responds Dan Hesse of Sprint to Charlie Rose in this interview
Wow, I never thought I would hear a telecom CEO say that about any device maker. It is the new reality as I wrote in my recent book:
Prior to Apple introducing the iPhone, carriers paid device manufacturers. just enough for “planned obsolescence,” and subsidized those devices to consumers. This allowed them to lock customers into another long-term contract with the new phone. There was little device loyalty. In fact, carriers like Verizon had the marketing slogan “new phone every two years.” The iPhone is a platform with frequent software updates and an application ecosystem. So it has a much longer brand commitment. The device used to be the commodity in the equation. Now as Apple expands its carrier choices—AT&T, Verizon, and Sprint in the United States—the mobile service becomes the commodity in this changing business model.
So, kudos to Dan for realism (disclosure they have been my family’s provider after over a decade with AT&T).
In many ways, though, he still thinks like old-telco if you read the rest of the interview
He expects a global sourcing advantage based on the recent deal with SoftBank
That’s actually one of the advantages of this combination with SoftBank, in that not only can we tap into their technical expertise, but in terms of scale, whether it’s network equipment or chips or devices like phones, collectively we’ll get a better deal, yes.
He expects more industry M&A
I believe in the U.S. it’ll be very difficult for the big two, AT&T and Verizon, to make additional acquisitions of other carriers because they’re already so large. But if you include everybody else in the industry over time, I think we’ll see significant consolidation.
And when it comes to innovation
Our differentiating advantage today is that we offer truly unlimited data—data being pretty much everything except for voice and text. Everybody offers unlimited voice and text. With this transaction you’ll see more innovation, more technological leadership from Sprint. I won’t show our cards any more than that.
Really? He is talking to the Charlie Rose and that’s all he can say about innovation?
Chris Meyer of Monitor Talent in his talk at Cognizant Community last week contrasted Airtel of India with Verizon – innovation versus what he called “pseudo-competition”. He said our telcos were following the advice BCG and other strategy firms provided in the 70s “Gain market power to extract rents in a zero-sum game”. Consolidate, advertise heavily, use your sourcing leverage. BTW Chris used the hilarious sequence from the movie Duplicity to make his point about what passes for innovation in telecom.
Wonder how Apple continues to inspire so many executives in so many industries – expect those at the ones which are closest to it?
We are at a historic point in the industry's evolution. Two strong and accomplished ladies are leading our biggest and most iconic tech companies, HP and IBM. As I read and heard about Meg Whitman at Gartner’s event in Orlando and about Ginni Rometty at an IBM event for CMOs in Paris last week, I pondered where they and their companies will be in 4 years.
Ginni, it appears, is on cruise control on a well paved highway and can afford to be chasing after new buying centers and making stylistic changes at IBM as Fortune describes below. HP is, in contrast, on a rocky road. Meg said last week 2013 will be a “fix and rebuild’ year. But so was 2012 and 2011.
You wouldn't catch Lou Gerstner or Sam Palmisano trying to smooth over someone else's faux pas. Rometty's two predecessors also are unlikely to have hosted a sales meeting in a loft, and they definitely wouldn't have described the proceedings as "neat." But they surely would have approved of Rometty's agenda that June day. She had assembled some familiar faces, the chief information officers who buy billions of dollars of software, tech services, and hardware from IBM (No. 19 on the Fortune 500), but she had also invited their chief marketing officers. (Thus the trendy venue.) Her ambitious -- and yes, unusual -- plan: Get the marketers to use IBM tools to sort their data for nuggets that will help them better reach customers and sell more stuff.
But appearances are deceptive.
What Fortune, and for that matter most of the media which follows IBM, do not point out is Ginni’s substantial challenge is not just to change the top soil, but redefine the aging core her predecessors have left her with. IBM Marketing does a good job presenting its Smarter Planet, Watson, digital marketing initiatives. But put together they make up less than 20% of IBM revenues.
The “core” is made up of 10, 20, 3o year old assets IBM continues to milk. An SAP practice which grew substantially with the PriceWaterhouseCoopers acquisition in 2002. The mainframe DB2 database which was first released in 1983. Lotus Notes first released in 1989 and acquired by IBM in 1995, Data Centers designed in the 80s and 90s with Cold War bunker mindsets.
Customers continue to utilize these products, but few of them are pleased when they see the IBM invoices for them. IBM still expects premium prices for these products, way past their prime. Ginni’s biggest challenge will be to get IBM customers to say “Neat” again.
