Decoding the new economy

Towards the Zettabyte enterprise

The data explosion is here, are you ready for it?

Toward the Zettabyte Enterprise originally appeared in Smart Company on May 31, 2012

Two hundred years ago, the idea of equivalent power of hundreds of horses in a single machine was unthinkable; then steam engine arrived with what seemed unlimited power and that, followed by electricity and the motor car, changed our society and the way we do business.

Back then it was inconceivable that the average person would have the equivalent of several hundred horses of power in their household, today most of us have that sitting in our driveway.

The same thing is happening with the explosion in data, it’s changing how we work in ways as profound as the steam engine, electricity or the motor car.

A couple of surveys released this week illustrate the how business is changing. The Yellow Social Media Report 2012 and the Cisco VisualNetworking Index both show how business and our customers are adapting to having high speed internet at their fingertips.

The Cisco index illustrates the explosive growth of data across the Internet as more people in Asia and Africa connect to the net while users in developed countries like Australia increase their already heavy usage.

In Australia, Cisco see a sixfold growth in traffic between now and 2016. As the National Broadband Network is rolled out, they see speeds increasing substantially as well, with Australia moving from the back of global speed tables up to the front.

Many people are still struggling with the Megabyte or Gigabyte, but very soon we’re going to have to deal with the Zettabyte – a trillion Gigabytes.

For businesses, this means we’re going to have to deal with even more data, it’s clear our hardware and office equipment aren’t going to deal with the massive traffic increases we’re going to see in the next few years.

Even if we have that equipment, it’s another question whether we have the systems, or intellectual capacity to use it effectively.

The Sensis social media report shows consumers are expecting not just rich data but also 24/7 online services.

A worrying part of the Sensis survey is that businesses aren’t keeping up with these demands; something that jumps out with the survey is that while 79% of big businesses have a social media presence, only 27% of small businesses have bothered setting one up.

Australian small businesses have basically given the turf away to the big end of town.

The real worry with these statistics is that small business just isn’t taking advantage of the tools available to them — not only are they leaving the field open to bigger competitors, but there’s a whole new generation of lean new startups about to grab markets off slow incumbents.

While the big companies are vulnerable, it’s the smaller businesses who are the low hanging, easy to pick fruit. If you’re in a profitable niche segment this is something you’ll need to keep in mind.

In the near future we’ll be dealing with inconceivable amounts of data, the businesses that understand this will thrive while those who don’t probably won’t even understand what has hit them.

FUD on the Desktop

Can moving off Windows XP really save companies money?

“User productivity costs jump up a staggering 40 percent“, “return on investment over 130 percent over a three-year period” and an eighty four percent drop in IT support costs are some the latest claims from Microsoft in their campaign to wean users off Windows XP.

These, undoubtedly true, claims are pretty impressive and compelling for cash strapped IT managers, but do they really matter anymore?

With the rise of Bring Your Device policies and cloud computing, what operating system employees use is rapidly becoming irrelevant.

In large organisations that supply workers’ computers, most systems are run on SOEs – Standard Operating Environments – which means users have limited accounts and can’t install rogue software.

For those organisations wedded to supplying staff with desktop or laptop computers XP is fine and almost all of them are well advanced in their plans to redeploy to Windows 7 or 8 when the XP support period runs out in April 2014.

We’re seeing fewer organisations locked into the SOE model as the financial sums and business benefits of moving over to an employee Bring Your Own Device – BYOD – model start to look compelling.

Developing an SOE is a complex, time consuming task for an organisation – the package has to be tested to work on the company’s hardware which might include dozens of different types of printers, laptops and other devices. Then it has to be tested on all the software employees use.

In a big organisation developing new operating environments is not done lightly. It’s a complex, expensive process.

With a BYOD policy the company can develop a standard desktop environment that runs on a web browser. Staff can then bring their own device running on Mac OSX, Android, Linux or even Windows XP and, as long as their browser is up to date, they can run on the corporate network.

