Paul Wallbank | Paul Wallbank - Communications Professional

Standing up to the giants – why the big software companies don’t always win

The survival of QNX illustrates how big companies don’t always prevail on the internet

In the latest Networked Globe post I have an interview with QNX founder Dan Dodge on how BlackBerry wants to be at the heart of the Internet of Things.

One of the things Dodge discusses is how twenty years ago Microsoft told QNX they would be driven out of business by the software giant’s Windows CE operating system.

As it turned out Microsoft failed dismally.

QNX’s survival in face of a big competitor is similar to Google’s failed attempts to enter various industries. Everyone assumes Google will succeed against the smaller players because they are rich and smart.

Often however the rich player doesn’t win because the smaller incumbent is savvy, focused and knows their market well.

Sometimes bigger is not always better in the software industry.

Reaching Peak Tablet as iPad and android sales begin to plateau

An electrical retailer’s financial results might mark turning points in two different economies.

Today Australian electronics retailer JB Hi Fi released its annual results. They confirm what’s been becoming apparent over the last year that tablet computer sales seem to have peaked.

A plateauing of tablet sales is bad news for retailers like JB whose stock price fell by 8% on the news.

It’s not surprising that tablet computer sales have peaked as the growth had been spectacular and, unlike PCs of a decade ago, there isn’t an obvious five year replacement cycle.

That the old PC industry business model doesn’t apply to tablets is why Apple is focusing on other revenue sources like the App Store and internet of things plays such as HomeKit and HealthKit.

Once again, the industry leaders are finding they have to pivot to stay up with a rapidly evolving market.

The other notable point from JB’s management was that Australian consumer confidence is tanking, which might indicate the economy is entering its first recession in twenty years.

If it is true that the Aussie economy is entering a recession, then it might be time for the adults to take charge in a very immature government. Some of the Liberal Party’s pampered princelings may have to start earning their salaries soon.

Everyone is a critic on the internet

Business owners need to stop being so defensive about what their customers say on social media

“Everyone’s a critic” is the old saying. Today this is truer than ever as anyone can post a review online.

One of the notable things about business in the internet age is how sensitive people are to criticism.

A good example of this is a story going around the web this week of a Dallas chef, John Tesar, who had a magnificent breakdown over a review of his restaurant in the local newspaper.

This set off a chain of claims and counterclaims including some truly bizarre pieces on various blogs about ‘chefs winning the war against critics.’

Probably the strangest thing with this whole debacle is the review by Leslie Brenner in the Dallas Morning News is actually quite constructive and certainly no AA Gill style demolition of the establishment.

This silly little spat illustrates how business people, not just temperamental chefs, have glass jaws. Another story going around the web this week is of Union Street Guest House in Hudson, New York, that fines guests for bad reviews

Tesar’s response is pretty typical of many business owners – attack the critic instead of addressing the problems. Given Tesar threw the Twenty Rules of Social Media – which apply to businesses as much as social media – out the window, he was lucky not to find his reaction backfiring horribly on him.

What business owners have to understand is that you will get criticism, unfortunately most of it you will never know about as unhappy customers tell their friends and relatives.

If you get the opportunity to hear that criticism, then you have the opportunity to fix the problem.

This is something business owners need to understand about review sites and social media; it’s an opportunity to get some honest feedback about how things are going.

So start listening to what your customers are saying online and stop being so defensive.

Uber looks to sending taxis and lyft ride sharing service to the deadpool

Uber is to launched a new service that further disrupts the taxi industry

In its latest move to reinvent the taxi industry, Uber has launched a new service caused Uberpool reports Techcrunch.

Uberpool allows customers to split fares with other passengers, making the service cheaper. This threatens both taxis and and ride sharing services like Lyft.

It also shows what deep pockets can buy, with plenty of venture capital funding Uber can afford to experiment with these services. Those resources makes it hard to compete against Uber.

For Lyft and many of the other hire car startups, Uber is doing everything it can to drive their businesses into the deadpool.

