Worth a closer look: SOFO

SANFORD, FL (jbeech.com) – Schools, universally facing budget crunches, are hoping technology rides to the rescue. The sooner the better.

In the news this week; reports of declining tax receipts lead to three additional schools being slated to close next year. Added to what’s turned out to be merely the first, it stirs quiet angst. In other news, we learn in-state tuition is going up. Again. I bet it’s the same in your state.

It spells opportunity. When better teachers are in demand but nobody will pay for them, and in an economy where college graduates are having a time of finding work, and when schools are closing, whomever offers solutions will make some money. A pot full of it.

Since follow the money is always good advice, here’s something you may not be aware of.  Sonic Foundry, NasdaqCM: SOFO. They offer hardware called Mediasite, plus archiving services. This last is important.

What’s it for? It’s a one-box Internet-video webcasting/archiving solution. In a nutshell, it means saving money plus schools. First, examples outside the schools.


It’s the end of the day and a police chief learns an 80-year old Alzheimer’s sufferer has wandered off. “I’ll make the silver alert myself.”, he says wearily.

Within minutes, they fire up a couple of $200 consumer video cameras. These are connected to a black box called Mediasite. The chief steps to the podium and says, “Friends, we’ve got a missing . . .”

This goes online in real time, e.g. it’s broadcast – webcast – live. One minute later (10 minutes if he’s got political ambitions), the ‘webcast’ is also available online; it’s archived. Best of all, it’s easy. No postproduction whatsoever.

This is important because with an elderly person, time may be of the essence. It’s available via a link. e.g. on the home page of local government websites, via feed to local radio and television stations, etc. This can be big with police departments.


Alternatively, a public corporation – probably spending more for cameras – but basically the same setup, reports their quarter, or introduces a new product. Again, video goes out live, and is archived for later viewing by shareholders. It’s fast and easy – like Jobs in his prime – but without the hassles. This can be big for businesses too.


However, if every public corporation in America, plus every police system had one, the applicability to schools would dwarf them all. For example, a cash strapped school system buys into the sales pitch as a way to lower costs.

The pitch is easy, build out your e-learning infrastructure, or it’s how distance learners get the same quality education, or perhaps it’s simply because they have homebound students – several kids with mono – needing service.

They purchase a single Mediasite. It’s installed in a classroom along with two cameras (CU and wide angle). There are two mics as well. The lavaliere is for the instructor if he’s the wandering type, otherwise a mic fixed to a podium works. Add to it a handheld wireless microphone to pass around. With this, plus ambient lights they’ve created a studio. It can be done in an afternoon.

All-in it represents $30,000 for consumer-level AV hardware. $60,000 if using pro level cameras and mics. Insiders know consumer/prosumer stuff is plenty good enough for virtually all webcasting. Maybe add in for a computer-whiteboard serving as another video feed to Mediasite (though a cheap camera trained on the blackboard works too). Regardless, it’s chump change in the world of school systems.

One camera and mic can be trained on the instructor. One, or maybe two, cameras aimed at the students, are enough. Getting fancy means instead of the instructor multitasking, because switching feeds with Mediasite’s switcher is easy enough, the class AV-nerd lends a hand.

Subsequently, the math teacher does his lesson plan on solving quadratic  equations. Every hour, on the hour, perhaps with minor orchestration at first, kids shuffle in and out of this one classroom. Before long it’s old hat.

Lessons are webcast and archived. A social studies teacher and the class Q&A about the 4th Amendment, or an English teacher lectures on verb usage. They’re all webcast live and subsequently available via the Internet.

Whether it’s online lecture capture, distance learning, continuing ed, meetings, or cops alerting the public more quickly than a news team can show up, they’re all available instantly. And storage is doing nothing but getting cheaper.

The real money – archiving

Archiving happens on SOFO’s servers. It’s where the real money is for SOFO; the lucrative services revenue-stream. Who’s using it already? They’re big name universities. Foreign governments as well. Our government too, of course. Moreover, after a trial purchases, they buy more. This is a good trend.

