Paul Wallbank – Brilliant Communications

Tag: innovation

  • The death of sport

    The death of sport

    In the 1960s, sports administrators refused TV replays of games because it would affect their revenue.

    Sports broadcasting rights were invented.

    In the 1970s, sports administrators resisted live TV coverage of games because it would affect their revenue.

    Sports broadcasting rights became lucrative.

    In the 1980s, sports administrators claimed TV viewers using video recorders would affect their revenue.

    Sports broadcasting rights became more lucrative.

    In the 1990s, sports administrators worried cable and satellite TV would affect their revenue.

    Sports broadcasting rights soared.

    In the 2000s, sports administrators warned the Internet would affect their revenue.

    Sports broadcasting rights soared further.

    In 2012, sports administrators shout that cloud computing services will affect their revenue…….

    Photo courtesy of mzacha on SXC.hu

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  • The end of the PC era

    The end of the PC era

    This morning a graph appeared on the web from analytics site Asymco showing the stalling of PC sales and the rapid catch up of Android and Apple iOS systems.

    Such graphs starkly illustrate how the industry is changing as people start using tablet and smartphones instead of their PCs but there are some caveats with making blanket comments about the death of the Windows based computer.

    Sales are still huge

    One important thing about the chart shown is it has a logrithmic scale – a doubling in height indicates ten times the sales.

    That point alone shows just how massive the lead Windows had over 15 years from the mid-1990s, something that is shown in a previous Asymco chart.

    Despite Gartner’s reported 1.4% fall in PC sales – the basis of the Asymco graphs – there are still 92 million personal computers sold each quarter so it is still a massive market.

    Tethered devices

    One of the weaknesses with smartphones and tablet computers is they are still tethered to the desktop. If you want to get the best experience from your phone or iPad you have to synch it with your home or office computer.

    For the moment that’s going to continue for most users, but not forever and the extended life of PCs means customers are using older computers to connect.

    Extended life cycles

    A bigger problem for the PC manufacturers is the extended life cycle of personal computers.

    Since the failure of Microsoft Vista, PC users have been weaned off the idea of replacing computers every three to five years and nearly half the market is using systems that are more than ten years old.

    On its own that indicates fundamental problems with the Windows and PC markets for Microsoft and their manufacturing partners.

    The irrelevant operating system

    One of the effects of increased computer life cycles is that the operating system has become irrelevant. Customers no longer care about what they are using as long as it works.

    This is one of Microsoft’s problems; the virus epidemic of last decade and various clunky versions of Windows Phones has left customers perceiving PC and Windows software as being clunky and buggy.

    Not yet dead

    While the PC market is now shrinking, it’s far from dead. There’s still a huge demand to cater for although the big growth days are over.

    For manufacturers whose business model has been based on fighting for market share in a growing sector, they now have a problem. They have to identify profitable niches and generate innovative products.

    Unfortunately for the PC industry, the market has moved on. Apple have captured the bulk of the high margin computer sector and the industry’s response of pushing “ultrabooks” to capture the MacBook Air customers isn’t going to resonate with consumers trained to buy cheap systems.

    Watching the PC industry over the next five years will be fascinating. Some companies will adapt, others will reinvent themselves and many will fade away as they cling to a declining business model.

    Despite the personal computer industry only being 30 years old, it’s already in decline which is something older industries should ponder upon.

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  • Why governments fail in building Silicon Valleys

    Why governments fail in building Silicon Valleys

    Don’t Give the Arnon Kohavis Your Money warns Sarah Lacy in her cautionary tale of what happens when an economic messiah comes to town promising to create the next Silicon Valley.

    “Hopefully this story finds a way to circulate out to the wider audience of government officials and old money elites who have good intentions of wanting to make their city a beacon for entrepreneurship.” Writes Sarah. “Hopefully it reaches them before they get bamboozled into giving the wrong people money to make it happen.”

    Bamboozled Bureaucrats

    For 19 months I was one of those government officials and saw those good intentions up close while developing what became the Digital Sydney project, that bamboozlement is real and a lot of money does go to the wrong people.

    Sarah’s points are well made, Silicon Valley wasn’t built quickly with its roots based in the 1930s electronic industry and the 1960s developments in semiconductors – all underpinned by massive US defence spending from World War II onwards.

    In many ways Silicon Valley was a happy and prosperous accident where various economic, political and technological forces came together without any planning. Neither the Californian or US Governments decreed they would make the region an entrepreneurial hotbed and sent out legions of public servants armed with subsidies and incentives to build a global business centre.

    This is the mistake governments – and a lot of entrepreneurs or business leaders – make when they talk about “building the next Silicon Valley”; they assume that tax free zones, incentive schemes and subsidies are going to attract the investors and inventors necessary to build the next entrepreneurial hotspot.

    For governments, the results are discouraging; usually ending in failed incubators and accelerator programs all conceived by public servants who, with the best will in the world, don’t have the skills, incentives or decades long timelines to make these schemes work.

    New England’s failure

    At worst, we end up with the corporate welfare model that sees governments and communities exploited like the tragic story of New London, Connecticut, where the local government spent $160 million and cleared an entire suburb for drug company Pfizer to establish their research headquarters, which they closed a few years later and left a waste dump behind.

