deal architect

Steve Jobs is an angel!

It has been surreal to watch the negative reaction to the price cut on iPhones, and the reaction to the $ 100 coupon to its early adopters. Not from Wall Street, but from Apple fans!

As I written before it was overpriced, and Apple moved quickly to make it competitive for the market beyond the early fans. It is still overpriced for the mass market both here and abroad, but the reaction to Apple's cut is enough to have Oracle, SAP, IBM and others say - "ungrateful customers will not appreciate more reasonable pricing."

Contrast this to what iPhone consumers are finding with AT&T, as this NY Times article today describes. Hundreds and thousands of dollars in "gotcha" charges.

Here are a few. The base plan at $ 59.99 only covers 450 domestic minutes a month. It does cover lots of night and weekend time and free calling to other AT&T mobile phones. But..God forbid you use it beyond "uninterrupted live dialog between two individuals" - say for conference bridges, its t&c say it can terminate your contract . If you have (or are) a teenager, you might as well sign up for unlimited texting at another $ 20 a month, or pay at 5c a text beyond the base 200. If you travel in the US and want to use its WIFI hotspot network for decent speed beyond its 2.5G mobile network, get ready to pay another $ 19.99 a month. And that does not include most US airports, for which there is a premium.

Overseas, the risks of doing business with AT&T are scary. Your "unlimited data" only applies in the US. Outside you pay roughly $ 25 (after taxes) for every meg downloaded. For that price you might as well buy an "unlimited" international add-on for 20 meg a month. But it is a 12 month commitment and if you travel only 1-2 times a year would not make sense. And only applies in 29 countries. In contrast, there is no global, unlimited voice plan. The "discounted" international roaming plan even after paying a base fee of $ 5.95 a month, still costs you 99c to 4.99 a minute depending on where you are (yes, $ 4.99 a minute - check out rates here. Plus taxes). International WIFI coverage comes in a premium plan of  $ 39.99 a month. If you call 2 total hotspots in all of Argentina and 3 in all of India "coverage".  None in one of the most wired pieces of real estate in the world - Estonia.  So you pay more to hotels or other local hotspots.

And if you decide you want nothing to do with AT&T, they can hit you for a 10% iPhone "restocking" fee. And invoke a $ 175 service cancellation fee for each line.

Steve Jobs cannot openly apologize for his decision to partner with AT&T (well he could but he ain't that naive). He did come close last week. The new $ 299 iPod in particular opens up a "crossover" market with lots of its attractive features but without dependence on AT&T.  With its WIFI access, you can access the internet and use VoIP for calling especially as free hotspots propagate around the world.

The monthly mobile bill is now a source of tremendous anxiety in most households. You have to claw, fight, go to your Congressman every time you get stuck in one of the gotchas (and I am just scratching the surface with examples above).

Compared to that what Steve did - voluntarily - is a class act.

Fear and Loathing at the Airport

A week after I write this flattering note about Southwest and Delta, BusinessWeek writes "Long lines, late flights, near collisions—everyone is unhappy with the state of the U.S. air travel system." Not just US. Same issues in Europe.

My wife would agree. Last week I dropped her at United to connect to Aer Lingus from Dulles to Ireland. It was an hour to the flight. She waited 25 minutes for one of the 6 United employees to finally check her in. Then they gave her hell for not checking in earlier for an international flight. (even though United was only carrying her domestic). And said not sure the bag was going to make the connection. At the same airport I have seen Southwest work magic in 20 minutes.

She gets to Dulles. Has 3 hours to her connection. She begs Aer Lingus to check if her bag has made it. They assure her it is - but in retrospect feels they told her that to get her to board. Security rules on international flights say an unaccompanied bag is reason to delay a flight. A unaccompanied passenger - well, it's their personal problem.

So she lands in Dublin. No bag. Aer Lingus grudgingly approves a small allowance. And ensures she does not live in Ireland. If she was an Irish resident no allowance even for deodorant.

Next day bag does not arrive. There is no daily flights from Dulles. 3 from New York, but you think they would go to that additional step? She finally gets the bag delivered 3 days late.

It is wrong to malign the whole industry. But there are plenty of uncaring employees and idiot rules in the industry.

