Paul Wallbank – Brilliant Communications

Category: Innovation

  • Android’s corporate wins

    Android’s corporate wins

    Telstra’s launch of the second iteration of their T-Hub device and the Commonwealth Bank’s Albert tablet Point of Sale device are notable in their choice of operating system.

    For the T-Hub, the first version was a bug plagued and slow proprietary system that which one of the reasons for the device’s market failure. Telstra’s second attempt runs on the Google Android system.

    The Commonwealth Bank didn’t make Telstra’s mistake with the Albert device, instead choosing  the open source system from the beginning.

    Choosing an open platform like Android makes it easier for the developers and company to support the device and develop new products. There’s also the advantage of thousands manufacturers supplying hardware that runs on Android.

    If we compare the costs of developing a proprietary system and sourcing hardware for it to run on, the choice of an open system is almost irresistible.

    For Microsoft, this adoption of Google Android by corporations is another blow to Windows’ dominance of the market, a few years ago all of these devices would have been running a version of Windows but Android is a cheaper, more flexible and better suited to most of the tasks required.

    It could be worse for Microsoft – Apple could be dominating this market. Apple though have had their own victory on consumer devices and increasingly companies have to cater for their customers and staff wanting an iPhone or iPad app.

    Like on smartphones, the battle is now between Android and Apple.

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  • On being a Luddite

    On being a Luddite

    “I’m a Luddite”, magazine editor James Tuckerman proclaimed as Master of Ceremonies for Microsoft’s Asia Pacific Bizspark Summit this week.

    James was referring to an article in Australian Anthill in the 1990s where he predicted businesses would never use the Internet for research.

    Being a Luddite isn’t a bad thing, James contends. In his view being skeptical about technology enables business owners to better evaluate technology as Luddites “think like a layman, don’t know the limits and think commercially”.

    None of this is true though – being a skeptic is not the same as being a Luddite.

    The original Luddites in the English Midlands weren’t anti-technology, they were opposed to the technology that would put them out of work.

    At the beginning of the 19th Century, mill workers were a highly skilled and extremely well paid trade but the new automated loom technology meant those skills were no longer needed.

    To protect their livelihoods, the loom workers started smashing the new machines and burning down factories. Eventually they were viciously suppressed by the British government with some being executed while others were transported to Australia.

    What drove the Luddites was the loss of their income and who is to say we would have behaved any differently if we were faced with being unemployed and destitute in the harsh conditions of 19th Century England.

    However we shouldn’t equate being skeptical about technology with being protecting one’s turf.

    Today’s Luddites are those businesses who don’t want to move with the times – those who have grown fat on easy credit or lazily clipping the tickets on state sanctioned monopolies.

    Some of those Luddites are going broke as consumers stop buying electrical goods or cars, while others lobby their friends in government to protect their privileged and profitable positions.

    In the early 1800s the Luddites eventually lost, we can only hope that when history repeats itself two hundred years later today’s Luddites haven’t damaged the economy too much.

    James Tuckerman isn’t a Luddite and that’s why he’s part of the future. I just wish he wouldn’t call himself one.

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  • Little disruptions

    Little disruptions

    Seasoned travellers learned long ago to treat the phone in their hotel room with caution as massive mark ups on call charges were a nice profit centre for most establishments.

    With the arrival of the mobile phone, that revenue stream started to shrink and now one hotel in Vancouver has decided to replace their room phones with iPhones.

    The Vancouver Opus hotel already supplies iPads in their rooms and the phones seem a natural extension to that, particularly given the chain has a “virtual concierge” app to guide guests.

    Increasingly it’s only the older hotel chains that rely on excessive charges for things like telephone calls and Internet access. Those establishments rely on the more senior business traveller who are locked into a 1970s way of travelling.

    When you stay at cheaper accommodation or newer boutique establishments, you find many of the expensive extras in the major chains are available cheaply or free. It’s a quandary of travel that a backpackers’ hostel will offer free Wi-Fi while the Sheraton up the road will charge $60 for an often inferior service.

    The opportunity for the Sheratons, or the Hiltons, or the Four Seasons to charge those sort of rates is dying at the same rate their older clientele is retiring. Its a dead model.

    Fortunately for those hotel chains, slamming guests with fat phone charges was just icing on a very rich cake, the loss of those revenues over the last two decades has been unfortunate but not fatal.

    Other businesses though might not be so lucky – if your business relies on big, unreasonable markups then right now you are in a sector very ripe for disruption.

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  • How much did Vista really cost Microsoft?

    How much did Vista really cost Microsoft?

    Microsoft Vista was the company’s despised stepchild – released way past schedule, clunky, slow and disdained so much by the market that PC manufacturers started offering “downgrades” to Windows XP to attract customers.

