 with very little underlying context for how to measure the importance of technology in our daily lives. As realtime media eats its parents and apparently destroys the economic constructs of the previous generation, few of our “thought leaders” seem willing to call the next winners. Instead, they settle for calling out the losers.

Newspapers are a common target. Certainly the handwriting is on the wall around the content, with current digital monetization returning a dime on the print dollar. So the conservative analysis goes: the 90 cents is gone, melting like the Wicked Witch of the West, not to return. The more liberal thinking is that the dime will grow, not fast enough to save the jobs but eventually because the value will find its audience.

Television seems more buttressed against complete collapse, but the banking implosion could foreshadow the speed of decline in broadcast media if some analog to incomprehensible derivatives lies waiting just below the surface. Imagining prime time becoming a shootout between Jay Leno, Comedy Central, and Keith Olbermann may not be too hard if the series cancellations accelerate past some threshold. If Heroes implodes, will Gray’s Anatomy be enough to stem the tide? Hollywood is having a tough time competing with reality these days.

The music business may be entering a climactic phase, as the social networks realize that’s where the real money is pooling. Facebook Connect is the third rail here; if users find out what their attention is really worth, some of these networks will be trampled in the rush for the doors. My money is still with Apple for now, but whoever controls the social graph as DVR will be in the driver seat.

Having just violated the Loser scenario if only a little, let’s handicap the next few months as they might play out. January 20th looms as the first inflection point, where the Republicans have to start playing regulation ball. Given the critical need for funding of the green and healthcare initiatives on the back of the Big Bailout of ‘09, it’s a safe bet that we’ll see some posturing from the right overwhelmed by the grace period of economic data taking some time to reflect the impact of the money injection.

In the absence of cable news drama of the usual kind, the focus may shift to the new media rally. Already we’re seeing the beginnings of the attack on Page Rank, the canonization of realtime media, and the roots of a new authority model. In essence, Web 2.0 has lost its brand momentum to the social vortex. Google continues to mine the growing extensions to Adsense, but user awareness of the value of their gestures is changing the nature of acceptable user contracts.

Scoble’s vision of mining the Twitter (FriendFeed) database of gestures is colliding with the notion of the free Web. Couched as a religious issue, the choice seems obvious: the volume of ambient signals outperforms the scoped cloud of qualified micro-communities. This is where the digital dime lives today – not enough to jump but enough to undermine a significant portion of the remaining tail of the dollar.

From the user’s perspective, the choice will soon morph from one of access to one of curated value. A choice of an unmanageable stream of free data or a controlled metered aggregation where the ROI is recorded and fed back into the stream as a constant reminder of its effectiveness and the user’s value to the system. Once the user understands the value of time spent in navigation (filtering) the economics of the system will tip.

Thus we have the race to deliver realtime activity streams with recursive social filtering. We know who the horses are: Facebook, Microsoft, Google/MySpace, FriendFeed/Twitter – and the drivers: Apple, Ebay/Skype, Amazon. Where they meet head on – VoIP over the iPhone, videoconferencing over 3G, Twittercredits redeemable at the popcorn line – is where micropayments meet microcommunities.

Extrapolating from this moment where user value creates economic clout, where does the power reside in funding the new media? On the surface, the incumbents remain in charge – the Oscars, the SuperBowl, the Stones tour, and so on. But how we pay for our entertainment shifts to some degree from the work we do to the way we share our impressions, expertise, insights, humor, and emotions. And even more valuable – what we’re bored by, cheated by, pandered to, and so on. The social capital that’s built by studios, companies, political figures, religious leaders is an ongoing reputational referendum – authority rank in the most dynamic and fluid of systems.

How soon we see this recovery depends on how difficult the transition is from paper dollar to digital dime. The digital dime may be worth more for its efficiency in reaching targeted markets than the anonymous dollar it is replacing. The social clouds we maintain and the affinities they reveal are powerful tools for getting the attention of companies and government, and extracting discounts, responsiveness, and even equity in future products. These shared dimes can add up to real money.

Next month is the annual Lotusphere conference. IBM is giving two free tickets to TC readers–leave a comment saying why you’d like to go to Lotusphere, and we’ll pick the winners by Monday morning. (Note: Passes cover conference registration only, not travel/hotel.)

Few pieces of software are as polarizing as Lotus Notes. When my last job forced me to use Notes, I found the interface clunky, the graphics Win 95′esqe, and the workflow architecture non-intuitive. Granted,  I was using Version 6.5 (Notes is now on Release 8), but even so I found it frustratingly unproductive. And I’m clearly not alone.

Probably the most famous Notes aficionado is David Allen of Getting Things Done fame. (The eProductivity application–built off the Notes platform–is David’s personal GTD tool.)

When I recently attended David’s GTD seminar, I was struck by the contrast between his fresh ideas, and the outdated nonsense of the Notes 6.5 interface. During this podcast, David directly asked, “Why do end users hate Lotus notes?” And then pointed out that most Notes users have no clue of the power of the tools they are using.

