I'll Take My Data Just Right

The amusing thing about the trade press, any journalists actually, is they are all looking for the next scoop.  They want something new to say that no one else has said before so they can stand out from the crowd.  Strangely, these new things usually turn out to be just slight variations on the things everyone else has said -- therefore propelling the reader and the industry further in the direction they were already going.  Until all of the sudden, someone breaks away from the lemmings and sends the herd back from whence they came.  

This is how we get a string of economy is improving stories, each with a unique spin, and then all of the sudden an economy is not improving story hits, sticks, and sends everyone back the other direction.

We are seeing this right now in the data and analytics field.  For the last 5 years it has been all about Big Data.  I challenge anyone in tech to get through a day, even at this late date, without someone saying something about how amazing Big Data is and how Big Data is going to change everything.  Yes, it is nice to know that someone out there is collecting all of the data about everything (insert your favorite joke about a three letter agency here), and people are finding new and better ways to put that big data to work.

Mid last year however, the articles started appearing about Small Data, and how it was going to change everything.  By this summer it will all be about Small Data.  The articles are going to say that the inustry is going back to Small Data because not black is white, not up is down, not east is west, and not Big Data is Small Data.  I propose that Small Data is not what came before Big Data.  Small Data is some other color, some other axis, and some other point on the compass that we have not seen before.  So to make it just a bit more natural, because in nature, small almost never comes after big, let's call this next new thing Just Right Data.

This is what I mean by Just Right Data: 

1. The Data I Care About:  Clearly, getting just the right data is what Goldilocks was thinking about when she said "just right".  Big data is awesome because it means that all of the data is being collected (instead of sampled, here is my post about sampling from 2012), making it possible for me to get all of the data I care about.  
2. Properly Adjusted:  Each of the data points are not of equal value.  The ones that mean more to my analysis should be amplified.  In some cases the most recent data points are more valuable, in some cases clusters of data points are more valuable.  
3. Action Enabling:  We cannot lose track of the reason we analyze data -- to make better decisions.  We do not analyze data to create cool looking graphics.  We analyze data to enable better decision making.  Timing is the biggest part of this, but noise is also important.  No use getting great analysis after it is too late to use it, or mixed in with so much other stuff that it is impossible to absorb.

To Illustrate, here is an example from the channel marketing industry:

Let's say we have 100,000 channel partners enrolled in our channel partner program.  We have their profiles, their certifications, their competencies and a bunch of other pre-big data stuff.  We add in the amount of sales they generated for us last year, another pre-big data element.  Now we add in the big data stuff:  every lead we have ever sent to every parter, the outcome of every lead, who from our company has worked with them, everything we know about each employee that works for each of the partners and their history, how much revenue was generated from each sale of each partner, each customer from each sale, and when each of these events happened.  Big data is indeed named accurately.

Now in comes a new lead and my Just Right Data experience begins.  At the start I get just the data I want to analyze (just the 5 partners that are in the right location, and that have achieved sufficient status for example) which is pretty much a pre-big data thing.  And I get all of the big data stuff that is relevant to the those partners.  This is the data I care about.

Now I rank the partners by their relative status to the others, or the status of other leads already delivered, or the fine points of capabilities or personnel ratings.  This is the data adjusted.

Now the lead hand off to the selected partner (hopefully algorithmically selected, but manually works too) happens and it must happen before the lead expires.  As we know from being customer focused and customers ourselves, leads are perishable and must be acted upon in a timely manner.  This is action enabling.

Thanks for staying awake to the end, (unlike Goldilocks).  And thanks to the Big Data people who have set the stage for us to do Data Just Right.

Cool or Fool?

Some time ago I wrote a post about the Apple Brand Promise where I proposed that the magic of Steve Jobs was making his customers feel cool for buying his products.  I still think people buy Apple products because of the way it changes how others view them.  People feel cool when holding an Apple device and not because it makes them more productive or smarter and clearly not richer, but because the Apple brand promise says cool people buy Apple devices.

Cool is almost impossible to fake, and there is no formula for becoming cool.  Just ask any rock band, super model, or San Francisco restaurant owner -- cool is as impossible to predict as stock price.  

