Innovation | Paul Wallbank - Communications Professional

Coffee machines, the Big Blue W and the barriers to new technology

All new technologies involve a learning curve and sometimes people don’t have time to gain that knowledge.

Last week my wife bought a new coffee maker, an impressive, all singing and dancing device that’s a vast improvement on the decade old machine it replaces.

Despite drinking three or four cups of coffee a day, for three days after the new machine arrived I didn’t make one long black or cappuccino. The reason was I didn’t have time to figure out how to use it or the high tech coffee grinder that it came it.

Being time poor is one of the greatest barriers in adopting new technologies as business owners, managers and staff often don’t have the time to learn another way of doing things.

The coffee machine reminded me of something I learned with a business I was involved in the early 2000s. We were trying to sell Linux systems into small and medium businesses.

We had some success selling into small service businesses like real estate agents and event managers where the owners could see the benefits of open source software and, in many cases, had a deep suspicion or resentment towards Microsoft’s almost monopoly on small business software.

Despite the success in selling the systems, the business though came undone because many of the clients’ staff members refused to use the Linux machines, as one lady put it to our frustrated tech “I want to click on the Big Blue W when I want to type a letter.”

That Big Blue W was Microsoft Word and no amount of cajoling could convince the lady to use any of the open source alternatives — she knew what worked in Word and she had neither the time or inclination to learn any thing different.

Eventually that customer gave up trying to convince their staff to use non-Microsoft systems and the computers were reformatted with Windows, Office and all the other standard small business applications installed.

This happened at almost every customer’s office and eventually the business folded.

For those of us involved in the business the lesson was clear, that time poor users who are content with their existing way of working need a compelling reason to switch to a new service.

In many ways this is the problem for legacy businesses — the sunk costs of software are more than just the purchase price, there’s the time and effort in migrating away from existing products and training staff.

When we’re selling new technologies, be it cloud computing services, linux desktops or fancy new coffee machines, we have to understand those costs and the fears of users or customers who’ve become accustomed to an established way of doing things.

In the eyes of many workers new ways of doing business are scary, challenging and often turn out to be more complex and expensive than the salesperson promised. In an age where marketers tend to over promise, that’s an understandable view.

For those selling the new products, the key is to make them as easy to use and migrate across to. The less friction when making a change means the easier it is to adopt a new technology.

Could advertising have saved Blackberry?

Would advertising have saved Blackberry

Could advertising have saved Blackberry wonders Joyce Yip on the Marketing Interactive site.

Yip cites Samsung’s blanket advertising as one of the reason’s for the Korean brand’s success while Blackberry could only afford a token presence for the new Z10 phone.

While there’s no doubt Samsung and Apple’s marketing muscle has helped them dominate the smartphone market, advertising alone doesn’t explain the dominant brands’ success.

Blackberry was doomed from the moment a business friendly smartphone was released, no-one expected it at the time but it turned out to be the iPhone.

Compared to the iPhone, the Blackberry was woefully underfeatured and once corporate users discovered email wasn’t the only use for a smartphone, the Canadian company’s fate was sealed.

While the Z10 and Q10 phones were well featured devices, they are way too late for a market where Apple and Samsung have most of the sales and take all the profit.

It’s tempting to think advertising and marketing may have saved Blackberry, but the company was overtaken by a fundamental market change which left it stranded.

For a while in the late 2000s Blackberry looked untouchable in the corporate market and no-one would have expected Samsung and Apple to disrupt their position. That’s the real lesson Blackberry teaches us.

Reducing the road toll through the internet of everything

How can the internet of everything reduce the road toll?

How can modern computer technology cut the road toll?

Transport for NSW’s John Wall spoke last week at Cisco’s Internet of Everything presentation in Sydney about some of the ways the connected motor car can reduce accidents.

John’s presentation comes from personal experience, having being a volunteer for nearly thirty years at his local State Emergency Service brigade where he was often among the first responders to local vehicle accidents.

Some of the improvements in technology see the road toll falling as people travel less because of remote working, teleconference and business automation. Many of the applications though are built into the vehicles, street signs and the roads themselves.

