Is Microsoft doomed in its Current Form?

It seems Microsoft has had a dose of reality in the last week. At the Consumer Electronics Show in Las Vegas, Tami Reller, the CFO of the Windows division, has warned that PC shipments will be lower than an already gloomy forecast in this quarter. In her case, she put this down to supply problems in the Thai flood regions where the high waters are still causing havoc to component makers, particularly on hard disks. Some UK distributors have plenty of servers but no disks which will impact their sales in the next few months.

Finally, it seems that the penny is dropping at Microsoft. Their figures are actually dependent on the shipment of PCs to a very high degree. I have illustrated before that Windows itself and Office Productivity products constitute the majority of the revenues and profits generated at Microsoft and these numbers are directly dependent on the number of client devices sold into homes and corporates. As PC sales alarmingly decline, so will Microsoft revenues and profits - in their very heartland.

Microsoft is a well spread company, for sure. But with servers taking a decline lately, Windows Server, already under severe attack by Linux, is also suffering. All this is occurring as Apple see sharp increases in the sales of its PC-like devices while tablets and smartphones continue to boom - all these devices coming with largely Apple and Google operating systems.

The threat also is that corporations are wising up. They have paid through the nose for arguably second rate products in their companies for too long. PCs which seem to fail conspicuously in less than 3 years, an operating so clunky it takes 5 minutes to load up each morning, office productivity tools which seem to suspend and crash for no perceivable reason, occupying ever expanding disk space.

Apple may charge top dollar for their hardware but you get a robust operating system, rich in features and free utilities of high quality which takes seconds to load up or resume, no matter what state you left it in. And office suite software is far cheaper with a breadth of products available at below £20 a pop - except Microsoft Office for Mac which is £189 but at least half the price of the PC version and many times better.

The fact is that tablets and smartphones are changing not just the array of client devices and how we use them for home and work but they are changing the way we buy software. Suddenly, we have a plethora, a vast hypermarket of innovative, low cost and clever software available to us that costs just a few pounds to buy. And we buy tons of the stuff. Finally, we are finding there are alternatives to the status quo that has frankly held us back for years in terms of real productivity.

Steve Jobs called it the post-PC era. I would liken it to the IT version of a 'renaissance' as people dream up all sorts of clever software and just punt it out in volume.

But there is a new trend. Bring Your Own Device (BYOD) is the consumerisation of IT. This is the concept that we buy our smartphones and tablets, even PCs ourselves and bring them to work as devices of choice to work with and demand access to the corporate networks and all its facilities and data. In the old days, at job offer time, we were told you would get a salary package and then a PC and phone would be provided. Already in the US, job offers go out with no PC or phone provided but the recruits are invited to bring their own.

This is one reason why Apple as a PC, tablet and smartphone provider and its counterparts in the tablet and smartphone arena are doing so well in the corporate world as users rebel against the constraints of the old PC world and flourish in the new post-PC era.

These are worrying trends for Microsoft. I heard of story of a Microsoft executive going into an Apple store to bait the salespeople with a new Nokia Lumia with its noddy-like tiling on the front having already arrived late and behind the market. It must have been a pathetic sight as an army of Apple customers looked up from their iPhone 4S devices and thought, 'whatever'.

This is part of the problem with Microsoft. This ingrained belief of impregnability and that users really have no place to go, so they swallow whatever Microsoft do and say. It's a Windows world, it's an Office world. The Spanish bank BBVA has proved that this is not necessarily the case in choosing to migrate its entire 110,000 staff to Google Apps for Business after a successful trial - encouraging all their employees to ditch the past. They have embraced the advantage of the Cloud to run their company by allowing the web to be the platform, not the PC which unshackles users from being given sub-standard machines and to choose a device of their own.

15 months ago, I bought the top of the range Lenovo Thinkpad - a great machine in terms of weight, PC sexiness and performance. Its battery life was always rubbish even though it was advertised as 10 hours and even though it runs Windows 7 its performance has degraded over time as I have found with every PC I have ever owned - it's as if they get fatigued from running rubbish software. Yesterday, as I walked into the atrium of a Microsoft building, it literally died. One minute I was looking at the presentation I was about to give, the next it was blank and dead. It still is dead.

In supreme irony, I had my Macbook Pro tucked in my bag (having not wanted to antagonise by using it) and latched onto the guest wifi and loaded up the same presentation from Dropbox. In seconds, without skipping a beat, I hooked up to the projector using my convertor cable and without pressing any button the projector and resolution was detected and my presentation was given. Jaws hit the table when they saw the Mac and I expected to get escorted out by security but when they saw how their own software behaved on a Mac with so many more options on how to run a slideshow from a PC and time your delivery, they were impressed.

But they still don't get it. Even when the graphs point out the clarity of the numbers and trends, they don't seem to get the fact that their very heartland, the core product set of the company is under persistent threat not by their customers but by users. No amount of canoodling with the CIO will make a difference. Users are rewriting corporate policy and deciding the future IT strategy.

