Paul Wallbank – Brilliant Communications

Author: Paul Wallbank

  • GE’s Predix predicament – an industrial giant finds software is hard

    GE’s Predix predicament – an industrial giant finds software is hard

    Industrial giant General Electric is finding software is hard, reports Business Insider.

    The company, which former CEO Jeff Immelt declared was a ‘digital industrial company’ is finding its Predix software system and associated cloud services are far more complex and difficult to manage than expected.

    Back in 2015, I toured the head office of GE Software outside of Silicon Valley and interviewed the division’s boss, Bill Ruh.

    Ruh was upbeat about the internet of things – or Industrial Internet in GE’s terminology – with an estimate the IoT was worth $14 billion to the company as it found new efficiencies and markets.

    Today that vision’s looking a little tarnished as the company struggles with a 25% share price drop and a self imposed ‘time out’ on Predix’s development.

    GE’s IoT predicament illustrates just how complex the engineering and management challenges of the Internet of Things really are.

    The software needs of a sensor in a train brake pad are very different to that of fuel pump in a jet engine or the blade controllers of wind turbine.

    Added to that is the challenge of organising, storing and securing the information these devices collect. This is the main reason why GE is moving its data management services to AWS and Microsoft Azure.

    That a company with the resources and top level commitment of GE is struggling with this underscores the complexity of the internet of things. That complexity is something every IoT advocate and connected device vendor fails to consider at their, and their customer’s, peril.

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  • Twitter’s curse of management

    Twitter’s curse of management

    Today Twitter celebrates the tenth anniversary of hashtags.

    What’s notable about the story is how Twitter’s management thought hashtags were a ‘nerdy idea’

    Twitter has been consistent in ignoring its user community despite every successful feature of the service coming from the platform’s grass roots.

    It’s hard not to think Twitter’s greatest barrier to success is its leadership.

     

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  • No promises from the NBN – the nation building project that guarantees nothing

    No promises from the NBN – the nation building project that guarantees nothing

    Since Australia’s National Broadband Network has started ramping up its connection, the project has been plagued with complaints of underperformance, culminating in Telstra admitting thousands of its customers were entitled to refunds.

    Today the national customer rights watchdog, the Australian Consumer and Competition Commission published a range of guidelines for advertisers, something I covered for Mumbrella.

    What’s striking though – apart from the ACCC’s adding a new layer of complexity with ‘minimum typical busy period speeds’ is the regulator’s requirement for ISPs to state maximum evening speeds on the network, with the cheapest plans offering no guarantees of speeds at all.

    There is no qualifying minimum speed for a plan labelled as ‘basic evening speed’ given there is no slower speed tier to which a consumer could move.

    By the ACCC’s figures, a third of subscribers on the NBN to date are on the lowest speed plan with no guarantee of any speed at all.

    The telephone system being replaced by the NBN at least guaranteed a dial tone and data speeds slightly better than an acoustic coupler, now a large proportion of Australians will not even get that.

    Australians are spending at least $50 billion dollars on a project that will see a third of the nation going backwards, future generations are going to wonder how we managed this.

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  • Breaking up the tech giants

    Breaking up the tech giants

    One of the stark realities of the technology industry is there is no third place – if you aren’t the biggest or second biggest in a mature market then you need to get out.

    With internet businesses it’s now appearing there may not even be room for second placed businesses as increasingly each market segment is dominated by one player.

    For Silicon Valley’s leaders, having a monopoly is their nirvana. As PayPal founder Peter Thiel once wrote, competition is for losers, which is ironic given his fortune is based upon challenging the banking and payment oligopolies.

    So with attitudes like Thiel’s, and the massive power of companies like Amazon, Facebook and Google, it’s not surprising there are now calls to break up the tech giants.

    There are some compelling arguments for this, the splitting of Bell Labs in the 1950s spawned the birth of Silicon Valley and the breaking up of AT&T created the conditions for development of the internet and mobile network. Monopolies stifle genuine innovation.

    For customers, the argument is moot. Very rarely does a monopoly result in anything but poorer service and higher prices.

    Even for shareholders, there’s a good argument for breaking up monopolies. A company with massive market power is often over staffed and poorly managed and the splitting of Standard Oil in the 1911 gave rise to dozens of new oil companies who returned far more to investors than the staid giant ever would.

    It’s hard though to see how companies like Google, Facebook and Amazon could be broken up. Unlike telephone networks, oil refineries and gas stations it’s difficult to separate assets or products. Breaking up Google, for example, may only result in more monopolies over smaller markets.

    However in the tech industry, a monopoly may not be permanent thing. Forty years ago IBM was the untouchable incumbent and twenty years ago it was Microsoft. Both today are shadows of what they once were as markets overtook them.

    So perhaps it’s too early to call for the breaking up of today’s tech giants because, like Microsoft and IBM, their success is based on a fleeting technological moment.

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  • Snapchat and the curse of Big Money

    Snapchat and the curse of Big Money

    Goldman Sachs fesses up to making a huge mistake about Snapchat, telling investors in an analyst note how they over-estimated the company’s potential and ability to execute on advertising opportunities.

    There’s much to be said about Wall Street’s role in supporting Silicon Valley’s greater fool model and Business Insider has certainly been across how Goldman Sachs and its fellow bankers have been less than honest in their public dealings over the Snap float.

    While the ethics and behaviour of Wall Street bankers and venture capital investors is a worthy topic for discussion, one of the notable things about Snap’s float is that it was too expensive.

    The initial IPO valued the company, which at the time was reporting $500 million a year in losses, at $28 billion dollars. It’s not incidental the float incurred $85 million in advisors’ fees to Goldman Sachs and their friends.

    A high valuation might be good for the early investors and employers – particularly those who sold in the initial ‘stag’ that saw the stock jump 60% on its first day – but for the company itself, and the later shareholders, it’s a disaster as the business’ management frantically struggles to find revenue streams to justify the market price.

    This is the same problem that has crippled Twitter, instead of focusing on long term value to customers, users and shareholders, the company has desperately flailed around looking for quick hits to its revenue numbers.

    While Twitter and Snapchat are outliers, the same problem faces smaller businesses which have attracted huge investments. The pressure to justify the money at stake becomes crippling and almost always damages the long term prospects of the company.

    Too much investor money is rarely a good thing. As with much in life, quality and not quantity is what really matters for companies looking for capital.

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