The Google Decade

Posted: May 17, 2013 in Uncategorized

It seems to happen in the industry with relative frequency, there always seems to be one. A Juggernaut  a company that does everything right and even when it does something wrong it is looked upon kindly.  Sometimes it happens in bursts of  two to three years and for a few it happens over the course of a decade.  In the past it has been Microsoft and then Apple.  It can almost be defined by decades.  In the nineties it was all about Microsoft and the rise of Windows and Office.  In the first decade of the new century we were introduced to the consumerization of technology and the rebirth and rise of Apple.  We had “i” everything – iPod, iPad and iPhone,  As we are early on into the second decade it seems a company that is starting to look like it will make it there decade is Google.  When I look at their product portfolio, their partnerships, mission statement etc..it all seems to be falling into place.  They are in the “zone”.  They get positive press even when they are not doing anything.

Though search is still their core business they have started to surround search with a lot of other technologies that have the ability to integrate and leverage the Google search engine.  This in the end leads to more Google revenues.  I have written several blogs on Google.  Some good, some critical.  Everything that Google does ties back to this core business, which allows them to do unique things in terms of playing and and altering traditional business models.  However as I have written Search was one of those things that changed the playing field. As industry legend Ray Ozzie pointed out while at Microsoft, it was an indirect business model.  Google used its massive cash flow from search advertising to fund other software ventures   Over time this has led to increased success for the Google Search engine while funding other successful business ventures.

Google Docs has become a significant threat to the only Office productivity suite we have known for the last twenty years,Microsoft Office.  When we are discussing Google Docs competing with MS Office we are talking about the cloud space.  The desktop for now is safe and sound still the domain of Microsoft Office.  However the PC landscape is changing quickly and so are the applications that used to solely be focused as Windows Apps.  Google Docs is in a good place as any market share they take is purely greenfield, they do not have the challenges that Microsoft faces in this space.  Microsoft has to defend 90% market share.  Any drop effects the bottom line. This is an area where innovation is simplification.  Among new users we are seeing increased familiarity and adoption of Google Docs.  Google has used its huge search revenues to fund this are and they do not really have anything to lose, except money, which they have a lot of.  they seem to be gaining inroads in education and start ups.  They are generating awareness.  They also changed the playing field from a package driven model to a software as a service model.  ”When facing superior forces change the playing field”, Sun Tzu.

gMail really took off, as the other predominate free internet email service had kind of stagnated, namely Hotmail.  It was not until 2012 that Microsoft finally updated the interface for Hotmail and replaced with Outlook.  In the meantime gMail has become the default email service people sign up for when they create their first email account.  Once you have signed up for a personal email account it is pretty hard to switch.  I have a gMail account and I like gMail, but for me to move everything over is a pain and not from a technical perspective, but from a social perspective.  I don’t want to have to notify and remind everyone, “hey Hotmail is no longer my  preferred email service please use my gMail account, blah, blah, blah..”  We used to refer to email as a “sticky” service and that has proven true.  Which is why gMail has proven so successful and been a method for Google to get users to leverage other Google services.  Once you go in decline in technology it is hard to recover.

Android has becomes the globes dominant mobile OS.  Thanks in large part to the folks over in Korea; Samsung    One report I read stated  that in 2013 800 million Android devices will ship world wide.  The benefit is that there are 800 million devices where Google will be the default search engine.   It is essentially like printing money.  If Google makes $1 per month in search per device that equates to $9.6 billion in revenue,  Not to mention the apps that are downloaded to each devices from the app store.  Those that are not free but purchased Google gets their cut.  Google was smart to use Open Source and make the Android platform free.  It makes adoption easier when you don’t have to pay.  It is another example of Google using indirect business methods to generate revenue for other business ventures.

Chrome is changing the way we think of a browser.  Besides increasing browser market share, they now have hardware devices shipping with the Chrome OS.  For those not happy with Windows or a Mac there is yet another choice.  But where I think Chrome hits the mark is it seems to be an idea whose time has come.  The world is connected so the question is how much local hard drive space do I need anymore?  Will it take off?  I have played with a Chrome Book and it is light weight and has a very simple user interface.  Can I see it being my primary device?  For me probably not yet but it is not hard to fathom this is the way the world is headed.  In the meantime Chrome continues to increase in browser share.

When Google swayed Microsoft GM Vic Gudotra, to leave the comfy confines of Microsoft they landed a rock star persona.  I remember Vic, smart and a showman on stage.  He was in Microsoft’s Developer and Platform Evangelism group.  He knew the developer community.  Since Vic joined left Microsoft, Google  has done a phenomenal job courting the developer.  One of the hottest developer conferences to attend right now is Google I/O (just held this past week).  This year it was sold out in under one hour.  Google is an internet company and since the last statistics I saw 75% of development targets internet services, it makes sense that Google is very successful in this arena.  If you have a string developer community you have a group creating value for your products, thus making them even more attractive.  Google may be the king of the developer community right now with everyone else playing catch up.

Will these things be executed upon to success? One thing Google has done well is reach for the stars in some of their initiatives that stretch boundaries,   Google Glass was one that was introduced that seemed rather strange and awkward when it was first introduced.  But over the past year it has garnered a tremendous amount of favorable press as more about the technology is understood.  the work being done on robotic vehicles has a chance to really change and reshape our society.  The opportunity and the benefits are tremendous. As I wrote recently in “The End of the DUI“, thousands of lives can be spared.  We can lead more enjoyable and productive lifestyles.  It seems right now with existing bets and  the “far off” bets Google seems dialed in right now.  Playing the future, predicting it.

