Poohwinn | Technology . Design . Creativity . Web2.0

Saturday, January 24, 2009

Encouraging SaaS takeup

The economic crisis that we are facing today may well benefit the SaaS market. Companies are now more conscious and careful about cashflow and will be less willing to invest high capital expenditure on software licences. Besides, one striking benefit of SaaS is the scalability and low risk of technology obsolescence since the risk is shifted to the provider. But, to all the SaaS providers out there, you gotta really understand that SMBs are usually less tech-savvy and have little IT resources at their disposal. In fact, many of the smaller SMBs are still relying on paper and pencil or basic excel spreadsheet to do their invoices and timesheet. To increase the adoption rate, SaaS providers should offer free training for first time users regardless how idiot-proof you think your application is and always offer free trial with no obligation. In addition, customer testimonials are always good to have. You can also see how to influence the government policies or work with business associations to provide some incentives to encourage the SMBs to adopt SaaS.

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Thursday, January 22, 2009

Why Apple iPhone Succeeds and Other Fail

Today Nokia announced that its profit for the fourth-quarter has declined by a whopping 69% and sales declined by 19%. Every $1 drop in revenue translates to 3.6x drop in profit. That's very very steep decline. It's a double whammy for Nokia. It lost market share at the lucrative high end and sales did not fly during the holiday season in the growth markets such as China. Nokia has also invested alot of money into the Come with Music initative. The price differential for a phone that has Come with Music and one that doesn't can be as much as $100 or more. I think in the hard times like today, it's going to be a uphill battle to squeeze that incremental revenue from consumer. Again, not surprisingly, about 1,000 job cuts were annouced. Just a week ago Motorola announced 4,000 layoffs and it would only roll out 12 phone models in a year. For smartphones, it will only produce for Android platform and the first Android handset is slated for Q2 2009 in the US.
The big software giant microsoft is not spared either. Its earning fell in second quarter on the back of weaker sales, resulting in earnings of 47 cents a share against analysts' estimate of 49 cents a share. 1,400 people were let go immediately and upto 5,000 in total are expected to be laid off.
Well not all is bad news. Apple had reported stellar quarterly revenue and earnings in Apple History. Its ipod sales set new record. This is a very good set of results considering that Apple had to amortise the revenue and costs over the economic lives for iPhone and Apple TV. To quote Steven Jobs, "Even in these economically challenging times, we are incredibly pleased to report our best quarterly revenue and earnings in Apple history—surpassing $10 billion in quarterly revenue for the first time ever."
Eversince Apple opened up its iPhone Appstore, Google Android, Blackberry and now Palm have jumped onto the bandwagon. I'm less optimitic about the takeoff for Blackberry Application Centre since most Blackberry users are enterprise users and generally companies have strict policies on what applications can be downloaded onto company handsets. Besides, Blackberry users will not be the right target segment for games and entertainment which are the ones that have the most downloads on Apple Appstore. Google Android is seen as the alternative to iPhone. The difference is that there is only one iPhone maker and that's Apple. Whereas we can expect more Android handsets by various handset makers in the future.
I think Nokia is making a strategic mistake to pump millions of dollars into its music store. No doubt that it's more and more common for people to play music on their cellphones but will people want to pay over $100 for a subscription per year to download unlimited number of songs (with DRM) at this economy? Wired.com recently wrote an article on the 5 ways the cellphones will change how you listen to music (http://blog.wired.com/business/2009/01/six-ways-cellph.html) and I think Nokia should reconsider their business model.
In the past, Microsoft and Blackberry dominated the smartphone segment. Nokia had some success with its E series too but all of these players were only focused on the exchange email synchronisation. What Apple succeeds and Nokia or Motorola fail is to revolutionalise the way people use the phone. The ability for each iPhone user to do "customisation" on his phone by installing apps that he finds useful is a very sticky proposition. Besides, the affordability of the apps only serves to reinforce the value proposition. This is also why Apple delivered an outstanding set of results where others fail. Let's see whether Palm manage to revive its fortune with Palm Pre.

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Saturday, January 17, 2009

The Mobile War

Recent Palm Pre launch has created quite a stir. I was once a Palm fan. At that time you could only synchronise your emails by putting the Palm onto the cradle and connecting it to your notebook (oh my, I still remember that I used a Tohsiba Protege then). Then as smartphones took the scene by storm, Palm faded. Sad, but the reality was that the once-upon-a-time innovative company could not stay ahead of the curve. Symbian-based Mobile phones (mainly Nokia), Windows Mobile phones, Blackberry took the lion share of the smartphone devices market until...we all know, Apple iPhone came along.

