I can’t think of a better way to show off a developing technology than to demo it while cruising down the Chicago River on a tour boat. And, apparently, neither can two proponents of WiMax, the pervasive wireless technology that promises to blanket entire cities with wireless Internet access.

For the demo, Motorola and Sprint Nextel, two heavyweight backers of the 802.16 wireless standard, operated seven laptops and five wireless phones with WiMax capabilities for 100 or so industry watchers and reporters “and were able to keep constant connections to data, video or voice streams while the boat moved perhaps 5 knots,” according to Computerworld.

“The devices were communicating with six WiMax antennas from Motorola affixed atop four buildings along the river, at the edge of Lake Michigan,” wrote reporter Matt Hamblen. “Sprint provided the antenna sites near other more typical cell sites and has the available WiMax spectrum under its federal license.”  

While WiMax has a much wider coverage range than Wi-Fi (a few square miles versus a few hundred square feet) and is sometimes described as Wi-Fi on steroids, it is also a lot less mature than Wi-Fi technology. Whether it will replace, compliment or lose out to Wi-Fi in the battle for wireless Internet access supremacy is still undecided.

As for the floating demo, Sprint and Motorola considered it a success, but not every passenger was so sure. As analyst Thomas Elliott of Strategy Analytics, who was aboard for the WiMax voyage, told Hamblen, “There are really so many questions still about WiMax.”

A fifth reprieve from Sarbanes-Oxley (SOX) does not appear likely for SMBs.

At a forum for small businesses, John White, the director of corporation finance for the U.S. Securities and Exchange Commission, said the SEC has no plans to extend the deadline for small business compliance with the internal controls requirements of Section 404 of the Sarbanes-Oxley (SOX) corporate finance law. White has been issuing this warning all summer, but some SMBs don’t seem to be listening.

In that same forum, White also promised that the SEC would introduce several rules by the end of the year aimed at making it easier for SMBs to comply with SOX, such as a relaxed process for issuing stock options.

Companies with less than $75 million in market capitalization have been granted four extensions on compliance since the law was passed by Congress in 2002 because small business advocates have warned that compliance is too pricey for them.

But another extension seems unlikely if you take White at his word. SMBs will have to be compliant by Dec. 15. At this week’s forum White said small public companies should be acting now to prepare compliance. But it’s worth noting that he is speaking for only the SEC.

“I would just urge all of you that are advising small companies that, at least from this building (the SEC), we are not anticipating any extensions,” White said, according to Reuters.

Note that he said “from this building.” He is speaking only for the SEC. In the world of Washington, D.C., where nuance is everything, that leaves some wiggle room. Congress could easily act again to extend the deadline if business interests like the U.S. Chamber of Commerce lobby hard enough. But time is running out. SMBs should probably be acting as if no fifth extension is coming. You should heed White’s warning.

Being the busy, frugal SMB IT professional that you are, you’re always looking for ways to do things quicker and cheaper. When it comes to phone service, that might mean switching to VoIP. 

After all, VoIP is generally easier to manage and less expensive than traditional landline service. What you sacrifice in call quality, your reasoning goes, you more than make up for in setup time and cost. 

But what else would you be willing to sacrifice? If you could get VoIP service completely free of charge, would you allow your service provider to eavesdrop on your calls? One company, Pudding Media of San Jose, is hoping you will. 

According to a report in yesterday’s edition of The New York Times, Pudding is offering free Internet phone service in exchange for the right to listen in on calls in order to display relevant advertisements on users’ computer screens based on the content of conversations, in real time. 

This is how it works, as reported in the Times: 

Voice recognition software monitors the calls, selects ads based on what it hears and pushes the ads to the subscriber’s computer screen while he or she is still talking. 

A conversation about movies, for example, will elicit movie reviews and ads for new films that the caller will see during the conversation. … 

Funny, I was just thinking that between the National Security Agency and corporate marketers, there really aren’t enough organizations spying on my every movement and monitoring my every word. 

