deal architect

More innovation

On the New Florence blog

The amazing range of 3D printing

National Science Board’s Science and Technology Indicators

Adobe + EchoSign

State Farm’s Mash-up

 

Introducing a new sponsor: Oracle

I am delighted to welcome Oracle to the past and present gallery of innovators and disruptors who sponsor this and the New Florence. New Renaissance blog. With Oracle Fusion Applications starting to roll out, and with their ability to mesh software and hardware as in Exadata with the addition of Sun, Oracle is poised to unleash a number of innovations over the next few years.

Oracle is the world's largest business software company and a leading provider of computer hardware products and services with more than 370,000 customers—including 100 of the Fortune 100, and representing a variety of industries around the globe. Initially, Oracle delivered database software, followed by packaged enterprise applications and middleware, to provide customers with a more complete, open, and integrated software solution. Now, with the addition of Sun's hardware and software technologies, Oracle's portfolio has evolved. Going forward, Oracle plans to engineer and deliver open and integrated systems—from applications to disk—where all the pieces fit and work together out of the box. Learn more about Oracle.

Disclosure: Blog sponsor policy is outlined here

Steve Jobs: A thousand “nos” and ten gutsy “yeses”

I recently submitted the first draft of my manuscript for my next book. It’s about what I call “technology elite” companies and it has 21 chapters most of which talk about attributes of what makes them elite. They include elegance in product design, malleable when it comes to business models, very aware of the power of the physical presence and touch even in our digital world, global when it comes to supply chain etc etc.

Honestly, when I started writing it I had Apple prominent in every chapter. I mean how can you ignore Jonathan Ive when you are talking product elegance? How can you ignore Apple’s masterful retail strategy when it comes to physical presence?

In the manuscript I ended up submitting Apple still looms large, but the book  is much more balanced. It has 17 case studies including UPS, 3M, Corning, Boeing, Virgin America, Google, Facebook, HP and of course, Apple, and 4 guest columns from CIOs and IP attorneys and professors as a companion to each of its 21 chapters.  

Here are some excerpts from my Apple case study

• “In a 2004 BusinessWeek interview Jobs said “And it comes from saying no to 1,000 things to make sure we don't get on the wrong track or try to do too much. We're always thinking about new markets we could enter, but it's only by saying no that you can concentrate on the things that are really important.” That ‘saying no to 1,000 things” has become part of the lore around Jobs and Apple. But Apple’s saying yes to plenty of gutsy, even maverick decisions is what really defines Apple’s success.”
• “While Apple did not invent MP3s, it dragged the music industry with iTunes to make it a big business. Over 15 billion songs – most of them singles - have been downloaded via iTunes and many more through other channels like Walmart.com. Even today, though, many music executives long for the return of albums, ignoring the “long tail” phenomenon – users buy many more “one-hit wonders” than they would if they were not unbundled.”
• “Apple has stayed loyal to Foxconn through multiple releases of iPods, iPhones and iPads in spite of sweatshop accusations, employee suicides and factory explosions in its Chinese facilities. Most companies like to diversify between company owned and outsourced plants and certainly across geographies. Apple has been willing to take the risk of putting its eggs in the Foxconn basket and taking plenty of jabs from China bashers (though Foxconn has recently been looking at a significant diversification to Brazil)”
• “When Apple opened its first retail store in 2001, an observer commented “"I give them two years before they're turning out the lights on a very painful and expensive mistake,"Apple dealers were not happy. One of them said “Apple might do just well enough to really hurt our business. They've also done a...poor job telling us how sales and service will work when an Apple Store opens nearby," Others questioned the timing in 2001 with the tech industry in a severe downturn and drawing parallels to PC maker Gateway's struggling retail effort.”
• “When Apple introduced the iPad in 2010, it tried to reverse “more than two decades of (industry) attempts to get tablets right–none of which really succeeded, and some of which failed on a monumental scale.“
• “Amazon has over the last decade become a dominant player in the book market. As eBooks started to grow in popularity over the last couple of years, Amazon had driven the market towards a $ 9.99 price point. At the iPad launch, Walt Mossberg of the Wall Street Journal asked Steve Jobs why people would pay more for the same book on an iPad. Jobs’ response was “The prices will be the same” Apple had no intention of keeping prices that low even though it was a trivial player in the book market compared to Amazon. Instead it signaled to publishers it would accept an agency model which would give them more control over pricing. That precipitated a show down between publishers and Amazon, and Amazon having to cede pricing control to the publishers. Venturebeat wrote “The ten-dollar e-book may soon be gone, replaced by the fifteen-dollar e-book””
• “While many technology companies use cash reserves to make acquisitions, Apple has on many occasions used large sums of money to secure strategic components. In 2005, “Apple reached long term supply agreements with a number of memory supply companies including Hynix, Intel, Micro, Samsung Electronics and Toshiba. Apple will prepay up to $1.25 billion for flash memory over the next three months. The agreements secure a supply of NAND flash memory through 2010.” In 2011 they announced “During the September and December quarters, we executed long-term supply agreements with three vendors through which we expect to spend a total of approximately $3.9 billion in inventory component prepayment and capital expenditures over a two-year period.”  Apple would not reveal the components or the suppliers but such large commitments not only get them priority in tight markets but also freeze out competitors.”
• “It could be saying no to 1000 things or it could be saying yes to 10 gutsy decisions, or it could be what Marc Benioff, who did a stint at Apple before founding his own very successful salesforce.com, says “Steve Jobs is the best technology leader the world has ever seen.” Certainly, few would argue he is the Tom Cruise “Maverick” - the “Top Gun” of the industry!

