Tuesday May 22, 2007

New Business Models for the Particpation Age

Today, Don Tapscott, author of "Wikinomics" presented a keynote about how mass-collaboration is changing the way that value is created in the world economy. This stems from both software functionality and network economies of scale. Obviously the enablement of new forms of economic co-operation is also a factor at continuing to drive specialisation. Tapscott quotes Carr's "IT does matter" and mentions that he has often debated with him, which is hard because Carr is good, but he (Tapscott) says "I have an advatage in this debate, he's wrong". The last three days has made me question about how one can innovate in corporate IT.

He told a story about being on TV, "Surfing the Net" and his kids cut him down to size by suggesting it was on par with surfing the TV or fridge. "I'm browsing the fridge for content!". (I thought this was really funny, but my kids tell me its not!) Amongst the younger generation, time online is at the expense of TV, and online activity is today a more creative & participatory act than watching TV, going to the Movies or a Play, or using the early web. The drive to participation makes all content collaborative and he has banned the term "web site" due to the owning author implications.

He then examined what Google, Ebay and Amazon really are, and argued that they are digitial conglomerates. Google sells ads, which makes it a media company, but its also a retailer, broker and bank. "This is not a bubble!". The creation and existence of new-age conglomerates, requires the examination of why a firm exists. Classically, its about transaction costs and the benefits of specialisation. As people cease to be labour in a knowldege economy and accounting costs drop to zero, the costs of doing business across the corporate firewall drop and business have created extended enterprises and latterly business webs. The next transformation will be mass collaboration and peer-production. (Interestingly, Tapscott quoted a mutual fund example of a folksonomy based co-operative, but I didn't write it down. Can any readers add those they know as comments?)

He summarised his presentation with an examination of the seven new business models he's identified as enabling in the new world of mass collaborations and pointing to his use of a Wiki to develop the ideas, much to the chagrin of his publishers, who are trying to work out how and if they can publish a volume two. They shouldn't worry, I certainly intend to check out the wiki and probably get the book.

This article was written over time from contemporaneous notes and back dated to near the time of occurance.

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More Futurology, Gartner's "Emerging Trends"

I am in Barcelona, attending Gartner's European Symposium and Expo. They have two of these each year and the spring event is positioned as broader and more forward looking. It was opened by a tour de force from Peter Cole, (CEO) and six of their top researchers. Later discussions brought home to me that one needs to be very carefull when listening to clever people, as sometimes one (i.e. I ) can assume that they mean the same things as yourself, this isn't always so.

I do wonder however whether their Macro-economic analysis is based too strongly on financial volume and on their boundary definition of IT. Just because our children don't see what they do as using IT, doesn't mean that it is not IT.

Another key insight I obtained here, is that there is a debate between those who think that IT as an industry is entering a maturity stage and those who don't. I should really have known this. Some IT companies are (very successfully) betting their future on the first view. I believe that because IT is dependent on software, which is not constrained by the laws of physics, it will continue to evolve rapidly and that its evolution will remain a source of value and wealth creation in the developed world for a while to come. This means that IT and most importantly, company's software portfolios will remain a source of differentiation and competitive advantage. Another point made to me is that peer based collaboration or community development may inhibit, ignore or exclude the genius that provokes radical change. It's an interesting point of view and one that community wranglers may need to think about.

A fair amount of time has been spent talking about "Green IT". Gartner's late arrival to this issue can be forgiven due the bravery of launching thier programmes in the USA, where they may be able to begin to remove the partisanship from the issue. 

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Tuesday Mar 13, 2007

A Faster Horse

John Maeden of BT presented after lunch and spoke about the nature of fundamental change and how organisations react in dealing with the problems that cause the change, indicating that data centre architecture was such a problem today, due to its complexity and the requirements of today's applications.

He also quoted Henry Ford about radical change,

"If I'd asked my customers what they wanted, they'd have chosen a faster horse"

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Monday Mar 12, 2007

Empowering people

I visited the Commercial Industry break-out room and was pleasantly surprised to experience three interesting and in the final case hilarious presentation

John Blackman of JB Associates announced his company's Carbon Balance Sheet audit. I have been looking at how I can adjust the TCO tools we've been using to talk in terms of carbon footprint so its good to see others looking at helping companies understand their carbon consumption.

