Apple is the No. 1 Client Device

A report out by Canalys on the final quarter of 2011 puts Apple ahead of HP as the preferred client device amongst corporates and consumers. Who would have ever thought that? Apple as the domain of geeks and marketing agencies is officially a thing of the past. Ty, you were right all along.

Some will say that this is wrong accounting as it includes iPads and iPhones in the total - but this is the entire point about the rapidly shifting client device market in corporations, the device is fast becoming the choice of the user not the company.

Bring Your Own Device (BYOD) is a real phenomenon and it is helping Apple become a corporate standard in a world traditionally dominated by PCs and Microsoft. 

Learn a lesson, everyone. There is not a penny of discount given for Apple products whether it be an iPod, iPad, iPhone or a Mac and they are top of the range end user prices. The PC market has been long rated as a commodity market and wags will tell you that Apple would never become a corporate standard as resellers and Apple itself never negotiate. That's another myth busted as Macs continue to grow and take market share off all the main players like HP, Dell, Lenovo and the rest. The PC market is no longer a price sensitive, high competition market - Apple have redefined the way to sell.

How did Apple do it? By winning the hearts, minds and wallets of real users through innovation, ease of use and entire new ways to buy products and applications. Incredibly, real users have gone back into corporations and not asked but demanded that their tablets, smartphones and, now, Macs be attached to the network even if they foot the bill themselves.

Microsoft, HP, Dell, everyone, never saw this coming that not just Apple but their operating system would take a massive chunk of the world dominated by the PC. Recent figures released by Microsoft show that they can no longer rely on consumers for their profit - now they are being squeezed in corporations.

The pace of change is incredible and none of the mighty companies saw it coming. Apple is the No. 1 client in corporations.

Pinch yourself, it's real.

Apple Doubles Everything

In stark contrast to Microsoft's earnings announcements, there were considerable crowings at Apple. Microsoft showed that without a strong enterprise performance, their overall numbers would have looked pretty grim and now it seems there will almost certainly be my predicted earnings drop in 2012 at some point.

But Apple just plough on. In fact revenue over doubled comparing the last quarter to the same last year with 118% growth to record over $46bn in revenue. And profit rose the same degree to $13bn and they added $17bn of cash in the quarter too.

Over 37m iPhones were sold and 15m iPads putting Apple back at No. 1 in both categories while Macs shipped over 5m units rising a steady 21% as the PC industry took a noticeable dive in shipments and earnings.

Considering there is a pipeline of amazing new products on the horizon, Apple's future looks very rosy. There may be a few green faces in Seattle. After a long and clever plot, Apple is now a serious product in the eyes of corporations despite the fact it is expensive and it doesn't run Windows.

Now who would have predicted that 10 years ago? OK, other than Ty.

Apple is Anti-Competitive?

It had to happen. When you analyse how you can buy an Apple PC product, the Apple Authorised Resellers concept is really not particularly healthy, it seems. It appears to be even more more unhealthy when it comes to its own stores.

My own experience of buying an Apple Macbook Pro was not entirely pleasant, I have to say. I went to Solutions Inc in St Albans and made the fatal error of asking for some money off the bill as a discount - as you have the right to do as a consumer, you know. I was greeted with almost revulsion by the local sales manager who made it clear that Apple Authorised Resellers are 'not allowed' to offer discounts or they might lose their status. This status, he explained, was hard earned through training and other such things but it meant that in return, Apple always gave them first in the queue status for stocks of new products.

I actually did connect on LinkedIn with the owner of the reseller but after an initial interest he was more concerned that the sale was lost to Amazon who at least offered a few quid off the deal.

I actually think Apple Authorised Resellers and their Stores are a credit to Apple. They present products brilliantly, the staff are incredibly knowledgeable and you can get all sorts of added services from them which could make the buying experience brilliant. The easy comeback to me by the sales manager was to indicate all that value versus the lack of attention I would get from Amazon before and after the sale. As a simple for instance, there is no such thing as an Amazon phone number and support on any product is not offered. That would have been the best justification for the few pounds difference in price.

But what Apple and its Resellers seem to be risking is the obvious wrath of the European Competition Laws - and they are serious stuff. The spat in France is centred around stock allocations. Theoretically, no matter what status as as  store or reseller may have, access to stock should be on a timed order basis. But it appears that this is not the case.

The case in France is specifically about Apple favouring its own stores over its Premium Resellers but I suspect that this problem could spill over into ether areas. There may a suspicion of some level of collusion between Apple, its stores and the Premium Resellers to keep prices at one high level. If this is proven, then it has some nasty repercussions, as the penalty for breaking European Competition Laws is a fine of up to 10% of global annual revenue.

That's a big 'ouch' and on the face of it and through my personal experience as a buyer, I think they should be worried.

Apple will Fail, Microsoft to Come Back?

In a boring conversation over Christmas, a friend of mine said that Apple will take a dive this year as, in his theory, they have saturated demand for their tablets and smartphones and their PCs will never get taken seriously by corporates. Meanwhile Microsoft will resurge back to normal growth rates, was his other prediction.

Of course, he's right on all counts.

Or is he? Having been recently converted to Apple, first via tablet, then iPhone and now the Macbook Pro, I have suddenly realised that as workers we have been held back from many productivity aids and better software over the years. As a for instance, this year over the Christmas period, I recorded and published a talking book of bedtime stories for my young boy which he can now read and listen to at his leisure from an iPad or one of our iPhones or any device that reads ePubs.

Apple Pages, at £13.99 for the software on a Macbook Pro (full end user licence cost), allows you to write the document while the free GarageBand software on the Mac allows you to record an audio file. You just add the media file to your Pages file and then export to ePub format. The recordings took 15 minutes each and the rest was done in minutes. The look on my little's boys face to see his pictures in the book and hear my voice telling the story? Well, priceless.

But this has nothing to do with business, has it? Oh yes it has. This week, my firm will use my Macbook to write several briefing and training documents about Cloud Computing which we will add audio files to and then export them to ePub format. We can then make them available to all tablet users as a multimedia document which they can listen to on the fly. Imagine you are an IT salesperson awaiting a first appointment with a client to talk about Virtualisation or the benefits of Cloud, these documents will be 15 minutes long as audio files to give first, invaluable briefings to make salespeople sound authoritative. And they can leave them with their clients.

What my friend fails to realise is that the PC market is plummeting - even servers - but Notebooks in particular are nose diving at over 50% per quarter. Vendors like HP, Dell and Acer question the viability at the low end as they can't make products cheap enough for the corporate market. Meanwhile, the software is still buggy and expensive and it does much the same as it always has done with precious little innovation over the last 5 years, particularly from Microsoft.

In the face of this, smartphones and tablets are rising at an exponential rate as the phenomenon of Bring Your Own Device (BYOD) takes off at work where our own devices are attaching to secure networks. And people using these devices buy their software in a different way - over the Cloud and for a few pounds a shot. And there's tons of it.

The revolution is here, have no doubt. And Apple PC's, in the face of the PC decline, are growing at 27% per annum in terms of shipments and revenue. Yet you can't get a bean of discount for love nor money on these expensive products.

