On the May 2013 Nightlife radio show Tony Delroy and Paul Wallbank discuss crowdsourcing and crowdfunding
Paul Wallbank joins Tony Delroy on ABC Nightife across Australia to discuss how technology affects your business and life. For May 2013 we’ll be looking at crowdsourcing and crowdfunding.
We’d love to hear your views so join the conversation with your on-air questions, ideas or comments; phone in on the night on 1300 800 222 within Australia or +61 2 8333 1000 from outside Australia.
You can SMS Nightlife’s talkback on 19922702, or through twitter to @paulwallbank using the #abcnightlife hashtag or visit the Nightlife Facebook page.
LogMeIn CEO Michael Simon sees the future of his business in the internet of machines
It seems a far jump from running a gaming platform to a remote access software company with a focus on the internet of machines, but that’s the journey remote access company LogMeIn and its CEO Michael Simon has travelled.
“Anything that could be connected will be connected in the next decade.” Micheal told me in Sydney last week and it’s where he sees the next step for the company he has led since its founding in 2003.
LogMeIn grew out of a team that formerly worked for uproar.com, an online gaming company sold to a division of Vivendi Universal for $140 million in 2001.
Two years after the sale Michael, who had been CEO of Uproar, and a team of ten engineers who formerly worked for the company thought they could solve the complexities of accessing computers remotely.
For geeks and big business, accessing your computer across the internet in 2003 wasn’t much a problem however it involved configuring software, punching holes in firewalls and configuring routers.
The LogMeIn team wanted to find a way to make this technology cheap and easy for small businesses and homes to use.
A decade later they employ 650 staff, half of whom are engineers, and have twenty million users of their product.
Building the freemium model
The vast majority of those users are using LogMeIn’s free services – Simon estimates that over 95% of users are using the free version.
In this, LogMeIn is one of the leading examples of the freemium business model – offering a free version of a software product and premium paid for edition with more advanced features.
One leader of the freemium movement was the Zone Alarm firewall, a product which earned its stripes in the early 2000s at the peak of the Windows malware epidemic.
Today one of Zone Alarm’s veterans, Irfan Salim, sits on the LogMeIn board along with two former executives of Symantec, the company whose PC Anywhere and Norton Internet Security products competed with both Zone Alarm and LogMeIn.
While LogMeIn has done well over the last ten years, the market today is very different to that of a decade ago with cloud computing technologies taking much of the need for remote access software
Mike Simon sees these changes as an opportunity with the computer industry having gone through three phases – the PC centric era, the mobile wave and now we’re entering the internet of things.
To cater for the mobile wave LogMeIn has released Cubby, a cloud based storage system that competes with Dropbox, Google Drive and Microsoft’s Skydrive, but Simon has his eye on the next major shift.
Controlling the internet of machines
The internet of things is a crowded market, but Simon believes companies like LogMeIn have an advantage over the telco and networking vendors as businesses with freemium and startup cultures look for ‘pennies per year’ rather than the ‘dollars per device’ larger corporation hope to make.
It’s a big brave call, but with the market promises to be huge – General Electric claimed last year nearly half the global economy or $32.3 trillion in global output can benefit from the Industrial Internet.
That’s a pretty big ticket to clip.
Whether Michael Simon and LogMeIn can achieve their vision of being integral part of the Internet of things remains to be seen, but so far they do have success on their side.
While the logistics of the operation are impressive with hundreds of accomplices across twenty countries, the real moral from the story comes from how the gang targeted outsourced credit card processing companies to adjust cash limits.
Again we see the risks of throwing your problems over the fence, a system is only as reliable or secure as the weakest link and, regardless of how tight commercial contracts are, outsourced services can’t be treated as someone else’s concern.
No doubt banks around the world will be having a close look at their systems and how they can trust other organisations’ outsourced operations.
During the interview Bill Gates made an interesting assertion about Apple’s iPad, ““A lot of those users are frustrated, they can’t type, they can’t create documents, they don’t have Office there.”
Bill’s undoubtedly right, some iPad users are frustrated by the device’s limitations. However for every irritated iPad user there are a dozen baffled by the lack of a Start button on Windows 8.
The reality distortion field though is strong, “Windows 8 really is revolutionary,” says Bill. “It takes the benefits of the tablet and the benefits of the PC and it’s able to support both of those.”
The Microsoft founder is enthusiastic about the company’s Windows tablet, “you have the portability of the tablet but the richness, in terms of the keyboard and Microsoft Office, of the PC.”
It’s notable Gates mentioned Microsoft Office, particularly given the question was about the cloud. It’s clear one of Microsoft’s priorities is to maintain their strength with productivity applications and move with their customers onto the cloud.
The problem though for Microsoft is that Apple’s iOS and Google’s Android are dominating the cloud focused operating systems, leaving Windows behind.
Sitting in a reality distortion field is fine when things are going well and you dominate your world, but Microsoft – despite still being insanely profitable – no longer dominates the markets that made it into one of the world’s leading companies.
The challenge for Bill Gates and Microsoft’s management is adapting to those changes, projecting your own frustrations onto the users of a competitor’s product, isn’t a recipe for success.
Now the US Congress looks set to pass a law which would make online sellers responsible for buyers’ state sales tax obligations.
The next stage will be treaties between countries on the collection of sales or value added taxes.
For many retailers though this won’t be particularly good news as price differentials are more than just the 10% GST or VAT and online shopping sites compete as much on product range and customers service.
