skip to main |
skip to sidebar
Material from Mobile Opportunity is being featured in two online forums, and I wanted to acknowledge them.
The Carnival of the Mobilists is a group of mobile-related bloggers who take turns hosting a collection of the week's best mobile-related posts. They recently featured my commentary on CTIA.
Wireless Watch, one of my favorite websites for Japanese mobile news, has just added a new community service in which it's consolidating the feeds from about 20 mobile-related weblogs around the world, including mine. There's a lot of material, but it's an interesting way to quickly see what the buzz is in the mobile community.
In my other blog, I took the authors of a famous business book to task for making bad projections about future technological change. But it's not fair to single them out -- the same sort of problem happens to experts making projections inside technology companies. I've seen a lot of those projections over the years. The usual pattern is that technology predictions with a two year horizon are pretty good, because a technology has to be almost in prototype stage now in order to appear in high-volume products two years from now. Five year predictions are moderately useful, but subject to embarrassing errors. Ten-year predictions are almost useless, and twenty-year predictions are best used as plot outlines for science fiction novels.
This came home to me the other day when I stumbled across an old document from Palm that I had put aside years ago. It was the company's projection, created in 1997, of what future handhelds might look like in five, ten, and twenty years.
Keep in mind that the folks at Palm were, at the time, the world's leading creators of handheld technology. It's humbling to see how many things they missed. Here's what the experts forecast, with some comments from me:
Five years in the future (in other words, predicted for 2002):
-320x320 display. Okay, that came along with the Tungsten T at the end of 2002. And it was in other companies' handhelds before that.
-56 kbps wireless data. Didn't happen in a Palm-branded product until the Tungsten C in 2003.
-Built in cell phone. Early smartphones were appearing by that time, although they were pretty clunky. I'll give this one only a partial correct score because I think the people making the prediction were looking at what would be built into a typical handheld, and smartphones weren't typical by then.
-Multi megabyte secondary storage (hard drive or flash). OK.
-MicroCD player. No, a clear miss. Rotating removable media turned out to be much more delicate, expensive, and power hungry than we'd all like it to be.
-Voice synthesis. Didn't happen with the level of quality that was needed for it to become commonplace.
-High speed serial for desktop connectivity. I think USB 2.0 qualifies here, although the authors thought it would be FireWire. But I don't think any handhelds were shipping with either USB 2.0 or FireWire in 2002 (please correct me if I missed one).
Ten years in the future (in other words, 2007):
-Size and thickness of a sheet of cardboard. If only. Part of the problem is that it's hard to make something that thin also rigid enough to resist breakage.
-Foldable screen; can be used in folded or unfolded mode. Not going to happen next year, alas. Maybe in another five years, although personally I'm even a little skeptical about that.
-24-bit color. Okay.
-Voice recognition and synthesis. Not with the reliability that would let you use it as your primary interface to the device.
-10 mbit/second wireless data. They didn't specify whether they meant local wireless or cellular. We won't have cellular that speed in most places, but some companies have announced 802.11g modules for handhelds, so maybe...
-Built in cell phone. Okay.
-Built in TV/FM receiver. This is possible but there doesn't seem to be huge demand for it, at least not in the US.
-Built in video camera. Okay, but it'll be a pretty low-res one.
-Built in GPS. Okay. But let me point out that no one I'm aware of is doing GPS + TV + FM + video camera + cellphone + 802.11g in a single device, which is what was predicted.
-Body heat powered. Uhhh, no.
Twenty years in the future (ie, 2017).
This prediction still has a long time to run, so maybe we can revisit it if I'm still alive and blogging in 11 years. In the meantime, here's how the prediction looks now:
-Device is surgically implanted into brain. I doubt it, more for cultural reasons than technical ones. Even if we can find a way to do this, I think the current generation will be uncomfortable with implanting anything into their brains. I think people will have to grow up with that idea in order to be comfortable with it. Kind of like nose rings.
-Displays images to optic nerve. There have been some interesting experiments in stimulating the optic nerve to produce synthetic sight for people with retinal damage. The research is still very early, though. I don't doubt that this will happen someday, but I think that in 11 years it won't be something that you'd use with anyone other than a medical patient.
-Talks into auditory nerve. Similar to the vision situation.
