Value is a term that’s thrown around quite a bit these days. And when it lives in the context of the corporation, it tends to get scrutinized even more.
If you’re familiar with media CEO and web visionary Tim O’Reilly, you know he’s been pitching a simple message around value for some time: create more of it than you capture. During last month’s SXSWi session, “Create More Value Than You Capture,” MIT researcher Andrew McAfee and O’Reilly analyzed its role in the rise of sustainable business, outsourcing, and machine-driven automation.
“Consider Microsoft, whose vision of a computer on every desk and in every home changed the world of computing forever, and created a rich ecosystem for developers. But as Microsoft’s growth stalled, they gradually consumed more and more of the opportunity for themselves, and innovators moved elsewhere, to the Internet.”
While it’s easy to beat up on big companies, the idea is that an ecosystem is essentially a company’s lifeline. And Redmond, for better or worse, is a classic example because so much of its software business rides on the integration and development expertise of channel partners.
“If you have too small of a group capturing value then the whole ecosystem breaks down,” he told McAfee. Soon after, O’Reilly eased up on the Microsoft example, saying it had never been an evil empire. Almost on cue, the other favorite evil empire, Google, surfaced. O’Reilly urged business leaders to stay focused on big, hairy, audacious goals, and described how some of the greatest companies always have a higher sense of purpose.
“As Google is increasingly dominated by economic concerns, they will become less successful,” he said. “Our job is to work for all of us, not for this or that interest group.”
From there, the conversation turned to areas where technology-driven disruption is occurring, something McAfee researched and co-authored in his book with Erik Brynjolfsson, Race Against the Machine.
McAfee touched on the rise of automation and outsourcing, commenting that the gains from replacing people with machines and overseas labor is taking a toll on the economy.
“It seems the value is be going into the paychecks of CEOs, instead of back into society. More and more jobs are being taken over by machines,” said McAfee.
One of the scenarios mentioned was connecting Apple’s SIRI application to Moore’s Law. Both men agreed the result could be less human-powered customer service, especially in e-commerce environments.
The other business models mentioned revolved around peer-to-peer and collaborative consumption as the basis for unlocking value. Both strategies are built on the idea that there’s plenty of value within a community of users. Unlocking that value is where the magic happens, and what eventually leads to value creation and monetization, explained O’Reilly. He went on to reference Couchsurfing.com and AirBNB.com as examples.
Both panelists were asked to elaborate on other areas ripe for disruption.
Not surprisingly, manufacturing, government, and education were the top three picks from O’Reilly. And while manufacturing might be having the biggest renaissance, he seemed to think government could be the biggest opportunity of all. His comparison was one the tech-rich audience appreciated.
“Government should focus on being a platform provider instead of a solution provider,” he explained. As the session ended, a humble O’Reilly recapped some of his ideas, all grounded in his consistent message of working on stuff that matters.
“Find people as passionate as you are,” he said. “It’s important to create value for society and make the world a better place to fill in the needs.”
Google+ or Minus?
Being the tech tire-kicker I am, when Google+ launched I was curious. Would the web giant get it right this time, or stumble through another missed opportunity a la Buzz? There was also a certain sense of fatigue that crept over me. I immediately felt compelled to tee up my best app configuration and social sharing skills for yet another destination on the web. So what gives after a few months with Google+?
Can It Be The Centerpiece?
After the Buzz hangover, the upside for Google’s social strategy was much murkier. You could see some of the pieces were in place, but fragmentation and execution were sorely lacking. You didn’t have the sense that Google had a vision for where it wanted to go with Plus.
NYT tech writer Nick Bilton was more forthcoming in a recent column: “Detractors don’t realize one very important point: Google does not see Google+ as a separate product; to the company, Google+ is the product.”
That’s exactly what I’ve noticed. You can see the black bar of collaboration (though that’s changing) creeping further down your screen and into all of the Google services you use. And that’ll be the trick. How will they continue to iterate and elegantly tie-in a larger ecosystem of apps and services?
