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tag:blogger.com,1999:blog-90742872014-10-29T15:50:00.245-07:00Peter Yared's MusingsHi, I'm the founder & CTO at Sapho and a tech blogger, most recently for TechCrunch, VentureBeat and WSJ. Previously CTO/CIO at CBS Interactive and founder of four enterprise infrastructure companies that were acquired by Sun, VMware, Webtrends and TigerLogic.Peter Yaredhttp://email@example.com:blogger.com,1999:blog-9074287.post-61575069793562286232014-08-23T14:00:00.000-07:002014-09-13T00:40:28.573-07:00Why Are PC Sales Up And Tablet Sales Down?
This post was also published on TechCrunch.

When iPads first came out, they were hailed as the undoing of the PC. Finally, a cheap and reliable computing device for the average user instead of the complicated, quirky PC. After a few years of strong growth for iOS and Android tablets and a corresponding decrease in PC sales, the inverse is suddenly true: PC sales are up and tablet sales are "crashing." What happened?

The tablet slowdown shouldn't be a surprise given that tablets have hardly improved beyond relatively superficial changes in size, screen resolution, and processor speed. The initial market for tablets is now saturated: grandparents and kids have them, people bought them as Sonos controllers and such, and numerous households have them around for reading. People that want tablets have them, and there's just no need to upgrade because they more than adequately perform their assigned tasks.

Businesses and consumers alike are again purchasing PCs, and Mac sales are on the rise year-over-year. Businesses in particular are forced to upgrade older PCs now that Windows XP is no longer supported. When purchasing a new PC, the main driver to choose a PC versus a tablet is fairly obvious: If you are creating any type of content regularly, you need a keyboard, a larger screen, and (for most businesses) Microsoft Office.

Reigniting Tablet Growth with "Super Tablets"

For the tablet category to continue to grow, tablets need to move beyond what Chris Dixon calls the "toy phase" and become more like PCs. The features required for a tablet to evolve into a super tablet are straight from the PC playbook: at least a 13" screen, 64 bit processor, 2GB of RAM, 256GB drive, a real keyboard, an actual file system, and an improved operating system with windowing and true multitasking capability. Super tablets form factors could range from notebooks to all-in-one desktops like the iMac. Small 7" and 9" super tablets could dock into larger screens and keyboards.

The computer industry is littered with the detritus of failed attempts to simplify PCs ranging from Sun Micrososytems' Sun Ray to Oracle's Network Computer to Microsoft's Windows CE. But this time, it's actually different. The power of mass-produced, 64-bit ARM chips, economies of scale from smartphone and tablet production, and — most importantly — the vast ecosystem of iOS and Android apps have finally made such a "network computer" feasible.

Businesses Need Super Tablets

As the former CIO at CBS Interactive, I would have bought such super tablets in droves for our employees, the vast majority of whom primarily use only a web browser and Microsoft Office. There will of course always be power users such as developers and video editors that require a full-fledged PC. A souped-up tablet would indeed garner corporate sales, as Tim Cook would like for the iPad … but only at the expense of MacBooks.

The cost of managing PCs in an enterprise are enormous, with Gartner estimating that the total cost of ownership for a notebook computer can be as high as $9,000. PCs are expensive, prone to failure, easy to break and magnets for viruses and malware. After just a bit of use, many PCs are susceptible to constant freezes and crashes.

PCs are so prone to failure that ServiceNow — a company devoted to helping IT organizations track help desk tickets — is worth over $8 billion. Some organizations are so fed up with problematic PCs that they are using expensive and cumbersome desktop virtualization, where the PC environment is strongly controlled on servers and streamed to a client.

And while Macs are somewhat better than Windows, I suggest you stand next to any corporate help desk or the Apple genius bar and watch and learn if you think they are not problematic.

The main benefits of super tablets to enterprises are their systems management and replaceability. Smartphones and tablets are so simple and easy to manage that they are typically handled by an IT organization's cost-effective phone team rather than more expensive PC technicians, who are typically so overwhelmed with small problems that they cannot focus on fixing more complex issues. Apps can be provisioned and updated by both IT and end-users without causing conflicts or problems. If a device is lost, it is easy to remote wipe data and to provision a new device with all of the same settings.

Programs like BYOD (Bring Your Own Device) just accentuate the fact that smartphones and tablets are so easy to manage that enterprises are comfortable letting their employees pick the devices themselves. Users also get great benefits, including instant-on, long battery life, simplicity, and access to legions of apps from the iTunes and Play app stores.

Why Can't the Big 3 Deliver a Super Tablet?

Former Apple executive Jean-Louis Gassée has long pointed out that Apple is gradually converging Mac OS X and iOS and will likely replace Intel processors with ARM processors. However, Apple is steadfast in maintaining a separation between the tablets and PCs and is bridging the divide with its new Continuity features. While Microsoft is willing to hack a touch interface onto a desktop experience, Apple will understandably not go there until the experience is perfect.

Apple will have to make this switch at some point soon, however, as users are increasingly expecting every screen to be touch-enabled. Tim Cook claims that he is not afraid of cannibalizing businesses, but Apple seems reticent to cannibalize its growing $20 billion Mac business.

Google's Chromebook is essentially a PC that can only run web apps. As many commentators have puzzled, Google should be focusing on a desktop version of Android rather than Chrome OS. The market has decided that it wants native apps on smartphones and tablets, so clearly users are going to want native apps on their PC replacements, as well.

Android has a huge advantage with its large app store and developer community. The Chrome OS has an inherently flawed mission – why try to compete with Windows whilst Microsoft itself is moving beyond Windows? The new generation of ChromeBooks based on ARM chips closely matches the specs of a super tablet – there just aren't any apps because of the Chrome OS constraint. The hardware is right, but the operating system is wrong.

Microsoft is actually very well positioned for a super tablet world with its Office 365 for iPad and Android, since as a subscription product it can draw revenue long after a manufacturer cashes in the thin margins on the hardware itself. This is an opportunity for Microsoft to make more money on a Mac than Apple does, as Microsoft did in the 1990s. Microsoft has already written off making money on Windows on low-end hardware and is setting itself up for a post-Windows future around devices and services under Satya Nadella's leadership.

Microsoft's Surface Pro 3 is a somewhat valiant attempt to reinvent the PC as a super tablet; however it is expensive and has a small screen, a subpar keyboard, a power hungry Intel processor and all of the headaches of managing Windows. The much-panned Surface 2 with Windows RT is ironically a step in the right direction, but its 32-bit ARM processor is underpowered and there aren't many apps in the Windows Store. Microsoft coincidentally offered Windows CE devices in the late 1990s that were actually quite close to super tablets, but like with Windows touch tablet, they entered the market far too early.

The ecosystem around building, distributing and maintaining PCs is massive and Apple, and the PC companies are understandably reluctant to cannibalize their sales. Lenovo offers a 10″ Android notebook and HP is reportedly soon shipping one, but these are intentionally small and underpowered in order to not compete with notebooks. This vacuum presents an opportunity for companies like Sony that have exited the PC business but continue to sell smartphones and tablets.

Samsung in particular is reportedly looking to shutdown its PC business, and must be evaluating how to grow its tablet business now that its smartphone sales have slowed. Samsung could offer up Office 365 bundling in exchange for royalty-free device sales in its next patent conflict with Microsoft.

The Enterprise Legacy Web Holdup

An interesting side note is that large enterprises typically run numerous legacy web applications that do not work on modern web browsers, with some legacy web applications only working on ancient browsers like Internet Explorer 6. Many of these applications were built in the first wave of the Internet to enable "employee self-service" and have not been touched since that era. Perhaps the move to a simpler, cheaper PC replacement will finally shift the cost/benefit equation such that these web applications will finally be upgraded or replaced with SaaS solutions.

Here's hoping that the Apple, Google and Microsoft can soon move into a super-tablet future where most businesses and consumers will be able to manage and customize their PCs as easily as they manage their phones and tablets … and us techies can move on from our part-time tech support jobs.
Peter Yaredhttp://email@example.com:blogger.com,1999:blog-9074287.post-54881922535843039382014-07-26T23:24:00.000-07:002014-07-29T23:25:15.299-07:00BMW Vs. Tesla: A Real Live Innovator's Dilemma
This post was also published on TechCrunch.

Jill Lepore genereated quite a fracas in Silicon Valley with her New Yorker article that questions disruptive innovation and posits that large incumbent companies often survive and subsume disruptive technology with small incremental gains. Fortunately, we have a live Petri dish: BMW's new electric i3 is an ongoing case study of a legacy manufacturer facing an innovator's dilemma in the face of Tesla, a very aggressive new competitor with next-generation technology.

Elon Musk has defined the standard for a future mass-produced electric car – it must cost around $40,000, have a range of 200 miles, and be comparable to a BMW 3 series. In order to achieve that audacious goal, Tesla is embarking on a plan to build a "Gigafactory" capable of producing batteries at an efficient and lower cost that would make such a dream car feasible. Investors are betting that Tesla will be able to dominate the electric car market when it achieves scale, continuing a growth rate that values Tesla at $28 billion even though it only produces 35,000 vehicles a year. It is interesting that Musk directly compared the Tesla's upcoming mass market Model 3 directly to the BMW 3 series, given that BMW is now delivering its new i3 to the US market in accessible volumes.

There are lots of great lessons for entrepreneurs to learn from watching the BMW versus Tesla battle since cars are so tangible and manufacturer sales tactics are so transparent.

Brand

Even though it has a "3" in its name, the i3 is decidedly not a 3 series BMW. It is two feet shorter, and should instead be in the BMW 1 series product family. The i3's electric range of 80-100 miles makes it more similar to electric cars like the Nissan Leaf and the Chevrolet Volt and nowhere close to a technological wonder like the Tesla Model S.

Despite its limitations, the i3 is clearly resonating, with rave reviews and a price that is spiking over the last month on TrueCar, indicating high initial demand in the United States. BMW has (mis)used the power of the 3 series brand to its benefit, and can now add features like longer length and range incrementally as battery technology improves.

Lesson: Legacy companies can mislabel their products to leverage their brand, especially if an upstart compares itself directly to a particular model.

	Tesla Model 3 (Estimated)	BMW i3	BMW 320

Passengers	5	5	5

Range	~200 miles on electric	80-100 miles on electric, 185 miles with gas range extender(Total hack!)	380-576 miles on gas

Base Price	~$40,000	$41,350	$32,750

0-60	N/A	7.2 seconds	7.1 seconds

Dimensions	~182" long x ~71" wide (Matching BMW 3 series)	157" long x 70" wide (Not even close to a 3 series!)	182" long x 71" wide

Availability	2017	2014	2014

Technology

BMW invested tremendous resources in its electric car platform to develop an all-electric vehicle platform, and it is willing to integrate legacy technology in order to deliver immediate value to its customers. Conversely, Mercedes chose a partnership route and is buying the drivetrain and battery technology for its upcoming electric car from Tesla. Both BMW and Mercedes are well ahead of Tesla in advanced vehicle technology like self-parking and cruise control that can automatically follow highway lanes and maintain distance from other vehicles.

Rather than waiting for battery technology to evolve to make an all-electric car with a 200-mile range at a mid-range price point, BMW is selling an optional "range extender" consisting of a two cylinder motorcycle engine that maintains the batteries at a 5 percent power level and extends the car's range an additional 80 miles. Since the range extender powers the batteries rather than a gas engine, the i3 is not a hybrid, but the range extender can be continually refilled so that the car is never stuck without power. It's a total hack, but is well thought out and competitive. BMW's engineers must have been giggling when they came up with this one.

With the i3, BMW has delivered a "good enough" luxury electric car for the urban driver and average commuter, who can also optionally use the car for longer trips without having to plan for supercharger stations.

Lesson: Legacy companies are often willing to hodgepodge new technology with their older technology to stave off new competitors.

Volume

Tesla shipped its first car in 2006 and is expecting sell 35,000 Model S sedans in 2014, or roughly 17,500 units in the second half of 2014. BMW started selling i3's in 2014 and sold 6,000 i3's in the first half of the year, primarily in the European market, which now has 3 to 6 months waits for the car. Now that demand is spiking, BMW increased production to 20,000 units annually and is now producing 100 units a day, a run rate of over 30,000 units annually. The fact that a legacy manufacturer is on the verge of outselling Tesla in its own luxury electric segment in the first year of shipping is fascinating given Tesla's superior product and years of market lead.

Lesson: Once legacy companies have hodgepodged technology, they can produce it at scale.

Sales

While Tesla is right in attempting to disrupt the antiquated dealership business model, BMW will be able to leverage its extensive dealer network to deliver to consumers worldwide, and consumers can use web services like TrueCar and Beepi to bypass the hassle of negotiating with dealers on the price of a new car and trade-in amount. BMW also has access to a deep well of financial incentives to drive consumers to buy cars. Auto manufacturers and their dealers are fighting Tesla with regulatory measures to slow the company down and limit market penetration.

Lesson: Innovators should not underestimate the power of a legacy company's large, lumbering sales channel.

Market Entry

Tesla had to enter the market at the high-end in order to deliver batteries capable of long ranges at a margin that would deliver profits to fickle investors, years before it could deliver a mass market mid-range vehicle. BMW's breadth enables it to enter at the mid-market and then move up into the ultra high-end next year in the U.S. with its i8 supercar. To BMW, the distinctive, urban-friendly i3 is essentially a rolling advertisement for BMW's innovative and green future, so the company could even sell them at a loss and come out ahead.

