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Archive for February, 2011

What if You Had an Uber Game Console and an Industrial Graphics Workstation in Your Browser?

Posted by Bob Warfield on February 27, 2011

Adobe has just released its first public “Incubator” (I think that’s early Beta) version of a new Flash player with Molehill API’s.  It represents a whole new level of graphics performance inside your browser.  Imagine being able to run Game Console quality games directly from the browser.  What’s different about Molehill is it directly accesses the hardware GPU capabilities of the underlying machine.  That’s where all the newfound 3D performance goodness is coming from.

Here’s a shot of Zombie Tycoon, a Playstation game, running under Molehill:

Playstation game Zombie Tycoon running under Molehill in a browser Imagine full 3D graphics with rich texts and not just thousands but hundreds of thousands or millions of polygons.  That’s what Molehill is all about.  And it isn’t just for games.  For example, I’ve been playing around in the CAD-CAM world, a decidely un-gamelike but very graphics-intensive world.  Here is a shot of my g-code simulator software G-Wizard:

G-Code is the “assembly language” of CNC manufacturing, where computer-controlled machine tools whittle all parts out of solid chunks of aluminum, steel, or whatever other material is desired.  Those green and red lines show the path the cutter will take as it machines the instrument panel that’s shown on the simulator display above.  Using Adobe Flex, AIR, and the Away3D open source library, I was able to build this application amazingly quickly.  It’s a Fat SaaS architecture, meaning it has the benefits of SaaS but can be run disconnected as well.

Until this point, CAD-CAM has been very much a software world trapped in the cutting edge of the early 90’s, selling software that comes on a gillion DVD’s and selling it for many thousands of dollars worth of on-premises perpetual license.  Given a high performance rendering engine capable of running in a browser, it suddenly becomes possible to bring the benefits of SaaS to this world.  Imagine being able to cruise around the manufacturing Shop Floor, tablet in hand, with full access to all of the product design information and no need to take notes and get back to your office workstation to access the information.  This sort of scenario, where your work follows you instead of forcing the worker to go to the work, seems to me embodies the ultimate potential for the mobile connected world.

With Molehill, the Adobe Flash/AIR environment gives us the ability to:

-  Run Game Console and Industrial Workstation Quality 3D Graphics

-  Build applications that are equally at home whether connected or not either as desktop (or mobile) apps with AIR, or as browser apps with pure Flex or raw Flash.

-  Run portably from one line of source code on essentially all the interesting mobile platforms, with the artificial exception of running in the browser on iOS.  You can, however, create Flash apps for iOS, you just can’t run from the browser.

-  That same line of code can use the excellent screen layout capabilities inherent in the Flex framework to make the app comfortable configuring itself to run on a phone, a tablet, or a PC, again, all with one code base.

-  It’s got hard core image processing and graphics capabilities even aside from the new 3D that are just amazing.  If animation, special effects, precise control over look and feel, or rich UI are at all important, Flash has got it covered.

-  While it doesn’t yet have true multithreading, the Flash engine does a pretty darned good job of using multiple cores for garbage collection, rendering, and now taking advantage of the GPU to achieve more parallelism.  We’re promised that we’ll see multithreading before too long as well, which will open up yet another level of performance.

-  The Flash VM is a pretty high performance interpreter, and the language itself has a lot of very nice dynamic language sorts of features.

-  Unlike Javascript, you need not worry about browser incompatibilities.  The same AIR executable for my G-Wizard software runs just fine on PC, Mac, or Linux.

-  It’s an ideal platform if you’re interested in Rich User Experience and Fat SaaS-style clients.

-  There is a rich  ecosystem with plenty of tools available and plenty of Open Source to assist your development efforts.

If you’re developing client-side software, I can’t understand why you wouldn’t want to be up to speed on what’s going on in the Flash world, whether or not you choose to take advantage of it.  Sure, there are the fanboy trolls who take delight in deriding it, but I’m not aware of any other platform that has the breadth of capability, performance, and robustness.

Posted in cloud, mobile, saas | Leave a Comment »

What the Obama Tech Supper Gang Should Do About Jobs

Posted by Bob Warfield on February 21, 2011

What do you suppose 12 Tech CEO’s and VC’s discussed with President Obama at their dinner?  Many things, I suppose, but  almost certainly there would’ve been a discussion about the job situation.  More than likely this was focused around Obama’s interests in improving education and US competitiveness.

I was shocked to get a note from LinkedIn saying nearly 1/3 of my contacts have found new jobs in the last year.  That doesn’t cover those who have not yet been able to find new jobs.  I regularly talk to smart people from tech who been out of work for approaching a year now.  Heck, I’m one of them.  I can’t remember a time in this industry when that was ever true.

There were a flurry of posts about the dinner, including such things as speculation about who should have been invited, but wasn’t from fellow EI Larry Dignan.  It was Larry’s list of “stunning omissions” that really got me thinking about what should have been said there, and maybe who else should have been invited.

