cloud computing | Paul Wallbank - Communications Professional

Eroding business silos

Knowledge is power, and the businesses who can share it are those who will define the 21st Century.

During our ABC radio discussion on politics and social media with Jeff Jarvis, we inevitably came around to the issue of sharing information.

We’ve covered the risks of personal sharing extensively and Jeff’s view is that our perceptions of privacy are evolving as we explore what is acceptable or tolerable in an information rich world.

Overlooked in this discussion is just how important sharing is for businesses – particularly in breaking down silos within an organisation.

As organisations grow, silos develop as various groups or departments grow to address specific functions. It’s a natural process.

However silos can damage businesses as valuable business knowledge is kept within the group rather than shared with the entire organisation.

This is the opportunity we see now in the various cloud computing, social media and big data tools that have developed to help people, gather, curate and share information.

Today there is no excuse for critical customer information sitting in the call centre logs not being available to marketing, sales or management teams. That is just one example of thousands.

Over time we’ll see businesses owners and managers develop the skills and tools to use data more effectively. This is already happening as many IT people move from Information Technology to Knowledge Management.

Business silos won’t ever be fully eliminated; in many ways they are necessary as you can’t expect the company accountant to know everything the customer service or sales staff do.

Those businesses who are successful will be those who overcome internal politics and resist the managerial urge to build little empires, information is too important to be hoarded by middle management princelings.

In the 19th Century power came in the form of steam engines, today it comes in knowledge. How well are you harnessing the power in your business?

Forget Plastics, today it’s Big Data

Big Data is the IT industry’s latest buzzword but it’s been sitting on our desktop all along

“Plastics” was the career advice to uni students in the 1967 movie The Graduate. Today the same advice to a smart young entrepreneur would be “big data”.

Big data is the current buzzword for the IT industry, we’re seeing start-ups with cool tools popping up and whole new job descriptions to manage it, while big and small businesses ponder how to use another technology in their operations.

At the end of the month, the third of the City of Sydney’s 2012 Let’s Talk Business series will see SmartCompany’s James Thomson among others discussing how data drives business.

How we use data in our business is something we’ve had to come to grips with for ages, but many of us haven’t really started to find those nuggets of value in our databases.

We’ve actually been in the era of big data for decades since computers were introduced in the workplace. One thing that PCs do very well is gather and store information.

Today computerised point-of-sales systems, database software, loyalty programs and web-tracking tools mean we have a massive amount of data about our clients at our fingertips.

As computers get more powerful and cloud-based services start making detailed data analysis more available, we’re going to see even more data pouring into our businesses.

Social media services add to the data deluge as they gather, giving even more intelligence about our markets, individual customers and the performance of our businesses.

The problem is that many of us are already overwhelmed by what we have. The thought of even more data we can’t use causes many managers and business owners to hide under their desks and weep.

An article in the MIT’s Technology Review about Peter Fader, co-director of the Wharton Customer Analytics Initiative at the University of Pennsylvania looked at this problem.

Professor’s Fader’s view is that most businesses have enough data – the problem is managing what we have, along with the risk of trying to extrapolate too much from historical information.

To deal with this overload we’re seeing companies like Kaggle starting-up to help us mine this data and get useful information about our businesses and customers.

What these data-mining companies are promising is the ability to see the patterns in what appears to be just a mass of confusing data.

Already we’re seeing businesses that can connect the dots get a head start on their slower competitors who don’t appreciate the value locked in their databases and CRMs.

Making sense of the data we’re accumulating is the real challenge. If we’re not paying attention to what we already have then there’s little point in gathering more.

Tickets for How Your Customer Data Can Drive New Business at the Sydney Town Hall on May 29 are still available.

Security and cloud computing

Understanding risks with online computing is the best way to manage it.

Last Friday cloud accounting service Saasu ran their Cloud Conference looking at the business benefits of online computing and business automation.

Among the topics discussed was the security of cloud computing with Stilgherrian giving an excellent overview of the state of information security.

