Paul Wallbank – Brilliant Communications

Tag: apple

  • Channel blues

    Channel blues

    “We do the pre-sales work then they come along and steal the customers. It’s wrong, just wrong” growled the sales manager of an IT integrator while talking about one of the leading cloud computing services.

    The business model of systems integrators is to be a company’s, or home’s, trusted advisor on IT and make money from charging for their services and the profit in selling software and equipment.

    In the last few years that model has become tough – the collapsing price of hardware has made the profits on selling systems leaner while the increased life of systems has meant the big lucrative upgrades have become scarcer.

    At the same time services have become less lucrative as more participants have entered the market, many using offshored cheap labour to provide remote support. It hasn’t helped that computers have become vastly more reliable, particularly since Microsoft have largely solved Windows’ gaping security holes.

    The icing on the cake has been the end of boxed software and corporate licenses. These were extremely profitable for the systems integrator – a big sale of Microsoft Office or Oracle licenses to a government department could see an IT salesperson pay for a holiday home or cover the kids’ school and college fees.

    Cloud computing has largely been the driver of all of these factors’ decline and now it is really hurting those integrators and their salesfolk who were used to a very profitable existence.

    While that’s good news for computer consumers – and even better news for hapless shareholder and taxpayers who’ve been largely dudded by big IT sales pitches to gullible directors and ministers – it does beg the question of how customers now get advice and support.

    Largely cloud based services rely upon customer self service and many of the providers would struggle to include user support in their list of core competencies.

    There’s a business model there for systems integrators, but it’s difficult to see how many those used to fat profits in the past can, or will, adapt to the new environment.

    An interesting side effect of this change is how it affects companies like Microsoft where their channel partners – largely those big and small systems integrators – are one of the most important distribution networks for their products and probably their best defense against competitors like Google and Apple. That strength is being steadily eroded.

    It’s tempting to think that change affects just “old” industries like retail, publishing or car manufacturing; in reality it affects all sectors and sometimes the most modern might be hurt more than the established players.

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  • Reputation’s long tail

    Reputation’s long tail

    When you decide customer support is an unnecessary cost, you make a statement that defines your position in the market place. Dell are reaping the consequences of this now.

    Micheal Dell, CEO and founder of Dell Computers, hopes to grab some of the tablet computer market from Apple with the release of Microsoft Windows 8.

    It’s a big goal – Apple have owned the tablet computer market since launching the iPad.

    Dell, along with most of the other PC manufacturers, squandered the decade’s head start they had in tablet computers with poorly designed and overpriced tablet PCs which were based around a clunky version of Microsoft Windows using styluses.

    Part of the problem was Windows itself; the operating system was designed for desktop users and to make it work on tablet computers it required a clunky workaround. Being designed for smart phones and tables mean Windows 8 may overcome previous limitations.

    But Dell have a problem; they are perceived as a low price, low quality supplier and have a competitor in Apple that has locked in the supply chain for the product.

    So Dell will struggle to beat Apple on price while customers believe the Dell system is inferior.

    Even more difficult for Dell is their support reputation, a quick look at the comments to the Bloomberg story illustrates the problem.

    Of the the sixteen reader comments, admittedly not a scientific sample, three business owners claim they will never buy Dell again after customer support issues.

    This is the critical mistake Dell’s management made in the 2000s – in order to cut costs so they could be profitable at lower price points they trashed their support.

    Eventually this culminated in the Dell Hell debacle where Jeff Jarvis’ experience summed up the frustrations of thousands of Dell’s disillusioned customers.

    Apple on the other hand chose not to go down the rabbit hole of cheap and nasty systems. Today they can offer free, and skilled, support in their genius bars as their fat margins allow them to provide constructive and helpful assistance to their customers.

    Now Dell has the reputation for at best indifferent after sales service which means they are locked into competing on price and ever declining margins.

    It’s not a good place to be for Dell but that’s what you get for treating your customers like an unnecessary nuisance while fixating on headline prices.

    We often talk about the Internet’s long tail; our online reputations could be the longest tail of all.

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  • Navigating the Internet jungle

    Navigating the Internet jungle

    I usually don’t pay much attention to stories about Apple malware given that most hysterical stories about Mac viruses are written by charlatans spruiking third rate security products.

    The story of the Flashback Trojan is an interesting one though, not because the malware is particularly original or that it comes with the usual hysterical claim of being part of the coming wave of viruses that will wipe the smug smiles off Mac users’ facers.

