deal architect

Ballmer’s legacy

Mary Jo Foley of ZDNet interviewed Steve Ballmer as he prepares to step down as CEO of Microsoft. Larry Dignan and Mary Jo summarize the interview in video below.

Ballmer’s biggest regret – the black hole that was Vista and the related loss of focus in adjacent markets like mobile. And his biggest pride – that Microsoft was immensely profitable during his tenure.

To me, during his tenure Microsoft became a “slow” follower in countless markets – smartphones, search, clouds, tablets etc. The good news is he continued to be a follower and an investor in many of those markets, and probably his enduring legacy will be the sprawling portfolio he has tried to leverage under the One Microsoft strategy . 

I was impressed during the analyst event in October when they described how they brought together Retail software, with Nokia Lumias and with other functionality developed by cloud partner Avanade for a POS solution in the sky for Delta. They told us how they were packaging for digital agencies their marketing apps along with access to their media properties.

The new XBox One leverages Win 8, Kinect, Skype, Azure, SkyDrive, Hyper V, Bing and other Microsoft assets.

Expect to see more such plays, especially as they target specific industries where they can mix and match what Ballmer and his executive team has identified as Microsoft’s competencies

• Operating System
• High Value Apps
• Hardware/Nokia
• Cloud Services
• Machine Learning
• Natural UI
• Consumer/Enterprise (comfort with both)

If the next CEO can build out vertical and process leadership they could be firing on many more cylinders. That would make  them scary.

 

CES and Fortune 500 exhibitors

CES in 2011 inspired my book The New Technology Elite which focused on technology embedded in products and services in over 75 industries. As I wrote in Chapter 1

Lost in the excitement about iPad killers and iPhone rumors at
the show was an even more significant nugget—the list of exhibitors included companies from just about every non-technology vertical industry… Whirlpool showcased its Duet washer/dryers with LCD screens and various laundry apps designed to give users advice on stain removal and other laundry questions… Nike introduced a GPS-enabled Sportwatch developed in collaboration with the navigation vendor Tom Tom. Ingersoll Rand showed off tech innovations around its Schlage home security and Trane thermostat products….Ford chose to unveil its all-electric Focus at the CES show rather than at the traditional car launch showplace, the Detroit Auto Show, which was only a week later. GM showcased a retail, boxed version of an OnStar-equipped rearview mirror…3M showed off its Patterned Transparent Conductors (PTC).

This week at CES in Vegas most of those companies are there again showing off more of their recent innovations. Ford is highlighting its C-MAX Solar Energi Concept car. Schlage its Nexia Home Intelligence system. Whirlpool will show an app that can scan bar codes to operate microwave ovens.

And they are joined by plenty others like ADT Security, American Express, Asahi Glass, Bosch, BMW, Corning, Delphi, GE, Reebok, Westinghouse and countless others.

Most of the analysts and media attention will, as usual, go to Silicon Valley companies and companies like Microsoft and Samsung.  Plenty of exciting technology is coming out from the rest of industrial world.

Market segmentation 2.0

My kids introduced me to Pei Wei over the holidays. It’s P.F. Chang’s “Asian Diner” concept in a growing number of neighborhoods. Both have one near their campuses and are regulars. I overheard my daughter excitedly talk to my wife  about Nordstrom Rack. At the annual car show which came through town last month, I checked out the Mercedes entry level CLA. Marriott is introducing a new concept, Edition to its Courtyard, Residence Inn and other lines.

Each of these new entries is aimed at a “hip”, younger, more tech savvy (so Rack has omni-channel design from inception, Pei Wei is a sophisticated user of digital marketing, Edition has laser lighting etc.) and often less affluent consumer. Indeed, they are hoping not to lose their traditional consumers. Bill Marriott, in London to open the Edition there, stayed at his more traditional Grosvenor House. I lost interest in the CLA as soon as I bumped my head trying to sit in back. My wife told my daughter Rack is for “you younger kids”.

Market segmentation is an old discipline in most companies going back to Alfred Sloan’s various brands at GM. But it is a lot trickier today – here’s Mercedes’s differentiation between its CLA and CLS lines.

More consumers these days want AND – tech savvy and good service and competitive pricing. You can see how Southwest Airlines which prided itself with a basic product at a fair price and had plastic, reusable boarding passes has been forced in the last decade to transition to offer on-board wi-fi, live TV, on-line check-in, mobile apps.  You see even the $2,500 Tata Nano offers infotainment technology.

When a 2 year old and a 90 year old both get tablets as Christmas gifts, you know the old rules of marketing segmentation need revision.

