The underlying economics of computing resources have always had a profound impact on development of computing architecture and in-turn the structure of the computer industry. In this regard the emergence of cloud computing is no different. Cloud computing has emerges as the product of a fundamental transition in the underlying economics of computing resources and – as in the past – this economic transition will drive profound changes in the structure of the computing industry. The nature of this change can best be described as a transition from the economics of scarcity to the economics of abundance.Continue reading →
How ‘Do Not Track’ Will Transform Internet Business Models
Imagine a world where all internet browsers are required to present users with a simple question: “Do you want your online browsing activity tracked, recorded and shared with marketing companies – Yes or No?”
What percentage of users do you suppose would answer “No?” My guess would be greater than 90%. If I’m anywhere close to being correct then Microsoft’s controversial decision to enable ‘Do Not Track‘ (DNT) by default in IE10 and Windows 8 would seem to be very much inline with consumer sentiment. But advertisers, Yahoo, and the developers of both the Apache web server and FireFox browsers are all decrying Microsoft’s decision.
This relatively arcane debate over a new internet standard masks a much more critical issue: In the long-term, how viable is the internet’s – advertising based – ‘Free’ content model?
Advertising revenue is the internet’s predominant business model. This is of course the core business model that enabled Google to become the 800 lb. gorilla of the industry. But this business model is based on users accepting a ‘Faustian’ pact where they agree to increasingly invasive tracking of their online activities in exchange for free content.
There’s only one small problem with the current situation. Very few consumers have ever read or consented to the ‘Contract.’ Most of consumers have no earthly idea how invasive today’s internet tracking technology is and once they are aware they are not going to like it.
Microsoft’s Pivot – A Plan to Dominate “Devices and Services”
We are currently witnessing a major pivot in Microsoft’s core business model. It is starting to become clear that – as Steve Ballmer recently announced – Microsoft is deadly serious about becoming a global leader in consumer “Devices and Services.” Successful execution of this strategy will require the company to control everything from manufacturing, distribution logistics through to retail.
The company appears to be focused on executing a ‘Leader’ strategy in the devices business which would give them even greater control than Apple famously does over the end user experience. In addition the company is likely to repurpose its online service investments to add value to this new device-led strategy. A-la Apple, consumers will have no choice but to use Microsoft own services when using a Microsoft mobile device and competition authorities will be powerless to prevent it.
If correct, this pivot will has profound implications for the structure of the company, shareholder value and for the entire mobile technology industry.Continue reading →
Why Microsoft Shareholders Should be Very Concerned
This weeks Partner’s conference has once again exposed Microsoft’s complete lack of any credible consumer strategy. On the one hand Ballmer claims he’s going to leave no “stone unturned” competing with Apple. Yet on the same day he also states that Microsoft’s own Windows 8 hardware “Surface is just a design point.” Note to Steve: Those are two mutually incompatible objectives.
If Ballmer really is serious about competing with Apple then Microsoft will need to control its own hardware destiny – in pcs, tablets and smartphones – and be completely committed to that strategy. Unfortunately that will also require a willingness to throw the OEM partner community under the bus. Protecting OEMs while aggressively competing with Apple are incompatible strategies. A textbook case of the Innovators dilemma.
Shareholders are likely to pay a very high price if Ballmer continues to believe the fantasy that he can accomplish both these competing objectives and still be successful in the consumer business.
Deploycon 2012 Slides
Link to the PDF of the slides I used for my recent “Paas: Fit for the Enterprise” presentation at DeployCon 2012 in New York.
The Network Carrier Dilemma
This article in Forbes magazine about network equipment providers enabling network carriers to expose service APIs (Application Programing Interfaces) started an interesting debate with Alcatel-Lucent’s Laura Merling (@magicmerl), Mike Maney (@the_spinmd) and others on Twitter.
The crux of the debate is whether exposing developer APIs at the network layer is a good or a bad thing. This is the latest round in the ‘dumb pipes vs. smart network’ debate which lies at the heart of an economic dilemma facing the network carrier business model.Continue reading →
The Jobs Are Not Coming Back
The NY Times published an interesting article today the impact of robotics on manufacturing jobs using Amazon’s purchase of robot maker Kiva Systems as an exemplar. The core question raised in the article is whether the adoption of automation technologies will create more unemployment or whether – as has been seen in the past – displaced workers will re-train and become employed in other productive areas of the economy. Continue reading →
Mahler’s Ninth
Waiting for the start of Mahler’s Ninth. Performed by the New York Philharmonic, Avery Fisher Hall at the Lincoln Center, New York.
2012 Predictions
Just for fun – and in no particular order – here are some technology industry predictions for 2012.Continue reading →
Intel’s ARMageddon II
Back in January of this year I published an article about the threat the ARM processor architecture would pose to Intel in the high margin – highly profitable – market for server processors. Bloomberg published a story yesterday indicating that HP is preparing to enter the ARM based server business. I don’t own Intel stock but if I did I’d be selling. ARMageddon is just over the horizon.