By APNWLNS payday loans
December 18, 2007
2008 will be the iYear, and no that doesn’t mean Steve Jobs gets another gazillion dollars for inventing a new gizmo with more cool than function.
The ‘i’ in iYear stands for “integration.” I see on the horizon signs showing that IT is shifting priorities and now faces an exaggerated form of post-consumption integration indigestion.
First, let’s be honest — the IT market goes through some predictable cycles. When the economy is good and customers have larger budgets, they buy technology that offers to give them competitive advantages. Sometimes this advantage is immediate, and sometimes it is long-term, and sometimes it is just hype. Regardless of the time frame in which the alleged benefits of the stand-alone technology should arrive, real business efficiencies come when that point technology is integrated with other technology , via integration , streamlines business operations.
I have already noted that there is a tech industry downturn coming. IT has been consuming packaged aps, infrastructure, BPI suites … and not integrating much of it. Now with economic uncertainty, credit tightening, oil-price inflation pressure, and more, IT is falling back. When IT doesn’t buy, they turn to the work they have been putting off which is typically integrating what they have already bought,Â deployed, and now need to see ROI from in order to survive revenue slumps.
Oracle, as usual, is a little ahead of the game. Though they articulate their integration solution as clearly as a toothless imbecile with a mouth full of marbles, Oracle is pitching an ammo belt full of silver bullets with the end product being a n-scalable enterprise cloud with Java as the programming linga franca. Clustered DBMS, Coherence (which is basically a multi-node data cache with transaction management), Java application servers, SOA integration tools, and more creates a middle-ware monster, but one with a purpose — a system for gluing together applications with a single vendor throat to choke.
Oracle and other companies will find resistance on several fronts. First, IT has always been loath to become too dependant on any one vendor (let’s call the the Microsoft Neurosis). The larger the sale, the more pressure IT is to get tangible results from the investment. Thus when salesdrones from Oracle, IBM, or anyone else comes calling, and try to sell a large, expensive, complex master solutions, CIOs will be unimpressed. CTOs are a different matter — they like being courted by the big vendors, and truly appreciate large, complex, expensive solutions — it fits their techie origins.
Matters are complicated by IT’s need to make small, strategic integrations happen quickly. After all, if you can invest one man year and $1,000 to get 50% of all new application integration value from it, why spend a dozen man years $100,000 to get 70%. Somewhere the cost of cash and time overrule all other motivations, and CIOs will push for a small number of highly valuable integration projects over some elegant master plan.
This is where Open Source scouts like SpikeSource and MuleSource come into the picture. They are the anti-Oracles. First, their products derive from Open Source, leaving CIOs feeling freed from vendor lock-in and extortion-level pricing. They also eshew “grand scheme” mentalities, and sell instead baseline functionality. So at a time when IT budgets are low, and the need to maximize sunk investments is high, the Open Source kids are selling simpler and more focused integration concepts.
Regardless, everyone selling integration this coming year will make a buck. Now if Steve Jobs could just integrate my iPod with my dashboard stereo ….
December 17, 2007
Upon occasion marketing professionals are under such onerous deadlines that even they make mistakes. Here’s a good one.
The photo to the right was scanned from a Sunday newspaper circular by Office Depot. Like a lot of folks, OD is peddling GPS units, this year’s hot gift. They had a pretty good price on this model that was advertised in a San Francisco newspaper.
It might have been so cheap because it evidently has road maps of Europe and not America (despite the ad claiming maps of the U.S. and Canada). But unit above is clearly giving directions in a Germanic language (“Ungarn- auf Louise-Schroder-Platz” translates to “Hungary at Louise Schroder place” according to Bablefish). The turn distances are in meters, not yards, and the arrival time of day is labeled “Ankunft.”
Now, you and I know some harried intern or first-year graphics employee likely grabbed an image from the Garmin marketing resources library without stopping long enough to look at it aside from admiring the colors. But I’d bet a buck that at least on Hungarian expat went down to Office Depot that day to buy as many as they could to send home for the holidays.
