Wednesday, November 30, 2005

UK Small Businesses risking disaster

Nuclear ExplosionA while ago, when my own PC disk starting making weird noises I asked "is it safe?"  I just saw a BT and IoD report published earlier this month that suggests:
"Less than 20 per cent of UK small businesses backup their data remotely, even though 82 per cent admit they could not function without it"
Professor Jim Norton, Senior Policy Adviser at the IoD, said: “For smaller businesses in particular, the owner/manager is in charge of IT. “As a result, things like backing up data are way down the list of priorities and are often seen as chores. This is because traditional backup methods, like tape or CD are often time consuming. But times have changed, and backup now requires little or no input from users.”
The report also reminds us that having a backup isn't the only requirement, as backup tapes or CDs kept on site can be easily corrupted should a disaster such as a flood or fire strike.  Just to make things more worrying, the London Prepared website suggests that 90% of businesses that lose data from a disaster are forced to shut within 2 years.  I've seen other reports that suggest the figure is 70%, but let's not split hairs. 
One aspect of SaaS solutions is that "best in class" off-site backup comes as part of the subscription price - another reason why you should be giving them serious consideration.  But SaaS may not cover all of your systems, and you'll probably have a lot of other data and documents in and around your systems.  There are a growing number of online backup solutions available.  As well as the BT service mentioned in their report, a quick Google search of "online backup" gives a list for your consideration, with charges starting in the range of £2-5 per Gb of storage per month.  I'd suggest this is worthy of some of your time to investigate, and I'd be interested if anybody has any experience they'd like to share.  But the maxim has got to be "prepare for the worst, hope for the best".
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Tuesday, November 29, 2005

Help with the dreaded Cold Calling

Cold CallingFor most people in business the toughest part of finding new business is cold calling, and that includes seasoned (don't I mean old?) sales professionals.  I screwed up on one yesterday where I temporarily forgot the cardinal rule, which is to always put yourself in the other guys/gals shoes.  It always helps to prepare and take advice.  Here is a good article on the topic from Business 2.0 magazine, and another one from Buzzle.com.
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Monday, November 28, 2005

Any advance on Web 2.0?

One of the key themes of this website is the impact of Web 2.0 on business.  The term is useful shorthand, applied to a perceived ongoing transition of the World Wide Web from a collection of static websites to a full-fledged computing platform serving web applications to end users.  However, I've noticed a worrying trend in the US where the label is being applied to various companies with a touch of marketing hype rather than reality.  But worse, I've seen a conference on Web 2.1, and if you do a Google search on Web 3.0 and Web 4.0 you'll get an alarmingly large number of hits.  Oh dear - I hope this doesn't generate too much confusion.
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Sunday, November 27, 2005

E-mail Is So 5 Minutes Ago

I saw this excellent article on Business Week online (registration site, but free).  It describes how Darren Lennard, the managing director in the London offices of investment bank Dresdner Kleinwort Wasserstein, after a long and onerous day at the office:
"plucked his hyperactive BlackBerry from his silk-lined pocket and proceeded to smash it on the gleaming granite countertop of his London home."
Nice image - some of us may know what he feels like!  The article goes on to explain that, of the 250 e-mails he received each day 85% were totally not important to his job.  Dresdner are now ditching e-mail in favour of other software tools that function as real-time virtual workspaces.  Among them: private workplace wikis (searchable, archivable sites that allow a dedicated group of people to comment on and edit one another's work in real time); blogs (like this one - chronicles of thoughts and interests); Instant Messenger (which enables users to see who is online and thus chat with them immediately rather than send an e-mail and wait for a response); RSS (really simple syndication, which lets people subscribe to the information they need); and more elaborate forms of groupware such as Microsoft SharePoint or other collaboration tools which allow workers to create Web sites for a teams' use on projects.  The article suggests that organisations like Walt Disney, Eastman Kodak, Yahoo!, and even the U.S. military are following suit.
More forward thinking organisations have been using these sorts of collaboration tools for a while in place of chasing e-mail trails.  However, it's good to see the concepts getting mainstream airtime.
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Software sales model shifts

Regular readers will know that the shift from the traditional licenced software business model to Software as a Service is a common topic with me.  Dennis Howlett pointed me at this ZDNet article, which speaks for itself.
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Business Process Innovation and Social Networks

I've just discovered Irving Wladasky-Berger's blog.  He's the VP of technical Strategy and Innovation at IBM.  He's written an interesting piece about a breakfast roundtable he attended in Palo Alto on Social Media and Web 2.0 hosted by Tony Perkins, founder and former editor-in-chief of Red Herring.  It also relates to the debate about business process outsourcing from earlier posts here.  You should read it.  He says that:
"with the emergence of Service-Oriented Architectures, Web  Services and similar capabilities we can now tackle the standardization and integration of business processes and truly contemplate building globally integrated businesses, industries and economies."
He goes on to comment:

"An innovative business looks for the proper balance between process – covering those aspects of the business that can be designed, standardized, and increasingly automated – and people – who bring their creativity and adaptability to handle everything else.  In a world that keeps getting more and more complicated and is changing faster and faster you need both – but even more, you need the innovation which, when all is said and done, is the truly human element."