Larry presents the following list for his “stunning omissions”:

  • Sam Palmisano, CEO of IBM: All Big Blue did this week was advance artificial intelligence and capture the imagination of the American people as Watson played Jeopardy. And oh by the way, IBM employs a lot of people. Costolo from Twitter? Not nearly as many people employed.
  • Leo Apotheker, CEO of HP: HP also can put a lot of people to work and innovates too. I’d put Apotheker at Ellison’s table just for giggles.
  • Jeff Bezos, CEO of Amazon: Obama clearly has his Web 2.0 goggles on. Bezos happens to have this cloud-friendly business called Amazon Web Services that enables a lot of entrepreneurs to launch infrastructure on the cheap.
  • Steve Ballmer, CEO of Microsoft. Ballmer takes his lumps, but surely has a few ideas about how to make the U.S. more innovative. Alternate: Bill Gates.
  • Marc Benioff, CEO of Salesforce.com. You want cloud? Benioff is Captain Cloud. Besides, he’s another one to put at Ellison’s table. Proposed seating order: Benioff, Ellison, Apotheker.

And here is the actual list of attendees:

  • John Doerr, partner, Kleiner Perkins Caufield & Byers
  • Carol Bartz, president and CEO, Yahoo!
  • John Chambers, CEO and chairman, Cisco Systems
  • Dick Costolo, CEO, Twitter
  • Larry Ellison, co-founder and CEO, Oracle
  • Reed Hastings, CEO, NetFlix
  • John Hennessy, president, Stanford University
  • Steve Jobs, chairman and CEO, Apple
  • Art Levinson, chairman and former CEO, Genentech
  • Eric Schmidt, chairman and CEO, Google
  • Steve Westly, managing partner and founder, Westly Group
  • Mark Zuckerberg, founder, president and CEO, Facebook

Here’s my problem with the lists.  For the most part, they’re very bright, very successful Captains of our Tech Industry, but these people are not connected with the end of the economy that produces the jobs.  Therefore, it isn’t clear to me they have much to tell Obama about how to fix the jobs situation.

As I’ve written before in response to Intel’s Andy Grove, Big Companies are not the job creators in our economy. In fact, we can argue about whether even the VC’s, like John Doerr see the bulk of job creation in from the companies they fund.  If you click over to my Andy Grove piece, you’ll see that the vast majority of jobs are created by brand new companies that have less than 20 employees.  It seems the longer companies are around, and the bigger they get, the less likely they are to be net job creators.

Why is that?

It’s pretty simple to understand, if you think about it.  After all, many of the things that result in fewer jobs are unique to larger organizations:

-        Small companies don’t outsource overseas.

-        Small companies don’t have huge piles of captive profits overseas that they can’t repatriate for fear of paying taxes on them.

-        Small companies can’t go through round after round of layoffs where the bottom 5-15% is cut.

-        Small companies don’t spend a fortune automating in order to get by with fewer jobs.

-        Small companies don’t have billions in the bank and billions more for shareholders to squabble over.  They spend over penny to keep going and growing.

-        Etc., etc.

Small companies just don’t have the critical mass to cut jobs.  They’re too busy trying to grow and generate the critical mass.  Now granted, there were people at the dinner who have experience with companies at that scale, although not all the attendees do and I’m not sure how much experience they have with such companies.  But collectively, they have a lot more experience and expertise doing the things that big companies do.  And their own agendas and enlightened self-interests are unlikely to be well aligned with doing anything that helps small companies at the expense of their big companies.

As a country, and particularly for politicians like President Obama, it’s hard to come to grips with this stuff.  We like to hear about the biggest baddest companies in the land and their leaders.  We like to think that we could fill a room with a handfull of power players, and accomplish anything.  People like these dinner guests.  We like to think that bigger is better.  If we only spend enough money on research and development, we will have innovation and that will lead to jobs.  But there is little evidence to bear this out.  Microsoft spends billions on research and development, yet is widely regarded as not particularly innovative.  Apple actually spends a lot less, relatively speaking, and is very innovative.

Shortly after the Tech Supper, President Obama met with Paul Otellini of Intel, and there was much talk of a new chip fab in Arizona and all the jobs it would create.  BTW, if you look at the numbers, it will ultimately cost Intel $5 Billion to create 1000 permanent jobs.  So creating a job costs $5 Million under that plan.  I think it’s great to have more chip fabs in America, but do you think we could manage to create more than 1 permanent job if we had $5 Million to spend on small business?  I wonder how many jobs someone like Paul Graham (who would’ve been one of my picks for the Supper) with the Y Combinator-style incubator could create per $5 Million?

Otellini has said that Obama (in fairness, he said Democrat dominated Washington) doesn’t understand what it takes to increase jobs.  He’s on the right track when he says our problem is too much regulation.  He claims it costs $1 billion more to build a factory here largely because of taxes, regulations, and legal issues.  Fellow semiconductor executive T.J. Rodgers says it isn’t that US labor is so much higher, it’s anti-business laws.

I couldn’t agree more, but here is the rub—it’s much worse for small business to afford this overhead.  They don’t have the luxury of building their multi-billion dollar factory overseas.  Whatever they’re going to do must be done domestically, or they can’t even begin to exist.

What the Tech Supper Club should have been discussing is how to change that anti-small-business environment for the better, even if it means tilting the tables so things are a little worse for big business so that small businesses can be stimulated.  What are the chances that audience was that enlightened?

The reality is a lot of the issues could be fixed for both large and small, but a lot of them can’t be.  We need to fix our runaway liability system, and that will benefit both.  We’ve seen too much mischief and mayhem from runaway deregulation, so I’m more skeptical about fixing that for big companies and particularly for anything approaching a monopoly of anything.