I predicted that Microsoft will make a profits warning in 2012 and Keller's announcement prior to Q2 results was seeding some bad news. At some point, a hole will appear in that lucrative area that Microsoft has depended upon for years. If nothing else, the price of MS Office has to collapse in the future - nobody is going to pay the kinds of prices of the past for that product for the future. 

I predict that Microsoft will survive but not in the same form. It will have to radically change and find new ways to make money. Right now, it's not at all clear how they will do that. Is it time for management change? Maybe that's the starting point. 

But what do I know?

Ban Social Networking at Work?

Yesterday I blogged about the sales collapse at Groupon in the lead up to Christmas and I have also looked at the apparent large drop off in use of social networking sites like Twitter over the traditional holiday period. In the two blogs, I have suggested that there seems to be a marked indication that social networking is being 'transacted' largely in working hours. If, I surmised, that the majority of all social networking is for 'social' use and not business, are employers going to get wise to the apparent fact that their workers are using social networking heavily in working hours which may be impacting productivity?

Indeed, should companies actively ban or limit the use of social networking at work? Should they have a distinct policy about its use? Should they only allow social networking to be used by agreed members of staff and for company promotional use only?

I ask these questions as the mini-debate in the comments on my blog sparked quite polar views. On the one hand it was suggested that people with certain types of job like bank-telling or police on the beat as examples should not use social networking as their job demands their full attention. As a good example, you would not expect a professional footballer to use Twitter while 'working' playing a match or a boxer during a fight or a rugby player during a game.

However, you might expect all of those people to engage in social networking outside of their working hours. Perhaps in their breaks - although I can't imagine Sir Alex Ferguson's reaction during the half time team talk if Wayne Rooney had his head down tweeting.

On the other hand at least two people argued that there should be full, unfettered access to social networking as this would enrich personal and team performance and make employees more productive as they are being more creative and happier. And there is a fair argument in working relations terms to show that happy employees are productive employees.

I have worked with companies who have distinct policies - say no more than half an hour on certain websites during work hours or social networking sites being filtered out completely. I have also worked with companies who have had full, unfettered access to the internet. I can honestly say that my own observation is that access to internet is vital for most people to do their job. However, at those companies where there has been a policy there has been a range of performance observations.

In the companies where there was unfettered access to the internet there was a cross section of performances on show. In one company I have worked with, a general monitor was put on staff to measure time spent on certain sites. The information was not used as an HR or management tool per se but it was used to develop policy although it was clear that certain individuals were spoken to casually about their usage specifically of Facebook afterwards. The results showed that specifically salespeople who spent more than 30% of their woking day logged into Facebook were markedly less productive than those who logged in less than 30% of their working day. 

A very interesting correlation showed that those who intermittently accessed the site during the day actually were more productive even if they were logged on on more than 30% of the time  - and there was no real timing pattern to this like lunch hour. 

The result of the survey was that company developed a policy around Facebook use specifically but it was extended to a number of websites including online stores like Amazon. There was a serious kickback at first and the policy was amended to accommodate some of the feedback but it eventually went forward with a limitation of use of Facebook in peak working hours. This has remained in force.

The results have shown that overall productivity as measured in a very detailed way in terms of access to work related systems, orders entered, sales achieved, profitability achieved, cash collected, supplier orders placed, stock reduced etc etc has not really increased or decreased appreciably. However, the company did hit all its fiscal targets in the following year having underachieved the year before. However, the budgets reflected the economic climate so were less onerous.

But, in certain job functions where there was a distinct measure on performance, productivity increased. More outbound phone calls were made, more access to the company CRM, online order and backlog systems were made, more physical transactions were made, more old stock was reduced.

It's arguable that none of those increases actually were related to decrease of use of Facebook specifically and they did not run a similar detail 'before and after' use comparison, mainly as there was some kickback about 'Big Brother' use of monitoring impinging privacy. But the biggest measure that was impacted was staff churn. In this specific industry, staff churn, particularly in the desk bound sales area, is high at around 45%. This fell to below 40% for the first time in 5 years.

I have only read the findings but anecdotally, I have worked with a company where there was no access to social networking or sports or retail sites during the day and that company has bombed since its IPO two years ago. Meanwhile, I have worked with a firm with unfettered access to the internet and seen salespeople even communicate in offices via Facebook - the company performance was poor and sales call out days were the worst I have ever seen in participation terms.

Yet those companies with clear guidelines seem to get something back. As in all things, there is a balance to be had. What the firm who did the study found was that there were some staff who just spent an incredible amount of their day on sites non-work related, but particularly Facebook. There was no doubt that those who did were the worst performing members of the company by some distance. But more importantly, these staff members actually brought the performance of their teams down.