Why are companies now paying top dollar for Apple when they are forcing PC vendors to crumble? Simple, the PC market never has really been about price. If you want capability to do a job, people are prepared to pay. The Sony Vaio is touted as the pinnacle of PC's in terms of graphics and portability but have you seen the Apple Mac Air? There's no real comparison.

But Apple is an island in the world of computing dominated by Microsoft so corporates will never buy, will they? Oh, but they will. Microsoft Office for Mac is vastly superior to the PC version and it's half the price. You can now get it as a client for MS Office 365. If you want full PC compatibility then for £67 you run Parallels virtual machine and then port all your MS licences across, automatically by wifi - Apple does it for you.

Of course, I don't think Apple will dominate the corporate market but I think the PC has had its day in the current form. The way in which companies invest in software will change as the Cloud drives prices down and multiple devices will be used to run the same piece of software with files sourced from one spot for all.

This is not a world described by PCs or Microsoft and so either these companies will have to adapt or get left behind. Apple may not win the end battle but they have shown that end or client devices can be anything going forward and users are defining what is paid for them against the corporate mandates. 

Steve Jobs said it before he died, we are in the post-PC era and you don't have to look far to see executives and consumers using the same devices running lots of software that has been suppressed for years by the narrow minded view of the world by mammoth software companies.

2012 will be a year of innovation and the year that the PC market accelerated its decline at the cost of new devices. Apple will get a share but look out for more innovative products and lots of great software at affordable prices. 

If Apple has done this one thing, then it has put value back into the valueless object that was once a PC.

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.

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.

Microsoft fails - Apple wins?

Yesterday I explored the hypothetical case of Microsoft collapsing. While I am not a Microsoft 'Arnageddonist', as I think $60bn of cash should buy them some path to safety, I do argue in my 5 predictions for 2012 that Microsoft will see revenues and profits stall in 2012 as pressure grows on Windows sales as PC shipments continue to fall while there will be increased pressure on Office products due to corporates questioned pricing models and the rise of new alternatives plus less PC shipments to sell them on. I do believe Microsoft needs a radical change in plans and I think that requires new management throughout. It has to break out of the rut its in. It may not be so vulnerable in large corporations but in the higher margin heartland of SME and consumer, Microsoft is at extreme risk to the likes of Apple and Google.

A sobering thought - 97% of UK companies are classified as SMEs, employing the largest share of the workforce and there are millions of consumers out there. That is where Google will sustain its attack in the places where free and low cost products and services are readily accepted. Microsoft are incredibly vulnerable down there in its long tail of untouched users.

But if Microsoft were to fail, would Apple gain and become the flag bearing IT giant of the future? Right now it is the US' most valuable company with more cash than the US Treasury. Not bad for a company that almost expired around 10 years ago. So would Apple be the company to take over Microsoft's mantle of IT giant and dominant force in the IT industry?

I don't think so. However, I am a recent convert to Apple and I love the company and the products. I am fully kitted out with Macbook Pro, iPad2 and iPhone 4 with IR keypad and somewhere we still have an iPod and iPod Shuffle. Now the whole triumvirate of products are bound together by iCloud which backs me up.

The clue was in the series of products. Apple has a strong base, which is how it came up by stealth on Microsoft, in the consumer market. This can also be a curse as the need to sustain the longevity of products and find the next new ones is a ceaseless and sapping task. Smartphones has been a productive area but there is intense competition from all angles and Apple cannot always sustain it's position on mere gadgetry. Just this morning, I am experiencing battery drain on what is now my third iPhone to show the same problem. Quality needs to match usability once the fad value is over.

And iPad. What a fantastic product. In the heat of taking it on, I off loaded around 80% of my work onto the device, forsaking my PC. Full of warm feelings, I switched my PC to Apple Macbook Pro and it has been a huge success for me. So much so that I now only use my iPad2 for around 10% of my work - mainly blogging and viewing documents.

The usefulness of tablets needs to be enhanced if they are truly going to take up the long term slack in the PC market and Apple's growing market share in the business world actually threatens the iPad in the same market.

In the final analysis, Apple is a superb innovator in the user experience and will always have its place as an end device of choice amongst users. The brand is cool and the products are always one step ahead. That may change but the wave is worth riding. But beyond that, Apple has no real binding to the mainstream infrastructure that sits at the heart of networks and computing today. It doesn't make servers or network stuff, not much software for interactivity, it's pretty much an end device company only and proud of it. It's operating system is different to the standards and there is always the annoying incompatibilities at the edge of things that just irk the corporate user and makes the full user experience just short of the nirvana expected for the outlay.

Should Microsoft falter then Apple will indeed benefit but it will not be the defacto standard that Microsoft has been. But what it will do is to continually challenge the status quo and set standards on the user experience that have been sorely missing from the Microsoft world from which we are slowly emerging. I think it will also, along with Google, challenge the absurd amounts of money we have all continued to pay for ropy old office productivity products that really are not that special. In fact, there will be a real software revolution as more products appear for less cost doing more.

Steve Jobs called this the post PC era and he was right. Microsoft will stumble and it will be the mark of the management to see if it can make this just a minor slip up or whether it will be a slow decline or the collapse that some foretell. Whatever happens next has to be good for the industry and even if they do not emerge as giants, we have a great deal to thank Apple for in shaking us all out of the malaise of accepting second best as the only way.

In my other predictions for 2012, along with MS issuing a profits warning before the end of the year, I predict Groupon will fail and get bought for a fraction of its IPO price, aggregators will rise as a force in computer channels as the Cloud takes a grip, corporate AppStores will arise in the face of the BYOD phenomenon and Google will see sales of its Google Apps for Business rise to between $500m and $1bn of annualised sales by the end of 2012.

New Cloud developments? Keep a close eye on two companies called Okta and independenceIT. 

Is Microsoft Going To Collapse?

There have been a lot of articles speculating on potential scenarios in which Microsoft will collapse - no, not just from Apple or Google-ites but from learned experts such as Forbes.

There are some scenarios in which Microsoft could come a cropper and there is a good slide show about 'Steve Ballmer's Nightmare' which depicts things too. I have argued that Microsoft need to be worried about some of the key industry trends and I focus on the growth of smartphone, tablets and office productivity tools in the Cloud as well as their treatment of channel but Forbes looks at the universe of Microsoft software and where the revenue comes from and argues that there are some doomsday scenarios.

The reality is that the vast majority of Microsoft revenues come from Windows and Office. The PC market as we know it is declining fast and this is Microsoft's staple income. The slack is being taken up by new wave devices like tablets and smartphones and Microsoft has has given that territory to basically Apple and Google on both counts. If the operating system is at risk, so too is Office as new waves of Cloud based software comes onto these devices and Macs for a fraction of the cost of the expensive Office products. Microsoft is not just under a barrage of attacks from alternative software but their costs too.

The demand for Cloud based office productivity tools is growing and Microsoft's Office 365 is a sham Cloud product which boasts a hosted Exchange and some tools which are too complicated and unusable for SMEs. Google is taking up slack as Google Apps for Business is a simple, flat cost per user and the arguments for a hybrid solution from Microsoft are being eroded.

