Author: Paul Wallbank

  • Sports cars, the cloud and the need for broadband

    Sports cars, the cloud and the need for broadband

    How the V8 Supercar races use the internet and networks shows why businesses need reliable communications and the way organisations are using cloud computing.

    My relationship with sports cars is similar to horses – I have a vague idea of which end water goes in and where not to stand.

    So Microsoft’s invite to the Launceston V8 Supercars to showcase their Office 365 cloud service as the race’s official sponsor wasn’t expected but it was a good opportunity to see how a sports organisation uses modern technology.

    Riding the cloud

    V8 Supercars David Malone and Peter Trimble

    At the opening media conference V8 Supercars CEO David Malone and Finance Director Peter Trimble described the IT problems the organisation had in the early days.

    We were penny wise and pound foolish” said Peter about their small business system that couldn’t grow with the event.

    To properly meet their needs V8 Supercars would have needed a bank of servers, cumbersome remote access software and a full time team of several IT staff for their scattered workforce and constantly changing locations.

    With cloud services, they eliminated many IT costs while simplifying their systems.

    That staff can now access documents regardless of location is a very good case study of where the cloud works well and understandable that Microsoft wanted to show off what their services can do.

    Networking the cars

    When challenged about the point of car racing, enthusiasts cite how the sport is a test bed for the motor industry.

    The motor industry is one sector leading the internet of machines with one car manufacturing executive recently describing the modern motor vehicle as being a “computer platforms” on wheels.

    Pit crews monitoring in car systems
    Pit crews monitoring in car systems

    Eventually we’ll see our cars connected to the net and reporting everything from the engine’s servicing needs to the driver’s musical tastes.

    That’s reality in today’s high performance racing, both the drivers and the cars are in constant contact with the crews as sensors report everything from engine performance to the foot pressure the driver is putting on the accelerator pedal.

    As continuous data feeds from the cars is essential to the teams the event has its own trackside network with receivers located along the course that are used for both vehicle telemetry and the video feeds from both car mounted and fixed cameras.

    Owning the rights

    In what’s becoming the future of sports broadcasting, the V8 Supercars organisers run their own camera crews and provide the feed to their broadcast partners and media outlets.

    This allows them to control all the rights across TV, cable and online channels.

    Having full control of the pictures also gives the V8 Supercars more revenue through signage and sponsorship by guaranteeing advertising placements which wouldn’t be available if they didn’t manage the feed.

    Connectivity matters

    v8-supercars-launceston-communications-cable
    Spaghetti Junction as the various feeds come together

    Getting the images out to the media and broadcast partners along with delivering the in car data to the racing teams is major challenge for organisers. The communications centres resemble a giant bowl of cable spaghetti as various groups plug into the network.

    It’s no coincidence that part of the deals the V8 Supercar management strike with track owners and governments includes providing fiber and microwave links to the venue.

    That single factor illustrates how vital communications links are to a modern sporting event.

    Another important factor is that everything will be packed up and taken away. Following Launceston, the entire show is packed up and moved onto Auckland, New Zealand. This in itself is a major logistic challenge which would fail without good connectivity and reliable systems.

    v8-supercars-launceston-truck-fleet
    the fleet of trucks ready to move on

    It’s easy to dismiss the V8 Supercars as a bunch of testosterone driven rev-heads, but the challenges in staging these complex events fifteen times a year shouldn’t be underestimated.

    We also shouldn’t underestimate how important communication links are to any business. It’s why debates about the need for high speed internet services are last century’s discussion.

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  • Driving a horse and cart in a digital economy

    Driving a horse and cart in a digital economy

    “There’s no point in building a highway if no-one can drive” Tasmanian business leader Jane Bennett said about the Australian National Broadband Network during an interview last week.

    Jane was touching on an important point about the digital economy – that most businesses aren’t equipped to deal with it.

    That half of businesses in the US, UK or Australia don’t have a website illustrates that in itself. What’s really worrying is setting up a website is the easy part and has been standard for a decade.

    In many respects this isn’t new, a similar thing happened when mains electricity or the motor car arrived. Many businesses clung desperately to their oil filled lamps and horse drawn carts way past the time these were superseded.

    Well into the 1970s there were hold outs who continued to ply their carts despite the costs of keeping horses on the road being far greater than buying a truck.

    That failure to learn about and invest in new technologies saw all those businesses die, many of them with the owner who’d eked out a living as a milko or rag and bone man for decades.

    On a bigger level, the struggles of the local milkman with his Clydesdale is a worrying reflection of business underinvestment. These folk are stuck with old equipment because they didn’t have the funds to spend on bringing their equipment up to Twentieth Century standards.

