Outsourcing has its fans and its detractors. Many companies would like to take advantage of promised cost-savings, but they're reluctant to entrust such critical activities as customer service to third parties. Now, a home-based call center pioneer, Alpine Access, is offering to show them how to get the best of both worlds by setting up their own distributed agent networks.

Not that long ago, the outsourcing of customer service to home-based agents was a small niche category, viewed as not quite on par with a bricks-and-mortar call center operation. For a number of reasons, that perception is changing -- starting with the lower costs involved in using a home-based agent network, and ending with the growing number of quality providers that have highly qualified staffs on hand.

With several years of operations under its belt, Alpine Access could arguably be the poster child for that movement. Now, the company is pushing the model even further: It has just begun to provide consulting services, as well as employee training, for companies that want to set up their own agent networks.

Alpine Access CEO Christopher Carrington spoke with CRM Buyer about his company's plans along these lines, as well as how the recession has affected its operations.

Chris Carrington: The best evidence I can offer is our top line. I'm happy to report 17 percent higher growth in Q1 compared to 2008 Q1.

CRM Buyer: What are some of the cost-cutting measures you've taken?

Carrington: Interestingly, we are seeing a lot of our customers and prospects taking cost-cutting measures -- but we have not had to. We had a strong Q1, and we are predicting a strong 2009.

In fact, we are investing more heavily -- putting more money in our sales area, and to developing new products and services. We just launched our consulting service division and invested more heavily in Alpine Access University.

CRM Buyer: How can your products help your customers' bottom lines in the near term?

Carrington: In tough economic times, the companies are looking to save costs. The reason we grew so strongly in Q1 is the fact that a home-based solution saves customers money. Companies using a [home-based] solution in the U.S. are [spending 15 percent to 25 percent less] than they would with a bricks-and-mortar provider.

CRM Buyer: What are some of the bright spots for your company right now?

Carrington: One of the most exciting is the launch last month of Alpine Access Consulting. For the first 10 years of our existence, we were purely an outsourcer of a home-based model -- and losing out on opportunities [with] companies that didn't want to outsource. Now, we can target those companies that want to set up their own home-based service network.

CRM Buyer: How will your company look a year from now?

Carrington: Based on growth projections, we will be 30 percent to 50 percent larger for the full year. We will continue to become a mainstream player in the U.S. for call center services.

CRM Buyer: Tell me more about the consulting service. Why would a company want to set up its own home-based network? Why not just outsource to a call center or to you? Also, have you gotten many inquiries for the service yet?

Carrington: A lot of companies still don't want to outsource customer care for whatever reason -- some figures say it is 65 percent of the market. So they want to do it themselves, but they also want to take advantage of the cost efficiencies of the home-based model. We just launched it, and already we have our first two engagements under way -- so, yes, there is a lot of interest.

CRM Buyer: Are you providing the infrastructure as well, or just consulting services?

Carrington: We are not there yet with the infrastructure, although we are looking at it. What we are doing is helping companies do virtual recruiting, training and management of a workforce that is completely distributed.

CRM Buyer: Tell me more about Alpine Access University. I am assuming it ties in with your consulting service?

Carrington: Yes, that is correct. Before, we were only training our own employees. Basically, we became expert in adult distance-learning. We've commercialized it, so we can sell it to companies that want to do at home themselves. They hire their own employees and then train on the AAU platform. It's another opportunity to put the brand in the market.

Also, in the second half of this year, we will begin recruiting for our consulting clients. What we have been doing is asking applicants who apply for jobs with us whether they are interested in being placed with another company in a similar job. We receive about 100,000 applications a year, so we have a lot of qualified people waiting. We can do all the interviewing and hiring for these companies.

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How do developments in mainframe technology and automation relate to cloud computing? Cloud computing is in a very basic sense virtualizing resources within the data center. As enterprises seek to gain data center efficiency, they're looking at bringing in a measure of virtualization, optimizing operations in ways similar to what mainframes have done for years.

How can mainframes can help enterprises reach cloud-computing benefits faster? Let's look at what defines cloud computing, with an emphasis on private clouds or those computing models that enterprises can control on-premises, but that also favor and provide cloud-like efficiency with lower-end costs and a heightened ability to deliver services that support agile business processes.

