Paul Wallbank | Paul Wallbank - Communications Professional

Zuckerberg meets the telcos

What do telco executives hope to learn from Facebook’s Mark Zuckerberg?

One of the fascinations of this blog is how telecommunications executives desperately fight against the idea of their service being a basic utility.

Should you scratch a tough, hardbitten telco executive; you’ll find a sensitive soul who desperately wants to be seen as a swashbuckling media tycoon or cool startup wunderkind rather than the manager of a staid old telephone company.

Once you understand the buried desired of telco executives, it’s not surprising that Facebook founder Mark Zuckerberg was invited to give the opening keynote of the 2014 Mobile World Congress.

Sadly for the Telcos it wasn’t good news as the real life tycoon and wunderkind described how Whatsapp, the startup he acquired for $16 billion last week, is going to introduce voice services in the near future.

Having seen messaging services like Whatsapp slowly strangle the telecommunications industry golden goose that was SMS, the telcos now face lucrative voice services being further eroded by these Over The Top smartphone apps.

Which leaves them with data, the lowest margin service in the telco stable.

Far from being the bravest man in Silicon Valley, Mark Zuckerberg is the telco industry’s future. Which is why the industry’s executives want to find ways to profit from developments like machine to machine (M2M) communications and media ventures.

The worry though is most of the new telco opportunities don’t appear to anywhere near as profitable as now declining or stagnant services that have been so lucrative in the past.

Which makes Ericsson’s partnership with Facebook in developing an Innovation Lab for the internet.com initiative intruiging.

The objective of Internet.com is to make the internet more accessible to more of the world, which again threatens incumbent telco models.

Transmitting data—even a text message or a simple web page—requires bandwidth, something that’s scarce in many parts of the world. Partners will invest in tools and software to improve data compression capabilities and make data networks and services run more efficiently.

Efficient, compressed data means even less revenue for the operators so it’s no wonder they’re looking at those alternate revenue streams.

No telco executive is likely to starve in the near future, but as revenues stagnate in their established markets it’s no wonder the industry’s leaders are wondering whether it’s worthwhile hitching their fortunes to Facebook’s success.

Disrupting the smartphone market

The Tizen and Firefox smartphone systems threaten to disrupt the entire industry and ruin the plans of both Apple and Google.

It’s been a long time since we’ve had a three or four way war in the technology industry, with most sectors settling down into a two way fight between alternatives.

Mozilla’s promised $25 smartphone project threatens to open the mobile industry into a three way battle just as it appeared the market had comfortably settled down into an Android and iOS duopoly.

Now we see a three way race and possibly four if Samsung can get traction with its Tizen operating system that it’s bundling into the latest version of the Gear smartwatch.

One positive aspect of the four way battle is that three of the participants – Firefox, Tizen and Android are relatively open so compatibility between them isn’t impossible.

For Google and Apple though, this four way tussle presents a problem to their business plans.

Apple’s iOS ambitions of putting the software in smarthomes, connected cars and, possibly most lucratively of all, into retailing with iBeacon are threatened by a fragmented market and a rapidly eroding market share.

For Google, both Firefox and Tizen threaten the dominant position of their Android operating system that forms a plank in the company’s ambition to control the planet’s data and become an ‘identity service’.

Worse still for Google’s information ambitions, Firefox is working with Deutsche Telekom on a security initiative that will lock away users’ data.

So the stakes are high in the smartphone operating systems wars.

It’s early days to forecast the demise of either Android or Apple iOS, which is unlikely in the short term, but if Firefox’s operating system does take hold it will mean the smartphone industry is about to become a lot more complex.

Microsoft struggles with in car technologies

Microsoft Windows faces further challenges as it loses market share and revenue in the automotive market

As Microsoft prepare for a major launch at this week’s Mobile World Congress, the news isn’t good for the company’s flagship Windows operating system.

Two Bloomberg reports illustrate the problems; the major story is the company is planning to drop licensing fees for Windows 8.1 while the other, still serious, news is that Ford will be dropping Windows as its in-car operating systems.

