Hans Hoffmann's Blog

In technology it is vitally important yet very difficult to see and understand when change occurs. You can invest millions in a product only to discover upon release that the market has moved on. I was on a recent camping trip when this thought started to come into perspective. As I think of the huge Microsoft Windows Phone 7 launch it dawned on me that the market Microsoft was going after was moving on into new fields of gold.

To put in perspective there are many technologies that are ahead of their time.  Sometimes it is just trying to find the market or an inability to create the market.    It’s challenging these days because we are faced with technology purchase decisions on a regular basis.  It could be a game console decision – am I going to be a Sony, Wii or Xbox person or family.  What eReader technology – Kindle or iPad?  Not to mention all the wannabe’s.   How long will these new technologies last before I have to get the latest and greatest?  How many people still have the original iPod, but more importantly how many people bought the next release? The Nano?   It’s an industry in constant flux.

This brings us back to our latest topic – mobility.  It’s been three years since Apple released the iPhone.  Three very painful years for the Microsoft Windows Mobile team (not to mention a lot of others: Nokia, Palm, RIM, etc..).  It caused a lot of denial at Microsoft and took some people to make a big decision to scrap the old code and stat all over again.  I am not sure what the people supporting the old code were defending, it was light years behind what Apple was doing. But the question to me will be when it releases this fall it will have been 3 years since the debut of the iPhone and is the market still in a place dreaming of a new great smart phone or has it moved on to newer and greener pastures?

There are three things that I see in play in the current mobile market:

1. A titanic struggle between Apple and Android – causing a huge surge in application development for these two platforms
2. A rapidly changing form factor being driven by the iPad changing how we interact with technology – that seems to bridge the Smartphone and LapTop/Netbook market
3. The rise of the “First Globalists” (age group 18-29) in driving technology adoption across the remaining groups in the market place

There is no question that when Apple launched the iPhone, beyond the beauty and experience of the device, Apple caused a huge shift in the developer community.  It seemed overnight you had companies starting up writing applications to the iPhone.  This means that developers were spending less time as a group on other platforms.  It was a rapid shift in the market.  Shortly after Google launched its Android initiative.  A beautiful example of the private sector mixing with the Open Source community.  Google provides the financial backing along with sales and marketing expertise.    Thee Open Source community, which is a developer community, provides the magic of creating a large application library.  I was talking with my friend Allen in the Silicon Valley  and he told me, “Right now in the valley it is all focused on iPhone and Android development”.  Today these platforms are each at or close to 100,000 applications.  At launch the Windows Phone is hoping for 10,000. In the tech industry if you do not have the hearts and minds of the developer, you have nothing.

The second area that is changing is the form factor of mobility.  The iPhone started that change, but the iPad is moving it forward in an ever changing direction.  The point being you can release a iPhone killer smartphone tomorrow, but it will not matter as the market has moved on. Not to mention that many capabilities we want in our smartphone are better suited for the iPad – such as browsing the web.  Another area is a phones primary function – voice.  Voice is no longer a service but an application and with the proliferation of voice enabled devices for PC’s, Netbooks and Tablets.  Though I do not expect phones to away our ability to interact with people through voice from whatever device I am connected to at that particular moment has been enhanced to the point that if I am watching TV i can interact with people through my TV while watching television.

The term “First Globalists” first came to my attention after reading John Zogby’s great book “The Way We’ll Be”.  It is the definition applied to the current 18-29 age group.  The first generation who have grown up in a world of ever and rapidly changing technology.  Who have always had the internet and a cell phone.  Who do not view technology with fear like many in my generation did.  So when the changes in form factor and how we interact with those new form factors occur they will approach and embrace these changes without hesitation and they will lead the market to new places.  Including yours truly.

Markets change rapidly and nowhere do they change faster than in technology.  You may have the best phone or at least a very competitive device but if you are late the market you are after may be transitioning to a new place.  From my days in marketing class at my university the term we used for these type of players is “laggards”.  Then it was academic but now I realize it’s not very flattering.  So my question to my past is “Where do you want to go today?”.

Good Night and Good Luck

Hans Henrik Hoffmann Sept 21st 2010

When I think of technology and what is successful and what is not, what ends up being a big success is not necessarily new, but something that has been tried many times before.  It just took someone or some company to take a different approach to make it a huge success.  When I look around the industry at the state of what is becoming the eReader space its interesting to see how it has evolved from its inception to the current rage, the current rage being the Apple iPad.