We'll examine how new developments in mainframe automation and supporting the use of mainframes allow for cloud-computing advantages and the ability to solve some of the more contemporary computing challenges.

To help us understand how mainframe is the cloud, we're joined by Chris O'Malley, executive vice president and general manager for CA's mainframe business unit. Welcome to the show, Chris.

Gardner: Chris, we've heard a tremendous amount about cloud computing and there's a buzz around this whole topic. From your perspective, what makes cloud so appealing and feasible right now?

O'Malley: Cloud as a concept is, in its most basic sense, virtualizing resources within the data center to gain that scale of efficiency and optimization you just discussed. It's a big topic of discussion right now, especially given the recession we're sitting in.

It's very visible physically that there are many, many servers that support the ongoing operations of the business. CFOs and CEOs are starting to ask simple but insightful questions about why we need all these servers and to what degree are these servers being utilized.

When they get answers back and it's something like 15, 10 or 5 percent utilization, it begs for a solution to the problem to start bringing a scale of virtualization to optimize the overall data center to what has been done on the mainframe for years and years.

We're now seeing the availability of the technology -- VMware (NYSE: VMW) is an example -- to start to create almost mainframe-like environments on the distributed side. So, it's both the need from a business standpoint of trying to respond to reduced cost of computing and increased efficiency at a time when the technologies are becoming increasingly available to customers to manage distributed environments or open systems in a way similar to the mainframe.

Gardner: I suppose there's also an issue around integration. When people talk about cloud computing, we hear them refer to it as an application-development or Platform as a Service (PaaS) affair. We also hear Software as a Service (SaaS) or just great delivery of the applications. Then, there's this notion of infrastructure fabric or Infrastructure as a Service (IaaS).

But to relate and manage all of those things is something we haven't yet seen in this whole cloud market. I imagine that at a private level, if you were to use mainframe and associated technologies, you might start to see some of those integration points among these different levels or aspects of cloud computing.

O'Malley: You're right. It's a maturity curve that we're going through, and it's very likely that larger customers are using their mainframe in a highly virtualized way. They've been doing it for 30 years. It was the genesis of the platform. It's a fixed asset that was very expensive way back, or at least relatively expensive, that they try to get as much out of it as they possibly can. So, from its beginning, it was virtualized.

You see the same big customers, though, having application needs outside of what they've done themselves. What customer relationship management (CRM) and Salesforce.com (NYSE: CRM) have done creates a duality of the mainframe acting as a cloud and using SaaS to support how they work their markets. It's very important that those things start to become integrated. CRM obviously fits into things like order entry, and tying those efforts together.

As you go through this maturity cycle, there is always a level of effort to integrate these things. The viability of things like Salesforce.com, CRM, and the need to coordinate that data with what for most customers is 80 percent of their mission-critical information residing on the mainframe is making people figure out how to fix those problems. It's making this cloud slowly, but pragmatically, come true and become a reality in helping to better support their businesses.

Gardner: So, that would lead, at some point, to a cloud of clouds and hybrid models. We've been worried about integration vertically and now horizontally. I suppose we'll have to start worrying about it across organizational boundaries as well.

O'Malley: Absolutely. There are other barriers that exist as well. The distributed environment and the open system environment, in terms of its genesis, was the reverse of what I described in the mainframe. The mainframe, at some point, I think in the early '90s, was considered to be too slow to evolve to meet the needs of business. You heard things like mounting backlog and that innovation wasn't coming to play.

In that frustration, departments wanted their server with their application to serve their needs. It created a significant base of islands, if you will, within the enterprise that led to these scenarios where people are running servers at 15, 10 or 5 percent utilization. That genesis has been the basic fiber of the way people think in most of these organizations.

It's not just the technical barriers and the complexity of it. It's a cultural shift of an acceptance by players across the business. They all start to use a shared commodity in fulfilling their needs, and the recession helps that. Good CEOs and good CFOs never let a recession go to waste. They explain to their executive management, "We need a greater level of efficiency. We need to transform our thinking, so that we can start to take advantage of these technologies, decrease our overall cost, and increase our ability to serve our market."

They are not just technical issues. There is also people's disposition on the way IT should be run. That has to change as well.

