Paul Wallbank | Paul Wallbank - Communications Professional

Building the internet of rice cookers

Chinese smartphone manufacturer Xiaomi hopes an Internet of Things ecosystem can drive the company’s growth

Are domestic appliances the next wave of connected devices? Chinese smartphone manufacturer Xiaomi hopes so.

Xiaomi is best known for its cheap smartphones aimed at third world markets and the company’s move into connected kitchen devices marks an expansion into broader areas.

Smartphones being the centre of Xiaomi’s product offerings seems to be the common factor in the expanded range of devices, with the company hoping their ecosystem will be a compelling point of difference in a crowded market.

The idea the smartphone will be the centre of people’s connected lifestyles isn’t new but Xiaomi’s bet on low margin home appliances to drive smartphone sales and subscriptions to cloud services seems a brave move.

It may work however, the business models of tomorrow look improbable today.

BlackBerry and the transition effect

BlackBerry are the classic case of a transition effect company that benefits, and then is squashed, by industry innovation.

Three months ago this site speculated if BlackBerry had shipped their last smartphone with the Android based Priv handset.

Yesterday BlackBerry announced disappointing sales of the Priv in their latest quarterly financial report, so things aren’t looking good for the company’s hardware business.

It looks like BlackBerry is a great example of a transition effect where a product, occupation or business has a brief period of success as an industry changes before being rendered obsolete by those same forces.

The need for executives to access their emails on mobile devices was the reason for BlackBerry’s success so when the iPhone recast the definition of the smartphone and included email as a standard feature of the device, the reason for BlackBerry handsets existing evaporated.

In many respects, BlackBerry are the perfect example of a disruptor being disrupted.

BlackBerry’s hope to remain a stand alone company lies in the security software and services space, a field where management have been investing heavily in recent years. How well they travel will depend now on how quickly they can jettison old business ideas.

Microsoft and the AI future

Microsoft’s continued push into artificial intelligence is part of an economy wide shift

Despite the embarrassment of their foul mouthed racist bot, Microsoft are pressing on with a move into artificial intelligence.

Ahead of this week’s Launch event in San Francisco, Microsoft’s CEO Satya Nadella laid out his vision for the company’s Artificial Intelligence efforts in describing a range of ‘bots’ that carry out small tasks.

Bloomberg tagged Nadella’s vision as ‘the spawn of clippy’, referring to the incredibly irritating help assistant Microsoft included with Office 97.

Tech site The Register parodied Clippy mercilessly in their short lived IT comedy program Salmon Days, as shown in this not safe for work trailer. While The Reg staff were brutal in their language and treatment of Clippy, most Microsoft Office users at the time shared their feelings.

While Clippy may be making a comeback at Microsoft, albeit in a less irritating form, other companies are moving ahead with AI in the workplace.

Robot manufacturer Fanuc showed off their self learning machine a few weeks ago which shows just how deeply AI is embedding itself in industry. Already there are many AI apps in software like Facebook’s algorithm and Google’s search functions with the search engine’s engineers acknowledging they aren’t quite sure what the robots are up to.

For organisations dealing with massive amounts of data, artificial intelligence based programs are going to be essential in dealing with unexpected or fast moving events. Those programs will also affect a lot of occupations we currently think are immune from workplace automation.

Running a post conventional company

Organisations are having to adapt to rapidly changing times, Holacracy is an attempt to move on beyond older management structures

One of the most derided organisational theories of recent times has been Holacracy, a system of running organisations without managers.

The idea behind Holacracy is job descriptions are outdated and unnecessarily limiting. Modern workplaces and roles are far more fluid than the traditional, almost militaristic, structure of the hierarchical organisation chart.

Creator of Holacracy, Brian Robertson, describes in a Medium post how the anti-management theory came around during the early days of running a tech startup in the early 2000s.

The impact of our deep dive into agile software development went far beyond just “how we built software”?—?it infused our culture and gave us a foundation of principles and practices for the management of the company as well. Over the next several years, we’d do our best to express this paradigm in everything we did. Agile principles became a guidepost and a measurement for all of our future experimentation, as did the highly overlapping principles of the lean movement.

Given the tech startup roots of the idea, it’s not surprising Holacracy applies many of the principles that make up the Agile and Lean movements – particularly the hostility to micro-management.

Moving on from Holacracy

It’s notable that Robertson posted his background on Holacracy on Medium as the service was one of the more prominent adopters of the organisational theory, however the publishing platform has now dumped the philosophy.

In his post about why he and his business partner have dumped Holacracy, Medium founder Ev Williams said “the system had begun to exert a small but persistent tax on both our effectiveness” however he still thought the concept has merit and traditional management structures are too slow to deal with the demands of modern business.

