Paul Wallbank | Paul Wallbank - Communications Professional

Building an ecosphere

How customers, followers and developers make a business dominant in its field

One of the keys to success for a software platform is its ecosphere – the community of developers, consultants and advocates that grow around a service.

By far the most successful company in building a community around its products is Microsoft, who over the years have attracted hundreds of thousands of developers and partners to support Windows.

Microsoft’s thousands of partners are the company’s greatest asset in beating back the threat posed by Google, cloud computing and Apple. The sheer size Microsoft’s supporter base gives it a natural buffer against competitors.

Apple too have that buffer, in the company’s darkest days during the late 1990s it was the true believers who kept the flame burning. The ecosphere that has developed around the iPhone and iPad has now cemented Apple’s iOS as being the dominant mobile platform.

The same thing happens around various industry software packages, as one company becomes identified as the leader in their sector they develop a following among users in that industry.

At the Xero conference last weekend, the cloud accounting software company showed how an ecosystem of developers, accountants and bookkeepers are developing around their software platform.

Companies as diverse as inventory management, point of sale system and document scanning services are plugging into Xero’s accounting data which adds functionality for customers.

In turn, those third party services makes Xero more attractive to the bookkeepers and accountants looking for ways to make their jobs, and those of their clients, easier.

Xero’s biggest competitor, MYOB, also has that strength with an army of certified consultants from long being the incumbent in their market.

The battle between Xero and MYOB for dominance in the business accounting software market will depend upon how well the incumbent can hold onto their existing markets and the effectiveness in the incumbent building a ecosphere that makes the newer product more attractive.

Disclaimer: Paul travelled to Melbourne and attended the Xero Partner conference courtesy of Xero.

Travel review – Melbourne to Sydney QF490

An easy flight from Melbourne to Sydney with the added bonus of queuing at both ends.

Returning from Xero’s Australian Partners’ Conference in Melbourne was again on Qantas, an evening flight rounded off a busy couple of days. Alas the free drinks on evening flights are no more for economy passengers.

Check in

Once again Qantas’ byzantine seat allocation only made aisle seats towards the back of the plane available.

This is an irritation if you aren’t a frequent Qantas passenger and for short hop flights, particularly for time and cash sensitive freelancers and the self employed it may be enough to choose the competition.

Apart from this irritation, web check in was straight forward and quick with only hand held luggage. Queues did not appear to be long at the check in desks for those with checked baggage.

Boarding

Evening flights out of Melbourne can be problematic as getting to the airport along the Tullamarine Freeway in peak hour can be slow. On this evening traffic was clear.

Surprisingly the security queues were massive as the two operating gates struggled with a relatively light load of passengers. Being early, this wasn’t a problem but others on soon to depart flights were being paged from the lines by anxious check in staff.

An 8pm flight out of Qantas’ domestic Melbourne terminal is a dispiriting affair if you want to grab something to eat as the overpriced food hall is shutting down and the range is dismal to go with the high prices.

Fortunately Gate One at Qantas domestic has ample power sockets so you can continue working instead of moping around the overpriced and depressing food court.

Onboard

Another rattly old 767. While well maintained, it’s still showing its age. Comfortable seats again.

Service

Again the cabin crew was delightfully pleasant and friendly belying Qantas’ reputation for surly service.

This could have been because the flight was nearly empty, which makes the restricted seat availability at check in even more frustrating.

It didn’t appear that the restricted seats had anything to do with weight distribution as the cabin crew invited us to move wherever we liked after the plane had taken off. This was an opportunity to nab a seat at the front of the economy class cabin.

Being an evening flight a meal was served – a basic penne pasta topped with tomato sauce and a tiny chocolate bar. The meal was fine although its size was closer to a snack.

Sadly alcoholic drinks are no longer complimentary on Qantas domestic so a ginger beer followed by a black tea were the accompanying refreshments.

On time performance

The flight was slightly late getting away but had a straight flight into Sydney and arrived ten minutes early.

Arrival

With an on time arrival and only carrying hand luggage, again there was no need to worry about baggage claim.

