Monthly Archives: July 2010

Idiocy and brilliance of American policy toward entrepreneurs

Listen to the story of Aye Moah. She grew up in one of the poorest countries on earth. She shouldn’t have many opportunities. Yet here she was, talking with me at a Silicon Valley party after the Always On conference. The route she took? She went to MIT. How did she get in? Was one of the top-scoring students in Burma. One of the top 10, in fact. Then she scored a perfect 800 on the SAT. That’s a cool story alone.

But now keep listening. She is one of the top talented people in the world. The kind that help start companies that hire thousands of people.

Yet she can’t work here in the United States.

Let me get this right. One of the smartest people in an entire country gets an invite to come to the United States to study. Does so. Gets a great education from one of the top universities in the world. And we can’t employ her because of our screwed up immigration laws.

Shame on America.

Even if she were to get a work visa, it probably would be from a bigger company that would treat her poorly (I keep hearing stories of how immigrants are treated like crap and can’t leave, otherwise their work visa will be yanked). These laws are unjust and not American. Worse yet they are anti innovation because it’s these smart, highly educated, people who will start the next companies. It isn’t lost on me that eBay was started by an Iranian.

But, standing next to her was Ronald Mannak. He is an entrepreneur who lost everything he owned. In Holland if your company fails and you’ve taken venture capital you are personally liable for the losses. So, Ronald owes the Dutch government $200,000 and lost everything, even his fridge, he told us.

Here in Silicon Valley it’s different. We let you fail, multiple times, and you aren’t personally liable to the venture capitalists.

So, here, in one video, you have a demonstration of how American policy is both brilliant and idiotic at the same time.

It’s amazing how anti immigrant we’ve become. Stupidly so, too.

This is why I support the Startup Visa project and urge you to support it too.

Does adding Twitter to a brand make it cooler?

Lorenzo's "Twitter bike"

Jorge Lorenzo is on top of the world right now. He’s a 23-year-old motorbike racer from Mallorca in Spain and is atop the standings in the MotoGP circuit (he won yesterday’s race in Laguna Seca by several seconds, too). But he has a problem. Teammate Valentino Rossi has a better brand. Mostly because Rossi is older, has won season after season, and has cultivated thousands of fans. When I saw Rossi speak last year at Indianapolis fans were literally crying for a chance to touch him. Seriously. Most of us have never seen celebrity like this close up. Photo of Lorenzo’s Twitter sign on his bike taken by my producer Rocky Barbanica — we got a tour yesterday of his pits and got a chance to see the Twitter bike up close and personal. More of my photos are up on Flickr.

#1 MotoGP rider Jorge Lorenzo

But the MotoGP sport has a problem. If Rossi can’t race anymore, like he couldn’t for a month this year because he broke his leg, ticket sales go down. A lot.

#1 MotoGP rider Jorge Lorenzo

So, the Fiat/Yamaha team is trying something new: Twitter.

While Rossi disdains talking with fans online, Lorenzo welcomes it. Posting photos, doing his own tweets, and meeting with fans one-on-one which, over time, will make him a world-wide brand. He also does things to get his Twitter fans to talk, like after the race yesterday he donned a space suit and re-enacted man’s landing on the moon at the top of Laguna Seca’s famous corkscrew turns (last week was the anniversary of the moon landing). Photo by Umberto Schiavella.

Laguna Seca - Race

But he pushes it further than any other racer on the MotoGP circuit and is including Twitter on his bike (Twitter gets this exposure for free, unlike other sponsors on his bike) and even holding up signs after races asking fans to follow him on Twitter.

Yes, the sport is also using other technologies, like small TV cameras to get fans at home into the race, but every racer is doing that.

Lorenzo's video camera

Only Lorenzo is really using Twitter in any big way on the track.

I’m noticing this with more and more brands: they are using Twitter to get an edge on their competition in the branding war — I’m seeing more and more “follow us on Twitter signs” in restaurants, malls, and even amusement parks. Are you noticing this too? Question is, does adding Twitter to a brand make it cooler?

To me it does.

Why?

1. It sends a signal to the world that you want to hear from your customers.
2. It sends a signal to the world that you’ll use the latest technology to communicate with them. Many of whom are no longer using email. My son, for instance, rarely uses email to communicate with his friends.
3. It lets you feature your customers. Notice the pictures on Lorenzo’s bike? They are his fans on Twitter. Win-win.
4. It gives your team a way to communicate in one stream all the photos and stuff.
5. It lets you bridge audiences around the world. Look at how he mixes Spanish and English together on Tweets.