Stil’s message is clear; online security is everyone’s problem – if the bad guys want to target you for whatever reason they will.

As a business owner, it’s essential to take basic precautions. This is something I’ve covered before and something Stil raises in his presentation by pointing out that Australia’s Defence Signals Directorate lists 35 mitigation strategies based on the security breaches they examined in 2010.

Of those thirty-five, the top five would prevent 85% of security breaches. The top one – keeping your applications up to date – would avoid almost every PC malware attack along with Apple Mac’s Flashback worm.

In answering my question about how Saasu and other cloud computing users can protect their system, Stil also raised a good point about using virtual machines for web browsing and even purchasing a computer just for business accounting and banking use so the services can’t be compromised.

Related to this topic is an ongoing discussion on the Reddit forums between posters claiming to be malware writers and botnet operators.

While it’s risky to trust everything you read on Reddit, the tips are worthwhile, particularly the advice to “disable addons in your browser and only activate the ones you need.”

By reducing the number of programs running on your computer or the add ons in your web browser, you lessen the risk of being infected. Again this would have protected the victims of the Flashback worm.

The security of our systems is our own responsibility, just like our home and office security.

Cloud computing is no different to other computing – the basics of information security, or #infosec, are the same regardless of whether you’re using software on your computer or the cloud.

Used responsibly, cloud computing is no less or more secure than any other computer or smartphone use. We shouldn’t underestimate the risks, or get hysterical about the threats.

Is the Paperless Office promise about to come true?

For twenty years abolishing paper has been promised. Is the promise about to be delivered?

For as long as personal computers have been around the paperless office one of the holy grails of the IT industry.

Paper is messy, difficult to file or store and cruel to the environment. So being able to move and save information electronically made sense.

Despite the promises of the last twenty years, the quest for the paperless office seemed lost.

While the networked PC gave us the ability to get rid of paper, its advanced word processing functions and graphic capabilities along with the data explosion of email tempted us into generating more paper.

To compound the problem, over the last thirty years paper manufacturers found cheaper ways to make their product which meant the price of paper dropped dramatically just as we found more ways to use it.

So rather than delivering on the promise of eliminating paper, computers generated more than ever before.

Just as it seemed all was lost in IT’s War On Paper, the tablet computer came along. Coupled with cloud computing services and accessible fast wireless Internet, suddenly it appears we might just be on the verge on delivering on those promises of the last twenty years.

At a suburban football game I saw this first hand as I watched the ground officials electronically filing match information with their league.

“This used to be a pile of paperwork that used to take until Tuesday to be filed and collated” the ground manager told me, “today it’s done within half an hour of the game ending with almost no paper involved.”

For amateur sports clubs, money isn’t so much the problem as time. There simply are never enough volunteers to meet the workload of getting a team on field.

This is true with almost any community based organisation – from volunteer firefighters to community kindergartens organisers struggle with rosters and finding helpers.

In business the same resource constraints exist except we know we can fix these problems by paying a worker to do it. The problem there is few businesses have unlimited funds to employ filing clerks and form fillers to handle the paperwork.

By killing paper in the office, we’re making business and the economy more efficient. We’re about to deliver on that promise.

Bill Gates once wrote that in the short term we overpromise what technology can deliver while in the long term we underestimate its effects.

This is true of the paperless office – now that promise is being delivered the effects on business and government will be profound.

Is your business prepared for these changes?

Undermining the cloud

Google’s broad claim on users’ data risks the viability of their services

Whenever I do a presentation on cloud computing and social media for business, I focus on one important area – The Terms Of Service.

Google’s relaunch of their Cloud Drive product has reminded us of the risks that hide in these terms, particularly with the one clause;

When you upload or otherwise submit content to our Services, you give Google (and those we work with) a worldwide license to use, host, store, reproduce, modify, create derivative works (such as those resulting from translations, adaptations or other changes we make so that your content works better with our Services), communicate, publish, publicly perform, publicly display and distribute such content. The rights you grant in this license are for the limited purpose of operating, promoting, and improving our Services, and to develop new ones. This license continues even if you stop using our Services (for example, for a business listing you have added to Google Maps). Some Services may offer you ways to access and remove content that has been provided to that Service. Also, in some of our Services, there are terms or settings that narrow the scope of our use of the content submitted in those Services. Make sure you have the necessary rights to grant us this license for any content that you submit to our Services.