More New Renaissance

on the innovation blog

Wireless Power in the Battlefield

Cop-Sourcing

Rain Bird: The Art of Irrigation

The Most Wired Hospitals

 

We need more Apple/Google/Amazon “moments”, less IBM “moments”

HP’s many announcements last week led observers to say this was its “IBM” inflexion point – deemphasize consumer tech, get more into enterprise tech. The interesting thing is Cisco and Dell are also going through similar therapy. I keep waiting for Microsoft to make a similar confession.

The funny thing is I see in different ways IBM longing for some of its consumer roots. Lexmark and Lenovo, both IBM spinoffs are doing pretty well. Watson was probably the biggest news maker for IBM this year. Its Smarter Planet commercials are aimed as much on consumers and citizens as their enterprise influencers and budget owners. Its big news in a booming mobile market was its sale of a few patents to Google.

The argument is IBM has shown enterprise revenue to be higher margin, more predictable etc. I would argue the better metric to use if what percentage of revenues comes from products introduced in the last 5 years and Apple, Amazon, Google blow IBM away by the wide margin on that metric. And my next book profiles enterprises in at least 50 industries that are developing “smart” products and services – smart pens, shirts, medical devices, digital citizen services. Somebody forgot to tell them the consumer market is not healthy.

The interesting thing is HP actually has one of the most robust tech supply chains in the industry – in my opinion (and based on research I have in the book) it is more robust than Apple’s. It is more geographically diversified beyond China, it has a better balance of company owned versus outsourced nodes, it handles a far greater variety of SKUs across print, PC/laptop/server and other categories.  Apple, of course, trumps it with executives like Jonathan Ive, Scott Fortsall and Tim Cook when it comes to industrial design, retail operations, App Store and other assets.

The biggest contribution Apple has brought to the industry is business model innovation. Its iPad has been untouchable from an economics perspective, but more importantly it has changed music (to allow us to buy singles versus albums), changed mobile markets (made device more important, commoditized carrier service – a dramatic shift), changed book publishing (by challenging Amazon’s $ 9.99 eBook price standard.)

We need more Apple emulation. And Google emulation with its formidable cloud data center network and  amazingly green initiatives (another case study in the book). And Amazon emulation with its own cloud data center network and physical and digital supply chain innovations. And Facebook and eBay/PayPal and Zynga and other consumertech innovations.

Back to IBM. It is a classy organization and that deserves emulation on many grounds. But not so much when it comes to technology. Little has been written about the fact that underlying Watson for which it has received so much praise is Apache Hadoop, and that another consumer focused company Yahoo! has been the biggest contributor to that open source tool. IBM launched its Social Business initiative at Lotusphere – Lotus is two decades old technology! IBM first talked about On-Demand computing in 2001 – a decade later we are still waiting for its version of Azure.

