January 18, 2005
The blogosphere is buzzing about the Wiki wars. Matt Marshall has an article in the Mercury News about it. Ross Mayfield felt compelled to write about it and give his point of view on the news. Here is the REAL news about Wikis - CUSTOMERS CARE AND ARE WILLING TO PAY FOR IT!!!!!
At this early stage of the market both companies should cheer each other on when they get customers as it validates the markets and moves people from asking, "What is a wiki?" to which "Wiki software should I buy?"
So Ross forget about trying to defend Disney's move to Jotspot and rejoice that people are buying Wiki software even if it is not yours.
November 15, 2004
Skype recently announced a partnership with Siemens to enable cordless phones to use Skype to dial out (in addition to using the PSTN):
Skype's free Internet telephony software works with Siemens phones via the Gigaset M34 USB adapter, an open interface adapter that is plugged into the USB connection point of a users' PC. It communicates with the phone’s base station to either make or receive a Skype call. The handset then enables users to gain cordless access to the extensive Skype features including, free Skype to Skype calling, buddy lists, the Skype Global Directory and conference calling.
Call-center and IVR solutions
Although Skype has so far been designed primarily with individual communication needs in mind, it can be used to provide business-class calling services through the Skype API. Businesses can provide Interactive Voice Response (IVR) solutions where the software answers the inbound Skype call and provides the user with automated choices and selections in combination with a back-end system. This could be used for ticket booking, payment, pizza ordering and many other services. The IVR system can be either fully automatic or a combination of operator/automatic usage.
For service monitoring purposes, the calls to operators can be recorded and later screened using regular audio manipulating tools on a standard PC. The information can be automatically stored and emailed.
Skype provides access to its functions from software a well as hardware devices. The Skype client software can be used with any audio hardware compatible with the operating system, such as headphones and a desktop microphone, or a dedicated USB headset or even telephone-like handset. However, all of these require the user to still work with Skype software and sit behind a computer.
Users may want more freedom both in home and business environments and not to be tied to a computer. This is why Skype has joined forces with Siemens as its first Preferred Cordless Phone Provider to give users a chance to move about freely. The Siemens M34 Gigaset USB Adapter plugs into the computer’s USB port and connects to a Gigaset base station that in turn is connected to one or more cordless handsets. The handsets have access to basic Skype functions like placing and answering calls and navigating the contact list.
The Skype API gives other hardware manufacturers an opportunity to build similar solutions in their existing or upcoming products. Note that for using all these functions, a computer running Skype is still required.
Demand prediction, scan-based trading
Interesting BI example in an NYT article about Wal-Mart:
A week ahead of the storm's landfall, Linda M. Dillman, Wal-Mart's chief information officer, pressed her staff to come up with forecasts based on what had happened when Hurricane Charley struck several weeks earlier. Backed by the trillions of bytes' worth of shopper history that is stored in Wal-Mart's computer network, she felt that the company could "start predicting what's going to happen, instead of waiting for it to happen," as she put it.
The experts mined the data and found that the stores would indeed need certain products - and not just the usual flashlights. "We didn't know in the past that strawberry Pop-Tarts increase in sales, like seven times their normal sales rate, ahead of a hurricane," Ms. Dillman said in a recent interview. "And the pre-hurricane top-selling item was beer."
Thanks to those insights, trucks filled with toaster pastries and six-packs were soon speeding down Interstate 95 toward Wal-Marts in the path of Frances. Most of the products that were stocked for the storm sold quickly, the company said.
The article also mentions scan-based trading, a term with which I was unfamiliar:
Eventually, some experts say, Wal-Mart will use its technology to institute what is called scan-based trading, in which manufacturers own each product until it is sold. "Wal-Mart will never take those products onto its books," said Bruce Hudson, a retail analyst at the Meta Group, an information technology consulting firm in Stamford, Conn. "If you think of the impact of shedding $50 billion of inventory, that is huge."
Here's some more on scan-based trading:
Scan-based trading (SBT) is not so much about coordinating data as it is about shifting financial risk from seller to supplier. Not only must a vendor such as American Greetings pay for the inventory of cards that will sit on the retailers' shelves right up until the moment of sale—such vendors also must bear the burden of making sure there are no holes in the tracking of products and transactions.
The idea behind these systems is simple enough. Rather than paying for products from suppliers as they are brought into the store, the supplier retains "ownership" of products on the shelf. Sales information is sent automatically from retailer to supplier. When the supplier receives that information, an invoice for goods sold is automatically created and an order is submitted to replace the sold merchandise.