This is an almost identical clause to that introduced – and quickly dropped by file sharing Dropbox – last year. It’s also pretty well standard in the social media services including Facebook.

Basically it means that while you retain ownership of anything you post to Google Drive, or most of other Google’s services including Google Docs you’re giving the corporation the rights to use the data in any way they choose.

While the offending clause does go onto say this term is “for the limited purpose of operating, promoting, and improving our Services, and to develop new ones” there is no definition of what operating, promoting or improving their services actually means.

Not that it matters anyway, as one of the later terms says they reserve the right to change any clause at any time they choose. So if Google decided that selling your client spreadsheets to the highest bidder will improve the service for their shareholders, then so be it.

If you’re a photographer then the pictures you upload to Facebook or Google+ now are licensed to these organisations as are all the documents stored on Cloud Drive.

To be fair this is not just a Google issue, Facebook has similar terms as do many others. Surprisingly just as many premium, paid for services have these conditions as free ones.

Because these Terms Of Service are about establishing a power relationship, there’s usually an over-reach by large companies with these terms.

While an over-reach is understandable, its not healthy where the customer has to trust that the big corporation will do the right thing.

Right now, if you’re using a cloud or social media service for important business information you may want to check that service doesn’t have terms that grant them a license to your intellectual property.

Locking in the mobile market

Where are the next challenges for a phone industry that’s re-invented itself?

Mobile phone carrier Vodafone yesterday announced its purchase of Cable and Wireless, the company that rolled out the telegraph and phone networks that connected Britain’s empire.

Vodafone’s purchase is one of the final phases of the telco industry’s long term restructure where customers – both home and business users – have switched from land lines to mobile devices.

It’s long been acknowledged the profit in this market lies in devices and data usage which is why Cable and Wireless steadily declined over the past quarter century.

While there’s good money to be made in running undersea cables, which is what C & W did, the big profit is in delivering the data over the “last mile” to the customer.

For most customers, that last mile is the radius around a cellphone base station.

In Australia, this is best illustrated by Telstra’s undisguised glee at being able to offload their legacy copper network and backbone services to the government owned National Broadband Network allowing the former land line monopoly to focus on the mobile, data customer.

That data aspect is important too, one of the big changes in telecommunications over the last 25 years has been the rise of data.

A quarter century ago, voice communications were the main traffic of these networks. For companies like Cable and Wireless, data was a profitable sideline with services like Telex and ISDN being lucrative business niches.

Those rivers of gold distracted incumbent telcos in the early years of the public Internet as they tried to protect those expensive data plans and discouraged customers from using the net.

Over time, a new breed of Internet Service Providers rose who could supply those data services customers wanted.

Ironically, the same thing has happened with mobile phone manufacturers and the rise of the smartphone. Unlike the incumbent telcos, they haven’t adapted.

The incumbents phone manufacturers like Nokia and Motorola missed the rise of data communications and the mobile web as the iPhone and Android devices delivered the portable utility that “dumb phones” couldn’t deliver.

For Nokia, that miss appears fatal with the company rapidly running out of cash as their smartphone devices fail in the marketplace and margins collapse in the sectors they still dominate.

Research In Motion – the manufacturers of the Blackberry phone – are in the same trap. While their devices were data orientated they were more akin to corporate “feature phones” where they did one or two things well but couldn’t deliver the full features mobile phone users increasingly wanted.

The rise of the iPhone threatened Blackberry’s market and the arrival of the iPad with applications like Evernote killed most of the product’s demand.

Blackberry and Nokia’s decline while companies like Telstra and Vodafone survive – not to mention massive profits of companies like Mexico’s Telefonica – illustrate the value of government licenses to telcos and the breathing space it gives the management of these licensees.