-Input through voice, muscle input, or thought. I am completely confident that we won't have handhelds that can read thoughts eleven years from now. Reading gestures is more interesting; there has been a lot of research on reading eye movements and such. The challenge seems to be more on the software side than in hardware – how would a gesture-driven interface work, and how would you train people to use it?
-Powered by blood movement. I guess it would have to be if you're going to put it in someone's brain. You wouldn't want to have to plug your head into the wall to recharge every night.
Twenty years seems to be the magic horizon at which we think anything is possible. Maybe that says something about how we all think. Or maybe it's just a sign of the pending Singularity.
There's a long and fascinating article from the New York Times describing Google's policy in China. As usual, the real story is more subtle and nuanced than what was first reported in the press. The article is great reading on several fronts – it talks about the cultural differences between the US and China, it discusses Chinese Internet usage patterns that are significantly different from other parts of the world, and it attempts to explore the thinking of the average Chinese Internet user.
The last bit rang a little false for me – the article's implication that many Chinese people welcome censorship of the Web reminds me of the articles during the Cold War that found Russians appreciated being oppressed by the Soviet government. When the government is powerful and punishes misbehavior, people quickly learn what they can and can't say. China is by no means a police state, and there's enormous diversity of opinion there, but I think it's dehumanizing to say that Chinese people somehow desire or deserve less of their rights under the UN charter than do people in other countries.
But all of that stuff aside, the most striking thing about the article to me was the description of how Google took enormous criticism in the press and in Washington for its China policy. The article describes much more egregious compromises made by Google competitors, and concludes: "Against this backdrop, the Google executives probably expected to appear comparatively responsible and ethical. But instead, as the China storm swirled around Silicon Valley in February, Google bore the brunt of it."
The article implies that timing and unrealistic expectations caused Google's problem, but I think there's another explanation: it's Google's own fault. When people misunderstand your intentions, when they blame you for things that you didn't do or didn't intend, it's a sign that you are not communicating properly. It's not their fault for misunderstanding you; it's your fault for failing to explain yourself properly. For a company, the process of explaining yourself properly is a thing called "marketing." Google's contempt for marketing was cute when the company was younger, but now it's just an embarrassing handicap. Unless Google comes to terms with that, and empowers some senior marketing people, I think it will inevitably get hammered again.
A commentary on my other weblog, Stop Flying Blind. It's not mobile-related, but I wanted to mention it here in case you're interested in the subject.
Last week I walked the busy halls of CTIA, the main mobile phone trade show in the US. The show's very large. Not as big as CES, but the exhibits filled the main hall at the Las Vegas Convention Center, plus a big side hall. The aisles were filled with an overwhelming variety of everything phonelike, from phone holsters to RF components to those big fake plastic trees used to disguise cellphone towers. And of course there were mobile phones. Lots of mobile phones, from every major vendor and many of the minor ones.
When I go to a trade show, I try to look for both interesting details and the big picture, to see the trees and the forest. I had trouble doing it this time; there was so much detail and so many different things to look at that I was kind of overwhelmed by the trees. I list some notable ones below. But as I collected brochures and watched demos and poked at display models, I eventually found myself coming back to one basic thought, over and over:
Gee, the user interface on this phone really sucks.
That was the common denominator across almost every mobile phone I saw. The phone hardware was interesting, sometimes beautiful. But the phone software was generally unworthy of the effort and creativity being put into the hardware. It was gaudy, overfeatured, and extremely difficult to navigate. The more sophisticated the phone's hardware, the more impenetrable the user interface generally was.
This was intensely frustrating. It was like being served a beautiful five-course meal, and then finding all the food was made of wax. Or sitting down by a crackling fire to read a great book, only to find that all the pages had been glued together.
The interface problems clustered in two general areas: looks and navigation.
Looks: Tart me up, baby. Las Vegas is a good spot for CTIA, because the interfaces of many mobile phones seem to be designed according to the same principles as Las Vegas casinos – the glitzier the better. Why use easily understood words to label a function when you can substitute a cute color icon? And why use just a static icon when you can have it bounce around and animate when the user selects it, or better yet have several more icons pop out of it to the accompaniment of a sproingy sound effect?