Not worrying about baggage is handy at Sydney Airport as you need all your wits when dealing with the Dantean circle of hell that are the airport’s taxi ranks. For first time visitors to Sydney, the inept management of something as simple as a line for taxis is a taste of the ticket clipping monopolistic incompetence that infests much of the state’s business community.

For most people it’s easier to get the train out of the airport unless you’re lumbered with luggage or travelling in a group.

Overall QF490 was a straightforward and easy flight with little hassle apart from the large security queues in Melbourne and messed up taxi rank at Sydney airport.

QF490 – 21 Jul 12. Dep Melbourin 8.00pm, arrived Sydney 9.35. Economy class ticket $180.

Paul travelled to Melbourne courtesy of Xero for their Australian developer’s conference.

Writedowns and triumphalism

Sometimes headlines don’t tell the full story

The contrast between Microsoft’s and Google’s results released on Thursday attracted a lot of interest – for the first time in twenty years Microsoft posted a quarterly loss with Google’s profits continue to grow.

While there’s no doubt Microsoft are challenged by the effects of their lost decade and bad decisions made in that time, but the business itself is still extremely profitable.

Microsoft’s posted loss is due writing down 6 billion dollars in their aQuantive investment, an attempt to compete with Google in the online ad placement space.

Despite a six billion dollar writedown, Microsoft only posted a 500 million dollar loss showing the business is still making over 5 billion dollars profit each quarter.

Google on the other hand posted a profit of 2.8 billion, up 11% from the same period last year.

But Google also has some nasty writedowns coming in the future – the purchase of Motorola will see some substantial write downs of that 12 billion dollar deal. It’s conceivable that a very big portion of that investment will have to be written off as well.

Right now, Google’s seeing some benefit from the Motorola acquisition as the phone company’s cashflow is covering a decline in online advertising revenue, a threat to Google’s core business.

It’s easy to be triumphant when the headlines proclaim you’re a winner, but it’s often worthwhile looking at the fine print to see the real story.

Flight review – Qantas QF427 Sydney to Melbourne

A comfortable flight on Qantas’ gracefully aging 767s

The milk run between Sydney and Melbourne is a pretty routine affair and increasingly the service is like catching a fast bus.

Normally I fly Virgin Australia but as Xero were paying for my flight to attend their Australian convention I was happy to fly Qantas, it’s enough out of my usual routine to warrant a review.

Check in

Only having a day bag is an advantage with short hops along Australia’s East Coast and Qantas’ on-line check in is reasonably efficient.

An irritation with Qantas is the opaque way seats are made available. Depending upon your fare and frequent flier status you may not see all the available seats when checking in online so if grabbing a specific seat is important then it is worthwhile manually checking in at the airport to see what has become available.

Boarding

For all of Sydney airport’s sins, getting to the airport and boarding is fairly straightforward and for an 11am flight the security queues are short and efficient.

Another advantage with flying Qantas out of Sydney is their Heritage Centre in the T3 terminal where you can kill time waiting for a flight while looking at everything from the evolution of cabin crew uniforms to 1920s outback flight schedules. Just watch you don’t get too engrossed.

Boarding a Qantas flight is fairly clunky compared to Virgin Australia. This is partly due to their 767 craft only boarding from the front and not from both the forward and rear doors on the Virgin 737 aircraft. This also means queues down the aisles.

Onboard

The 767 aircraft are homely and showing their age. It’s surprising Qantas have kept flying them for as long as they have and the operating costs of these planes must be costing the airline a fortune compared to newer craft.

A positive with the older aircraft is the 2-4-2 seating is quite wide and comfortable compared to the equivalent JetStar and Virgin craft. Inflight entertainment is lacking although this hardly matters on a 95 minute flight.

Service

Qantas has a patchy reputation for cabin service, but the crew on this flight were delightfully friendly and helpful.

The inflight snack was a raspberry and white chocolate cookie or an apple (I had both) along with tea, coffee and softdrinks. The super-sweet cookie went well with a cup of tea.