But what we could do, rather than eliminating laws like Sarbanes-Oxley entirely (adds a huge overhead to public companies and is partially responsible for the drastic reduction in Tech IPO’s), is point the laws at the big companies and let the little ones off.  After all, SOX was a response to Enron which was many billions in revenue before it ever got up to mischief.  To think the population’s widows and orphans are at significant risk from a $100M a year software company is a little bit silly.  Yet that small company pays 6% of its revenue to deal with SOX compliance alone.

There are a lot of creative things that could be done to clear the way for small companies.  Fix SOX. Do some liability reform that benefits smaller players while continuing to hold big players accountable.  Fix the patent system so trolls can’t touch the little guys.  Reduce the health care costs for small companies by having insurers combine them in pools with big companies.  Quit regulating small companies in general so much and quit politicizing the dole when it comes to things like small business loans.  These are just a few of the possibilities.

If we successfully ignite a boom for small business through such measures, everybody would win.  We would create many jobs—in fact this may be the only way to dig ourselves out of the job deficit.  We would stimulate the heck out of the economy.  Big companies would boom too as a result.  Innovation would be restored.  It’s always been a function of sowing a thousand seeds and waiting to see where the flowers bloom.

We bemoan the loss of our middle class, but they’re the ones who largely create, own, and run small businesses.  Can we help them out?  That’s the fastest way out of this job crunch.

 

Posted in business | 5 Comments »

Quick Thoughts on A/B Testing for Boostrappers

Posted by Bob Warfield on February 21, 2011

First thing is, if you’re not A/B testing, you’re missing out.  It’s an absolutely essential tool for marketers.  It’s completely free and easy too, thanks to tools like Google’s Website Optimizer.

Second thing: most of what you test will fail!

Yeah, pretty crazy, huh?  It’s true.  I keep an agile backlog (fancy way of saying a little more than a todo list and a little less than a project) of marketing ideas for my bootstrap experiments.  I subscribe to a number of blogs and come across all sorts of ideas and advice for marketing landing pages.  Luckily, I started out being pretty agnostic due to my marketing mentor’s (Marc Randolph, the guy that came up with the idea for Netflix) advice that all marketing is tragically knowable through testing.  But it really is amazing to go through the litany and see what works and what doesn’t.

So far, I have found that the most reliable things boil down to eliminating clutter, making things harder hitting but terser, and the like.  Streamline.  Things I have had less success with:

-  Focusing on benefits instead of features.  You hear this incessantly from marketers, but it doesn’t necessarily always hold true.  My suspicion is my audience already had a pretty good idea what they wanted to get by way of benefits and were focused on whether they believed the features would deliver those benefits.  Eliminating too much discussion of the features made the landing page less impactful.

-  Headline tuning.  They tell you the headline is absolutely the most important thing you can tune.  For whatever reason, my initial headline was a winner.  Every blessed alternative I’ve tried has been inferior.  Even the ones I thought ought to work better.

Aside from making the page more concise and hard hitting, things that have worked have been things that subjectively reduced risk.  Familiar credit card logos and a written guarantee, for example.

Third thing:  the test ain’t over ’till the fat lady sings!  Yep, it is amazing to watch tests go up and down.  Do not stop the test until your A/B test software’s confidence interval is telling you it is a valid result.  I’ve had tests start out great and look like a slam dunk and then suddenly go south until they were clearly a bad idea.  Google says not to quit until you’ve had at least 100 visitors check out each alternative.  It often takes 200-300 to be sure.  Until you get a statistically significant result, you have to keep going.

Last quick thought: if most of what you test will fail, and if it takes at least 100 and perhaps 200-300 trials, be careful spending too much traffic testing if revenue matters.   You need to be constantly testing new things, otherwise, how will you discover things that work?  And, since most things don’t improve the response rate, that begets even more testing.  But, if all of your traffic is directed to tests, and most of the tests don’t work, what happens to your response rate?  Darn!  I hate when that happens!

I am fortunate to have a web site that delivers 60,000 unique visitors a month to use as my bootstrap test bed.  Even so, I don’t like to spend more than 50% of the traffic on the testing.  I tee up something at the beginning of the week, and generally a week to a week and a half will yield a result.  I keep the winner and tee up another set of tests.  Even so, if 50% of your traffic isn’t pulling because it is stuck doing tests that mostly don’t improve the response rate, that’s hard on your results.

Such is the life of an A/B tester!

Postscript

If there is anything that will convince you that it’s risky betting your marketing on your gut, A/B testing will do it.  My mentor, Marc Randolph was right, marketing is tragically knowable.  Don’t make the mistake of not knowing!

Posted in Marketing | 1 Comment »

Virtualization Made Mac What it is Today

Posted by Bob Warfield on February 18, 2011

Sam Diaz is writing about Apple’s latest Draconian App Store subscription policies and how they’re not a bad thing.  Forrester CEO George Colony says Apple is headed for a repeat of their defeat at the hands of Windows with these policies:

We know what happened — the world has had to use a lowest-common denominator PC operating system for decades, with excursions into wonderful places like Vista. This time around, Apple’s hostile position could result in a 2014 App Internet market that looks something like this: 80% Android, 10% Apple, 10% Other.

