Author: Paul Wallbank

Paul Wallbank is a speaker and writer charting how technology is changing society and business. Paul has four regular technology advice radio programs on ABC, a weekly column on the smartcompany.com.au website and has published seven books.

The Death of the IT Guy

The IT support sector is being disrupted as cloud computing service shake up what was a settled industry.

Until recently the cottage industry of computer repairers was thriving, having been born with the massive take up of computers by homes and businesses in the 1990s.

Over the years, things got better for the local IT guy as businesses and then homes became networked. Some of the smarter technicians started selling and supporting servers and things got better.

The arrival of the Internet, the approach of Y2K bug and, in Australia, the introduction of the GST made even more business for the local computer tech and the Windows virus epidemic of the early 2000s guaranteed plenty of work for anybody who knew how to wield a screw driver and a boot disk.

As the industry matured, maintaining office servers and looking after the regular glitches in desktop computers was a steady, reliable source of income for most support companies.

Every few years businesses or homes would upgrade their computers and that would trigger a cascade of costs as data was migrated and older peripherals like printers, serial mice and ADB accessories had to be replaced.

Then all came to a stop with the arrival of cloud computing services where many of older computers could access online applications just as well as newer computers.

For IT organisations with a business plan based up customers upgrading systems every three to five years this was a disaster.

These businesses were already feeling the pinch with the late arrival and market rejection of Microsoft Vista and now their customers could sit on older XP machines and happily use the latest online applications.

Sensible IT folk have understood the change and the good support companies now have an armoury of cloud based services for their customers. These businesses know the IT hardware and support spend of most businesses is shrinking and taking the market with it.

Unfortunately there are a few holdouts trying to keep the old business model alive who have a hundred reasons why cloud services are no good for their customers.

To be far to those fixed on the old IT model, this attitude is probably even more prevalent in corporate IT departments and among CIOs with cloud services seen – probably rightly – as a threat to their power and income.

One of the biggest risks to those support folk who aren’t at least evaluating cloud services for their clients is that shrinking IT spend and eventually there won’t be much money, or customers, left for the old model.

A similar thing is happening to bookkeepers and accountants as newer businesses and those with younger owners or managers are moving to cloud based software while the older ones are wedded to their legacy systems.

The older accountants who won’t move to the newer systems are finding their businesses growth stagnant while their younger colleagues are picking up the work from new businesses.

Computer support was always a business based upon the transition to a digital workplaces, similar to the men employed to walk in front of early motor cars with red flags.

Now workplace technology has matured, there’s less work for the IT guy. Hopefully most of them will make the change and not get run over like the guys clutching red flags.

On being a Luddite

Being skeptical about technology isn’t the same as being a Luddite.

“I’m a Luddite”, magazine editor James Tuckerman proclaimed as Master of Ceremonies for Microsoft’s Asia Pacific Bizspark Summit this week.

James was referring to an article in Australian Anthill in the 1990s where he predicted businesses would never use the Internet for research.

Being a Luddite isn’t a bad thing, James contends. In his view being skeptical about technology enables business owners to better evaluate technology as Luddites “think like a layman, don’t know the limits and think commercially”.

None of this is true though – being a skeptic is not the same as being a Luddite.

The original Luddites in the English Midlands weren’t anti-technology, they were opposed to the technology that would put them out of work.

At the beginning of the 19th Century, mill workers were a highly skilled and extremely well paid trade but the new automated loom technology meant those skills were no longer needed.

To protect their livelihoods, the loom workers started smashing the new machines and burning down factories. Eventually they were viciously suppressed by the British government with some being executed while others were transported to Australia.

What drove the Luddites was the loss of their income and who is to say we would have behaved any differently if we were faced with being unemployed and destitute in the harsh conditions of 19th Century England.

However we shouldn’t equate being skeptical about technology with being protecting one’s turf.

Today’s Luddites are those businesses who don’t want to move with the times – those who have grown fat on easy credit or lazily clipping the tickets on state sanctioned monopolies.

Some of those Luddites are going broke as consumers stop buying electrical goods or cars, while others lobby their friends in government to protect their privileged and profitable positions.

In the early 1800s the Luddites eventually lost, we can only hope that when history repeats itself two hundred years later today’s Luddites haven’t damaged the economy too much.

James Tuckerman isn’t a Luddite and that’s why he’s part of the future. I just wish he wouldn’t call himself one.