"Follow Me on Twitter" Banner

But what do you think? What are you seeing the bleeding edge brands doing today to find more customers and build more brand loyalty? I wonder what Chris Brogan would say?

Oh, and it wasn’t lost on the team that about 100 people were checked in at the track on Foursquare. How long before Foursquare has some involvement with race and sports brands? I give it a few hours the way Foursquare’s business developer Tristan Walker has been working lately.

Finally, just in case, they are on Flickr at lorenzo99 and has an old-school website plus a Facebook fan page. But the team tells me that Lorenzo likes Twitter the best. He even wants to visit Twitter’s headquarters in San Francisco to meet his hero, Evan Williams. I bet he gets that dream. Something about him tells me he’s going to be someone we’ll hear from for a long time to come.

#1 MotoGP rider Jorge Lorenzo

Flipboard: A startup’s first bad day or success?

Flipboard's team

I’m seeing lots of tweets saying I caused Flipboard to have a bad first day. Why? Because its servers were overwhelmed and it wasn’t letting new users sign up properly and even existing users, like me, were having trouble getting to the service and getting utility out of it.

Is that my fault? Yes and no. If I were the only one hyping it and if the product didn’t resonate after I hyped it they would have only gotten a few hundred visits. The problem is that Flipboard is the real deal. If you can get in and get it to work it’s a revolutionary product and hundreds, if not thousands, of people on Twitter and blogs said so. The reviews still are coming in and they almost all are positive. That I didn’t do, even if I was the first to tell the Internet about it.

What’s funny is I just hit the Twitter fail whale three times. Twitter is a company that has been around for three years and continues to have scalability and reliability problems yet we all keep using Twitter. It has gotten so commonplace that we sort of accept it, too, even in discussions with venture capitalists who helped fund Twitter, like the conversation I witnessed yesterday with Fred Wilson. He said Twitter was never built right to start with.

I see on iTunes that Flipboard is getting some bad reviews because of this reliability issue. Is it fair to judge a startup badly based on 24 hours of extraordinary growth? Yeah, a little. They could have been better prepared — I sent them plenty of notes telling them they were the best startup I’ve seen so far this year and I kept telling them about reactions of influencers — all which matched my observations.

In fact, when I showed it to famous actor Ashton Kutcher he was so excited about the product (said it was “a revolution in publishing”) he turned to me and begged to be introduced to the company. “I want to invest in this,” he told me. A week later he was, indeed, an investor.

The former head of MTV had the same reaction this weekend.

So they had some warning that their first day would be incredible and see an much larger amount of hype than they would otherwise see.

What’s my failing? I tried to get them to use Rackspace for hosting their service. I failed, they are using another cloud provider. I failed so badly that I couldn’t even convince them to change providers a few months ago when their provider was down when I visited them to get an early look at this company. I think I must take some sales lessons and get retrained. Sigh. But even with Rackspace’s help would we have been able to keep them up? I would like to think so. After all, Rackspace hosted YouTube for its first few years of life and has helped many startups scale.

But this is a world we’ve never seen. Things get faster, bigger, than any time in human history.

The number of people who’ve worked at companies that have seen this kind of growth — all in 24 hours — are almost non-existent. Even experienced entrepreneurs, like Flipboard’s CEO, who started TellMe, which sold to Microsoft for $800 million, have never seen this kind of growth.

I remember back to 1996. ICQ that year released November 1 to 40 people. It took six weeks to get to 65,000 users. I bet Flipboard got close to that in just their first day (I don’t know their numbers, but, heck, a few weeks back I had a VIDEO watched by half a million people in a week, so I bet Flipboard is seeing those kinds of numbers based on the hypestorm that I see continuing around this company).

It is a new world and this new world is bumpy.

Anyway, just my way of saying to cut a team of 10 people who’ve done something extraordinary some slack. No one else has launched a company to this kind of hype, er, adoption, and stayed up as well as Flipboard has. At least none that I know of. Do you know of someone who has had a better first day?

Onward for all of us. Flipboard is working hard (its developers are on Twitter and I can see them responding to customers as to what they are doing to get and stay up) and I’m back on the street looking around the tech industry for the next hot startup.