Tesla's high-end first approach could turn into a liability as the Tesla S is quite large and therefore not well suited for urban environments – it is wider than and almost as long as a 7 series BMW. Large, luxury four door sedans are typically purchased by upper middle class men over the age of 35 which, as a member of the demographic, I unfortunately have to admit we're not exactly the most hip crowd. BMW examined the market thoroughly and is targeting hip, young, urban professionals with the i3's forward design, a smaller urban-friendly size, and the brand's proven appeal with a younger demographic.

Lesson: Legacy companies are often in numerous segments of a market and leverage their scale to beat an upstart's roadmap.

Who Exactly Is Getting Disrupted?

The big question is what industry exactly are electric cars are disrupting? At first it seemed like the legacy auto manufacturers would not be able to step up to an electric car challenge. They have widely adopted hybrid electric cars, are now delivering somewhat competitive electric cars, and are continually experimenting with hydrogen fuel cells. From a broader view, it is possible that ExxonMobil and Chevron will be more disrupted by electric vehicles rather than BMW and Chevrolet.

Elon Musk is an entrepreneurial hero who is concurrently disrupting the passenger vehicle, space transportation and electric utility industries. Some of the legacy companies in those industries were bound to wake up at some point and respond aggressively. Fortunately, Musk can rest assured that the United Launch Alliance will not be as agile against SpaceX as BMW has been against Tesla!

Disclosure: The author is number 6,250 on the Tesla Model X waitlist.
Peter Yaredhttp://email@example.com:blogger.com,1999:blog-9074287.post-55601115709302526162014-06-14T09:00:00.000-07:002014-06-15T19:33:23.162-07:00Google's Push Past Search
This post was also published on TechCrunch.

As a recent analysis indicated, Google's traditional search is not working on mobile as well as it did on the desktop web. Sifting through organic search results on a mobile device is a sub-optimal experience, especially when compared to the push notifications and personalized streams of cards that have made mobile apps from Facebook, Twitter and Tinder so habit-forming and successful.

Google is getting well ahead of its mobile organic search problem, especially on Android where it has full control of the end-to-end mobile experience. Google has strung together push notifications, a stream of predictive answers and an answer box in an attempt to answer a search query three times before showing organic search results.

 Answer Attempt No. 1 – Notify you that something important is happening before you even ask

Google's primary push play is its much-maligned Google Now, which is increasingly becoming more functional and relevant, especially for Android users. Google Now uses mobile notifications for important events. This feature has initially focused around calendar appointments and location, with more recent additions such as sports scores for teams you follow.

When you have an upcoming calendar appointment, Google Now checks travel routes and notifies you when you should leave in order to arrive at the appointment on time. Google Now sometimes gets confused about where you are going and doesn't know when you are going to work or skipping an appointment. However, when it works, the feature really feels like magic.

As Google Now learns what you are interested in, this notification feature will likely incorporate big stock swings in your portfolio, major news events of interest to you and important emails from your boss. The calendar notifications themselves will likely be a lot smarter, with features like Refresh or RelateIQ that provide context around a meeting. Right now, Google Now is a lot like type-ahead: when it works, it's great. When it doesn't, it's a real pain. But it is slowly getting better and more context-aware.

 Answer Attempt No. 2 – Show you things you might search for before you even search

In an ideal situation, Google Now would anticipate what you want and deliver you a card before you even thought to ask. Perhaps Google will get there one day. In the meantime, Google wants its users to form habits around its Google Now cards as much as possible.

When you type a Google search on a mobile Android device, Google automatically pushes the Google Now stream, which attempts to predict what you might be searching for by showing a stream of updates to websites that you have recently visited, new content for search terms you have searched, real world events such as a new episode of a television show whose website you have visited, and nearby places in case you are looking for a café or a restaurant. Google uses your search history and profile information to build the cards, so the cards are generally very relevant.

Google Now is becoming increasingly anticipatory about new search results you might find interesting by incorporating the Google knowledge graph into search. It can tie various web pages together based on distinct entities such as a band. When you search for a band and listen to its YouTube song, Google Now will tell you when they're coming to town to play a show.

Yes, Google is not only crawling the entire web, it is now crawling the entire web on your behalf and flagging pages it thinks will be interesting to you. In addition, Google is even trying to figure out things like where you parked and if you are on public transport to notify you when it's your stop.

 Answer Attempt No. 3 – Answer your query with an answer box

If Google fails at answering what you want with a push notification or its predictive stream of cards, it still shows you a card above the search results. The Google "Answer Box" is where Google really shines, delivering cards that contain the answer to many common and even obscure queries. Google takes in context such as location and responds to voice and written queries with the answer to a question. The thing to realize is that most answer boxes will eventually become a Google Now card, delivering answers to questions before you even ask.

I see no search results – looks just like Google Now!

As users become increasingly accustomed to Google answer cards, they will be less and less surprised when these cards start to materialize before they have even entered a search query.

 Answer Attempt No. 4 – Show the search results that we once loved and now disdain on mobile

Yes, Google's organic search, which we have known and loved since the late nineties, is now a failure condition of a failure condition of a failure condition. Going through and clicking on search listings on a mobile device is just painful. Every time I get the search results, I wish Google had instead returned an answer box – why can't the Google knowledge graph just show me the date of the event I'm looking for?

The shift away from showing organic search results on mobile devices will have a profound effect on websites that rely on Google for traffic, on top of the devastation wrought by the Google algorithm updates of the past few years.

Are these "cards" just a deconstructed portal? Yes in some ways, and that's just great

Wait, haven't we seen little boxes of relevant data before? Google Now in some ways is the new, smarter portal that figures out what you should know. Google Now doesn't show your entire stock portfolio, it only shows the top movers in your portfolio. It is not a coincidence that Google launched Google Now for desktop Chrome soon after it killed its iGoogle portal. It is ironic that Yahoo, which essentially invented the portal category, is now trying to reinvigorate its search product, while Google is moving past search and what is effectively a next generation portal.

Google is the stalwart of Web 1.0 and Web 2.0 "Pull Computing," with interaction hinged around a user deciding to search for something and sifting through results and advertising. Google is now reinventing itself on mobile with a "Push Computing" paradigm. Push Computing, where server computers curate and organize content to send to a client, is the backbone of successful mobile companies.

There were attempts in the late 1990s to push-enable portals with products like PointCast, but they were cluttered with too much content to consume and required too much bandwidth for the time. Google is addressing those problems by curating what is sent to clients with extensive machine learning.

The Google search experience was not going to carry Google into the future, and Google is getting well ahead of the problem by predictively pushing cards into notifications and a stream. And just like they did last time with search, they can figure out how to monetize later. Google Shopping's answer box is entirely paid (although not in the EU due to antitrust issues) and on a mobile screen there is plenty of room to add a single, very expensive AdWord ad to every answer box. As Google learned the first time around, there are a lot of ways to make money when you're the on-ramp to everyone's Internet.
Peter Yaredhttp://firstname.lastname@example.com:blogger.com,1999:blog-9074287.post-56763111659935387012014-03-30T20:54:00.001-07:002014-03-30T20:54:50.623-07:00The Resurgent, Post-Windows Microsoft
This post was also published on TechCrunch.

Microsoft had become an oft-ignored, behemoth to the North, despite $77 billion in revenue, $57 billion in gross profits and $21 billion in net income. It seemed that the mobile revolution had passed it by. Although Steve Ballmer was already making many of the right moves, it took new CEO Satya Nadella to fully accept that Microsoft had to move beyond Windows into a new future of apps and cloud services.

The future of Microsoft is in selling its software, such as Microsoft Office 365, Microsoft Dynamics CRM and ERP, and Microsoft servers in the Azure cloud to business customers on whatever platform they like. Each of these products is arguably best-of-breed and cloud-based, and has a large customer base. Microsoft indeed has the ability to pivot, and pivot hard, as it did when it switched from pushing MSN to competing with Netscape in the Internet space. And Microsoft is once again not encumbered by antitrust restrictions from aggressively pursuing these markets.

There was a time when, if Redmond aimed its guns at a market segment, startups fled. Since the launch of the iPhone almost seven years ago, Silicon Valley startups have operated without any fear of Microsoft competing aggressively in apps and device-agnostic cloud services.

As the first step towards its new OS-agnostic future, Microsoft recently released its OneNote note-management software for the Mac OS, rounding out a full multi-platform strategy for the software, including Windows, Windows Phone, Mac, iPad, iPhone, Android and web.

Microsoft quickly followed up with Office 365 for iPad, in addition to its existing Android, iPhone and Mac support. Microsoft Office 365 is remarkably good, and offers a web only option that is priced the same as Google Drive with far better features and the familiarity of Office. Power users can pay more per month for small business premium that includes the desktop versions of the apps, so an IT department can offer different versions to different types of users. Office 365 now only has three different versions, versus the headache-inducing menu from years past. Most business buy Microsoft software through enterprise license agreements which will bypass the Apple 30 percent cut.

Although it is a huge step for Microsoft Office to now be available on all of these platforms, just touch-enabling software does not necessarily make it mobile first. Microsoft has to keep a sharp eye on startups like Quip that have completely rethought the office experience for mobile.

Microsoft Dynamics CRM and ERP are a billion dollar plus business and growing rapidly. Dynamics CRM is available as SaaS on all platforms including iOS and Android. Dynamics ERP is available as a cloud hosted solution but is not yet available on other client platforms.

Windows Azure cloud, which is rumored to be rebranded to "Microsoft Azure," is also growing rapidly and provides a growth platform for .Net development platform, Microsoft's Windows Server, Active Directory, and SQL Server database products.

Microsoft has an army of loyal developers who love its easy-to-use tools, and it is rumored that it's going to acquire Xamarin, which lets Microsoft .Net developers build apps for iOS and Android. The companies recently signed a partnership, but an acquisition of this technology would be a huge step forward for Microsoft's new mission of platform agnosticism.

So what of Windows?

Microsoft is not giving up on Windows, but it is going to stop tying its growth products to only one operating system. Windows 8.1, for all of its faults, is the same as Windows 7 once you ignore the Modern UI. And on a tablet, the Modern UI actually works quite well. I have been using a Lenovo Yoga exclusively for almost a year and have actually quite enjoyed it despite its quirks. In addition, Windows Server is seeing a renaissance as part of Azure cloud.

There is a report that Microsoft is seriously considering giving away a version of Windows 8.1, much like Google gives away Android and Chrome OS in order to drive more Google Search revenue, and Apple now gives away Mac OS upgrades.

Microsoft's OEMs have been struggling to increase margin and have been extracting lower Windows licensing fees and even no licensing fees in some cases. However, these discounts could be used as a lever to finally get hardware OEMs into line with more stringent hardware standards.

With a free Windows on decent hardware and a $99 Office 365 home subscription, Microsoft can retain legions of value-oriented consumers (think Costco shoppers) that want to use the same computer at home that they use at work. While some urban Apple devotees may look with disdain on this strategy, there are many high growth, high profit companies that sell exclusively to middle America.

The saving grace for Windows Phone is that at some point, the apps market is going to calm down, and there will be 1,000 apps that matter to 99 percent of the population. Microsoft can pay each of those app developers up to $500,000 to port to Windows Phone, so it would cost $500 million for Microsoft to offer a phone that has the top 1,000 apps. Quite achievable for a company that has a $2.5 billion annual marketing budget and more than $100 billion of cash. The much-maligned Surface tablet is now a break-even business with almost $1 billion in sales. Even if consumers don't buy them, Microsoft is selling large volumes to businesses such as Delta.

The operating system story for Microsoft is now one of slow growth and middling progress, which keeps it somewhat in the game without bogging down its application growth engines.

The other businesses

As many an analyst has stated, the Xbox and Bing businesses should be spun out. One option is to sell Xbox to troubled Sony so it can combine the declining consoles market into a single larger entity and gain efficiencies in production and retain AAA game developers. Yahoo could pick up Bing in order to accelerate its renewed focus on search.

Perhaps I have a tendency to favor the underdog, but Nadella has a great shot to make Microsoft relevant again with its new focus on selling its high-growth software to businesses on whatever platform they want. There was a time in the early 1990s when Microsoft made more money on every Mac sold than Apple did. With its new platform-agnostic strategy, this is a metric that Microsoft could attain again for every device sold to a business.
Peter Yaredhttp://email@example.com:blogger.com,1999:blog-9074287.post-43187655140585683902014-03-15T12:17:00.000-07:002014-03-16T12:17:46.354-07:00Why Can't a Startup Build a Self-Driving Car?
This post was also published on TechCrunch.

On a 10- to 20-year horizon, large-scale technological innovation is going to center around machine intelligence, robotics and sensors. Each of these fields requires gargantuan amounts of capital and a lot of patience, a combination well beyond the scope of even the most progressive venture capital firm.

As Google has demonstrated with its self-driving car, the combination of machine intelligence, robotics and sensors can already perform better than a human at a complex task such as driving a car, something that 10 years ago was unthinkable to most people.

No doubt, Tesla has built an amazing car and after much trial and tribulation, brought it to market. However, General Motors had already shipped a production electric car years before. Tesla took advantage of the innovator's dilemma, where legacy car companies are virtually incapable of embracing electric-only cars and integrating modern electronics.

Tesla's roadmap includes "autopilot" and eventually "autonomous" features. Perhaps Tesla also will deliver these features slightly before legacy car manufacturers do, including Mercedes and Lexus, which are aggressively adding similar features. But the winner in this game is Google, which has a multi-year technology lead and can extract enormous licensing fees.

The amount of raw computing horsepower necessary for cognitive computing is massive. Integrating next-generation sensors such as LIDAR is extremely complicated. The regulatory environment for introducing smart machines is extremely unpredictable, and the required experimentation and unpredictable timelines of this type of work puts it squarely in the "research" side of research and development. And venture capitalists inherently hate research – they like development.