Cool is also impossible to copy.  Fake Rolex watches will never be cool.  No one is going to remember the band that tried to be like A Flock of Seagulls.

Those who have been touched by the ferry godmother of cool all know down deep that the chances of becoming cool are about the same as winning the lottery.  Feel lucky if you win, but don't start thinking it was because you deserved it.

Which brings us to Microsoft.  Microsoft makes people productive and enables them to keep more of their money in their pockets.  It is rare that one feels cool with a Microsoft product, but who cares!  I will take smart over cool any day.  Smart matters, smart is lasting, people who are smart got there on more than the luck of the draw.  The Microsoft brand promise should be associated with smart -- not cool.

I think many of us have lost track of what the Microsoft Brand Promise is.  If you know, feel free to post a reply.  

When using W8 the other day (I mostly use W7), I did not feel smart or cool!

Could This Possibly Work for Amex and HP?

“I love money. I love everything about it. I bought some pretty good stuff. Got me a $300 pair of socks. Got a fur sink. An electric dog polisher. A gasoline powered turtleneck sweater. And, of course, I bought some dumb stuff, too.”

-Steve Martin

I try to make these posts positive.  The world has enough negativity without me adding to the stinking pile.  However, not long ago I got the most unbelievably dumb direct mail piece from American Express. Not wanting to go negative, I held my tongue.  

Today, I got an equally rediculous piece from HP, and here I am -- joining the screaming hoard!  

That is right, American Express sent me a 30 inch long remote control speedboat!  To buy an equivalent item on Amazon?  $30+!  

Any company doing a direct mail campaign where the item shipped is over $30 must have over $50 invested by the time it hits my door -- particularly with the custom box, shipping...  Any company spending that kind of money per item, must have done their targetting homework... right?

WRONG!

I am already an American Express customer!  One would think that before sending this list off to the mailing house, Amex would have done a quick compare to the current customer list.  

Hmmm... maybe they were targetting current customers specifically.  After all, the name and address matches exactly to my statement.  Why would anyone spend that kind of money to reach out to their current customers?  I have no idea.  American Express must have one talented advertising agency.

According to AdAge, Ogilvy and Mather New York is the agency of record for American Express, who is the 9th largest advertiser in the country with an annual budget of over $2 Billion.  These guys must be super smart -- do you think this campaign could possibly work?

HP and BBDO - Just Keeping Up

Not to be left out, HP sent me a remote control Ferari.  Now this is a bit more modest, less that a foot long, and probably in the under $20 price range.  Also, we are an on again, off again HP customer and partner, so getting in front of us could make a difference in our purchasing habits.  Lower cost, more upside... but I still have a hard time believing that this campaign could even pay for itself.  Incidentally, HP's ad budget is only $1 Billion.

I didn't respond to either and my kids looked at the plastic crap and shrugged.

What on earth will the big spenders think of next?

IBM Gets It

It seems that just about every week I see something that reinforces how IBM is way out front in the customer centric-ness of big data.  Here is a great video they posted on YouTube showing what they are talking about when they say Smarter Marketing:

If you want a bit more of the IBM Smarter Marketing juice, they have a whole bunch of great content on this web site:IBM Smarter Planet: Marketing

Good for Ford, Bad for Microsoft

When the rental car web site says Ford Taurus or equivalent I just groan.  Anyone who has done any traveling at all knows the feeling.  Just as fun as finding out your hotel room is next to the elevator winch room, or that your toothpaste blew up in your bag.  

Ford has been making a big push into the tech business.  Advertising on all of the geek sites and pulling out all of the stops at CES.  The revival of the Mustang has been well executed too.  I have rented a few Mustang convertibles while on vacation and really loved them.

Getting your product in front of potential new customers in a real life trial is risky because it produces both potential new customers but if the product is not well matched to the customer, it can easily eliminate potential customers.

In the last two weeks I have been dealt the Taurus card twice and I have to say they have been great.  What a surprise!  Stylish, well put together, and fun to drive.  The rental introduction certainly worked for me with Ford.

Not so lucky with Microsoft and Sync.  I was eager to try out Sync and it is a disaster.  I got it to connect to my phone by bluetooth, but it would sometimes work and other times not work.  The user interface is not intuitive and any of the voice activation stuff will require half a day spent with the manual.  

