Mobile Device Management - The HOT application for 2012

Are you an IT VAR looking for a new technology area in 2012 in a explosive growth market with great opportunities for value added services? Would you also like to get a piece of the action in the high growth market of tablets and smartphones and wrestle it free of the mobile operators and their mobility partners? Are you looking to exploit your knowledge of Cisco networking, HP wireless devices and Microsoft applications to leverage this market?

Come on down, the time is perfect.

Bradford Networks are the leading provider in Mobile Device Management solutions specifically for the BYOD (Bring Your Own Device) market and they have a specialised offering for Managed Service Providers too.

This is one of the hottest technologies in one of the hottest markets in 2012 and it bridges the technologies and market opportunities of networking and mobility.

For more information, call +44 (0)207 193 2356.

The Social Network is on Holiday

It's funny, isn't it. We even take a holiday from blogging and Tweeting at Christmas time. Now why would we do that?

Just out of morbid curiosity I turned on my Twitter this morning to see that the number of Tweets since Xmas Day was minimal. Emma James, the Bucks Naturist and all round fitness superstar was chirping like a bird about her local area, Shane Warne was lovey-doveying about Elizabeth Hurley, 'Bumble' was watching Poirot, Aggers was watching Downton Abbey and Rory McIlroy will be in Thailand with his gorgeous girlfriend. Mercifully the usual rubbish was missing and I could actually read some things that were vaguely interesting.

But blogging was down too as everyone focused on Christmas festivities, eating and drinking. It's the way it should be, I might think. But why would people suddenly be quiet over the Christmas period when they probably have more to say than at any other time? Why would they forsake their computer or phone when it is only yards away?

We know that roads are clearer, we expect it. We know that families are together - but so what? Tweeting takes just a  second.

Wait a minute. The workplace is empty. 

Ah, so that's it. We Tweet and blog only when we are meant to be working, is that it? We take a family holiday and we stop. Now isn't that a thing?

I can only guess at the volume decrease but if my Twitter was registering over 10% of the normal volume of Tweets then I would be overcalling it. The same for blogs. 

So what, I hear you say. This is serious, is my reply.

From an advertising point of view, TV takes enormous share at Christmas time as viewing figures go higher so there are some incredibly expensive shows to sponsor. Advertisers make money at Christmas time - in fact, any time when families are together. Weekends, national holidays etc. 

It's the exact opposite for social media. I have no idea about Facebook as it is a noise to me but for the ones I use, I see no activity at all. That will be for the best part of two weeks.

That's a serious consideration in this valuation tomfoolery. Social media is at its peak during working hours and non holidays. It's value for users seems to be at its height at times when they should be working.

If an employer is reading this, they might consider filtering all social media sites from employees on their networks. It's a productivity theft system. Or they might have a light bulb above their heads and think, 'How can I turn this to my advantage?'.

But for those whizz kids and their investors at these social media sites, I might just be a little concerned that such a dramatic drop occurs at such times.

Happy, Happy Christmas everyone.

From Crackberries to Facebook Anonymous

Addiction to technology or devices is reality even if much of it is in the virtual world. That sounds either trite or daft or both but I think you know what I mean. 

There was a time when you could see the bowed heads of grown men staring into their laps apparently fiddling with their genitals - what a relief when you found out that the reason they haven't being paying attention was because they were playing on their Blackberries. Imagine our surprise to find some weren't - but that's another story.

In an office of someone I know, the secretary in the small team used Facebook so much during the day to communicate with few friends that her manager, sitting next to her and watching her habits, sent her a Facebook message to make some tea. The person in question without saying anything simply got up, made some tea for everyone then sat down and resumed her Facebook 'work'. The manager sent another message to thank her and she even responded to that. It was the tail end of what had been an unhappy employment experience for both parties.

I worked with a company where they had 90 people on a main sales floor and everyone of them used Facebook to communicate to people not more then a few feet from them. It was probably the most unproductive sales team I have ever come across.

This isn't necessarily an age thing as older employees are as likely to be heavy Facebook users as younger ones but I am sure the statistics will prove a point about the new generation of workers. Many companies are starting to formulate policies on use of such services like Facebook, Twitter and even LinkedIn during business hours. We have already had a landmark legal case where an employee who used LinkedIn for work was found to have violated client confidentiality and non compete clauses in their contract of employment by simply using the same LinkedIn account at a new firm.

But addiction is more than that. Genuinely, many of the new social media applications are fast becoming like the chat sites at the turn of the millennium where many employees got sucked into nattering inanely online during work hours. Instant Messaging is still an issue. For many companies, the recording of IM messages remains a taboo subject but should there be legal cases surrounding such communications such as in employee tribunals or libel actions, these forms of communications are just as likely to be called as evidence as emails.

We have seen the use of social media grow to make legal issues complex such as the 'outing' of identities in super injunction cases and the jurisdiction of law is not at all clear. But addiction comes in many forms and it could be argued that simply believing that what you say in 'private' on Facebook, Twitter or any other form of interaction not controlled by your company directly, is your own business.

It is not at all clear whether that is the case or will continue to be so. There was a recent case of a Dutch website which hosts a community of kids and teachers and some of the anonymous accusations against students and their teachers have been far beyond good taste and into the realms of libel and slander. The site in question basically says that you should comply to the law of the land where you are based when using the service. Which sort of makes a mockery of Terms of Service. It also means that legal issues are reflected at the source of the issue.

Addiction to social media has relevance beyond non-productivity in work time which is a huge issue in itself but it has potential deep legal ramifications. As users naively continue to chirp away merrily on any number of internet hosted sites they are potentially storing up some problems.

What they say while sat at work, during work hours may never be as private and free to say as they think. 

Here's gut feel prediction for 2012, I think one or other of the major social media sites may get involved in at least one corporate case where an employee has compromised the professionalism of their company by saying things they shouldn't have - either about fellow employees or managers or rival firms. I predict we may get a few landmark cases on this in the UK soon.

How do you prevent it? Well I think you can have company policies and that's fine for those people who are fully attached to the corporate network. But for those attached as guests or accessing via mobile telephony via tablets or smartphones there may be more problems. In terms of weaning people off such social media addictions, I honestly think we'll see some Facebook Anonymous groups popping up in the not too distant future.