Gardner: I suppose we've gone along with the pendulum swing, from centralized, to decentralized, and now we're coming back. I've spoken to a number of people that say the shortcomings of distributed computing are, in fact, the set of requirements for cloud computing. Do you agree with that?

O'Malley: I absolutely do. This 15 or 10 percent utilization is what we consistently see, customer after customer after customer. Recently, I was with an international customer. They took me on a data center tour, and one of the first things I see is an air conditioning unit the size of a school bus. I see walls that are three-and-a-half feet thick, poured concrete. I see cabling that looks like it weighs tons and football fields of floor space. In the midst of the tour, somebody tells me, "Here is a blade server that cost us next to nothing."

The difficulty in bringing and using these things in an efficient fashion, the cost of all those moving parts, and everything that has to be managed as a single thing, rather than in a virtualized form, has caused a scale of waste that you cannot hide.

Time and time, I hear there is not a CEO or a CFO interested in adding yet another square foot of data-center floor space or adding people to manage the environment at a scale equal to the increasing capacity. They should be getting economies of scale and are just not seeing it.

You're seeing the pendulum come back. This is just getting too expensive, too complex, and too hard to keep up with business demands, which sounds a lot like what people's objections were about the mainframe 20 years ago. We're now seeing that maybe a centralized model is a better way to serve our needs.

Gardner: A lot of what attracts people to the cloud model -- because it is still rather amorphous, and not well-defined -- is this notion of elasticity. That's both, as you say, to help on utilization when it's low, but also to allow for the spikes to be managed externally or to take workloads and apply them across multiple machines in the case of a private cloud.

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The e-tailer's ebullient CEO highlights the company's latest trove of successes, from the Kindle to cloud computing.

When you're the CEO of Amazon.com, you get to have fun at the shareholder's meeting.

While many tech execs these days are sweating their way through the yearly ritual -- facing grim forecasts and unhappy shareholders -- Amazon (NASDAQ: AMZN) chief Jeff Bezos gave every indication of enjoying his day in front of the e-tail juggernaut's investors.

During today's shareholder meeting, Bezos shared wacky tales of live elephant births relayed using cloud computing, directed an on-stage contest to show off a new packaging feature, waxed poetic about his vision of a paperless society using Kindle DX and got nostalgic when talking about the days before the online giant sold thousands of windshield wiper blades.

But joking and storytelling weren't the only highlights of the meeting: The company gave some tantalizing hints on where it might be heading next -- and where it won't be.

For instance, Amazon won't have color displays for Kindles for at least several years (much to the chagrin, no doubt, of gadget gossip-mongers.) The company is pilot-testing food sales and delivery in Seattle, however, and it's aiming to cash in on e-commerce in China through a partnership there.

Bezos and Amazon are afforded this kind of relative calm thanks to the company's strong continued performance in one of the worst economic downturns in recent memory.

While competitors such as eBay struggle to maintain market share in the midst of significant restructuring, Amazon continues to fine-tune its core customer experience strategy, expand services for third-party online sellers and roll out successful new product lines, such as the Kindle series.

Bezos attributed Amazon's success to a laser-focus on customer experience, and went on to tout the many offerings of the e-commerce giant -- from the Kindle e-reader to its elastic cloud Web services.

"If you identify the key needs of customers, those are unlikely to change over a 10-year period, so if you base your strategy on those durable components, that energy pays off in dividends way into the future," Bezos said.

Focus on customer service

To demonstrate his point, he held a contest between two staff members charged with unwrapping a toy pirate ship. The idea was to show off Amazon's newly introduced "Frustration-Free packaging," in which customers can choose to have select items, such as toys and consumer electronics, delivered without all the wire ties, plastic clamshell casings and other trappings found in traditional retail packaging.

"We introduced Frustration-Free Packaging last year, and it surprised us how much it delighted our customer base. Many holiday mornings were ruined by wire ties -- there's 36 inches of it on this [toy]," he said, joking that to even get the packaging open, "you need a small nuclear device."

Amazon also has said it works with manufacturers to deliver products direct to its warehouse without any of the unnecessary packaging.

"It's more environmentally friendly, it saves the manufacturer money, it saves the customer time -- everyone wins," Bezos said.