Automotive systems are one of the key markets for Microsoft as the company tries to move into markets beyond the stagnating personal computer sector and should the reports be true that Ford is looking at moving to the rival Blackberry owned QNX system then Windows Embedded has taken an embarrassing blow in a key market.

More serious though is Bloomberg’s report that Microsoft plans to cut its licensing fees for Windows installed on cheaper devices.

While not unexpected, this will damage the company’s earnings given the Windows division made up 22% of Microsoft’s earnings last year.

It’s clear that the free Android system is beginning to hurt Microsoft both in the smartphone and personal computer markets.

For Microsoft’s new CEO Satya Nadella, dealing with Windows’ place in the new Microsoft is going to be one of his most pressing challenges and will almost certainly define his first year in the role.

As the Internet of Things and Machine to Machine markets grow, Microsoft is going to have quickly decide if the company wants to compete in the market.

Solving intractable problems

How are consumers like terrorists and what does this teach businesses about solving problems?

Developing counter terrorism strategies is an unlikely path to founding a business that deals in organisational change, the latest Decoding The New Economy video covers exactly this in an interview with David Snowden.

Snowden is the Chief Scientific Officer and founder of UK based consulting network Cognitive Edge that assists organisations with change and solving ‘intractable problems’.

A failing Snowden sees with the way most businesses approach organisational change and problem solving is “the case based approach that dominates most of society.”

“The idea is you find what other companies have done and you imitate it.” Snowden explains; “apart from the fact you can’t imitate the context, no company has succeeded other by imitating other people – they succeed by doing things differently.

“We take what we know about how the human brain works and we help people work those problems out.”

Safe to fail experiments

In approaching ‘intractable problems’, Snowden believes there are two ways to approach them; one is to set up ‘safe to fail’ experiments where smaller experiments are run in parallel within the organisation to see what innovative solutions arise.

The other approach involves using Snowden’s software based approach where staff or customers’ views are captured in real time to create a crowdsourced view of problems and their possible solutions.

“You can’t afford, for example, in market research to spend three months commissioning something, two months gathering the data and one month interpreting it.”

“If we create a sensor network of your customer we can give you data in real time.”

Consumers and terrorists

Dealing with real time data in public security are the origins of Cognitive Edge; “we started in counter terrorism where you have to deal with weak signal detection, you need fast real time feedback loops and you need to intervene very quickly.”

“There’s no difference between a terrorist, a customer, a citizen and an employee,” says Snowden. “They all represent the same problem which is how the hell does a large authority make sense of fragmented data.”

Developing human sensor networks

Snowden sees ‘human sensor networks’ where groups contribute their stories to create a narrative around a topic, as being one of the strongest intelligence and communications channels.

“Big data can tell us where you travelled, a narrative approach can tell why you travelled. If something goes wrong, I can also use that network to communicate.”

One project Snowden is looking at brings these concepts together to create new communication channels at airports, an idea that came to him after being stuck for two days at Toronto airport in a snowstorm, “frequent fliers have smartphones, they can be activated by the airlines and used as a communication mechanism.”

The interview with David Snowden is one of the most information and concept dense videos that I’ve done to date. It’s worthwhile listening this a few times to understand some of the fascinating fields he and Cognitive Edge are working in.

Learning to ask the right questions

What a three time Oscar winner can tell us about managing the data generated from the Internet of Machines

How do we make sense of the masses of data entering our businesses? Tableau Software founder – and multiple Academy Award winner – Pat Hanrahan thinks he has the answer.

A major challenge presented by the Internet of Things is in understanding the data that’s generated by devices, data visualisation companies like Tableau Software are making easier to interpret what machines are telling us.

“The streaming data coming from sensors is a very interesting opportunity,” Tableau co-founder Pat Hanrahan told Network Globe when discussing machine to machine technologies, “there’s so much potential.”

A Stanford Professor and winner of three academy awards for Computer Generated Imagery, Hanrahan founded Tableau with Christian Chabot and Chris Stolte in 2003 with a mission to help people to understand data. Today the company employs a hundred people after going public last year.