The management model that most companies employ was developed over a century ago. Information flows too quickly?—?and skills are too diverse?—?for it to remain effective in the future.

Williams’ point is right, the 19th Century military structure of businesses was fine at a time when product cycles could be measured in years if not decades. In today’s world where the life of companies, let alone products, has been drastically compressed a much more flexible and fast moving way of organising businesses is needed.

Dynamic times

Along with needing far more flexible and fast moving structures, organisations also have the tools to create them. Again, the days of memos moving through layers of management via manila envelopes are long gone and now we have collaborative, real time communications methods.

One of the great changes in business over the next decade is going to be the rethinking of how organisations are managed, Holacracy may turn out not to be the answer but it is an early attempt of making sense of a very changed business world.

Management are the one group that really hasn’t been disrupted over the past thirty years. As strange as it might sound, Holacracy is a taste of the radical changes the executive suite are about to experience.

The sensor in your pocket

Wayze brings together crowdsourcing, cloud and smartphone GPS services to create a useful product.

Very soon your smartphone will be able to warn you if you’re driving too fast reports VentureBeat.

Israeli founded and Google owned traffic application Wayze will soon give alerts to users in certain countries if they’re over the speed limit, the service announced yesterday.

Wayze is unique in that it’s one of the first genuine crowdsourcing programs where users contributed information on traffic conditions and it’s doing the same thing in gathering speed limit information.

The fascinating thing about Wayze is how it brings together crowdsourcing, cloud and smartphone GPS services to create a useful product.

Wayze also shows how the smartphone is the ultimate personal Internet of Things sensor, that’s something which shouldn’t be overlooked.

Breaking the APIs

Access to APIs is going to be critical in the connected world, but what if a service closes down?

One of the truisms of modern business is we live in an API economy where open Application Programming Interfaces allow software companies to connect their platforms that builds an ecosystem of developers and extends the functionality of their products.

But what happens when an API shuts down or a company starts applying the web2.0 principles of draconian legal terms and conditions to its data feeds? Pinboard, “the social bookmarking application for introverts” is illustrating how serious legalese can be for developers.

Maciej Cegowski, Pinboard’s founder, decided the terms and conditions imposed by popular automation site If That Then This (IFTTT) were too demanding and pulled his service from the platform.

In a blog post he lays out exactly why, citing IFTTT’s demands for rights over his service along with the option of the plaftorm being able to assign those rights to third parties.

For developers, IFTTT’s terms are almost impossible as the platform strips them of their intellectual property rights and restrains their trade. It’s a classic case of legal over-reach which is all too common in the control obsessed tech industry.

As we’re seeing software vendors releasing platforms to manage IoT devices through APIs and cloud services making their plethora of APIs a selling point, access to these becomes a serious matter for the software industry.

There is a worrying aspect for users in this as well, as those relying on Pinboard services driven through IFTTT are now effectively stranded and have to look for another site that provides similar functions.

While Pinboard is quite small, a larger service shutting down its APSs could have dramatic effects. This is even truer with Internet of Things devices that could use a service like IFTTT to run key functions.

Designing devices and services to cater for the possibility an API or web service may become unavailable needs to be priority for IoT vendors while for developers and users, the risk a service may stop is something that should never be far from their minds and factored into the business and purchasing decisions they make.

Playing Innovation Buzzword Bingo

Can discussion over Australia’s 21st Century challenges move beyond shallow buzzwords?

One of the frustrations of being a technologist in Australia is how the media, and population in general, doesn’t pay much attention to technology stories beyond the latest shiny consumer device or quirky stories from the weird and wonderful internet.

So when one of the nation’s main political TV programs, Q and A, decides to do a program on the government’s Innovation Statement with a panel involved in the tech and startup sectors it’s a must watch.

As usual the Q and A format lets the viewer down with the panel suffering from having an unwieldy six guests of which two are major party politicians who tend to trivialise the discussion with party talking points. Regardless of the topic, the show usually ends up an unsatisfactory experience for anyone wanting to explore the evening’s issue.

Startup focus

In the case of last night’s panel the initial focus of the discussion reflected the startup obsession of most commentary around the Innovation Statement.

While encouraging Australians to start new businesses and take entrepreneurial risks is worthwhile, it’s concerning much of the thinking is based around the current Silicon Valley startup model which is based on easy access to venture capital and ruthless marketing.

Coupled with that is a surprising hostility towards the research community and education establishment, while there the panel featured no discussion of how little Australian corporations invest in research or development.

Lacking diversity

This little genuine research and development carried out by corporate Australia exacerbates the nation’s poor economic and business diversity. The effects of that are crushing for those studying in high tech fields.