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Saturday, November 26, 2005

How to network

I've only just discovered Real Business magazine.  Here's some great advice on Networking.
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The Elevator pitch

Elevator pitchAn "Elevator Pitch" is a concise, carefully planned, and well-practiced description about your company that your mother should be able to understand in the time it would take to ride up an elevator.  While I was thinking about improving mine, I found this resource on perfecting your pitch by Bill Joos.  He preaches the art of the pitch for Garage.com a venture-capital investment bank that's helped more than 60 startups raise a total of $200 million since 1999.
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Old ERP and outsourcing vs. small is beautiful

Vinnie Mirchandani has written an interesting piece called Business Process "Angioplasty", that has been commented on by Dennis Howlett, and within a few hours  I read about Sainsbury's giving up on Accenture and insourcing their IT back home.  Vinnie's argument is that the move to major brand ERP solutions in the 90s, supported or recommended by the big consultancies, wasn't doing anything clever in re-engineering the organisation's processes, and was providing just the same old transactions with a different user interface and database.  He says:
"Implement it and magically you became "world class" was the thinking. It would get you Toyota's Lean and GE's Six Sigma - without the discipline and the investment. It was a fad diet. After ERP, we moved to SCM, CRM and other business applications."
Dennis asks if they were:
"selling snake oil?"
In Sainsbury's case the report suggests they outsourced their IT to a partner that seems to have had the appropriate expertise to manage the systems and infrastructure, but not enough understanding of either retail or the Sainsbury's business itself.  These all echo other stories we've heard of major IT projects that have gone astray.  But Vinnie's article has some important positive points.  He says:
"As I have written throughout my blog, "tiger teams" are showing huge payback from small, creative technology deployments. On the other hand, the payback from large enterprise applications in many cases has been questionable."
He spends a lot of time discussing business process outsourcing, culminating in the these words:
"Having seen IT outsourcing for 2 decades, I firmly believe in the adage  "make a process efficient before you outsource". With many business processes so broken just handing over to BPO provider will not magically fix them."
So what I draw from this is that big bang project implementations should be avoided and that small is beautiful. 
This is another indication of how the Software as a Service based solution's time has come.  The SaaS approach always starts from a small pilot, or "tiger team" approach, which is proven to work before the solution is rolled out to a wider audience.  The SaaS solution providers are also starting from the commoditised application areas, like accounting - we know how the debits and credits need to work.  The processes around how they need to be managed and reported, either for the client or the accountant, are relatively straightforward.  And unlike the Sainsbury's example, you are outsourcing the application and infrastructure management to a specialist 3rd party to relieve the IT headache, whilst retaining control of the business process and the data yourself.  That will avoid the snake oil or the need for angioplasty. 
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Friday, November 25, 2005

Sage research points to SaaS and better use of technology

Dennis Howlett tipped me off to an excellent piece of research carried out by YouGov and Launchpad Research for Sage, which analyses the responses from 486 accountants and 2301 businesses about the relationship between businesses and their accountant.  You must go and download/read the full report, but some key sentences which jump out:
  • 55 per cent of businesses felt that the working relationship with their accountant could be improved.
  • 81 per cent of accountants believe that they can use technology to increase the effectiveness and efficiency of the services they provide.
  • A third of businesses believe accountants can make better use of technology to increase the effectiveness of the service they offer.
  • 36 per cent of businesses and 37 per cent of accountants would use a hosted service if it meant that data could be shared more effectively between the two.
Some of the other frustrations listed in the report were to do with arguments over fees, and communication issues on both sides. 
Firstly, this highlights that use of Software as a Service solutions to share data between the business advisor and the client is already in the minds of a significant proportion of the audience on both sides.  The second point is that effective use of new technology can affect many of the communication issues raised here, whether it is use of CRM, practice management, extranets, document management or blogging.  As with anything to do with marketing and business development, the keys are relationship building combined with effective dialogue in all areas of the business.  Those companies that start to review these areas, move away from the traditional software approaches, and look for cost effective ways they can improve their interaction with their customer and business partner communities will be the ones who succeed.
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Wednesday, November 23, 2005

Timeout - consider starting a blog today!

