Sunday, December 30, 2007

Global Outsourcing--Multiple Points of View

Here is an interesting video from an European point of view.

This is the link for the ABC News Video on Rise of India.
Here's a video on software offshoring to Vietnam.

Saturday, December 29, 2007

Netscape Navigator: Fading Out But Hopefully Not Forgotten

NY Times reported today that: Netscape Navigator, the world’s first commercial Web browser and the starting point of the Internet boom, will be pulled off life support Feb. 1 after a 13-year run.Netscape Navigator, the world’s first commercial Web browser and the starting point of the Internet boom, will be pulled off life support Feb. 1 after a 13-year run. ...

“While internal groups within AOL have invested a great deal of time and energy in attempting to revive Netscape Navigator, these efforts have not been successful in gaining market share from Microsoft’s Internet Explorer,” the director of Netscape, Tom Drapeau, wrote in a blog entry on Friday.

Full details are in this blog entry.

It is clear that whenever the history of the transformation from the industrial age is written, there will be always a place for Netscape and specifically Navigator--which is more than a tool to access web pages on WWW.

One: it ushered in the network-era with so many different modes to connect to the network from all over the world.

Two: It challenged us to think about different pricing models for the network-era. (Free is OK as long as we know where revenue and margins come from!).

Three: Netscape helped create Mozilla and the Firefox browser. AOL nurtured support but now has not the resources to divert away from its core business mission of focusing on ad-supported business models.

Four: While Navigator may be fading out, Firefox is very much alive and thriving.

In my view Netscape (and Navigator) unleashed something that we may not fully comprehend for a while. Just as we did not fully understand the power and impact of steam engines till much much later. Or for that matter telephone or telegraph.

Saturday, December 8, 2007

Dell and WPP Restructure Marketing Services

I remember the time (1989) when Kodak outsourced its IT operations to IBM: The IT outsourcing industry was at its early days, some companies saw outsourcing as a way to restructure their operations and focus on their core competencies while others saw it as a misplaced strategy that gives away the corporate crown jewels. The Fortune magazine story started out as follows:
"WHY NOT FARM OUT YOUR COMPUTING? Hiring another company to do your data processing can save you big bucks. Some say it's the biggest trend since the PC burst on the scene a decade ago..." and went on to quote Kathy Hudson, Kodak's IT Director at that time: "IBM is in the data- processing business, and Kodak isn't. IBM runs our computer center as it's supposed to be run -- as a profit center rather than a cost center."
My doctoral student, Lawrence Loh at MIT Sloan School of Management wrote his award-winning thesis on IT Outsourcing and we wrote a scholarly article in Information Systems Research on the "Kodak effect."
Now we may have the Dell Effect when it comes to [out]sourcing marketing services. The following post from a Dell blog is worth reading and reflecting.

Dell announces new agency agreement with WPP valued at $4.5 billion in agency billings over three years

Dell is announcing today that it will partner with WPP, who will join Dell to create a new global integrated marketing and communications agency.

Together with the WPP agency, Dell is creating a new marketing model designed to further propel Dell's growth. We've been calling this ‘Project Da Vinci' because we've been looking for the combination of artist and scientist—an agency that has both the creative horsepower and ability to measure the business impact of their work.

The agency will be charged with building shareholder value via programs that are centered on "creativity with a business purpose". We believe this is the first time a global client and agency have come together to redefine the "agency" on such a scale.

The process started with Vice President of Global Marketing, Casey Jones, joining Dell eight months ago and discovering that the Company was working with more than 800 agencies worldwide. Project Da Vinci was soon started and, as Casey has often said, "Instead of dating 800 agencies, we are creating a partnership with one firm. We want our partner to spend 100% of their time thinking about our customers, rather than how they will get the next assignment."

We've made several observations together during the agency review process that will guide our effort going forward. Here are a few as well as additional commentary on this vlog (link) from Casey, who is our leader of Da Vinci.

Key Observations

  • The rationale for one partner - A "partner" is someone who works with you not for you. Shares your business goals and is invited into the heart of your marketing process. By combining our agencies we can invest in the long term, in the people and tools to unlock far greater results than a patchwork quilt.
  • Why Dell and why now? - Dell is known for simplifying PCs and the supply chain beginning 23 years ago. It's in our DNA to simplify all we do and now we are going to apply our expertise to simplify marketing at Dell.
  • The Internet revolution - When you have one billion people online and another one billion joining them over the next four years, it becomes very important for us to have the right analytics, the right team and the ability to build campaigns in days, rather than months.
  • The importance of agency talent - We want Dell's agency to be the agency of choice for the most talented people in the world.
  • How we will coordinate - Most agencies integrate by gluing teams and people together within their holding company with a completely separate P&Ls. Da Vinci will have one global P&L. One great team at WPP to match up with our team, so we can create magic together. One team that is known for highly productive relationships between those who create and those who manage the daily work. Pretty simple stuff.
  • The importance of analytics - Improving shareholder value is the ultimate award for all of us to win. Yes, we don't mind winning industry awards, but our customers and our shareholders are our focus, not what we can win in Cannes. A combination of great analytics and creative is key.
  • The centralization of new relationships - We will empower our new agency to handle all subcontracting relationships with talented professionals and firms who want to work with Dell. They will be encouraged to join our Da Vinci team.
  • The investment in our future - WPP will invest in our relationship as much as we do in them. It's mutual from day one.


I see it as another key building block in thinking about strategy in a network era as a portfolio of capabilities obtained through relationships.

Thursday, November 29, 2007

Ford--Microsoft Sync: Videos

Here are more commercials featuring a service that is the result of a joint initiative between Ford and Microsoft called Sync. I have put all the videos relevant to discussing this case in one blog.





I wonder if anyone has used this as a business case example to understand the opportunities and challenges of competing in a network era.

Ads in Adobe PDF Documents Inserted by Yahoo

By now, everyone (well, nearly everyone!) is all familiar with what Google has done to online contextual advertising--search, maps, GMail, etc. As we do more things online, it is just a matter of time that every interactions on the web will be facing potential onslaught of contextual advertising. So, here's the latest: Advertisements contextually inserted into PDF documents created on the Adobe website. According to an article in The Advertising Age:
The service with a mouthful of a name -- it's called "Ads for Adobe PDF Powered by Yahoo" -- targets the growing stable of publishers focused on online formats, many of whom are moving to web-only models. Under the program, which is in test mode, publishers can insert contextual text-based ads within Adobe's Adobe Reader and Adobe Acrobat brands.
The benefits are obvious. Again as summarized in the article...
For publishers, the program may be an additional source of revenue, potentially offering readers more free content. Advertisers, meanwhile, can tap into a new type of content and will have the ability to track advertising performance the same way they do with web-placed ads.
According to Adobe's press release, the process works as follows:

To join the program, publishers must register online, and then simply upload their Adobe PDF content so that it can be ad-enabled before distributing PDFs as they do today. Ads can only be displayed within Adobe Reader and Adobe Acrobat, in a panel adjacent to the content so that they do not disrupt the viewing experience. Every time the PDF content is viewed, contextual ads are dynamically matched to the content of the document. The publisher can then monitor performance through detailed reports. Publishers already committed to participating in the Ads for Adobe PDF Powered by Yahoo! beta program include: IDG InfoWorld, Wired, Pearson’s Education, Meredith Corporation, Reed Elsevier and many more.

“Since moving to a Web-only format earlier this year, we at InfoWorld have been able to apply a laser focus to cutting-edge solutions for the electronic distribution of our content,” said Allen Fear, director of Online Content at InfoWorld. “The unique combination of Adobe PDF and Yahoo! ads presents a new way of generating revenue from many of our existing products. We are excited about the opportunity to work with Adobe and Yahoo! on what we believe is a solution that significantly enhances the value of PDF distribution.”