Even a cursory look at the list of higher learning institutions, which have made repeat purchases, is compelling. There’s a reason. The technology will certainly make it’s way into local schools where use may be controversial. However, there’s potential for getting world-class instruction online cheaply . . . and saving money.

SOFO is a small issue, there’s certainly no dividend, but it’s early in the game. Do your own homework, e.g. whether there’s a place for it in your portfolio. Now you’ve been briefed on what it is and what it does.

If I were the sales manager responsible for selling this product I’d be arranging dog-and-pony shows at any and every county board that would make 10 minutes for me. I’d hook them for an hour, maybe two . . . and I’d help make SOFO shareholders filthy rich because it’s an easy sale.

MSFT – dead money for a decade

SANFORD (jbeech) – Dismantling Gates’ vision; Balmer’s hubris

CNN.com, Amazon.com, Genesishobby.com all three have different interfaces. In the early 80s, software too was a wild west-like scene. It was just as discordant as the multitude of website navigation schemes we have today. We have it easier in fact because at least we’re now all trained on using a computer mouse to select menus on the screen. Back in the day, e.g. predating the mouse, we used keyboard-commands like Alt-PrintScrn or Ctrl-Alt-Delete.

For example, before the mouse was common a spreadsheet program called Lotus 1-2-3 was the dominant numbers-tool (pre-Excel). Instead of a mouse, getting to its menus involved typing the /-key (this was technically called the /-prompt or slash-prompt). Frankly, it was as quick and easy as it seems, Just pressing the slash-key brought up the menu choices.

The problem was the premier database software (dBase) didn’t use the slash-prompt. It used the dot-prompt. Ditto for the most popular word processor back then, WordStar, and their innovative diamond.

While individually not too tough to learn, they were all different from each other. Absolutely nothing was the same. Unfortunately, zero commonality for even the most trivial functions, e.g. printing or saving led to higher training costs for business. This is bad.

Making life easier – common commands for common functions

Along came Bill Gates with a vision for making software easier to use. The idea was simple; common commands for common functions. E.g. opening and saving files was performed the same whether you’re using a word processor, a database program, or a spreadsheet. Similarly, go to the same place and do pretty much the same thing to print, or edit.

This was a revolution in ease of use, which promised to reduced the costs of training employees because learning one program put someone a fair way down the road to using another. The trick was in borrowing the concept of a mouse and graphical user interface. Bill too had seen the future in the work of Xerox PARC.

Toward that goal, Gates introduced a product called Windows. It was an especially risky bet because computers of the day were largely incapable of running Windows, a graphical product, which consumed seemingly vast tracts of RAM (CPU-hog too). This back when a 386/33 with 1 meg of RAM was considered a bad boy.

Incredibly, Windows competed with another of Gates’ products, MS-DOS because both are operating systems. In effect, Gates was so convinced he unleashed the mammals to eat the dinosaur’s eggs. As if that weren’t enough (and proving he has huge wontons), in concert with Windows, Gates launched a suite of programs expressly to compete with the big three, called Office.

MIcrosoft Office was generally composed of Word, Excel, and Access. They took on Wordstar, 1-2-3, and dBase respectively. Moreover, they introduced the now familiar File, Edit, View, Insert, etc. pull-down menu scheme.

Collectively, these programs soon eclipsed the command-line menus software as businesses responded to Gate’s vision. Simply put, in the real world, common commands results in software being easier to learn to use, e.g. more bang for the buck training-wise.

The bet paid off – big – and the already wealthy Gates became the richest man in the world. All because of the now ubiquitous Windows, plus Office, which supplanted the then then dominant big-three programs.

Kicking down sandcastles

Steve Ballmer replaced Bill Gates as head of Microsoft. However, for various reasons, Ballmer’s not getting it done. Witness MSFT, trading sideways since the dot-com bust. He’s been around a long time. He’s the wrong guy.

From the outside looking in, Ballmer’s like a bully kicking down the other kid’s sandcastle. Bound and determined to prove himself better than Bill Gates, he’s reinventing the graphical user interface. This is a problem.

