Wednesday, January 31, 2007

Technology is no longer technology

Inspired by a comment by my friend Greg to an old post (The Devil Wears Prada... is Technology Fashionable), I started thinking about a shift in the High-Tech industry. Historically, whenever we hear the "High-Tech" term, we think innovation, science at its best, universities and PHD students. We think of robots from the beyound and super-computers. We also used to think advanced gadgets... like a TiVo... or a DVD-R... or a Dual-Mode Cell-Phone... see where I'm going?
In the early 20th century, a cordless phone might have seen as pure high-tech. Today, it's just a product everyone has at home. How about Internet? Same thing, there's nothing high-tech about it anymore... but there is with Web 2.0.
So, an Apple iPhone cellphone might seem as pure high tech, but it's just a cellphone. Once a market or industry starts becoming mainstreams, it appears that it leaves the "High-Tech" category, and innovation needs to come from somewhere else, triggered by consumer needs. So a TiVo is not high-tech, a cell-phone is definitely not high-tech (no matter how advanced the device is or how many pattents it has). Once it leaves the category and becomes mainstream anything can happen: prices drop due to economies of scale and mass production, prices go up due to increased perceived value from manufacturers, and marketers start looking at consumers for what they want.
In the end... although it appears that the High-Tech industry is been growing, in fact it is not. It's becoming more refined and dynamic. We may think it is "High-Tech", but in reality it is "Electronics" or "Computers". Items enter and leave the category all the time, because they are pulled out by consumers, and injected by scientists. We better keep this balanced....

Tuesday, January 23, 2007

Microsoft vs. Cisco

Microsoft will release his most anticipated Office Communications Server 2007 next month. For those who don't know this is an attempt from Microsoft to enter the Unified Communications market with a Personal Communicator (that is an application that you install in the computer, and enable several communication avenues between the company; for example, you get email, IM, phone, presence status, etc). This product's been anticipated because of the idea of having Microsoft, an end client and OS player, entering the communications arena. Will it succeed? - I doubt it.

Cisco released its Unified Personal Communicator, and believe it, they have a much better chance at succeeding here, and this is why.

Cisco's presence in the Unified Communications goes back several years. In fact, Cisco dominates the IP Telephony market. Visualize this battle in the following way: in the typical office cube, you have a desktop or laptop computer with Windows on it and Office installed. Used for everyday operations. You also have a phone (an IP Phone) used every day as well.
Unified communication will establish the link between these two main components: the user will use its computer to write Word Documents, to compute Excel Spreadsheets, and send them via email, contact someone via IM, and make a phone call to a customer or provider.
At one end, you have Microsoft owning the desktop, trying to grab the phone. At the other end you have Cisco owning the phone, trying to get to the desktop. Thanks to Web 2.0, the open-nature of software development, the odds are on Cisco's side. You are more likely to see a third-party application (Personal communicator in this case) installed in every desktop, than a proprietary Cisco protocol trying to gain access to a phone.
The truth is that the industry is the only one that will tell. And both companies have been sucessfull at their business. We'll see who wins that fight.

The Devil Wears technology fashionable?

Continuing the discussion on mobile phones, there were some news in the papers last week, related to an LG-Prada phone. ( This was supposed to be a high-end LG cell-phone, very much along the lines of Apple's iPhone (we shall make the distinction between Apple's iPhone, and the original Linksys' iPhone). The phone is a tri-band GSM (Global System for Mobile Communications) model (900/1800/1900MHz) with support for EDGE data transmission. It will go on sale around February in Europe only. It will cost around €600 or US$775.
When I saw Apple's iPhone, it looked great. Looked like a gadget that even though it is very pricey, I'd love to have. However, a Prada phone? a Gucci Phone?. I wouldn't pay for fashion, but I definitely would for functional benefits (e.g. larger color screen, or fast email access).
So I think to myself... is technology getting fashionable?... surprisingly, the answer is yes!. Apple started a revolution in consumer products with the iMac, then the iPod. People would develop cults for design, so no wonder that brands such as Prada, Gucci and Calvin Klein want to jump into the high-tech industry and generate an ultra thin market for them to tap into.
Now, is this bad for the industry?... i don't think so. All it can do is generate more money for the industry as a whole and continue fostering innovation (for another market, not for the fashion market). We shall see if this happens... meanwhile, we stick with technology as a source for increasing productivity, lowering opex, and generating more revenue instead.

[by the way... it seems that it is really hard for me to keep up with daily postings, therefore I've decided to make it weekly]

Friday, January 12, 2007

Consumer Power: "We want entertainment!"

As I've posted in the past. It's a fact that consumers drive innovation and business today. Therefore companies need to adapt and address that first - especially they must take care of the customer.