The world is changing fast thanks to the enhanced ways we have to communicate. That may not always be a good thing. There is such a thing as anti-social networking and there is such a thing as lack of productivity.

I think both of these things will become bigger issues in the next year or two.

Merry Christmas! You're A Security Threat

If you are the proud recipient of a shiny tablet or state of the art smartphone this Christmas and you plan to use it at work, attaching to the corporate network to download emails and some data, then you are a security threat.

BYOD (Bring Your Own Device) is fast becoming the biggest threat to corporate security as people synchronise files over all their devices, regardless of whether they are company owned or not, using technology like Box.net, Dropbox, Evernote, Microsoft OneNote and Google Docs. It's the biggest advantage of the new age of such devices and the emergence of Cloud applications to enable such working. But that massive advantage to productivity comes at a cost.

To date, CIOs reamin somewhat laissez faire to the whole issue, but all you need is an executive's iPad or smartphone to get stolen and, suddenly, a non-company owned and controlled asset could be in the hands of a nosy stranger or, worse still, a thief. Although some devices can require the input of a 4 digit pin, that could be fairly easy to get around. Then you have all the applications on the device that have accessed the corporate data, like email and office productivity tools and any files that may be shared on common storage areas.

While there are ways to protect the machines and the data more rigorously, few fall under the remit of the central security policy of big companies - and that has to be a Governance issue at minimum. In the world of the US SOX regulations, that could be corporate negligence which Directors sign up to personally.

It isn't actually the users' problem, you might argue. But as many of the users of BYOD devices are company directors or senior management then I would argue there is a responsibility in many cases.

This year, BYOD will raise its head on the agenda of many big companies but it will be hugely important to SMBs too. As more technology moves into the Cloud, it may become less easy to know exactly what assets are accessing your network and where. 

Companies like Bradford Networks have a strong solution tuned to the BYOD threat to turn it from threat to a major productivity opportunity. 

You just have to make sure you control of the access to data on your network. It's been the core requirement of IT departments and remains so.

Cal +44 207 193 2356 for more information.

What is the Social Media Agenda?

It isn't normally an acid test for a business to ask that if it failed to survive from tomorrow would we miss it. But you could easily ask that question when applied to say the Royal Mail whose collapse would have a very large effect if it shut down tomorrow as post and parcels may not get delivered before Christmas, as an example.

It's perhaps more applicable to ask the question when the company offers its service free of charge, like Twitter.

Yesterday I asked if social media and networking had actually down anything for us. I don't think anyone would disagree that the new medium has helped change the way many of us communicate and therefore it has done something for us. But if a substantial part of social media was to change, not exist or become chargeable as of tomorrow morning, would we actually miss it?

Let's ask that question of Twitter. Why Twitter? because it is the most ingeniously simple of all the social media ideas. In just 140 characters you have to say something that you hope many people will read as something of value. Well I follow some 180 people and I can honestly say that I would value around 1% of what they say. I set aside Cricket Commentator David Lloyd whose list of Christmas presents for his 'Nest of Vipers' was hilarious and Shane Warne's public and sugary growing love story with his fiancé Elizabeth Hurley - they have been intriguing in different ways. Why? Because they are stories 'at source'. They are not newspaper articles or people surmising, they are the individuals saying real things.

But if Twitter died tomorrow, I can honestly say nothing would change of any consequence in my life - my business would carry on, life would carry on. Like the loss of a favourite TV channel, that would be that.

I would say Twitter has that odd feel about it as a business. So much might possibly be done by it but its fragile mechanism and attraction depends almost solely on the users' love affair with chuntering out any old 140 characters regularly unimpeded, unregulated and free from bombardment by advertisers. Mess with any of that equation and you suddenly have the whole lot falling down.

Twitter had further inward investment of some $300m from a Saudi Prince recently. There is no shortage of cash for investment and clearly all the investors see the potential return. Or do they? Is this the rich people's equivalent of putting $300m on the nose of some nag in the 5.30 at Kempton Park? Or have they seen the way that a 100m users will suddenly realise $billions of revenue every year?

If that medium is missable from tomorrow, then you would have to question investors' sanity. Clearly, with that kind of inbound investment money, Twitter is sticking around for a while yet. But the clock is ticking and pay back will be required some day soon. 

I think there is a huge danger in believing that just by attracting a large following that you can suddenly monetize it. Business models are key here but the bit that really worries me is the honesty with the users. If Twitter never proposes to charge users any money then realistically all they are is a database company who will rent out the 'space' each user occupies to the highest bidders to attract those users to spend some money on products or services. Twitter and Facebook, in that sense are glorified TV channels with the IP addresses of all the users which is pretty good knowledge.

That makes them the ad man's dream. If that is the case, shouldn't the users know that some day they will get bombarded with adverts, time and again with ever more personalised content to stimulate us buying? 

The Real Future of Social Media

Some years ago, I went to a presentation on the future by an entrepreneur who had invested in several internet companies every one of which I can say have failed. However, he did foresee that there would come a time when every advertiser on the planet will no longer work on house addresses or hit and hope on TV adverts, they will send personalised adverts into your private space on the internet with full knowledge of your buying habits, the credit cards you use, how much credit you have, what sex, age and dimensions you were, where you shopped, what you did on holiday, where your holiday snaps are, what you do for a living, what private habits you have, who your family were and what you were doing at any exact time. The murmur at the interval was that man was talking rubbish.

If anyone wanted to know all about any one of us, all that information is largely available from many sources on the web. A great deal of it is now held on Facebook and other social media sites. We have surrendered potentially valuable personal details of all sorts onto the web and there is very little left for people to know. The race is on to consolidate that information and monetize it.

Make no bones about it, the business model of every social media company is to whore its user base as long as we don't pay. Advertising of the future will no longer be hit and hope, it will be highly personalised and very intrusive but there will be far more sinister uses for all that data. 

In that context, if Twitter died tomorrow, I wouldn't miss it. But it's records of what I have done and said are saleable to somebody so there is a lasting legacy.