If this battleground is lost by Microsoft, then its profitability is at risk and the basic tenet of arguments is that Microsoft is then at wider risk.

While this all may be calling Armageddon a little early, it has been disappointing to see Microsoft's apparent lack of creativity and innovation in the Cloud, specifically on Office products while the alleged inbred arrogance of the management is perceived as stifling alternatives for the market and threatening channel confidence. The lack of ability to tackle the smartphone and tablet market has been major manifestations of this.

Personally, I think Microsoft has plenty left in the tank. It makes enormous profits and has strength in depth. They can do more, if they try. Certainly, my observation is that it's a company that has got into the old IBM mode - it is management by upward presentation which falls in line with top level thinking. I don't see much challenge to the status quo and it's Steve Ballmer that everyone seems to want to be sure they concur with. So the slides do just that.

While that may have worked for Apple because Jobs was visionary enough to be ahead of the game, Ballmer seems to be nearing the end of his long tenure of a company that has coasted for too long off the back of a line virtual monopoly. The fact is, it seems to have lost the art of innovation and has lost the hunger to compete by anything more than loud bluster.

Certainly, the rapid changes in the market, the explosion of the Cloud, the decline of traditional computing and the rise in new devices controlled by others seems to have caught Microsoft off balance. This represents the first serious and prolonged onslaught on Microsoft's dominant position and cannot be ignored by either wishing it away or unintelligent arrogance by its employees. 

The reality is that Google and Apple have taken a significant new position in the market, from which they can attack Microsoft's heartland. And it seems as if Microsoft never saw it coming, have been slow to react and thinks it can talk its way out of trouble. All of which points to the fact that Armageddon is more something that Microsoft can do to itself rather than the market do to it.

The obvious answer is for Microsoft to change management fast at all levels to breathe new life, thought and creativity into the giant without the baggage of the past and mobilise the research and production teams to drive new innovation into the products and get costs down while dreaming up its master plan to beat Google and Apple.

It's time to walk the walk not talk the talk. And fast.

Calx Europe is Business Acceleration company which works with vendors and channel to develop and implement plans to win in the Cloud market opportunity. For more information please call +44 (0) 207 193 2356.

Buying Software in the Future

Steve Jobs was an incredible man - I think we all agree on that. But to my mind, amongst all his innovations and acumen what he did to converge the mobile and computing market was stunning. I think it was just the first steps in an exciting journey.

Recently, the CEO of Tech Data asserted that smartphones were the products to watch in the next year or two and he knows a thing or two about products as his company sells around $25bn of Hi-Tech kit a year. So it seems the world is set to ride the tsunami of mobility products - smartphones and tablets to the fore.

This has been much the domain of the consumer until recently when we all started to turn up to work with these products that we bought with our own money and insisted they should be put on the network and to heck with the security risks. This 'Consumerisation of IT' or 'BYOD' thing is becoming a huge issue but it brings opportunity.

So what did Steve Jobs do that was so amazing? Well Vodafone and the likes had toyed with sending applications and things to the phone for a while but it was all a bit disjointed and ineffective. Jobs turned it all on its head. He brought the world of computing to the mobile industry by not just inventing a great smartphone but by re-inventing how applications were to be delivered to the phone and he encouraged hundreds of companies, small and large to develop Apps. And he cut out the phone companies from the action. And he cut out the channel from the action too. It was all owned and delivered by Apple - just as he had done with iTunes, the App Store revolutionised the way software is delivered first to phones and then to tablets - and where next?

Unlike Microsoft who opened up the PC market for everyone to develop in, Apple opened up the phone but took on the role of software distributor by providing the only outlet to get the product. And it takes a sizeable cut of the sale for doing so - much more than a distributor would. By creating this bond with its customer, Apple has also become the fastest growing Cloud storage company in the world when they delivered iCloud. Suddenly the bonds with Apple get stronger and it spreads across the spectrum of Apple iPhone, iPad and Mac computers. This is a superb business model for the future as you can just layer on more products and services easily.

So is this the template for the future of PC software purchases? As yet there has been no great move by a single large company to try to emulate Apple but there are few parallels in the PC industry other than Apple themselves. This leads me to think that the software hypermarket company of the future has yet to emerge.

I can imagine a company setting up an AppStore software hypermarket and aggregating as much software as possible for consumers and small businesses to buy - both traditional perpetual licence software and Cloud based. Such a company could cut out traditional channels as Apple have done. It's not as easy to do as Apple have farmed their own base in doing so whereas there are loads of PC vendors out there. 

That's why I think the software store of the future will be independent of vendors and potentially not of the channel today. Now who could that be? Amazon? Google? Wal-Mart?

Calx Europe is a Business Acceleration company specialising in working with vendors and channel to develop and implement strategies in the Cloud market. Call +44 (0) 207 193 2356 for a no obligation discussion.

The Channel is Dead, Long Live the Channel

This Cloud thing is making vendors do some potty things. Lots of them are investing greatly in their own hosting capacity and then they try to circumnavigate the channel in terms of dealing with the end user. Yet they also want to use the channel's leverage in customers to get recommended for the sale, recognising the role the channel plays in reaching so many customers.

Something tells me this is not a long term business model that has sustainability.

Channel executives are canny folk. They survive most onslaughts on their business and barmy channel strategies by vendors with ever decreasing margins and hoops to jump through and still grow at the end of it. The trouble is that customers just keep on buying. Vendors just don't seem to get all this as they continually claim that Resellers and Distributors offer less and less value yet more and more is bought from them.

Broadline Distributors are a great example of this - the mighty Ingram Micro and Tech Data should have died long ago according to vendor executives if they really do provide no value in the channel but they keep on turning in growth. And they still are the 'Go To' guys when vendors need a favour.

So why is Cloud so much different? And why are vendor executives at some of the top firms in the world so convinced that this time distributors will whither on the vine and die? Perhaps they ought not to say it too loud in case the distributors hear and they might live to regret those words.

All is well at the distributors. Numbers look good, margins are holding with a few collywobbles about supplies of this and that from Thailand and the 'will they, won't they' at HP but by and large things are pretty rosy. It's fair to say as the phenomenon of 'Bring Your Own Device' takes hold, some of the distributors are getting uppity about revenues flowing through things like airtime providers or App Stores but they can't complain too much when they also supply smartphones, as in Tech Data's case, by the bucket load. 

In fact, most distributors are pretty sanguine about such vendor comments that their value ceases in the Cloud. They adopt their hardy pose and say, 'Well we've survived all this industry has flung at us yet' and knuckle down. Much of what they do is for the now as annual, quarterly, monthly and daily numbers drive their mentality and so thinking about what might be in 2015 is usually just a number in someone's imagination. What the business might look like then is not the thought du jour.

Somewhere along the road, vendors and distributors with the rest of the channel need a meeting of minds or else things just might get a bit messy out there. 

Just this morning a VAD Distributor in the Cloud reckoned aggregation platforms at distributors were the domain of only broadliners. That's a naive way of looking at things and although it may conflict with large resellers, the fact is that distributors have a huge presence in the mid-market where no one can afford such costly systems right now nor the problem of running them alongside their current ERP. Let distributors scale up theirs.

