What if the TV was intelligent?

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In recent weeks all the focus has been on the life and legacy of Steve Jobs. Rightfully so. With the release of his biography a lot of interesting questions, quotes and comments have come forth.  Some are the typical stuff of Hollywood gossip rags, but a lot has to do with the clarity of  his visions  for the future.  One area I have found particularly interesting is the area of television.  We have seen the Apple TV offering but it falls far short of a satisfying experience.  Augmenting a TV rather than replacing the television.   I am sure he would be the first to say the initial Apple foray in television was less  than stellar. But then this is Steve Jobs and his visions were always far grander.  His comment regarding Apples intent around the television in the forth coming biography highlights this point “I’d like to create an integrated television set that is completely easy to use,” Jobs told his biographer, Walter Isaacson. “It would be seamlessly synched with all of your devices and with iCloud. It will have the simplest user interface you could imagine. I finally cracked it.” What if he did?  How many of the people on this planet own a TV and what if the existing TV experience was significantly enhanced?  The television has been augmented with devices but the core TV has changed little (OK…I do love Flat screen…that was cool).  If Steve is correct, yet again, we could be looking at a new era of television viewing experience.

To be clear this area has been traveled many times before.  When I first started in the industry and as I wrote earlier this was a big area of opportunity before the internet.  The problem was the world was just not ready at the time.  With all signals to the television now being sent in digital format that is changing.  We now have services being streamed across the internet like Netflix and Hulu.  Our access to content provides us with hundreds of channels to choose from.  However for the most part our experience has been complicated as we have a choice between satellite and cable services, a Tivo box, blue-ray player, HD content, etc,,  Going into anyone’s house and trying to turn on a television can be an adventure.  Try finding the correct channel changer.  Takes time.  Perhaps the time is right to rethink the whole television experience.

If you think about your television it is just a giant monitor like a PC.  But to date it has not seen any significant enhancements despite all the new gadgets we can attach to it.  As we add new devices and functionality we seem to be adding new complexity.  A fried of mine bought a new LCD a few years back with a Tivo.  His comment to me was “It would be helpful to have better guidance in the setup as to what you need”.   After three trips back to the retail outlet he had a functioning entertainment system.  What happened to I plug the TV in and attach my cable and off I go?  Don’t get me wrong despite these complexities people love their entertainment.  In the end they put up with it.  However if someone came up with a better user experience that took television to a whole new level  people would gravitate towards that offering.

To date most of the efforts have been on the set-top box and providing new digital services.  At Microsoft this was tried several times.  The cable providers have done this.  Though some of the demo’s I saw were pretty cool, for the most part it appeared to be one more controller.  One more thing to hook up and one more thing for the cable provider to charge me for.  The solution for some was a universal controller.  Go to “x” site and download the latest software and let it walk you through setup. Having spent enough time in geek land we can all vomit in unison now (Steve Jobs, RIP, I am sure will vomit with us).  People get tired of going through set up’s asking a bunch of questions that they usually do not understand.  God knows my wife asks me all the time.  Go ahead install those DLL’s.  What do they do?  I have no f^%^ing clue!  All I know is if you say no, the app will not install, it will abort.  Why they hell ask someone in the first place?  Who are these programmers and do they speak a recognizable human language!?!?  Ok, my rant is over, sorry I digressed.  But do I want this on my TV?

In my earlier Steve Jobs quote he said, “it will have the simplest user interface you could imagine…”.  What is the UI?  it’s the TV.  In the age of digital your television screen is a big user interface.  With enough real state to make the old Win95 screen look meek and pathetic.  For those who have followed my blog you may remember I managed some of that Windows 95 real state (Prodigy ISP).  However unlike Windows95 I doubt the current Apple leadership would sell AppleTV real estate.  I wouldn’t be surprised is Steve Jobs made sure to forbid it before he passed away. There is the ability to display a lot of useful information on these large flat screen televisions, why not use it?  Just keep it simple stupid.

