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.
Microsoft CEO Satya Nadella seeks to find a future for the company as it enters middle age.
One of the great business stories of today is how Microsoft is reinventing itself in the face of a totally changed industry. With the company turning 40, The Economist has a look at the business in its middle age.
The Economist concludes CEO Satya Nadella is making the important changes to the business that founder Bill Gates couldn’t make because he was too protective of the company’s core products and that Steve Ballmer, Nadella’s predecessor, wasn’t interested in making as he sweated the existing assets.
As this blog has pointed out before, The Economist notes the profit margins of the cloud and mobile services Nadella is focusing on are far slimmer than those Microsoft are used to from their server and desktop products.
Those fat profit margins were the reason why Nadella’s predecessors had little reason to refocus the company but towards the end of Ballmer’s leadership it was clear Microsoft couldn’t resist the shift for much longer.
Microsoft’s dilemma was clear to the stock market as well with The Economist having a chart showing the relative performance of IBM, Microsoft and Apple over the last 35 years.
When Microsoft peaked in the late 1990s, the company was worth over twenty percent of the total tech sector’s valuation – today Apple has stolen most of that value.
A particularly jarring from The Economist’s graph is just how much IBM dominated the tech sector a generation ago and its steep decline following the introduction of desktop computers.
IBM’s decline in its dotage is exactly the fate Nadella is trying to avoid for Microsoft, with companies like Google, Apple and Amazon as competitors he has a tough task ahead of him.
In their campaign to amend the US Digital Millenium Copyright Act to give vehicle owners the right to access and modify their automobiles’ software the EFF raises an important point.
Should the software licensing model be applied to these devices then purchasers don’t really own them but rather have a license to use them until the vendor deems overwise.
Cars, of course, are not the only devices where this problem arises. The core of the entire Internet of Things lies in the software running intelligent equipment, not the hardware. If that software is proprietary and closed then no purchaser of a smart device truly owns it.
Locking down the smarthome
This raises problems in smarthomes, offices and businesses where the devices people come to depend upon are ‘black boxes’ that they aren’t allowed to peer into. It’s not hard to see how in industrial or agricultural applications that arrangement will often be at best unworkable.
Four years ago tech industry leader Marc Andreessen pointed out how software is eating the world; that most of the value in an information rich economy lies in the computer programs that processes the data, not the hardware which collects and distributes it.
That shift was flagged decades ago when the initial fights over software patents occurred in the 1980s and 90s and today we’re facing the consequences of poorly thought out laws, court decisions and patent approvals that now challenge the concepts of ownership as we know it.
Is ownership outdated?
However it may well be that ‘ownership’ itself is an outdated concept. We could be entering a period where most of our possessions are leased rather than owned.
If we are in a period where ownership is an antiquated concept then does it matter that our cars, fitness bands, kettles, smoke alarms and phones are in effect owned by a corporation incorporated in Delaware that pays most of its tax in the Dutch Antilles?
Who owns the smartcar’s data?
The next question of course is if the software in our smart devices is secret and untouchable then who owns the data they generate?
Ownership of a smartcar’s data could well be the biggest issue of all in the internet of things and the collection of Big Data. That promises to be a substantial battle.
In the meantime, it may not be a good idea to tinker too much with your car’s software or the data it generates.
The possibilities in using drones on farms are endless, they free farmers up to do substantially more tasks and if they’re equipped with sensors to communicate with stock, crops or farm infrastructure they can be pulling in more information about the property.
For the poor sheepdog this isn’t the first time a farm animal has been displaced. Until the arrival of the steam engine and then farm tractor horses had been an essential part of agriculture for thousands of years.
But while news isn’t good for sheepdogs not all animals are intimidated by drones as one unfortunate owner found out when he decided to harass a mob a kangaroos.
Automation, robots and artificial intelligence are threatening the future of many jobs and businesses
Transaction based businesses are in the firing line as robots and algorithms are taking over the tasks that are the mainstay of many service businesses.
“The two dimensions relate to the things computers do best: (1) repetitive tasks, and (2) structured data,” states Kihn. “If you’re a knowledge worker, your biggest enemy is routine. To the extent your work is predictable, it’s codable . . . and you’re a target.”
Kihn describes a curve where repetitive, structured jobs are at risk of automation while at the other end are more abstract analytic roles which are relatively safe from the algorithms and robots.
While Kihn is focusing on marketing jobs, his message is clear for all occupations and businesses – if your company makes most of its revenue from low skill, easily automated tasks then it is ripe for being overtaken by algorithms or robotics.
Even for businesses that are higher up the value chain, there are roles that can be replaced within the enterprise; a good example are the mining companies replacing high paid drivers with automated pit trucks.
