Category: software

Google’s lost Docs mojo

Has Microsoft seen off Google’s threat to their office suite dominance?

Last week I spent the day at Xero’s Australian convention speaking to various cloud service companies, bookkeepers and accountants.

One of the notable organisations missing in the conversations was Google – two or three years ago, Google Apps would have been at the front and centre of conversations about cloud services and integration. Yesterday the company was barely mentioned.

Part of the reduced buzz around Google Apps at XeroCon is due to Xero’s closer relationship with Microsoft, but it also betrays how Google Docs is no longer the smartest, newest product on the block.

“We tried to eat their dog food, but our staff rebelled,” one manager of a marketing agency who worked with Google told me. “We thought we’d go Google Apps for all the work we were doing with them but we just found the products lacked the functions we needed.”

The main problem for business users are Google Docs’ slimmed down feature. While most people don’t use 95% of the tools included in Microsoft Word or Excel, each person uses a different 5% and find something critical missing from the cloud based challenger.

For writers, Google Docs’ lack of a word count function is a deal breaker. Speakers find the Presentation function far too basic concerned to the Microsoft Powerpoint or Apple Keynote packages.

In the cloud computing industry, Application Program Interfaces (APIs) are all important as these allow other services to plug into data and enhance value for users. Over the last two years, Microsoft have done a good job in cultivating their developer community while Google have taken theirs for granted.

Most importantly though is that Google seems to have lost focus on their productivity suite, it may be another example of the company’s corporate attention deficit disorder, or it may be be that Microsoft have seen off another challenge to their dominance in that sector.

If it is the latter, then Microsoft have done a good job with Office 365 in seeing off the threat that Google posed.

Despite the company’s challenges in the post-PC, post- Gates era it would be dangerous to write Microsoft off.

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Security by obscurity’s false promise

Suppressing public knowledge of security flaws is not the way to fix a software problem.

Yesterday’s post looked at how security needs to be a fundamental part of connected systems like cars and home automation, an article in The Guardian shows how auto manufacturers are struggling with the challenge of making their products secure.

In the UK, Volkswagen has obtained an injunction restraining a University of Birmingham researcher from divulging security weaknesses in Porsche, Bentley, Lamborghini and Audi cars.

A mark of desperation is when a company has to go to court to suppress the details of a software security breach, it almost guarantees the bad guys will have the virtual keys while the general public remain ignorant.

Over time it backfires on the company as customers realise their products aren’t secure or safe.

The real problem for Volkswagen is a poor implementation of their security systems. It was inevitable that a master code would leak out of repair shops and dealerships.

While the law is useful tool, it isn’t the best way to fix software security problems.

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Take ten engineers and the internet of everything

LogMeIn CEO Michael Simon sees the future of his business in the internet of machines

It seems a far jump from running a gaming platform to a remote access software company with a focus on the internet of machines, but that’s the journey remote access company LogMeIn and its CEO Michael Simon has travelled.

“Anything that could be connected will be connected in the next decade.” Micheal told me in Sydney last week and it’s where he sees the next step for the company he has led since its founding in 2003.

LogMeIn grew out of a team that formerly worked for uproar.com, an online gaming company sold to a division of Vivendi Universal for $140 million in 2001.

Two years after the sale Michael, who had been CEO of Uproar, and a team of ten engineers who formerly worked for the company thought they could solve the complexities of accessing computers remotely.

For geeks and big business, accessing your computer across the internet in 2003 wasn’t much a problem however it involved configuring software, punching holes in firewalls and configuring routers.

The LogMeIn team wanted to find a way to make this technology cheap and easy for small businesses and homes to use.

A decade later they employ 650 staff, half of whom are engineers, and have twenty million users of their product.

Building the freemium model

The vast majority of those users are using LogMeIn’s free services – Simon estimates that over 95% of users are using the free version.

In this, LogMeIn is one of the leading examples of the freemium business model – offering a free version of a software product and premium paid for edition with more advanced features.