Seriously, when I read this yesterday I thought it was a joke. Who in their right mind would willingly let a startup media company listen to their most intimate conversations just to save $25 a month? Not to mention, how creepy would it be when, after casually mentioning on a call to a friend or colleague the snack you had at the movies last night, an ad for Junior Mints or Jujy Fruit popped up on your laptop screen?

I know SMBs — actually, companies of all sizes — are always looking for ways to save a few bucks. But this is just too much of a sacrifice. Granted, the Pudding service is not aimed at the enterprise market, but if the company gets even one organization to use this in a corporate setting, I’d be shocked. 

As for consumers, I really hope most people value their privacy enough to resist the temptation of free phone service. If not, and Pudding proves a success, society will have lost yet another battle in the larger war to protect personal privacy, and we’ll have no one to blame but ourselves.

SAP knows big business. SAP knows small business. SAP now knows medium-sized business really well. At least, that’s what SAP hopes.

On Wednesday, SAP unveiled SAP Business ByDesign, a full suite of business applications delivered through the Software as a Service (SaaS) model. Unlike many big-iron vendors that dip their toes in the SaaS waters, SAP actually built this product from the ground up as a SaaS application, which should make SaaS evangelists happy.

If you look at this press information page, you’ll see that SAP is positioning this technology as the lower midmarket product in its SMB ERP product portfolio. It has SAP All-in-One, a vertical-specific suite of on-premise ERP software aimed at larger midmarket firms, with 100 to 2,500 employees. Then there is SAP Business One, a truly small business solution for companies with fewer than 100 employees. Now there is SAP Business ByDesign, aimed at companies with 100 to 500 employees.

As James Governor of Red Monk noted in an excellent blog review of Business ByDesign, SAP is one of those huge enterprise software vendors famous for complexity that is just plain poison for small and medium-sized companies. However, SAP likes to tell us that 65% of its customers are SMBs.

Last year SAP started airing television commercials during NFL football games. Clearly, these ads were aimed at rebranding SAP as a company that could serve SMBs. Every single enterprise software vendor you talk to says it’s going after the SMB market because it represents the best opportunity for rapid growth. With a three-headed monster of a product portfolio, SAP clearly means business. SMB business, that is.

Business ByDesign will feature on-demand software that will help medium-sized firms manage their finances, business analytics, human resources, projects, supply chains, customer and supplier relationships, and compliance.

Governor said SAP hasn’t hit a home run with Business ByDesign, but he thinks it’s offering a tool that may serve the medium-sized market well.

“I am pretty positive about BBD’s chances in the market, and it looks [like] a powerful set of apps for $149 per month per user. I do, however, feel SAP could have really smacked the ball out of the park had it driven harder on Web 2.0 front-end interaction. Time for SAP to get JavaScript religion.”

Dennis Byron, who says he’s a fan of the product, wrote on SeekingAlpha.com that SAP’s new product has a ways to go.

“Sorry, SAP, I am a great admirer but Business ByDesign (codenamed A1S) has a few problems. The name is too long, the beta set of users is too small, the price is too high, the reference implementations and demos are too much old SAP, and the channel strategy is too 20th century.”

I believe this is SAP’s first foray into SaaS. Companies like Salesforce.com and NetSuite have earned some well-deserved hype for their customer wins in the SaaS-delivered SMB ERP market. Now SAP is going to try to take them head on.

SAP is planning to sell this product through its channel partners, which is how most big vendors reach the SMB market. But will channel partners embrace this as an opportunity? New research from IDC suggests maybe not.

Last week, I blogged about IDC’s forecast for the social networking market, which it expects to grow at an astounding rate of 815% between 2006 and 2009. This week, another analyst firm, this time Gartner, weighs in with its predictions. 

According to eWeek’s Clint Boulton, Gartner expects the social networking software market “to grow at a compound annual revenue growth of 41.7 percent through 2011.” That’s obviously a huge difference from IDC’s heady predictions for the market, and it’s hard to say which prediction is more accurate. But at least both firms agree that social networking software will enjoy significant growth in the coming years, however wide a gap in their forecasts. 