In some unnerving way, the whole business model of social media is mass blackmailing. I don't necessarily mean blackmailing as we know it although there is a great deal of potential there, but I mean advertising of such a personal nature that it 'blackmails' our sensibilities into making us do things we wouldn't have done without the stimulation to do so. And the 'protection racket' will be for us to pay to stop receiving such offers all the time.

The internet will become a legalised, largely unregulated forum for a good old protection racket.

There's more. Just as financiers have turned to nuclear physicists to help them beat the markets, psychologists can be used to make us all part with cash we would never have parted with otherwise. Supermarkets use 'data warehousing' to look at our individual buying habits and give us 'suggested trolley loads' and then tailor offers to make us buy more - because they know we will. In fact, they will be able to predict the precise moment to know when we will be more prone to do so.

How? If we Tweet or add a Facebook message with specific data, don't be surprised to find something specifically tailored to the context of what you have just done using all your personal data to predict exactly what you will do next. To sell that exact moment to an advertiser could become the nirvana of every social media company.

So it isn't just your personal space that is for sale, it is every second of your existence based on the intimate knowledge of you as an individual and every personal and financial piece of data on you and your family, friends and business associates.

There is a way to go yet on this journey. But people don't invest this kind of money in such flimsy business ideas without the firm knowledge that there is a mega payback. The payback will be guaranteed by our ever increasing willingness to not just surrender more personal data onto the web but to be able to track exactly what we are doing and when.

You didn't think there was a reason for setting Facebook as your default internet page with automatic login? Didn't you, really? 

In the world of monetisation of social media, the real fun has yet to begin. I hear people bleat about data protection and privacy but I would challenge that not more than 1% of all the 800m Facebook users has ever read more than the first sentence of the company's Terms of Use.

You didn't really think all these benevolent platforms were for free, did you? Microsoft gave us all those lovely free products and yet made 40% net profit on sales. 

Nothing is ever really given for free.

Will Social Media Ever Make Money?

Amidst all the global hype on valuations of social media companies that amounts to hundreds of billions of dollars there are a ton of people who say that social media and networking has not only profoundly changed us all but through some means or another we will all spend a great deal of money to either sustain it or better it in the years to come.

That's a pretty hefty bet considering the actual amount spent on social media and networking so far by individual users vastly lags the level of investments raised to date - and the fact we live in austere times. So what will change in our daily and annual habits that will push us to spend several thousand dollars per head every year going forward to sustain these heady valuations? In fact, here's a tougher question - what has social media or networking done so far that we would place that kind of individual value on it - so much so that we could never, ever do without it again?

Well, social media has indeed brought a lot of people out into the world of communication - some 800million of us have Facebook accounts alone. We exchange messages, share links, display content and we have some fun. In the world of telephony, we are happy to pay considerable sums to not only have the best device to use but to have the possibility to communicate. Perhaps, then, the only people who will ever make serious money out of the social media scene are the basic technology providers like broadband companies or mobile phone providers? After all, we will always need an input device and an access method. And there's always advertising, I suppose.

I can't help thinking where someone like Lord Hanson would have invested his money. Probably in the bricks and mortar that house the vast arrays of machinery that power the web as they are tangible assets that don't decay with user sentiment based on land that someone may always need. Maybe he would be on airtime or broadband.

What he wouldn't be in is the shares in the likes of Facebook. Or would he?

Content is going to drive social media, I am told,. Blogging (heck I am doing myself) is the lifeblood of the world of social media. As long as we have something to say, we'll use it. But if Facebook (actually I don't use it), Twitter and others stopped tomorrow could I a) survive and b) still do business? The answer is likely to be yes, I can do without any of the social media sites. 

I could but I would suggest I would have lost one of my best ways to promote my company, myself and services. Sites like LinkedIn have become important in business and there is a proven model to sustain revenues for the future based on current monies and there is more potential. But others I worry about as I wonder whether, when the money starts to be extracted, will the lustre diminish, the value be questioned and the golden colour be only a thin veneer at the surface?

Go global everyone! There is no doubt that I can get seen in more places now than ever before at the click of a mouse. That makes my company big and I can fight on similar terms than much larger companies - if not be more agile and nimble thanks to my agile infrastructure or lack of it - again thanks to the Cloud. I can analyse that a great deal of the traffic to my blog comes from North America and Asia. Yet all my customers in the last two years came existing connections I had and mainly in Europe. Most of what I have written is viewed by people who will never buy from me. So if I had to pay for that, it would be like shotgun marketing in terms of return on investment.

So social media has to go more focused and more local in many senses. In that respect, much of the implied value of social media diminishes as really all we are doing is leveraging our local scene and network. My wife has literally thousands of clients as an IFA and she gets all clients through referrals by recommendation by word of mouth. All of them. She pays for some lunches and social interaction but that is all about creating bonds and relationships. She has never got solid referrals from the internet and those she has have come at considerably lower margin than her usual network who really value her service.

Maybe there's a lesson to be learned there. Our best business and value opportunities already know us and the next best are connections of theirs. You don't need social media to unlock that, one might argue?

When all is said and done and the great money tap of social media is turned on, we may be disappointed to find that there was no alchemy at work that turns free use into real hard, sustainable money. In business history, there have been few companies who gave away their service for free who have subsequently come back and made a fortune on the same service.

Maybe worth thinking about. In that context, what has social media really done for us? And are we prepared to pay to keep it?

Last thought. Microsoft switched off free chat some years ago. They hardly get a bean in revenue in any chat service they now run, same for LiveMeeting. The answer on social networking may already there for us to see. Who knows? 

If Twitter got turned off tomorrow I would probably miss just 1% of its content. That's no value proposition.

BYOD Threat to Enterprise Security

BYOD or BYOT (bring Your Own Device or Technology) is a huge trend in corporations. As yet CEO/CIOs don't really understand the full implications or don't care that much, according to some research, but the growth in smartphones and tablets being brought into the enterprise network set up promises to be one of the biggest threats to security in the coming years.

Imagine the CEO's iPad going missing complete with an auto-connection to Dropbox on several applications and some local files with only so much as a 4 number PIN protecting it if anything at all. It couldn't happen? It has - the European President of a $24bn global company did just that. And not a single IT person could do a thing to prevent any data loss.

