deal architect

Enterprise Mobility and the Talent War

Apple's leader of iOS development Scott Forstall, in on record saying its App Store, has "created the best economy in software in the history of the planet”

Before you call him immodest, let’s put things in perspective. When IBM introduced the AS/400 in 1988 its partners “announced more than 1,000 software packages in the biggest simultaneous applications announcement in computer history.” The AS/400 ended up being a wildly successful platform for IBM.

Apple’s App Store, in contrast, has over 400 times the number of applications, so Scott does have a point. Now if you want to nitpick, you can point to juvenile apps like the Brostcahe app you may have seen in the Geico commercial which asks ““Do people use smartphones to do dumb things?” 

The BroStache app advertises “You can choose a 'stache for any occasion—meeting, birthday party, or hot date. Just open the BroStache app, choose a 'stache, then hold it up to your mouth and start talking.”

On the other hand, I interviewed for my next book, Gerlinde Gniewosz, whose firm Zuztertu has built a wide variety of cerebral applications for the App Store including "Pollock's Toy Theatre". Benjamin Pollock was a famous printer of toy theatres in London at the turn of the 20^th century.

But whether the app grabs your attention or not, her background should.

She has experience at Yahoo! (the Web company), Orange (the European telecommunications company), and McKinsey & Co. (the strategy firm). She has an MBA from Harvard Business School. She was born and educated in Australia, went to business school in the United States, has worked in Germany and the United Kingdom, and has traveled the world.

What in the world is she doing in the Apple ecosystem?

Or move over to the Android ecosystem, which trails Apple, but in just a couple of years has grown to over 200,000 applications and users have downloaded almost 5 billion copies.

I also interviewed Charlie Wood of Spanning Sync for the book. His firm has racked up tens of thousands of customers in 58 countries as part of the Google ecosystem.

Dennis Howlett raises some interesting questions about the mobile enterprise here. But a far bigger question is that of talent.

How do you get folks like Gerlinde and Charlie interested in working for your platform? How do you get younger developers to not see stars when they read what Scott says or when they watch Hugo Barra, Product Management Director of Google Android on Youtube?

Why should they go work for IBM or SAP when Apple allows them to keep 70% of the revenues and pays for marketing, credit card fees and gives them the thrill to be part of the “best economy in software in the history of the planet”. Or at just as an attractive one at Google?

More New Renaissance

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The De Dietrich Induction Hob

Taking advantage of incumbent customers

Time magazine recently sent us a promotional offer – extend your subscription for $ 25 for 2 years, and we didn't hesitate a second. Done!

But it hit me how unusual that is.

The Wall Street Journal keeps sending me “please come back” emails and offering a “promotional” rate which is much higher than promotional rates they offer new customers. Symantec and McAfee do the same for their virus software when they know we can go to amazon and get an annual update shipped for much cheaper.

Intuit annoyed me recently. Even though they charge a hefty (for small businesses) annual payroll update fee, they are into a habit of making you update the basic Quickbooks every 3 years or so and making you pay for that in addition (their payroll updates do not work otherwise). So, I let my subscription lapse and got a partial refund for the remainder of the annual payroll service. Ironically that refund by itself paid for a new version of Quickbooks and a payroll update from amazon. I will just buy annual payroll updates from amazon from now on. Intuit has lost my subscription revenue for ever. 

Verizon has been sneaking up new charges on our FiOS broadband and in the meantime sending promotional materials on their rates for new customers. We are no longer on a term contract – I plan to call and get the lower rates or frankly, just move on. They lost our business line last year, and they may have also lost the home business with their continued sneakiness.

Do these companies realize comparison shopping does not happen just in retail stores anymore? More importantly, do they appreciate that you should take care of incumbent customers – those that have been loyal to you in the past?  In each of these cases, we have been customers for years – with Verizon over 20 years!

More New Florence

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Discount to HR Tech Conference

Good friend Bill Kutik is again offering a nice discount to readers of this blog to the 14th annual HR Technology Conference ,this year for a change in Las Vegas starting October 2- easily the best HR software and best practices event in the industry.  

Use the promotion code of VINNIE11 (case sensitive) when registering to get $ 500 off (but do it before the promotion expires September 19 – and no, don’t expect a deal from Groupon to beat this!)

2 months before the doors open, 50 percent more practitioners have registered than last year’s record-breaking attendance at the same time.

Besides HR practitioners, every leading talent management, HRM outsourcing, social HRM and other people-centric vendor in the industry will be there. The Expo will be the largest ever with them competing for your attention at their booths or in one of the new private demo rooms: about 200 vendors in all.

