Paul Wallbank | Paul Wallbank - Communications Professional

Product Review: Australian Financial Review iPad app

How does the AFR’s latest iPhone application stack up.

I really wanted the Australian Financial Review’s iPad application to be great as the country desperately needs good reporting on the platforms people are using. Unfortunately Fairfax’s misguided commercial judgement gets in the way of delivering a killer app.

Many publishers are putting faith in iPad applications, seeing them as an opportunity to catch a market that is fleeing paper publications for their online equivalents.

To meet this demand, the Australian Financial Review has released their iPad application with a free fourteen day trial and plans starting from $59 per month for the digital editions.

It’s telling the subscription plans favour those buying the paper editions as the feeling from using the iPad app is that Fairfax’s management would rather you bought the paper.

This continued focus on print shows in the news not being updated – a reader of the app in an airport lounge at 6am will find little different logging at lunchtime or in a cab on the way home in the evening.

Clinging to the old news timetable is admirable but it means the AFR isn’t taking advantage of its marketplace strengths or the talents of its staff.

One of the reasons the iPad has become so popular as a reading device is the rich, relevant content publishers can display, for instance The New York Times iPad app, their stories on the Syrian massacre in Al-Houla link directly to Youtube clips from local news sources.

So it is disappointing is that the AFR hasn’t harnessed the multimedia advantages of the iPad. For instance Canberra correspondent Laura Tingle’s political stories don’t even link to Laura’s video page on the service.

Similarly a story on BHP won’t have any links to the AFR’s profile of BHP, its stock price or financial results. These are features that could make the AFR’s a killer application for anyone wanting to understand the Australian business scene.

Compounding the issue is Fairfax’s unfortunate policy of reluctantly linking to outside sources – this short sighted view devalues all Fairfax’s online efforts as it detracts from the authority of their broadsheet and business publications. This again is true in the AFR iPad application.

Overall, the AFR’s iPad app is a missed opportunity which is a shame as the Australian business sector desperately needs good reporting delivered through the tools today’s executives and investors are using. Hopefully the next version will do better.

The Australian Financial Review online subscription was provided by Fairfax and the AFR. I have free subscriptions available for the best two comments on the blog this week so fire away with your views on this post or others.

Free Subscription to the AFR Digital Edition

Make a comment, win a free AFR online subscription.

As part of the review of the Australian Financial Review’s new iPad application, I have two free one year subscriptions to both the app and the AFR website available.

To win one, submit a comment to any of the site’s posts over the next week and the best two as judged by myself will win the subscription.

You don’t have to comment on the AFR iPad’s review, it can be on any of the website’s posts. Feel free to agree, disagree or point out the subtleties and nuances I’ve overlooked.

I’d like to hear your opinions anyway, but this week there’s an additional reason to comment. Fire away.

FUD on the Desktop

Can moving off Windows XP really save companies money?

“User productivity costs jump up a staggering 40 percent“, “return on investment over 130 percent over a three-year period” and an eighty four percent drop in IT support costs are some the latest claims from Microsoft in their campaign to wean users off Windows XP.

These, undoubtedly true, claims are pretty impressive and compelling for cash strapped IT managers, but do they really matter anymore?

With the rise of Bring Your Device policies and cloud computing, what operating system employees use is rapidly becoming irrelevant.

In large organisations that supply workers’ computers, most systems are run on SOEs – Standard Operating Environments – which means users have limited accounts and can’t install rogue software.

For those organisations wedded to supplying staff with desktop or laptop computers XP is fine and almost all of them are well advanced in their plans to redeploy to Windows 7 or 8 when the XP support period runs out in April 2014.

We’re seeing fewer organisations locked into the SOE model as the financial sums and business benefits of moving over to an employee Bring Your Own Device – BYOD – model start to look compelling.

Developing an SOE is a complex, time consuming task for an organisation – the package has to be tested to work on the company’s hardware which might include dozens of different types of printers, laptops and other devices. Then it has to be tested on all the software employees use.

In a big organisation developing new operating environments is not done lightly. It’s a complex, expensive process.

With a BYOD policy the company can develop a standard desktop environment that runs on a web browser. Staff can then bring their own device running on Mac OSX, Android, Linux or even Windows XP and, as long as their browser is up to date, they can run on the corporate network.