    Despite the embarrassment, Microsoft retained its position as the world’s leading software company and does so today. But Vista certainly did hurt Microsoft and today’s marketplace shows the deep, long term effects of that damage.

    Research website Asymco earlier this week looked at the ratio of Windows PCs sold to the sales of Apple Macs over the last 30 years. The ratio peaked at 56 to 1 in 2004.

    Today that ratio is 18 and when phone and tablet sales are added in, the ratio is approaching 1:1. Apple has caught up.

    It’s no accident 2004 is the peak of the Windows-Apple ratio. In 2004 Windows XP had matured after three years on the market, the older computers running Windows 98 or ME (another hated operating system) were being retired and a new version of Windows – codenamed Longhorn – taking advantage of newer technologies and with improved security was due to be released.

    On August 27, 2004 things started to change with Microsoft’s announcement Longhorn would be delayed two years. This effectively broke the product roadmap that underpinned the business models of Microsoft and their partners.

    To make matters worse, Apple were back in the game with their OSX operating system well established and a steady stream of well designed new products coming onto the market.

    For consumers and businesses one of the advantages Windows systems had over Apple was the cost difference. The “Apple Tax” started to be eroded by the company’s move to Intel CPUs which delivered economies of scale coupled an aggressive program of tying up the supply chain with key manufacturers.

    Then Longhorn – now known as Microsoft Vista – was released.

    Despite the cheerleading of the Microsoft friendly parts of the technology media, consumers weren’t fooled. The product was slow and buggy with a new interface that confused users. Making matters worse was Microsoft’s ongoing obsession with multiple versions offering different features, something mocked by Steve Jobs,  which further confused the marketplace.

    Vista languished, customers decided to stick with Windows XP or to look at the faster and better designed Apple computers, and Microsoft’s market share started to slowly erode.

    By the time Windows 7 was released Apple had clawed back their market position, launched the iPhone and caught the shift from personal computers to smartphones.

    Probably the biggest embarrassment of all to Microsoft was the launch of the iPad, the market had been gagging for good tablet computer since the late 1990s and Microsoft’s partners had failed to deliver, partly because Windows XP, Vista and 7 didn’t perform as well as Apple’s iOS on the tablet form factor.

    Microsoft’s completely blowing a decade’s lead in the tablet market is almost certainly due to the misguided priorities and feature creep that dogged Vista’s development. This is now costing the company dearly.

    Asymco’s conclusion of Microsoft’s new market position is stunning and accurate.

    The consequences are dire for Microsoft. The wiping out of any platform advantage around Windows will render it vulnerable to direct competition. This is not something it had to worry about before. Windows will have to compete not only for users, but for developer talent, investment by enterprises and the implicit goodwill it has had for more than a decade.

    It will, most importantly, have a psychological effect. Realizing that Windows is not a hegemony will unleash market forces that nobody can predict.

    Vista’s cost to Microsoft was great, it meant the company missed the smartphone surge, the rise of tablets and – possibly most dangerous of all to Microsoft – the move to cloud computing.

    A lot hangs on Microsoft’s next operating system, Windows 8. Another Vista could kill the company.

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  • Ranking managers

    Ranking managers

    Vanity Fair’s analysis of Microsoft’s lost decade focuses on an unlikely culprit – the management tool of stack ranking.

    Stack ranking, or “forced distribution”, is the practice of listing staff members in order of effectiveness or placing them on a bell curve where those in the middle are satisfactory and those at the right hand of the graph are exceptional.

    Those on the left of the curve or the bottom of the list are deemed to be underperformers and risk losing their bonuses or even their jobs should the company be shedding staff.

    Like all business tools, stack ranking can be useful. One manager of a North American multinational who encountered this when working with an Indian outsourcer described how it was used.

    “A senior manager told me how he applied it in his group. Of 300 people, everybody was given a ranking and were told that ranking and given a chance to put their case if they thought it was unfair.
    Then the bottom 5% were culled. Tough but fair.”
    So at the Indian outsourcer it was applied to large groups and the bottom tier were given the opportunity to put their case. There was some transparency and at least some fairness in the process.
    Used poorly though, it can backfire, “using it for groups of ten is stupid and lazy” said that manager who later saw it introduced at his own corporation with catastrophic results.

    The real problem at companies misusing tools like stank ranking is too much management.

    Like the old saw of “too many cooks spoil the broth”, too many managers create mischief. To justify and protect their positions they build little empires and make work for themselves.

    Give empire building middle managers a tool like “stack ranking ” and you have a problem where office politics and patronage become more important than technical skill or performance which is exactly what the Vanity Fair article describes at Microsoft.

    Ranking employees in a mindless way is symptom of a bigger problem in an organisation. In Microsoft’s case, the problem is too many managers.

    The solution to that problem is simple.

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