Cartoon from PrawfsBlawg.blogs.comUse of the Internet gives an armoury of weapons for guerrilla marketing tactics for the small to medium business.  It is the key factor in the rise of the number of small businesses being created, but more importantly succeeding.  These days, you wouldn't think of starting a business without a phone, a fax and a website.  But what about the rise of the blog?  I think if you move the clock forward a few years, a company blog, or one written by the business owner/leader will be a normal, essential part of the marketing mix that will be in the plan without thinking about it.  I would suggest that you take time out of your busy schedule today and take some steps to starting one, so your organisation can be ahead of the curve.  If you've already started one, take some time to see how you could improve it.
The key thing about the concept is that it is a dynamic conversation with your target audience.  You get your message and ideas across in a way that the more static pages of your website don't do, and it invites feedback from your audience.  It doesn't have to cost very much, and you could even get started by using free tools like Blogger.  It will only cost you the time and effort to come up with the ideas, do the writing, and be disciplined enough to keep the content flowing.  However, if your passionate about your business, I'd be very surprised if you don't have enough material coming at you day to day that you'd like to comment on or use to emphasise your message.  You could even hire a specialist copywriter - contact me for some suggestions.
Obviously there are key things to get right, and mistakes you can make, and I'll be putting together some dos and don'ts, and pointers to resources to help over the next few days.  By coincidence Dennis Howlett, who inspired me on this topic in the first place, put a related piece on his blog last night.  This is part of the beauty of this media, because there will always be useful materials you can cross reference to reinforce your message.  His item confirms that his AccMan Pro blog is working, generating business for him. 
Note: I thought the cartoon was appropriate on the rise of the blog.  I don't know the author, but I found it here on PrawfsBlawg.
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Tuesday, November 22, 2005

White Papers with grubby edges

whitepaperI don't know about you, but I'm fed up with some organisation's attitudes to "white papers".  I regularly download white papers on a variety of topics, or to find out about what my competitors are doing and thinking.  Some are extremely good, but some examples I've downloaded recently from AccountingWEB campaigns and elsewhere have been little more than recycled sales collateral, with very little real content, or just a taster of an idea, where you need to get further in to the sales cycle with that company before you get the real answers. 
I'm convinced that well written white papers should be part of your marketing strategy.  However, you need to be confident enough to provide a good message and information on the topic, and trust that your audience will see you've got expertise in that area, and be compelled to pick up the phone, e-mail, or make contact with you.  My business partner and I have just written a series of white papers on issues around our business, and we pride ourselves that they provide interesting ideas and pointers to good reference sources - so far audience reaction  has been very positive. 
Thankfully we did a reasonable job based on our experience, but here is a good article I wish I'd read first, with advice on this topic that you should read: How to Write Compelling White Papers (Your Audience Will Really Want to Read).
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Sunday, November 20, 2005

Software's Eve of Destruction

I've been one of several contributors to an interesting debate with Paul Stobart, CEO of Sage, on the Software as a Service (SaaS) topic in the pages of AccountingWEB.  In the latest instalment Stobart denied that there was any great complexity in offering software as a service and argued, "The debate goes way beyond hosting. ASP/on-demand/SaaS is really a red herring to what's really going on".  The rest of us have been arguing that SaaS isn't just an alternative delivery mechanism, certainly isn't a red herring, but is a major shift that traditional software houses will ignore at their peril.  So it was interesting to read this piece by Kevin Kellerher on TheStreet.com.  Read the full article, but some key quotes are:
"The whole software industry is being disrupted by the software-as-a-service approach," says Gordon Ritter, an Emergence partner and a former vice president at IBM. Ritter says that the rise of Salesforce.com came shortly before the decline of Siebel, and its subsequent purchase by Oracle -- and it's no coincidence.
"Salesforce.com is taking down Siebel and pulling biz from it. You have a giant coming to its knees with a start-up disrupting them with a better value proposition," Ritter says. "We see new entrants coming in with this software-as-a-service approach. We see a giant industry with disruptive forces hitting it."
I was also interested to hear this article refer to "creative destruction", the expression used  by economist Joseph Schumpeter to describe his view of the process of industrial transformation that accompanies radical innovation. 
In the AccountingWEB article Stobart also said "For people to say we haven't thought through the implications is doing us a disservice".  I would guess that he does realise the disruptive forces that are at work, but can't say too much because of the various constituencies he has to keep happy.  Dennis Howlett has done a good piece on the cash crunch for Sage in making the business model switch.  Any traditional software company is going to be hard pressed to make the necessary changes to their model, stay profitable, and keep their original customer base and reseller community happy.  These are definitely both creative and destructive times for the software industry, and it can only provide better value for the customer as the new order is established. 
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Help with Wikipedia