The IT department no longer has to care about what the staff member has on their desk and can focus on more important business technology issues – although sadly the password issue doesn’t go away.

For Microsoft, this evolution in corporate IT is a problem. Increasingly big organisations aren’t placing orders for big fleets of centrally managed desktops. The IT industry has moved to the cloud.

In a perverse way Microsoft are winning the desktop battle, most of those workers in companies implementing BYOD policies will choose Windows 7 or 8 systems because they are cheap and work well in a business environment. The problem is that’s where the profit no longer lies.

While we’ll see more FUD – Fear, Uncertainty and Doubt – about cloud computing, BYOD and Windows XP over the next year, the battle has been fought and won.

Increasingly Microsoft are looking like an exhausted army that has won an irrelevant battle while the real war has moved elsewhere.

The challenge for Microsoft is to find its way back to relevance in an era where the operating system doesn’t really matter.

Can Warren Buffett save local news?

Maybe an old billionaire could save the local newspaper industry

Warren Buffett’s purchase of local newspaper chain General Media Publications last week raised eyebrows and the question about the future of local newspapers.

Local news has bucked the trend of the big four gatekeepers taking over – most of us expected Google and Facebook with their local business listings, search and community functions to take over the market just as the web has stolen the income streams of the bigger metropolitan mastheads.

What’s more, us digerati believed social media services like Facebook and Twitter would give us most of the information about what is happening in our communities and make the role of the local newspaper redundant.

This hasn’t happened and there’s several reasons for this – a key one is current web services are great at connecting disparate communities but don’t do a good job of connecting local groups.

A bigger failure is both Google and Facebook blew the opportunity to dominate local news.

Basically, local news isn’t sexy, it’s much more of an ego stroke to be treated like a rock star at a conference or to negotiate a billion dollar purchase of a social media application.

Late nights reporting goings on at the local council or chamber of commerce isn’t sexy. So Facebook and Google’s executive focused on the shiny things.

That failure to execute by the big players has largely left the market to the incumbents and their income is largely untouched – Media General’s income is largely static, unlike the declines being seen by big city mastheads.

A similar phenomenon is at work in other markets, in Australia Fairfax’s regional newspaper division is far more profitable than any other sector while competitor APN makes a good return from their publishing activities in smaller communities.

Interestingly almost all of the local news incumbents are saddled with debts or poorly thought out ventures that absorb the profits coming in from their core operations.

Part of the profitability is because local newspapers are established brands. Locals know they will get news about their community that is immediately relevant to them.

For local businesses, they still have to advertise in the local press as that’s where their market is. Local customers might be reading about Federal politics, Kim Kardashian or Occupy Wall Street on the web, but they are still turning to the district news to find out what’s going on in their immediate community.

How this pans out for Warren Buffett is going to be interesting, Berkshire Hathaway tends to run a lean management philosophy in its businesses and this might be one of the saving attributes for their local media investments.

Stripping out the million dollar men who infest the top levels of the newspaper industry and investing in content – both online and in print – may well be the key to success of the local news industry.

Key to the local news success will be energising the advertising sales teams – there’s little point in skilling up journalists in new technologies or getting editors to “think digital” if the salespeople are stuck in the mentality of display print ads being the only thing that matters. This is the same challenge metro newspapers face.

Strong local media matters in both country and suburban communities. It’s essential to the spirit of the local town and a healthy local media is always a feature of a prosperous community.

One of the promises of the Internet is that local groups could seize back the news about their towns and suburbs, this doesn’t appear to be happening. Maybe it’s going to take Warren Buffett to fix it.

Creative Quandaries

How artists, musicians and writers are struggling with the economics of the online economy

In February, musician, coder and uber-geek David Lowery gave a talk to the SF Music Tech Summit on the difficulties musicians have making money in the online economy.

Meet the Old Boss, Worse Than The Last Boss is an excellent dissection of the economics of the music industry as it currently stands – and it doesn’t look good for artists.

David shows how the old distribution model was more rewarding for artists than today’s digital model, the old fashioned record store has largely gone out of business and has been replaced with the iTunes where Apple receive half the income of the local shop but assumes no risk, few costs and a far greater profit margin.