On many phones, the cumulative effect of all this graphical clutter was much like what happens when you stand on the Las Vegas Strip at night – visual overload. It's pretty, but you also have trouble figuring out where you're going. On the Strip, the effect is intentional; the casinos want you to feel a little disoriented so you'll stay longer and lose your inhibitions. I'm not sure what benefit the mobile phone companies get by making their customers feel lost and overwhelmed.
Navigation: Help, I've opened a sub-menu and can't get out. My general test of a phone interface is to see if I can confuse myself in one minute. I start clicking around, trying features, to see if I can lose track of where I am or get stuck without any obvious way to get back to where I was before. On almost all the phones, it was depressingly easy to do this. Typically I'd get stranded in a sub-menu or dialog with no way to get out without canceling everything and going all the way back to the main phone interface. The more sub-menus I had navigated through to get to that point, the more frustrating it was to have to start over.
Usually the culprit was missing or inconsistent use of navigation buttons. Often different applications on the same phone will use different buttons inconsistently. For example, in one app Back may take you back a step, while Cancel may do the same thing in another app. On some phones, the button for Menu and OK are the same. If you want to get back to the main menu you'll push the Menu button, only to find that you've just said OK to a function that you didn't want to select.
Another common culprit was phones with "soft" buttons, the two buttons under the screen on the left and right side, without labels on them. In most cases, one of these buttons is normally used for Back, but some applications and functions change the button's meaning, leaving the user with no way to go back at all.
Backspacing in text when I made an entry mistake was another nightmare. Even after a lot of experimentation, I wasn't able to find the backspace function on some phones, or I accidentally selected OK or Cancel instead.
These inconsistencies and problems have the effect of punishing someone who tries to experiment with the phone. Once you've memorized a few basic functions, you're afraid to try something new for fear that you'll screw things up. I saw this a lot in early DOS users, pre-Windows. They used only a small percentage of the PC's features because they were afraid that they'd accidentally erase the disk drive if they did something wrong. Software usage rose substantially with the Mac and Windows, because people could re-use interface tricks across multiple applications, and because they were more protected from tragic mistakes.
The phone world hasn't reached this point yet. That isn't a critical problem today because most phones are used only to make calls and send text messages. But I think adoption of more sophisticated data services is going to be held back tremendously unless the interfaces get a lot more transparent and consistent.
Phone user interface vs. data user interface. What the phone industry doesn't seem to understand is that the interface needs for a mobile data device are very different from the interface needs of a traditional mobile phone phone. A phone that does just voice and texting can have a fairly playful interface because it's only doing a couple of things and the user isn't too likely to get lost. But the goal of a data device interface is first and foremost to be usable. If people can't figure out how to find the data service, or how to use it, the whole purpose of the device is defeated. That means as the phones get more sophisticated, the interfaces need to become more simplified. Right now the interfaces are going in the opposite direction.
My favorite phone interface at the show was the SonyEricsson Walkman phone. To play music, you press the Walkman button. Your commands are listed as text (rather than dancing icons) displayed in a list that scrolls up and down. It's very easy to figure out what you're doing, and very easy to go back if you make a mistake.
Sony's not exactly known for making great user interfaces, and I know from working with the Sony Clie handheld team that they have a fondness for 3D icons and strange graphical effects. So you might wonder where SonyEricsson got the inspiration to create something so simple and easy to understand.
Yeah, it's pretty clear they copied the market leader.
I don't have a problem with that. At least Sony was willing to learn from someone else's success. And I think the iPod has a lesson for all mobile device companies. Do you see any dancing icons on the iPod's screen? Do you think that has hurt iPod sales at all? The customer evaluates the iPod on how well it does its job, not on how groovy its screen looks. To paraphrase an old Macintosh commercial, "sometimes the most powerful devices are the ones that people can actually use."
Looks over usability. At the other extreme was my poster child for an overdesigned user interface, the vaunted ESPN phone.
I love the idea of MVNOs (mobile virtual network operators), small operators who buy air time from the big players and sell phones and service plans specifically tailored for the needs of vertical markets. Mobile ESPN is an MVNO focused on sports fans, leveraging the brand and content of the ESPN cable network that dominates sports television in the US.