Wikipedia logoAre you, like me, a regular user of Wikipedia as your favourite reference site?  If so, then this article Ten Wikipeda Hacks might help you get more out the experience.  I like the AJAX search, the use of A9 to search Google and Wikipedia together, and I hadn't found the printable article tool.  Very useful.
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Friday, November 18, 2005

Getting Things Done

Here's a suggestion on personal productivity.  Around 25 years ago I was handed the Time Manager system at IBM, and I've been carrying organisers and using various different approaches ever since.  I find that every couple of years I need to change system, and read a good book on the topic to re-vitalise my ideas and shake things up.  Recently I'm a convert to David Allen's Getting Things Done.  I recommend reading the book, the first line of which is "It's possible for a person to have an overwhelming number of things to do and still function productively with a clear head and a positive sense of relaxed control." 

GTD workflowThe diagram gives you a flavour of the approach, but one of the keys is that this system makes you deal with all that amorphous stuff that is bouncing around in your head and causing you grief at night.  Other ingredient's are the "do it, delegate it, defer it, drop it" approach to emptying your in tray, and a 2 minute rule on deciding what to do now and what to defer.

There are many fervent evangelists for the approach, which can be a little off-putting, but they've created some useful tools that you can find with a quick Google search.  My own personal system uses a combination of my Time & Chaos PIM, use of note flags in MS OneNote (my main vehicle for note taking) and lots of manila folders.  Whichever tools you decide to use, get the book, and give yourself an injection of organisation.
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SaaS, integration and AppExchange

One of the keys to success in adoption of Software as a Service will be ease of integration between web services.  Of course this has always been an IT issue, with users choosing either an ERP style path, or "best of breed" applications.  This is balancing a compromise on functionality versus the support and cost issues of integration.
Salesforce.com is endeavouring to avoid going the way of Siebel in their sector by approaching this issue with their AppExchange.  When they announced it a few months ago they likened it to the eBay and the iTunes of applications.  iTunes is an interesting comparison, but I'm not sure eBay is a particularly positive example.   The idea will definitely foster an ecosystem of add-on and complimentary applications, but I can't see that large volumes of software vendors will want to adopt the Salesforce technology platform as their foundation, in the way that they did with Microsoft to build client/server applications.  Other SaaS vendors are taking an open source style approach to extend their product, like JotSpot encouraging developers to create add-on applications for the whole customer community.
However, the better SaaS offerings will use SOAP, XML and good design to make it easy for customers to take the "best of breed" approach without the integration overhead that we had to live with using client/server applications.
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Stone Age vendors

I attended a NetSuite webinar yesterday called "How to manage a Software as a Service business".  It was interesting, but more an advert for how you could use NetSuite to run a SaaS business than offering innovative ideas and insights on the topic.  However, the main presenter kept contrasting SaaS companies like NetSuite and Salesforce.com with "the stone age vendors like Sage".  Far be it from me to describe the traditional vendors in such disparaging terms, but it did make me chuckle!
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Wednesday, November 16, 2005

(ya)Hoo are the World's top 10 websites?

I just read an interesting piece from the excellent Richard MacManus blog on ZDNet.  He's listed the top 10 sites by visitor traffic as recorded by Alexa, and it shows some interesting things:

1.   Yahoo!
2.   Microsoft Network (MSN) 
3.   Google
4.   Yahoo! Japan 
5.   Baidu.com 
6.   sina.com
7.   EBay
8.   Passport.net 
9.   sohu.com
10. 163.com

I find it surprising that Yahoo and MSN are ahead of Google, but what shouldn't be so surprising is that 4 of the top 10 are Chinese sites - Baidu.com is China's leading search engine.  Read more of his story here.