    In the 1980s I saw this first hand in some of Australia’s factories. A foreman at a valve manufacturer in Western Sydney boasted to me how he had done his apprenticeship on a particular lathe fifty years earlier.

    That machine still had the belt and pulley assembly from the days when the factory was powered by a steam engine at one end of the plant. It had an electric motor bolted onto it some time in the 1960s but was largely unaltered since.

    It was understandable many Australian factory owners wouldn’t invest after World War II – many industries were protected and property speculation offered, and still does, better returns.

    Another reason for not investing was the sheer cost of buying new equipment, major capital expenditures are risky and for most businesses it wasn’t work taking those risks.

    Today there’s a big difference, hardware and software are far cheaper than they were in the 1960s or 70s with the big investment being in understanding and implementing the new technologies.

    Few businesses don’t have computers or the internet but most of the things we do online are just variations on how our great grandparents worked with documents, filing cabinets and the penny post. We have to rethink how we use technology in business.

    It would be a shame if we find ourselves stuck on the side of the highway wondering what the hell happened in the early years of the 21st Century.

    Stage coach image courtesy of Velda Christensen at http://www.novapages.com/

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  • 2013 MYOB Business Monitor: Cloud & web-savvy SMEs continue to enjoy better business

    15 April 2013

    2013 MYOB Business Monitor: Cloud & web-savvy SMEs continue to enjoy better business

    Financial chasm has widened between the online-savvy & online-cautious

    Small and medium business operators (SMEs) who embrace cloud computing and business websites are much more likely to enjoy rising revenue than others, according to Australia’s largest accounting software provider, MYOB. In fact, those who say they are in the cloud were twice as likely to see an earnings uplift in the past year.

    The March 2013 MYOB Business Monitor also found the financial chasm between the online-savvy and the online-cautious is widening, while the take up of online technologies has changed little in the past nine months.

    In the latest study of 1,000+ SMEs commissioned to research firm Colmar Brunton only 16% said they use cloud computing in business, up on 14% in the July 2012 report. Only 38% have a business website, unchanged on July.

    Those who do use cloud were 106% more likely to see a revenue rise in the past year than those who don’t, up on 53% in July. Similarly, those with a website were 60% more likely to see a revenue rise, also up on 53%.

    CEO Tim Reed says, “It’s obvious that as time goes on Australian business operators using cloud computing are increasingly likely to achieve positive financial results. That said, I’m surprised fewer than one in every six say they use cloud in business. This ubiquitous technology has helped so many smaller businesses become better connected, more productive and more competitive.

    “Our research findings provide a clear cut case for embracing online technologies in business. The latest study reveals SMEs using cloud were twice as likely to see a revenue rise in the past year than those who aren’t. It’s similar for those with a business website, who were almost two thirds more likely to see a rise than their peers.

    “These ratios have increased significantly since the Business Monitor study conducted nine months ago, which suggests the gap in financial performance is widening between the online-savvy and the online-cautious.

    “Interestingly, more than half our respondents said they would vote for the political party that proposed ‘providing free government-funded training to all small businesses on how to use the internet to enhance and grow their business.’ This says the majority realise they require further education on how to best employ online technology.

    “It’s also clear the majority are unaware of the value in having even a simple website that contains their contact details. Many businesses have first-hand experience of the benefits of being found online, being able to attract and retain customers in this way. Our research proves it can have a tremendously positive financial effect.”

    Financial benefits

    Business operators in the cloud were not only more likely to see a revenue rise in the past year (33% versus 16% of those who weren’t) they were more likely to expect one in the next year (37% versus 28%). They were also more positive about the domestic economy improving within 12 months (33% versus 23%).

    Further, those using cloud computing were more likely to plan to increase these activities in the next year:

    §  Focus on customer retention/acquisition strategies: 52% versus 34% who don’t use cloud

    §  Prices and margins on products/services sold this year: 36% versus 22%

    §  The number or variety of products or services offered: 33% versus 24%

    §  Working with business advisers to enhance the business: 30% versus 15%

    §  Spending on marketing and advertising  their business online: 29% versus 18%

    §  Pay their employees more: 28% versus 20%

    §  Boost staff numbers this year: 25% versus 11%.

    Similarly, those with a business website were not only more likely to see a revenue rise in the past year (24% versus 15%) they were more likely to expect their revenue to increase in the next year (35% versus 27%).

    They were also more likely to plan to increase these activities in the next year:

    §  Focus on customer retention/acquisition strategies: 49% versus 29% without a website

    §  The number or variety of products or services offered: 37% versus 20%

    §  Spending on marketing and advertising their business online: 36% versus 10%

    §  Their prices and margins on products/services sold this year: 28% versus 19%

    §  Pay their employees more: 28% versus 16%

    §  Working with business advisers to enhance the business: 22% versus 14%

    §  Boost staff numbers this year: 21% versus 8%.