Apple now has thing's like Mobile Me and Find the iPhone with iCloud as back up which start to solve some of the issues but realistically they go nowhere near the kinds of security set up required to satisfy Corporate or Public Sector Governance on data controls and security. As the astronomic growth in smartphones and tablets continues unabated, this is going to become a major issue going forward.

Enter Bradford Networks from the US. This company has a specific solution for the BYOD craze and it's Network Sentry product addresses this issue. 

Bradford Networks' Network Sentry product manages IT assets like iPads and provisions customised security policies to control things like unauthorised network access especially in the case of a device falling into the wrong hands. Bradford Networks have specific market sector solutions for the enterprise, healthcare and education. It may mean some sacrifice in privacy for users as the product monitors activity but in reality corporations need to wrestle back control of the security of data and Bradford Networks offers a resilient way of doing this.

Bradford Networks has also joined in the SaaS market - not Software but Security as a Service with its Bradford.cloud solution for Managed Service Providers (MSPs). What Bradford.cloud does is to provide a protection layer on Private Cloud networks provided by MSPs so they can understand what devices are connected to the Private Cloud and manage their security from a single console.

Bradford Networks are at the forefront of delivering the highest level of security to enterprises both on premise and in the Cloud and have a unique answer to the growing question on security the BYOD brings for resellers and Managed Service Providers.

For further information, call +44 207 193 2356.

How Small Businesses Can Benefit from the Cloud

Let's be honest, there is no shortage of adverts of who can offer hosting location space, set up a number of virtualised servers in a building, offload your storage back up or give you some point solutions like email systems you have never heard of. That's tow a penny out there.

That's all very well but is it really helpful to an SMB company looking at the array of IT things that it has, not just servers and storage, but infrastructure, networking, end points, printers etc. How do they really take their entire IT requirements as a whole and get some benefits out of the true scalability of the Cloud without hassle and from experienced businesses? The biggest issue is that lots of companies have parts of the solution which often requires change and upheaval, few have a total, single answer and can then charge your entire IT management as a single monthly charge. If you are a large sized company you might buy an HP Cloud Matrix system for a low end of £120k but that's no SMB solution while other companies look to outsource your IT and that's no good to an SMB either.

independenceIT hailing from the US are one such company that can really help revolutionise your IT and embrace the true scalability advantages and cost efficiencies in the Cloud for all your IT, as it stands today. And it's that last statement which is vital - all your IT including servers, storage, infrastructure, devices such as printers, desktops, laptops and smartphones - all of it gaining the advantages of the Cloud. And all your applications too. Today.

The crucial difference here is what companies like independenceIT offer is to take your applications into the Cloud. This is not selling 'Capacity on demand' which is the focus of just about every Cloud company today or managing point solutions but it is 'Capability on demand' - allowing SMBs to properly scale their organisation in a truly logical and manageable way both from an IT and cost sense.

Take a company with say has less than 100 PCs and laptops, some smartphones, running MS Exchange and OMS Office applications, some CRM and accounting, maybe with some other applications, printers and networking. independence IT manages the whole lot into the Cloud, easily and smoothly, and then returns the capability back in the form of a single charge per desktop per month. Supporting over 300 business applications in its portfolio, independenceIT has experience of running all business grade applications and can help you now.

Imagine having the benefits of a large company IT outsourcing in the Cloud for a single charge per desktop per month of around $100 for your whole IT requirements now and in the future.

That's the power of the Cloud to the SMB and independenceIT brings that scalable power of 'Capability on demand' to SMBs today. For more information call me on +44(0) 207 193 2356.

And resellers, distributors, Telco and Service Providers are are welcome too.

Will Facebook Fail?

The IPO is slated for next year. Facebook has 800m users and it's estimated valuation for that float is $100bn. Simple mathematics on the potential 'monetisation' of that huge user base means that the valuation looks cheap at just a few dollars per head. Facebook can't fail.

Or can it?

We all remember, and some have the scars still, web 1.0 and the furore that it created about valuations. Every business that cropped up had 'massive potential' and we all fell for it. Few really have survived and fewer still have delivered on that dreamy potential. In between then and now, there have been just one or two massive IPOs which have have been hyped in the same way and then delivered. Google remains that shining example of proving the case for those optimists. 

But Google had a business model that already worked. It was growing like crazy with real money flowing in through the door and had a very detailed plan of how it would not just continue to grow that model but it had several new ways to make money up its sleeve. And it has delivered on it. In fact, Google had a product or service that customers wanted, would pay for and it had several enhancements that would earn more money. Google never fell into the trap of having to think how to charge its consumers even if it had some ways to do it. It charged right from the start for services around that user base to companies that had money. Google was not a consumer business, it was a business to business.

And Google had Intellectual Property (IP). It had specific technologies and understanding of search that no others had. It still has and its still evolving. Strip away lots of other clever things, much of which we can do without if push came to shove like Google Buzz etc, Google has a prize asset that is worth $billions.

Facebook has users but no real IP. I'm sure there's lots of ways it's optimised the site but realistically it's nothing that hasn't been cloned in some way. It's value is in the potential of monetising those 800m users. So here's a 'what if?' scenario.

The top 100 users of Facebook have enormous numbers of 'Friends' or followers and some of them grow those numbers of followers in the tens of thousands per day (you can look this up, by the way, on Facebook itself). These would be the likes of superstar celebrities. These celebrities are paid nothing by Facebook yet the number of times their pages are accessed per minute far out weigh the vast majority of the 800m users have accessed in an entire year.

Facebook is nothing better than a decent sized TV channel that shows some interesting content. Just like the ratings, some content is more polar than others. So what if some of that content switched to another channel? What if Google+ said to Lady Gaga, come to my site and close down your Facebook site and I will pay 50% of every piece of revenue I earn from advertising paid for on your pages? Would she move? What could Facebook do about it?

It couldn't happen, could it? Well they probably said that about the Premier League or naming Highbury the Emirates Stadium. You see Facebook has several ways it might potentially make money but without the following of those users interested in others then it falls to pieces.