Even the biggest venture-backed play in machine intelligence, DeepMind, with $50 million in very patient funding and 75 top researchers on staff, was recently acquired by Google for $500 million. Google has been on a massive buying spree lately, snapping up the building blocks of future technology with robotics acquisitions, other AI acquisitions such as DNNresearch, and key hires such as Ray Kurzweil, who is considered by many to be the godfather of commercial cognitive computing. Google is among the only customers of D-Wave, a much-maligned quantum-computing company.

Companies like Google, IBM and Microsoft have been building out machine-learning teams that can leverage their investments in vast networks of computers built around the globe. The amount of transistors needed to match the number of neurons in a human brain is a tremendous 100 billion, and it will take us until around 2025 to replicate on a computer chip, according to Kurzweil, although this might be aggressive due to the physics around increasingly smaller transistors in microchips.

The market uptake of machine intelligence is going to take a while. IBM has shown that a computer can outperform humans at chess and Jeopardy, and is transitioning its cognitive computing work into fields such as medicine. Even at the scale of an IBM, shareholders are complaining about the cost of this transition and the head of the Watson group was recently replaced. If IBM's Watson were a startup, its investors would have long ago forced it to sell so that they could put their capital into more efficient short-term and mid-term investments.

Other companies with large computing grids are starting to get into the game. Facebook recently kicked off an artificial intelligence lab with the hire of Yann LeCun from NYU, and also acquired speech recognition company Mobile Technologies. EBay hired Hassan Sawaf from SAIC to spearhead its machine-intelligence efforts. Yahoo! has spun a deal with Carnegie Mellon to access their researchers. Apple, with its relentless focus on the client side of computing, is struggling to keep up with making its email systems scalable, let alone keep its Siri acquisition on par with Google's relentless drive towards machine intelligence.

The upside is huge. Every sector of the economy will soon enough have its own version of a self-driving car, even fields as advanced as medicine. As anyone with an undiagnosed or somewhat diagnosed medical condition can tell you, the amount of guesswork and over specialization of medical professionals is maddening. A computer can take a holistic approach and quickly narrow down what a problem could be, and iterate with exclusionary tests. Given the fundamental shift required, it will take quite a while for this transition to happen in fields such as medicine.

Despite repeated fears, startups are definitely taking on far bigger challenges than just photo and chat apps. But will startups be able to compete with these giants in areas such as machine intelligence? Perhaps Google, IBM and Amazon will offer Cognition-as-a-Service that would usher in a wave of new companies, much like Amazon's Infrastructure-as-a-Service offering reignited the web.

IBM has created a $100 million investment fund for Watson-based companies and just made its first investment. Amazon could kickstart a cognition service by acquiring nascent cognition service companies such as Wise.io, Expect Labs, and BigML and offering them at scale. Now that would unleash a generation of "smart" startups.
Peter Yaredhttp://firstname.lastname@example.com:blogger.com,1999:blog-9074287.post-48195107980924980642014-02-21T10:39:00.002-08:002014-02-22T22:42:56.273-08:00Mobile Contacts Are Now The Real Social Network
This post was also published on TechCrunch.

Facebook's surprising acquisition of WhatsApp signals that it has realized that users' true social network is the contact list on their smartphones. Mobile contacts are usually limited to people a user knows well and actually communicates with, a veritable treasure trove when compared to the copious list of Facebook friends that many users have accumulated over the years.

Adding someone to your phone is more intimate than friending them on Facebook. And messaging someone through their phone number is much more intimate than a Facebook message, something that Mark Zuckerberg himself says is akin to informal e-mail. Facebook had the opportunity to own the social graph for new apps with Facebook Platform, which spawned multiple successful companies such as Pinterest that used the "follow all my Facebook friends" feature to build their own social networks.

Threatened by the emerging networks, Facebook decided to clamp down on new "competitive" social networking apps, and turned off access to its social graph for emerging messaging apps like Voxer and Vine.

Without access to the Facebook social graph, the new generation of mobile communication apps such as Snapchat and Secret use mobile contacts exclusively to build connections between users.

Younger and international users are particularly attracted to the mobile contact as the defining criteria of their true social network. As Path's struggles have shown, attempting to force an intimate social network with the same real-name mechanism as Facebook does not work.

Social Network	Identity	Who It's For

Facebook	Real Name	Casual acquaintances

Instagram	Alias	Aspirational following

WhatsApp	Phone Number	Actual friends

Facebook had already acquired the ability to have a unilateral, aspirational follow capability akin to Twitter with its Instagram acquisition. WhatsApp offers a social network of 450 million users that are intimately connected with each other by phone numbers.

With this acquisition, Facebook now controls the intersection of all three kinds of social graphs: casual acquaintances, aspirational following, and intimate relationships. And that's worth quite a premium.
Peter Yaredhttp://email@example.com:blogger.com,1999:blog-9074287.post-5213518609722654152014-01-19T11:00:00.000-08:002014-01-26T21:25:13.825-08:00Why The Big Picture Matters on Mobile
This post was also published in VentureBeat.
Chances are you've checked out Instagram, Tinder, Whisper or Snapchat within the last hour. Or maybe the last five minutes. They are some of the most popular and addicting consumer mobile apps today. And they have a remarkably consistent user interface: a big picture with an accompanying line of text.

Research indicates that reading is actually quite difficult for the human brain, which from the start evolved to capture and process mountains of information visually. The narrowing of information delivery instigated by text messaging and Twitter has trained users to communicate efficiently with fewer words. The paucity of text has allowed imagery to take over on the mobile form factor, as evidenced by the most popular new apps.

The attention-focusing layout of a big picture with accompanying line of text originated with the newspaper front page. Above the fold layouts were used for big events such as wars, royal weddings, and big sporting events. Or, in the case of The New York Post, every day.

This treatment first emerged on the web with memes such as LOLcat and has subsequently infiltrated every aspect of the Internet.

The picture with accompanying line of text trend has become so pervasive that Whisper, a popular app for anonymously sharing thoughts, automatically suggests somewhat contextually-relevant images for the user to pick from. The thoughts without imagery are actually somewhat hokey. Adding imagery makes them seem somewhat deeper, as Saturday Night Live showcased with its popular Deep Thoughts by Jack Handey interstitials:

Facebook and Twitter are including larger images in newsfeeds to accompany a short line of text, and newer apps like Circle and Jelly are combining the Flipboard-style text overlay on each image in a newsfeed, a look that Facebook and Twitter will likely also soon implement.
  Snapchat even allows messaging with hand drawn additions.

Perhaps in the next phase of this evolution, there won't even be a line of text at all. As the saying goes, a picture is worth a thousand words.

The only saving grace for the written word in 2014 may be the strong growth of Ev William's long-form oriented Medium. While short-form communication continues to accelerate, a contra-trend of long-form content may materialize as well.

In our increasingly polarized, bifurcated world, there likely will not be much room for anything in between.
Peter Yaredhttp://firstname.lastname@example.com:blogger.com,1999:blog-9074287.post-50080128528777715932013-11-22T15:21:00.000-08:002014-02-21T14:27:26.462-08:00Email Is Now Just Another Stream
This post was also published on TechCrunch.
Only a couple of years ago, pundits were predicting an end to email. But instead of fading away, there's been ever-increasing email volume and usage. Rather than being replaced by Facebook and Twitter streams, email is actually becoming a stream itself.

Mail systems are evolving to match the new volume of email, and users will increasingly see only algorithmically vetted emails. Some other emails may be shown below the vetted email, and the rest will flow away into temporal oblivion, just like uninteresting social posts from a few hours ago.

Implications for marketers are significant. The days of the average AOL or Yahoo! mail user scrolling through every email in their inbox are rapidly fading. Email has been especially important in e-commerce sales and customer re-engagement. For e-commerce in particular, email marketing exceeds the performance of social advertising. Large-volume email senders will need to make a greater effort to send emails that are both personalized and interesting to the recipient.

The email tsunami problem is pervasive. Several Silicon Valley folks have already committed the unfortunately termed "email suicide," where they give up on reading unread email and start anew. Others are adding email auto-responders stating that they will not necessarily see email. New vendors such as SendGrid have helped bring on the deluge by dramatically lowering the price of sending volume email and democratizing access with simplified onboarding and easy developer APIs.

Google has added several features to Gmail in an attempt to add some order to the chaos of email. The changes will effect both email users and marketers. With Gmail features like Priority Inbox, Gmail Tabs, and Circles, users are increasingly engaging only with algorithmically vetted email from senders they know. Priority Inbox is only a satisfactory product and needs to evolve to automatically mark as "important" email from senders that a recipient repeatedly opens, especially if the recipient replies. Next-generation email clients like Inky go as far as sorting email by relevance rather than date.

For marketers, sending a ton of email without any user engagement will soon become counterproductive. For each type of volume sender, a new balance will have to be found between sending numerous emails and still achieving desired "open rates" and "clickthroughs" — mechanisms by which an email provider like Google can detect whether or not the email is of interest to a user. Much like how "edge rank" increases for Facebook posts when the people like, share or comment on it, "mail rank" will be an increasingly important benchmark for email marketers to measure their effectiveness.

At CBS Interactive, we send over 200 million emails a month, ranging from news summaries to personalized fantasy sports updates, to an audience of 270 million unique users. We have corporate standards and systems to ensure that recipients can easily unsubscribe from unwanted emails. However, given these upcoming changes, we will need to look at overall open rates from a particular property and begin to proactively prune users that have no interest in emails we send.

The shift to email as a stream will have personal implications as well. People may have to be introduced via a mutual party rather than sending a cold email, especially if the sender has sent numerous emails that have not entailed or received a response. Even personal emails from people you know may soon be treated like a Facebook or Twitter post, where a user either immediately responds, such as with a Facebook like or comment, or instead lets it flow into the ether. Much like social posts, senders will likely shift toward keeping email messages short and to the point.

Facebook and Twitter both have nascent but unique takes on messaging. Facebook messages that are not from one of your friends go into an "other" folder that is rarely read. Twitter direct messages can only be sent to people who follow the sender, although Twitter is experimenting with opening this up a bit.

Stream-oriented companies like Facebook and Twitter essentially charge brands to target their own customers by allowing brands to purchase promoted posts for their fans and followers. Email providers may soon sell "promoted emails" where a marketer can target a user in their priority inbox. Users may revolt, but in the end they are getting email for free, so it will be hard to complain. Email has become a stream, and as the adage goes, when you're not paying, you're the product.
Peter Yaredhttp://email@example.com:blogger.com,1999:blog-9074287.post-23418297529752270332013-08-24T10:00:00.000-07:002014-06-15T20:22:02.112-07:00Rebooting the Bay Bridge: A Classic Rewrite Story
This post was written with Mathew Spolin and published in VentureBeat.

From the smallest startup to the largest multi-national company, the ground-up software rewrite is the unicorn of organizations. At some point, a software system needs to be rewritten from scratch, usually for one or more of three reasons:

Architectural flaws inherent from the onset.

External market conditions that the software can not meet.

Too much deferred maintenance such that the software is unstable and unchangeable.

Software is sometimes hard to understand as it is abstract. However, we have the ultimate physical, real-life rewrite on our doorstep here in San Francisco: the rebuild of the eastern span of the Bay Bridge.

Architectural Flaws

The eastern span of the Bay Bridge, first opened in 1936, had a significant architectural flaw in that it could not survive a high-magnitude earthquake. The magnitude 7 Loma Prieta earthquake in 1989 caused a 76- by 50-foot section of the upper deck to collapse onto the lower deck. There was a single fatality on the bridge and the bridge was out of commission for a month, from October 17 to November 18.

Sometimes software hits an architectural wall, and has to be rewritten. The current mobile and tablet phenomena has caused many traditionally web-only companies to substantially overhaul their software in order to deliver their service to mobile devices.

The Technically Obvious "Rewrite" Proposal

Bridges are hard to build, and the more complicated the bridge, the more complicated and expensive the construction project. The existing eastern span of the bay bridge was nothing fancy, and could be replaced relatively easily by a modern, economical skyway at a cost of $1.1 billion.

When proposing a rewrite of software, things may seem simple at first, and engineers and managers think that they can rip out a new version relatively quickly.

The Rewrite Maelstrom

Although there was a simple alternative, there are lots of stakeholders who couldn't get what they wanted from the existing bridge and wanted to put their imprint on the new bridge. Jerry Brown, then the mayor of Oakland, demanded that the new bridge be a "statement bridge" since Oakland deserved a modern suspension bridge on par with what San Francisco has with the Western span of the Bay Bridge. Biking advocates demanded a bike lane, even though there is not much to do on Yurba Buena and Treasure Island and the Western span of the bridge doesn't have a bike lane. Everyone settled on a self-anchored suspension bridge, a type of bridge design that had never been attempted at the scale of the Bay Bridge.

Even though the Governor at the time, Arnold Schwarzenegger, attempted to override everyone and go back to the simpler skyway design, there were so many people and factions involved that eventually the more extensive design was greenlit.

When rewriting software, it is important to consider that there are many people that are stakeholders in the existing solution, and likely have pent up requirements that they were not able to solve with the existing solution that they would now finally like to be addressed with the new solution. It is also extremely difficult to remove features as people expect a new solution to improve on their current solution. This type of requirements creep is all very normal and should be expected, and needs to be addressed well as it can lead to a significant amount of analysis, sometimes paralysis, and a lot of change management.