    While the New London story is one of the worst examples, this sort of corporate welfare is the standard role for most government economic agencies. The department I worked for gave subsidies to supermarket chains to open distribution centres and stores that they were going to build anyway.

    One of the notable things with development agencies and the provincial politicians who oversee them is how they are easy victims for the economic messiah – it could be a pharmaceutical giant like in New London, a property developer promising Sydney will become a financial hub or a US venture capital guru flying in and promising Santiago will be the next San Francisco.

    The truth is there are no short cuts; building a technology centre like Silicon Valley, a financial hub like London or a manufacturing cluster like Italy’s Leather Triangle take decades, some luck and little intervention by government agencies or outside messiahs.

    Silicon Valley and most other successful industry centres are the result of a happy intersection of economics and history. The best governments can do is create the stable financial, tax and legal frameworks that let inventors, innovators and entrepreneurs build new industries.

    All government support isn’t bad as well thought out, long term programs that help new businesses and technologies grow being the very effective – we should keep in mind though taht Silicon Valley couldn’t have happened without massive US military and space program spending.

    Like a parent with a baby, the best governments can do is create the right environment and hope for the best. Interfering rarely works well.

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  • Pretty shells and shiny toys

    Pretty shells and shiny toys

    “I was like a boy playing on the sea-shore, and diverting myself now and then finding a smoother pebble or a prettier shell than ordinary, whilst the great ocean of truth lay all undiscovered before me.” – Isaac Newton

    “We live in a bubble, and I don’t mean a tech bubble or a valuation bubble. I mean a bubble as in our own little world,” – Eric Shmidt

    Newton’s famous quote is one of the things that jumps out on reading the opening of Jeff Jarvis’ Private Parts, is how we live in an era of pretty shells that catch our attention and obsess some of us.

    While we play with those pretty shells, we ignore much of what is happening around us. Those glittering social media and cloud computing tools are fun to play with, but what do they really mean?

    The winners from the early stages of the industrial revolution were people like Josian Wedgwood and Robert Stephenson who saw how to apply the inventions of the time to create new products and markets, later they were followed by people like Thomas Edison, Andrew Carnegie and Henry Ford who developed the industries of the 20th Century.

    Right now, we’re making shiny trinkets out of our technology tools, Business Week’s It’s Always Sunny in Silicon Valley makes this case well and Eric Schmidt’s bubble quotation above comes from that.

    We see lots of applications for finding coffee roasters, sharing music files and plugging into the social media platform of the day; all of which are the concerns of middle class white people trying to maintain last century’s consumer society.

    Somehow we’re missing the bigger picture, but gee those sea shells are pretty.

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  • The business of denial

    The business of denial

    Denial is a powerful sedative, it allows us to trundle dozily along a well worn patch oblivious to the reality our comfortable world has changed.

    Last week’s claim that youth is fed up with the iPhone by Nokia’s Niels Munksgaard – who has the wonderful title of Director of Portfolio, Product Marketing & Sales – is a great example of how far and how long denial can continue while there’s still money to pay executive bonuses.

    Canada’s beleaguered Research In Motion, manufacturers of the Blackberry phone, showed the same delusions when they released their Playbook tablet computer with the declaration Amateur Hour Is Over.

    The only amateur hour was in the hubristic minds of RIM’s marketing team.

    While profits keep flowing big organisation can afford delusions – Google can indulge their social media fantasies while the Adwords rivers of gold continue to flow ever faster and Microsoft can continue to indulge their delusions while their Windows and Office products remain immensely profitable.

    Microsoft’s “droidrage” campaign, designed to embarrass Google’s Android mobile phone platform, is part of that delusion; for Microsoft’s campaign to work they have to prove there is a widespread Android malware problem, show their system isn’t prone to the same flaws and – most importantly – have enough product on the market to sell to those disillusioned Google customers.

    Such a negative campaign has many fallacies – it assumes there are widespread security problems in Android, that Microsoft will pick up disaffected Google customers and there are enough Microsoft based products to grab those sales.

    Probably Microsoft’s biggest problem is the assumption that customers actually care about that stuff – for years Windows dominated its market despite being riddled with computer with security holes and malware.

    Microsoft succeeded because their competition was delusional; the best example being WordPerfect claiming graphic systems like Windows were a fad at a time when an inferior Microsoft Word was gobbling up their markets.

    By the time WordPerfect realised their error and released a truly dreadful WordPerfect for Windows it was all too late, like a stagecoach company realising the motorcar is here to stay.

    The problem for businesses in denial is that reality eventually does bite; plenty of people in the newspaper industry believed their advertising based model was secure and profitable – indeed many of the cosseted managers in that sector still believe it is – which now leaves them struggling in a changed world they thought they could ignore.

    Denial among incumbents is a great opportunity for newer, more flexible players; for years mobile phone and tablet computer manufacturers were in denial about the usuability of their product – Apple proved them wrong and now commands the most profitable chunks of those markets.

    Being the village blacksmith or a buggy whip maker was a good business to be in at the beginning of the 20th Century. Thirty years later those block boys and saddlemakers who hadn’t made the jump found themselves out of work.

    It’s going to be interesting to see will be this century’s buggy whip manufacturers.

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