Driven Dave

Last January I asked What does Dave Duffield have left to prove?

In his quiet, unassuming way - plenty. While Workday core customer focus is mid-sized , early adopter companies, Dave's eyes have  always  been on larger customers .  Every time  I run into him he hounds me to introduce him to my CIO clients. And then pesters me why the deal has not closed! I have been impressed how he personally calls CIOs and then follows up with notes every few weeks.

From one of his follow up notes, I am also pleased to see he has closed deals with 3 large companies ranging from 7,000 to 25,000 employee, two of them existing PeopleSoft customers.

Drop in the bucket? Yes. But he started PeopleSoft on a similarly slow trajectory. He has time and persistence on his side. And Oracle and SAP's growing unpopularity does not hurt either. 

Dear Mr. Bezos:

My wife and I are frequent shoppers at amazon.com. I have also written flattering stuff about your technology, EC3 etc on this blog.  I have always thought you were a smart organization till this experience below.

On August 20, I ordered an extra battery for my laptop. I have an international trip next week and thought that was plenty of time for the order to arrive. 16 days later no shipment.

So I emailed customer service . I got a response from a Karthik M saying "I have investigated your order and determined that the estimated shipment and delivery dates displayed in your order confirmation e-mail and Your Account were incorrect.  Please accept our sincere apologies for this error.  In actuality, you can expect your order to be delivered by September 17, 2007 - September 19, 2007"

So I email back right away saying that's too late I have to leave the country before then.

I get a response from Dave N which ignores what his colleague says above and my request for expediting and says

"We should be able to ship your package in advance of the date estimated on our web site (which was incorrect in first place), so we expect your order will arrive within 5-7 business days from the date it is shipped."

I happen to see it at 6 am eastern this morning and send a message back titled URGENT - PLEASE ESCALATE with the hope someone could change the shipment to 2 days.

The request gets ignored. At 1.20 pm I get a shipment confirmation email saying estimated delivery date September 17. I go to the USPS site to see if there is a chance I can get it before my flight. The site says "The U.S. Postal Service was electronically notified by the shipper on September 8, 2007 to expect your package for mailing. This does not indicate receipt by the USPS or the actual mailing date." Really reassuring!

So I go enough emails, let me call customer service. First time, the call drops after a few minutes of conversation. But lady goes "don't worry you will have it before 12th." How if she so confident? Trust us...and line drops

In meantime, on-line customer service responds to my ESCALATE request. It is Karthik M again. "Unfortunately replacing the order does not guarantee a delivery before September 12, 2007. In this case please wait till Sept 12,2007 for your order to arrive. If your order does not arrive by the dates, Please write back to us and as a onetime exception to our standard policy we will be happy to issue a full refund for the total order cost. We hope this is a satisfactory solution. "

I call customer service again. It is Brandi at the PSC call center in Washington. More of the "trust us it will be there". Don't worry, the USPS site is unreliable. Then she suggests the only way I can be assured it will be here by 12th is to go order another copy. Why can amazon not ship me a replacement  and I will return the other package when I am back from my trip? Not allowed to do that. Her "lead"  Tammy confirms her information. For pete's sake they have my credit card on file and we do plenty of business with them. Where's the lack of trust? 

So I hang up - and go to the amazon site and order another copy with 2 day delivery. 

But Brandi does send out a form email "We always strive to provide a high level of service, and we would appreciate your feedback.  Please let us know if we resolved your inquiry."

Jeff, I hope you tell Brandi.... it is just plain bad business to make a customer start a whole new transaction and return/refund the previous one when a couple of keystrokes on the part of her colleagues over the last 2 days could have resolved it.

Update: What Brandi said they could not do...another of her colleagues proactively did. He ordered me another battery for one day delivery. Since 2 are already en route I had to cancel his one. This is turning in to a real comedy.

Does this man ever sleep?

Dennis's blog turns 2. And if you read this post you can see all that he is up to. Blogging is a hobby!

And he does not mention how generous he is. He will drop everything to take a call from one of the Irregulars, and from total strangers. Not to mention reach out to tens of sources for his posts. And of course, he is a voracious reader.

