The biggest buzz of Day 2 at the Web 2.0 Expo came from Google’s Eric Schmidt, who announced a presentation program was being added to the Google online apps package. However, the most significant news of the day came from Vidoop, which publicly launched an innovative two-factor authentication system based on simple image-recognition and identity verification (without any hardware). Another important development from an IT perspective was that both tech stalwart IBM and new startup Swivel talked about unlocking business data for building faster and more comprehensive business reports.

Vidoop’s legitimate alternative to passwords

Vidoop’s new authentication technology is the best new thing that I’ve seen at the show. And, quite frankly, it’s the best new IT product that I’ve seen so far in 2007. The concept is simple and powerful to the point that it makes you wonder why no one has thought of this before. It is a true alternative to the much-maligned password system, which is a long-standing security risk and resource drain for IT.

Here’s the synopsis of how Vidoop works: You set up a user account with a username, an identity verification option (e-mail, phone, and/or text message device), and you select three types of images (you can do more in high-secure environments). For example, the theme of the images could be water, sports, and space (see the screen shot below).

When you login for the first time from a new machine, you enter your username and click Sign In. Then you must verify your identity by entering an activation code (which can be sent via e-mail, phone, or text message). Once you enter the code the first time on a computer, you can choose to save it as a cookie, and then you don’t have to activate each time. Once that step is complete, you are presented with the grid of images shown in the screen shot below. You simply enter the letters from your three images, click Secure Login, and you’re done. Keep in mind that the letters rotate across different images each time you login.

The result is two-factor authentication that is easy for users to understand and use, while providing a much more secure infrastructure for IT to manage. I have a lot more details to share about this product and how it can work with Web sites, Active Directory, Outlook Web Access, and VPNs, but I will save that for a follow-up article solely on Vidoop. For now, let’s just say that this company has an opportunity to change the world with this product, if they do it right.

Google launches PowerPoint competitor

Despite the proliferation of different versions and packages, Microsoft Office primarily revolves around four applications: e-mail, word processing, spreadsheets, and presentations. Google already has online equivalents of the first three, and today Eric Schmidt announced that the fourth — presentations — is on the way because Google is buying Tonic Systems.

In his keynote, Schmidt downplayed the Google office package as an alternative to the full-blown Microsoft Office suite. He said, “We don’t think it’s a competitor to Microsoft Office. It’s casual and sharing and a better fit to how people use the Web.” However, judging by the applause of the audience when Schmidt made the announcement, it appears that users may have a different perspective on the issue of an Office alternative.

For more, go over to ZDNet and take a look at Dan Farber’s synopsis of the Google presentation announcement.

IBM wants to unlock data for business dashboards

Rod Smith, IBM Fellow and Vice President of the Emerging Technologies Software Group, explained to me IBM’s vision of how data needs to be unlocked in the future to provide easy-to-build business dashboards. Rod pointed out that text and photos have been unlocked and commoditized by search engines such as Google, but a lot of database data is still locked up in proprietary systems.

IBM’s vision is that private data can be unlocked and standardized via XML and RSS so that it can easily be fed into dashboards and cross-referenced with public data to provide more powerful data analysis. As an example of this type of data “mashup,” Rod talked about a dashboard that could monitor server power in five data centers in different locations. The dashboard would import that internal data and then display it alongside some public data on the price of power in each of the five locations where the data centers are located. That would give IT managers powerful information at their fingertips, and that information could have a major impact on decision-making around provisioning and re-provisioning servers. Right now, this information often lives in a spreadsheet. In the future as IBM sees it, this data would exist in a Web-enabled dashboard that updated regularly and automatically.

By the way, IBM wasn’t the only one talking about unlocking data at Web 2.0 Expo. A startup named Swivel demonstrated a Web-based data analysis tool that quickly and automatically creates graphs for data that is plugged in. Swivel CEO Brian Mulloy said, “Swivel’s mission is to liberate the world’s data.”