Why Samsung Could Be Heading For A Fall

In January, I wrote a story for Forbes called Is Samsung Invincible, predicting that the South Korean manufacturer might just have carved itself a defensible Number One spot in electronics, achieving an ambition that has eluded Sony, Panasonic and many others.

3 Reasons Samsung Is On Top

1. Samsung has been one of the top three players in major markets like TV and cell phones for more than a decade. Forget those stories that claimed Samsung came into its own at CES 2013. Samsung achieved its dominance way back in 2003. $53 billion in revenue in 2012 is tough to argue with.
2. It is one of the top manufacturers of the crucial components ' flash memory, DRAM, LED screens and OLEDs ' that everyone else has to buy. Even when Samsung loses market share, it still wins.
3. Samsung doesn't make mistakes. Sony stuck its neck out with Rolly. Panasonic tried to get into movies when it bought Universal. Microsoft tried to popularize the tablet in 2002 and something called SPOT that certainly resembles the fabled iWatch in 2003. Samsung makes interesting products, but it doesn't make foolish bets. And it sells 500 Android phones a minute.

Game over. And for the cherry on top, Samsung continues to crank out some pretty funny ads, showing it has a surprising flair for consumer outreach.

This why a Wall Street Journal story claims that Google is now afraid of Samsung because of Samsung's dominance in Android phones. The idea is that Samsung will leverage its share to gain concessions from Google.

"There is a threat from Samsung to Google that is real," Rajeev Chand, a managing director at boutique investment bank Rutberg & Co, told the Journal. "Over time, Samsung will be able to leverage market-share dominance to negotiate better terms from Google.'

(See also How Samsung Ate The Smartphone Industry ' And Now Threatens Google.)

Second Thoughts On Samsung's Dominance?

So what could change all this?

Petulance.

Corporations take advantage of consumers all the time. You can feed them horsemeat burgers and lock them into credit card contracts that Sauron himself would admire. But if your success becomes too public, if it somehow looks like you're bragging about it, they will walk.

Your mission: To Serve Man ' without any hint of irony.

Dell was an invincible juggernaut in PCs until customer service and satisfaction ratings began to dip. Instagram recently risked a peasant revolt when it unveiled plans to use photos in ads. Consumers don't have much power, but they've come to realize that many globe-spanning operations can be brought to their knees by collective hissy fits.

Hanna Montana. MySpace. Australopithecus. Look upon my 2003 Motorola Razr, ye mighty, and despair.

And So It Begins'

So how will the Samsung decline begin? It won't happen for a few years. In fact, expect to see the company enjoy a temporary surge of popularity. But then you'll see the backlash begin to sink in: Buy a Samsung? Ewwww. Don't know why, just ewwww. An investment bank will make a prediction about Samsung quarterly shipment declines. Others will pile on.

And let's be clear: The power in the Google-Samsung relationship all sits with Google. Google has the best information retrieval system in the world. It owns a global data center that is absorbing more functions ' like shopping and advertising ' by the day. To undercut Google, you'd have to engage in the equivalent of medieval warfare and invest billions in infrastructure just to come close. Samsung's value in the relationship is that it's a slightly more upscale partner than HTC or LG. That's it.

The company will also eventually find itself on the horns of the killer product dilemma. Samsung has always been a great fast follower. It aspires to have the most feature-rich or best designed products in the majority of the high-end price bands. But it doesn't create truly new products. Comb the company's product catalog and you won't find a Walkman, or an iPhone, the first $1,000 PC or the first laptop. You'll find the digital equivalent of John Kerry.

To truly become the sort of company that rivals the best of Sony or Apple, Samsung does have to create a signature product. The flexible OLED phone comes close. It rolls up! OLEDs, however, remain difficult and expensive to make in volume, particularly large format OLEDs. Companies have been trying to bring them to market for more than 10 years.

If Samsung can pull that one off, here's to another ten years on top. If it even slightly misses the mark, let the dog pile begin.

The big question is, how many companies can come up with a hit on demand? That is Samsung's problem.

Image courtesy of Shutterstock. Samsung logo from Samsung

Apple iOS Apps Leak More Personal Info Than Android

Free iPhone and iPad apps from Apple's App Store pose a greater privacy risk than free apps from Google Play. That's the finding of the latest study by Appthority, which is in the business of evaluating mobile apps for companies.

Why the App Store Loses

On the surface, the Appthority study ' released Tuesday during the RSA security conference in San Francisco  ' appears to find iOS and Android apps equally culpable of privacy violations. Of the 10 top-selling apps the firm tested in each of five categories, 60% of the iOS apps shared data with advertising and analytics networks. So did 50% of Android apps.

A closer look, however, revealed that iOS apps were far leakier than their Android counterparts. A full 60% of iOS apps gathered your location data, 54% vacuumed up your contact lists and 14% siphoned information from your calendar. With Android apps, those percentages were 42%, 20% and zero, respectively ' not exactly laudable, but certainly an improvement over the performance of Apple apps.

Encrypting user data was not a big priority for apps on either platform. All of the iOS apps sent unencrypted data to ad networks, while 92% of Android apps did the same.

Appthority says iOS apps fall short because ad networks are willing to pay more for user data from Apple devices, giving developers a greater incentive to gather and hand over as much information as possible. At the same time, there are more developers making iOS apps, so they have to work harder at making a buck ' and that apparently tempts some to compromise on privacy.

"Developers are struggling to monetize, because it's hard to run a company giving apps for free or selling apps for 99 cents," says Domingo Guerra, president and co-founder of Appthority. "So, in turn, they use the ad networks to try and get money, and the ad networks will pay more money if the developers share more data on the users."

The Overall Numbers

Appthority tested business, education, entertainment and finance apps, as well as games. Entertainment apps were the worst when it came to user privacy. This category had the highest number of apps that tracked location and shared data with ad networks. Education and finance apps posed the smallest threat ' relatively speaking, at least ' to user privacy.

Individual developers built roughly 80% of the apps tested. Companies with iOS apps in the study included Apple, Intuit, Kids Games Club and PayPal. On the Android side, the companies included Imangi Studios, Intuit, PayPal and Intellijoy.

Appthority's last report was in July 2012, when the apps tested posed a slightly higher risk to user privacy. However, the study was done differently. It analyzed the top 50 free apps in each platform, regardless of category.

Last year's study also showed iOS apps gathering more user data than Android apps, though less than iOS apps this year.

The Trend

Guerra predicts the next Appthority study in three months will show a decline in risky app behavior, thanks to recent government crackdowns on online privacy abuse.

This month, the Federal Trade Commission announced an $800.000 settlement with social networking start-up Path, which was charged with uploading users' address book data without permission and gathering personal information on several thousand children without parental consent.

In addition, some states are also taking a hard stand on privacy. California Attorney General Kamala Harris last year formed a Privacy Enforcement and Protection Unit to prosecute companies that violated the state's privacy laws.

While prosecuting scofflaws can be a deterrent, sometimes the best way to protect privacy is to pay for an app, rather than hunt for something similar that's free. In general, paid apps gather less user data than free apps, Guerra says. "Your privacy is worth more than 99 cents, so just buy the app."

Image courtesy of ShutterStock

Sudden Site Shutdowns And The Perils Of Living Our Lives Online

The other day, all of my memories were erased. Well, that's how you'd describe it in the marketing parlance of Memolane, an excellent social history timeline service that shut down late last week. Just a few weeks prior, the always-useful crime stats and community updates from Everyblock stopped flowing into my Google Reader. What the hell, Internet?

As the Web matures, the possibility that our favorite services might suddenly and unexpectedly shut down always looms in the background. It may be unlikely, but it's something to bear in mind as we spend more of digital lives in the cloud: This data isn't ours. We're handing it to some company that's storing it on their servers. If we're really lucky, they'll let us click an "export" button at some point and take it with us.

This isn't an entirely new phenomenon. Remember LaLa? The online music service was nearing Rdio-caliber levels of awesomeness before Apple bought it and shut it down. Since Larry Page took over as CEO, Google has been routinely cleaning house and closing less popular services while making the remaining ones more Google Plus-y.

Then you have the thankfully rare scenario that some  unsuspecting Megaupload users were caught in last year when the feds shut down Kim Dotcom's cyberlocker. More recently, Yahoo acquired Pinterest clone Snip.it and subsequently slammed the doors shut. To be fair, that site was nowhere near as popular as Delicious, the social bookmarking service that narrowly escaped the swing of Yahoo's downsizing hatchet in 2011.

Expect More Startup Roadkill

Don't be surprised if this sort of thing happens more frequently as the Web gets older. Startups will either fail or get acquired, and the giants will keep fine-tuning their products as their business priorities shift.

In many cases, few will mourn these shutdowns. Nobody wept when the curtain rang down on Google Wave (although some of us are still bitter about the loss of Google Reader's sharing button).

But in some instances ' see Everyblock ' services with a substantial community can disappear overnight. When this sort of thing happens, it hopefully won't always be as thoughtlessly bungled as NBC's shutdown of Everyblock was. But happen it will.  

Memolane, We Hardly Knew Ye

Memolane was not a hugely popular service, but  loved it. The premise was simple: You plugged in your Facebook, Twitter, Instagram, Foursquare and SoundCloud accounts (among many others) and it built a nice-looking timeline of your social media updates and content, going all the way back to whenever you first started using Facebook or Flickr. Mine went back seven years, so it was pretty interesting to scroll through.

You could also plug in any RSS feed, so I kept an archive of my ReadWrite stories alongside my photos, check-ins, tweets and other social content. If you live online like I do, your Memolane timeline would be pretty thoroughly detailed. 