One leader of the freemium movement was the Zone Alarm firewall, a product which earned its stripes in the early 2000s at the peak of the Windows malware epidemic.

Today one of Zone Alarm’s veterans, Irfan Salim, sits on the LogMeIn board along with two former executives of Symantec, the company whose PC Anywhere and Norton Internet Security products competed with both Zone Alarm and LogMeIn.

While LogMeIn has done well over the last ten years, the market today is very different to that of a decade ago with cloud computing technologies taking much of the need for remote access software

Mike Simon sees these changes as an opportunity with the computer industry having gone through three phases – the PC centric era, the mobile wave and now we’re entering the internet of things.

To cater for the mobile wave LogMeIn has released Cubby, a cloud based storage system that competes with Dropbox, Google Drive and Microsoft’s Skydrive, but Simon has his eye on the next major shift.

Controlling the internet of machines

The internet of things is a crowded market, but Simon believes companies like LogMeIn have an advantage over the telco and networking vendors as businesses with freemium and startup cultures look for ‘pennies per year’ rather than the ‘dollars per device’ larger corporation hope to make.

It’s a big brave call, but with the market promises to be huge – General Electric claimed last year nearly half the global economy or $32.3 trillion in global output can benefit from the Industrial Internet.

That’s a pretty big ticket to clip.

Whether Michael Simon and LogMeIn can achieve their vision of being integral part of the Internet of things remains to be seen, but so far they do have success on their side.

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Breaking out of the gilded cage – Microsoft’s challenge with Windows

How can Microsoft adapt to a market that’s shifting away from the products which have delivered spectacular profits over the last thirty years?

Update: With the announcement that Steve Ballmer will be stepping down as Microsoft CEO, the future direction of the company now becomes the biggest challenge for his replacement.

Over the last three weeks the news for the personal computer industry has not been good. How does Microsoft, the business that leads the sector, move on from the product which has been its mainstay?

Three stories in the last three weeks have shown how dire the situation is for personal computers, Windows and Microsoft.

Consulting firm IDC’s report that global PC sales had dropped a stunning 14% was a clear signal the PC era is ending.

A Gartner report two weeks ago warned that Microsoft faces a slide into irrelevance as Android device sales dwarf Windows’ numbers and Apple sales catch up with PCs.

Industry commentators Asymco made similar observations about the state of the PC industry noting that Apple takes 45% of all profits from an industry that is in decline.

In the past Microsoft has responded quickly to industry threats, one of the great management feats of the 20th Century was Bill Gates’ turning the company around to meet the challenges of Netscape and the newly popular internet.

So how can Microsoft meet the challenges of today’s much more competitive world, while protecting their impressive revenues and profits?

Replace the management

Steve Ballmer was employee number 30 at Microsoft having been hired in 1980. Since his appointment as CEO in 2000 the company’s stock price has wallowed.

Regardless of Ballmer’s performance, 13 years is a long tenure for a CEO in an industry that has radically changed in the last decade. A new perspective in the executive suite may well help the company leverage its strengths and weaknesses.

Microsoft’s management problems shouldn’t just be blamed on Ballmer however, a stunning Vanity Fair profile of the company last year blamed human resources policies, specifically ‘stack ranking’ employees, for poor performance.

Overhauling the company’s notoriously siloed management would give Microsoft much more flexibility in meeting the cloud and mobile challenges to its business.

Ditch Windows

At the core of Microsoft’s success is the Windows operating system which in 2012 delivered a quarter of the company’s revenue but has reported no growth for two years in a stagnating PC market.

It is still a cash rich business though and as a stand alone entity, the operating system division could still be an attractive private equity investment.

The story of Michael Dell’s attempt to take his company private is instructive as investment companies fight for a stake in a business with a turnover is less than Microsoft’s Windows division and far less profits.