And we need to wake up to the fact that IT budgets are not growing and if HP and Cisco and Dell and others fight harder for them, the dollars will have to come from the hides of incumbents like IBM.

So whatever future holds for HP (and Cisco and Dell and Microsoft) here’s wishing them more Apple and Google and Amazon moments.

Innovation: The Back to School version

25 Cool College Labs

CNET's back to school product picks

The Amazon college student app

 

More New Florence

on the innovation blog

GPS –beyond satellites

SAP in the Youtube era

@WalmartLabs

This drone is also a hacker and a poser

SaaS-Fest

Trivia: did you know Munich’s Oktoberfest actually starts in the middle of September?

Oh well, the last week of August is shaping up as SaaS-Fest in San Francisco. Courtesy of Marc Benioff’s hospitality at his Dreamforce conference, a number of SaaS vendors – Workday, NetSuite, Appirio - are planning get togethers and briefings for bloggers.

Workday already got me in the spirit with a briefing today about release 14. You can see the acceleration – in features and in customer counts. 148 new features in this quarterly release including a “receipts-on-the-go” feature using iOS camera functionality and a variety of iPad and other analytics. They now count over 200 customers with 1.9 million workers – up almost twice from 2010. The momentum is really accelerating.

I also had a chance to interview Dave Smoley, CIO of Flextronics for my next book – he bet on Workday way early in their short history with a massive global HR rollout. Workday announced today they have won Thomson Reuters which has more than 55,000 employees in 100 countries

It will also be great to meet with NetSuite and Appirio folks and hear about their own accelerating momentum.

Of course, all that will be dwarfed by Brother Benioff’s Traveling Salvation Show.

Heck, even SAP is skipping Hofbräuhaus München and planning something that week in the Bay Area!

Google’s Motorola Motion

One of the chapters in my next book is on how attorneys have in some respects become more important than engineers in the tech industry.

Couple of extracts:

“If there is a poster child for a regulatory agency which is overwhelmed by technology advances it is the U.S. Patent Office. Even though a quarter of patent applications come from California, it does not have a branch office there. The office is so backed up applications don’t get looked at for years. It is not uncommon for patents to take 3 to 5 years to get issued. Till recently, the Office which should be tech savvy itself would not accept digital applications.”

and

“Many technology lawsuits end up in Marshall, Texas, because “In the rough calculus of intellectual property litigation, [its] tough judges equate with speedy cases — and that’s exactly what you want if you’re a plaintiff with limited cash, but potentially big - time settlement payments or damages from a company you claim is infringing on your patent.

So the town of 20,000 “with more pottery manufacturers than software companies” has become famous around the world. It comes complete with its folklore of a “rocket docket” for the speed of its cases and of lawyers making “rattlesnake speeches ” similar to the loud posturing the local venomous species does to warn of its presence.

Willie and Waylon and the boys put Luckenbach, TX on the map. Technology attorneys have done even better for Marshall.”

And quite a bit of the chapter focuses on the whole slew of skirmishes around Google’s Android. Ironically, Microsoft makes more from Android lawsuits than its does from Windows Phone. IBM which is not a major mobile player just traded a bunch of patents to Google. 

So it’s unfair to Motorola’s engineers, but the math suggests the Google bid is to get access to its 25,000 existing or in-process patents. It could have paid $ 4 billion for Nortel’s 6,000 patents a few weeks ago. Now it gets X times those patents, and the engineering talent and access to Motorola’s high-definition set-top box space to boost Google TV.

It should also allow Google to defend its fast growing Android ecosystem (and those of Amazon, Verizon and Vodafone) like Apple has jumped in to the Lodsys action against its App Store developers.

But most importantly, it should allow Google and its partners to spend precious dollars on strategic components (like the $ 4 billion Apple spent earlier in year) for their devices and data centers rather than on attorneys and more patents and “rattlesnakes”

Which is why most of Google’s Android hardware partners welcomed – yes, welcomed the news instead of fretting about now having to compete with Google. See quotes here from Samsung to HTC  seeing it as “defending Android”

More Innovation

On the New Florence blog

Video Games now twice as big as movies

The Universe’s Ten Most Epic Projects

Wired’s Trash heap of devices

Turning your iPad, iPhone, iPod Touch into a baby monitor