My grandmother died in 1997, a few months before Larry Page and Sergey Brin registered the domain google.com. If I wanted to find out more about her life, I'd have to dig into old boxes or ask my mother. I can't Google her. My grandchildren, on the other hand, will have as richly detailed a history as you can possibly imagine, right down to individual haircuts (thanks, Foursquare). Kids graduating high school this May will have an even more thorough digital biography awaiting future generations. 

Tools like Memolane allow us to start aggregating all the content and updates we're sprinkling across the Web, pulling them into a thorough and chronological timeline. Nobody cared about my Memolane but me. And even I didn't look at it regularly. It was just interesting to go back every once and awhile and reminisce about things that were happening in my life four years ago.

I could imagine my grandchildren one day scrolling through my Memolane timeline, wondering what life was like before Internet-connected neural implants and laser-shooting eyeballs. 

Memolane felt very personal. So when it shut down, it was a little weird. LaLa, Everyblock and other public services were one thing, but this was my history. I don't even get an export button? Apparently not. 

Fortunately, all Memolane was doing was aggregating content from other sources, all of which are still live. So I can at least partially recreate the experience on another service like TimeHop or Rememble. Easy enough. 

Still, these recent shutdowns offer yet another sobering reminder of something we already knew: It's not our Web, even when it feels like it is. So have fun and share as much as you please. But try not to get too attached.

Lead photo by Chris Gilson

The Surprising Holes The IT Security "Kill Chain" Is Neglecting

The conventional wisdom holds that your organization will be secure if you focus on shutting down zero-day exploits and keep out the rest of the exploits by applying multi-layer defenses from multiple vendors. That complacency is about to take a serious beating from new research coming out of NSS Labs this week.

The news really could not have come at a worse time. Last week's revelations that China may be participating in state-sponsored cyberattacks against Western nations, coupled with Anonymous' full-on declaration of war against various corporate and government agencies following the death of Aaron Swartz, mean that security is very much on the minds of IT leaders these days. Finding out your bulletproof vest is made out of cardboard instead of Kevlar just as the firefight is heating up does not make for happy security executives. 

Bypassing The Kill Chain

Good news or not, Frank Artes, Research Director at NSS Labs, are spreading the word about the research he and colleague Stefan Frei have done.

After analyzing the massive amount of data NSS Labs collects as it analyzes security products up and down an organization's security stack (known as the kill chain), the team discovered that the usual practice of using heterogeneous, layered tools to filter out exploits is not as effective as one would think.

The idea of this layered approach, Artes explained, is based on the premise that even if an exploit can get through one vendor's defenses, another vendor's tool can catch that exploit and kill it. Hence, "kill chain."

But in reality, "huge numbers of exploits are getting through," Artes said. The NSS Labs researchers mapped those exploits and identified them based on criticality and availability (is the exploit hard to get or part of a crimeware package that a script kiddie can buy with a credit card?). Using a visual model, the team was able to create graphic results that demonstrate just how many serious exploits can get through.

Exploits Don't Have Expiration Dates

NSS Labs, which acts as a Consumer Reports-like organization in the security sector, is not singling out any one vendor as a problem. Instead, Artes emphasized, all vendors' products, be they browsers, Intrusion Prevention Systems (IPS) or firewalls, have exploits that can let malware through, and a surprisingly high number of these holes are shared among various products.

Part of the problem is that many vendors are so focused on security in the present, such as protecting customers from zero-day exploits and advanced persistent threats (APTs), such as state-sponsored attacks.

"We're always looking forward, watching out for the next Duqu or ILoveYou for 2013," Artes said. What should also be done is keep an eye on what's happened in the past, because it can come back to haunt you.

Exploits don't have expiration dates and there are a lot of older methods and tools that can bust through security because the security software may never have been properly patched or (in some cases) the exploit may have been deprecated from the security tool's database to make room for newer exploits. Databases for security software can't afford to get too big, Artes explained, or their tool's performance would be hindered.

End users patch-management policies can also affect how many exploits get through. Because many applications can touch parts of a security stack, you can't just automatically update every single piece of security software to the latest and greatest - without extensive testing, business applications could break and die when confronted with freshly patched security code.

Revisiting your company's patch-management procedures is a good way to help ensure systems are locked down as much as possible. Devoting more resources to these procedures is your best bet, Artes explained, but many companies don't have the time or the money to beef up patch management.

Instead, they may have to work smarter, not harder. Tools like the visual analysis Artes and Frei's team have developed should help  focus efforts, even on a fixed budget.

Lead image courtesy of Shutterstock.

How The Mobile Enterprise Puts Business Leaders On The Hot Seat

Guest author Robert LeBlanc is Senior Vice President of IBM Software Group.

The era of the mobile enterprise has officially arrived. Half of American workers are now using smart devices for work as well as personal usage. The use of those devices is now at a critical mass and it's just the beginning.

Yet Gartner, a leading information technology research and advisory company, says few organizations plan and manage mobility with a truly strategic or proactive approach. They're mostly reactive and tactical.

Mobility Isn't About The Device

For enterprises, mobility shouldn't be about the device. Instead, it needs to be about figuring out what an organization can do differently and better now that its employees and customers use mobile technologies so frequently at work and in their private lives, and can access processes and data anywhere and anytime. 

Simply put, mobility changes everything for the enterprise. And that puts business leaders on the hot seat ' forcing them to grapple with one of the biggest challenges of business today. Its a question of when, not if, mobile technology will impact the business.

A mobile enterprise is an organization built on a foundation of technologies and business processes that enables people to connect, share information and participate in the business processes no matter where they are. This facility allows businesses, employees and customers to better understand the world around them so they can make smarter and quicker decisions. And just as importantly, it helps them interact more effectively with all of their constituents.

How a Mobile Enterprise Works

Mobility forces leaders to rethink how they operate their businesses, how they deal with employees and customers and how they manage their information and their technology. By its very nature, mobility makes it more difficult and challenging for IT leaders to control people and information. So they have to achieve a judicious balance between the need to loosen their hold on many aspects of their businesses with the need to assure the security and integrity of business processes and information.

What are these challenges?

How to operate the business? Many fundamental business processes were established in an era when companies tightly controlled every aspect of their operations. Mobility disrupts those linear flows of work and information. Now, business leaders have to restructure their business processes to take into account new kinds of interactions with customers, employees and business partners, and new sources of information. Example: How can a B-to-C company run an outstanding marketing program without taking into account the locations of customers and their real-time communications via social media?

How to interact with clients? Today, most businesses recognize the importance of their clients, but mobility and the emergence of big data add new elements to this calculus. CEOs understand that their most important assets are not just their employees but also the vast storehouses of information they possess and the day to day interaction with their clients. Leaders have to deal with the fact that, because of the mobility revolution, many of their most important clients have choices in who they interact with, when they interact and the type of interaction. It is imperative they take advantage of this new paradigm, embrace it, innovate around it and improve their client experiences.

How to manage employees? For all the talk about flat organizations and employee empowerment, many organizations still operate under the command-and-control management model. Today, thanks to mobility technologies, employees have the means to gather information and make decisions on the spot, and, increasingly, they'll want to act. Leaders should empower them to exercise their judgment and creativity. Mobility is a great enabler. At the same time, though, organizations need to establish policies, practices and training programs that protect the company and its customers from undue risks.

How to manage information? Many companies keep their information in silos aligned with particular business units and functions. Most of what they gather sits in databases in rows and columns. But the coming era of big data means a tremendous amount of information of different types is now available'including unstructured data from sensors, video and Web pages. This information must be shared across the enterprise, and, naturally, it will be pushed and pulled via mobile technologies. Companies have to manage their information so it is easily accessible for those who need it and, at the same time, protected from unauthorized access.

How to manage technology? For established business, most of their technology was installed before mobility became such a big factor. It makes no sense to rip and replace it. Instead, companies should add-on capabilities that make it easy for the data and business processes managed in legacy computing systems to be available via mobile devices. New business processes and software applications should be developed with a 'mobile first' mindset. That way, accessibility and security will be designed in from the start. Mobility should always be evaluated in the context of the other major technology shifts that are around it today, namely, cloud computing, data analytics and social business. These new capabilities are all game-changers individually, but together they can transform a business, making it more efficient, dynamic and productive.

Embracing change and the impacts of technology like mobility is a great opportunity for most businesses. Change is inevitable. Those that harness it and exploit it correctly will be leaders. But technology for technology's sake is not the full equation. The combination of technology along with new business processes, insights derived from data analytics and the evolving interaction among people is the game changer.

Note: This post originally appeared on IBM's Building A Smarter Planet blog. IBM has recently announced a new generation of mobile enterprise technologies that are based on the point of view in this post.

Leap Motion To Begin Shipping In May

Leap Motion, the flash drive-sized controller that lets you manipulate your computer's interface with a multitude of precise hand gestures, will begin shipping to customers who pre-ordered the device on May 13. In a partnership with Best Buy, the Leap Motion controller will also hit physical store shelves in the U.S. starting May 19.

Since the company's founding last year, Leap Motion has advertised its product as a life-changing technological jump toward intuitive 3D software, while drawing in developers who will shortly offer a impressive suite of apps with functionality ranging from gaming and art to web browsing and 3D modeling. All these apps will be available in Leap Motion's new app store, Airspace, says Leap Motion VP of Product Marketing Mike Zagorsek.

Starting with the sci-fi-influenced idea that computing of the future will be done seamlessly with hand gestures alone (think Minority Report), CEO Mike Buckwald and CTO David Holz co-founded Leap Motion with the aim of delivering a truly futuristic product. They predict that this kind of interface could change the way we interact with technology forever, from kitchen screens at McDonald's to electronic music-creation tools for DJs, as ReadWrite editor in chief Dan Lyons wrote last December. 