We are in what is often called the 'Follow Me' era of social networking where it is about getting your personal brands worth more by adding followers. Klout, Peer Index and others then tell us how 'influential' we are on the various options to network and it's obvious some 'brands' have better cache than others. Well, if you went to a Lady Gaga concert and you saw an advert for Coke on stage as she sang you can bet your bottom dollar that the Lady herself would earn a great deal from it as Coke tries to leverage her brand.

Facebook has that potential problem to face, in my opinion. The vast majority of the 800m users of Facebook will never pay a penny for using the platform. However, they are definitely an advertising opportunity but some users are worth more, like premium advertisement hoardings, than others. So if the high worth ones are picked off, what is left?

Facebook has contracts but has an obligation to tear down your pages if you no longer wish to use the service. So users can come and go pretty freely. While there is no substantial alternative to Facebook to attract these big stars away there is no real threat. But Google has that potential.

Will it happen? I don't know. Let's put it this way, when Sky took boxing into premium land, the sport lost a massive following. In fact, I have not actually watched a whole boxing match since whereas when it was free on TV, I was an avid fan. Monetisation has the potential to alienate people and lose followers completely.

History is a funny old thing. While social networking is new and its business models look different with multifarious opportunities to potentially make money, there is a fragility to the model that makes it creak at the edges to the point that if something gives then it could all implode.

At the end of the day, every business needs to have a sustainable engine for making money. Facebook has advertising today producing around $3bn a year and growing but if that was the main contributor to the valuation then the company, in my opinion, would be worth no more than $30bn. That's still a heck of a valuation but it does kind of show that there is a substantial amount missing from the equation. And even then, there is a threat to that business in the competitive world to attract the marketing budgets of big firms which are notoriously tough to sustain.

Even though online advertising is on the up, we all know that business has its limits and is notoriously fickle. We all know that certain places to advertise cost a great deal more than others and celebrities have a strong opinion of how they should be used in adverts. 

That day of dichotomy between the 'followed' stars and Facebook has not arrived. I predict it will arrive in some form or another at some point in the near future.

There are other potential ways to monetize us like having the Facebook 'wallet' or virtual credit card system - but that would rely on us waiving our rights to privacy and giving our credit card or bank account details to a site already famed for its accessibility. I can't see those easily making up the difference. 

Facebook looks a fantastic opportunity, have no doubts about it, but money making is all about the execution on a sustainable business model and it's not there yet. It's a 'potential potential' business still and I think for that reason it's over-valued by a large distance, possibly tenfold. And what it has is not bullet proof, either. 

Three things can happen in the coming years beyond an IPO - 1) Facebook makes more money than everyone expects, 2) Facebook makes the money everyone expects and 3) Facebook fails to live up to expectations. If you weigh those options up in the cold light of day, the best you'll get is a 33.33% risk of any of them happening - and that's not good odds in my book.

Buyer beware at this price.

Cloud Brokers - snake oil or valid service?

Cloud broking? What's that all about?

It's happening already - everyone sees a way to make a few bucks on a new trend without really getting involved. As take up of the Cloud rises exponentially, the speculation is that large companies, even resellers, may have simple capacity requirements such as data storage or virtual machine provisioning and the 'Cloud broker' will effectively just be a service that shops around for the cheapest rates to match customer requirements.

It sounds very much like a 'MoneySupermarket' type service for the Cloud but the reality is that there are an awful lot of companies building some huge capacity out there and it's highly likely that while they will get premium customers taking top rate managed services from them, they will have a ton of spare capacity for selling just to get a marginal return on costs already accounted for largely.

So the new kind of middle man could be a 'Cloud Broker' or Cloud arbitrage where they simply match that over capacity with customers' needs. On the face of it this is good news as this will increase competition and that means prices will drop and that means adoption of the Cloud rises. What can be wrong in that?

What is the opportunity? Well, on one level there will be the Aggregators who are the companies that simply consolidate services and applications to be billed as one monthly bill - utility style as you will pay on a consumptive basis. This may only be a billing service, i.e. is there a role for a company to not actually provide any more of a service but to poll and manage your Cloud suppliers and then produce a single bill with all the services itemised on it? That company may then collect a fee for doing this service but they may also get a cut in the service costs from the suppliers as an agent. They may also be tasked to drive the cost of supply of these services down as far as they will possibly get rewards based on the savings. This is not unlike some of the service providers in the Telco business sector who watch Telco costs for big companies.

But then there is the plain old brokers who just match up capacity to need. They will get paid a cut from the service provider as a referral fee on an ongoing basis without really forming any relationship with the end customer other then providing the matching service. There may be a reward for finding savings. This means that there may be plenty of 'churn' and migration between service providers to be managed and that's a possible additional service these brokers can provide. Much as with the mobile phone industry, customers can change providers totally and in between there is the whole migration process to be handled in order to access the savings - the transfer of individual numbers and accounts etc.

So Cloud brokers could provide a fantastic way to drive down costs ensuring that the Cloud provides yet higher returns on investment for end customers. As far back as 2009, several companies like Cloudkick, Elastra, Kaavo sprouted up and there are many, many more in existence now. And it's serious stuff as even software vendors like the mighty Oracle take this sector as a serious part of their 'Go To Market' model of the future as well as the validation given to the sector by Gartner.

So what could possibly go wrong as end customers simply move their data and capacity requirements around from supplier to supplier for the best price? Surely everyone wins?

Here's a 'what if?' for you to consider. What if, after taking up a capacity service to store some archived data, the customer is unable to pay the bill. Who owns the data? What then happens to that data? If it is to be destroyed, who checks that it has been? Does it become the property of the hosted who is not paid? Can they then do with the data what they wish, i.e. sell it?

Here's another 'what if?'. What happens to your data if it is moved from one supplier to another? Is the old data simply deleted off - if so by who and who checks it all has been done, under what conditions or compliance standards? What is the legal jurisdiction in all this? Where the data is held or in the country where the original contract is taken out? Where are cases heard if there is a dispute?

Cloud broking is here and it will stay so it is pointless dismissing it as a non-starter. But it comes with some huge questions about service levels, legal questions and compliance issues. There may be a further complication - what if the end customer takes out a contract with a software vendor but in turn that vendor farms out the data storage side to a broker service to get best rates to fulfil the contract? What happens to the data ownership? Don't under estimate this issue as many companies like resellers, system integrators and distributors let alone vendors are already playing this game in reselling the services of hosting companies. You think that the Service Agreements are back to back and that may be the case. But what about the data? Where does the legal jurisdiction lie? How does your contract tackle this question?

