Paul Wallbank | Paul Wallbank - Communications Professional

Tech and tax write offs

Last week’s expansion of depreciation allowances for Aussie businesses is an opportunity to refresh your company’s tech

In last week’s Federal budget the biggest news for business was the expansion of the accelerated depreciation limits where items up to $20,000 can be immediately claimed as a tax deduction.

While this was a reversal of the previous budget that slashed the previous allowance, it was welcome news for businesses looking at replacing older tools and equipment or investing in new technology.

One of the notable things about business technology is companies have a habit of holding onto older equipment long beyond what should have been its use by date.

The consequences of using old technology are real, the older equipment is often not as fast as the newer kit which affects productivity and unpatched software is often the way malware finds its way into a business.

Point of sale risks

Earlier this week computer security vendor Trend Micro held their Cybercrime 2015 breakfast in Sydney where the director of the company’s TrendLabs Research division, Myla Pilao, described some of the threats facing businesses.
One of the top risks were Point Of Sale systems (POS) where Trend Micro’s research had found over a third of US retailers had malware on their cash registers, in Australia it was six percent.

Most of those infected POS terminals would be older units with many of them being software running on out of date versions of Windows that haven’t been patched or upgraded since they were bought a decade ago.

Similar problems exist with older workstations, internet routers and even photocopiers where the technology has moved on and security holes discovered. Basically old equipment holds businesses back and exposes them to risks.
Now the carrot of an immediate tax deduction gives Australian businesses an opportunity to refresh their technology. So what is the technology, smart company managers and owners should be spending their money on?

Kick out your desktops

“If it ain’t broke, don’t fix it” is the mantra for most business IT and desktop computers are the best example of this. In most companies as long as the word processing software or accounting package works the PCs continue to be used.

With the withdrawal of support for the decade old Windows XP operating system last year, many older computers started being a liability in a business so now is the time to replace them.

Consider tablets

It may not be necessary to replace the old desktop computer with new ones, for many job roles a tablet computer is often a better choice. With cloud technologies increasingly being adopted there’s less of a need for a grunty PC sitting on each staff member’s desk.

Upgrade the router

One of the areas where businesses often compromise is with their internet access. Having an old, cheap router designed for home use is just not good enough for companies who rely upon being connected.

A new business grade router will improve office internet access along with resolving most of the security issues older equipment is notorious for.

Going mobile

If you’re struggling on old mobile phones, now might be the time to upgrade to the latest smartphone. Amongst other things this will improve your office productivity, particularly if you combine the investment with some of the cloud services that make working on the road a lot easier.

Cloud services are not part of the depreciation rules as they are usually subscription models and this shows the weakness in the Federal government’s thinking.

Indeed for those vulnerable Point of Sale systems, a cloud based service running on tablet computers is probably a better solution than most server and PC based packages.

A lack of vision

The ‘ladies and tradies’ theme of the budget shows the Federal government is stuck in with the vision that Australian businesses are mainly mom and pop service operations in the traditional trades and professions.

While the depreciation changes are welcome they do little to help startups or companies in emerging industries and for the economy in general will provide not much more than a GDP ‘sugar hit’ for retailers’ cash registers as we buy imported equipment for our businesses.

For the Australian economy in general, the move really only benefits Gerry Harvey who can buy a few more racehorses from his stores’ and his rich mates who can afford some more expensive wine fuelled brawls in Sydney waterside restaurants.

Australian businesses owners need to be demanding better thought out policies from a government that claims to be friendly to industry. The economy is changing and 1970s style tax benefit is not the way to prepare for a changing world.

In the meantime, enjoy your tax write offs.

A great time to raise funds

For the right startups there’s plenty of investor money available right now

“There’s great availability of capital for young companies,” says Doron Kempel, the CEO of software defined data center company SimpliVity.

Since being founded in 2009, the company has had five rounds of funding and raised $276 million dollars in equity and debt.

The notable thing is Kempel says the banks are keen to lend money to his business, something that probably underscores how difficult it is for banks to find suitable places to place funds.

As one of the unicorns – Simplivity’s last fund raising gave the company a valuation of over a billion dollars – it shouldn’t be surprising that banks are comfortable lending money to the business but it also underscores just how much money is available to startups with the right investors.

For those investors the paper returns are good as well, with Kempel observing each round of funding sees the company’s valuation triple.