Apps Confirmed For Airspace

After launching its software development kit last year, Leap Motion began crafting a long string of partnerships with both high profile and independent developers. The list of confirmed app partners with products in the pipeline now includes 3D design software company Autodesk, painting and illustration app-maker Corel, Disney Interactive (with racing game Wreck It Ralph: Sugar Rush Speedway), independent game studio Double Fine (with music game Dischord), The Weather Channel, and ZeptoLab (with casual mobile game Cut the Rope). 

Buckwald and Holtz will be at SXSW on Saturday, March 9 to talk with the Wall Street Journal's Jessica Lessin in an event titled, "Leap Motion & The Disappearing Interface." The company will also have a booth at the Austin, Texas-based festival that weekend to give the public its first chance to try out the device. 

Pre-orders are still available from Leapmotion.com, for both U.S. and international orders. Bestbuy.com will also begin taking pre-orders as well starting today, but only for the U.S. The price, once $69.99, is now $79.99.

And just yesterday, the makers of the wildly successful productivity Mac app Clear announced that they will be adding Leap Motion support to the aesthetically pleasing list-maker. Check out Realmac Software's video below for a demonstration:

 

Images courtesy of Leap Motion

Microsoft Could - And Should - Eradicate Facebook. Here's How.

[Editor's note: Joachim Kempin is a former top Microsoft executive and author of a new memoir, Resolve and Fortitude: Microsoft's `Secret Power Broker' Breaks His Silence. It's a fantastic book, and I've asked Kempin to write a few columns for us sharing his perspective on Microsoft. In this, his second column for us, Kempin argues Microsoft should take over the social networking space, and get out of the hardware business. 'Dan Lyons]

Last week I gave you a historical perspective about Microsoft and pinpointed several areas for improvements. Today I will continue that discussion with more food for thought:

Reinvent Social Media Software

Microsoft could create lots of magic by developing advanced social media software, which would be so user-friendly that even a dog could use it with ease. The leading product, Facebook, lacks a good user interface; while it connects you, it basically sucks. Its value lies in its huge user base, the vast computer network it needs to function, and the ease with which it attracts immense amounts of advertising dollars.

As with any social media network, the vast user information it contains is its most valuable asset. This is the main reason why Google is making a serious effort in that product category. By properly analyzing and evaluating this info with modern data-mining techniques, Facebook can create unprecedented consumer market knowledge and deliver well-targeted advertising. Microsoft has only a very small share in this business.

Therefore, Microsoft needs to reinvent this space and make it easier, more fun and more intuitive for users to create a lively community. Convincing current social media users to migrate into a Microsoft-conceived realm will take time and incentives, and will require an easy transition path in form of a few clever mouse clicks to reestablish links and move existing user information into a more captivating universe.

A Facebook-like product with superior functionality and vastly improved privacy features, including characteristics from Twitter, Google+ and LinkedIn, would be extremely compelling. Microsoft has the technical capacity and the design wit to do this. In particular, when combined with free Skype usage, it could take a lot of advertising revenue away from Facebook and Google.

There's also an opportunity to bend over backwards and open up the Chinese market. This could be done through a local partnership or a technology deal. Since Facebook is blocked in that country, Microsoft could have a nice growth opportunity.

In the '90s, Microsoft undertook something comparable with the Java programming language invented by Sun Microsystems. The principle applied was christened 'embrace, extend, and innovate.' It succeeded because Microsoft improved a mediocre product by providing the necessary plumbing through foresight and architectural underpinning.

Applying the same method a second time, when reinventing social media software, would very likely succeed and curtail the success of Microsoft's competitors.

But let's not stop there. Let's be audacious, and provide Internet Explorer (IE) with a long-needed boost by making social networking capabilities an integrated part of IE, available for everybody's web-browser-fingertips, anywhere on any mobile and desktop device! This would be way more effective than spending advertising money to encourage people to use IE.

I can see the competitors already running for cover and complaining once again to the feds, but since it's a 'genuine technological integration' - as a court once ruled in regard to IE ' such a move would represent a totally legal operating system/browser extension.

Research With A Product Angle

The other change I would introduce is to locate product development and relevant research personnel under one roof. The goal would be to accelerate the turning of research projects into marketable products.

This means abandoning the currently centralized research unit. Under this new scenario, the person running the Office group (for example) would pay for and guide his or her own research department. Therefore that executive would have the ultimate motivation to turn innovative ideas into money-making ventures. This was already talked about when I was still around, but has never been accomplished.

Best products win ' mostly! The company needs to remember that and execute accordingly. Over the last decade it has not adhered well to that principle. Moving research into the product groups might just do the trick and re-infuse that old but so very successful principle and enable the company to lead in several categories, as it did in its glory days.

Complaining, as Bill Gates recently did, that the company is no longer innovative enough proves my point. Act, Mr. Chairman! Act!

Products To Divest Of

Very simply put: All hardware devices. The foundation for Microsoft's prosperous ecosystem was built with software DNA and partnerships with hardware producers and software vendors. The company's leadership needs to remember these old roots and make it a priority to keep suppliers who support Microsoft's platforms close, and enlarge that club with the ones who once left.

Its CEO and chairman know very well that re-earning formerly prevailing trust is the key to success here. It takes years to gain it, and only one wrong announcement or power grab to destroy it.

The reason why people prefer a certain computing device over another ultimately comes down to a combination of usefulness and affordability. Usefulness means how easily one can operate the device and how many software applications are made available for it. Charge too high a price, and users will most likely compromise and pick the cheaper and a less useful platform. Low price is the main reason why Windows PCs beat Macintosh computers by eight to one, and why Android-based smartphones outnumber iPhones. Apple's products, while superior, are as overpriced as the wonderful Porsches I love so much.

Recently, Microsoft announced it is changing direction and wants to be known as a device and services company, so that it can show off its software products more favorably. I am not surprised about emphasizing a more intensive focus on cloud services, where competitors are way ahead. But I vehemently disagree with the idea of producing hardware devices to the detriment of loyal ecosystem partners. It simply undermines their trust, and is a distraction for the company.

Microsoft's experience with building hardware is very limited. From computer mice and keyboards to the Xbox game console, the company has struggled for years to compete and be profitable in that field. Why will the newly introduced Surface tablets change that?

In the '80s, Microsoft ventured into producing hardware in form of memory cards, an add-on board for the Apple II so it could run CP/M software, as well as printer hardware and computer mice. I sold all of them as General Manger of Microsoft's German subsidiary. With the exception of the computer mice and the Apple II add-on board, all of them flopped. When the Apple II fell out of favor, only the Microsoft mouse survived until the turn of the century when ergonomic keyboards and the Xbox game console showed up.

The mice are still getting produced, but just for the replacement market. My team sold 150 million of them to PC manufacturers, but the business was abandoned in 2000 because we were no longer price competitive in that cutthroat market segment. The same happened to keyboard sales. Dropping mice and keyboards altogether would make some friends ' Logitech comes to mind ' and would hardly be noticed on the balance sheet.

Xbox, Microsoft's game console, came into existence to keep Sony from conquering the living room, as Bill Gates once pointed out. It came with a steep price. The company lost $6 billion to $8 billion in this venture. Even today, every Xbox remains subsidized. Its losses are made up with software royalties from game manufacturers, profits from Microsoft's prospering 'Halo' game and service fees paid by cloud services users. Leaving Xbox behind would therefore only cause a small revenue shortfall, and would hardly be noticeable at the bottom line.

The best solution: Spin the total hardware division off and continue to do game software. Game consoles, in particular, are a dying breed. The future of gaming for hard-core gamers will be on powerful PC systems equipped with high-end graphics and on tablets for the causal crowd. Sony's recent PlayStation 4 announcement confirms this to some degree. Sony wants to revive game console sales by making them as powerful as PCs, or maybe even more powerful, by including social media connectivity, improved cloud services and key PC attributes. Why not just subsidize PCs instead of spending money on a proprietary platform design which will increase Sony's losses for years to come?

The real money is in gaming software, period. Spinning Microsoft's console business off would avoid future losses. And last but not least, Valve might be interested in buying that division. Who knows?

What else to get rid of: All retail stores. Sell online instead and clean up the messy Windows 8 application store or Windows 8 might join the lists of Redmond management casualties.

Next Step

Next week, I will focus on organizational issues and explain why a major organizational change is needed to revive Microsoft's mojo.

Image courtesy of Shutterstock.

Microsoft Stays Conservative On Web Standards In IE9-To-IE10 Shift

Microsoft launched Internet Explorer 10 for Windows 7 on Tuesday, providing a substantial speed increase over Internet Explorer 9 as well as more support for modern Web standards. But Microsoft added that it will continue its conservative approach to supporting Web standards - no doubt disappointing some in the Web community.

For those Windows 7 users with Windows Update turned on, IE 9 on Windows 7 will begin self-upgrading around the world, Microsoft said, within the 95 different languages supported by the Microsoft browser. To help mark the occasion, Microsoft launched ExploreTouch.ie, where users can explore singer Blake Lewis' song, "Your Touch." The site is designed to showcase the use of touch, IE10 and Windows 8, Microsoft said.

Better, Faster, Stronger

IE10 is designed to improve performance, privacy and compatibility compared to IE9. Specifically, Microsoft claimed that IE10 users would load websites 20% faster than in IE9 - giving the new browser what company executives characterized as market-leading real-world site performance. In tests of eight common browsing tasks by independent researchers at Principled Technologies, IE10 was up to 63% faster than Chrome on Android and Safari on iOS, the firm found, and Microsoft also cited real-world tests of site performance that found IE10 came out on top. (Of course, it always makes sense to take browser makers' speed claims with a bit of salt.) 