Focusing on such minute details of customer satisfaction indeed seems to be paying off, as Amazon continues to buck the recessionary trend with first-quarter profits and revenues well above analysts' expectations -- a 24-percent increase from the same period last year.

Part of that success is coming from Amazon's core offerings of special shipping promotions and efforts such as Amazon Prime -- a program that enables members to pay a yearly fee to get free two-day delivery on items, as well as other discounted shipping options.

Windshield wipers to Web services

Bezos also attributed the company's growth to its effort to continue adding new categories of product to its vast inventory. He added that the company saw an 18-percent jump in third-party sellers compared to last year.

Presenting a slide of a windshield wiper blade, he told the audience it had sentimental value for special reasons.

"More than 10 years ago, when I would be asked what I envision Amazon selling, I would say it could even be windshield wiper blades," Bezos said. "And two weeks ago, I saw a day when we sold more than 10,000 of these."

But recent years have seen Amazon's reach extending well beyond its core e-commerce business -- efforts like Amazon Web Services (AWS) that Bezos also said have proven successful.

The Amazon chief touted the growth of AWS's Elastic Computer Cloud (EC2) cloud computing offering, which allows companies to pay for server time in the cloud on a metered basis, instead of buying and maintaining their own.

"Using the Elastic Computer Cloud is not just a cost savings, it's a whole new way to consume computational business resources," he said.

The Kindle e-book reader also represents a relatively new area for Amazon -- one that's likewise paying off, it said.

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Silicon Valley entrepreneur and veteran newspaper editor details his pitch to save newspapers through an industry-wide ad consortium.

Amid all the hand wringing over the future of newspapers, industry executives held a semi-secret meeting last week in Chicago to discuss how to better monetize their content on the Web.

A tricky question, to be sure. One of the favorite taglines of the escalating debate is that the Internet has turned newspapers' print ad dollars into digital dimes.

Veteran newspaper editor and serial tech entrepreneur Alan Mutter has an answer: an industry-owned cooperative that would drive up the rates that newspapers could charge advertisers through detailed behavioral targeting and the bargaining leverage of the collective industry.

Mutter, perhaps best known for his Newsosaur blog, pitched the idea of ViewPass to newspaper executives at the Chicago meeting, describing it in a blog post as a "single, ubiquitous brand to enable consumers to access valuable content on the Web sites and mobile platforms of all participating publishers."

ViewPass would facilitate a payment system where publishers could charge for access to content, either through subscriptions, bundled content packages or micropayments -- an a la carte model that would charge a small fee for access to a single article.

"It would be deployed as a widely recognized and widely accepted brand in a manner similar to the way Visa cards were established by the banking industry as a ready substitute for cash," Mutter said.

But the real value of the system wouldn't be in trying to start charging for the content that consumers have come to expect to be free.

Rather, as an industry-owned collective, ViewPass would allow newspapers to assemble detailed profiles about their readers, information that could then be supplied to advertisers to serve more targeted ads at steeper rates.

"ViewPass would consist of a simple, one-time registration system that would remember users as they moved among participating Web sites," Mutter said. "It would build a profile of individual users from demographic information supplied by them, as well as by tracking the content they viewed as they moved from site to site."

In a nod toward the inevitable privacy concerns that arise when people started talking about detailed profiles, Mutter noted that ViewPass wouldn't pass along any personal identifiable information to advertisers.

Privacy advocates have become increasingly concerned in recent years with the personal profiles large Web companies have been amassing in their efforts to serve more relevant, targeted ads, and there a fresh effort is underway in Congress to draft a privacy bill that would set some parameters.

But advertisers are willing to pay more for better targeted ads. In the case of newspapers, Mutter believes ViewPass could enable publishers to more than double their CPM (cost per thousand impressions) rates, partially righting the dollars-to-digital-dimes imbalance.

Further, by setting it up as an industry-owned partnership, ViewPass would bypass some of the third-party vendors helping newspapers sell ads online. Mutter said that revenue consolidation, coupled with the higher CPMs and the market clout of an industry-wide consortium, could enable publishers to "rapidly triple their online margins."

Some online firms, most successfully Yahoo, have developed advertising platforms to drive up online revenues for newspapers. But while Yahoo's APT platform drives up ad rates with better targeting technology, Yahoo keeps half of the revenue, Mutter noted.

