Interesting Trends

We have arrived at that season where the list of predictions for 2013 will start to pile up.  I find them interesting reading, but I have not felt that I have much to add to the pile, so mostly I just read instead of making a list of my own.  

This year however, I will be taking note of a handful of trends that seem to capture my interest.  I see tend to read articles about these things and I just might have some thoughts congealing into a theory that brings them together.  

For now though, just the trends:

1. Education:  One of our greatest exports to the rest of the world is educated people from our university system.  Why do we get that right and K-12 is seeming to fall farther and farther behind?
2. Big Data:  Technically big data is just a lot of data.  Specifically, it is the ability for systems to capture and save everything.  Before big data we used to keep track of the closing price of a stock, then we stored the closing price and the high and low price for the day, big data is storing every single trade, who made the trades, their sequence…
3. Internet of Things:  There are between one and two billion people connected to the Internet.  Devices and sensors are being added to the network by the billions and probably already outnumber the people.  Soon the number of connected machines will dwarf people and the Internet will change significantly.
4. Vendor Relationship Management:  The relationship between the makers of things and their customers has been mostly one way and managed by the manufacturer, with CRM systems.  This relationship dynamic has been evolving through 1:1 marketing to an inversion of CRM where the customer is in charge and the vendor is managed.  The Berkman Center at Harvard is defining a new industry called Vendor Relationship Management (VRM).
5. Digital Divide:  The people at the top of the economic ladder will advance ahead of the rest in earning capacity, lifespan, leisure time, and as a result will desire many new services. Those not at the top will have to serve the others or live off of charity or government assistance.  The gulf between the haves and the have nots is getting bigger in our country and around the world.  Right now the unemployment rate for white college graduates in the US is 4%.  Other social classes or ethnicities are much worse -- some over 25%.  It is hard to think about things getting even worse.

Of course the current year always feels like the one that is moving faster than ever before and 2013 will certainly feel the speediest ever.  In this context, and considering this list, it will be an interesting exercise to do the Gretsky thing and skate to where the puck is going to be.  It will be even more interesting to take a shot -- because the other famous Gretsky quote is: "You miss 100% of the shots you don't take."

Comcast Throttles

I guess I should not be surprised.  I have been suspecting it for some time now and right before posting this entry I searched for "Comcast Throttles" and found 3,210 hits -- with just about every one of them recounting their stories about how Comcast selectively turns down their bandwidth.

I do download things, but I do not consider myself a big bandwidth user.  My biggest loads are Microsoft software updates, then Audible audio books, then a song here or there from iTunes.  But I find myself tripping whatever mechanism Comcast has set up, and then I stay turned down -- sometimes for days.

I measured my throughput daily for the last week and you can see my bandwidth changes quite a bit.

I am sure that Comcast has to manage a variety of loads on the network, so I don't expect to be at 15 MBPS all of the time.  But any time that my download speed is less than my upload speed -- is clearly suspect.

I don't think there is any law against turning down my bandwidth, and I am pretty sure that I don't have a contract that guarantees me a certain throughput all of the time.  The offense in my view is that Comcast denies doing it -- when they clearly are. 

Maybe I should move to Kansas City!

I don't think legislation is the answer because our lawmakers are definately under the spell of big companies like Comcast -- so any attempt to control their businesses would result in fewer rights or benefits to the customer.  

So let's hope for competition to solve the problem.  

Some links for you:

The "Comcast Throttles" search.

Speakeasy's Speed tester 

Wired Mag on the 250 BG cap 

Now I have to start looking for ways to give Comcast less business.  More on that later.

The Surface - The Second Day

Yesterday I brought my new Windows RT Surface into the office and the whole world changed.  In 5 minutes, my IT guys had it set up to use Remote Desktop Connection and presto - every app that I can run at the office now runs on my Surface.  

Now those are apps that count!

The entire Adobe suite, Quickbooks, Visio, Access, SQL Server... this wipes out just about all of the list of not so good things I said after day 1 and puts this machine so far ahead of my iPad that there is no comparison.  

I would go on and on about this but I have work to get done and I am doing it on...my Windows RT Surface. 

Yow, I am sounding like I have lost my objectivity.

What if Advertising Doesn't Work… At All?

Forget not knowing which half does not work.  Click through rates are at 0.02 – it is not that hard to imagine 0.00.  OK, maybe a Bud advert gets a guy off of the couch and headed to the frig to have another beer.  But outside of that could there be anyone left that believes anything they see in advertising?

When AT&T says they have the best cell coverage, or BP says they really care about the environment, we know that in fact the opposite is true.  Following this line of thinking I suppose the scale of advertising effectiveness could go below 0.  There are a few attack ads I have seen this campaign season that have inspired me to fight harder for the guy being attacked.  I would put that in the negative effectiveness category.

Advertising worldwide is a $400B industry.  If everyone comes to believe that advertising just does not work, it could free up that money to do other things – like lower the cost of products, or pay for R&D.  Alternatively, it could be a means to accelerate creative destruction.  Essentially a tax on companies that make bad products or that have weak values.  They spend their last available dollars on big branding efforts and then go out of business.