The performance enhancements could be a factor helping IE climb to more than 55.14% share of browser usage, as measured by Net Applications, its highest share ever among desktop browsers. (At the beginning of February, NetApps said that 2.3% of desktop users used Windows 8, which ships with its own version of IE10.)

From a privacy standpoint, Microsoft has left a feature called Do Not Track on by default, asking websites not to track IE10 users. Advertisers have howled in protest at this feature, but IE10 also includes Tracking Protection, which actively blocks personal information from being transferred. (Still, Australia has expressed concerns about Microsoft's suggested approach to privacy and data collection, wondering if incidental data provided by routine transactions could be used without consent to build a user profile.)

Slow And Steady On Web Standards

Microsoft has long taken a more deliberate approach toward implementing Web standards than other browser vendors, which has earned the company some criticism - perhaps due to the legacy of browsers like IE6, whose insecurity and lack of standards support has collected widespread scorn, and a place in PC World's list of the 25 worst tech products, among others. (Microsoft later created IE6countdown, a concerted effort to kill off IE6; today, just 0.2% of U.S. users still rely on it, the site claims. It has a much higher market share in some overseas markets.)

Some critics haven't given up the fight. "We are filing this complaint on behalf of all consumers who are tired of having a monopolist make choices for them," said Jon von Tetzchner, chief executive of Opera, which asked the EU to prevent Microsoft from bundling Internet Explorer with Windows. "In addition to promoting the free choice of individual consumers, we are a champion of open Web standards and cross-platform innovation. We cannot rest until we've brought fair and equitable options to consumers worldwide."

That was in 2007, however. Criticism has tapered off in recent years, although Microsoft has fallen on its sword a time or two:

"The way we approach this is from the standpoint of what developers want, within the platform," said Rob Mauceri, Microsoft's group program manager for Internet Explorer. "When there are standards being developed with the W3C [World Wide Web Consortium], often time we are directly involved with those standards. We work with others in the community to define and then implement those standards, as they're ready and mature enough to implement, and as developers are actually interested in them."

In IE10 Microsoft implemented 30 new standards, including HTML5, CSS3 and Web applications, Mauceri said. IE10 adds new rich visual effects to the page with shadows, 3D transforms, CSS3 gradients, sophisticated page layouts with CSS3 grids, flexbox and multicolumn support. Plus, there are enhancements to the Web programming model like LocalDB, per-application caching, WebSockets, Web workers and more.

"These are just a few examples, but they really cut across things... developers look for as they're building new experiences on the Web," Mauceri said.

Leading From Behind?

"There are two aspects of what Rob called out: what developers want, and what developers are coding to," said Ryan Gavin, the general manager for IE within Microsoft. "Is the spec ready for the browser? And then there's the thing that you lose when you go to an HTML5test.com that generates a somewhat arbitrary score and tries to put the thing down into a numerical value. In some cases we have a point of view unlike some of the other browser vendors: implementing a spec too early actually causes developers a lot of pain."

"And so it's really not a race to throw as much crap as you can into the browser," Gavin added. "If you implement a spec too early and it changes, as these things do, sometimes on a weekly basis, the developer ends up writing and rewriting and writing their site, and testing it, because they're always in break-fix mode, because that spec is always evolving."

Microsoft tries to add support for a standard when it's "site-ready": defined as a state that when developer writes to a spec, there's a high degree of confidence that it's going to work and persist over time, Gavin said.

Commercial Blitz

Microsoft plans to launch a commercial blitz around the new IE10 platform, made by the same agency that developed the "Beauty of the Web" spot and the Lewis song. The new commercial will go live on Tuesday, pushing - naturally - the aspect of touch. (Gavin took the high road when asked about the touch-enabled Chromebook Pixel, applauding Google for following Microsoft's lead.)

Most would agree that the "Beauty of the Web" spot does an excellent job of showcasing Internet Explorer, and the new commercial goes a step further, adding touch to the equation. As Microsoft moves forward, its challenge is to persuade third-party developers to continue making the Web beautiful, too.  

The Mobile Enterprise: 4 Steps To Keeping It Secure [Infographic]

Guest author Vijay Dheap is a Mobile Security Strategist at IBM.

Security is a balancing act, especially when it comes to emerging technologies that promise to unlock massive business potential. Each new wave of change requires an enterprise to adapt its security posture, or risk being left behind - or exposed to unmanaged risk.

Mobile is no different.

What was predominantly a consumer-oriented phenomenon is rapidly becoming a top business priority. Individuals, product teams and marketing departments are all scrambling to seize the benefits mobile presents, while security organizations are scrambling to regain control - or at least awareness - of all the enterprise's mobile-related activities. Enterprises recognize that going mobile requires a strategic perspective.

The importance of defining a security strategy for mobile carries greater urgency than ever. While 84% of consumers now use their personal smartphones for work, mobile malware has increased more than four times since 2010. Recent reports indicate that 51% of companies have experienced data loss due to insecure mobile devices - and the average cost of a breach was a hefty $5.5 million. Enterprises have a very real need to reduce this risk while not affecting business objectives focused on mobile. (For a visual look at mobile security stats, see the infographic at the end of this post).

Given the dynamic nature of the mobile market, it can be difficult for an enterprise to define a mobile risk management strategy. Organizational inertia alone can lead to increased risk. One approach is to concentrate on four focus areas of mobile security:

1. BYOD
2. Protected Access
3. Secure Mobile Solutions
4. Mobile Security Intelligence

1.BYOD, or Bring Your Own Device, has become a defining characteristic of mobile adoption in the enterprise. While not exclusive to smartphones and tablets, these new devices led the way with rapid, organic penetration of many enterprises. But every organization can customize the policies that govern the use of employee-owned mobile devices within the enterprise. BYOD policies should reflect the organization's risk appetite based on its industry, regulations and culture. Policies can modulate the degree of device choice and which employees participate. Of course, before it can enforce its BYOD policies, an organization needs to gain visibility and control over these new devices.

2. Protected Access: Mobile devices empower employees to access relevant information whenever they need it. No matter how much enterprise data is stored on the device, users will frequently need to access additional enterprise data and resources. The enterprise must not only establish secure connectivity channels but also manage risk associated with user authentication and authorization. Given that mobile access typically takes place predominantly outside enterprise boundaries, special care is needed to prevent unauthorized access and reduce risky behaviors. Plus, protecting mobile access provides security teams another lever to gain awareness over their mobile audiences even when they cannot have visibility over the devices themselves (i.e. consumers, partners and unmanaged employees).

3. Secure Mobile Solutions: Apps have emerged as the primary interface for delivering mobile solutions to consumers, partners and employees. Apps enable the rich, task-oriented functionality and user experience that mobile consumers demand. Some mobile solutions are outsourced, while others are built by various parts of an enterprise. Security design needs to be incorporated in each step of the software development lifecycle. Mobile app developers - who are generally not particularly security aware - need tools and processes that help them bake in the enterprise's security standards and best practices. And the enterprise must also enforce a baseline of security standards across the entire range of mobile solutions it develops.

4. Mobile security through risk management requires constant vigilance. With rapid innovation comes new capabilities that promote new behaviors. And as mobile adoption accelerates, it becomes a richer target for attackers. The threat landscape indicates a growing affinity towards targeted attacks at individuals or organizations, leveraging mobile as a primary socialization platform. To identify risks and take appropriate mitigation steps, enterprises need to gather intelligence across all the touchpoints of mobile engagements. Intelligence gathering should include aggregating security events from the device, users, apps and the network for analysis - including tracking compliance with existing risk management policies.

Mobile is a transformational technology giving individuals unprecedented freedom and flexibility in how they engage professionally and personally. Enterprises cannot afford to ignore that opportunity, but can't put themselves at risk in their rush to embrace the new technology. By focusing on BYOD, protecting access, securing mobile solutions and developing mobile security intelligence, enterprises can balance the risks and rewards for individual workers and the organization as a whole.

For more on mobile enterprise security, see the infographic below.

 

 

Lead image courtesy of Shutterstock.

Microsoft Completes Journey To Big Data Through Hadoop

There's no beating around this bush: today Hortonworks announced a new beta version of its Hadoop Data Platform that will run on Microsoft Windows Server, a move that shows Microsoft's own big data efforts will forever be connected to open source innovation.

This is a highly significant (and even expected) move in the big data sector, even as this is a very strange intro to write. Hortonworks is one of the big Hadoop vendors in the market, though more in terms of innovation than sales, where Cloudera is currently regarded as the leader. Hortonworks' founder and architect Arun Murthy is one of the original Hadoop coders that came out of Yahoo back in the day, and he also serves as the VP of the open source Apache Hadoop project at the Apache Software Foundation.

Which all means that any major platform move like this is sure to impact the rest of Hadoop development and, by extension, the rapidly growing Hadoop ecosystem that's driving much of the big data sector.

Why Windows?

Until today's announcement, Hadoop of any flavor was typically to be found on a Linux-based machine (physical or virtual). This made a lot of sense, since one of the big advantages of Hadoop is the capability to expand its data warehousing out on any number of clustered computers. When the operating system of those clustered machines is Linux, growth is frictionless in terms of licensing and configuration.

But when the underlying operating system is Windows Server, then wouldn't the licensing of Windows create much more friction when trying to build a Hadoop cluster? Or, to put it more frankly, wouldn't using Windows Server as the OS for a Hadoop system be too expensive?

David McJannet, VP of Marketing at Hortonworks, doesn't seem to think so. From Hortonworks' perspective, there were just too many Windows-based shops out there that were shying away from using Hadoop because they didn't want to mess around with heterogeneous resource management that would be part of the package of deploying a Linux-based Hadoop solution.