One audience question came from a young woman, Elana Nerwich who is studying mechatronics. She correctly noted in Australia, it’s unlikely she will get a private sector job in that field and some of the panelists advised her to stick with it and build their own startup.

While admirable, that advice overlooks how high level workers can’t advance their skills in the Australian economy. This in turn results in more derivative taxi and pizza delivery apps rather than genuine innovations using cutting edge technologies being applied in the private sector, which are the real drivers of economic growth.

Concentrated economic power

Another issue for the Australian economy is how the nation’s economic power is concentrated in the inner parts of Sydney and Melbourne, something briefly flagged by panellist Holly Ransom. The startup obsession exacerbates that concentration of talent and business in the same way it does in San Francisco, if anything it illustrates the weaknesses of applying the Silicon Valley VC model to other societies.

Sadly a deeper discussion on how the Innovation Statement’s benefits can spread beyond the affluent parts of Sydney and Melbourne was beyond the scope or focus of the Q and A panel. That the challenges of regional Australia are restricted to the occasional token program in a country town illustrates both the limitations of Q and A format and the nation’s Sydney centric media.

The greatest take away from the Q and A innovation panel though was how Australians are dependent upon government. Almost all the discussion around how the nation becomes ‘innovative’ was around government policies and not on how does a nations of complacent conformists create a competitive 21st Century economy.

Explaining innovation

Which leads us to the biggest unanswered question from the Q and A show – what does ‘innovation’ really mean?

For the average viewer watching this program the conclusion would be ‘innovation’ is a meaningless string of buzzwords put together by a group of people lobbying for government support.

Those pleas for government funding illustrates the greatest weakness in the current Australian mindset, the nation’s real problem is the private sector’s reluctance to invest in new industries and technologies. Rather than throwing money at startup incubators, the most important thing the country’s politicians can do is reform taxation and corporate governance rules to encourage productive investment over property speculation and incumbent ticket clipping.

Sadly little of that was discussed on the Q and A program partly as a result of its clunky format.

Australia faces a great challenge in pivoting from a successful late Twentieth Century economy into one that’s competitive in the 21st, sadly the Q and A program format left us with nothing more than more buzzwords while failing to convey the opportunities for the nation.

Rebuilding America’s communities

The Atlantic’s James Fallows explores how America’s communities are adapting to a new economy

One of the features of the Twenty-first Century will be how communities take over providing their own services as cash strapped governments find it difficult to provide the services citizens expect.

In many respects the United States is ahead of the rest of the world in this as the decentralised nature of US government sees many functions being the responsibilities of local county and city agencies.

Following the 2008 financial crisis many smaller cities and rural counties found their revenues crunched, for many of them this compounded thirty years of economic decline as local industries folded or fled overseas.

James Fallows in the Atlantic recounts a trip with his wife across the United States where they visited communities rebuilding themselves in the face of economic adversity.

In his long piece detailing how those different communities are rebuilding, Fallows comes to the conclusion a new political consciousness is evolving among the groups working to change their cities. While early, the common objectives of these groups will evolve into a movement.

Fallows marks what will almost certainly be a defining feature of today’s first world nations as their politics evolve around these movements.

Exploring the downsides of artificial intelligence

Microsoft’s racist bot shows the limits and dangers of artificial intelligence

Microsoft Research ran an experiment last week on their artificial intelligence engine where they set a naive robot to learn from it was told on Twitter.

Within two days Tay, as they named the bot, had become an obnoxious racist as Twitter user directed obnoxious comments at the account.

Realising the monster they had created, Microsoft shut the experiment down. The result is less than encouraging for the artificial intelligence community.

Self learning robots may have a lot of power and potential, but if they’re learning from humans they may pick up bad habits. We need to tread carefully with this.

Transforming a dysfunctional company

Once dominant IBM is facing another major market transition, do they have the management skills the navigate that change?

Robert X. Cringely writes a depressing account of the company’s tactics in cutting its head count but the main thrust is how IBM are cobbling together a bunch of disparate products under umbrella brand names as a bloated, bureaucratic management puzzles with a marketplace change.

At the heart of everything is the question of what IBM’s customers really want, as Cringely points out.

The lesson in all this — a lesson certainly lost on Ginni Rometty and on Sam Palmisano before her — is that companies exist for customers, not Wall Street. The customer buys products and services, not Wall Street.

While investors are important, businesses only exist if customers want to pay for their wares. If a company can’t convince people to buy their products, or find a way to subsidise it like the media industry did for most of the Twentieth Century, then there is no reason for the venture, or its industry, to exist.

For many technology companies this is the situation they are facing right now, many other industries aren’t far behind.

Australia’s lost dreams of global champions

The tale of regulatory mis-steps and dashed political hopes of telecommunications policy illustrates the failure of Australia’s ‘go big, go global’ policies of the 1980s.

