Paul Wallbank | Paul Wallbank - Communications Professional

Your credit history is history

We learned a lot from the global financial crisis

We learned a lot from the Global Financial crisis.

Radio Rentals tells us “your credit history is history”

“He looks like a geek”

The media scrum around alleged Bitcoin founder Dorian Nakamoto is based on some flimsy thinking

The unseemly media scrum around alleged Bitcoin inventor Dorian Nakamoto has not been the press’ finest hour.

What’s more worrying though is a Business Insider interview with Sharon Sargent a ‘forensics analyst’ who was part of the Newsweek investigative team.

A systems engineer by training with experience in computing security, military protocol analysis, and artificial intelligence, Sergeant said everything she found converged on an individual with a background apparently similar to hers — and who ended up sharing a name with Bitcoin’s creator.

“I said, ‘I think I know this guy — he wears a pocket protector, he has a slide rule, he comes from that genre,’ which was very different from other characterizations,” she told BI by phone Friday.

He wears a pocket protector and uses a slide rule? Hell yeah, not only did he create Bitcoin but he’s probably a witch as well.

One hopes Newsweek have found the right man.

Picture courtesy of forwardcom through sxc.hu

Tell me something I didn’t know

Co-founder and CTO of Sugar CRM, Clint Oram, sees software changing in the way it delivers value to users and customers.

“Tell me something I didn’t know about my customer;” is what Clint Oram demands of his software.

“If you think about legacy of Customer Relationship Management tools it’s really been about entering something I already knew about by customer so my manager can keep track of me.”

Oram sees that changing with Sugar CRM, the open source Customer Relationship Management software company he co-founded in 2004 at a time when the software industry was coming out of the post dot com bust depression.

“There was a huge backlash by customers to the enterprise software market,” Oram remembers. “There were a lot of hopes and promises made of all this fantastic software that would change the world. The reality was a lot of it didn’t do anything.”

Foundations for the cloud

In Oram’s view, that disillusionment formed the basis of today’s cloud based software businesses with the market’s demand that software be delivered as a service, reducing up front commitments to any one product, commercial open source that gave customers a stake in development and annual subscription licensing.

That last factor – a radical change to the traditional software model that saw small businesses buy boxed programs and larger enterprises negotiate complex agreements with expensive implementation projects – is the biggest change to the modern software industry.

Oram sees that as challenging those established giants like SAP, Oracle and Microsoft; “in the past it was ‘here’s my software, goodbye and good luck. Maybe we’ll see you next year.”

“If you look at those names, the competitors we see on a day-to-day basis, several of them are very much challenged in making the shift from perpetual software licensing. It’s been a challenge that I don’t think all of them will work their way through, their business models are too entrenched.”

“Software companies really have to stay focused on continuous innovation to their customers.”

Freemium challenges

From his ten years in business, Oram learned the freemium model is a difficult way to run a business, “we learned that the freemium model is challenging and you gotta really focus on differentiation across your software editions and deliver clear value to each customer segment.”

While the Freemium business model remains a challenge, Oram sees mobile and the cloud as driving the CRM industry with the sector focusing on delivering more customer insights as software increasingly goes mobile and gets better at predicting behaviour.

“We’re taking these cloud, mobile based platforms that can be delivered anywhere and anytime,” says Clint “and now work on collecting that data about your customers and telling you what you should do next.”

“How do you help your customer to get the fullest value out of working with you.”

Delivering value to customers is a challenge not just for the software industry; in an era where business is far more competitive, it’s a question facing all industries.

Bill Gates and the fight for trustworthy computing

Microsoft’s task of securing its software was a huge undertaking, one that isn’t over yet.

One of the great, and possibly under recognised, business achievements of the computer age was Bill Gates’ recognition that Microsoft’s online strategy was flawed shortly after releasing Windows 95. A few years later he had to repeat the task when the company found its products were almost dangerously insecure.