Apple iPhone didn't immediately target the enterprise users when it was first launched. It targeted the lifestyle users who didn't really care about having their corporate emails on iPhone. That was a smart move. The addressable market for lifestyle users was much bigger and competition was less stiff. If Apple were to target enterprise users from day one, it would be attracting too much attention from Microsoft and Blackberry. It is a much wiser market entry strategy to build up a bigger base of customers by addressing the lifestyle user and leveraging on Apple's strengths in user interface and integrated entertainiment apps and its already big base of iPod fans. With the launch of iPhone 3G, Apple upped the ante with the launch of appstore. It's nothing revolutionary. Yes, you can already buy symbian or windows mobile applications today. But have you wondered why it never really took off in a big way? It never quite reached the tipping point that iPhone created. I'm not sure if the fact that iPhone 2G was jailbroken to allow the installation of third party apps through the Installer (for those who jailbreak your iPhone, you should be quite familiar) had accelerated Apple's plans to launch the appstore but I would say that the strategy of allowing third party to develop apps is definitely one big factor to increase the stickiness. It is definitely a plus point that most of these apps are priced at very affordable prices - at price point that most consumers won't mind paying to try out. Prices can be low because of the the large base of iPhone users worldwide. The phone has evolved to become a very personalised piece of device that is more than just making phone calls or texting someone. With mobile broadband through WiFi or HSPA, I can now run web-based applications with just thin clients on my phone. I can access my computer easily to retrieve files when I'm away from my computer.

So, the trend for mobile is clearly on the apps side. Nokia has its Ovi. Blackberry has its Application Storefront. Google has its Android Appstore. Now Palm is launching an appstore for its Palm Pre. The fight will be on the installed base. The more apps a user installs on his phone, the less likely he's going to switch out to another phone device, especially if there are one or two killer apps that the user must have. The market is now beginning to heat up. Today, most apps are non-enteprise. I can see that as companies become more receptive to cloud computing and web-based applications, mobile enterprise apps will be the next wave. As aptly put across by Gartner, "SaaS adoption is being driven by businesses' pursuit of cost savings and quicker implementations, as well as wider availability of high-speed Internet connections....initial concerns regarding the SaaS applications' security and reliability have faded somewhat as the model has matured"

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Sunday, January 4, 2009

Book Summary: The Mckinsey Engagement

It has been a week since my last post. I am savouring the last day of my long break before I report back to work tomorrow. In the past one week, I had the opportunity to catch up with my reading.

If you are interesting in management consulting, you may be interested the book titled "The McKinsey Engagement: A Powerful Toolkit For More Efficient and Effective Team Problem Solving" by Paul N. Friga (http://snipurl.com/9ftfd)

The author uses TEAM FOCUS as the acronyms for the framework discussed in this book. While the contents make sense and will be usefule as reference for team problem solving, I am not sure if this is THE Mckinsey engagement approach. It seems rather generic. I should caveat to say that the author did point out that this book is not endorsed by Mckinsey.

In a nutshell, TEAM FOCUS refers to the following:

A: Assist
M: Motivate

F: Frame
O: Organize
C: Collect
U: Understand
S: Synthesize

I will elaborate a little more on what the author means by each of these acronyms.

Talk (T): communicate constantly, listen attentively and separate issues from people
Evaluate (E): discuss group dynamics, set expectations and monitor results, develop and re-evaluate a personal plan
Assist (A): leverage expertise, keep teammates accountable, provide timely feedback
Motivate (M): identify unique motivators, positively reinformce teammates, celebrate achievements

Frame (F): idenfity the key issues, put into profitability issue tree, business issues, information tree, decision tree, articulate the hypothesis
Organize (O): develop process map, content map, story line
Collect (C)- collect ghost charts, interview guide, interview summary, secondary sources
Understand (U): undestand implications summary , insight -titled chart
Synthesize (S): obtain inputs from various stakeholders and ensure buy in from client and provide a final report

If you read enough of books on Mckinsey, you will remember that a key principle that all consultants must internalise is the MECE (mutually exclusive collectively exhaustive) framework. MECE means that when you break down an issue, you must consider be able to group the various underlying factors into distinct buckets. There must be no overlap of ideas across groupings and all the possible factors must be accounted for in one of the groupings.