We shouldn’t underestimate though the risks to all these businesses if they don’t adapt.

Risks and opportunities in crowdsourcing

There are real benefits and dangers for business in the globally connected marketplace

Crowdsourcing and offshoring are changing bringing to small business the same changes we’ve seen in manufacturing and low level office jobs over the last forty years.

Those trends are going to affect local businesses – particularly the home based service providers – in a serious way as the local web designer and bookkeeper find themselves undercut by freelancers in countries where an Australian day rate is a month’s pay.

With those thoughts in mind I went along to a round table discussion with crowdsourcing advocate Ross Dawson, Freelancer CEO Matt Barrie and Design Crowd founder Alec Lynch to hear them discuss some of the issues around the concept ahead of their half day workshops in Sydney later this months.

Having read Ross’ recent book, Getting Results From Crowds, many of the concepts and arguments are familiar but its worthwhile considering how the trend of a globalised workforce is changing.

The benefits of crowdsourcing services

Crowdsourcing services like Design Crowd and Freelancer have benefits traditional outsourcing services don’t have.

Alec Lynch describes these as reduced expense, speed and risk. A broad range of cheap, accessible suppliers mean businesses aren’t locked into costly contracts with the attendant risks while they can bring projects to fruition in days.

Until recently, globalisation only bought benefits for major corporations with manufacturers contracting work out to China, back office functions to India and software development to Eastern Europe.

The rise of web based services where smaller, one off projects could be paid for by credit card has bought global outsourcing into the small and medium sized business markets.

Now local businesses are affected by business practices that, until recently, were the concern of those working for large organisations.

This is bad news for local service businesses; the suburban web designer or bookkeeper is now finding themselves competing with individuals who, as Matt Barrie points out, have a very good weeks’ income for the equivalent of a day’s pay in Australia.

Basically the same forces that drove most low value manufacturing offshore are now driving services and white collar jobs the same way.

Responding to the threat

There are major downsides for clients using these project based outsourcing services; for instance designing a logo is only part of a much bigger branding exercise which in turn has to be considered against the orgainisation’s longer term objectives.

Often, most of us don’t know what we don’t know and that’s the real reason why we hire an expert to explain why a logo should look a certain way, an expense should be allocated to one specific cost centre and not another or why we should one software package over another.

When we outsource our services, particularly to a low cost provider, we lose that expert insight and end up with someone just carrying out a task; it is up to us to supervise something we probably don’t understand ourselves.

Part of that supervisory role is project management, in the design field managing creatives can be like herding cats. This is why experienced project managers are worth their weight in gold.

Like many essential skills, project management is one of those which most of us don’t have and is chronically undervalued but when a business is outsourcing to a freelancer in Estonia or Eritrea then this service is essential.

Providing those skilled supervisor and management roles is where the opportunities lie in a crowdsourced market place.

In many ways, we’re seeing the end result of the post-industrial society. Just as we offshored the manufacturing industries through the 1970s and 80s then the low skilled office work in the 1990s and 2000s, we’re now outsourcing local services to low cost countries.

Whether ultimately this is a good thing or not is a big question but for local businesses, the trend is clear and much of the basic work is going offshore. Those who choose to whinge rather than adapt will be left behind.

Why VCs hate Amazon

How cloud computing is changing investment and entire industries

“Venture capital investors hate us” said Dr Werner Vogels, CTO of Amazon.com at the April Sydney FED, “once you needed five million dollars to launch a new technology business, today you need $50,000 and a big box of ramen.”

Dr Vogels was talking about the Amazon Web Services (AWS) platform that underpins many of the cloud computing and social media sites which are redefining how we use computers and the web.

What’s really interesting with the doctor’s comment is it’s only part of the story; for businesses outside the tech sectors –say retailers or service companies – they get cheap or even free access to the cloud computing services running on AWS or its cloud competitors like Windows Azure.