If Apple has plans and made headway in changing the overall television experience the opportunity is huge.  As was stated Apple would tie all this together with both existing Apple services (iPad, iPhone etc..) and new Apple services (iCloud) .  Show your family vacation in the TV, while streaming from your iTunes music library.  Stream movies easily to the television.  If the user experience is simple to set up and easy to use people will gravitate to it.  If it has iPhone marketing behind it how much will a cable or satellite provider pay Apple for an exclusive agreement?  How many new subscribers did AT&T attract because of the iPhone?  If it’s a game changing experience the value can quickly get onto billions of dollars.  People don’t buy televisions as often as Smartphones.  If it is a success the idea of competitors playing catch up is not going to be an appealing job opportunity as people will be unwilling to switch,.  We have talked in the industry about digital convergence for years and it’s still early but the television transformation will be here soon.  I, for one, cannot wait.

Good Night and Good Luck

Hans Henrik Hoffmann November 8, 2011

The Wall ST Protests and the clueless CNBC Folks

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I will preface this entry by saying my morning ritual starts with coffee and CNBC. I love the stock market and invest whenever I can. I find it a wise long-term investment and enjoy doing the research. I run Yahoo Finance all day long. I check my accounts all the time and do not get overly concerned win or lose.  But then again that is just me. In recent news  we have seen this global phenomena of people protesting Wall Street and the financial markets.. It has spread like locusts across the United States and across the oceans.  My buddies at CNBC Jim Cramer, Joe Kernan, Becky Quick and whomever else is on in the morning show are confused as to what they are protesting and what the protesters want.  I don’t think it is that hard to figure out. People in America understand Wall Street they just don’t want it running their country. I wonder how often the CNBC folks follow current events and what the impact of those event are.  It’s the latter that concerns me more, I think they are on top of the former.  Is Wall Street just so disengaged from main stream America that they really don’t know what is happening .  So what do the protesters want? For starters CNBC they would love for you to all to be fired and your network to be shut down. Remember I like your show, but I am just saying…

If we go back in time and just review what the internet and cable networks have meant for Wall Street, in short it has been nothing less than monumental.  If you remember before the internet investing was done over a phone.  How your account was viewed was through a monthly statement.  To place a trade was expensive.  I remember the first trades I did were $69.  You really had to factor that in to your return on investment.  Now trading is done online and you can view your statements whenever you want.  The cost to trade is less than $10.  The cable networks supply a steady flow of up to date business news.  Earning reports, Tax Cut discussions, political leaders and CEO’s, who have more or less become pop stars. The stream of information we are given is endless and relentless.  We have the ability to make thousands upon thousands of dollars in a relatively short time.  The down side of course is we can lose that money in a relatively short time, which brings us back to where we are today.  When things began to unravel it happened very quickly.   Then homes just started being repossessed.  No one was ready.  This left us with a nation  of angry people.  Which is where we are now.

Andrew Ross-Sorkin wrote the epic book “Too Big to Fail”, which detailed our current economic downfall.  It is a great book, detailing the events and activities of all the power players in the financial services sector and in government.  It was a lot of late night dinners at high-class restaurants.  Corporate jets flying crossing the Pacific and Atlantic.    Interactions with government officials at the highest level.  The cast of characters is vast and includes;  Lehman-Brothers CEO Dick Fuld, JP Morgan CEO Jamie Dimon, Secretary of the Treasury Hank Paulson, Fed Chairman Ben Bernanke, Tim Geitner President of the New York Fed etc..It is an impressive line up of individuals.  All playing with and trying to hold onto the power they wield on day-to-day society.  They come off as economic puppet masters playing with a group of puppets called the economy.  The good news is they are all in fine health and living well.   Dick Fuld still has his retreat in Sun Valley. Which brings us back to our protesters and why they are angry.  As engrossing as the book is, it never mentions the people who make up the economy.  Your neighbors, your friends, co-workers, at the end of the day these are the people who make up the economy.  What was happening to them while Goldman-Sachs and others played God? Do any of these people know what life is like without a job or health insurance? Hundred’s of thousands of people in America no longer have a home that they own.  These are many of the people who are angry at Wall Street.