ABC Nightlife Computers: The state of tech

July’s ABC Nightlife tech looks at viruses, online frauds, security and social media

Join Paul and Tony Delroy to look at some of the trends and events that are affecting how you use phones, computers and internet in your home or business.

A lot’s happened in the tech world over the last few weeks – Facebook has gone from the web’s golden business to being shunned, new tablet computers have been launched and we’ve had a virus threaten to knock people off the Internet.

If you missed the show, you can listen to it online through the Nightlife website. Some of the topics we looked at included;

  • So what was the DNS Changer Trojan? Did the FBI really take over a criminal computer network?
  • Could a virus really damage computers and bring the Internet to a halt?
  • Is it true the US, Israel and North Korea are using viruses to attack other countries’ computers?
  • Should we worry about viruses on smartphones and tablet computers?
  • What about virus hoaxes? There’s a good one going around about Facebook at the moment?
  • Both Microsoft and Google have launched new tablet computers, will they knock off the iPad?
  • Microsoft’s tablet is going to run the new Windows 8 operating system, how does that look?
  • Facebook seems to have gone from hero to zero since they launched on the stock market. What happened?
  • There’s been some pretty serious Facebook privacy changes recently, what should people watch out for?
  • Microsoft have had some big security updates this week, what are they.

For the Microsoft updates we mentioned, the major security updates can be downloaded from the Windows Update page or the Automatic Updates in Windows Vista and 7.

Windows 7 and Vista users should also disable the desktop widget feature, Microsoft have two fix it tools available for download and users should run both.

Listeners questions included the following problems;

Alternatives to Outlook Express

George was looking at upgrading to a new version of Windows that doesn’t have Outlook Express included but still wants a computer based email client rather than trusting a cloud service.

Some of the alternatives include;

Antivirus programs

Margaret asked about antivirus options for Macs, there’s a couple of free antivirus programs designed for the Apple Mac

For Windows users, the easiest free anti-virus to use is Microsoft Security Essentials.

Microsoft Silverlight on Android

Accessing Microsoft Silverlight based services like NineMSN on Google Android devices can be a problem as Jason found.

Unfortunately at this stage there’s no clear solution for playing Silverlight sites on Android devices as Moonlight, the open source Silverlight player has been abandoned.

Next Nightlife spot

Our next Nightlife tech spot will be on August 6 and we’ll decide the topics closer to the dates. Watch the website for details over the next few weeks.

Using your customers to build a world beating business

Our customers are the foundation of our business.

Listening to your customers is a business truism, it’s so obvious that it really shouldn’t have to be said. Unfortunately all of us have to be reminded of this sometimes.

The amazing thing is today’s business has the tools not just to listen to our customers, but also to react quickly.

At Microsoft’s Asia Pacific Entrepreneur summit this week, we had the opportunity to hear from some of leading voices of the Australian startup and investment community.

One of the things that really leapt out from the array of founders, investors and entrepreneurs is how successful businesses thrive from listening to their customers.

Michelle Deaker spoke of her experience in founding giftcards.com in 1997. At that time there was no experience in running an online gift card business and the only way to figure out what worked was to listen to customers. Eventually Michelle sold out of the business and today talks from the investment side of building enterprises as the CEO of OneVentures.

Viocorp founder Ian Gardiner described how their video streaming business not only has to adapt to customers’ needs but also to a market that has dramatically changed over the last decade.

Moving quickly to respond to those market changes is something Sebastien Eskersley-Maslin of Blue Chilli touched upon in his presentation where startups in their Venture Technology program are encouraged to get a built product out of the door in three months.

“You can’t build quickly enough” says Sebastien.

Sebastian also has a three customer view – there’s the customer that you build the product for, the bulk customer such as a corporation and the “strategic customer” who is the potential buyer for your business.

Considering the business buyer as being the ultimate customer fits into the Silicon Valley model of “flipping” business which isn’t applicable for many ventures although it illustrates that we need to consider customers through the prism of our own business objectives.

That we often don’t listen to customers is unforgivable in an always on, connected world. We have the communications tools like social media and the business intelligence tools to monitor visits to our websites and sales through our stores.

In a world where we’re lionizing technology startups on the basis of the number of users – note “users” are not the same as “customers” – or the amount of money a large corporate will pay for a small development team, it’s important we don’t lose touch with the basis of all businesses.

Ultimately it’s the customers who matter – if we don’t solve a problem, fill a need or provide value then our businesses are ultimately worthless.

Little disruptions

A hotel’s change to iPhones is symptomatic of a change in technology.

Seasoned travellers learned long ago to treat the phone in their hotel room with caution as massive mark ups on call charges were a nice profit centre for most establishments.