Finding the safest route

John’s first suggestion for improving driver safety is having navigation systems sourcing traffic, weather and other information to suggest the best route for the driver. An intelligent system may also modify the recommended journey based on the experience of the driver and state of the vehicle, such as the tyre conditions.

Watching the eyes

Fatigue kills and all of us have driven when we were really too tired to be behind the wheel.

The first in car technology John discussed is facial recognition technology that detects when drivers are fatigued. Tying this feature into the vehicle’s entertainment system with a stern aviation style “PULL OVER – YOU ARE TIRED” warning could well save hundreds of lives a year on his own.

Connected road signs

One of the underpinning factors of the internet of everything is cheap computers and transmitters embedded into almost anything. Road signs and sensors talking to cars could help reduce driver errors such as entering curves too fast.

Those signs can also be plugged into weather conditions so if there’s ice, fog or rain then the car can be told of the hazards ahead.

Going on the grid

Signs are not the only devices that could be talking to each other, vehicles themselves could be talking to each other. Should one car hit a slippery or soft patch on the road, it could tell following vehicles that there’s a problem ahead and respond accordingly.

That technology too could help traffic planners and road authorities, as data on traffic speeds and road conditions feed into their databases it becomes easier to identify black spots or road design problems before lives are lost.

Helping the first responders

A wrecked car or roadside sensor can also help those first responders attending an accident. The vehicle itself could transmit the damage and give rescuers valuable, time saving information, on the state of the occupants.

Similarly, the system could also warn emergency services such as hospitals and ambulances of the injuries likely and what’s needed to treat the injuries on site, in transit and at the casualty ward.

Importantly, a smart vehicle can also warn those first responders of potential risks such as live air bag gas cylinders, car body reinforcements or high voltage cables as they attempt to free trapped occupant from a wreck.

The rescuers themselves may be wearing technologies like Google Glass that help them see this information in real time.

Bringing together the technology

As Kate Carruthers points out, the internet of everything is the bringing together of many different technologies – wireless internet, cloud computing, grid networks and embedded devices all come together to create a virtual safety net for drivers.

By the end of this decade that we will all be relying on these technologies to help us drive. Which means we might find our licenses start to be endorsed for the level of technology in our vehicles, just as we used to have to get qualified to drive a car with a manual transmission.

Concluding his presentation, John Wall told the story of Jason, a cyclist from his town who was killed in a road accident and left a young family. In his slide he showed Harry, Jason’s young son, playing with the flowers on his father’s memorial.

“I hope for Harry is that when Harry learns to drive that things will be different on our roads and things will be different because we are all connected,” said John.

It’s a strong reminder of the real human opportunities and costs when we adopt new technologies.

Car crash image courtesy of jazz111 through SXC.HU

Hotels and 3D printing

Technologies like 3D printing will change the hotel, locksmiths and other industries in ways we don’t expect

One of ADMA Forum’s second day speakers, Phil McAveety, EVP of Starwood Hotels, had a look at the hotel of the near future.

In Phil’s view, the key to success in the hotel business lies in providing in a unique guest experience as the world’s middle classes explode.

The role of the 3D printers in the hotel experience where guests can order a pair of sneakers or swimming goggles to be printed up when they’ve forgotten their own is one of Phil’s fascinating views on how technology will change the hospitality industry.

Its a shame that most hotels have old style door keys, All Things D looks at a start up called KeyMe that stores details about door keys on the cloud which customers can download 3D printing files.

These two examples illustrate just how a technology like 3D printing will change industries.

Never going to let you go – the failing businesses clinging desperately to baby boomers

As younger people turn away from old business models, those comfortable with the status quo cling desperately to their established but shrinking markets

Probably the driving factor of the consumerist society’s development was the baby boomers’ growing up.

Through the last fifty years everything from Coca-Cola to baby products and hair loss treatments has been aimed at the cohort born between 1945 and 65.

For many businesses and marketers this group has been so profitable it’s been hard to let them go.

The US motor industry is a good example of this with Bloomberg reporting the over 55 age groups are dominating domestic car sales as younger folk turn away from car ownership.

A similar thing is happening in Australia as TV executives decide that competing with the internet for millennials is too difficult so sticking with the over 50s market is safer.

“We’d go out of business if we stayed with our traditional demographic of 16-39.” Channel Ten CEO Hamish McLennan told the Mumbrella360 conference in Sydney earlier this year.