So for companies with good ideas and unique stories it seems right now is a good time to be raising money, particularly if the founders can get one of the pedigree venture capital firms to invest.

The question now though is how many coffee apps and delivery services can the also ran VCs support?

The not so smooth rise of 3D printing

MakerBot’s story shows the development of new industries is never smooth

Vice’s Motherboard details the remaking of MakerBot, the rescue of an early leader of 3D printing industry.

The story is great long read for any business owner or want to be startup founder and a reminder that the development of new industries is never smooth sailing.

Netflix and the global entertainment network

Netflix’s move into China is part of a global shift in broadcast televison

Streaming video service Netflix is looking to launch in China reports Bloomberg Business.

The Chinese joint venture to be run with Wasu, a company backed by Alibaba founder Jack Ma, looks to increase Netflix’s global footprint.

Netflix plans “to be nearly global by the end of 2016,” the article quotes a company spokesperson answering questions about a possible China partnership.

The Netflix model is a major departure from the established broadcast television and movie business where studios and producers would enter distribution agreements with local TV stations and theatre chains.

With Netflix and the streaming model, the licensing of rights to local outlets becomes largely irrelevant with the producers – which increasingly includes Netflix itself – able to cut out the local licensees.

A similar thing is happening in sports, one of the mainstays of broadcast television, where the professional leagues are taking control of their own content and leaving the networks, at best, minor players.

Neflix’s move is part of a shift that’s affecting many industries, including those like broadcast television that thought they were untouchable.

Defining the jobs of the future

Instead of asking what will happen to today’s jobs, we should be preparing the workforce for the economy of the future.

Once again the question of what happens to the jobs of today in the face of technology is raised in a Quartz story by Zake Kanter looking at how driverless cars will lost the US economy millions of jobs over the next decade.

Zake isn’t alone in this, just one study predicts half the US police workforce could be put out of work as autonomous vehicles take to the road.

Worrying about today’s jobs is understandable as it’s clear the news won’t be good for many occupations. However the discussion should be about what roles are going to be needed in the future.

Looking back

Should we go back a hundred years there were a huge number of people, primarily young boys, employed in cleaning roads of horse dung. The equine industries provided work for tens of thousands of workers ranging from skilled blacksmiths and buggy makers through to those unskilled street sweepers.

Most of those people lost their jobs and their careers became redundant as the age of the motor vehicle took over.

Yet those displaced eventually founds jobs – as mechanics, panel beaters, traffic cops and gas station workers – although for many the dislocation was tough.

Automotive transformation

The motor car also stimulated a transformation in society as it made travel easier and wide scale logistics viable. Those changes allowed supermarkets, drive-in theatres and fast food chains to develop, all of which were unthinkable at the beginning of the Twentieth Century.

Industries like fast food and the drive-in theatre were also driven by the demographic and social changes of the mid-Twentieth century as concepts like the teenager and the consumerist society were developed.

Demographics and economy

Those changes to demographics are important as well, the developed economies’ aging populations and shifting income patterns are going to determine the shape of society and the workforce even more so than technology.

For businesses and governments assuming the mid Twentieth Century consumerist economy is the future the next wave of change could be a difficult time. Even more so given that model of growth and employment was allowed to continue far beyond its natural life by the 1980s credit boom.

Credit, and banking, will be one of the challenging fields for the next decade as governments struggle with the consequences of guaranteeing institutions during the Global Financial Crisis along with the disruptions of higher frequency algorithmic trading, Big Data analytics and startups with new payments platforms.

Disruption everywhere

The disruptive effect on the banking industry by new technology will be repeated across sectors with startups and new business models challenging everyone from retailers to window cleaners, it’s not just the automotive industry that’s challenges.

While it’s difficult to predict exactly what the world is going to look like in 2025, it is clear that many industries and occupations will be struggling with a very changed world. The task for managers and business owners is to be aware of unexpected threats and opportunities.

Some of the opportunities are going to lie in studying statistics – essential in a world of big data – and learning the basics of software coding. Design is another area that is going to need many new workers.

For today’s workers, it’s more important than ever to be grabbing the skills required to be employed in the industries of the mid Twenty-First Century.

Dividing the Internet of Things

Increasingly the Internet of Things is going to be split into different fields

One thing that’s becoming clear in researching and writing on the Internet of Things is how three distinct strands of the concept exist due to the different needs of industry and the marketplace.