Got one? Email me. scobleizer@gmail.com

Update. I just added a photo of Flipboard’s team to this post. Left to right (forefront folks):
co-founder, Evan Doll
engineer, Troy Brant
engineer, Charles Ying
engineer, Gene Tsai
co-founder, Mike McCue

UPDATE 2: PC Magazine has an interview with Flipboard’s founders, asking for patience.

What’s more productive? A stream or a page? A debate


@Scobleizer My point is that I think Flipboard is a nice imitation of a print magazine. But isn’t that a step backwards?less than a minute ago via TweetDeck

Nova Spivak has been debating with me tonight about how much more efficient he feels news readers are if they stream items down like you’ll see on Twitter.com, or in social media clients like Seesmic or Tweetdeck bring.

I used to agree with him. It was hard to get me away from Seesmic or Tweetie.

But now? I’m a changed man.

Keep in mind that I read about 19,000 inbound on Twitter alone. On Facebook I have 1,800 friends and on Google Buzz I’m following more than 1,000.

I read a LOT of social media. Heck, in the past year alone I’ve FAVORITED 20,000 tweets! (Not counting the ones I’ve retweeted).

So, I’m always looking to be more productive. Yes, I’ve tried Pulse and I’ve tried lots of other readers (I was one of the first to use NewsGator and Google Reader). But nothing is as productive — for me — as Flipboard is.

I actually measured this. I got about 30% more favorites done in a day using Flipboard than I got done in the same amount of time with a streaming reader. And using Flipboard is 10x more fun!

Why is this?

For that I have to go back to my newspaper design class. I remember that early eye tracking research showed that pages that had a single headline that was twice as big as any other headline were more likely to be read. Same for pages with photos. If you put two photos of equal size on the page, it would be looked at less often, or less completely, than a page that had a photo that was at least twice as big as any other.

I won a newspaper design contest in college because of this — my designs made sure that they included headlines that were twice as big as any other and photos that were twice as big as any other.

This might not seem intuitive, but it is how our brains work and eye track research has proven that over and over again. Some of my favorite reading studies were done by the Poynter institute, here’s one such study.

Notice that having large headlines and photos gives eyes an entry point onto the page.

Now, what’s missing in, say, Seesmic or Tweetdeck? That’s right. Any kind of editorial weighting to the headlines and photos are totally missing. Entry points are gone.

Not all tweets are the same. One about Apple’s financial results SHOULD be bigger and more important than one about what I had for lunch today. In Flipboard, which isn’t always perfect because it’s done by algorithms, there is weight and photos and an attractive design.

I’ve come to realize that we’ve actually gone backward in our news media design in the past few years as we’ve gone away from newspaper and magazine-style layouts and toward streams.

One other thing I’ve noticed: my eyes get less strained after using Flipboard for four straight hours when compared to using Twitter’s iPhone or Android apps, or Seesmic or Tweetdeck style apps. In looking why, it gets back to this weighting. Our brains are awesome pattern recognizers and our brains like it when there’s a clear pattern of “look here first, look here second, look here third.” In streams that pattern is gone completely, other than “look at the newest thing first, then this second newest thing, then this third.” That might seem to be more efficient, but it really is not.

Not to mention that a LOT of what value we get out of the world is photographic or videographic.

On tweets you just get a bit.ly link on most readers. Not in Flipboard. That makes it MUCH more productive.

How about for you? Which do you prefer? Streaming like Seesmic or Tweetdeck? Or paginated like Flipboard?

First look at “revolutionary” social news iPad app: Flipboard

You’ve seen Twitter clients like TweetDeck or Seesmic, but you’ve never seen one like this.
You’ve seen news readers like NewsGator, Google Reader, or, even, newer ones for iPad like Pulse, but you’ve never seen one like this.
You’ve seen news aggregators like Techmeme, Google News, Skygrid, Yahoo News, Hacker News, or Huffington Post, but you’ve never seen one like this.

What is “this?” It’s Flipboard.

It’s from a new company you’ve never heard from before. Embedded here is an exclusive interview with CEO Mike McCue. You might have heard of Mike before. He sold a company, TellMe, to Microsoft for about $800 million dollars. Flipboard, the company, has already had one round of funding from Kleiner Perkins and today is announcing a new round of funding along with an acquisition of the Ellerdale Project (http://www.ellerdale.com/).

What is Flipboard? It turns your Facebook and Twitter account into something that looks like a magazine. It also lets you build a custom magazine, either by choosing from Flipboard’s pre-built curated “boards” or by importing Twitter lists. This is a very powerful and engaging way to read Twitter. You can also turn a single person’s Twitter account, or a single brand’s Twitter account, into a Flipboard. For instance, you can follow Techcrunch on Twitter with it and it will turn Techcrunch into a beautiful magazine-like interface that’s easier to read than any other reader.