It’s not that his vision is better or worse than the old way, the problem is it’s different. Different is a bad idea because the train has already left the station. As a world, we’ve already placed our bet between Windows and Apple.

Changing the rules opens the door to consumers reconsidering Apple. It’s a huge mistake and likely has something to do with the growth in the Mac OS since there’s no performance benefit to changing to their hardware.

Frankly, it’s one thing for Google to come up with something new and improved, but for Microsoft itself to do it opens the door to Apple because as the thinking goes . . . “I’m about due for a new computer, everything looks different. Show me an Apple.” It opens the door to Chrome too.

It’s especially egregious because it’s not like Mr. Market has deemed Office and Windows a failure, e.g. the reason the stock’s traded sideways. Instead, Microsoft seems to suffer from a surfeit of ideas and unlike mammals eating dinosaur eggs, this is self-immolation.

It comes under the aegis of Ballmer. He’s effectively dismantling Gate’s splendid achievement; the unified command structure. He’s seemingly intent on showing he’s smarter than Gates. He’s wrong. Notice how Steve Jobs would come out and say things along the lines of, “The user doesn’t need to learn anything new because it works the same, only better”. Basically, Jobs grokked users don’t like unnecessary change.

Changing the secret sauce – not what we signed up for

For example, upgrading your Office 2003 to Office 2007 (or 2010) is like opening a can of Coke, slurping it down, and spewing because it’s not Coke . . . it’s sweet tea. Not that you don’t like sweat tea, more like it’s just not what you were expecting, capisce?

Word in post-2007 Office doesn’t have File, Edit, View, Insert, Format, Tools, etc. but instead has Home, Insert, Page Layout, References, Mailings, Reviews, etc.

This is way different. It’s 100% different. Who sold Ballmer this bill of goods, and why wasn’t he smart enough to realize changing the secret sauce is dangerous? Hello.

Moreover, there’s a fly in the ointment. The common schema for using software is gone – poof. Gone too – and the part I, as a businessman, especially resent – is the business investment in employee training. It’s all tossed out the window because the software looks and functions so differently we have to basically learn how to use it all over again.

So different we couldn’t even figure out how to save a document

When we purchased Microsoft’s Office 2010 to upgrade various computers loaded with Office 97, Office, 2000, and Office 2003 we eagerly installed it across our network of computers (5 licenses). Frankly, we were quite excited to see what was new.

Amazingly, we had to resort to the manual. While this is OK for brand new software, it’s not OK for an upgrade. What happened to the common user interface? Poof, it was gone!

Ultimately, after a fair week of testing, which consisted of mostly futzing around to find the familiar tools like word count, thesaurus, formatting, etc. we took an unprecedented step. We decided to uninstall the new Office. Basically, our users hated it. 100% of them.

In part it’s because it was different, which meant retraining. People don’t like going back to school for no especially good reason. This is expensive to a company, much more so than the mere cost of the software. It’s expensive in terms of relearning muscle memory. Moreover, it wasn’t better. In fact, in some ways it was a little worse.

Reduced vertical space makes composition feel claustrophobic

Recapping; changing how commands are accessed left folks predisposed against it. Moreover, another complaint was how there was less vertical space for composing. It’s not a huge difference but everybody commented on it. Between Word 2007 and Word 2003 the vertical reduction is just enough less than what you had to be irritating.

Like learning Chinese

Another user-complaint dealt with icons for the commands. For example, now there’s an icon for File, and a different icon for Print, and a yet different icon for everything else. There are dozens of them.

Fortunately, in recognition they’re too confusing, Microsoft labels them. I wonder this of Microsoft, What was the point of replacing the menu choice File with an icon labeled File?

I suppose it’s fortunate we can read because other than icon designers, who else benefits from this scheme is anybody’s guess.

Oh yeah, the commands are grouped differently too. For example, after a decade of getting a word count by going to Tools, there’s a new way of getting a word count. Why? What was wrong with the old way?

Three strikes

First, the Ribbon Bar fails us because it forces expensive retraining since commands have been regrouped. Second, it also fails because it is so confusing the icons need text labels. Third, it even fails because it consumes more precious composing space.