As the economy continues to sputter along it seems obvious (at least to me) that people are going to start to get a little roiled with these so-called prophets of Wall St.   While these great and mighty business leaders are having double martini’s with caviar there are people in the real world with real world problems.  Families whose house was foreclosed.  Children with medical issues, but no health insurance.   Fathers and mothers collecting unemployment.  These issues add a heavy weight and pressure to everyone involved.  It has been going on since the fall of 2008 and people are getting tired.  And the worst part?  Everyone says it’s not getting better, that it could be another year or two before we turn the corner.  In the meantime Wall Street gets excited by great earnings.  Sometimes good products (Apple comes to mind), other times through cutting costs, or layoffs.  While Bob heads to unemployment, Cramer says good job Apple or Goldman.  It has become that our lives are governed by Wall Street.  America emigrants left Great Britain as they were tired of being ruled by despot monarchs.  Now we are ruled by something much stronger but far less tangible.

After all this, when the protests break out CNBC cannot seem to understand why?  Funny thing is Cramer used to be one of them.  Back in his hippy days and then he lost his hair and needed to change direction.  When one looks at the people who make up the protesters there are the people impacted and those who are just joining the work force.  Those who have experienced reality and those that are young and are idealists.  Neither of whom should be ignored.  It is not that different from what happened at the turn of the century as average Americans began to turn against the Vanderbilt’s and JP Morgans of the world.  the so-called “Robber Barons”.  One of the biggest issues people had then and they have today is the access these people have to power, namely Capitol Hill.  Corporate Execs go to Capitol Hill seeking tax breaks and access to government programs that result in big payouts.  These big payouts being funded by you and I through our tax dollars. Democracy is 100% not 1%. It would be wise for many leaders in America to remember that.

In the end CNBC,  people are tired and hope is beginning to wane.  While you prop up government officials and corporate CEO’s the real America waits.  They wait to return to a job, a career. to provide for their families, to be insured. Those things that we have become accustomed to that now seem to be slipping out of our reach.  Maybe if you did a human interest story and talked to the actual people who make up the economy.  Maybe then you would understand. Until then tells us all your ivy league theories and enjoy another Manhattan (Makers Mark please) for me.  Choose to ignore the real economy.  That is the protesters outside your door.  They are the economy now and the economy moving forward.  They should be the ones you worship.  They are America. Remember I am a big fan of yours…but I am just saying.

Good Night and Good Luck

Hans Henrik Hoffmann November 1, 2011

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Google Docs vs Microsoft Office

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Ok I know right now this is no contest. Microsoft Office 2010 is a huge success in the 4-5 billion range per quarter and it is the ultimate cash cow. Anyone in business school would probably call Microsoft Office the definition of cash cow. They would be correct in doing so.  Over the past couple of years we have seen a new competitor come to the market in the form of Google Docs.  Competition to Microsoft is nothing new.  It has been tried many times before.  But I am seeing things a little differently with regards to Google Docs than I have in the past.  My son does his home work using Google Docs.  At my current place of work when we order out for food we place our orders through Google Docs.  A lot of start-ups choose to use Google Docs in order to cut costs.  These are things that just did not happen in the past   So what has changed and what is going on in the industry?  Lets look back and take a look.

When I started at Microsoft the competition was WordPerfect and Lotus 123.  Those two products feature wise were considered better than the Microsoft alternative Word and Excel.  But some bright people at Microsoft got an idea. Not so much a technology idea but a marketing vision.  Let’s create a bundle of products targeting the office space. And so Word, Excel and PowerPoint become the first bundled suite of office productivity tools. As a customer service rep it made for an easy sale as when customers asked a bunch of questions about products and were looking for both a word processor and spreadsheet application I could just say buy the bundle with presentation software and get 3 for the price of 2.  It was not so much sales as common sense. Over time Microsoft would standardize the interface between the applications, standardize the macro language, make it easy to cut and paste between applications add a database, Microsoft Access and many more over time.  Before the competition knew what hit them Microsoft Office was pulling in billions in profits.