It is still early in the decade we have time and things can change quickly as is always evident.  My blog title is probably just a bit presumptuous.  But there are so many things that Google seems to doing rights that this moment and through it all they are generating a tremendous amount of cash reserves.  Somethings I did not even touch on such as Google Maps. Apple and Microsoft have tried to compete here, but Google Maps has become such a staple of day to day life it is used by people without much thought.  The Google Nexus tablet has proven very popular.  Google is at one of those moments in time where everything seems to be pointing their way.  Will it change?  Yes it will.  Momentum shifts quickly in this industry.  However when you are in the zone, it is a great and exciting place to be.

Good Night and Good Luck

Hans Henrik Hoffmann May 17, 2013

High Tech meets Fashion

Posted: May 7, 2013 in Apple

Back a while in history, a little post dot com boom, Microsoft Research and Development came out with a new gadget that used the FM airwaves to communicate with a watch.  It would be released and received some love in the press.  It was called the Microsoft Spotwatch. It was an interesting idea at the time.  In an odd way it made sense.  With digital watches I had never really considered it or thought of it as a tiny user interface.  But I guess it really was a “mini” UI.  Since Microsoft at the time was all about owning the user experience it made sense and, for the first time it seemed Microsoft R&D had actually made something, like a real product coming from our vaunted and well-funded labs.  That is a basic tenet of R&D.  Create.

Not long after, while walking the halls of Microsoft, one of our geeky employees was actually wearing one.  It was actually kind of hard to miss, since it was so big.  It was not pretty, rather big and black.  It was like a giant Timex watch.  You could sort of interact with it.  Find weather and simple items like that.  However as a project did not last long.  Thinking back on it, it was just a little ahead of its time, by a decade.  There were other similar projects like this.  I was at CTIA Wireless in Orlando and Siemens had made a watch you could stream video to.  The guy showing me the demo said there was no commercial viability to the watch, they just wanted to prove it was possible.  Projects like the aforementioned two, though seemingly silly and not viable at the time of development are often a window of opportunity for the future.  The problem with invention is often the inventors do not think big enough or long-term enough.

Probably the technology that is most on the forefront of this shift to technology engaging the world of fashion right now is Google Glass.  It has garnered a lot of press and created come controversy.  The 5-Point Cafe in Seattle banned Google Glass from its establishment saying essentially it violated the privacy of its seedy dive bar status (FYI I highly recommend the 5-Point, good food, good drink).  I am not convinced it will take off, but it does create a new method of communicating with the internet.  In a world where we are increasingly mobile I can now be walking and talking with no device in my hand.  The glasses themselves are not aesthetically perfect, but they are not horrible.  Not like the SPOT watch.  You can see eventually they will be pretty slick, maybe not even noticeable.  The power of technology is it seems to always get smaller, until eventually it is vapor.

Returning to our watch theme, of late Apple has been on the press with a Apple iWatch.  Are we going back to the future?  I have been searching for what this device would look like and the good news is it promises to be much smaller and I hope with Apple’s obsession with great design it should be pretty slick.  Bigger question for me is do I really need this in a watch?  If it is simple and elegant I could see a lot of simple scenarios where this could be of valid use, beyond just checking the time.  I could have local weather mode.   Find the nearest taxi.  Communicate with my robotic vehicle.   Could be my communicator all Star Trek.  If I could talk to my watch I could all of a suddenly have a lot of clever uses.  Siri on my wrist?  I see this happening.

At South by Southwest Google was showing off Google Shoes.  A shoe that can collect information as you run.  This made me think more of the latest buzz word in tech, “Big Data”.  Everything that moves is collecting information.  Why not shoes?  You could see pursues as essentially a big repository of data. Wallet? Data.  The question will be can we make the technology into an accessory that is either unnoticed or looks sleek and something I want to wear.  If you watch “Project Runway”, designers are very creative people so the idea of technologies like Big Data, Robotics, and Search meeting Karl Lagerfield, Hugo Boss, and Calvin Klein is more science than fiction.  It will be geek meets chic.

Finally there is already a website that addresses these scenarios (are you surprised?).  You can go to FashionTech.  there is also a battle heating up between Google, Nike and Jawbone in the field of what is being called wearable tech.  I prefer fashion tech because if it is not in fashion most people will not wear anyway.  There is no question we will be connected in new ways via the clothing we wear. These things are happening in front of us.  It has made me think that the trend of the dying  PC is not  quite as we may think.  We are simply moving from a world where the computing power which was once centralized and tied to our desktop is now being distributed into a multitude of devices and fabric.  Erich Schmidt, Chairman of Google once said, “Every human will be ten IP addresses”.  It does not sound so far off now.  We have a wrist watch, sneakers and glasses so I already can count three IP addresses.  Seven more does not seem that far off.  You won’t connect anymore to the internet you will wear it.