Colony’s concern is that this is the formative time for app consumption and app markets.  It’s too early to exert a monopolist’s egregious tax on those markets.  People aren’t locked in enough yet.

Diaz has a counter-argument:

Here’s the thing: Colony says that like it’s a bad thing. Say what you will about Apple’s share of the PC market – but the fact is that Apple’s lineup of Mac computers are far superior to anything that’s running Windows. And increasingly, quarter after quarter, the company notes that its share is growing and that about half of the Mac purchases in a single quarter have been by consumers who switched from Windows.

My problem with Sam’s argument is that none of that shift started happening until Virtualization meant you could have your Mac cake and eat some Windows software too.  It isn’t really clear they’re leaving the door open to do that with their App Store policies.  This isn’t about not only having Apple wonderfulness PLUS everything else in the world when Apple doesn’t happen to have the right answer.  It’s about ONLY having the Apple wonderfulness and being glad of it, dammit.

It’s going to be interesting to see what happens come the June 30 deadline for compliance with the new policies.  We will no doubt get hints along the way.  As an iPad user who set aside his Kindle but still constantly reads using the iPad’s Kindle app, I’m keenly interested.

During his last go-round with book publishers and Amazon, Steve Jobs largely managed to get book prices on Kindle raised.  That may turn out to be the result here too.  Kindle charges a “publishing expense” fee back to the book publishers.  So far it covers the wireless costs for Kindle’s built-in Sprint modem.  Perhaps Amazon will decide to roll the iPad 30% into that fee, making books sold there dramatically less profitable for publishers.  There would be a certain poetic justice in that.  The publishers leaned on Jobs to break one walled garden only to see another spring up immediately in its place.  What are they going to do about this one?

 

 

 

 

 

Posted in amazon, apple, business, cloud, Marketing, mobile | 1 Comment »

Remember HP’s New Wave? Here We Go Again!

Posted by Bob Warfield on February 15, 2011

Sam Diaz has gotten clarification on the future of Windows in the light of their Web OS announcements.  It should come as no surprise that Windows isn’t going anywhere, and certainly won’t be replaced by Web OS any time soon.  Instead, HP is saying:

HP will integrate the WebOS experience into Windows, but not through virtualization. He said: “…it will be a combination of taking the existing operating systems and bringing WebOS onto those platforms and making it universal across all of our footprint.”

Sounds great.  Been done before.  Remember HP’s New Wave?  It was a new object-oriented UI shell and mini-platform (we looked at possibly using it for our Windows apps at Borland but declined–not enough value add for the trouble) that HP launched way back in 1989.  They’ve been down this road before of trying to enhance Windows.

It’ll be interesting to see whether it works any better this time around.  Personally, I’m betting against.  The little things it adds that have been demoed so far are all obvious things Microsoft should be building into Windows and in fact will have to build if they want to make their Nokia partnership perform as it should.

This is more or less what happened to New Wave.  It introduced some cool stuff that Redmond promptly scooped up and marginalized through various releases of their own.  It’s good news for Microsoft though.  Their engine is not particularly innovative, but if someone else can show them what to do that’s in a format not too far removed from what they’re familiar with they will grind that stuff out like nobody else.  They’ve needed some of that help, though frankly it has been out there lately and Microsoft hasn’t bitten (Xobni, anyone?). 

Perhaps this will get their attention.

Posted in mobile, platforms | 12 Comments »

Scoble Discovers Developers are Schizo About New Platforms

Posted by Bob Warfield on February 12, 2011

I just listened to Scoble’s bar interview of @longview (Nick Long) and @renatto (Paul Robinett), two Dreamworks developers who are building a mobile app of their own.  They’re talking about the Mobile World, and there are some great sound bites coming from the interview.  BTW, the Cinchcast tool he used to do the interview was pretty cool.

These developers conclude Nokia-Apple are “screwed”, Android is the cutting edge, yada, yada.

Some key passages and ideas I’ve paraphrased: 

-  The constant refrain: “No one is developing apps for X”.

-  It’s costly to learn a new platform.  Android has Java.  If you know Java and have to learn Objective-C that’s hard and vice versa.  You have to hire a new programmer.

-  It’ll be hard for developers to straddle 2 platforms and 3 is impossible.  How can there ever be a #3 of any consequence?

-  You have to pay us up front enough so it wouldn’t matter if anyone bought the platform.  Because they can’t guarantee the distribution.

 – Cool is about openness, not about closed.  The big momentum is with Open on Android. 

-  The Cool Kids want to be on the cutting edge, but that’s slowing down a little bit for Apple.

-  When somebody builds the uber cool app on Android first, that shift away from Apple will be here.

-  Scoble’s advice to Microsoft, get rid of Windows and go XBox.  They may have been too long in the bar at this point!

-  What if the Apple store is full of hundreds of thousands of apps, and you’re lost in that sea of apps.  How about a marketing decision to launch on Google first so you stand out?

Takeaways for Once and Future Platform Kings

I am a developer and have worked with developers for my entire career in a variety of different markets.  I’ve also spent a lot of time doing the “impedance match” between marketing/sales and developers, and formulating winning product strategies in new markets.  Let me tell you it is an interesting challenge to juggle all of those balls just because of how the various players think and are motivated.  It’s worth getting behind the sound bites of this interview and understanding the developer, marketer, and strategic implications for companies who want to be Platform Kings.