I still think you have to look at this issue on a case by case basis. It was clear from this in depth study that people performed really well when they seemed to finish tasks and took a break on the internet. Those who never logged out were contributing virtually nothing and poisoned the performance of others. In reality, this is not rocket science and it's nothing new, as the HR Director pointed out in the narrative. This is just a case of certain workers either being in the wrong job or not being managed or trained well or being plain lazy, finding distractions to make their day more interesting. On company time.

So in my own, mini experience, I have seen companies like Google with the most whacky work environment possible for distractions to productivity become one of the biggest companies in the world, I have seen a public company hurtle downwards after restricting internet access and I have seen a company with a sound and fair policy get gains.

A balance is to be had and as with all things, where people know and understand the boundaries, you get good results.

Now here's the corollary to the findings at the company I mentioned. The policy of use of social networking sites ( and certain other sites) is a guideline and is voluntary. There is no monitor on the system stopping them after a certain time. The employees themselves police their own policy. Use of Facebook specifically has more than halved since the implementation of the policy and very few staff now log on for more than 30% of their working day. There have has been only one disciplinary related to excessive use of social networking and that was raised after members of the person's team brought it to their manager's attention.

I like to think that's a victory for common sense all round.

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.

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.

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.

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.

Is Groupon Going To The Biggest Tech Stock Failure?

Groupon shares have now fallen back to pre-IPO level where they spectacularly raised $805m just 3 weeks ago. Investors are getting worried as news that Groupon's Chinese Joint Venture has already hit a rocky road.

Yesterday I blogged on Groupon looking at a potentially flawed business model that is a child of the times. I mean this not only in that we are in a recession and so discount offers are very popular in harder times amongst consumers but also it is a time when it is perfectly acceptable for a business to start up and raise huge sums of money on the back of a business that loses ever more money in its model every time it makes a sale. The actual cost of acquisition of each customer is increasing for Groupon not leveraging the scale of the operations as you would expect of any business - so the question is: when will it ever make a profit?.

I highlighted some reasons why Groupon specifically is flawed in the face of investors who willingly chipped in nearly $1bn for a small stake in the company:

1. It's a business borne out of hard times that may lose it's shine when the recession ends
2. It is reliant on the habits of 'Discount Junkies', i.e. customers who are serial discount offer buyers and are not likely to show brand loyalty
3. The business model for many of the retailers participating is flawed and once they have overcome the fad value they will realise they have to be more targeted with their offers and more frugal 
4. It's really a 'me-too' proposition that's not only easy to clone but it is potentially at risk by big gun players like Google and Amazon.

I doubt if my article triggered the share slide as there have been high profile news stories of bakers losing thousands on offers that were 'too successful' and in the US there have been cases where the ethics of offering cosmetic survey under an intense, short period deals is pressuring people into surgery they either don't need or haven't sufficiently considered.

It all points to a potential short term story for Groupon and a possible bad news story for investors. To put the case for a fall in even more practical terms there are now rumours that executive and staff lock-ins on stock options are less than 6 months and there may be considerable 'internal' share sales to follow - a sort of sign that rats are leaving  the sinking ship as these people realise the game is up.

This has serious repercussions for other Tech stocks that wish to IPO as investors may well be very concerned at the sight of Groupon's potential implosion. The fact is that I blogged on this potential some months ago and to me it was perhaps too obvious that this company would fail or at least be not so world changing. I get no satisfaction about being right but there has to be serious questions asked about the 'get rich quick' mentality that has pervaded in venture capital and tech investors who have talked the Groupon story up.

Scrutiny may now change to others with 'Potential potential' business models as I describe them like Twitter. You have to ask yourself that if a service is not valuable enough to be charged for at the start, how can it possibly charge later? If Twitter is just modelling itself to be sold then all someone is buying is a glorified and very expensive database.

The Emperor's Clothes springs to mind. 

Will the Industry Benefit from Groupon's Failure?

There is a school of thought that the industry needs a big failure to snap investors out of this daft flawed business model mentality of jam tomorrow. Hopefully, the good that will come of it will be that need start ups have a cogent plan for making money early rather than the too hopeful tack of accumulating vast losses on the wisp of a hope that some day they might hit the seem of gold.

Oh dear, are we living through the second Californian Gold Rush? Lot of people got rich then and many more didn't.

Calx Europe is a Business Acceleration company specialising in helping companies develop and implement plans to capitalise on the Cloud market opportunity. Please call +44(0) 207 193 2356 for more information.

Windows & Chips, please

So Google and Intel have teamed up http://liten.be//r8Xgb.

The mighty Intel has not faired well in the world of smartphone and tablets and as the PC market dwindles at a rate of knots that no one could have predicted, Intel risked losing its mighty market position.

So after its long, long history of working closely with Microsoft, it has walked across the street to the new boys, Google, and signed a deal to work more closely with their Android operating system.