To see the latest, download the pdf of the full conference brochure

Verizon’s repeated miscues with the iPhone

Its unlimited iPhone data plan was a differentiator from AT&T, but it could not resist moving to tiered plans. Why? Ostensibly because smartphone users are “data hogs”.  Well, here is a reality check from Consumer Reports

“…the median Verizon smart phone customer gets the worst deal. He  pays top dollar, $30 for 2GB, and at the end of a typical month leaves unused some 90 percent, or 1.8GB, of the data he paid for.”

It passed on the original opportunity to partner with Apple over 5 years ago. Industry talk was it was turned off by Apple’s demands for control over account activation and features like Visual Voice mail, and that Apple dared ask for revenue sharing. As we now see, some of Apple’s innovations with the iPhone have driven innovation throughout the cell phone industry.

The biggest issue of course is its LTE rollout will take years so the iPhone is stuck with its CDMA network, which does not allow talk and surf at same time. In the last 5 years, Verizon could have fixed that (it has been saying it will soon) but in the meantime, it has given AT&T a chance to make jokes about walking and chewing gum at the same time.

Actually, Verizon’s own FiOS broadband group also makes unintended fun of its mobile unit with its ad campaign “service this good does not need a term contract”. Since the mobile unit typically asks for 2 year contracts how should we interpret the quality of its service?

Verizon should have been the one laughing when Apple broke the AT&T exclusive but time and again Verizon has shown it does not believe in the power of business model innovation. 

The future of work at Foxconn

It can take credit for having assembled over 200 million iOS devices for Apple, and countless others for just about every major device and hardware manufacturer, but Foxconn has also taken its share of criticism for various suicides and explosions at its plants, and it is increasingly facing  significant wage inflation in China.

So, it has announced it is looking at a significant (multi-billion dollar)diversification into Brazil if it can get appropriate incentives from that government.

But now comes an even more significant announcement. “The company currently has 10,000 robots and the number will be increased to 300,000 next year and 1 million in three years”  “The robots will be used to do simple and routine work such as spraying, welding and assembling which are now mainly conducted by workers”

The pattern has been going on for centuries. Businesses will always look for cheaper labor, then automation. It sounds callous, and over the last couple of decades many US and European companies have been vilified for offshoring. In at least some cases, SaaS is showing them how to automate some of that labor.

It is remarkable how massive data centers are being run by less than 50 folks. It is interesting to see service robots (for nursing and other care) being deployed in Japan. How Google translate and voice transcription  is displacing traditional labor for those tasks. How real estate companies are  using QR codes on signage and 360 degree videos of for-sale homes to reduce broker activities. How sites like Trademarkia are cannibalizing attorney fees for IP searches. 

I am just glad I don’t run PR for Foxconn. They will likely take even more hell for the Brazil and robot moves than they have for the suicides. Efficiency is a poor competitor to emotion. 

“Government and IT: A recipe for rip-offs”

That’s the title of a report by the  Public Administration Select Committee (PASC) of the UK House of Commons.

It says “The Government's over-reliance on large contractors for its IT needs combined with a lack of in-house skills is a "recipe for rip-offs". The committee found that as a result IT procurement too often resulted in late, over budget IT systems that are not fit for purpose”

As you read the report it sounds like a post-mortem for an accident which happened years ago.  My reactions:

a) They are just now waking up to the poor technology economics and project overruns?

b) They are using PC TCO benchmarks even as Apple and Google are talking of a post-PC world?

c) I wonder if they benchmarked printer ink, storage costs, roaming charges, consultant travel and so many other IT “empty calories” I have written about.

d) They have terms like “oligopoly” and “cartel”.  No, the UK government does not have a bullseye painted on its back. It affects technology buyers around the world . As I wrote in The New Polymath:

“The top 25 global technology vendors, such as HP and AT & T, now make up more than 50 percent of the volume of the IT amount spent externally. The top 25 global technology buyers (dominated by large banks and government entities), however, barely make up 5 percent of the total spend”

The solution is more cooperative benchmarking (not just within the UK agencies) and often going with less “safe choices” when it comes to technology decisions.

e) The report does suggest using smaller vendors more – in the spirit of less “safe choices”. I am all for that but good, solid competitive bidding between larger vendors also works. Try pitting HP against Cisco when it comes to networking, Microsoft against Google and IBM when it comes to mail, groupware, EMC versus amazon when it comes to storage, Accenture versus TCS when it comes to services and on and on.

f) It gets into agile versus waterfall methodologies. That can certainly affect application implementation costs, but I wonder if they looked at the long tail – data center costs of applications, application management costs, annual software maintenance costs and the alternative economics of SaaS.

Maybe I am being harsh, but I think they only looked at the tip of the iceberg. The good news is they know it is there and need to find ways to melt the iceberg or avoid it going forward.