Has anyone stopped to look at the Terms of Conditions stated by companies like Salesforce.com or even the mighty Microsoft and its Office 365 service (which in Europe is hosted in Ireland)?

The Cloud is here and it is a simple concept on the face of it. Just below that surface lies a potential quagmire of issues. One thing is for sure, Cloud Brokers may provide a valid and valuable service. But there will be charlatans peddling snake oil and juicy savings with sweet talk and clever comparison tools no doubt. Many will trivialise the issues surrounding the data and its ownership, many will skim over the Terms of Service and most will have no earthly idea bout the legal issues.

The Cloud is exciting, it's innovative, it has the potential of helping many businesses grow linearly rather than stepwise but it has some problems. Make sure you have the best advice as you move into the Cloud.

Blacks Swans are Everywhere

In June 2008, at the height of the financial panic, I wrote a blog article about the concept of the black swan effect as asserted by Nassim Nicholas Taleb, the renowned author of 'The Black Swan: The impact of the highly improbable'.

Taleb argued that as a black swan is so rare that its existence could be said to highly improbable, then to see one is almost impossible. He asserted that a single 'Black Swan' event triggered the downfall of the world's banking system and caused the crisis of 2008.

I wrote then that it wasn't a 'Black Swan' event. I argued strongly that the supposed cause of the meltdown, sub-prime mortgages in the US, was merely a manifestation of a deeply unstable and flawed financial system. I likened the whole system to a house of cards built on pillars of sand. Every contact point was not just frail but it had the potential of bringing down far more of the structure, if not all of it.

Last night's program on RBS and Robert Peston's series on 'The Party's Over' should remind us all that rather than Black Swans being a rarity in the system, it seem that most swans are black if we analyse our system. Debt and its trading is the basic issue mapped against a single assumption that all assets will rise in value. From that basic principle, the financial world invented a whole series of deeply complex and convoluted products that created money out of thin air from which only a very few benefited. There was simply no substance to it. 

This whole assumption was less apparent yet underpinned the massive boom in less secured credit to consumers in Britain and with goods getting cheaper from the Far East, we forgot our the basic principle of spending within our means as our true earnings decreased and we ditched saving for the future. 

As the banks went pop as inevitably they had to, the massive debts they ran up were merely transferred to the Public Sector and so Sovereign debt is now the main issue while banks, having been reloaded and forgiven, have carried on trading in exactly the same way. 

At that time, I predicted that credit crunches would become cyclic unless we solved the base issues and changed the entire banking system - something that people like Tony Blair argue against and God knows what Gordon Brown now thinks. Do we even care? Sure enough, we have another credit crunch and this time it has only been staved off by Central banks easing their lending. Meanwhile, the Eurozone slips into deeper crisis as even mighty Germany is in danger of over reaching itself.

Taleb was right in asserting that banks only ever make money from lending to consumers - investment banking is all about huge booms and cataclysmic busts with no net movement. We learned very little from Fred Goodwin's lunacy and because we are all stupid enough to believe there are such things as free lunches and that our houses are cash machines when all we are doing is loading ourselves with more debt, then the world will not change.

Black swans are now cluttering the system. They are everywhere. 

Will 2012 be the year of the Gigaflop?

Lord Hanson famously worked on the adage of buying companies that made the basic commodities like bricks, cement and batteries as he reasoned that they would always be in demand. He made a bob or two in the process.

In a way you could interpret that approach as one of low risk investment. If you could see that a company made products that people wanted and there wasn't a lot of clever things in between like lots of research costs then you could always make money. The simpler the business model, the easier it was to foresee a return.

Next year sees the IPO of Facebook and this year we have seen Groupon go to market - both with incredible valuations. The valuations are not just big, they are hopeful beyond all measure. They could even be described as hopeless by some measures.

The attraction of social networking for most of the 800 million subscribers to Facebook, and the same can be said of Twitter, is that we love the freedom of use that benevolently donated platforms can give us. So far, we are mildly irritated but not put off by advertising. Which is good news as this is a multi-billion dollar business in itself of which Facebook already has $3bn a year. That's sheer exploitation of the user base in no uncertain terms and it may not be long before users who attract a lot of attention start believing their own bull and think that companies like Facebook, Google and others are making a mint off their popularity and start charging these companies to use their space.

Hmmm, is there something flawed in the model here? Sticking an advert on my Facebook page is useless, frankly. I hardly ever go there and neither does anyone else. Rather like paying for the best hoarding for an advert in a Tube Station the demographics of Facebook's user base commands the price. And will those users who do get millions of page impressions suddenly wise up that it isn't about Facebook, it's about them? Are we talking users huddling together and forming a 'Premier League' style breakaway?

If that ever happens, will Facebook's value implode or will there be enough of the second tier to fill the gaps and start all over again? Could this actually ever happen?

I really don't know but I would imagine that as I write there is some enterprising individual who might actually be dreaming up this concept. It's a simple thought - some users are more valuable than others to Facebook and the likes so if they got stripped away then the calculation on which the valuation is made is skewed, possibly ruined.

The only really rock solid foundation for Facebook would be to use a 'taxation' model. If every user paid a small fee for being a subscriber every year then there would be a base revenue which would always be the core source of the profits. Losing a few users would then be not a real worry. Exploitation of the membership has an inherent flaw and it's why many of these seemingly fat golden geese may actually be plain old ducks in the end.

Mark Zuckerberg is an infinitely more clever individual than me but Lord Hanson would point out that my tiny company made more net profit last month than his company has accumulated in its entire existence. That's a sobering thought. 

2012 could be a landmark year. I honestly believe that Groupon will implode sometime in the next two years. It has a fundamentally weak business model that could even be transient at best but infinitely clonal at worst. In fact, any model predicated on believing that consumerism will only expand in the next 5 years is basically a high risk business if it is not uniquely differentiated in my small and insignificant book. And Groupon is not differentiated enough by far.