The differentiator for Flipboard is the design. Lots of touches that make it engaging:

1. Touch an article and it “zooms” to reveal more.
2. Touch a video and it plays inline.
3. Turn your iPad and everything reconfigures, even photos switch from vertical to horizontal formats.
4. Touch “read more on Web” on longer articles and instantly be transported to the original website that was the originator of the information discussed in the tweet.
5. When you bring in your Facebook friends your friends’ photos, status messages, will all be laid out in attractive pages.
6. You can touch to share, favorite, like, or retweet, depending on what you are reading.

To get a sense of how dramatically different Flipboard is from any other Facebook or Twitter client, you should watch the video we filmed with McCue where he demoed the app for our cameras. In the interview he covered the philosophy of this interesting new company, demoed the product for us, and talked about where the company is going.

So, why is this disruptive, or even, revolutionary? Revolutionary isn’t our word, either, but is what actor/entrepreneur Ashton Kutcher said when we showed him the app to get a feeling for how it would affect the content businesses he’s involved in. He’s not the only one, either. We showed it to Wolfram Alpha’s CEO, Barak Berkowitz and he said “it’s one of the most awesome iPad apps I’ve ever seen.”

Techcrunch has covered that in a second post about why Flipboard is a killer app that — on first look — appears very disruptive to Twitter client producers, news readers, and news aggregator/publishing companies. In that second article we’ve also laid out why Twitter and the iPad have set in place the ingredients for a real media revolution — one that goes way beyond other publishing systems and one that further moves our reading behavior away from RSS aggregators.

But here let’s discuss how it works.

You add in your Twitter and Facebook accounts. It builds tiles, or “sections” out of your accounts. If you are an advanced user you can add in other people’s Twitter accounts, Twitter lists, or choose from a pre-done set of custom boards to choose from. More on those in a minute.

You then click on the section it builds after you flip past a “cover” that is made from photos that it finds from your friends and people you’re following on Twitter. The cover itself is pretty interesting, but the meat is inside, so we’ll focus on that.

Click on “Facebook,” for instance, and you’ll see your friends’ photos, tweets, status messages, articles, and videos. Just drag your finger through page after page, er, board after board, of these things. This is your Facebook news feed, but in a way you’ve never seen it before — all laid out like a newspaper. Click on any item and you can see the originating status message and all comments. You can “like” the item, or comment on it too.

How did Flipboard find these things? After all, I have 1,800 friends on Facebook and am following 19,000 people on Twitter and it filters out most of the noise I see on other Twitter and Facebook readers. Well, it has a set of algorithms that are looking for highly engaged items. You know, items that have lots of comments, likes, or retweets. It also has an algorithm that senses photography that’s been linked to from Facebook status messages and it lays those photos out.

When you reopen Flipboard it re-paginates the whole set of boards (you can only display nine sections at a time, which is a major limitation of the first version, but more on limitations in a second.

Along the bottom is a timeline that you can run your finger across to see a menu of all items. If you get to the end of the timeline and want to see more, just flip the last board over and it will go and get more pages for you to view.

LIMITATIONS

This is quite remarkable, and addictive to play with, but there are lots of things we’d like to see Flipboard add. More section tiles, for instance, is desperately needed. I have 25 different Twitter lists of just my own, for instance, and if you go to Listorious you can find thousands of lists on all sorts of different topics, all of which make good Flipboard sections.

Some might wonder why RSS isn’t used. That will be a limitation for some people, especially if you are trying to follow a blogger who doesn’t yet put their stuff into Twitter (naughty!) In reality, though, there is so much that IS on Twitter or Facebook that this limitation isn’t that big a deal. If you find some cool blog you can Tweet it and then it’ll show up in Flipboard anyway.

After playing with this I wanted to have Flipboard on my Android and iPhones. Unfortunately the team has chosen to focus solely on iPads for right now but are considering other devices for the future.

There’s no advertising, which leaves us guessing as to what the business model will be in the future. Mike McCue told me they are looking at new, design-centric, advertising that could possibly fill a page or a portion of a page.

A major limitation is that this is a reading and commenting app, not one where you can build your own tweets or Facebook status messages. I found myself often wanting to tweet from inside the app as I was reading.