The problem for both the US motor manufacturers and Australian TV stations is the trends are against them.

For TV stations trying to compete against the internet, the older age groups are following their kids across to the web at the same time that they are beginning to save for retirement.

That need to save is also working against the car dealers, while many boomers fawn over new cars a large number simply aren’t going to be able to afford these indulgences. It’s not a good prospect for the motor industry.

In the meantime, younger people are turning away from the motor car, Bloomberg quotes University of Michigan Transportation Research Institute s researcher Michael Sivak who penned a report on generational shifts in the US motor industry.

“I have a son who lives in San Francisco; when I get a new car and I tell him what I got, he couldn’t care less,” Sivak said. “To him, it’s a means of getting from A to B. He goes into great lengths about taking a BART or bus, even though it takes him an hour longer. He does have a car, but uses it very rarely.”

The movement away from the motor car indicates something much more profound about western society — if the baby boomer represented the age of consumerism, the entire Twentieth Century was defined by the automobile.

For politicians and town planners wedded to a 1950s view of economic development, it may be they are making terrible and expensive mistakes in pushing freeway and other road projects.

While aging baby boomers purr over their expensive cars, the forces of history may be passing them by. Those businesses pandering to those older groups might just want to consider whether they want to be left behind as the economy, and the kids, move on.

It’s comfortable to cling onto what has worked for the last fifty years, but sometimes the lowest risk lies in letting go.

Realising value from the internet of everything

How will businesses benefit from the internet of everything?

How much opportunity does connecting all our machines to the internet really offer businesses and society?

Cisco’s Internet of Everything index released last week looks at one of the great opportunities facing today’s managers in realising business value in these new technologies .

On Cisco’s calculations, the internet of everything is worth over $14.4 trillion to the world economy and nearly half the business benefits are going wasted.

Germany and Japan lead the pack and, as discussed yesterday, Australia wallows between China and Russia.

Despite German businesses being the leaders, Cisco estimates $33bn, or nearly 40% of the potential gains, isn’t being realised even in that country.

How different industries are using the internet of machines is notable as well, with Cisco claiming the biggest benefits currently being realised by the IT industry while the greatest potential lies in the service, logistics and manufacturing industries.

cisco-internet-of-everything-value-index-by-industry — Internet of everything value by industry

If anything, these projections could be on the conservative side with Cisco estimating fifty billion devices connected to the net by 2020. Given the rate of smartphone being sold and everything from vending machines to clothing being online, it may well be ten or even a hundred times that number.

The real challenge for businesses in all these projections is how individual organisations can realise this value in their operations.

For some businesses, there’s plenty of existing opportunities with well established services in areas like field services and logistics tracking the locations of staff and packages. These are relatively simple to incorporate into existing operations.

In other applications, businesses will find things more complex as the connected devices will tie into analytics and Big Data plays. These won’t be simple.

One particularly important area for the workforce as a whole in business process automation where many tasks currently done by humans can be carried out by machines talking to each other.

This is already happening in fields like fast moving consumer goods and hospitality where stock levels can be automatically monitored and replacement stock ordered in without staff being involved. As the technology becomes more widespread this will threaten the roles of many previously well paid managers.

Many of those managers though will be challenged anyway unless they’re prepared to deal with the changes that internet of things is bringing to their businesses.

How do you think the internet of everything will change your business?

Is Australia falling behind on the internet of everything?

Australian businesses are falling behind the rest of the world in using the Internet of machines says Cisco

Last Friday Cisco Systems presented their Internet of Everything index in Sydney looking at how connected machines are changing business and society.

Cisco Australia CEO Ken Boal gave the company’s vision of how a connected society might work in the near future with alarm clocks synchronising with calendars, traffic lights adapting to weather and road conditions while the local coffee shop has your favourite brew waiting for as the barista knows exactly when you will arrive.

While that vision is somewhat spooky, Boal had some important points for business, primarily that in Cisco’s view there is $14 trillion dollars in value to be realised from utilising the internet of machines.

Much of that value is “being left on the table” in Boal’s words with nearly 50% of businesses not taking advantage of the new technologies.