I played with the ESPN phone at CTIA and felt both captivated and dismayed. I was captivated by the idea – a phone for sports nuts, saturated with stats and video and alerts that tell you every time your favorite team scores. I was dismayed by the implementation. The ESPN phone uses an extremely high-resolution screen that's incredibly sharp. ESPN took advantage of this resolution to cram the screen full of extremely tiny icons, and text that's literally about five points high. Think I'm exaggerating? Below I've reproduced a photo from the phone's screen (left), plus two screen shots from the Mobile ESPN website. They have all been scaled to the size of the phone's screen. The images look fuzzier here than they do in real life, because your computer's screen isn't as high resolution as this phone. But the size of the fonts should be about right. (To check, look at the service and battery icons at the top of the screen image at left. They're standard sized.)
Maybe ESPN's target demographic is 19-year-olds with the eyesight of eagles, but I don't know how many of them can afford the phone's monthly service charge, which can run to $60 or more.
My other issue with the phone is its navigation scheme. The phone uses an innovative icon menu called the Sideline that pops out of the left edge of the screen. You can scroll up and down in it, and then the menu pops back out of sight after you make your selection. I think ESPN could have achieved the same effect with greater usability if it had used text labels instead of icons (preferably nine-point text), but I can live with that because the number of icons is relatively low. What bothered me most was the sub-menus you get after choosing an icon. These menus don't operate the same way as the Sideline itself, and I couldn't figure out how to get out of some of them.
To me, the ESPN phone is a great example of glitz over functionality. But out of fairness I should also let you know that it has gotten some enthusiastic reviews here and here and here and here. Maybe I'm out of touch.
Or maybe a lot of reporters are nearsighted.
Brew: Great technology, wrong business model
Part of Qualcomm's booth was given over to small demo stations for Brew developers. If you're not familiar with Brew, it's Qualcomm's answer to iMode and Java (Brew...Java...get it?) Brew is a software development platform paired with a very nice billing and software installation engine. Qualcomm's trying to get it installed on a lot of phones. Software developers are being encouraged to create Brew apps, which they can then sell to users through operators that adopt Brew.
Unfortunately for the developers, Brew is not set up to be an open garden. Instead, the operators choose which Brew applications they want to offer to users. This gives developers very little control over their own fates – they have to go begging to operators to carry their products. This favors larger developers who can afford the investment and risk associated with marketing to operators.
The downside for Qualcomm is that the most innovative developers are usually the smallest ones. They're the people who are least likely to be able to jump through all the business hoops associated with developing for Brew. As a result, most of the applications I've seen for Brew are pretty unimaginative, not the sort of things that would compel an operator to feel like they had to offer Brew. I think Qualcomm's very nice architecture is being stunted by a bad business model.
Palm and Microsoft, sittin' in a tree...
Palm is doing an extremely good job of leveraging its relationship with Microsoft. The Palm booth was in a very visible spot, right next to Microsoft, and they were featuring each others' products. Meanwhile HP, the single largest licensee of Windows Mobile products, was stuck some distance away in an obscure booth overshadowed by another pavilion. Even after I found HP's spot, there were almost no mobile devices on display. CTIA underscored how far behind HP has fallen in the phone market.
LG: Love my heinie, love my phone
Most companies that step up from regional player to global brand go through an awkward phase while they learn how to talk to people from other countries without coming off as peculiar. LG is in the middle of that process, and earned my award for the most embarrassing booth at CES. As far as I can tell, LG wants desperately to convince the world that it's not a square Korean electronics company. Unfortunately, to prove this it put on a floor show in which very leggy girls rapped badly with supposedly edgy hip-hop DJs who looked slightly like refugees from the Cotton Club circa 1940.
Photo by PC Magazine. There are a lot of great phone photos from CTIA on their site.
I guess the theory was that if you liked a dancer's big hair you'd also like her phone.
The show was hilarious, but probably not in the way LG intended. Rather than making the company look cool, it looked out of touch and insincere. That's marketing poison in the US, where companies are falling all over themselves to appear genuine.
LG makes very creative hardware. Its clamshell "V" keyboard phone (formerly called the VX9800) would be formidable if it were paired with a RIM client instead of an MP3 player, and supposedly the LP4100 Sobriety Phone with built-in breathalyzer is a hit in Korea. (I'm not making this up.)