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As the total number of domain names reaches 183 million, can China's .cn surpass .com?

The domain name business is still adding new registrations even in the midst of the worst recession in at least 50 years.

According to the latest Domain Name Industry Brief from VeriSign (NASDAQ: VRSN), at the end of the first quarter of 2009 there was a total 183 million domain names registered across all Top Level Domain (TLD) names, representing a 12 percent increase on a year-over-year basis.

That said, new domain growth is actually slowing, according to a different metric in the VeriSign report.

The VeriSign report stated that 11.8 million new domain names were registered in the first quarter of 2009. According to the report, "this reflects a 17 percent growth in new registrations over fourth quarter 2008, but a 17 percent decline from the same quarter in the previous year."

Not all TLDs are growing at the same rate. Specifically, for .com and .net domains, VeriSign reported that the total number of domains grew by 9 percent on a year-over-year basis to 92.4 million domain names.

"We were pleased to see better than expected growth in the quarter and believe it is due to a number of factors including seasonality, as the first quarter is typically the strongest quarter for this business," Jill McNabb, VP of Naming Services at VeriSign, told InternetNews.com.

McNabb added that new .com and .net registrations were added at an average of approximately 2.4 million per month in the first quarter of 2009, for a total of 7.3 million new registrations in the quarter. This 17 percent increase from the previous quarter also marked the first positive growth rate in new registrations since the first quarter of 2008.

"While throughout most of 2008, the rate of growth of new .com and .net registrations was not as high as it once was, VeriSign still saw new registrations each quarter, which added to the overall base of .com and .net domain names," McNabb said.

While .com and .net are growing, so too is the .cn China Country Code TLD (ccTLD). On a year-over-year basis, the .cn ccTLD grew by 27 percent. The .cn ccTLD has been the second largest domain space (behind .com) in the world since December, when it surprised Germany's .de. VeriSign's report does not provide specific figures for the actual size of the .cn domain space, but they're not worried that it will surpass .com anytime soon.

"While .cn continues to grow as Internet use becomes more widespread in a country with a massive population, .com still has the largest base and we do not anticipate that this will change in the near future," McNabb said.

The growth of the domain business is good business for VeriSign, which recently reported revenue growth for its own first fiscal quarter of 2009.

Could the increase in domain registrations be a sign the economy is turning?

"We are cautiously optimistic that the increased growth in domain name registrations signals that the worst is over and may be a sign that the economic environment has a glimmer of stabilization," McNabb said. "While there are quarterly ups and downs in the domain industry -– and the larger economy expands and contracts -– the Internet continues to show sustainable growth year over year."

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A high court in the United Kingdom has ruled that eBay cannot be held accountable for the sale of counterfeit L'Oreal perfumes and face creams.

The cosmetics maker had argued that knockoffs were rampant across eBay's (NASDAQ: EBAY) marketplace, and sought to bar the sale of its products on the site to cut off the counterfeit trade.

Richard Ambrose, eBay's head of trust and safety, heralded the decision as "a victory for consumers and the thousands of entrepreneurs who sell legitimate goods on eBay every day."

L'Oreal said it was satisfied with the court's ruling, noting that the judge said that eBay could do more to police its site for counterfeit goods.

The judge suggested 10 measures eBay could take, including filtering listings before they appear on the site and establish tougher penalties for people caught selling knockoff goods. The judge also advised capping the volume of merchandise that sellers can list in categories prone to counterfeit, such as fragrances and cosmetics.

Counterfeit experts say that people selling knockoffs on sites like eBay commonly sell them in batches. Instead of posting a listing for a single diamond bracelet from Tiffany's, for instance, a counterfeiter's site might have a dozen of them for sale.

eBay, no stranger to trademark infringement battles, maintains that for the volume of business it handles, the site remains remarkably free from counterfeits. The company said that of the 2.7 billion listings that appeared on eBay's global site in 2008, 0.15 percent of them were flagged as potentially counterfeit.

Earlier this week, eBay launched an anti-counterfeiting campaign, appealing to members of the consumer electronics industry to join forces to help it fight fakes.

