Mar 312015
Salesforce Analytics Cloud

Today social media analytics startup Vintank announced their acquisition by the W2O Group, a network of data driven marketing and communications firms.

W2O’s acquisition shows how data analytics and visualisation is increasingly an important tool for management in a world where businesses are drowning in information.

Last year Vintank co-founder Paul Mabray spoke to Decoding the New Economy about the company and how social media data is a valuable tool for the wine industry.

“The wine industry is last industry to have been changed by internet,” Mabray says. One reason for this in his view is how that the sector hasn’t had a disruptive startup like Yelp or Open Table to drive change and upset incumbents.

Despite the wine industry’s reluctance to adopt digital technologies, social media and the disruption of established media channels is having a profound effect on the sector’s marketing and sales.

“In the old days there was a playbook originating with Robert Mondavi in the 1970s which is create amazing wine, you get amazing reviews and you go find wholesalers who bring this wine to the market,” Mabray told Decoding the New Economy during a visit to Australia in 2014.

Dealing with global proliferation

Mabray also flags the massive growth in the wine industry as being one of Vintank’s driving forces, “the global proliferation of brands the increase of awareness and consumption patterns where people like wine more, those playbooks didn’t work in 2009 when the crisis started.”

A proliferation of new competitors coupled with disrupted communications channels isn’t unique to the wine industry, the attraction Vintank has to the w2O Group’s president Bob Pearson; “VinTank provides us with a way to create agile audience engines for a brand, where we can learn what an audience is doing online, understand what content they like.”

For many businesses social media is a both an opportunity and a mystery; while customers are telling the world what they’re buying through services like Facebook and Twitter capturing, managing and using that information remains a challenge.

Panning for digital gold

As Robyn Lewis of Visit Vineyards whose database holds details on over 30,000 Australian wineries and associated tourism business says, “the gold is in the data.”

Panning for that gold is Emma LoRusso of Sydney social analytics startup Digivizer who told Decoding The New Economy two years ago “the truth is in data”. Services like Vintank, Salesforce’s Radian6, Klout and startups like Digivizer attempt to add context to that data.

Another aspect of Vintank’s technology is the ‘geofencing’ of information, creating a virtual geographic perimeter so only data relevant in that region is flagged. As well as reducing noise, this increases the value to local wineries and tourist operations.

In some respects the geofencing is possibly the most powerful part of services like Vintank as it allows regional operators to focus on visitors and customers to their districts rather than worrying about national or global activity.

W2O’s acquisition gives Vintank access to a broader market outside the wine industry as well as deeper data analytics capabilities. For W20 the purchase adds to the social media tools the company can offer.

Data driven business

The Vintank deal with W2O shows how the marketing and advertising industries are increasingly becoming data driven. For other business functions this is true as well.

For businesses of all types, understanding the data pouring into their companies is going to be the difference between success and failure in an increasingly digital world. Providing those tools to do so is one of the great opportunities in today’s economy.

Feb 252015

There’s a fundamental problem with smart devices warns Kim Zetter and Andy Greenberg in Wired magazine.

In Why Firmware Is So Vulnerable to Hacking, and What Can Be Done About It, Zetter and Green look at the problem with the embedded software that is shipped with every computerised device from Personal Computers to smart sensors.

The problem with firmware is that it’s difficult to check it’s not been changed, awkward to upgrade and complex to find, the Wired piece mentions how even the batteries in Apple laptops have vulnerable software embedded into their chips.

As the smart devices become common in our homes, cars and workplaces suppliers will have to do more to secure their software.

Jan 092015

Today’s links are somewhat more upbeat; starting with Apple extending its lead over Android in smartphone activations, a teenager’s view on social media and Google’s declining market share.

Apple takes the lead in smartphone activations

In their regular survey of mobile phone activations, research company Kantor found that Apple have taken the lead back from Android phones.  The Kantar Worldpanel ComTech global consumer panel monitors the brands of phones being connected through selected apps to give them an idea of what’s going on in the smartphone marketplace.

While not an absolute numbers, and one that was inflated by the new range of Apple iPhones released late in the year, it’s clear Apple are by no means out for the count when it comes to the smartphone market.

What teenagers think of social media

I’m not sure how accurate or scientific this story is, but it illustrates how complex the social media industry is and how dangerous assumptions are with what age groups use new media channels for.

How boring can driverless cars be?

Another story points out driverless cars are actually quite boring to ride in. Maybe we’ll all catch the train insead.

Google loses market share

Since signing an agreement with Firefox to be the default search engine provider, Yahoo! sees its share of the marketplace spike upwards. Should Google be worried?

So you thought a tech job was safe?

Document service Evernote cuts jobs proving that even a job in the hottest parts of the tech sector isn’t safe. Notable in this story is the concentration of employment in two locations which shows Silicon Valley isn’t keen on remote working at all.

Dec 092014

“Productivity is our life blood,” says John Case, Microsoft’s Corporate VP for the company’s Office product line. “It’s part of the company that we say is our mission.”

Case was speaking at a media briefing ahead of Microsoft’s launch of their Australian Cloud Solution Provider program for resellers with the company making the case for integrators and IT support businesses to sell the Microsoft Cloud Services.

For Microsoft this is part of the evolution from the 1990s “PC on every desk” strategy to a mobile and cloud first service.

This shift doesn’t come without pain for Microsoft and it’s resellers, the cloud is a fiendishly competitive space with Amazon regularly dropping prices and Google steadily eating into the productivity suite market.

Making matters worse for Microsoft are that Google are moving into their hosted server space with the announcement that Google’s Cloud Platform now supports Microsoft Server.