Bernard Taveres of Unilever followed with a presentation on some social programmes supporting Unilever's transition to adopting and living its “strategic intent” of “people vitality”. He spent some time talking about building the business case for building new forms of collaboration, and they saw the key variables as people, space and technology. I suppose what is interesting is the way in which innovators in teleworking recognise the cost of space and how its use changes as companies begin to trust their employees. Earlier schemes, including Sun's own iWork scheme started by reducing the time and cost of the commute, the consequent benefits include the reduction in space budgets, although realising this is both hard and takes time, and allows a company to hire the best, not merely the best within travel distance of an office.

Robert Hamilton of Orange then spoke, starting with the assertion that

Offices are pretty lousy places to work

He argued that the main use of an office is to take delivery of snail-mail and parcels. Well, that and meeting people, which makes the web-cam (or X-Coffee application) very useful, because you can check out whose in, before travelling to work and decide not to if the office is empty or full of boring people.

The tag line he developed is that agile businesses need to “collaborate in parallel” and people need to act as customers. Only two industries describe their customers as users, one of them is IT. He also asked why people mail presentations as attachments. We understand that putting a button onto a web site, reduces the viewers by 50%, why put your content as an attachments which requires a click and application load before people can read what you want. Obviously those with stuff to hide zip the presentations up, and require their readers to use the mouse twice. As Robert said,

why mail a presentation anyway, if what I say with the slide didn't add value, I wouldn't turn up.

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Monday Oct 09, 2006

The Growth of Google

I'm still pretty jet lagged, and woke up at some terrible time this morning to discover that Google have bought You Tube. See Yahoo...

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Thursday Oct 05, 2006

The road to somewhere....

A swift drink before the flight home with Chris Gerhard, and I tested out Benkler's theory that much of the drive to cheap computing and the over supply is in the 'lumpy' nature of computers and the consumer sector. I thought that the OpenSolaris "Appliance" project might be able to leverage these factors. He thougt not and reminded me of the compelling argument, that as greater bandwidth to the home became available, people would move their IT to utility. They don't want the fans and power draw in the house, and they want reliable disks; managing backups will never be a consumer activity. We also discussed the essential necessity of caching within the network, something known for years by the video on demand people & also considered what it might take for games to be served over the network to thin client devices.

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Saturday Sep 30, 2006

Listening to customers, proving value

Marc Hamilton (blogs here...) currently runs the "Systems Practice" solutions teams, of which we have three and spoke to us on thursday, and not only as in introduction to his team, who lead the "Data Centre Optimisation, HPC and Web Tier Infrastructure teams. These are led by Raj Dosaj, Simon See, & Steve Staso, who spoke to us on Friday. Marc introduced us to the way he wanted the global headquarters teams to work with the field and demonstrated the change in communication and collaboration tools. His team (and mine) are moving from Vignette to Media Wiki - from Web 1.0 to Web 2.0. Some of my colleagues were interested in how to develop solutions capable of supporting COM & .net applications. Marc's reply repeated what John Fowler said earlier in the week, that deals based on Micorsoft's hegemony are not long term good business for Sun and should be pursued with only with channel partners. He talked about CDW, an american reseller, who use call centres to sell computers and drive the sales out of the strock control system. The sales staff are on daily targets/bonus and if they don't close, or can't ship, they don't get credited with the sale. This is what true volume sales is! Basically good business for Sun only occurs when customers need our unique technology or expertise. A fine example was provided by Dr Simon See, who spoke about the High Performance computing team and a pursuit that was in the last days and he had high hopes of success. (You'll have to subcribe to Sun NewsSun News and wait for the press release). Simon is another Principal Engineer and his undoubted expertise and enthusiasm makes him to my mind someone you'll hear more of. This is an area where Sun's experts and technology can help customers make a difference.

Jonathan blogged about Simon's deal today, 4 Oct 2006, and referenced this press release...

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Friday Sep 29, 2006

Corporate Consolidation in Hitech

Good Grief! CNET News reports that HP are to buy Voodoo PC. (See here...). When HP's wintel rival Dell bought Alienware earlier , I commented on my blog, that I thought or hoped that Alienware's system design expertise would be safe inside Dell's corporate mantle and even that I had found some value in Dell's self help resources. There is no doubt in my mind that like Sun these two companies design and build superior systems. This'll be interesting to see if Voodoo is valued for its design expertise or only its customer base - maybe its seen as an ink demand creation investment :), but it does mean that these games platforms will get into the shops.

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Sunday Sep 24, 2006

I.T. is business critical!

I finished off yesterday's Independent and noticed in the business pages that MFI has had to get out of its iconic flatpack furniture business due to significant losses arguably caused by a new IT systems implementation described by the Indy as, "so mismanaged that it couldn't deliver ...goods". I wonder whose fault that was!