This is articulated best by Bill Ruh, the Vice President of GEs Global Software Center, who in an interview this week – which I’ll post later – suggested the IoT is best divided into the industrial internet, the enterprise internet and the consumer internet.

At the base level the consumer internet includes the bulk of startups and the devices that get most of the publicity; the Apple Watches, Nest thermostats and smart door locks.

Largely operating on a ‘best effort’ basis, consumer IoT vendors don’t guarantee service and security is often an afterthought. This is going to present a few challenges for both consumers and retailers as the inevitable problems arise.

Catering for the enterprise

The IT industry vendors are at the next level, the Enterprise internet, where companies like Microsoft, Cisco and VMWear are adapting their businesses to the cloud and Internet of Things.

At this level, which Cisco calls the Internet of Everything, the security and reliability challenges are understood and the practices of the IT and communications industry lend themselves to the widespread transmission of data from smart devices.

Similarly most of the telcos with their machine to machine (M2M) technologies fall into the enterprise internet camp.

Driving the industrial internet

While the enterprise vendors are providing robust systems, the IT industry levels of service don’t quite meet the needs of mission – and often life – critical applications found in jet engines, precision manufacturing and most industrial processes.

Providing that level of security, precision, reliability and low latency is where the industrial internet is applied. This is where the companies such as GE and the other big engineering companies come in.

At the industrial internet level it’s far harder for startups to disrupt the existing players as it requires both specialist knowledge of their industry sectors and deep pockets to provide the necessary capital for product development.

However the existing industrial conglomerates don’t have all the skills in house and that’s an opportunity for smaller companies and startups to enter the industry.

The long product times are another aspect of the industrial internet, as Rue points out, GE are still supporting equipment that is over eighty years old. While that equipment will probably never be connected to the internet, the machines being designed today will be expected to have similar lifespans.

While the three different IoTs have their own characteristics, and in many instances overlap, all three are opportunities for savvy developers and entrepreneurs.

The difficulty some businesses, both as vendors and customers, will face with the IoT is applying the wrong technology set to their problems and industry.

Seven flavours of Windows

Microsoft’s latest Windows roadmap may well be the last hurrah of the old software licensing model

In a post on Microsoft’s blog the company’s VP for Windows, Tony Prophet, yesterday laid out the final line up of the upcoming Windows 10 software.

As previously, Microsoft have decided to spoil the market with choice, offering Home, Pro, Enterprise and Education versions of the operating system along with two different versions of the mobile package and a stripped down product for Internet of Things devices.

In many respects this is Microsoft desperately holding onto the old model of operating systems where a consumer version bundled into a commodity PC offered less than an Enterprise version supplied as part of a lucrative corporate license.

That model still works – Microsoft’s licensing revenue was $19 billion last year – although it is in slow decline although the problem is operating systems are now commoditised and the old position of dominance in the PC industry doesn’t work in a world of cheap, lightweight devices interacting with cloud based services.

One theory running around the tech industry at the moment is that Windows 10 will be the last Microsoft operating system, if that’s true then today’s seven flavours of the software is the last grab at the old licensing model.

Niches and needs: necessity and the mother of invention

How one person’s problem becomes an invention

An old saying is necessity is the mother of invention and nowhere is this shown better than walking the exhibition floor of the Internet of Things World conference in San Francisco today.

The Wallflower is a good example of this, thought up of after the founder had to rush home when his partner thought she’d left the stove on (she hadn’t), he thought there had to be something that could monitor this on the market and when he discovered there wasn’t, he invented it.

Snowboarding needs

Probably the sexiest device on the floor is the Hexo+, an autonomous drone designed for video shots. Use the app to tell you what shot you want and it the drone will take off and video you.

Hexo+ was founded by Xavier de Le Rue, a French professional snowboarder who wanted to get shots of his maneuvers but couldn’t afford a crew or a helicopter to do so. The preprogrammed flight patterns represent the most common camera sequences optimised for the GoPro camera.

Probably the most trivial is the MySwitchMate, a mechanical device that fits over a wall light switch. Set it up and you can use its app to flick your lights on and off.

The device was born out of the founder wanting to remotely control his college dorm lights from his bed. While the market seems to be those who don’t want to get out of bed, its main market are those who would like remotely controlled lights but can’t install a smart lighting system.

A niche from a need

What all three of these devices show is how a need by an inventor spurred a product’s development, in that respect the Internet of Things is no different from any other wave of innovation.