    Key drawcards

    The most popular reason for cloud use was the ability to access data from whatever location they wanted (52%), well ahead of other reasons. Over one third pointed to being able to have their team members work remotely (36%), while 30% said they used it because their data was better protected and safer online on external servers.

    Business operators were also asked what business tasks they used cloud computing for. The top five were: file sharing (50%), file back-up (49%), email (44%), file storage (42%), and online banking (41%).

    Those who didn’t use cloud computing were asked why and the top reason was ‘I don’t know enough about it to make the right business decisions about it’ (35%). Ranked second was ‘I am not very tech-savvy and don’t feel confident about even starting to look at it for my business’ (22%), followed by ‘It is of interest, but there are many more important other business priorities to take care of first’ (21%).

    Other recent MYOB research found the top three reasons why SMEs without a website hadn’t set one up were ‘we prefer to advertise and market our business using other methods’ (68%), ‘it’s not a priority right now, we have all the work we can handle’ (66%) and ‘we don’t see any value in having a business website’ (60%).

    Businesses most likely to be online-savvy

    The business types most likely to use cloud computing and have a business website were:

    Cloud computing

    Business website

    Businesses exporting goods and services

    31%

    58%

    Businesses whose revenue was up in the last 12 months

    29%

    48%

    Business, professional and property services sector

    27%

    50%

    Businesses importing goods and services

    26%

    64%

    Small businesses (5-19 employees)

    25%

    66%

    Metropolitan-based businesses

    18%

    42%

    Across the mainland states, South Australia had the highest proportion of cloud users (22%) and business website owners (42%). In the prior report, New South Wales had the highest proportion of cloud users (15%) while Queensland had the highest proportion of business website owners (47%).

    For MYOB product information, research results, business tips, discussions, customer service and more visit the MYOB Business Monitor webpage, The Pulse blog, MYOB LinkedIn, MYOB Facebook or MYOB YouTube.

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  • Fifty trillion shades of grey

    Fifty trillion shades of grey

    If you give me six lines written by the hand of the most honest of men, I will find something in them which will hang him said the 17th Century French politician Cardinal Richelieu.

    Today those six lines could be written on a social media site or be six disparate points drawn from a database. Without context those six lines could condemn us.

    Something that’s missed when we talk about Big Data is the risk of false positives – if you dip into the stream, you can prove anything against person.

    The world isn’t black or white, there are fifty trillion shades of gray and that’s why it’s important to think before posting an image on the web, firing someone or calling the cops.

    In an era where we’re quick to judge and condemn people, the stakes are very high.

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  • Should Amazon focus on shareholder returns?

    Should Amazon focus on shareholder returns?

    “Shareholder returns” has the been the mantra for the modern manager – particularly when justifying fat salaries and bonuses.

    Amazon though is very different – despite the company’s massive market position it doesn’t make profits, founder Jeff Bezos claims he prefers to focus on customer needs.

    On a fundamental level Bezos is right – the business that delivers what customers want will succeed. The market doesn’t give a fig about shareholders’ returns or management’s KPIs.

    Although making a profit is helpful.

    That Amazon is spectacularly unprofitable should worry shareholders, it’s fair enough for a startup in its early days to incur losses but Bezos’ baby is nearly 20 years old and it still isn’t capable of walking on its own.

    Yet this doesn’t deter shareholders. Comparing Amazon’s stock price against Apple’s and Microsoft’s is instructive.

    Amazon-Apple-Microsoft-share-price

    Microsoft currently trades at a Price/Earnings ratio of 15.8 while Apple’s is 9.7 – Amazon trades at an infinite P/E.

    A school of thought is that Amazon will reap monopoly profits once it conquers the world’s online retail and owns a big chunk of the cloud computing market.

    However these are big markets and its unlikely any one company can ever dominate them. Indeed Amazon has failed to do so for nearly two decades despite undercutting most competitors and buying out nimble new rivals.

    It’s tempting to think of Jeff Bezos being a modern day Nelson Bunker Hunt.

    Bunker Hunt and his brother William spent most of the 1970s trying to corner the global silver market. At the peak of their attempt, silver prices went from $11 an ounce in September 1979 to $50 an ounce in January 1980 only to crash back down to $11 by Easter 1980.

    The brothers were bankrupt by the end of the 1980s.

    It’s doubtful whether Amazon’s shareholders want to follow that example, so it’s going to be interesting to see how long Jeff Bezos can continue to see the story of putting customers before owners.

    Image by By The Cuba Company, New Jersey [Public domain], via Wikimedia Commons

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