Good Night and Good Luck

Hans Henrik Hoffmann May 7, 2013

The end of the DUI

Posted: April 24, 2013 in Uncategorized

On April 4, 2013 Morgan Frick Williams left her home in Seattle and drove her car to her office in downtown Bellevue.  Normally Morgan took the bus across the 520 bridge, but on that day she was going to drive to Bellingham after work to visit an old high school friend who was in a hospice.   However in the pre-dawn morning just before she reached the bridge Morgan’s car was met head on by an SUV driving in the wrong direction.  Morgan never made it to work, nor will she ever again as the accident took her life.  Another victim in a preventable crime that takes nearly 10,000 American lives per year.  To put that in perspective, on average every night of the year on 27 occasions across the country a police officer notifies someone with words such as “I am sorry sir, your son is dead”.

I remember the morning of the accident.  Turning on King 5 news that morning and being greeted by live footage at the crime scene.  Knowing the bridge well it was evident without hesitation that it was a drunk driving accident.  The fact that the bridge was closed east bound meant a fatality had occurred.  It seemed senseless. Like all drunk driving incidents it seems like it should be preventable.  The only problem is to prevent these tragic deaths we have one factor to consider..we are human.  We are  prone to making poor decisions. Susceptible to addictions.  Emotionless at times to the lives of others.  Then when all is said and done we have emotions left to live with such as guilt, remorse, regret. depression and pain for those who commit the crime. Those who lose loved ones they live with something far worse, emptiness.  Then once they emerge anger and hate, man kinds worst level of emotion.

On the horizon however there is hope.  Technology is making breakthroughs that in time will enable those leaving a friend’s party, a dive bar. a corporate Christmas party, in fact name the event, but those that are either mildly intoxicated or severely will get into a car and say”Drive me home”.  It will remove the greatest risk, the human risk. Sound far-fetched?  Not really, most  of the technology exists today.  How many people reading this blog use their smartphone Maps application to navigate unfamiliar roads?  For years there has been a robotics auto races.  The Defense Advanced Research Program Agency (DARPA) has sponsored the “Grand  Challenge” since 2004.  It has since changed into other challenges, the next events scheduled here in 2013.  It has morphed into an event that will not require vehicles as that domain is conquered.  It will actually be what was once fictional, humanoid robots.  The reason being the easy piece, car navigation has become boring.

It is a change that will happen in society and a change, I believe, that is inevitable.   There will be many hurdles to overcome.  the first being legal.  Most states today don’t yet have laws in place that encompass robotic vehicles.  As this technology rolls out there will be the trial and error effect.  It will lead to lawsuits, which will be nice for a lot of “starving” lawyers, who are a beastly bunch.  But the upside to our country will be immense.  Both our aging auto industry and are nascent technology sector are behind these efforts.  The car is changing.  As Bill Ford said it is becoming a platform.  Like an iPhone (and with an iPhone in the car) you are seeing apps being built with a car in a mind.

As a society we are almost all using a GPS service, either on our iPhone or Android device.  They are not perfect but can get us to our destination without fail over ninety percent of the time.  In a robotics world they will occasionally deliver us to the wrong destination. But as with all technology the rough curves will be smoothed out until it ceases to be an issue.  Like the dawn of the POC age a car will improve and increase its onboard processing capabilities in time.  I stated with 4mb RAM and a 40mb hard disk.  Just twenty tears later we talk in gigs of memory and are now seeing terabytes of hard disk space.  The robotic car will follow this same path as it matures over time.

Bill Gates is one of the most optimistic people, when it comes to technology, that I have ever heard and I have no doubt he would echo my positive sentiment on this one.  The downside is, before this change takes place, there will be not just one or two more Morgan Frick William’s incidents, there will likely be tens of thousands if not hundreds of thousands of cases just like what we saw and read about on the 520 bridge,  In the time since I started writing this blog entry hundreds of lives have been lost.  Robotics is set to become a gigantic part of our present.  With it many lives will be saved as we will have a means for the drunk driver to not drive, to take away the human element of these travesties

We live in a world where we are almost numb to disturbing,  violent and often tragic news.  It could be the latest terrorist attack, gun shootings, rape,. pick your poison it is likely to be a daily news story.  But in many instances we have one of the greatest human conditions at work; hope.  There is around the corner advancements taking place that could one day reduce (not eradicate) a tragedy that has been on place since Henry Ford created the automotive assembly line.  The robotics revolution is upon us and it will enable people like Morgan Frick Williams to have a boring drive to work and except for those that know her, we will not know her name.  And society will be better for it.  More importantly her family and the tens of thousands of lives saved will be better for it.

Good Night and Good Luck

Hans Henrik Hoffmann April 24, 2013

The Death of the Windows Operating System

Posted: April 10, 2013 in Uncategorized

I wrote this nearly 3 years ago…with today’s poor PC Shipment numbers I thought it was interesting to read what I though and where we are.  This was well before Windows 8.

I am sure a lot of my former Microsoft colleagues will look on this title with horror and possibly even shame and anger towards Hans Hoffmann. Everything Microsoft has accomplished over its 30+ years existence can be traced back to the vision and success of the Windows Operating System. On top of this all Microsoft has just released the best operating system in its history, Windows 7. The most recent Microsoft earnings reports, though dismal on some front, shows that Windows 7 has been a huge success. I will be forthright, I run Windows 7 and it is rock solid. I have been a very happy user of the OS, but it has raised some questions in my mind. In particular the role that the operating system will play in our lives moving forward.

