Nokia Is The New Blackberry Of The Emerging Countries

Nokia announced mobile email service, Mail on Ovi, currently targeting the emerging markets.
Nokia has had great success in selling reliable and inexpensive handsets in the emerging markets. In the countries such as India the consumers never used the voice mail on their landlines and went through the mobile revolution to use SMS as a primary asynchronous communication medium. Many of these users are not active email users, not at least on their mobile devices. If Nokia manages to provide ubiquitous user experience using Ovi to bridge email and SMS on not-so-advanced-data-networks it can cause disruption by satisfying asynchronous communication needs of hundreds of thousands of users.

The smartphones would certainly benefit out of this offering and give Blackberry a good run for their money. Nokia completed the Symbian acquisition that makes them a company whose OS powers 50% of all the smartphones in the world. Symbian is still a powerful operating system powering more than 200 million phones and it is open source and it is supported by Nokia. The emerging countries haven't yet gone through the data revolution and Nokia is in great position to innovate.

De-coupled Cloud Runtime And Demand-based Pricing Suggest Second Wave Of Cloud Computing

A couple of days back Zoho announced that the applications created using Zoho Creator can now be deployed on the Google cloud. On the same day Google announced their tentative pricing scheme to buy resources on their cloud beyond the free daily quota. We seem to have entered into the second wave of the cloud computing.

Many on-demand application vendors, who rely on non-cloud based infrastructure, have struggled to be profitable since the infrastructure cost is way too high. These vendors still have value-based pricing for their SaaS portfolio and cannot pass on the high infrastructure cost to their customers. The first wave of the cloud computing provided a nice utility model to the
customers who wanted to SaaS up their applications without investing into the infrastructure and charge their customers a fixed subscription. As I observe the second wave of the cloud computing a couple of patterns have emerged.

Moving to the cloud, one piece at time: The vendors have started moving the runtime to a third party cloud while keeping the design time on their own cloud. Zoho Creator is a good example where you could use it to create applications using Zoho's infrastructure and then optionally use Google's cloud to run it and scale. Some vendors such as Coghead are already ahead in this game by keeping the both, design-time and run-time, on Amazon's cloud. Many design tools that have traditionally been on-premise might stay that way and could help the end users to run part of their code on the cloud or deploy the entire application on the cloud. Mathematica announced their integration with Amazon's cloud where you can design a problem on-premise and send it to the cloud to compute. Nick Carr calls it the cloud as a feature

Innovate with the demand-based pricing: As the cloud vendors become more and more creative about how their infrastructure is being utilized and introduce demand-based pricing, the customers can innovate around their consumption. Demand-based pricing for the cloud could allow the customers to schedule the non-real time tasks of the applications based on when the computing is cheap. This approach will also make the data centers green since the energy demand is now directly based on computing demand that is being managed by creative pricing. This is not new for the green advocates. The green advocates have long been pushing for a policy change to promote variable-pricing model for the utilities that would base price of electricity on the demand against a flat rate. The consumers can benefit by their appliances and smart meters negotiating with the smart grid to get the best pricing. The utilities can benefit by better predicting the demand and make the generation more efficient and green. I see synergies between the cloud and green IT.

Incomplete Framework Of Some Different Approaches To Making Stuff

Steve Portigal sent me an article that he wrote in the Interactions magazine asking for my feedback. Unfortunately the magazine is behind a walled garden and would require a subscription but if you reach out to Steve he should be able to share the article with you. In the absence of the original article I will take liberty to summarize it. Steve has described how companies generally go about making stuff in his “incomplete” framework:

• Be a Genius and Get It Right: One-person show to get it right such as a vacuum cleaner by James Dyson.
• Be a Genius and Get It Wrong: One-person show to get it wrong such as Dean Kamen’s Segway.
• Don’t Ask Customers If This Is What They Want: NBA changing the basketball design from leather to synthetic microfiber without asking the players
• Do Whatever Any Customer Asks: Implementing the changes as requested by the customers exactly as is without understanding the real needs.
• Understand Needs and Design to Them: Discovery of the fact that women shovel more than men and designing a snow shovel for women.

I fully agree with Steve on his framework and since this is proposed as an incomplete framework let me add few things on my own:

Know who your real customer is:

For enterprise software the customer who writes the check does not necessarily use the software and most of the time the real end users who use the software have no say in the purchase or adoption process. Designing for such demographics is quite challenging since the customers’ needs are very different than user needs. For instance the CIO may want privacy, security, and control where as the end users may want flexibility and autonomy and to design software that is autonomous yet controlled and secured yet flexible is quite a challenge. As a designer pleasing CIO for his or her lower TCO goals and at the same time delighting end users gets tricky.

Designing for children as end users and parents as customers also has similar challenges.

Look beyond the problem space and preserve ambiguity:

Hypothesis-driven user research alone would not help discover the real insights. Many times the good design emerges out of looking beyond your problem space.