I shan't wheel out the figures again, but by 2014 Android will have the largest share of smartphone and tablet operating systems in a client market that is already changing dramatically away from the old-style PCs. 

In the face of that, this is a very shrewd move indeed.

Meanwhile, in a land far, far away Microsoft showed off its new Windows 8 (http://liten.be//49cSl) operating system patronisingly designed for both the PC and tablet world as we all must live in that twilight zone, mustn't we children?

Not only has the new 'metro' version interface been designed for smaller devices but Microsoft have come up with a novel idea to buy through an 'App Store'. And, as the ink dries on the deal between Google and Intel as highlighted above, Windows 8 will be optimised to use with the low powered ARM chips (Hoorah for the UK).

Gartner's figures have tablets being 70m by the end of this year and 300m by the end of 2015 so it is time Microsoft got its act together in a tablet market it is currently predicted to only have 13% of by 2014.

Is the bet with ARM right? Is this too little, too late by Microsoft? Having used both Apple and Android, the array of software already on their App Stores is dazzling. When a Microsoft executive demo'd a Windows based phone to me back in May his prize App was some kind of cooking recipe thing. I was embarrassed.

It's a big step forward by Microsoft, to be sure. But they are so far behind and in the wake of Google and Apple in this market with partners facing lawsuits, it is hard to see how they will catch up.

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. 

Virtual Reality Check

You can only go so far up ones own backside before you emerge into the same world at the other end. I made that and I am proud of it.

Online reputations are a wonderful thing if you are interested in them. I have no doubt that activities online will augment the standing you have in your business world and you can create wider and richer social networks. I am bought into all that. But if the current vogue of measuring your online reputation gets beyond the faddy fun scenario then we are in danger of promoting the wrong behaviour as drivers for future success.

You see one of the main drivers in the online world has been the urge to quench people's desires to be recognised for more fundamental reasons like love, relationships and sex plus for the business of basic hoodwinking. Yes we now have more business recognition sites like LinkedIn which helped people widen business networks and I have picked up several contracts from LinkedIn. But that changed about two years ago and now LinkedIn is the defacto research engine of choice for the recruiting world. People can advertise availability against which their profile can be matched for current jobs. And most of what goes on there is just that now.
There are many other business to business platforms but most are recognition seeking too. The Ecademy stands out as one site where business people are trying to do business with one another but most of that currently centres around networking itself which is fine.

What you cannot get around is that relationships have to be formed in the real world. Violent people can appear angels on the web. I pose the question that if Al Capone and Mother Theresa were alive today and actually used the web, who would have more Klout or value on Empire Avenue? It's obvious what the answer would be and is that a good thing?

You want to really influence people? Go learn from Rupert Murdoch. He doesn't Twitter people he goes see them or sends his agents. Google spent $2.06m on Government lobbying last year, yet they own Google Plus. The real world has not changed. You cannot cover up rubbish service by sweet talking Twitter accounts at the Carphone Warehouse, but you can win more sales by having a cool website and natty Twitter manner. Reality bites in the end.

People need to learn that ultimately you will be judged by who you really are, not who you virtually pretend to be and that's where reality is the best checker. Fancy CVs no longer impress me, interviewing people finds out what really makes them tick - even over the phone. The last batches of LinkedIn recruits I saw at one company were the lowest calibre I have seen yet their profiles spoke volumes of achievements.

My advice. Trust your instincts. Check people out. Don't give more credence to online reputations without checking as anything goes on the web and the most influential person could be the clown of the web who just posts heavily on Facebook in work time or 'a happy go-lucky girl' who might or might not have stuck insulin into saline drips killing 4 people or someone who has convictions for violent relationships and appears so sweet.

Reality check - you know it makes sense.

Small Business? Think Big

If you are a small business, the last thing you need to worry about is how much reserves and capital you need to keep on hand to expand. If the opportunity presents itself, you just want to take advantage of it.

I have bleated on about The Cloud and so it is best to illustrate how to organise your IT so that you don't have to worry about it as you grow. You just add users as and when you need to rather than having to worry about whether you have enough storage and dedicated servers to run your business. It also practical advice on how to secure your data from the most common threat - forget hacking, it's good old theft.

So here's a heads up on a few recommendations. I started my small business using TASBooks software. It's a great, easy to use package and even a non-skilled finance person like me can easily keep my books up to date. I farm out my payroll to a professional who for £150 per quarter does the payroll calculation, sends the necessary filing to HMRC, calculates my VAT and does the same and my P60 once a year. It's a good service. Because I have some international customers, I now use TASBooks 2 which has multi-currency. I have needed some support so I now pay £372 a year for support which I use infrequently, but when I do I need it badly! So it's a no brainer, I have to have it and it at least gives me the odd upgrade too.

Then I pay an accountant once a year to do my return plus produce my accounts. That's around £1,800. In total then, I spend around £372 plus £600 plus £1,800 just for accounting which for the financially minded is £2,772. I could shave a bit here and there if I tried but that's the sum of it to date and it make me feel reasonably secure.