Hacks on a plane

That avionic systems could be vulnerable to hacking is a wake up call for the internet of things industry.

One of the great concerns about the internet of things is what happens when older computer technology that was never designed to be connected to the net is exposed to the online world.

A presentation to the Black Hat Conference in Las Vegas this Thursday by researcher Ruben Santamarta promises to show some of the vulnerabilities in aircraft avionic systems.

Today’s aircraft are extremely smart devices with the downsides shown in the tragedy of AF447 where an Air France jet plunged into the Atlantic Ocean when two undertrained pilots didn’t understand what their plane was doing as it encountered severe ice conditions in a storm.

With aircrew increasingly dependent upon computers to help them fly planes, the risks of bugs or security weaknesses in aircraft systems is a serious issue and with the continued mystery of MH370’s fate adds an element of speculation that a glitch of some form was responsible for its disappearance.

It wouldn’t be the first time a passenger plane came to grief because of a computer error; most notably Air New Zealand flight 901 crashed into Antarctica’s Mount Erebus during a 1979 sightseeing trip due to wrong information being loaded into the navigation system.

The internet adds numerous risk factors to aircraft – Santamarta’s hack allegedly works through in plane WiFi systems – particularly given these avionics systems haven’t been designed to deal with unauthorised access into their networks.

Should Santamarta’s demonstration prove feasible, it will be an important warning to the aviation industry and the broader Internet of Things community that security is a pressing issue in a world where critical equipment is connected.

Los Angeles joins the startup boom

Los Angeles is another city joining the startup boom

According to the website CB Direct, LA has joined the startup boom with funding tripling in the last five years.

It seems there’s plenty of money to go around as this current startup boom ripples around the world.

Los Angeles image by Todd Jones through Wikipedia

Blackberry’s quest for its future

BlackBerry stakes its future on increased enterprise security concerns and the internet of things

This is the unedited, submitted version of ‘is BlackBerry ripe for a comeback‘ that appeared in Technology Spectator on 30 July, 2014.

“What do we well?” is the question Blackberry CEO John Chen asked when he took the reigns of the Canadian communication company last November.

Chen was speaking on Tuesday at Blackberry’s Security Summit in New York where he and his executive team laid out the company’s roadmap back to profitability.

Since the arrival of the iPhone and Android smartphones, times have been tough for the once iconic business phone vendor as enterprise users deserted Blackberry’s handsets and the company struggled to find a new direction under former CEO Thorsten Heins.

Back to BlackBerry’s secure roots

In Chen’s view, the company’s future lies in its roots of providing secure communications for large organisations, “It became obvious to us that security, productivity and collaboration have to be it.”

“This is not to say we are not interested in the consumer, but we have to anchor ourselves around the enterprise.” Chen said in a clear move distancing himself from his predecessor and products like the ill fated Blackberry Playbook

An early step in this process of focusing on enterprise security concerns is the acquisition of German voice security company Secusmart which was the cornerstone of Chen’s New York keynote.

Blackberry’s acquisition of the company is a logical move says the CEO of Secusmart, Dr Hans-Christoph Quelle, who points out the two organisations have been working closely together for several years.

“It fits perfectly,” says Quelle. “We are not strangers having worked together since 2009,” in describing how Secusmart technology has been increasingly incorporated into Blackberry’s devices.

Secusmart’s key selling point has been its adoption by NATO and European government agencies; the Snowden revelations on the US bugging of Angela Merkel coupled with the Russian FSB leaking intercepted US state department conversations along with the release of Ukrainian separatist conversations after the shooting down of MH17 has focused the European view on the security of voice communications.

Launching new services

Along with the acquisition of Secusmart, Blackberry will also be launching an new enterprise service in November, the new Passport handset in December along with a range of security applications including BlackBerry Guardian, a new service that will scan Android apps for malicious software.