Similarly, the record labels’ costs and risks haven’t substantially changed but their income has plummeted.

We’ve seen the controllers of the music distribution business replaced with a far smaller, and more profitable, group of digital gatekeepers.

A great line in David’s presentation is just how much money technology company executives are making compared to their record industry counterparts of the 1980s, without taking on the responsibilities for keeping the creative supply pipeline flowing.

Record labels value content and content creators. Sure they kept a lot of money for their executives (although even mid 90?s music executive pay is dwarfed by tech executive pay.) But record labels unlike tech companies, know they built their businesses on those who create content. Therefore when they were flush with cash they set out to buy the services of as many artists as they could. This had the effect of sharing the wealth with musicians. It may have been uneven it may have been wasteful, it may have not touched every artists and the labels may have pocketed most of the revenue but at least they felt they needed to give something back to the content creators. They knew artists created something of value.

The key words in the above passage are “content creators” as the struggles of the music industry are similar to those of writers, photographers and anybody creating original works that can be digitized.

Probably one of the most interesting aspects of this are that many of the digerati David criticises for their utopian views on technology are themselves marginalised, and often impoverished, by the same economics.

David links to a number of Huffington Post articles examples, yet it’s Adrianna Huffington and her contemporaries like Chris Anderson who are aggregating paid writers work and turning most of us into digital sharecroppers.

It’s the Lords of the Digital Manor who are making a return while the bulk of content creators struggles.

Those digirati, like myself, are making just as poor a living from their work as David’s friends in the music industry.

What’s clear is we have to find the methods of distributing music and other valuable creative works that benefit the artist or writer, the old models of the publishing, broadcasting and music industries did this – not always fairly, but at least creators were rewarded.

Right now we’re in a world where information is free and a small group of gatekeepers are controlling what revenues are available.

It’s unlikely that situation is sustainable and over time we’ll see new models develop to displace the current gatekeepers who may be part of the transition effect to a changed economy.

The person who figures out the successful model will be the 21st Century’s Randolph Hearst – hopefully they’ll spread the wealth around a bit more than the current gatekeepers.

What do we call the long term?

Has the long term arrived yet?

Yesterday Optus launched their revamped business services under the banner of Optus Vision.

As part of the launch, the telecommunications company released their Future Of Business report complied by Deloitte Access Economics.

In discussing the details, economist Ric Simes of Deloitte Access made some observations on what drives businesses in adopting digital technologies. Ric broke it down into management time horizons.

Short term: Economic uncertainty is no excuse for ignoring digital strategies.

Medium term: Companies start using digital technologies for competitive advantages.

Long term: Structural change disrupts industries.

On asking Ric what his definitions of short, medium and long terms are, he said “1-2 years”, “3 to 5” and “beyond five years”.

The interesting thing with this is that for most industries the long term has arrived, in fact it’s been with us for a decade. It’s just many managers and investors haven’t noticed.

John Maynard Keynes once said, “in the long run we are all dead.”

For some industries that long term disruption has happened and their business models have died – it’s just that managers haven’t noticed they are dead.

Does Facebook’s float mark social media’s peak?

Is social media about to plunge into the trough of disillusionment?

After its successful float on Friday, social media giant Facebook’s stock is now 18% down on the IPO price and there are claims some investors were aware of revised analyst expectations shortly before shares went on sale.

Facebook’s share price isn’t being helped by large advertisers, most notably General Motors, publicly expressing their dissatisfaction.

In SmartCompany’s survey on business tech use, one statistic that stood out was that less than 30% of businesses were happy with their returns on social media.

Facebook can’t even win in the courts with a Californian magistrate throwing out the social media platform’s trademark case against a Norwegian pornography site.

It’s been clear for some time that the tech industry has been in an investment bubble and social media services have at been the centre of that hype .

The huge expectations of Facebook’s float value has been one of the drivers of Silicon Valley’s investment boom – a dangerous feedback loop in itself.

So now Facebook’s share price is in decline and angry investors are asking “why” and demanding answers from advisors and banks.

The real question though is does Facebook’s float mark the peak of the current tech boom in the same way AOL’s merger with Time Warner in January 2000 marked the peak of the original dot com mania?