The origins of Tableau came from Hanrahan tiring of the movie industry which he’d been part of since joining Pixar on graduating in 1987, “I was thinking could we use computer graphics for other things, I want to find something more work related so I got interested in data visualisation.”

Hanrahan teamed with Stolte, who was one of his students, to set up a company called Polaris that became the basis of Tableau; “it was a classic Stanford start-up, Google was literally right next to us. I remember when the company started, Larry Page came to our office party.”

Making data accessible

“I’ve always been fascinated with taking the high end stuff and making it more accessible” says Hanrahan. “We’re in a transition phase, where we’re tying to figure out how to make it more accessible.”

Helping those who are passionate about facts and reasons is one of Tableau’s missions,”we have fanatical customers,” says Hanrahan.

“If you’re one of the rare people who use facts and reasons to solve the world’s problems then you are persecuted, you are on a mission, you’re going to convince those crazies that you’re right and you’re wrong and that’s why they’re so fanatical about our product.”

“There’s a little bit of hype around big data right now, but it’s a very real trend;” states Hanrahan. “Just look at the increase in the amount of data that’s been going up exponentially and that’s just the natural result of technology; we have more sensors, we collect more data, we have faster computer and bigger disks.”

A good example of the exponential growth in computing power is in how the smartphone has developed, citing how far computers have come since 1997 when IBM’s Deep Blue computer beat Kasparov, “at the time both Kasparov and the computer were rated 2700, the best chess programs now are rated 3800.”

“The chess program running on my iPhone is rated above 3000,” observes Hanrahan.

Despite the leaps in power, Hanrahan doesn’t see algorithms completely replacing the human touch, “you have the technology and resources to do this but you still need someone to figure out how to make it accessible.”

One of the keys to understanding information is to be literate in using it, “every student should be efficient in using data,” Hanrahan says and he sees data analysis skills as being essential in the future workforce; “we have to know how to ask the right questions.”

Making the data generated by connected machines accessible to the public, workers and managers is going to be one of the big challenges for organisations over the next decades; it’s an area where companies like Tableau are going to do well.

You can’t get there from here

What the world can learn from the failure of Australia’s National Broadband Network

I swore – mainly for my own sanity – that I wouldn’t discuss Australia’s National Broadband Network on this site anymore, today though the topic raised an interesting point about business leadership and project management that can’t be ignored.

Australian Communications Minister Malcolm Turnbull today released the Broadband Availability and Quality Report (PDF) along with the accompanying My Broadband website that identifies the nation’s telecommunications blackspots.

Extraordinary failure

“It is extraordinary that in six years of Labor talking about Australians having inadequate broadband they never bothered to do the work of actually identifying where services were good, bad or indifferent,” said the minister at the announcement.

Turnbull’s comments are correct, although the criticism is just as valid of previous Liberal and Labor governments who’ve all made incredibly poor decisions in the telecommunications portfolio without considering what was actually happening outside the ministers’ offices.

A bigger lesson though is that before commissioning a project the size of the NBN – estimates have put its cost anywhere between twenty and eighty billion US dollars – it’s a good idea to know where you are are and where you want to go.

Big Hairy Audacious Goals

To put the comments that follow into perspective, I was a supporter of the NBN concept although I thought it was a Big Hairy Audacious Goal.

In the shadow of the Global Financial Crisis the NBN project ticked all the boxes; it put cash into the economy, it employed an army of workers and upgraded Australia’s telecommunications network that had been neglected by thirty years of incompetent government policies mixed with incumbent telco greed.

Australia could have afforded ten NBNs during the mining boom of the 2000s; it was an opportunity to rebuild the nation’s ports, roads, railways, schools and tax system that all needed reinvestment and reinvention to meet the needs of the 21st Century.

Building a middle class welfare nanny state

Rather than reform the economy or build modern infrastructure, the Howard Liberal government decided to spend the mining boom’s proceeds on building a middle class welfare state.