December 11, 2007
Closed systems make money. Open systems make money. And the two dynamics are co-exists … for a while.
I’m pondering these realities as I comb through reports in the wireless market, where Silicon Strategies has a new client. The evolution of the wireless market will soon make a shift and the smarter vendors are rapidly adapting to the inevitable.
First, a musing on closed and open markets. In closed markets, the vendor has control by virtue of either a monopoly or through customer lock-in due to the high cost customers face in switching to different technologies. The IT technology industry was a closed market for a seeming eternity until the folks at Berkeley began porting and promoting their flavor of UNIX (which could be considered the original computer virus). When Sun Micro and other vendors began using open standards (like UNIX) as a wedge into the market, the closed system protected by high switching costs began to fade. Microsoft has a virtual monopoly on desktop operating systems, and we may be seeing the first cracks in that closed system as well.
Open systems work on the principle that choice creates other competitive realities and opportunities. For example, there is not a dime’s worth of technical difference between most of the Linux distributions. Linux purchasing decisions are primarily based on other issues, such as the perceived financial soundness of the vendors or their dedication to Open Source principals (or in the case of Novell, the seeming immunity from litigation by Microsoft).
TV cable operators are another case study of closed systems. Due to the dubious nature of local franchise laws and the instituted monopolies they create, cable carriers have zero incentive to innovate. It wasn’t until home satellite came into being that there was any movement by the cable companies, and even that has been lackluster due to the limited competition created between these two closed systems (like the limited innovation that existed between VMS and MPE — and if those abbreviations don’t date me, nothing can). There have been various attempts to create an standardized set-top box for cable consumers, but higher margins are created by renting gear to couch potatoes instead of letting customer buy one of many makes at Circuit City.
Now we are about to see a fissure in the wireless market. Google started the collapse by prodding the FTC to mandate some degree of open access by whomever wins the bidding war of the soon-to-be re-purposed 700Mhz spectrum. Google’s stand (and now the FTC’s as well) is that whomever wins temporary ownership of this chunk of air must make some or all of it open to allow any application, and certified device, any wireless service and any third party services provider to tap into the 700Mhz waves.
Naturally, this raised a stink from every vendor who had designs on any piece of this space. Cisco complained. Verizon cried foul. Even Satan, who current resides in Redmond, grumbled. But as soon as the FTC put their bureaucratic foot down … well, people started changing their tunes. Verizon, who had been one of the noisier detractors to Google’s open system scheme not only turned their opinion 180 degrees, they started opening the existing network, presumably as a show of philosophical acclimation to curry FTC approval.
In other words, once the inevitable opening of cellular services were going to be mandated somewhere, Verizon decided to join the new paradigm than fight to preserve the old.
Good move on their part. Sun rode the UNIX revolution, and took a great deal of market away from competitors, and opened new markets as well. Later in life they fought the Linux revolution and lost big. Both UNIX and Linux were opening previously closed systems, and Verizon learned from Sun’s mistake.
There is a truism among market strategists that notes the best way to win in a market is to change the rules. But the same applies when the rules are changed against you. If the change is inevitable, or worse still mandated by law, then the smart people will use the new rules to their advantage, create new differentiators, and leave their competition to slowly die.
December 4, 2007
The stock market has correctly predicted 12 of the last seven recessions.
Should we have more faith in Goldman Sachs, Gartner, IDC, Regent, MGI Research, the Financial Times and others in forecasting financial apocalypse? No, we shouldn’t.
But fail to put the two together and you’d be dumber than my cousin Earl, a man with an IQ so low he can only find employment as a congressman.
