Tag: google

Apple’s line in the sand

The refreshed Apple range will add pressure to Google and Microsoft.

The comprehensive refresh of Apple’s product lines announced by CEO Tim Cook this morning is a clear warning to Google and Microsoft that the market leader in the post-PC computer marketplace is not going away.

With both Google and Microsoft having a major product releases over the next week, the pressure is now on both companies to match Apple’s announcements and product range.

For Microsoft, the stakes are now substantially higher for their Windows Surface tablets. The Fourth Generation iPad and iPad Mini (or is that iPod Maxi?) are going to be the benchmarks the Redmond tablet PCs will be measured against.

An interesting part of the Apple presentation was marketing chief Phil Schiller trash talking the Android competitors with a side-by-side comparison between the iPad and the Nexus.

These comparisons are becoming a hallmark of Schiller’s marketing in the post Steve Jobs Apple, whether this is good or bad remains to be seen, but it is a difference compared to the old boss’ way of doing things. Although Jobs wasn’t adverse to poking fun at some of Microsoft’s confusing habits.

For geeks, and those who like shiny things that go “beep”, it’s an exciting week and Apple have shown why they are masters at controlling the tech media.

It’s now up to Google and Microsoft to see if they can match Cook’s announcements and meet Apple’s price points.

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Can Microsoft beat the PC marketplace’s structural decline?

Windows 8 faces big challenges in replacing Microsoft’s cash cows

In New York on Thursday Microsoft will have a marathon launch of their Windows 8 system and the futures of many of their hardware partners lie on the success of the new system.

For Microsoft, Windows 8 could be the last throw of the dice for the desktop operating system that has sustained the company for thirty years.

The figures aren’t good for Windows as Microsoft’s 2012 profit and loss shows, here are the figures broken out by operating unit segment from the company’s annual report.

Year Ended June 30, 2012 2011 2010
Revenue  bn $  bn $  bn $
Windows & Windows Live Division 18,818 18,787 18,789
Operating Income (Loss)
Windows & Windows Live Division 11,908 11,971 12,193

The core Windows & Windows Live Division has stagnant revenues and a slowly declining profit margin. We’ll leave the huge losses in the online division for a future post.

Since the days of the first MS-DOS deal with IBM, Microsoft’s core business has been the licensing of operating systems to PC manufacturers and now that model is in trouble.

For instance Dell had an 8% drop in revenue resulting in a worrying 22% drop in operating profit, their PC dominated consumer division suffered a fat 22% drop in sales and recorded a miniscule .5% profit margin. Similarly Asus had 25% drop in sales to record a 2011 loss.

The pain being suffered by PC manufacturers’ sales and margins will almost certainly be shared by Microsoft as companies like Dell, HP and Asus simply can’t afford to pay the licensing fees which have sustained the Redmond business model for so long.

Microsoft and their partners hope – or pray – that the PC decline is a temporary hiccup in computer sales similar to the traditional lull seen before the release of a new system.

History’s not on their side with research company Asymco expecting sales of tablet computers to overtake PCs sometime in late 2013.

This is not a cyclical trend – the PC industry is in structural decline; the traditional Windows upgrade cycle is dead and Google are running interference with their Chromebook networked laptops.

Moving onto tablets and smartphones in this light makes sense for Microsoft and given the PC manufacturers have failed dismally to deliver decent tablet computers or phones over the last 15 years so it’s understandable the software giant wanted to develop their own hardware or team up with a struggling company like Nokia.

The declining margins in personal computers means we’re seeing the end of the Windows desktop ecosystem. With the rise of the web and cloud computing the type of operating system we use is like arguing between Toyota and BMW drivers; one might be more prestigious but both will get you where you want to go.

For Microsoft the challenge is to replace those Windows licensing rivers of gold with similar revenue streams through their phone and tablet products but with Apple and Google already dominating those fields, is it too late for the company that dominated personal computing? The next six months will tell us.

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Google for entrepreneurs

A global research for entrepreneurs and business people from Google

This is an interesting project – Google have pulled together all their entrepreneurial resources into one page at Google For Entrepreneurs.