If Apple were to ask people what they would want in their phones people might have said they want a smart phone with a better stylus and they do not expect their phone to tell them where they should eat their dinner tonight. We wouldn’t have had a multimodal interface on iPhone that could run Urbanspoon.

Embracing and preserving the ambiguity as long as you can during the design process would help unearth some of the behaviors that could lead to great design. Ambiguity does make people uncomfortable but recognizing that fact that “making stuff” is fundamentally a generative process allows people to diverge and preserve ambiguity before they converge.

Does Cloud Computing Help Create Network Effect To Support Crowdsourcing And Collaborative Filtering?

Nick has a long post about Tim O'Reilly not getting the cloud. He questions Tim's assumptions on Web 2.0, network effects, power laws, and cloud computing. Both of them have good points.

O'Reilly comments on the cloud in the context of network effects:

"Cloud computing, at least in the sense that Hugh seems to be using the term, as a synonym for the infrastructure level of the cloud as best exemplified by Amazon S3 and EC2, doesn't have this kind of dynamic."

Nick argues:

"The network effect is indeed an important force shaping business online, and O'Reilly is right to remind us of that fact. But he's wrong to suggest that the network effect is the only or the most powerful means of achieving superior market share or profitability online or that it will be the defining formative factor for cloud computing."

Both of them also argue about applying power laws to the cloud computing. I am with Nick on the power laws but strongly disagree with him on his view of cloud computing and network effects. The cloud at the infrastructure level will still follow the power laws due to the inherent capital intensive requirements of a data center and the tools on the cloud would help create network effects. Let's make sure we all understand what the powers laws are:

"In systems where many people are free to choose between many options, a small subset of the whole will get a disproportionate amount of traffic (or attention, or income), even if no members of the system actively work towards such an outcome. This has nothing to do with moral weakness, selling out, or any other psychological explanation. The very act of choosing, spread widely enough and freely enough, creates a power law distribution."

Any network effect starts with a small set of something and it eventually grows bigger and bigger - users, content etc. The cloud makes it a great platform for such systems that demand this kind of growth. The adoption barrier is close to zero for the companies whose business model actually depends upon creating these effects. They can provision their users, applications, and content on the cloud and be up and running in minutes and can grow as the user base and the content grows. This actually shifts the power to the smaller players and help them compete with the big cloud players and yet allow them to create network effects.

The big cloud players, that are currently on the supply side of this utility mode, have few options on the table. They either can keep themselves to the infrastructure business and I would wear my skeptic hat and agree with a lot of people on the poor viability of this capital intensive business model that has very high operational cost. This option alone does not make sense and the big companies have to have a strategic intent behind such large investment.

The strategic intent could be to SaaS up their tools and applications on the cloud. The investment and control over the infrastructure would provide a head start. They can also bring in partner ecosystem and crowdsource large user community to create a network effect of social innovation that is based on collective intelligence which in turn would make the tools better. One of the challenges with the recommendation systems that uses collaborative filtering is to be able to mine massive information that includes users' data and behavior and compute the correlation by linking it with massive information from other sources. The cloud makes a good platform for such requirements due to its inherent ability to store vast amount of information and perform massive parallel processing across heterogeneous sources. There are obvious privacy and security issues with this kind of approach but they are not impossible to resolve.

Google, Amazon, and Microsoft are the supply side cloud infrastructure players that are already moving in the demand side of the tools business though I would not call them the equal players exploring all the opportunities.

And last but not the least, there is a sustainability angle around the cloud providers. They can help consolidate thousands of data centers into few hundreds based on the geographical coverage, availability of water, energy, and dark fiber etc. This is similar to consolidating hundreds of dirty coal plants into few non-coal green power plants that can produce clean energy with efficient transmission and distribution system.

Microsoft Cloud Computing Blogger Roundtable

Today Microsoft announced the cloud offering for Exchange and SharePoint. I was invited to participate into the Microsoft Blogger round table that took place after the announcement as an initiative by Microsoft to establish relationship with the bloggers and thought leaders in the cloud computing area.

The launch event, attended by select customers, partners, bloggers, and the press, included a demo that articulated the seamless ubiquity of the solution – from the cloud to on-premise and vice versa reiterating the client-server-service strategy. Microsoft also iterated their commitment to continue investing massively into the data centers and also emphasized commitment to sustainability.

When asked about the SLA the answer was that the SLA is based on availability, security and privacy, and recovery time in the event of a disaster based on the geography. The SLA is three 9.

Stephen Elop, president of the Microsoft Business Division at Microsoft dismissed the possibility of slow online adoption due to the continued investment into the on-premise products commenting that the customers will still need an on-premise client - some kind of “local processing” - citing Google Chrome (without naming it)

The event was followed by a blogger round table that I participated into. This was an effort by Microsoft to establish relationship with the bloggers and thought leaders in the cloud computing, Enterprise 2.0, and social innovation area. It was an interesting conversation on the topics such as Microsoft embracing the cloud computing culture as an organization, better ways to engage with the bloggers, cloud computing adoption concerns, messaging issues around Microsoft products, SharePoint as a platform on Azure etc.