Frankly, File, Edit, View style menus were simple. They were elegant. Commands were out of the way until you need a function. It’s a clean interface. I like it better than Apple’s. Moreover, nearly all programs – until now – use this titanic shift, so if you switch and then hire someone who’s not trained on Word 2007 or newer, expect to pay for training, or time futzing about. Seems to me this is a lot of human value being undone for little benefit.


Fortunately, eBay came to our rescue. We bought new, unopened, licenses of Office 2003 for all the new computers. An attractive free alternative, Open Office, also exists (if cost is a principal issue). Be warned, it’s similar to Word 2003, but different enough it entails retraining as well.

Thus, and quite sadly, instead of making Office better, Mr. Ballmer’s made things worse. Like New Coke was deemed inferior to the Coke, Ballmer’s vision for MIcrosoft lacks.

Any idiot can complain

Solutions count because any idiot can find things wrong. I believe there are many places Office could be made better. Re-creating the cash cow. For example, instead of a new application for website design (Front Page), why not just extended Word? Or offer the old style menu structure alongside the Ribbon Bar . . . let users choose.

Meanwhile, folks now use PHP to generate dynamic web pages, which are composed largely of written words. Surely between Word and Access they could have done the same thing in Office. Speaking of Access, it’s something of a dead end too because folks are using MySQL instead. Hmmm, are all Microsoft’s cash cows now dead? Is there no hope? Not so fast.

The king is dead, long live the king

No, MIcrosoft’s cash cow possibilities aren’t dead because there are new cash cows aplenty in the world of software, which Ballmer’s neglecting. For example, there are tools for creating and managing websites called shopping carts. Does Microsoft offer one? Nope.

Amazingly, instead of turning to Microsoft for building out a widget website, people have to turn to a shopping cart product created (essentially by a nobody). Mustn’t be too hard to do judging by the multitudes of shopping carts available.

Unsurprisingly, none have the finish and panache of a Microsoft product. MIcrosoft could make it and give it away because the money’s in the hosting.

Folks pay $100 month for the software and service. Now this is a cash cow – by any definition –  but especially in a world where the OS as well as Office are bundled for little more than a one-time shot of 100 bucks each. Who’s asleep at the switch? Ballmer.

And it’s not just widget websites. There are vanity websites too, e.g. photo websites, family websites, and a host of others because nearly every computer user at some time will surely express an interest in a website if it’s as easy as Internet or Windows Explorer. Talk about marketing the cloud, those are fees for data storage, hosting, etc. These are all cash cows . . . on steroids enough to humble Office in its heyday.

Meanwhile, a lack of extended Office tools – for the web – result in stuff like Expression.

Other examples of Access-Word hybrid software applications abound. E.g. CMS products like Drupal, WordPress, and Joomla! are popular. Where’s Microsoft?

Frankly, it beggars the imagination how this need exists and Microsoft is out fighting yesterday’s battles remaking Office. Or ineptly explaining the ‘cloud’ with incredibly inane television commercials.

Moreover, once a widget website is alive, the next question for an entrepreneur is this; how do you link this thing to my accounting, e.g. QuickBooks? The short answer is you don’t, not easily because QuickBooks requires a cluster of a procedure – 3rd party tools.

Worse, even if you drag your data kicking and screaming into accounting, you cannot turn around and update the website, or otherwise manipulate it easily. Hmmm, do you remember Microsoft Money?

Another idea is use the Money investment to fold it into Office. After all, it was a nifty enough personal finance package Microsoft once offered, which failed because users didn’t want to learn a new way of doing things. However, instead of extending and improving it, e.g. competing with Intuit’s Quicken and QuickBooks, seamlessly fold it into Office. Jobs would.

Speaking of Jobs, once upon a time Steve Jobs’ return propelled Apple to the moon. While he stepped out on top, MIcrosoft shareholders (and loyal users) better hope Gates gets bored and returns to Microsoft to right the ship. If not Gates, then somebody else . . . please, anybody but Ballmer.

Until then, MSFT is dead money. It’s a sell.