There are even many management jobs that may be affected as artificial intelligence advances. Approving spending or hiring requests for example can be largely dealt with by algorithms with only the rare exceptional case requiring a manager to intervene.
So the executive suite may well be just as vulnerable as the lower status roles in an organisation.
MIT professor Andrew McAfee who Kinh quotes has been clear that we’re on the cusp of massive change in the workplace as robots, algorithms and artificial intelligence progress. It may well be there are far more jobs and businesses at risk than we think.
Sports technology, smart cars and the internet of things is are the topics for the April Nightlife
Paul Wallbank joins Tony Delroy on ABC Nightlife nationally from 10pm Australian Eastern time on Thursday, April2 to discuss how technology affects your business and life.
Tune in on your local ABC radio station from 10pm Australian Eastern Summer time or listen online at www.abc.net.au/nightlife.
We’d love to hear your views so join the conversation with your on-air questions, ideas or comments; phone in on 1300 800 222 within Australia or +61 2 8333 1000 from outside Australia.
You can SMS Nightlife’s talkback on 19922702, or through twitter to @paulwallbank using the #abcnightlife hashtag or visit the Nightlife Facebook page.
W2O’s acquisition shows how data analytics and visualisation is increasingly an important tool for management in a world where businesses are drowning in information.
Last year Vintank co-founder Paul Mabray spoke to Decoding the New Economy about the company and how social media data is a valuable tool for the wine industry.
“The wine industry is last industry to have been changed by internet,” Mabray says. One reason for this in his view is how that the sector hasn’t had a disruptive startup like Yelp or Open Table to drive change and upset incumbents.
Despite the wine industry’s reluctance to adopt digital technologies, social media and the disruption of established media channels is having a profound effect on the sector’s marketing and sales.
“In the old days there was a playbook originating with Robert Mondavi in the 1970s which is create amazing wine, you get amazing reviews and you go find wholesalers who bring this wine to the market,” Mabray told Decoding the New Economy during a visit to Australia in 2014.
Dealing with global proliferation
Mabray also flags the massive growth in the wine industry as being one of Vintank’s driving forces, “the global proliferation of brands the increase of awareness and consumption patterns where people like wine more, those playbooks didn’t work in 2009 when the crisis started.”
A proliferation of new competitors coupled with disrupted communications channels isn’t unique to the wine industry, the attraction Vintank has to the w2O Group’s president Bob Pearson; “VinTank provides us with a way to create agile audience engines for a brand, where we can learn what an audience is doing online, understand what content they like.”
For many businesses social media is a both an opportunity and a mystery; while customers are telling the world what they’re buying through services like Facebook and Twitter capturing, managing and using that information remains a challenge.
Panning for digital gold
As Robyn Lewis of Visit Vineyards whose database holds details on over 30,000 Australian wineries and associated tourism business says, “the gold is in the data.”
Panning for that gold is Emma LoRusso of Sydney social analytics startup Digivizer who told Decoding The New Economy two years ago “the truth is in data”. Services like Vintank, Salesforce’s Radian6, Klout and startups like Digivizer attempt to add context to that data.
Another aspect of Vintank’s technology is the ‘geofencing’ of information, creating a virtual geographic perimeter so only data relevant in that region is flagged. As well as reducing noise, this increases the value to local wineries and tourist operations.
In some respects the geofencing is possibly the most powerful part of services like Vintank as it allows regional operators to focus on visitors and customers to their districts rather than worrying about national or global activity.
W2O’s acquisition gives Vintank access to a broader market outside the wine industry as well as deeper data analytics capabilities. For W20 the purchase adds to the social media tools the company can offer.
Data driven business
The Vintank deal with W2O shows how the marketing and advertising industries are increasingly becoming data driven. For other business functions this is true as well.
For businesses of all types, understanding the data pouring into their companies is going to be the difference between success and failure in an increasingly digital world. Providing those tools to do so is one of the great opportunities in today’s economy.
Smart street poles may well be the cornerstone of connected cities believes the Urban Software Institute’s Lutz Heuser
Are street poles the key to rolling out a smart city? Lutz Heuser, CTO of Urban Software Institute believes these are the easiest way to connect a community and roll out mobile and Internet of Things technologies across a town.
“For us it’s the perfect example of how infrastructure can change things very quickly,” Heuser told Decoding The New Economy at the AIIA Internet of Things summit in Canberra last week.
Heuser sees the street poles as an easy success for cities looking to connect services and assets with most towns and utility companies replacing poles on a regular basis which provides an opportunity to roll out smart technologies.
“If you put in some extras like communications, sensors and environmental monitors and all of a sudden you create a whole new ecosystem that helps the citizens and the environment.”
