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.

Kodak - What can Tech Businesses Learn?

Today one of the pioneers of the photography, Kodak Eastman, filed for Chapter 11 bankruptcy protection in the US. After 132 years of dominating the world of photography, Kodak is on the outtake pile.

Yet the photography business has never been bigger. We buy more cameras, take more pictures and share them more today than we ever did and the market is growing. How could a savvy giant like Kodak have so misjudged the market? How could it just stand by and watch the world around it change? How could it stand up, King Canute-like, to the sea of change and get drowned so very easily?

It proves just one thing. You can be the biggest, even the best, but you have to move with the market and change. Microsoft needs to watch this implosion very carefully and mull over just what happened here because you have to innovate to survive. And when management goes to sleep or gets to swallow too much of its own story, that's when danger occurs. The market moves swiftly and pays no respect to status.

That's the Kodak lesson, learnt the hard way.

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?

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.

Mobile Device Management - The HOT application for 2012

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

Come on down, the time is perfect.

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

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

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

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.

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

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

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

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

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

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

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

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

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

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

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

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

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

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.

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. 

Microsoft Outage - A Lesson in Humility

At approximately 8pm Pacific Daylight Time to 11.30pm the same day on 8 September, Microsoft Office 365 experienced a GLOBAL outage.

Luckily for us Brits that was in the middle of the night and realistically if you are going to have an outage, after business hours on the West Coast ain't bad. But this wasn't a local or regional outage - this was the big one. All users got nobbled.

In my Inbox I saw nothing suspicious or to tell me something had occurred although Microsoft acknowledge that some users are still experiencing problems.

Rather generously, Microsoft have refunded 25% of one month's fees to all users.

There is no doubt that this is a serious setback to Microsoft and it follows recent outages on their BPOS system - their reliability story which they tout so much is looking rather ropey. 

Microsoft chose a pathway which places them straight in the firing line with their customers. By not allowing the active syndication of their software by any other companies except some Telcos who have sold precious little, they have assumed responsibility not just for the manufacture but the delivery of the software.

Further, their strategy was so direct that they bypassed all channel members to have the contracts direct with customers. So there is no one to share the blame with, there are no resellers to take the initial blow by the customers, Microsoft are the one and only company to blame here.

But it wasn't for the want of trying. Big Distributors offered to share the pain by actively asking Microsoft to become syndicators to the thousands of resellers and millions of customers they service. In shallow hindsight, this would have spread the risk and reduced the chances of ALL customers receiving the same outage at the same time. It would also have put the responsibility of dealing with the end users several rungs in the supply chain ladder below them.

Finally, they could have deflected criticism that this is a software led issue, casting the shadow on Microsoft's capability to manufacture the product as well. By having the 'deliverers' assume the responsibility they could have blamed the delivery mechanism rather than the software.

Distributors have been struggling to find their place in the value chain in the world of Microsoft Office 365 and Microsoft have been very blunt about what value Distributors and Resellers can add in the delivery of the product and service.

Well, Microsoft, here's your answer. This could have been limited to a regional or even localised outage of a single channel player. Instead, every single user of Microsoft Office 365 experienced the outage and every single one will get the refund.

By adopting Google's strategy of direct delivery, Microsoft exposed themselves to the main weakness in the newcomer's strategy. Doesn't look such a bright idea now, does it?

My strong advice to Microsoft? Don't have your staff be so damn rude to Distributors and Channel about their potential value in the new world of Cloud. Remember the old adage, 'In the journey to the top be very careful on whose face you tread on the ladder up as it will be the same faces you see on the way down.'

Saturday morning philosophy. You can't be it.

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.

Heads in the Cloud

Talking up the game is not unusual in sales and marketing - heck, we are all guilty of over calling success whether be the development of our kids or making a slightly 'exaggerated' claim on the success of a product.

The Cloud is not unusual on that front. I love the way that Microsoft says that it has been in The Cloud for many years with such things as Hotmail and LiveMeeting. Such statements are, indeed, true but these are not chargeable services, even though I remember the time when Microsoft acquired PlaceWare and bundled part of the Meeting technology for free when we charged for it. That is the crucial difference here for the likes of Microsoft. This time around, they have to make money out of the Cloud.

It's fine giving a free email service - people accept it's free and worth every penny in that if it goes down then they should not get uppity. But in the world of Business to Business Cloud software and services, there is a rather big problem if the service goes down as not only are people more dependent on the services but they are paying for it.

It does also come down to whether people understand and care what that difference makes. We have all been brought up on being in corporations where glib messages are sent out that email is offline or a server is down and we tut and get on with it. When that happens in the Cloud, many more companies at the same time may share the same outage and suddenly it becomes a serious issue. If you sell on-premise software as well as Cloud based, you can easily turn to your customer and tell them the virtues of having hybrid environments or warning them off the Cloud. That's fine if you get paid both ways. But true Cloud people don't have that life raft - they get measured on success on only their Cloud service being available nearly all of the time.

 I still have this issue about tree-hugging by the Vendors of on-premise software who are now offering Cloud versions. Not only are the salespeople less knowledgeable about the benefits in the Cloud but they are equivocal because they do not live or die by the results of their expert advice. I think this will decrease the traction of Cloud version software for traditional vendors as they will not instil passion in their salesforce, their channel players and their end users. There is always a safety net if something doesn't quite hang together. The other issue, is that most of these people have not been in SaaS based businesses before so they do not understand what impact selling monthly recurring services has on cash flow, P&L and how you incentivise salespeople. It isn't a question of holding a transformation workshop, it's about giving the practical tools to help. It's about sharing the migration experience and if both parties don't model their businesses the same way how can they truly help or advise one another?

