Decoding the new economy

Commoditising cafe Wi-Fi

Over the past decade the idea of offering Wi-Fi internet connections to customers has become standard in the hospitality industry, today it’s pretty well a commodity.

Not so long ago it was difficult to find a cafe that offered Wi-Fi and many of those that did either charged for it or were part of a provider’s networks that you had to be a member of.

Today, Wi-Fi has become pretty standard in cafes and places like airport terminals although interestingly the hotel industry has been slow to adopt it.

In the hotel industry a perverse rule of thumb seems to apply that the more expensive the property is, the pricier internet access will be as backpackers hostels invariable have free Wi-Fi while six star hotels charge anything up toe $30 a day for a connection.

While the hotel industry still has to be dragged into the 21st Century on this front, cafes seem to have reached a point where having Wi-Fi is no longer a commercial advantage but not having free internet is now a distinct disadvantage.

This was the point made by Nicholas Carr in his 2003 essay IT Doesn’t Matter where he suggested that computers, and other ‘infrastructural technologies’, don’t offer a competitive advantage once they are widely adopted.

For a brief period, as they are being built into the infrastructure of commerce, these “infrastructural technologies,” as I call them, open opportunities for forward-looking companies to gain strong competitive advantages. But as their availability increases and their cost decreases – as they become ubiquitous – they become commodity inputs. From a strategic standpoint, they become invisible; they no longer matter.

Carr’s proposition also implies that businesses who don’t adopt these technologies once they’ve become widespread risk being irrelevant and marginalised.

For cafes, this means that customers will be ignoring them unless they do offer Wi-Fi and it will be another cost of doing business for the proprietors of coffee shops.

Which begs the question of how do cafes differentiate themselves.

Perhaps the answer lies in the dog bowl shown in the photo, making a venue pet, or child, friendly may be one way to attract customers.

One thing’s for sure, just having good coffee and tea might not be enough to cut it in the future.

Measuring an industrial hub’s success

What should measure the success of technology incubators and hubs? London’s Google Campus gives us some clues.What should measure the success of technology incubators and hubs?

A short article appeared on London’s City AM website yesterday discussing the successes of Google’s Campus and the government’s Tech City initiative.

What jumped out of that story is the quote from Benjamin Southworth, the former deputy chief of the Tech City Investment Organistion, that London’s first tech IPO is “probably 18 to 24 months away”

Southworth’s comments raise the question of how do you measure the success of initiatives like Tech City, does a stockmarket float indicate success of business or tech cluster?

The debacle of Australia’s Freelancer float which saw the shares soar over 400% on the first day of trading certainly doesn’t indicate anything promising about the startup scene down under apart from the opportunities for those well connected with insiders on Australian Security Exchange traded stocks.

In London’s case, Google’s Campus gives a far better indicator of what tech hubs and industrial clusters can add to an economy – £34m raised from investors in the 12 months to October 2013, 576 jobs created and 22,000 members of its coworking space.

Google’s statistics raise an interesting point about the different objectives for the stakeholders in incubators and hubs; entrepreneurs want money or glory, investors want returns, corporate backers want intellectual property or marketing kudos, governments want jobs and politicians want photo opportunities with happy constituents.

These different objectives means there are different measures for success and one group’s success might mean bitter disappointment for some of the others.

What the various partners define as success is something anyone involved in an incubator or hub should consider before becoming involved, in that respect it’s like a business or a marriage.

Becoming an all mobile executive

Salesforce CEO Marc Benioff says he’s gone completely mobile, will other executives follow?

“I don’t want to use a laptop again,” Marc Benioff told the closing Dreamforce 2013 customer Q&A. “The desktop remains the biggest security threat to corporations — it’s a nightmare. The PC and laptop we never designed to be connected to a network.”

Benioff was walking his talk in promoting his company’s Salesforce One mobile platform, claiming at the Dreamforce conference opening that he hadn’t used a PC or laptop or nine months as he’s moved over to tablet and smartphone apps.

That push to move the company and its customers onto mobile services was emphasised by Peter Coffee, Salesforce’s Vice President for Strategic Research.

“Your mobile device is no longer an accessory,” says Coffee. “It’s the first thing you reach for in the morning and it’s the last thing you touch at night.”

Salesforce’s push into into the post-PC market follows Google and Apple’s lead, much to the distress of Microsoft and its partners.

“We saw the phenomenal engineering work of Scott Forstall at Apple and the visionary work of the late, great Steve Jobs,” Benioff told his cutomers at the final Dreamforce Q&A. “When we saw the iPhone we sat up and thought ‘wow, what are we going to do about this?'”

“This is a paradigm shift, we’re moving from the desktop world to the mobile phone world and then of course we saw the iPad world emerge and that amplified it.”

Salesforce’s impressions were shared by much of the business community as senior executives, board members and company founders quickly embraced the first version of the iPad, which on its own triggered the Bring Your Own Device (BYOD) trend in enterprise computing.

In a mobile age, Benioff now sees three key priorities for Salesforce; “we want to be feed first, we want to be mobile first and we want to be social first.”

Regardless of Benioff’s vision, not everyone will go mobile which is something that Peter Coffee acknowledges.

“The laptop will occasionally be used to author creative work like a presentation or to deal with something that needs a large screen like pipeline analysis,” says Coffee.

Marc Benioff though is adamant. “Honestly I don’t ever want to use a laptop again,” he told his audience.

It will be interesting to see how many business leaders follow him in abandoning their desktops and portable computers as the post-PC era of computing develops.

Will the internet’s insecurities damage economic growth?

Online security problems are chronic and costing our economies billions claim researchers.