I find this interesting as it is another example of business ecosystem in formation with Google and Yahoo offering alternative advertising platforms. In the case of Yahoo, this particular initiative is an attempt at expanding its advertising platform scope by joining together with a document platform architect, Adobe. Will this initiative attract massive network effects? The marketplace will judge whether this offering is compelling enough to compete effectively against Google. Welcome to the content network!

Tuesday, November 27, 2007

Media 2.0: Two Network Connections to Track

One of my interests is to make sense of the shifts underway in the media space. This is a leading edge laboratory for understanding strategies for a network era. The competitive space is becoming complex and there are huge changes in the consumption of media (place-shifting, time-shifting and device-shifting just to mention a few). Business models in the media space are under attack.
Two announcements about corporate connections caught my attention and I think these are potentially very significant.

October 24, 2007: Google announced a relationship with The Nielsen Company.

...the companies have established a multi-year, strategic relationship. As a first step, the relationship leverages Nielsen’s experience in television audience measurement to bring demographic data to the Google TV Ads™ advertising platform. By combining Nielsen demographic data with aggregated set-top box data, Google can provide advertisers and agencies with comprehensive information to help them create better ads for viewers and maximize the return on their advertising spending.

Google TV Ads is an online platform for buying, selling, measuring and delivering television ads. The platform, which has been operational since May, includes advertising inventory across hundreds of channels and all dayparts. A key benefit of Google TV Ads is the ability to report second-by-second set-top box data so advertisers can evaluate the reach of an ad and only pay for actual set-top box impressions. Advertisers can better understand exactly how their ad is performing and make near real time changes to their TV advertising campaigns to deliver better ads to viewers. Data derived from Nielsen’s representative television ratings panels will provide Google TV Ads advertisers with the demographic composition of the audience.

This is the first time that advertisers and agencies will have this level of detailed measurement available in a single place and at such a large scale. This information is available through the existing Google AdWords™ report center

Moving forward, Google and Nielsen will explore a number of other opportunities to work together to measure online and other media.


November 27, 2007: NBC and TiVo announced a relationship. WSJ reported that:

The agreement, announced today, reflects rising demand in the TV industry for detailed audience viewing information. TiVo, a provider of digital video recorders, about a year ago started offering advertisers second-by-second ratings of programs and commercials based on the viewing habits of its subscribers, as well as other services. Earlier this month, the Alviso, Calif., company added demographic data about the viewers themselves, such as age, income, marital status and ethnicity.

NBC Universal's agreement with TiVo will give the TV concern's networks, such as NBC, Telemundo and Bravo, as well as its NBC owned-and-operated TV stations, access to TiVo's ratings data.

The deal comes as advertisers, media buyers and TV executives continue to grapple with a changing TV ad landscape, where an increasing number of viewers are using digital video recording devices to fast-forward through ads.

With its research, TiVo is competing with industry giant Nielsen Media Research, which also offers commercial-ratings and demographic data. Advertisers, media buyers and TV networks have made many of their ad deals this year based on Nielsen ratings of TV commercials.


So, what are we seeing here?

The set-top box is a critical point of control--whether it is TiVo box or one provided by the cable/satellite operator--for advertisers. Both the relationships (Google-Nielsen and NBC-TiVo) are jockeying to extract valuable data from the set top box. Nielsen has the potential to integrate a broader array of information but Tivo is more widely deployed. It will be interesting to see what other relationships are formed with other entities in the media space (for example: what role if any for Motorola and Cisco/Scientific Atlanta that make the set top boxes--are they simply hardware providers or can they expand to play critical roles here?). There are also huge privacy issues and challenges that both TiVo and Google have dealt with before.


These are not just two random announcements of corporate connections. They reflect the shifts underway and by no means will they be the last ones we see in this space.

Google's GDrive as a Holiday Treat?

Will we see GDrive (or by some other name) soon--possible in times for the holidays?
WSJ reported today (Nov 27) that:
Google is preparing a service that would let users store on its computers essentially all of the files they might keep on their personal-computer hard drives -- such as word-processing documents, digital music, video clips and images, say people familiar with the matter. The service could let users access their files via the Internet from different computers and mobile devices when they sign on with a password, and share them online with friends. It could be released as early as a few months from now, one of the people said.
Why is this interesting and relevant? Simply because it is another piece of the puzzle about the shift to a network era. Sure, there are others that provide such a service (some free, some for a fee). But, Google's move is interesting and potentially important since we use its services (and applications) so often and on such a regular basis. Sure, GMail now gives me 5GB data storage and I can get huge data for my photos on Picasa (by paying a fee) but these are stored in silos (which is so yesterday!).
I think this will be a welcome gift for the holiday season!

Friday, November 23, 2007

Sync--TV Commercials

Ford and Microsoft have started running television advertisements to get consumers to think about Sync in Ford cars. Here's one:

It will be interesting to watch how well the consumers embrace Sync and whether this will allow Ford to gain a higher market share than otherwise. Is this a killer-app? Will this be more of a competitive advantage for Ford than what OnStar has been for GM?

Sunday, November 18, 2007

Imagine this Number--$12.3 Billion for Digital Maps!

Yes, it is true. TomTom of Netherlands will acquire TeleAtlas (also of Netherlands) for $4.2 billion. And, Nokia has paid $8.2 Billion for Navteq--another global map maker. Garmin abandoned its attempt to buy TeleAtlas and I am not sure if there are any other digital map makers up for grabs for Garmin. It is clear that recently, there have been intense jockeying to garner this critical content. Clearly, we will see lot more maps-based products and services sp that TomTom and Nokia realize the value from these investments.
These acquisitions are happening at the periphery of the telematics market where GM continues to push OnStar and Ford and Microsoft are working together on Sync. Clearly telematics is simply one setting to extract value from digital maps. The maps will come handy as more mobile phones deploy applications that are location-based and Google brings its advertising expertise into the mobile arena through its software platform.
The network boundaries are blurring. This space is worth watching as we better understand how companies better leverage location of customers as a critical anchor for product-service strategies.

Friday, November 9, 2007

Ford--Microsoft Sync

One of the cases that I have enjoyed teaching over the years is GM OnStar. I have written several version of the case over the years. Recently, I have resorted to using the website to get the students (and executives) to get a feel for the offering and then discussing the strategic challenges of competing in a network era using OnStar as a case in point. The videos provide a good overview of the features for the student to get a good working understanding of the offering (more than perhaps reading a dry case!).
The discussions invariably turn to competitive reactions and responses. Ford created a joint venture with Qualcomm a few years back called Wingcast but that did not last too long. Recently, Ford and Microsoft have joined together to create Sync.

Sync is available on a wide range of Ford model automobiles in 2008.

Here's a good review of Sync by Walt Mossberg of Wall Street Journal.

I am looking forward to the next opportunity to discuss telematics as an example of the network era with interesting developments from auto companies such as GM and Ford. In addition, there is a lot of excitement in the telematics space with Nokia acquiring Navteq for over $8 billion. Garmin and Tom Tom are bidding in the $3 billion-plus range for TeleAtlas. The business networks are evolving and morphing in important ways--which make this a challenging arena to examining the nuances of competing and succeeding in a network era.

Tuesday, November 6, 2007

Gphone Announcement: 'Google Inside Mobile Phones'

Finally, we go from rumor to an announcement. Google has now provided some details on its phone initiative. Adam Rubin, who is the mastermind behind Google's mobile platform initiatives has a blog entry that has all the relevant details for now. Some may be disappointed that Google has not announced another glitzy device (I am still partial to Apple iPhone!). But, their announcement makes far more sense than launching a phone in a competitive market. Why go after the commodity-end of the market anyway? It is far better to make software available for monetizing advertising on as many phones as possible than create a distinct brand of devices. It's smart thinking for the network era.
How successful will it be? That's a multi-billion dollar question (stock market valuations are based on Google's ability to be a dominant force in the mobile handsets). This strategy requires Google to become a leader in orchestrating an ecosystem and that is a new area for Google. This is an area that Microsoft has more experience and has historically done well. What Google is trying to do is to become 'Google Inside' the mobile phones of tomorrow. It is a strategic move that is brilliant but requires flawless execution. Intel succeeded with this strategy with a broad set of personal computer makers that were creating Wintel (Windows-Intel) computers and laptops. Can Google succeed with 'Google Inside' mobile phones? Worth watching since it marks a shift in its strategy that calls for new capabilities for orchestrating a portfolio of relationships.