One of the great similarities with the original dot com mania is the businesses’ failure to make money from their services – today’s Pintrest and Twitter have that much in common with the great Dot Com boom debacles of Pets.com and Boo.

The biggest problem with the social media services is most of them are advertising dependent. As we see from General Motors’ dissatisfaction and that of the businesses in the Smart Company survey, most businesses aren’t happy with the performance of social media platforms.

Getting the advertising, or other revenue streams, right is key to the survival of these services. Google cracked this after the original dot com boom and are now one of the most successful companies ever.

The companies that figure out the revenue models for social media, or online news, will be the next Google’s and Facebook could well be the business that cracks the code for social media.

For the social media industry overall, it appears the sector is now at what Gartner calls the “Peak of Inflated Expectations” on their hype cycle.

The next stage from the peak is the tumble into the “trough of disillusionment” and that appears to be where Facebook is heading.

As Gartner points out, that trough is also where good, stable businesses are built. While the sector or technology is scorned, those who survived the tumble out of fashion are able to consolidate and learn from the harsh lessons they’ve received.

Eventually the market rediscovers the technology or industry and eventually becomes accepted as a mature part of business or as Gartner put it, they enter the “plateau of productivity.”

This is exactly the process Amazon went through during the dark days of 2002 and 2003 after the tech wreck which today finds them as one of the Internet’s giants.

Whether Facebook can emulate Amazon or Google is for history to judge, but social media’s falling out of favour is not a bad thing, the wreckage of the current tech mania will see much stronger and viable social media businesses that will deliver real value to industry and society.

In the wreck of the dot com boom we saw HTML “coders” reduced from driving Porsches to driving buses, the same thing will probably happen to many of today’s social media experts. That in itself is not a bad thing.

The View From The Cloud

Where is the cloud computing industry heading and how does it affect businesses?

I’m presenting View From The Cloud this afternoon where we look at the results of SmartCompany’s technology in business survey.

The results are interesting, with nearly half the respondents saying they don’t use any cloud services.

Almost certainly, those respondents are wrong – they don’t realise many of the things they do on the web are cloud based. The 9% who nominated “they don’t know” are closer to the truth.

Those “unknown unknowns” are the big challenge for business managers and owners – those who think cloud computing isn’t being used in their organisations don’t know what their staff are up to with their laptops and smartphones.

Of those who are knowingly using cloud computing services, over two-thirds said they did so for the flexibility while just under a half appreciated the cloud services’ ability to grow with their business.

An encouraging aspect of the survey is how only a quarter of the respondents nominated price as being the reason for adopting cloud services.

This is an aspect of selling cloud computing services that has worried me for a while, that companies are commoditising their market by giving away free – or insanely – cheap services.

As always, price doesn’t drive the good customers and this survey illustrates that. Provide a good service at reasonable price points and the customers will come.

Business respondents also illustrated a mature attitude towards risks with cloud service with 61% concerned about data safety and half of that number worried about access issues.

An interesting part of the threat response was that 17% had other concerns about cloud technologies – including being tied to one vendor.

This is an interesting attitude which indicates people don’t understand the degree of vendor lock in that already exists in the computer world and why the majority of businesses are using Windows computers running Microsoft Word. If anything, cloud services are far more open than boxed software.

Vendor lock in though is a real concern and something that all cloud computing users should check before they, or their business, becomes too dependent on any one software package, consultant or online application.

Overall, the SmartCompany business technology survey is an interesting snapshot of where business is today with emerging trends and services. Join us at 12.30 to discuss the results.

Security and convenience

Good security is always inconvenient. We have to learn to live with it.

“Your security advice is too difficult, I don’t want to log in when I start my computer or have to mess around when I have to install new software,” a lady told me on the weekend.

Security is always inconvenient. It would be far more convenient if car doors weren’t locked and starting them was a matter of flicking a switch.

Of course we know if that was the case, most cars would be stolen within hours of buying them.

We accept the inconvenience of car keys because we know the cost of having a vehicle stolen is way higher than the occasional frantic search for lost car keys.

Right now we don’t value our data, computers or smartphones the same way.

This is changing and as we start using our phones as electronic wallets we’ll start valuing our passwords and online security more than our car keys.

ABC Weekend computers: Vibrating tattoos and implantable computers

Some interesting patents indicate where computers are going next.