Agreement Challenges

Even once a new design and its features are agreed upon, there will likely be additional disagreements. In the Bay Bridge's case, Mayor Willie Brown of San Francisco and Mayor Jerry Brown of Oakland, bickered over whether to put the new bridge to the North or South of the existing bridge. Brown wanted the new bridge placed to the South of the current bridge in order for its shadow to not decrease the value of prime real estate on Yurba Buena Island. Even the Navy was involved, since it was transferring the land to San Francisco, and wouldn't let Caltrans test the soil at the site. The disagreement dragged on for two years and added hundreds of millions of cost to the project.

When rewriting software, it should be expected that there will be disagreements, so it is critical that all the stakeholders meet regularly, keep the overall project goals in mind, and have the ability to engage in frank and open dialog in order to address issues.

Unforeseen Problems, Delays and Cost

The Bay Bridge had numerous delays and cost overruns, ranging from bad welds due to welders being rushed to bad bolts that the manufacturer changed specifications on after they were initially tested.

During all the debate about what type of bridge to build, and exactly where to build the bridge, China's building boom began consuming all available concrete and steel, driving up prices. The delays in the Bay Bridge construction ended up costing billions of dollars. The state and local agencies haggled constantly on who would pay for overruns, leading to toll increases and debt. The simple design was estimated to cost $1.1 billion, and the bridge ended up costing $6.3 billion and was delivered years late, with some potential flaws.

In large, complicated projects, unfortunately it should be expected that there are going to be unforeseen problems and delays, in even the most padded schedule. It is a fact of life of engineering and time and cost overruns are unfortunately very typical of large projects. In addition, these types of delays can cause endless thrash in organizations as people expected the new solution and deferred maintenance and features on the existing solution.

Finally, a New Bridge!

I have learned the hard way, unfortunately more than once, that rewrites are an incredibly painful process. They may initially seem simple, but end up taking far more time, money and coordination than initially envisioned. However, on the other side of the process, you end up with a brand spanking new bridge, ready for the future.

For more on the Bay Bridge project, see Wikipedia and BayBridgeInfo.org.
Peter Yaredhttp://email@example.com:blogger.com,1999:blog-9074287.post-54691391150301483622013-08-22T10:28:00.002-07:002013-08-22T10:28:38.483-07:00How to Sell to the CIO, Part 3: Closing the Deal
This post was published in the Wall Street Journal's CIO Journal.

After almost two decades of selling enterprise infrastructure to IT organizations, I have spent the last two years on the other side of the table as the CIO/CTO of CBS Interactive. This is part three of a three part series on how to sell to CIOs.

In part one, I provided tips for getting into an account and in part two I discussed how to navigate the sales process. Now it's time to close the deal.

Timing

Deals are going to take as long as they take, and there is really not much a vendor can do to make all the stars align within a big enterprise. A sophisticated vendor understands that large enterprises have a lot of processes in place to close deals and an aversion to new vendors. There is generally no shortcut through legal, finance and other internal approvals.

When a vendor asks for deviations so that they can make a number or close the deal in Q4 as they promised the board, it makes them seem weak and engenders doubt. It leads everyone internally to ask, "Are they really so desperate that our $150K is a make or break for them?"

While there's no way to tactfully ask for a deal to get expedited, a vendor should understand a company's process and track that the deal is going well. We had a deal with VMware Inc. that slid for two quarters for various reasons. They were so patient and diligent that in the end, we took them out to dinner.

Pricing

Sometimes vendors agree to a price range at the beginning of a sales process and then change the price when it's time to close. Agreeing to terms during contract iteration and then shifting parameters around and returning something completely different for each subsequent iteration makes a vendor look untrustworthy and unreliable. We once got very far along with a vendor, showed them how to pitch to our business units, had everyone lined up to switch to this vendor, and then they started playing tactics like this and we walked away.

When the reasons behind pricing are not clearly communicated, the vendor gets blamed. We once requested a tiered price instead of a flat fee for a deal to access segmentation information ad hoc. It was a reasonable request that the vendor accommodated, but unfortunately a rumor spread through our organization that we were paying by the impression to access our own data. The pricing was so customized that we had a hard time getting buy-in. As word of the pricing debacle spread, it reflected poorly on the company. So if the pricing model is customized in order to close the deal, be sure that it is very clear why this is the case and that the information is disseminated widely.

Deals always seem to get hung up on indemnification. While everyone seems to know where a deal will end up, it often takes weeks of back-and-forth between legal and a couple of ultimatums to close. If I ever run a software company again, I will be sure to have two pricing tiers: greater indemnification at a higher price, less indemnification at a lower price. You pick, and we all save ourselves a big headache.

Reputation Matters

The biggest surprise I had upon running a large IT organization is the level of information sharing and collaboration between CIOs at different companies, particularly about vendors. Most CIOs and IT VPs are all very accessible, candid, and frank with each other about what products they are using, how the vendors are doing, and how they make internal decisions.

Vendors should be aware that their performance quickly makes the rounds, both in a particular vertical and across different verticals. This type of diligence accelerates as more players across finance and legal get involved in a deal. "I heard they completely screwed up at Company X" will kill a deal even if it is on the verge of signing. Vendors need to make sure that they have happy customers.

In addition, executives often transition between companies in a vertical such as media or finance. One of my biggest internal stakeholders for a video platform had a bad experience with a potential vendor at his previous company — a cable channel without a large video-streaming offering. The vendor CEO's reasoned that the previous company was small, and that we would be treated a lot differently as a large customer. Wrong answer. A much better approach would have been to figure out exactly what went wrong at the previous account, remediate it, or at least offer a "lessons learned" on how they have improved service.

Reputation is also important globally. If a vendor does a global deal with a company but doesn't provide good service to the satellite locations, the international offices will go out and find their own vendor, causing a lot of thrash throughout the company. A global deal is not done until it's delivered well internationally.

Account Management

Once a deal looks like it is about to be signed, there is typically a hand off to account management. A lot of vendors fail at this step. Salespeople need to be incented to ensure that there is a clean handoff. Vendors would also be wise to ensure a single account management point of contact, especially for larger organizations. Handing us an organizational chart with different contacts for professional services, technical issues, and billing makes us feel like we are not getting what we paid for.

And finally, a note of caution about growing organically within an organization: Although it can look like a vendor has traction because they are used in multiple departments, they can still be replaced. For example, in the cloud file-sharing segment, we were running Dropbox Inc., Box Inc., Google Inc.'s Google Drive, and others. When it became clear that we needed one official cloud storage vendor, our corporate IT folks took all the vendors through a rigorous process and picked a single vendor. Soon after, the other vendors were blocked at the firewall level. To stay relevant, a vendor should stay ahead of the customer with new features, provide excellent service, and be proactive if there is downtime or failures.

Sell to Yourself

The best thing a vendor can do is have staff who are domain experts at what they are selling and also staff who have worked in a decision-making capacity within enterprise IT. Sometimes that's not possible, so I've shared my experiences to give vendors the inside look on how enterprise IT makes purchasing decisions and how to optimize time for everyone involved. A clear, straightforward pitch, a salient case for how your product will help the customer, and a good deal of patience go a long way when it comes to selling to the CIO.
Peter Yaredhttp://firstname.lastname@example.com:blogger.com,1999:blog-9074287.post-82649629305970938762013-08-15T23:13:00.002-07:002013-08-15T23:13:52.647-07:00How to Sell to the CIO, Part 2: The Sales Process
This post was published in the Wall Street Journal's CIO Journal.

After almost two decades of selling enterprise infrastructure to IT organizations, I have spent the last two years on the other side of the table as the CIO/CTO of CBS Interactive. This is the second of a three part series on how to sell to CIOs.

The tips I laid out in part one helped you get into an account. But getting the meeting is just the beginning. Now it's time to sell your product.

Sell the ROI

The question enterprise IT has for the salesperson during a sales meeting is, "Will your product save or make us money and does it have low risk?" As Founder and CEO of Upstream Group Doug Weaver writes, "They're not thinking about helping you out or what kind of day you're having. 'What's in it for me?' is the order of the day."

A vendor needs to have a very clear and verifiable return on investment (ROI) story with measurable metrics. There are times when companies buy software or services without evaluating ROI, such as during the e-commerce push in the dot-com boom and the social craze of the past couple of years, but these are the exceptions.

An ROI story should use the right numbers. I have experienced several instances where vendors offer ROI examples that don't add up. For example, a database-as-a-service solution that is deployed on-premises and is pitched as cheaper than Amazon.com Inc.'s Relational Database Service. The comparison leaves out the cost of the database administrators needed to run the solution on premises. Also, many vendors don't take into account the difference between capital expense and operating expense, a distinction that should always be included in ROI calculations.

There is generally a significant transition and maintenance cost to adopt new technology that IT organizations consider before starting a new vendor relationship. Numerous vendors have pitched us on "reporting in the cloud," but never consider the cost of copying vast volumes of our data to their system or the compliance and regulatory headache that comes with having our proprietary data in their hands. The reporting features need to be morethan an on-premises solution for us to even entertain the concept.

Product Fit

It is critical for vendors selling a product to an enterprise to have people with domain expertise on their team.

Vendors should be very careful about "vaporware," products that are announced but not yet implemented. For example, once a vendor showed screenshots and demonstrations of their product working in a certain way, but when we trialed the solution, we found that the software was missing several key features. The vendor then acknowledged that the features would be coming out in six months. Unfortunately, after wasting my team's time, we will not give them another chance any time soon.

While it's important to cater to the customer, make sure other enterprises also need a product feature before adding every feature a company requests. One approach for vendors is to have a blanket policy that three customers must request the same feature before it is implemented (but be careful when wielding that stick as customers often do talk to each other). There are, of course, certain products that inherently need to be customized and should include a set amount of professional services. Finding the right balance will result in a product fit that works for both the vendor and the customer.

Go to the Right Person

To sell to an IT organization, convince the person who actually has the problem. When someone three levels down in my organization comes running into my office and proclaims that they found a great product that pays for itself in six months, will save us money, and that they have already trialed it and it works well, there's a great chance that deal is going to get done.

Get the attention of the database manager, the networking director, the system administration manager, the procurement director or whoever is the appropriate person and convince them to try the product. The best way to sell to people on the software side is to have a product that they can find, deploy and use on their own without needing to talk to anyone at the vendor.

MySQL's Marten Mickos perfected this strategy with his "15 minutes to delight" philosophy, previously unthinkable for a product like a database. Subsequent products from Atlassian Inc., New Relic and Splunk have adopted this business model, and their growth reflects this philosophy's focus on delivering a killer product.

Once a product has already been tested, the sales process becomes much smoother. Vendors can direct their salespeople to focus on learning the organization and helping to navigate finance, legal and stakeholders' agendas to ensure that required features are added to the roadmap. Once a product sells itself, the sales organization doesn't waste time chasing down leads and requesting face-to-face meetings.

This advice does not apply to companies selling deep workflow solutions like order management software that requires a lot of analysis, buy-in from multiple stakeholders and has a long implementation time. These types of solutions still require "traditional" sales techniques and cycles. The best way to close a deal like this done is to understand that it will take a long time and to identify an executive champion that will help push it through.

I will explain more about how to close a deal in the final part of this guide on selling to the CIO.
Peter Yaredhttp://email@example.com:blogger.com,1999:blog-9074287.post-63801643149756779482013-08-08T19:35:00.000-07:002013-08-08T19:36:39.680-07:00How to Sell to the CIO, Part 1: The Initial Pitch
This post was published in the Wall Street Journal's CIO Journal.

After almost two decades of selling business infrastructure to technology companies, I thought I knew it all. But since spending the last two years on the other side of the table as the CIO/CTO of CBS Interactive, I realized how much I didn't know about selling to enterprise IT.

The way to truly understand how and why an enterprise purchases technology is by gaining the ability to understand how IT departments at medium to large-size organizations work, how decision-making actually happens and how vendors can avoid getting in their own way.

Based on my experience on both sides, the following guide aims to help salespeople and companies become more efficient for both their clients and themselves.

Be clear what it is you do

A pitch, whether from a small startup or a multinational corporation, should always concisely state the following:

1. Description: What the offering specifically does, how it's different from competitors and how it can help a CIO. Ideally this includes some tangibles, such as screenshots or performance graphs.

2. Validation: What stage the product is at and who else is using it.

3. Process: How can the offering be purchased, what the typical on-ramp looks like, and how much it costs.

Here's a mock example of a good pitch:

Super Interconnect provides a next generation fiber interconnect that is 10x the speed of existing interconnects. Super Interconnect makes it possible for your web and application servers to quickly access backend resources such as databases, thereby significantly reducing latency to customers. As you can see in the attached graph, we offer 25x the price/performance of 10gigE, and are a year ahead of other nextgen fiber interconnect technologies.

Super Interconnect is a young company, however we all come from networking companies such as Cisco and Juniper, and are well funded by top venture capitalist firms Accel and Sequoia. A few of your peers such as PepsiCo and Walt Disney Company are actively using Super Interconnect and can serve as references.

We sell our product direct to IT organization and can work through your preferred resellers. A typical POC takes 30 days to deploy with minimal time by your staff. Super Interconnect is priced at $1K/server, a 300% significant $/gbps savings over 10gigE."

If an introductory pitch can't cover this basic information, IT professionals will get the sense that a meeting will likely be painful and will want to avoid it.

Also, if a company is new and doesn't have a product yet, it's best for the vendor to be honest and say that they are in a research phase. Instead of polling a number of CIOs, vendors might consider finding and collaborating with a domain expert that knows the next thing an enterprise will need. Hype and vision won't sell.

