Jun 282016
 
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“If you’re digital now, you’ll be cognitive tomorrow” says Ginni Rometti, the head of IBM.

Rometti was talking at the Sydney IBM Think forum today where she laid out the vision of IBM’s role in the data rich organisation of the future,

IBM’s pitch is that services like their Watson artificial intelligence platform is a key part of business as companies try to differentiate themselves in the new economy.

While Rometti’s view is correct, the question is whether IBM are the company to do this. The audience in Sydney were largely incumbent corporations and government agencies, it was almost sad that some of the panelists citing their digital smarts were from Australian businesses that have been tragically leaden in responding to changes to their markets over the last two decades.

In the first panel Rometti was joined by Andrew Thorburn and Richard Umbers the respective CEOs of the National Australia Bank and the Myer department store chain.

Thornburn’s comments about NAB being an agile fintech company were somewhat at odds with the reality of Australia’s housing addicted banking sector but Umbers’ view that Myer is leading the way in customer experience is almost laughable given how his company has missed almost every development in retail over the past twenty years.

Leaden corporations are Rometti’s core customers however – it still remains true that no-one at companies like Myer and NAB gets sacked for buying IBM.

“We’ve been part of your past, and I hope we can be part of your future” was Rometti’s conclusion of her keynote. It remains to be seen whether her customers are part of the future.

Jun 212016
 
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What are the technologies that will change business over the coming years? During Gartner’s Business Transformation & Process Management Summit in Sydney on Tuesday, we had the opportunity to talk to Brian Blau, the company’s Vice President of Research, about what he sees as the five technologies that are most likely to change business.

Brian himself brings a lot of experience with emerging technologies, while he’s currently Gartner’s leading Apple analyst and specialises in consumer and mobile & Wireless technologies he spent the previous twenty years working in the virtual reality field which gives him an informed perspective on the many of the current popular tech buzzwords.

Talking to Blau in the busy analysts room at the Sydney Hilton, he kept reaching into his bad to show off his collection of the latest gizmos ranging from VR headsets through to smartwatches and fitness trackers, showing his enthusiasm for the field he covers.

Augmented and Virtual Reality

“It’s been a long time coming, I had twenty years in AR/VR and I’ve been an analyst for six and I’m glad I have that background,” says Blau.

Blau sees augmented and virtual reality tools altering the workplace dramatically as they change the experience for workers. The industries he sees being affected in the near future are sectors like field service, training and design.

Wearables

“Wearables are interesting devices,” Blau says. “You can almost think about them as transitory technologies so today there may be lightweight analytics about what employees do at work or what consumers do in public is kind of a stepping stone. If that device has a screen or some sort of interface on it, it becomes interactive.”

Blau cautions though that much of the data gathered from consumer wearable devices is far from reliable and while the quality of information improves there is still a way to go until we can depend upon these devices for life or mission critical tasks.

Virtual Personal Assistants

“These are combinations of hardware and software – Apple Siri, Microsoft Cortana or Amazon Alexa,” Blau states. “These Virtual Personal Assistants are having a big transformation, today they answer simple questions based on rules but in the future they are going to be hyper-smart.”

“Facebook, Apple and the rest of them have opened up their platforms to developers, we think this has applicability to all sorts of consumers and in the business domain we’re going to see these devices used in workplaces.”

Cameras and computer vision devices

“There are two advances that are happening, there are multi lens camera devices and the algorithms behind them are starting to decode what’s behind the image,” says Blau. “I think this is exciting technology as it’s an input that’s never been digital before.”

Blau sees the increasing sophistication of cameras and the software processing the images as finding important applications within the workplace, “there’s a lot of tasks around vision that are manually processed at the moment and computer vision is going to automate those.”

Personal IoT devices

“These are more about the workforce, the sensors that are in the work environment are those that people could bring to work, it overlaps with wearables.” Blau says, “the next generation of IoT devices are going to be much more personal.”

“Almost every business I talk to is very interested in virtual reality and wearables,” states Blau. “There is a high amount of interest because there’s a firm belief these devices will change workplace and consumer behaviours.”

For these devices to be adopted on a large scale, they will have to become more reliable Blau believes with the barriers currently being that most devices and their software are still at Minimum Viable Product stage.

Tips for the future

Blau advises businesses looking at these technologies should start with a basic belief that the specific technology will benefit their business, then they have to experiment and identify what the return on investment will be. “My main advice is to experiment with the technology, run a series of pilot programs, make sure you’re diverse in what you are looking and keep an open mind,” he says.

“The goal with these devices is to change behaviour,” Blau states. “The real challenge will be to get it right over time. You’ll have to reiterate time upon time.”

