Category: cloud computing

Beacons and the hype cycle

Industry experts believe beacon technologies are being overhyped in the retail sector.

Are beacon technologies being overhyped? Some industry experts believe they are in the retail sector.

This week’s Netsuite Suiteworld conference had a heavy focus on the retail industry and one of the points being strongly made is that beacon technologies are a long way from prime time in the sector.

A reason for this is the current clunkiness of beacon driven apps points out Miya Knights, Senior Research Analyst of IDC Retail Insights, “customers have to go through the rigmarole of downloading apps, accepting permissions and so on. It’s too hard.”

One of the answers to this could be in creating compelling reasons to install the app, at the eBay Innovation Showcase last year the company showed off some of the potential with how a connected sports stadium could make ticketing easier while improving access to food and drink concessions.

However for many stores Knights’ point is going to remain a problem as creating a value proposition that encourages time and attention poor customers to enable apps will be difficult.

On the other hand, it may well be that beacon technologies are currently better suited in being used for the business operations in roles such as stock control and point of sale systems.

For the beacons themselves it’s likely we’re seeing the hype cycle in action with the technology grinding its way to The Peak of Inflated expectations.

Should it be the case that beacons could be about to become unfashionable, then we’ll start to see the technology find its industrial role.

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Shifting the cloud business model

Just as the cloud vendors disrupted the software market, they themselves face shifting business models

“What’s the biggest risk to your business?” was one of the questions asked of Netsuite CEO Zack Nelson during a post keynote discussion at the Suiteworld event in San Jose yesterday.

Nelson’s response was the shift to transaction based businesses and cited cloud based human resources company Zenefits as an example.

The transactions model can work two ways with either a fee being charged for each transaction – something that data analytics Splunk does – or Zenefit’s model of taking third party commissions.

A commission driven business

Zenefits doesn’t charge for its software instead making money from commissions paid by companies they refer users to. When a client needs workplace insurance or a new benefits package, the service gets a fee from the provider.

Investors love the idea with the company yesterday raising $500 million in a round that values the business at $4.5 billion dollars after just two years since being founded.

Regulators however don’t like its less than transparent commissions with the service in trouble in a number of US states and it’s clear to see how such a revenue model would hit problems in countries with strong disclosure rules.

Both of the transaction models present a threat to current cloud computing software businesses such as Netsuite and Salesforce that charge fixed license fees based on the number of users and the features they want. Both Splunk and Zenefits on the other hand give their software away.

Disrupted disrupters

Just as the cloud providers’ licensing model disrupted the traditional massive negotiated contracts for enterprise software and the fixed cost box model for small business, the online companies themselves might be facing their own disruption to the way they make money.

For executives like Zach Nelson, shifting from one lucrative model to another more uncertain revenue source will be something keeping them awake for a while longer.

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Twitter’s discordant note

Twitter’s decision to restrict access to its data has cost them dearly

It’s been a bad week for the social media service Twitter with its stock pounded after the leak of poorer than expected results.

Writer Matthew Ingham says Twitter lost its way five years ago when it started closing down access to third party developers, a move that hurt the service’s growth and user adoption.

Twitter’s move was greeted with disappointment at the time and many developers gave up working on the company’s APIs.

With the growth of third party applications stunted, there was little reason for new users to come on board and so Twitter is now disappointing the market with its results.

Basically Twitter CEO Dick Costolo and his team reaped what they sowed in restricting access; they kept control of their data but it’s cost them users and hurt their share value.

Twitter’s woes show that the economics of  cloud and social media services reward business that share data. While there may be some commercial and legal limits to what information can be shared, the default position should be to make data available.

In an information rich society, those who contribute the most get the rewards. This is the point Twitter’s management missed.

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How the cloud killed the CIO

Has the shift to cloud computing made the IT manager redundant?

In Technology Spectator today I have a piece on cloud services and how the promise of high reliability threatens the IT manager and Chief Information Officer.

This shift is the same change that’s affected the IT support industry, as technology becomes more standardised and a commodity the need for specialist support and management becomes unnecessary.

In many respects this is similar to a hundred years ago where most factories had their own power plants providing electricity, steam or bel power to drive the machinery.