What are the limitations? Well the TASBooks requires a PC to run the software and I need to back up all the files which are not big. So I have Acronis software and 500Gb pocket drive. This means I have to be attached to the unit to do the nightly back ups but they get done. Goodness knows how I would restore but let's just assume I can. The backups often fail - I don't know why but I get error messages which I don't understand and I don't have time to check. I just hope the next night it works.

My laptop is my work machine and so it runs the TASBooks and the back up manager - and if I want to do any accounting stuff on the fly in some down time, then that's the machine I have to use. If I am on the road, I can't back up - pure and simple.

I used to run ACT from Sage as well and keep a support contract which last time I paid was £180 per year. I found I didn't need much support but I could never get functions like group mailings working. Also, it requires back ups and it runs on my laptop.

I actually have a hosted Exchange Server at Fasthosts for around £90 a year and I host my domain there too for another fee and I get around 2Gb of mail storage space there in the deal. My website is controlled by en external contractor and consequently it hasn't been updated for at least 3 years.

I am a small businessman on the road. The issue for me is if I am on business and either my laptop breaks down or I get robbed, my entire business fails. It's that weak a set up.
Only my email is half resilient as I could start up again with a new machine quickly and Fasthosts have all my mail data safely on their data centre site in Gloucester and their tech support is pretty good. People try to sell me PC maintenance but you cannot replace data and applications too. If they are lost it is a nightmare trying to piece it all back together. And as a small businessman, I haven't the time or money to think about building in resilience. There is the nightmare of reloading all those little programs I use too like PDF complete. My business is billing clients.

So here's an alternative. Either host your Exchange server as I do or go with a Cloud based solution. Microsoft 365 at £15.75 on their absurd charging levels is the starting point of choice and grin and bear the lunacy of running it locally, having a SharePoint back end that you will have to work around but at least you are resilient. Google Apps is another alternative at $50 per user per year but for those working in Government areas the servers are unlikely to hold your data in this country while if you work a lot with MS Office people you may find annoyances around compatibility of files. But the advantage is that you can access your mail and files from any device including a smartphone.

Then your accounts. I am now looking at going with www.inniaccounts.co.uk. It has a starting price of £69 per month and this not just gives you online accounting software backed up in The Cloud and accessed anywhere via the web but it also gives you, in the cost, all the bits that I have detailed I outsource as above. An accountant at hand to do your filing, VAT returns, and your end of year accounts plus payroll. That's just £828 per year all in. That's a saving of £1,944 for me.

I have also gone Salesforce.com for my CRM and that was on a deal at £120 for the year. Now I can group email to my heart's content but all my data is backed up online and I can access the program from my iPad and laptop or any machine anywhere, any time. That's a saving on annual costs of ACT of around £60 but with the data automatically cared for.

Then there is Evernote of which I am a huge fan. At base level this is free. It allows you to keep multiple note books on things like projects into which you can pile web pages of research, files, emails - anything. It's all online so it's automatically backed up each time you add something and it is synchronised over Android and iPad if you want so these notepads are available to all, automatically as well as working offline. The premium version which gives more space is £26 a year. Microsoft OneNote, it's big competitor which I bought and never used, is a few hundred pounds.

It's my end of year this month, so I am thinking about these things as I am faced with an upgrade dilemma on my excellent Lenovo X200 laptop. I am on Windows XP and Office 2007 although the Exchange Server is actually Office 2003. I now do around 80% of my work on my iPad and love it as it is convenient for emails and note taking plus working in Salesforce.com. I have to go back to the PC for things like accounts and presentations as everyone works in PowerPoint and I need to project things which the iPad is weak on and printing is not a good solution yet.

But to upgrade it will cost me £134 for Windows 7 and £350 for Office 2010 and I am not sure it will work with my hosted Exchange. I have trialled MS Office 365 and Google Apps and on cost and usability Google wins but it's a Microsoft world and I cannot be an island of incompatibility with my clients - or just risk it. But MS 365 is so annoyingly clunky and not simple - it just peeves me that this is the best that the largest software company can produce with all those vast resources of brilliant people at their fingertips. Think customer, for goodness sake!

Rant over, I have to work out which way to go and it's likely to be MS 365 at £15.75 per month. While I just have to sort out the main back up and retrieval software as Acronis is ok but I want something more flexible. Of course, my data is sensitive and I don't want Americans snooping at it, as one comment was made to my blog yesterday, but our mails and data can be monitored any time if so desired so get real. Phones can be hacked too easily and banking details can be blagged simply as we have all just learned. I argue strongly that for the small businessperson it is far too hard to be as secure as the major vendors in terms of data control and security. We don't have the money, the scale and the time to do it as good as Microsoft or Google. So a solution outsourced to either, in my terms, is far more secure than what I have today.
If someone steals my laptop, they have everything. If someone hacks a server in an office or gets a back up tape or a stray USB or someone leaves a laptop on a train with the customer database on it, then they have the crown jewels. When it's all on the web, the laptop is a useless to them on that front.