On time performance

Sydney airport can create hell for passengers if the weather or various traffic restrictions conspire against them. This was not one of those days and the flight was away a few minutes late but arrived on time in Melbourne.

Arrival

With an on time arrival and only carrying hand luggage, there was no need to worry about baggage claim.

An advantage with Melbourne Airport is that cab ranks and bus stops are right outside the terminal although passengers using the Skybus service should note that the city bound buses usually stop at the Virgin terminal first so you may fight to get a seat unless you’re prepared to walk the 200m to earlier bus stop.

Overall QF427 was a comfortable trip and a good re-acquaintance with the flying kangaroo. The 767 aircraft though are desperately showing their age and while for passengers this doesn’t really matter on a short trips, it can’t be good for the airline’s image or operating costs.

QF427 – 20 Jul 12. Dep Sydney 11:00am, Arrived Melbourne 12.35. Economy class ticket $120.

Paul travelled to Melbourne courtesy of Xero for their Australian developer’s conference.

Distribution is not the problem

If your business relies upon distribution problems, then you may be in trouble.

The web is too efficient at information distribution, which is the problem for newspapers whose business model was built out of the difficulty the working man and woman had in finding out what was happening in the world around them.

In today’s society, there’s no excuse for not knowing what is going on. If you only choose to keep up to date with what the Kardashians are wearing, the weight of Olympic swimmers or who won last night’s reality TV extravaganza then you only have yourself to blame.

The web’s efficiency means there’s no shortage of ‘stuff’ pouring into our lives – music writer Bob Lefetz puts it well when he says “Kids don’t have a short attention span, anybody who says that is completely ignorant. They’ve got an incredible shit detector”.

Distribution is not the challenge, that bit is insanely easy. It’s delivering quality and getting the message about our products heard above the Internet’s constant buzz.

As consumers, and more importantly as citizens, it’s up to us to filter that noise and not accept dross any more.

Outsourcing’s changing face

Freelancer’s 50 fastest movers job list shows some interesting trends

Outsourcing company freelancer.com regularly releases the fifty fastest moving job descriptions requested by their customers.

This year’s list shows how the online industry is changing – content creation, social media and SEO job requests are all down substantially as users and gatekeepers like Google adapt to the information flood we all have to deal with.

Keeping in mind the market that Freelancer.com caters to small businesses and many of the jobs posted are for fairly small – some would say laughingly tiny and insulting – amounts, it’s probably safe to say we’re looking at the low value end of the market.

Article writing (down 15%), proofreading (5%), blogging (13%) and submission (4%) jobs are probably the cheap and nasty “Demand Media” style of low quality content designed for SEO purposes.

SEO itself is in trouble with jobs in that sector down 7% indicating Google’s Panda and Penguin search engine changes have achieved their objectives of improving search results and knocking out those gaming the system with low quality content.

A similar thing has happened with social media. Facebook is too hard for many businesses and they’re not seeing a return on their substantial time investment.

“Companies in industries from consumer electronics to financial services tell us they’re no longer sure Facebook is the best place to dedicate their social marketing budget—a shocking fact given the site’s dominance among users,” Freelancer quotes Nate Elliott, an analyst at market research firm Forrester.

A bright part in Freelancer’s list is the rise is in open standards as HTML5 starts moving up the list with 20% growth.

“The Internet is becoming more interactive, and the technologies that are winning and will continue to win are open standards like HTML5 and jQuery- to the detriment of the incumbents proprietary technology providers like Adobe and Microsoft,” says Freelancer’s CEO Matt Barrie.

Open standards aren’t winning everywhere though as Apple’s iOS is clearly winning the developer war as iPhone grows by 30% and iPad by 26% compared to Android’s 20%.

Freelancer’s list is an interesting snapshot at where industry demand is right now, what’s we’re starting to see are some of the transition effects working their way through the system. The rise and fall of the social media and SEO specialists being one of those.

The full Freelancer list is below;

Windows 8 to launch on October 26

The next version of Windows gets a release date.

It’s official, Windows 8 has an October 6, 2012 release date.

