Ram Shriram: On the Rise of India and China

The “fear of failure” is being replaced by the “urge to succeed” – that’s what Ram Shriram says of the cultural change taking place in both India and China. The focus on math and science is finally paying off in these countries.
Read his Stanford presentation ==> “Perspectives on the rise of India and China”
The US has chosen another road. And we are already paying the price… Here’s what Doug Smith says >>

Edge View: John Hagel’s Visit to Dubai

“Why should business executives care about what is happening in the container port business in Dubai? It provides insight into much more fundamental trends that are re-shaping our global economy at an awesome pace. It shows that countries and companies on the edge have an opportunity to become significant global players by understanding and harnessing the forces at work. It also drives home that our most well-known and well-established companies, even those granted royal charters in 1840, are vulnerable to these same changes and can succumb quickly to the initiatives of more aggressive competitors, even those just formed in 1999.”
read John Hagel’s post here >>

The Executive Guide to Business Service Management

John Hagel has just written an insightful paper on Business Service Management, as they call it.
What is Business Service Management? The different vendors describe it in their own terms, but basically it’s about connecting your business processes to your IT processes, so you know the business impact (in $) when a server goes down. You could say that BSM makes IT accountable, finally.
Check it out here (registration required).

BusinessWeek: Holiday Tricks

BusinessWeek reports:
“Forrester Research Inc. says online retail sales this holiday will surge 25%, to $18 billion. The increasingly strong profitability of Net commerce is giving retailers the chance to experiment with a stockingful of new sales and marketing tactics. They’re tapping into technologies such as blogs, social networking, and wireless phones to draw shoppers to their sites.
“The experiments are coming from startups to Web giants alike. Yahoo! Inc. is testing Shoposphere, a networking site within Yahoo! Shopping that offers thousands of reviews, blogs, and shopping lists generated by members. Rob Solomon, a vice-president at Yahoo! Shopping, says relying on users lets Yahoo serve markets too small to command space on its front pages.
and
“Yub.com, a site with thousands of product reviews, offers visitors cash-back rewards of up to 10% when they make purchases at more than 60 other sites, including Macy’s and cosmetics retailer Sephora. Yahoo plans to let people earn cash for posting reviews that lead other users to make purchases.”
Read the article >

Keep Web Videos Under a Minute Long – Jakob Nielsen

“You can’t recycle video and expect to create a good online user experience.”
Jakob Nielsen in his latest Alertbox:
“While I’ll surely have many more guidelines later, for now the main guideline for producing website video is to keep it short. Typically, Web videos should be less than a minute long.
“A related guideline is to avoid using video if the content doesn’t take advantage of the medium’s dynamic nature. This doesn’t mean incessant use of pans, zooms, and fades to add artificial movement. It does mean that it’s better to use video for things that move or otherwise work better on film than they would as a combination of photos and text.
“Finally, recognize that Web users are easily distracted, and keep distracting elements out of the frame of your shots. If there’s a road sign in the video, for example, users will try to read it and will thus miss some of the main content.”
Nielsen’s remains at the vanguard of user experience design. Check out his “eyetracking” chart for web video and his 1997 post: “TV Meets the Web.”
Finally, here’s an interview I did with Jakob a while back:”Creating The Loyal Customer.”

Harvard: “Business! Start your Blogging”

“Bloggers have damaged a number of companies, but it’s time to think of the blog as your friend. Skillful blogging can boost your company’s credibility and help it connect with customers.”
Finally, the folks at Harvard think the blogging is OK for business. Thanks for the green light, but I still don’t see Michael Porter or Clayton Christensen blogging, or Dorothy Leonard for that matter… what’s up with that? Harvard, time to practice what you preach.
Here’s why businesses may want to blog:
“…a blog is an incredibly effective yet low-cost way to:
Influence the public “conversation” about your company: Make it easy for journalists to find the latest, most accurate information about new products or ventures. In the case of a crisis, a blog allows you to shape the conversation about it.
Enhance brand visibility and credibility: Appear higher in search engine rankings, establish expertise in industry or subject area, and personalize one’s company by giving it a human voice.
Achieve customer intimacy: Speak directly to consumers and have them come right back with suggestions or complaints—or kudos.”
Here’s their blogging endorsement.

Tom Davenport on Personal Knowledge Management

Says TD: “Most interventions to improve performance in business are at the organizational or process level, but it doesn’t have to be that way. We can also improve individual capabilities. Ultimately, knowledge worker performance comes down to the behaviors of individual knowledge workers. If we improve their individual abilities to create, acquire, process and use knowledge, we are likely to improve the performance of the processes they work on, and the organizations they work for.”
Right on! Read this insightful post on Tom Davenport’s blog- BabsonKnowledge.org.