I guess the first question I had when I finished booting my Windows 7 operating system was how simple the user interface was, there was not much there. It did however offer quick access to the browser. There are some cool features, like when I hover over the browser it shows me all the windows that are currently open. But in the end it was very basic, the user interface was not very busy. In fact I would say it was very clean. For many years some of the most valuable real estate in the PC industry was the Windows User Interface. Because no matter what you wanted to do on your PC you had to launch Windows first.

There had been many efforts to try to drive revenue by leveraging the Windows UI. After the launch of Windows 95 and the birth of the web, it was felt that Microsoft needed to have an offering for ISP’s where they could put their logo on the Windows UI and customers then could sign up for their online offering. Microsoft would then get a fee for every user that signed into the ISP’s monthly service. The initial ISP’s selected were AOL, Earthlink and Prodigy. For a while in my career at Microsoft I managed the Prodigy relationship, with the primary responsibility of collecting the money. They paid us about $600k per year, not bad revenue. Later on with Vista there would be the ill-fated attempt at gadgets. A memory hog and not something I was going to pay for. This has all changed in today’s world as most users boot a OS and launch right into the browser. The most valuable real estate today is on the web, not the desktop. The desktop more or less is a system I boot to get to my browser.

This brings us back to the simplicity of Windows 7. The competition is taking notice and trying to restructure the playing field and doing in at different levels. At the base level (or consumer level) we have what Google is trying to do with Chrome. And at the enterprise level you have two things occurring, virtualization and what VMWare is pursuing and then the cloud efforts which pretty much everyone is doing.

For over three decades now the world of the personal computer has played by the same rules. You have a microprocessor, a basic input output system (BIOS) and an operating system that handles the interaction between software and hardware. Every 3-4 years we either buy a new PC with a new OS or just buy the software and upgrade the existing OS. Certain technical limitations have facilitated that model, however that model is under threat with increasingly powerful hardware now providing the mainframe of yesteryear now in a small laptop and allowing us to be where we want to be. In addition the power of the web seems to grow exponentially every year.

Things are changing in the industry towards this traditional view of computing. In a recent interview on CNet, former Microsoft GM and now Google VP, Vic Gudotra talked about his time at Microsoft and the belief during those days that there were certain things that only the PC could do and that the web would not be able to replicate. In particular he mentioned a partner, KeyHole which had created a cool PC based app that was a prime example of an application that could exist only on the desktop. Not long after KeyHole was acquired by Google. Today that application is known as Google Earth. The main point, which I agree with is never underestimate what can be done on the web.

When I think what VMware is doing with virtualization and the cloud it’s hard not to think back to Microsoft’s introduction of .NET. One of the key architects and brains behind .NET was then Group President, Paul Maritz. In an industry trade rag article written around that time it was suggested that Microsoft was trying to decouple the .NET framework from the underlying OS thus reducing the dependency of the Windows operating system. I can not validate the truth of this, I was not in the room when those types of discussions took place, but it would make sense for Microsoft to look towards the future and discuss the role of the operating system of the future. This much I do know is if those discussions took place Paul Maritz would have been involved and a primary driver of any strategic and technical thought process. Today Paul Maritz is CEO of VMWare. Look at what they are doing and do the math.

The Microsoft OEM channel is not immune to these changes either as some of the major Microsoft partners are starting to experiment with OS’ that are not Windows. This is not a new phenomena, as during the dotcom revolution Dell toyed with OEM versions of Linux, but eventually dropped as a desktop OS. However the world has changed very quickly on the last 10 years. The net is no longer new but an established part of our everyday life and available everywhere in the world. The world of mobile computing has taken off as Laptops are cheap and replacing the traditional home computer. All schools in the US have some type of laptop program for students. The thin device called a netbook has found place for many users in daily life. Finally mobile computing within the phone has increased drastically, in large part due to the iPhone phenomena. Recently HP acquired Palm, which has its own Mobile OS, which I am sure could be extended to a Tablet. Acer is also in the process of launching a Netbook based on Google’s Android OS. Given the rise of Android as a mobile computing platform I think the chances of success are pretty good this time around.

Another issue is the rise of office productivity applications, that are not Microsoft Office. One of the key drivers for the success of Windows has been the success and innovation that has been a cornerstone of the Microsoft Office Platform. Though not universal yet it is not uncommon these days to find PC’s running OpenOffice or Google Docs. These applications are tightly aligned with the browser and can run across multiple platforms, thus rendering the underlying OS not as relevant. Though still a small percentage of the overall market they are gaining traction. Even if they only got 10% of the market in the next 3 years it would be a significant financial blow to Microsoft.

Part of the dilemma in this rapidly advancing world of technology for Microsoft is how do you embrace this new world without cannibalizing $20 billion in revenue? I think in general that is the challenge for any company with a large cash cow. In technology when change starts to happen it happens with tremendous velocity and cannot be contained. It is the nature of the industry and also what makes the tech sector one of the most exciting places to work. The impact of technology is felt in everyday life and in every industry. For many years Microsoft was able to see these changes and envision where it would play when those changes took place, of course Microsoft’s place in those tidal shifts was at the top of the industry. We are now at a shift which could fundamentally alter how traditional computing has been viewed. It will affect what we purchase, where we purchase and whom we purchase from. If the operating systems as we know it starts to lose value as other alternatives become available, what then for Microsoft? With tremendous change comes tremendous opportunity, but when something is so core to your identity it is hard to make the change as it is as much cultural as financial. The risk of course is the tremendous opportunity will happen it will just go elsewhere. As I said earlier the computing model for the operating system has not changed a whole lot in 30 years, but today that transition is happening off of the PC operating system. What was once the sole domain of the PC is now part of the universal domain of the web. It’s been a great ride but now it’s on to the future, may the desktop OS rest in peace.