Let’s start with the marketing / strategic perspective for the mobile world.  It’s all about the apps you have on phones, and Scoble gets this in a prior blog post very eloquently:

Nothing matters in this world more than apps. Write that on your forehead. Write that on the mirror on your bathroom wall. Write that on your car windshield. Whatever it will take so you remember it.

HP execs know this. Google’s execs know this. Everyone in Silicon Valley knows this.

Apps are the ONLY thing that matters now.

Why? Because when a customer, whether in Cape Town or San Francisco or Tel Aviv walks into a store to buy a smartphone they will NOT want to feel stupid.

What makes you feel stupid when buying a Smartphone? Buying one that doesn’t have the apps your friends are taunting you with.

Apps need a platform, so if you’re going anywhere in these markets, you’d better have one that will attract the right apps.  Unfortunately, it’s getting late to try to establish a new platform.  Why?  Because the developers are in control of whether or not apps will appear on your platform, and you will have a hard time attracting them.  Many companies are woefully unprepared for the idea that if they’re in the platform business, they actually have two sets of customers.  First are the people that buy the phones.  Those are the obvious customers, the ones marketers at companies like Nokia have built their entire professional careers learning how to deal with.  Second are the developers that bring the apps.  These are the customers many of these companies have no earthly idea how to deal with, yet they are the gate keepers for the apps.

So how do we think about developers as customers and how do we get them to adopt our platforms?

There are a very limited number of opportunities to attract developers because they are so schizoid about new platforms.  On the one hand, developers really hate having their expert status reset to beginner while they learn a new platform.  They may protest that its cool, they’re always learning new things, they love to learn, yada, yada, but they really hate the nuts and bolts of the learning.  This is a corollary of what happens when you give a developer somebody else’s code to maintain.  The code may have come from their most revered uber geek hero, but if they don’t know that’s the source, their first words on briefly looking over the code will be, “This code is shit–we have to rewrite it.”  Welcome to the real source of NIH.

So what will get a developer to voluntarily surrender his Uber Geek status for the time it takes to learn a new platform? 

There really are only two things.  Either that platform is so hot and sexy they will lose their Uber Geek status anyway if they don’t learn it, or the platform is so successful that profit motive dictates it must be supported.  Are you beginning to see the problem with introducing a new platform?  It hasn’t been around long enough for profit motive to kick in, so you have to make sure it isn’t just a little bit cool, it has to be ultimately way-over-the-top-super-duper-no-kidding-insanely-friggin-UBER COOL. 

This has been Steve Jobs genius.  He has managed to create such platforms multiple times in his career.  That’s no small accomplishment, and I don’t know whether we’ll ever see it again in our lifetimes from someone else.  The Apple II.  The Macintosh.  The iPod.  The iPhone. The iPad.  Dang Steve, that’s gettin’ jiggy with it.

When the corpocracy wants to roll out a new platform, that’s what they’re faced with.  There are a limited number of things the Corpocracy (my term for that faceless Big Business  thing the lady in the Apple 1984 commercial threw her hammer at) can do about this.  The best one is to make their platform absolutely compatible with some other platform so that developers don’t have a long learning curve.  We’ve seen a lot of those kinds of things going on in the industry.  It’s one reason why some things just won’t die.  Sometimes it works to give away the platform, and make it open.  It’s helpful if in the process you can make it as compatible as possible with something developers know.  Enter Android with a lot of Java inside.

That’s about it.  If you can’t make your platform fit those molds, you’re probably not going to be a Platform King.  Not enough developers will learn your stuff no matter how great it is because it was either not sexy enough or didn’t already have a big enough installed base.  The latter, BTW, is why Gordon Moore says it is better to go from app to platform than vice versa.  At least you’ll have the installed base and ecosystem of the app users to drag developers onto the platform.  They come to make the app users happy if there is enough motivation in that.  But this does not necessarily a huge platform success make.  This is the problem Salesforce struggles with in Force.com. 

Getting back to the Scoble interview, are these developers right, is Nokia screwed?  And whither the other mobile platforms?

Because developers have this big speed bump in their willingness to learn new platforms, they will tend to create sub-cultures that don’t communicate very much.  Right now we have a huge division between the Unix + Open Source world and the Windows + .NET world, for example.  Only a very small number of developers can claim to be Uber in both camps.  The vast majority know very little about the camp they are not Uber in, and often hold it in extreme disdain as a result.  But that does not mean they’re right.  It only means you have to understand where those boundaries are and what they mean to the success or failure of your product strategy. 

Translation:  don’t ask a set of developers about whether a platform they will have to learn will succeed unless all you care about is whether they perceive it as cool.  They don’t know much else.  It’s all religion to them.  Despite the fact they are engineers, very few will look at this sort of thing objectively.

In fact, Microsoft may have the only viable alternative platform opportunity that will work for mobile after Apple and Android.  Why?