Yes, that's a driving game on the screen of the Sobriety Phone. I guess the idea is that if you're too blitzed to drive for real you can make believe while you wait for the cab.LG is a sharp, fast-moving, incredibly intense company, but almost none of its culture or history involves tall blond women, and a quick check of the website of LG CEO Kim Ssangsu revealed no mention of hip-hop at all.
Here's hoping that LG will grow out of its very awkward adolescence quickly.
I'm very happy to say that I've finally re-launched my second weblog, Stop Flying Blind. It's now hosted at a new location, using a different blogging tool, with a cool design. The design is by Michael Rohde, and the programming was done by Michael Ashby. They do great work, as you'll see if you check it out.
Stop Flying Blind is a book I'm writing on how to plan corporate and product strategy, using market and technology information. It's the summation of what I've learned through almost 20 years of work in strategy and product planning roles. It's not focused on tech the way Mobile Opportunity is, and I hope it'll be useful to people in any industry who work in marketing, product management, strategy, and general management. I will continue to post all my tech commentary here, while general comments on management and business strategy will be in Stop Flying Blind.
I'll be posting a new section of the book about once a week (the first part is already posted). The idea is to get the first draft out there, collect feedback, and then hopefully get it into print in the future. Your comments and suggestions will be incorporated, and are encouraged.
If you're interested in the subject, I invite you give it a look.
Nobody really knows what Web 2.0 will do to the software industry.
That's my quick summary of the Software 2006 conference, which I attended yesterday and today. That's not a mobile show, and so this isn't going to be a post on mobile technology. As part of my work with Rubicon Consulting, I'm trying to get back in touch with the tech world beyond the mobile space, and this was a step in the process. I wanted to share what I learned.
I haven't been to this conference before. Attendees are a mix of IT managers and software company executives. Despite the broad name, the focus is mostly on enterprise software and business services; the big enterprise players like Oracle and SAP had keynotes.
My one-line summary of the show was an oversimplification, of course. A more nuanced summary would be, "there are many conflicting and incomplete opinions on what Web 2.0 will do to the software industry." To be even more detailed, there isn't even a single agreed term for what's happening, let alone agreement on which aspect of it is most important. Some people here talked about Web 2.0. Some focused on "Software as a Service," which is typically shortened to the irritating acronym "SaaS." Some focused on outsourcing, some on globalization (which is subtly different from outsourcing). And since this was a software conference, a couple of people talked about open source.
The one thing everyone seemed to agree on is that when you add together these trends, all of which are happening at the same time, the software industry will change fundamentally. But there's no consensus on what it's changing into, or what to do about it. Here are some of the ideas I heard, with my comments:
Selling to consumers at work
Ray Lane, formerly of Oracle and now a general partner at the VC firm Kleiner Perkins, talked about the attributes of the most promising new software companies. Like many VC presentations, the heart of his talk was a list of checkoff items a VC looks for when browsing a business plan. His hot buttons include software that's viral (anyone can download it and try it out), that generates value for an end user (so they'll have an incentive to install it), that doesn't require any data entry or training (so users can work with it instantly), and that generates instantaneous value (he called it "value first, pay later").
To me that sounds a lot like consumer software, which is a little strange for an enterprise conference. And in fact when Lane listed some of the most important of these new enterprise apps he listed several tools that I think of as consumer – Skype, instant messaging, and Google Desktop. Plus of course Salesforce.com ("SFDC" among the acronym crowd).
This idea of a blurring between the consumer and enterprise worlds wasn't discussed heavily in any of the presentations, but it lurked in the background all over the place. The selling and marketing model changes profoundly if you're trying to get an online service deployed virally in companies via end users, as opposed to selling down through IT managers. Most of today's enterprise software companies don't have a clue how to sell this way, and it makes them extremely uncomfortable. This is an area where I think Microsoft has an advantage over an Oracle or SAP, because it has a strong consumer business. We'll have to see if it can deploy that skill set to its advantage.
Another issue Lane mentioned, and one that I think is incredibly important, is the cost variation between online services and traditional enterprise software. He talked about "services that cost $50 per user" displacing $500,000 enterprise software sales. That's a life-threatening problem for every big software company from Oracle to Microsoft, and no one I heard at the conference had a compelling answer to what they should do about it. Usually they just say, "it's a big challenge..." and then the room goes quiet until someone changes the subject.
