Hasso Plattner seems right at home in Silicon Valley. SAP, which he helped found 35 years ago and where he is still head of the supervisory board, is best known for its stolid R/3 suite of enterprise applications. But Plattner displays the same sort of restless impatience and frustration with the limitations of the software status quo that are apparent in today’s generation of software entrepreneurs. Is that enough to push SAP faster along the road of one of the most important product transitions it has ever faced - particularly now that protege and one-time heir apparent Shai Agassi has quit?

When I met him earlier this week at SAP’s labs in the Valley, Plattner was fizzing over with what he calls his "new idea" - the on-demand software (codenamed A1S, due to appear next year) that is aimed at small and medium-sized companies, but which also looks like a blueprint for the way much of the business software market will one day work.

The German company was simply late to the on-demand party. As Plattner says:

We didn’t believe five years ago you could run an enterprise system over the internet. Google and others have shown you can run big systems over the internet with reasonable response time.

He still insists that it will be a long time before the big companies which are SAP’s core customers are ready to switch fully to the internet (shareholders had better hope he’s right.) The key to SAP’s future, though, rests on a new architecture: composite applications delivered over the internet, assembled from piecemeal software services, and onto which you could bolt a number of different "front-end" user interfaces, depending on the needs and skill level of the user. (This blog post by Dan Farber, from SAP’s user conference in Atlanta last month, is a good summation.)

Think of it as Web 2.0-meets-SOA: The back end is based on the robust but more flexible service-oriented architecture that Agassi pioneered, while the front end is an adaptable interface that draws on all the community and communications features of the Web 2.0 world.

This challenges the SAP culture to its roots. Consider this: SAP, a company not exactly known for the useability of its products, is trying to set itself up as designer of user interfaces that will act as the front-end to both its own software "services" and those created by others. That puts it in competition with Microsoft, which is trying to cement its place as the universal UI by offering to license the interface of its new Office, free of charge, to any application maker that wants to take it.

Plattner has a home in the Valley and plans to work here for the next few months. His presence is no doubt partly intended to help make up for the recent loss of Agassi, who was the animating spirit of the Palo Alto labs. But longer term, he badly needs to find another protege with the vision to launch SAP on its next 35 years.

Steve Jobs called it Rosetta after the Rosetta Stone - the key to translating the untranslatable. Others have referred to it as the Holy Grail.

The actual, less historic, name of  what you might guess is a pretty powerful piece of software is QuickTransit,  from Transitive, a company born in Manchester in the north-west of England, but now marketed and managed from Silicon Valley.

QuickTransit was the software that allowed thousands of programs written for Apple’s PowerPC-based computers to run on Intel-based Macs after Apple switched over to the new processors last year.

Around 6m Mac users are taking advantage of QuickTransit, a.k.a. Rosetta, in what Mr Jobs has described as the smoothest transition of computer microprocessors in the industry’s history.

QuickTransit has the unique ability to enable applications compiled for one processor and operating system to work on another without any noticeable deterioration in performance.

The company faced scepticism in finding what many considered to be the Holy Grail, but its success with Apple has banished doubts and led to a succession of deals.

When the chief executives of Sun and Intel announced an alliance in January for Intel’s processors to power some of Sun’s servers and for Intel to endorse Sun’s Solaris operating system, they knew that Transitive would take care of the translation.

At Sun’s JavaOne conference in San Francisco this week, Transitive announced QuickTransit for Solaris/SPARC to-Solaris/x86. This means the very broad eco-system of programs written for Sun’s Sparc processor and Solaris OS will run seamlessly on the new servers being produced with Solaris and Intel’s Xeon processors, which have very few programs written "natively" for them.

The software can therefore make changes from one system and processor to another a relatively painless one and remove one of the biggest objections to change when IT departments and companies consider replacing their old systems, as in the question: can we still use our old software?