In a sprawling account of the company’s response to the security problems at the turn of the century, Life In The Digital Crosshairs, describes how Microsoft’s engineers responded to their then CEO’s call for Trustworthy Computing.

The problems at the time were vast, compounded by Microsoft’s failure to take security seriously – the first version of Windows XP came out without a firewall which ensured thousands of users were quickly infected by the computer worms rampant on many ISPs networks at the time.

As the story tells, it was a long difficult task for Microsoft to change complex and interdependent computer code involving 8,500 of the company’s engineers.

One suspects the cultural challenges were even greater in getting the managers supervising the army of engineers to understand just how serious the security threat was to Microsoft’s users.

The biggest challenge though was Microsoft’s own product line; because the company hadn’t ‘baked’ security into its software, key products like Microsoft Office relied on lax security practices to work properly.

Office and Windows also had the problem of legacy code and applications; one of Microsoft’s selling points over Apple and other competitor systems was that the company took pride in supporting older hardware and software, this in itself creates security risks when programs designed in the MS-DOS days still want to write to the system kernel.

For Microsoft the journey isn’t over, although the shift to cloud computing has changed – and simplified – the company’s security quest by making legacy issues in Office and Windows less important.

Microsoft and Gates’ success in seeing off the threats posed by the internet gave the company another decade of computer industry dominance, however dealing with security issues was nowhere near successful.

In the end however it wasn’t security issues that saw Microsoft lose its dominance; the internet eventually prevailed as Apple revolutionised mobile computing while Amazon and Google improved cloud services.

With Bill Gates reportedly finding himself getting more involved in the company he founded, the challenges of both the internet and security are two that he’s going to be very familiar with. It will be interesting to see what we write about Microsoft in 2022.

Renaming places

Is Madrid renaming a metro line as part of a sponsorship deal a good idea?

Madrid have renamed a subway station to Vodafone Sol and plan to rename an entire metro line as part of a corporate sponsorship deal.

Personally I think renaming places changes the culture of place; something well understood by dictators but possibly not so well by corporate marketing people.

Do you think this is a good idea?

Picture of Madrid Sol station courtesy of Zaqarbal through Wikimedia

Software’s modern loom weavers

Are we coming to the end of the hand crafted era of software development, Pegasystem’s Alan Trefler thinks so.

Are we coming to the end of the hand crafted era of software development? Pegasystem’s Alan Trefler thinks so.

“Technology has completely dis-served the modern economy;” Alan Trefler, the founder and CEO of software vendor Pega Systems, told the audience at the opening of his company’s new office in Sydney yesterday.

Trefler sees there being an ‘execution gap’ between what software promises and actually delivers; that development is too slow and programs don’t give users what they need.

Ending the hand crafted software era

A key reason for this in Trefler’s view is that too much software is ‘hand crafted’ and that his company’s object orientated methods speeds up development time and delivers a better product.

This may well be true, Pegasoftware’s client list is impressive, however moving from the age of ‘hand crafted software’ may well spell the end of many IT industry worker’s careers.

One of Pegasystem’s key Australian customers is the Commonwealth Bank and the company’s CIO, Michael Harte, gave some comments at the opening that illustrated how the software industry is changing.

Freeing up resources

“Does an IT organisation want to change fast enough to adopt a new model driven approach so they can free up capital and free up resources?” Harte asked.

That freeing up resources and capital is exactly what befell the Luddites when the 18th Century mill owners decided to change the technology they used.

For modern IT workers, the last decade has been tough as a whole generation of business analysts, software engineers and project managers have found the enterprise computing industry has been offshored and automated; Harte and Trefler are describing how that process is by no means over.

“Older project models necessitated people to build a use case and then to design something, go through requirements and start crafting software, that’s on old idea,” says Harte who sees a model orientated approach as being more effective for modern enterprises.

Let the machines do the grunt work

That’s not to say that either men are pessimistic about the future of the software industry; both see an improved industry delivering better results for business.