Software as a Service: tool or business model?
There were two panels on Software as a Service, and they had very different perspectives. The usual pitch for Software as a Service emphasizes flexibility and fast turns – your software gets updated rapidly at low cost, enabling a vendor to underprice the incumbents. But that wasn't the perspective at the first panel, where the focus was on vertical solutions.
The panel included representatives from Sonata, IBM, Embarcadero Systems, and Yodlee. Embarcadero creates management software for seaports, and Yodlee does web back-end software for banks (they power the consumer financial transaction websites for many banks).
Embarcadero and Yodlee are both Software as a Service companies, but they use the flexibility of web software to create intensely customized software programs tailored to narrow verticals. The whole idea of viral adoption and quick turns is foreign to them – no end user installs software to run a seaport, and quick feature changes are disruptive to banks because their marketing departments can't communicate the new features quickly enough.
IBM reveled in this pitch because they say these vertical customers need to be reassured that they can rely on this hosted vertical software. IBM positions itself as a business partner to these vertical companies, providing services and an aura of reliability.
Yodlee gave an interesting example of the things they have to do to build trust. The banks want guaranteed response time for a financial transaction, which is very difficult to do when your product is a web application running on the public Internet. So Yodlee invests heavily in monitoring the performance of its customers' web servers. This is something it does surreptitiously, so it can route around problems and also so it can document the cause if there are any complaints about its service.
At first it was a little weird to think of Software as a Service companies that focus on slow turns and heavy infrastructure investment, but to me it made an important point. Software as a Service is a design approach, not a product. It can be adapted to solve a lot of different problems in different ways.
The true believers speak up
The second panel was much more what I expected. Panelists included Liz Herbert, an analyst from Forrester; Treb Ryan of OpSource (which makes tools for Software as a Service companies), Steve Lucas of Business Objects (which is adding a hosted service to its traditional software offerings), Gordon Ritter of Emergence Capital (a VC which focuses exclusively on Software as a Service), and Sam Ramji of Microsoft.
Overall, the Software as a Service guys were passionate and evangelical, just what you'd expect from people who have a shiny new paradigm that answers every question. Business Objects was cautions, and Microsoft was surprisingly quiet. The panel reminded me a little of a 1960s encounter between a flower child and Jack Webb of Dragnet. The hippie is saying, "you just don't get it, man, the machine is going down," while Jack Webb's rolling his eyes and trying to get the license number of the VW microbus that ran over the poodle.
Some interesting points:
--It's not just about hosting an existing app on the Internet. You have to design it from the ground up as a service.
--The challenge is, "how quickly can you iterate?" Get a product out there that does something useful for someone, then add features over time. Say "no" to any feature requests that get in the way of doing this first basic launch.
--A great opportunity for Software as a Service is "critical but noncore" business services. A core service would be selling logistics software to FedEx. You don't want to do that because logistics are so critical to FedEx that it's going to buy an app that it can install and customize onsite. But you could sell an online HR services product to FedEx, because that's not their core business. What's core and noncore varies by company.
--Ritter was very skeptical about companies that try to offer both online services and a version of their software that a customer can host on his or her own servers behind the corporate firewall. The concern is that once you let a customer host the app, you'll be tied into maintaining it, and you lose the agility that makes a Software as a Service company successful. He quoted a financial analyst who said, "if a (Software as a Service) company offers just one customer a behind the firewall solution, I'll cut their projected market capitalization in half."
--Ryan on Software as a Service companies that offer radically lower price structures compared to traditional software companies: "They're exposing how little value you got for the software in the past....They're rationalizing the value, not cutting the value."
--Lucas on the difficulty of harmonizing price between a traditional software product sold to a large enterprise, and a Software as a Service product sold to a small company: "I just charged Coca-Cola $15 million, and now you're beating me up over $29? Goodbye, gotta' go."
--Web 3.0 is what happens when the VARs and other parts of the software delivery chain also deliver their added value as an online service.
--Herbert from Forrester shared some interesting survey data showing that among enterprises, 26% are using Software as a Service, 4% plan to use it, 8% are very interested but have no plans, 21% are somewhat interested, and 41% are not interested at all. Those figures reminded me of what PalmSource found when it tried to measure corporate adoption of mobile data – about a third of companies were early adopters who sprinted ahead with major deployments to their employees, and the other 2/3 were cautious adopters who were barely even doing trial deployments.