Which leaves me wondering–has IBM’s Lotus Notes lost touch with the user-centric web 2.0 world?

To answer these questions, I interviewed Kevin Cavanaugh, IBM’s VP in charge of the Notes/Domino group. Also joining us was Ed Brill, IBM’s Director of Messaging and Collaboration.
(My conclusions after the interview.)

Most people I talk with think Notes is dead or dying…

Notes has had seventeen straight quarters of growth. This year alone, we experienced 17% growth in Q1, 20% in Q2, and 10% in Q3. Over 60% of IBM business is overseas, and that’s mirrored in Lotus. Currently, out of the approximately 46,000 companies using the Notes/Domino platform, only 30% are US based.

What’s your target customer size?

Traditionally, IBM as a whole has focused on large enterprises. [The Notes group] average customer is a little smaller than the rest of IBM–we’re certainly more active in the small to medium business market.

Are you jumping on board the cloud bandwagon?

Generally, security concerns and the economics of cloud offerings aren’t as appealing to IBM, and larger enterprises. However, we recently released several cloud offerings for Lotus, including the Lotus Foundation, a remotely managed appliance targeting companies smaller than 250 people.

What’s up with the clunky UI?

Until R8, the UI was from 1995 era. We kept renovating under the hood, but not the UI. For R8, we significantly improved the UI, including over 2,000 usability tests.

New UI:

Clearly, you’re marketing to IT managers. Are you reaching out to end users?

Ed: We’re actively reaching out both online (Facebook, LinkedIn, YouTube, Twitter, etc) and offline, trying to help people understand the power of Notes. When I was last in London, I met with a blogger to try to understand why he was so frustrated with Notes.

Why do so many people hate on Notes?

Ed: Users live in their messaging environment, and blame everything from network problems to a full inbox on Notes. But in this case, the ease of Notes deployment means many current installations are ten years old or more. They’re functional from an IT perspective, but still using the older UI.

Previously, I suggested that the next wave of knowledge management innovation may come from consumer applications invading the enterprise space. What are you doing to make the enterprise more accessible to users? (How are you avoiding a device-centric model?)

Ed: Notes has an online component–not just e-mail and calendar, but multiple collaborative tools including integrated IM, bookmarking, etc. We support Blackberries, Windows Mobile, and iPhone. RIM, in particular, is a huge partner, not just because they’ve deeply penetrated the enterprise space, but because they’re actively supporting this partnership. We’re also starting to partner with more startups building off the Notes platform–startups who traditionally weren’t in the enterprise space.

It was a fascinating interview–especially because IBM admits there are things that WERE wrong with Notes…

Over the past few years, Notes lost touch with users. David Allen may love the power, but those features are useless if people can’t figure out how to access them. It isn’t just poor training either–a proper UI intuitively guides users. (Note: I haven’t used R8, so can’t comment on current UI.)

What does the future hold for Lotus?

Clearly, Lotus is making money, and growing. Few web 2.0 companies can claim seventeen straight quarters of growth!

But refocusing on the international market avoids questions about Notes growth in the US market–a key group of core “small-medium enterprise” customers.

According to eProductivity founder Eric Mack, Lotus must shift focus:

The secret to a renaissance with Lotus Notes will be to focus on what end-users are doing with Notes. Come on, we are living in a web 2.0 world; users expect to have a say and they want to take ownership of the tools that they use. As long as [IBM] perceives Lotus Notes as something pushed down from the top–part of the ’system’–the tools won’t become personal.

Couldn’t have said it better myself!

Update: Originally I’d quoted Kevin as saying 10,000 companies use the Notes/Domino platform. Ed e-mailed me to say it’s actually 46,000.

As we “work” our way through the holiday (or winter break as the school system calls it) we are once again reminded of Mike Arrington’s skill at dominating the trainwreck formerly known as The Conversation. I’ve watched Mike at close range for some number of years now, and it never ceases to amaze me how he does this.

For example, several weeks ago we did a Gillmor Gang episode live onstage at LeWeb. For two days I noticed Mike trying to come up with an angle to run with – Loic LeMeur’s jacket fabric just one of several weak entrants – but nothing to write home or about. Yet within seconds of Loic making a comment about bloggers and what I’d like to call social mediots not having a life, Arrington suddenly lurched upright like a dog at the beginning of a hunt, then sat back in an insolent slouch.

You know the rest, if you were online anytime in the next several days. My guess is that as soon as Mike understands the opportunity, all other sensory input continues to be recorded and stored while he plays out the scenario he’s identified. Analyzing his posts would reveal much of the same dynamic, but Arrington has a few tricks up his sleeve that separate him from others. A few notes on the Arrington methodology follow:

1. Think of it first. Seems obvious, but so hard to clone. Mike is what’s known as a natural athlete, for whom the mechanics of hitting the baseball are perhaps learned the first time contact is made with the ball. The feel of a clean hit cannot be replicated but only repeated. With a new idea.