So my point today is that if you are going to invest your hard earned cash or leverage your house to do so, then don't back the IPOs of these sorts of companies and certainly not as long term investments. 

2012 could be the year of the Gigaflop.

Where are the IT Companies in the Virgin Fast Track 100?

There was a time when Hi Tech companies dominated the Virgin Fast Track 100 - I worked for Eyretel for a while when they won it on the back of their growth in the digital voice recording business sold in the City.

This Sunday, the list published by the Sunday Times shows a very different landscape with only online retailers qualifying as Hi Tech and there are barely a half a dozen of those in the Top 60 while there are a couple of phone retailers and just one Telco reseller scraping in at 60th in the Top 60.

No software companies, no computer maintenance companies, no online computer vendor, no computer resellers, no accessories companies, no Apple App producers - in fact, the first computer associated company comes in at 62 and it's an ink cartridge recycling company.

Refreshingly, there are plenty of recruitment companies in there although I understand the Hi Tech recruiters are suffering while Telecom resellers starts to sprout up with growing frequency after 60th place. 

After Robert Peston's program last night, it was chilling to see that one of the fastest growing companies in Britain is an Equity Release broker as we all struggle to manage debt and provide for our retirement somehow.

It is perhaps a sign of the times that Hi Tech companies are missing from the Fast Track 100. Amongst computer resellers, insolvencies are up, gross margins are getting tighter and competition remains fierce. The PC market is dropping like a stone as the client device markets change, server shipments are static if lowering - what can a struggling reseller do to change its fortunes?

On page 8 is a small article by a very good friend, former colleague and business partner of mine, Scott Dodds who is now GM of business strategy and marketing at Microsoft UK. Scott points out how smaller companies are embracing the Cloud to help them grow faster and he highlights one of the Fast Track Companies called Gritit who unsurprisingly are making hay while we experience harder winters.

What Scott points out is that small companies can save on IT costs and scale their business faster by effectively outsourcing their IT to the Cloud so that small companies can focus on what brings in sales rather than back office issues like IT.

I think there is a step further to go. Companies like independenceIT go beyond just putting a few applications like email, back up and CRM into the Cloud but allow SME businesses to push the management of their entire IT infrastructure and applications into the Cloud and have it served back to them at a single monthly cost per desktop. As traditional hosters like Rackspace or Fasthosts really offer just the renting of resource, independenceIT offers a true managed service that allows SME companies to scale not just their resources but their applications for as single monthly charge.

There are no capital outlays, just single monthly fee per desktop - all the rest is taken care of using Tier 1 datacenters and giving the highest availability and support.

Scott and I agree, the Cloud is definitely the best way a small business can grow its IT base and I think independenceIT has a unique and compelling proposition for this. For resellers who want to get back into growth mode and be able to offer a true managed service to customers without all the massive outlay, independenceIT have a fantastic solution to help get growth back in your business - profitably.

Please get in touch with me for more information on +44 (0) 207 193 2356.

Who Owns Your Data in the Cloud Then?

Dropbox - a belter of a product/service. It's a handy App downloadable on any device that sort of acts like an extension of your PC or Mac file structure and is offered as free online storage for Apple, Google and other tablet and smartphone devices - meaning you can see files across platforms. You can share folders and files with other people, ideal for showing pics to relatives or working on projects.

But now that your data is in the Cloud, who owns the data?

Of course, the assumption is that it was your data before you put it there so it remains your data until you decide to take it back. Well, that isn't actually true. You see as with Dropbox and many other companies even as diverse as iCloud, Box.net, iTunes, Google, Facebook, Photobucket and others all have detailed Terms of Service which you agree to when you click the box accepting their terms.

I don't suppose you have ever read them and perish the thought of passing them through a legal department. While you may think this would be added bureaucracy for a consumer, businesses are allowing employees to sign up to these services daily from many devices and dropping in company data. The reality is that most of these Cloud companies can assert complete control on the data you have deposited into their custody. Most people and all companies would not willingly give away rights to their data or privacy if they really knew what they were agreeing to but actually this is going on all the time.

So consider Twitpic which is a service where you can add a picture to Twitter. If you delve into the ToS you will see that this company can distribute your 'data' to other companies. Of course, what they mean is that they can 'syndicate' it to Tweetdeck or other Twitter clients but the wording is not specific to describe this and many users have challenged these terms. But many haven't.

In Dropbox's ToS you are basically agreeing for your files to be placed in the Cloud. Users have questioned recent updates to Terms by Dropbox but effectively you are granting them permission to control your data in the web. 

The simple fact is that most people don't read the ToS when they sign up to all these services because we are believing we are getting free storage and neat facilities that allow us to back up and share files easily and cheaply leveraging the Cloud to its full benefits.

I dare say this does not pose a problem to most of us but you can bet your bottom dollar it will some day. What happens if one of these companies goes bust? What happens if these companies do run short of cash and sell your data on? What happens if one suffers a major crash and loses or corrupts your data? What happens if there is breach and your data is compromised? What happens if you want to terminate the service - can they keep a copy?

As a quick experiment, try deleting some files in Dropbox and then go into the main web app and look what has happened to them. Still there? Yes they are. The originator of the file has to delete and then confirm delete and even then I have seen files reappear which not only clutters up your free storage but it questions who actually owns that data?

Do you know?

Could Privacy Laws Kill the Social Media Boom?

Facebook, Google and others have been dogged by issues surrounding privacy and use of personal data. It is perhaps the biggest threat to Facebook's monetization opportunity.

The controversy in the US got bigger recently as Congress got involved over the case of the application Carrier IQ. Until as late as October Apple used the data gathering software in its iPhone and iPad products and still today remnants of the program exist in OSX 5 and will be swept clean in the next release although Apple have been swift to tell us that the program is switched off. Apple assured us that no keystroke, messages or personal data was ever recorded but only diagnostic information and it did not violate any privacy laws where each user has to agree to allow the information to be sent.

Facebook, obviously, records everything that we willingly put into it. The degree of personal information entered and shared with others could go a long way to understanding most of our most personal secrets let alone having nuggets of gold in pointing tailored adverts to us all.