As well as being a handy resource for anyone building a business, it’s a great overview of the various programs Google and their partners are running around the world.

If you are looking at setting up a business or have a fast growing enterprise it might be worthwhile having a look at the resources Google have pulled together.

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They thought they didn’t have a problem

Apple’s mapping problem could indicate bigger problems at the company

As Apple fans howl about the about the new iOS6 Maps feature which replaces the old one driven by Google Maps, it’s useful to get a cartographer’s view of how Apple got things wrong.

Michael Dobson’s analyis deep dives into the complexities of mapping which can be summed up in one phrase;  “their problem is that they thought they did not have a problem.”

Those Rumsfeldian ‘unknown unknowns comes back to bite a company again.

Like many things in life, mapping is a lot more difficult than it looks and assuming that a drawing or an older map is correct or the features unchanged is risky.

This is not a job you just leave to machines sucking down data from various sources; details needs to be checked, validated and checked again before being added to a map.

What’s worrying about Apple’s map snafu is this probably wouldn’t have happened under Steve Jobs as he’d have used the app himself and yelled at people when it didn’t work.

Apple’s decision to run with a substandard service smells horribly of decision by committee and compromised products being release to suit managerial imperatives rather than delivering one perfectionist’s vision of what worked.

We may well be seeing the beginning of Apple’s evolution into an anonymous corporation.

One of the positives of that is we may also discover a less secretive or hubristic Apple.

How Apple fix their map application is going to be interesting, they certainly have the funds to hire the best brains in mapping along with the 7,000 other employees Google are estimated to have in their mapping division, the question is should they?

For Google, having a huge division building and improving their maps search as geolocation is a key part of their local services and search tools.

Apple on the other hand doesn’t need a stand alone mapping division and while they can afford one, it certainly isn’t an effective use of their capital or management time.

It may well be that Apple will have to swallow their pride and license the data feeds back from Google or even Nokia, or perhaps they could even put in a bid for Nokia just to mess with the minds of Microsoft’s management.

Regardless of which way Apple decide to go, they’ve got themselves in an expensive mess which is going to take some time or money to fix.

For now, I’m sticking with iOS5 on my phone as I like my mapping app too much, particularly the integrated public transit features. My guess is I’m not alone.

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Salesforce’s place in the web’s walled gardens

Can Salesforce take a place alongside Apple, Facebook, Amazon and Google?

“Did he just say we’re at the half-way mark?” Whispered the ashen faced journalist beside me as Mark Benioff’s Dreamforce keynote reached the 90 minute mark.

Benioff did and the presentation did indeed go three hours because Salesforce.com had a lot to announce with launches of new mobile apps, customer service programs and HR services.

At the press conference later in the day, Benioff said “we are interested in collaboration and the customer. the reason we’re in marketing is because our customers want us to be in marketing.”

An interesting part of this is the Facebook relationship, with the Buddy Media acquisition 10% of Facebook’s advertising revenue comes through  Salesforce. This in itself makes Salesforce a key Facebook partner.

Facebook’s relationship goes deeper with Salesforce, at the media conference Marc Benioff mentioned that the company’s purchase of Rypple came about because of urging from Tim Capos, Facebook’s CIO.

That deep relationship was on show in the opening keynote where Facebook were one of the strategic partners showcased by Benioff.

Of the products showcased, one of the important points that kept being raised was Salesforce’s role as the enterprise social media identity service.

A partnership between Salesforce and Facebook to provide online identity validation would effectively kill  Eric Schmidt’s aim of Google being the Internet’s identity service although Benioff was at pains in the media conference to emphasise there was room for more than one player.

Google are also being challenged by Benioff’s announcement of Chatterbox, a secure online file storage and sharing service.

While the focus with the Chatterbox announcement was on the threat this presents to Dropbox and Box.net, the bigger targets are Google Drive, Apple iCloud and Microsoft’s SkyDrive.

Salesforce’s move into the various fields of HR, marketing, file storage and collaboration are part of the company staking its own position among the various web empires.