If you are more into logic and thinking process, I would recommend you to read the book titled "The Pyramid Principles" by Babara Minto (http://snipurl.com/9fteb). If you read Japanese, you may wish to read the book "ビジネスカの磨き方" and "実戦!問題解決法" by Kenichi Ohmae. I have read almost all the books by Kenichi Ohmae. I first read his book "The Mind of the Strategist" more than 10 years ago. My key takeaway from his recent books is that what's important is the ability to harness your logic thinking skills for problem solving and develop your own thinking style.

Happy New Year!!!

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Saturday, December 27, 2008

Cloud Computing. Areas to Look Out For.

In my earlier post, I gave a short review on the Animoto iPhone app. Animoto is a classic example of why cloud computing works best for them. Animoto was first made available on Facebook in April and within a week, the company had to increase the number of servers with Amazon's Elastic Computer Cloud (EC2) from 50 to 5,000. To a startup company, it is going to be overly capital intensive to invest in so many servers. Besides, It will also be a hasty decision for the company to buy the servers and is also tough for the company to get the servers running up quickly due to the set up and installation required. An opex model where company only pays for what it uses will be a better business model for a start up like Animoto until it establishes its baseline of usage.

There is a recent good article by Computerworld that talks about cloud computing. I will highlight the key points, coupled with my own views. 

1. As illustrated in the Aminoto's case, cloud computing can bring savings to a start up who has yet to establish a usage baseline. Cloud computing also offers scalability and redundancy. One point to note is that it's easier to scale up but the company using cloud services need to be more careful when scaling back as there can be some residual processing resident in the servers that are being switched off and this may cause disruption to the service. The company needs to do the proper clean up first before scaling back. 

2. Cloud computing providers need to create different types of pricing models so that it can cater to different needs. For example, the article suggests that for data that has not been accessed in more than 6 months, the provider can move to a slower form of media and charge a lower price for it. The view is that it's not economical to store data in the cloud over a long period of time. Shop around and choose one that best meets the needs but not sacrificing future scalability (we all think big right?!) Check if the company provides detailed billing or audit report for verification, if the need arises. 

3. Cloud computing is becoming popular but the performance may not be uniform across various geographies. Getting SLGs from cloud computing provider is important. In my view, it is also equally important to understand the experience of the cloud computing providers. What is their expertise and their main clientele base? What is the customer base's geographical composition? What is the scalability and redundancy plans and where are their data centres. Another important note is to understand their bandwidth upgrade policies. 

4. Have back up servers for the mission-critical applications in the event of a service disruption. The idea is not to have your business totally disrupted if there is a complete outage of the cloud. If you can't afford the servers, perhaps you should diversify your requirements across multiple vendors. 

5. If you are subscribing to an application provider that is running the application on a cloud, find out whether it is a native 'cloud' application or it is a thick client app that is made to fit into the cloud. If it is the latter, understand what are the restrictions between a 'cloud' app and a thick client version.

Courtesy of Computerworld, the chart below also shows you the potential of IT cloud services are likely to be in the area of collaborative apps, IT Management apps and Personal / Biz Apps. THe survey participants characterised current an future usage - on a scale from 1 (none) to 5 (widespread) - of a variety of IT cloud services within their organization. The chart shows the percentage of respondents toward the higher end (4 or 5) of the usage scale now and / or who will be there in 3 years. 

Just in case you are wondering what is cloud computing or what is cloud computing isn't. Computerworld article lists down 4 different styles of cloud computing offerings:

- Software as a Service (SaaS): special-purpose software made available by a third party over the internet with usage-based pricing model e.g. Salesforce.com, Zoho (my own personal view is that SaaS is not cloud computing but rather a form of cloud service).

- Platform as a Service (PaaS): An integrated software environment for whcih systems administrators and developers can build, test and deploy custom applications. E.g. Google Apps Engine

- Infrastructure as a Service (IAAS): A service that providers the core computing resources and network fabric for the cloud deployment e.g. Amazon's Elastic Compute Cloud

- Core Cloud Services - standalone components built on cloud platforms that can be woven into cloud applications, such as billing systems management and storage e.g. Microsoft BizTalk, Right Scale. 

Here's another article that tells you what cloud computing isn't. 

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Friday, December 26, 2008

Photoshop.com: Do I like it?