The risk here is customer stickiness. If a distributor does this right then it can aggregate the sales of all resources, products and services a Reseller sells on a single monthly bill. It will accumulate vast history, even bill-on-behalf of some Resellers. Effectively it will become both the bank and the back end system for thousands of Resellers and just as it is hard to change your ERP system overnight, it will become equally hard to change your distributor once you commit Cloud business to them. All of which means that margins should start to solidify and even creep up while churn may become lower. 

So that VAD distributor needs to get wise. And so do the vendors. End users will not appreciate having thousands of suppliers. It would be hell for consumers to have to buy their Apps individually from the myriad of software writers and the App market would never have taken off the way it has if that was the case. Apple changed the paradigm for us all in terms of online software hypermarkets and aggregated billings and, guess what, they make plenty of money out of it, far more than the average distributor does on software today.

So aggregation has an important and huge future and it is the one thing that may make those vendor executives regret their words about distributors. Meanwhile, distributors ought not to get over confident that just buying a platform will do the trick. There has to be a meeting of minds and the strategy must coincide with that of the vendors. That's going to take a while.

Why? Because many senior executives at vendors and channel alike simply don't get the Cloud yet.

Calx Europe is a Business Acceleration company specialising in helping vendors and channel develop and implement Cloud strategies. Call +44 (0) 207 193 2356 for a no obligation discussion about the Cloud and its future.

Shifting Sands in the PC World

In a matter of just a few months we have seen the IT 'Client' market change dramatically. The definition of this is what we use on the desktop to compute with - desktop, laptop, notebook and now tablet.

We all knew that tablets are trending - Apple will likely manufacture and sell 20 million iPads this quarter alone and by 2014 it is reckoned that of the total 1.3 billion PCs on earth, over a quarter will be tablets. To reflect this, Gartner Group issued some appalling figures on the PC market for last quarter - of notebooks alone, there was a 53% drop in sales and PCs fell by 21%.

It is very clear that despite industry pundits trying to dismiss the Apple iPad and other tablets as just fancy gadgets with no business worth, the tablets are very quickly becoming productivity and relaxation tools. Finally, the world of computing is truly reflecting what mobile workers does - we work and relax while we travel.

The Apps are getting better. While I type this I am also keeping an eye on the Ireland v USA RWC game in the ITV Player window. I use Evernote to capture my research and notes for all meetings and projects in handy notebooks that synchronise over all devices immediately over The Cloud - at just £27 per year for the Premium version, it is one of the best productivity tools on the market. I use Pages to generate lose documents and blog articles on my iPad and then upload them into my blog as it is easier and quicker using things like WordPress or Blogpress. I can open and review large PowerPoint presentations in my iBooks App as PDFs. Realistically the only two things I don't do well are spreadsheets and presentation building where the world is dominated by Microsoft Office although I like the functionality of both Numbers and Keynote.

It's the cost that gets me. I have yet to pay over a few quid for any App - even the iWorks suite cost less than £20 in total on the iPad. It's revolutionising the way we work and buy Apps because at no time has any corporate restriction or IT manager defined what App I use. I just buy them.

The outcome of this is that I have changed my workhorse laptop from Lenovo PC to Apple MacBook Pro. From here there is no turning back. I have the iWorks suite installed for £14 each but Office Mac Home & Business for around £180 is simply the best suite from Microsoft for years. Apple is steadily getting back on executive desks and Steve Jobs' incredible journey of rescue has got Apple back into mainstream computing by the back door.

No one could have predicted all this in just a short period. Edifices have crumbled and the once mighty HP has not only surrendered early in the tablet market, it has capitulated in the entire PC market - a $43bn business to the company - as the death knell of the PC market sounds.

Channel players will be sanguine. As long as everyone needs clients, there will always be need for resellers and distributors. Right?

It's rapidly becoming unclear how that looks in reality. If Apps and the Cloud will be the main 'shop' by which everyone buys product - perhaps bespoke App Stores for corporations - then where does the channel get the incremental sales from? The infrastructure will change dramatically and more of the delivery of products may well change too.

App vendors like Google will be salivating as they are reckoned to be the winners in the tablet operating system market with Apple as No 2, the obvious follow on thought will be that Google Apps will become more prevalent as a result. With Google Android getting a huge share of the Smartphone operating system, this seems to be logical. For Apple, iCloud will lead the way for serving their applications and business needs.

I haven't mentioned Microsoft in all this. They have proved with Office for Mac that they can innovate again but their future in the tablet market operating system market is put at just 13% and this may be less if they cling onto the hope that tablet users want full versions of operating system and applications - and for the usual big money. 

Google Apps at $50/user/month and iWorks at perpetual licence costs of less £20 have defined the future of software. 

It will be very hard to predict what happens from here. But the channel needs to start thinking. The issue is 'clouded' by Cloud generally as traditional vendors try to stake out their roles. But Cloud is a great deal more than this. It's about how products will get to users and what they will pay also. And as client technology changes so dramatically and quickly, the future is arriving faster than we would all like.

So much of what is written about the Cloud tries to translate what we do today to a world of tomorrow. Vendors talk of 'transformation' of worlds of software from on-premise to Cloud and how resellers must do this and that. 

The reality is rapidly evolving that the new world will have little to do with the old world. Transforming existing software into the Cloud may be one option but there will be many more. In the last year or so, thanks to the tablet's explosive start, thousands of innovators are starting up and charging little amounts for cool software.

There is a strong argument that says that the winners of the world of tomorrow will be new vendors who will throw off the need to adhere to legacy, solve the issues of integrating into corporate directory structures and explode lower cost, clever office software to be used on any device, anywhere.

There is also a strong argument that says the new channel of distribution of software generally has yet to emerge. 

Many of the channel players today are standing around waiting for some light to emerge which they can follow to lead them to what the future holds. Many look to their vendors for the answers but some of these vendors have ploughed their own furrow without channel following the likes of Google and Salesforce.com ahead of them. 

It's a pretty confused state. Or is it?

At Google and Apple, life isn't very confused at all. This is client technology and these companies have worked out exactly how they will make and deliver their products to all the users. Out of the box, my Apple MacBook Pro worked with my Microsoft Office 365 and absorbed all the iCalendar and directory structures without a hitch. I cut the umbilical chord to the PC world but for one application - my Sage accounts. That will be solved soon as I trial NetSuite.

Apple will launch iCloud next year and this will likely revolutionise how I do all those things for the future.

So if Apple will have around 38% of the tablet market and Google 40% and their shares of smartphones will around the same - and the total number of these devices used by consumers and corporate clients will be around half the number of PCs in the world today, what is the future for the PC as we know it? And what is the future for the world that PCs live in technically?

This is the issue facing channel players today. Sticking with the strategy of staid software and hardware companies may not be the brightest of ideas. Some of these mega-companies don't really want channel players for the future so a question channel players should all ask themselves is, 'Why should I help you sustain the past if you don't want me for the future?'

It's as well that software vendors think about that particular question. 

Microsoft Bites Back

No, Ty and others, don't switch off yet or send haranguing messages. Hear me out, I haven't gone mad yet. Well, at least, not completely.

