Thoughts on things

Convergence Redux?

quigleymar — Wed, 05 May 2010 17:03:21 +0000

The Shaw acquisition of the broadcast division of Canwest has people taking about the convergence of content and connectivity once again. Jim Shaw must be dreaming of the untold riches that this deal will yield, just like what happened with AOL TIme Warner, and Bell Globemedia. Oh. I forgot. AOL Time Warner was a disaster of epic proportions and Bell Globemedia has not lived up to the promise of Jean Monty’s vision. I guess Jim forgot his history, or maybe the world has changed over the course of the past decade?

I would go with door number 2 – the world has changed. Devices have evolved at a rapid clip as have the networks that support them. The application space has been as busy as well – social networking applications (Twitter, Facebook etc…) did not exist, and Youtube was still 5 years away from hitting the planet.

Let’s consider a fairly normal family, with a mind to understanding what they use.

1. 7 year old boy – He uses the MAC in the basement. He does not use email often (only when someone tells him to send something to an aunt or uncle), but he does watch lots of Lego Starwars and Hockey highlights on Youtube. He sometimes plays Flash games on Treehouse.com. His social networking activities are zero (for now…).

2. Teenaged girl – She ‘speaks’ to her circle of friends via email, text messaging, Facebook, Twitter and Myspace. She has not met half of the people in many of her circles. She accesses this stuff via the iPhone she got for Christmas or via the Mac in the basement. Although not the Mac so much because her dumb brother can see what she is doing. She uses the camera on her iPhone frequently and posts pictures and the occasional video to Facebook and Myspace.She watches alot of Youtube videos that people have sent her way.

3. Business guy – Chained to his Blackberry. He uses it for email and viewing attachments on occasion. He is afraid to use it for too many personal things because he is sure the IT department is watching everything that he does. Thankfully he has an iPhone that is 6 pages deep in applications from Facebook to Twitter to Angry Birds. He access his Gmail account from here and often visits Youtube. He also uses a work laptop (again, no personal stuff) and a Mac at home. A lot of time is spent downloading Torrents of old TV programs and movies that he wants to see, but never seems to have the time to watch. He likes rugby and English Premiership football. As a result he subscribes to iSetanta in order to stream games to his television (using his laptop). He covets his neighbours iPad.

4. The wife – Mom has been at home for what seems forever raising kid 1 and then kid 2. She is a heavy iPhone and Mac user. She spends time sending email and monitoring her Facebook account. She watches videos posted on her SuperWall and playing ‘Words with Friends’ on her iPhone. She also likes to watch Mexican soap operas on Youtube.

The thing to consider is this – the only thing these people would have been doing 10 years ago was email and the only content most people thought about came in the form of PowerPoint decks and an occasional digital photo. No video games, no Youtube highlights, no Torrents – nada. The picture in another 10 years will be even more distorted, and will no doubt consist of services and applications that ride over devices that we have not even begun to contemplate. People will be demanding more content over these devices. We ain’t seen nothing yet.

It seems clear that that the business model used by content distributors must change, and change radically. The internet gives people, if they chose, to watch what they want more or less when they want. The advent of Video on Demand, DVRs and content distribution via Torrent, services like iSentanta, iTunes, Youtube etc etc has changed the playing field. The world is not returning to the content distribution model that made Shaw et all the companies they are today. I think that the end result is that ‘owning’ (and that can mean a lot of different things) content will be more important as we go forward. The key is figuring out how to monetize it in a brave new world…

Salesforce and VMWare

quigleymar — Tue, 13 Apr 2010 20:05:05 +0000

All we can do is speculate at this point, but this looks like it could be very interesting…more thoughts as they come.

More thoughts as promised…

We are likely looking at something along the lines of Amazon’s EC2 offer. Interesting, but not exactly earthshattering. Pre-announcing now has served to generate a lot of interest – lets hope that there is something more at play.

Twitter and Advertising

quigleymar — Tue, 13 Apr 2010 20:02:59 +0000

Tomorrow is d-day for Twitter as it will begin to introduce ads in an effort to turn Tweeters into dollars and cents. As I understand it, Tweeter will soon find ads at the top of the search list based upon keywords that have been used. So a search for Starbucks might yield Tweets from Starbucks advertising $0.50 off a Grande Latte or whatever. The next step is apparently to insert advertiser Tweets into your Twitter feed.

Step 1 is OK with me – I have never searched for anything on Twitter, so no ads for me. Step 2 presents something that I am uninterested in - part of Twitters value to me is that I get to choose whose Tweets I read. If I see value, I follow. If I don’t get any value, I stop following. Easy. Pushing unwanted ads will seem intrusive and detract from my overall experience. It was a problem on Explorer, Firefox etc, but Ad blockers and Popup blockers do a great job minimizing the clutter. My hope would be that Tweetdeck et al are able to build filters to help manage the mess, assuming Tweetdeck remains a tool with Twitter at its heart (Please read Fred Wilson’s thoughts on Twitter. He is Principal at Union Square Ventures, one of Twitter’s lead investors.)