With these new technologies entering the business world, companies are going to face changes both within their workforces and in their markets. Being across the potential of these technologies is going to be essential for managers.

Jun 182016
 
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17 year old Giorgio Doueihi had a problem, his school had just rolled out a student diary app that was unusable. So Doueihi, who’d started coding at 13, decided he’d write a new one.

“I’d been dabbling with a bunch of projects at high school and I’d taught myself how to code,” Giorgio told Decoding the New Economy at Telstra’s Sydney Muru-D incubator.

That app was quickly adopted by his high school which had spent $100,000 developing the unusable system. Giorgio finished school, started university and Backpack, as his app became known, was accepted into Sydney University’s student INCUBATE startup program.

“I found out about INCUBATE and thought ‘I might just pitch this idea I had at high school’ then it kind of took a turn.”

Backpack became Fluid Education and Giorgio was accepted onto the Muru-D program, the product was doing well in the market and gaining customers when he decided to shut it down and move to a new product.

“Sales cycle was a large part of the pivot,” he explains. “Another part was that it had changed from a student orientated app to something more enterprise focused, something we were uncomfortable doing.”

So Fluid Education pivoted and is now a service for matching tutors to students and managing their appointment with the new platform about to come out of beta, “We’ve gone back to our roots,” Giorgio explains.

In many ways Giorgio Doueihi story is straight out of the startup textbook, he’s passionate, has identified a problem to solve and was agile enough to change the business’ course when he was unhappy with the direction.

Fluid education and Giorgio will be a very interesting story to follow over the next few years.

Jun 162016
 
how much money can we save on cloud computing

With the global Zero Interest Rate Policy experiment failing, we’re now entering the era of negative interest rates with a quarter of the world’s central banks charging savers.

The world is flooded with money, but we also have surpluses in manufacturing, a surplus in most commodities, of energy and an increasing surplus of labor.

From Shanghai to Barcelona, the surplus of labor is beginning to be felt as industries become increasingly mechanised and the consequences of short sighted economic policies over the last thirty years begins to be felt.

That labor surplus is also driving the political shifts in Europe and North America as workforces are finding their living standards being pressured and their economic prospects dwindling. As a consequence, voters are looking for scapegoats – immigrants in Europe, the EU in Britain and Mexicans in the US.

Regardless of which scapegoat you choose to blame for the global economy’s uncertainty, the fact remains we are in a time where scarcity can’t be assumed.

This means business models that are based upon restricted supply are, in most sectors, under threat. The whole economics of scarcity becomes irrelevant when there are no shortage of suppliers around the globe.

In some fields, such as energy, technological change is seeing the dominant positions of oil companies, electricity generators and distributors being challenged in ways that wouldn’t have been thought possible a few years ago.

Even regulated industries where government licenses artificially controlled supply – like taxis, broadcasting and telecommunications – increasingly new distribution methods are changing the economics of those industries. No longer is buying a government license a sure fire way to big profits.

Right now, the imperative for businesses to find the areas where there is scarcity and supply constraints. For many industries that may be too difficult a transition.

Negative interest rates though take us into uncharted territory. How the global economy responds to virtually free and unlimited money is going to be an interesting experiment.

Jun 152016
 
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Two years ago I interviewed Technology One founder and CEO Adrian DiMarco about his company’s pivot to the cloud and the gold rush among consultants and services providers looking at making money out of cloud computing services.

DiMarco’s founded Technology One in 1987 to compete in the enterprise software space with the likes of SAS and Oracle. At the peak of the dot com boom in 1999, DiMarco listed the company on the Australian stock exchange where it is one of the few genuine tech stocks on the nation’s finance and mining dominated bourse.

Given the focus on listed companies at the moment, DiMarco’s views are worth noting. “if I were to do it again, I’d don’t think I’d go that path,” he says about listing the business. “I have a real issue with how public companies run in Australia.”

DiMarco’s view is at odds with Netsuite’s Zach Nelson who told Decoding the New Economy last month how being on the stock exchange forces management to focus. “Managing a public company is a great discipline and in some ways gives us an advantage over non-public company who don’t have to have discipline and make good investments,” Nelson said.

In DiMarco’s opinion, the regulatory and ‘box ticketing’ requirements of a listed company don’t reflect the true performance of a corporation’s management. “There are mediocre CEOs walking away with millions,” he says.

While listing made sense for Technology One in 1999 those looking at starting a business today shouldn’t necessarily follow his path warns DiMarco, “tor startups these days, don’t follow up normal route.,” he says.