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Instant Intranets with Web 2.0

Jot CreateOver the last few months we have been in the set up phase of a new business partnership with a particular software author, with other agents in various parts of Europe at a similar stage of development.  I had been badgering the author to set up a partner intranet for us to facilitate communication and cooperation, but the author was more interested in getting on with their own developments - probably a good thing!
At our last partner meeting I decided to take the issue on myself.  It was on a Wednesday that I volunteered to create a partner intranet by the following Monday.  I decided to use JotSpot, the wiki based intranet company started by Joe Kraus.  I signed up, decided on my subscription level, and spent a couple of hours on the Sunday morning creating some structure to the site - pages on useful documentation, contracts, sales campaign ideas, a contacts directory, FAQs by topic, etc.  None of the 2 hours was anything technical, only content creation.  One of the beauties of the Jot wiki approach is that it's as easy to use as Word, but goes beyond standard content management systems and allows easy creation of a new page with a special word style.  Everyone has access to the facility, which fosters collaboration, and JotSpot has full version control so if anyone makes a mistake, or writes something we decide isn't helpful, we just roll back to the previous version of that page.  I can store any documents and files too.
Jotspot also has a library of plug-in applications, and nice features, like the ability to e-mail content to any page.  It is an ideal example of how the Web 2.0 and Software as a Service phenomenon is providing really practical and useful tools for business, if you know where to look.  We now have a working intranet, that was created in a few hours, was useful from day one, and costs us $9 a month for our community of 20 users .  You can try the service out for free at JotSpot.
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Monday, November 14, 2005

Management visionary Peter Drucker dies at 95

PeterDruckerThe preeminent business philosopher, Peter Drucker, died last Friday at the age of 95.  Harvard Business Review called him the father of modern management and he published more than 40 books over 60 years, including The Practice of Management in 1954, and continued to write, contribute, and consult well in to his 90s.  Drucker challenged business and labour leaders to find ways to give workers more control over their work environment.  He also argued that governments should turn many functions over to private enterprise. 
 
Many of us will have read his ideas and words, but I am indebted to Phil Wainewright for his piece on ZDNet where he talks about a prophetic 1996 interview Drucker did for Wired magazine. In it he likened the IT industry to the birth of the printing industry in the 15th century, where the early printers became great stars as the industry flourished.  Later in the next century though, these men who focused on the technology had become mere craftsmen, and the emphasis and plaudits had shifted to what we now call publishers.  Wainewright goes on:
"This is the historical precedent for what we now see happening in IT with the emergence of on-demand services, in which the emphasis passes from those who sell software and the tools to run software (Microsoft, Oracle, IBM) to those who sell new views on data and information (Google, Amazon.com, Salesforce.com and hundreds of other on-demand providers).  It's not the technology that matters, it's what you do with it that counts."
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Friday, November 11, 2005

SaaS is creating a storm for traditional software vendors

I've seen, been quoted in and contributed to a number of posts on the Software as a Service topic recently. With Microsoft's latest announcement, SaaS will begin to become a mainstream application option for general business, but there is still a lot of confusion out there over what it is, as well as company's changing to a SaaS style pricing model, when really there is a lot more to it than just delivering an existing client/server application on a hosted platform. Actually the concept isn't new. In 1961 the respected Computer Scientist John McCarthy was the first to publicly suggest (in a speech given to celebrate MIT's centennial) that computer time-sharing technology might lead to a future in which computing power and even specific applications could be sold through the utility business model (like water or electricity). It's just that technology has caught up to implement a great idea properly.

This IDC diagram explains some of the issues:

Software as a Service coverage

On the left we have the vendors with an existing client/server application designed for a one-to-one or one-to-few interaction, which they are endeavoring to deliver in Application Server Provider (ASP) style. This is either hosted from their own hardware or with an outsource partner, and web enabled with, maybe CITRIX or Terminal Server. They have to tackle the licencing issues of the original product and change their pricing model, but there is much more to SaaS than that.

On the right you have the true SaaS vendors, who have architected their product for the Internet and web services from the ground up, so that one-to-many is built in to the design. These vendors get the real performance, scalabilty and usability benefits. But even then, that is only part of this story.

For the traditional vendor the move to SaaS is a complete change of business model. When IBM announced, earlier this year, some special programs to support ISVs in making the switch Dave Mitchell, director of SaaS at IBM, said:

"From a business perspective, a company needs to think about revenue recognition, compensation for your sales force, routes to market, and distribution channels. From a technical side, companies have to consider service delivery, billing, and user support."
From a June press release, Treb Ryan, CEO of OpSource said:
"To make the transition to SaaS, software companies need to develop a new discipline around operational services, and it just isn't in their DNA. As a result, there is an ecosystem of SaaS enablers that has arisen, to help software companies deploy and implement SaaS."
Ryan's company is part of that ecosystem, along with others like ServePath and Sandhill. So if there's money to be made in assisting vendors make the transition, it must be a difficult prospect. There's a storm coming!
Whether it is a company the size of Microsoft, or a smaller mid-range vendor, many of the current players won't manage the transition. They would do better to start a new subsidiary with a different brand identity and the SaaS mentality embedded in the "DNA" of that company from day one.
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Wednesday, November 09, 2005