2. Know you’re right. This is why people call Mike arrogant. Have you ever noticed how arrogant Ringo Starr is. No matter how pleasant or hip or whatever the interviewer is, Ringo always has that “I’m Chevy Chase and you’re not” vibe going, except Chevy stole that from Ringo. Arrogance when right is something else. And even when he’s wrong, Mike is still sure he’s right.

3. Be funny. Another big differentiator. (Ed note: Apple’s spell check redlines differentiator but offers differentiators as a replacement) Arrington has a sense of humor, which rules out most of his competition. The combination of being right and funny is devastating in almost every context, once you get out of high school where being right doesn’t matter.

4. Know that what you’re interested in is reason enough. It’s not considered politically correct to not care what the audience thinks, but if you care what you think and let that be representative of the audience, you are set. Another reason to call Mike arrogant, but I’d prefer listening to someone who actually agrees with what he or she is saying.

5. Know when to quit. Notice that Mike’s posts sometimes seem to just be moving along just fine and then… over. Even the endless stories about getting rid of Yang seemed appropriate once he was finally gone.

6. Listen to commenters. Just checking you’re still reading.

7. Portray the world in black and white, or Silicon Valley vs. virtually everywhere else, terms. People who see things the way you do, or who are absorbed in Silicon Valley culture, will rush to your defense while everyone else starts throwing stones. Delightfully entertaining chaos ensues.

8. Add a tinge of outrage about things that most people don’t get worked up about. It’ll just make everyone else even more outraged and, therefore, more likely to respond in the comments or on their own blogs.

9. Don’t take anyone’s shit. In fact, use it as an opportunity to entertain the masses.

10. Don’t be afraid to go on a random rant now and again. News isn’t the only that gets people talking and engaged with your site.

11. Love what you do.

There you go, the most important tips on writing a Mike Arrington blog post. Print it out and carry it in your wallet. I’ve left out some super secret ones, like how to control Scoble and 20 surefire post topics without Twitter in the title. You can get these and more by signing onto FriendFeed, opening a realtime feed, and waiting for Mike to comment. He promised me he’d be there, this time for sure.

[Image courtesy of Laughing Squid]

Traveling for the holidays? Me – I’m staying home and catching up on my reading. We recorded the Gillmor Gang on Saturday, and I’m liking the new day. After the fireworks at LeWeb, newbie Loren Feldman and golden oldie Jason Calacanis seemed bent on continuing the vibe. Why not; I let it float for a while and then eased off the juice into a nice comfortable purr.

We’ll look back on these terrifying times as the moment when we reconnected with the power of this Web. The noise about Web 2.0/3.0 aside, the sense that realtime virtual experiences are as real as any others is beginning to settle in. But what about them is real has yet to be fully fleshed out.

For starters, those of us who’ve been living this silly life for years are starting to accumulate significant relationships that began, continue, and are constantly refreshed over virtual networks. We still apologize for talking about Twitter, but last night my daughter walked into the living room with her MacBook opened wide to introduce her boyfriend to her grandparents. They’re meeting in the flesh today, but Naomi intuitively understands the value of introducing her friend via the new medium as a way of sharing how her friends communicate.

Of course, texting is the glue that cements this digital coffee shop. By that I mean that texting is the support system for more fluid systems as yet constrained by carriers and to some extent platform vendors bent on using these new communications patterns to frustrate competitors out for Web dominance. Silverlight represents a check on Flash penetration, more to encourage Google semi-rich experiences than to stop Adobe in its tracks.

Google’s video chat plugin is another subversive move by the “search” company. Forget its market share and focus instead on its underlying message of cross-platform ubiquity. Those of us who are deeply addicted to Gmail and its growing toolkit of Labs addins are inexorably migrating from Skype and iChat to the new service. Whoever controls the console wins, and each new adopter, whether on Mac or PC, pops up on my traffic control screen in realtime.

It’s easier to click the icon and select video chat than reach for the iPhone, easier than bringing up Skype, and beats iChat by being cross-platform. Skype has a much richer user base and business penetration, but GVideo is easier to visualize. It’s analogous to Twitter’s asymmetrical Follow cloud as compared to Facebook’s much broader reach. The dynamics of peer authority trump ubiquity. This is the dominant economic pattern of the recovery.

In 1997 the Hendrix estate released a version of Jimi’s last studio album. WHile some tracks were fully realized and others perhaps to be cut out in favor of newer songs that never were to exist, the so-called title track is a mysterious hybrid of the various incarnations of Hendrix’ persona. At once bluesy and layered, Miles crossed with White Album, incomplete and experimental but deeply purposeful, the song is cinematic is in its reach and rewards.

This is where we are with the multi-headed thing we struggle to understand as the intersection of cloud computing and social media. We can infer what this world will feel like in the dawning future because it’s already here in enough ways to taste it. The hunger for progress has been blunted somewhat by the power of Obama’s triumph, as though we dare not be so greedy as to think, ok, what next? But our children are blessedly ahead of us, recalling the moment in the 60’s when we realized that we could invent the world as we thought it, and stand a reasonable chance of having it exist, at least for the time being.