The likes of Intel, IBM and Sun are using Transitive to help them move into new markets, including each others, with their technologies, which makes you wonder why none of them has yet bought the company.

"This is a highly strategic technology," admits Bob Wiederhold, Transitive chief executive.

"Companies are thinking not so much ‘Should we buy these guys?’ as ‘What happens if someone else does?’"

MySpace’s interest in buying Photobucket is an interesting evolution of the sector, according to John Borthwick, chief executive of Fotolog, a five-year-old site that features photo uploads as a springboard for  social networking.

“This is MySpace recognising the value of the media itself – they have the social network and it’s them saying: We want the media as well,” he says.

“They are continuing to push aggressively into photo and video-based media as they see Google and Yahoo! zero in on this area as well.”

Mr Borthwick says Fotolog itself has made major strides to become the world’s 26th most-trafficked site, with 7m accounts in more than 70 countries and 150,000 members being added a week.

On Monday, it announced a deal with AOL’s Userplane subsidiary that will add chat, instant messaging and video messaging to the site. As a photo-blogging destination it has become part of the micro-blogging trend of minimal text entries and images replacing words that includes Twitter, Tumblr and Radar.net.

While people say little, they stay longer, it seems. Mr Borthwick says they spend on average 25 minutes per visit, compared to around five minutes for Yahoo’s Flickr. It’s yet another twist on the saying that a picture can be worth a thousand words.

World of Warcraft players can now have their own specially designed credit card, although real-world purchases do not translate into virtual currency rewards in the world’s most popular online role-playing game.

WoW, with more than 8.5m players worldwide, has combined with Visa and First National Bank of Omaha to offer the card, with Reward Points being awarded that can be exchanged for free playing time.

With their first purchase, subscribers are awarded 1500 points, enough to play the game free for a month. Subsequent purchases will earn one point per dollar. There are 13 designs featuring WoW characters to choose.

Interestingly, Blizzard, WoW’s developer, has chosen not to reward the credit card’s users with the virtual currency of gold. It has tried to keep ways of earning the currency inside the game and has opposed real-money trades of its gold on sites such as eBay. Ebay itself instituted a ban in January on sales of virtual goods.

But the WoW card brings one step closer a prediction that credit cards will soon earn their users virtual money rather than real money, from Second Life’s Linden dollars to Eve Online’s ISK.

Further reading: Eve Online is as much business classroom as hypercapitalist playground.

Whenever the phrase “inflection point” comes up at Intel, you know the speaker is channeling Andy Grove, the former chief executive who used it to describe a key business moment in his book Only The Paranoid Survive.

The biggest inflection point for Intel was when it came under pressure from Japanese memory producers in the mid-80s and decided to abandon that market and establish itself in the relatively new field of microprocessors.

At Intel’s spring analyst day on Thursday, Paul Otellini, the current chief executive, identified a non-existent market at present, which he predicted would be a new inflection point for the company.

He foresees Intel’s low-cost, low-power Silverthorne processor family, appearing on smaller 45-nanometre chips next year, as driving new products from small internet devices to consumer electronics boxes and ultra low-cost PCs.

Mr Otellini is making a big bet on this unproven segment, which his company thinks could be worth $30bn and total 900m units in 2011. He had earlier put 1,000 engineers to work on the Ultra Mobile PC (UMPC) concept and last month announced the smaller Mobile Internet Device (Mid) format.

The UMPC has yet to take off and Intel had previously failed to make any significant inroads with its processors in mobile phones.

However, poor battery life has been the main criticism of UMPCs since their launch in 2006 and Mr Otellini said Silverthorne chips from 2009 would have a twentieth of the power requirements of its first UMPC efforts.

Such advances could certainly boost the category, but these cheaper lower-margin chips are unlikely to represent the kind of inflection point that would see them supersede Intel’s core business of notebook, desktop and server microprocessors.

For those of you who haven’t been keeping score, this is how things stand in the internet advertising business, as revealed in first quarter earnings (the latest news, from AOL, was contained in Time Warner’s earnings on Wednesday.)