Time is not the answer

Virtually every contact a CIO receives has the same ask: for a meeting or phone call. As most CIOs' schedules are crammed, realize that coffee, lunch, drinks, dinner and events are particularly tough requests. So instead of asking for the CIO, who is not even the best decision-maker on a lot of new technology, vendors should ask to talk to the right experts in a CIO's organization.

For startups in particular, sales and business development executives love to have big brand names and titles in their pipeline. Even when it is clear that a product is not a fit, they still push hard for a meeting in order to justify their own value to their management chain. This can reflect badly on a startup, so salespeople need to work to find the right targets and measure success not by the amount of meetings, but by how many prospects are moving into the next step in the sales funnel.

Bypassing IT is not realistic

Selling directly to a line of business and bypassing IT is not realistic. IT is generally with the program, supportive of cloud applications and no longer a roadblock like in years past. And lines of business need to have their tools integrated with their company's overarching systems as well as be in compliance with security and Sarbanes-Oxley policies.

Treating the IT department like a speedbump signals that the vendor does not value what IT thinks. Lines of business typically partner with IT, and a deal takes agreement between the two.

Understand the IT culture

While IT vendors spend their time trying to sell to IT departments, they rarely have anyone on staff that has actually worked in an IT department. IT departments have a certain culture and the best way to sell to them is to understand how they work.

When a vendor secures a meeting, it's in their interest to show up early, be on their best behavior, dress and act professionally and make sure not to reschedule unless a significant life event occurs. Once a vendor has the attention of IT management, they should tell it like it is and then try to close a deal. There are quite a few vendors that don't answer direct questions regarding features and pricing.

Startup companies need to make sure to spend more time talking about how their passion is solving a customer's problem, than about how their idea is "awesome." The history of the company and its various pivots can be interesting, but only within the context of how excited the founders are to solve a business problem for a customer.

Getting feedback

IT managers are generally loathe to give any feedback since it usually engenders hostility. Quite often, what a vendor is selling is not a good fit for a particular enterprise. Particularly for startup founders, learning this can be quite emotional. It is important for founders to contain that emotion and try to learn exactly how a product needs to shift in order to meet the needs of an enterprise customer.

The best way to get feedback is to ask specific questions. For example: What is it that the customer likes and doesn't like about their current solution? How hard would it be to move to a new solution? And is it realistic that the customer would move to a new solution or will they simply wait for their existing vendor to add the missing features?

The flip side

Enterprise IT is guilty of wasting vendors' time in order to learn what's going on in the industry and to keep options open. A question I used to ask when I was on the vendor side of the table was, "What's the last product you bought and what was the process like?" If no one can answer, the IT group is clearly very conservative and a vendor should come back in a year after they have found and closed some early adopters.

In the next part of "How to Sell to the CIO," I will discuss the sales process.
Peter Yaredhttp://email@example.com:blogger.com,1999:blog-9074287.post-86277598374242504562013-08-03T13:38:00.002-07:002013-08-03T13:40:36.742-07:00In Mastering Machine Intelligence, Google Rewrites Search Engine Rules
This post was written with Cameron Olthius and published on TechCrunch.

Google has produced a car that drives itself and an Android operating system that has remarkably good speech recognition. Yes, Google has begun to master machine intelligence. So it should be no surprise that Google has finally started to figure out how to stop bad actors from gaming its crown jewel – the Google search engine. We say finally because it's something Google has always talked about, but, until recently, has never actually been able to do.

With the improved search engine, SEO experts will have to learn a new playbook if they want to stay in the game.

SEO Wars

In January 2011, there was a groundswell of user complaints kicked off by Vivek Wadwa about Google's search results being subpar and gamed by black hat SEO experts, people who use questionable techniques to improve search-engine results. By exploiting weaknesses in Google's search algorithms, these characters made search less helpful for all of us.

We have been tracking the issue for a while. Back in 2007, we wrote about Americans experiencing "search engine fatigue," as advertisers found ways to "game the system" so that their content appeared first in search results (read more here). And in 2009, we wrote about Google's shift to providing "answers," such as maps results and weather above search results.

Even the shift to answers was not enough to end Google's ongoing war with SEO experts. As we describe in this CNET article from early 2012, it turns out that answers were even easier to monetize than ads. This was one of the reasons Google has increasingly turned to socially curated links.

In the past couple of years, Google has deployed a wave of algorithm updates, including Panda and Panda 2, Penguin, as well as updates to existing mechanisms such as Quality Deserved Freshness. In addition, Google made it harder to figure out what keywords people are using when they search.

The onslaught of algorithm updates has effectively made it increasingly more difficult for a host of black hat SEO techniques — such as duplicative content, link farming and keyword stuffing — to work. This doesn't mean those techniques won't work. One look into a query like "payday loans" or ''viagra" proves they still do. But these techniques are now more query-dependent, meaning that Google has essentially given a pass for certain verticals that are naturally more overwhelmed with spam. But for the most part, using "SEO magic" to build a content site is no longer a viable long-term strategy.

The New Rules Of SEO

So is SEO over? Far from it. SEO is as important as ever. Understanding Google's policies and not running afoul of them is critical to maintaining placement on Google search results.

With these latest changes, SEO experts will now need to have a deep understanding of the various reasons a site can inadvertently be punished by Google and how best to create solutions needed to fix the issues, or avoid them altogether.

Here's what SEO experts need to focus on now:

Clean, well-structured site architecture. Sites should be easy to use and navigate, employ clean URL structures that make hierarchical sense, properly link internally, and have all pages, sections and categories properly labeled and tagged.

Usable Pages. Pages should be simple, clear, provide unique value, and meet the average user's reason for coming to the page. Google wants to serve up results that will satisfy a user's search intent. It does not want to serve up results that users will visit, click the back button, and select the next result.

Interesting content. Pages need to have more than straight facts that Google can answer above the search results, so a page needs to show more than the weather or a sports score.

No hidden content. Google sometimes thinks that hidden content is meant to game the system. So be very careful about handling hidden items that users can toggle on and off or creative pagination.

Good mobile experience. Google now penalizes sites that do not have a clean, speedy and presentable mobile experience. Sites need to stop delivering desktop web pages to mobile devices.

Duplicate content. When you think of duplicate content you probably think of content copied from one page or site to another, but that's not the only form. Things like a URL resolving using various parameters, printable pages, and canonical issues can often create duplicate content issues that harm a site.

 Markup. Rich snippets and structured data markup will help Google better understand content, as well as help users understand what's on a page and why it's relevant to their query, which can result in higher click-through rates.

Google chasing down and excluding content from bad actors is a huge opportunity for web content creators. Creating great content and working with SEO professionals from inception through maintenance can produce amazing results. Some of our sites have even doubled in Google traffic over the past 12 months.

So don't think of Google's changes as another offensive in the ongoing SEO battles. If played correctly, everyone will be better off now.
Peter Yaredhttp://email@example.com:blogger.com,1999:blog-9074287.post-47698020406376007952013-03-11T12:18:00.001-07:002013-03-16T02:32:48.175-07:00To Cloud or Not to Cloud
This post was published in the Wall Street Journal's CIO Journal.
Cloud is all the rage in IT right now, offering nearly instantaneous time to value, continual feature upgrades, and reduced cost. However, it is important to delineate different types of cloud offerings and what should and shouldn't run in the cloud. There are also several contractual issues CIOs should consider when dealing with cloud vendor.

Software-as-a-Service is mainstream and cost-effective

Among the very first cloud offerings, software-as-a-service (SaaS) solutions such as Salesforce.com Inc. and ServiceNow Inc. are very compelling. The offerings are completely self-contained, turnkey and offer rich feature sets that are continually enhanced and refined by the vendor. Often SaaS vendors integrate with each other which makes it easier to piece a stack of software together.

When selecting a SaaS vendor, CIOs should ensure that the vendor has a high standard of data security and offers an interface by which data can be retrieved into internal systems. Lines of business have a tendency to start using SaaS vendors on their own, and savings and compliance can be realized by rolling up several of these point purchases into a global deal with a single vendor. An interesting new tool from Skyhigh Networks can monitor what SaaS tools are being accessed from a company's network in order to facilitate discovery of SaaS usage.

Legacy enterprise software vendors such as IBM Corp., Oracle Corp. and SAP AG are increasingly acquiring SaaS companies in order to continue their growth beyond traditional packaged software. After such acquisitions, pricing typically increases two to three times, so in order to have a predictable experience when engaging a SaaS vendor, a CIO should consider singing multi-year deals with a set yearly increase and exit options.

Infrastructure-as-a-Service is great, but expensive

Infrastructure-as-a-service (IaaS) offerings such as Amazon Web Services are a convenient method to elastically expand your data center without buying new equipment. Amazon.com Inc. provides security features such as Virtual Private Cloud (VPC) which segregates your network traffic and allows access via a secured virtual private network (VPN). In addition Amazon provides Direct Connect which offers point-to-point access to your Amazon infrastructure.

The elasticity and self-service features of infrastructure-as-a-service make it easy for internal customers to add machines instantly without waiting for machines to be ordered, racked, and kick-started. Additional machines can be added for heightened traffic due to large events or seasonality.

In order to build out an IaaS service, it is important to lock down security with features such as VPC and VPN. From a compliance perspective, it is important to have a clear policy of what can and can't be run on the IaaS, as well as a plan to move systems off of the IaaS and back into a data center within a set amount of time in case the systems need to be moved back due to a security breach or legal issue.

The downside of IaaS is the price. Pricing can be complicated in terms of figuring out how many and what type of instances are needed, and whether or not to use reserved instances with a time commitment that are cheaper. At CBS Interactive, we have a director of cloudarchitecture that assists business units with this type of decision making, and we continually monitor the aggregate Amazon charges in order to maintain efficiency.

IaaS charges are completely operating expense, and cannot be depreciated as a capital expense as is normally the case when purchasing hardware for a data center. When I first started using Amazon Web Services in their private beta a decade ago, after 25 or so instances it was cheaper to run your own hardware. Now that number is 200 or so instances. However, the total cost comparison should include the business agility offered to internal customers in terms of easily spinning up new machines.

Private clouds are emerging

At CBS Interactive, we host a large number of websites ranging from CBS.com to CNET to Last.fm. We are currently building out a private cloud in one of our main data centers where internal customers will benefit from CapEx amortization and have the agility of an IaaS provider. At that point, what to run where will become a simple math equation since system administration will be comparable between our IaaS and our private cloud.

Private clouds are difficult to implement, however, as they require cobbling together vendors that offer self-service provisioning, load balancing, storage access, and database administration that leverage the existing networking and system infrastructure in a data center.

Hybrid clouds are not realistic for existing applications

Many vendors claim that hybrid clouds offer elasticity without having to move systems into a SaaS or PaaS environment. In my experience, this is not a realistic alternative. Applications that can run in a hybrid cloud are specifically designed to be split across different data centers and architectures.

Taking a legacy application and running parts of it outside of a data center with a cloud provider requires that incoming requests into that application are load balanced across the two, that data access from the cloud version to the source system is available without latency, and that some data is synchronized between the two in such a way that the application performs as expected. The amount of work to accomplish all of this on an existing legacy application typically far exceeds the benefits of elasticity.

Platform-as-a-Service has too much lock-in

Platform-as-a-Service (PaaS) offerings such as Google Inc.'s AppCloud, Heroku Microsoft Corp. 's Azure, and Amazon Beanstalk offer the ability to drop in code modules without having to worry about features such as load balancing, scaling, user management, and database management and tuning.

While they are typically not appropriate for legacy applications, these services offer incredibly fast time to value for new applications. However, PaaS platforms are like Hotel California – it's easy to get in and hard to leave, as the application is heavily locked into the PaaS vendor and cannot be easily moved without significant re-engineering.

If the application needs to be moved due to a compliance or legal reason, or it has grown so much that it is exorbitantly expensive to run on a PaaS, organizations can find themselves stuck between a rock and a hard place. PaaS is therefore much more suited for smaller organizations, and only applicable to larger organizations that have a strongly defined PaaS policy in place on what proprietary PaaS services may be used in order to ease a transition out of the PaaS.

In addition, given Heroku's recent metrics issues, it is important that independent measuring be put into place to ensure that the PaaS system is performing as promised.

Features-as-a-Service require too much access to internal systems

I am of course using the term feature-as-a-service in jest. There is currently a rash of analytics, Big Data, and mobile enablement vendors pitching the enterprise with a cloud-based approach and promising the simplicity of a SaaS solution.

However, virtually all of these solutions require that either the enterprise continually copies mountains of data into the vendor's cloud systems, or that the enterprise allow deep vendor access into internal systems such as databases. Either option causes innumerable security and compliance headaches.

Some of the vendors are beginning to shift, either only targeting the SMB market, or adding a traditional on-premise option for their software. Another emerging option is to have the vendor deploy their solution within an Amazon Virtual Private Cloud, thereby accessing secure enterprise data within that cloud, but without compromising security or compliance.

Perhaps data oriented features-as-a-service will be more viable if an enterprise's data shifts to the cloud onto the new breed of systems such as Amazon's RedShift data warehouse. In the meantime, the benefits of a feature-of-a-service cloud offering rarely outweigh the compliance and data cost of onboarding the vendor.

To Cloud or not to Cloud

There are different types of cloud solutions, different types of applications suited to the cloud, and different levels of comfort with an enterprise to move systems to the cloud. It is important to evaluate each cloud option with a well-formulated approach that looks at the overall benefit, cost, exposure and includes an extraction evaluation to avoid lock in. Cloud on!
Peter Yaredhttp://email@example.com:blogger.com,1999:blog-9074287.post-64763995032297269882013-01-11T11:00:00.000-08:002013-01-23T00:47:06.642-08:00Android Challenges the iPhone in Every Category
This post was also published on CNET and VentureBeat.