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Tuesday Jun 27, 2006

Knowledge & Wealth

I picked up a free copy of the FT (Financial Times) yesterday. Its not normally a paper I read, but tucked in the middle was a book review of "Knowledge & the Wealth of Nations", by David Warsh, the editor of Economic Principals.

The book examines the development of economic theory in the light of the central contradiction in Adam Smith's insights, that specialisation creates increasing returns of scale, but the increasing returns mitigate against the required competitive processes. Without competition, the value of the economies of scale accrue to the monopolist not the consuming market. Warsh also reveiws more recent contributions to economic growth theory in the light of the role of knowledge and technology change to the economic innovation process. The reveiw talks about both IT and pharmaceuticals so it should be relevant to us. I think I need to read this.

The book's site has a review section (here...) where the FT's review is reproduced.

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Thursday Jun 15, 2006

Can we "commoditise" computing?

Again reflecting on some of the ideas generated from last week's Enron film; Enron's domination of the creation, distribution and exchange of gas and electricity created a vertically integrated monopoly. These require regulating or breaking up (or taking into public ownership). Also it seems to me that when trading becomes the 'raison d'etre' of a market, it offers very little value to the primary players. It made me wonder how the roles of primary provider, primary consumer, secondary traders and an exchange can be organised to enable a market, rather than distort it and if this can be applied to both bandwidth, which Enron experimented with, and CPU cycles. I've no real answer's today! More reading and listening....

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Derivative Trading or Gambling

I also discovered that Enron experimented with trading in weather and I'm not sure what they did, but its reminiscent of some ideas expressed in James Surowiecki's "Wisdom of Crowds" where he explored the remarkable prescience of the University of Iowa's Electronic Markets for the prediction of political events, most obviously elections but also other political futures. (I read somewhere, during the last {UK} general election, that the most effective forecast for the result was the bookmaker's odds, this must be very disappointing to the polling organisations, but it seems a financial interest sharpens the mind.) Its also a fact that if you want to trade in weather, at least in the UK you have to go to Ladbrokes to bet on snow at Xmas.

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Wednesday May 31, 2006

Global Green Machine!

Global Green Macine Also in Green Futures was an article about One laptop per child project aimed at developing a $100 laptop to help break the digital divide. It is planned as low cost, low-energy and aimed to rollout across the global south.

I have linked to a picture in their project wiki and I suggest you check out either the magazine or the project web sites if you want to know more.

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Green Futures

I also looked through Green Futures, a magazine about sustainable development which I picked up at one of the Sun offices. It has attracted a number of corporate sponsors, including a number of energy companies and telcos (inc. BT) and surprisingly "First Choice" (one of the UKs biggest travel agents). One of the articles was about Holiday's in 2020 (see also this article..., I wonder if they're linked in anyway?).

The main feature was an article by Anthony Lovins, arguing that green energy is cheap energy and that nuclear is both poor environmentally, but also bad economics. (See http://www.rmi.org).

I may have to subscribe to this, and I don't see an RSS button. I was surprised when I first heard that Charles Andrews, had been talking to a UK Bank's board members about the brand value of a green data centre, but senior business executives are running with this stuff and I for one need to catch up.

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Enron: The smartest guys in the room

It's fairly recent since I last flew Virgin, but I had not seen this documentary about the fall of Enron. (I've not seen it reviewed in Empire either, but that's my fault; they gave it 5 stars here....)

Well made, very informative, mixing interview with recorded material from both Enron's corporate archives and the congressional investigating committees. The failings summed up by the ex-trader who states, the Enron tag line was "ask why?", I didn't!, although some people come out of it really well. I wonder if we'll be talking about Bethany McLean, a fortune journalist who wrote the first questioning article in the same breath as Woodward & Bernstein. Probably not, because despite the Bush family and the Republicans being obviously entwined with Enron, it won't bring down the President, although it did contribute to the recall of Schwarzenegger's predecessor in California. (I certainly wasn't aware of the impact of Enron and the politics of energy in that episode.)

I suspect its hard to explain "Mark to Market" accounting in a film, or anything short of a term long course in an accountancy or business school, but Bethany McLean followed the money and asked where the revenue was, a simple enough question. The answer was in the manipulated Californian energy market and a corruptly hidden debt mountain.

I had just finished reading a "Management Today" article on the private equity (PE) fund business in Europe, and they asked who pays for the PE companies super-profits and argue that its the banks (or their customers) and the same occurred here. Enron's profits (when not fraudulently enhanced) were at the expense of the banks and eventually the Enron staff. In the banks case, their actions in support of Enron were where not illegal, sometimes deeply questionable.

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