“Let’s move people into higher order things and allow the machines to do the grunt work,” Harte urges.

“Not that long ago when I was learning how to do this stuff we’d have to fill in punch cards and then fill in Word Documents to write out technical requirement, that’s not much fun.”

“Lets have some fun and get some work done.”

Harte is describing a very different IT industry and workplace, one that doesn’t need older skills and – more importantly – doesn’t need as many clerks or middle managers carrying out routine administrative tasks.

It should be noted that both Harte and Trefler were adamant that their visions did not mean job losses when asked by this writer about the employment consequences, but it’s impossible not to come to the conclusion that a fundamental industry change means many skill sets become redundant – again this is what happened to the Luddites in the 18th Century fabric mills.

“What we think the next ten years are going to be about is changing those metaphors,” says Trefler. “There can be a more highly evolved communication between IT and business folk.”

Both Trefler and Harte see design as the future of software with most of the human work being in creating the interfaces that work for the people using the computers, this is where the high level, high value work is to be done.

The changes that Pegasystems are describing is not just an IT industry issue; these are changes that are happening across the workforce and in all sectors. For both managers and workers, it’s a time to refresh skillsets and understand where the value lies in what they do.

Many industries have products handmade by skilled tradesfolk become a thing of the past, it now appears the time has come for the IT industry’s craftsmen and women.

Customer service is no longer a department

Customer service needs to pervasive through modern organisations says Salesforce’s Alex Bard

When it comes to customer service businesses, Alex Bard calls himself a ‘career entrepreneur’, having founded four startups in the field since the mid 1990s.

In 2011 he sold his most recent business, Assist.ly, to Salesforce and became the company’s Vice President for Service Cloud and the Desk.com customer service offerings.

Bard tolds Decoding the New Economy last week how social media and Big Data are radically changing how organisations respond to the needs of their clients.

“I’ve been in the industry for twenty years and I’ve never been excited as I am now,” Bard says. “The real transformational things that’s happening now are these revolutions – the social revolution, the mobile revolution, the connected revolution.”

The philosophy of customer service

“What they’re really driving is this idea that customer service is no longer a department, it’s a philosophy.”

“It’s a philosophy that has to permeate throughout the organisation. Everybody in the company has a role in support. It’s not just about a call centre or a contact centre or even an engagement center which is what these things are called today.”

“I really don’t like the word ‘centre’ because I really fundamentally believe that everbody in that company has to interact with customers, has to engage and has to the information – no matter they are – about that customer to provide context.”

Abolishing the service visit

With the Internet of Things, Bard sees GE’s social media connected jet engine as illustrating the future of customer service where smart machines improve customer service.

“They’re going to capture more data in one year than in their entire 96 year history prior,” says Bard. “With that data they’ll be able to analyse and do things on behalf of that product or service that’ll reduce the number of issues.”

“Because the best service of all is one that doesn’t have to happen.”

In this respect, Bard is endorsing the views of his college Peter Coffee who told Decoding the New Economy last year that the internet of machines may well abolish the service visit.

“Connecting devices is an extraordinary thing,” says Coffee. “It takes things that we used to think we understood and turns them inside out.”

“If you are working with connected products you can identify behaviours across the entire population of those products long before they become gross enough to bother the customer.”

For Alex Bard, the customer service evolution has followed his own entrepreneurial career having evolved from being personal computer based in the 1990s to today’s industry that relies on cloud computing, big data and social media technologies.

As these technologies roll out across industry, businesses who adopt the customer service philosophy Bard describes are much more likely to adapt to the disruptions we’re seeing across the economy. Changing corporate cultures is one of the great tasks ahead for modern executives.

Saving retirement

The costs of the baby boomer population bubble are becoming apparent

Retirement age is vexed problem in the developed world; while life expectancy has increased over the last Century, the age where one becomes eligible for the pension has barely changed.

Harvard University professor Martin Feldstein illustrates this in a post on Project Syndicate, Saving Retirement, where he has a number of suggestions of moving the pension age to ease the pressures on public finances.