The new breed of Android devices exceeds the iPhone 5 in every way, including hardware, operating system, and apps.

For the past month, I have been using an HTC Droid DNA, which has similar specs to the rumored upcoming Samsung Galaxy S4. People approach me at grocery stores, airports, coffee shops, even on the street and ask me about the phone. The device is indeed quite compelling, even from a distance.

The HTC DNA has an amazingly bright 1080p HD display with a higher resolution than Apple's iPhone 5 Retina display. The operating system is modern with dynamic widgets that tell you at a glance what's going on. The apps such as Facebook, Twitter, and such are equivalent to those available to iOS, and Google Apps such as Google Now, voice recognition, and Google Maps are sleek and modern. This is hands down a better device than the iPhone 5, and people seem to intuitively recognize it.

What phone would I recommend for my mom? An iPhone. It's safe, predictable, and uniform. What would I recommend for anyone under 40? Definitely one of the new breeds of  Android phones. Android might still be a bit quirkier than an iPhone, but it's definitely not confusing for people who interact daily with a variety of advanced technology. Samsung really nailed it in its commercial where a young woman is waiting in line for a new iPhone and it turns out she is holding the spot for her parents.

The new breed of Android devices exceed the iPhone 5 in every category -- hardware, operating system, and apps.

The spec is alive and well -- and killing Apple

Hardware from Samsung, HTC, LG, and others has now caught up and eclipsed Apple's devices. Smartphones don't really have that many specs to evaluate, and each of the specs actually means something tangible to an average consumer. After five years of advanced smartphones, specs like screen size, screen density, screen brightness, camera speed, camera megapixels, physical dimensions, physical weight, amount of memory, and battery life are easily understandable and relevant to even the average smartphone consumer. Even specs like the number of processor cores and speed that are typically not easy to understand are easily understood when framed as "faster than the iPhone 5."

Conversely, the spec is definitely irrelevant when purchasing Apple products. There are so few products to choose from that decision making is essentially boiled down to a Goldilocks-style small/medium/large decision mainly driven by cost rather than actual features. While this is great for my mom and MG Siegler, the lack of spec-based decision making is not necessarily a good thing in a world where consumers actually understand each of the specs and would like to choose how to balance them out relative to cost. Apple has been a follower on many specs, particularly in terms of form factors, trailing the market in both 4-inch phones and 7-inch  tablets.

iPhones are definitely gorgeous devices, but they are relatively uniform and monotone. Aluminum is definitely great. Conversely, I was surprised by how many women commented on the red accents on the HTC DNA, which are part of the DNA's crossbranding with Beats Audio. People like colors and variety, and they don't necessarily like having to completely cover a phone's shell and make it bulkier in order to express themselves.

Let's not forget that all of those Samsung Galaxy phones you see cost the same as an iPhone -- their owners are not bargain shoppers; they are spec and style shoppers.

The screen should actually show you something!

As mobile app developer Ralf Rottmann recently noted, the new generation of Android 4 Jelly Bean is a fundamentally better operating system than iOS -- better rendering, better cross-app sharing, better app/OS integration, and more polished.

 But the real standout for Android is the customizability of the display. Rather than iOS static icons with embedded notifications, with Android, apps are front and center, displaying the time in different time zones, the weather, appointments, emails, texts, whatever you want in numerous themes that can completely reinvent the user interface.

Windows Phone 8, the dark horse in this race, is actually even more integrated, with a unified messaging interface that consolidates emails, texts, and Facebook messages into a single thread, and a consistent tile interface with which apps can display information on the home screens.

 The operating system is not as important as the apps, and this is where Android is beginning to shine.

The cloud behind the app is more important than the app

In a world where the hardware and operating system have become commoditized, the apps are the differentiator, and more and more, the apps are a viewport into a cloud service driven by machine learning.

 The vast majority of Internet users rely on Google Search, Maps, YouTube, Mail, and such, and spend more time in those apps than in the mobile operating system itself. As people are beginning to note, Google's apps are way better than Apple's. What good is Siri if it thinks "Hurricane Sandy" is a hockey team, when Google knows what's actually going on? Google Now is adding ambient awareness to Android devices, letting people know what's going on around them and what they need to do in a very personal way, with features like a notice that you need to leave for your next meeting because there is now traffic en route.

Perhaps, as is rumored off and on, Apple will start snapping up cloud services such as Waze. However, it is hard to buy and integrate a new type of product category into a large company that doesn't have it in its DNA. Competing with Google, an entrenched, dominant player in machine intelligence that recently added Ray Kurzweil to its roster is going to be a challenging affair. Microsoft actually had a better track record of delivering large-scale cloud services, such as mail, mapping, and storage, than Apple.

Beyond Google's apps, the reality of the app market is that all of the applications that matter are now on Android, and it actually will soon have more apps than iOS. Dan Lyons of ReadWrite is lambasting the Silicon Valley tech press for living in an iPhone echo chamber, and he does have a point. Pundits are lauding Google Maps features on their iPhones that have been available on Android devices for literally years. Bloggers breathlessly reveal new Facebook iPhone app features such as "Find Friends Nearby" that had been available for over a month on Android.

The feedback loop of the echo chamber is that developers initially develop apps on iOS, much like the recently popular Cinemagram. However, developers like Rottmann like cool devices, and are starting to shift over to Android. In addition, developers are feeling limited by iOS user interface patterns and its skeuomorphic apps and are branching out. Like the Mac OS of the early '90s, the consistent UI across applications will likely splinter.

The numbers speak for themselves. Android has a 75 percent smartphone worldwide market share, as evidenced by the hordes of Samsung devices in use throughout Europe and Asia. While Apple is regaining market share in the U.S. with the iPhone 5, it is about to face an onslaught of 5-inch Android phones with specs that far exceed the iPhone 5's. Wall Street clearly sees a shift coming, and has hammered Apple's stock price over the past quarter.

The average consumer has moved past the days of pious, scruffy haired, unshaven, thick glasses-wearing dudes lecturing us on how Apple is so cool. Perhaps soon Silicon Valley will catch up. When you see someone in a cafe with a MacBook Air, iPad, and iPhone on the table in front of them, is "Think Different" really what comes to mind?
Peter Yaredhttp://firstname.lastname@example.com:blogger.com,1999:blog-9074287.post-86591403138594545312013-01-02T10:00:00.000-08:002013-01-03T13:30:44.521-08:002013: The Internet of Things, Delivered via Smartphone
This post was also published in VentureBeat.
Virtually every electronic device has now gained a smartphone controlled equivalent over the past year. The well known products in this category, such as the Nest thermostat and Sonos music system, have now been joined with smartphone controlled light bulbs, door locks, refrigerators, security systems, home theater remote controls, game consoles, weight scales, and even vacuum cleaners. Services such as teleconference systems that used to be controlled just by touch tones are now controllable by smartphones. There are even smart device powered telepresence robots.

Historically, these types of devices had unintuitive control panels, small, hidden buttons, and other such complex interfaces. The smartphone ecosystem makes is easy for manufacturers to deliver mobile apps as control systems, and for users to intuitively control devices by using a familiar interface.

The tech underneath it all

This device revolution has been powered by a new generation of cheap, embedded controllers, where full web-enabled systems can be cheaply embedded into a device. Consumer versions such as Arduino and the Rasberry Pi have kicked off a generation of controllable devices that even include do it yourself smartphone controlled power strips.

One quagmire that many users run into is that it can be hard to add a device to a home network and then connect a smartphone to the device. It can sometimes takes a while for a smartphone to find and log into a home Wi-Fi network. Sonos solves this problem by broadcasting over your network and letting users push a button to pair devices together. New peer-to-peer wireless protocols such as Wi-Fi Direct are attempting to address this problem in a more seamless manner.

There is a definite threat that hackers can gain control of a home network, and thereby control all of the devices in a home, so it is important that users secure their WiFi with a password and a high level of encryption.

This new era of control by smartphones is actually quite cheaper than legacy electronic controls. For example, both a legacy "smarthome" lightswitch and an overstock 7" Android tablet each cost $70. iPads are far cheaper and more usable than state-of-the-art systems such as Crestron.

Touchscreens are not applicable to every dedicated device. My personal experience waiting for clerks to use iPad enabled point of sale terminals has not been positive. For whatever reason, it seems to take about twice as long for items to be entered and a receipt printed than with old-school push button registers.

Where is this going next?

A very interesting facet of this next generation of devices is their ability to add ambient awareness to devices. Just like the Nest thermostat learns your comings and goings and the FitBit monitors your activity level, all of these devices will be soon be able to monitor their surroundings and fetch information like the current weather for their location.

Google Now is currently providing this for Android users. Hobbyists have had a boon tinkering with the Xbox Kinect to add ambient awareness to their projects, and this type of technology is likely to be embedded in numerous devices in the near future.

Another area that may soon feel the impact of smartphone interfaces is vehicles. There have been quite a few attempts at vehicle touch interfaces, with a large level of investment, from manufacturers including Ford with its MyTouch panel, Tesla with its huge 17" panel and Audi's Multimedia Interface. While these interfaces are functional, they are not familiar to users that expect iOS and Android style touch interfaces.

In the near future, vehicle manufacturers will likely be pairing up more with software vendors, much like Ford partnered with Microsoft for its Sync voice recognition system. Imagine a day when you can add the iOS or Android control panel as an option when purchasing a vehicle.

It is likely that every room of a home will have a 4" or 7" smart device mounted as a control panel for lights, music, and more. Soon, "flipping a light switch" will sound as archaic as "dialing a telephone".
Peter Yaredhttp://email@example.com:blogger.com,1999:blog-9074287.post-34404308109365453312012-10-26T10:00:00.000-07:002012-11-10T14:27:34.556-08:00Zynga is Vastly Undervalued
This post was also published on CNET and VentureBeat.

Zynga's stock has been in a freefall since its initial public offering, and the tech pundits and press have been looking on with schadenfreude as it continues to drop. Zynga is now worth essentially nothing: Its market capitalization of $1.82 billion is roughly equal to the value of its cash and real estate holdings, even with this week's announcements of real money gambling and a $200 million stock buyback.

How can a company that brings in $1.2 billion a year, and recently cut costs in order to achieve profitability, be worth nothing?

It doesn't make sense. Here's why Zynga is undervalued -- provided it does the right thing next.

Zynga is sitting on three widely known and popular potential gaming franchises: Farmville, Poker, and With Friends. Each of these titles is well-known, has broad distribution, and an audience at least willing to check out a new iteration on the franchise. For instance, Farmville 2 just garnered 50 million users shortly after its launch. And each of Zynga's potential franchises targets a different audience: Farmville for middle-aged women, Poker for middle-aged men, and With Friends for the lucrative under-30 market.

What Zynga needs to do is expand its franchise strategy.

The gaming industry, much like Hollywood, is all about franchises. It is easy to churn out another Spider-Man movie or Call of Duty title, because there is already an audience for the content, which is a huge part of the hurdle in terms of success. Once you have a guaranteed audience, you can focus on the content.

Rovio, the makers of the Angry Birds franchise, is worth a reported $9 billion. Angry Birds is a great, fun, casual game that has successfully implemented distribution onto emerging smartphone mobile platforms, but in many ways Angry Birds is simply the Tetris of this generation of computing. In effect, Angry Birds is a single-player, traditional game that doesn't leverage the social graph, multiuser gaming, and advanced graphics. It barely even takes advantage of touch screens.

Still, it's hugely profitable because Rovio has truly turned Angry Birds into a game franchise. Rovio has leveraged every possible gaming channel from iPhone to Android to even the Google Chrome App Store, added Star Wars editions, and signed cross-industry deals for everything from stuffed toys and lunch boxes to theme parks. Before it came up with Angry Birds, Rovio had 51 failed titles. It is now promoting Bad Piggies, a new title that is actually a spinoff of its Angry Birds franchise.

Franchises are not necessarily a guaranteed result, as titles can run over budget and fail at the box office. However, from a business perspective, it is a lot better to get a 50 percent head start than to start fresh and roll the dice with new content.

It is easy to see Zynga as a pure-play social gaming company that is struggling to shift into mobile, while social gaming becomes increasingly difficult to monetize. Yes, social channels have dried up after Facebook's shift to Timeline stymied potentially viral news feed user acquisition (aka spam). And indeed the Zynga game playbook has gotten tired now that Facebook is no longer a new platform and expectations of game mechanics have matured.

But in reality, Zynga sits on three potential franchises, each of which could be huge.

Right now, Zynga's most popular titles are stuck in their existing channels. Farmville and Poker are only available for Facebook users. With Friends games are only available on mobile. Each of these titles could easily go cross-channel, to Wii, Xbox and PlayStation. Why not play Zynga Poker on Xbox Live?

Building deep, franchise-driven titles for multiple platforms takes time and investment. However, it is a proven monetization model.

In addition, Zynga's announcement this week of real-money gambling is also potentially lucrative, especially in context of its ability to deliver the gambling audience of its Zynga Poker gaming franchise.

The technology industry, particularly its intersection with Wall Street, can be very herdlike, and it is hard to shift the herd perspective on companies like Zynga that are in flux. Still, a herd mentality can be an opportunity for clever investors to make a bet against the crowd.

In the midst of writing this article, I was having dinner with a hedge fund manager in London, who usually invests in things like mines. He had just bought Zynga for his personal portfolio, despite the fact that Piper Jaffray, Credit Suisse, and BMO Capital all downgraded the stock. The pure hedge fund perspective is to bet against the market, especially when the market is not acting on fundamentals.

