Tag: internet

The death of the short message service

How SMS revenues are drying up

The New York Times’ Bits Section looks at how in many countries text messaging (SMS) services are declining.

For telcos, the SMS feature was a happy – and extremely profitable – accident with the Short Message Service feature designed as a control channel for the mobile voice networks.

The Short Messaging Service cost almost nothing to develop and quickly became a massive profit centre for mobile phone companies.

Today in markets where smartphones are dominating sales, people are moving many of their communications away from text messages over to Internet based services like email, instant messaging and social media.

Interestingly, in the United States text messaging still growing although at a slower rate than previously. This makes sense as the US is behind countries that have fully adopted 3G networks and subscribers don’t get the full benefit from a smartphone without a reliable and fast data service.

For developing countries, we’ll probably see SMS continue to grow as the attractions of a relatively cheap and simple communications channel like text messaging still make sense in markets where data plans are expensive and smartphones scarce.

As revenues from text messaging drops, we’ll be seeing more telecommunications companies try to replace the lost income with other services. Expect to see more offers for various business and home service bundles and offers to upgrade to the latest phones or packages as providers try to lock profitable customers into cash generating agreements.

The era of accidental profits for telcos is over, the quest for these companies now is to find how they can maintain profits in an era where data services are commoditising their lucrative product lines.

For the managers of these companies, the challenge is on to successfully do this – it remains to be seen how well they do in refocusing their businesses.

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ABC Nightlife: The next wave of smartphones

Paul Wallbank joined Rod Quinn to look at where mobile phones are going.

The world of mobile phones is getting busy again as a whole new range of smartphones appear. Paul Wallbank joined Rod Quinn for ABC Nightlife on October 20 to discuss what the new smartphone wars mean for home and business users.

We’ll be going to air from 10pm, Eastern Australian time across Australia on ABC Local Radio’s Nightlife to look at the following questions;

  • Why were people disappointed with Apple’s iPhone 4S that was released a few weeks ago?
  • The big competition are the Google Android phones, what are they doing?
  • What’s happened to Nokia? They seemed to have lost their domination.
  • Microsoft were the other big player, what are they doing?
  • How are the smartphones changing business?
  • Shopping centres seem to be jumping on board with various social media checkins. What are those?
  • There’s been a push to online payments, how are the smartphones affecting this?
  • Are smartphones going to be the big buy for Christmas?
  • What are the best plans for consumers and business?
  • How do people deal with telco disputes?

The podcast from the program is available from at Nightlife website, and some of the information we mentioned can be found here;

Dealing with Telco complaints

We’ll be adding more resources in the next few days, the next ABC Nightlife spot is on 23 November and our events page will have more details. If you have any suggestions for future programs or comments on the last show, please let us know as we love your feedback.

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Price points

Amazon’s new range of Kindle e-book readers illustrate how important price points are to winning consumer confidence.

It’s no coincidence Amazon’s media release announcing the new range of Kindle e-book readers was headlined introducing the All-New Kindle Family: Four New Kindles, Four Amazing Price Points.

The $79 price for the base model has authors excited, and quite rightly too as this will guarantee sales of the e-readers and spur sales of e-books.

Once a product’s perceived as being affordable by the market, sales take off. The classic is Josiah Wedgwood selling bone china at prices affordable to the 18th Century English working classes. The basic product was similar in all but the decoration to the ornate wares Wedgwood sold to Europe’s royal families and the then new methods of mass production guaranteed a quality product to all customers.

Just over a century later, Henry Ford did a similar thing with the motor car, meeting the price points that made the horseless carriage accessible to the middle classes in early 20th Century United States.

In more recent times we’ve seen similar trends happen; the under $2,000 personal computer in the 1990s, the sub $500 netbook in 2008 and the affordable smart phones of recent years.

We can add broadband Internet and budget airlines as other examples of how demand has exploded when the cost has dropped below a certain price point.

As technology becomes affordable, we use more of it. A point that’s often lost monopolists and established players in industries.

This is the real opportunity Amazon are now offering with the cheap Kindles and we’ll see e-books boom as people are prepared to make a small investment in the devices.

Almost certainly this will open new markets and unforeseen opportunities for entrepreneurs and writers. The resulting pressures on competitors like the Apple iPad and the various Windows or Android tablet devices should increase innovation as well.

In our own businesses we need to ask what those price points are and what is stopping us from meeting them. As other price busters have shown, if you can meet these price points, the riches are there for the taking.

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Do you have customers or just users?

Are subscribers, visitors and users really supporting your business?