The challenge for Twitter will be presenting advertising in a relatively unintrusive manner. For example, a Tweet from someone that I follow which points me to a particular product might be of interest as these folks are trusted sources. I believe that most users will be tolerant as Twitter does have value. At the end of the day, it is in our interests to see the company prosper and grow.

That said, I do not think it would take much to encourage some people to go somewhere else. This Internet thing seems to be pretty adept at providing alternate solutions to things…

I am curious to see how Twitter is tomorrow.

Microsoft Kin

quigleymar — Tue, 13 Apr 2010 18:15:45 +0000

Microsoft announced the Kin One and Kin Two yesterday. The phones will be only found on the Verizon (US) network to begin, and then making its way to Vodaphone networks in Spain, the UK, Germany and Italy. It is worth remembering that Vodaphone has a healthy interest in Verizon Wireless. Nothing in Canada at present, which is fairly typical as far as wireless product introduction goes (the Canadian iPhone launched a year after the US). Bell and Microsoft have had a very good relationship in the past, so Bell Mobility would seem as likely a candidate as any to offer the devices in the future.

Both devices are designed to hit a very specific demographic (15 to 25) that is deemed to be very socially networked and largely disinterested in much beyond that. There are three key features called ‘the Loop’, ‘the Spot’ and ‘the Studio’ (read about them at the Kin site) that managed people and feeds, let you share stuff and then back EVERYTHING up to the cloud (this is very cool, btw) making it available from any web browser. Both phones are ‘Zuned’ and give on the fly streaming access to the Zune library. Both phones also have cameras that will do video as well as stills. A browser and email client are also on board. However, there are no applications to download, no games to play, no Youtube and no GPS on board. According to Microsoft these features will be available when Windows Phone 7 launches in the fall. It is important to remember that this is all about a specific demographic.

The marketplace for handsets is huge. According to Gartner, 1.2 billion mobile terminals and 172 million smartphones were sold in 2009. There is plenty of room to segment the market and focus devices appropriately. Indeed, Apple is unique in that is only has the iPhone. Key to the iPhone’s success is the App Store which gives users the ability to customize the device to fit whatever needs they have, thus giving the iPhone the remarkable ability to straddle most segments as a result. Part of the challenge is that Apple has been very successful with the iPhone (25 million of the 171 million smartphones sold in 2009 where iPhones), particularly from a marketing and hype point of view. The end result is that smartphones seem doomed to get compared (sometimes myopically) to the iPhone.

Duplication of the iPhone is no easy feat (Google Android, anyone?) and it arguably makes more sense to approach the market as Microsoft appears to be – segment wisely and market to that segment with laser-like focus. The Windows Phone 7 launch in the fall will be the next step for them.

Amazon Canada

quigleymar — Tue, 13 Apr 2010 00:00:12 +0000

Seems Amazon has been granted the ability to open its own distribution centre in Canada. I wonder if this will have any impact on the service they deliver to Canadian consumers? Amazon Prime anyone?

The Canadian Government and the Cloud

quigleymar — Mon, 12 Apr 2010 18:55:09 +0000

Read this. It is good to see that the Canadian federal government seems committed to the cloud. The fact that they seem to have moved beyond strategizing and roadmaps to actual deployment of cloud based services is a good thing, and ought to bode well as they move forward. The government’s existing IT infrastructure would seem to resemble a tangled nightmare and a move to cloud based computing should result in significant cost savings and productivity increases across the board. If they get it right…

The Federal Government does not have a great track record when it comes to successful deployment of cross ministry IT programs (I am fairly certain the Shared Services program cannot be judged as a success). The reasons are many and perhaps unique to the public sector. The linked to article points to issues caused by over-engineered requirements and the ‘nature of the public sector itself’ (and I suspect that suspect that the former is likely related to the latter). An organization as large as the federal government, that is divvied up into series of smaller organizations (Ministries) each with its own CIO group is bound to suffer when it comes to making broad cross-Ministry decisions. Consensus becomes exceedingly difficult to find as people (only human after all) seek to protect their turf, their budgets and their people. Not only that, but one suspects that they all suffer from a degree of technical hubris (i.e. my security requirements are better than yours), not only making finding consensus a challenge but also helping to drive complexity into the process. Couple this with significant cultural momentum (i.e. this is how it has always been done here…) that will underpin everything and it becomes obvious that there are no easy solutions. A couple of things come quickly to mind. A significant step forward might circle around the notion of CIO consolidation – a single voice to dictate direction, versus a model one in which individual departments appear to have significant influence would bring some clarity (it will also make some people unhappy, which means implementation and going forward operations might be sticky from the outset…). An injection of private sector talent would also be an important step forward. Mid and high level ranks of the public service are composed of public servants that have worked only within the confines of the public service. They are no doubt well versed in how to work within the confines of government, but I would argue that that they thought processes are hampered by a culture that does not encourage the exploration or reward of risk.

The CRTC Doesn’t Get It

quigleymar — Wed, 24 Mar 2010 15:16:39 +0000

I read with interest an article in the National Post today. The headline reads “Canadians can afford high cable fees: CRTC. Regulator finds Canadians absorb higher cable fees without complaint.” The article goes on to state that the average cable bill has risen by almost 50% since 2002 and that “Such results do no seem to suggest a significant withdrawal of demand for television services when consumers are faced with rate increases.”