Tuesday, October 30, 2007

Social Networking and the Bottom of the Pyramid

Here's an inspiring story in New York Times about how social networking is made available for the societal good in India. It refers to an that seeks to
bring the social-networking revolution popularized by Facebook and MySpace to people who do not even have computers — the world’s poor. And the start-up is just one example of an unanticipated byproduct of the outsourcing boom: many of the hundreds of multinationals and hundreds of thousands of technology workers who are working here are turning their talents to fighting the grinding poverty that surrounds them.

As I blogged earlier, the ultimate power of networking is to ensure that it impacts those at the bottom of the pyramid.
This initiative may spawn other such efforts--using the power of networks for societal good and also elevate the standard of living for many.

Monday, October 22, 2007

Network Era--What's the Impact on the Bottom of the Pyramid?

Professor CK Prahalad has challenged corporations to focus on serving the bottom of the pyramid. His book is a very inspiring read.
I have often wondered how to link his ideas to the broader shift to a network era that allows knowledge-workers to participate in the global development. What we need are applications that specifically focus on the value that can be delivered to those that can be characterized as being at the bottom of the pyramid. Here's a video of an experiment underway in rural parts of South India. This is impressive. We need to scale up such initiatives. We need to learn from these initiatives and adapt the applications so that they continue to deliver superior value. We cannot afford to have the network era worsen the digital divide. Network era has the opportunity to close the divide between the rich and the poor and this should be pursued.

Friday, October 19, 2007

Google Pontiac Television Ad Trial-- Just an experiment or shape of things to come?

I have seen a few reference to this advertisement run by Pontiac with the ending... "Google Pontiac"

I started to wonder: "How many other advertisements have followed this trend? what has been the impact?"
Then I started thinking if Google may be using this as an experimental probe to assess the attractiveness of getting into television audience measurement business, competing against Nielsen? Or as an ally to the television networks that are struggling to better understand their audience viewing habits?
I should look at this issue in more detail soon.

Apple iPhone and Third Party Applications

At one level, it is easy and straightforward to leverage the power of independent software developers to make your platform more attractive. We know that the attractiveness of a platform like Windows is largely based on the strength of complementary applications (just as XBox and Sony PS3 etc..).
We also know that Apple has been relatively closed and only cautiously leverages third-party developers. It does not mean that Apple has not recognized (or understood) the power of indirect, complementary network effects. I see it as Apple selectively deciding when and how to bring the power of third-party developers to maximize the attractiveness of Apple products to its users. If Apple had not made iPod and ITunes compatible with Windows, Apple would have surely remained as a niche player in the music sector.
In the case of iPhone, Apple is also being selective and cautious. Sure, there are a lot of people wanting Apple to open up its architecture to third-party application developers. Yes, we all want to be able to customize the look-n-feel of our phones. But, we also want stable and robust applications that are reliable (and do not just hang!). So, as an Apple iPhone user, I welcome what Steve Jobs has announced as his intention to bring the power and creativity of third party developers.
Third Party Applications on the iPhone

Let me just say it: We want native third party applications on the iPhone, and we plan to have an SDK in developers’ hands in February. We are excited about creating a vibrant third party developer community around the iPhone and enabling hundreds of new applications for our users. With our revolutionary multi-touch interface, powerful hardware and advanced software architecture, we believe we have created the best mobile platform ever for developers.

It will take until February to release an SDK because we’re trying to do two diametrically opposed things at once—provide an advanced and open platform to developers while at the same time protect iPhone users from viruses, malware, privacy attacks, etc. This is no easy task. Some claim that viruses and malware are not a problem on mobile phones—this is simply not true. There have been serious viruses on other mobile phones already, including some that silently spread from phone to phone over the cell network. As our phones become more powerful, these malicious programs will become more dangerous. And since the iPhone is the most advanced phone ever, it will be a highly visible target.

Some companies are already taking action. Nokia, for example, is not allowing any applications to be loaded onto some of their newest phones unless they have a digital signature that can be traced back to a known developer. While this makes such a phone less than “totally open,” we believe it is a step in the right direction. We are working on an advanced system which will offer developers broad access to natively program the iPhone’s amazing software platform while at the same time protecting users from malicious programs.

We think a few months of patience now will be rewarded by many years of great third party applications running on safe and reliable iPhones.


P.S.: The SDK will also allow developers to create applications for iPod touch.

[Oct 17, 2007]

Orchestrating an ecosystem is a a core competence for success in a network era. I am one who argues for seriously recognizing how complementary capabilities can be brought to bear in business innovations. In such cases, every company should ensure that the benefits of a vibrant network outweighs the downside risks.
Apple's success with iPhone depends on how well it ensures that its distinctive signature--design and elegance--are enhanced (not detracted) by its partners (including network operators such as AT&T, O2, Orange and others) and third-party application developers.

Thursday, October 18, 2007

Social Retailing: Social Networks + Next Generation Retailing

It is fascinating to see applications of social networking in different fields. Here's an initiative (social retailing) that could appeal to the generation that cannot live without mobile phones...

I wonder what the initial reactions are from users that have tried this out..

Wednesday, October 17, 2007

Pfizer-Sermo Social Networking Link

Pfizer and Sermo have entered into an interesting agreement whereby one pharmaceutical company will preferentially have access to Sermo's network of physicians. The following paragraphs from their press release is worth looking at closely.

New York and Cambridge, Mass., October 15, 2007 — Pfizer Inc and Sermo, the nation’s largest online physician community, today announced a strategic collaboration designed to redefine the way physicians in the U.S. and the healthcare industry work together to improve patient care. Sermo is a Web-based community where physicians share observations from daily practice, discuss emerging trends and provide new insights into medications, devices and treatments.

Through this collaboration, Sermo’s community of physicians will have access to Pfizer’s clinical content in tangible ways that allow for the transparent and efficient exchange of knowledge. With access to the most comprehensive and up-to-date information on Pfizer products, physicians will be able to find the data they need, when they need it, to make informed decisions.

“This collaboration reflects Pfizer’s commitment to engaging in peer-to-peer medical dialogue with physicians to better meet our mutual goal of delivering the best care to patients,” said Michael Berelowitz, MD, Senior Vice President of Global Medical and New York Site Head of Worldwide Development for Pfizer. “Sermo’s state of the art technology has the potential to greatly improve our ability to provide physicians with timely and accurate information they want about our medicines and clinical data.”

Pfizer, working together with Sermo’s physician community and other Sermo partners, plans to pursue a number of key objectives through this collaboration, including:

* Discover, with physicians, how best to transform the way medical information is exchanged in the fast-moving social media environment

* Create an open and transparent discussion with physicians through the innovative channel offered by online exchange

* Engage with the FDA to define guidelines for the use of social media in communications with healthcare professionals

* Work with physicians to develop a productive exchange between pharmaceutical professionals and the Sermo community

Here's a video that discusses the deal in some detail


I can clearly see the first-mover advantage that Pfizer is striving to get. Instead of creating a site that is visited sparingly by doctors who may have a preference to get on Sermo, they have created a preferred partner agreement. But, i wonder what Sermo may do if Merck or J&J wanted to be on it as well? How will the doctors deal with these competing demands? Who will arbitrate?
I am intrigued to see social networking logic go from C2C to B2B. This is clearly an important move--one that may get refined as both parties better evaluate the benefits over time. Clearly worth watching to see what the next set of moves are in this space.
update: Here's a short overview of Sermo's business model as described by CEO Daniel Palestrant.