“I was on your mailing list for general info, for spams and scams etc which were helpful. Suddenly it changed and now the business format is not useful to me” said an lady when unsubscribing from one of my newsletter mailing lists.

The lady concerned had been on one of the mailing lists for over ten years and, once upon a time, had been a paying customer for my old business, PC Rescue. Although we’d only earned a $100 off her and that was seven years ago.

While it’s sad to lose a subscriber – you don’t run a service business for twelve years without caring about those who use your services – the question is was the lady really a customer?

This is an important distinction where many of us are giving away much of our knowledge for free; are our users really customers?

For the social media and web2.0 sites, this is easy; users are the raw material for their aggregated and segmented data feeds and audience, the customers are the advertisers. This is just a modern twist on the broadcast model that sustained the radio and TV industries for most of the 20th Century.

Many of those social media platforms aren’t making much money from that data and there’s a good argument those who are have been wildly overvalued by investors.

The value of user data, whether it’s aggregated or identifiable appears to be nowhere as high as most of us think, unless you intend to rob your users’ bank accounts.

Overvaluation of your customer, or user, database is a common problem for smaller businesses too. If you’re the local plumber, computer repair guy or coffee shop then the value of any mailing list is probably way overstated – the only metric that ultimately matters to the business is how much money you’re making from the customer.

If you care about the people that you deal with, this may be a hard reality to face but those who visit your shop, subscribe to your newsletter or download your free e-book aren’t your customers, only those who are prepared to pay are.

This is something we have to understand in this era of abundant free information and online services. The challenge for most of us is how many users we can convert from being window shoppers and freebie seekers into customers.

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The quiet revolution

Productivity gains of the 1990s were based on accessible computer technology, are we about to see a cloud computing revolution in our workplaces?

Earlier this weekPricewaterhouseCoopers released their Productivity Scorecard, which showed Australia’s business efficiency isn’t improving as fast at it once was and the country’s relative performance is steadily slipping down international tables.

One of the notable things in the PwC report is the massive growth of productivity in the 1990s, a point emphasised by the accompanying paper on business productivity in a presentation by economist Saul Eslake last month to the Reserve Bank of Australia.

Economists attribute most of this late 20th Century growth to deregulation and privatisation by governments in the 1980s and 90s but the driving force was really computerisation that allowed most businesses to do much more with less.

Immediately noticeable for an Australian walking into a British, European or Japanese office during the early 1990s was the lack of desktop computers.

Australian businesses adopted technology a lot quicker than their counterparts outside of North America and this alone was probably responsible for the country’s relatively good productivity growth in that decade.

The arrival of computers – followed by desktop printers and Internet access – suddenly gave small businesses access the means to do jobs that even the biggest corporations had struggled to do previously and drove a rapid reorganisation of most offices.

Everybody from secretaries to architects and graphic designers to lawyers – even economists – suddenly found they had the tools at their fingertips to do work they could have only dreamed of prior to 1990. This drove massive productivity gains in businesses of all sizes.

From 2000 onwards, things became tougher as the easy gains had been made and the incremental improvements in technology, such as smartphones, cloud computing and web publishing didn’t have the same substantive effect the early PCs delivered with spreadsheets, word processing and desktop publishing.

The real challenge we now face in business – and government – is to start harnessing cloud computing driven online services that promise to deliver similar productivity gains to what we saw twenty years ago.

We have the tools; online office apps, Customer Relation Management services (CRM) and sharing platforms all deliver major improvements in the way we work within our businesses and with external partners like contractors, suppliers and event clients.

One of the most powerful aspects of cloud computing services is reduced capital cost meaning reduced barriers to entry into markets we previously may have thought were safe.

This easy access into established sectors is one of reasons the retail industry’s giants are now struggling as online competitors can setup cheaply and quickly while offering better prices and service.

Retail is only one of the more obvious sectors being changed by these technologies and as the decade continues we’re going to close to every industry be radically changed by low cost computers accessing the Internet.

As business owners and managers we need to look at our own processes and systems with an eye on how we can improve workflows and customer service within our organisations.

Those of us who manage to get these new technologies are going to reap the benefit of the next productivity wave, those who don’t are going to go the way that many uncompetitive and slow to respond industries did in the 1980s.

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the new gatekeepers

Are four powerful online empires developing?

As the net matures, are we seeing a new phalanx of gatekeepers gathering to complement the old ones?

Four companies striving to control great parts of the Internet economy; Google in the search market, Facebook for social media, Amazon in e-commerce and Apple in mobility.