Boal was particularly worried about Australian businesses with Cisco lumping the country into ‘beginner’ status in adopting internet of everything technologies along with Mexico and Russia, with all three lagging far behind Germany, Japan and France.

In Boal’s view, Australian management’s failure is due to “the focus on streamlining costs has come at the cost of innovation.”

This something worth thinking about; in a business environment where most industries only have two dominant players and the corporate mindset is focused on maximising profits and staying a percentage point or two ahead of the other incumbent, being an innovator itsn’t a priority – it might even be a disadvantage.

For Australian business, and society, that complacency is a threat which leaves the nation exposed to the massive changes our world is undergoing.

What business can learn from the lost Island of Jura

Google Maps losing the Scottish island of Jura raises some interesting challenges for local businesses.

What would you do if your entire suburb, town or district vanished off the map? That’s the problem the villagers on the Scottish isle of Jura have had to face after Google wiped them off the map

The good humour of the locals about their predicament shines through the story, although the British and Scottish governments are less than impressed.

Particularly noteworthy is how the island’s distillery dealt with vanishing off the map – Jura’s whisky is quite distinctive for those who’ve tried it – came up with a great idea for a Twitter campaign to promote their brand.

Kira’s residents show just how important initiative and resilience is for business people, it’s a lesson we should all keep in mind the next time you hear an executive or interest group whingeing that the government needs to do something.

Our hackable lives – why IT security matters.

Now our cars, homes and security systems are hackable we have to start taking IT security seriously.

Two stories this week illustrate the security risks of having a connected lifestyle. Forbes magazine tells in separate pieces how modern car systems can be overriden and how smarthomes can be hacked.

Smarthome system security is a particular interest of mine, for a while I was involved in a home automation business but I found the industry’s cavalier attitude towards keeping clients’ systems secure was unacceptable.

The real concern with all of these stories is how designers and suppliers aren’t taking security seriously. In trading customer safety for convenience, they create serious safety risks for those using these system. It’s as if nothing has been learned from the Stuxnet worm.

A decade ago, a joke went around about what if General Motors made cars like Microsoft designed Windows. Like all good stories, it had a lot of truth to it. Basically, the software industry doesn’t do security particularly well; there are developers and vendors who treat security as a basic foundation for their work, but they are the exception rather than the rule.

That may well be a generational thing as today’s young developers and future managers are more aware of the risks of substandard security in the age of the internet.

Rather than seeing security as something that is bolted on to a product when problems arise, this generation of coders are having to treat security as one of the fundamental foundations of a new system.

What is clear though is that the builders of critical systems are going to have take security far more seriously as embedded computers connected to the internet of machines become commonplace in our lives.

Google and Microsoft show how online business is changing

Google and Microsoft’s quarterly reports show how all businesses are vulnerable in times of change.

Both Microsoft and Google yesterday reported their second quarter earnings for 2013 and both missed the targets expected analysts. Does this really mean anything?

Microsoft’s earnings were particularly notable as they included a $900 million dollar write off on Surface RT inventories, this almost certainly means a key part of the company’s tablet strategy has failed.

What’s striking in Microsoft’s earnings report is the terrible performance of the Windows Division which saw sales increase 10% year-on-year to 4.4 billion dollars, but earnings collapse by over 50%. Excluding the Surface RT write off, the division would still have seen a ten percent fall.

The company’s statement emphasised how the division is struggling with increasing costs.

Windows Division operating income decreased $1.3 billion, primarily due to higher cost of revenue and sales and marketing expenses, offset in part by revenue growth. Cost of revenue increased $1.2 billion primarily reflecting product costs associated with Surface and Windows 8, including the charge for Surface RT inventory adjustments of approximately $900 million. Sales and marketing expenses increased $344 million, reflecting advertising costs associated with Windows 8 and Surface.

At Google, the company’s 2nd Quarter report show trend is still upwards but the core business of online advertising is showing some cracks as the total number of paid clicks grows, but the value of each falls. At the same time traffic aquisition costs are rising at the same rate as revenues.

This could indicate that advertisers’ appetite for online links is fading. For smaller businesses, the cost of adwords campaigns has been escalating to the point where the old days of newspaper classifieds and Yellow Pages listings start to look cheap.