Meg, in contrast, has an undisciplined portfolio of products that has been difficult to prune. However, she still has plenty of engineering talent important in a Polymath world where Apple, Google, Microsoft and Oracle are showcasing innovation via blended hardware/software and cloud capabilities. She also is well positioned as consumerization continues to influence the enterprise. IBM has, in contrast, by spinning off its PC and printer divisions has been shrinking that engineering and consumer footprint over the last decade.
Also, what is considered Meg’s big weakness – its EDS heritage services and Ginni’s biggest strength – Global Services – may soon be flipped around. Meg realizes IT is still her major buying center. At Orlando, as an example she said “marketing chiefs matter, but HP will also work through the CIO." IBM in contrast, is using its IT centric services to sell to the CMO – a bit of a stretch unless its acquires some digital agencies and social analytics tools.
Both HP’s and IBM’s services group are challenged in 3 market segments – infrastructure outsourcing, application management and BPO. The first and fast movers with rapid growth over the last five years have been cloud companies like Amazon, Rackspace, SaaS vendors like Salesforce and Workday (that are cannibalizing upgrade and application management services) and firms like Cognizant and Appirio. Granted they are growing from smaller bases, but they are growing explosively. Then there is another early trend – companies which outsourced to legacy service providers are bringing the support back in or are increasingly “churning” it. GM’s recent decision to bring 3,000 jobs in from HP may be a harbinger. Meg’s smaller footprint in the legacy service provider space may actually turn out to be a blessing.
Both Meg and Ginni have unique opportunities and challenges ahead. I would love to do a book in 2016 cataloging how both of them have fared. No, nothing to do with the next Presidential race – but will be a good checkpoint for their performance in their new jobs and also fit well with my every 2 years book schedule.
In a recent conversation about performance enhancement in so many sports, a friend said in mock seriousness “Vinnie, your blog needs to be tested for being so prolific.”
He is right. New Florence will end October with 600 posts and likely will have 700 by the end of the year. That’s almost 50% better than any previous year. Enhanced performance indeed.
Go ahead, run some tests. You will see it comes from a full dose of pure oxygen – er innovation. We are living in a Golden Age, and the blog has a fine tuned curiosity gene and finds inspiration in many, many places.
Even better, just sit back and enjoy the daily dose (no pun intended) averaging 2 posts of “wow”.
Craig Mundie, Microsoft’s Chief Research Officer in an interview with Spiegel explaining a major reason why Microsoft is behind in mobile computing
“During that time, Windows went through a difficult period where we had to shift a huge amount of our focus to security engineering. The criminal activity in cyberspace was growing dramatically ten years ago, and Microsoft was basically the only company that had enough volume for it to be a target. In part because of that, Windows Vista took a long time to be born.”
So many questions spawn out of that statement:
a) What about Microsoft’s massive PC ecosystem – did Intel, HP, Dell etc not contribute to Win security engineering?
b) Where is the proof that the large focus on security engineering has actually paid off in later Microsoft software?
c) “Only company” to be a target? What about banks, government agencies, Google’s clouds, Apple, Sony and countless others which have been targets of constant intrusion and other cyber attacks in the last decade?
d) Do Apple and Google deserve no credit for transforming the mobile landscape? Microsoft had a comfortable mobile OS market share just a few years ago, especially with Asian device makers like HTC. Microsoft’s partners like HP were some of the first with tablets almost a decade ago. Even with a shrunk mindshare could Microsoft not have relied on its partners?
e) Is Microsoft capable of only fighting one “war” at a time? So, while it was fighting cybercrime, it chose to not go after promising markets? Or did XBox and gaming deserve more of the shrunk mindshare?
…for having a last name like mine. It has been butchered for decades. The tide seems to be turning, though. (Must be my nephews and kids for making the family name infamous).
Most hotels, events, unfortunately even spammers are getting it right. Bruce Rogow had a slide titled the “Mirchandani Maxim” in his presentation at Cognizant Community this week and teased me sitting in the back of the room that it was a major accomplishment.
Now the problem is I have confused the world about my profession and affiliation. Next day, when I was introduced for my panel at Community, my firm was listed as “Deal Merchant” (nice twist on firm and last name)
Hey, join the crowd.
Here is a sampling of others – check the category (blogger, industry analyst etc) and the affiliation (my book, my firm, EI etc).
No wonder my wife jokes if she could have, she would have run with our children from the delivery bed and registered them under her family name “Newman”. Not sure my kids would have enjoyed a lifetime of requests for samples of salad dressing and dog food :)
This continues a series of columns from practitioners I respect. The category "Real Deal" describes them well. This time it is Jim Fowler, director of competitive market intelligence for Software AG, based in Reston, VA.
