Red Herring editor says the future is 'Always On'
By Aliza Earnshaw
14:07 EST Friday
January 17, 2003
portland.bizjournals.com
Tony Perkins, editor-in-chief of Silicon Valley's Red Herring Magazine, regaled more than 380 attendees of Friday's Business Journal Power Breakfast with his views on technology, society and politics in a lively dialogue spiked by Perkins' puckish humor and laid-back California demeanor.
His retrospective assessment of the internet bubble and its lack of a sensible revenue model, for example, was both succinct and folksy. "The investors paid for everything, and the customers paid for nothing. It was a weird, stupid time."
Or take Perkins' view on how the internet is changing politics. "Look at the rise of the Al Qaeda network. They communicate with each other by messages encoded on different web sites. It's the rise of the cybernation. That's what's got the president all freaked out and focused on."
The concept and infrastructure of Perkins' latest venture say a good deal about what Perkins has absorbed from his years of watching the Silicon Valley tech business scene. The Always On network is a membership-based web site that he has constructed on the eBay principle: "The members provide the entertainment and the fun, so the content is free."
Always On, which just went live two days ago (at alwayson-network.com), will provide short editorial pieces written by technology figures such as Larry Ellison and Michael Dell, and members of the site will be able to post their comments on those pieces, creating a discussion forum that Perkins hopes will generate sufficient buzz to drive increasing numbers of people to the site.
Questioned by an audience member about the Always On revenue model, Perkins said the web site will generate revenue from a variety of sources, starting with site sponsorship (advertising) and moving on to fee-based products such as premier member services and research reports. Like other internet-based businesses, Perkins said, Always On will "have to diversify the revenue streams."
Perkins expressed some old-time internet bubble optimism around the revenue question, saying, "We have to realize that the whole world is converging on the internet. All of the ways we exchange money will end up on the web. The model for Always On is the model for commerce in general."
But it's the infrastructure of Always On that points perhaps most provocatively to the future, not only of the internet, but of enterprise computing in general. The Always On "back end," said Perkins, is built entirely on the Linux operating system, an open-source software that can be used by anyone without payment of a license fee.
"I spent $150 on software to build the Always On site," said Perkins. "I felt so guilty that I wrote a check to the Open Software Initiative." The entire site cost Perkins $40,000, as compared with the Red Herring site, for which he was quoted $1 million, said Perkins, for a white paper that would "sort of" tell him how to build the site.
It's not just the buildout costs that Perkins saved on by using Linux. He also saves on running costs. "My monthly service fee is $400. I asked what would happen if hundreds of thousands of users come to the site, and they told me it could go to $700 a month," he said. To put that into perspective, Perkins added, "We spent $200,000 per month to operate [Red Herring's] site not too long ago. I'm embarrassed to tell you that."
Asked about other disruptive technologies, Perkins said that wireless internet access, which he regards as the next killer app, is quite disruptive. All business functions will have to move to the web, because users are demanding the ability to do whatever they need or want to do anytime, anywhere, from any digital device. Perkins pointed to the example of his college-aged daughters, who use wireless networks on their campuses and will certainly expect to work in a wireless-network environment when they graduate — just like everyone else of their generation.
"Enterprise will have to be rewrittten to the internet," said Perkins, with a "client-web" model replacing the current "client-server" model. "Businesses will have to Dell-ize or die," he added, referring to the fact that Dell Computer now takes orders automatically on the web, sending them automatically to finance, inventory and other corporate system. What used to take six phone calls to process now is untouched by any human employee, Perkins said.
The internet will also disrupt other long-established business models, Perkins predicted, offering the example of traditional telephone service. "There's a company out of Pennsylvania offering internet-based telephone service. It costs $29 a month to talk anywhere in California, unlimited," said Perkins. That kind of business poses a real threat to traditional telephone companies, he said.
As for the drying up of venture capital, Perkins, who is the son of Tom Perkins, a partner emeritus of well-known venture capital firm Kleiner Perkins Caufield & Byers, said, "Underneath all the madness, there are still rational people out there, and lots of money to be had. First go sell your customer. Don't start by trying to sell a V.C."
Contact Aliza Earnshaw at 503-219-3433 or by e-mail at aearnshaw@bizjournals.com. |