Keen students of Australian politics crack a wry smile that the recently elected Abbott Liberal government, of which Turnbull is a member, proposes a paid parental scheme that will complete John Howard’s grand vision of a Middle Class Welfare Nanny State.

One of the tragedies of the populist and cowardly Gillard and Rudd Labor governments that succeeded Howard was neither had the courage to dismantle the Liberal party’s middle class welfare state.

At least though both Rudd and Gillard were prepared to make some big infrastructure investments, even if they weren’t fully thought through and chronically underfunded.

Failing to think through the needs, scope and costs of the project meant the National Broadband Network project quickly collapsed into a managerial mess exacerbated by the dribbling incompetence of the company’s executives, government officials and contractors, which bought us to Turnbull’s announcement today.

A project in search of a scope

The project’s failure is a worrying commentary on the abilities of Australia’s management elites in both the private and public sector, however the lesson for the entire world is understanding both where you are and where you want to go to is essential for a project’s success.

Spending on well planned and necessary infrastructure is good, but to avoid disasters like Australia’s NBN it’s good to start with understanding the problems you want to fix and a project scope that clearly identifies the work that needs to be done.

Unfortunately too many governments and businesses don’t know where they are or where their plans will take them.

Going to the cloud is not for the faint hearted

Technology One CEO Adrian Di Marco has strong advice for businesses that are looking at moving onto the cloud

“The cloud is not for the faint hearted,” warns Technology One CEO Adrian Di Marco in describing his company’s evolution into a software as service provider.

“We thought that this was five to ten years away, I’d like to say we got that wrong and this phenomena is happening now.” Di Marco said at the company’s 2014 Evolve conference on the Gold Coast today, “we’ve seen huge uptake in companies going to the cloud.”

A virtuous circle

Responding to that demand meant that Technology One had to redesign their software and update it to the meet the very different requirements of cloud services.

What Di Marco found in moving Technology One’s software onto the cloud was it became easier to identify problems and inefficiencies in his product, creating what he calls a “virtuous circle”.

It’s not just Di Marco’s customers who’ve been through that process, Technology One itself has gone all cloud internally with the company using services like Google Docs and Salesforce.

The aim of moving online is to make organisations more flexible with Di Marco citing the newly reformed Noosa Council in Queensland as being able to get up and running in four months by using cloud services.

Problems with the cloud

Despite being an enthusiast for cloud computing, Di Marco does sees some problems with the cloud, the first being that the term is overused and ill-defined which results in services being mis-sold.

A bigger problem in Di Marco’s view is a ‘gold rush’ has developed around the concept with revenue hungry vendors looking at making money

“IT companies, particularly consultancy firms, have over the last few years seen their revenues decline so to find new sources of growth they are all targeting the cloud.”

“Everybody wants to become a cloud provider, everyone wants to provide strategic services to do with the cloud.”

“There’s a lot of people offering very mediocre ideas, concepts and services.”

The key takeaway for businesses from Di Marco’s presentation was businesses need to be careful about their choices of cloud services providers.

Di Marco’s other point is that cloud services work best when there aren’t intermediaries such as resellers and integrators involved that reduce efficiencies and add costs.

“The cloud is a platform for the future of business,” sums up Di Marco. “Businesses that move to the cloud have an enormous strategic advantage, they can move at a pace that normal business can’t. They can move fast and innovate quickly.”

Neglecting the small business sector

The IT industry continues to neglect the small business sector

I’ve previously flagged how the IT industry fixates on the consumer sector, the Kickstart forum on Australia’s Gold Coast emphasised this with vendors, particularly those in the Internet of Things market, focusing on home users.

This is mindset is understandable given the huge numbers being cited for consumer applications, but the sneaking suspicion is that home users simply aren’t going to pay for these technologies and that the real money will be made in helping the retail sector deliver services to customers.

On Networked Globe today we discuss that quandary, it’s something that both vendors, consumers and small businesses should be thinking about given the way it’s going to change supply chains and entire industries.

Trusting the computer security industry

There’s something wrong in the way the tech security industry sells its product

I’ve been sceptical of computer security vendors for a long time and it’s interesting that even as threats evolve, the suspicion remains.