When Vinnie invited me to write a guest post on the topic of competitive intelligence (CI), I was faced with a dilemma: how do I shed light on my profession without divulging information that could put my employer at a disadvantage? My solution is to cover a few essential principles of CI that might be helpful to someone just entering the field, or to a vendor that has decided it’s finally time to stand up a CI function within the company.
Competitive intelligence is not corporate espionage. When people learn that my job is CI (and that I am located about 15 miles from CIA headquarters in Langley, VA), some immediately envision me as a cloak-and-dagger spook, tapping phones by day and dumpster diving by night. In fact, CI is a recognized profession, with a formal society called Strategic and Competitive Intelligence Professionals (SCIP) dedicated to working within applicable laws and well-established ethical guidelines. For example, when I attend an industry event, I am not allowed to use a fake ID, pocket my badge or use any other means of deception to elicit information. And I insist that any vendors I hire to help me abide by the same guidelines. This makes the task of data gathering much more difficult, but it also helps keep my profession within the realm of legitimacy and respectability.
Context is king. The basic principles of competitive intelligence are fairly straightforward, and intensive courses are available from groups such as Academy of Competitive Intelligence to teach them. However, the craft of CI takes decades to master. And it is not only about sophisticated data gathering and analysis techniques. The practitioner must have significant industry knowledge in order to know which information is relevant, and which patterns are truly meaningful. I suppose there are many CI professionals with masters’ degrees still job hunting in part because they lack vertical industry knowledge.
Intelligence is not action. One of the biggest temptations in CI is to collect and analyze a bunch of interesting data without having a clear purpose in mind. To avoid this problem, I and many others in the CI field use a method called Key Intelligence Topic (KIT). With this approach, every research project starts with a question or topic that needs to be answered. But more importantly, the project cannot proceed until two critical questions are answered: 1) What decision will be made or action taken based on this information? 2) Which individual owns the action or decision? The individual identified must typically sign-off on the KIT project before it starts. The KIT approach is a very effective filter, and it is interesting how many potential-time-waster CI projects never materialize once this filter is applied.
Secondary research is nice; primary research is essential. With so many free online tools available such as Google, LinkedIN, Facebook, etc., it might be easy to imagine doing data collection with nothing more than a notebook or tablet and a cup of coffee. This is called secondary research. But in fact the most valuable data comes from primary research – having a phone conversation or face-to-face meeting with a specific individual. Primary data collection is the true “black art” of CI, and all the best online research tools in the world are no substitute. If you don’t personally have this skill, you need to work alongside someone who does.
I personally find competitive intelligence a very rewarding and interesting job. However, to my potential competitors thinking of establishing a CI function, I would say that it is a complete waste of time, and they should invest their resources elsewhere :)
Jim can be reached at jim DOT fowler AT softwareag DOT com
Francisco D’Souza, CEO of Cognizant, sighed as he had to break away at 9 pm from a reception where his guests were enjoying hand rolled cigars and flambé. He had a few more phone calls to make that night. And unlike at previous Community events he had not had the chance to personally greet every one of the 350 client executives at the event. In previous years he would carry a list of (far fewer) attendees and check them off as he spent time with each.
During his short tenure as CEO, Cognizant revenues have quadrupled and employee count tripled, but he and other Cognizant executives always worry about keeping Community a small, intimate affair. Oracle and Salesforce.com can brag about tens of thousands of attendees to their events. Cognizant wants Community to be a high-class networking and learning experience for its attendees.
They need not worry about the feel of the event if my Monday night dinner table was any indication. 6 non-Cognizant and 3 Cognizant attendees self-selected to be at that table. And the conversations moved effortlessly from Felix Baumgartner to Peyton Manning to Paul Ryan to some of the presentations during the day. None of us had met the others before the conference but the conversation was relaxed and invigorating. And there was no sales talk.
Malcolm Frank, EVP of Marketing (and along with my friend Alan Alper, the architect of the superb event agenda) mingled with the crowd in Francisco’s absence and the conversation focused on Steven Strasburg and Bobby Valentine and on his impressive presentation in the morning on “boiling points” of various industries. Again no sales talk.
The agenda included a wide array of authors and big minds. The panels and breakouts profiled a variety of Cognizant clients and SMAC (the Cognizant acronym for social, mobile, analytical, cloud) projects. The recreational activities showcased the best of the desert that surrounds Phoenix. The resort was vast and impressive.
There was something for everyone there in a congenial setting. No, Cognizant need not worry Community is getting too big. As I wrote last year, it is still a model event for our industry.