Friday, October 12, 2007

Social Networking and Google

I am not surprised that Google is planning to make a big push into social networking. This blog from NY Times gives some details based on comments made by Eric Schmidt. Two points made in the blog are central to discussions of how important network thinking is to business strategy these days.

1. “People don’t appreciate how many page views on the Internet are in social networks,” According to Schmidt.

2. Mr. Schmidt did say that over the next year, Google is planning to use information it has about the connections between its users, something techies call the “social graph,” to improve searches and other Google services.

I am looking to see what Google will do in terms of software and applications on the mobile phone. This is where it could have an edge over MySpace and Facebook. Worth watching to see how this space evolves in the coming months.

Saturday, October 6, 2007

Monetization Challenges (1): eBay's Skype Premium

eBay took a risk paying a huge premium for Skype a few years back. Now, it has written down the value by over $1 billion.

eBay is growing (in terms of subscribers and calls) but is not making appropriate profit contribution to eBay's bottom-line. Monetizing eBay's main business model is clear and straightforward but monetizing Skype (with value-added services on top of base free services) is not that clear and simple. Moreover, the so-called synergy between the core business and Skype never materialized. This is what Meg Whitman said about the acquisition in September 2005.
“Communications is at the heart of ecommerce and community,” said Meg Whitman, President and Chief Executive Officer of eBay. “By combining the two leading ecommerce franchises, eBay and PayPal, with the leader in Internet voice communications, we will create an extraordinarily powerful environment for business on the Net.”
Social connectivity is hot (and trendy) but monetization challenges remain. That does not mean Meg Whitman made a mistake when she bought Skype. This is a high-risk fast-changing business and some mistakes are inevitable. She deserves credit for acknowledging it and then writing it off against her otherwise good financial performance this year!

Thursday, October 4, 2007

Microsoft's Move in Shaping the Healthcare Ecosystem

Microsoft has announced a new 'software and service initiative.' I was expecting Google to take the lead in the health arena but Microsoft seems to have beaten Google at least in terms of launching version 1.0.

The website is live now. It will be worth watching how many individuals sign up. Ultimately, in such initiatives, the critical first performance indicator is the rate of sign-ups; subsequently, we should look at how steadily do people update and maintain their health records on this site.
--Here's the WSJ article discussing this initiative.
As in any network-era initiative, success will depend on Microsoft's ability to orchestrate multiple entities in the health ecosystems. The launch site shows the initial set of players that have committed to show their support. But there is a huge difference between showing commitment (intent) and actually supporting it on a sustained basis (use).
Clearly, health is an important area and this initiative is worth watching and tracking as this ecosystem takes shape over time.
Update: Here's a reference article published in NY Times.

NY Times article noted how this can help mitigate risks of heart attack:
At the American Heart Association, Dr. Daniel Jones, the president, said working with Microsoft was a way to accelerate his group’s efforts to curb heart disease. Microsoft is collaborating with the association on an online tool for managing blood pressure. Heart patients will be able to go to the association’s Web site, open a HealthVault account and submit their blood-pressure readings, weight and medications.

At first, Dr. Jones said, consumers will probably enter the data themselves, but later they may have it sent from a doctor’s office or laboratory. Ideally, he said, patients would share the information with their doctor or nurse, who could call or send an e-mail message to warn of any disturbing changes.
Healthcare ecosystems will evolve around complex issues of information, privacy, service delivery, insurance and preventive care. And, information technology will be at the center of the dynamic ecosystems. Microsoft's healthvault is an important building block.

Tuesday, September 25, 2007

DuPont uses Video to Reach Younger Generation

Here is a powerful illustration of how DuPont uses Brightcove to reach younger generations. I expect to see more established companies embrace video technologies as a central mode of communications and conversations.

What other companies are already on the video bandwagon?

Monday, September 17, 2007

Monetizing Content in a Network Era: The NY Times Decision

One of the most profound implications of the shift to a network-era is the location of cash register. Many content owners were adamant for a long time that their content is so valuable that the consumers will pay subscription fees. New York Times allowed its physical newspaper subscribers to access their electronic content without paying extra while seeking to attract on-line subscribers for a fee. However, today, it announced that its content will be free.
This particular statement is particularly noteworthy.
“But our projections for growth on that paid subscriber base were low, compared to the growth of online advertising,” said Vivian L. Schiller, senior vice president and general manager of the site,
The shift from paper to online compelled NY Times to rethink its revenue sources; online revenue is less about direct subscription fees but more about online advertising. NY Times has finally seen its internal numbers: $10 million annually--which may limit its ability to garner a higher amount through advertising. As the article noted:
What changed, The Times said, was that many more readers started coming to the site from search engines and links on other sites instead of coming directly to These indirect readers, unable to gain access to articles behind the pay wall and less likely to pay subscription fees than the more loyal direct users, were seen as opportunities for more page views and increased advertising revenue.
Network era is shifting the cash register. Will Wall Street Journal, Economist and the Financial Times follow suit? Will this impact other content like music and video?

Sunday, September 16, 2007

Apple Macintosh versus iPod

An article in NY Times today that discusses how Apple missed a window of opportunity during the introduction of Vista. The market share for the Macs is stuck at around 3% (down from a high of 14% in 1984). Randall Stross does a good analysis of Apple's retail strategy (including the relationship with Best Buy). But, winning market share in the personal computer arena (against Windows) is more than just fixing the retail and distribution strategy. Windows succeeded because of the strength of its network of complementors. Apple made a strategic decision long back to keep Macintosh closed (and not open to third-party developers). Apple's production-constrained for sure.
In contrast, Apple made iPod compatible with Windows: that decision (more than anything else) has made Apple enjoy a commanding market share. If Apple had required that we buy Apple Macintosh to use iPod, it would have had a market share in single digit. Stross concludes with this sentence about the strength of Windows.
Mr. Kay, of Endpoint, described a Microsoft operating system and its thousands of certified supporting hardware vendors and the two million device drivers as forming an enormous flywheel.
What Apple has going for it is a similar flywheel with iPod and iTunes (and potentially iPhone).
Succeeding in network-era competition is more than crafting an effective retail strategy--which is necessary but not sufficient. For early clues about network-era leaders, look at the pattern of complementors linked to it. That's what defines Microsoft with Windows (but not Zune) and Apple with iPod (but not Macintosh). At the same time, these network-based advantages are not sustained for longtime unless the leader nurtures and evolves the ecosystem.

Saturday, September 15, 2007

Can Yahoo Beat Facebook?

During the heydays of the dotcom, AOL was riding high. It enjoyed steady subscriber growth and very little churn. It bought Time-warner and was going to redefine the media landscape. Ensuing events proved its strategy to be costly and foolish. The anticipated synergies never materialized. Amazon, eBay and Yahoo survived the dotcom explosion and have established robust business models with impressive market capitalization levels.
Nowadays, the question is who will win in the social networking space? Will it be MySpace? Facebook? Google with Orkut? Bebo?
Or will it be Yahoo? Yahoo got into the social networking scene with Yahoo 360 but that service seems to be losing steam. MySpace and Facebbok seem to be fighting for leadership (and Bebo seems to be doing well in the UK). Yahoo, still a leader as a destination site in terms of unique visitors, is now jockeying to compete against MySpace and Facebook with the launch of Yahoo Mash (in beta, invitation only). A CNET Review seems to indicate that it has a good chance.
To beat the leaders, you have to be not just different but also superior. It seems to have taken the best of MySpace and Facebook as a starting point. In addition, it has incorporated some core features of Wikipedia: your friends can edit your pages (a scary thought!) But in the spirit of wikis, there is a revision history so users can roll back the changes; and there are privacy options so that you can decide who gets the rights to edit and so on. From the review, it looks like they are extending the social networks to include the core ideas of wikis.
Ultimately, it's all about leveraging interconnected strands of network effects. First: Can it create stickiness within its customer community (direct network effects)? Will individuals switch from MySpace and Facebook to Yahoo Mash? Will wiki-like features catch on?
Second: Can it orchestrate a vibrant community of developers that design widgets for Yahoo mash (indirect network effects)? Will developers offer their widgets for Yahoo preferentially over Facebook? Mark Zuckerberg realized the importance of courting the developer community in establishing the Facebook platform.
The winner will be the one that can leverage both sides of the network effects in a virtuous dynamic fashion.
My prediction for the near-term: Advantage Facebook (Over 30 million active members and an enthused developer comnmunity that developed over 65 million applications!).