Any time questions about counterfeits arise, eBay points to its Verified Rights Owner Program (VeRO), an automated system it launched in 1998 to allow trademark and copyright owners to report knockoffs. In court battles, eBay generally asserts that its role is only to facilitate transactions between buyers and sellers, and that it cannot be held responsible for individual sellers hawking counterfeit goods.

But that hasn't deterred rights owners from plowing ahead with cases and accusations against eBay. Typically, they claim that eBay's anti-counterfeit mechanisms are too weak and that it shirks its responsibility for policing its site.

In July, a New York judge cleared eBay in a high-profile infringement case brought by Tiffany. That ruling came just a week after a French court held the online auctioneer responsible for $63.2 million in damages for its role in facilitating the sale of counterfeit Louis Vuitton goods.

Meantime, the software industry has a longstanding gripe with eBay for abetting piracy on its site. The Software and Information Industry Association has an eBay certification program to guard against pirated software, and has sued numerous sellers on eBay and even threatened to sue the site directly.

Today's ruling in the U.K. court follows similar decisions in Belgium and France, resolving three of the five cases L'Oreal brought against eBay in 2007 in the favor of the e-commerce giant.

Last year a court in Germany ruled against eBay, and L'Oreal's case in the United States is still pending.

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Sun's planning to birth its own "billion user baby" - launching an app store June 1.

Sun Microsystems is the latest company to jump on the app store bandwagon with Project Vector, likely to be renamed Java Store, to launch June 1 at its annual conference, and CEO Jonathan Schwartz is already making bold predictions of 1 billion users.

Schwartz wrote in a blog post that an app store would capitalize on the distribution of Java and JavaFX.

Here's how Schwartz sees it working: "Candidate applications will be submitted via a simple Web site, evaluated by Sun for safety and content, then presented under free or fee terms to the broad Java audience via our update mechanism. Over time, developers will bid for position on our storefront, and the relationships won't be exclusive (as they have been for search).

"As with other app stores, Sun will charge for distribution -- but unlike other app stores, whose audiences are tiny, measured in the millions or tens of millions, ours will have what we estimate to be approximately a billion users. That's clearly a lot of traffic, and will position the Java App Store as having just about the world's largest audience."

The news from Sun (NASDAQ: JAVA), which was acquired by rival Oracle (NASDAQ: ORCL) in April for $7.4 billion, comes at a time when app stores are in vogue, with everyone from mobile network operators, to software developers to handset makers and even eBay is trying to cash in on the nascent yet lucrative market.

The phenomenon took off after the success of Apple (NASDAQ: AAPL) App Store for the iPhone, which now has about 35,000 applications and more than a billion downloads.

BlackBerry maker Research In Motion (NASDAQ: RIMM) answered by opening its own app store in April. Google has one for the mobile open source platform Android and eBay announced plans for one as well.

No love lost

Meanwhile, it's no secret that Apple and Sun haven't bonded over the years, as Java largely remains a pariah in terms of iPhone app development.

An example of the discontent: In January 2007, CEO Steve Jobs told the New York Times that "Java's not worth building in. Nobody uses Java anymore. It's this big heavyweight ball and chain."

Indeed, the move by Sun may be a way for the company to try and get some traction in the mobile market. "Sun wants to be a big player in the mobile market, and with the alienation with Apple, this may be their way of trying to do that," Jack Gold, analyst with J. Gold Associates, told InternetNews.com.

He adds that he thinks Sun's entry into the app market will not have much impact on the Java market. "I wonder how serious they are or if it's just for good P.R. It may get them some headlines, and they'll put a stake in the ground, but frankly, I don't think it will generate much revenue for them."

And it could cause headaches. "They've had directories and sites for Java apps forever, but if Sun's going to become the merchant and sell them, how do they police it all and make sure none are malicious? Are they going to test every single one? All of that is part of the equation. Even Apple learned never say never when it comes to issues like that," said Gold.

But differences between Sun and Apple aside, Schwartz is optimistic about Sun's venture into app storefronts. "This creates opportunity for everyone in the developer community -- and specifically, for any developer (even those not using Java/JavaFX) seeking to reach beyond the browser to create a durable relationship with their customers," he wrote.

"Remember, when apps are distributed through the Java Store, they're distributed directly to the desktop -- JavaFX enables developers, businesses and content owners to bypass potentially hostile browsers."

At press time, Apple had not responded to requests to comment.

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