Society and business in the 21st Century
Later this week Google will announce an Android based IoT operating system later this week at their I/O Conference, Netimperative reports.
In doing so they’ll be joining Microsoft, GE, BlackBerry and a host of others in looking at providing the software that runs the Internet of Things.
The carving up of the IoT continues.
Facebook and Google both put their users first in their latest updates. It’s something other business should consider.
Over the last few weeks much has been written about Google’s mobile search update that went live on Wednesday, some said it would be the death of small business on the internet while others claimed it would be the end of corporates online.
While all the focus has been on Google’s search changes Facebook quietly made a change that will probably be more vexing for many businesses.
Both Facebook and Google are struggling with making their services more useful for users, with the Google changes the intention is to make search on mobile devices more useful in giving preference to websites that work on smaller screens.
In a post on Google’s webmaster blog, Developer Programs Tech Lead Maile Ohye answered the basic questions about the search engine changes which dispelled much of the hysteria and myths about the update. The main point of Ohye’s post is that Google want to show users useful information.
Facebook have a similar problem, they have to balance the often competing interests of their users and advertisers with the main aim being keeping visitors on their site for as long as possible.
The objective of keeping users engaged is the reason for a series of tweaks Facebook announced this week that change the newsfeed visitors see.
The goal of News Feed is to show you the content that matters to you. This means we need to give you the right mix of updates from friends and public figures, publishers, businesses and community organizations you are connected to. This balance is different for everyone depending on what people are most interested in learning about every day. As more people and pages are sharing more content, we need to keep improving News Feed to get this balance right.
Facebook are putting their users priorities first in making sure the news feed is interesting and relevant, which the company believes will entice visitors to spend longer on the site and make advertising more attractive.
If it works then it’s a win for Facebook, their users and those who pay to advertise on the site. Again though, the losers are the companies and brands not advertising who thought they could get views by the quality of their content.
Unless the content is very good, those companies not paying Facebook are in for more disappointment as their reach collapses even further than its current pathetic rates.
Google’s change too is something that puts users first; rather than dumping mobile web surfers onto an unreadable page, they are making sure people get to sites that are useful.
In many ways Google is only encouraging what has been best practice for at least five years, that every site should work equally well on mobile devices as they do on desktop computers.
What Facebook and Google are showing us is the value of putting users’ needs first. If your guests are happy then your business model has a much better chance of succeeding, regardless of who the eventual customer is.
Making business more user friendly should be a priority for all companies in a competitive world.
The Microsoft alliance with Dropbox puts Google at a disadvantage and shows how alliances are evolving on the cloud
Today’s announcement that Dropbox and Microsoft have deepened their alliance throws a further challenge out to Google’s ambitions to take a slice of the office productivity market while further reducing profits for the once dominant software giant.
Dropbox’s new deal with Microsoft give of users the ability to edit Office documents natively in their browser. It’s an advanced version of the feature that Google have offered with their Docs service for some years.
A notable aspect of this deal is how Dropbox have been prepared to partner with Microsoft – a decade ago smaller and relatively new companies were suspicious of working with Microsoft given the giant’s well deserved reputation for ruthless behaviour.
Equally Microsoft teaming with more agile newcomers rather than trying to bully them out of business is a distinct change from the company’s peak days under Bill Gates.
The real target of the alliance though is Google and the Dropbox-Microsoft deal makes Office 365 a far more formidable offering as a cloud service.
For Google the deal means they have to add more features to their Docs service to counter a more competitive Microsoft offering. It also shows the marketplace is shifting as alliances of convenience are forming.
Google are in talks with Hutchison Whampoa for the Hong Kong based conglomerate to provide global roaming for Google’s proposed mobile phone network reports the London Telegraph.
Hutchison, who recently agreed to buy UK operator O2 for £10.2 billion from Spain’s Telefonica, are one of the quiet global telecommunications players with services in East Asia, Europe and Australia. An international roaming agreement with Hutchison would give Google a substantial global headstart.
While the mobile phone angle is the obvious service for a global cellular network, another attraction for both Google and Hutchison is the Internet of Things. Being able to offer a worldwide machine to machine (M2M) data service fits very well into Google’s aspirations with products like Nest.
For the mobile phone operators, the prospect of Google entering their market can’t be comforting with the search engine giant having three times the stock market capitalisation of the world’s biggest telco, China Mobile.
It may well be however communications companies have little choice as the software companies start to take the telcos’ profits just as they have done with many other industries.
Should the story be true about Hutchison and Google being in talks it will probably be the start of a massive shift in the global communications industry and one that will see many national champions threatened.
Google’s global network ambitions could change the future of the Internet of Things industry.
Ten years after being founded YouTube is facing competition as new sites are being setup or existing video services start aggressively courting creators reports Variety magazine.
YouTube is the poster child of the user generated content movement where it’s largely unpaid contributors who generate the material that people watch on the service.
This model works fine as long as it’s amateur cat videos people are watching but when as it becomes a big business the justification for not paying content creators becomes flimsy.
Google’s management recognised this some time back and started rolling out its own partnerships with creators to add more income than the often tiny advertising revenues most earn.
Now it turns out those popular video bloggers are being tempted over to other sites and for YouTube the cost of premium content is about to get expensive.
For the Silicon Valley businesses is requires a change of culture as they simply don’t like paying creators; in the tech startup view of the world it’s only coders, founders and few lucky support staff who get the rewards while the bulk of people who add value to the product are treated as commodity ingredients.