Double down on Windows

The counter view to floating the Windows division is to double down and concentrate on the company’s core business. While the PC industry is fading, the need for embedded systems in machines is growing.

Microsoft though hasn’t executed well with non-PC operating systems – the continued failure of tablet versions of Windows XP is a good example – so it may mean a new management team to guide the company down this path.

Claim the cloud

The biggest cash generator for Microsoft is their business division that includes their Office and Dynamics products. These are most at risk by the market’s move to cloud services.

Paradoxically, Microsoft has a track record on the cloud products having acquired Hotmail in 1997, developed the Azure platform and taking steps to move its business products across to Office 365.

Microsoft’s experience with Hotmail is instructive of the company’s uncertainty with cloud services having renamed the product constantly. Currently its incarnation as Outlook.com indicates further integration with Office 365.

With a focused management, Microsoft may well be able to compete against both Google and Amazon on the cloud by leveraging its traditional market strengths and its army of evangelists, developers and support partners.

Buy Nokia

So far the alliance with Nokia has been underwhelming with Windows Phones being met with market indifference.  A purchase of the struggling mobile phone giant would give Microsoft more depth in understanding the mobile marketplace.

A more interesting aspect of Microsoft buying the mobile vendor would be the acquisition of Nokia’s mapping technology. This would give Microsoft an advantage over Apple and give them an opportunity to compete with Google in the still developing mobile and local markets.

For Microsoft, sticking with the status quo is tempting – a business with seventy-three billion dollars income and $17 billion in profits still makes it one of the world’s most impressive businesses.

The risk though is all of the company’s major revenue streams are being challenged by mobile and cloud service and Microsoft have to adapt to a world very different to the one they grew in.

As Gartner have pointed out, the company risks becoming irrelevant in an era of mobile devices accessing cloud services.

The Challenge for Microsoft’s management and board is to find the spark that keeps the company relevant in a marketplace where the company is no longer the dominant player.

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The Five Stages of abandoning a product

Microsoft show us how to kill a product with the slow abandonment of Windows 8

Killing a technology product is never a clean process, as Google well know. Microsoft show the way to deal with a failed project and we’re seeing their five stages of abandoning a product as they prepare to retire Windows 8.

The stages of Microsoft are abandoning a product are well known – the failure of Microsoft Vista is the best example, but not the only one.

As Microsoft smooths Window 8’s pillow and prepares for its imminent demise we can see the process at work.

Denial

At first the company denies there is a problem, the flashy advertising campaigns are boosted and the various ‘in the camp’ commentators get informal briefings from company evangelists to fuel their snarky columns about people getting Microsoft’s latest product all wrong.

This usually goes on for around six months until the market feedback that the product is dog becomes overwhelming – usually this happens at the same time the first reliable sales figures start appearing.

Anger

As the consensus in the broader community becomes settled that the new product isn’t good, the company’s tame commentators turn nasty and lash out at the critics for ‘misrepresenting’ the new product.

This is usually a touchy period for Microsoft and other vendors as they can’t risk being too aggressive but they have to allow their allies to both let off steam and try to recover the credibility they lost in hyping what’s clearly been a market failure.

Bargaining

Once it’s clear the perceived wisdom that the product isn’t very good isn’t going to be shaken, the vendor comes out with special offers and pricing changes to try and coax users over to the new service.

With Windows 8 Microsoft tried something unusual, rather than cutting prices, Microsoft announced they would increase the cost of Windows 8.

The idea was probably to panic people into buying the product and giving Microsoft a revenue and market share bounce for the quarter.

It didn’t work – the consensus that Windows 7 is a better product meant people stayed away.

Depression

As the realisation that pricing tweaks and promotional stunts won’t work sends the company, and its supporters, into a funk.

For experienced industry watchers, the silence around a product that’s been heavily hyped and defended for the previous year or two is a good indication that the next version is being accelerated.