With the arrival of the mobile phone, that revenue stream started to shrink and now one hotel in Vancouver has decided to replace their room phones with iPhones.

The Vancouver Opus hotel already supplies iPads in their rooms and the phones seem a natural extension to that, particularly given the chain has a “virtual concierge” app to guide guests.

Increasingly it’s only the older hotel chains that rely on excessive charges for things like telephone calls and Internet access. Those establishments rely on the more senior business traveller who are locked into a 1970s way of travelling.

When you stay at cheaper accommodation or newer boutique establishments, you find many of the expensive extras in the major chains are available cheaply or free. It’s a quandary of travel that a backpackers’ hostel will offer free Wi-Fi while the Sheraton up the road will charge $60 for an often inferior service.

The opportunity for the Sheratons, or the Hiltons, or the Four Seasons to charge those sort of rates is dying at the same rate their older clientele is retiring. Its a dead model.

Fortunately for those hotel chains, slamming guests with fat phone charges was just icing on a very rich cake, the loss of those revenues over the last two decades has been unfortunate but not fatal.

Other businesses though might not be so lucky – if your business relies on big, unreasonable markups then right now you are in a sector very ripe for disruption.

Hanging on the telephone

Is there a digital divide appearing in customer support services.

Ever tried to call an online company about a problem? As the New York Times explains, it’s often hard to find the telephone number, let alone someone to answer your call.

The NY Times article worries a new type of digital divide is appearing between those happy to do business using email or social media and those who who demand to speak to someone.

In reality, the truth is more subtle than just generational differences – it’s about the web2.0 service-free business model where few, if any, resources are spent on customer support. The idea is the an assistance can be given out on “self service” basis through a website or, better still, crowdsourced on a user forum where the customers work together to figure out solutions themselves.

For many of the web based cloud computing and social media businesses, this model is essential to their survival. If you were to add a customer support department answering telephones, the viability of the business would collapse.

While it’s uncertain if that business model is sustainable for many of these web based companies, it’s interesting to ponder how many phone calls most businesses could avoid by having relevant information on their website.

It’s worthwhile looking at call logs and asking your staff what are the most common questions to your business. Answering those on the company web site might mean happier customers and fewer staff distractions.

For some businesses, letting customers discuss issues in an online company forum might be a way of crowdsourcing support and giving ideas for future products or service improvements.

Rather than leaving customers and staff hanging on the phone, having relevant and helpful information on the website saves everybody time and money.

Are small business owners whingers?

Too many businesses are blaming others for their problems.

People of the same trade seldom meet together, even for merriment and diversion, but the conversation sends in a conspiracy against the public, or in some contrivance to raise prices.” Adam Smith – The Wealth of Nations.

At a meeting with the state’s Small Business Commission I was once again reminded of Adam Smith’s words – that business owners will try to seek whatever opportunity they can to raise prices and whinge when they can’t.

Over the last few months I’ve heard business owners complain the government doesn’t do enough to protect the quality of their imports, give them more onstreet dining permits, stop their neighbours from having onstreet dining permits and, my favourite of all, regulating discounts offered on group buying websites.

Restauranteurs are complaining their customers don’t appreciate the cost of running a business – which is true, but it isn’t the customers problem.

A spectacular example is the anti-carbon tax propaganda where local businesses are displaying letters from a political party claiming their prices will go up and one franchise chain was dumb enough to even write down their plans to blame price rises on the new tax.

We also have the ongoing narrative that local councils – particularly those controlled by Green or Independent groups – are “anti-business” and killing commerce through unfairly enforcing parking rules and building bicycle lanes. Something that nicely fits the talking points of the Corporatist political parties that anyone who isn’t endorsed by a major party is “a dangerous radical”.

The best of all though is the ongoing campaign to eliminate the GST and import duties threshold for overseas purchases, which claims all the problems of the nation’s retailers would be solved if customers were forced to wait a week a pay a couple of hundred dollars in administrative fees.

Some of these gripes are fair – some councils are unreasonable (interestingly usually in areas where local government is seen as a stronghold a big party), the current tax rules are unfair and there are truly stupid people deeply discounting on group buying sites – but most of them are just excuses.

Business is always tough, if it wasn’t everybody would be doing it and taking it easy.

If all you can do is whinge about prices, your council, the government, your competitors, staff or your customers then maybe you should think about getting a job or at least taking a holiday.