Of the four, Apple seems to be the furthest along this path as the iTunes store coupled with the market take up of iPad, iPhone and iPod combination are beginning to dominate the mobile device segment of the Internet.

This is illustrated by two stories in recent days; the first is News Corporation’s deal to develop a dedicated iPad “newspaper” and the other Robert Scoble’s description of how Application developers are increasingly focused on the Apple platform.

The telling part of Scoble’s story is where he speculates how the tech media could be being rendered irrelevant by Apple’s control of the iTunes store, he goes on to say;

“Do app developers need the press anymore?

They tell me yes, but not for the reason you might think.

What’s the reason? Well, they suspect that Apple’s team is watching the press for which apps get discussed and hyped up.”

Scoble’s article is interesting in how Apple’s dominance of the distribution chain allows them to bypass other media channels; why go to Facebook or Google, let alone your local newpaper to find out what the hottest new apps are?

Even more fascinating is how Apple’s control of its distribution channels ties in with its dominant hardware platform, this is the online equivalent to one company owning the paper mill, the presses, the trucks and the news stands then forcing every magazine and newspaper publisher to work them.

It’s instructive that despite the real risk that Apple could end dictating all terms to those who rely on iTunes as their publishing platform, newspaper publishers are locking themselves onto this world. This is despite the publishers spending the last two decades shoring up profitability by reducing margins to their news sellers and delivery agents.

Despite these risks, News Corporation isn’t holding back after Rupert Murdoch described the iPad as “a fantastic invention”, across the empire various outlets are promoting their iPad applications, including the New York Post, London Sun and the Sydney Daily Telegraph.

It will be very interesting to see how this alliance between an old and a new media empire will turn out.

Meanwhile the new empires are jostling each other where they meet, Google’s latest spat with Facebook over data is just one of many skirmishes and we can expect to see many more as the big four explore the boundaries of their businesses.

The real question for us is how do we see ourselves working with these empires. Will we reject them, or will we accept that doing business with Facebook, Google, Apple and Amazon is the easiest way of getting on with our online lives?

If it’s the latter then we’ll have seen the old gatekeepers of the media, retail and communications simply replaced by new, bigger toll collectors.

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The strange story of the Stuxnet worm

A virus crippling the Iranian nuclear program could affect your business

The tale of the virus infecting Iran’s nuclear program is one of the fascinating stories of the computer world.

Whoever wrote the Stuxnet worm did a spectacular job in bringing together a number of security problems and then using two weak links — unpatched Windows servers and poorly designed programmable logic controller software — to create a mighty mess in the target organisation.

The scary thing with a rootkit like Stuxnet is that once it has got into the system, you can never be sure whether you’ve properly got rid of it.

What’s worse, this program will be writing to the Programmable Logic Controllers the infected computers supervise so plant operators will never know exactly what changes might have carried out on the devices essential to a plant’s operations and safety.

Damaging Iranian nuclear plants

A report on the Make The World A Better Place websites over the weekend indicates the Stuxnet Worm may have damaged the Iranian nuclear reactor program.

The story behind the Suxnet worm is remarkable. It appears this little beast is a sophisticated act of sabotage involving using a number of weaknesses in computer systems as detailed by Computer World in their Stuxnet Worm hits Industrial Systems and is Stuxnet the best Malware Ever articles.

The risk of unpatched systems

One of the things that leaps out is how servers running unpatched systems are an important part of the infection process. The Stuxnet worm partly relies on a security hole that was patched by Microsoft two years ago so obviously the Iranian servers were running an unpatched, older version of Windows.

This is fairly common in the automation industries. I’ve personally seen outdated, unpatched Windows servers running CCTV, security, home automation and dispatch systems. They are in that state because the equipment vendors have supplied the equipment and then failed to maintain them.

These companies deserve real criticism for using off the shelf, commercial software to run mission critical systems that it was never designed to do.

Commercial programs like the various Windows, Mac and other mass market operating systems are designed for general use, they come with a whole range of service and features that industrial control systems don’t need. In fact, the Stuxnet worm uses one of those services, the printer spooler, to give itself control of the system.

Securing industrial systems

These industrial systems require far more basic and secure control programs, a cheap option would be a customised Linux version with all the unnecessary features stripped out. In the case of Siemens, the providers of the PLCs supplied to the Iranian government, it’s disappointing such a big organisation couldn’t build its own software to control these systems.

Business owners, and anyone who has computer controlled equipment in the premises, need to ask some hard questions to their suppliers about how secure supplied computer equipment is in this age of networked services and Internet worms.

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