It also doesn’t use LinkedIn or Google Buzz, both social networks I’d like to turn into Flipboards.

WHAT IT GOT RIGHT

Flipboard got a LOT right. It shows how you can enter a crowded space of Twitter clients with something that’s beautiful. The interaction design is beyond anything I’ve seen from a startup since Siri came on the scene earlier this year (and was almost instantly purchased by Apple).

They are totally right to bet on Facebook and Twitter. These are the default information sharing systems for most people now and are both mature enough to serve as news sources. I have a Twitter list of world news brands, for instance, that is awesome in Twitter. http://twitter.com/scoblemedia/world-news-brands Lots of people haven’t seen the power of lists like these, but now they will, and they’ll also understand that Twitter isn’t just about telling people what you’re doing.

WHAT IT DID NOT GET RIGHT

There is a lot missing from Flipboard. First, the #1 thing we need is more tiles, or what they call “sections.” Nine is simply not enough.

Second, we need a far better “store” from which to find new sections, er, Twitter lists. Yes, you can eventually figure out that you can search for people, lists, etc, but we need a better way to do that. I wish there were a stronger tie between Listorious, which I find has a very nice way to find lists, and Flipboard, which makes it somewhat difficult to find new lists to make into Flipboard sections.

Third, as a content producer, I’m very worried that this takes too much of the brand and advertising dollars away from the content producers. If I share a Techcrunch article, for instance, I get more credit than Techcrunch does inside Flipboard. That’s not good. Also, they need a better way for content producers to tell Flipboard just how much of the text they are using. Right now Flipboard looks for an RSS feed from a content producer to see if they’ve set full text, or partial text, or headline only, to figure out the syndication rules but there needs to be a way inside Flipboard for publishers to communicate their wishes since I’m sure lots of publishers won’t like what they see inside Flipboard. From a user standpoint, though, I find this reading experience to be unparalleled, so media producers should work with Flipboard instead of flipping out, as I expect some of them like Rupert Murdoch to do.

There are still some bugs. I often see duplication of articles, especially in my lists that follow larger numbers of people (Flipboard’s own curated lists have small numbers of sources to keep them cleaner). I also occasionally see bad text or bad headlines that were pulled in. But those are minor problems for a 1.0 beta and will be fixed, the team says.

THE FUTURE OF FLIPBOARD

The acquisition of the Ellerdale Project, this morning, gives Flipboard lots of new “trending” features to build as well as some strong algorithms to further reduce the noise and pull out great items for us to read, no matter what the list is we’re aiming Flipboard at.

Overall this is an extraordinary iPad app and one that will shake the media world for quite some time.

ANALYSIS OF WHY THIS IS IMPORTANT:

Every once in a while I get an early look at a “killer app.” I still remember the day I first saw Pagemaker (back then from a company named Aldus, which later sold to Adobe). That app, along with a $5,000 laser printer from Apple, was a “killer app” for the Macintosh. Why? Because if you wanted to do a new form of publishing you needed to buy a Macintosh, a laser printer (back then $5,000) and Aldus’ Pagemaker.

I’ve been using my iPad since the very first day and have been looking for that “killer app” that would give me a reason to tell you why you must get an iPad. In other words, an app that would justify buying an iPad for a large number of people.

We’ve seen other companies get close. Last month Techcrunch wrote about Pulse, a news reader for the iPad. I downloaded it, but it wasn’t revolutionary, just a nicer done RSS news reader. Earlier this week another nice news app, Apollo, was announced in Techcrunch, but I quickly answered back on Twitter that I had already been beta testing something that went far beyond what they were offering.

“So, Scoble, spill the beans already!”

The app I’ve been using? Flipboard. See the news article elsewhere on Techcrunch for more details, since Flipboard also announced new funding and an acquisition too.

It does something very simple: it turns your Twitter and Facebook into something that looks like a magazine.

But, don’t miss what’s happening here, because there’s a news revolution that has been born due to Twitter. First, you must see that Twitter has moved from being just for a way to follow your friends to a way you can follow news brands. Techcrunch, for instance, has a Twitter feed that I follow in Flipboard and other Twitter readers like Seesmic, Tweetdeck, and Twitterrific. But go further, I have a list of 216 news brands like the BBC, CNN, New York Times, etc at http://twitter.com/scoblemedia/world-news-brands. You add that into Flipboard and you have the most complete newspaper-style media you’ve ever seen. You can follow just the BBC, or just the New York Times, or just your local newspaper on Twitter.

