Mass Customization: From "There is a plug-in for that" To "There is an app for that"

In a much anticipated mystic event Apple announced a tablet today called an iPad. Steve Job's hypnotizing presentation convinced people that iPad is a magic. I was not there in person to see Jobs unveiling an iPad and somehow escaped the magic. That gave me time to think about the implications of a trend that an iPad endorses - mass customization. Firefox's success in part can be attributed to its approach to allow the developers to write and publish extensions. There is a Firefox plug-in for pretty much anything. Then came the iPhone and we had an app for pretty much anything. Now we have an iPad and the trend continues.

Mass customization trend is about micro-chunking the software that we run on our devices ranging from cell phones to laptops. The emergent architecture and delivery model have empowered the consumers to buy only the chunks of software that they actually need. The cloud computing and SaaS have further enabled the consumers not to run any software other than a web browser for many daily tasks that they need to accomplish. Micro-chunking and webOS have grave implications on the large shrink-wrapped software packages that occupies the most space on consumers' hard-drive, hogs memory, and provides a little value. I won't go to the extent of calling this gold rush for the app developers but I do agree that the independent developers now have a level playing field to compete with the ISVs.

I certainly welcome this trend. I not only want to be in charge of the devices that I own but I also want to experiment and micro manage the applications that I run on my devices. If I can get a tall non-fat extra hot double shot latte at Starbucks why shouldn't I expect a device that runs the exact software that I need - no less, no more.

Silicon Valley Is An Innovation Dagger

It was a routine trip back home from work one of these days. As soon as I boarded the bus the driver asked me: "So, what do you think about Google's announcement regarding China? Will Yahoo follow the suit?". The same bus driver had asked me about my views on NexusOne on the day it was announced. He even has a strong point of view on net neutrality. The other day the librarian showed me a Firefox plug-in that hides your identity from Google. Everyday it's a constant reminder of the demographics that we live in the Silicon Valley. It's an innovation dagger. One edge keeps people to stay on top of cutting edge technology and the other keeps them away from the vast majority of the users that don't live in the valley.

I cannot overemphasize the importance of being surrounded by the smartest of the smart people in the valley. However for entrepreneurs it is equally important to stay grounded in the reality. As cool as iPod was and iPhone is and iPad/iSlate will be it takes years for the products to cross the chasm and many products simply vanish. If you are designing a product in the valley please do me a favor - find your users outside the valley. They are the real people, the mass, that you should be designing for. It took Facebook 5 years to go from 5M users to 350M users and Foursquare is just the beginning of what's more to come. If you are in the valley building the next big thing, be real. Hangout with all the cool kids on the block but don't forget that you will have to cross the chasm and it won't be easy.

Tomorrow Apple is going to announce the tablet. When I take the bus tomorrow I will face the question from the driver: "So, what do you think of the tablet?". While I prepare my answer, check out this hilarious "In The Valley" performance that resonates well with what we see and how we think.

What Can Enterprise Software Learn From CES? - Embrace Ubiquitous Convergence

One of the biggest revelations to me from my trip to CES is that the ubiquitous computing, once an academic concept, has finally arrived. The data, voice, device, and display convergence is evident from the products that I saw. There has been wide coverage of CES by many bloggers who track consumer technology. However, as a strategist and an enterprise software blogger, I have keen interest in assessing the impact of this ubiquitous convergence in consumer technology on enterprise software.

I believe that the consumers will soon start expecting the ubiquitous experience in everything that they touch and interact with ranging from their coffee cups to the cars and everything in between. This effect is going to be even more pronounced amongst millennial who grew up digitally and are entering into the workforce with an expectation of instant gratification. The mobile phone revolution was consumer-driven at large and Apple made the Smartphone category popular and appealing to non-enterprise consumers. These consumers slowly started expecting similar experience in enterprise software, because of which, many enterprise software vendors are now scrambling for making mobile a priority. I suggest that they learn a lesson from this and stay ahead of the curve when this ubiquitous convergence picks up momentum.

So what exactly does this mean to the enterprise ISVs?

