Well, I have to admit, blogging is a little unnatural for me. I had a false start at doing this 6 or so months ago, I’m hoping this time to sustain an interesting information channel. Why do this you might ask? The answer is simple: a number of CNS staff and stakeholders have suggested that this is a good way to directly share my thoughts and that I should do so routinely. Here’s the inaugural attempt….if you learn something, do me a favor, let me know. If I don’t get feedback, I’ll assume this is a low value activity and it will die due to my natural inclination.

So, what does one blog about? Thought I’d share an experience from my week of time in Europe to start.

Given that Sun’s strategy is Communities Create Markets, are there any business models that demonstrate live examples of how CNS can help Sun executes? A very interesting question and there are the obvious answers: Google, Yahoo, eBay, etc. Established players with mature (now, not 10 years ago) customer bases and network based services serving communities. But I found one this week that is emerging and I think shows the power and potential of this strategy.

First, some facts:

• China’s population is about 1.3 billion (or, 1,300,000,000)
• The average difference in salary between an English speaker vs. non-English speaker is 40%
• The estimated number of Chinese citizens learning English is 300M
• The estimated number of “good” English teachers (defined by being able to understand Chinese culture and idiom to do the non-obvious translation) is in the small number of hundreds
• Intellectual Property laws and attitudes are different than in other regions in the world, one must take active measures to protect such property or have a high risk of losing control of the property

Given the facts above, it shouldn’t be surprising to know that there is a startup company that has identified this market opportunity and has arrayed resources to tap into the potential. Dr. Pengkai Pan formerly of the MIT Media Lab, has returned to China to start a company named Saybot to do just that. Now, what is it about Saybot that is more interesting than anyone else?

What Saybot has done is write a piece of software that runs on a PC (later perhaps mobile phones) that will play media content (think XML tagged audio) to teach a lesson in English. An unique aspect of this program is that it uses speech recognition to determine both general and specific grammar and pronunciation errors with specific improvement suggestions in realtime. For instance, the student is instructed to say “This line at Starbucks is too slow. If this makes me late to my interview I’m dead meat.” (No kidding, that’s what the demo said!) The system will then analyze what the student said for accuracy and suggest corrections. It’s an iterative approach to learning. The interface is very simple, it has play, pause/stop, chapter advance/return, chapter select, preferences, and close. Non-computer aficianados will easily be able to master the program. It’s really a software-based speech recognition robot.

The topic potential for teaching the language is enormous, virtually unlimited. Pan & Co. decided to hone in on a very specific community within the market: job seekers. As such, the content they’ve created is all about conversational English related to interviewing, from being impatient in the Starbucks line before the interview, to the actual interview session, to post-interview follow-up. There are some 20 lessons now in existence available for use by the job seeker community.

Realizing that the Chinese attitudes toward sharing software, Saybot designed the client to be easily and freely copied and downloaded with some small set of available content, the first lesson is free. Each subsequent lesson is available for something more than the price of a cup of coffee in local currency (yuan.) Since the content plays only in the Saybot client and is never permanently cached, the user has to connect to a network service to access the content, authorized and authenticated. This approach allows protection of the valuable asset (content) while taking advantage of the culture (sharing) amplified by free trial content.

The start of Saybot is modest, but one can easily see upside in the model and in scale by including other content producers into it’s network service fabric. Many other language services exist and one could imagine that a forward thinking company like Rosetta Stone could relatively easily enter into a partnership with Saybot for content distribution in this space on a percentage split basis. The vision from Pan is that Saybot will release new content continuously causing evermore learners to participate and that the English as a second language in China market is merely an entry point. Worldwide, it is estimated that there are 2 BILLION people in the process of learning English. Given the sheer size of the market and the approach, Saybot is an interesting, but as yet, unproven play.

But what’s this got to do with Sun and CNS? I think the answer is pretty evident. We face very similar challenges to those of Saybot. If we closely examine CNS’ situation, one can see we’re creating the business models in the offering team, the technology attach and build in the engineering team, the deployment, operation, and content management in the operations team, and discreet functions like security in self-contained units. My view is we’re getting closer in mindset and function to compete successfully as a network services provider in our market space. However, I remain concerned that we’re not thinking about adding incremental value, we’re not yet in continuous content mode, we’re not yet involving our partners in this to help amplify the value, and we’ve not yet cracked the code on how we sell this value to our customers. All very thorny problems I have full confidence we’ll crack this year.

Well, that’s it from the mind of Mike. Don’t expect each blog entry to be as long or detailed, but I hope you’ll find them useful. Again, if you learned something, please say so and that will encourage me to continue to blog…Thanks for taking the time to visit.