So in my above examples, I would save a considerable amount of money if I go to online accounts. I have already saved going with Salesforce.com and Evernote. And it's likely I will succumb to Office 365 which also gives me a new website although I am toying restarting using WordPress as it is so simple, associated with blogs which I do all the time, and it's darn cheap (plus there is a free app on the iPad so I can update it on the fly).

Just with some simple thoughts, I can off load all my IT worries to The Cloud, save money, get security and resilience, avoid expensive one off upgrades and scale up if I need to at a smooth monthly cost. I even replace my very nice accountant which is the only downside.

But business is business.

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.

Google Apps vs Microsoft Office 365 - The End of the Story

The final twist in the saga on my trial of both Microsoft and Google came late last night.

The background is that MS Office 365 uses a SharePoint back end to store files. It assumes that you have a local version of Office because as a product that's how it is designed. So if you receive emails with attachments in MS Office 365 then the common way of storing the attached file is to upload or download the file to and from your hard disk. This seems a complicated way of doing it when normally you would just right click and save the attachment.

But it gets worse. If you want to attach a file in the SharePoint Team Site in MS Office 365, you have to email a link to that document and open that link. SharePoint allows you to share to up to 50 people outside your company. It's a senseless way for a small businessperson to work asking them to keep track of permissions.

And this is the point of what has been a trial that promised a great deal and delivered nothing. I cannot work like that. I am an SME who works at other companies' premises, at airports, at train stations, on the fly. I need products that keep me productive. I cannot be done with dipping into the administration page of my application every time I want to share something. I need an easy way of doing things. I need to have support for new, innovative devices that make my working life easier like tablets, smartphones and, yes, iPads. I need to be flexible.

Microsoft have foisted SharePoint as a back end on unsuspecting small businesspeople as the central storage area for MS Office 365 but it's an enterprise-grade project and departmental product that was devised as a Lotus Notes alternative. It's not a small business product, and it certainly is not a modern solution to the mobile executive.

I have tried very hard to see the way forward on MS Office 365 as I am at a point as an SME when I should be upgrading and I got terribly close to buying. My excellent Lenovo X200 laptop is keeling over with loads on its operating system and I daily face periods where it goes into stasis as every other PC I have ever had has done after a while - something never adequately explained to me but seems to be resolved by buying a new one and starting again. Now I would like Windows 7 not XP and Office 2010 features. To do this without MS Office 365 it would cost over £500 and or possibly a new laptop. That is not a solution - that is the usual 2-5 year upgrade plan PC and MS users have. Those days are t be ended by The Cloud as it's an unaffordable future and there are alternatives.

To go MS Office 365 and solve the problem that way means locking myself into a new method of working which is counter intuitive and restrictive for an SME. Frankly, I don't think Google is a better solution as I am too fearful of isolating myself in the short term, but they have the right approach. Whatever your device is, it's part of the set up.

The Cloud offers so much and in the key area of office productivity it is failing to deliver. Obstinacy and lack of innovation at Microsoft is killing the opportunity as they fail to engage with modern devices for fearing revenue drops while Google are full of their 'change the world' attitude which narrowly misses the point.

Whether we or Google like it or not, the majority of office users are Microsoft based. Google needs to embrace this and give sound alternatives. It is close to doing so but not close enough. Microsoft just seems in total inertia and denial. The Cloud and mobile computing will be what they say it is and that's that. Resellers will lump what they have as a market opportunity or get stuffed.

I have said it before. There is an opportunity for a company to come from left field and re-invent office productivity with the modern world in mind. That company may not be the owner of the operating system and it may not even be visible yet.

But it would be depressing to think this is as good as it gets. The Cloud promises much, much more. Someone embrace and give us what we need. Right now, I cannot afford to change.

Keep Taking the Tablets, Boys

This whole tablet thing isn't happening. It won't take off not in the way it actually has done already. It will be the way we design it to be. The market will stop, retrench and come back to our way of thinking. I have my fingers in my ears and I'm saying 'La la la la'. I can't hear you, Mr Tablet Market.

That's the Microsoft way, according to Andy Lees, MS Windows Phone President, who said as much at this week's WPC event in Los Angeles. In doing so Microsoft has banned its OEM Partners from using the Windows Phone operating system as the operating system for tablets.
OK, let's recap the story so far. By June of this year, Apple had sold approximately 25 million iPads, and that rate of growth in sales is accelerating with 6 million sold in the 3 months between March and June. In total between smartphones and tablets around 394 million have been sold versus a global PC population of 1.3 billion and a global mobile subscriber base of 5.1 billion.