This is just one more situation where Microsoft shows up on the consumer radar as a company that just cannot make products that work -- let alone that are fashionable.  Lucky for Ford, I have not found other auto computer systems to be all that easy to use either.  So maybe Microsoft Sync will not prevent people from buying Fords.  But Microsoft Sync will turn people off to other Microsoft products.

Nest Delivers Perfection

What a difference a year makes.  Last year I tried to do a little home automation.  First I bought a whole bunch of Zwave stuff including a Mi Casa Verde Vera 2, a Trane remote energy management thermostat, and a pile of light switches.  I spent a couple of weekends trying to get the stuff to work - it actually did for about 10 minutes, and then the controller got corrupted somehow, the new firmware had to be installed from a Win XP machine.... and well, yah.  

So I thought, maybe the high priced route?  So I signed up with Schlage for their Zwave controller and paid service (Mi Casa Verde is free after you buy the controller) and another few weekends of screwing around and the project was abandoned.  The ironic thing is that my old thermostat was programmable, and the Trane needed the controller to be programmable, so for most of 2012 my functionality was worse than 2011 and before.

Friday I put in the Nest thermostat.  Done in 10 mins.  I can control it from my iPad, my Android phone, or any PC.  Done.  Awesome.  

Now it is learning to program itself from our behavior.  Awesome.

I cannot wait to see what Tony Fadell and his team introduce next.  No matter what it is --- I will buy it.  It is beautiful, it works, and it is an absolute pleasure to interact with the company.

About that interaction.  I have never called them, or emailed them, or tweeted to them, barely had to read the instructions.... so what is this "interact with the company"?

The thought and care that the Nest team put into their product speaks volumes.  It is just as magical to see it on my wall as it was to hold 1,000 songs in my pocket with the first iPod.

I am sure many companies strive for this kind of perfection... but almost no one can do it.

Way to go Tony and the Nest team.

Here is a picture of the screwdriver that comes with the thermostat.  Need I say more?

Yes, But Does The Advertising Work?

The front page of the SundayBusiness section in the NY Times carries a piece by Natasha Singer about Frank Addante's Rubicon Project, a real time trading market for internet adds.  This feature length article dutifully talks about the size of the industry ($2B in display ads bought by auction in the US this year), and other players in the business (BlueKai), the mechanics of the business (cookies), and consumer response (mostly they don't care but the advocates think they should), and advertiser response (apparently they like it a lot).  The author then wheels through a number of anecdotes that illustrate how the auction system can be used.  Anyone dedicated enough to make it to the end of the article is not rewarded with a conclusion but the now tired trope that the customer is the product.  

I am on this rant about the article not because I think it shouldn't have been written or placed prominently in the Sunday edition but because it could have been so much more.  No wonder newspapers are threatened!  So much of the content is disappointing.  Newspapers say that their advantage over bloggers is the interplay between the reporter and the editor that results in better content.  Where was the editor on this one?  

Here are some questions that I would have wanted to see surface in the article: 

1. Does the targeted advertising featured in the article work?
2. Is there a causal link between these auctions increased consumer tracking?
3. Have there been any actual cases where people  have been harmed by the tracking?

 Those seem like pretty basic questions if you ask me.

Here are some other things a reader might like if interested in this subject:

• The Wikipedia page for Online Advertising:  Quotes Jupiter Research's forcast of $34B in online advertising for 2012 -- a good reference point for the $2B quoted in the article.
• The MagnaGlobal Advertising Forecast:  One of the leading research groups tracking the industry -- says the US Ad market is going to be $152B this year.
• BusinessInsider on ComScore's report on Facebook add effectiveness:  Says that Facebook ads do work -- funny, there was no mention about the auctions and facebook in the article.
• Inc. Magazine about the relationship between online advertising and offline activity.
• If you are worried about who is tracking you and how, check out ghostery.com:  They make tools that help you track the trackers.

 Anyone want to guess how this article got into the NY Times?  Answer:  The PR firm from Rubicon wrote it.

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.

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.

Business Runs on Microsoft Software. Period.

It is insteresting and instructive to take a step back from the big ecosystem builders and think about who their customers are and what they are selling.  Just so we all start from the same point on the map, I am going to clarify that customers are the people that pay and they pay for whatever a vendor is selling.