Case though is sanguine though about the threats from Google, particularly the increased commissions being paid to resellers which will only put more pressure on Microsoft as resellers consider the options.

Probably the toughest part of the shift for Microsoft are the reduced margins – although for resellers the change is far more wrenching as the profits from cloud services are far lower than installing servers.

For Microsoft the key to success in the cloud depends upon the confidence of customers; security and trust are going to make and break all cloud services, something that Case acknowledges.

Ultimately though Case sees Microsoft’s network of resellers and partners as being the company’s best defense against Google and the shift to the cloud. Whether that network is strong enough to overcome a structural shift in the market place remains to be seen.

Productivity may be the lifeblood of Microsoft’s business but as margins erode, it may be that that market is not longer lucrative enough to sustain a $400 billion dollar business. Microsoft’s fight for survival is on in the cloud.

Nov 112014
Microsoft CEO Satya Nadella

The decision of Microsoft to offer its Office tablet apps for free last week has had the desired effect with them rocketing to the top of the charts as people enthusiastically grab them.

Microsoft’s decision pretty well locks its resellers into the loss leading strategy the company flagged last week in China, with the tablet apps available for free its hard for retailers and integrators to be charging for the desktop version.

That loss leader strategy has been further laid out by CEO Satya Nadella at a function in London yesterday where he described their cloud and mobile first strategy, something he also discussed at a briefing to ‘a small gathering of journalists’ last week.

Nadella’s vision isn’t really anything new; it differs from Ballmer’s ‘devices and services’ strategy but the thrust of the business was always going to be on cloud services and the company’s Azure services regardless of any conceits around tablets or professional offerings.

Of the three key areas Nadella identifies — Windows, Office 365, and Azure — two of them are problematic; the Office 365 for reasons already mentioned and the Windows product line.

The ‘Windows everywhere’ strategy, which also happens one of Ballmer’s earlier initiatives, is doomed as the operating system is not suitable for smartphones or lightweight internet of things devices.

Even if Windows was successful on smartphones or could be successfully ported to low powered smart devices, the margins are tiny compared to the traditional desktop market that was so profitable for Microsoft in the past.

All of which brings Microsoft back to Azure; it’s clear the cloud service is the future of the company but the margins are dire except for some relatively niche areas like collaboration software.

Mantras about ‘productivity’ count for nothing as every software and cloud computing company cater for the B2B market is delivering a service that claims to improve customers’ productivity. That Office is declining as a profit centre only makes things harder for the company.

If anything, Nadella’s discussions illustrate the company is still casting around for the next big profit centre. As the Windows and Office franchises decline, time may start to run out for the current management just as it eventually did for Ballmer.

Giving away Office apps may lock some users into the 365 service and could prove moderately profitable, but last week’s moves indicates a much smaller future For Microsoft.

Nov 052014
In 2001 Microsoft released Windows XP

Two of the key indicators that your business model, and industry, is being threatened is declining sales and margins.

A good example of this is the story Microsoft are urging their Chinese resellers to use Office 365 as a loss leader to get their foot in the door with customers.

Not so long ago Microsoft Office was a huge cash generator for the business; now it’s a loss leader.

If anything this shows how the margins in the software business are being eroded by cloud computing. Businesses like Microsoft and its resellers that have grown fat on big margins now have to evolve to a very different marketplace.

This means a very different way of doing business, a different way of delivering products and much more streamlined operation that doesn’t need battalions of highly paid salespeople and managers. In fact those managers and salespeople become a very expensive legacy item in a cloud computing world.

Microsoft are by no means the only company to find themselves giving away once profitable products in order to maintain their market position but when that starts happening it’s clear the time has arrived to find a new line of business.

In Microsoft’s case that’s been a pivot to the cloud, however the company will never find things as lucrative as the good old days when software was sold in boxes or licensed out with impossible to read agreements.

Funnily, the same thing is happening in the telcommunications world. It’s an interesting time to be in business.

Oct 292014

One of the great market battles of the PC era was the fight between the ‘best of breed’ software designed to do specific jobs well — Lotus 123, WordPerfect, and Harvard Graphics — versus the bundled ‘suites’ led by Microsoft Office.

Bundled suites of programs offered a common platform and cheaper price over buying products individually.

In the case of Microsoft Office, it also helped that the software giant was aggressive in undercutting the market and leveraging the deals it had made with hardware vendors and system integrators.

The winner of that battle was Microsoft as it turned out customers preferred the cheaper price points of the bundled packages and the common software platform made it easier to share data across the applications.

In the cloud computing field that fight is happening again as Zach Nelson, CEO of Netsuite, describes; “I think the next battle is going to be the same battle that happened in the client-server world. Is it the best of breed cloud apps or is it the suite?”

Nelson believes the suite vision will win out, “the suite is going to win again for exactly the same reasons why the suite won in the client-server world — it’s very hard to synchronise data between applications.”

Given Netsuite’s business, as its name suggests, is in providing a suite of software it’s no surprising that Nelson believes their way of doing business will prevail. Those providing ‘best of breed’ stand alone cloud applications naturally disagree.

Chris Ridd, Australian General Manager of accounting service Xero, disagrees with Nelson’s view. “With cloud and open APIs you have the holy grail of interoperability,” Ridd says. “In the 1990s the open systems were too early and didn’t work as well as they do today.”

Ridd also points out that Xero has over 350 add on services, ” I don’t think any suite can deliver that” he says.

History is on Nelson’s side but it may be that in this case history doesn’t repeat as the technology has moved along and now stand alone apps are what the market wants.

Time will tell although its unlikely whichever prevails will have anything like the success and market domination of Microsoft Office during the PC era.