Infrastructure management is a big component of the reasoning McJannet gave to explain Microsoft's work with Hortonworks over the past 18 months. Numbers were also a big part of reason for the new version; McJannet cited that a "majority of servers" were running Windows in the enterprise now.

The company's press release backs that up: "According to IDC, Windows Server owned 73 percent of the market in 2012 (IDC, Worldwide and Regional Server 2012'2016 Forecast, Doc # 234339, May 2012)."

It is not clear just what server class this 73 percent represents, since the report itself costs $4,500, and it thus a little hard to access. File servers? Application servers? It's sure not web servers, where according to Web analytics from Netcraft, Microsoft currently has 16.93% of the marketshare, dwarfed by Apache's 55.26% marketshare.

McJannet also cited ease of data exploration as another reason for Hadoop on Windows. Using SQL-based queries that can now directly integrate with the Hadoop Distributed File System (HDFS), products like SQL Server and Excel can tap straight into Hadoop-stored data, enabling end-users to more easily navigate through the lakes of data Hadoop contains.

Embracing Open Source

This is not the company's first foray into Windows land. Late last year, Hortonworks released the Windows Azure HDInsight product - essentially Hadoop for the Azure cloud platform.

As odd as it may seem to see Hadoop on Windows Server, the move makes a lot of sense from the Microsoft side of the arrangement. The company needed a big-data entry ever since it decided to drop its own Dryad data warehousing framework back in 2011. The expectation a year ago, when Microsoft announced it would build in tools within SQL Server to connect to Hadoop, was that this day would eventually come.

McJannet emphasized that to date, Microsoft was playing well with others within the open source development model that Hadoop uses, so much of this innovation will be dropped back to the rest of the Hadoop community.

Expect, then, to see more Hadoop vendors to announce their own connections to Windows in the near future.

Image courtesy of Shutterstock.

4 Ways Google Has Already Appeased Big Copyright

Google and the entertainment industry have long had a complex relationship. After years of taking heat from the MPPA and RIAA, the search giant is desperately trying to shed its reputation as an accomplice to copyright infringement. 

Why? Well, avoiding billion dollar lawsuits like the one Viacom filed (unsuccessfully) a few years ago would be nice. But Google also wants to be on good terms with the music and movie industries so it can strike content deals that will help products like YouTube, Google Music and Google TV to thrive. The company still gets the majority of its revenue from search ads, a reality it knows won't last forever. 

The changes started off small but are now getting more serious as content becomes a more important focus for Google's business. Still, even after some of the most significant changes, the record industry and Hollywood tend to fire back complaining that they don't go far enough. That happened again this week when the RIAA put out a report questioning the effectiveness of Google's search results tweaks. 

As our own Brian Proffitt demonstrated with some test searches, the RIAA might have a point.  But Google is trying. It has a delicate balance to strike between the interests of copyright holders and the users who generate more than a trillion search queries every year. It's eager to please the content industry, but has to roll these changes out gradually to avoid a mass user freakout. 

So how has Google altered its search engine and other products to cater to big copyright? Here are four notable recent examples: 

1. Blacklisting Terms From Autocomplete and Google Instant

In January 2011, Google started blocking certain terms from its Autocomplete and Google Instant features. Rather than undertaking the full-blown search results censorship the entertainment industry wanted, Google decided to meet them half way and at least stop recommending piracy-related search terms to people. 

Since then, the list of forbidden terms has grown. Even Megaupload is still blocked from Autocomplete, even though that site was seized by the U.S. government over a year ago. 

Overall results are mixed. If I type "hurt locker torrent" into the search bar, it doesn't show me instant search results (nor did it attempt to autocomplete the phrase). But "torrent hurt locker" is another story. That returns links to torrents for the popular movie, followed by an article about how the film's makers sued thousands of BitTorrent users. Careful!

2. Streamlining The Copyright Takedown Process (SometimesTo A Questionable Degree)

When you run a user-generated content site as massive as YouTube, you have to be capable of handing potentially millions of copyright complaints. To keep up with the never-ending flood of complaints, Google has progressively made it easier to file them. Its Content ID feature lets copyright owners supply YouTube with audio or video reference files that the system then uses to automatically identify infringing content and flag it for further action.

 As you can imagine, Content ID has resulted in some highly questionable takedown requests. So last year Google implemented an appeal process to help minimize frivolous takedowns. Of course, even with protections in place, eyebrow-raising takedown requests are still granted from time to time.  

Google also now claims to be responding to copyright takedown notices within 24 hours, a promise it made to the content industry a few years ago. 

3. Tweaking Actual Search Results To Discourage Piracy 

The content industry has long wanted Google to not just tweak search suggestions, but to actually remove and downplay results that lead to infringing content. For years, Mountain View was unwilling to tinker with the secret algorithm that bulldozes billions of dollars into the company every year. As big content companies become more valuable potential allies, Google has warmed up to the idea. 

Google is constantly bombarded with requests to removed URLs from its search results on copyright grounds. In 2012, the company pulled 50 million infringing links from its index. In the last few months, the number of requests have skyrocketed, so it's likely we'll see even more links de-indexed in 2013. 

Granting DMCA takedown requests is one thing. What the content industry has wanted all along was a deeper, algorithmic change to Google's search results. In August, they got their wish. 

In its most radical anti-piracy move yet, Google added copyright takedown requests to the more than 200 signals it uses to rank and index search results. That is, if a site gets a high number of "valid copyright removal notices," it may wind up taking an SEO hit as a result. Not surprisingly, the RIAA was quick to cry "not good enough!" only six months after the admittedly measured changes were made. 

4. Next Up: Defunding Piracy Sites 

To quell any remaining doubts that it's serious about piracy, Google is about to cave into another long-held entertainment industry wish. According to the Telegraph, Google is currently in talks with MasterCard, Visa and PayPal to cut off funding to sites that engage in copyright infringement. The report is short on details, but presumably such a tactic would be reserved for some of the worst offenders, especially those who dodge takedown requests or operate in other jurisdictions. This is an unconfirmed report, and one that reveals only discussions, not action. If Google does proceed with this one, it's anybody's guess what the timeline might look like. 

Of the changes that have been implemented, each one is decidedly measured. Google can't quite afford to go nuclear with its antipiracy efforts, much to the chagrin of the industry. This is going to be an evolutionary and thoroughly imperfect process. As the business incentives and industry pressures mount, expect to see Google make increasingly aggressive moves. And, like clockwork, expect the RIAA's complaints to keep coming. 

MasterCard's MasterPass Aims To Sidestep The Mobile Payments Mess

The hype around mobile payments sometimes obscures the fact that not only aren't there yet any clear winners ' there's not even a clear market for services that have a lot of potential, but which most ordinary consumers seem reluctant to embrace.

On the corporate side, everybody wants a slice of the potential multi-billion dollar pie. That's cluttered the mobile payments landscape with so many products and solutions ' and no real infrastructure and platforms ' that it has actually slowed down the potential acceptance of paying for goods with your smartphone.

Too Many Options

Think about it. Google has its contender in its NFC-based Google Wallet. The mobile carriers their own NFC option called Isis. Square and a variety of competitors have the dongle-based solutions covered. (PayPal has its own copycat dongle ' yes, the one that's triangular instead of square.) Visa, MasterCard and American Express all have their own technologies and digital wallets.

Major retailers basically got fed up, said, 'screw you' to the rest of the mobile payments industry and started building their own, though so far incredibly vague, mobile wallet. A variety of startups are also trying to sidestep the established players. If you're a retailer, how are you ever going to figure out what to use for the supposed mobile payments revolution?

It's a real mess. Mobile payments has become such a muddied place that it's nearly impossible to see the entire ecosystem or to discern which way to move.

MasterCard Takes The Platform

MasterCard wants to separate itself from all that. Today, at Mobile World Congress in Barcelona, it has announced a new "platform" in the mobile payments race it calls MasterPass.

The effort is an evolution of the PayPass system MasterCard released in the spring of 2012. The goal of MasterPass is to bring together all the different forms of payments that people use to pay for things ' cards, digital wallets and the like ' and to give retailers one multi-tool option for how to integrate mobile payments.

'We tried to think about the lessons learned at an industry level of what's worked and not worked in the past. We tried to take a hard look at what has been working, where have we seen mobile payment apps really take off,' said Ed Olebe, MasterCard's group head of MasterPass Services in an interview with ReadWrite. 'The way we can envision this working at the greatest scale, and for us this is really about moving into digital. So our ultimate vision with all of this stuff, this is going beyond plastic cards into fully digital payments.'

Offering A MasterPass

MasterPass will have three primary elements:

• Checkout Services: For in-store or online purchases, MasterPass will support NFC, QR Codes or mobile devices at the point-of-sale (the register).
• Connected Wallets: The digital wallet is no longer just a MasterCard PayPass option. MasterPass instead creates a platform where individual banks, retailers and partners can create mobile wallets. In addition to MasterCard, consumers will be able to pair other branded credit and debit cards to the wallet.
• Value Added Services: The kicker in any mobile payments. Users and merchants can get data about the transaction, balances, loyalty programs and real-time alerts. 

'Really what we're doing is we're offering merchants a whole suite of services that allow them to execute checkouts in all manner of different ways to enable them to have what they would call a sort of omni-channel consumer experience,' Olebe said.  

MasterCard envisions MasterPass as a hub-and-spoke type of environment. At the center is MasterPass and its ability to digitize payments and offer application programming interfaces (APIs) and standard structures (such as cryptography and security) for transacting payments. The spokes are MasterCard's technology partners that build apps and transactional elements such as digital wallets and point-of-sale software for retailers.

For instance, MasterCard is partnering with mFoundry to create digital wallet apps for banks and Verifone that makes point-of-sale hardware and software. These partners can then integrate straight to retailers and services. For instance, if you take a cab in London, the credit card reader is likely made by Verifone. Through these partnerships, MasterCard can extend the platform from the relatively closed solution that was the PayPass wallet project into a platform that connects a variety of retailers, payment methods and technologies.