Meme Time (rhymes with Dream time)

Richard Dawkins - The Selfish GeneI've seen the word meme in a lot of my web 2.0 research recently, and even faux-meme. Now I'm not too proud to admit that this was one of those words where I knew what it meant, but couldn't have verbalised a definition or the history. So I decided to look it up. I now know that Oxford zoologist Richard Dawkins is credited with first publication of the concept of meme in his 1976 book The Selfish Gene. Memes are contagious ideas, all competing for a share of our mind in a kind of Darwinian selection. If you want to find out more, check out Meme Central.

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Monday, November 07, 2005

Capture the Imagination

Science of Aliens logoI took my kids to the Science of Aliens exhibition at the Science Museum in London the other day, and I was reminded of the power, and importance of capturing your audience's imagination.  One of the exhibits, Zone 3 - Almost beyond imagination, had a distinct WOW factor with all of the people around me.  This is where the museum, with the help of Channel 4 and Big Wave Productions challenged some of the brightest and best scientific minds to imagine life on alien worlds.  But their way of getting the message across was what made the difference, with a creative use of the same technology as interactive whiteboards or interactive projectors.
This zone has a series of tables, with the alien world projected on them from above.  Strange creatures stalk about amongst the planet's landscape.  You touch one, and a tabbed window opens up with pictures and information.  As you page through learning about the alien's habits, there is still a link back to your alien, prowling around, exhibiting the behaviour or adaptation that you are just reading about on the tab - say hunting other people's aliens!  Now the interesting thing here is that, from a technology point of view, this is nothing special.  The interactive projector technology exists in many schools and colleges.  The graphics programming must be pretty rudimentary when compared to the stuff my son buys for his Playstation 2.  But the application of the technology in this environment made the subject matter seductive.  The combination of novelty, fun and simplicity of the approach meant that the audience was reading and learning about the subject, in a way that wasn't happening with the static display cards elsewhere in the exhibition. 
I think you'll begin to see more of this type of presentation, particularly for exhibitions, or at point of sale.  I found this company, arcstreamav, who has applied the idea to projecting on the floor for advertising.  Take a look at this page on their site, as it has a nice video showing the principle rather nicely.  However, the key lesson for me is not the technology, but the message itself.  Wherever you are trying to get your message across, there will be standard technology that you can apply that might cost a little more in time and effort, but will help you capture your audience's imagination much more effectively than just the words on the page (screen or display card).  The trick is to take a step back and think differently.
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Saturday, November 05, 2005

Are Open Source databases more secure?

Open Source Software is gaining acceptance, particularly in the arena of infrastructure and development platforms. Many medium and large corporations have a growing number of Linux implementations, the Open Source operating system started as a project at the University of Helsinki in 1991 by the Finnish programmer Linus Torvalds. More often than not this is because it was the cheapest way for IT to develop test systems, and then the usage has grown from the test environment to operational systems, but the pace has increased as the platform has been embraced by major suppliers like Dell Computers and IBM .

Interest is growing in Open Source databases and security is a large part of the reason why, according to a recent US survey by Evans Data. While 85 percent of the 400 companies surveyed said proprietary database servers were compromised at least once in the last year, only 9 percent of those using open source databases reported the same. The study also finds that use of MySQL, the popular open source database, increased over 25 percent in the last six months and that 44 percent of developers are now using it. Interestingly, the suggestion is that the open source community can respond more quickly to vulnerabilities than can developers of proprietary software. Factors like these are only going to increase the pace of adoption when they come to the attention of safety conscious senior executives.

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Friday, November 04, 2005

Is Skype really worth $4.1 bn?

Skype logoNow Skype is a great product. I use it myself on a daily basis, and there is a growing community of us - 179 million downloads so far! People are beginning to put their Skype ID on their business cards.

Having worked for traditional, well managed software companies, who slug it out year on year and produce healthy, regular profits of, say, 10%, but see their share price remain in a relatively steady state, I am constantly amazed at the valuation of some new technology companies. Like many I saw the headline number for eBay buying Skype last month at $2.6 bn without really thinking about it. But this is product which most of us download and use for free, and some pay modest amounts for extra services like voicemail and Skype Out to call external numbers at very cheap rates. Skype's estimated revenue for 2005 is $60 million, up from $7 million in 2004. How do these numbers work for eBay? But it gets even more interesting. Most will have missed the fact that, if certain performance targets are met, eBay said it would pay an additional $1.5bn to Skype over the next three years. What do the management at Skype have to do from a starting point of $60m revenue this year for the next three years to get the $1.5bn bonus? I know a few sales guys who would fancy that commission plan.