Microsoft

This is a big week for Microsoft with the long anticipated Windows 8 launch.  Even though I am very much looking forward to getting my MS Surface (hardware) this week, Microsoft is still the maker of software and its customers paid $16 B in the most recent quarter and generated $5.3B in profits including for operating system software ($3.2B revenue /$1.6B profit), servers and dev tools ($4.5B/$1.7B), and productivity and business software ($5.5B/$3.6B).  This is highly profitable business with one half of all revenue returned in profits.  You will notice that a bit over $2B is missing from this revenue analysis - because that is the amount MS generates from XBox -- without generating any profit.  Ouch!

Simply, customers pay Microsoft for the software they need to be productive.  Anyone who has tried to be productive on an iPad knows what I am talking about.  Producers need Microsoft's products to produce.

Apple

Apple quite famously makes more revenue and profit on the iPhone than all of Microsoft combined.  In its most recent quarter it generated $16.2 B of a total of $35B from the iPhone at 43% margins.  Any company that can grow from zero in 2007 when the iPhone was introduced to over $60B in annual revenue from a single new product line - deserves to be the worlds most valuable company.  Even more impressive is the $9.2B in iPad revenue last quarter from a product just 30 months in the market.  However, as Apple is demonstrating with the change of the standard cable plug on the latest version of the iPhone - it is selling devices that are driven by their popularity, not by business acceptance.

So, customers pay Apple for fashionable gadgets and Apple cranks out fashionable gadgets like no one else.

Google

Google has revenues about the same size as Microsoft's.  The most recent quarter concluded with $14.1B in revenue and $7.45B in profits. 75% of Google's revenue comes from advertising.  Advertising was 97% before the acquisition of Motorola -- and Motorola now makes up 19% of Google's revenue.  Google makes all kinds of software (gmail, Google docs...) but most users get those services for free -- and the customers are the companies that pay to place their advertisements where those users can see them.

So customers pay Google for advertising.  Google dominates the search market with 65% of all internet search traffic.

When analyzed from the perspective of the paying customer it is almost hard to believe that these three companies are fierce competitors.  No one buys Microsoft products to be seen with them in the first class lounge at the airport.  Almost no one pays Microsoft for advertising.  Just about everyone pays Microsoft to make their businesses run.

What is CRN Smoking?

CRN ran a story this morning about how Microsoft is like Philip Morris.  I know that expecting web sites to avoid link bait is like expecting candidates running for the oval office to tell the truth.  Even so, this one is over the top.  There are many companies with comparable growth rates to Microsoft.  Picking the one that sells an addictive product that causes cancer and that spent decades undermining efforts to understand the effects of cigarette smoke -- is poor form.

The article did make one good point though:  when channel partners pick the vendors they partner with, they are making investments.  In fact, they are making very big investments.  

CRN says that channel partners should partner with Apple, Cognizant, Google, Rackspace, and Salesforce.com instead of Microsoft because those companies are growing faster. Really?!?

Let's take this apart company by company:

Apple:  Apple is in fact starting a partner program.  Apple however does not have a single enterprise software app.  It can offer a desktop operating system, and a productivity suite, but Microsoft has hundreds of products -- and most of them solve very real enterprise computing problems.  

Cognizant:  Most people have never heard of this company.  It is in fact a $6 billion dollar company, but it is a consulting and outsourcing firm -- a competitor to most channel partners.  I bet it is a very big Microsoft partner.  So there really is no reason a solution partner would partner with this organization instead of Microsoft.

Google:  Google is kicking everyone's behind in search.  True.  But I can't think of how it would make sense as a channel partner to give up Microsoft's partner program in exchange for Google.  Google offers no side by side go to market capabilities to support partners.  Even if we were to humor CRN and think for 10 more seconds about this one - how can a partner make any money deploying Google Docs?  This is one of those cases where Google takes a dollar someone else is making and turns it into a dime of advertising for itself.  So Google can take revenue away from Microsoft, but it does not have that dollar to share with its channel partners.

Rackspace:  Rackspace is not even a software company.  