“Competing on Analytics” – Tom Davenport and friends

Competing on Analytics is a Babson Executive Education report by Tom Davenport, Don Cohen and Al Jacobson.
The report describes the emergence of a new form of competition based on the extensive use of analytics, data, and fact-based decision making. The analytics— quantitative or statistical models to analyze business problems—may be applied to a variety of business problems, including customer management, supply chains, and financial performance. The research assessed 32 firms with regard to their orientation to analytics; about one-third were classified as fully engaged in analytically oriented strategies. Both demand and supply factors for analytical competition are described. Of the two, demand factors are the more difficult to create. The presence of one or more committed senior executives is a primary driver of analytical competition.
Registration is required for download, but it’s worth it.

Ratan Tata: The $2,200 “People’s Car”


Tata speaks about the Indian group’s international strategy, his plan to create a $2,200 “people’s car,” his vision of India as a knowledge center for the world, and his dedication to the social responsibilities required from companies operating in developing markets.
On the car:
“Today we’re producing a $7,000 car, the Indica. Here we’re talking about a $2,200 car, which will be smaller and will be produced in larger volumes, with all the high-volume parts manufactured in one plant. We’re also looking at more use of plastics on the body and at a very low-cost assembly operation, with some use of modern-day adhesives instead of welding. But the car is in every way a car, with an engine, a suspension, and a steering system designed for its size. We will meet all the emissions requirements. We now have some issues concerning safety, mainly because of the car’s modest size, but we will resolve them before the car reaches the market, in about three years’ time.
“In addition—and this again touches on the social dimension—we’re looking at small satellite units, with very low breakeven points, where some of the cars could be assembled, sold, and serviced. We would encourage local entrepreneurs to invest in these units, and we would train these entrepreneurs to assemble the fully knocked-down or semi-knocked-down components that we would send to them, and they would also sell the assembled vehicles and arrange for their servicing. This approach would replace the dealer, and therefore the dealer’s margin, with an assembly-cum-retail operation that would be combined with very low-cost service facilities.
On India:
“If we play our cards right as a country, we could be a supplier of IT services and IT solutions to the world. We could also be a product-development center for pharmaceuticals. We could be a very good global R&D center in biotechnology and in some of the emerging technologies, such as nanotechnology, provided we really give them the focus they would need.
On bringing talent back to India:
“Indians coming back to India really go through a cultural shock. They give up a lot in terms of the quality of life, the education of their children, the availability of medical facilities. This will also have an impact when we want to hire people who are not Indians, as we will have to do in a world without boundaries. Even if we start only with pockets of the country and make those pockets less of a cultural shock, the benefits will spread. In some ways, this is what China did with the economic zones.
On values:
“What I feel most proud of is that we have been able to grow without compromising any of the values or ethical standards that we consider important. And I am not harping on this hypocritically. It was a major decision to uphold these values and ethics in an environment that is deteriorating around you. If we had compromised them, we could have done much better, grown much faster, and perhaps been regarded as much more successful in the pure business sense. But we would have lost the one differentiation that this group has against others in the country. We would have been just another venal business house.
“I think it is wrong for a company in India to operate in exactly the same way, without any additional responsibilities, as if it were operating in the United States, let’s say. And even in the United States, I think if you had an enlightened corporation that went into the Deep South, you would see more of a sense of social responsibility, of doing more for the community, than the company might accept in New York City or Boston. Because it is inevitable that you need to be a good corporate citizen in that kind of environment. And companies that are not good corporate citizens—those that don’t hold to standards and that allow the environment and the community to suffer—are really criminals in today’s world.”
Read the McKinsey Quarterly article >>

Rebranding Intel

“This might be the company’s most important makeover campaign ever.”
What’s the big deal? Apparently the Intel logo no longer has the “e” letter dropped, and the blue label is now wrapped around the corporate name.
The chip names are rebranded: single core Yonah processors will be named “Core Solo” and dual core versions will be called “Core Duo”.
Yawn.

Google Base: Googlespace & Open Knowledge Management

Another giant step in Googlespace?
“Help the world find your content. Google Base is a place where you can add all types of information that we’ll host and make searchable online.”
And so Google takes another step with another micro-service. Try it here.
And it’s not just about classifieds. It’s about Open Knowledge Management.
Wonder what Tom Davenport and Larry Prusak have to say about this… I’ll let you know when I find out.