Friday, September 14, 2007

Random Thoughts on iPhone

Just some thoughts on iPhone.
1. It has reached the million units mark in 74 days. According to AppleInsider: “One million iPhones in 74 days -- it took almost two years to achieve this milestone with iPod,” said Apple chief executive Steve Jobs. “We can’t wait to get this revolutionary product into the hands of even more customers this holiday season.” The race is on towards 10 million by 2008 end. Aggressive pricing will surely help.

2. The early buyers (the fanatics like me) will get a $100 credit (details here). This is unusual but Steve Jobs decided wisely not to alienate his loyal ardent enthusiasts!

3. iTunes will provide functionality to convert songs into ringtones and that should appeal to the users seeking value from the convergence of devices and applications. Moreover, iTunes Wi-Fi music store will be launched soon (bypassing the mobile operators network to access music).

4. Will we see a 3G iPhone soon? Strong indications are coming from Germany that it may happen before the end of 2007--the question is will it be in USA or elsewhere?

Apple is in the midst of the kind of challenges that we expect to face when competing under fast-changing conditions, where success depends not just on the focal company's actions but how it orchestrates a network of alliances and partnerships.

Thursday, September 13, 2007

iTunes and iPhone Ringtones: Another Step in Convergence

Apple is finally allowing consumers to convert their purchased iTunes music into iPhone ringtones. Here's a brief summary from AppleInsider.

iPhone Ringtones
In addition, iTunes customers will now be able to create custom ringtones by selecting up to a 30-second segment from over a million participating songs on iTunes and easily sync them onto their iPhone. Once a customer has purchased a participating song from iTunes, including previously purchased participating songs, it will only cost 99 cents to make up to a 30-second segment of that song into a ringtone and easily sync it onto their iPhone. Customers can personalize their ringtones by choosing which portion of the song they want to use, and setting custom fade in and fade out points. iPhone users can assign a custom ringtone to be their default ringtone and they can also assign them to individual callers in their address book.

It will be very interesting to see how network operators react to this move as they were fighting hard to defend their profit streams from ringtones--which globally is estimated to be around $5 billion.

Winning in a network-era calls for careful understanding of likely shifts in the location of cash registers. In this case, the network operators, who could historically defend their ringtone profits, need to figure out a way to earn their share with other partners in the fast-changing business network.

Monday, September 3, 2007

Thoughts on GPhone and GPay (Taken Together)

Lots of buzz around in recent days about GPhone. The rumors center on the notion that Google will experiment with a branded phone in India (using a network of alliances and partnerships); then it may expand to other countries including USA and Europe. There may be some merit in doing it in India--one of the fastest growth markets in the world. Besides, many do not have PC-based access to the Internet and mobile phones serve as a gateway to access the Net.
I never paid serious attention to GPhone rumors. Here is a good overview of the rumors and news articles. Then, I saw this posting today in London-based Timesonline about GPay. It refers to a patent filing that has been published by the US Patent Office on August 30, 2007. Clearly, SMS-based payment systems exist in many parts of the world: So, what's so great about GPay? Also, Google has an online payment system, Google Checkout that competes not so effectively against EBay's PayPal. So, the question is: Is GPay a serious threat?
Unlike other SMS-based payment services which may be fragmented and not have the computer processing capability to collect and analyze the massive amounts of data, Google may be in a much better position to link 'search' to 'purchase' thereby providing valuable insights to marketers (and advertisers). GPhone and GPay taken separately may look like 'me-too' imitations but taken together hint at the power of information to provide insights into how (and when and where) we access information and how we buy products and services.
Where's the cash resgister located in GPhone and GPay? It's not just in a share of the revenue from the mobile operators that offer GPhone. Nor is it just in transaction fee from GPay payments. It's more about monetizing advertising in the mobile arena and offering insights to the marketers about placement of advertisements in context. GPhone and GPay may well be the link to Google's serious foray into monetizing advertising in the fast-growing mobile space. Viewed this way, Google is not deviating from its core business at all. In fact, it is aggressively using its core capability to exploit emerging new market niches. I am watching to see Google's moves in the coming weeks and months. I am also equally interested to see what the competitive responses and counter moves in the business network.

Sunday, September 2, 2007

Big (IBM) and Small (Scrybe) Companies Use YouTube to Promote New Offerings

It is not surprising that YouTube is becoming an efficient way to promote ideas in development (it is a superb alpha test marketing platform, I think). Here are two examples worth taking a look at.
IBM has put a quick tutorial on its tool QEDWikiQEDWiki on YouTube.

A small start-up company based in Pakistan, Scrybe Corporation--which has developed a personal information manager--launched the product on YouTube in October 2006.

Both IBM and Scrybe Corporation can gauge the degree of interest and excitement about its offering by monitoring how this video is received (watched, downloaded and embedded on different web sites).
Is this a new way for Google to monetize YouTube beyond advertising?

Friday, August 31, 2007

Nielsen's Initiative with Consumer Networks

I recently saw a reference to the forthcoming initiative. According to their website..
Coming later this year, is an interactive and fun environment where you can provide feedback on your favorite entertainment (tv, movies, etc). Nielsen, in turn, may share it with the companies responsible for those entertainment products. Furthermore, users who give rich, insightful, and frequent feedback may be asked to participate in other surveys and webcam interviews for tv, movies, and commercials.
I think it is an important way Nielsen can corroborate and complement what they glean from their rigorous and long-established traditional TV panels. I wonder how this may relate to other social network sites (Facebook, MySpace, Yahoo) who may have an edge with higher level of stickiness with their users but may lack the domain knowledge about TV or the objectivity behind ratings that Nielsen has long established. It will be interesting to see how the networks of relationships evolve between those seeking to orchestrate consumer communities and those monitoring how consumers consume media and related products and services. And there are many consumer communities today (here's a list of the top ones).

NBC Universal--Apple Relationship Shifts

Today's NY Times is reporting that NBC Universal has decided not to renew the contract with Apple for digital downloads.
The media conglomerate — which is the No. 1 supplier of digital video to Apple’s online store, accounting for about 40 percent of downloads — notified Apple of its decision late yesterday, according to a person familiar with the matter who asked for anonymity because negotiations between the companies are confidential.
This situation highlights some of the key requirements of winning in a network era.

1.Winning depends on managing a portfolio of relationships. Not all relationships are equally important. The real analytical challenge is to prioritize the relationships for today (current conditions) and for tomorrow (a range of plausible scenarios). Where's NBC Universal in the scheme of content providers today and where would it be in the future? .

2. The relationship interdependency is dynamic. Clearly, Apple-NBC intedependency has changed over the years. In the beginning, iTunes would have failed but for good quality content (from NBC and others). Now, can NBC Universal do without Apple? Will Apple customers desert iTunes in favor of an alternative if their favorite content is not made available on their iPod?

3. Will the shift in the relationship between two entities (Apple and NBC) impact a third entity (such as Microsoft or a different content provider like CBS or Disney) to gain an edge? [I had hinted about this possibility earlier.] Is the move by NBC because Apple is closer to Disney (by virtue of board-interlock with Steve Jobs on Disney Board)?