I have moved from the Dark Side to the sunny world of Apple by buying a MacBook Pro 13" and it's the cat's whiskers and it looks good too. All that a laptop should be and more. OK, so forget the spiel on battery life as it is no better than my old Lenovo and it's heavier but what a brilliantly designed machine. It comes with ton of useful software, you can get complete iWorks suite for business for a little over £40 and it set up with my Microsoft Office 365 hosted server easily. I was up and running within minutes to enjoy the 'always on' world of Apple with its innovative way to see your desktop, find files, buy software - it's the future for sure.

And then there is Microsoft. I bought Office for Mac and it's simply superb. You can get all the iWorks equivalent for just £70 if you shop around - Excel, Word and PowerPoint. But it's not the tired old staid versions you find on the PC - this is Office for Mac 2011 and it is Microsoft back at its best. Innovating, clever, sassy and so good - these applications once again are great to use.

Having sat with the Apple email, address book and calendar for a while - all of which came with the machine and synchronised easily with my hosted Exchange, I tried the upgrade to Office for Mac Business which gives you Outlook. This was expensive at £125 and for any extra it gives you over the resident Apple programs it's not worth it. But if you are stuck in a rut with Microsoft and long for having the full Office suite, then bite the bullet and buy it. It's brilliant.

Remember I had upgraded to Office 2010 in my £189 per year MS Office 365 implementation - well Office for Mac 2011 is just a load better. It looks good, performs brilliantly and its full of Microsoft innovation and cleverness. Why can't we get things like this on PCs?

Everything was so simple to set up - all my contacts and calendar were immediately imported from MS Office 365 and then I got the benefits of the new look Office for Mac things. Go look at the templates for new documents, look at the contact cards, look at the ease with which you can organise your Outlook with simple tabs. It's just a league different to their old stuff.

The Down Side

Well I had to play to my new Apple friends in the audience. Why oh why was Office for Mac not offered as an alternative download for the Office client in MS Office 365? I have had to buy the whole thing again instead of porting my existing, expensive licence. That's just dumb and profiteering - the world is changing, wise up.

Then there is SharePoint. Microsoft - why did you lob this into Office 365? It is just so brainlessly useless for small businesses. On the Mac you are given MS Connections as part of Office for Mac and it links to a SkyDrive and SharePoint - well the latter doesn't  'see' my Office 365 SharePoint server. How stupid is that? 

But the no cost alternatives are SO MUCH better - Dropbox is just so great and Box.net is similar to SharePoint. For instance, I tried setting up my SharePoint Workspace so my accountant can see all my accounts spreadsheets for my quarterly VAT returns. But you can't easily mimic your file structure and you are limited to the number of files in the Workspace and that you can download at a time. So we use Dropbox instead - it took a minute to set up and we share a folder which syncs with my desktop. No cost.

And here's a daft point. Office for Mac 2011 can't interface with Exchange 2008 or below. Microsoft's legacy is going to pull it away from being able to migrate people successfully into the Cloud because of that haphazard and nightmarish upgrade path it used where it made backward compatibility not possible to try and force people to upgrade. Now its left with users all over the place and an inconsistent and nightmarish story for Cloud which its own salespeople are not capable of articulating.

Watch out for Google and Apple then because neither worry about such corporate atrocities. It is at the dilemma of upgrade that Microsoft remain horribly exposed. The cost of moving to Cloud then to Apple has been daftly prohibitive and maybe be a waste anyway. If iCloud delivers on half of what it promises, I cannot see myself staying with Microsoft at all.

The Good Side

If you are currently a hosted Exchange customer with Microsoft product then MS Office 365 is a good move forward. It makes sense for a small business. If you are a small business and you run your own Exchange server, consider hosted Exchange and Office 365 - it really takes all the IT nastiness away and the flexibility is great. The cost justification is there also but don't rely on Microsoft to articulate it because they don't seem to understand the fundamentals of real business so ask people like me what difference it makes over 3 years. I am a user and I have worked it out. Microsoft salespeople are lost in the morass of their own world and struggle with the actual concept of business - really it's not a good place to be in trying to sell Cloud.

MS Office 365 working with Apple for Mac is AWESOME. It's a tragedy that it isn't offered as a client alternative in MS Office 365 but hopefully blogs like this will make Apple think again.

Let's hope the next step is for Microsoft is to produce innovative new versions of Word, Excel and PowerPoint to compete with Apple's iWorks suite at the same price. There isn't that far to go and let's hope we see them on the Apple iPad too. If Microsoft could get there, then they are showing that they can once again be kings of the office. If they stick to their PC mantra, they risk being taken out.

It's crunch time and they need to think hard on their MS Office 365 strategy. Think the way you designed the Apple versions and use that as your starting point not the PC. It will make a huge difference.

The Cloud? Nah, it'll never take off

The Cloud? Nah, it won't happen. People still want to have their cosy Microsoft Office environment on their tight knit and safe Corporate network.

In less than two years something odd has happened. In more then one major quoted company I have worked with, over 10% of the user community now use Apple Macs as their PC of choice. These companies are not fuzzy designers or lovey media types they are plain old IT companies with rules and regulations on what PCs they buy and what applications the company network runs. They even have rules and regulations on internet use and social media restrictions during work hours. They are completely normal.

So how the heck did these Apple Macs get in there?

That Steve Jobs is a canny sort. He reinvented a company that was almost dead, out of cash and ideas and not just saved it but turned it back into a being vibrant, successful company again. And in doing so he changed the Corporate world. Central to all of it was The Cloud - without it he could never have achieved it. You see, Jobs took gadgets and made them the must-have devices of choice of businesspeople. First iPods - no threat to the IT status quo there. Then came iPhones and suddenly we had a funky device that linked to a shop online that also backed up your data and you could buy tons of applications easily - and cheap as chips.

It was first in the wave of clever smartphones that we all wanted. But surely these things were leisure devices? These were not serious contenders as business productivity tools? By the time the iPad came and the new wave of mobile innovative computing had took hold, many vendors had woken up and smelt the coffee. Via the back door, Apple had set a new agenda for computing. By getting executives and workers alike to buy effectively gadgets with their own money, an upsurge of revolt against the IT rules occurred in companies across the globe. IT managers wept as CEOs relented and allowed iPhones and iPads to be bought and for users to express choice and buy Apple Macs as their PCs of choice.

Apple came back into mainstream Corporate computing via the back door - from left field. And nobody saw it coming. Using the Cloud as the tether not the network, Apple totally revolutionised the way in which we bought applications and the price which we paid.
Executives not only had Macs and iPads but they had tens of small applications running on them, some business, some leisure which helped them to do what they wanted. You could now just flip open your computer and quickly dash off an email wherever you may be via the phone or WiFi network while listening to music and without all the rigmarole of linking to the home network. The Cloud made it all happen easily.

Computing has got innovative, exciting and sexy again. Luddites and Victorian minded companies like Microsoft are trying to pour scorn on these upstarts like Apple and Google. They can never challenge Microsoft on business-grade computing. People love and need Microsoft Office on their PCs, USB ports to tether to devices and strict rules governing what productivity tools they use. They need Office because that's the Corporate standard across the globe. Don't they? The Cloud is what Microsoft will define it to be and it's just a bit of extra connectivity but the good old lumpy, maxed-out PC is still the business workhorse.