The 7th Face of the Web: Googlespace

Back in 2000, Bill Joy, Sun’s Chief Scientist and co-founder, told people that the economic future of technology is rooted in the notion of what he called “the six Webs.”
– the “near” Web, the traditional desktop computing environment.
– the “far” Web, which includes simple interaction through, for example, a remote control while flipping through an interactive television screen.
– the “here” Web, or the industry of mobile Internet devices, which, Joy stresses are going to continue to grow in importance and popularity.
– the “weird” Web, or those systems of access that actually immerse the senses, like virtual reality or voice-activated surfing.
– the eCommerce (Business-to-Business) Web and, quite simply, the “pervasive computing” Web, or “the networks that connect people to other people and the information they need, enabling them to act on it anytime, anyplace.”
Today, there’s a 7th web- the “Search-driven” Web, i.e. the Googlespace. The “search-driven” web will bridge all 6 faces of Bill Joy’s web. And that’s why Microsoft is is trouble.
A simple way of looking at this: Joy’s 6 faces are technology or platform-based. This is the old geek view of technology- shared by Microsoft et al.
In reality, the user doesn’t care about platforms – just finding what they need- the “user-based” view. And that is fast becoming Googlespace.

The Birth of Internet TV: Finally!

AOL, Warner Bros Team for Online TV– In2TV.
The channels are:
– LOL TV (comedies such as Welcome Back Kotter, Perfect Strangers and Hangin’ With Mr. Cooper),
– Dramarama (Falcon Crest, Sisters and Eight Is Enough)
– Toontopia (animated shows like Beetlejuice and Pinky and the Brain)
– Heroes and Horrors (Wonder Woman, Lois & Clark: The Adventures of Superman and Babylon 5)
– Rush (action shows such as La Femme Nikita, Kung Fu and The Fugitive)
– Vintage (Growing Pains, F-Troop and Maverick)
Soon this will go global, and we’ll be able to watch TV from other countries on our “Internets.” Cricket, anyone?

The Remarkable Opportunities of Unbundled Media

Terry Heaton’s essay: TV News in a Postmodern World
“…driven by the very real demand of less time, we’ve begun the process of tasting that which is unbundled. We unbundle television shows by skipping the commercials with our DVRs. We unbundle CDs by downloading the songs we want. We unbundle the national media by subscribing to specific RSS feeds. The signs of a burgeoning unbundled media world are everywhere.”
What Terry doesn’t say: we are unbundling reality: our politics, our minds, our society, and our souls as well…

Gartner: Microsoft Far Behind

Gartner’s Nick Gall:
“I just played with Windows Live this morning, and it’s (so far) nothing but an AJAX-enabled portal – and a pretty poor one at that.
“I think the real news is how far behind Microsoft is. If this is all it has at this late stage of the consumer portal market, the company is really in trouble. With no synergy with the Windows OS or even IE (there’s not even a toolbar yet), and no compelling content on the site itself, what would possibly draw users from another consumer portal?
more>>
Microsoft is always slow. In the past they’ve always been great at catching up and passing their opponents. Google isn’t going to make the Netscape mistake, though!

Google Analytics: Another Dagger in the Heart of Microsoft?

Take a look- Google Analytics gives you a free ride into the world of web behavior, and it’s integrated w/ adwords.
Here’s the pitch:
Google Analytics tells you everything you want to know about how your visitors found you and how they interact with your site. You’ll be able to focus your marketing resources on campaigns and initiatives that deliver ROI, and improve your site to convert more visitors…. blah blah blah
So what’s really going on? Here’s what: Microsoft used to own your desktop, but Google will own your universe. Google will learn how users behave across websites, beating Alexa/Amazon.com at its own game and setting the stage for the final fight with Microsoft.
Every website manager will sign up for free, and Microsoft can them make them part of their network- from Adsense, to Adwords, to the applications which will replace Office.
BTW, did I forget to mention that Google is also buying cable companies? I’m sure Microsoft is freaking out right about now. This is going to be a war.
MEMO to Microsoft: guys, open up!!
On the privacy front:
# We may use personal information to provide the services you’ve requested, including services that display customized content and advertising.
# We may also use personal information for auditing, research and analysis to operate and improve Google technologies and services.
# We may share aggregated non-personal information with third parties outside of Google.
# When we use third parties to assist us in processing your personal information, we require that they comply with our Privacy Policy and any other appropriate confidentiality and security measures.
# We may also share information with third parties in limited circumstances, including when complying with legal process, preventing fraud or imminent harm, and ensuring the security of our network and services.
# Google processes personal information on our servers in the United States of America and in other countries. In some cases, we process personal information on a server outside your own country.

Do no evil, Google.