'We're saying, you choose who you want to work with, you decide what experience you want and we'll plug in to it,' Olebe said. 

Hurdling Traditional Obstacles

Two basic problems have hindered mobile payments adoption: standards and infrastructure. With all the players jostling for position, there are too many standards for merchants and consumers to consider. That, in turn, hinders the development of payment infrastructure, since retailers don't know what equipment to install or what software to deploy.

MasterCard says its discussions with merchants led it to realize that top-down solutions from technology or financial companies won't work. The way forward has to originate within the retailer, after which a company like MasterCard can enable it.

'Our job is to provide services and APIs that even if they make different design choices, they could go forward in a consistent way for that customer,' Olebe said. 'We're not telling merchants you have to do it one way. What we're saying is, 'We recognize that two very rational merchants even in the same category can come up with different perspectives on the right kind of tech they want to invest in and the right kind of experience.''

Which all sounds great. Now to see whether merchants are ready to dance with MasterPass, even if it lets them lead.

Box CEO Aaron Levie On The Future Of Data Storage [Video]

Last week, ReadWrite Editor-in-in-Chief Dan Lyons sat down with 27-year-old Box CEO Aaron Levie to discuss the complex market of enterprise cloud technology in the third ReadWrite Mix event in San Francisco.

(See also Aaron Levie On The Uncertain Landscape Of Enterprise Software, Aaron Levie On Finding Mentors & Mixing Enterprise/Consumer Cultures and Aaron Levie On Growing Up During The '90s Tech Boom)

When not discussing his hilariously-named teenage startups or early ambitions to join the MLB, the one-hour sit-down saw Levie and Lyons discussing nearly every facet of the enterprise software business, from how it started and what is now to how Box aims to lead the way into its uncertain future.

This 2:19 clip illustrates Levie's uncanny ability to make even the most seemingly mundane topics - the growth of data storage - sound fascinating  As storage costs go down, Levie sees Box's opportunity to give away more space at a lower price. "Probably in the future, you will use us for infinite storage," he says, because "the amount of capacity we have is increasing at a faster rate than our ability to use it." 

 

RIAA Slams Google For Anti-Piracy Fail

Frustrated and bitter that laws like SOPA and PIPA have yet to get pushed through Congress without those pesky constituents objecting to turning the U.S. government into muscle for entertainment industry, the Recording Industry Association of America (RIAA) is taking out its anger on Google. The music industry lobbying group is accusing the search engine giant of failing to effectively demote search results that lead people to those nasty little download sites.

In a blog post on the RIAA site yesterday, Steven M. Marks, EVP & General Counsel, RIAA made it clear that the music copyright association thinks that Google, despite making some headway, remains a day late and a dollar short.

"We recognize and appreciate that Google has undertaken some positive steps to address links to illegal music on its network," said Steven M. Marks, the RIAA's executive vice president and general counsel. "Unfortunately, our initial analysis concludes that so far Google's pledge six months ago to demote pirate sites remains unfulfilled. Searches for popular music continue to yield results that emphasize illegal sites at the expense of legitimate services, which are often relegated to later pages. And Google's auto-complete function continues to lead users to many of those same illicit sites."

(This isn't the first time: see also RIAA Slams Google's Anti-Piracy Efforts, Demands Even More Unreasonable Measures.)

Testing The Claims

I wanted to see if the RIAA might be overstating its concerns, something that they've been known to do before. So I performed a little one-man experiment, using the song "Some Nights" by Fun. as the guinea pig. Your mileage may vary, of course, but my quick-and-dirty test revealed that the RIAA may have some valid claims.

A search for "Fun. album" returned a first, second, and third page of results that were absent of any results that would seem to contain illegal downloads, with the bottom of the third page containing three DMCA takedown notices that point to the Electronic Frontier Foundation's ChillingEffects.org for more information.

But down in the "Searches related to" section of all of the results pages, "fun. some nights download" was among the listings, and a click-through pulled in the plenty of links to aggregate MP3 download sites, mixed with a few legitimate sites, like iTunes (#3), Amazon (#7) and the official video on YouTube (#8).

As for the RIAA's claim that Google's AutoComplete will suggest search terms that could lead users to sites containing unlicensed copies of songs, I found this was indeed true. By the time I typed "fun. some", Google had filled in four results:

fun. some nights
fun. some nights lyrics
fun. some nights meaning
fun. some nights mp3

On a whim, I turned on SafeSearch to see if that would make a difference. Results did differ on some search results, such as "fun. some nights download", where legitimate sites (like the Wikipedia entry for the album) were moved up slightly on the first page of results, but the sketchy download sites were still in full-glory display.

I should also note that the RIAA did not take Microsoft's Bing service to task, even thought the same experiment on Bing yielded very similar results, even in the auto-complete results. Type in "fun. some" on the Bing home page and you get these helpful suggestions:

fun. some nights lyrics
fun. some nights
fun. some nights meaning
fun. some nights torrent
fun. some nights video
fun. some nights album download
fun. some nights mp3
fun. some nights review

Search Engines As Police?

Based on these (admittedly quick) search tests, it seems like the RIAA has a point, and Google is failing to block apparent pirate sites on its search results, and its demotion policy announced in August 2012 isn't really working all that well, either.

But let's be clear: Google has said all along it wasn't going to block site results from any site unless it receives a specific copyright removal request from the rights owner.

"Only copyright holders know if something is authorized, and only courts can decide if a copyright has been infringed; Google cannot determine whether a particular webpage does or does not violate copyright law. So while this new signal will influence the ranking of some search results, we won't be removing any pages from search results unless we receive a valid copyright removal notice from the rights owner," senior vice president of engineering Amit Singhal wrote back in August.

At the time, what Google said it would do was add a new signal to how it ranks search results.

"Starting next week, we will begin taking into account a new signal in our rankings: the number of valid copyright removal notices we receive for any given site. Sites with high numbers of removal notices may appear lower in our results," Singhal stated.

The RIAA is contending in its statement this week that Google has failed to live up to that promise.

One has to wonder, though, if trying to keep up with the sheer number of sites that provide access to unlicensed media content is comparable to spitting on a forest fire. If the signal for page ranking depends in some way on number of takedown attempts, perhaps the RIAA and other rights holders are not sending enough signals. Or maybe these sites know who to game other ranking signals to boost their status on Google and Bing search results.

It is very easy to point fingers at Google and Bing and accuse them of not doing enough to keep people away from pirated media. If you forget, of course, that this not their job.

Complaining about the auto-completing results would seem to be a more valid concern, until you remember that there could be legitimate results for "download X."

The RIAA wants to protect the rights of its artists and producers, a valid concern. But it is not clear at all that Google, Microsoft and the other search engines should be relied upon as key allies in the recording industry's ongoing quest to stomp piracy. Search engines' missions are to provide data, not analyze that data for legality.

Despite what they're asking for here, I suspect even the most vehement anti-piracy activists would not care for some of the implications of a world where search engines were to undertake that goal.

Microsoft's Rotten Friday: Hack Revealed As Azure, Halo Go Down

Microsoft ended the week with a pair of black eyes: a failure to secure a security certificate brought its Azure cloud service tumbling down, and the company also confessed to being the latest corporate victim of a high-profile hacking attempt.

The Azure failure also affected Microsoft's Xbox game, Halo 4, Microsoft confirmed.

The highest-profile incident may have had the least effect: "a small number" of Microsoft PCs were penetrated by an unknown intruder. No user data was compromised, Microsoft said in a blog post. 

"Consistent with our security response practices, we chose not to make a statement during the initial information gathering process," Matt Thomlinson, general manager of Microsoft's Trustworthy Computing Security unit, wrote. "During our investigation, we found a small number of computers, including some in our Mac business unit, that were infected by malicious software using techniques similar to those documented by other organizations. We have no evidence of customer data being affected and our investigation is ongoing."

The attacks were consistent with other efforts to penetrate computers within Apple and Facebook, Microsoft said. Facebook discovered its attack last week, which followed attacks on the Wall Street Journal and The New York Times via an unpatched exploit within Java, exploited, experts believe, by the Chinese military.

Separately, ZenDesk reported Friday that it too, was hacked, exposing emails that clients Tumblr, Twitter and Pinterest used to communicate it with it for service-related requests. 

Lack Of SSL Certificate Brings Azure Down

At press time Friday night, Microsoft still had not implemented a fix for the Azure issue, caused by a failure to obtain a new SSL certificate. That brought its Azure storage services down across all of its worldwide regions, as well as services that were dependent upon them.

At 9:30 PM UTC (4:30 PM ET), Microsoft discovered that "HTTPS operations (SSL transactions) on Storage accounts worldwide are impacted," the company said.  By 9:45 PM UTC, the the management portal, WindowsAzure.com, and the service bus, plus the websites that Azure serves were also down. By 10:15 PM, the company had begun validating steps to repair the problem, but hadn't formally announced a fix. After users began circulating screenshots of what appeared to be an expired SSL certificate, the company acknowledged its error.

"Windows Azure Storage has been affected by an expired certificate," a spokesman said in an emailed statement. We are working to complete the restoration as quickly as possible. We apologize for any inconvenience this has caused our customers. For more information please go to http://www.windowsazure.com/en-us/support/service-dashboard/." Microsoft also apologized to customers via Twitter.

Microsoft also reported problems with its Compute services, preventing users from creating new virtual machines. That left users who needed to create those virtual machines to host new apps scratching their heads. "Most of our apps are screwed up now!" pinvoke.in, one commenter, complained. "WHATS NEXT? All compute instances die because someone at the data center switched them off?"