Because there is a large community of developers who don’t have to relearn their tools.  To the extent the phone platform can minimize relearning and appeal to that group, they’re in.  It would be ideal if Microsoft can also create the commercial reality of a big enough market.  In fact, that will be a requirement in the long run.  But in the short run, Microsoft needs to stimulate some innovative hit apps on the platform that show life and prime the pump.  Steve Ballmer, if you’re listening, that’s the most valuable thing the billions you spend on R&D could purchase.  Bring 3 to 6 hip, really cool, must have apps to your platform so your customers don’t have to feel stupid (ala Scoble and mobile phone apps) and you have a chance.  While you’re waiting for that lightning to strike, at least make sure you have apps that give great experiences for all the key hip web properties out there, such as Facebook and Twitter.  And with whatever cash you have left, make sure your phone platform is minimizing the speed bump for .NET, Windows, and XBox developers to put apps on your phones.

It’s not too late, but it is far from early.

Related Articles

This community of developers who know Microsoft platforms is one of the under-served markets I alluded to in my article saying that Nokia-Microsoft are filling the last of the 3 winning market strategies.

Posted in platforms, software development, strategy | 5 Comments »

Nokia-Microsoft Deal Completes the Three Winning Strategies a Market Can Have

Posted by Bob Warfield on February 11, 2011

According to Michael Porter, markets have three winning strategies:

-  Best:  Build the best product in the market.

-  Low Cost Provider:  Compete on Price.

-  Niche:  Service a niche that is under-served by the other two strategies.  All markets have niches of one kind or another.

Can you guess which of the three smartphone players goes in which slot?  It’s easy:

-  Best:  Apple’s iOS products.

-  Low Cost Provider:  Google’s Android

-  Niche:  Nokia-Microsoft had better be targeting this spot, at least for now!

It’s not an unreasonable play for the two companies, although most commentators see it as a marriage of desperation.  Still, we shouldn’t let that reality steal too much away.

How can Nokia-Microsoft serve niches that are underserved by iOS or Android and go on to prosper?

In many ways, the Microsoft .NET world has grown up to be just such a world.  It isn’t really the best, despite what Microsoft or some fans might argue.  The ecosystem that places Oracle instead of SQL Server at its center has that base covered.  It isn’t the cheapest either, since Open Source of various kinds has handily taken that spot.  Instead it has grown up to fit into all the gaps these others leave under-served, and it’s worked out reasonably well for them.  Take a look at the XBox business for example.  It’s been reborn with a vengeance by the Kinect, which is a niche gizmo.  A very cool one to be sure, but it isn’t as if every single game you’ll ever want to play is a Kinect game.

Now in the phone world, Scoble has two pretty good examples of the kinds of niches Nokia-Microsoft can go after:

1. Nokia has dealers and stores in the weirdest places on earth. Places Apple won’t have stores in for decades, if ever.

2. Microsoft has great developer tools.  I will add to that they have the .NET community and ecosystem, which is under-served by iOS and Android.

Ideally, Nokia-Microsoft should look for more of these niches.  For example, Nextel created an awesome cell phone niche play by rolling up the features needed by services that dispatched their trucks, taxis, and other vehicles by 2-way radio.  Perfect example of a niche play.  Nokia-Microsoft will have a great niche if they can better serve Windows users than iOS or Android, since that’s already Microsoft’s niche and a huge one at that. 

Speaking of serving Windows users, HP is showing some fascinating new developments.  For example, the ability to see your phone’s instant messages on your PC without having to go get the phone in the next room.  That’s the kind of stuff Nokia-Microsoft should be doing for Windows.  The question in my mind is where does this leave HP?  They’ve decided to go it alone, even talking about Notebooks without Windows.  The demonstrations they’re showing are spot-on the kinds of things that under-served markets love to get their hands on, so I would say that what we are going to see is a real dogfight between HP and Nokia-Microsoft because neither has much chance of usurping Apple or Google from their Best and Low-Cost plays.

What’s also interesting is we will see the play between Vertical and Horizontal Integration and Partnerships.  Andy Kessler wrote a great article at GigaOm on Ken Olsen, who recently passed away, that talks about how DEC lost the war by trying to be too vertically integrated like IBM.  They wanted to do everything soup to nuts.  I don’t agree that this was DEC’s only problem–they also faced the horror of rebuilding their whole channel to work the way the emerging retail world operated instead of via Direct Sales.  Faced with that, most companies give up.  It means taking a real dip before you get back to ascendency and throwing away many core competencies while you learn something new.  Nevertheless, it was a factor, and one to consider for HP, who are assuming they can go it completely alone.  Yes, there is an installed base, but that’s about it.  Nokia-Microsoft can at least hope to rally a broader ecosystem around their axis which is crucial when dealing with a platform like a mobile phone.

As I was reading fellow EI Vinnie Mirchandani’s take on the whole thing, I was reminded that this is a wonderful study in when to be a polymath (vertical, doing it all) and when not.

The Polymath, who is expert at all the key areas needed for a project, has the advantage in producing the Best because they avoid all of the cruft and friction of fitting together two areas of expertise when the experts don’t speak each other’s language.  Apple may be the world’s foremost example of this, at least in terms of visible consumer products.  In terms of being the Low Cost Provider, there will certainly be opportunities for the Polymath because there are savings to be had in avoiding the friction of fitting together.  However, the advantage is not so great.  The reason is that Best has to start out Best and stay that way.  There is therefore very little time to learn and evolve your way to Best.  Low Cost is always looking for incremental savings.  They can learn their way past their lack-of-Polymath.  For many years, I think Dell would’ve made a fabulous example here.  They outsourced so much that they were basically marketers and component specifiers.  They did not have the Polymath knowledge of a great many things and didn’t want it.  I don’t know if they are still the masters.  Because one can learn to be lower cost, it is a less defensible barrier.  As for the niche, this too seems like an excellent Polymath domain.  Niches often come about because the Best and Cheapest players just don’t know enough about the niche.  The Polymath has to span that gulf in domain knowledge.