Businesses and consumers alike change their spending priorities when times are good and when they are not. The world economy is still absorbing the effects of high oil prices (driven as best as I can tell by pure speculative fervor). These inflationary pressures are just beginning to leak their way into the free economy maelstrom as the market bottoms out from a sub-prime induced credit crunch. The net effect is that everyone is beginning to rein-in their spending, with the glaring exception being holiday shoppers who seem to be spending money faster than Larry Elison on an acquisition spree.
What happens next in technology marketing is as predictable as a Russian election. As revenue growth drops into low single digits or even goes negative, and as calls for market budget cuts are issued from the corner office, technology marketing folks start the review their fundamental strategy. I have seen it before — my best year as a marketing strategy consultant was in the dot-bomb era.
The reasons are fairly obvious: when times are good, when buyers are abundant, when cash is flowing, everyone assumes their strategy is good. When the economic river runs dry, they assume their strategy is faulty. The truth is that when times are good, the motives of customers tend blur and your external communications become muddled as you chase trends, fads, and even your own hype.
Technology marketing in troubled times, when spending on tangent differentiation is not an investment priority, requires reviewing what really drives your core customers. Customers in each segment tend to have very similar motivations, and these are based primarily on how they make money. Refocusing your efforts on helping them make money in ways in which they are already competent is a “back to basics” system that works and cushions economic downturns.
I hear there is going to be a recession. I decided to not participate.
November 27, 2007
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Nobody — especially marketing professionals with education and experience in survey techniques — should give much credence to self-selected surveys.
In this case, I’ll make an exception.
The Linux Foundation asked the world at large if they were using Linux on the desktop. The numbers have started to trickle in, and though any top-line figure on penetration is suspect, how the numbers divide is not and provides some interesting insights.
Of all Linux desktops in production among 20,000+ responding companies, most were in small businesses. This is primarily due to the fact that there are many more small businesses than mid-sized or large firms, so the number of Linux desktops in use among small businesses is not surprising.
What is surprising is that small businesses are adopting Linux desktops at all. Conventional wisdom has been that small businesses needed to standardize as much as possible, be able to obtain hand-holding support, would avoid any solutions requiring sophisticated IT staffs, and would follow the Microsoft herd.
Conventional wisdom fails in unconventional times.
Like life, the market finds a way. There are no insights in this survey into how conventional wisdom was broken. Linux certainly has become stupid-level-simple to install and configure. It has proven itself to be very stable, meaning there is little after-installation support required. And some studies have show that local support outfits (what we used to lovingly refer to as neighborhood hacker shops) are all Linux savvy, and may be providing what little support is necessary.
One marketing reality is that when all other needs (software, support, ease of use) are met, then price rules. What we may be seeing is that desktop Linux is now able to fulfill most/all baseline needs of even the smallest and least tech-ready companies, and that price is now the primary decision driver. This is pure speculation on my part, but the fault lines seem obvious given that the survey also found that 64% of installed Linux desktops were not being used by engineers — that normal information workers were the end users.
Does this mean Steve Balmer should be looking over his shoulder? Not yet, but Forrester thinks Microsoft’s date with Linux destiny is approaching. Forrester notes that Vista, Microsoft’s latest and fattest OS, may be driving enterprise-level inquiries about Linux as an alternative. Since large companies have to make commitments to technology on wholesale levels, and market milepost like Vista invite such decisions (which explains the anemic 2% adoption rate for Vista thus far). Vista may be its own worst enemy.
My reasoning for why Microsoft’s dominance days are drawing closer is that the traditional adoption path has been up-ended. Small companies are adopting before large ones. This puts a chink in classic Chasm theories, and indicates the beginning of another Grow Rich Slowly market model. If Linux desktop adoption follows the path of MySQL, then they will create a defensible position in the market. Once this foundation is laid, addition of new capabilities will make Linux desktops more and more acceptable to enterprises, and more of their employees with have Linux desktop experience from previous jobs or even from home use. The snowball effect will be measurable.
Steve Balmer does not need to cash in his options just yet, but I’m now watching the short-sell ratio on MSFT every day.