The problem is that when you see the New York Times on Twitter.com it looks boring. You don’t see the great photography that the New York Times provides. You don’t have an easy-to-read layout. And if you try to read the New York Times along with my list of news journalists or if you want to follow Techcrunch’s staff writers on Twitter you’ll see them all mixed together with all the noise that comes with that. If MG Siegler posts what he’s drinking on Friday night, as he did last week, it is weighted the same as a New York Times article of international importance.

This makes reading Twitter far less useful than it could be and it lays out why Flipboard is a publishing revolution. Oh, don’t take my word for it. I showed actor/entrepreneur Ashton Kutcher Flipboard and he turned to me and said “this is revolutionary.” Then he asked me for an introduction to Flipboard so he could invest in the company (which he did). Nearly every person I gave a sneak peak to Flipboard said the same thing after playing with it.

It’s disruptive to several groups: those who publish media, especially news organizations; those who produce Twitter clients; and those who produce news aggregators.

“One of the most awesome iPad apps I’ve ever seen,” is what Barak Berkowitz, CEO of Wolfram Alpha, told me after he saw it. “It brings to life the real capabilities of social media.”

“It takes a lot of the stuff from nerddom to mainstream,” Gary Lauder, VC at Lauder Partners, and TED speaker. “My mother is not going to read tweets, but she will read Flipboard.”

But it isn’t just the app that makes this a significant new company.

It also is backed by an interesting team, starting with co-founder Mike McCue who started TellMe, which was acquired by Microsoft in 2007 for $800 million. < << http://www.crunchbase.com/company/tellme >>>

It also has already made an interesting acquisition, of Ellerdale < << http://www.crunchbase.com/company/ellerdale >>> which has been building algorithms using semantic technology that filters the real-time stream by topics, instead of keyword strings. Basically, this means that Flipboard has some cool trending topics features and noise control that will come in future versions.

It also has a list of impressive venture capitalists, including Twitter founder Jack Dorsey, Google investor Ron Conway, Facebook co-founder Dustin Moskovitz, The Chernin Group founded by Peter Chernin, Alfred Lin, Peter Currie, Quincy Smith, actor/entrepreneur Ashton Kutcher, and major investors Kleiner Perkins Caufield & Byers, and Index Ventures.

But that’s not why I view this as disruptive. It just is plain fun to use. I’ve spent more than 50 hours on it so far and love that it removes most noise from my Twitter feed, makes me much more productive in finding interesting items, and is plain addictive to use. It also makes me feel like I’m reading an old-time newspaper with beautiful design that helps me find important items to my life. Not every Twitter item is interesting and Flipboard focuses on that.

What do you think? If you have an iPad already do you agree that this is a “killer app?” If you don’t have an iPad does this push you over the purchasing decision line?

Rackspace ends cloud lock-in

I hate lock in. It’s one reason why I have used WordPress for so many years. With it I can move my blog between hosts and, even, can export my blog to a database and import it into another tool. Dave Winer (the developer behind many of the technologies that run underneath blogs) and Matt Mullenweg (the guy who brought us WordPress) have written about, and spoken about, how lock-in is anti customer and anti innovation quite a bit over the last 10 years.

Over the years I’ve asked developers, CEOs, and CTOs why they went with open source solutions rather than buying something from Microsoft or Oracle and they invariably answer something about how they don’t want to be locked in. WIth open source, they tell me, they can see the code, poke around in it, and, even, take it and build their own systems with that code.

That’s exactly what Rackspace is doing today in announcing OpenStack. But that’s not the only big announcement we’re making. Already 25 companies, including NASA, have already started using the OpenStack code to build some impressive things, but more on that later.

This is the biggest strategic announcement we’ve made since going public.

Why?

1. It means the end of lock-in for cloud customers. Don’t like Rackspace for some reason? Take your cloud-based apps somewhere else. We already have competitors who are using OpenStack to run their own cloud infrastructure. Compare this ability to ANY other cloud infrastructure available on the market today and you’ll see we’re the only one who has absolutely no lock-in. How will Rackspace compete? Plain old customer service and fanatical support.

2. It means that new capabilities are coming your way, including those developed at NASA, who have also open sourced cloud infrastructure as part of OpenStack developed to run NASA’s Nebula Cloud Platform.

3. This is a true open source announcement, not one of those “we’re open” announcements where you find out by looking at licenses that something key has been kept proprietary. Compare our licenses to ANYONE and you’ll see we’re the ones who went fully open source.

