Category: Internet

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.

Finding the smart money

Can events like Sydney’s AngelEd and London’s City Meets Tech help those cities become global startup centres?

Around the world startup communities are working to connect with local investors, in Sydney and London two groups are showing how it is done.

“We’re looking at turning idle money into start money,” is the aim of Sydney AngelEd says one of its founders, Ian Gardner.

Fitting startup companies’ capital needs into the established criteria of investment managers is an ongoing problem that AngelEd’s founders want to resolve. “We see startups becoming an asset class,” says Gardiner.

AngelEd, to be held on November 7, aims to educate high wealth investors and asset managers on understand the risk, benefits and hype around angel investment, particularly in tech companies.

The global search for funds

Startups around the world are struggling to engage with investors – in London, the local tech community has set up City Meets Tech to introduce British investors to high growth companies.

London should have an advantage in this field given its leading role in the global finance industry, however the challenge for the tech community is to find financiers who are prepared to accept higher levels of risk than mainstream investments.

“The City is generally risk adverse and doesn’t understand tech and tech start-ups,” says the City Meets Tech website, “though really it’s about understanding the business and managing risk though unfortunately innovation requires at least some risk.”

Australia’s trillion dollar superannuation system should similarly give Sydney an opportunity that to become a global centre however it suffers from a similar, if not worse, conservative investment culture to London’s.

Turning Sydney into a global finance centre has been an objective successive state and Federal governments for twenty years but the sleepy, comfortable and risk averse culture of Australian fund managers offers little to attract foreign investors or companies.

Much of Australia’s is problem is the insular nature of local fund managers with all but a tiny part of the nation’s retirement savings being put into the top local stocks, listed property funds or domestic infrastructure projects that are notable for their lousy returns and extortionate management fees.

Breaking that mentality is going to be the key to both AngelEd and the Sydney’s success as a financial centre.’

Competing with the world

While London and Sydney are struggling with the challenges of encouraging investors into the high growth sectors, cities like Singapore and New York are developing investor communities that are attracting entrepreneurs to their cities.

Many governments dream of being the next Silicon Valley and while it isn’t likely anyone can recreate the circumstances that led to Northern California becoming the computer industry’s world centre , a vibrant and accessible capital market will be necessary for any place hoping to be a global cnetre.

For Sydney and London, the success of initiatives like AngelEd and City Meets Tech may be critical for both centres’ future in the global digital economy.

Microsoft’s devices and services strategy starts taking shape with the Surface tablet

Does the Microsoft Surface show the company is starting to execute Steve Ballmer’s device and services strategy?

Microsoft’s latest version of their Surface tablet computer is the company’s first attempt at executing Steve Ballmer’s device and services strategy. If the company succeeds, there are some interesting implications for the tablet computer market.

Currently Microsoft is on a worldwide PR campaign to promote their latest range of Surface tablet computers. Last week during the Sydney leg of their tour I had the opportunity for a hands on demonstration of the new devices with Jack Cowett of the product’s marketing team.

The Surface itself is an interesting device with some major upgrades and changes as Microsoft begins to understand the tablet market with the device having more memory, better processors and battery life – although the lack of a cellular version is going to hinder its adoption by the consumer and small business markets.

Devices and services

It’s in the device’s integration with Microsoft’s cloud and communication services where the long term vision, and real story behind the Surface lies.

Most obvious is the bundling of services with purchasers of a Microsoft Surface 2 or Surface Pro getting 200Gb of Sky Drive storage and a year’s free international calls included with the device.

It’s an early taste of how Microsoft can combine services and devices that leverage off their existing position in the marketplace.

While these incentives may not be enough to convince customers that the Windows systems are a better buy than Android or Apple devices, integrating these cloud services makes the computers more powerful devices.

Keyboards as blades

Equally interesting with the Surface, is Microsoft’s devices play with the range of Surface covers that the company is informally calling ‘blades’ – an unfortunate choice of name which will confuse conversations with many IT managers.

Blade covers for Microsoft surface tablets
Blade covers for Microsoft surface tablets

These covers dispense with the usual keyboard electronic layout with an underlying layout featuring a 1024 sensor pad that give the covers more potential than just being keyboards.

As part of the Microsoft marketing push to show this aspect off, the company has released a blade cover with a sound mixer layout and seeded the devices with various DJs under the banner of the Remix Project.

While the blade covers have applications as sound mixers and keyboards, the number and  flexible nature of the 1080 built in sensors will see their application in other areas.

The way businesses have used tablet computers has taken manufacturers by surprise as  Google’s Eric Schmidt told last week’s Gartner conference and Microsoft’s devices open up more industrial applications.

Already the medical industry is applying Windows based tablets as Microsoft are proud to show off.

Should third party developers be able to develop their own skins for Surface blade covers then Microsoft may have a killer industrial device that plugs into existing Windows based networks.

Added to Microsoft’s opportunity is the possibility of plugging Surface devices into the internet of everything giving business users direct access to the machines in their organisation.

Should Microsoft be able to capture a slice of these markets, it may well be a pointer for the company’s future in a post-PC world.