If I have it correct, the CRTC’s notion is that because consumers are happy to pay for new things that add value to their experience (i.e High Definition channels, PVRs, speciality channels, pay per view), it means that consumers will be happy to pay for something that does not add any additional value and has been free since the first black and white television was sold in Canada? To quote an old colleague, that is like comparing apples and carburetors. As a rule consumers do not like paying more for something that brings little value to their television viewing experience (or any other experience for that matter) and I am not convinced that paying $6 a month (or whatever is agreed upon) for the pleasure of not watching a local news program (the only local programming anyone really cares about) is worth it when I have other means to get the same information. Broadcasters can hide behind the wall of decreasing local content, but I think we need to question what local content actually means.

Let’s all agree that the relationship between content producer and content distributor is undergoing rapid change. I think we can further agree that a business model built entirely on leveraging traditional modes of advertising (i.e. the 30 second spot) is in decline. More, we can agree that the availability of Internet based content is threatening the model currently used by existing distribution networks (If you think the Internet is content rich now, give it 5 years…). End of the day, the MODEL IS BROKEN and it NEEDS TO BE FIXED. I have not read the CRTC report as yet, but I wonder if the CRTC has directed content providers and distribution networks to try and fix the mess that they are in. Yesterday’s decision is not a long term fix to the problem.

The CRTC and Television

quigleymar — Tue, 23 Mar 2010 22:57:44 +0000

The CRTC announced its long awaited broadcast decision, which gives television networks the right to negotiate carriage fees with cable and satellite companies (the Cable Cos). To date, Canadian stations were carried at no cost to the Cable Cos. This model worked for a long time, with both parties profiting from the arrangement. However, a decrease in advertising revenues has put the pinch on the networks and a change in model was almost inevitable. Neither side was willing budge on the issue – both seemingly content to play to the perceived public sympathies in an effort to build support for stated arguments. So what is likely to happen?

1. Networks will begin negotiations with the Cable Cos.

2. Agreement will be reached – at the end of the day, it is in everyone’s best interest.

3. The CableCos will moan about #2, and then insist they are all broke and try to pass the fees along to the consumer.

4. Consumers will not be happy.

BUT, what happens if consumers say no?

What happens is they refuse to pay for the extra few dollars for Canadian networks? Will the Cable Cos start to blackout local programming? What does this do for advertising revenues for the networks? Certainly a declining viewer base translates into a further decline in advertising revenue. A potential slippery slope ahead, I think.

What does this mean from a very practical Canadian content perspective (i.e. you can have all the Canadian content you want, but if no one watches it doesn’t matter much)?

At the end of the day, this seems like a short term fix. There are significant business model issues that are not going to be fixed via regulatory relief offered by the CRTC’s decision. The regulator might have offered a lifeline, but this is not a panacea. I hope that the networks are not leaving their heads in the sand – if the current model is broke, perhaps they need to something a little more creative than bleat to the regulator? Or maybe I am hoping for a little too much?

As an aside, BCE ought to ease up on the hyperbole. If BCE is losing significant money via ExpressVu, maybe they ought to sell the operation and invest in areas where a profit can be found? At the end of the day, BCE generated $572 million in operating income across its operations for 4Q09. Pleading poverty is disingenuous. A poor idea…

Google Apps Marketplace

quigleymar — Wed, 10 Mar 2010 21:02:50 +0000

Google announced the Apps Marketplace yesterday.

The upshot is that Google Apps subscribers will have access to a number of applications that can integrate with existing Google Apps (gmail, calendar etc). Applications are delivered by a network of over 50 partners and include applications like payroll, project management, web conferencing and efax. What’s interesting is the fact that Google is moving beyond productivity (Google Docs, email, search) and is introducing applications that can drive efficiency across the business. Applications like Intuit Payroll, ZohoCRM and myERP.com (I have no idea how well these apps work, I am just giving examples) present powerful examples of what is possible.

While it is obviously too early to tell, my suspicion is that the App Marketplace will find a home across all segments of the market. Business efficiency applications will likely see more adoption in the SMB market, but tools like project management and workflows will not be out of place in the enterprise (not that they will be adopted from the top and pushed down. More likely that these applications start in a team environment and potentially move outward).

A key challenge will be managing the partner ecosystem. Google will have little control over how partners manage service delivery, particularly when you extend this to management of trouble tickets and the like. As an example, issues with payroll tend not to be well tolerated by customers, while issues with eFax are likely to be tolerated. Unless a strict SLA regime is part of the partner relationship, Google will have little control beyond ensuring that customer feedback is front and centre. I am sure a lot of adoption decisions will be made after examining the number of stars an application has.

Cisco – Video is the killer app.

quigleymar — Wed, 10 Mar 2010 19:20:28 +0000

Cisco’s CEO, John Chambers, made this bold statement yesterday when announcing a new carrier-grade router. He said the same thing in 2007, and 2009. Point made at this stage, I think?