This is not to say over time there were not efforts to provide an alternate to Microsoft Office.  There were.  Borland struck up a partnership with WordPerfect and they combined assets to create a bundled alternative.  But there was no standardization of the interface and no integration.  It was a rather weak effort.    Then they sold assets to Corel, a Canadian based outfit.  Now everything was under one house and they were going to capitalize on the open-source craze that was catching fire in the DotCom bubble.  When the bubble popped you never heard of Corel Office anymore.   Then of course there were open source efforts like StarOffice, out of Germany.  This was acquired by Sun who was acquired by Oracle and eventually everything transitioned over to OpenOffice.org.  This has received more traction than other competitors but remains relatively small   Like many open source communities, its audience tends to be very technical and anti-Microsoft.  The problem is they just cannot relate to real people.  Sales and marketing has a place in the product feedback loop.

Google Docs represents a new form of competitor.  There are a few things that make this a different and much stronger competitor.  From a technical stand point it is a cloud based application.  It just requires an account, no set up.   It provides 90% of what users need, which is primarily the ability to type and format.  Second, Google is an established company with lots of cash at its disposal.  It can continue to invest in product development and do the necessary marketing it will take to be an effective competitor.   If it takes ten years to get 10% market share they have the ability to wait that long.   Any company in the Office Productivity space who were to get 10% market share would inflict significant pain on Microsoft and specifically its share holders.  Finally there is the current Generation Y or whatever label you want to give them, but they grew up with technology.  They are not intimidated.  They are not beholden to any one company.  The idea of cloud based apps makes no difference to them.  In this “i” everything society they are quite comfortable with a SmartPhone, Tablet, Laptop etc..Breaking free from Microsoft Office is not that hard.

Which brings me back to my opening statements, which in short states that a lot of people are familiar with and are using Google Docs today.  The other competitors mentioned, you would find it hard to find people who know what they are or what they do.  With Google Docs anyone who has a gMail account has access to Google Docs.  The days when you receive a document and automatically you open Word for Windows, is no longer the case (this sometimes creates its own source of headaches for older people such as myself).  Google has done a great job leveraging its name to drive new services to customers.  They are gaining familiarity in the home as kids bring new technology home and then the next thing you know PTA members are sending you Google Docs.  To be successful in technology you need to go viral.

Down the road you can begin to see chinks in the Microsoft Office armor.  Everyone who uses Excel or Word say the same thing, “I only use about 10% of its capability”.  Which is true, it has become so big and bloated that a streamlined word processor like Google Docs has an opening it can penetrate.  Any College student working on a mid-term paper would appreciate the ease of use and set up of Google Docs, not to mention the cost savings.  College students are poor. Anything to save money and buy beer.  I see Google taking an Apple approach and penetrating the educational system.  The current economic climate only helps their cause.  It seems not a day goes by without a state or city announcing major budget cuts to education.  Every crisis kills someone but is an opportunity for someone else.

These are interesting times in technology as fundamental change in computing technology seems to be in the air.  It is a time for disruption.  Disruptive technologies change the industry climate.  Certainly the advent of the affordable PC changed how we viewed technology.  The internet created a connected society.  Mobility allowed us freedom.  The cloud could threaten entrenched players, who thought their business model was a birthright. Google seems to have jumped on this disruption early and it will be interesting to see if the Office folks can catch up.  They are trying with Office 365.  So far the only disruption they have caused is how I view a Word doc in Hotmail.  That would be disruption in a non flattering way.  The future is happening now.  Will it still be a business of billions of dollars or is disruption going to cause fundamental shift in revenue (someone is making money, just possibly not in the traditional sense).  Change is starting to happen in a fundamental way in traditional technology business categories.  The Office productivity suite will not resemble what we have today in 10 years, that is for certain.   It may be Microsoft Office, it may be Google Docs, it may be someone else.