4. Winning strategies requires anticipating likely moves in the network. These involves not only realignment of relationships amongst existing players (example Apple and NBC) but also new players that may enter the market in the future.
Contract negotiations depend on an analysis of how nodes (companies) and linkages (relationships) are today and how they are likely to evolve in the future. Both Apple and NBC know that this contract renegotiations will alter not only their specific relationship but also the broader network of content creation and delivery. These moves--individually and collectively--will shape and reshape the media landscape.
Update: There's a Sept 1 posting at Business 2.0 blog that speculates on what iTunes looks like without NBC. It's worth reading.

Microsoft-RIM (M&A)--A Real Possibility or Just Speculation?

Over the last few decades, companies have always explored mergers and acquisitions as ways to grow out of trouble. Horizontal acquisitions and vertical integration emerge as first courses of actions for many companies. Microsoft has historically stayed away from major acquisitions that could change their corporate strategy, structure and culture.
Now, I saw this news story about possible acquisition of RIM. This may be nothing more than idle speculation. But it is worthwhile thinking how the mobile market will evolve: Specifically, what roles will Microsoft, Google and Apple have? Will Symbian and Palm have any distinctive value plays at all or are they nearly-closed chapters? What about the convergence of applications symbolized by Apple iPhone but we all know that it is only the beginning.
Clearly, we will see some acquisitions. But acquisitions should not be constraining as companies such as Microsoft strive to be relevant and dominant in the fast-changing marketplace. Will Microsoft-Blackberry combination win? We cannot really answer that question till we take a more complete look at the network of linkages that exists amongst the key players that straddle hardware, software and service domains. Also, acquisition is not always the most effective startegy under fast-changing conditions of convergence in functionality as we see in this space.

Sunday, August 26, 2007

Outsourcing to India--Homer Simpson Style

Here is a somewhat irreverent look at outsourcing The Simpsons Style.

Towards a Web 2.0 Infrastructure for the Network Era Business Models

There has been a lot of excitement about web 2.0--mostly in the consumer space but it is also gaining traction in corporations. Andrew McAfee at Harvard Business School has spearheaded the excitement around Enterprise 2.0 and has a useful framework to think about it in an article published in the Spring 2006 issue of the Sloan Management Review. I particularly like Andy's definition of Enterprise 2.0 as:
Enterprise 2.0 is the use of emergent social software platforms within companies, or between companies and their partners or customers.
The reason I like the definition is that it allows the scope of the platforms to extend beyond a single enterprise to include a network of partners and relationships that are central for creation and delivery of products and services demanded by the customers.
So, what's the state of art in our understanding of how the web 2.0 infrastructure shapes and supports the emergent business models of the network era? Well, we have a good set of leading-edge case studies. These studies serve as a good foundation to understand how companies are experimenting with web 2.0. There are the initial case studies as Dresdner Kleinwort Wasserstein where JP Rangaswami was a keen proponent of blogs and wikis as critical building tools for the next generation infrastructure. (JP now is at BT and has a thoughtful blog here.). There are also attempts by many other companies to embrace the principles of web 2.0. I had previously blogged about BBC 2.0; there is some news recently about what SAP Imagineering Unit creating tools by adopting the web 2.0 philosophy of embracing the user community as part of design and development. I am not surprised that software companies like SAP are developing tools to create the web 2.0 infrastructure. I like to see what evidence we have of user companies embracing web 2.0 and creating a business infrastructure that is in sync with Andy's definition.
Then I saw this CIO Insight Survey about the State of Use of Web 2.0 by CIOs. A caveat here: I am not a big fan of such surveys of managers in general because personal use of applications rarely captures how enterprises uses tools such as video, blogs, wikis, mashups, podcasts, social networking tools etc. For instance. the #1 application is the use of video over the web (no big deal there as I am sure many CIOs are at least casual visitors of YouTube or Google Video or videos embedded in WSJ and Ny Times). The real question is what is the degree of reliance and use of videos for internal and external collaboration on critical projects that deliver superior value to customers.
I think time is ripe to carry out a systematic study of how web 2.0 tools and applications are reshaping the business infrastructure in different vertical industries. Such a study should also see how companies may be deploying these applications across organizational boundaries so that we can discern the opportunities and challenges.
We are still in the early stages of web 2.0 infrastructure but the business potential seems promising. I am bullish not on any specific web 2.0 start-up but on how enterprises to embrace the new tools and applications to usher in a new era of business strategy and practices that truly reflect a network era.

Friday, August 24, 2007

Distribution of Lunch Boxes in Mumbai--a World Class Process

Some of you may have heard of the century-old process of distributing lunch boxes in Mumbai.

here is a good overview video.
Find more videos like this on NewTeeVee Pier Screenings

This is world-class.

Friday, August 10, 2007

Web 2.0: A Funny Look

A good way to restart my blog after a long break!

Thanks JP.

Tuesday, July 3, 2007

Apple iTunes and Universal Music: Does Microsoft Zune Have any Role?

Now that iPhone is launched and the craze has somewhat subsided, it's a good time to look at iPod [and iTunes]--the second leg of Apple's transformation from Apple Computers to Apple inc.

In the midst of the hype surrounding iPhone, there was an announcement from Universal Music. Business Week reported that:
The music label is balking at renewing a deal that gives Apple unfettered access to Universal's massive music catalog and limits Universal's ability to strike exclusive distribution deals with competing download services.
But sources close to Universal say the company has moved to what's known as an "at will" arrangement that enables it to strike exclusive distribution deals with other digital music providers for individual artists or tracks, though it will continue to sell music through iTunes. Under the new arrangement, for example, Universal could charge another music e-tailer (or Apple, for that matter) a premium to sell Jay-Z's latest single exclusively for a limited time.

This announcement highlights the need to adopt a broader network perspective in analyzing the relationships. It is not just about Apple and Universal. Universal needs Apple and vice versa. But, there are other players. It is equally about Universal and Microsoft (yes--Zune that you may have discarded as an also ran offering!). If Apple iTunes was the only game in town, Universal may sing a different tune. Microsoft's Zune may not win any design contests but it is myopic to discount Microsoft's capability to orchestrate a network of complementors to make its platform succeed.

The strategy message for the network era is: Behind every announcement between two companies, look for the invisible role (often implicit) of a third company that is seeking to rebalance the power.

Friday, June 29, 2007

June 29 (This Day in Business History--A Turning Point or Footnote?)

August 9, 1995: Netscape goes public with its IPO
August 24, 1995: Windows95 is launched.
These dates have important significance in business history--at least viewed from an information technology and business strategy perspectives.
June 29, 2007: iPhone is launched..

In about five years (say 2012), will we look back on this date and remark that Apple revolutionized the communication and entertainment landscape or will it be a footnote in business history? All indications are that this will be marked as a critical point in history-whether Apple maintains its lead or not. The design will be imitated more; multi-touch may be more prevalent; and the business model of cooperation between handset makers and network operators may be more widespread.

We will know later today how the public reacts to the product and the service. More important than the product design elegance will be the initial reaction to the service quality that depends on AT&T network (I am keeping my fingers crossed). Pundits have mostly been enthusiastic about their initial tests--David Pogue of New York Times gives it a glowing rating (with caveats about AT&T's potential network limitations; Walt Mossberg of the Wall Street Journal is also positive about it. Soon, we will get initial reactions from the die-hard Apple enthusiasts who have been camping outside Apple stores all across the country.
So, what am I looking to track in the initial phase? Not the sales (that's a given; it will be sold out for sure) but the level of enthusiasm in the blogosphere; the number of complaints about poor AT&T network coverage; and the frustrations users have about the differential service levels across WiFi and cellular networks.