Unfortunately for Microsoft, this sort of thing has happened before. At the end of February 2012, Microsoft failed to account for the leap day at the end of the month, Feb. 29. As a result, the Azure services was down for more than 12 hours before Microsoft could issue a fix. Microsoft hasn't said whether or not the recent outage was a result of an oversight, or a more serious technical error.

Oddly enough, Netflix began reporting problems of its own on Friday night, leading to the intriguing possibility that two cloud services may have been failing at the same time. But although Netflix has gone down before when Amazon's AWS service failed, Amazon's own AWS service dashboard didn't indicate any problems.

Facebook Bugs Have Been Messing With Your Page Reach

In yet another Bad News Friday post, Facebook has informed us that it hasn't exactly been counting the audience for our posts quite correctly. In fact, the social network has been significantly understating the "reach" of Facebook posts ' especially paid posts ' for at least the past several months.

In a blog post yesterday on Facebook Studio, the social network's marketing hub, the company admitted that coding errors have been misrepresented the audience reached by Facebook posts since sometime last year (though it hasn't yet been much more specific than that). Facebook stresses that these bugs have only impacted reporting and not delivery, meaning fans were still receiving the posts, even if Facebook wasn't counting them properly. The company said the stats should update once Facebook cleans up its code. 

This admission could be a big deal for Facebook, which has taken some serious heat from Dallas Mavericks owner Mark Cuban and other big brands for allegedly throttling their access to their Facebook fans. Last November, Cuban complained, both on Twitter and in heated articles on sites like The Huffington Post, that Facebook was restricting brands' ability to engage their fans in order to juice sales of paid "promoted posts."

Less Bang For The Buck

The bugs Facebook is describing, however, could also conceivably have led brand and business owners like Cuban to believe they were getting less bang for their Facebook marketing buck. In its post yesterday, Facebook claimed that the bugs held down the reported audience for paid newsfeed posts, meaning that such promotional posts actually reached a larger number of users than the social network's statistics previously suggested.

"As soon as we found the bugs our engineering team began work to resolve them as quickly as possible. We're rolling out fixes beginning this morning and over the weekend," Facebook's post states. That's certainly reassuring for anyone who relies on Facebook for social marketing, but the underreporting to date is still a pretty big deal. It's an even bigger deal where paid reach is concerned, since that involves placing ads placed in users' news feeds ' ads that then reported back inaccurate numbers. 

Here's what will change as a result of the ongoing bug fixes, according to Facebook:

• Total reach to stay the same or increase for most Pages
• An increase in paid reach if you ran News Feed ads
• An increase or decrease in organic reach, depending on many factors such as the composition of your fan base, when and how often you post and your spending patterns
• A change in metrics computed from reach and impressions, such as engagement rate and virality
• We know that accurate data is fundamental to building and improving your Facebook presence. We are taking this very seriously.  We have already put a number of additional quality and verification measures in place to prevent future bugs and resolve them quickly if they arise

Where It All Began

Facebook says the problems originated during an update to its iOS and Android apps, TechCrunch reported. While trying to speed up mobile performance of its site, Facebook ended up stripping away a little too much of the data reported back to its servers. This resulted in a couple of bugs that failed to count page posts as users upgraded to new versions of the apps, and then a lesser bug that counted the viewing of a desktop news feed ad twice, as both an organic and then a paid impression.

It wasn't until a number of complaints from clients that Facebook decided to perform an internal audit, which uncovered the bugs and forced the company to begin an intense three-week fix. 

While you can certainly argue that the bugs didn't cause that much damage ' after all, many pages will soon show improved reach as a result of the fixes ' the problem certainly does some damage to Facebook's reputation as a secure and accurate social hub for business. 

But if you're a brand manager who's been feeling a little down in the dumps over your failure to engage readers with paid posts, you can take heart in Facebook's two-minute video reiterating its solutions. With alarmingly low depth-of-field, a woman with a very calming voice explains everything you need to know about this not-a-real-problem to soothing piano music. Surely your average social media manager shouldn't require much more than that to fend off frustration. 

Risk Averse: Will iOS Become Apple's Windows XP?

Until recently Apple has been on an unstoppable roll. Apple's iPhones and iPads have been flying off the shelf. But when Apple's latest quarterly results got a thumbs down from Wall Street, from the market, lots of people started wondering if Apple had lost its mojo.

Dan Lyons put it this way here here at ReadWrite, 'It seems Apple has hit a wall. It's not just about sales and earnings, but also about innovation. It's been years since Apple did something truly revolutionary.'

A Delicate Balance Of Innovation

But truly revolutionary can also be truly risky. With 75 million iOS devices sold in Q1 of its 2013 fiscal year, Apple's success is now increasingly all about iOS. To keep the iOS train moving and churning out profits, Apple needs to innovate - but not so much that it scares away the legions of happy iPhone and iPad users.

Might iOS, the very product that helped put Apple on top, require risk taking beyond what the new Apple can handle? Current users love iOS - but Apple seems to losing the numbers war to Android.

To turn the tide, iOS may need to be re-invented. That often happens to operating systems, but it is not easy to pull off without killing the goose that lays the golden eggs. Other companies have seen inordinately popular operating systems actually hold them back from getting fully behind new and improved versions.

The Windows XP Comparison

Look at Microsoft. Windows XP was released on October 25, 2001 and it took until August 2012 before Windows 7 had more users. Windows 8 - given its challenging new interface - might have an even tougher time moving the needle.

Windows XP was successful because - as David Johnson, an analyst with Forrester has noted - 'It was a very, very good operating system... a superb OS because it removed a lot of pain.' While the Macintosh was often called great, Windows XP was often said to be 'good enough' and with inexpensive hardware as a platform, it won the desktop computing war.

Windows XP retains a strong hold on many users, to Microsoft's chagrin. The company would like to see them buying new computers loaded with Windows 8.

Is it conceivable that Apple has achieved that magic 'good enough' formula with iOS on its current iPhones? People hang onto to their iPhone because it has been a positive experience for them and it works - will that affect Apple's ability to get the to try something new and presumably better?

The iPhone and iOS revolutionized smartphones and tablets much like the Mac popularized graphical user interfaces. Now, in spite of huge Apple numbers, the smartphone and tablet markets are slipping away to Android much like the computer market went to Windows XP.

Is iOS Falling Behind?

Where does iOS stand today? Erica Ogg at Gigacom argues that while there have lots of releases of iOS, there has been little change.

'While iOS has seen six new releases since its debut in 2007, there have been few major changes. The arrival of the App Store in 2008, and push notifications in 2009 were the last big adjustments in how the software works.'

John Martellaro, a Mac Observer writer who used to work for me at Apple, recently had this to say in his article, We've Changed and Grown. Apple's iOS Hasn't:

'iOS, now roughly six years old, was designed in an era of much less hardware capability and launched on the small 3.5-inch display of the original iPhone. Now, it's being pressed into service on ever larger iPhone and also iPad displays. One of the big annoyances is the single foreground app/single window design.'

The iPhone is also losing some notable users and influencers, including Steve Wozniak and Robert Scoble. Yet in spite of all this, the number of people who own iPhones and who are planning to switch to another platform remains small. A recent study suggests that the number of iPhone users planning to buy another iPhone has dropped only from 88% to 75%.

Why Change Will Be Hard

If the iPhone and the iPad are no longer the clear technology leaders, big change seems in order. Ironically, Apple's loyal customers who still plan to buy a new iPhone might be a hurdle. How much Apple can change iOS without losing the loyalty of those customers?

In a recent Ars Technica survey - iPhone users: what does Android have that you want? - 8% said they wanted bigger displays - but 10% said they would never switch from their iPhone.

Apple Has Been Here Before

Finding just the right amount of change in that environment won't be easy. But Apple has successfully faced this type of pivotal moment before - sometimes even without the help of Steve Jobs. Apple's history demonstrates a willingness to make technology breaks when needed.

Today's need for innovation while maintaining a satisfied customer base calls for the same boldness that Apple displayed when it moved users from the Apple II line to the Macintosh line, and later from Mac OS9 to Mac OSX and finally to Intel processors. Apple users gave Apple high marks for these difficult transitions.

Can Apple Do It Again?

But this is a different Apple - and a different, arguably less-forgiving market. As Blackberry and Nokia so clearly demonstrate, things happen quickly in the mobile space, with little room for error.

Whether Apple can innovate enough to stem the Android march while keeping current users happy might be the first big test for the new, post-Jobs Apple.

Apple still has one key advantage. Apple owns the whole widget, the hardware and the software. In the past it has made the ecosystem change so compelling that loyal customers followed without hesitation. But Google and Microsoft are starting to copy Apple's whole-widget strategy - and that could make any iOS transition even harder.

What's Next?

All things point to Apple making significant changes in iOS in 2013. Most Apple iOS users will follow wherever Apple goes - but that is only half the battle.

It all boils down to two things. Does Apple have the vision to make the next version of iOS a true advance? And even if the next iOS is a huge hit among current users, will it be enough to stem the tide toward Android?

If Apple can pull off this difficult transition, it could find itself set for another 5 years. If not, it will face increasing pressure from many sides.

 

Image by Fredric Paul.

Stalking Shadow IT: Amazon Assembles An Enterprise Cloud Army

If you're like most enterprise IT professionals, you have serious concerns about cloud computing. According to a new Lieberman Software 2012 Cloud Security Survey, sponsored by the Cloud Security Alliance, 88% of the 300 IT professionals surveyed believe that some of their data hosted in the cloud could be lost, corrupted or accessed by unauthorized individuals. That's likely why 86% keep their most sensitive data behind-the-firewall.