Blackberry’s executives were at pains to emphasise their products aren’t focused on any single smartphone operating system and not dependent on customers buying their smartphones although to get the maximum security benefits.

“We will provide the best level of security possible to as many target devices out there as possible,” said Dan Dodge who heads Blackberry’s QNX embedded devices division.

Longer term plans

In the longer term, Blackberry sees QNX division as being one of the major drivers of future revenues as the Internet of Things is rolled out across industries.

QNX was acquired by Blackberry in 2010 to broadband the communication company’s product range, now it is one of the pillars of the organisation’s future as Chen and his team see that connected devices will need secure and reliable software.

Dodge says: “With the internet of things, you can have devices that can change your world.”

While QNX is best known for its smartcar operating system – it underpins Apple’s CarPlay system being rolled out for BMW as well as its own system deployed in Audis – the company’s products are used for industrial applications ranging from wind turbines to manufacturing plants.

Despite Blackberry’s announcements in New York, the company still facing challenges in the marketplace with the Ford Motor Company announcing earlier this week it will drop the Blackberry for its employees by the end of the year and replace them with iPhones.

Chen’s though is dismissive about Apple’s and IBM’s moves into Blackberry’s enterprise markets, “what we do and what they do is completely different.”

Focusing BlackBerry

The focus for Chen is to differentiate Blackberry and play on its strengths, particularly the four markets it calls ‘regulated industries’ – government, health care, financial and energy that the company claims makes up half of enterprise IT spending.

Whether this is enough to bring Blackberry back on track remains to be seen but Chen says this is where he sees the company’s future, “This is why we are so focused on enterprise and so focused on these pillars.”

For Blackberry, the emphasis on enterprise communications is a step back to the profitable past. It may well be successful as businesses become more security conscious in a post-Snowden world.

Paul travelled to the Blackberry Security Summit in New York as a guest of the company.

Rent doesn’t matter to startups

Rent doesn’t seem to matter for startups — for the moment

Following yesterday’s post about the factors behind cities like New York, London and San Francisco becoming startup hubs, a friend asked “let me gues — cheap rents?”

In truth it’s the opposite; none of the cities cited as startup centres are cheap places to live or work and London is usually towards the top of the most expensive places on the planet.

That rents aren’t a huge factor is possibly because the typical tech startup is a lean operation with a small team crammed into a crowded location.

One suspects though there are limits to how much a business conserving its cash will pay — you don’t see many startups based in A-grade locations alongside big law firms and banks — and this may be the weaknesses of these big cities.

Certainly in London’s Silicon Alley the complaint is the days of cheap rent are long gone and newer startups have to base themselves in other locations across the city.

Overall, rents are important but they aren’t the critical factor in developing a tech sector hub. Whether that remains the case depends upon how the industry develops.

Why have cities like New York, London and San Francisco become tech hubs?

What are the ingredients that have driven today’s tech startup centres to prominence?

One of the recurring topics this site keeps returning to is how cities like San Francisco and London have seen an explosion of tech startups in recent years.

Probably the spectacular of all the cities that have shot to prominence is New York; a decade ago tech startups in the city were a rare thing, today there are thousands.

Today I had the opportunity to visit AlleyNYC, one of New York’s biggest tech accelerators. It’s impressive how a venture two years old can be so successful.

A question I asked was ‘what has driven the change in New York?’ The consensus was the combination of the Great Depression and the success of high profile companies like Facebook.

The success of high profile startups has validated the business model in the eyes of both investors and founders, people who would have been reluctant to leave their jobs and start a business now see the opportunities while investors can see there are returns to be made.

What’s notable about cities like New York, London and San Francisco is the depth of industry expertise, capital, networks, education institutions and diversity. These are key factors in attracting tech startups.

For other cities aspiring to be ‘the next Silicon Valley’, it would be worthwhile considering where their strengths lie compared to these giants.

It’s not a given that any of today’s global leaders will be the future centres of industry, but other cities and regions will need to have a very strong reason for businesses to choose them over the incumbents.