Good Night and Good Luck

Hans Henrik Hoffmann October 25, 2011

The Downer of Digital Music

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In this day and age so much has changed in how we consume and how we live.  Technology has been the primary driver of those changes.   But for all the significant enhancements to our day-to-day lives I do feel we are replacing a sense of adventure with convenience.  A lust for now and not the search.  One area I loved dearly in my youth that has undergone fundamental change is music.   Some of my biggest changes in life and fondest memories were of finding new music and going through a journey of self discovery and self fulfillment.  I remember in 9th grade at Tillicum Junior High in my hometown of Bellevue, we had the final school dance. In order to celebrate a group of six of us decided to rent a limo, go out to eat, go the dance and then head into Seattle. It was our grand finale. After dinner and the dance we were heading into Seattle U-District to go to Arnold’s and play video games for the rest of the evening, well everyone except me I had a far grander plan…I was heading to Tower Records. So the chauffeur dropped the other 5 off at Arnold’s and drove me up to Tower Records and opened the door for me.  Many on the ave, as it was called. gazed and wondered who was this high-class dignitary?  Or so I thought (you can only imagine the kind of put together outfit a 15-year-old boy dons for such events).  When I entered the Tower records store it was like a musical Mecca.  It was completely overwhelming the aisles or records…of music.  I had never seen anything like it.  Prior to this it was the Sears record department.  I did not have much time to browse and had to decide quickly.  As I had just been introduced to the whole New Wave and Punk scene that was happening I went for the new classics. I settled on The Sex Pistols “Never Mind the Bollocks”.

Through the years, especially my high school days, I would hit Tower often, usually with my friend Carl.  The great thing was the University district had a lot of small new and used record stores as well as Tower Records..  It was fun just to adventure up and down the avenue looking for music. Looking at today’s tech driven consumer society we have seen music evolve into the digital download age and provide us avenues of access to music that are truly wonderful.  As I write I listen to Pandora, which I am completely in love with as it has allowed me to rediscover music lost in my soul and introduce me to a ton of new artists.   But in the iPod/iPhone/iTunes driven age something has been lost.  One thing I always enjoyed about an album was it was a constant process rediscovery, as often the music you originally bought the album for grow tiresome, but when a year later you played that same album you discovered new uncharted songs grabbed you attention.  Now in the download age the entire album is replaced by the purchase of individual songs.  When you burn out of that song you got on to the next latest and greatest hit, rarely listening or even being interested in listening to the artists body of work.  The album.

Buying music now is completely different as the hours spent going to record stores are replaced with the instant gratification of online retailing.  I guess the cool thing is I could be in the middle of Stanley Park, hear a song, and purchase and download within a few minutes.  Or I could be at my favorite restaurant.  Does not really matter where, to be honest.  I just need to be connected.  The days of making your girlfriend the “love” tape are gone.  No more hours spent going through albums and painstakingly recording the onto cassettes.  No reason to write down the songs with little love quotes next to them.  My wife recently found one of these tapes and read out load what I had written.  Painful.  Today you can have 20 romantic songs, title it, hit shuffle and play and be done in minutes.  Despite my nostalgia for the past I have to admit this is pretty damn cool.

Of course these dramatic changes did not just happen one day when Apple released the iPod.  It happened over time and through many changes.  The start of MTV, the move to the compact disc, Sony Walkman, peer-to-peer networking and the creation of Napster, Internet Radio, etc..But despite it all this disruption the music labels did not see the big change coming.  Focusing on short-term revenues and not envisioning long-term revenue.  How people would purchase music and when that change happened, they were ill prepared and left playing catch up in a rapidly changing digital world.  I remember an interview in Wired magazine with a VP of Sony discussing the transformation tat was going on in how music was being consumed.  This was around the time the Apple  iPod was taking off.  His view was that the hard drive was interesting technology. Interesting?!? Really?!?  I wish I could remember his name and only hope that he was fired.

These changes have also changed the artists.  It used to be taboo to be a rock start and market products, but the dear departed Michael Jackson was ahead of the game when he became the spokesperson for Pepsi.  Now it seems like pop stars are created to sell products.  Look at Brittany Spears, Jennifer Lopez, Beyonce, etc..Members of the Who must be rolling in their graves…hold it some are still alive (sorry Pete and Roger).  In fact it seems in many cases a lot of  pop stars are corporate entities.  They can cry me a river about the money and fame but in the end we all want it so I shed no tears.  The move to digital, to be fair, has caused the industry to expand on how to make money off of the artists work into new arenas.  It’s similar to comic books.  You don’t make money off the comic, but the movies and the accessories can be sold to a large buying public.

As for me, yes I have put all my music onto my PC and play on my Zune (yes I actually own one).  But recently thanks to Pandora I have had a desire to revisit my youth and go looking for music only to discover that there is not many places left to do that.  The future took off and when I went to return to my happy youth it was sadly gone.  The downer of digital music is also the downer of aging.  However I still have my memory of those days walking up and down the aisles of many record stores and the adventure it inspired and the joy it provided. I shed a tear for the departure of the album, the departure of my youth.