In lots of ways he epitomizes the model technology blogger. Part journalist, part practitioner, part curious child, part watchful parent. Fiercely independent. And not afraid to let his emotions show.

One of the unexpected joys of my own blogging over the last couple of years has been my banter with Dennis. And I am just one of thousands he has touched.

One world in harmony

Courtesy of Susan Scrupski I saw this feel good Google Mail video

But I kept going back and asking

- so which of these characters are spammers
- which of these cc's every one on every email
- which of these routinely send out 10 mb attachments - and cc's everyone
- which of these promise me untold wealth in Nigerian banks
- which of these know my email addresses but choose to force me to join their LinkedIn, Facebook, other circles
- which do not even invite me to join their circles, but their social network grabs their contact list and invites me anyway without their approval

be nice if Google included character roles and credits in the back of the video -)

Justice Dept, meet State Dept.

Om Malik points out DOJ is coming out against net neutrality, in favor of established telcos suggesting among other things "Consumers and the economy are benefitting from the innovative and dynamic nature of the Internet" and that ""Several studies have noted that prohibiting broadband providers from charging content providers directly would lead consumers shouldering a disproportionate share of the costs necessary to upgrade network infrastructure."

Perhaps Condi Rice should sit down with outgoing Attorney General Alberto Gonzales before he leaves office. As a world traveler she knows and should point out US consumers have been paying for years for that infrastructure higher rates than most other country consumers and still do not enjoy:

The mobile WiMAX citizens of Korea enjoy
The broadband access citizens of Estonia enjoy
The free WIFI citizens of Macedonia enjoy
The mobile access Chinese citizens enjoy even in obscure parts of the country

The US is far behind far poorer countries in so many telecom areas. Our status quo needs a kick not more protection.

For the privilege

I went "nice" when I read about AT&T Smart Limits for Wireless which allows "parents to set usage limits on their children's mobile phones, including text messages, instant messages, downloads and access to Web sites."

Then I read it wants $ 4.99 a month a line and I go "that's not very nice"

AT&T itself benefits from such parental limits. Their network is less taxed as a result, so why not share that with parents - not charge them for the "privilege". Their social responsibility index also improves as they help parents block access to unsavory sites.

It's like airlines which charge you extra for an earlier flight on day of travel. The probability they will sell a seat later in day at a premium price is much higher than one leaving shortly you want to go on. Or banks which charge for ATM usage when they know a transaction inside with a human teller would cost them much more. But they feel the need to charge for "your" privilege.

Not very nice.

Can tiering work in outsourcing?

Porsche manufactures only 15% of what goes in its cars. Boeing 30% in its planes. But in outsourcing, particularly with Indian firms, there has been little use of second and third tier suppliers.

Steve Hamm at BusinessWeek points to Anantara Solutions which has only 40 employees but has an ecosystem of 25 other companies, with a total of 2,500 employees from several countries.

Odds of success seem low. Usually you need a big "channel master" to be able to drive such a supply chain efficiently. Second, you need very tight product specification, a still immature art in IT projects. Finally, people are not as fungible as parts and widgets.

But, nice to see a firm like Anantara thinking out of the box.  Right from the start they will have more of a "global delivery" model than firms which talk global but are 99% India delivery.

Is XP the correct benchmark?

Microsoft along with Wipro and GCR says total cost of ownership for Windows XP is $4,407 annually, while Vista's cost is $3,802.

I suspect Gartner would pick some holes in the analysis. In this report they go "PC hardware and operating system choices are no longer the greatest determinants of PC total cost of ownership (TCO). The implementation of policies, best practices and processes offers the main opportunities for enterprises to reduce the TCO of their PC installed base across its life cycle."

Most CIOs I know have little interest in moving to Vista for another 18 to 24 months. And then they will be benchmarking whether they can replace at least some of their desktops and laptops with ever more powerful PDAs, and others with  low-end thin client machines which can run SaaS applications just fine. Many will even want to compare with  Macs.

Microsoft may need to fund a few more TCO comparisons in the next year. And find some more ROI drivers beyond TCO reduction.

Update: PCWorld reminds us of the Windows track record over the last two decades. Version 1 of most everything has usually been a little more TCO, and a little lower ROI than people expected.