Blogging as a business tool
The diversity of companies' attitudes toward blogging is fascinating. The range goes from companies like Sun and Microsoft which have aggressively embraced and implemented blogging, to firms that are still trying to decide whether they should have anything to do with it. I sat through a panel on the subject that featured two journalists (Sarah Lacey of BusinessWeek and Fred Vogelstein of Fortune), Bruce Lowry of Novell, and Andy Lark from Sun.
Some highlights:
--The journalists spent a lot of time talking about blogging's impact on print publications (doesn't kill the best ones, but it's cannibalizing advertising revenue, and a reader on the web yields only about 20%-30% of the advertising revenue that you get per reader of a print publication).
--Lacey and especially Vogelstein were skeptical that most companies will ever adopt blogging as aggressively as some tech companies have. As Vogelstein put it, "will blogging in companies run into a roomful of lawyers?"
--Blogging makes it so easy to post information that it's much harder for readers to determine what's true and what isn't. This will help to maintain publications like the Wall Street Journal and the New York Times, because they're trusted to do fact-checking.
--Lark said he now spends more time using blogging software than Microsoft Word. Some Sun blogs get more than 50,000 visitors a day. Blogs also profoundly affect the search traffic coming to a website, and so can change the economics of marketing for a small company.
--Blogs can be especially useful for small companies that can't get any attention from the mainstream tech media. A blogging effort lets them communicate directly to interested customers with no intermediary.
At the end of the session, I tried to ask a question about the sort of people you can communicate with via a blog. In my experience, weblog readers (like you) are generally much more technically sophisticated than the average person. Most of them are influencers and early adopters – the sort of people who generate word of mouth for a product, but not necessarily an average customer. There seemed to be some agreement from the panel, but I wasn't sure Lark and Lowry really bought into it. Lark said Slashdot is great because he can use it to collect knockoffs on competitive products – he just writes down what people said on Slashdot. I think that works a lot better when you're selling to technophiles than when you're selling to average consumers. But then Sun's not a consumer company, so maybe their customers are all Slashdot readers.
Microsoft's plan for everything
Outlook as the user interface and platform for web services. That's the strategy. Got it?
Simon Witts, senior VP of the enterprise and partner group at Microsoft, said browser-based interfaces to web services are hard to learn and use. People already know how to use Outlook, so it makes sense for web services to integrate with Outlook, inserting documents into the user's message queue. He said Microsoft has exposed APIs to Outlook that let companies develop these services, and claimed that that firms like SAP and Oracle are very enthusiastic about doing it.
In addition to giving an arguably better user interface, this use of Outlook could enable a web service to work both offline and online, leveraging Outlook's architecture for caching and syncing transactions. To me, this is the most powerful part of Microsoft's pitch, since there's no industry standard infrastructure I'm aware of for for melding online and offline transactions.
Witts said Microsoft plans to extend Outlook to cover other business processes, including mobility, collaboration, search, workflow, customer management, infrastructure, unified communication, content management, business process integration, and business intelligence.
I wasn't clear on whether Microsoft intended to implement all of these itself or to work with partners; maybe a little of both. Certainly if Microsoft succeeds in making Outlook the interface to everything it will put competitors at a disadvantage. For example, if Outlook is the default interface to use search, that turns Google back into a plumbing provider the way it was when it powered Yahoo search. Microsoft's approach would also make obligatory the installation of Microsoft software on every device that interacts with the web – PCs, laptops, and mobile devices.
It's a very sweeping vision, but I'm not sure if it's Microsoft's vision or just the Outlook team's vision. Whichever is the case, web services companies should be very careful about putting themselves under Microsoft's control.
Mobile was an afterthought
Mobile was mentioned in a number of presentations, usually in a list of important new trends for enterprise software. But no one I saw discussed it in any depth. I think most of the companies are more concerned about what's happening on the web, and they also seem to think they can handle mobile via a straightforward browser client. Not true, because of latency and coverage limitations, but they won't figure that out until they get into it and a few products fall flat.