For Microsoft, the pressure is now on. Not only does the desktop version have to be shipped but also the smartphone and tablet versions. Their cloud services are going to have to be flawless on the day Windows 8 goes live.

The tablet version is doubly important as Microsoft has to convince cynics like me that the Microsoft Surface is not vapourware. With the Surface RT scheduled for release with Windows 8, Microsoft are going to have to announcing pricing and final specifications very soon. Reports are that the Surface is beginning to appear on Amazon sites so release may not be far away.

Nokia too will now be under a lot of pressure as releasing credible Windows 8 are the only hope for the company’s future. As it is, the current range of Lumia phones are now dead in the water despite massive discounts.

As we’ve previously discussed, Windows 8 is essential to Microsoft’s market position and will define their future – a failure will almost certainly lock the once dominant software giant to a another lost decade.

We’ll see a lot advertising and PR hype around Windows over the next few months, the real test will come at the end of October and with the Christmas buying season.

By the middle of next year we’ll have a good idea of just how successful Windows 8 will be. Steve Ballmer’s future depends upon it.

Android’s corporate wins

Android is increasingly becoming the platform for business hardware.

Telstra’s launch of the second iteration of their T-Hub device and the Commonwealth Bank’s Albert tablet Point of Sale device are notable in their choice of operating system.

For the T-Hub, the first version was a bug plagued and slow proprietary system that which one of the reasons for the device’s market failure. Telstra’s second attempt runs on the Google Android system.

The Commonwealth Bank didn’t make Telstra’s mistake with the Albert device, instead choosing the open source system from the beginning.

Choosing an open platform like Android makes it easier for the developers and company to support the device and develop new products. There’s also the advantage of thousands manufacturers supplying hardware that runs on Android.

If we compare the costs of developing a proprietary system and sourcing hardware for it to run on, the choice of an open system is almost irresistible.

For Microsoft, this adoption of Google Android by corporations is another blow to Windows’ dominance of the market, a few years ago all of these devices would have been running a version of Windows but Android is a cheaper, more flexible and better suited to most of the tasks required.

It could be worse for Microsoft – Apple could be dominating this market. Apple though have had their own victory on consumer devices and increasingly companies have to cater for their customers and staff wanting an iPhone or iPad app.

Like on smartphones, the battle is now between Android and Apple.

Digg and perserverence

Is persevering with a failing business worthwhile?

A couple of years ago news sharing site Digg was one of the hot properties of the Internet. On the weekend Digg’s remaining online assets were sold for $500,000. So what happened to a service that promised so much?

The short answer is the business was overtaken by other services like Reddit, Facebook and Twitter. Coupled with that, the founders moved onto other projects. Running a business is tough and it’s understandable that founders would move away from an enterprise that doesn’t seem to have an exit.

In many ways this ties into the presentation by Ian Gardiner, Viocorp’s Co-founder and CEO, at Microsoft’s Bizspark APAC conference about perseverance. Where does a business owner draw a line with their startup baby? Should you pivot into another model or just move on from the idea altogether?

None of this is straightforward and the decisions will be different in every business. A local computer guy is going to have different factors to consider to failing doughnut franchise. Equally a fading media company is going to be very different to those confronting a declining department store – despite what the MBAs and management gurus steeped in the 1980s view that “all business is like soap” ideology.

For some like Ian, ‘pivoting’ to a new business model is the answer. At the Microsoft event last week, Sebastien Eskersley-Maslin of Blue Chilli described a participant of his Club Kid Entrepreneur who decided to sell paper airplanes and was so successful they started running out of paper to make new ones.

Faced with a shortage, the young entrepreneur decided to use the remaining planes as a target game – so rather than selling them, he charged a few cents to throw them at targets.

That’s the classic pivot, which the founders of Digg couldn’t execute with their web service.

All isn’t lost for Kevin Rose and the other founders of Digg though, while the headlines read about the $500,000 sale of the remaining assets they overlook that Digg’s other assets sold for sixteen million.

Choosing to persevere with a struggling business is a matter of faith – faith in yourself, the vision and the product you’re selling. It can be tough to let go of something you have so much faith in.