The wild cards are GMail and mobile. With the former, Google has a loyal base of early adopters and a hub of active users that can help it tweak the platform as it’s integrated and becomes the dial for Google’s communications hub. As the crispness of communication improves, G+ will ride its Android momentum and infiltrate more of the nooks and crannies of our digital lives. Monday Note’s Jean-Louis Gassée commented on the mobile piece recently, touching on the Android effect.
“This makes Google Facebook’s biggest, most direct competitor. The Trojan Horse applications on Android-powered smartphones are a direct threat to Facebook’s advertising business. Just like Google, Facebook wants to maximize our exposure to ads that are finely-tuned using the personal data we provide as a payment for the service. For this, the company needs a well-controlled smartphone.”
While Gassée singles out the advertising piece, it’s easy to see what Google’s working towards. That device tied to your hip is the entry point for everything, sans a few enterprise apps here and there.
More On That Facebook Fight
History tells us there’s no online network that’s safe from fickle internet users. The only thing that’s a Facebook killer is Facebook itself. And Google’s smart enough to realize this isn’t an all or nothing fight. Even if Facebook remains the photo album, gaming destination, and chat hub for so many, those are still commodities.
Granted, their scale is unmatched, but tech standards and processing capacity will likely ensure they’re interchangeable in any online environment. To move beyond the commodity fight, more utility has be created. Take the poster child for utility, LinkedIn. Love it or hate it, they built the platform as a utility to connect business people. After nailing that, they’ve continued to add commodity features. So who’s in a better position to build around niche and move past features? That’s where Google+ might have the advantage.
The Enterprise Boost
If you buy into the earlier Android point and factor in the enterprise angle, things get more interesting.
In a recent NYT piece, Facebook and Microsoft were again in Google’s sights.
“Possibly more important to Google is the way that Apps helps Google build social networks inside business. If successful, it would be a threat to Microsoft’s biggest division and would create another inroad in its struggle with Facebook to dominate users’ online lives.”
Having spent some time in the social software industry, it’s clear there’s pent up demand for platforms like Google+. Looking at its Circles feature, you can tell Google was striving for a simple way to delegate and distribute information. The configuration is a but much, but the core concept seems pretty solid. Let knowledge workers share content based on certain parameters and bake in communication capabilities on the periphery.
And while incumbents like Microsoft’s SharePoint still account for most of the dollars in enterprise collaboration, none has the consumer sizzle that Google+ brings. As our business and personal lives continue to collide in the cloud, it’ll be Google+ that has a head start. Most of us don’t use SharePoint before we tuck our kids in bed, but there’s a good chance you’re touching a piece of Google’s portfolio.
So if you buy into Bilton’s argument that Google+ is the center of all things Google, the long-term picture becomes clearer: grab a significant consumer foothold, iterate as needed, and move into the lucrative enterprise green fields. It’s the consumerization of IT on a big stage, and a show all startups should be watching.
This is not a smart-phone and I don’t care
mobileTech Tuesday, by Steve Guengerich
I attended Dell World 2011 last week and it was pretty remarkable on a number of levels. On one level, I reflected on Dell’s maturation as an enterprise.
While the majority of what we write about in AustinStartup.com are new hardware and software ideas being brought to market, it’s easy to forget a couple of things. One, that Dell itself – presently 41st on the Fortune 500 list of largest companies – was once an Austin startup, way back in 1984. Two, that the majority of startups would like nothing better than (a) to be acquired by a big company like Dell or (b) to become a big company like Dell.
On another level, it was interesting to observe the evolution of Dell’s position. For those unfamiliar with the classic description of company position by Geoff Moore in Crossing the Chasm, note that position is a noun, not a verb. A position is something a company has, not something it does.
So, it was very interesting to see the lengths that Dell speakers and workers on the exhibit floor went to reinforce the merging position of Dell as the “new HP” (my words).
Gone are the days of Dell consumer devices dominating the spotlight – the MP3 players, bargain-priced plasma TVs, and Dell Streaks of the world. Sure, they are still there, but now mainly referred to as “end points” or “nodes.” (By the way, did I forget to say this was an IT-centric crowd?)
In their place are two big messages, at least that I took away from Dell World 2011:
First message: that Dell is emerging as the pre-eminent end-to-end computing solutions company on the planet – more than IBM, more than Cisco, and definitely more than anything you will ever see from Apple!