That suspicion comes from running an IT support business though the turn of the century virus epidemic, it’s hard to take the same companies whose products failed to detect the malware — and in some cases made problems worse.

At the annual Tech Leaders Kickstart event today, I found that old hostility bubbling up as a series of security vendors warned us of the terrible threats in cyberland and how their product would solve most, if not all, of our problems.

The irritating thing with their pitches is that none of them would articulate how the threats are evolving, or give real time examples.

Not that there’s any shortage of real time examples with corporate security disasters like Sony and Target as great case studies of what can go wrong. Indeed, there’s very good reasons for businesses and every computer user to take security seriously.

There’s something missing in the way tech security is sold and articulates the industry articulates its message.

An era of exponential innovation

Deloitte Center for the Edge founder John Hagel talks about our era of exponential innovation.

“How do we move to an exponential approach to innovation” asks John Hagel, Director of Deloitte’s Centre for the Edge in the latest Decoding the New Economy video.

The Centre For The Edge is Deloitte’s Silicon Valley based think tank that identifies and explores emerging opportunities related to big shifts that are not yet on the senior management agenda.

John tells us how the cycles of change and innovation have varied over the last thirty years in the industry; “the biggest thing for me is that nothing is stabilising. I often go back into history and look at things like electricity, the steam engine and the telephone – all hugely disruptive to business practices.”

“But the interesting pattern is they all had a burst of innovation and then a levelling off,” says John . “You could stabilise and figure out how to use all this technology.”

“With digital technology there is no stabilisation.”

That lack of stabilisation leads to what John has termed ‘exponential innovation‘ where he sees business and education being rapidly transformed as technology upends established practices and methods.

Healthcare, financial services and “any industry that has a high degree of information content ” are the sectors currently facing the greatest challenges in John’s view.

John sees the solution for businesses and managers in looking at the current era not as a time of technology innovation but of institutional innovation. That institutions, like companies, have to reinvent how they are organised.

Reinventing well established companies or centuries old bureaucracies is a massive challenge, but if John Hagel’s view is right then that radical change to institutions is what is going to be needed to face a rapidly changing society.

Bank image by Ben Earwicker, Garrison Photography of Boise, ID through sxc.hu

Hitting the eighty percent of needs

Cloud computing has changed the way we expect software to work and changed the entire industry’s philosophy.

“I don’t use ninety percent of what’s in Microsoft Word” has been the complaint of computer users for years as they struggled through the myriad features of box software products.

In the days of floppy disks and CDs, software developers tried to deliver as many features as they could; despite the fact that the ordinary user only needed a core set of functions and that most items on the menus went untouched.

The result was bloated, difficult to use software. The cloud computing model changes this, particularly in business fields like accounting software.

Last week saw a blitz of releases from cloud accounting services with Xero, Intuit and MYOB all making big announcements.

MYOB announced a wide ranging product refresh, Intuit their mobile service and Xero its new board directors that point the direction for its US expansion.

A key part of all the announcement was how the services are all boasting of their partner ecosystems developing add ons that improve users’ functionality.

Once consequence of having an army of developers plugging into the product means that companies don’t have to ship bloated packages that have dozens of features that are irrelevant to each users’ needs.

Xero’s Australian CEO, Chris Ridd, put this well during the week by observing that company aims to “address the basic eighty percent of needs”.

This is the exact opposite of the box software model of the past where vendors would try to pack more features into their products which gave rise to the term bloatware.

Microsoft’s Office package was probably the best example of this massive growth in the product size, with the installation files eventually taking up a full 4.3Gb DVD to deliver something that most people were happy with when WordPerfect 2.0 shipped on three floppy disks.

That change to the software model is a good example of how business practices and methods change as technology evolves; it also illustrates just one of the fundamental changes older software companies are having to deal with as cloud services change their industry.

We can still have all the features we want in a software package, but we’ll just have to connect – and probably pay for the add ons.

Today, we’re more likely to be scrambling to find an add-on rather than complaining about features we don’t need.