Good Night and Good Luck

Hans Henrik Hoffmann June, 1 2010

When I first joined Microsoft in 1991 we were a company rapidly ascending to the top of the mountain.  We were a company trying to fulfill our destiny, “A PC on every desktop and in every home”.  To climb that mountain required laser focus.  To have people day in and day out committed to accomplishing that goal.  To do this required Microsoft to build a  great set of products.  It also required focus on what was happening  in the industry.  We needed to know at all times what our competition was doing and how it was impacting the market. The potential threat to the Microsoft bottom line.  This was driven into every employee  from the top, from the top man, the founder and chairman, Bill Gates.  Time and time again he would hammer home his fear that a company that was younger and hungrier would come along and clean Microsoft’s clock.  That Microsoft would fall behind in the game.  Every employee understood that and worked hard to prevent it.  But time and growth can be cruel lessons of missed opportunities and so what Bill feared has happened.  It did not happen overnight, but slowly and surely it happened.  A silicon valley sweet heart, named Google came along and slowly they have increasingly encroached on everything Microsoft thought was their birthright.

When Novell CEO Eric Schmidt announced he was leaving his post in Provo, UT.  It was in many ways welcomed.  Eric was well known from his days at Sun Microsystems.  Eric was highly regarded, it was actually more  surprising he took the helm at Novell to begin with as they were rapidly sinking at the time he took over. During a meeting with Bill Gates, while he was commenting on Novell, he felt they were in very capable hands with Eric at the helm.  Google was known, but nowhere near where it has ended up.    In tech circles it was viewed as a interesting and exciting move.  Schmidt was a talented guy who was leaving a dying company to go somewhere where their was a future.  It was good to see him land somewhere worthy of his talents.  He would also serve as a capable mentor to Google founders, Larry Page and Sergey Brin. There were a lot of search engine players in those days (Yahoo, Alta Vista, Lycos etc..).

Google would rise as they changed the computing paradigm with the web search engine.  It was this new business revenue model Ray Ozzie would reference in his landmark memo while he was at Microsoft.  Google was using their incredible ad revenues from search to fuel software development in other areas, among them Google Docs.  This should have served as a great warning to Microsoft executives, but instead they seemed to just read the search revenue piece and seemed to miss what else was going on and focused on the obvious.  They focused on search, not heeding Ray’s words about the funding “other stuff”.  Those being Google Maps, Android, Google Docs, Google Cloud, Robotics, Google Glass  etc..In the end what we  got was Bing.  Google has used search to be a disruptive technology company, one that changes the playing field and in doing so change the balance of power. To simply follow their lead is to risk certain death.

Microsoft has released with some success their cloud based version of Microsoft Office with Office 365 .  In the meantime Google Docs has slowly plodded along improving its feature sets and capturing the low hanging fruit. start ups who do not want to pay a few for Microsoft Office.  They are also starting to make headway into larger enterprise accounts.  With a simple flat fee structure of $50 per desktop, enterprises are talking notice and either considering Google Docs or going to Google Docs.  Companies like Office Depot, Roche and Dillards have already signed on.  Keep in mind if Google takes 10% market share that is over $1 billion to Microsoft bottom line that they lose.  It is no wonder Kevin Turner issued a ultimatum of no losing to Google Docs.  It will be interesting to see how that goes.  Corporate CIO’s would be foolish not to consider Google Docs.  It is the first true contender to Microsoft with a sales force and money to back product development.  Worst case for a CIO is they knock the price of MS Office down.  I cannot think of an instance these days where a CIO is not being asked to do more with less.

The Chrome book has been an interesting development.  It really takes us back to the early days of the internet and what Netscape founder Marc Andreessen said about Windows, “Netscape will soon reduce Windows to a poorly debugged set of device drivers”.  The problem was at the time was not the vision necessarily, but launching an attack against a competitor who had billions when Netscape only had millions.  A second point was ubiquitous bandwidth was not available yet.  Most people at the time did not have DSL services let alone wi-fi in their house.    It was still  28.8kb modem.  Fast forward to today and a couple of developments have changed that has created a new landscape.  The first is we are always connected.  It does not matter if we are in our favorite cafe, at home, at work or at the beach.  We can access the web, we can call our friends, text them, post what we are doing to Facebook, tell people what we are thinking via Twitter.  What device do we use?  Laptop? Tablet? Smartphone? Chromebook?  It is about price and convenience.  The second is Microsoft has decided to compete against its traditional OEM partners with the  launch of SurfaceRT and SurfacePro lines of hardware.  One thing Netscape struggled with in their day was access to Microsoft’s OEM channel.  Give these recent strategic decisions by Microsoft, Google will not find it as hard to gain access to this channel.  They will arrive in a much stronger negotiating position.