One of the many examples of this IT-centric, end-to-end, “big iron” preeminence was the demonstration modular data center that Dell showed on the exhibit floor.
Some facts about the modular data center (shown in the photo above): contains 1,920 servers, 138 terabytes of RAM, multiple petabytes of storage, and is 100% free air cooled. Stick that in your iPhone 4S pipe and smoke it!
Second message: that when it comes to “end points,” Dell loves PCs. No, you don’t understand: I mean Dell LOOVVVVEEESSSSSS PCs!
Over and over you heard this phrase – “We love PCs” – during the two days of guest keynote and Dell corporate speakers. Michael said it. Steve Ballmer of Microsoft said it. Paul Ottelini of Intel said it, although he also liked referring to Intel’s reference platform of the future, which Intel calls “the Ultrabook.”
In fact, Intel believes there is still so much room remaining for next generation PCs, that it has opened a $300 million fund to spur innovation with the “suppliers to the suppliers” of ultrabook devices. In other words, the fund isn’t meant for the Dells or even the next hot tablet start-up. Instead, it’s for the companies creating the power supplies, graphics controllers, and wireless adapters for those future devices.
The beauty of these kinds of investments, for those of us focused on the mobile and app world, like I am at Appconomy, is that such innovations will only serve to benefit the larger industry as a whole.
And, that’s a big reason why I enjoyed being at Dell World, seeing the energy and enthusiasm up close of companies like Intel, Microsoft, and especially Dell, working hard every day to stay on top of the tech mountain.
If you were at Dell World 2011 or attended any of the events & activities, let us know your thoughts in the comments section below.
Mobile Alchemy Makes 20
mobileTech Tuesday, by Steve Guengerich
It was good to see the announcement in Austin’s paper of record, the Statesman, today about the launch of Catapult Systems‘ mobile business.
Last Thursday, at the Austin Tech Happy Hour, I caught up with founder and CEO Sam Goodner for a few minutes and he talked about Mobile Alchemy and the expectation of making the announcement official this week. (By the way, as if you needed it, this is another reason to attend ATHH – to get the news about what’s happening in the greater Austin tech scene, before it’s printed.)
Key members of the Seed Labs team, which has carved a solid niche producing apps for festivals and events, are former Catapult colleagues, so a joint venture conversation and cultural fit were easier to have than sometimes occurs when parties are unfamiliar and lack shared history.
Sam’s no dummy (I say that with serious tongue in cheek because I consider us longtime friends). In fact, far from it: he’s managed to build a successful, long-lasting tech services business that continues to excel. Less than a month ago, for example, his flagship firm, Catapult, was awarded the Microsoft Digital Marketing Worldwide Partner of the Year award.
But, with so much momentum around mobile apps, it was important that his firm not miss an opportunity to respond to customer inquiries about mobile design and development – especially with the success of other cross-town, friendly rivals like Mutual Mobile and BestFit Mobile.
Even further, because of Catapult’s long-time, productive affiliation with Microsoft, it’s equally important to provide a mobile solutions brand that is appealing to prospective customers that don’t count themselves as Microsoft shops. So, Mobile Alchemy’s cross-platform appeal – for Android, iOS, and other non-Microsoft-platformed apps – is a pragmatic strategy on Catapult’s part to preserve and grow business in the one segment in which serious money is being made, week-in and week-out – services!
In fact, Austin has become, as we’ve written before, a center of gravity for mobile apps design and development. With the addition of Mobile Alchemy – which is styled as a Catapult division, but positioned with a free-standing identity – I count no fewer than 20 mobile apps design and development companies that call Austin their headquarters, as we’ve been capturing with the Mobile Scene maps around the country…and I’m certain we’re leaving some out.
NOTE to readers: If your company isn’t on the Austin map, then please let us know or, better yet, add it yourself, as the map is a shared wikimap!
So, congratulations to the Mobile Alchemy team. I’m looking forward to hearing about some of the large-scale, innovative enterprise solutions that they are able to mobilize, given the significant amount of Microsoft Sharepoint business that Catapult has implemented for several years. It’s one of the areas that many predicted (including us) that would begin to see real progress in 2011 – a year of mobile in the enterprise.
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