4. OpenStack will include several cloud infrastructure components, the first being OpenStack Object Storage, a fully distributed object store based on Rackspace Cloud Files, available today at OpenStack.org. The second component, OpenStack Compute, will be a massively scalable compute-provisioning engine based on the NASA Nebula compute project and Rackspace Cloud Servers technology, available later in 2010. Any organization will be able to turn physical hardware into massively scalable and extensible cloud environments using the same code currently in production serving tens of thousands of customers and large government projects.

5. An OpenStack Design Summit hosted by Rackspace was held in Austin, Texas on July 13-16, where more than 100 technical advisors, developers and founding partners had the opportunity to validate the code and ratify the project roadmap.

So, what does this mean? Why would Rackspace turn over code it spent 10s of millions of dollars acquiring and developing?

1. It puts the focus on Rackspace’s famous “fanatic” customer service like never before. Because we have no lock-in anymore there is only one way we’ll keep customers: provide the best support.

2. It extends Rackspace’s development efforts far beyond what we could achieve otherwise. And we have been building some awesome software development teams. You might have missed but we hired most of the MySQL Drizzle development team, among many other great developers. But this wasn’t enough when faced with new cloud competition from Google, Microsoft, and Amazon. One company headquartered in San Antonio, Texas, just was never going to be able to take on companies with market capitalization in the 10s of billions of dollars. But as you’ve already seen from the new capabilities that NASA has brought to OpenStack this brings a massive new group of developers into this and the entire world will benefit from that.

3. It has already helped hiring and employee morale. I didn’t grok just what it would do here. I guess that’s part of my Microsoft background. You know, the one that says “why would a company give away its crown jewels?” But it has turned working at Rackspace for many of my coworkers from just a job to one that’s a mission. After all, our code now is going to be used by NASA. Think about what that does. Also, it’s a lot easier to recruit great developers when they get to work on an open source initiative. I almost didn’t talk about this on the blog because this effect has been so pronounced. I believe it’ll force other cloud companies to go open source as well because they’ll lose key hires to Rackspace and they already have.

4. It further aligns Rackspace with the industry it serves. Go around the industry as I have with my video camera and you keep hearing “we’re betting on open source and companies that don’t lock us in.” Every startup, nearly, uses the LAMP stack and those who don’t go that way tell each other at private industry events like the one I’m at right now in Jackson Hole, Wyoming, that jumping off the open source stack brings negative results for companies. I’ve been talking with CTOs, VCs, and CEOs and they are excited to have more choice in cloud-hosting. More on that later as this announcement rolls out.

Here is the official press release. You can learn more at OpenStack.org and also on the official Twitter account for OpenStack.

Rackspace Open Sources Cloud Platform; Announces Plans to Collaborate with NASA and Other Industry Leaders on OpenStack Project

More than 25 companies, including Citrix and Dell, support open source cloud platform to accelerate industry standards

San Antonio, TX – July 19, 2010 – HYPERLINK “http://www.rackspace.com” Rackspace® Hosting (NYSE:RAX) today announced the launch of OpenStack™, an open-source cloud platform designed to foster the emergence of technology standards and cloud interoperability. Rackspace, the leading specialist in the hosting and cloud computing industry, is donating the code that powers its Cloud Files and Cloud Servers public-cloud offerings to the OpenStack project. The project will also incorporate technology that powers the HYPERLINK “http://nebula.nasa.gov/” NASA Nebula Cloud Platform. Rackspace and NASA plan to actively collaborate on joint technology development and leverage the efforts of open-source software developers worldwide.

“Modern scientific computation requires ever increasing storage and processing power delivered on-demand,” said Chris Kemp, NASA’s Chief Technology Officer for IT. “To serve this demand, we built Nebula, an infrastructure cloud platform designed to meet the needs of our scientific and engineering community. NASA and Rackspace are uniquely positioned to drive this initiative based on our experience in building large scale cloud platforms and our desire to embrace open source.”

OpenStack will feature several cloud infrastructure components including a fully distributed object store based on HYPERLINK “http://www.rackspacecloud.com/cloud_hosting_products/files” Rackspace Cloud Files, available today at OpenStack.org. The next component planned for release is a scalable compute-provisioning engine based on the NASA Nebula cloud technology and HYPERLINK “http://www.rackspacecloud.com/cloud_hosting_products/servers” Rackspace Cloud Servers technology. It is expected to be available later this year. Using these components, organizations would be able to turn physical hardware into scalable and extensible cloud environments using the same code currently in production serving tens of thousands of customers and large government projects.