Android which is a huge success poses two problems: 1) The mobile OS 2) The developer.  On the first front projections are that in 2013 800 million devices will ship with Android.  How many will ship with Windows 8?  Microsoft will not catch this juggernaut anytime soon.  The mistakes made by Microsoft are many in mobility.  They got hit by Apple’s iPhone, were slow to react, watched as Google ran past them, and fundamentally did not understand what was happening in the market place.  Google in the meantime has been laser focused on building a Android ecosystem that rivals that of Apple.  They have more importantly focused on consumers mobile lifestyles,  To the point, as far as competition goes in the mobility space consumers and industry analysts do not think about Microsoft.  I sometimes wonder if my old friends in Redmond realize what an insult that last statement was.  There was a time everybody thought of Microsoft when competing in a market.  Now Microsoft is just trying to get noticed.  The biggest announcement over the past couple of years has been their exclusive partnership with Nokia, another fading star.  As Google Exec, Vic Gudotra said when this partnership was announced, “Two turkeys does not make an eagle”.  It kind of sums up Microsoft mobility.

On the developer front, Google is a huge hit with the dev community.  Google’s premier dev conference, Google I/O sold out in under an hour this year.  Last year it was twenty minutes.  As I wrote in last July’s blog post “Google I/O and the giveaways“, Google knows how to treat developers.  Like royalty.  They have the advantage of being an internet company who knows that the internet is the development platform.  That sounds obvious but it seems some are slow to learn. Microsoft is still intent on promoting and protecting its “Windows Paradise”.  That was the refrain used back in the day when Microsoft was competing against Netscape, but tat world no longer exists.  The numbers I have heard around applications written for Windows 8 for that launch are horrifying – less than 5000.  The events Microsoft holds for developer are designed to reduce costs and treat developers more like welfare recipients.  As noted Google treats developers with all the care and feeding they could possibly want and it is noticed in the community.

Then there is the area of taking risks.  Despite the billions of dollars spent by Microsoft on Research and Development, there seems little to show for it.  In a group that is funded to take risks it seems little are being taken.  Google seems to be doing nutty kinds of thing all over the place.  At South by Southwest they showed a prototype of the digital shoe.  Their Google Glass, though expensive seems to be getting lots of press.  In the bay area you can see Google’s experiments with robotic vehicles.  Google has ventured into the world of wi-fi attempting to connect cities via wi-fi service, in such cities as Kansas City.  Will any of these tie into Google’s revenue model?  As long as each has internet access you can bet that Google will figure out how to monetize.  A lot of Microsoft’s struggles in this area is cultural as it looks to protect today’s revenues while forfeiting the futures.  Steve Ballmer’s love of the Jack Welch GE model, though a legendary business lesson, does not play so well in the world of innovation.  It has become a quagmire, sort of Steve’s personally built Vietnam. Google at the same time despite their growing size, seem to have remained nimble and agile in how they go about their business.

Finally there is User Interface Design.  Yes the ever present UI – how we interact with the world of technology.  Google’s search engine has been applauded for the simplicity and elegance of its search interface.  For a long time it seemed Microsoft owned the ideas of interaction with the device.  But Microsoft became complacent and did not seem to update or change basic user functions.  With the launch of Windows 8 Microsoft finally killed the Windows 95 interface.  In the meantime we saw not only Google, but Apple and Facebook present us with much more elegant and friendly user interfaces.  Once you lose the advantage it has hard to catch up and in this case the defeat is generational.

Technology is in the end about survival.  To foresee the future and not just react to it, but shape and create the future.  The ability to stay relevant.  To push the boundaries of what is possible.  The easiest way to lose focus on what made you relevant.  Microsoft seemingly has tried to be everything to everyone over the past 15 years.  In the meantime those small start-ups who are young and crave success day in and day out have emerged.  Google seems to have the vision for what the future will be and their role that they will play in it.  Microsoft unfortunately treats Google as one of many competitors.  Google meantime has kept their eye on the prize…Microsoft billions in unchallenged revenue..Windows and Office.  Microsoft now finds itself in the precarious position of having to defend those empires.  More importantly since Ballmer has taken over the reigns from Bill Gates the desire to innovate has been lost and replaced with a culture of old school corporate politics. More concerned with maintaining existing empires rather than creating new ones.

Microsoft needs to refocus, starting by turning its sights to its most immediate threat: Google.  It needs Google more than it realizes.  It needs them to help focus the company.  To energize the companies employees, to rally them from product development to sales behind a common cause.  That was the way it was in the early days.  In those days the companies who lacked resolve faded quickly as Microsoft always looked 3-5 years out.  Companies like Lotus 123, WordPerfect, Borland, Novell etc..Microsoft was thinking ahead of the game visa vi the competition. But maybe I am asking too much of today’s Microsoft.  Maybe I am harping back to a day and a time that will never return again. Just maybe Microsoft is about to become another celebrated company that is more a part of history, rather than making history.

Good Night and Good Luck

Hans Henrik Hoffmann March 25, 2013

Facebook – Threats and Opportunities

Posted: March 12, 2013 in Uncategorized

For a company so young it seems odd to be writing a blog about major competitive threats, usually reserved for more mature organizations,  but at the same time it makes a whole lot of sense.  In the digital age, companies rise and fall from power is accelerating. Microsoft rose to power in 20 years.  It took Google less than ten.   In the last five years no company has risen as high and as fast as Facebook.  If you talk about Social Networking this company is the Goliath in the room.  They define Social Networking.  They have over 1 billion members.  That is a large audience.   They have already done an Academy Award film about its founder Mark Zuckerberg, “The Social Network”.  In the world of marketing it would be the “creme de la creme” of  target markets.  Over one billion people I could target and sell to.  If I had their search patterns I could create unique ads to each individual, thus increasing my average revenue per user.  Why is Wall Street down on this company?  But this is America and we love to compete so for all the opportunities that seem before Facebook there are threats.

