All Posts in Technology

|In: Industry Commentary|Last Updated:

Bing has, according to comScore, plateaued.

Yes, comScore appears to have confused the number of searches with the number of searchers. Still, there’s no evidence suggesting Bing has much growth left, probably because there’s no evidence Bing does a better job than Google. While absence of evidence isn’t evidence of absence, without a good reason to switch most users will continue to use what they’re accustomed to using because why would they do anything else?

Speaking of Microsoft failing in the marketplace, any number of industry pundits have declared Apple to be the winner in the tablet marketplace, writing Microsoft off.

Any number of industry pundits are wrong. Not only isn’t the game over, it hasn’t even started.

Not that I have a lot of confidence in Steve Ballmer’s judgment in this area — he did, after all, kill the Courier, which would have been a game-changer, in favor of an it-must-be-Windows approach that pretty much guaranteed two or three years of sitting out the dance.

It’s just that the corporate tablet marketplace is wide open.

Back in 1999 I presented a formula for IT product success. It listed three determining factors: What the product will do for its customers; its affordability or lack of it; and how much disruption it causes.

A product that doesn’t do anything interesting isn’t going to get very far in the enterprise marketplace. Even if it does, if it’s expensive, few companies will risk spending a lot for something that’s unproven.

And please note: So-called “disruptive technologies” don’t succeed because they’re disruptive. They succeed if they can find a niche in which they aren’t disruptive. That’s where they mature. When they’re ready for the big time they then emerge to disrupt the older marketplace.

Marketplace, that is, not the IT architecture. Products succeed that integrate into the IT architecture, not that have no place in it.

The original Windows tablets failed at two out of three. They cost a lot more than equivalent laptops, and their poor touchscreen integration meant they didn’t do very much that was interesting. All they had going for them was their non-disruptiveness — not much of a sales pitch.

Will Windows 8 tablets be more interesting? They certainly could be. The iPad, as has been mentioned here numerous times, is designed for information consumers … for entertainment. Microsoft software is designed to support actual work.

Pricing? Here’s a place Microsoft fails repeatedly. If Windows tablets are to succeed, Microsoft will have to change its licensing so that MS Office in particular is attached to people rather than devices. If one license lets an employee use Office everywhere it will run, that keeps the cost where it needs to be.

But wait … it gets better. The iPad really can’t serve as a laptop replacement for most employees (if you disagree, look here), but a Windows tablet probably can. So instead of tablets being an additional expense, they suddenly become an economical alternative.

That leaves disruption, and there’s no doubt at all that Windows tablets will integrate far better than iOS and Android tablets. At least, there’s no doubt at all among those who have tried to move documents back and forth between any of the tablet office suites and MS Office.

But how about the dreaded “first-mover advantage” so beloved of industry pundits … the supposed insurmountable advantage that comes from being the first in a marketplace?

The answer is, what first-mover advantage? Here’s a challenge: Name a single product that currently dominates its category in IT that was the first to appear. I’m pretty sure there aren’t any, and in fact there aren’t all that many that continue to be credible contenders.

Heck, even many second-movers are either irrelevant or entirely gone … WordPerfect and Lotus 1-2-3 come to mind.

The near-complete lack of imagination on the part of Android tablet manufacturers probably does mean Apple will continue to dominate the consumer tablet marketplace. But the corporate marketplace? It is, at the moment, wide open.

Given MS Office’s status as the de facto standard file format and its extensive SharePoint integration, the game is Microsoft’s to lose. It “just” has to get the pricing right, and the technology right enough.

The view from here: Until Windows 8 tablets appear, master “bring your own tech.” It takes no CapEx budget, takes away any pressure to set a long-term direction, and encourages end-user innovation.

And, it keep your tablet options open — a good choice for a game that has yet to begin.

Comments

|In: Industry Commentary|Last Updated:

Bad metrics continue to be worse than no metrics because, as Mark Twain famously said, “It ain’t what you don’t know that gets you into trouble. It’s what you do know that ain’t so.”

Which brings us to Deloitte, its Center for the Edge’s Shift Index, and the “Big Shift” it concludes is happening to our economy.

I quote: “The Shift Index highlights a core performance challenge that has been playing out for decades: return on assets (ROA) for U.S. companies that has steadily fallen to almost one quarter of 1965 levels …”

It’s a shocking statistic, strongly suggesting that economic collapse is imminent (oh, wait …), even though, as the report continues, “… while labor productivity has continued to improve,” which hints at some redeeming virtues.

(Note: The full report runs 142 pages and has far more virtues and faults than I can do justice to here. It gives the ROA trend great prominence as a symptom, which is why I’m focusing on it here.)

You’ll recall that the KJR Manifesto specifies consistency as one of the six characteristics of a good metric. Consistency means the metric must always go one way when the item being measured improves and the other way when it gets worse. ROA fails this test. Here’s why:

On the surface, this 45-year private-sector-wide decline seems to reflect an across-the-board failure of management to do its job. It’s a tempting perspective, as it satisfies our shared need to find a group of people who aren’t “we” to blame for whatever we’re unhappy about.

Too bad it doesn’t stand up to close scrutiny.

ROA is a dubious measure, even for assessing the performance of individual companies. It’s too easy to manipulate, and fails the consistency test.

But that doesn’t matter. Big Shifts are a macroeconomic matter, so the question is whether ROA, aggregated across the whole economy, is a useful way of looking at things.

It isn’t.

Something investors know well is that different industries have radically different asset requirements. Comparing ROA across industries doesn’t work.

And yet, in 1965 the U.S. economy depended heavily on manufacturing. Since that time, as you might have heard, we decided manufacturing belongs in China. Our economy now relies much more on finance, service, and entertainment.

Interestingly enough, finance, service, and entertainment seem to have far lower ROAs than manufacturing. Might this be the Big Shift that has caused the huge fall in economy-wide ROA and not a colossal failure of management?

Nor should we conclude that building an economy on low-ROA industries is a bad idea, because why would we? GDP grew from $719 billion to $14.5 trillion over the same period of time after all, and GDP growth also has some value as a measure of aggregate economic health.

Here’s what’s unfortunate: I strongly support one of Deloitte’s conclusions, namely, that “… the gap between potential and realized performance is steadily widening as productivity grows at a rate far slower than the underlying performance increases of the digital infrastructure,” (although it isn’t just a nitpick to complain that their assessment of the “digital infrastructure” has more to do with amount than with sophistication and capabilities.)

Why might this be? Here are two likely explanations, both regular themes in this space.

The first: Businesses don’t integrate IT into their functioning – either the technology itself or the organization. Instead, IT delivers software that’s supposed to “meet requirements,” leaving it up to its “internal customers” to figure out what to do with it. That’s in contrast to IT collaborating with the rest of the business to design, plan, and implement business changes and improvements … a more enlightened model, but one relatively few companies have embraced.

The second: Far too many companies are equipped with 21st century tools but a 20th century workforce. We have SharePoint. We have web conferencing. We have internal blogs, wikis, and all manner of other tools that can help employees be more effective, both individually and as they collaborate in teams.

And few companies make mastering those tools even a data point in assessing employee performance.

These two factors matter greatly, both to your company’s success, and to our success as a world economic power.

It’s too bad I can’t cite Deloitte’s analysis as supporting evidence.

* * *

Disclaimer: The folks at Deloitte are smart enough to have thought all this through, and know the subject matter better than I do. I’ve forwarded this column to them, and will publish their reply next week if they choose to provide one.

Comments