For a period it was difficult for media startups to get funding unless they had a free source of user generated content, as Buzzfeed founder Jonah Peretti revealed in 2012.
Tech investors prefer pure platform companies because you can just focus on the tech, have the users produce the content for free, and scale the business globally without having to hire many people.
The movie studios and record companies on the other hand have a culture of paying their artists and production staff, despite their reputation of exploitation and stinginess.
It may well be that we’re past the golden era of user generated content and the free lunch for the sites that depend upon free materials.
If it is, then standards on sites like YouTube can only improve even at the costs of Google’s profit.
“All the pieces are now in place,” President of Google At Work, Amit Singh, tells Business Insider in an interview about how the company’s enterprise offerings are competing in the marketplace and, perhaps most critically, undermining Microsoft’s Office products.
While Singh may be confident about Google’s products, the company’s earnings from its cloud services are trivial compared to its competition.
Google don’t break out their income from their apps services, instead lumping it into ‘other’ revenues which also includes Google Play, Apps Engine and all their other non-search products. In the last quarter that was $1.9 billion, barely 10% of the organisation’s entire income.
Microsoft also obscure their office software earnings having split its products into the Devices and Consumer licensing division and Commercial Licensing however the last quarter Office’s income was reported it was a seven billion dollar a quarter business.
While Microsoft’s income from the various forms of Office will have shrunk in the shift onto the cloud, it’s still safe to say it still dwarfs Google’s income from Apps.
Google’s ‘other’ category is also a general bucket of products that is competing against Microsoft Office, Amazon Web Services and Apple iTunes – with a combined total of 17 billion dollars, ten times Google’s quarterly income.
Another problem for Google are the margins in its cloud services, as Microsoft have found the profits from online products are very slim compared to those from boxed software or advertising. For Google to continue its impressive profits, it’s going to have to find something more lucrative than cloud office software.
These slimmer margins also have another effect on the business model as Singh would know well from this days of working at Oracle.
Oracle, like many of the 1980s and 90s software companies, boasted extraordinary margins. This allowed them to pay huge commissions to salespeople, engineers and executives. A single enterprise sale for an Oracle, IBM or SAP salesdroid could pay for a decade of private school fees or a very nice yacht.
At Google and its partners the idea of being able to pay off the mortgage with the commissions from a single corporate deal raises a hollow laugh; there simply isn’t the money to pay for armies of hungry salesfolk.
Those thin margins also mean a change to Google and Microsoft’s business models. Shareholders expecting big profits from cloud services may need to be looking elsewhere.
Having seen its dominance of the smartphone market eroded by a resurgent Apple and a range of upstart Chinese vendors, Samsung has announced it will launch its Galaxy 6 smartphone on March 1 reports the Sammobile website.
The new phone is reported to boast a curved screen measuring somewhere between 5.1 and 5.3-inches a fingerprint sensor and a 20 mega-pixel camera, which compares well to the iPhone 6’s eight mega-pixel camera.
While the proposed specs are impressive, the company has a challenge ahead as consulting firm IDC reported its smartphone shipments dropped 11% year on year last quarter in an market that grew by quarter.
Top Five Smartphone Vendors, Shipments, Market Share and Year-Over-Year Growth, Q4 2014 Preliminary Data (Units in Millions) source IDC Research
| Vendor |
4Q14 Shipment Volumes |
4Q14 Market Share |
4Q13 Shipment Volumes |
4Q13 Market Share |
Year-Over-Year Change |
| 1. Samsung |
75.1 |
20.01% |
84.4 |
28.83% |
-11.0% |
| 2. Apple |
74.5 |
19.85% |
51.0 |
17.43% |
46.0% |
| 3. *Lenovo |
24.7 |
6.59% |
13.9 |
4.75% |
77.9% |
| 4. Huawei |
23.5 |
6.25% |
16.6 |
5.66% |
41.7% |
| 5. Xiaomi |
16.6 |
4.42% |
5.9 |
2.03% |
178.6% |
| Others |
160.9 |
42.9% |
120.9 |
41.31% |
33.1% |
| Total |
375.2 |
100.0% |
292.7 |
100.0% |
28.2% |
| *Lenovo + Motorola |
24.7 |
6.6% |
19.5 |
6.7% |
26.4% |
While the numbers for the Chinese manufacturers are impressive, Apple’s shipments should also worry Samsung given the two companies are fighting for the top end consumers in the European and North America markets.
For Samsung its smartphones form a central part of its Internet of Things strategy so the success of the Galaxy 6 is critical to the company’s future plans, particularly given the lukewarm reception to the Tizen based Z1 phone on the Indian market last month.
With Samsung struggling with both its high end Android smartphones and its lower priced Tizen devices as Chinese manufacturers like Lenovo, Xiaomi and Huawei steal market share, the company desperately needs to hit the mark with the Galaxy 6.
Google as well has a stake in Samsung’s success as the Chinese manufacturers are increasingly turning to open source versions of Android for their smartphone systems. A flagship device for Android to counter the iPhone 6 is desperately needed to keep consumer and developer interest in the Google Play store and for Google’s consumer IoT ambitions.
The stakes are high for both Google and Samsung, the South Korean giant getting a mis-step with the Galaxy 6 could see it following the faded fortunes of its Japanese competitors.