Obviously, retirees deserve advance notice before benefits are reduced. That is why it is important for the US – and for many countries around the world – to act now to make the changes needed to stabilize future pension finances.

Those pressures are going to become more real in the decade as the baby boomers join the ranks of the retired, the cry “I’ve paid my taxes, where’s my benefits?” is going to get louder.

Unfortunately for them, the kitty’s going to turn out to be bare – there simply aren’t enough Generation X and Y workers in the developed economies to pay for millions of boomers collecting pensions for the next thirty years.

Governments around the world have ignored this obvious, and predictable, problem for fifty years and now it’s time to address it. Unfortunately few leaders have the courage to tell their electorates the truth of the challenge ahead.

Contemplating a jobless future

Few industries are going to be untouched by the disruptions of the next decade and that’s going to present challenges for all of us.

Last October, ahead of the company’s Orlando Symposium, Gartner Research Director Kenneth Brant released a paper looking at the effects of technology on the workplace.

“Most business and thought leaders underestimate the potential of smart machines to take over millions of middle-class jobs in the coming decades,” Brant wrote. “Job destruction will happen at a faster pace, with machine-driven job elimination overwhelming the market’s ability to create valuable new ones.”

Brant’s view about middle class jobs is a sobering thought, many of the corporate ‘knowledge worker’ positions can be easily replaced by computers to make the decisions now being made by armies of mid level managers, bean counters and clerks.

Indeed the whole concept of ‘knowledge worker’ that was fashionable in the 1980s and early 90s in describing the post-industrial workforce of nations like the US, Britain and Australia is undermined by the rise of powerful computers and well crafted algorithms to do the jobs unemployed steel workers and seamstresses were going to do.

Twenty years later and the ‘knowledge workers’ had morphed into the ‘creative class’ and it appears the computers are coming for them, too.

Personally, I subscribe to the view in the medium to long term new jobs in new industries will evolve – a view shared by economists like GE’s chief economist, Marco Annunziata.

Over the next decade however there’s no doubt we’ll be seeing great disruption to established industries and the hostility to Google buses in San Francisco may be just an early taste of a greater antagonism to the technology community in general.

For managers, the problems are more complex; while their own departments, corporate power bases and even their own jobs are at risk, they are going to have to find ways to incorporate these changes into their own business. Gartner warns CIOs in its briefing paper;

The impact will be such that firms that have not begun to develop programs and policies for a “digital workforce” by 2015 will not perform in the top quartile for productivity and operating profit margin improvement in their industry by 2020. As a direct result, the careers of CIOs who do not begin to champion digital workforce initiatives with their peers in the C-suite by 2015 will be cut short by 2023.

Few industries are going to be untouched by the disruptions of the next decade and the resultant job losses are going to present challenges for all of us.

A breach of trust

In business, trust is essential as security company RSA is discovering

“Today I’m happy not to have an RSA Conference badge on me;” Mikko Hypponen, head researcher of Finnish security company F-Secure told the inaugural TrustyCon conference in San Francisco yesterday.

Hypponen was referring to what was one of the world’s most prestigious information security conferences hosted by industry vendor RSA.

RSA are known to many corporate computer users for their SecurID authentication tags; the little key fobs that give a passcode for secure networks that illustrate this post.

Sadly for RSA’s users those tags were compromised in 2010 and the company did its best to obscure, if not downright hide, the problem both from the industry and its customers.

However the killer blow for RSA’s reputation was an article in Reuters at the end of last year claiming the US National Security Agency had paid the company $10 million to weaken its security protocols.

The company denies this but the damage was done, as Hypponen says “When a security company can’t be trusted, what do they have left?”

How the RSA lost the trust of security professionals is a good lesson for all of us; our businesses rely upon the goodwill of our customers and our peers. If we betray their trust, we’re hurting ourselves.