Regardless of how well Microsoft do with the internet of everything, the latest range of Surface tablets and accessories shows how the company is executing its strategy of becoming a devices and services company.

Valuing Twitter

How does Twitter compare to Facebook and Google when they were floated?

Now microblogging service Twitter has released documents ahead of a stock market float, it’s possible to start looking at the viability and stock market valuation of the company.

When Facebook’s float was first mooted in early 2011, we looked at how the social media service stacked up against Google a decade earlier. The question was ‘is Facebook worth $50 billion?’

The stockmarket answer was resounding ‘yes’ despite an initial fall that saw investors face a 50% loss in the early days of Facebook being a public company. Today the stock has a market valuation of $122 billion, with an eye popping price/earnings ratio of 122.

So how does Twitter stack up at the valuations being discussed? Quite well it appears when we put it against Google, Facebook and LinkedIn.

Company Google Facebook LinkedIn Twitter
Market Cap 288 123 27 13
P/E 25 288 901 29

For Twitter, the real challenge is making money from the service and their latest idea is marketing the service as an essential companion to watching TV.

The discussion over how Twitter makes money exposes another problem for the service in it has no obvious revenue stream which makes comparing the platform to Facebook or LinkedIn rather problematic.

Facebook has advertising while LinkedIn has premium subscriber services both of which are problematic.

Not having an obvious revenue model may not turn out to be a problem – as LinkedIn’s P/E shows – and Twitter’s founders are probably more likely than anyway to be the digital media industry’s David Sarnoff.

It may be Twitter makes its money from giving advertisers, marketers and others access to the massive stores of data the company is accumulating.

Whatever way it turns out, Twitter’s going to be the hot IPO news for the tech industry for the rest of the year. At current prices, the investors will be lining up to buy the stock.

Building tomorrow’s markets

As technology evolves, it gets harder to predict what customers will want in the future.

“If I’d asked my customers we’d have built a faster horse,” is a quotation often attributed, probably incorrectly, to Henry Ford.

The point of the quote is that asking today’s customers about tomorrow’s market is pretty pointless when new products change consumer behaviour.

Just as the farmer of 1906 had no inkling of how the motor car, truck and tractor would change their business, the cellphone user of 2006 had no idea of how the iPhone would change the way they used a phone and communicated with the world.

Which brings us to Nokia.

The Sami Consulting blog discusses how Nokia lost their lead in the cellphone business as the market migrated the Apple and later Android smartphones.

Nokia’s problem was they spoke to their customers about their existing mobile phone use rather than considered how the technology might evolve.

When the inventors of the touchscreen approached Nokia, the company carefully evaluated the technology, consulted their customers and decided it wouldn’t work for their products.

What does this story tell about foresight?  First, it shows that innovation creates futures that are fundamentally unpredictable. We do not have facts or data about things that do not exist yet.  When a mobile phone becomes an internet device with sensors, touch screens, and broadband access, it becomes a new thing.  If you ask your existing customers what they like, the answer will always be about incremental improvements.  When you ask about the future, the answer will always be about history.

In many ways Nokia were the beneficiaries of a transition effect, they took advantage of a brief period of technological change  and were caught flat footed when the technologies evolved further.

To be fair, it’s hard to see that change when you’re focused on incremental improvements.

The motor car turned out to define the Twentieth Century – even Henry Ford couldn’t have foreseen how the automobile would change society and the design of our communities.

Both the motor industry and smartphone industries are going through major change, particularly as the internet of everything sees the two technologies coming together.

One thing is for sure, how we use our phones and cars over the next fifty years will be very different to how we use them today.

Big Data needs big databases

Investors are making big bets on the databases that underpin Big Data

While the tech industry’s startup hype this week has been focused on the impending Twitter Initial Public Offering, a much more fascinating company quietly completed a major capital raising.

MongoDB provides an open-source, document database program and last week raised another $150 million from investors that values the company at $1.2 billion dollars.

Databases lie at the heart of Big Data and businesses need better computer programs to manage the overwhelming amount of information that’s pouring in every day.

As every business is unique, larger corporations find they spend huge amounts of money on their databases. The enterprise that buys an Oracle, IBM or SAP system usually spends tens, if not hundreds, of millions of dollars in adapting the system to work for them, often with less than spectacular results.

While implementing MongoDB or any other open source program doesn’t eliminate implementation costs, it is often easier to setup and maintain as most of the information about the system is shared and freely available rather than locked inside the vendor’s proprietary knowledgebases.

Probably most important of all, the data structures themselves are open so customers don’t find themselves locked into a relationship with one vendor because all their information is in a format that can only be read by one system.

Open source is where Big Data, social media and cloud computing intersect – without the data itself being open and accessible, most cloud computing and social media services will almost certainly fail.

So MongoDB and the other open source products are the quiet, back of house technologies that keep the internet as we know it ticking along.

Bloomberg Businessweek reports there’s some very serious investors in MongoDB.

The deal attracted new investors such as EMC Corp. (EMC:US) and Salesforce.com Inc. (CRM:US), along with previous backers Red Hat Inc. (RHT:US), Intel Corp. (INTC:US), New Enterprise Associates and Sequoia Capital, according to MongoDB.