 

Dealing with the DNS Changer Trojan

On Monday computers infected with the DNS Changer Trojan will stop surfing the net. Make sure you aren’t infected.

On Monday, thousands of computers around the world will be cut off the web as the servers behind the DNS Changer Trojan Horse are shut down.

The DNS Changer did exactly what the name says – it changed a computer’s Domain Name Service (DNS) settings so that all web traffic went through servers belonging to the virus writers.

Eventually the writers were caught and the computers were seized, in order to avoid disruption the servers were left running but they will be shut down on Monday.

On Monday, those computers still infected won’t be able to surf the net until the problem is fixed.

How Do I Know I’m infected?

As part of the Shutdown, the DNS Changer working group was set up. On their site they have a  detection tool website that will tell you if your computer is infected.

How can I fix the problem?

The easiest fix is with the Microsoft Malware Scanner which will check your computer for the DNS Changer virus along with other malware. If the scanner detects a problem it will remove the virus. IT Queries also have instructions on Removing A Trojan.

To prevent further infections, it’s necessary to install an up to date anti virus. A good free one is the Microsoft Security essentials tool.

The DNS Changer Trojan was very effective malware and it illustrates why computer users need to be careful of where they go on the mean streets of the Internet.

How much did Vista really cost Microsoft?

Microsoft Vista’s failure hurts Microsoft today.

Microsoft Vista was the company’s despised stepchild – released way past schedule, clunky, slow and disdained so much by the market that PC manufacturers started offering “downgrades” to Windows XP to attract customers.

Despite the embarrassment, Microsoft retained its position as the world’s leading software company and does so today. But Vista certainly did hurt Microsoft and today’s marketplace shows the deep, long term effects of that damage.

Research website Asymco earlier this week looked at the ratio of Windows PCs sold to the sales of Apple Macs over the last 30 years. The ratio peaked at 56 to 1 in 2004.

Today that ratio is 18 and when phone and tablet sales are added in, the ratio is approaching 1:1. Apple has caught up.

It’s no accident 2004 is the peak of the Windows-Apple ratio. In 2004 Windows XP had matured after three years on the market, the older computers running Windows 98 or ME (another hated operating system) were being retired and a new version of Windows – codenamed Longhorn – taking advantage of newer technologies and with improved security was due to be released.

On August 27, 2004 things started to change with Microsoft’s announcement Longhorn would be delayed two years. This effectively broke the product roadmap that underpinned the business models of Microsoft and their partners.

To make matters worse, Apple were back in the game with their OSX operating system well established and a steady stream of well designed new products coming onto the market.

For consumers and businesses one of the advantages Windows systems had over Apple was the cost difference. The “Apple Tax” started to be eroded by the company’s move to Intel CPUs which delivered economies of scale coupled an aggressive program of tying up the supply chain with key manufacturers.

Then Longhorn – now known as Microsoft Vista – was released.

Despite the cheerleading of the Microsoft friendly parts of the technology media, consumers weren’t fooled. The product was slow and buggy with a new interface that confused users. Making matters worse was Microsoft’s ongoing obsession with multiple versions offering different features, something mocked by Steve Jobs,  which further confused the marketplace.

Vista languished, customers decided to stick with Windows XP or to look at the faster and better designed Apple computers, and Microsoft’s market share started to slowly erode.

By the time Windows 7 was released Apple had clawed back their market position, launched the iPhone and caught the shift from personal computers to smartphones.

Probably the biggest embarrassment of all to Microsoft was the launch of the iPad, the market had been gagging for good tablet computer since the late 1990s and Microsoft’s partners had failed to deliver, partly because Windows XP, Vista and 7 didn’t perform as well as Apple’s iOS on the tablet form factor.

Microsoft’s completely blowing a decade’s lead in the tablet market is almost certainly due to the misguided priorities and feature creep that dogged Vista’s development. This is now costing the company dearly.

Asymco’s conclusion of Microsoft’s new market position is stunning and accurate.

The consequences are dire for Microsoft. The wiping out of any platform advantage around Windows will render it vulnerable to direct competition. This is not something it had to worry about before. Windows will have to compete not only for users, but for developer talent, investment by enterprises and the implicit goodwill it has had for more than a decade.

It will, most importantly, have a psychological effect. Realizing that Windows is not a hegemony will unleash market forces that nobody can predict.

Vista’s cost to Microsoft was great, it meant the company missed the smartphone surge, the rise of tablets and – possibly most dangerous of all to Microsoft – the move to cloud computing.

A lot hangs on Microsoft’s next operating system, Windows 8. Another Vista could kill the company.