Acceptance

Eventually the vendor accepts the product has failed and starts working on its own exit strategy – hopefully one that doesn’t see too many executives sacked.

With Microsoft’s this process starts with a quiet announcement that the replacement version of Windows is on the way, in this case Windows Blue.

At the same time, the tame commentators start talking about ‘leaks’ of the wonderful new system that is in the pipeline. Early beta versions of the new product start popping up in developers’ forums and file sharing sites.

Eventually you get stories like this one that appeared in The Verge yesterday – Windows Blue leaks online and we can be sure the Microsoft public relations machine has subtly moved onto the next version.

Vale Windows 8

So Windows 8 is coming to an early end. In one way this is a shame as it was a brave gamble by Steve Ballmer and his team to solve the ‘three screen’ problem.

Computer users today are using three or more screens or devices – a desktop, a smartphone and a TV or tablet computer.

Microsoft were hoping they could develop a system that unified all these platforms and gave users a common experience regardless of what they were using.

It appears to have failed, probably because the different devices don’t have the same user experience so a keyboard based system doesn’t work on a touchscreen while a touch based system sucks really badly on a desktop or laptop computer – which is Windows 8’s real problem.

Unrealistic expectations

Another problem for Microsoft were the unrealistic expectations that Window 8 would halt the slide of personal computer sales.

PC manufacturers have been baffled by the rise of smartphones and tablet computers – vendors like Dell, HP and Acer have miserably in moving into the new product lines and they hoped that Microsoft could help arrest their market declines.

This was asking too much of Windows 8 and was never really likely.

So the cycle begins again with Windows Blue, the question is whether it will be the last version of Windows as we move further in the post-PC era.

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First we kill email, then Powerpoint

French company Atos intends to eliminate email, Powerpoint and meetings from their business. Few organisations are brave enough to follow them.

Two years ago French technology firm Atos raised eyebrows after announcing the company would go email free.

Atos CEO Thierry Breton said at the time,

We are producing data on a massive scale that is fast polluting our working environments and also encroaching into our personal lives. At [Atos] we are taking action now to reverse this trend, just as organizations took measures to reduce environmental pollution after the industrial revolution.

Eighteen months on, the Financial Times reports Thierry is well on the way to eliminate the office pollution that is email. Lee Timmons, one of Atos’ Vice Presidents, tells the paper,

“At the 2012 London Olympics, we were able to zero-email certify some processes – a first – and (we) look set to be email-free internally by the end of 2013,”

Now Atos is looking at eliminating other business distractions, notably Powerpoint presentations and meetings.

Eliminating inboxes, Powerpoint and meetings from the workplace seems a noble cause. Few organisations would be prepared to even consider this.

For many staff and managers, spending hours sorting email, attending pointless meetings and futzing around with over-elaborate Powerpoint presentations is how they justify their time.

It’s going to be interesting to see how Atos goes with thier objective of streamlining the workplace and how many other companies are prepared to copy them.

Man sending an email image courtesy of Bruno-Free at SXC.hu

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ABC Nightlife February 2013

For February’s ABC Nightlife segment Tony Delroy and I are looking at software prices, the new breed of smartphones for seniors and the future of the telco industry

Paul Wallbank joins Tony Delroy on ABC Nightife across Australia to discuss how technology affects your business and life. For February 2013 we’ll be looking at the software rip-off, smartphones for seniors and Telstra’s roadmap for the mobile economy.

The show will be available on all ABC Local stations and streamed online through the Nightlife website.

Some of the topics we’ll discuss include the following;

We’d love to hear your views so join the conversation with your on-air questions, ideas or comments; phone in on the night on 1300 800 222 within Australia or +61 2 8333 1000 from outside Australia.

Tune in on your local ABC radio station or listen online at www.abc.net.au/nightlife.

You can SMS Nightlife’s talkback on 19922702, or through twitter to @paulwallbank using the #abcnightlife hashtag or visit the Nightlife Facebook page.

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