So if you wonder “why doesn’t someone sell this?” it might be an opportunity to set up your own business or invent an IoT device to meet that need.

How to make the IoT pay

Keeping things simple for the home and selling efficiencies to big business are the way to make money from the IoT

How do companies sell the internet of things to consumers? This was the question at the opening panel of the Internet of Things World conference in San Francisco this morning.

Belkin’s Chief Technology Officer Brian van Harlingen took the lead in the panel stating that the opportunity lies in making sense out of the IoT’s complexity. “With data comes complexity, we have to make it simple for the end user,” said Van Harlingen

Van Harlingen’s view was backed up by Verizon’s Chief Data Scientist, Ashok Srivastava, who understandably sees the challenge of managing the information generated by masses of devices as being an opportunity for his company and data scientists in general.

That masses of data is being generated isn’t surprising seeing the other member of the morning’s panel was Jason Johnson, Co-founder and CEO of smart lock maker August. That the ordinary door lock may be generating masses of data indicates just how much information might be churning around the average smart home in the near future.

Cut out the complexity

It may well be that all of this data and complexity isn’t necessary as Joe Dada, the CEO and founder of smarthome company Insteon, point out. “Leave the network as quiet as you can,” is his advice. “People over-estimate the amount of data that needs to be pushed across the network.”

Dada, a twenty-five year veteran of the smarthome industry, sees the over-complication of the IoT as being a weakness in many of the products and business models being touted today with his company selling their products on being convenient, safe and fun.

While Dada has a successful business model, many of the other business don’t and exactly how to make money from the IoT wasn’t really answered by the panel.

Capturing efficiencies

It may well be that for many the answer lies in making existing products better, in talking to Cisco’s Brad Bechtold who runs the networking giant’s Oil and Gas Industry Transformation division estimates that there could be operational savings of up to 11% for the sector through implementing IoT technologies.

With estimates of the oil and gas industry’s size being around four trillion dollars a year, that represents an opportunity of over a hundred billion dollars a year in the one sector alone.

Selling the IoT

So it may be that the way to sell the Internet of Things into the industrial sector is to point out the operational savings available. Should the promise of substantial cost reductions be realised then it may even trigger a new wave of capital investment as businesses decide it’s easier to upgrade equipment than retrofit it.

The analytics and management aspect will turn out to be lucrative for many businesses as well, however the key to success is going to be demonstrating how these services add value for customers.

For the consumer market however the key probably lies in Joe Dada’s advice – keep it easy, convenient, safe and fun.

The tough world of IoT hardware startups

Starting a business making IoT hardware is a tough challenge

Yesterday Internet of Things startup Ninja Blocks announced it was shuttering its doors after three years of operations, two successful Kickstarter campaigns and three successful fundraising campaigns that netted $2.4 million.

Ninja blocks aimed to become the centre of the smarthome with its simple controllable device but, as many other startups have found out, the costs and complexities of designing, manufacturing and shipping hardware are not trivial.

Last year I spoke to Ninja Blocks and a similar IoT startup which also failed, Moore’s Cloud, about their opportunities and challenges. In the light of both companies failing they are worth watching again.

Daniel Friedman, CEO of Ninja Blocks outlined the company’s plans along with the limits of crowdfunding.

The CEO of Moore’s Cloud, Mark Pesce, had much stronger views on crowdfunding and its limits.

From the Moore’s Cloud and Ninja Blocks story it would be tempting to conclude that pure IoT hardware startup plays are doomed to failure, however the lessons of companies like Fitbit and the Pebble watch show otherwise.

A very good example of success is Spanish IoT company Libelium whose founder and CEO Alicia Asin told Decoding The New Economy two years ago how the company had started under the shadow of the 2009 economic crisis and thrived since.

The failure of Ninja Blocks and Moore’s Cloud really tell us we’re in the early days of the IoT and the business models and technologies are not certain. It’s also a commentary on the risks involved in startup businesses, as investor Dave McClure says, “not every one will be a unicorn.”

As the markets grow and the technologies evolve we’ll be seeing many more IoT startups, few will become billion dollar unicorns and many will fail. That’s the nature of new industries.

A series of weak links

Security continues to be a challenge for Internet of Things vendors

One of the ongoing discussions in the world of the Internet of Things are the security weaknesses in many devices that leave networks vulnerable to rogue devices or malicious hackers.

A good example of this is Craig Hockenberry’s post on his Furbo.org site on how bugs in Apple’s Bonjour software messes with networks.