Only this week, the Federal Trade Commission in the US had a suit settled by Facebook about its misleading its 800 million users about its use of their private data. It has now surrendered to be independently audited for the next 20 years. CEO, Mark Zuckerberg, has admitted that Facebook has made a 'bunch of mistakes' in a recent blog but assures everyone that his social networking empire is now back on course.

Crucial to all this has been the notion of 'Opt in' which was the traditional way that users of any service or website could agree to not only receive regular emails but to have their data effectively passed on or sold to other parties for their own use. This created the first waves of 'legitimate' spam in a Big Bang of data that still echoes around the web. Often the email address from which you originally 'opted in' is still being bombarded by a ton of spammers who bought the data. And once opted in, it has proved to be impossible to get off the lists as once the data is sold on it, like some sort of debt swap, has a life of its own and it is the data originator's - your - responsibility to opt out of all the spam sent to you one by one.

It is worth remembering on your Facebook account. Sadly, 'fixing' the problem doesn't really exist as once you have 'opted in' your data can be used by that site until you 'opt out' by which time that data may have been traded or passed on several times.

There may be no evidence to show that Facebook has ever traded that data but there is no doubt that it has been used to allow advertisers to get better access to you. This whole area has a way to go yet as one of the most prized assets within the $100bn valuation that Facebook has is not just access to your most personal data but that many of you have 'opted in' to allow that data to be used by Facebook in whatever way it wishes.

It's as good as owning your private details to be used and traded in whatever way Facebook chooses. So the next time you post a picture of your child or send a message to a friend, think about who 'owns' that data.

I foresee that privacy and data ownership will be the biggest issue of the Social Media boom and could take the shine off the big money IPOs for the future. As, strip it all away, that's all that Facebook has is data. 

But, my goodness, it has tons of it, and really personal stuff, on each and every one of us.

Is Facebook Past Its Sell By Date Already?

There is plenty of hand rubbing going on as we build to the projected IPO of Facebook around halfway through next next year. The rumours are that it will even eclipse the IPO of Google and value the company at $100bn.

That's pretty big. That's about half the size of what Facebook sees as its biggest rival, Google, who IPO'd in 2004 amidst huge furore. At that time, the hype wasn't so daft as Google had a great revenue stream and a fantastic business model. Facebook is what I describe as a 'Potential potential' business as it has lots of potential forms of revenue - potentially.

No lesser sage than Sir Martin Sorrell who knows something about advertising, believes that as a commercial advertising medium, Facebook has poor value. The projected figures on advertising revenue for Facebook is only $3bn per annum which doesn't go anyway to justify the enormous price tag.

Some may cynically argue that Facebook is just a glorified database with tons of personal details on it. This is true and the question is how to monetize that without violating privacy or data protection laws which are coming increasingly to fore in the Facebook and Google debate.

What is definitely true is that Facebook is a sticky website. Those who use the site regularly login more regularly than Google users and spend on average 30 minutes each per day on the site which is a potential advertiser's dream. Imagine if those ads could be really customised to the user based on demographic, sex, hobbies, age, looks, size, interests, even buying habits rather than just contextualised. The scope would be enormous but the possibility of data misuse is too horrible to contemplate.

There are two important things to consider about Facebook:

1) Users, as with Twitter, don't really like or want adverts cluttering their viewing area - they see it as intrusive as it is 'their space'. More advertising may cause users to actually use the service less.

2) Businesses are concerned that employees spend too much time on the site in work hours and several companies I know have written policies, some actively block the site during the working day. I know of one company where a director sitting next to a lady asked for a cup of tea via Facebook and she didn't bat an eye and made him one only to realise afterwards that he had been monitoring her using the site through the day.

The issue may be that Facebook actually has already reached its zenith. It has 800m users, over half the population of Britain has an account and the story is similar in some of the other developed countries. New sign ups are not the area of potential growth. Monetizing the existing users is the objective.

As the Founders of Ecademy know, you have to provide a great deal of value to extract subscriptions from users, and then only a small percentage of the subscriber base will pay. No one on a business level will part with cash for no real return, whether that be real money or perceived increase in brand value. LinkedIn have found some rich seams in the B2B market, exploiting the recruitment industry and becoming a decent forum for business or candidate search.

But Facebook is hardly a B2B platform. The vast majority of users are individuals not representing their business. The businesses on there are looking to promote their brands with the users, maybe find new talent at a push but realistically they want consumer products bought.

With the potential data and privacy nightmares yet to really be tested in extremis, with the potential of more advertising on the site to cheese off users and with the potential pressure from businesses to limit its use during business hours, has Facebook already seen its best days?

Are we overstating the potential? Or have we yet to see the real way that money will be made for Facebook? Is it just a big, juicy database after all that can never quite be unlocked to create real value?

Is $100bn vastly over valuing Facebook or is this company really going to be creating sales with twice the profit potential of Tesco, more than Amazon, more than McDonalds?

We'll see.

Cloud - Capability on Demand

A recent article caught my eye where a company called Doyenz asserted that in 2012 there would be a slowdown in the need for Cloud storage, i.e. the need to keep piling more data in the Cloud.

In some respects they are right as they also predict that the Cloud will become more about applications on demand rather than data. This echoes and an article I wrote a while back about the concept of of 'Capability on demand' rather than 'Capacity on demand' as a driver for the Cloud. But applications generate data so let's not get too hasty.

I am working with a company called independenceIT who have exactly this view of the Cloud. It's really of no great use just putting data into the Cloud on places like Dropbox, although such sites serve a good purpose in the short term. What companies will really want out of the Cloud is a solution that takes their infrastructure, resources and applications off their hands and then serves them back as a completely managed and automated solution for which they pay a fixed monthly fee per desktop.

This flips the whole hosting industry on its head so that companies can get true economies of scale rather than just places to plant their data and get only the advantages of capacity on demand.

If anyone would like to know more about independenceIT and truly be able to outsource their entire IT resources including applications and leverage the Cloud to its fullest extent either as channel company offering the solution to its customers or as an end user seeking the efficiencies of the Cloud, just drop me a line or call.

Calx Europe is a Business Acceleration company specialising in working with Cloud software or service providers to develop and implement go to market plans in Europe. Please call +44 (0) 207 193 2356 for more information.