Despite those concernse, though, an equally whopping 86% believe their cloud deployment has been a success. It's therefore not unreasonable to suspect that 100% will be back at the cloud computing trough, again and again and again.

That is really good news for Amazon, which is looking to double down on selling its cloud services to the enterprise.

Amazon Hires an Army

In a bid to drive enterprise adoption, the cloud leader looks set to nearly double its AWS salesforce, as Business Insider discovered. No doubt these salespeople will focus on moving enterprises to use Amazon Web Services beyond the test and development workloads currently in the cloud, currently the dominant type of workload enterprises cede to AWS. The goal, clearly, is to get them to move mission-critical applications to AWS.

This could prove harder than it first appears, given enterprise insistence on tight Service-Level Agreements (SLAs) and the big differences between enterprise and consumer cloud requirements, as Wikibon's Kristen Feledy posits:

IT organizations are under tremendous pressure to cut costs and the 'Amazon Effect' increases that pressure. The reality is many of the successful public cloud examples are characterized by a single application accessed by millions of people; whereas the traditional enterprise is made up of hundreds or even thousands of apps accessed by thousands or maybe tens of thousands of users. These are different worlds where the former is all about scale and simplicity and the latter emphasizes service levels, reliability and security.

Amazon, after all, has mostly taken a somewhat blasé approach to SLAs, which Wikibon describes as "we'll do our best ' if we don't please send us an email."

Not exactly a confidence booster for the cloud-wary CIO.

Shadow IT: First Open Source, Now Cloud

This is changing. Amazon recently rolled out premium support plans for the enterprise, including "white glove case routing." To sell a premium AWS experience, Amazon's job profiles scout for sales professionals who "possess both a sales and technical background that enables them to drive an engagement at the CXO level as well as with software developers and IT architects." In other words, Amazon recognizes that it is the developers and architects that pull cloud computing into the enterprise, but it is the CIO who will bless this "shadow IT."

After all, it is shadow IT that has been selling the enterprise on Amazon for years. By now, just every enterprise is using the cloud, be it from Amazon, Microsoft, Rackspace or others, as progressive IT professionals have looked to the cloud to get things done despite friction from internal bureaucracy. For those paying attention, this is precisely how open source succeeded: currying favor with developers until its spread was so pervasive within the enterprise that CIOs were forced to accept it, and signed sales contracts with Red Hat and others to mitigate legal risk and improve service.

Hence, Cloudscaling's Michael Grant is arguably correct to suggest that rather than fight shadow IT and its inexorable march to the cloud, CIOs should recognize shadow IT as "a forward thinking testbed for IT innovation." If Grant is right, that testbed suggests a future in the cloud, both for dev/test and mission-critical workloads, driven by the promise of higher convenience and lower costs, but really about increased innovation.

But it also suggests that Amazon has been right to first focus on the enterprise's new kingmakers: developers. This is how open source won. It's how the cloud is winning, too. 

Box CEO Aaron Levie On Growing Up During The '90s Tech Boom [Video]

Last week, ReadWrite Editor-in-in-Chief Dan Lyons sat down with 27-year-old Box CEO Aaron Levie to discuss the complex market of enterprise cloud technology in the third ReadWrite Mix event in San Francisco.

(See also Aaron Levie On The Uncertain Landscape Of Enterprise Software and Aaron Levie On Finding Mentors & Mixing Enterprise/Consumer Cultures)

In their wide-ranging, hour-long conversation, Lyons and Levie touched on just about every topic of interest in the enterprise startup space. But perhaps the most interesting aspects concerned Levie's own unique story. This 1:53 clip touches on how growing up in Seattle helped inspire Levie to begin starting companies as a teenager (publishing HTML webpages to the Internet was all it took, he says), and how he had to try his hand at countless projects on the way to his dream of starting a successful company. Levie did acknowledge an alternate dream that included playing professional sports: "It's either MLB, or start an Internet company," he joked. 

5 Top iPad Photo-Editing Apps

Who says the iPad wasn't meant for creation? Sure, you can't exactly run Final Cut Pro or Adobe InDesign on Apple's tablet (nor would you really want to), but the device has come a long way since 2010. One category of apps that demonstrates the iPad's creative prowess is its growing selection of photo-editing software.

Indeed, there are now a ton of apps that let you manipulate images on your iPad with no shortage of vintage filters, quirky effects  and single-purpose gimmick apps. Those can be fun, but we wanted to focus on the super-popular, fully-featured editing apps that seem best to supplant desktop options for some users. 

Let's be honest. You're probably not going to walk around town holding up your iPad to take photos. If you do, we assure you that you'll look ridiculous doing it. It's also unnecessary. With syncing options like Photo Stream and Dropbox and the camera-connecting accessories available for iPad, you're free to snap photos on a more appropriate device and then access them on your iPad, where the editing experience keeps getting more and more delightful. 

5. Process 

To anybody who's accustomed to just about any digital photo editing software, Process will seem a bit unconventional. That's because the usual on-screen conventions for editing photos have been abandoned in favor of a system in which changes are made by adding "Processes" to the image. All the standard adjustments you'd likely make to an image ' blur, brightness, contrast, curves, highlights, etc. ' are each available as a preset called a Process, which once applied, can be adjusted manually. 

Process has its limitations. You can only apply edits, effects and filters to the entire image and can't drill down, use brushes or tweak individual details. It's not the most capable app out there, but it has an incredibly simple interface, making it a breeze for pretty much anyone to use. 

PROS: Super-simple UI, intuitive controls and commonly-needed adjustments.
CONS: Limited functionality. 
PRICE: $14.99 
Download From iTunes

 

4. Photo Forge 2

If you're looking for a more Photoshop-esque editing experience,  Photoforge 2 is a solid choice. It's popular among professional photographers who need a mobile solution for quick edits. In addition to all the typical photo adjustments like color balance, curves, contrast and the like, Photo Forge lets you add Instagram-style effects and simulate specific lenses, film types and processing techniques. Unlike most iOS photo editing apps, this one supports layers like those popularized by Photoshop on the desktop years ago. 

Photo Forge 2 is rather powerful, but all those features are packed into an interface that's anything but intimidating. It's a cleanly designed interface with intuitive controls. 

PROS: Feature-packed, supports layers, masking and high-res photographs. Upload photos via FTP. 
CONS:  Occasional performance issues reported by some users.
PRICE: $3.99
Download from iTunes

 

3. SnapSeed

Everybody loves SnapSeed. It has one of the highest ratings among photo apps in iTunes and constantly gets rave reviews. It's very good. Its super-simplified interface and grid of common adjustment options is reminiscent of Process, but with far more capability and granularity packed into each option. 

SnapSeed's touch gesture-based functionality takes full advantage of the iPad's form factor, desktop editing conventions be damned. Swipe your finger up and down to select the type of adjustment you want to make, then slide across the image to the left or right to tweak its intensity. You can even make selective adjustments that target only one part of the photo and blend it seamlessly with the rest of the image. Stuff like this can get pretty tedious to try and pull off in Photoshop. 

Like Process, SnapSeed doesn't give you total control, but what it does give you is enough to generate some stunning images. 

PROS: Intuitive, touch-based editing, selective adjustments and no price tag.
CONS: Not a fully-featured photo-editing app. It has its limitations. 
PRICE: Free
Download from iTunes

 

2. Adobe Photoshop Touch 

For awhile there, it looked like Adobe had given up on mobile photo editing, as app after app one-upped its underwhelming Photoshop Express app. Then it launched Photoshop Touch. 

Photoshop Touch brings many of the desktop's apps most useful features to a more minimalist, easy-to-learn interface on the iPad. It's no CS6, but Photoshop Touch supports such desktop staples as layers, the magic wand tool, the paint brush, clone stamp, text, gradients and a range of filters. That's all in addition to standard stuff like saturation, brightness/contrast, color balance and noise reduction. 

Realizing how unlikely you are to hold up your iPad to take photos like a goofball, Adobe went beyond the device's local Camera Roll and integrated Photoshop Touch with Google Image Search, Facebook and its own Creative Cloud.  

PROS: Familiar Photoshop interface, but more simplified and intuitive. Integration with Facebook and other photo sources. Built-in tutorials. 
CONS: Typography options could be better. FTP export would be a plus for pros. 
PRICE: $9.99
Download from iTunes

1. Photogene 

Photogene is another app that often gets a nod from professional photographers. It's easy to see why. Like Photoshop Touch and Photo Forge, Photogene is a feature-packed app that supports the kind of workflow that pros need to tone, resize and adjust their photos. And again, like those apps, it's easy to use and reasonably priced. 

Of all the pro-level iPad photo-editing apps, Photogene seems to have packed the most options in. Unlike Photoshop Touch, Photogene doesn't support layers or making granular selections within an image, but it more than makes up for those shortcomings with a huge selection of manual and preset editing options. You can do the one-size-fits-all Instagram-style filter or make modifications manually.  Photogene lets you FTP images to a server, which will allow it to fit into the workflow of pros on the go. 

PROS: A wide range of adjustments, filters, effects, presets and  export options, including FTP. 
CONS: No layers 
PRICE: $2.99
Download from iTunes

Other Noteworthy Options 

There are plenty of other options. Apple's iPhoto and Aviary's iPad app (which is free) both deserve serious consideration by anybody who wants to edit photos on their tablet. Luminance and Gridditor are worthy of the hype they've received recently as well. 

Which iPad photo-editing app is best for you? It depends on how serious of a photographer you are, how much control you want, and how much you're willing to pay for an app.  Photogene, Photoshop Touch and Photo Forge 2 are good enough to work for pros (most of whom will undoubtedly still turn to the desktop for serious editing needs), but all of the above options are accessible enough to be used by beginners.

Lead photo by Flickr user nayukim.