What the US Congress’ bill really shows is how online retailing is maturing – rather than thinking of companies like Amazon, eBay or niche operators like Shoes Of Prey as being disrupters they are the new normal.
Customer subscription models are changing many industries which opens up opportunities for smart businesses
One of the biggest changes in business is the move to subscription based services rather than selling one-off, lump sum products. This is affecting industries ranging from the motor industry to software.
We’re pretty passionate in our belief that every company will be a subscription business in the next five, 10, 20 years. That’s certainly what we’re seeing with digital companies, whether they are technology firms (software, hardware), media and publishing firms, or telecom companies. The ideas of content and access are starting to blend together and we are seeing more and more commerce companies dip their feet as well. So we’re really see this as an across the board phenomenon.
Probably the industry most focused on the subscription model right now are newspapers – subscribers have always been an important revenue stream for the print media and the loss of their advertising rivers of gold means they are looking at ways to get more money from readers.
As Tien Zhou points out, businesses moving to subscription services is an across the board phenomenon.
Yesterday I mentioned the Google Maps connected treadmill, that is a subscription model where the treadmill seller gets money from the initial purchase, but also a revenue stream from the services attached to it.
Getting customers onto lifetime subscriptions has been one of Microsoft’s aims for the past decade as the company realised that software users, particularly those using Microsoft Office, hung onto their CDs for years and increasingly decades.
Perversely it took Google and Apple to show Microsoft how to wean customers onto subscription services.
That Microsoft Office is a good example of the evolution of subscription software, or Software-as-a-Service (SaaS), isn’t an accident. The enterprise computing sector is currently the most profoundly affected as companies like Google and Salesforce threaten high cost incumbents.
At the same time agricultural and mining equipment suppliers are introducing big data services for their customers where the information gathered by the sensors built into modern tractors and bulldozers are providing valuable intelligence about the crop and ore being gathered.
The subscription business model is nothing new, King Camp Gillette perfected the strategy with the safety razor at the beginning of the Twentieth Century. The razors were cheap but the blades were where the money was.
Microsoft and the rest of the software industry tried to introduce subscriptions in the late 1990s with Software as a Service, but failed because the internet wasn’t mature enough to support the model. Today it is.
Like many things in today’s economy, the subscription model is going to change a lot of markets. It’s a great opportunity for disruptive businesses.
How the V8 Supercar races use the internet and networks shows why businesses need reliable communications and the way organisations are using cloud computing.
How the V8 Supercar races use the internet and networks shows why businesses need reliable communications and the way organisations are using cloud computing.
My relationship with sports cars is similar to horses – I have a vague idea of which end water goes in and where not to stand.
So Microsoft’s invite to the Launceston V8 Supercars to showcase their Office 365 cloud service as the race’s official sponsor wasn’t expected but it was a good opportunity to see how a sports organisation uses modern technology.
Riding the cloud
At the opening media conference V8 Supercars CEO David Malone and Finance Director Peter Trimble described the IT problems the organisation had in the early days.
To properly meet their needs V8 Supercars would have needed a bank of servers, cumbersome remote access software and a full time team of several IT staff for their scattered workforce and constantly changing locations.
With cloud services, they eliminated many IT costs while simplifying their systems.
That staff can now access documents regardless of location is a very good case study of where the cloud works well and understandable that Microsoft wanted to show off what their services can do.
Networking the cars
When challenged about the point of car racing, enthusiasts cite how the sport is a test bed for the motor industry.
The motor industry is one sector leading the internet of machines with one car manufacturing executive recently describing the modern motor vehicle as being a “computer platforms” on wheels.
Pit crews monitoring in car systems
Eventually we’ll see our cars connected to the net and reporting everything from the engine’s servicing needs to the driver’s musical tastes.
That’s reality in today’s high performance racing, both the drivers and the cars are in constant contact with the crews as sensors report everything from engine performance to the foot pressure the driver is putting on the accelerator pedal.
As continuous data feeds from the cars is essential to the teams the event has its own trackside network with receivers located along the course that are used for both vehicle telemetry and the video feeds from both car mounted and fixed cameras.
Owning the rights
In what’s becoming the future of sports broadcasting, the V8 Supercars organisers run their own camera crews and provide the feed to their broadcast partners and media outlets.
This allows them to control all the rights across TV, cable and online channels.
Having full control of the pictures also gives the V8 Supercars more revenue through signage and sponsorship by guaranteeing advertising placements which wouldn’t be available if they didn’t manage the feed.
Connectivity matters
Spaghetti Junction as the various feeds come together
Getting the images out to the media and broadcast partners along with delivering the in car data to the racing teams is major challenge for organisers. The communications centres resemble a giant bowl of cable spaghetti as various groups plug into the network.
It’s no coincidence that part of the deals the V8 Supercar management strike with track owners and governments includes providing fiber and microwave links to the venue.
That single factor illustrates how vital communications links are to a modern sporting event.
Another important factor is that everything will be packed up and taken away. Following Launceston, the entire show is packed up and moved onto Auckland, New Zealand. This in itself is a major logistic challenge which would fail without good connectivity and reliable systems.
the fleet of trucks ready to move on
It’s easy to dismiss the V8 Supercars as a bunch of testosterone driven rev-heads, but the challenges in staging these complex events fifteen times a year shouldn’t be underestimated.
We also shouldn’t underestimate how important communication links are to any business. It’s why debates about the need for high speed internet services are last century’s discussion.