It’s going to be interesting to watch the Nokia-Microsoft and HP gambits unfold.  Probably the biggest obstacle against them is time.  Nokia-Microsoft are talking 2 year time scales at a very pivotal point in the Smartphone era.  That’s a long time to wait!

Posted in business, mobile, ria, strategy | 7 Comments »

Is Google 2011 Better Than Google 2000?

Posted by Bob Warfield on February 9, 2011

Matt Cutts says he has 40,000 queries and their results saved from 2000 that prove Google 2011 gives better results than Google 2000 (hat tip to Techmeme!). 

I think that’s very cool, so I left a comment asking Matt to publish those results so the world can see them and make up their own minds.  If he’s right, it would be excellent press for Google.  When I left it, the comment was waiting for moderation.  It’ll be interesting to see whether it gets posted and whether the 40,000 queries with their results get published.

Barry Schwartz is calling for the results too.

Posted in saas | Leave a Comment »

The Wealthy Pirate VC

Posted by Bob Warfield on February 8, 2011

Having been in the software business all my life, I’m no stranger to the idea that many people think it’s okay to steal digital property.  After all, it costs virtually nothing to manufacture another copy, so the reasoning goes, and so therefore the owner isn’t out anything.  It’s an unenlightened and unsophisticated rationalization of what, in the end of the day, is still theft.

Imagine my surprise at reading Fred Wilson’s diatribe against the music industry (or perhaps one particular record label) who “forced” him to steal their music.  After all, Fred is in the digital content business and should understand all this.  But, it seems that after trying mightily to acquire a new album legally, he gave up and copied it illegally.  The album in question was being rolled out to limited media (CD) and limited geographies (UK).

The comment thread for the post is a wonderful petri dish full of the arguments pro and con for digital theft.  Andy Swan kicks it off with this wonderful analogy to Fred’s music acquisition rant:

Just the other day, I was wanting a Land Rover. But it was totally messed up. The only one the dealer had available was red. I wanted black. I’m not going to buy red just to have to go get it repainted. Plus, they wanted $79,000….I didn’t want to pay that much AT ALL.

I did find out that there was one going to be released in a couple weeks in Canada, so I started looking at ways to get a fake ID so that the Canadian dealership would sell it to me. This was beyond frustrating.

So, reluctantly, I called my old high school friend, “Tommy two gloves”. He said he could have me a black Land-Rover, exactly the way I wanted it, within a few days….for $10k. It was easy, and I love the new car.

So Land-Rover—if you’re listening—it’s totally messed up that you FORCED me to steal a car. By not offering me exactly what I wanted, exactly when I wanted it, you turned me (and tommy) into a criminal….and until things change with your distribution and pricing systems, I will remain one.

Andy has mapped the twists and turns of Fred’s story perfectly, the only difference is in Andy’s story, a much more expensive physical good was stolen.  That post set the tone for what was to follow because it so effectively highlighted the opposite side of the coin, where everyone agrees the Land Rover case was theft.  The justifications from the Digital Theft appologists were fascinating.  Let’s consider a few:

Fred immediately replies, “Atoms and bits are different, Andy.  I’m shocked you don’t grok that.”  This was ill-advised, because of course Andy had no problem coming up with a bits scenario involving a couple of Fred’s portfolio companies, Twitter and Etsy.  Simply put, if bits are not valuable, neither are the portfolio companies and it would be okay to steal their bits if they make it too inconvenient to pay for them.

Andy’s point is well-taken: Bits have immense value to their creator and owners.

Morgan Warstler makes another time-honored point:

If oil and food could be copied, there would be riots in the streets if they were not near free.

The entire concept of property rights and ownership – hugely important ideas – is predicated on the zero-sum nature of the atomic.

When you or anyone else (RIAA / MPAA), attempt to treat the digital as if atomic, you ruin, bastardize, weaken true property rights.

His argument goes on for quite some while, back and forth, but it boils down to it being moral to steal things that others are unwilling to defend with a gun.

I have two problems with this.  First, as Andy points out, digital is what he sells, it is his livelihood, and while you may think you are doing no harm stealing it, you are damaging his livelihood.  Many of the arguments have to do with the idea that when you steal something digital, you don’t take away the right of the owner to use it.  But that argument is wrong.  While you may not diminish the supply, you have diminished the demand, and therefore taken away from the owner some of the value of the thing. 

Second, to say it is part of reality that digital theft is not treated as strongly by society as physical theft is true, though we can argue about whether it should be.  To then cross the line and argue that because of that it is moral is ridiculous.  Warstler seems to think caveman ethics should prevail, and that unless someone is being shot, nuked, starved, or otherwise severely damaged, it should be ignored.  The whole point of civilization and the rule of law is to move us beyond caveman ethics and into a world people should actually want to live in.