The thing about Facebook is it is not so much a website as an internet application.  People spend time there.  Facebook has a real opportunity to capitalize on that time in ways that Google cannot.  It is amazing and worrisome how much time people do spend online.  Sometimes posting pics of what looks like a great time, when in reality it was not as special as it looked.  However when you have such a large user bases you have one of the largest opportunities in internet history.  Facebook has said the key for them is monetizing mobile ads.  It is hard to disagree as Facebook beyond being an internet application is utilized for people with lifestyles on the go.  Whenever and wherever you are, Facebook is where you tell people what is happening at a specific moment in time in your life.    No matter how mundane it may be.

I guess if Facebook wanted with its investor and partner Microsoft a common foe it would have to be Google, though things get a bit dicey after that.  With the launch of its new Social Graph from Facebook they are targeting a more sophisticated experience for developers and end users.  It starts to blur the lines of search and social networking and provides a way for Facebook to monetize its user base.  Though Facebook  has signed on to use Microsoft Bing as part of its Social Graph, I think long-term this partnership may be doomed.  Trying to draw lines of distinction on the web can be tricky and the competitive landscape changes quickly.  One day a partner the next a competitor.  Google and Apple were cozy for a while.  Google however has  taken notice of what Facebook is doing and though Google Plus has not taken off I do not expect Google just to drop their tail between their legs and run.  Facebook will use their own search engine to try to monetize their base and they will attempt to take market share from Google (and Microsoft).  Make no mistake from a competitive standpoint Google will be the company that is top of mind at Facebook.  Their paths are colliding and will continue to collide.

Another company that could cause Facebook trouble is Twitter.  Twitter is the pulse of the internet.  What is happening at a specific moment in time.  If you followed the green revolution in Iran or any other major news event (Cairo, Tunisia, Libya etc..) it seems the entire world or maybe middle east was a flame with “tweets”.  Twitter is in many ways much more fast paced than Facebook.  People post of Facebook an event they attended or something that took some amount of time to explain and to happen.  Twitter is very impulsive.  How many athletes, actors, politicians etc..have tweeted something very impulsive and ended up sounding moronic?  The number of apologies for ill-advised tweets at times is nauseating.   But Twitter moves fast and in the age of the internet there is value to that speed.  Can Twitter monetize these rash impulses?  Possibly.  If they do they can realize revenue very quickly.  What that number is I do not know, but I would bet it would start with a “B” and would be plural.  Twitter is also the main competitor in the mobile ads space.  Just like Facebook, Twitter is for people on the move.

Change happens quickly in the consumer space and changes can be generational as we move from one age group to the next.  Remember Facebook was not the first.  The first was MySpace.  Can Facebook maintain and create new excitement?  That is going to be an interesting test for them moving forward.  There are signs that people are getting tired of Facebook.  Is there another phenomena that could take revenue away from Facebook?  Always.  That is the nature of the internet beast.  I key challenge for Facebook will be staying in front of change, staying in front of disruption.  New phenomena happens and our happening with more frequent regularity.  the velocity of business is alive and well.

Moving forward I will be interested how Facebook copes with being a publicly held company.  What I see so far I like.  Despite the negative press surrounding their IPO they seem to have remained calm in the face of this scrutiny   This starts at the top with their founder and chairman, Mark Zuckerberg.  He strikes me of having that Bill Gates like demeanor when he talks about Facebook and the future.  The vision of the future and where Facebook will play in that future seems understood.  In the early days of Microsoft, dreaming of a PC on every desktop and in every home, Microsoft understood it destiny.  Then a combination if the internet and the DOJ happened and Microsoft seemed to get lost in the technological woods.  Those legal winds seems to hover around Google these days but as privacy issues evolve and if Facebook maintains their lead this could fall into their domain as well.

Chapter One of Facebook is nearing its end and we are waiting for the next big breakthrough.  A mobile device?  Zuckerberg says no.  Will it be Social Graph?  Still too early to tell.  Are there other opportunities that they may seize that could create new competitors.  Retail?  Then you bring on Amazon.  Maybe possible takeover targets?  What about Yahoo?  I am sure they would much rather be a part of Facebook than Microsoft. It is going to be a fun and interesting journey.  One I am sure I will blog about later.

Good Night and Good Luck

Hans Henrik Hoffmann March 12, 2013

The Drone Wars

Posted: March 5, 2013 in Uncategorized

With the recent flack about the Obama administrations leaked memo regarding drones being used in the United States by our government, I wanted to tackle the issue as it has been on my mind for quite some time before the story broke and even more so now  since the story broke. I guess my biggest question would be “is this a surprise”?  In a world increasingly caught on video we are entering a new world of surveillance. One more reminiscent of George Orwell’s “1984″ or if you want to be more current, Suzanne Collins “The Hunger Games”.  This world has now taken to the air. During the hunt for Osama Bin Laden, drones were our little robotic hero’s in the sky as they patrolled the rugged mountains of Afghanistan.  Mountains that historically have been impenetrable by opposing armies.  But history has shown us often devices originally targeted for military use have a way of making their way back into the consumer mainstream.  However these new devices challenge our civil liberties in a way we had only imagined in film.  The Big brother scenarios  thought to be  far away, now seems much closer than it ever has since the fall of communism.