On ABC 702 Sydney Weekend computers this Sunday, May 19 from 10.15am Paul Wallbank and Angela Catterns will be looking at wearable tech.

Nokia recently filed a patent for vibrating cloth patches or tattoos that will be able to communicate with your phone. Every time you receive a text message, your tramp stamp will wobble.

The idea of vibrating tattoos is pretty simple compared to some of the advances we’re seeing in nanotechnology and miniaturising computers.

We’re already used to the “bionic ears” such as those made by Cochlear and scientists are now developing computers that can be implanted in patients’ eyes to monitor conditions like glaucoma.

Listeners questions

As usual we had a range of listeners calling in about computer issues. Here’s some of those we said we’d get back to;

Safari tool bars

Margaret called about websites being listed across the top of her Safari browser.

To get rid of these, click View in Safari and then take the tick off Hide Bookmarks Bar.

As a later caller suggested, it’s worthwhile making sure websites aren’t starting with the browser, you can fix that in Safari by clicking Safari, Preferences, General and making sure a new window is selected for what to do when the browser is opened.

More Safari Blues

Jarrod also reported problems with Safari, being unable to open pages from his telco. This is probably due to Javascript being disabled.

To fix this, in the Safari preferences we describe above, click on security and tick the box saying enable javascript.

Anti virus programs

We always have a caller asking about antivirus, Steve asked about antivirus on Windows Vista.

For most windows users, the free Microsoft Security Essentials is probably the best, and simplest, solution.

We love to hear from listeners about how tech is changing their lives so feel free call in with your questions or comments on 1300 222 702 or text on 19922702.

If you’re on Twitter you can tweet 702 Sydney on @702sydney and Paul at @paulwallbank.

Should you not be in the Sydney area, you can stream the broadcast through the 702 Sydney website and call in anyway.

Now Facebook’s challenges really begin

How can Facebook build their revenues to justify the huge market valuation.

The long awaited float yesterday of social media service Facebook was a triumph for the business’ founder Mark Zuckerberg, his management team and advisors.

A market valuation of 100 billion dollars for a business started less than ten years ago is an impressive achievement and that sum now presents massive challenges for management who have to deliver on what investors believe the service is capable of.

At US$38 a share, Facebook is valued at 76 times its projected 2012 earnings of 50 cents a share, and nearly twenty times its expected revenues of US$5 billion. This compares to Google which trades at less than 15 times its 2012 profit estimate and six times revenue.

For Facebook to match Google’s value, the social media service is going to have to start making serious money beyond they can from charging egoists and corporations $2 a time for featured posts.

Google’s success was in moving out of their walled garden, had Google focused on advertising just on their own search pages the company would be earning a fraction of the billions they now make every quarter.

It’s difficult to see how Facebook can move off their platform into other sites and with users moving to mobile, the company will find itself even more constrained by Google and Apple who want to control access to their devices.

A more obvious course for Facebook is to maximise income from the massive data base of likes, preferences, relationships and opinions they have amassed from their users. How they do this will probably be the biggest challenge to Facebook’s management.

In monetizing their database, Facebook will push the limits of the law, tolerance of privacy advocates and possibly the patience of their user base. This is going to test a company that has in the past been slow to respond to public concerns.

Another challenge is perception – with such a massive valuation, Facebook is going to attract critics regardless of what they do.

A good example of this is the number of people criticising the float for not ‘popping’ on the stock market debut. At the end of the first day’s trading the stock had only gone up 0.6% and some in the media claimed this showed the IPO wasn’t the successful.

The idea a successful IPO is one that soars on the first day of trading is a naive view from a 1980s mindset. The idea was born out of the privatisation of British and Australian utilities in the 1980s and 90s where taxpayers were seduced by the idea of “free money” in exchange for selling community assets cheaply.

A ‘stag profit’ from a share that soars on its public float is theft from the existing shareholders and a transfer of wealth to insiders and their advisors.

Silicon Valley venture capitalists and startup founders aren’t dumb and have never fallen for that trick – investors pay dearly for stock in their ventures.

While no-one would call Mark Zuckerberg and his management team dumb they have a big job ahead of them finding revenue sources to justify the $100 billion market valuation. It’s going to be an interesting ride.