The revolution has already started. The Cloud - no - the internet is the platform and it's giving people the power to do things unimaginable. All those years ago, Microsoft gave us that power to be individuals in a business world full of rules by opening up possibilities. Now it's being the matronly old lady that tells us that we cannot have fun and do business at the same time. The Cloud and companies like Google and Apple say that it's different and people - business people - agree.

Apple is back in mainstream computing. Google is on the business scene. A whole new raft of exciting new companies are innovating as if we have emerged from a computing Dark Age. The future is new and exciting and it's fun.

On the same device a 16 month old kid can have fun with a 70 year old man swiping through photos and playing the virtual drums while the same machine receives corporate email and be a mobile computer. Suddenly, the world of business and leisure has merged and laptops need not be left to whir forlornly over weekends as the family goes for a picnic. The computer gets invited along too.

The Cloud has opened up the corporate network. The next logical step is for companies to reassess their use of business productivity tools in the light of what is going on around them. The Cloud isn't for everyone but every small business in the world today will be thinking how to maximise their sales not run their IT. The Cloud gives them the freedom to do just that. Being fast moving, agile, accessible, innovative and competitive is what business is all about not being restrained by networks and rules. Using The Cloud will help small businesses be leaner and win. It helped a big company like Apple to flourish again.

It's a competitive world out there and technology is changing by the minute. Companies can now share in the freedom of making decisions about IT that are not about 3-5 year windows but 6 months or less - they can adapt to the changing world much, much quicker. They can embrace social media on the fly to maximise business, they can answer phone calls on a virtual PBX while sitting in cafe at the Station just the same as if they were in the office. The power of what can be done is no longer limited by the purchase of a server or dedicated device to do it.

Just do it.

You see, The Cloud is being made out to be some mysterious, ethereal intangible plume of vapour into which data descends and gets lost. It isn't. It's a high grade network into which companies have poured billions to make it the communication vehicle for everything from voice to data for the future. It allows us to not just do business with people everywhere and make small companies look big but has given us a voice and platform to increase our personal footprints. It has also done the same for business. It has also allowed us to share in the economy of scale of expensive hardware and software by not making us purchase the whole caboodle to do it but join others who have knowing there is plenty of capacity for us all.

The Cloud has given people and small businesses scale. Use it to make yourself bigger and pay for only what you use. The Cloud is like having a high speed train service that doesn't just stop at stations but stops at your door step or wherever you are and takes you exactly to wherever you want to go, and is cheaper than buying and using your own car and getting caught in jams.

The Cloud is not just the superhighway for the future, it is the future of computing for small businesses.

Caught with their pants down

Another day and another mobility giant disappoints.

This time around its RIM, makers of the Blackberry. The once darling of the markets and the must-have device of any workaholic executive, the Blackberry led the way for corporations to serve their emails on mobile technology. It had so many things that were wrong to start with - the clunky wheel mouse, inability to read attachments, constant scrolling up and down to find messages, that blinking deductive text that made so many messages just total rubbish. It didn't matter, the Blackberry was simply a cutting edge device, we put up with it all.

Suddenly the world is different. Profits dropped in the quarter to May to $695m down from $769m on the same period last year - missing even their revised forecast. Talk of challenges and cost cutting is rife - shares are down 12%. Oh and any company that has joint CEOs is asking for trouble.

The same could be said for Nokia who, having absorbed Symbian, had got so locked into their own world of mobile phones they simply failed to see the Smartphone revolution as a threat. HTC, Apple, Samsung have all battered them repeatedly and now they have turned to Microsoft as a last ditch effort to be saved.

For Blackberry, their woes have gotten worse as there have been delays in delivering their new tablet product which would be just another catch up device in a rapidly filling market. Google Android came from left field with Apple to invade the mobility market and their power and brilliance has simply left the traditionalists behind. Innovation at RIM and Nokia seems to be a thing of the past.

In both cases, RIM and Nokia have been caught with the pants down. RIM has at least got a decent share of the corporate market to defend but when it took me precisely two minutes to configure my email client on my Android with ZERO new software on any server, you know that Blackberry are struggling for the future.

Analysts are saying that users are not waiting for Blackberry - they are moving to other platforms. The same can be said of Nokia. Too little, too late.

Nokia Knocked Again

Nokia has once again downgraded its revenue and profit forecast. This has caused an 18% slide in the value of its shares.

Not a good time for the new UK General Manager, Conor Pierce, to take the helm and some important decisions will have to be made for the future. Nokia is still the highest shipper of handsets even if its market share is dwindling. The problem is that it still ships the vast majority of its handsets in the very low margin 'dumb mobile' sector. The high margin smartphone sector has largely passed them by and this is now being dominated by the rapid growth shown by companies like Apple and HTC.

Did Nokia's management underestimate the threat posed by companies like Apple who came from left field? Did Nokia cling to the hope that Symbian would be the de facto standard in mobile operating systems, again underestimating the threat that companies like Google posed - again coming from left field?

They have pinned all their hopes of a revival on their much publicised partnership with Microsoft. The first of the new handsets sporting Windows 7, as there is no real mobile operating system form Microsoft, will not be seen in UK markets until Q1 2012. It already sounds late.

Having already made announcements about 7,000 job cuts, the once mighty Nokia is a little punch drunk. But is it on the ropes?

Xooming Marvellous

Up front, I will admit I am an Apple iPad man. I bought my iPad 2 about a month ago, upgrading from the iPad in the process. And I love it.

Now here's a curious thing. Chatting to a high-up-in-Microsoft mate of mine recently, he basically said that the iPad would get swamped by the Microsoft combatants. I poo-pooed his argument as usual as just MS bluster version 3.5.

BUT, whilst my MS friend version 2.0 maybe wrong on one count he may be right on another. You see, I also recently received an upgrade on my mobile phone and went from a steam-driven pseudo Nokia smartphone to the HTC Desire Z. Oh my, what a spanking phone - if you will forgive the battery from not lasting anything like it says on the tin, that is.

OK, battery aside, the phone is superb. And that's because of its Android operating system from Google. There are tons of brilliant Apps, the Wifi linkage is brilliant and even the retractable keyboard for idiots like me is actually fairly redundant as the touchscreen works really well.

What is more, the operating system seems stable and quick. The graphics are dazzling and it's a dream to Twitter, email, text and all else from. In short, it's the cat's whiskers in smartphones, in my humble opinion.

So enter the Motorola Xoom, the Android 3.0 (honeycomb) driven tablet. Even the marketing blurb is wonderful simply saying 'It supports Abobe Flash Player 10'. If only Apple could say that for the iPad - it continues to be a rusting nail in a festering wound for them.

There's more. The Xoom has a 10.1" display at 1280x800 WGA screen. What does that mean? It's bigger and better definition than the iPad 2. The onboard cameras are better than the iPad's too. Better still, you can buy nice accessories like a portfolio case rather than useless and expensive Smart cases that the iPad 2 has. Mine went straight into a cupboard and I stuck with my nice, leather and expensive yet not dimensionally correct 'Snugg' case bought by my family on my birthday.