As is usual for me I guess I have to leverage those 18 years at Microsoft.  Some of my “former” readers find this very boring, but I think for this little blog its a good place to start.  Since the dawn of Microsoft R&D one of the things they have worked extensively on was eReader technology.  Microsoft Research (MSR) was launched in 1991 right around the time I started with the company.  It was one of the earliest Microsoft mantra’s -“to provide the technology for the paperless office”.  Trying to move books to the PC seemed like a great place to start.  Probably most people do not know this or do not care because during all those years not much in the way of a product was actually released.  They did invent something called Clear Text which was cool as it looked and read like a book when and was not very hard on the eyes.  In fact most of what I see today in the industry is Clear Text. But true to Microsoft they looked for partners to create the “wow” experience.

It was a long time before anyone figured this out to make it popular on a wide scale.  It came from what would seem an unlikely candidate, Amazon.  I only say unlikely because up to tha point they were really a eCommerce site.  However when you  think about all the relationships they have with the major publishers it made sense.  It is expensive to carry an inventory of books and ship books.  When it is all stored and delivered digitally then the margins become much more attractive. The Kindle became a huge success from Amazon and an eye opener for the industry.  This idea of reading paperless books and been envisioned for so long but the dream of success had never been achieved.  I first saw one of these devices on a flight.  An older gentleman was sitting next to me in First class.  He was showing it off to one of the flight attendants and I could not help but ease drop.  The Kindle was elegant just based on its simplicity.  It allowed you to change font sizes at a click of a button.  This was great in my eyes, since as I get older it is getting harder to see. then there is the sheer quantity of books that can be stored on your Kindle.

However when I look at the Kindle, despite its current success I view it as a stepping stone technology.  That technology that is great and popular until something better comes along.  There are a lot of past and current examples of these type of technologies.  Tivo seems to me likely to fall behind as a home media server finally takes hold (xBox is going down this path).

The new rage and the one that I think will be around for a while is the Apple iPad.  Unlike the Kindle it is not a single function device but allows users to read, watch videos and play music to name but a few things in a seemless user-friendly experience.  We over use the term “user-friendly” in technology but in the end it cannot be emphasized enough.  Simply because so many companies say it, but fail to deliver upon it.  Then there is the question of how many devices to I want to lug around, the more I can condense my devices into one device the better my experience.   The iPad is yet another big hit for Apple and one that seems destined to sink those in the eReader space who oppose it.

It will be interesting to see if Amazon will be able to respond to the threat of iPad or carve out a niche for itself.  I think they will be very challenged to keep pace with the innovation coming from Apple.  Not to mention the fact that Apple is leading the consumer technology industry in defining the term “user-friendly”.  As I said in the beginning what is being done with content is not new, it is not as if it has not been envisioned.  It has just taken time for everything from device form factor, to software experience to content distribution to fall into place.  But that time has finally arrived and now there is no turning back.

Good Night and good Luck

Hans Hoffmann August 31st 2010

It is hard to believe in technology how far we have come in such a short time.  Through the years companies have come and gone.  There were times when the “hot” companies were Sun Microsystems, AOL, Yahoo, WordPerfect, Lotus, Novell, Informix, Enron, Qwest (pre-USWest acquisition), MySpace etc..It is a long list.  Some are still around but a shadow of what they once were.  Today we have a whole host of new “glamour” companies like VMWare, SalesForce.Com, Google, Research in Motion, Facebook, Twitter etc..Some of these companies will survive others will burn out in a flame of glory and still others will slowly die or be acquired.  There are a few stalwarts who have survived.  Some died and came back like Apple.  Others have just plodded along achieving great success later like Adobe.  In my many years in tech one company that is a constant and I have admired from a far is Oracle.

Founded by the eccentric and eclectic Larry Ellison Oracle has risen from nothing to make Larry one of the. richest guys on the planet.  I first heard of Oracle back at my first MGX in San Diego in 1904.  Microsoft was building a database business with SQL Server and had targeted Sybase and Oracle as its two strongest competitors.  At the time we knew we were no match for Oracle.  We were going to tackle Sybase first and then go after Oracle.  I remember quite well Bill Gates on stage talking about the future and going after Oracle.  Microsoft felt that they were priced way too high and that eventually would come back to haunt them.  Bill even poked a little fun at Larry Ellison saying, “I could pick on Larry, but that would be too easy”.  Sixteen years later the fight goes on.