The IT department no longer has to care about what the staff member has on their desk and can focus on more important business technology issues – although sadly the password issue doesn’t go away.

For Microsoft, this evolution in corporate IT is a problem. Increasingly big organisations aren’t placing orders for big fleets of centrally managed desktops. The IT industry has moved to the cloud.

In a perverse way Microsoft are winning the desktop battle, most of those workers in companies implementing BYOD policies will choose Windows 7 or 8 systems because they are cheap and work well in a business environment. The problem is that’s where the profit no longer lies.

While we’ll see more FUD – Fear, Uncertainty and Doubt – about cloud computing, BYOD and Windows XP over the next year, the battle has been fought and won.

Increasingly Microsoft are looking like an exhausted army that has won an irrelevant battle while the real war has moved elsewhere.

The challenge for Microsoft is to find its way back to relevance in an era where the operating system doesn’t really matter.

The View From The Cloud

Where is the cloud computing industry heading and how does it affect businesses?

I’m presenting View From The Cloud this afternoon where we look at the results of SmartCompany’s technology in business survey.

The results are interesting, with nearly half the respondents saying they don’t use any cloud services.

Almost certainly, those respondents are wrong – they don’t realise many of the things they do on the web are cloud based. The 9% who nominated “they don’t know” are closer to the truth.

Those “unknown unknowns” are the big challenge for business managers and owners – those who think cloud computing isn’t being used in their organisations don’t know what their staff are up to with their laptops and smartphones.

Of those who are knowingly using cloud computing services, over two-thirds said they did so for the flexibility while just under a half appreciated the cloud services’ ability to grow with their business.

An encouraging aspect of the survey is how only a quarter of the respondents nominated price as being the reason for adopting cloud services.

This is an aspect of selling cloud computing services that has worried me for a while, that companies are commoditising their market by giving away free – or insanely – cheap services.

As always, price doesn’t drive the good customers and this survey illustrates that. Provide a good service at reasonable price points and the customers will come.

Business respondents also illustrated a mature attitude towards risks with cloud service with 61% concerned about data safety and half of that number worried about access issues.

An interesting part of the threat response was that 17% had other concerns about cloud technologies – including being tied to one vendor.

This is an interesting attitude which indicates people don’t understand the degree of vendor lock in that already exists in the computer world and why the majority of businesses are using Windows computers running Microsoft Word. If anything, cloud services are far more open than boxed software.

Vendor lock in though is a real concern and something that all cloud computing users should check before they, or their business, becomes too dependent on any one software package, consultant or online application.

Overall, the SmartCompany business technology survey is an interesting snapshot of where business is today with emerging trends and services. Join us at 12.30 to discuss the results.

Eroding business silos

Knowledge is power, and the businesses who can share it are those who will define the 21st Century.

During our ABC radio discussion on politics and social media with Jeff Jarvis, we inevitably came around to the issue of sharing information.

We’ve covered the risks of personal sharing extensively and Jeff’s view is that our perceptions of privacy are evolving as we explore what is acceptable or tolerable in an information rich world.

Overlooked in this discussion is just how important sharing is for businesses – particularly in breaking down silos within an organisation.

As organisations grow, silos develop as various groups or departments grow to address specific functions. It’s a natural process.

However silos can damage businesses as valuable business knowledge is kept within the group rather than shared with the entire organisation.

This is the opportunity we see now in the various cloud computing, social media and big data tools that have developed to help people, gather, curate and share information.

Today there is no excuse for critical customer information sitting in the call centre logs not being available to marketing, sales or management teams. That is just one example of thousands.

Over time we’ll see businesses owners and managers develop the skills and tools to use data more effectively. This is already happening as many IT people move from Information Technology to Knowledge Management.

Business silos won’t ever be fully eliminated; in many ways they are necessary as you can’t expect the company accountant to know everything the customer service or sales staff do.

Those businesses who are successful will be those who overcome internal politics and resist the managerial urge to build little empires, information is too important to be hoarded by middle management princelings.