Salesforce.com:  Salesforce.com, like Oracle (where Benioff came from) has a nasty habit of eating its own young.  A few companies have made a living working with Salesforce.com, but most get run over by their scorched earth sales team.  And all of that to partner with a company that has one product.  Oh sorry, two products if you count Chatter as a seperate product.

Microsoft has made its way in the world by working side by side with its hundreds of thousands of partners worldwide.  There are some companies that are growing faster, but none that comes anywhere close to supporting a partner ecosystem like Microsoft does.

It is hard to imagine what CRN was smoking when they proposed that Microsoft was like Philip Morris!

Ideas Happen When Execution Works and it is Safe to Fail

Reason #3 (Why our clients choose CSG).  

Ideas are just about everything. I say “just about” because like Maslow’s hierarchy, the basic things need to exist first. So humans need food and security before the other stuff, but life really would suck without the top items (love, esteem, and self actualization). The same goes in marketing. Without the ability to act on marketing ideas -- the ideas are worthless.

Marketing firms are often evaluated on their ability to execute, but that should just be the cost of getting into the dance. Once in, it is all in the ideas.

At CSG we build technology to make the execution so good that we can invest most of our energy in the highest value activities -- generating and testing ideas.

Indeed testing is essential because ideas come in both the good flavor and the bad flavor and all ideas have to be tested. The bad ideas have to be killed off to make room for testing yet more new ideas. Again this relies heavily on ease of execution. The kind of flexibility needed to implement a new idea and then kill it off -- requires amazingly effective execution.

One more thing. Having the strength of execution that enables the rapid change associated with testing ideas also requires a culture that accepts failure. Without it, people naturally hold on too tight to ideas that do not work. Worse yet, when the stakes are high enough (i.e. people with failed ideas get fired) we sometimes see people waste all kinds of resources dressing up bad ideas to make them look good.

So, ideas are everything and they require great execution and a culture that accepts failure.

Technology That Works

Reason #2 (Why our clients choose CSG)

Sometimes the simplest things are very difficult to implement. At CSG, we have been developing technology for 15 years and we use that technology to deliver better results for our clients. From our proprietary phone system, power dialer, voicemail automation, voicemail stitching, email integration, email stitching, cross platform reporting, lead distribution, deal registration and our latest innovation OneVoice, our technology works.

We accomplish all of this while maintaining redundancy and security at the level required by the biggest and most demanding technology clients.

We do mobile and social media too, but often we see the industry using those “hot” technologies as a means to deflect attention from the fundamental plumbing required to make the trains run on time.

We think our success in technology puts us well ahead in the industry. The biggest advantage however is how it enables us to think freely about new ideas. Have you ever been in a meeting where creative ideas die because the tech people say it cannot be done?

Here is Reason #1:  We Get Results

Get Results by Adjusting and Learning and Never Giving Up

This is the first in a series of posts resulting from work we have been doing at CSG to better understand why our clients value our services.  Sure it sounds like self promotion -- it is!  Either way, we have found this bit of introspection quite interesting and we hope you do too.

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Reason #1:  We Get Results

We work side by side with our clients to design marketing campaigns that work and then put our money on the line when we carry them out.  Sure, everyone says that – but we are different in three distinct ways:

We Adjust, Adjust, and Adjust Some More

Sales and marketing are inexact sciences and particularly in the technology industry exist in an ever changing environment.   Only rarely do things go according to the plan.  We measure everything and adjust – sometimes every day.  We have 15 years of campaigns to benchmark against – so we know before anyone else if things are in need of adjustments. 

Even the campaign that worked beautifully last quarter may not work this quarter.  We go in with our eyes open and stay flexible.

The next time you hear: “We executed perfectly, but the plan was never going to work.”  I suggest you look at what adjustments were made.

We Listen and Learn

Customers and partners often give the feedback we need to deliver results.  It is critical to listen to them and learn faster than anyone else. 

We Never Give Up

Marketing budgets are not bottomless and we are always thinking of the burn rate as it compares to measurable results.  In this environment it is easier to think of the campaigns to cut than the new campaigns to try.  No one ever increased sales by reducing sales and marketing investment however.  We keep trying and of course – never give up!

So if you are looking for an experienced partner to help you achieve increased revenues through your channel partner programs – switch to CSG.