“No country is cyber-ready” warns Melissa Hathaway, author the Cyber-Readiness Report.

Hathaway’s warning is that the economic benefits of the internet are being lost to the various vulnerabilities in our information infrastructure.

Dutch research company TNO claims that the Netherlands lost up to 2% of their GDP to cybercrime in 2010 and Hathaway claims similar losses are being incurred in other developed countries.

Supporting Hathaway’s views at a function in Sydney today, Cisco System’s Senior Vice President and Chief Security Officer, John Stewart, made a frightening observation about corporate networks.

“Every single customer we have checked with, and these are the Fortune 2000, has high threat malware operating in their environment – every single one of them.”

So the bad guys are in our networks and causing real economic damage. The question for businesses and governments is how do we manage this threat and mitigate any losses?

On our more intimate level, how do we manage our own systems and online behaviour to limit our personal or business losses?

Hathaway makes the point that the internet was never intended to do the job we now expect it to do and as consequence security was never built into the net’s design.

Today, we rely upon the internet regardless of its lack of inbuilt security. With everyone from governments through to organised crime and petty scammers wanting to peek at our data, we have to start taking security far more seriously.

IT becomes the plumbing

As the internet of everything and cloud computing takes over, IT is becoming just like the plumbing. This is a good thing.

One of the things that jumped out of last week’s smart city tour in Barcelona is that Nicholas Carr’s IT Doesn’t Matter is coming true — IT is now the plumbing.

That’s not to depreciate IT, it means the technology is now becoming so embedded in society and business that people no longer notice.

Like roads, electricity and water people assume it will be available but don’t notice the massive effort or investment required to make sure these services work.

With cloud computing, pervasive internet and connected devices, most business never need to see an IT worker.

For telco executives, IT managers and tech support people this is a blow to their egos as they always wanted their industries to be more than utilities.

In one way being a utility legitimises IT as it makes the industry more important than just a bunch of geeks playing with computers.

That also means that things have to work, ‘best effort’ services no longer cut it when you’re a utility and things have to work 99.99% of the time. Just like in plumbing.

Becoming the plumbing could be the best thing that happened to the IT industry.

For God’s sake get a website

Setting up a website is one of the easiest, and most important, things a new business should do.

The annual MYOB Business Monitor was released earlier this week with the depressing news that half of the Australian businesses surveyed didn’t have a basic website.

MYOB’s survey reinforced the finding of PayPal’s Digital Literacy Report a week earlier that found only 34% of Australian small businesses list their contact details online.

This is madness – over a decade ago consumers moved online and now with the mobile internet any business without a website is almost invisible in the marketplace.

What is really dispiriting about these reports is that listing with the various online services and setting up a website is not hard, at worst it should take half a day for a simple site and to complete Google Places, Facebook and Yellow Pages listings.

The easiest way to create a website is to setup a free Blogger page, it takes about twenty minutes and is more than adequate if you just need a site that lists your services, location, contact details and phone number.

While Blogger is good for the basics, it does run the risk of locking a growing business into Google’s walled garden which is why WordPress is the better alternative for more advanced companies or proprietors.

Most readers of this site already know how important an online presence is for any organisation, but it’s almost certain that everyone knows a business owner who doesn’t have a website.

If one of those business owners is someone close to you, then the best thing you can do for them is to sit down with them and setup their basic online presence.

Unless you think it’s time they went out of business. In which case you won’t have to wait long.

Intel’s challenge to find a new message and market

Can Intel adapt to the post PC marketplace where the old Wintel dominance no longer matters

Twenty years ago people cared about the specifications of their computers and chip maker Intel led the industry with its marketing of 486, Pentiums, Pentium Duos and Pentium IIs.

As we come to the end of the PC era, the consumerisation of technology and the rise of cloud computing mean customers no longer care about what’s inside their systems and Intel is struggling to find a new message.

Over the last few months Intel have been showing off their latest range of Central Processing Units (CPUs) to enterprise and small to medium business (SMB) groups. Last week the company hosted an SMB event in Sydney that illustrated how Intel is struggling to cut through the market.

Speaking at the event was Steph Hinds – an evangelist for cloud computing – who told the story of how her Growthwise accounting practice was flooding out during storms.

Because her systems were on the cloud Steph and her staff were able to work from home and local cafes while the landlord fixed her offices. Had Growthwise been using a server based system the business would have been crippled while her IT people implemented a disaster recovery plan.

Steph’s story in itself illustrated the Clean, Well Lighted Place argument for cloud computing and also showed how Intel is struggling to sell its PC and server upgrade cycle message in an era where that business model is dead.

This didn’t stop some of the other speakers at the small business event trying to sell the idea that upgrading computer systems and retaining an IT support company were essential to small business success but it’s a message that was valid a decade ago.

For Intel the challenge is to find a new message – it may well be that the company’s future lies in supplying the powerful CPUs that run data centres, or maybe the low energy and maintenance chips required to control the billions of intelligent devices that will run the internet of everything.

The company’s launch of their Galileo board – a tiny computer designed to compete in the intelligent devices market with the likes of the Raspberry Pi – is a step in the latter direction and shows Intel is exploring the possibilities.

Wherever Intel’s future lies, it doesn’t lie in trying to sell a business model that is quickly going the way of the Brontosaurus.

During most of the PC era, it was the Wintel partnership that dominated the computer industry, now Microsoft have realised this fundamental market change and started their journey to become a devices and services company.

The challenge now lies with Intel to decide where their journey will take them in a post PC world.

Category: Internet

Commoditising cafe Wi-Fi

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