Obama’s election is the acid test, pardon the expression, for what happens when we achieve something difficult to ascertain let alone accomplish. Right up until the moment the networks called it, we were still from Missouri, half expecting some Bradley Effect to swoop down. Those of us who remember ‘68 and Watergate are still being very careful not to take anything for granted.

The technologists who came after the music subsided carved the computer revolution out of their own 60’s, the space program. They were the next wave of astronauts after the Beatles, Dylan, Hendrix, and Coltrane. Now, with Jobs and Gates yielding to a new generation, we question the social kids as our parents questioned the hair, volume, and free love of that time.

Soon we’ll find out how real this stuff is, how we share our lives across these new dimensions with familiar strategies, how our mettle is tested. By process of elimination, it’s likely we’ll see several of the social networks collapse into one, meshing realtime signaling with identity consolidation. Though, and perhaps because, it’s the most important thing to simplify, identity trust will depend on some actual service value before a critical mass is realized.

What will that service be? FriendFeed has a good shot at becoming the Facebook for the little guys, a routing engine for artibtraging messages between quasi-federated systems. Already we are beginning to add comments via realtime IM to conversations while appending Twitter usernames to help identify them for passthrough Twitter followers and tracking/filtering. As this hybrid nomenclature gets built out, FriendFeed can become more intelligent about handling the return flow. Twitter already respects the reply_id of each tweet; now it’s FriendFeed’s turn to expose that data in its comment threads.

Once routers are processing metadata about endpoints across activity streams, there will be an economic rationale for consolidating access to such metadata globally, and therefore infrastructure, services, and network effects benefits for the user to do so. Bob Dylan’s release of Like A Rolling Stone and The Beatles’ release of double A-sided singles prepared the way for hit albums and the democratization of radio. Consolidation of song writing, performance, and production comleted the takeover of the “old” record business.

On the Gillmor Gang, Jason Calacanis called for the destruction of the blogosphere in favor of email newsletters and micromessaging, while NBC used Jay Leno to wipe out the 10 o’clock hour of primetime series production in favor of nightly talk shows. It may be that NBC is capitulating to the computer, to shared microcommunity offerings spread in swarming patterns over realtime networks. The market splits into those interested in interacting in lieu of subscription payment and those willing to get what they’re served without complaint or at a bundled fee.

The economic crisis will accelerate those models that produce revenue immediately. The threshold of success will be somewhere between making real money and losing less money than competitors. Audiences willing to identify themselves because producers are targeting them with new services cultivated for them will quickly become high value identity clouds. The eventual release of the Beatles canon on digital networks may mark the moment when identity nets are restructured around access to the catalog rather than release of it.

It’s not hard to imagine this will happen quickly, or conversely, hard to see what will slow it down. As Obama prepares to take office, so too are a generation of creatives and marketmakers that starts in the 60’s and just now are coming into their own. As Hendrix says 2:12 into the track, “Is the microphone on?”

This summer, I worked under marketing thought-leader Seth Godin. I’ll never forget his quote about innovation: “Creativity thrives under constraints.”

Last spring, I spent a week shadowing one of the world’s top lean manufacturing experts–a Japanese sensei who had worked under Taiichi Ohno. The lean manufacturing movement began when the Japanese realized they couldn’t directly compete with Detroit. So they innovated the car manufacturing process. Their success is evident.

Gradually, concepts from the Toyota Way permeated all manufacturing industries. But only now is it starting to hit mainstream knowledge management process–like software development. Wikipedia calls it “Agile Software Development.”

Certainly, moving to Agile isn’t pain free–there is risk involved–but companies that take the risk consistently report strong results, including those listed on the banner above. (Expect it to be flavor of the week if you apply it like the flavor of the week.)

On Friday, I interviewed Ryan Martens, CTO & founder of Rally Software, about agile development. (Rally offers Agile lifecycle management products and is a key player in the online Agile development community.)

Ryan told me that approximately 30-40% of ISV’s have begin experimenting with Agile practices, but it’s only penetrated 10-15% of major enterprises. Enterprises typically use success metrics oriented towards cost, rather than time-to-market.

If you want to experiment, Rally recently created an ROI calculator based on previous client work. Some of it feels like smooth marketing, but there’s also a few gems about the radically different paradigms in Agile development.

I wonder.
If Seth’s quote implies Agile adoption rates will skyrocket in the face of a tanking economy.

A friend of mine who recently switched jobs.

I receive my fair share of PR pitches for surveys, analyst reports, and experts offering their opinion. Mostly, I pass–I prefer to post news, not opinions.

But with over 100,000 tech employees laid off recently, this survey about orphaned user accounts–accounts left active when an employee moves on–seemed particularly timely.

Risk=probability*consequences. While the probability of someone maliciously accessing data seems low, 15% of the respondents reported this happening. And the consequences can be serious.

Symark International surveyed more than 850 security, IT, HR and C-level executives across all industries.

Highlights:

42 percent of businesses do not know how many orphaned accounts exist within their organization.