Things to look forward to in 2014

I am running a series from a scan of over 50 magazine issues on New Florence of best of 2013 and things to look forward to in 2014. The 2013 entries were summarized here

Here are the 2014 entries:

Entrepreneur - Women to watch

Conde Nast Traveler – Travel forecast

BusinessWeek – Industry Risk profile

Computerworld – 100 top IT leaders

Automobile – Car of the Year

PC Magazine – Tech industry trends

Architetural digest - Creative firms and designs

Dumb Pipes

Verizon has been running the commercial below over the holidays. What’s remarkable is they showcase wearables, bluetooth speakers, other electronics…but no phones. Their new retail stores carry phones, but they are often tucked in the back aisles. I look at the family’s annual telecom spend and GoGo, Vonage, Boingo, Skype, Google Voice, Brighthouse are far more visible than either Verizon or AT&T.

Telcos have long been warned they are turning into dumb pipes, with consumers moving services to providers around them. Instead of competing better they are moving to electronics retail, data services (like Verizon’s Precision Insights) etc.

Software AG decided to publish and print on their own The Digital Enterprise that I helped narrate . I was not sure about the decision but seeing the gorgeous paper and font and graphics in the end product and thinking about effort it takes to edit a book with interviews and contributions from over 20 countries and 20 industries, I wonder what additional value a traditional publishing house could have brought to them. Then I talk to some friends who are using a large publishing house essentially for printing and distribution,  and the term dumb pipe comes to mind again.

My friend Mike Laven who has  spent his career working in financial services technology, is now CEO of  The Currency Cloud which focuses on international payments – over $ 3 billion last year. He was part of a Wired UK workshop this summer which brought together several other innovators who are targeting specific portions of the banking/trading/financial services industry from mobile payments to micro-loans. They are biting off pieces of the dumb pipe that traditional banks have become.

It’s happening in a frightening number of industries. The bigger companies will not disappear overnight, but a new generation of Fortune 500 companies is being born as we speak.

The brave new world of enterprise security

An excerpt from The Digital Enterprise says

“There is a growing acceptance that most commercially available antivirus software cannot keep up with the speed and intensity of the attacker community. Also, if attackers are going to target an enterprise directly, they are likely to use a new technique that most antivirus products will miss. Consequently, at least some CIOs are reducing their firewall
and antivirus software spend and are shifting their resources to other security tactics.”

FireEye just announced they are acquiring Mandiant. In a world of giants like Symantec and McAfee, who are they you may ask?

Rather than using a blacklist to block known threats—the conventional method employed by antivirus software—FireEye software works by assuming everything is suspect and testing programs in a safe “sandbox” before allowing them to run on a machine.

Mandiant gained notoriety by disclosing it had spent 7 years of sleuth work in looking at suspected Chinese cyber-crime. With suspicions about NSA and other government agencies (remember Stuxbet?) growing, using a firm like Mandiant may make more sense that calling in the regulators when there is a breach.

So now you know. And you already knew only the paranoid survive.

Time to evolve the NSA conversation

Over the holidays personal data has drawn plenty of my attention. On the one hand, we can celebrate the data rich life we live as I wrote in Living the Vida Data. On the other hand there is a constant stream of court and back door stories involving the NSA.

One story in particular caught my attention. Der Speigel spends quite a bit of ink describing how NSA’s (likely unplanned) jamming of airwaves played havoc with garage door openers in San Antonio, TX.

My reaction – seriously, this from a leading European publication?

Our (and most of the world’s) wirelesss spectrum is thinly sliced. Portable phones, garage door openers, microwaves, TVs, home Wi - Fi, Bluetooth headsets, toll transponders, ham radios, AM radio, FM radio, XM radio, and more coexist without interference. Now every time there is an issue are we going to suspect the NSA?

An agency tasked with security should monitor every one of those channels. If anything, I was pleased to see this Time pictorial of how NSA is thought to use a wide range of cell towers, satellites and other assets to monitor a wide range of frequencies.

What I want to hear about is examples of where the NSA is abusing its reach. Should it be spying on allies? On our citizens? Is it any worse than the Israeli, Russian, French, Chinese agencies? Then we can discuss where it should be curbed.

Enough of silly emotional talk about how all espionage is evil. Because if it is, we need to erase the hugely popular images of James Bond, Jack Ryan, Jason Bourne in our books and movies.

And to also rewrite history. Let’s wipe out Sun Tzu and Trojan Horses and Rosetta Stones and Mata Haris and pretend espionage has not been around since times immemorial.

Let’s discuss controls around our spooks, not pretend we don’t need them even as NATO debates whether cyberspace is the "fifth dimension" of warfare after land, sea, air and space.

Keep Climbing

The New Florence blog ended 2013 with 730 posts. No, not a record – 2012 had 750.

However, November and December had 200+ entries – each way above monthly average.

So, we can dream of a 1,000 entry 2014. There continues to be ever widening innovation to profile.

Of course, there could be another book commission. Some demanding consulting assignments which take away from innovation research and blogging.

For now, though thanks to Delta Airlines for this inspiration.

Happy New Year!

Photo Credit