Something has changed. Knock, knock Microsoft. Hello, is there anyone at home?

By 2014 it is estimated that there will be more than 400 million tablets sold globally at a rate of 185 million a year by then. It is thought that not Apple but Google's Android operating system (OS) will be the choice of over 40% of those tablet vendors and will be the biggest market share. It is estimated that Microsoft will have less than 13% of the tablet OS market, Blackberry falling to just 5%.

Why is it important to treat these devices as mobile smartphone type devices and not PCs? Don't we want to use them for business? Won't we want Microsoft Office running native on these devices?

The answer is that yes we will want them as hybrid devices as Microsoft describes them but the paradigm has changed. The web has become the platform so we don't need USB ports or adherence to corporate networks, we just need access to the web by WiFi or 3/4G. We want to use these lightweight devices to port business around like a briefcase, sharing folders in The Cloud but having local copies.

Just this morning I blogged that Microsoft Office 365 is already redundant for the iPad because it's SharePoint back end is the wrong animal for the job and it assumes bulky Office client software to be present in full on the local device. Dropbox is the obvious choice. GoToDocs allows creation, viewing and editing of MS files and PDFs and you can print them via WiFi (OK that's ropey for now but it's not rocket science to get it right). This application was downloaded in seconds from iTunes Store and cost less than a few pounds. And cost is key here - nothing in Apple's App Store costs over £30 at the last look. This is good news.

And this is the point. We don't want another device that takes an age to boot and has zillions of processes clogging up the CPU and memory. We want always-on, reasonably priced innovative applications that allow mobile working to be not just effective but affordable. We don't want over-priced, resource-hogging, out-moded operating systems hammering the performance. We want machines with high performance graphics that we can use as a business-grade engine AND as a recreation device - that lasts full day in battery and doesn't weigh a ton.

The tablet market is one of the most exciting things to emerge in the industry for a decade and products like Evernote lead the way in terms of usable business software. A superb MS OneNote alternative constantly synchronises the notes you make on all devices via the Cloud - and it's free. Why do you want vast local storage with that power at your fingertips?

At last the world of computing has wrestled free of Microsoft's grip. And it's fast moving and it's exciting again. This weekend Google Plus will attain 20 million users in just a short period of time - that pulling power is distorting our way of thinking and users like the way it's going. The web is making the world of computing available to any device and it's capturing our imagination.
Microsoft has to change. It is fast becoming a dinosaur and there is a feel of the IBM of the 80s about the management talk as they adhere to only things they know and want to hear. They talk only in the product set they have and cannot seem to innovate new things to tackle the companies stealing their market.

With the European PC market dropping by over 17% this year, the writing is on the wall as the tablet market grows into the space left behind. The world has changed already and Steve Ballmer, Lees and others at the top are standing Canute-like as the 'Sea of Progress' inevitably washes over them.

The problem is that Microsoft's numbers don't reflect it yet. And that IBM feeling comes back once again. The bolt from the blue - the one no one saw coming - has already struck but it hasn't manifested itself in the numbers as yet. The tablet market is established and the main player is not Microsoft - that has got to hurt.

Where a potential 13% of the tablet market leaves MS OS and Office is anyone's guess but with a potential 40% of it, Google would be rather hopeful that they may have a greater say than anyone else with Apple standing beside them.

You could not have predicted this just two years ago. Bill Gates once wrote a book, 'Business at the Speed of Thought'. Well it seemed someone stopped thinking in his company. And Steve Ballmer is reputed to have once fielded questions from an audience where he started by saying, 'Microsoft is right. Now what was the question?'

That about says it all.

Google Apps vs. Microsoft Office 365 - The Trial

A while back I decided to test this whole Cloud thing and trial Microsoft Office 365 and Google Apps. I have blogged that I was disappointed with some aspects of MS 365, well here's the results on Google Apps.

To set the scene I am a long term MS Office 2007 user and a small business who has a hosted Exchange server via Fasthosts. It's a good set up but it's actually an expensive set up - having cost me £350 or so to buy Office 2007 five years ago and then £90 a year for my hosted Exchange.

So Google Apps on paper has an attraction as for my size business it's free and at most $50/user/year. With this in mind, I set about setting it up to mimic my domain. The beauty of Cloud computing is that it is meant to take away the dirge and hard work of IT and let you focus on your business. Not as such, Mr. Google.

Google Apps has copious amounts of helpful written information which guides you through setting up the trial to effectively squat on your domain, mine being Calxeurope.com. This means it can effectively send and receive emails from there so that you can trial it properly. Microsoft set you up a dummy site which is very easy and useful. Google try to get too clever and by the time I read that I have to set up an Active Directory Object for each trial user I started to get frightened - and bored.

I spent hours looking in the Fasthosts Control Panel and then calling them to ask about this. After much angst, it was decided that as a hosted user, I did not have they rights to do so. The trial stopped in its tracks. Sort of.