Now the usual rules of brand marketing will apply, and although Yahoo, Google and Microsoft have jumped on board with equivalent products, Skype are there first in the mind of us consumers. But is Skype worth that much? I don't believe we have entered a bubble era like the Dot.com boom, but the web 2.0 world will occasionally throw up big winners like this.

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Thursday, November 03, 2005

Is Microsoft nailed to it's perch?

Bill Gates announcing LiveLast month Microsoft reorganised in to 3 divisions. Analysts predicted this move was a bulwark against Google, and that it signalled an accelerated commitment to hosted-software services. Tuesday's announcement from Bill Gates is the result, and it said that it is more important than the .NET announcement of 5 years ago, or even the Internet Explorer announcements of 10 years ago that put Microsoft head to head with Netscape in the browser wars. I would suggest that it is at least as important as these things, and I agree with the many that also suggest that the announcement will have major implications on the future of Microsoft, and not in a positive way! The key thing that it does do is legitimise the movement towards Software as a Service (SaaS), as well as "free" Open Source Software. Although Microsoft is following in the footsteps of Salesforce.com, Google, Yahoo and a host of smaller providers, this move from the giant will put the SaaS concept on the map for the general business community. Amazingly, some analysts, like Drew Brosseau of SG Cowen, suggest that this is a positive move for Microsoft because of the extra revenue streams addressed by Windows Live and Office Live. I just don't see that. I agree with the likes of Dennis Howlett and others who see the conflict this move is going to cause between these offerings aimed at the consumer and the small business, and the existing licence revenue from the corporate sector, as well as the VAR community who live off their slice of that revenue. What's in this announcement for them? How is the rest of Microsoft going to move from a business model based on licence sales to one based on subscriptions and advertising. There are other factors too. Windows Live overlaps with the current MSN and so some of the revenues generated won't be incremental, they will actually come from displacing existing MSN revenues. And will users flock to the new services in droves?

Windows Live does not seem to be anything new:

Live.com serves as the personalized starting point for Windows Live services - but isn't that like my Google or Yahoo tailored home page?Windows Live Mail is a new, global Web email service. No it's not, it's just the next version of MSN Mail and just another choice from Gmail and Yahoo Mail.Windows Live Messenger provides instant messaging, file and photo sharing, PC-based calling and more. Or in other words an upgrade from MSN Messenger to catch up with Yahoo, Flickr and Skype.Windows Live Safety Center is a Web site where users can scan for and remove viruses from their PC on demand. Isn't that like MacAfee or Norton?Windows OneCare Live, a PC health subscription that helps protect and maintain PCs via an integrated service that includes anti-virus, firewall, PC maintenance, and data backup and restore capability. More of the same Norton and MacAfee, plus backup like Storegate or Connected.comWindows Live Favourites is a service that enables individuals to access their Microsoft Internet Explorer and MSN Explorer favourites from any PC that's online. Yes, just like I already do with Yahoo MyWeb, or Del.icio.us.
Office Live at least has some potential:
Office Live Basics helps a small business establish an online Internet presence including a domain name, a Web site with 30 MB of storage and five Web email accounts at no charge through an advertising-supported model. Office Live also provides a set of subscription-based services with more than 20 business applications to help automate daily business tasks such as project management, sales and collateral management, customer management, expense reports, time and billing management, and secure internal and external collaboration - all built on Windows SharePoint Services. So we have some old, some new, and some threats to the current crop of collaboration, document management and CRM tools, but nothing you could call dramatic.

Tell me - how is all of is this going to produce revenues dramatic enough to replace the drop in both corporate and mid sized licence revenues? How are the MS VARS going to survive as this accelerates the move from traditional towards SaaS based solutions from all suppliers, not just Microsoft? At the moment I can't see this as anything but the start of a slow and steady decline for Microsoft. It could take quite a while, but how soon before we have an ex-Microsoft on our hands?

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Wednesday, November 02, 2005

Take a look at Microsoft "Live"

More about what Windows Live is here.

The beta of Windows Live can be found here.

You can sign up for Office Live, to be released Q1 2006, here.

The key slide from Bill Gate's presentation that explains Microsoft's new view of the world is here. Thanks to Niall Kennedy.