June 29, 2007. I see the launch of iPhone as a product that straddles different industry boundaries in the spirit of network-era competition; I see it as a new way to co-create value involving network of partners (in this case Apple and AT&T initially; apparently, Verizon had their initial chance but rejected it). I also see it as a strong reflection of Steve Jobs' approach to stick with relatively closed architecture and go counter to the conventional wisdom that calls for more open architecture. It is more than an important date for Apple; it may signal a new era of network-era strategy and competition and cooperation. There will be many moves and counter-moves as this gets played out over the next few months and years.

Wednesday, June 20, 2007

iPhone and YouTube: Why I Worry About Quality of Experience

iPhone launch is about a week away. Announcement about better-than-expected battery life is a welcome news.
"With 8 hours of talk time, and 24 hours of audio playback, iPhone’s battery life is longer than any other 'Smartphone' and even longer than most MP3 players," said Apple chief executive Steve Jobs, Apple’s CEO. "We’ve also upgraded iPhone’s entire top surface from plastic to optical-quality glass for superior scratch resistance and clarity. There has never been a phone like iPhone, and we can't wait to get this truly magical product into the hands of customers starting just 11 days from today."

Today's announcement about YouTube clips available on iPhone is to be expected as a logical outcome of Apple--Google partnership. Apple had previously announced the YouTube link on its Apple TV. Apple announced that:
iPhone has a special YouTube player that you can launch right from the home screen. So now you can access and browse YouTube videos wherever you go. And when you find a video you want to send your friends, iPhone can even create an email with the link in it for you.

“iPhone delivers the best YouTube mobile experience by far,” said Apple chief executive Steve Jobs. “Now users can enjoy YouTube wherever they are—on their iPhone, on their Mac or on a widescreen TV in their living room with Apple TV.”

Those who are lucky enough to get hold of iPhone on June 29 will have access to about 10,000 videos on June 29 in the H.264 format.
Why do I worry? Quite simply because people may expect the video streaming to be at the same level of quality as they access it on their computers (broadband) and Apple TV. Moreover, there will be inevitable differences in quality of experience using WiFi and AT&T's cellular network. I only hope that this does not turn out to be a dud.

Monday, June 18, 2007

Widgets and Web 2.0

I was beginning to develop a catalog of different types of widgets that make web 2.0 functionality happen and I came across this post. I think it is a very good starting point for anyone that may be thinking of mapping the functionality of widgets against their business objectives. i will blog more on this later when I have developed a typology that may bring out the business implications of widgets.

Many widgets are already widely used: YouTube and iGoogle are popular examples. This one widget from Random House is an interesting initiative. Here is a brief summary of their announcement:
The widget is a lightweight internet application that can be easily embedded into a Web page. In its small version, at 195 x 335 pixels, it fits snugly into any website and delivers interactive book previews by allowing a user to page forward and back through the book or search for keywords in the actual text content of the book - without ever leaving the Web page.
Now, you can let your mind wander and examine what new applications can be delivered as widgets to take advantage of web 2.0 functionality.

Here is an example that shows its potential.

Thursday, June 14, 2007

Apple iPhone: Who Will Manage the Customer Interactions?

One of the challenges in the network era is the multiplicity of actors involved in customer relationships. It is easy when the relationships in the ecosystem are 'away' from the customer--such as the multiple companies involved in the design, manufacturing and supply of Apple iPhone. In such a case, Apple acts as the prime contractor and the partners carry out the assigned tasks to create the product in ways specified by Apple. What makes Apple iPhone interesting is that both Apple and AT&T will have complementary (and in some cases, overlapping) roles in customer interactions. This is an inevitable issue in ecosystems where value is co-created by multiple customer-facing entities.

In the case of iPhone, here are the areas to watch out for:

1. The much-hyped Apple iPhone will be launched on June 29 at 6:00PM (local time) at relevant Apple Stores (about 170) and AT&T stores (about 1800). Clearly, anyone who has walked into both the Apple Store and the AT&T store knows that these retail store experiences are NOT the same. However, there are far more AT&T retail stores than Apple stores. So, the chances are that more customers will buy an iPhone from an AT& store than an Apple store. Now, if it is a simply a matter of buying a product from a store, then it may not mean much but, in this case, there is a minimum 2-year contract with AT& service. So, AT&T will bill me for the phone service (which is very different from any other Apple product or service).

2. To set up an iPhone, we need an acount with iTunes. Here's what we know now. Apple explicitly states that:
To set up your iPhone, you'll need an account with Apple's iTunes Store. If you already have an iTunes account, make sure you know your account name and password. If you don't have an account, you should set one up now to save time later. To set up an account, launch iTunes, select the iTunes Store, and click the Sign In button in the upper right corner of iTunes. Sign in and you're ready to go.

So, it looks like customers will have atleast two separate interactions--a bill from AT&T for phone services; and a bill from iTunes fo rmy media (music and video downloads). I only hope that customer service encounters do not hugely differ between AT&T stores (and call centers) and Apple stores (and call centers).

Service encounters have a huge challenge when multiple companies interface with the customer, such as: who has what data? who owns the responsibility for customer loyalty? We know this from business-to-business service interactions in consulting and IT services. But, it is new in the customer domain.

So, Apple iPhone is more than just a product launch. Media publications such as Boston Globe have been focused on competitive responses from Palm, Nokia, HTC, Prada and others. But, those commentaries miss the most important point that this launch signals a NEW way of crafting winning strategies in an network-era. Prada may look like iPhone but the customer interaction is primarily with the service provider. Apple iPhone launch with a preferred partner, AT&T is different.. And over time, Apple will announce non-AT&T carriers. How will that impact the relationship between the launch partners? This product spans more functionality than other phones and consequently, will involve other key partners (example: videogames and banking?). There will be mishaps, there will be annoying and frustrating posts in the blogosphere. But, we should glean valuable lessons from this initiative for other settings when multiple entities are involved in customer interactions.

Look beyond obvious imitators from a product perspective. Look at how the different companies are working together to orchestarte winning customer interactions. The more significant innovation may be in how different companies work together to orchestrate service interactions

Wednesday, June 13, 2007

Graduation Speech and Apple iPhone

Officially, the college graduation season has ended. I do not know how many remember the graduation speaker(s) or what they said...

Now, we are inching towards the Apple iPhone season!. I am sure these students will remember their graduation speech at least till they see the iPhone!

Tuesday, June 12, 2007

Browser Wars 2007: Safari 3 for Windows and the iPhone Connection

We all remember the browser wars of the last 1990s: Navigator versus Explorer; Netscape versus Microsoft. Some may also recall the ensuing discussions, debates,legal cases and testimonies on Microsoft's monopoly powers and the intricacies of bundling products in the digital networked world.

Fast Forward June 2007. ON June 11, Steve Jobs introduced Safari 3 Public Beta. What made this announcement important was that it is for Mac + PC. Just like iTunes is for Mac + PC. Just as iPhone is for Mac + PC.

The stock market was disappointed that Apple did not open up the iPhone architecture for third-party applications. In fact, what most analysts failed to see was that Apple has opened up the iPhone architecture through Safari 3 that is compatible with Windows.

The browser wars of the 1990s was about the personal computer. The browser wars now is about the mobile phones. The Safari 3 launch is not about fighting yesterday's battle to control how we access the Internet through personal computers but is about the jockeying underway now to control how we use the mobile phones.

Just as making iTunes Windows-compatible allowed Apple to appeal to a broad base of consumers, this announcement is to selectively appeal to a broad base of Windows users who may be attracted to iPhone. Safari on iPhone automatically syncs bookmarks from PC and Mac and that's where the seamless connection confers advantage to Apple. And at this point in time, the built-in-search engines are Google and Yahoo on the iPhone.

In the coming months, we should look at the strength of third-party developers writing applications on Safari 3. That would be a lead-indicator of how Apple is likely to control the network architecture relative to others (especially, Microsoft, RIM and Symbian). Making Safari Windows-compatible may turn out to be a key decision on how broad and how deep Apple can succeed in the network era.