In theory, everybody is supposed to come out a winner. The retailer loses the financial risk of carrying inventory while reducing its administrative and order management costs. The supplier gets daily alerts to replenish its wares—which means more sales—and is able to gather nearly real-time data about the performance of products store by store. This data can be used by the supplier to improve forecasting, production planning and product targeting.
August 10, 2004
Warren Lieberfarb and the DVD
From a Newsweek profile of Warren Lieberfarb, the father of the DVD, this succinct vision statement:
if movie discs were the size of CDs, were priced right and offered a better picture and sound than video, people would collect movies like books. The key was to make the discs cheaply, based on a universal standard.
July 24, 2004
ZDNet has an article on click-through fraud problems with search engine advertising. Basically the problem is that you could run ads on your page and employ bots or low-wage offshor labor to click through those ads. Those click-throughs generate revenue for the web site through revenue-sharing agreements with the search engines running the contextual ads.
Now, since search engine advertising is a big business, you (predictably) have fraud-detection technologies emerging to address this problem, creating another arms race:
Fraud-detection technologies are emerging to help advertisers analyse their campaigns and traffic. Some advertisers and search-engine marketing companies say they are compiling lists of sites that generate a high number of clicks but not sales.
Coremetrics, Urchin and Whosclickingwho.com are just a few that sell technology to examine click rates and sales that result from paid searches. Alchemist Media, which charges flat fees for its consulting services, has detected fraud while acting as an intermediary between search networks and marketers.
Many policing technologies can counter click fraud by analysing Web traffic logs or surfing behavior. If a page is turned every 1.8 seconds over a period of time, for example, fraud-detecting systems will flag the traffic as suspiciously uniform.
Human operations can be more difficult to detect because a wide network of people can click on ads from different computers across many regions, without a steady pattern. According to a report in the India Times, residents are being hired to click paid links from home, with the hopes of making between $100 to $200 per month.
June 12, 2004
Transforming clicks to rings
NYT profiles a couple of startups - Ingenio and eStara - that are trying to bridge Internet search and old-fashioned telephone calling by extending the pay-per-click advertising model to include pay-per-call. The idea is to allow small businesses that have no web presence to advertise on the web and direct the customers offline for fulfillment.
The Ingenio service, which is to begin this summer, relies on old technology: toll-free numbers. When a user types in a search for, say, plumbers in Tucson, FindWhat's advertisers will display a dedicated toll-free phone number that Ingenio has secured on the advertiser's behalf. (Advertisers will eschew Web addresses in their ads.)
When the customer calls the number, Ingenio registers the event and charges the advertiser whatever fee the advertiser had bid for the right to appear near the top of the search listings. Ingenio and FindWhat then share that fee according to a revenue split that neither company would disclose.
May 31, 2004
I've been reading Michael Cusumano's The Business of Software and encountered this anecdote re: the beginnings of Business Objects. The founders, Bernard Liautaud and Denis Payre had both worked for Oracle France in sales and marketing. They were approached in the late 80s by an engineer and consultant named Jean-Michel Cambot with a concept for a decision-support tool. His software made it possible to generate SQL statements from a simple user interface, without the user having to know SQL. He had approached Oracle to productize and distribute his prototype, but they had declined. Liautaud and Payre bought the software from Cambot and founded Business Objects in 1990.
From the beginning, Business Objects went after a big “horizontal niche” rather than a “vertical” market. It attempted to “cross the chasm”… by riding on the backs of Oracle customers… The company was not trying to create a new platform to work with all database technologies, but rather was positioning itself as a “complement” to Oracle.
Interesting market entry strategy for several reasons: (1) horizontal rather than vertical strategy, (2) leverage the large installed base of a big successful company and sidestep the Early Adopters and the Chasm, (3) by creating a complementary offering, you get to work with BigCo’s salespeople, help them win more deals, make their product work better, etc., (4) since the product is complementary and improves the performance of the established product, this opens up the possibility of an acquisition down the line. Another example of this strategy would be PayPal and eBay.
May 22, 2004
Barcode technology adoption
Fortune has an article (subscription required) on barcodes and how they have come to be so pervasive. It is an interesting study on the adoption of new technology and exhibits many familiar features:
* Key enabling technologies need to advance along their trajectories of improvement: Joe Woodland, an engineer, decided to invent a way to automate supermarket checkouts and came up with the idea of barcodes in 1949. “By 1952, Woodland and a partner had patented their system. But ... lasers and computers, which would play integral roles in bar-code systems, didn’t yet exist in cheap form. And so, despite joining IBM in the hopes that it would produce his invention, Woodland watched his idea languish and eventually sold his patent to another company.”