If there is going to be a serious threat to Apple, I think it will be Android that will bring it on. If nothing else, we are all a bit jaundiced by the Microsoft 'catch up and botch it' syndrome. In this case they cannot simply buy the company to compete as Apple and Google are just a little beyond reach on that front.

There are a few drawbacks at this stage. Models available are Wifi only so far, with external 3G Mobile broadband extra which is a shame and it looks slightly pricey at the moment although you do get bigger memory for your bucks.

I would like to see one in action to validate my argument but on 'paper' the Motorola Xoom with Android looks pretty darn hot.


- Posted using BlogPress from my iPad

Google Samples Reality

A friend and former colleague had a good adage about free products - 'They are free and worth every penny'.

It used to be my mantra when selling web and videoconferencing against the likes of Microsoft who allegedly (despite making over 40% net profits at the time) gave NetMeeting away free. Sure enough they stopped developing the product but it scuppered many a sale for me.

And so Google, the masters of 'selling' free products and services, finally stepped up and brought us a touch of reality - their version of a SmartPhone, the Nexus One. Sold either as a separate item or as an airtime bundle with T-Mobile in the US it is not cheap but it is meant to be an alternative to the immensely popular Apple iPhone. In the UK, it will be sold via Vodafone or Google direct.

The trouble is that Google has always offered support of its product via anonymous email - why expect more as their products are free, after all? Not so with the Nexus One - you pay serious money to get in on the act and Google were set to make handsome profits. But the real world intervened. Phones can go wrong and customers in the US are furious - filling bulletin boards and forums with complaints about lack of service and finger pointing by Google as neither they or their airtime provider can agree who should be taking the calls to service complaining customers - and Google do not have a line you can call.

Google must have watched Microsoft, who over the years have made lack of customer service an art form. Microsoft products are not cheap - a full MS Office suite for a home user, small business or even a Corporate User sets you back a pretty big sum. But try getting some support on the product and you have the delight of being referred to your PC supplier if it was bought pre-loaded or just sit and wait for hours if you bought it direct from Microsoft. And it's not as if Microsoft products are bug-free - some of the bugs actually were put in the very first versions and reside there today like antique quirks.

Google are vying to topple the likes of Microsoft and become standard applications in the world of Cloud Computing. To do so it has to learn a lesson that customers are fed up with the arrogance of the likes of Microsoft when it comes to ropey products and poor support. To make us all change, the alternative not only has to be 'fresh and cool' but reliable and well supported.

I hope Google get it right for the UK launch.

Two Rules, Same Issue

Hot foot from his sleazy holiday on an expensive boat in Corfu, courtesy of David Geffen of Dreamworks, Lord Mandelson personally intervened to strengthen laws against those who download music or films illegally. He did not attack the real perpetrators of the crimes, those who steal the content, but the people who take advantage.

Think about this. Suppose you invent something really clever and you then patent it. Next step, you bring it to market somehow and you find it is serving a need and it becomes successful. The next thing you know, another company or individual steals the exact same idea, even though you have a patent, and starts to make and then sell an almost identical product at a slightly less price. You would have incurred all the development costs associated with bringing the real thing to market, the 'cloner' would have simply capitalised on all that expense and taken a slightly lower margin to whip you with the same idea.

In law, there is nothing stopping people buying the 'cloned' product. We are getting some pretty poor attempts to stop the illegal trading of designer label goods like clothes, but that's a brand protection issue not inventions. Realistically patents are swiped every day in the area of technology and there is huge money in it. If the owner of the patent wants to do anything about it, then they can only sue the violator of their patent and that is a long, expensive and nasty process. You only have to look at what happens when you see Apple's incredibly long running dispute with Microsoft over the infringement on their patent on an operating system using windows.

Notice how this long running sore and drain on people's ideas has never been tackled. Despite serial inventors like Trevor Baylis lobbying Mandelson, nothing will get done as he has no expensive yacht and he wields no power in the world of business and commerce. There are no plumb non-executive jobs at stake or any movements in the world of the rich and famous. Inventing can be the grubby domain of garage-based grease monkeys who have passion and commitment, for who the money is really a bonus - it is the invention that provides the stimulus.

Not so in the high octane world of David Geffen and his peers. The laboratories and offices are full of the latest hi-tech kit and littered with the brainiest of talent who work on taking other people's ideas and turning them into films. Often, unless you are people like JK Rowling, who have their own way of controlling their income by having the much needed sequels in their head, the writers get little return compared to the producers, actors and others who distribute the content in the digital world. The popstars have to be pretty hot and consistent to keep the mincing machine going which is why people like Geffen and Cowell deal in the numbers game - and are so incredibly rich.

In the new digital world, it is the creators and inventors who are preyed upon by the likes of Google who take their content like any old piece of junk and just distribute it. Today you can buy ebooks by any old duff author who couldn't sell an actual book alongside the classics. Google is strangling the life out of news too by making the value of the content almost worthless but the distribution is worth billions.

So in the new digital age, Mandelson rides roughshod over inventors who have genuine patents logged and waves two fingers at them by focusing laws only on the digital age. He has even made those laws geared toward the downloaders, the equivalent of nobbling those of us who by PCs with Windows, which was 'allegedly' invented by Apple. It's actually the wrong way around as you need to stop the actual thieves.

But no, life at the top is all about being smooched by rich people. Laws are crafted far more carefully if wealthy people directly gain as then you have some favours to call in later. The new Digital Britain Laws are absolutely barking up the wrong tree. If content, illegally replicated is made available on the web, the people who replicated it should be the ones prosecuted. There is so much free content made available on the web, it is crazy to implement laws which puts the onus on individual users to check the intellectual property rights of the source of their download - it is sheer lunacy and flies in the face of digital media and freedom to access content. This is a problem the software and media industry should solve, not users.

Mandelson has got it completely wrong. Should he now be attacking all of us for not checking whether Microsoft has infringed any IP before we buy their products? No, he doesn't ask us that but frankly, there is a fair bet they have in many cases judging by the amount of companies who sue them each year. Such companies are far too rich and nice in his eyes to bring a case against them. The same actually goes for David Geffen and his peer companies - have they observed the rights of all the individuals and companies they should have in producing their content?

Why should ISPs knowlingly allow illegal content to be made available via their portals to the web - why are they not prosecuted instead of their customers?

This is a huge blow to the individual freedom of any user of a PC and having access to the web. It has meant that we, the users, are responsible for checking the validity of the IP of all content, not the people who distribute it. Content aggregators like Google, ISPs, telecom companies, and all others who present content to us over the web just got off scot free. Should anybody who is prosecuted under these new laws have a case against their ISP for allowing the content to be downloaded in the first place?

The users have become the criminals, the people the furthest from the source of the alleged crimes. Welcome to Digital Britain, Mandelson style.

Has The iPhone Changed The World?

The Apple iPhone is a remarkable device. It certainly saved Apple from a long, slow death but it has arguably changed our view of mobile phones forever, moving away from the world dictated to us by the Scandinavian and far eastern manufacturers. But in the world of mobile, has the iPhone really reinvented the model?