Good Night and Good Luck

Hans Henrik Hoffmann October 17, 2011

The Walking Dead

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I will preface this blog article and say it will target mainly people who are at Microsoft or have been at Microsoft.  For those who have no association it may be a bit dry, but hopefully my writing can make it a bit entertaining!?  Just a thought.   It’s time to talk reviews. What do you mean reviews Hans? Well the time of year has just passed at Microsoft where people receive their annual review. This determines their level, pay scale, bonus and future growth at Microsoft. Are they invaluable or are they expendable.  The review process was new this year going from the Exceed – Meet – Below format of previous years to a 1 is great and a 5 you suck. format.  The irony of the new format is it’s the inverse of the of format of 5 your great and 1 you suck format of years.ago.  There are differences, however, and ramifications.

In the old format I can say a score of 5 was rarely if ever attained.  A great score was 4.5 and above avg was 4.  Many strove for a 3.5 and 3.0 was the average employee and most employees in the end received the 3.0 score.  If you got a 2.5 (which was the lowest I ever heard of anyone getting) you had to work your way back and those few who received, many did fight back for a better day.  In those days it was policy and  pretty much everyone followed the rule that you did not discuss your review score. Fast forward to today and you have a strictly applied bell curve for each group and so that there are those who can get anywhere from a 1 to a 5.  If I understand correctly you could have an over performing group, but some people will still have to fall under te “bell” and receive a score of under performing.

The new bell curve is pretty hardened in the sense that a few will get 1 a few will get 2 many will get 3 a few will get 4 and a few will get 5.  It does not matter how well the group did as a whole, there will be one of 5 scores for everyone.  It’s almost a bad thing to work for a high performing group as you could do really well and still get a 4 or 5.  A big change is how open people are about review scores these days.  I have heard from many either directly about their own score or that of a colleague. It’s as if some do not care or have accepted their fate.  The problem is, when you get these low scores  your future is reduced to pretty much zero.  Many groups will not hire anyone with a low score of 4 or 5.  It is a group policy. If you are a 4 you have a limited set of options.  Maybe you have an old co-worker or manager willing to vouch for you and take you into their group.  Or you work hard for two years (hiring manager’s always ask for your last two review scores) and get high scores and live for another day.  If you get a 5 you are next in line to either get fired or laid-off.

In the end, of your 85,000 employees nearly 20% will fall into the lowest tiers.  In all honesty for them there is no road back.  They will just exist at Microsoft. The good news is they will be paid,  The bad news is their days are numbered.  they are what I term “The Walking Dead”.  Some work hard trying to make up for their mistakes.  Hoping to make enough of an impression that they will be allowed to stay.  Others see the writing on the wall and plan their escape.  Looking elsewhere for work, but in this difficult economy that is not easy to do.  Then there are those who do not see it coming and one day they walk into work only to discover an HR rep waiting to greet them and then point them to the exit.  On the latter I seem to get emails monthly from former Microsoft friends now out on their own looking for the next big job opportunity.  If you read the Microsoft blogs, part of this apparently is an effort to “youthanize” Microsoft, however I refer to it as the effort to euthanize Microsoft.

In the end these walking dead will have an impact on Microsoft.   When you are talking about up to 20% of the work force what type of attitude do they bring to their day-to-day jobs and what type of impact does that have across Microsoft?  It concerns me as if I look back in the day when things were growing fast people came inspired to make a difference in the world, it was not just a job but something bigger.  For such a huge revenue generating machine I am constantly amazed by the low moral.  I am also shocked how readily middle and upper management by into this new system, without question. Finally probably the saddest thing is just the concern and fear that has gripped many in the company.  I think we all know fear is a great motivator.  To be innovative, though, you need passion.  Passion is driven out of love for what one is doing. It’s hard to love anything when you are scared.   It’s hard to walk away from a job these days, with no prospects, however is it better to live or just exist?

Good Night and Good Luck

Hans Henrik Hoffmann October 11, 2011

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