    Flashback’s interesting because it combines all the tactics of a modern computer virus or malware, bringing together unpatched vulnerabilities and some social engineering with the intention of stealing user passwords.

    These are risks regardless of what type of computer, smartphone or tablet you use. It illustrates how the security risks have moved on since the first epidemic of Windows computer viruses just before the beginning of the century.

    Similarly, the motivation for writing viruses and malware has evolved. Where it was once an intellectual exercise for bored, highly skilled young code cutters, today it’s a lucrative criminal enterprise aimed at getting access to victim’s bank accounts and other assets.

    Which is the reason why it’s a good idea to have different passwords for various online services – no more using the same password for your online banking, Minecraft and Facebook accounts.

    Having the latest security patches installed is also important, particularly with third party products like Adobe Flash, Java or Microsoft Office, so don’t ignore those warnings as a caller to one of my radio slots boasted.

    We also need to keep our wits about us online and watch out for the sneaky tricks used to fool us into opening malware, it’s a jungle out here on the web.

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  • Is it time for Microsoft to make a clean break?

    Is it time for Microsoft to make a clean break?

    Over the weekend Christina Bonnington in Wired magazine looked at how Microsoft is struggling to decide whether to have separate operating systems for their tablet and desktop products – as Apple have – or design one that works on both.

    Creating another version of Windows risks further confusing the marketplace given Microsoft already has between its four different versions of Windows and six flavours of Office.

    Although Apple haven’t suffered at all by having different operating systems. Mac OSX is more popular than ever and iOS dominates its markets.

    Perhaps its time for Microsoft to copy something else Apple did and have a clean break – rework all the Windows code and build a new system.

    Apple did this when they introduced OSX in 2001. Among other things it didn’t support floppy disks, the Apple Device Bus, floppy disks or the networking standards used by the older systems. At the time there were howls of protest from long suffering Apple true believers who had invested a lot into the earlier versions of Mac OS.

    Despite the protests and early hiccups – we sometimes forget that the first version of OSX, named Cheetah, was terrible – Apple’s clean break with the past was a great success.

    Microsoft’s selling point has been backward compatibility; software designed for one version of Windows is expected to work on the next version.

    Backward compatibility is the reason for the spyware epidemic of the early 2000s as Microsoft ignored Windows XP’s security features so that they wouldn’t have to ditch older code in other products like Office.

    Similarly, the contradiction of redesigning the Windows operating system while minimizing disruption to existing users was one of the reasons why Microsoft Vista was such a disaster.

    Perhaps it’s time for Microsoft to bite the bullet and bring Windows into the 21st Century.

    Whatever they decide to do, they better hurry as Apple and Google are carving out dominant positions; waiting until 2013 or 14 for the next version of Windows and Windows Phone may be too late in a market where Microsoft is quickly becoming irrelevant.

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  • The Internet’s cold war

    The Internet’s cold war

    “We’re designing exclusively for Android devices,” the software developer confided over a beer, “we don’t like the idea of giving Apple 30% of our income.”

    That one business owner is making a choice that software developers, newpaper chains, school text book publishers and many other fields are going to have to make in the next year – which camp are they going to join in the Internet’s cold war.

    As the web matures, we’re seeing four big empires develop – Google, Apple, Facebook and Amazon which are going to demand organisations and consumers make a choice on who they will align with.

    That decision is going to be painful for a lot of business; each empire is going to take a cut in one way or another with Apple’s iStore charges being the most obvious.

    For those who choose to go the non-aligned path – develop in HTML5 and other open web standards things will be rocky and sometimes tough. At least those on the open net won’t have to contend with a “business partner” whose objectives may often be different to their own.

    Over time, we’ll see the winners and losers but for the moment businesses, particularly big corporations and publishers should have no doubt that the choices they make today on things as seemingly trivial things like reader comments may have serious ramifications in a few years time.

    Consumers aren’t immune from this either; those purchases through iTunes, Amazon or Google are often locked to that service for a reason.

    Probably the development that we should watch closest right now is Apple’s push into education publishing; those governments, universities and schools that lock into the iPad platform are making a commitment on behalf of tax payers, faculty and students that will affect all of them for many years.

    For many, it might be worthwhile hedging the bets and sticking to open standards. A decision to join one or two of the big Internet empires is something that shouldn’t be made lightly.

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