Sequoia Capital are one of the longest lasting Silicon Valley venture capital firms whose greatest success was being one of the first investors in Apple Computers and New Enterprise Ventures have a similar pedigree with companies like 3Com, Juniper Networks and Vonage. Investment by industry leaders like Intel, Red Hat, Salesforce and EMC in the company also shows MongoDB isn’t the standard Silicon Valley Greater Fool play.

When there’s a gold rush, it’s those selling the shovels who make the big money and the investors in MongoDB and similar services are hoping they’ve found some of the modern day shovels.

That may well turn out to be the case and while the smart folk make more money from the technologies that drive social media and cloud computing services, the rest of us are distracted by the latest shiny thing.

On the internet, the Feds know what breed of dog you are

The downfall of Silk Road’s alleged founder is a lesson on how fragile our privacy and online security are

The arrest of alleged Silk Road founder Ross Ulbricht – also known as the Dread Pirate Roberts – has attracted plenty of media attention.

What’s particularly notable is the FBI is claiming Ulbricht made a basic mistake in posting to a website under his real name that gave his identity away.

If true, Ulbricht’s trivial mistake illustrates how easy it is for any determined investigator to find someone’s identity online from the trillion points of data we all create in the connected world.

Anyone who wants to be truly anonymous on the web has to work extremely hard to protect their identity. Most of us aren’t prepared to trade convenience for security, particularly given the massive effort required.

Even if we could protect our online habits, the use of credit cards, loyalty plans and even driving our cars still it almost impossible to escape the watch of a determined investigator.

In the early days of the web, it was said “on the internet, no-one knows you’re a dog.” Today the feds can figure out not only what breed of dog you are, but what your name is and your favourite brand of dog food.

The modern panopticon we live in is a very efficient machine and it’s difficult to hide from society’s gaze. It’s why we need to rethink privacy and information security.

Image of Presidio Modelo by Friman through Wikimedia.

Globalisation with Chinese Characteristics

What are the challenges facing Chinese businesses as they expand globally?

“eBay is a shark in ocean, Alibaba is a crocodile in the Yangtze” film maker Porter Erisman quotes the founder of Alibaba, Jack Ma, in comparing the two online trading sites.

In promoting his film Crocodile in the Yangtze, Porter spoke to Decoding the New Economy about the rise of the global Chinese internet giant.

A key part in Alibaba’s success is taking on eBay on it’s own turf, “if you’re David fighting Goliath you can’t play by the big guy’s rules,” Porter says.

This is exactly what the Chinese company did when eBay entered their market and today Alibaba and it’s subsidiary Taobao have sales exceeding eBay’s and Amazon’s.

“Back in about 2003 Jack Ma came to me and told me about a secret project to overtake eBay,” Porter says. “When we looked at them they looked like a Goliath, they’d never really been beaten in a market they’d entered first and they had a huge war chest with a $150 million committed to the China market.”

It turned out that eBay weren’t as powerful as they appeared, something other entrepreneurs have discovered when giants like Google have entered their markets.

The Chinese Leapfrog

Like many rapidly developing countries, China is leapfrogging various stages of development that Western economies went through with the retail industry and e-commerce being two examples.

“Some people say cellphones will leapfrog landlines, actually the same is due with entire systems,” says Porter. “In China coming from so many years of a command economy there wasn’t a very developed retail culture or even a consumer culture.”

“Taobao came along at a time when all of that was still in the early phases of development and the company basically leapfrogged that whole phase of building out shopfronts and building logistics.”

“E-commerce in China is revolutionary while in the US, or Australia, it is evolutionary.” Porter says.

Porter quotes Jack Ma as saying “e-commerce in the US would be a dessert, in China it is the main course.”

China’s Global Challenge

As companies like Lenovo computers, Hauwei telecommunications or Haier whitegoods have discovered, Chinese businesses face challenges when expanding overseas. Porter sees this as a matter of time and scale.

“Like Japan in the 1970s and 80s there’s a whole wave of companies that have started going global. China’s such a big market that there’s a lot of companies that get big and develop scale before going international.”

“I’d say the biggest challenge in the beginning is cultural,” states Porter. “China’s at a disadvantage because information and the media are so controlled that’s sometimes a rude awaking when a company goes global like a Hauwei and then faces a bunch of political issues it doesn’t understand.”

“One of the reasons I made the film,” Porter says. “I wanted entrepreneurs in China to see it and understand these are the issues Alibaba faced when they went global and hopefully you can learn from some of those successes and mistakes.”

Going to China

Porter’s advice to westerners going into China is to shut up, listen and learn, “don’t assume that just because things are done a certain way in the US or Australia that it’s superior.” The country’s culture and ways of doing business are different to those of North America, Europe or Australia.

“If you look at the way traffic moves in Shanghai it looks crazy. If you drove like that in Sydney it would be a disaster but there’s just different ways of through traffic, getting point A to B.”

“It’s better not to judge, but just step back.”

Regardless of our judgements, China’s move up the value chain means we will see more PRC founded companies going global.

Over the next decade we’re going to see the globalised economy start to take on some recognisably Chinese characteristics.