There are a lot of characteristics about Oracle that have allowed them to succeed.  One area in the industry where they are legendary is their sales force.  Oracle has the reputation of being cut throat in sales.  Only Type A personalities need apply.  It is interesting to note that the culture was created by a man who was a former Mormon Bishop.  It’s well know in the  industry that at Oracle you can be a superstar one month and irrelevant the next.  Microsoft’s sales culture does not have that type of attitude.  A large part is due to the licensing practices Microsoft has which creates a situation where a Microsoft rep has sold a bunch of licenses that may be sitting on a shelf and the Microsoft  field force is not incented to get customers to utilize.  Oracle also in the enterprise space has partners willing to sell in Oracle solutions to customers,  Having competed against Oracle the value of these partners solutions is very hard to win against. It is especially hard when those partners do not have an equivalent Microsoft based offering.  On top of that most enterprise customers have a lot of Oracle DBA’s.  As the CIO of T-Mobile once told me, “I don’t know what they do but I pay them”.  When you add all these things together – aggressive sales force, strong partner channel, and an army of DBA’s trained on Oracle you have a hard to beat competitor.  In my opinion current Microsoft COO Kevin Turner would fire the Microsoft sales force in a heartbeat to have Oracle’s

Oracle is an enterprise company.  Larry Ellison goes where there is lots of money.  Enterprises have lots of money.  I admire the focus Oracle has on selling into the enterprise.  Beyond selling into the enterprise Oracle has enhanced its position with a focus on acquiring companies that help facilitate more sales into the enterprise.  They acquired Siebel the dominant CRM vendor.  They acquired ERP power PeopleSoft.  For the middle tier they acquired BEA Systems.  For the developer (and hardware vendor) they went out and got Sun Microsystems (in the enterprise Java rules).  I will add that as part of this acquisition of Sun they also got MySQL, the number one open source database.  Since open source means it is free, Oracle is quietly killing it as Larry Ellison makes no money. In my opinion they have been very smart in who they went after and how they would fit into the Oracle empire.

I would add that this focus has blunted Microsoft ability to overtake Oracle as the leader in enterprise databases.  Oracle continues to have customers believe they can scale where others cannot (besides TeraData).  Despite Microsoft’s continued improvements in this area and all start cast of database people (Gordon Bell, Dave Campbell, Bill Baker and the late Jim Gray).  When I went into accounts they never knew or believed that SQL Server scaled beyond one terabyte.  I attribute this to Oracles efforts to suppress it and Microsoft’s marketing inability to promote it. 

Oracle like Microsoft has its own image problems.  But when I look at Oracles competitive landscape it is not as broad a Microsoft’s and many of the competitor duels as partners like SAP and Salesforce.Com.  They compete against Tibco in the middle tier, but Tibco is a big J2EE shop, so not all bad now that Oracle owns Java.  Oracle has had its share of failures like when they were going to overtake Microsoft Exchange as an email platform   Though I did find it humorous at an Exchange Conference they rolled up an espresso stand for attendees and provide free latte’s along with a promotion for their email system.  They were also smart with Linux and XML.  They jumped all over the Linux OS.   The OS is free but pay Oracle.  On XML I met with Microsoft guru and industry legend Don Box (Don was one of the people who wrote SOAP). Microsoft was just starting to jump on XML.  We were prepping for a meeting with ATT Wireless and he was going to cover UDDI. He said , “Oracle is five years ahead of us”.  I was depressed but when I guy like Don Box speaks it carries a large amount of weight.  He did the whole presentation to ATT Wireless in Notepad.  I was impressed.

There are many things to admire and despise about Oracle but in the end they have never wavered on their business and technical focus.  They continue to lead in the database market after all these years.  as I started the blog so many have competitors have come and gone over the course of time , but Oracle has always had the grit to survive.  I have no doubt in ten years we will still be talking about Oracle.

Good Night and Good Luck

Hans Hoffmann August 19th 2010

The “monkey boy” comment came up several years ago when YouTube was first starting and a Ballmer video surfaced of him going nuts on stage in front of 15,000 people. It was interesting to see and hear the general publics reaction to this video. What kind of guy is running Microsoft?  What a psycho.  Wierdo.  Nut job.  It ran a lot on the local news. 