In the 19th Century power came in the form of steam engines, today it comes in knowledge. How well are you harnessing the power in your business?

Forget Plastics, today it’s Big Data

Big Data is the IT industry’s latest buzzword but it’s been sitting on our desktop all along

“Plastics” was the career advice to uni students in the 1967 movie The Graduate. Today the same advice to a smart young entrepreneur would be “big data”.

Big data is the current buzzword for the IT industry, we’re seeing start-ups with cool tools popping up and whole new job descriptions to manage it, while big and small businesses ponder how to use another technology in their operations.

At the end of the month, the third of the City of Sydney’s 2012 Let’s Talk Business series will see SmartCompany’s James Thomson among others discussing how data drives business.

How we use data in our business is something we’ve had to come to grips with for ages, but many of us haven’t really started to find those nuggets of value in our databases.

We’ve actually been in the era of big data for decades since computers were introduced in the workplace. One thing that PCs do very well is gather and store information.

Today computerised point-of-sales systems, database software, loyalty programs and web-tracking tools mean we have a massive amount of data about our clients at our fingertips.

As computers get more powerful and cloud-based services start making detailed data analysis more available, we’re going to see even more data pouring into our businesses.

Social media services add to the data deluge as they gather, giving even more intelligence about our markets, individual customers and the performance of our businesses.

The problem is that many of us are already overwhelmed by what we have. The thought of even more data we can’t use causes many managers and business owners to hide under their desks and weep.

An article in the MIT’s Technology Review about Peter Fader, co-director of the Wharton Customer Analytics Initiative at the University of Pennsylvania looked at this problem.

Professor’s Fader’s view is that most businesses have enough data – the problem is managing what we have, along with the risk of trying to extrapolate too much from historical information.

To deal with this overload we’re seeing companies like Kaggle starting-up to help us mine this data and get useful information about our businesses and customers.

What these data-mining companies are promising is the ability to see the patterns in what appears to be just a mass of confusing data.

Already we’re seeing businesses that can connect the dots get a head start on their slower competitors who don’t appreciate the value locked in their databases and CRMs.

Making sense of the data we’re accumulating is the real challenge. If we’re not paying attention to what we already have then there’s little point in gathering more.

Tickets for How Your Customer Data Can Drive New Business at the Sydney Town Hall on May 29 are still available.

Security and cloud computing

Understanding risks with online computing is the best way to manage it.

Last Friday cloud accounting service Saasu ran their Cloud Conference looking at the business benefits of online computing and business automation.

Among the topics discussed was the security of cloud computing with Stilgherrian giving an excellent overview of the state of information security.

Stil’s message is clear; online security is everyone’s problem – if the bad guys want to target you for whatever reason they will.

As a business owner, it’s essential to take basic precautions. This is something I’ve covered before and something Stil raises in his presentation by pointing out that Australia’s Defence Signals Directorate lists 35 mitigation strategies based on the security breaches they examined in 2010.

Of those thirty-five, the top five would prevent 85% of security breaches. The top one – keeping your applications up to date – would avoid almost every PC malware attack along with Apple Mac’s Flashback worm.

In answering my question about how Saasu and other cloud computing users can protect their system, Stil also raised a good point about using virtual machines for web browsing and even purchasing a computer just for business accounting and banking use so the services can’t be compromised.

Related to this topic is an ongoing discussion on the Reddit forums between posters claiming to be malware writers and botnet operators.

While it’s risky to trust everything you read on Reddit, the tips are worthwhile, particularly the advice to “disable addons in your browser and only activate the ones you need.”

By reducing the number of programs running on your computer or the add ons in your web browser, you lessen the risk of being infected. Again this would have protected the victims of the Flashback worm.

The security of our systems is our own responsibility, just like our home and office security.

Cloud computing is no different to other computing – the basics of information security, or #infosec, are the same regardless of whether you’re using software on your computer or the cloud.

Used responsibly, cloud computing is no less or more secure than any other computer or smartphone use. We shouldn’t underestimate the risks, or get hysterical about the threats.

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