30 percent of respondents said they have no procedure in place to locate orphaned accounts.

Approximately 27 percent of respondents said that more than 20 orphaned accounts currently exist within their organization.

More than 30 percent of respondents said it takes longer than three days to terminate an account after an employee or contractor leaves the company, while 12 percent said it takes longer than one month.

More than 38 percent of respondents said that they had no way of determining whether a current or former employee used an orphaned account to access information, while 15 percent said that this has occurred at least once.

More details.

Let’s face it–no matter how tech savvy Gen Y is, enterprises will forever need an IT department. (Some employees can’t figure out how to turn on their computers.) But as more and more data moves to the cloud, the role of IT will change.

For example, Cathedral Partners contracted with Appirio to build an entirely cloud-based database on the SalesForce.com platform. The new system was designed and developed in less than four months by Appirio, and it works seamlessly with Cathedral Partners’ existing Salesforce CRM application.

Michael Wolverton, Cathedral Partners CEO, told me that “Security and scalability were the major obstacles for building out own application–by using the Force.com platform, we shifted those responsibilities onto them.”

It’s an interesting dilemma–the reverse of the classic Spiderman quote “With great power, comes great responsibility.” With much of the IT responsibility,outsourced, Cathedral Partners is now entirely dependant on SalesForce.com and Appirio to keep everything running. Similarly, their ability to grow is tightly intertwined with Appirio.

Granted, Cathedral Partners is a small firm, but it’s no small feat for every single employee to focus on working with clients. Similarly, Appirio last year had 500% year over year growth as measured by revenue.

And the underlying platform, Force.com’s Sites technology, has more than 51,800 customers including such heavy hitters as Sprint Nextel and Dow Jones Newswires. Previous coverage here of Force.com.

For those of you new to the Web since the end of May, you can be forgiven for having no clue about why Track is the shit. Despite months of denial, an open source clone war, a VC-backed API counter offensive, and unknown secret plans to force Twitter into a business model, Twitter still has not returned Track to service.

As a consequence, no one really knows what the world would be like if Track had persisted through the summer and fall. Perhaps Obama would have failed to stop Hillary’s comeback, Hillary would have lost to McCain, and VP-elect Romney would be just a heartbeat from the Residency. Or maybe the economic meltdown would have been stopped by an alert network of Track-enabled researchers bent on cracking the mysteries of derivatives. We’ll never know.

In Paris last week, I spent a few minutes with VC Fred Wilson in the LeWeb speaker room, huddled over a heater next to the bread and water tray. No, that’s not true; there was no bread, and the heater was actually Gabe Rivera’s new MacBook, busy serving up the only outbound connection to the rest of the known world. But Fred, a prominent Twitter investor and a visible Net citizen who actually responds to Tweets about sensitive questions like “Is Track coming back?”, told me Track is definitely coming back.

I can’t quote him verbatim (fingers too numb and light headed from lack of food and wifi) but the gist of what he said was this:

Track is working internally at Twitter.
The Summize engineers are working to perfect Track.
When it’s perfect they will ship it.

Fred has been consistent about this from the beginning. He is one of those who discovered Track pre-May and loved it, and now is eager for it to return. I didn’t have a chance to grill him further because he had to join a meeting of European startups for a two hour lunch, but I wouldn’t be surprised that since he said Track is up and running inside Twitter that for him it already is back.

Fred has solved his Track problem by owning a chunk of the company, but since Twitter is private we don’t have that option (or the money either.) So I’ve been doing some thinking – made possible by the lack of interruptions from a working Track – about how to accelerate the return of Track to our realtime arsenal. In Letterman order, here are the Top Ten ideas:

10. Begin Track filibuster in FriendFeed to disrupt realtime feeds.
9. Convince Obama to elevate Track to Cabinet level appointment.
8. Nominate Bob Dylan as Secretary of (Blood on the) Track(s).
7. Alternatively, invade Twitter and install Track-friendly government.
6. Convince Microsoft to divert 5-10% of total operating income from search to Track R&D.
5. Forget about it and go have two hour lunch.
4. Placeholder for some idea would have had if Track were working.
3. Shouldn’t the ideas get better closer to the bottom?
2. Build Track into Gears, and therefore Chrome.
1. Wait

JackBe, an enterprise mashup company, today announced a $5 million funding round and appointed Wayne Jackson as the new Chairman of the Board.

They’ve raised at least $14.5 million, counting the $9.5 million they raised a little more than a year ago.

The $5 million funding was secured from existing investors including Harbert Venture Partners, Core Capital Partners, Blue Chip Venture Company, Intel Capital, and Darby Technology Ventures. The investment will be used by JackBe to expand sales, marketing, and partner activities worldwide.

JackBe’s mashup concept was explained more fully in our previous coverage.

Today’s top stories involve Apple. One says Steve Jobs will not deliver the keynote at MacWorld, leaving the job to chief lieutenant Phil Schiller. And this will be the last MacWorld for Apple to boot. The other story involves reports that Apple will release two netbooks at the same show.