And while this hedge fund guy usually invests in physical mines, even he has noticed that Zynga is sitting on a potential gold mine -- one that is definitely worth a whole lot more than nothing.
Peter Yaredhttp://firstname.lastname@example.com:blogger.com,1999:blog-9074287.post-17442122714514363002012-09-18T04:13:00.002-07:002012-09-18T04:13:43.927-07:00$AAPLCrazy retweets on this one

$AAPL = $GOOG + $MSFT + $AMZN + $FB ($655B)
— Peter Yared (@peteryared) September 18, 2012
Peter Yaredhttp://firstname.lastname@example.com:blogger.com,1999:blog-9074287.post-51879055258434633082012-09-04T10:45:00.000-07:002012-09-05T22:33:53.164-07:00You Say Google+ is a Ghost Land? Time to Revisit That One
This post was also published on CNET.
The company has taken repeated hits in the press, but Google+ is fast becoming a social business for small businesses.

Compared with Facebook or Twitter, Google+ can seem like a veritable ghost land. I'm finding few posts from friends or interesting people on the service. And it's not just anecdotal observations of there being slim pickings. A recent report by RJMetrics found weak user engagement with the social network. And yet Google+ claims to have an ever-growing number of users. So how has it managed to pull off that neat feat?

 The not-so-apparent fact is that Google has aggressively integrated its social network throughout its properties, thus driving users to unwittingly use Google+. This is particularly true of Google+'s pages for small businesses, also known as Google+ Local.

 For instance, when users search for a small business, Google automatically showcases that business on the right side of the page, as part of its Knowledge Graph initiative, which provides aggregated "answers" in addition to search results.

Clicking on the very prominent knowledge graph result for a local business takes users directly that business' Google+ page.

Pundits opine about how Google is becoming a content company with its various acquisitions. However, Google could, in fact, simply be attempting to juice its local listings. And there's no shortage of material it can tap into.

Google is integrating local business reviews from its $125 million Zagat purchase, and will likely soon integrate additional content from its recent $23 million acquisition of Frommers. A $148 million investment is chump change to Google on its road to better capture the small business market. Consider that at one point in time, Google wanted to pay a reported $6 billion to acquire Groupon to address the same market.

Rather than becoming a content company, Google is taking a different tack by providing a service to its customers. In fact, Google has long provided services to small business advertisers. Providing them with a landing page that allows users to subscribe and be reached, social network style is an obvious next step that meets both the needs of advertisers and users.

Review sites like Yelp are built on the back of a user searching Google for a local business and then clicking on a Yelp search result. In that interaction, Yelp gets most of a user's attention. In the new model, with the Google+ result to the right, the Google+ page for a business gets most of a user's attention. When Google tried to include Yelp review excerpts in Google Places, Yelp lobbied the FTC to prohibit Google from including its content. While Yelp is unhappy, it could be said that Google is much more advertiser-friendly than Yelp, considering the number of small businesses that are unhappy with Yelp's aggressive sales tactics.

Google's acquisition of social-marketing company Wildfire isn't a nefarious attempt to infiltrate Facebook marketing. Instead, view it as an additional step in its strategy of connecting small businesses with users. Wildfire's self-service promotions platform is widely used by small businesses to deliver sweepstakes, coupons, and other marketing promotions. On top of that, Facebook's Timeline update has significantly reduced promotional opportunities on Facebook business pages, incentivizing businesses to look at alternative profile pages that can offer similar features.

Google+ has rapidly become the business social network, differentiating itself from LinkedIn as a promotional and communication network rather than a public directory of employees. (Google just announced Google+ features for medium to large businesses.) Google+ is already a great place for small businesses to create an online presence that gets a lot of traffic and provides users with context such as reviews and location. It will likely soon let users opt-in to a business' "circles," then allow businesses to shoot promotional material straight to a user's Google+ inbox, also known as Gmail. Now that's a winning small business strategy.
Peter Yaredhttp://email@example.com:blogger.com,1999:blog-9074287.post-48755813008299103212012-08-23T00:14:00.001-07:002012-08-23T00:14:40.214-07:00Bigger Ads, Bigger Bucks? Facebook feels Wall Street Heat
This post was written with Paul Sloan and published on CNET.
With Facebook's stock now half of its IPO price, Mark Zuckerberg and company are testing more ways to make money from advertising. And they can do a lot more.

See that image above? That's a plain old giant banner ad grabbed from my Facebook page. It appeared after I logged out. Facebook actually calls them "Logged Out" ads. It rolled them out in February when it was trying to show Madison Avenue it was serious about brand advertising in advance of its IPO.
A social ad? Sort of, I guess. It wants me to "like" it to get an insurance quote. But make no mistake: While Facebook can come up with whatever terminology it wants, this is the sort of ad that Mark Zuckerberg has long shunned -- the kind that splashes across the page the way one would expect to see on Yahoo, not Facebook.
And yet there it is. Which leads to the question of Facebook's cratering stock price, and the pressure Zuckerberg must feel from his more business-minded colleagues to do more to rev up the money machine. Zuckerberg has long modeled himself after tech titans like Steve Jobs and Jeff Bezos, founder-CEOs who steadfastly ignored the harsh judgments of Wall Street in pursuit of their long term visions and, ultimately, incredible financial success. But Facebook is up against a tsunami-like wave of pessimism following what has been calculated to be the worst performing IPO of the last decade.
The stock now trades around $19 a share, or half its IPO price. Facebook also got dealt a PR blow with the disclosure this week that board member Peter Thiel, the company's first outside investor, has cashed out the bulk of his holdings -- not a big vote of confidence as the din of criticism about Facebook management gets louder. And while Zuckerberg is still sitting atop the world with his billions, many employees are stuck with stock options priced far higher than where Facebook now trades. The high-minded refusal of their CEO to chase the easy money notwithstanding, they might prefer a little short-term thinking.

A 'gigantic amount of money'

No one expects Zuckerberg to veer dramatically from his strategy, which, in brief, boils down to two key components: On the one hand, the company wants to persuade Madison Avenue of the value of Facebook as a new kind of social advertising medium. At the same time, it needs to solve the $64,000 question facing all ad-driven social media sites and amp up its efforts on mobile. Facebook's story is strong: 955 million monthly users, more than half of them coming back daily; $922 million in revenue from advertising in the last quarter. But Wall Street isn't in the mood for a "story." That's so 1999. It wants proof, in the form of higher revenue and profit growth, especially considering that Facebook, despite the plummet in its share price, still carries a price-to-earnings ratio that dwarfs those of Apple, Google and LinkedIn.
If you think about the above ad, this Wall Street problem might actually be a simple problem to solve. Why stop at splashy ads on the logout page? Why not the home page? Facebook could expand beyond those tiny ads on the right side of your screen that force advertisers to use static graphics with separate text.
People cry that such ads will ruin the user experience, but would they really? Every other site on the Web uses them. Facebook's could be well targeted, and it could make a lot of money sprinkling them across Facebook and stealing ad dollars now going elsewhere. Heck, with its traffic, Facebook could theoretically soak up the entire display market. Surely there's an acceptable look somewhere between the Facebook of today and the messy MySpace of yesteryear. In fact, given all the additional features to Facebook over the past few years -- including Facebook Ticker and Facebook Chat -- even Facebook no longer looks likes Facebook. Google+, like it or not, is now the clean alternative to Facebook's clutter.
How easy would it be to turn Facebook's huge reach into a cash machine? Here's what Marc Andreessen, a venture capitalist and Facebook board member, told Charlie Rose in February 2009:
Facebook is deliberately not taking a lot of the kind of normal brand advertising that a lot of Web sites will take. ...Facebook has made a strategic decision to not take a lot of that business in favor of building its own sort of more organic business model and it's still in the process of doing that and if they crack the code on that which I think that we will, then I think it will be very successful and will be very large. The fallback position is to just take normal advertising. And if Facebook just turned on the spigot for normal advertising today, it'd be doing over a billion dollars in revenue. So it's much more a matter of long-term strategy.

Then Rose follows up: "So if you want to make a lot of money instantly, you could." To which Andreessen replies, "Yeah, oh, very easily. It could sell out the homepage and it would start making just a gigantic amount of money."

 Just reading that I can hear the throngs of Facebook employees and investors screaming, 'Do it! Turn on the spigot!'
In the long run, Zuckerberg might very well be right: The types of social ads that Facebook is pushing, such as Sponsored Stories, which appear in your news feed and are less ad-like, could prove really effective. Big, splashy display ads are hardly great performers, after all. But we're not talking a long-term strategy that would replace Zuckerberg's current direction. We're talking triage in the face of a slipping stock that could color everyone's impression of Facebook -- including ad buyers who might start to look at Facebook as a damaged company.

Testing new mobile ads

Then there's Facebook's mobile challenge. Facebook is under constant attack for not moving faster to squeeze money out of its growing mobile user base. In the latest quarter, mobile monthly users climbed 67 percent from the prior year to 543 million. Facebook has been careful about how it spreads ads on mobile phones. In March, it began rolling out Sponsored Stories for smartphones, where companies can create "stories" that show up in News Feeds of a brand's fans and their friends.

The early signs are that this is going well, albeit slowly. A study by AdParlor found these ads to be far more effective than desktop ads, and during Facebook's second quarter conference call, Zuckerberg said that as of late June, Sponsored Stories were bringing in about $1 million a day, with half of that from mobile. That would give Facebook about $182 million in mobile revenue a year.
Enough? Apparently not. Earlier this month, Facebook rolled out its first mobile ad units that aren't tied to a user's social connections on Facebook. The company is letting developers buy ads in mobile News Feeds as a way to help them drive more people to their apps, which sure sounds like a strategy designed to boost Facebook's mobile revenue rather than improve the user experience. Tap on the ad, and it takes you to the Android or iOS App Store purchase page.
While Facebook says it's only testing these ad units with a limited number of partners, it certainly shows a willingness to try ads that have nothing to do with whether or not you "liked" something. In fact, these ads are no different than ones that marketers buy from mobile ad networks like Tapjoy. Similarly, Facebook last week started a test in which brands can pay to have their "sponsored" posts show up in Web and mobile News Feeds of Facebook users who have no connection to them -- something that, until recently, would have been hard to imagine Zuckerberg signing off on.
"Marketers have been told for years is that Facebook is about community," says Jed Williams, a senior analyst with BIA Kelsey, a research firm focused on interactive media. "Suddenly all that changes if you can drop an ad anywhere." (A Facebook spokesperson described this latest effort as a "small test.")
Facebook, of course, has many big advertising opportunities that it could be working toward expanding. In June, the company launched an ad exchange, called Facebook Exchange, to let advertisers better target users on Facebook by tracking what else they do across the Web. And there is plenty of speculation that Facebook will create its own third-party ad network that, through Facebook Connect, would tap into your social connections to sell targeted ads across the Web.

In the end this may come down to a question of Mark Zuckerberg convincing Mark Zuckerberg to rethink his principles and bend to the sometimes brutal demands that accompany life as a publicly traded company. And if that happens, Facebook stock may get a much-needed jolt. Peter Yaredhttp://firstname.lastname@example.com:blogger.com,1999:blog-9074287.post-91471695246696092802012-06-21T16:39:00.000-07:002012-08-23T00:30:15.790-07:00Hey, Windows 8 Doesn't Suck
This post was also published on CNET and VentureBeat.

For months now, various pundits have been deriding the upcoming Windows 8 as the next Vista. People have made mocking videos showing older people thoroughly confused by Windows 8's Metro tile interface. Indeed, the Windows 8 Metro interface is radically different than the traditional Windows desktop. It's a touch interface.

Yet the same pundits that slammed Windows 8 on the desktop are now lauding Microsoft Surface, the Windows 8-powered touch tablet that Microsoft announced Monday. Since the Windows 8 Metro software hasn't changed, what exactly is so different? After all, Microsoft is demonstrating the exact same interface on touch-enabled hardware. And all of a sudden, Windows 8 is making sense.

It's not at all crazy to assume that soon all notebook and desktop screens will be touch enabled. Haven't you sometimes just wanted to reach out and touch your MacBook Air or desktop screen, just like you do on your smartphone or tablet?

Microsoft, it turns out, is slightly ahead of the curve here. To avoid consumer confusion, the company should seriously consider making Windows 8 Metro work slightly differently when it is not being used with a touch-enabled device or let people automatically bypass it on the Windows desktop. Why force a touch interface on non-touch computers? Microsoft has been adjusting Windows 8 based on feedback during the beta period; it recently reversed its decision to not support Flash in the Metro IE10 browser.

Discovering the secret to well-designed products

Apple certainly led the way in bringing well-designed, easy-to-use products to the market, and now others are beginning to get a clue. It's actually not that complicated. Hire reputable industrial designers, then listen to them. And then test the resulting products extensively and fix whatever annoys people. This same process has been applied to cars, kitchen appliances, and other consumer categories at companies run by MBAs, not Steve Jobs.

In the Ultrabook category, Microsoft OEMs, such as Samsung and Acer, are delivering beautiful MacBook Air-like computers. With Microsoft's Surface stake in the ground, it will not be surprising if those Microsoft frenemies start delivering beautiful tablets as well. It is hard to compete with Apple's soup-to-nuts approach and Microsoft has had to lead the way, much like Google led the way with the Google Nexus phone, and was soon outshined by Samsung's popular Galaxy S II.