                              Net advertising ($m)           Growth from year before (per cent)

Google                                 2,530                                    65                        

Yahoo!                                  980                                       9

AOL                                       549                                      40

Microsoft                             350 (estimate)                    23

Below the numbers, how are these companies doing?

AOL. The new advertising-driven strategy is starting to work. But AOL does not disclose traffic acquisition costs (which have been netted out of the Google and Yahoo figures) - and since the fastest growing part of its business is placing adverts on other publisher’s sites, climbing by 80 per cent in the quarter, these costs will be going up fast.

Yahoo. Just as it gets close to mending its search monetisation engine, another wheel on the wagon starts to go wobbly. Growth in display advertising has come down to under 20 per cent. Yahoo blames the shift to all that "non-premium" advertising inventory surrounding user-generated content, and hopes buying Right Media will help it navigate this new market better (in this interview, an early Right Media investor says what he thinks is driving the spate of acquisitions in online advertising.)

Microsoft. Some much-needed relief for Microsoft shareholders: advertising revenues finally climbing as AdCenter begins to click and the company claims classified growth in line with the market. It wouldn’t do to get over-excited, though: Microsoft still lost nearly $500m in its internet division in the first nine months of its fiscal year and falls further behind Google by the day.

The best hope for these companies is that Google’s attempt to kick-start its display advertising business with the purchase of DoubleClick misfires. Counting on your competitor’s failings, though, is not much to base a strategy on.

Digg’s user revolt, and the site’s subsequent decision not to comply with demands to take down articles containing a key to the copy protection on high-definition video discs, have raised all sorts of interesting questions about censorship, copy protection and democracy in this user-driven, Web 2.0 world.

But won’t someone think of the investors? Kevin Rose, Digg’s founder, has taken millions of dollars in investment from backers including Pierre Omidyar, Marc Andreesen and Graylock Partners. By Mr Rose’s own admission, that investment may now go up in smoke:

"You’d rather see Digg go down fighting than bow down to a bigger company," he said today in a message to Digg’s users. "We hear you, and effective immediately we won’t delete stories or comments containing the code and will deal with whatever the consequences might be. If we lose, then what the hell, at least we died trying."

We’ve just confirmed that Digg declined to consult its financiers before deciding to risk exposing the company to potentially crippling copyright lawsuits. Jay Adelson, Digg’s chief executive, says that although he undertands the risks, "investors in Digg have really empowered management to make these sorts of decisions."

Whether Digg’s investors will come to regret that level of empowerment remains to be seen. In the meantime, Mr Adelson says, "we’re going to get back to work, get back to democratising the media and empowering our users."

Boo.com, the fashion site that was Europe’s biggest dotcom flop, is coming back like some Night of the Living Dead zombie; but this time its business plan is less scary.
Boo relaunches today as a travel website that combines search, booking capabilities and Web 2.0 social networking.
Its parent, Web Reservations International is keen to stress that the new owner is nothing like the old Boo as it generated 300m euros in bookings in 2006 and 19m in profits. At the same time, it is playing on the notoriety of the Boo.com domain to give its site a launch boost.
WRI acquired the domain from fashionmall.com some time ago, according to its PR company, although fashionmall’s website was today still displaying the boo.com logo, with the unfortunate tagline "Style never dies".
Boo died gruesomely in 2000 after burning through $120m in six months. It occupied expensive Carnaby Street offices, its executives, including former Swedish model Kajsa Leander, lived large and its website featured 3D imagery, Flash technology and a Miss Boo avatar that was way above the capabilities of most users’ internet connections in 1999.
Fashionmall appears to have done little with the boo.com domain and relaunches touted in 2000 and 2006 never happened.
Even with its new Web 2.0 clothing, it remains hard to see how WRI can transform Boo’s image from being one of the Top Ten dotcom flops of all time.