Any surface can be an interface and a display:

I saw a range of new interface and display technology including pico projector, multi-touch screen by 3M, a screen with haptic feedback, and 3D gestural interfaces. A combination of a cheap projector and a camera could turn any surface into a display or an interface. The consumers will interact with software in unanticipated and unimaginable ways. This will put ISVs under pressure to support these alternate displays and interfaces. I see this as an opportunity for ISVs to differentiate their offering by leveraging instead of succumbing to this technology trend. Imagine a production floor that has the cameras and projectors mounted on all the walls. A maintenance technician could walk in and the maintenance information is projected on the machine itself which also doubles as a touch interface. The best interface is no interface. We all use software because we have to.

Location-based applications and geotagging will be a killer combination:

Google's Favorite Places and Nokia's Point and Find (that I saw at CES) are attempts to organize, and importantly, to own the information about places and objects using QR codes. The QR codes are fairly easy to generate and has flexible and extensible structure to hold useful information. The QR code readers are the devices that most of us already own - a camera phone with a working data connection. Combine geotagging with Augmented Reality that is already fueling the innovation in location-based applications, you have got a killer combination that could lead to some breakthrough innovation. This trend can easily be extended to the enterprise software to geotag objects and the associated processes from cradle-to-grave that provide contextual information to people when they interact with the software and the objects. This could lead to efficient manufacturing, smarter supply chain, and sustainable product life cycle management.

3D will go from "cool" to "useful" sooner than you think:

Yes, you and I will be wearing those 3D glasses in our living rooms and may be in our offices as well. Prada and Gucci might make them. What seems like beginning of 3D with movies, video games, and game consoles this area is going to explode with the opportunities. What is being designed as "cool" will suddenly be "useful". With the exception of a few niche solutions ISVs will likely brush off 3D as not relevant in the beginning until someone unlocks the pot of gold and everyone else will follow. Simply replicating 3D analog in a digital world will not make software better. Adding third dimension as an eye candy could actually introduce noise for the users that can look at the data in 2D more effectively. The ISV will have to hunt for the scenarios that amplify cognition and help users understand the data around certain business processes that are beyond their capacity to process in 2D. The 3D technology will be more effective when it is used in conjunction with complementing technology such as multi-touch interface to provide 3D affordances and with location-based and mapping technology to manage objects in 3D analog world.

The rendering technology will outpace non-graphics computation technology:

The investment into rendering hardware such as Toshiba's TV with the cell processors and graphic cards from ATI and nVidia complement the innovation in display elements technology e.g. LED, OLED, energy-efficient plasma etc. The combination of faster processor and sophisticated software is delivering hi-quality graphics at all form factors. The enterprise software ISV have so far focused on algorithmic computation of large volume of data to design various solutions. The rendering computation technology always lagged non-graphics data computation technology. Finally the rendering computation has not only caught up but it will outpace non-graphics data computation in some areas very soon. This opens up opportunities to design software that not only can crunch large volume of data but can leverage high-quality graphics without any perceived lag that delivers stunning user experience and realtime analysis and analytics.

Consumers will have "Personal Cloud" to complement the public cloud:

Okay, this is a stretch, but let me make an attempt to put all the pieces together. The consumers now have access to ridiculously powerful processors and plenty of storage in their set-top boxes, computers, appliances etc. These devices can be networked using wired and wireless devices that support wireless HDMI and USB 3.0. This configuration starts to smell like a mini "Personal Cloud" even though it does not have all the cloud properties. The public cloud, as we all know today, will mature and grow beyond utility computing and SaaS. The public cloud, the hardware that leverages IP6 and multicasting, and sophisticated CDN will see plenty of innovation ranging from streaming movies to calibrating carbon footprint of consumers against their neighbors. The public cloud and the personal cloud will complement each other in providing seamless ubiquitous user experience across all the devices. The ISV who will leverage the cloud and the channels to these consumers' devices have great potential to grow their portfolio of solutions that extends well beyond enterprise software and has a lot more productive and delighted users.

I don't want to predict what is a fad and what is the future but the convergence is clear and present. It is upto the ISVs to be innovative and find the golden nuggets and tune out the noise to deliver better business value to their customers.

On a side note, I really badly want this iPhone controlled AR.Drone - the coolest toy that I saw at CES!