There have been helicopters flying over my house since my wife and I bought our home 17 years ago.  Sometimes literally over the house at 6am monitoring traffic over Interstate-5.  Unfortunately all too often.  The good news is there is a lot of movement a front to allow drones into air space  previously reserved for piloted aircraft.  According to some reports this could happen as early as 2015.  This means that my morning traffic report can be provided via these small drones that do not make nearly as much noise as their aging helicopter counterparts.  They would be controlled by some person in a remote room miles away from my house.  The individual would be just like a kid playing a video game.  This of course would be just one example of utilizing a small drone to handle work previously handled via a manual operation.  There would be ample opportunity to survey, take pictures, film etc in ways that have not been possible before.  Someone lost on a hike in the forest in the Cascades?  Drones could cover a vast amount of territory in ways that never could be done before.

Law enforcement will change as well.  Those cars that like to show off their muscle going 100 mph…see you in court and bring your wallet.  Holed up in a house with a young child as a kidnap victim?   Like the pirates off the coast of Somalia, be careful, your head might get blown up.  Night Goggles…no need, Police will have night drones.  This could be a huge benefit to underfunded and overworked police officers.  It could have the same benefits to local law enforcement that it has had to the Department of Defense in the mountains of Afghanistan.  Not to mention looking for drug facilities in remote parts of the US.  The ability to find and shut down meth labs.  There are already cities having to address this issue.   In Seattle the police department was forced by the city council to return drones it had purchased.  Many members were uncomfortable with the idea of video surveillance in the air.  Unlike traffic lights this, in the minds of the council, the Police department had crossed the line, without consulting them first.  Other cities like Miami and Houston have acquired drones.  There use however has been under fire.  Civil Liberties Unions are already starting a grassroots movement to try to get this issue more towards the forefront of the American conscience.

In the Obama administrations memo the fear is that Al-Qaeda, once feared and targeted only on foreign soil, could now be feared and targeted on US soil.  If you stop and pause and think about that, what that means fundamentally, is a drone in the sky carrying weapons.  Is that much different from today?  Yes we do have police helicopters in the sky.  Are they armed with guns and missiles?  Could be.  But as I have outlined above for all the benefits of technology there could be and will be a cost.  These type of capabilities could be and will be abused.  The irony is some people may hate their government, but the government is not the only one enabling this; Silicon Valley is.  Our academic institutions are enabling this.  We are at the beginning of the robotics revolution. The FAA already estimates there could be 30,000 drones in the air by 2020, but is that too conservative?  You can actually get some interesting information on this topic at the Association for Unmanned Vehicle Systems International website (yes..apparently there is such an organization).  Go to the useful links section and you can spend the better part of a month reading about the topic.

The frightening thing is we could be evolving to a society where we are all under surveillance 24/7.  Who has not received a traffic ticket by camera? If you have not, you are probably in the minority.  But those are just camera’s attached to the traffic light.  Now imagine they are in the sky with video and radar.  They are mobile, not stationary.   Nothing says they need to be limited to flight.  They also continually are getting smaller.  We could enter an era where it will be difficult to differentiate between the insects and the drones.    The smallest drone today is the Raven, which measures about 3 feet in length, but researchers are hard at work at making drones that’s motions would be mimicking insect wings, so you get the idea of where this is headed.  Like Moor’s law where microprocessors double in speed every 18 months, Hans’ law says drones shrink in size by half every 18 months.

Can you regulate all this?  Can the law move as fast as the technology advances?  This will be a big challenge to both the federal government and state governments.  At the center of the debate is what is useful about drones and what is not useful about drones.  They can help find criminals.  They can do traffic reports.  They can do surveillance of the land for farmers.  They can do a lot of good stuff for society.  The challenge  as was mentioned in the previous paragraph was when doing all this surveillance what else do they capture and what happens to that data?  Where is the data held? Who owns the data?  Am I as an individual entitled to know?  There are a lot of unanswered questions.  This is just at the state and federal level.  What about international laws?  International espionage is undergoing fundamental change with these technology advances, pretty soon foreign competitors will not have to be on the wire to get at sensitive data, when they can simply launch a few thousand insect drones.  How do you stop those crossing borders?

Technology has become unbound from physical constraints   No longer tied to the mainframe or PC, not even by the wires that make up the internet.  Thanks to the wireless revolution we will have a range of stationary and mobile devices performing a wide range of tasks that used to be constrained to science fiction.  The air will be lit up with flying devices ranging in all forms and in all sizes.  Some we ill see but others will be nearly invisible to us, capturing information of our daily lives, no matter how mundane and insignificant it may be.  We may fight these intrusions in our courts.  We will fight with bright woman and men clad in the highest of quality of suits.  Perhaps in a fight of futility.  The war of the drones is upon us, where it will lead and what the benefits and consequences are,only the future knows.

Good Night and Good Luck

Hans Henrik Hoffmann  March 2, 2013