“I think the world’s your oyster to do want you want. Don’t let anyone talk you out of anything,” DiMarco says. “When we started out we were told ‘don’t build enterprise software’. We did and we succeeded.”

“Don’t be scared,” he advices. “It really is a great time to startup a business. The technology is redefining business. It’s a good time.”

Jun 082016
 
Future proofing your business free webinar

“Just do it!” Almost every startup founder I interviewed for The Australian’s series on expat entrepreneurs had the same advice for budding entrepreneurs wanting to go global – don’t wait, just do it.

Peter Grant of Brisbane founded Safesite did though inject a slightly different view when he pointed out that it may not make sense for a company with a good domestic business to make the move, “If it’s going to be too complex or you already have a profitable business in Australia you may not need to come to the US, you have to be realistic about it. It might make sense to find a local partner.”

In Peter’s case though that move made sense. “We have a year on our competitors,” he notes.

Not being scared of making the move was part of a discussion I had with TechnologyOne founder Adrian DiMarco today, I’d previously interviewed Adrian for Business Spectator a few years back and it was good to hear his views on the current startup mania and the Australian innovation push.

One of the points DiMarco made was about not being scared when launching a venture, whether it’s the competition, the marketplace or the overall daunting task of running a business, being fearless is a key attribute to making the first steps, not just success.

That fearlessness is something that should be acknowledged about business founders, whether it’s a tech startup, dog walking service or donut franchise. Every single proprietor is taking a great leap.

May 192016
 
Zac_Nelson_Netsuite_CEO

Both the public cloud and a publicly listed company are good things for a business says Netsuite’s Zac Nelson.

“Managing a public company is a great discipline and in some ways gives us an advantage over non-public company who don’t have to have discipline and make good investments,” says Zac Nelson, the CEO of Netsuite.

Nelson was talking to Decoding the New Economy yesterday at the annual Suiteworld conference, Netsuite’s annual gathering in San Jose.

The CEO’s comments are in contrast to a common view that being publicly listed company distracts a company’s management from focusing on long term objectives, a sentiment Nelson rejects.

“In terms of managing a public company I think it’s an important discipline, I think a lot of people are opposed to these SOX (Sarbanes-Oxley) rules but when I look at these rules I think they are just common sense. Are you managing your business right? You want to have control of your business so you aren’t blindsided.”

Probably the biggest advocate of taking companies private is Michael Dell who took his eponymous business off the markets three years ago and is now looking at doing the same thing with EMC in what will be the biggest IT merger in history.

Dell going private

Nelson doesn’t think Dell going private was a mistake though, “I saw Larry Ellison say it was one of the greatest business moves in the history of man, I’ll agree with Larry – he’s usually right on that stuff,” he laughed.

“The thing I see Dell doing that I understand is they are giving their smaller division more autonomy. Dell Boomi is going back to being just Boomi and Secureworks just went public. Certainly from a structural standpoint and business model innovation that makes sense and it’s what I understand.”

As a public company, Netsuite does come under scrutiny and one of the criticisms is that it continues to post losses, something that Nelson puts down to the treatment of stock options. In the last earnings report, the company claimed capitalising stock options added $30 million in costs and not including them would see the company reporting an eight million dollar profit last quarter.

“We’re cash flow positive, we generate over $140 million in cash,” Nelson says. “People are happy with it, we’re still investing. What we’re investing in this year is different to the past, we’re investing in services to enable our customers to invest in product.”

Integrating the stack

One of the advantages Nelson sees that cloud based companies like his have are integrated systems, “the client server world created this perspective that dis-integrated systems actually work – you have Windows, you have third-party apps – but what really works well are integrated systems.” he says. “Look at the most common system you guys use, called Apple, it’s an integrated end-to-end system. Same with Amazon, that’s what we’ve built.”

“The detour we took in the client-server world is still being taken in the software world, a lot of software people believe you can compile this stuff and it will magically work. No, it doesn’t. Integrated systems work better.”

Securing the cloud

One area he specifically sees where cloud services have an advantage in being integrated is with security, “a problem that large enterprises have that we to some degree don’t have is we have one system, we have five data centers. You look at some of these large enterprises and some of them don’t even know where some of their data centres are. How on earth do you secure that environment? It’s not a product problem, it’s a process and IT management problem.”

Nelson’s comments on security are a swipe at competitors like SAP and Oracle who are often criticised for having disparate systems.

With Suiteworld moving to Las Vegas next year, it will be interesting to see who’s taking bets against cloud services like Netsuite. Certainly with salesmen like Zac Nelson, they’re able to tell a good story. The key though is to show some profits in the longer run.

Paul travelled to Suiteworld in San Jose as a guest of Netsuite.