India Needs Public Policy And Service Innovation And Not Web 2.0 Companies

The second most populous country with the fourth largest spending power, India, saw a surprising 7.9% YOY GDP growth well above the expectations of 6.3%. The Indian stock market recovered much quicker since the US financial meltdown. In fact one of my friends who oversees sales of a European earthmoving equipments company in India complained that the European manufacturers have not increased their production to meet the increased demand in India due to the faster economic recovery, especially in the infrastructure sector. When I switch on a news channel in India I hear all about incentivizing manufacturing companies to increase indigenous production that will fuel the growth of the industrial sector. I also see commercials ranging from baked potato chips to a service to transfer money using virtual currency on a mobile phone targeted to the fast growing middleclass. The marketers have no problem understanding the rich and the middle-class of India and designing the products for them.

What I don’t see is entrepreneurs catering to the people at the bottom of the pyramid. Vivek Wadhwa’s guest posts on TechCrunch stirred quite a controversy especially the one on the “reverse brain-drain” - the Indians returning to India from US. NYTimes recently carried a story on the innovation pace in India. There are more angel investors in India than even before. A few people from Infosys have started their own VC fund. This is all good but I don’t think that the entrepreneurs are pursuing the right opportunities. I have written before about the opportunities to cater to the people at the bottom of the pyramid and I will repeat again that it will be a huge mistake to equate India’s needs with those of the developed countries. India has a little over 300 million people that are below poverty line (450 million by international definition – who earns less than $1.25). What it simply means that at least the one-third population of India has no guarantee that there will be food at the table and access to affordable healthcare. India has significant challenges in getting the basic services right and educating its people and providing healthcare to them. These people will do just fine without Web 2.0 companies.

Here is an example and an opportunity for the kind of innovation that I am referring to:

Electronic voting machine

India has been trying for many years to improve its voting process where the votes are regularly rigged in many parts of the country – it’s called “booth capturing”. The ex. Chief Election Commissioner N. Gopalaswamy (also father of a close friend) helped revolutionize the voting process with the introduction of electronic voting machines with a tiny little feature called “12 second delay” that made all the difference. This delay prevented the votes to be “stuffed” even if the machine was physically compromised. The machine also has an algorithm to recognize a pattern to detect the votes being cast every 12 seconds and simply discard them if needed. This is a great example where technology is being used to fight the corrupt behavior during the elections.

Universal Healthcare Card

This is a huge opportunity. The Universal Healthcare Card is an attempt to insure 300 million people (below the poverty line) with the cost of $1B, which is a small fraction of overall healthcare spending of $45B, which in turn is only 4% of the GDP. This policy has administrative and operational challenges to fight corruption and to ensure that people below poverty line actually benefit out of this plan. I see this as a socioeconomic problem that technology can help solve to provide accessible healthcare to the people who really need them without any pilferage.

What India really needs the most is the entrepreneurs who can get involved in the public policy and create service innovation to remove the fundamental roadblocks that India has on its way to become a developed nation. We need more people like Nandan Nilekani who left Infosys to spearhead the efforts of the national Unique Identification Project. He is an ultra smart entrepreneur who understands the challenges associated with such a project, has deep passion for public policy, and is fully committed to make things happen.

Are you an entrepreneur up for such a challenge?

Google Does Not Have Innovator's Dilemma

I asked a question to myself: "Why has Google been incredibly successful in defending and growing its core as well as introducing non-core disruptive innovations?". To answer my own question I ran down Google's innovation strategy through Clayton Christensen's concepts and framework as described in his book "Seeing What's Next". Here is the analysis:

Google's latest disruptive innovation is the introduction of free GPS on the Android phone. This has grave implications for Garmin. To put this innovation in the context it is a "sword and shield" style entrant strategy to beat an incumbent by serving the "overshot customers". The overshot customers are the ones who would stop paying for further improvements in performance that historically had merited attractive price premium. Google used its asymmetric skills and motivation - Android OS, mapping data, and no direct revenue expectations - as a shield to enter into the "GPS Market" to serve these overshot customers. Google later turned its shield into a "sword" strategy by disinteremediating the map providers and incentivizing the carriers with a revenue-share agreement.

On the other hand Google's core search technology and GMail are a couple of examples of "incremental to radical" sustaining innovations where Google went after the "undershot customers". The undershot customers are the ones who consume a product but are frustrated with its limitations and are willingly to switch if a better solution exists. The search engines and the web-based email solutions existed before Google introduced its own solutions. GMail delighted the users who were frustrated with their limited email quota and the search engine used better indexing and relevancy algorithms to improve the search experience. I find it remarkable that Google does not appear to be distracted by the competitors such as Microsoft who is targeting Google's core with Bing. Google continued a slow and steady investment into its sustainable innovation to maintain the revenue stream out of its core business. These investments include the next generation search platform Caffeine, social search, profiles, GMail labs etc.