One the notable things about the Australian economy is how most sectors are dominated by a handful of corporations.

The concentration of Australia’s business power has its roots in the 1980s where the then Hawke Labor government decided the nation’s corporations couldn’t be globally competitive unless they had scale in the home markets, and so a wave of mergers and acquisitions started.

An industry that was particularly problematic was telecommunications. At the time Hawke came to power in 1983 there were three government owned telcos; Telecom Australia that operated the domestic network and the Overseas Telecommunication Corporation which handled the nation’s global links along with a small satellite provider, Aussat, intended for remote access and some defense functions.

David Havyatt at InnovationAus describes the late 1980s thinking that lead to Telecom and OTC being merged to become Telstra, the company that dominates the Australian telecommunications industry today.

The then political troika of Prime Minister Bob Hawke, Treasurer Paul Keating and communications minister Kim Beazley decided allowing OTC and Telstra to merge would give the company global scale, as Havyatt quotes from a policy discussion around 1990.

“A strong vertically integrated national carrier which is able to provide a one-stop-shop for Australia’s telecommunications services both domestically and internationally, providing economies of scale and scope and the prospect of a unified and enhanced international profile.”

Despite the lofty ambitions and a few half hearted attempts to grow global business operations, a quarter century on sees Telstra’s international returns at an almost derisory level.

Dodging global bullets

One could argue that Telstra’s shareholders dodged a bullet – Canada’s Nortel followed the same path and, after early successes, failed spectacularly in the early 2000s.

For Australians in general though, Telstra’s insular focus has been a disaster as maintenance and investments were deferred to make the company’s yields more attractive and the Howard government’s compounding the Labor party’s mistakes in fully privatising the business without breaking its monopoly power.

Which lead Australia into the folly of the National Broadband Network – while the original intention of investing in the telecommunication sector and breaking Telstra’s lock on the industry was a good idea and supported by this writer – it quickly morphed into a massive waste of money and remains so today. If anything, the NBN will only increase Telstra’s market power while delivering more expensive services to the nation.

Missed opportunities

The tale of regulatory mis-steps and dashed political hopes illustrates the failure of Australia’s ‘go big, go global’ policies of the 1980s. Today, Australia is more dependent on mining exports than it has been in more than 50 years while manufacturing and services have actually fallen since the 1980s as a proportion of outward trade.

Australian exports by sector: Department of Foreign affairs and trade

Notable in the above graph is how in the 1990s it appeared the ‘go big, go global’ was working but by the turn of the century, the combination of the mining boom and the nation’s business elites – particularly in banking, insurance, retail and media – had starting looking at exploiting their domestic markets rather than competing internationally.

While there have been successes such as Westfield in shopping centres, Lend Lease in construction and Brambles in logistics management, the bulk of Australia’s corporate leaders are inwardly focused on extracting maximum revenue from their captive local companies.

Global ownership

Increasingly, those dominant companies aren’t even Australian. The brewing industry is a good example where locally owned beer producers make up less than ten percent of the market dominated by New Zealand’s Lion Nathan and British based global conglomerate SAB Miller. Australians, it seems, cannot even brew their own beer any more.

Australia’s managers have been the greatest beneficiaries from the nation’s failed business policies as it’s insulated them from global competition, life is good when you’re the biggest fish in a tiny pond.

While good for managers, the lack of business diversity competitiveness and insular focus leaves Australia’s economy deeply exposed. The failure of the 1980’s grand vision where Australia developed a cohort of globally leading businesses is one that will be regretted by future generations as they pay higher prices for poorer products.

Evolving into a data centric company

The newly demerged HP Enterprise is dealing with a shifting market and a change in product focus.

I’m currently at the HP Enterprise Seize the Data roadshow in Singapore where the recently split company is showing off its range of data analytics tools.

Like companies such as IBM and Google, HPE are looking to make money out of data feeds and analytics with a key part being a platform for developers to create applications.

In launching their Haven OnDemand service, HPE are entering a crowded field with IBM, Salesforce, AWS and Splunk – among others – offering similar products. What compelling difference HPE will add to the field will be something I’ll be asking the company’s executive later.

One of the other services, HP Vertica, looks running data analytics against structured and ‘semi-structured’ sources. Again this is a field where other companies are well established and have an advantage in being able to examine unstructured data.

The overwhelming question though is how big, and lucrative, the market is for these data products. It’s not clear exactly how all of these companies are going to monetize these services and, should they be able to, their profitability.

As a company finding its feet less than a year after being split in two with the added problem of seeing its core server hardware business being eroded, HP Enterprise is realigning its business around data analytics and cloud services.

The challenge for the company is differentiating itself and providing competitive products in these markets, this will be a tough challenge.