To be sure, the iPhone has changed our perspective in many ways. As you would expect, Apple brought us an easy to use, sophisticated user interface, as they brought windows to the world of PCs long before Microsoft did. Apple also destroyed the mobile store model as they invented the concept of an online mobile store that allowed not only ringtones but applications, music, movies and much more to be bought and downloaded on the go. They also brought us a flat-pack price model even if you have to pay a premium for the phone. There is no doubt the world they brought us on the mobile is here to stay as others rush to follow and the growth of 'Smartphones' as they are called is causing a rise in network traffic.


This rise in traffic is enormous but smartphones are not the lone or even the biggest contributor to the rise. Netbooks, laptops and the growth in the mobile browser, peer to peer data calls, application downloads, multimedia streaming and other things are contributing to a truly phenomenal rise in data traffic on mobile networks. As subscription penetrations reach saturation point, the pace of innovation keeps the market driving forward and for the first time last quarter the market reached $10bn in revenue in the US alone. By 2010, the global codified information base will exceed 1 'yottabyte' or 1,000 billion terabytes (a terabyte being 1,000 gigabytes which is 1,000 megabytes). The future we will be fast talking about 1 zettabyte (1,000 exabytes or squillions of bytes to the rest of us). We are talking more data than bank bailouts here - at last a number bigger.


We are entering the 'yottabyte era' as some call it and the one thing you can depend upon is that the mobile network providers are not ready for it. The financial strain of keeping up with this incredible growth in data is enormous and with the laughable prices of Government tenders around the world for airwave licences, it has not been easy for companies to make enough profits to keep reinvesting at the right pace to get ahead of the traffic growth.

With the exponential growth in mobile applications, mobile media viewing and advertising expected mobile operators are going to have to accelerate deployment of new 4G technology, they are going to have to take some of the load off networks by implementing femto or Wifi technology faster, get a better grip on managing the network and optimising it, look to standards on broadcasting mobile video rather than let it grow itself without control and look to get smartphones defined properly.

It's a hard job and very cash consuming but we are only now seeing the kinds of possibilities that mobile technology really offers. It's a far cry from the bricks that we used to use as mobile devices when, from a small, flat device, I can browse my emails, make video calls, view films, listen to music and browse the internet, all for a flat monthly charge.

And it has only just begun.

Microsoft Wobbles Again

I am sure it has nothing to do with my recent purchase of a new laptop and downgrading it to XP from Vista Premium but little by little, the world is not at ease with Microsoft.

It has just announced that profits are down by almost a third in the last quarter. It has been a tough year with sales falling short for the first time in a long, long while and they took the unprecedented step of making redundancies in the first part of the calendar year. As the world did not look quite so rosy, they have seen an increase in competition from some of their main rivals. Last year, Google threw down the gauntlet by introducing their browser, Google Chrome which is neat, quick and works well. For many of us, browsers like Mozilla or Firefox have been good stand bys as I find an increasing number of websites display problems with Internet Explorer (IE) 8.

Google's strategy on Applications make use of the Cloud and Microsoft is significantly behind the pace here. Already some significant corporations are migrating to the Cloud concept of having their applications served from the web where they also store all the documents. Detractors say the web is still too unreliable but pro-campaigners are quick to point out how often corporate networks display similar problems while security is becoming less of a threat with arguably corporate networks at greater risk than parts of the web.

But it was Google's recent announcement that shook us all. Last month, Google announced it would be launching an operating system to rival Windows and already several PC manufacturers had signed pre-deals with them. The great core of Microsoft's business relies on the fact that just about every PC other than Apple Macs are shipped with a Microsoft operating system. It is the great 'cash cow' business that needs precious little selling resource and so the cost of sale is minimal compared to the vast returns.

It has also been the source of their greatest achievements in anti-competitive activities.

Famously, Microsoft killed NetScape and all other early browser vendors by adding Internet Explorer into the Windows operating system and so effectively shipping it for free. Of course, the astute amongst us would realise that no company that made a 40% net profit was actually shipping anything for free but Microsoft 'looked' as if it was playing the nice guy while snapping the necks of its competitors. AOL bought the pathetic husk of NetScape and only recently finally killed off any connection to the old browser. But it has not stopped a new wave of browsers as Microsoft showed once again that when it gets fat and complacent, it does not innovate. Particularly in the area of virus, hacking and malware, IE has shown to be very vulnerable.

But the Windows Operating system has also been the launch pad for the success in the suite of Office products such as Outlook, Word, Excel and PowerPoint. In each case, not one of those products was the best in breed - Excel in particular was a poor man's Lotus while CCmail and WordPerfect were arguably far better products in the email and word processor categories. The fact was that when every PC came with something from Microsoft actually running it, the leap to Microsoft's suite was too easy. Slowly, Microsoft strangled the competition and today we have the joy of running possibly the most cumbersome and ill-fitting suite of desktop applications for our everyday use - and it ain't cheap either at an entry point for around £210 for small business licences.

In reality, Microsoft is slowly losing its grip on the desktop. Today, a small business may have to buy a new PC with Microsoft Windows and get MS Office on it too. But when it comes to security, AVG have an excellent solution, back up from Acronis, PDF making for free, Accounts from Sage, Skype for Business, Yugma webconferencing and CRM from Salesforce.com or ACT and you have will not have outlaid too much for best in class products, not one of them would be Microsoft-made. In fact, recently my new Office Suite arrived with Business Contacts built in. The laugh was that there was no obvious way to load my current Outlook contacts in there en masse yet it embedded itself into my Outlook. One click could export all my Outlook contacts into a file ready for Salesforce.com or ACT which seamlessly use Outlook as its email generator. It really was a dreadful attempt to lure me to buy Microsoft, and now I can't actually find how to remove it from the Outlook interface just to make me more cheesed off!

The next two years will be crucial for Microsoft. After the disaster that has been Vista, they need to get back on track. Windows 7 needs to be inch-perfect but if IE 8 is anything to go by, Microsoft are not releasing well thought out and tested products - but many would argue that has never been their strength. Google are fast moving up on their shoulder, totally dominating the Search market from all angles and their revenues are now rivalling Microsoft's. Google's launch into the world of operating systems extends their bright faced, cool image right into the heartland of the lumbering Seattle giant. If they have got it right, then Microsoft could well have seen its zenith and is already on the slope downward.

The problem for Microsoft executives is that all those years of ill will and arrogance over users will pay a heavy price. Locally, Microsoft feel they have never had the ear of the CEOs but always the CIOs. Now this could be a massive threat as for once, the CEO may know as much about a viable competitor as the CIO and guess who outranks the other. In all the years, Microsoft never paid commissions to its sales staff and so has never had big-hitting, skilled salespeople at its fingertips but lots of people who immersed themselves in the 'Office Stack' technology and the complex world of licencing. These people have been order-takers who pre-sell massive licence deals which see customers pay for a whole load of things they never use. The only skill of the Microsoft salesperson has been to get a customer to use those items before the next licence negotiation. Little by little, thanks very much to the Vista fiasco, major corporates have played hardball and pushed back. Now there is a viable alternative to Microsoft on the horizon.

And it isn't some trumped up start-up. It's Google. You had better watch out.