India, India, India
One of the most interesting sessions, even though it had very little to do with the rest of the conference, was a panel on bringing technological innovation to the developing world. Participants included Adam Lashinsky of Fortune, John Wood of Room to Read (which is trying to install libraries in the developing world), Jim Koch of Santa Clara University, David Green of Project Impact (which focuses on health care for the developing world), and CK Prahalad of the University of Michigan.
Prahalad is mot famous as co-author of Competing for the Future, the book that inflicted the concept of core competency on the business world. It became one of the most overused business cliches of the late 1990s, and gave large consultancies the opportunity to bill companies millions of dollars for basically telling them to focus on tasks that they were good at.
I' a lot more comfortable with the ideas that Dr. Prahalad is pushing now. In the panel and a separate keynote, he lectured the audience passionately on what's happening in the developing world and what to do about it. He said his goal is to make capitalism humane, so everyone can benefit from it, and therefore so the world stays stable. I expected the audience to tune this out, since it was so far away from the vendor presentations in the rest of the conference. But a lot of people seemed to eat it up. Some tidbits from Prahalad and the other panelists:
--Companies need to design solutions to scale radically for the number of people in the developing world. "If you can't touch 100 million people, it's not going to solve the problem."
--Change the way you think about pricing. Rather than starting with what it costs to make something today, and then adding your profit on top of that, find out what people are able to pay and then figure out how to sell profitably at that price point. This means learning how to build cars that sell for $4,000, or performing cataract surgery for $30. Throw out and restructure everything to make this sort of price points work.
--Forget about the four P's when selling to the developed world. Instead, focus on the four A's: awareness, access (distribution that reaches people in the developing world), availability (products in a form that the target customers can use), and affordability.
--Wood described his effort to get 20,000 libraries built in the developing world, and to get books for those libraries written in local languages. For example, he talked about getting children's books written in Tibetan. Someone in the audience asked about the effort to create a $100 notebook computer; wouldn't it be better to distribute a lot of these rather than building libraries for paper books? I thought Wood would be welcoming to this, but actually he was quite dismissive. "We're kidding ourselves if we think there are a lot of high tech solutions that are going to work in the jungles of Vietnam." Rather than delivering a PC for $100, he wants to deliver a library at a total cost of $5 per child, or a school that will serve 500 kids for $10,000.
Prahalad chimed in: "A lot of the thinking is very elitist...poor people have their own priorities. If you don't include them...it isn't going to work." Solutions must be adapted to local needs – what works for a village in Cambodia won't work for a village in India. Concentrate on setting global standards and then customize.
He said western businesses must approach the developing world with dignity and humility, and co-create solutions with them.
Point well taken.
Like just about everyone else in the tech industry, I was caught off guard by Google's announcement late yesterday that it's acquiring Sprint. We all knew Google was interested in the wireless market, but I don't think anyone expected it to make a move this big, this quickly.
In retrospect, though, I think the deal was kind of obvious.
Google can compete with the wireline phone companies and the cable TV companies by offering municipal WiFi networks. It didn't have to acquire companies in those spaces. But WiFi mobile phones aren't ready for prime time – there are too many holes in the network coverage. Google needed a play in the mobile operator space. By combining its WiFi offerings with Sprint's mobile network, Google will be able to offer comprehensive communication and data services that can't be matched by any other company.
The press release was pretty sparse on details, but I loved the statement that we'll be able to use a single Google ID to receive phone calls, e-mail, and instant messages anywhere in the country. I like its commitment to offer unlimited flat-rate voice and data. And I was thrilled by Eric Schmidt's promise that Google's mobile data network will be open to any application from any vendor.
It'll be very interesting to see how the competitors react. Is Yahoo going to buy Cingular? I have to assume that Microsoft will feel obligated to buy an operator as well, but without the other Web properties that Google owns, Microsoft will find it very hard to match Google's scope and synergies.
I also start to believe the rumors about AT&T buying Comcast. They'll need it to compete with Google across the board.
It will also be interesting to see what happens to the handset companies. I don't believe Google or Yahoo will be willing to accept mobile phones whose user interfaces are as cluttered and confusing as the ones on the market today. Well, maybe Yahoo would.
The biggest downside of the Google-Sprint deal is that today is April Fool's Day, and I fabricated the whole thing. None of it's true.
Not yet anyway.