“We are founding the OpenStack initiative to help drive industry standards, prevent vendor lock-in and generally increase the velocity of innovation in cloud technologies,” said Lew Moorman, President, Cloud and CSO at Rackspace. “We are proud to have NASA’s support in this effort. Its Nebula Cloud Platform is a tremendous boost to the OpenStack community. We expect ongoing collaboration with NASA and the rest of the community to drive more-rapid cloud adoption and innovation, in the private and public spheres.”

Rackspace and NASA have committed to use OpenStack to power their cloud platforms, and Rackspace will dedicate open-source developers and resources to support adoption of OpenStack among enterprises and service providers. An OpenStack Design Summit hosted by Rackspace was held July 13-16 in Austin, where more than 100 technical advisors, developers and founding members joined to validate the code and ratify the project roadmap. More than 25 companies were represented at the Design Summit including AMD, Autonomic Resources, Citrix, Cloud.com, Cloudkick, Cloudscaling, CloudSwitch, Dell, enStratus, FathomDB, Intel, iomart Group, Limelight, Nicira, NTT DATA, Opscode, PEER 1, Puppet Labs, RightScale, Riptano, Scalr, SoftLayer, Sonian, Spiceworks, Zenoss and Zuora.

“OpenStack provides a solid foundation for promoting the emergence of cloud standards and interoperability,” said Peter Levine, SVP and GM, Datacenter and Cloud Division, HYPERLINK “http://www.citrix.com” Citrix Systems.  “As a longtime technology partner with Rackspace, Citrix will collaborate closely with the community to provide full support for the XenServer platform and our other cloud-enabling products.”

“We believe in offering customers choice in cloud computing that helps them improve efficiency,” says Forrest Norrod, Vice President and General Manager of Server Platforms, HYPERLINK “http://www.dell.com/” Dell. “OpenStack on Dell is a great option to create open source enterprise cloud solutions.”

To download or contribute code and get involved, visit OpenStack.org. Follow OpenStack on Twitter @OpenStack.

About Rackspace Hosting
Rackspace Hosting is the world’s leading specialist in the hosting and cloud computing industry. The San Antonio-based company provides Fanatical Support® to its customers, across a portfolio of IT services, including Managed Hosting and Cloud Computing. For more information, visit “http://www.rackspace.com/” www.rackspace.com.

About the NASA Nebula Cloud Program
NASA Nebula is a Cloud Computing service based at NASA Ames Research Center that provides high performance compute, network, and data storage services to NASA scientists and researchers. Nebula allows NASA to share and process large scientific data sets and was one of three flagship projects highlighted in NASA’s Open Government Plan. For more information, visit http://nebula.nasa.gov.

Forward Looking Statements
This press release contains forward-looking statements that involve risks, uncertainties and assumptions. If such risks or uncertainties materialize or such assumptions prove incorrect, the results of Rackspace Hosting could differ materially from those expressed or implied by such forward-looking statements and assumptions. All statements other than statements of historical fact are statements that could be deemed forward-looking statements, including any statements concerning expected development of the OpenStack project; the acceptance of OpenStack technology as an industry standard; anticipated operational and financial benefits from any development of the OpenStack project; the participation of other companies or individuals in the OpenStack project; any statements of expectation or belief; and any statements of assumptions underlying any of the foregoing. Risks, uncertainties and assumptions include the possibility that expected benefits from the OpenStack project may not materialize because the underlying technology is not reliable or generally compatible with industry standards; there are changes in technology that adversely affect the adoption of the standards, and other risks that are described in Rackspace Hosting’s Form 10-Q for the quarter ended March 31, 2010, filed with the SEC on May 6, 2010. Except as required by law, Rackspace Hosting assumes no obligation to update these forward-looking statements publicly, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future.

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UPDATE: Here’s some blog posts about this:

Techcrunch. “OpenStack.org: Rackspace Open Sources Their Cloud Services Platform, and Gets NASA On Board.”
The Next Web. “Rackspace issues a challenge to the cloud industry; goes open-source with OpenStack.”
RWW: “OpenStack: Rackspace and NASA Nebula Join Forces for Open Cloud Ecosystem.”
GigaOm: “OpenStack: An Open Source Cloud Project Emerges.”