For those businesses, it’s possible to start an idea for nothing but the founder’s time; rather than putting fliers up at the local bus stop or shopping mall an entrepreneur starting an online store or neighbourhood computer repair business now can create a website and all the local search profiles without spending a cent.

Being able to start up a business with little, if any, capital means we’re seeing a new breed of innovators and entrepreneurs entering markets.

At the corporate level, or in the $50 million dollar VC investment field, the opportunities for exploring Big Data without buying big supercomputers is another benefit of the cloud computing services.

Services like ClimateCorp which insures farmers against extreme weather couldn’t have existed a few years ago as the processing power to analyse historical rain and drought data was only available to those with insanely expensive super computers.

Today, the combined power of millions of low powered cheap computers – the definition of cloud computing – delivers the processing grunt of a supercomputer at a fraction of the cost.

Access to cheap computing power means innovations can be bought to market quickly and at a fraction of the cost that was normal a decade ago.

We’re in early days with what the effects of super cheap computing means to most industries, but it is changing industries as diverse as agriculture, banking, logistics and retail quickly.

Cloud computing is giving big business the tools to understand their markets better and small business the ability to grab customers from bigger competitors who are too slow or don’t want to face what their clients really think.

These are the forces that are changing the way business is being done; if you’re in business it’s time to start paying attention.

In reality, Dr Vogels is pulling our legs – the smart VCs aren’t hating Amazon, they are rubbing their hands at the profits that are going to be made in disrupting cosy industries.

Who will be the future Betamaxes?

A modern version of the video tape standard wars is being fought on our phones

This morning Paypal announced its PayPal Here service, a gizmo that turns a smartphone into a credit card reader.

On reading PayPal’s media release in the pre-dawn, pre-coffee light I found myself grumpily muttering “which platforms?” as the announcement kept mentioning “smartphones” without saying whether it was for iPhone, Android or other devices.

It turns out to be both Google Android and Apple iOS. It adds an interesting twist to the Point Of Sale market we’ve looked at recently.

The omission of platforms like Windows Phone raises the question of which platforms are going to go the way of Betamax?

Sony’s Betamax and JVC’s VHS systems were the dominant competitors in the video tape market in the early 1980s. They were totally incompatible with each other and users had to make a choice if they wanted to join one camp or the other when they went to buy a video recorder.

On many measures Betamax was the better product but ultimately failed because VHS offered longer program times and Panasonic’s licensing out of their technology meant there were more cheaper models on the market.

A few days ago Bloomberg Businessweek listed the Betamax device as one of the “technology’s failed promises”

With a superficial comparison, Apple would seem to the Betamax while Google and possibly Microsoft are the VHS’s given their diverse range of manufacturers their systems run on and Apple’s refusal to license out iOS, which was one of the reasons for Sony’s failure.

But it isn’t that simple.

In the smartphone wars, it’s difficult to compare them to VCRs as the video tape companies never controlled content and advertising the way smartphone systems do – although Sony did buy Columbia Studios at the peak of the Japanese economic miracle in 1987.

This control of content is what makes the stakes so high in the smartphone and tablet operating systems war. A developer or business that dedicates their resources to one platform could find themselves stranded if that platform fails or changes their terms of services to the developer’s detriment.

Another assumption is there is only room for one or two smartphone systems; it could turn out the market is quite happy with two, three or a dozen different systems and incompatibilities can be overcome with standards like HTML5.

In a funny way, it could turn out to be Android becomes the Smartphone Betamax due to having too diverse a range of manufacturers.

One of the first questions that jumps out when someone announces a new Android app is “which version?” The range of Android versions on the market is confusing customers and not every app will run on each version.

More importantly for financial apps like PayPal Here and Google Wallet, smartphone updates include critical security patches so many of the older phones that miss out on updates pose a risk to the users.

In the financial world confidence is everything and if customers aren’t confident their money is safe or will be promptly refunded in the event of fraud they won’t use the service.

Whether this uncertainty will eventually deal Google out of the game or present an opportunity for Microsoft and other companies is going to be one of the big questions of the mobile payments market.