Separating facts from speculation is always difficult with Apple. The company’s commitment to closely held product plans is central to its DNA, though recent announcements have been surprisingly and quite accurately foreshadowed by rumor sites. But the big stories – the iPhone, the move to Intel processors, even the reboot of the hardware signaled by the MacBook Air – have been tours de force in marketing and breaking out ahead of the pack.

In these tenuous times of economic crisis, Silicon Valley looks to Apple for signs of rescue from the downward spiral. MacWorld has always been a counterpoint to CES and the Bill Gates keynote, and in recent years has handily trumped the Vegas expo in the news. But Apple has shifted its product roadmap in recent times to iterative consolidation of its more epic leaps, with refreshes of the notebook lines around the Air hardware development process, the transition to iPhone 3G, the App Store, and Mobile Me.

Steve Jobs has used these mini-events to consolidate Apple’s control of the marketing process away from third party events, and downsized his personal involvement in favor of a team approach at the recent WorldWide Developers Conference. Certainly concern about the CEO’s health plays some role in these shifts, but more important is maintaining a strategic momentum in staying out front of the sweet spot of the two markets Apple is leading.

It seems unlikely Apple would undercut Air sales with a netbook strategy, and equally dubious that Phil Schiller would be given that task. There’s room in the refresh cycle to either abandon the Mini or consolidate it in a portable context, but that would play more into Google’s hands as yet one more device to offer Google Apps and Chrome. One thing Jobs has never done is to blur the distinction between his products and the rest of the market.

As for the iPhone, the news is good and getting better. It’s hard to ignore the number of people who are leaving hardware at home and venturing to meetings with just the iPhone as their net connection. Though some see the G1 as challenging the iPhone with Flash support and relaxed application controls, Apple has much less to concede to slow competitive pressure. Already services such as Qik are transcoding user videos into Quicktime format, and eventually pressure will encourage Apple to allow applications such as the Qik recorder for the iPhone to be made available to the public.

Stepping back from the day-to-day turmoil and looking at where we are a year and a half after the iPhone’s release, Google’s on-demand cloud apps have fundamentally transformed how we reach the Web. Not only has the free suite of mail, calendar, chat, video conferencing, and collaboration tools finally pushed Microsoft into the game, but the shift of our data to the cloud has made the interchange between phone and computer seamless.

Apple understands how we work in this new paradigm, and has provided the necessary tools for managing the work of information triage in this burgeoning world of realtime virtualization. The device matters more than ever, but not as an island unto itself. Deficiencies on the iPhone such as lack of copy and paste can be managed through services that provide addresses, phone numbers, and microbites of information as part of reminders or task lists. Gmail’s new task list keyboard shortcut for email items can be extended to harvest other links, and pushed to the iPhone for action on the go.

Virtualizing information flow creates a strategic barrier to those who follow, and Apple is out ahead in each major area except the ones that Google must own to continue to grow. Understanding the Google imperative frees Apple to take advantage of the Google “middleware” layer to stitch its hardware together across the various nodes of our work and play life. This virtual life style is more efficient for companies seeking to outsource their workforces while maintaining the subtle group dynamics that lead to success in difficult times.

Killing off the MacWorld conference is just such a pragmatic business decision at the enterprise level; there’s no need for a conference to evangelize the next wave of products when the current wave already does the trick. Apple’s challenge is to pry open the carriers to transport the video endpoints from mobile devices, and work with Google and others to create software to take advantage of multiple collaborative endpoints that know where you are and behave accordingly. This orchestration of business processes around streaming video, micromessaging, and social identity is the IP that Apple lives on and for.

Yesterday, Omniture released a real-time iPhone analytics SDK. (Main TechCrunch coverage here.)

On the innovation side, this is a big deal. The iPhone market shows that consumers, frustrated with the suboptimal mobile browsing experience, prefer actual applications. Example: I use the iPhone Remember the Milk application every day, and can’t imagine using a mobile website.

As consumers bypass websites, it leaves marketers without a way to capture sales-cycle metrics. (A personal favorite: Startup Metrics for Pirates.) Building metrics into applications is a no brainer–expect that trend to accelerate.

But before you get excited, realize this particular SDK is useless without an Omniture account. And since Omniture’s primary customers include giants like Microsoft, eBay, and Disney, it’s too expensive for most iPhone developers.

Yesterday, I talked with Matt Langie, Omniture’s Senior Director of Product Marketing. He brushed off questions about privacy, saying the data is entirely anonymized. Maybe so, but the RealNetworks scandal wasn’t THAT long ago.

He also said no current apps have integrated this technology, but since Apple is a current Omniture customer, they don’t expect any problems with the App store approval process. (Although this wouldn’t be the first time Apple ventured into the gray.)

Robin’s post yesterday included a list of competitors.

Despite the economic downturn, companies that solve real problems are still successfully raising money. Aravo, a SAAS supplier information management tool, announced today that they closed $7 million in Series D funding.