While Apple won’t say what causes this issue – an ominous point in itself – Hockenberry surmises it’s due to older software in some devices that no longer have updates available, which is another problem facing the IoT.

On top of Hockenberry’s story, a piece in Threat Post reports the Open Smart Grid Protocol has serious security issues.

The writers of the package that’s installed on more than four million smart meters and similar devices worldwide decided to write their own encryption algorithm that has proved easy to break.

So the smart home which might feature both a slew of Apple devices and one of these exposed smart meters has a range of security holes that the occupier has no idea about. This hardly breeds confidence.

As the Internet of Things is rolled out, security is going to have to be at the front of developers’ and vendors’ minds. The stakes are too high for shoddy and ill thought out compromises or for vendors like Apple who rate secrecy over their customers’ security.

Building a future proofed business

Adapting your business to survive change means an open mindset and a wide use of cloud software

A few weeks ago the source of all wisdom for micro-businesses, Flying Solo, and I did a webinar on Future Proofing Your Business.

During the presentation we looked at the big trends that will affect business over the next decade with a focus on some of the demographic, economic and technological changes that are happening today.

The technologies are evolving rapidly and some of those we focused on as being business changing are the driverless car, automation, robotics, the internet of things and cloud computing.

Future proofing your business from Paul Wallbank

As with all good presentations we took as many audience questions as possible and the feedback was particularly pointed on one topic, “given the degree of automation, where do the jobs come from?”

Finding the jobs of the future

While to some it might be surprising to hear this from a business audience, it’s very much a valid question given most of the solo operators tuned in are in consulting type roles that will probably be eliminated or affected by algorithms or robotics, if not outsourcing through o-desk, Airtasker or similar services.

Exactly what will be the jobs of the future is a difficult question to answer as predicting what tomorrow will look like is a fraught task, predicting in 1990 that web designers and online analytics would be a growth field ten years later is a good example.

A changing economy

What we can be sure of though is that business and employment does change and evolve around technological advances. The third slide of the presentation shows Sydney’s Circular Quay in the 1920s.

The economy though was still predominantly farm based, in Australia around a quarter of the workforce were in agriculture – in the US 27% of the population were farmers – in both countries today it’s below three percent.

All of those displaced eventually found jobs, although the transition costs were great as John Steinbeck documented in the Grapes of Wrath.

Free your mind and the rest will follow

So the key to future proofing your business lies in not being one of Steinbeck’s Oakies and that requires a mental shift, we need to be data literate and deploy the tools that mean our companies are more responsive to changing markets.

One of the keys to business survival in a changing world is to use the right tools, particularly cloud computing services some of which I’ve listed below.

We only touched on a small number of ways that the world is changing, for instance the image illustrating this post is Microsoft’s Holo Lens and we haven’t mentioned Virtual Reality at all. The key is to keep an open and flexible mind.

Office applications

One of the biggest costs for business is the software for writing letters and working on spreadsheet. There’s free and paid for services that you can use on the cloud that cut your costs and increase your office productivity.

Google Docs
Evernote
Zoho Docs

Website platforms

There’s plenty of free, or cheap, tools to get your name out on the web. Don’t forget to register you business name’s domain though.

WordPress
Blogger
Wix

Design software

In a crowded world good design matters, Canva is a good quick way to get a good looking logo and graphics for your business.

Canva

Accounting services

One of the greatest challenges for small business is doing their books and accounting software is a must have for every commercial operation. Online services reduce costs and increase flexibility for businesses of all sizes.

Saasu
Xero
MYOB Business Essentials

Customer Relationship Management

CRM software helps you monitor and understand who your customers are and what you’re doing for them.

Salesforce
Sugar CRM

Backups

Backing up is critical for your business. Having an online automated backup helps you ensure essential data is safe.

Carbonite

Shared storage

Sharing files with others helps your business be more efficient as teams can get work done without using the same computer.

Dropbox
Box.net

Communications

Voice over IP, or VoIP, is a massive cost saver and most of them are cloud services.

Skype
MyNetFone

Project management

Running and managing projects is a complex task made much easier with a good project management program to keep track of tasks and time.

Basecamp
Zoho Projects

Outsourcing

Cloud computing and online services are making outsourcing possible for small businesses. With a browser and a credit card, you too can be in the outsourcing business.

Upwork (formerly O-Desk
Freelancer