Reinventing point of sale

Cloud and mobile devices are changing retail systems.

One of the banes of running a business computer support organisation were cash registers.

Retail Point Of Sale (POS) systems were almost always arcane, clunky and difficult to maintain, at PC Rescue we dreaded a call from a shop, pub or hairdresser having problems with their registers.

Frequently this was by design, the POS system supplier would try to lock in their business customers into expensive support contracts.

By making it difficult for anybody without intimate knowledge of the product to actually do anything with it, the retailer was stuck having to hire overpriced custom support.

To make things worse, many of the POS systems ran on outdated hardware which offered the suppliers another opportunity to hit their customers (victims?) with high support costs.

Since the iPad was released, I’ve been waiting for an application using cloud services for a back end that challenges the existing Point of Sale systems and today US online payments system Square has announced their Square Register app.

While only available in the US, Square has been setting the pace for physical payment systems like taxi fares and coffees using online technologies so it’s hardly surprising they are leading this push.

The iPad as a cash register is a logical step for the device and tied in with a robust Point Of Sales platform behind a simple to use app, it will probably make a huge dent in the point of sale market.

It may be the Square service won’t be the point of sale leader – Square is more a payments service than retail platform – which means this field is way open for some savvy operators.

One of the concerns with the Square service, and any iPad based application, is the spectre of vendor lock-in. Being fixed on the iOS platform means there is a risk of being held hostage to Apple’s business plans, also being locked into Square’s payment systems may not be the best choice for many merchants.

The payments and point of sale industry is another that’s being radically changed by mobile devices coupled with cloud computing. It’s not a time for incumbents to rest on their laurels.

The battle for big data

Customer information is now our biggest asset. Are you prepared to fight for it?

Information has always been a key part of doing business – having an intimate knowledge of customers and suppliers is one of the traits of a successful entrepreneur.

As Internet access becomes taken for granted and computer processing power becomes cheaper, the nature of how business data is used is changing.

Earlier this week the iStrategy digital marketing conference was held in Sydney. Much of the talk at the event was about how marketers can use the data being generated by the Web.

At the opening panel representatives from PwC, Google, Expedia and News Limited showed how Internet businesses are gathering data.

Nicholas Chu of Expedia went through the journey of a family to Disney Land, describing how they are integrating search and social tools into the experience of organising a holiday online and catching up with friends.

Lucinda Barlow of Google told the story of how a doting father’s baby photos were saved after he lost his phone, luckily it was all synched in the cloud with Google+ and Picasa services.

All this data is being collated, saved, mined and processed. Companies like Google and Expedia – not to mention Facebook or Apple – see this information as their businesses’ major asset.

One of the other panel members, Stuart Spiteri of News Limited, raised the problem with this when he asked if everybody in the room really understood the consequences of giving their data to intermediaries like Apple or Facebook.

For businesses this is a problem, we’ve become used to the free platforms given to us by Facebook and Google while the easy distribution systems like iTunes mean it’s easier to give Apple a 30% cut than sell products ourselves.

In the travel industry it means Expedia or any of the other dozens of travel planning sites like Tripadvisor or, again, Google know more about our customers and the patterns affecting our business than the local hotel, restaurant or tourist attraction does.

That easy booking service suddenly looks expensive when it becomes clear it could be offering different holiday or meal options to your customer whose likes and preferences it now intimately knows.

When the web first came along many of us, myself included, believed it would get rid of the middle man. We were wrong.

The web has affected the businesses of existing middlemen like department stores, newspapers or travel agents but in their place a whole new group including companies like Amazon, Google and Expedia have taken their place.

Whether these middlemen add more value than ones they replaced will be seen, but we can be certain the new breed are much better at collecting and analysing data about our customers.

One of the big battles for the next decade is going to be for customer data. Smaller businesses may find themselves marginalised as the big Internet companies fight to grab information about consumers.

It’s worthwhile treasuring what you know about your clients and considering exactly which of the online gatekeepers you’re sharing these vital assets with.