So I decided to set it up anyway, going as far as it would allow me. Gmail is easy and I set up a new user in my domain with a slightly different email alias. From there I tried to enable Google Apps. The most bizarre thing happened. The Apps tried to load then jumped back to the set up screen, tried to load, jumped back etc. It did this without my intervention and would have continued ad infinitum unless I stepped in and stopped it which I did. Repeating the process it did the same thing for Calendar. I stepped back and tried it all again. Eventually it worked,
I sent email to myself, tried to upload files which worked although it confusingly asks you if you want to change format. But uploading folders failed with some error to do with Java. Things seemed to be OK beyond this. My uploaded spreadsheet opens with two pages, one is a large view of the title tab, the other is the subsequent sheet. How strange. It does the same for multiple sheets. But at least the content was OK. Creating your own docs is easy.

However, annoyingly, every time you click on something new a new window opens. Pretty soon you have multiple windows open and you lose your place. Badly. In fact, it's really daft. In Gmail, instead of organising mails, threads appear which you need to get used to but are good. Searching mail is understandably simpler from a web search company but it works. Then there are the adverts. Of course, I am a freebie user and the notion is that if it's free someone has to make money out of you so you are sent adverts.

That winds me up. If you are going to give something away, then do so in good grace and make sure they have the best view of what you are selling. Trust that it has a viral effect and that my experience will drive me to pay the fees required. Don't bombard me with adverts. This makes Microsoft the BBC of the business. No ads on their trial. I hate this new idea that free means money.

Then there is the 'Internet Explorer Compatibility' guff. Google sense I don't use Chrome so it tries to convert me with no reason as to why. So I don't. There that showed them. But wait a minute. I am in Gmail - now where is the link to Google Apps? There are buttons for Contacts and Tasks but where have my Apps gone?

There they are up top left a wispy menu I hardly noticed when I looked for them next to the Calendar and Chat. Nothing intuitive about the interface but there is a lot there. The view on my iPad is similar but I also have the GoDocs App and I haven't yet worked out how to sync my trial to this but I have used this App before and it's good but not great. Go To Docs is better for Microsoft users by some distance.

Google Apps is decent - it gives you up to 5 users on your domain and 8Gb for free. There isn't a worry about using local apps like Office because it is all served by the web which is the bit Microsoft misses. In the end, by some mystery, I can send emails back and fore from what appears to be my domain with my added domain user but not my actual normal email alias as the trial should do.

In reality, to make Google Mail and Apps work in your domain, you need to know where to look in MS Exchange. I don't have an IT manager - that's me - and I didn't know. I wasted too long messing about with this and it didn't work. SOHO and SMEs like me will lose the will to live if this is the case and this is an issue to Google - particularly as the whole point of The Cloud is to free us up to run our businesses. And they don't want to talk toy you as that would spoil their cost model. Intervention on the web is a money sapper. If I can't do it via reading the manual, I am not worth selling to.

For me, as a long term Microsoft user, I have to say that there is safety in what I know. For £15.75/user/month I get a full version of MS Office 365 running as per my set up today plus a hosted SharePoint back end which I don't have today. There is snug feeling about this. Moving to Google, even free, would be a risky step not knowing when compatibility may isolate me - and even though it's free for my level, the potential impact to my business if it fails me on a minor issue is potentially worth far more in terms of credibility or worse than the £189/user/year price tag on Microsoft.

Google has some way to go to convince people. There are still questions about MS 365 to resolve in terms of whether my add ins will still work like Salesforce.com, Xobni, Evernote which are now key to my productivity and I am not sure who can answer them. This is the final step for Microsoft in convincing users like me at the cusp of an upgrade not to desert them and go to Google.

Price says Google. Peace of mind and familiarity means Microsoft. Both teams have issues but I would pay the £189 on MS 365 vs Google Apps simply as I don't have enough time to get to know the new features, there are no add ins to make me as productive and the risk of making myself an island of incompatibility at a crucial time is there even though I cannot quantify that risk.

Microsoft still has the winning story. But not every business user is like me. To many, free vs £189 is a no brainer particularly when Google are constantly evolving. Coaxing people from PC to web is the battleground and Google have an advantage that Microsoft underestimate. They have never been a PC application. They are a web company through and through. Microsoft is a PC based company and it has a long way to learn that they are a distant second place or worse on the web.

Google Plus is out and already they reckon 20 million users will have signed up by the weekend. Microsoft should not underestimate the growing link between Social Media and business and office productivity.

Just as people fear and moan about Microsoft's dominant position on the PC, many are concerned of the insidiousness of Google on the web. Both companies behave badly from this point of view. But they are surely the main players in the grand battle for the hearts and minds of small businesspeople.

The battle has begun. I stay in the Microsoft camp. This week I will sign up to MS Office 365 and pay £15.75 per month. I'm actually quite excited about it. How sad is that?