Posted On: September 30, 2009

PayPal Open Platform to Ignite Innovation

Managers and employees at Internet payment giant PayPal envision a future in which cash is an obsolete form of currency. We will order drinks through a touch screen at a bar and buy movie tickets by touching a movie poster on the side of a building. In PayPal’s forward-thinking future, software developers working for other companies will be able to create these alternative ways of purchasing the products we want by using PayPal’s technology. These visions of our possible future got a lot closer when PayPal announced that they would open their platform on November 3 to developers who want to build payment applications.

While innovations in many other industries have changed the way we live, work and play, there has been significantly less innovation in new and alternative means of making online payments. PayPal President Scott Thompson said as much recently at the Web 2.0 Summit in San Francisco. He said that the industry has been resistant to change, but legitimate concerns about fraud and security have been the largest impediments to innovation in the field. He also said that payments are a highly regulated business and require a great deal of cooperation and coordination between senders and receivers.

Still, “there’s a clear sign in the market that people want something better than they have today,” Mr. Thompson said. “Cash and checks are dying a slow death.”

PayPal, an integral part of Internet auction giant eBay, has primarily been driving the growth of the popular auction site. Now, the company is keenly interested in becoming the way that people pay for everything online, on their cell phones and in the course of their daily lives. Mr. Thompson said that the company has been working with software developers at big hardware and software companies, start-ups, mobile telecommunication device manufacturers and other companies. “Payment innovation needs to move from the hands of a few big entities to the hands of many,” he said.

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Posted On: September 23, 2009

Founder of Dell Says Windows Users Will Love Their PCs Again

Dell’s founder and chief executive, Michael Dell, said recently that people who purchase a new computer with Windows 7 installed and then buy Office 2010 when it comes out next year would experience a “computing catharsis.” While speaking at an event hosted by Silicon Valley’s Churchill Club, Dell said, “You will love your PC again. We have not been able to say that for a long time.”

The well-documented problems of Microsoft’s Vista operating system created a marketing nightmare for the software giant and personal computer manufacturers that pre-installed the Vista OS on their desktops and laptops. After Vista’s release, its shortcomings were shared around the world online and both Microsoft and PC makers went into damage control mode.

Dell knows firsthand how customers’ relationships with their PCs suffered during the Vista years. Around 80 percent of Dell’s business customers requested that Windows XP be installed on their new computers instead of Vista. Since Vista’s release, Dell has resorted to extraordinary measures to distance itself from the flawed operating system. Surprisingly, the company has been an aggressive advocate for Linux—an up-and-coming and far more secure and stable OS than Microsoft’s products.

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Posted On: September 16, 2009

Windows 7 to Atone for Microsoft's Vista Flaws

Microsoft is hoping to end its 3-year Windows Vista nightmare with the release of Windows 7 in late October. When Microsoft released Vista, that operating system (OS) quickly developed an unenviable reputation for its slowness, intrusiveness and incompatibility with many gadgets. Microsoft altered its operating system many times to make it less dependent on high-end computers since its release, but Vista’s reputation as an overly gimmicky and flaky OS was hard to shake.

As recently as this past summer, at least two-thirds of corporate computers were still running the less flashy, but far more reliable Windows XP OS. However, early reviews of Windows 7 are positive. According to several reviewers, Windows 7 keeps the best of Vista, like security, stability and lots of eye candy and addressed most of what Vista users disliked, such as:

  • Sluggishness
    Microsoft says Windows 7 offers “faster, more responsive performance” than its predecessor.

  • Hardware requirements
    Users with older computers cried foul at the time about Vista’s higher-end hardware requirements. The standard edition of Windows 7 only requires 1 GB of memory and 1-GHz processor at the minimum to run, well under the current standards for new computers.

  • Less alarmist than Vista
    Vista users reported that the OS freaked out anytime any real or perceived security threat occurred. With Windows 7, no less than 10 different categories of warnings accumulate in a unified Action Center and don’t interrupt processes.

Another aspect of the new OS that some users aren’t wild about is the fact that there are five different versions of Windows 7: Starter, Home Premium, Professional, Enterprise and Ultimate. Each version comes with a different set of features and ranges from $120 to $320 in price.

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Posted On: September 9, 2009

Twitter Evolves and Grows Successful by Listening to Customers

What started only two years ago as a messaging service with few bells and whistles has evolved into a company with worldwide recognition, millions of Tweeters and the fans who read their tweets. Twitter founders, Evan Williams and Biz Stone, had the business savvy to outsource ideas on how to grow and improve their service to the people who use it on a daily and hourly basis. The company monitors how users use the service and which ideas become popular. Then company engineers transform these ideas into features.

The company has announced that two new features will be rolled out sometime in the next several weeks called Lists and Retweets from users’ ideas.

“Twitter’s smart enough—or lucky enough—to say, ‘Gee, let’s not try to compete with our users in designing this stuff, let’s outsource design to them,’ ” said Eric von Hippel, head of the innovation and entrepreneurship group at the Sloan School of Management at MIT and author of the book “Democratizing Innovation.”

Professor von Hippel said that economists have thought that the people making products and running the companies are natural sources for new ideas and innovations. However, technology companies have turned that model upside-down successfully by allowing others to innovate for them. This works primarily because the Internet lets people around the world share ideas in real time and software allows users to design new products inexpensively. A good example of this is photo-sharing giant Flickr that started out as a small part of a game. When Flickr founders discovered that the photo-sharing aspect was more popular than the game, they shed the game and focused on building Flickr.

This shift favors young start-up companies as older companies tend to rely on proven ideas and techniques, and the structures of their companies may discourage outside-the-box thinking intentionally or unintentionally. Nevertheless, that may be changing somewhat as older companies now try to emulate the methods of new companies after watching how new companies grow to success. One good example is Ford Motor Company—it noticed that users were modifying the voice-activated entertainment and GPS system, Sync, and so invited college students to create new features for the system.

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