Your business personalities

A business reflects the owner’s personality. Deal with it.

Eccentric Sydney restaurant Wafu made headlines a few years ago over the owner’s strict insistence that diners followed her house rules.

A few weeks ago Wafu announced it would close and owner Yukako Ichikawa gave Sydney diners a serve of abuse on the restaurant’s site (currently down due to bandwidth issues).

There’s no doubt diners at Wafu had to accept Ms Ichikawa’s rules or else. Bring your own “doggie bag” or container and don’t waste anything or else you would be in trouble.

Wafu was a reflection of the owner’s beliefs, she wasn’t just running her business to make money. As she’s quoted in the Sydney Morning Herald,

“Wafu is viable, as a business, if I continue to accept inconsiderate, greedy people.

“But I couldn’t do it. Wafu has always been, and will remain, more to me than simply just another business.”

People often misunderstand why someone would start a business – it isn’t always about the money. Sometimes it’s because the founder or proprietor wants to do things differently, sometimes because they don’t want to work in an office anymore and sometimes it’s because they are unemployable anywhere else.

Often it’s because the business founders are sick of dealing with jerks. The freedom to refuse to do business or work with assholes is a great liberating feeling and something that those working in a corporation or government department will never experience.

Whatever the reason, those businesses reflect the owner’s personality and they have put their money, and their livelihoods, where their mouths are.

I wonder how many corporate warriors and armchair critics of Yukako Ichikawa have ever done that in their lives?

Ranking managers

Microsoft’s problems are deeper than just a misused HR tool

Vanity Fair’s analysis of Microsoft’s lost decade focuses on an unlikely culprit – the management tool of stack ranking.

Stack ranking, or “forced distribution”, is the practice of listing staff members in order of effectiveness or placing them on a bell curve where those in the middle are satisfactory and those at the right hand of the graph are exceptional.

Those on the left of the curve or the bottom of the list are deemed to be underperformers and risk losing their bonuses or even their jobs should the company be shedding staff.

Like all business tools, stack ranking can be useful. One manager of a North American multinational who encountered this when working with an Indian outsourcer described how it was used.

“A senior manager told me how he applied it in his group. Of 300 people, everybody was given a ranking and were told that ranking and given a chance to put their case if they thought it was unfair.
Then the bottom 5% were culled. Tough but fair.”
So at the Indian outsourcer it was applied to large groups and the bottom tier were given the opportunity to put their case. There was some transparency and at least some fairness in the process.
Used poorly though, it can backfire, “using it for groups of ten is stupid and lazy” said that manager who later saw it introduced at his own corporation with catastrophic results.

The real problem at companies misusing tools like stank ranking is too much management.

Like the old saw of “too many cooks spoil the broth”, too many managers create mischief. To justify and protect their positions they build little empires and make work for themselves.

Give empire building middle managers a tool like “stack ranking ” and you have a problem where office politics and patronage become more important than technical skill or performance which is exactly what the Vanity Fair article describes at Microsoft.

Ranking employees in a mindless way is symptom of a bigger problem in an organisation. In Microsoft’s case, the problem is too many managers.

The solution to that problem is simple.

Facebook’s final fail

Has Facebook gone to far with its address changes

We’ve come to expect Facebook storing and manipulating our personal data, but is changing our contacts’ email addresses the final straw for the social media service?

Last week Facebook started changing users’ default email addresses to their inbuilt @facebook accounts.

This was irritating for many users, but now it appears the social media service has gone too far with changing the address books of their users.

If you have connected your iPhone, Android or Windows smartphone address books to the Facebook App, there is a chance that your contacts’ email addresses are now set to send to the user’s Facebook address rather than their “normal” email account.

When you synch your phone with your PC or laptop these changes will also be made in your main address book.

Given most people don’t use their Facebook supplied email this means many people won’t see messages sent to that address. This is a serious problem

You can check if your address book has been changed by simply looking at your contacts’ email addresses.

If it has, let your contacts know their addresses may have been changed as they can change the settings on their accounts. Read Write Web has instructions on fixing the address book problem.

Facebook’s behaviour on this is seriously worrying, it’s bad enough they store all of our data but altering our personal information is for me a bridge too far.

Given most mobile phone users would rather have their wallet stolen than lose their handset, Facebook’s messing with phones address book is going to shake their confidence in the service far more than the myriad privacy issues.

If the IPO was Facebook’s peak, it could well be this poorly thought out tactic that marks the beginning of the company’s decline.