Single Access to Multiple Applications in the Cloud

Cloud applications are proliferating. It's likely that somewhere in your company a group or more uses one or more of Salesforce.com, NetSuite, Workday, Taleo, Evernote, Webex, LiveMeeting. It's also likely that the first implementation was some sort of unauthorised trial followed by a departmental purchase and in many cases it was followed by an enterprise wide deployment. That first point of entry probably was in defiance of company policy on IT, bought via a low flying departmental discretionary budget and avoided the clutches of the IT manager.

That's how Cloud has grown in many companies and it was the way it was originally sold by people like me. Pick off specific groups with particular needs who had budgets at their fingertips and then work your way out from there with internal reference selling.

Today, it means that Cloud applications are usually on-boarded without the usual controls and checks by IT, particularly when it comes to security. This has been exacerbated in the recent past by the growth in the phenomenon of Bring Your Own Device (BYOD). Who would have thought that in these tough times people like you and I would go out and buy own devices like smartphones and tablets and then bring them into work and have them put on the network? And these devices aren't cheap, particularly as most companies issue perfectly capable products like Blackberries and laptops for us all to work with.

But times have changed and work and leisure are beginning to merge thanks to the new wave of smart devices that can combine the two worlds as one. But this also presents massive security issues for the corporation as many of us start to use handy applications like Dropbox to quickly share files we are working on. What happens if the device gets lost or stolen? The data can be accessed all too easily as most iPads or similar are protected by a PIN at best and with nothing as robust as a standard VPN.

And there is the general issue of 'password-fatigue'. Hands up how many of us use the simplest of passwords like a common word, your spouses' name or a simple thing like 'qwerty' or '123456'? And how many of us use the same password for all or many of our entry points? Why? Because we simply cannot remember all the multiple points of entry into the various systems we have. I recently bought one of these password memory apps and have recorded 32 applications or websites so far that I have entry points for. I just hope I can remember the password to get into it…..

So as this whole Cloud thing and BYOD takes greater holder on companies the issues of multiple logins, security and control over deployments, data and access rights is going to get worse and worse. And more complex. How is it all going to be controlled?

Well, one solution could via a US company called Okta.com who have looked at the whole issue of multiple logins, access rights and password fatigue in conjunction with the proliferation of applications and services in companies. They go a step further in helping companies to fully understand the ROI in SaaS or Cloud based software. One of the biggest aspects of this is that with perpetual licence software you basically bought one licence for every user regardless of how many people use the software, to what extent and how many simultaneously. 

Okta, by giving a single point of access to all applications in a Cloud Services Network, can also monitor and manage the usage of all software who gets access to what. Crucially, this control can be device agnostic and so all these new exotic devices being brought onto the network can come back under a single point of control by administering the access to the applications and data.

Okta are currently focusing on growing their North American business but could be coming your way soon. Certainly take a look at downloading their whitepaper and you may even be able to take a free trial but it's well worth keeping a watchful eye on this company as the Cloud grows.

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. 

My Top 5 i-Technology Predictions for 2012

I have been doing a bit of Mystic Meg'ing and you can find my predictions published by Jeremy Geelan of Cloud Expo Inc.

Nigel's i-Technology Top 5 Predictions for 2012.

Feel free to challenge or agree!

An early Happy Cloud Year 2012.

Is Microsoft Going To Collapse?

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

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

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

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

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

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

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

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

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

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

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

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

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

Buying Software in the Future

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

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

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

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

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

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

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

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

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

The Channel is Dead, Long Live the Channel

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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.