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Microsoft embraces Software as a Service with "Live"

Bill Gates and Ray Ozzie announced yesterday a major shift in Microsoft strategy towards web based applications supported by advertising and subscription business models. More analysis from Business Two Zero will follow, but first some of the facts. These words from Eric Auchard at Reuters (or read the full story):

Outlining what it said was its biggest strategy shift in five years, the Redmond, Washington company told a meeting of analysts and reporters that it would deliver many of its key products and services as online services as well as selling subscriptions or licenses for software installed on computers.Windows Live and Office Live will give users some of the basic features of the software giant's two most-profitable products, but without the complexity of installing and maintaining the software in computer hard drives."We are trying to put a 'services plus software' mentality into many many of the product groups inside Microsoft," said Bill Gates, Microsoft's chairman and chief software architect.Microsoft also said it planned to fold many well-known products in its MSN division into a new brand called Windows Live. The move will combine its instant-messaging service, a new online e-mail service replacing Hotmail, Web security, data storage and other features, all available via the Internet.The software giant is looking to defend its mainstay Windows and Office software franchises by borrowing from ideas used by challengers such as Google, Salesforce.com, WebEx, Yahoo Inc. and scores of start-ups.

Analysts attending the meeting said Microsoft demonstrated it clearly grasps how the industry is shifting to deliver software as Web-based services rather than isolated programs. But these moves are preliminary and fragmentary, they said.The new initiative also reflects a recent company-wide reorganization at Microsoft that put MSN under the Windows division and put Ozzie in charge of Microsoft's efforts to deliver software services over the Web.

These words from Yardena Arar, live from the event on Today @ PC World:

Now he's talking about Windows Live and Office Live. The former, Windows Live, is not Windows. Rather, it's "Internet based personal services to bring together your digital world." But Windows Live isn't MSN.com either. It sounds basically like a new Web portal.Office Live sounds similar, but business focused and easy to integrate with Microsoft Office (but you don't need Office to use Office Live). Some of these Live services will be free, others will be subscription-based. Gates explained that the Live platform will help Microsoft deliver a broad range of technologies to users.

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Tuesday, November 01, 2005

Solutions - traditional, sassy or sweet?

One of my business partners is in the process of implementing a new CRM solution. While I was debating with them the merits of the particular solution they've chosen, I started to think about the technology choices available to the organisation today. For most application areas we are beyond the make-or-buy decision, as there is a huge choice ofstandard offerings, but there are two major technology shifts that mean the buy choice can fall in to 3 categories. They are traditional licenced software, Software as a Service (SaaS) and Open Source Software (OSS).

Historically, companies were required to buy, build, and maintain their own IT infrastructures despite exponential costs. Even a small business with a few PCs needs to find somebody in their organisation to take on the role of the IT Manager – to install the applications, manage the new versions that come from the author at regular intervals, to make sure the systems and data are regularly backed up and stored securely off-site, to think about a disaster recovery plan – all the necessary technical and management issues that can rise to a significant overhead in any company and need a large team in bigger organisations. Software as a Service effectively redefines the software deployment model from packaged applications with upfront licensing fees and lengthy implementations to one that constitutes a dynamic, “pay-as-you-go” Internet delivered service relationship. This shift fundamentally changes the assumptions, relationships, partnerships, and value proposition between software vendors, clients & end-users, and third-party service providers.

According to an AMR Research study, over 80% of CRM software deployments either fail to add value, encounter significant adoption issues among end-users, or fail outright. Maybe this is why Salesforce.com is one of the companies at the forefront of the new wave of SaaS providers. An SIIA (Software & Information Industry Association) and Tripletree report last year showed a comparison between two successful CRM projects for 500 user systems. The traditional approach with Siebel cost $8.8m, whilst the new approach with Salesforce.com cost just over $1m. Although the difference will be less pronounced for smaller projects, the payback for a SaaS CRM system is typically in the 3 to 6 month timeframe, compared to 12 to 18 months with the traditional approach.

But the situation is complicated, in a good way, by the possibility of a third option - the OSS route. An option to compare with Siebel and Salesforce.com is an open source company called SugarCRM. They have a typical business model for this field. You can download the free version of the software, and tap in to the development community and message boards for help and advice, or even track down some consulting help from the community or SugarCRM themsleves. In this instance, I have a business partner who integrates the solution to their content management system, so they have the expertise, and a days consultancy from them could give a working installation. This type of company would even host it for me - price dependent on the capacity I need. Beyond the open source download, there are some commercial options with extra features which I can licence, or even buy as a Software as a Service offering for a monthly charge. Depending on the type of application and the business risk, you can argue pros and cons for the SaaS or OSS route, but the writing is on the wall for the traditional software licence option.

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