Boulton, reporting from the floor of the Web Innovations summit in Las Vegas, also details Gartner analysts’ theory that “digital natives” — those who’ve grown up with social networking tools — will be the ones to drive the enterprise segment of the social software market.  

As these digital natives grow up, they’re moving into the work force, taking with them blogs, wikis, mashups, RSS feeds and other so-called Web 2.0 social networking tools that will enable them to collaborate more freely in an enterprise environment, said Gartner analyst Anthony Bradley.  

“They bring with them a set of expectations of how they will interact and the tools they’ll use to interact, and they can be woefully disappointed walking into organizations that don’t have some of the Web 2.0 tools that they’re used to using for building relationships and getting things done,” Bradley said.

Digital natives will thus usher in what Gartner calls the Enterprise 2.0, where users will use rich Internet applications, social software and a Web platform to execute tasks. 

If I’m interpreting Bradley right, he seems to be saying that for businesses to compete for top talent, they better get on board with Web 2.0. Otherwise, the best and the brightest will find a different employer that has.

On the heels of last week’s announcement that it’s joining the OpenOffice community, IBM today announced the launch of IBM Lotus Symphony, a free desktop application suite, reports The New York Times. 

According to the report, Lotus Symphony consists of three free programs — word processing, spreadsheets and presentations –- and will compete directly with Microsoft Office.  

The Times continues: 

IBM’s Lotus-branded proprietary programs already compete with Microsoft products for e-mail, messaging and work group collaboration. But the Symphony software is a free alternative to Microsoft’s mainstay Office programs — Word, Excel and PowerPoint. The Office business is huge and lucrative for Microsoft, second only to its Windows operating system as a profit maker… 

IBM executives compare this move with the push it gave Linux, the open-source operating system, into corporate data centers. In 2000, IBM declared that it would forcefully back Linux with its engineers, its marketing and its dollars. The support from IBM helped make Linux a mainstream technology in corporations, where it competes with Microsoft’s Windows server software. 

CNET News also has a good report on the Symphony announcement, while IBM executive Ed Brill writes today on his blog: 

I’m excited about this announcement on many levels. First, it shows the strategic nature, based on current and future plans, of IBM’s investment in delivering the editors in Notes 8 as well as through other channels.  Second, it offers something from the Lotus brand focused on the end-user/consumer. Third, it demonstrates the strength of IBM’s commitment behind desktop alternatives (Linux, ODF, etc) to the broader market — which should help with all distributions of OpenOffice.org-based editor tools, today and tomorrow. 

In the name of self-promotion, to get the full story on IBM’s decision to join OpenOffice and its implications for the open document format, check out this article I wrote on the topic last week.

The social networking application market will grow to over $420 million dollars by 2009, a whopping 815% increase from its 2006 size of $46.8 million, according to a recent report by IDC. As the market develops, the report continues, social networking functionality will increasingly be built directly into the foundations of communication platforms including email and IM. 

IDC identifies three emerging market segments that it says will fuel the majority of growth, all of which should be of particular interest to business users. 

The first is self-service applications that IDC says will prove particularly useful for marketing campaign teams. The second is something IDC calls “brand applications that focus on persistent customer engagement.” And the third is enterprise applications that improve communication and interaction with outside players, including customers and partners. 

While the first two market segments seem to me to be the same and the descriptions of all three are unnecessarily convoluted, the important point is this: enterprise applications, not consumer apps, will lead the social networking application market’s explosive growth over the next three years. That’s a significant statement, especially considering there are still some in the IT community who question the value of Web 2.0 technologies in the enterprise.    

“Social networking is the new must-have communication application and is being used for both marketing and operational efficiency,” said Rachel Happe, research manager for digital business economy at IDC in a statement. “Social networking applications drive engagements, information exposure and conversions as well as reducing marketing and operational costs.” 

So, does this report qualify as a sober, realistic assessment of the social networking market, or is it the latest volley of Web 2.0 hyperbole? Not to hedge my bets, but I think it might be a little of both.  