With a strong enterprise position, it’s quite possible Salesforce could establish itself as the fifth of the Internet’s great empires.

Every empire needs an army and a particularly strong claim Salesforce would have are the ranks of developers and supporters gathering around the service’s open APIs.

The move to establish an independent position on the web would also explain Benioff’s commitment to HTML5 as this avoids locking the company into an Apple, Google or Microsoft dominated app environment.

We’ll see over time how Salesforce establishes their position among the internet empires, right now though their range of services, customer base and partner ecosystem means they are well placed to compete with the big four currently dominating the web.

Paul travelled to the San Francisco Dreamforce conference courtesy of Salesforce.com

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Google tries to drive American business online

Can Google convince reluctant American businesses to move online?

Google’s quest to sign the world’s businesses up to websites stepped into the big time this week with the launch of America, Get Your Business Online.

The US program is based upon the Getting British Business Online program which was followed up with similar projects in Australia and then Texas prior to being launched nationally across the States.

An interesting aspect with the rollout of the various programs has been Google’s choice of partners — in Britain the key supporter was the incumbent telecommunication company BT.

For some reason the subsequent programs have chosen to partner with accounting software companies and small business groups. The US program is no exception.

These partnerships are interesting as the software companies involved are threatened by online cloud services — both Intuit and MYOB have their business models of selling boxed software to small businesses under siege.

While Google regularly cite the Boston Consulting Group’s survey on the importance of websites to business, it seems most small operators don’t care as about half of small businesses don’t care about an online presence most developed countries.

In Australia, the Getting Aussie Business Online fell short of its 50,000 sign up target which indicates smaller enterprises still don’t see the point.

They may be right — for the local locksmith or lawn mowing service a Google Places account may be all they need rather than a relatively high maintenance website.

Part of the problem is that small business proprietors are probably the most time poor people on the planet, so  filling in another set of forms is one of the last things they will do.

Were Google to link Google + for Business to their other services so information wasn’t being duplicated there would be a far quicker and greater take up of their services.

America, Get Your Business Online should be a useful service for some local enterprises but the real challenge for Google is to integrate their services to make it easier for smaller operations to use.

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Enter the Dragon

The development of Aliyun, a mobile phone software package, illustrates how Chinese industry is moving up the value chain.

Once up a time our parents laughed at the tinny little Japanese cars – in the 1960s companies with silly names like Toyota and Mazda could never threaten world giants like Chrysler, Ford and General Motors.

Within two decades the Japanese had moved their products up the value chain leaving their American and European competitors running scared while governments in western countries offered the new leaders of the manufacturing industries bribes to set up plants in their towns and states.

It was always obvious China would follow the same course as the Japanese, particularly given the country’s position as the world’s cheap labor supplier had a time limit thanks to the demographic effects of the 1970s One Child Policy.

So it’s no surprise that Alibaba, China’s biggest e-commerce service, has built its own mobile operating system to compete with Google’s Android.

If Aliyun follows the Japanese development path, the first version is terrible but within five years – the development cycle of software is a lot quicker than that of cars – Alibaba will be a viable competitor to Google and Android.

Chinese developers moving into the mobile market is terrible news for the also rans like Microsoft and Blackberry. As Apple dominate the premium mobile sector and Android the mass market, it’s very hard for those running third or lower to achieve the critical mass needed to be competitive. Aliyun makes it much harder for them to gain any traction in high growth developing markets.

An interesting aspect of the Wall Street Journal’s story is how Aliyun is aimed at the domestic Chinese market for the moment. This is part of China’s economy moving away from being overly reliant on exports, having locally made products that meet the needs and aspirations of a growing domestic economy is an important part of this process.

Exports though will remain an important part of the Chinese economy for most of this century and value added products like Aliyun will be important for China as the cheap labour advantage erodes over the next two decades.

Businesses who think their markets are protected because their quality is better than their Chinese competitors may be in for a nasty shock, just like the 20th Century auto makers who dismissed the Japanese were in the 1970s.

Whether Aliyun is successful or not, we’re once again seeing many of the facile assumptions about Chinese growth being tested as the country’s economy and society evolves.

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