Having been at Microsoft for a long time I did not even blink an eye when I saw the video.  After all I had seen it so many times I frankly could not see what all the fuss was about. The Microsoft Global Sales Summit (later changed to Exchange) was where this always happened.  In my 18 years at Microsoft I went to 14 Sales summits. .  Always in July and always somewhere really hot. I always got to see Steve running around the crowd, jumping up and down, listening to his voice go horse, etc..  So lets run through my favorite “monkey boy” moments.

Climate wise the first was probably the best as it was in San Diego.  I can’t remember much of Steve from that meeting.  He came out yelling and screaming, so the new exec who followed Steve just thought that was what you do.  He came out yelling and screaming.  I don’t have the  definition of fool handy but I am sure that execs name can be found in the definition,

In 1996 we went to Montreal.  I like that city and the province, “Jem le Quebec”.  We always had a big opening act.  We had members from the dance troop from the musical “Stomp”  Very cool as they came about with 5 foot bamboo staffs.  Pounding the stage with those staffs and dancing and jumping it was great entertainment.  All of a sudden from backstage like a caged lion who had been released comes 260lbs of Steve Ballmer with a 5 foot staff.  Now you want to see some one pound a stage and jumping with mega force and screaming, well that was Steve.  It was very motivating.  After that he went to the podium and attempted to speak french.  Not so good, but a positive memory was imprinted in my heart and soul.

In 1999 we went to San Francisco.  As Mark Twain once said, “The coldest winter I ever spent was a summer night in San Francisco”.  It was the only sales summit I can remember being cold at.  It was just before the DOJ case was to burst into the mainstream media.  It was the first time i had felt the mood at a Microsoft Summit was a bit down.  Steve came out as always  the San Francisco convention center.  He was rather heavy at this time, looking like we was enjoying the life of a CEO.  When he finally finished his run  around the center he got up to speak.  The problem was he was so out of shape and so winded he could hardly speak.  I just kept thinking, “great, this is just f***ing great.  The company I love is about to be put on trial for anti-trust and our CEO is about to have a heart-attack and die in front of 12,000 people”.  The monkey boy lived.

A few years later we were in Atlanta.  It was July. It was hot. I was walking around the conference center in downtown Atlanta when I spotted Steve going down an escalator.  What struck me as odd was he was wearing a rather heavy and ugly brown coat.  It will be explained a little later.  Now one thing about Steve is when he is on stage he perspires..a lot.  At one company meeting hosted by Dana Carey (of SNL fame), Dana had three words of advice for Steve “Aired Extra Dry”.  When Steve finally got on stage after dashing around the crowd it was quite apparent what was going on.  He was as sick as a dog (thus the reason for the big brown coat).  After 5 minutes he was not just sweating he was drenched.  His collar was completely soaked.  Steve managed to speak for 2 hours.  It was a great moment of leadership, passion and love for the company.  Orlando Ayala our VP of WorldWide sales acknowledged the performance afterwards as he should.

With the years passing and the company growing (shrinking now) Steve has continued his same performance.  He still has an immense love of the company.  But it seems to have lost its luster.  This years event in Atlanta as has become custom the performance made it to YouTube.  Despite best efforts as I am told by Microsoft to stop this.  The CNBC team even commented how lifeless the audience seemed to be in watching their CEO.  I can suggest a couple of reasons.  In the early days when Steve was out high fiving and yelling, most of those sales reps he was slapping hands with were people he had met and often had been on sales calls with them.  There was areal personal connection between Steve and the sales force.  Second most of the people who attend the sales summit’s these days are new hires.  The summit is the first time they have ever seen Steve in person.  Finally the overall event has lost its innocence and feels just like a big corporate sponsored event.  I don’t view this as a negative it is something that just happens when a company goes from 7500 employees to 90,000 employees.

We often say that corporate executives live in ivory towers and have lost touch with what is happening on the ground floor.  I think that has happened to Steve as much as he would fight against me saying that.  However that has not dimmed his enthusiasm for the company.  When the whole Monkey Boy thing came about I remember Steve Saying at eth corporate meeting, “I may be monkey boy!  But I’m your monkey boy!”  Yes Steve you are and you always will be.

Good Night and Good Luck

Hans H Hoffmann July 27th 2010