Predicting 815% growth is pretty bold, and any time you hear the phrase “the new must-have,” your B.S. radar should start buzzing and blinking. But as I wrote a couple of weeks ago, I don’t think Web 2.0 is a bubble waiting to burst, akin to the dot-com bubble of the ‘90s. And I definitely think social networking tools, blogs and wikis have an important role to play in the enterprise, so I agree with the report that enterprise social networking apps will likely lead the market’s future growth.  

Hey, even if IDC’s prediction is off by half, that’s still about 400% growth, which is none too shabby. I guess we’ll just have to check back in 2009 and see if IDC hit the mark or not.

In yet another sign that Web 2.0 isn’t just a passing fad fit for only wide-eyed startups with visions of grandeur, CIO Insight is reporting that Microsoft has a deal with Wachovia to provide the bank with a social-networking platform for its 100,000+ employees.

According to the report:

The nation’s fourth largest bank will roll out a social networking service for 110,000 employees over the next several months, giving workers a sophisticated knowledge-management platform that combines the user-friendly approach of the popular Facebook service with broad integration into Wachovia Corp.’s business applications.

The vendor for the big project isn’t one of the many contenders such as Visible Path, SelectMinds and Leverage Software in the burgeoning enterprise social-net market, or the ballyhooed Facebook itself. It’s Microsoft, which offers easy interconnection with other applications via its Office SharePoint Server product. Integration into the daily routine of business was a difference-maker in choosing the software.

So add Microsoft to the growing list of old-school, established tech companies jumping into the Web 2.0 pool. In fact, the pool’s getting a little crowded, with the likes of IBM and SAP already making their way to the deep end.

Three months after announcing Foleo, a companion technology to the Treo smartphone, Palm has cancelled the product.

Palm CEO Ed Colligan wrote on his corporate blog that his company is canceling the Foleo in order to focus on building a next-generation software platform for its handheld devices. According to Colligan, Palm is taking a $10 million hit to its earnings to stop production right now.

The Foleo, which looks like a mini-laptop, was greeted with yawns and quite a few sneers. While Apple was coming out with the flashy, hyped iPhone, Palm was offering up a … what exactly was this thing, anyway?

Just two weeks ago, Engadget.com in an open letter to Palm urged the company to stop wasting money on the Foleo:

“We all know this isn’t going anywhere. And even if it does do alright — and let’s be real, it’s never going to do better than alright — it’s really just a distraction from the main business you’re already neglecting. Besides, how many Treo companions do you expect to sell if the Treo itself isn’t up to snuff? The Foleo is not the way to make the core product better.”

Judging from the comments Colligan received on his blog, canceling the Foleo was the right thing to do. However, more than a few of those who commended Colligan in their comments also asked him for one of the prototype. “I promise that I won’t resell it on eBay,” wrote one Palm fan.

Are there any Palm fans out there who were planning to adopt the Foleo? I’d love to hear from you. How were you planning to use it, and what are your plans now that the product is canceled?

Labor Day is behind us and the summer is over, but for Yahoo and Microsoft, Rumor Season may just be getting started … again.

Yesterday, both the New York Times’ DealBook blog and TheStreet.com speculated that a Microsoft acquisition of Yahoo, in an effort to take on mutual foe Google, might not be such a far-fetched idea after all, citing the release of a report by Bear Stearns analyst Robert Peck.

According to DealBook, Peck writes in his report that Yahoo makes “an attractive acquisition candidate for either traditional media companies […] or for technology companies such as Microsoft.”

In the same post, however, DealBook blogger Andrew Ross Sorkin writes:

But neither Microsoft nor Yahoo has ever publicly acknowledged any takeover talks. The closest either one came to doing so was last year, when Mr. Semel, Yahoo’s chief executive at the time, said that his company had tossed around the notion of Microsoft buying a stake in its search business. But he quickly added that he found such a transaction deeply unpalatable, saying it “doesn’t make any sense.”

Similar rumblings of a potential Yahoo-Microsoft deal made the blogosphere rounds last spring, but dropped out of sight by Memorial Day. Despite Peck’s note to the contrary, it looks like it should have stayed out of sight. I’d say we can put this rumor to bed now, if not permanently, then at least for the next six to twelve months.

At least that’s what Google’s hoping for.