Of course Andy calls Warstler on this, since Warstler sold a company that makes digital property, and Warstler trots out another favorite argument for digital theft:  it’s what built the Internet and made companies successful.  Hey, I am doing you a favor by stealing your property.  More people will see it and hear about it.  I have two problems with that.  First, it ought to be my decision whether to embark on such a marketing strategy.  Many have.  Warstler has said the market prices all this sort of thing in.  If so, then the market will make my competitor who gives away the free so much more successful than me that I will either perish or repent and start offering free.  Whether or not this dynamic ever plays out is my second issue.  Not one of the examples by Warstler demonstrates that the digitial property owner benefited by theft.  For example, he claims broadband came about largely because of Kazaa.  Great, and even if we believe that (I don’t), how did this actually increase the profits of the digital property owners?  It didn’t.

Here is the thing: stealing because we think it does no harm to the owner or to relieve some inconvenience or perceived slight of our own is wrong.  You can argue around it all you want, but it’s wrong.  The more you use the lack of value lost to the owner, the less justification you have for stealing it because it’s obviously a nice to have.  If the argument works for the owner, why not the thief?  You’re not stealing food to feed your starving children, you’re stealing music that you’d like to enjoy?  Sorry, my sympathy is for the guy feeding his children, not the guy who wanted more enjoyment.

We should debate the laws and whether they’re right.  I for one am not a believer in software patents.  I think they’ve caused far more harm than good.  But to decide its okay to situationally ignore the law is a mistake.  Lots of things are digital in this age, more all the time.  One could argue money is digital too, and Wall Street no doubt thinks it did no wrong in the recent economic crash.  Fred will do well to move away from this position that if a company inconveniences you enough, it’s okay to steal.  Given the nature of his portfolio, and the propensity of others to choose ever more questionable scenarios for justification than his own, he’ll find it’s costly if the laws can’t protect digital goods.

Postscript

After I wrote the long diatribe above, Chris Walley did a much better job stating my own personal feelings:

Love the blog, read it often, but I completely disagree with the implication that if you want something badly enough it’s ok to do something else you don’t believe in. Forget all the arguments about bits and atoms or whatever, the fundamental issue here is about YOU being consistent with your own values. The question I ask myself in these situations is, “Are you going to let your wants and desires interfere with your personal integrity?”

Some other great points made in the comment thread.  For example, folks from all over the world welcoming Fred to their world where music and other goods are readily available in the US, but not in their parts of the world, or if they are, not for the same prices.  These are forms of artificial scarcity.  Danny Strelitz adds another:

Wait till you get in to the formats war – mp3 in 128bit or 320 bit, flac, ogg, and you will find yourself pirating like a Somali fisherman on speed, if you spend 2000K a year on music and suddenly the format you got it all is considered low quality or not working with your primary music listening device.

I am not a fan of artificial scarcity, and have written about how the market will punish you for it.  Still, it doesn’t make piracy right or a right.

Posted in business | 2 Comments »

Where’s the Amazon AWS App Store?

Posted by Bob Warfield on February 7, 2011

I was talking to the interesting folks over at DreamFactory the other day (courtesy of Phil Wainewright who introduced us, thanks Phil!), and we wound up on a fascinating topic of conversation.

At a time when many companies are still not in the Cloud, DreamFactory is in 5 different clouds with as many as 8 different applications.  They’re doing some very cool stuff that I want to write more about in a later article, but suffice it to say they’re one of a very few companies who can seriously talk about the differences between Clouds.  For example, Bill Appleton, DreamFactory’s CTO, has published some benchmarks of the different clouds that are fascinating.

One of the topics that really grabbed me during our discussions was the strange dichotomy of who has an app store and who doesn’t.  DreamFactory has gotten tremendous mileage out of being listed on the app stores of various clouds.  CEO Eric Rubin tells me they receive at least 100 leads every day from Salesforce’s AppExchange alone.  Obviously, they’re very interested in Clouds having an app store, and in this day and age where app stores are all the rage, it makes a lot of sense.  At the same time, we have Amazon Web Services, one of the most popular if not the most popular Cloud out there, and they have no app store!  Yeah sure, they’ve put up a store for Android apps, but there’s no store for AWS apps. 

That’s a real oversight for Amazon.  I mean after all, they’re only a frickin’ online retailer for crying out loud–probably the world’s largest!  How strange is it that they have no app store for AWS developers?  As I think about it, there’s quite a lot of opportunity there for them.  Given my belief that Clouds will have strong network effects, I think it is a mistake for Amazon to go very much longer without an app store.

I did a search before writing this article and see that there has been some other speculation along these lines.  James Urquhart asks whether they couldn’t sell business apps in a Tweet, and Krishnan Subramanian also speculates in a blog post.

I’m a big believer in offering bite-sized modules that go together to make up a PaaS (Platform as a Service).  Amazon has a few of these, including the newly introduced bulk email service, but a full-on app store with billing capabilities would be great for a lot of smaller apps and startups to get going with.

Honestly, Amazon, what’s taking so long for this?  What are you guys thinking?  You should have been one of the first non-mobile app stores.  The handwriting’s been on the wall for some time!

Posted in amazon, business, cloud, saas | 4 Comments »

 
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