Where most of the companies inevitably fail Google succeeded by spending (a lot of) money on lower-end disruptive innovations against "cramming" their sustaining innovation. Google even adopted this strategy internally to deal with the dilemma between its sustaining and disruptive innovations. One would think that the natural starting point for Google Wave would be the GMail team but it's not true. In fact my friends who work for Google tell me that the GMail team was shocked and surprised when they found out that some other team built Google Wave. Adding wave-like functionality in the email would have been cramming the sustaining innovation but innovating outside of email has potential to serve a variety of undershot and overshot customers in unexpected ways. This was indeed a clever strategy.

So, what's next?

If I were AT&T I would pay very close attention to Google's every single move. Let's just cover the obvious numbers. The number of smartphone units sold this year surpassed the number of laptops sold and the smartphone revenue is expected to surpass the laptop revenue in 2012. Comcast grew their phone subscribers eight-fold with the current number exceeding 7 million. Google Voice has over 1.4 million users of which 570,000 use it seven days a week. Even though Google does not like its phone bill Google seems to be committed to make Google Voice work. This could allow Google to serve a new class of overshot customers that has a little or no need of land line, desire to stay always-connected, and hungry for realtime content and conversations. Time after time Google has shown that it can disintermediate players along its value chain. It happened to NavTeq and Tele Atlas and it is happening to other players with Google Power Meter and Chrome.

Many people argue that Chrome OS is more disruptive. I beg to differ. I believe that Chrome OS does not have near term disruption trajectory. Being wary of hindsight bias, I would go back to the disruptive innovation theory and argue that Chrome OS is designed for the undershot customers that are frustrated with other market solutions at the same level. For the vast majority of the customers it does not matter. If Google does have a grand business plan around Chrome OS it certainly will take a lot of time, resources, and money before they see any traction. I see the telco disruption happening much sooner since it serves the overshot customers. I won't be surprised if Google puts a final nail in telco's coffin and redefines the telephony.

Branding On The Cloud Is Part Business Part Mindset

As it goes "on the Internet, nobody knows you're a dog". Actually people do. Recently AT&T asked their employees to fake the net neutrality. Employees were asked to use their personal email addresses to petition against net neutrality. The internal memo ended up on the blogs and Twitter in minutes. Forcing your brand down your employees' throats is not particularly a smart idea.

Is your brand ready for the cloud? This is not a question that many companies ask until their brand gets caught in a cloud storm. The storm is about the customers, partners, and suppliers discussing your products and brand in the public using social media, report problems using the SaaS tools, and engage into the conversations in ways that you never anticipated. Recently Seth Godin announced an initiative to help companies launch brand in public. It stirred quite a controversy and created confusion. He had to pull back. The organizations are simply not ready. The organizations are unclear on how to monitor, synthesize, and leverage the conversations that are happening on the cloud. The cloud enables the people to come together to share and amplify their conversations. .

Whether you are a SaaS ISV, non-SaaS ISV, or not even a software company, what can you do as an organization to build your brand on the cloud? It is part business past mindset:

Don't dread failures instead use them to amplify brand impact:

Recently an enterprise SaaS ISV, Workday, experienced an unplanned 15-hour outage. Not so surprisingly customers responded well with the outage. SaaS essentially made the outage a vendor's problem. Unclear? Take an example of the analog world. Occasionally I have experienced power outage in my neighborhood (yes, even in supposedly modern silicon valley). The wider the outage faster it got resolved. The utility folks feverishly worked to resolve the problem that impacted hundreds of subscribers. Coming back to Workday's outage, while Workday had all hands on the deck to resolve the outage the management team personally picked up the phone and started calling the customers to reassure them that the outage will be resolved soon. They extensively used the social media during and after the outage to be transparent about the overall situation. Now it gets even more interesting. They reached out to a key blogger, Michael Krigsman, who analyzes IT failures to brief him on what happened and extended an invitation to have a chat with the CEO. Michael Krigsman has a great post 'A matter of Trust' covering this outage and his subsequent conversations.

Workday used its outage not only to underscore the fact that why people think they are better of with a SaaS vendor but also used the opportunity to strengthen their brand proposition amongst the customers, analysts, and bloggers.