Now, I put myself on the shoes of the consumer. Since I'll be moving to Florida next week, I am searching for new home entertainment, and I've found lots!. The best example: TiVo

TiVo: I know what it is, I know what it's used for, but I've never actually used one! You have to admit it looks like a great product. After all, it's been able to survive competition from the generic DVR and On-Demand TV from Cable operators. What is it that makes this product unique? - Well, I think it is that you can use it with any TV, any connection, anywhere.

That is precisely why I am considering getting one, because it is actually an alternative to having Digital Cable with On-Demand and a DVR. You may get basic cable (no set-top box), and hook up a TiVO. With it, you can record a full season of your favorite show, hook it up to your home network and listen to you iTunes collection on the TV, or you can even listen to Online Radio Stations. So, technically you get Internet Entertainment ported to your TV system (which you can then hook up to a decent Audio or Surround Sound system and get a very powerful Entertainment System).

The product per se gives you what it's called "Entertainment Time-Shifting": You can see your favorite shows whenever you want. So in essence it is a very advanced digital VCR,and they were the pioneers. The core patent of TiVo is a technology to endlessly digitally record on a hard drive. Like a FIFO queue, where you record for hours, and the oldest things get deleted. The best product they could think of, was a TV recorder, and what a hit it is. TiVo was the first to introduce the concept of digital recording, and that gave them such a big advantage over the competition (DVR and On-Demand, like I mentioned before). Now they offer far more than others. They have been able to survive, and still lead that market.

Before I finish, if on the other hand, you travel a lot.... you got the perfect component to TiVo: Slingbox (this is a fairly new product)

Slingbox: is another product that I know what it is, and what it does, but I've never seen (this one I am not planing to get, but I just want to share what it is). The slingshot is what gives you "Entertainment Space-Shifting". That is, you can watch your TV from anywhere with an Internet connection (even on you PDA). You can log in to your TiVo and see your recordings, favorite channels and even change the channels. Good for Consultants, I guess....

Wednesday, January 10, 2007

Apple's design lessons

If you haven't checked it yet... Apple's iPhone looks absolutely awesome....

I'm not one of those "Super Mac Fans". I believe the life-cycle of Apple products is way too short (You get one of their computers today, and probably it is already outdated in two years). Maybe that is the secret to their success in Product Design and Product Development.

Some Details (according to The Wall Street Journal)

  • Estimated Price: $600 with Two Year Contract
  • Provider: Cingular Wireless
  • Innovations: Visual Voicemail, Touch-Scroll Screen, Automatic Brightness adjustment, automatic shift orientation.... it runs Mac OS-X.

Another great iPhone (same name) is Linksys new phones (same name: iPhone). You can use them as dual phones at home (i.e. a regular old fashioned cordless phone, and a web based phone for Yahoo Voice, or Skype, or any SIP Service provider).

It's not a cell-phone, but technically you can take it to a cyber-cafe or hot-spot in the nearest coffe shop and use it as your phone.

Tuesday, January 9, 2007

Consumers create demand, not business

In the past, companies designed products to satisfy the largest and juiciest market first. They had a very specific priority list: First satisfy Service Providers, then Financial Institutions, then the Enterprise Market, and finalize with Consumers.
The logic was very simple: Go for the big bucks.
The interesting thing about today's economy (post Web 2.0) is that priorities have shifted dramatically. Now the big bucks are not in the SPs and Financial Institution just because they are large institutions with huge amounts of cash flow... it's not even in the public sector or the military.... It's the consumers who drive product development. The list has turned into: First Consumers, then Service Providers (because they serve consumers!), and at the remote end Financial Institutions and the Enterprise Market.
For a company whose main focus is the enterprise market or SMB, this is bad news. It's important to understand that this phenomenon affects their market tremendously. And it is not due to the "Internet Boom". It's more than that.
People ultimately look for cheap prices. It is the ideal of an almost perfect economic market. The bigger the universe of people that want to buy something, the more perfect the market is. Therefore, as we lower the communication costs with things like "Triple Convergence" or "Unified Communications" or "Skype" and "Google Earth", the more people will be attracted. And this produces huge demands, but also huge development!. That's why Skype is such a good service, or why YouTube is being able to ramp up in popularity so quick, or why Google is so big and used today.
For an Enterprise-oriented company to survive, it has three options: (1) it either changes to a consumer market, (2) it understands why would a company pay premium prices for a product/service (telephone service, for example, when any human being can use skype to call for free across the world), or (3) do both.
That is why it's so important to understand your customer and know how to respond to questions like "Why would I buy that?". The standard "Because it is enterprise level, so it is of better quality" answer, no longer applies.
For Example, think about Linux vs. Windows. Why hasn't Linux been adopted as the main Operating System if it's free? - Because it is not yet simple enough for the average Joe. Therefore, Microsoft is safe (for now). There isn't enough interest in the consumers. The barrier of entry is not so low. But what about Skype, for example. These is the type of questions that you should be thinking about... after all, the customer is always looking for the best deal.