Headaches with managing vendor information–think SalesForce.com for suppliers, rather than prospects–is a very real problem. Last summer, I worked in supply chain at a small manufacturer, and I remember calling over a hundred suppliers to get e-mail addresses. (Those addresses were never transferred into our ERP system.)

Currently, Aravo claims their GE installation is the largest single SAAS deployment. “We are now managing over 500,000 suppliers and their data in Aravo, and have just gone live in six languages,” said Gary Reiner, CIO of GE.

Aravo’s software hooks directly into SAP & Oracle, and includes options to track ISO certifications, sustainability initiatives, and risk analysis.

Given the cost-cutting emphasis in supply chain, it’s no wonder Aravo continues to grow during a downturn. Surprisingly they do not expect to be profitable until 2010. CEO Tim Albinson told me this latest financing round provided the runway to emphasize growth over profits, and they plan to double in 2009.

Aravo has raised $30 million so far–almost exclusively from individual
investors, with the majority of the firm’s Series A, B, and C investors participating in the Series D
round. The round was lead by Charles Schwab/Big Sky Partners, who made their fourth
investment in the company. Other investors in this round included Stephen Friedman (Retired
Chairman, Goldman Sachs) Tony Mayer (Former CEO, JP Morgan Capital), and a syndicate of
senior partners and C‐level executives from Goldman Sachs and Morgan Stanley. A second close on the round is planned for mid January.

This morning Cisco released their annual security report.

Perhaps most disturbing was the increased hijacking of legitimate domains and legitimate e-mail addresses. When I met with the Cisco team last week, I was reminded that security begins and ends with people–the origin of an e-mail or web attack is a key flag for identifying threats.

It wasn’t all bad news, thankfully. Malware e-mail attachments declined by 50%.

Unfortunately, most security improvements are faster reactions to threats, rather than proactive avoidance. As companies get larger amounts of data from multiple silos, perhaps we’ll see a greater emphasis on identifying potential vulnerabilities, rather than just shutting down obvious threats. Cisco, for example, aggregates the data from their IP, e-mail, and website defense systems to predict new threats.

Highlights below (Full report here):

The overall number of disclosed vulnerabilities grew by 11.5 percent over 2007.Vulnerabilities in virtualization technology nearly tripled from 35 to 103 year over year.

Cisco researchers saw a 90 percent growth in threats originating from legitimate domains, nearly double what was seen in 2007.

Spam: According to Cisco, spam accounts for nearly 200 billion messages each day, approximately 90 percent of worldwide e-mail. The United States is the biggest source at 17.2 percent. Other countries who contribute spam include Turkey (9.2 percent), Russia (8 percent), Canada (4.7 percent), Brazil (4.1 percent), India (3.5 percent), Poland (3.4 percent), South Korea (3.3 percent), Germany and the United Kingdom (2.9 percent each).

Botnets: Botnets have become a nexus of criminal activity on the Internet. This year, numerous legitimate Web sites were infected with IFrames, malicious code injected by botnets that redirect visitors to malware-downloading sites.

Reputation hijacking: More online criminals are using real e-mail accounts with large, legitimate Web mail providers to send spam. This “reputation hijacking” offers increased deliverability because it makes spam harder to detect and block. Cisco estimates that in 2008 spam resulting from e-mail reputation hijacking of the top three Web mail providers accounted for less than 1 percent of all spam worldwide but constituted 7.6 percent of the providers’ mail traffic.

Just as marketing requires multiple channels, information overload has led to multiple channels. IM, e-mail, twitter, Work twitter, wikis, Basecamp–all have different expectations and users.

But when will the enterprise hit too many channels–all with important information?

Friendfeed was the consumer answer–aggregate a public conversation across multiple silos. Only they made it possible for multiple people to follow a single individual. Now companies like Fuser and Xobni are flipping the funnel and collecting conversations FOR a single individual, rather than FROM a single individual.

Similarly, companies like NutShellMail, Fuser, and SocialCast are pulling personal information feeds into corporate inboxes.

By the way, if you didn’t notice yet, the TechCrunch main site launched Facebook Connect integration. This follows on the heels of Yahoo BOSS search integration. Which means your job–staying up on tech by reading TechCrunch–has invaded your personal information stream. It goes both ways.

Any IT manager knows this will be a knowledge management security nightmare. The solution isn’t obvious–but the lines between work and personal life are rapidly blurring.

This morning Forbes.com announced that a five-year old company called Xignite provides their real-time stock market quotes via easily integrated widgets.

Whether or not you’re interested in the financial market data industry, this is a case study in how cloud-based information services save costs and deployment time, even as they force raw information to become a commodity.

Google, CNBC, and WSJ pay the NASDAQ a sizable chunk of money for a single cumbersome stream of data. Now, Forbes.com joins the handful of consumer portals offering real-time data–with minimal development costs to integrate the raw NASDAQ or BATS data.

