Information Technology

 You could sell used merchandise on both EBay and Amazon until now. With Google Base and Google Checkout, you can sell for less. Of course, web-traffic to Google Base is not as high as to Ebay or Amazon, so the probability of your selling stuff on Ebay or Amazon is greater than selling through Google Base.

Here’s a comparison of merchant services (based on a $25 book)

I got rid of my yellow pages and phonebook a couple of years ago, but I still used to look up some addresses using Superpages and Whitepages. Now I rarely use any of those websites either preferring to “Google.” However, I recently looked at the Live Search ads on the Wall Street Journal and decided to give Live a try. Yahoo has also consistently been bringing out fantastic products and I tried their local search as well.

The top 3 search engines have built out comprehensive offerings, so I did a comparison of the various features.

With these features, and information accessible faster than opening a phonebook or navigating to the Whitepages url, why would anyone use or advertise on Yellow pages? It is obvious that these “disruptive technologies” are indeed being very disruptive to those companies, and it is very likely that the incumbents will do what most companies do when they suddenly face competition – they will try to mimic them, do that poorly and will eventually lose their ability to capture value.

Since gathering information about local businesses is a time-consuming process, and websites like Judy’s Book and Yelp have a head start in gathering this information, they offer a considerable value to a person looking for dry-cleaners in Seattle’s Fremont neighborhood, or the best Chinese takeout in New York’s Upper East site ( I personally use menupages.com to choose NYC restaurants). This should ideally ensure that these websites capture some of the value they have thus created.  

I said “ideally” in the previous sentence because of the assumption that no other entity could just copy the contents of Judy’s book or Yelp and offer it as their own. No other entity, unless they are a search engine! An action that is clearly a copyright violation for most other entities – is Fair-use for search engines!

So Google, Yahoo or MSN Live could easily display portions of local search results (including reviews from these sites). And if the copyright owners (Yelp or Judy’s book) object, search engines would stop indexing them altogether –making it harder if not impossible for customers to get access to this information, and a huge drop in traffic for these sites.

Let’s hope they “don’t be evil!”

• Land
• Power costs for HVAC and computer equipment
• Construction Costs
• Cost of hardware
• Security (from geological and geopolitical risks)
• Provisioning and setup costs
• Maintenance costs

Facility managers have increasingly started taking these factors into account when building a data-center. For instance, Google and others are building data-centers at Bend, Oregon where real-estate and power are cheap.

Interestingly, vendors too are realizing that if they reduce the cost of a unit of processing, customers will be more willing to pay a higher price for hardware. Sun's recent offering (Blackbox) is a step in this direction. By eliminating real-estate and buildout costs, Sun hopes that its customers will value Sun's offering higher than other commoditized solutions.

However, I am concerned. If the TCO for Sun Blackbox was really lower than a data-center, then wouldn't Sun have a irreplicable competitive advantage by offering utility computing? So why are they not offering a utility computing solution using Blackbox?

The Sun Grid solution, which is a flavor of utility computing offered by Sun, is far less flexible and significantly more expensive than Amazon's EC2. Amazon, with its EC2 offering, leapfrogs traditional IT vendors by offering utility computing in a "pay for what you use" model. IBM has been offering a version of utility computing to its clients (albeit with additional servers at the customer's data center - which they don't pay for until they use them).

Salesforce, with its AppExchange platform, is also offering complete applications and infrastructure packages for its customers. I agree with Nicholas Carr, that it is just a matter of time before utility computing will offer businesses low-cost IT on-demand.