One mode for consumption, another for creation

 One of the biggest pundit dings on Windows 8 is that it has two modes: the Metro tiled interface and the traditional Windows desktop mode. However, we need to recognize that personal computers are undergoing a fundamental shift in how we use them.

When personal computers first came out, they were essentially creation tools. There was no communication, no multimedia, nothing to load from disks. Back then, users edited a document or edited a database. There were steps along the way to the Internet, of course, but now the personal computer has become a device for communicating and reading, watching or playing stuff, whether movies or music or articles such as this one.

It is quite reasonable that at this point users need two separate interfaces: one for consumption and another for creation. For multifunctional machines, it is actually not odd to overlay one model on top of the other. When you want to consume content on the Microsoft Surface, you use it as a tablet. When you want to create content, switch it to the Windows desktop mode and use its innovative keyboard. Microsoft ran two user interfaces in one with Windows on top of DOS, and pundits trashed this strategy as well, but after a few years Microsoft was very successful with Windows 95 and brought all of its users along for the ride.

Apple currently provides two interfaces as well with the mobile/touch version iOS vs. the desktop version, and former Apple President Jean-Louis Gassee points out that the two Apple user interfaces are converging in terms of design.

Microsoft has innovated in a touch-based, creation interface with its experimental Microsoft Surface tabletop, which has an interface reminiscent of the interface Tom Cruise uses in the 2002 sci-fi movie Minority Report. It would not be surprising if in a couple of years Microsoft ships a Windows 9 that adds touch to the creation mode, and professional workers will be touching their screens just as much as they do at home while reading the news on a tablet.
Peter Yaredhttp://firstname.lastname@example.com:blogger.com,1999:blog-9074287.post-24238591956443798862012-05-22T23:01:00.000-07:002012-05-26T11:53:19.101-07:00What's Next for Mobile Now That Adaptive Web Design Has Failed?
This post was also published in VentureBeat.

This article was written for business readers. Due to an outcry from the responsive design community, I added the word "web" to the term "adaptive design" to avoid confusion with progressive enhancement, and updated the text to read that Facebook uses "a precursor to" responsive design, even though very techie trades like RWW say that Facebook uses responsive design. Obviously, the outcry has more to do with the content than the terminology, but it's always good to be pedantic. Read on!
Analysts commenting on Facebook's IPO have highlighted a major issue in mobile computing: that it's incredibly difficult to monetize on mobile devices. Like many other engineering-led cultures, Facebook has embraced adaptive web design, a precursor to also known as responsive design, where essentially the same code can render itself down from a desktop browser to a tablet to a diminutive mobile screen.

Adaptive web design is an elegant solution to the thorny technical problem of having to deliver a content experience on multiple devices. And engineers love more than anything to apply the same hammer to multiple nails.

Unfortunately, users do not agree. Desktop web browsers, tablets, and mobile devices are fundamentally different and are used in very different ways. Across our properties at CBS Interactive, we have experimented with a variety of adaptive and direct designs and are learning the hard way that a one-size-fits-all solution delivers a subpar user experience.

Turn those mobile pages

The app has defined the mobile form factor. Users expect to see menus with only a few relevant options that do not require scrolling, titlebars with back buttons, and do not mind paging through content as long as it loads fast. In contrast, when a full size web page is adapted down to a mobile form factor, it forces a lot of vertical scrolling – even if some components are removed and others are made smaller.

Narrowing a mobile experience down to the essentials of what a user wants while mobile is critical. Tight menus and quick page loads compel users to turn more pages, which is essential in the small mobile form factor that has limited ads. Some ad units on mobile are worth more on mobile than desktop — for example, someone reading a product review on a mobile device in a store is likely contemplating buying that product.

Content publishers can learn a lot from airlines and banks, which are usually technology lagards. The mobile sites of United Airlines and Wells Fargo are tight, focused, and substantially different from their websites.

Tablets are for swiping

The tablet is essentially a magazine form factor, and users have been trained by numerous popular apps ranging from iBook to the New York Times to Flipboard that they should swipe right to left to page through content an a tablet. Users are perfectly happy to swipe through an article that is split into several pages, since this is what they did with magazines.

Rather than adapting a web page down to the tablet form factor and requiring users to scroll vertically, publishers should embrace swiping. Users are not perturbed at all to see a full page interstitial ad stuck into the mix while paging through content, making the tablet extremely monetizable.

Swiping is very difficult to code for mobile web. Fortunately, there are turnkey solutions such as Pressly and OnSwipe that make it easy for simple sites to create swipeable tablet editions. Extensions to jQuery Mobile and Sencha Touch make it easy for programmers to add swiping features to their mobile HTML.

Let websites be websites

Website design is proven, monetizaton techniques work well, and users expect sites to function the way they currently function. There is no pressing need to substantially change how they work.

The trend of "iPadification" of websites is more about adding simplicity and whitespace rather than a complete restructuring of how a website should work. Some types of services, such as Twitter, provide a tablet-like experience on their website. Twitter's website offers a clean design with white, rounded content areas and no dynamic menus. Users are comfortable scrolling vertically on tablets to see streams, so the same design works well for desktop web and tablet.

It is painful for engineers to have to support three different use cases for three different form factors. However, particularly for content sites, the effort bears worthwhile fruit in terms of mobile monetization.
Peter Yaredhttp://email@example.com:blogger.com,1999:blog-9074287.post-71575307671785823802012-05-01T10:10:00.000-07:002012-08-23T00:52:04.564-07:00Big Data May be Hot, but Little Data is What Matters
This post was also published on CNET.

Big Data is in vogue, with a glut of startups and numerous large installations appearing in corporations. At CBS Interactive, we process almost one billion events a day that flow from our Web and application servers over message queues to a cluster of 80 twelve core Hadoop nodes that then feed a Teradata data warehouse.

Processing and analyzing such a large volume of data helps us ask important questions: Which pages on which properties are most profitable? Who goes where across our various sites? What types of content generates the greatest number of advertising conversions?

But here's the thing: Most of our conversations with product and business managers are spent discussing what I like to call "little data."

Little data constitutes the nuts and bolts metrics of running a business. For a Web property, that means getting a handle on issues such as the bounce rate, SEO session starts, social session starts, funnels of how users flow through a property, and page views per session. Too many people lose sight of these simple but critical metrics.

Monitoring and actively managing a Web property to these "little" metrics creates significant lift in page views and conversions, and that helps revenue. Even something as simple as actively managing the hoops you make people jump through to register for your site and the sorts of emails you send when they do builds and grows a loyal following.

One of the most critical metrics we are tracking comes from the gaming world: the ratio of daily active users to monthly active users (DAU to MAU). When the ratio is low, say around 0.03, it means that your unique users are coming only once a month, and you're essentially running a fly-by tourist site. When the ratio is high, such as Facebook's estimated 0.60, it means that a majority of your users are using your site on a daily basis and that your property is a key part of their online lives. (I can't share the DAU to MAU for our sites, as they're confidential.)

Taking control of little data

There are a variety of inexpensive little data tools that are easy to implement. SimplyMeasured is excellent at managing social traction -- i.e., how much impact your site is making on various social networks. KISSMetrics is world class at managing "conversion funnels," the path a user follows through a site before "converting" to a sale. Google Analytics, which is free, does a great job of managing metrics such as bounce rate and SEO session starts, measures of how "sticky" your site is and how well you're doing at attracting new external visitors. Implementing such easy-to-use tools encourages product and business managers to actively manage their sites with "little data" metrics in mind.

Managing a site by the numbers shouldn't be taken to the extreme, however. Sites need to look good and say something relevant to readers; they shouldn't just be optimized within an inch of their lives to drive revenue. We don't, for instance, want to make CBSNews.com look like GoDaddy, which is -- understandably enough -- completely optimized to drive revenue.

Growing up to big data

Once the use of little data becomes pervasive in an organization, big data can then begin to help decision making, since a culture of data-driven decisions is ingrained. Moving beyond just simple web metrics, big data can provide an integrated view of a business by integrating financial metrics, answering questions you hadn't even thought of when initially setting up a site, and deciphering trends across disparate sets of data.

Big data is hard to do, and can be very expensive and time consuming. Integrating revenue and cost data in order to manage end-to-end business models is a complicated and time consuming task. Some organizations decide to outsource to companies like Omniture and Webtrends (where I used to be a GM), which can help figure out how to tag and manage the process, in addition to storing the vast amounts of data required for meaningful analysis.

If your organization has enough volume and the technical competence to do your own implementation, keep in mind that it's easy to get lost in the process of building out big data infrastructure and lose sight of the fact that, in the end, big data needs to be usable. This might sound straightforward, but in practice it can be anything but. It requires highly skilled data scientists and strategists that understand business problems and can distill the data into simple, actionable metrics.

In effect, the magic of big data is turning it into little data.Peter Yaredhttp://firstname.lastname@example.com:blogger.com,1999:blog-9074287.post-32474125756753271762012-04-18T14:51:00.001-07:002012-04-19T12:44:11.676-07:00How Expanding Twitter's Pledge Could End the Patent Wars
This post was also published on CNET and VentureBeat.

Twitter's momentous announcement yesterday that it would only use its patent portfolio defensively was received with wide acclaim by the tech world. With two small changes, Twitter's Innovator's Patent Agreement (IPA) could actually completely change the landscape of software patents.

1. Share patents defensively with any other company that signs the IPA

Allow any company that is a signatory to the IPA to use each other's patents defensively. To qualify, a company would have to have at least 10 patents to contribute and no active patent litigation. The minimum of a 10-patent contribution creates a virtuous circle that incents even startups to innovate with patents, as they will get an umbrella of patent shielding from all other companies that have signed the IPA.

With this small change, Twitter could spur a wide following of companies that follow suit, as they will all mutually benefit from joining the IPA. While there are no guarantees that will avoid all patent claims and trolls, the combined patents of all of the signatories would provide numerous claims that could undermine predatory patents.

Currently, companies can only obtain broad patent coverage by paying defensive patent rollup companies like RPX Corporation. While RPX has a broad array of excellent patents that can undermine many patent claims, RPX is expensive and only accessible to larger corporations.

2. Make the IPA patents perpetually defensive

The software equivalent of hammers and nails are patented today, and developers can't make anything that doesn't violate numerous patents. When I left Sun Microsystems in 2003 and started a company, I had to violate my own patents to do what at that point had become widespread methods of building Web applications.

Fortunately, Sun, like Twitter, only used patents defensively. However, it is a case in point that such patent promises can be transitory. Since its acquisition by Oracle, the Sun patents are being used to sue Google for its use of a proprietary Java virtual machine in
Android.

The IPA provides an encumbrance to prevent future assignees from using the patents offensively, but the language seems weak and lacks real teeth. This could be solved by automatically reverting the patent to the original author or a nonprofit holding company.

This commentary has absolutely no reflection on CBS Corporation's stance on use of patents and is focused on patent strategy for startups.Peter Yaredhttp://firstname.lastname@example.com:blogger.com,1999:blog-9074287.post-69976070814413505782012-04-17T17:25:00.000-07:002012-04-17T17:25:37.155-07:00How RIM Could Save Itself: With a "Super Feature Phone"
This post was also published on CNET and VentureBeat.

Research In Motion is reportedly attempting to sell itself after rejecting the former co-CEO's plan to open up its network to carriers. But for some reason it is not pursuing the creation of a lucrative category between smart phones and feature phones -- the super feature phone.

Less than a smartphone, but far more than a feature phone

What are you left with if you take a smartphone and remove the ability to install apps? It's far more functional than a feature phone, with built in apps for e-mail, Facebook, and a camera. But it's definitely not a smartphone like an iPhone or
Android device. RIM's range of devices are fully capable, with integrated apps and cameras, but suffer from a paucity of apps other than an attempt to integrate Android apps.

The key to the super feature phone is the ability to use cheap data plans in the $10-per-month range, rather than the more expensive full data plans required by smartphones. Not everyone needs a smartphone with a data plan. RIM should focus its devices on the feature phone segment, especially for armies of corporate workers that need access to email but not much else. RIM can easily compete with the players in this space, including Samsung's Bada and Marvell's Kinoma.

RIM should also ensure that the carriers do not sabotage a super feature phone plan by forcing a full data plan, like they did to the ill-fated Microsoft Kin and instead leverage the BlackBerry network.

A lucrative mobile device management future

RIM has always held a core competence in integrating corporate Microsoft Exchange e-mail and calendar servers in sync with its devices. RIM has attempted to expand into the integration of
Google Android and Apple iOS devices with Microsoft Exchange with its Fusion product line, but those devices can now integrate out of the box with corporate e-mail and calendar systems.

Many corporations are implementing bring your own device programs where their employees can use off-the-shelf devices to access corporate resources. This shift has presented an opportunity for new mobile device management software (MDM) that ensure that corporate data can be wiped from lost handsets and terminated employees' devices.

RIM should acquire a few of these MDM vendors, including Airwatch, MobileIron, and Zenprise and roll up this space. Although RIM's stock has been hammered, it is still worth $7 billion and can afford to overpay for growing startups. This will enable it to have new, desirable products to sell through its enterprise direct sales force and channel partners.

Have some marketing fun -- BlackBerrys are better sometimes!

BlackBerrys may not equal an
iPhone, but it is a heck of a lot faster to type out a text message or call someone with a BlackBerry. There is a lot of potential for fun ads that show off that comparison with people in awkward situations that need to contact a friend quickly while their friends are still fumbling with touch screens. BlackBerrys could even become cool again.

Let's face it: Apple and Android are never going to provide cheap devices that don't require a data plan, and this is a huge opportunity for RIM.Peter Yaredhttp://email@example.com