I tried out photoshop.com. Overall, I'm quite happy with the application. The interface is clean and easy to navigate. On the left side bar, you can find your photos or albums and the links to the 4 key sites - Picasa, Facebook, Flickr and Photobucket. You can open and edit the photos that you have saved on these sites within photoshop.com. After you have finished editing, you can click and drag the file into any of 4 sites or choose to download and save it locally on your hard drive. If you choose to download (see the menu bar at the bottom of the screen), you can save in different formats (original size, email/web size or thumbnail size). Making photo edits is simple for novice like me as Photoshop.com provides different selections, showing the range of effects applied on the photo. Generally speaking, Photoshop.com provides more options for photo edits compared to websites like Flickr. You can also choose to put together the photos in a slideshow format or create an album and allow access to friends by emailing them a URL. However, it's also lacking in some features such as geo-tagging and does not accept videos, unlike Picasa or Flickr. In addition, free user has only upto 2Gbp of storage space. 

Given the growing popularity of camera phones including iPhone, Photoshop.com should have a mobile site that is accessible via phone. It would be ideal if Photoshop develops a similar app for the iPhone, given that more and more people are using iPhone to snap and upload the photos immediately to their own blogs. In addition, Photoshop.com should also look into linking its site to other mobile photo or social-networking sites (which also means that Photoshop.com should have geo-tagging capability). 

If I were running Photoshop.com, I would look into partnerships in the infrastructure layer. Over time, I believe more features will be added to Photoshop.com, including the support for videos and eventually making it into a social networking site. To provide better user experience, Photoshop.com can look into partnering with players which could provide grid/cloud computing and data centre space as well as with handset makers for the mobile site tie-up (if Photoshop.com has a mobile site). Many handphones today are preloaded with applications for access to Facebook or Flickr. In exchange, Photoshop.com provides the eyeballs. To boost its awareness, it may be useful to get a few credible users as evangelists of the product (or perhaps have a twitter account). The site can also be linked to its forum page directly to encourage more interaction and exchange among the users.  

See the full gallery on posterous

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Thursday, December 25, 2008

Review of Edward de Bono's New Book - Six Frames

I just finished Edward de Bono's new book, Six Frames (http://adjix.com/2tfc)

Six Frames is a set of tools for thinking about Information. These Six Frames are:

1. The Triangle Frame - to layout very clearly your purpose of requiring a piece of information. Is it for a specific need? For your general interest? For confirmation? Edward de Bono says that it's is important to be clear with (1) what is the purpose of this information; (2) why do you need this piece of information; and (3) and where to look for it.

2. The Circle Frame - to review the accuracy of the information as the degree of accuracy will affect the value of the information. Accuracy of the information can be influenced by the following factors: (1) authority - is the source credible?; (2) internal checking - are there inconsistencies in the information? (3) comparative accuracy - counter check the veracity of the information against other sources; (3) adequate accuracy - is the information sufficiently accurate in spite of some minor errors; (4) doubts - this will inevitably limit the accuracy of the information but may not totally eliminate the value of the information.

3. Square Frame - is there any biasness in the information? Are the views balanced or one-sided? Is there other way of looking at the information?

4. Heart Frame - to direct attention to matters that are of interest to you. This could be general interest or special interest due to the work that you are doing.

5. Diamond Frame - what is the value of the information? In this book, Edward de Bono also links the Diamond Frame to his 6 Value Medals
    Gold medal: human values and values that apply to people
    Silver medal: values that apply to an organisation or entity
    Steel medal: values relating to quality
    Glass medal: values relating to innovation and creativity
    Wood medal: values concerning the environment at large.
    Brass medal: perceptual values. How would this be perceived?

6. Slab Frame - this is the final stage where you lay down your conclusions using the information that you have to support the conclusions.

While I think this book is certainly not as interesting and insightful as his previous books, it is nonetheless a useful guide for those who need a quick framework for thinking about information. We also have to be cognizant that not everyone will have the same piece of information and it is possible that with different sets of information, different conclusions may be reached. If the conclusions are vastly different, it may be worthwhile to go back the process once again and to see if we have under-utilised any of the 6 Frames? For example, did we only collect information that only support our hypothesis or did we ignore the doubts cast by the information?

Having filtered the information throught the right framework is not enough. It is equally important that we are able to communicate our thoughts. I would therefore recommend that you consider picking up some books relating to story-telling in an organization setting. Two books that I have read are: What's your story (by Ryan Mathews and Watts Wacker) (http://adjix.com/u432) and The Secret Language of Leaders (by Stephen Denning) (http://adjix.com/u2q3).

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