It is interesting to note that Google, a company that makes its money selling advertising, does very little advertising of its own products and services.   We could say that with over 65% market share – they don’t have to advertise.  If we see a big campaign out of Google, it may be a sign the end is near!

What will a world without advertising look like?

The Surface – One Day In

Yesterday I attended the Seattle Interactive conference which gave me a great real world testing scenario for the Surface.  Here is my current thinking about this device:

My Favorite Parts:

1. Instant On:  Just as good as the iPad and clearly the killer feature.  Nothing keeps me from my Windows 7 machine like slow boot up time and its inability to handle sleep mode.  This machine comes on with a swipe and when done you just put it down. 
2. Battery Life:  Also amazing.  I used it for ten hours yesterday and still had 26% left.
3. Windows RT:  Not so hard to get used to.  Access to the desktop is easy.  The fact that I could get to the control panel was a pleasant surprise.  Connecting to wifi networks and other machine administration tasks was easy and familiar. 
4. Office Aps:  I did not try PowerPoint, but Word, Excel, and OneNote all work great.  Integration with Skydrive was easy and I used it right from the start.
5. Mail:  The new mail app is clean and works pretty well. 

Not So Good Parts:

1. IE:  The browser was the hardest app to get used to.  I struggled with the tabs and the back button, it just seemed to be a bit off.  Some sites just don’t work well with the browser and I really wished I had another browser – even if just to see if the problem was with the site I was viewing or with my browser.  This needs work.
2. Apps:  The WSJ, NY Times, Netflix, and Evernote apps were fine right out of the box.  I was surprised that there was no Twitter app, I also wished for apps from The Economist and Bloomberg Businessweek.  IMDB would be good too and I am sure there are a handful more that I will miss today.  I know the apps are on the way and so I am really not hung up about this too much.
3. Mail:  I mentioned above that the mail app works fine, but I miss outlook.  Don’t get me wrong, there are parts about Outlook, and frankly email in general, that I would gladly do without.  But I depend on Outlook to get me through my emails and when it is time to sit down and really crank through my inbox the lack of Outlook is going to push me back to my full PC. 
4. Stability: My Surface has crashed a couple of times.  I am pretty sure the crashes were due to up and down connectivity at the conference and either the log in process with the browser, or the mail app’s connection to our exchange server.  Once the device froze up, I did not really know what to do.  So I held down that button on the top and just hoped for the best.  It seemed to work, but I am not so sure I actually re-booted.  So that is going to take some getting used to.

All around I am excited about the Surface.  It is a big step forward for Microsoft.  We are not going to know how big or how far forward for at least six months, maybe a year. The Apps will tell the story.

Getting to the Future

Last year the Microsoft Office team produced a video showing their vision for the future.  It is pretty cool.

Technology companies produce mountains of these aspirational works -- probably mostly to inspire their own people to get motivated and build the stuff.  I still remember this video Apple showed in the 90s.

Dr. Francis Colins said:  

The First Law of Technology says we invariably overestimate the short-term impact of a truly transformational discovery, while underestimating its longer-term effects. 

At the time he was talking about he the human genome sequencing project, but it applies to all technological advances.  We always want the future to get here sooner and we often are dejected, or at least frustrated, by the time it actually arrives.  But arrive it finally does and we only have to look at the amazing things around us to confirm Dr. Collins' first law.

The buzz about the Internet of Things is roaring and we are not so much talking about how refrigerators are going to be on the internet, but an avalanche of billions and billions of sensors reporting everything from the proximity of cars to each other to advances in industrial automation.

China is doing its top down thing in an effort to lead in the industry.  They just concluded their third Internet of Things Conference this last weekend.  The EU has gotten underway with an initiative to establish standards and information sharing with their own IOT web site.

Here in the US it does not appear that there is a governmental initiative, but plenty of companies are working on building the tools we will need to make the most of the concept.  IBM was probably first with its Smarter Planet initiative, now in its 4th year.  Microsoft has StreamInsight, Oracle has its initiative, and there are many others.

It took the introduction of the iPhone in 2007 before people could visualize a world with billions of little computers in people's pockets.  There had been smart phones before, there had been PDAs, but for some reason the iPhone showed us the way.

What is going to be the thing or event that breaks through and enables everyone to visualize the Internet of Things revolution?

What is going to get us to that future?

The Microsoft Effect

The Hawthorne Effect famously demonstrated the changes to worker productivity resulting from changes in work environment.  Like many studies the key learning turned out to be somewhat different than anticipated.  Initially intended to figure out if lighting levels or other environmental factors impacted productivity the result turned out to be that workers did better when working together to improve the conditions.  The improvements were not dependent on the changes but on the process of working together to make the changes.

I have to wonder if the same thing is happening in the Microsoft/Google/Apple race for the hearts and minds of the workers.  Each is courting the users with new and improved ways to be productive.   Microsoft has of course dominated the worker productivity area with the Office suite and the addition over the years of Outlook, Access, Visio, and OneNote. Google helps workers find stuff and has innovated around the edges with priority inbox in gmail and better spam filtering and Google docs and drive. Apple has turned the world mobile, brought about the app revolution, and companies now shower iPhones and iPads on their employees like they used to do with sales trips to Hawaii.