Sunday, June 3, 2007

Media 2.0: BBC's Journey Update

Here is a good summary update of what BBC is doing along its journey towards BBC 2.0. Mark Thompson embraces many of the core underpinnings of the shift to 'letting go' of the content so that different partners and customers can consume it in different ways. I believe that the speech was given on May 30, 2007. I had speculated before in an earlier blog post about BBC's transformation to the 2.0 world and it is informative to see that BBC is making good progress.

Friday, June 1, 2007

Microsoft Surface: Thinking through business imapcts

By now, we have seen previews of Microsoft's latest product named Surface. Steve Ballmer said that: “With Surface, we are creating more intuitive ways for people to interact with technology..... We see this as a multibillion-dollar category, and we envision a time when surface computing technologies will be pervasive, from tabletops and counters to the hallway mirror.” And many blogs have reviewed them. See David Pogue's post here. Jeff Han at NYU is one of the leading researcher on multi-touch interaction research.

Here is a good video from Popular Mechanics.

The challenge with any new technology innovation is thinking through the possible trajectories of evolution. Our initial reactions often is often simple questions such as: Who will buy it? Who needs it? How much will it cost? What products will it replace? etc. etc. Those are valid questions. Looking at it from the point of view of users (demand-side) and not technology providers (Microsoft, in this case), we could ask--what new functionality can we create and differentiate from our competitors? Not by embracing the standard technology but by adapting the functionality to differentiate and deliver new value. In that sense, demonstrations from vendors are either stylized (as in the video above) or limiting (because they do not fully understand how differently the features and functionality could be used).

It's far more important to see how the lead-users embrace the technology and show the benefits. Microsoft has clearly partnered with some interesting companies such as Harrah's Entertainment, Starwood Hotels and T-Mobile (may be others as well). I like to see early (honest) results from trials and experiments that demonstrate the business value (cost savings, customer satisfaction, increased revenue and profits etc.) Beyond the cool features of enlarging digital images and moving music around, we need to see hard-facts to make the business case to deploy such devices on large scale. We need more than testimonies from these companies surrounding the introduction of such new products. We need to see what they find as the numbers (and logic) supporting the business case they make to the hard-nosed CFOs.

This is a 21st century version of the business challenges of localized exploitation that I wrote in Sloan Management Review. In the early 1990s, the new technologies were airline reservation systems and inter-organizational order-entry systems (through EDI). Today, they are web 2.0 and multi-touch interaction computing. Technologies may have changed but the need to think through customer value (and competitive differentiation) has not becomes any less important.

Thursday, May 31, 2007

Toyota's Product Launch: Marketing 2.0 Style

There's a lot of skepticism about web 2.0. People ask me--where's the money? and where's the evidence? Memories (mostly bad) of the boom-n-bust of web 1.0 (e-commerce) is still fresh for many including me. So, I am always on the look out for hard data that provides evidence of how web 2.0 is working.

Here is a blog that provides some evidence of Toyota's product launch in Greece.

For the launch of their new hatchback model, the Auris, Toyota Hellas wanted a digital campaign that would promote the new car's interior design and the feel drivers get when sitting inside the Auris' modern "cockpit". The campaign needed to actively engage consumers with the brand, to generate leads and "test-drive" requests.

OgilvyOne Athens decided to think "Web 2.0" and find a way to invite consumers to do most of the talking and promoting. So Greek bloggers were invited to test-drive the car for a week if they would post their findings on their respective blogs, which would also be collected into a central blog. At the same time, a banner campaign invited the general public to request a test-drive, which could also win them a 4-star hotel weekend in Greece with of course the Auris at their disposal.

The Auris Blog campaign lasted for 10 weeks. There were 85 requests from Greek Bloggers and the car was given to 15 of them after a careful selection process. 55 different posts were written, most of them including photos and videos. (A digital camera was given as a gift to the bloggers in order to get multimedia content from them). There were 175 comments to the posts.

The Auris Blog had more than 52.000 visits by 41.000 unique visitors and the overall response rate of the banner campaign was at 4.75%. More importantly, 2.000 test-drive requests were submitted from this campaign, accounting for 50% of the total test-drive requests received through all channels (phone, in-store, events or promotions).

I wonder if there's a site that systematically tracks the results of experiments and initiatives using web 2.0 ideas.

Wednesday, May 30, 2007

Embedding Videos from WSJ vs. NYTimes (Update!)

Over the last two decades that I have been teaching strategic management (at MIT Sloan School) and IT strategy (MIT and now at Boston University), I have found it valuable to use videos to add some multi-media context to the case discussions. Most videos in the 1980s were CEOs speaking to different classes at Harvard Business School that the publishing arm would distribute to faculty members to use. Some were promotional videos from companies such as FedEx or Intel or Apple to illustrate new technologies or features.
Fast forward to 2007. I can embed videos in my course blog--either before class or after class--and students can select and watch them when they are multi-tasking (I do not know anyone less than 25 who is not a multi-tasker!). Here is one example of video that I have embedded in my course blog. It can be either a short one (often less than 3 minutes) highlighting a simple point or it can be a long video (such as Tom Friedman's video for the discovery channel on 'The Other Side of Outsourcing.' Either way, I have found that videos complement discussions and enhance learning.

Wall Street Journal allows its videos to be embedded (much in the spirit of web 2.0). I do not mind watching the advertisements that play just before the video because that pays for the videos to be made available free.
Here is an example that I could have linked to my post before on Microsoft-Ford partnership.

New York Times--on the other hand--still expects that their videos be linked but not embedded. They still seem to operate under the notion that content should be located at their site (reflective of 1.0 thinking!) but not letting their videos to be available on other sites (in the spirit of 2.0). They could still monetize advertisements around their video content(!). So, if I wanted to link David Pogue's discussion/commentary on Apple iPhone, I can only link.

I think it's just a matter of time before more multi-media content owners make their library of multi-media clips (CEO presentations, speeches, product launches, product promotions, advertisements etc.) available for enhancing education and deriving deeper insights into the functioning of modern corporations.

Update: Thanks to David Pogue for clarifying that I can do more than link to his videos (which I like incidentally!). Here are his suggestions.

You could embed my video from YouTube, since all of my videos also appear on YouTube.

Or, even better, you could subscribe to them on iTunes--and then enjoy the fully DOWNLOADABLE, much better H.264 video quality.

--David Pogue
New York Times

I will use the YouTube option to embed and then itunes subscription to perhaps show it in class.
Thanks David.
Update: June 2, 2007.
Other developments to watch as Real Player launches new player.

The newsrelease from Realnetworks is here.
The key features are:
Consumers can use the innovative, single-click process to quickly download and save videos for later enjoyment.

Consumers can download multiple videos simultaneously with RealPlayer, allowing people to save time and easily multitask. Users can also start downloading in the middle of watching a video, and the entire video will be captured.

Consumers don't need to worry about video format compatibility issues — the new RealPlayer supports videos created in the most popular formats, including Flash, Windows Media, Quicktime, and Real.

Consumers can easily burn videos to CD (or to DVD, using RealPlayer Plus). The Video CD format used by RealPlayer can be played in most DVD players.

Consumers can send links of their favorite videos to their friends with a convenient "Share with a Friend" feature. The link that arrives in their friends' email will direct them to the online source of the video content their friend downloaded.

RealPlayer supports both downloading and recording for popular streaming format (Windows Media, Real, and Quicktime)

RealPlayer will only download/record video that is not protected by DRM (Digital Rights Management) systems.

RealPlayer features an improved look and feel, a streamlined installation process and faster video playback.

RealPlayer will first be released for Windows, and will work with both Microsoft Internet Explorer and Mozilla Firefox. Real plans a version for the Mac to be released later in the year.

Here is a blog entry from RealPlayer product team on their new offering. and here is an interview with Jeff Chasen, VP of RealNetworks.