You can’t cost cut your way to growth

Cosy management leaves a business exposed to disruption as Australia’s Qantas Airlines has discovered.

Yesterday I interviewed Alex Bard, Senior Vice President for Service Cloud at Salesforce for the Decoding The New Economy YouTube channel.

Alex’s interview will be up tomorrow, but during the conversation afterwards he made a comment about modern management saying, “you can’t cost cut your way to growth.”

This is at odds with 1980s management theory where CEOs like Jack Welsh at GE and Al ‘Chainsaw’ Dunlap at Scott Paper slashed costs to bring listless businesses back into profit.

During that period, many businesses were overstaffed and poorly managed so leaders like Welsh and Dunlap were the right men for their time.

To a generation of bean counting executives, Dunlap and Welsh proved that any business problem could be fixed by cutting costs. They were truly men of their times.

Which brings us to Australia’s Qantas Airlines who, at the time Alex Bard and I were having coffee, announced 5,000 job cuts; close to 25% of the company’s workforce.

Qantas certainly does have problems as shown in its $252 million loss and some of them, as with all legacy national carriers, lie with long outdated labour arrangements.

However the airline’s problems are much deeper than a featherbedded workforce and most of the blame for Qantas’ dilemma lies with the company’s management.

Management mistakes have included maintaining an old fleet of Boeing 767s and 747s while pouring investment into their discount subsidiary, disastrous international alliances in Asia that have seen them kicked out of Vietnam and planes for their Japanese venture grounded in Europe.

Probably the biggest mistake though for Qantas though was management’s assumption it had a cosy position in its domestic market.

Like most Australian industries, the nation’s aviation sector is a duopoly dominated by Qantas, a result of the 1980s theory that the country could sustain global champions subsidised by hapless domestic consumers.

This theory has proved disastrously wrong for Australian consumers with the duopolies becoming very good at exploiting their domestic market power after deciding it was simply to hard to compete outside the home country.

For Australia, the consequence of this strategic mistake by the country’s business and political leaders has been to make domestic industries hopelessly uncompetitive as local managers are largely isolated from genuine competitive pressures.

Qantas is the classic case study of Australia’s insular corporate mentality as the airline steadily abandoned its international routes and focused on maximising profits on its domestic operations, particularly those unfortunate rural routes where the Flying Kangaroo has no competition.

Unfortunately for Qantas’ shareholders; Virgin Australia, the other duopoly player in the Australian airline industry, wasn’t going to play by the rules that keeps the rest of the country’s complacent corporate sector relaxed and comfortable.

As a consequence, Qantas found itself in a damaging price war as it sought to protect its 65% domestic market share. Worse still for the airline, its competitor started offering Business Class services and competitive lounge facilities that started to erode its most lucrative fares.

For Qantas, the sensible option is to focus on its strengths and build in its most profitable areas but instead the airline’s CEO, Alan Joyce, chooses to fight for the airline’s precious two third market share while slashing staff numbers.

Alan’s response is classic ‘cutting for growth’ and it won’t work – the airline desperately needs investment and visionary management, both of which it won’t get.

Cosy management can prosper in a cosy market, but it leaves those companies exposed to disruption from keener competitors and that’s what Qantas is learning.

Sadly for Qantas’ management, they aren’t in the 1980s and Joyce is no Jack Welsh. Today, as Alex Bard points out, the game is customer service and slashing your workforce is the wrong starting point.

Kickstarting the smarthome revolution

The latest Decoding the New Economy video interviews Daniel Friedman of Sydney startup Ninja Blocks.

The latest Decoding the New Economy clip is up with an interview with Daniel Friedman of Sydney startup Ninja Blocks.

Ninja Blocks focuses on controlling smarthomes with basic “if, then” rules where house holders can set basic instructions like “if the garage door opens after 5pm then turn on the kettle.”

It’s an interesting interview that covers Ninja Blocks’ vision along with the challenges of selling electronic devices globally and how to run a successful Kickstarter campaign for a hardware startup.