As mains power became common and reliable, businesses no longer needed specialist staff to ensure the power flowed.

While much of today’s commentary focuses on the CIO role evolving, it may well be the position is redundant.

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A small business makeover challenge

Microsoft’s Modernbiz technology makeover program is an interesting study on how small business computer usage has changed

One of the key factors in bringing the Personal Computer era of business to a close was the end of the upgrade cycle where users tended to buy new systems every three to five years.

For companies like Dell, Acer, IBM and Microsoft this cycle was an important and reliable income stream.

In the early 2000s though it stopped as customers decided that with most new innovations coming onto their computers through web browsers they didn’t need to buy new systems.

For the PC industry, particularly Microsoft, this presented a huge threat to their business models and all of them have been trying to find ways to refocus their businesses.

The ModernBiz Technology Make-Over

Late last year I was asked by Microsoft Australia to participate in their ModernBiz Technology Make-Over where a small business running Windows XP and Server 2003 was given a free tech upgrade to the latest equipment.

This was interesting as it was an opportunity to see how Microsoft and the market are adapting to a very changed industry.

As well I still carry the many scars – most psychological but some physical – from my years of running PC Rescue where upgrading companies’ old technology was a core part of the business.

Doing a tough job

The fallacy many managers and inexperienced companies fall for is that migration customers from old equipment to new systems is a simple matter of copying a few files. It is never that simple.

Upgrading company computers a tough field as every business is unique and in workplace where the technology has been in use for over a decade the learning curve onto new software is insanely steep for staff and management alike.

So watching the process from a relatively safe distance where I wasn’t worrying about losing customers’ data or trying to complete a complex task within a short deadline was quite attractive. Basically I wanted to see the other guys sweat.

Another attraction in participating was to see how Microsoft are managing the transition from supplying business servers to provisioning cloud services and how customers are managing that change in product offerings.

Dealing with a shifting market

For both Microsoft and their customers the shift from one off hardware and license purchases to cloud based monthly subscriptions is a major change in mindset, so seeing how small business users adapt to online services will be interesting.

Overall the technology makeover promises to be an interesting exercise on how the small business computer industry is changing.

For his participation in the Modern Biz Technology Makeover program, Microsoft gave Paul a Lenovo laptop which he hasn’t yet used.

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Webinar: Future proofing your business using cloud computing, social media and other tools

Join us on April 29 to look at how business can grow in rapidly changing markets

On April 29 I’m helping Flying Solo with a webinar on how small and single operator businesses can future proof their businesses.

During the webinar we’ll be looking at how businesses can adapt and profit from a rapidly changing economy.

Some of the things we plan to discuss include the trends driving the changing marketplace, some of the tools businesses can be using to harness a rapidly evolving workforce and methods to attract mobile consumers.

We’ll also have a look at some of the ways canny business owners can use social media, cloud computing and other online services to make their businesses more profitable and flexible in a tougher business world.

The webinar itself is free and you can sign up at the Flying Solo website. Hope to see you there.

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Building the closed internet

Social media services like Facebook and LinkedIn are building API walled gardens that will change how online services work

One of the great strengths of the social and cloud business model was the idea of the open API, recent moves by Twitter and LinkedIn show that era might be coming to an end.

This week Nick Halstead, the founder and CEO of business intelligence service Datasift, bemoaned his company’s failure to negotiate an API access agreement with Twitter that restricts their ability to deliver insights to customers.

Earlier this year LinkedIn announced they would be restricting API access to all but “partnership integrations that we believe provide the most value to our members, developers and business.”

Monetizing APIs

Increasingly social media and web services companies are seeing access to APIs as being a revenue opportunity – something many of them are struggling to find – or as a way of building ‘strategic partnerships’ that will create their own walled gardens on the internet.

For developers this is irritating and for users it restricts the services and applications available but it may turn out to backfire on companies like LinkedIn and Twitter as closing down APIs opens opportunities for new platforms.

A few years ago industry pundits, like this blog, proclaimed open APIs will be a competitive advantage for online services. Now we’re about to find out how true that is.

One thing is for sure; many of the companies proclaiming their support for the ‘open internet’ are less free when it comes to allowing access to their own data.

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