The discussion was quite open and well moderated by David Spark. Microsoft expressed the desire to better connect with the thought leaders and bloggers in the cloud computing area. Following is a list of some of the bloggers that were at the table:

Jeff Nolan – Enterprise 2.0
Ben Metcalfe – Co-founder of the Data Portability group
Salim Ismael – Headed Yahoo Brickhouse in his previous career
Phil Wainwright – from ZDNet
Geva Perry
Tom Foremski
Adrian Chan
Deb Schultz
Ohad Eder

Continuous Passive Branding During Economic Downturn To Change Customers' Opinions

The current economic downturn has forced many CIOs to significantly reduce the external IT spending. Many projects are being postponed or canceled. This situation poses some serious challenges to the sales and marketing people of companies selling enterprise software. Many argue that there is nothing much these people can do. I would disagree.

Marketing campaigns tend to rely a lot on selling a product using active aggressive marketing that may not be effective under these circumstances since many purchase decisions are being placed on hold. However these circumstances and poor economic climate are ideal to build a brand and paddle concepts with continuous passive branding exercise. The branding exercise, if designed well, could change buyers’ experience around a concept or a product and evoke emotions that could be helpful when a product is actively being sold. Guy Kawasaki points us to an experiment that studied the art of persuasion to change people's attitudes. People should always be selling since the best way to change someone's mind is to sell them when they are not invested into an active purchase decision, emotionally or otherwise.

GE’s green initiative, branded as ecomagination, is an example of one of these passive branding exercise. Last year Climate Brand Index rated GE No. 1 on green brands. GE published a page long ad in a leading national magazine introducing their new green aviation engine. Instead Jeff could have picked up the phone and called Boing and Airbus and said "hey we have a new engine". Instead GE paddled their green brand to eventually support their other products such as green light bulbs. Climate change is a topic that many people are not necessarily emotionally attached to and have a neutral position on but such continuous passive marketing campaigns could potentially change people's opinions.

Apple’s cognitive dissonance is also a well known branding strategy to passively convince consumers that a Mac, in general, is better than a Windows. Many people simply didn’t have a stand on a laptop but now given a choice many do believe that they like a Mac.

The art of persuasion goes well beyond the marketing campaigns. Keeping customers engaged onto the topics and drive the thought leadership is something even more important during this economic downturn. The sales conversation is not limited to selling a product but also includes selling a concept or a need. The marketing is even more important considering the customers are not actively buying anything. The leaders should not fixate themselves on measuring the campaign to lead metrics. Staying with the customers in this downturn and help them extract the maximum value out of their current investment would go a long way since customers don't see their opinions being changed by a seemingly neutral vendor. When the economic climate improves and the customers initiates a purchase that sales cycle is not going to be that long and dry.

The leaders should carefully evaluate their investment strategy during this economic downturn. The economy will bounce back, the question is will they be ready to leap frog the competition and be a market leader when that happens. Cisco's recently announced their 2009 Q1 results. John Chambers made Cisco's strategy in the downturn very clear - invest aggressively in two geographies: the U.S. and selective emerging countries since emerging countries will be a steady state of growth as the countries grow and be prepared to sell in the western countries since they are likely the first ones to come out of this downturn.

“In our opinion, the U.S. will be the first major country to recover. The strategy on emerging countries is simple. Over time we expect the majority of the world’s GDP growth will come from the emerging countries. In expanding these relationships during tough times, our goal is to be uniquely positioned as the market turn-around occurs. This is identical to what we did during Asia's 1997 financial crisis.”

First Click Free - Opportunity For The Publishers To Promote Previously Undiscoverable Content

Nick has posted his analysis on Google's First Click Free . This free service allows the content providers to participate into it and promote their content by making the first click free when users discover the content via Google and subsequently enforce registration or subscription for the rest of the content.

I think this is a great idea! I am personally against the walled garden approach and do not believe in registrations and subscriptions just because content providers haven't managed to convince me so far to register or subscribe to for their content. This is a great opportunity for the publishers to showcase their content by making the first link free, demonstrate the value proposition, and drive traffic towards the paid content.

The discussion on the service has so far centered around:

• Google making other search engine's users second-class citizens and not sticking to an unmediated role.
• Users' ability to trick the content providers to get access to all the pages by acting as if the request is coming from a Google bot
  

I do not buy into the criticism around Google's unmediated role. No one is stopping the other search engines to build a similar service and work with the content providers. Though I would expect Google to somehow differentiate the first click free content from the always free content on the search results so that users don't feel that they are being tricked.

I also do not buy into the argument that users can trick the content providers by faking the request as if it is coming from a Google bot. Google can very easily solve this technological challenge to ensure that only the Google bot and no one else gets access to all the free content.

As much as I appreciate and value this service I suspect that the many publishers won't get it. I hope publishers don't ask Google to pay for the traffic instead of being happy that Google is sending them the traffic. I also see a challenge and an opportunity for the publishers to redesign their website to convert the first free click into a registration, subscription, or a future visit.