Building brand leveraging SaaS delivery model to act in realtime:

If you are a SaaS vendor ask yourself whether you are leveraging the SaaS delivery model to strengthen your brand in realtime. Jason Fried from 37 Signals was quite upset upset with Get Satisfaction when 37 Signals got labeled as “not yet committed to an open conversation”. A couple of people from Get Satisfiction immediately responded, apologized, and changed the parts of the tool in minutes that caused the problems. Similarly Twitter postponed its scheduled downtime to accommodate the protest against the outcome of the election in Iran. A former deputy national security advisor to George W. Bush, Mark Pfeifle, went to the extent to comment that Twitter founders should have won the nobel peace prize for postponing the downtime.

Being able to demonstrate the support for what you believe in has significant positive impact on your brand. Don't underestimate the power of social media on the cloud. Twitter has changed culture of Comcast.

Empower your employees to be your mavens:

As Malcolm Gladwell puts it customers don't retain their soap wrappers to call the toll free number to let the manufacturer know if they are unsatisfied. But if someone does call, you know that, you discovered a maven whom you should serve at any cost. That person will start the word-of-mouth epidemics. Chances are that some of your employees are already having conversations on the cloud. Make them mavens of your brand. Get Satisfiction is an example of a great tool that a company can use to encourage their employees to get closer to the customers using the alternate customer support channels. Glassdoor is another example of such a tool that not only works as a great salary benchmarking tool but also provides insights into culture of an organization. Primarily designed as a tool for the external candidates the tool has potential to be used by the internal executives to objectively assess the employee sentiment and help improve the external brand perception as projected by the employees. Focus on your employees and how they can better connect with the customers and partners using the tools and open communication channels on the cloud.

I am not ignoring the negative aspects of the cloud being an open medium that isn't perfect. It never will be. As Bruce Schneier describes the commercial speech arms race - "Commercial speech is on the internet to stay; we can only hope that they don't pollute the social systems we use so badly that they're no longer useful."

I am optimistic. The cloud is a great platform for social participation that, if used wisely, could strengthen your brand.

Augmented Reality Will Change Enterprise Software For Real

Augmented Reality (AR) has seen a sudden buzz in the last few weeks. The announcements just keep coming; Layar announced a 3D API and Wikitude announced AR API. VentureBeat recently ranked the emerging start-ups in augmented reality. AR is still a nascent domain with many quirks and twists but it is for real and it is going to cause disruptions in many dimensions. This is how I see it would affect the enterprise software:

No interface will be the interface

The augmented reality uses the most natural interface, the reality, and layers information on top of it essentially eliminating the need to have an artificial interface. Users will prefer in-context user experience at the locations where they perform their primary task compared to unnatural static experience on their current devices. I also see the impact and potential for innovation in the MVC frameworks. The AR opens up a lot more opportunities for the developers and designers, who were constrained by the traditional technological barriers, to innovate new UI frameworks that have higher affordance and closer mapping to users’ mental model against an unproductive artificial user interface. Getting closer to user’s mental model is going to make the user experience a pleasure and the users more productive. Check out this Layar video:



Data will be the new design

With the growing popularity of AR once considered a nice to have feature, the alternate data consumption, will become the core requirement of the enterprise software. The users are likely to access data with a variety of new clients in unanticipated ways. The widespread adoption of RSS feeds made the interaction and visual design of a blog less relevant against burning the feeds to deliver the content in realtime. Similarly accessibility to a range of rich enterprise data in real-time is going to outweigh everything else. The users will create new environments and experiences. This emergent behavior is a golden opportunity for the companies that have captured rich enterprise data but have faced challenges to make it accessible and useful to the end users.

The SaaS, the cloud, and mobility will be base expectations

The AR applications require the data to be accessed from a range of physical locations on mobile devices without any latency. This distributed data need combined with the nature of the AR deployments where one company does not own an end-to-end solution will necessitate the data and the apps to be delivered from the cloud to optimize the solution. The users will not only demand that the application be accessible from the mobile devices but the mobile devices might be the primary and in some cases the only interface to the business information. Emerging technology trend such as cloud-based rendering, when combined with such AR deployments, has potential for some killer innovative applications.

These are exciting times and I hope that the entrepreneurs tap into the world of augmented reality and make it real by creating innovative experiences that demonstrate technology excellence, create new business models, and make it a real pleasure to interact with the enterprise software.