Couple the cost of advertising with the inevitable ‘ad blindness’ that web surfers have developed and a worrying trend for Google starts to appear. Overall Google’s net profit margin was 26%, down from 31% a year earlier.

While both companies remain insanely profitable – Google earned $14 billion this quarter and Microsoft $6 billion – both businesses are showing stresses as their markets evolve. It proves no business can afford to be complacent in these times.

The sport of racing dinosaurs

Bud Selig’s refusal to use email tells us how major sport administrators are insulated from the realities of the modern economy.

The admission from Bud Selig, the US Major League Baseball Commissioner, that he has never used email raised lots of eyebrows around the world.

As Business Insider notes, Selig is 79 years old and there are plenty of other sports administrators challenged by technology so it’s understandable that the commissioner might not see the need to use a technology that became common twenty years ago.

Bud Selig’s story illustrates a much more important issue facing the professional sports industry, that it’s run on an aging business model.

The last fifty years has been very good for professional sport as television and Pay-TV networks bid sporting rights higher across the world.

In most nations, the dominant sport did extremely well as broadcasters fought each other; the Olympics, Soccer leagues in most of the world along with baseball, American football and basketball in the US, Cricket in India, Aussie Rules in Australia, Rugby in South Africa and New Zealand all became incredibly rich.

There weren’t many competitive pressures on the managements of those sport as the dominant sports rarely had any competition, it was a matter of just playing the TV executives off each other.

As a consequence, many sports are run by people with a somewhat exaggerated sense of privilege – they believe it’s their talent, not Rupert Murdoch’s or NBC’s money, that is responsible for their game’s riches.

Bud can dismiss the disbelieving gasps of people in the real economy because for most of his career the only competition he’s had to deal with was from his colleagues has he fought his way to the top job which he won in 1998.

In the real economy, there’s no such luxury. In fact, email may be becoming yesterday’s technology as social media and collaborative tools take over. David Thodey at Telstra and Atos’ Thierry Breton are two leaders in this field.

The danger for sporting organisations is that they are ripe for disruption, so far broadcast media rights have stood up well while revenues in other parts of the entertainment and publishing industries has collapsed. There’s no guarantee though that broadcast sports will remain immune from those changes.

Should disruption come along, even just in the form of sporting rights stagnating, many professional codes will suddenly find inefficiencies like Bud Selig are an expensive luxury.

While Bud’s story is amusing, in reality there’s little the rest of us can learn from how Major League Baseball’s senior executives run their offices.

Image of Bud Selig courtesy of bkabak through Flickr.

Could 3D printing be lurching up the hype cycle?

3D printing is hot, so hot it’s found a place on the hype cycle.

3D printing is undoubtedly a game changing technology that changes the economics and scalability of manufacturing. But is it possible the technology is becoming over-hyped?

Two stories today illustrate the opportunities and potential of 3D printing; a home made SLR camera and NASA manufacturing their own rocket parts.

NASA’s experiment shows how precision, low demand components could be made. One of the problems with procuring parts like rocket engine injectors is that the production runs are low so the manufacturing costs are high given there are no economies of scale involved.

Additive manufacturing, or 3D printing also has the advantage that components can be manufactured in one piece rather than requiring assembly from a number of different parts. In turn this reduces production times and errors.

Printing your own camera seems a bit of waste of time and money seeing that cameras aren’t particularly expensive and the one printed isn’t a digital SLR – your have to find somewhere to buy and process the film.

The point though with Bozardeux’s project is that it is open source – anyone can modify or adapt the design and that is where the potential lies.

While the possibilities are endless with 3D printing, it may well be that the technology is being overhyped. Both the rocket engine injector and the SLR camera are early stage proofs of concept, neither are ready for full time use.

It also has to be kept in mind that traditional manufacturing methods aren’t going away – there will always be products more suited to mass production or using materials that can’t be fed through a 3D printer.

Right now we’re on the early stage of the hype cycle with 3D printing and while the potential is clear, the immediate future of the technology being oversold is also becoming apparent.

That of course means opportunity for many entrepreneurs and their investors, but it also means you have to be very careful in choosing technologies or where to place your bets.

In poker it’s said if you don’t know who the patsy is at the table, then it’s probably you. The same is true when a new technology is being hyped.