I am 24 hours into using my new Windows RT Surface and all I can think about is how much work I could do on the thing.  It has been 90 years since Elton Mayo did his study in Hawthore, IL, maybe it is time for a new study.  We could call the key learnings the Microsoft Effect.

Partners Will Embrace the Surface

Well MS has launched the Surface running Windows RT and it is a pretty cool machine.  There has been a bunch of noise about how Microsoft is sticking it to its partners by jumping into the hardware business. I think this is another case of the media inventing a fight because it is good for the media.  

In two and a half years Apple has sold 100M iPads.  In the same amount of time Microsoft has grown the Windows 7 user base to more than 600M -- just about all of those were sales of new machines.  It is just about impossible for anyone to imagine the MS Surface outselling the iPad.  It is not hard to imagine the Windows 8 user base to grow at 300M units per year.  

In other words, there is plenty of room in the market for everybody.  Microsoft's partners are going to sell hundreds of millions of Windows tablets in the years ahead.

Microsoft and its partners, that number in the hundreds of thousands, solve business problems for their customers.  Armed with the Surface, Windows 8 RT, Windows 8, and every shape and size of hardware imagineable from a legion of capable hardware makers, these partners are going to have so much to offer their customers that it is going to take years for the market to absorb it all.

Next week we get the new Windows 8 Phone.  Partners are going to embrace that new device too.

Technology That Changes The Game

It was a relatively short time ago that computers were produced in the dozens, cost millions of dollars, and were run by the phone company, the government, and a few very big businesses.  The most technological thing that a small business had was a cash register.

In an office environment like a law firm or an accounting firm, there were typists, and a copy machine, and the only cloud application was the connection to AT&Ts big computer (the phone).  In some cases professionals had specialized tools -- I for example had my HP12C programmable calculator.  I never programmed it to do anything though.  Amazingly, HP still sells that very calculator - 30 years later.

Then came the PC and voicemail and email and mobile phones and well, we all became computer operators plus whatever our jobs had been before that.  Now we spend so much time staring at the screen that we feel like computer operators all of the time -- so it is no wonder that we sometimes forget that we have actual jobs to do.  Facebook even relieves us from having to pull away from the computer to waste time at the water cooler.  

We have become much more productive despite the time we have to spend getting our machines to work for us.  Since the introduction of the PC, GDP per capita in the US has grown from $27,000 to $47,000 per year.  And that is the average for the entire country.

Keep in mind that workers that use PCs have done much better than the rest of the population, so the productivity has more than doubled for PC users. Advances in technology drive our economy and our ever improving quality of life.  This is an easy argument to make when you consider that penecilin was an advancement in technology.  A bit harder in the context of nuclear weapons. 

These advances in technology have provided for us so much extra time and money that we don't know what to do with it all.  Most of us have more than one computer plus a phone with computer like computing power plus maybe a tablet too.  

There are two types of advances in technology: incremental things and game changers. New computing capacity that reduces the time to run a report from a giant database is incremental.  New sensors that report every person's location, everything they purchase, and many of the things that they think and say into a giant database is a game changer.

The incremental things we get from technology are gains in efficiency that make one business more productive than another.  Game changers are new capabilities that just could not be done before and that completely change the business environment.

As the cost of compute cycles comes down the incremental functions will blend into the background and deliver less and less profit to their makers -- so look out HP and Dell.  Game changers will become the whole game and command more and more of the profits.  And as always the pace of change will be accelerating.  Very few companies have the will to change their own game.  Apple did it with the iPhone and now generates half of their revenues from a product they introduced only 5 years ago.  Google did it to the advertising industry -- but it remains to be seen if they can do it to themselves.  Microsoft is in the process of trying to change their game with Windows 8.  Will they be able to do it?  

Advertisers Trade Digital Dimes for Mobile Pennies

Tomorrow is the big Windows 8 / Surface Launch, so I will continue on with the Microsoft vs. Google vs. Apple thinking from yesterday.  

Henry Ford is credited with the famous line:  "I know that fifty percent of my advertising is wasted, I just don't know which half."  I wrote a post about this a few years back and also dug into the idea that Google is trading analog dollars for digital dimes.  Which turns out to be easier for Google, the company that gets the dimes, than for other advertising providers that are losing the dollars.  The advertising dime migration is fueling a whole bunch of creative destruction in the advertising business.

It is going to get much worse.  Every day advertising gets more measurable and it might just turn out that the non productive half of the advertising business is in fact bigger than half.  In an anemic growth environment, or worse yet another recession, companies might just find a better use for a big part of the $600B presently spent on advertising.

If so, what happens to all of the technology companies that have placed their bets on making advertisers their customers?  What if the digital dimes get traded for mobile advert pennies?  Google was perfectly happy getting new revenue away from the newspapers -- so they did not care that their prices were a tenth of the market.  But if Google has to trade its own dimes of revenue for pennies -- it is going to hurt.

All the while Microsoft soldiers on making businesses productive.