Rapid iteration is a major benefit of cloud-based systems, though forcing further reliance on your partner. Forbes.com simply embeds a widget on any page that needs stock quotes. The Achilles heel is that Forbes must now depend on Xignite for any widget changes. For a large company, this may not always be an easy decision. But for smaller companies, this gives them access to services previously reserved for the big boys.

At the same time, the cost savings of Xignite is only multiplied as traffic increases:

“In the midst of this financial crisis, there is significantly heightened demand for financial data,” said Stephane Dubois, CEO of Xignite. “Markets are going up and down by hundreds of points every day and people need real-time data to make sound decisions. Our cloud services platform allowed [Forbes.com] to add BATS Exchange real-time market data to their Web site in just a few days. And now, Forbes.com can quickly adapt to their readers’ needs by dropping widgets anywhere on their Web site in minutes.”

As more and more information streams are provided by cloud-based services, raw information becomes a commodity, forcing companies to find other differentiators. No longer must companies maintain a Google-sized development team to integrate real-time data.

Anything Microsoft does is looked at through a prism cut from the glass of the company that Gates built. The days of the anti-trust trial, Hailstorm, and the browser wars may seem far away, but not for the Netscapes and Novells who foundered in the face of the Windows and Office steamroller. Yet refugees of those wars have reinvented themselves in the new world of the social network, most poignantly represented by Eric Schmidt and his third-times-the-charm Google.

In the context of Google, a reinvigorated Apple, and the rise of cloud computing, Microsoft has figured out they have just as much of right to be reborn. Ray Ozzie’s tenure at the company has been a kind of stealth startup transformation applied to the entrenched duchies of the old company, and it’s bearing fruit in new language not often heard from Redmond: open, cross-platform, Mesh, Silverlight, Azure.

Opening the LeWeb 08 conference in Paris, Dan’l Lewin, Microsoft Corporate Vice President for Strategic and Emerging Business Development presented this new face in a conversation with me embedded below. I’ll admit I like Dan’l and the new Microsoft, especially when viewed in the context of a troubled world economy and its effect on the shortened runways of the Silicon Valley startup community. There’s a sense that even with its plentiful assets, Microsoft and Lewin understand they have to come more than half way to gain a necessary trust.

Lewin heads the BizSpark initiative, designed to give startups a jumpstart with access to Microsoft servers, tools, and services for three years with the caveat that, wait for it, they are making less than $1 million in revenue per year and are willing to cut Microsoft a check for $100 at the end of the term. I’ll let Lewin explain the rest as he did on the stage yesterday, but stay tuned for the message behind the pitch – that Microsoft is ready to compete not just with itself but others for the hearts and minds of the Net crowd. Only when you compare carefully the various value propositions do you begin to see how far Microsoft has come – and how far they will have to continue to go.

Free, ad-supported email is making its way into the enterprise and challenging the stranglehold that Micrososft and IBM still have with Outlook/Exchange and Lotus Notes.  Google is trying to push Gmail as an Outlook replacement, but many businesses don’t quite feel comfortable giving up their email servers just yet. An angel-backed startup called Unison Technologies is iaunching a beta on Tuesday of its powerful client-server communications software. It like a combination of Outlook and Skype, bringing together email, enterprise-wide instant messaging, and a VoIP gateway/phone messaging system.

Unison looks like Microsoft Outlook, complete with email, contacts, and calendar. It also has presence management through its own IM that can interoperate with Jabber, Gtalk, MSN MEssenger, and ICQ. And it acts as a PBX for VoIP phone systems, complete with follow-me phone numbers and the ability to pause calls on the desktop or switch them over to another phone. The phone system is also tied into the presence management so that when you pick up the phone, your status changes to “not available.” And you can listen to, save, or forward voicemails through the desktop software just as if they were emails. You can also record phone calls.

The software is not a Web app. Unison is a fat client-server app that works on Linux or Windows PCs. It took a 60-person team and more than $10 million to build.

The software comes in a free version that is currently sponsored by Ubuntu and Intermedia, but will contain dynamic ads in the future. Personal identifying information will be stripped out, but Unison will have the ability to target advertising by company and even by department. Companies can pay for an ad-free version, but they may not be so averse to a few ads in these trying times. The concept might be catching on. Another startup combining advertising and corporate email is WrapMail, which serves a company’s ads wrapped around each piece of outgoing email. (Watch WrapMail’s Elevator Pitch).

Here are some Unison screen shots with ads inserted for illustrative purposes, including the IT manager’s control panel:

RightScale this morning announced it had raised $13 million in a second round of venture capital funding.

As the name implies, RightScale attempts to solve the accessibility problem for small to medium sized businesses who lack the development resources to transition into cloud computing. They provide a simple dashboard interface that fits on top of Amazon Web Services. In addition, their services also include auto-scaling of servers according to usage load, and pre-built installation templates for common software stacks.

Currently, RightScale has launched over 200,000 servers during their two year existance.

The round was led by Index Ventures and included BenchMark Capital. Index Ventures Partner Danny Rimer has joined the company’s board of directors.

Given the current economic climate, it’s reassuring to see that VC’s are still investing in cloud computing.