The likes of Salesforce.com and NetSuite never thought that way when they evangelised their Cloud services. It was live or die, win or lose. Get paid or not. It instills total commitment and belief not only in the attributes of their product and service but in the benefits brought by the Cloud. They didn't try to bite off more than they could chew or do mass conversions - they stepped their way to success by persuasion, trials and proof of concepts and then they referenced like crazy. Today, these are some of the fastest prowling, most profitable software companies in the world, but it didn't start that way and that's part of the issue. To a person, vendor salespeople are telling key channel players that whatever effort they make in Cloud it has to produce an ROI in the first year to get any vendor funding help. Then don't be surprised if the channel player turns off.

 

So I think traditional software vendors are holding themselves back by using the same tactics, channel and salespeople to sell their Cloud products. They need to embrace the challenge even competing within their own installed base to truly gain traction and success. They need to have people who not only can demo and talk the story but to use it and live it.

Only then will they get success. Applying old methods to the new world will not work as fast and may even lead to failure. These vendors need fresh blood, fresh methods and people who understand the new world.

Until then, they risk Clouding their own story. 

Cloud Survey & Facts

Microsoft released data from its SMB Cloud Adoption 2011 Survey this week.

It reveals that across the globe, 39% of SMBs will pay for levels of Cloud services in the next 3 years which is a sharp increase in numbers since the last survey was done a year ago. The figures point to SMBs taking an average of 3.3 Cloud based services.

The figures were interpreted to show that SMBs and Enterprise customers alike will mix on-premise based solutions and Cloud based and have some level of hybrid services. The interesting finding is that the larger the SMB, the more Cloud based services they will buy over the next 3 years. Some 56% of companies with between 51 and 250 employees will buy on average 3.7 Cloud based services.

Here's an interesting statistic - within 3 years, 43% of workloads will become paid Cloud services while 28% will remain on-premise and 29% will be free or bundled with other services. Heart warningly 82% of SMBs say buying Cloud services from a provider with local presence is critical.
An interpretation of the data by Microsoft itself is that Cloud services adoption will be gradual over the next 3 years and that there will remain a mixture of Cloud based and on-premise applications - so existing infrastructure will need to remain. But as equipment reaches the end of its life cycles, more and more companies in the SMB market place will start to consider Cloud based alternatives for the future.

I refer to such milestones as 'Compelling Events' when kit needs to be upgraded or hardware comes off maintenance contracts or a significant refresh of kit is required.

The good news for the Channel is that it appears local support and supply is key. Plus it is presumed that more resellers will take 'White Label' Cloud services such as co-hosting, back up, archiving, disaster recovery, unified communications, remote desktop support and email solutions in future.

Drivers to the Cloud are reaffirmed in the survey. Companies want to get greater scalability in their business to match growth expectations, drive down costs and profitability up, and pay-as-you-go models are becoming increasingly attractive. Obtaining more smooth and predictable costs when growing rather than lumpy IT costs are more desirable for businesses and their investors.

Much of the above merely augments the view of Cloud fans like myself. It doesn't necessarily address some of the obvious concerns and blockages like security and data management to help persuade people but it certainly validates what is the perceived opportunity to vendors and Channel players.

What it also doesn't address is how Channel players should take advantage of the opportunity but a clear message is that Channel companies should be looking to offer a range of options from hosting, applications, to deployment services and support. But there is a definite demand for clear solutions beyond simple software offerings.

What is clear is that as the adoption of Cloud services grow, there will be a corresponding decrease in the usual software application opportunity and the server/storage usually associated with on-premise solution. The two models in terms of sales revenue and cost structure are very different. A £100,000 on-premise sale today creates the lump of profit to fund current sales activity. But if that sale collapsed to a potential £4,000 a month then many resellers will be top heavy in terms of cost.

The quid pro quo is that as annuity style revenues accrue over time by renewing these deals and growing the user bases, then by 3 years down the line there will be a substantial monthly revenue flow that will have accumulated well above the cost structure.

So modelling the costs, realigning resources and reassessing commission models will be fairly fundamental for vendors and resellers alike. This is probably the most important area of understanding required by the industry in The Cloud as getting this right can yield huge results. Getting it wrong can bring ruination.

SaaS veterans like myself have long understood that selling software and services on a monthly annuity basis versus capital spend needs different selling skills, a different mentality and a very different incentive structure. Vendors and resellers should know that the initial decision for an end user to go into Cloud solutions is only the point at which the real sales effort starts. Instead of revelling in the deal volumes and the bloated commission cheques, salespeople need to drive adoption and usage from the first moment of deployment.

That requirers an entirely different sales mentality and incentive structure. Large software vendors are already making big mistakes in the reward structure and margin opportunities for the Channel maintaining the old 'sell and forget' model of reward. The margin and reward structure needs to incentivise on a basis of 1) Initial deployment, 2) Adoption driving, 3) Usage driving, 4) Renewal securing, 5) Driving upgrades.

There has to be enough 'skin in the game' to make selling after the initial deployment worthwhile as that is where the real profit lies in The Cloud.

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.