Heuser sees funding as another advantage in using street poles to rollout smarcity technologies as the energy savings in modern LED lights as providing enough incentives for municipalities to replace older infrastructure.
The key though is leadership, both in business and politics, this is essential in Heuser’s view in getting the best return for smartcity and IoT investments.
As technologies like smart parking meters and connected rubbish bins roll out and municipal staff like garbage collectors and enforcement offices need real time connectivity, cities increasingly are going to rely upon wireless services. The humble street pole may well turn out to be the answer to what is otherwise an expensive problem.
A Chinese hydrogen powered tram shows how cities and energy use are going to change
China doesn’t have many trams but that might change soon as the coastal city of Qingdao rolls out their new streetcar system.
What makes Qingdao’s system particularly notable is the trams will run on hydrogen with water being the only by-product of the vehicle.
The Qingdao city leaders hope the hydrogen trams will reduce the chronic air pollution the city, like most Chinese urban centres, suffers.
Should the trams be successful, hydrogen fuel cells will be another shift from mains electricity and motor vehicles. As we’re seeing, being off the grid might soon be a viable option.
Having too much money is as bad for a new business as having too little warns a Silicon Valley VC
One of the biggest days in the startup calendar is Y Combinators’s pitch event. This year, the incubator’s president Sam Altman, put a downer on the day by criticising the overly high valuations on new tech business.
“I don’t think it’s necessarily good when companies are able to raise money at very high valuations, or raise lots and lots of money” continues Altman.
It’s said a Chinese curse is ‘may you live in interesting times’, for new businesses ‘may you have too much money’ could be equally bad news.
Cultured meat promises to disrupt agriculture as growing beef moves from the farm to the laboratory.
In thirty years ‘cultured meat’ will be commonplace and it will disrupt the cattle market Professor Mark Post warned the Northern Territory Cattlemen’s Association earlier this week.
Artificial, or ‘cultured’, meat is a dramatic change for the food industries and it promises, or threatens, to radically transform the cattle grazing business.
This is another example of an industry that wasn’t expected to be affected by change facing a radical transformation. It shows again few of us are immune from change.
Both Government and businesses have a role in building smartcities
“It’s amazing what can be achieved when government is committed and prepared to partner with industry,” was the AIIA Internet of Things summit MC’s reaction to a presentation from Steve Leonard on Singapore’s quest to become a connected city today.
Leonard, the head of Singapore’s IDA, had laid how the nation had embarked on a smartcity project due to the pressures of increased population and an ageing society. The government sees technology as a way to deliver health services more effectively and use scarce resources more efficiently.
One of the areas Leonard cited was in traffic management where the city’s bureaucrats asked “how can we double the traffic on our roads without building anything new?”
The answer lies in smartcars and autonomous vehicles, Singapore has partnered with MIT to run a driverless car pilot on some of the city’s roads. Leonard points out that cars can travel closer together when run by computers rather than being driven by humans.
For governments traffic management is one of the easiest ways to introduce the internet of things into smart cities says Lutz Heuser, Chief Technology Officer of Germany’s Urban Software Institute.
Heuser worries that many cities are “sitting on the fence” when it comes to rolling out IoT and smartcity initiatives and sees “the humble lightpost” as being one of the ways technology can be rolled out into urban environment.
Smart censors in the street lights
This echoes the Geek’s tour of Barcelona where street light poles are a key part of the city’s digital infrastructure, providing a base for sensors and the Wi-Fi connectivity needed for devices like intelligent rubbish bins and digital services.
One of the advantages of using intelligent, or at least half smart, lightpoles is that local governments are replacing them on a regular basis – around three quarters of Europe’s poles are more than twenty-five years old – which means they can be rolled out as part of a planned maintenance programs.
Having rolled out connected city initiatives like Barcelona’s smartbins or Singapore’s ‘fibre hydrants’ – fibre nodes around the city that government and emergency services can tap into when needed – local businesses can then leverage off that infrastructure to further improve the well being of citizens.
For governments, the rolling out of smartcity technologies is to deliver better services more efficiently. As Singapore and Barcelona have showing, by working with local businesses it becomes far easy for agencies to deliver real improvements in their communities.
The Australian government is about to pass data retention laws which will be expensive and won’t work
This morning I’m speaking on ABC Radio’s Overnights about the risks of the Australian government’s law to force telecommunications companies to retain users’ metadata for two years.
While the act, currently before the Senate having passed the House of Representatives last week after the poorly named ‘opposition’ Labor Party supported it, mandates that telcos and ISPs will have to retain the details of users’ connection times, places and type of device for two years and that government agencies will be able to access this data without a warrant.