* The importance of standards: “For an automated checkout system to work, supermarkets and packaged goods companies would have to agree on one standard code to translate lines into prices. There would be chaos if different stores implemented incompatible codes. So representatives of supermarkets and their counterparts from consumer-goods companies convened to tackle the problem. After weighing proposals, the committee chose the universal product code, or UPC, an IBM design that built on elements of Woodland’s idea.”
* The challenge of finding the right first application: “Supermarkets liked bar coding because it allowed them to eliminate price stickers, saving labor costs. Industry planners hadn’t considered that shoppers might not cotton to that. Food inflation in the early ’70s was intense. And now the stores were asking customers to buy products with no stickers on them and trust that prices weren’t being changed behind their backs. Consumers were incensed, and the supermarkets’ response didn’t help. A number of them dispensed grease pencils so shoppers could copy prices off the shelves. That didn’t placate shoppers, and state legislatures began passing laws mandating price labels. Faced with potential federal legislation, the supermarkets capitulated and promised to label items.
Initial bar-code adoption was so anemic that in 1976 Business Week published an article headlined ‘The Supermarket Scanner That Failed.’ Experts had predicted 1,000 stores would have scanners by that point, but only 50 had installed the costly equipment. Not until the early 1980s would scanners become pervasive in supermarkets. "What really turned the corner was not the grocery industry, but the mass merchandisers," says Stephen Brown, author of Revolution at the Checkout Counter: The Explosion of the Bar Code. "When the mass merchandisers, most notably Kmart, decided to adopt the system, that built a momentum that never stopped."”
* The scope and scale of the impact of new technology can be hard to foresee: The guy who invented barcodes saw in them a way to automate supermarket checkouts. However the real value in barcodes, not initially foreseen by the inventor, is information. “As often happens with seemingly minor technological changes, bar codes have had a huge and unexpected impact. Cash registers had been mere repositories of money; post-UPC, they became data conduits par excellence. Each time a product is sold, a record of the item is now preserved. And as any student of Wal-Mart can tell you, that altered the balance of power between retailers and manufacturers. Once, manufacturers controlled data about product sales via warehouse inventories. They understood what was selling much better than the retailers. But now the stores had data too—and both sides would learn to mine that information.”
It will be interesting to see how the RFID wars play out and in what unforeseen ways they will change the world of business as well as our lives.
March 07, 2004
Scott Adams and incremental innovation
Michael Schrage at Technology Review offers up this interesting anecdote:
Even before the Internet was a gleam in Jeff Bezos’s eye, Scott Adams—Dilbert’s creator—got his syndicate to agree to attach his e-mail address to the strip. The reason, Adams has explained, was to see what kind of reader feedback—if any—e-mail accessibility might generate. In fact, he still gets much of his best Dilbert material from reader e-mail... The simple act of tagging a comic strip with an e-mail address proved brilliantly innovative. Getting your fans to subsidize your creativity—for free!—is an enviably efficient business model.
February 18, 2004
Localization of software and emerging markets
For now, such projects are largely curiosities. But analysts say they could present a significant long-term threat to Microsoft's dominance on PC desktops. Regions and language groups that don't have enough of a PC market now to justify development of proprietary commercial software will naturally turn to open-source alternatives, they say. And by the time those markets become big enough to draw the attention of Microsoft and other commercial software makers, open-source could be as entrenched as Microsoft is in developed countries now.
The article cites localization efforts underway at OpenOffice and presents the argument that since open source development is effectively decoupled from market forces and since open source is, well, open source, you could see grassroots efforts resulting in localization ahead of the growth in demand that would draw the attention of a Microsoft.
Open-source advocates believe they have the upper hand, however. By separating software development from profit motives, they can respond more quickly and completely as computing communities arise.
"It's one of those areas where proprietary software companies are fundamentally at a disadvantage because of their method of allocating resources," said Hiser. "You've got markets that are fragmentary at best, where software as we know it is not economically viable. But that doesn't matter for an open-source project. You just have to have a need and some people willing to work..."
Meanwhile, Microsoft isn't standing still either - see here for MSFT's Office localization for the Indian market.
The article also references another recent Cnet piece on Microsoft's recent decision to segment the Windows and Office product lines by creating an entry-level version to enter the Thai market.