What Happened to Nathan Myhrvold

The article I mentioned in the previous post also mentions Nathan Myhrvold:
Nathan Myhrvold, part of Microsoft’s early brain trust and the former head of its heavily endowed research arm, founded Intellectual Ventures, a fund that he says spends “millions of dollars” annually to support individual inventors in long-term projects. Mr. Myhrvold started his fund about five years ago after he retired from Microsoft; he now backs about 20 inventors in such fields as nanotechnology, optics, computing, biotechnology and medical devices.
“As far as we know, we’re the only people who are doing this – which means we’re either incredibly smart or incredibly dumb,” Mr. Myhrvold said. “There’s a network of venture capitalists for start-ups that have created thousands and thousands of businesses, but very little for inventors.”
Mr. Myhrvold says that most public and academic grants are for investigating well-defined research problems – and not for backing, as he does, “an invention before it exists.” His staff of about 50 people files about 25 patent applications a month on behalf of inventors and his fund. He and his staff also help inventors refine ideas, pay for their time and labor and share ownership stakes in projects with them.
“We all love the goose that lays the golden eggs but somehow we’ve forgotten about the goose,” Mr. Myhrvold said. “This decade I’m hoping will be the decade of the invention.”
Very cool:
Intellectual Ventures is an invention company. We conceive and patent our own inventions in-house through a world-renowned staff of internal and external scientists and engineers. We also acquire and license patented inventions from other inventors around the world. Our network of invention sources includes: large and small businesses, governments, academia, and individual inventors. These inventions span a diverse range of technologies including: software, semiconductors, wireless, consumer electronics, networking, lasers, biotechnology, and medical devices. Our current focus is on developing our invention portfolio. Over time, we intend to market our portfolio on a broad and non-exclusive basis through a variety of channels including spin-out companies.
A new intellectual-property business model.

Have We Given Up on Science?

Are U.S. Innovators Losing Their Competitive Edge? asks as article in today’s New York Times.
The article cites a report from the National Academy of Sciences which tries to ring the alarm: “Although many people assume that the United States will always be a world leader in science and technology, this may not continue to be the case inasmuch as great minds and ideas exist throughout the world. We fear the abruptness with which a lead in science and technology can be lost – and the difficulty of recovering a lead once lost, if indeed it can be regained at all.”
The report cites China and India among a number of economically promising countries that may be poised to usurp America’s leadership in innovation and job growth.
“For the first time in generations, the nation’s children could face poorer prospects than their parents and grandparents did,” the report said. “We owe our current prosperity, security and good health to the investments of past generations, and we are obliged to renew those commitments.”
The Industrial Research Institute, an organization in Arlington, Va., that represents some of the nation’s largest corporations, is also concerned that the academic and financial support for scientific innovation is lagging in the United States. The group’s most recent data indicate that from 1986 to 2001, China, Taiwan, South Korea and Japan all awarded more doctoral degrees in science and engineering than did the United States. Between 1991 and 2003, research and development spending in America trailed that of China, Singapore, South Korea and Taiwan – in China’s case by billions of dollars.
Read the report. Here’s the TOC:
1 A Disturbing Mosaic
2 Why Are Science and Technology Critical to America\’s Prosperity in the 21st Century
3 How is America Doing Now in Science and Technology
4 What Actions Should America Take to Remain Prosperous in the 21st Century
5 Ten Thousand Teachers-Ten Million Minds
6 Sowing the Seeds
7 Best and the Brightest
8 Innovation Incentives
9 What Might the United States Be Like if it is Not Competitive in Science and Technology
Ouch!
BTW, the National Academy of Sciences also has this report available online: Science and Creationism: A View from the National Academy of Sciences, Second Edition (1999)
Heck, just listen to what Peter Drucker had to say.
All is not lost, yet. But we took a wrong turn somewhere.
The article raises another point:
“The inventiveness of individuals depends on the context, including sociopolitical, economic, cultural and institutional factors,” said Merton C. Flemings, a professor emeritus at M.I.T. who holds 28 patents and oversees the Lemelson-M.I.T. Program for inventors. “We remain one of the most inventive countries in the world. But all the signs suggest that we won’t retain that pre-eminence much longer. The future is very bleak, I’m afraid.”
Mr. Flemings said that private and public capital was not being adequately funneled to the kinds of projects and people that foster invention. The study of science is not valued in enough homes, he observed, and science education in grade school and high school is sorely lacking.
But quantitative goals, he said, are not enough. Singapore posts high national scores in mathematics, he said, but does not have a reputation for churning out new inventions. In fact, he added, researchers from Singapore have studied school systems in America to try to glean the source of something ineffable and not really quantifiable: creativity.
“In addition to openness, tolerance is essential in an inventive modern society,” a report sponsored by the Lemelson-M.I.T. Program said last year. “Creative people, whether artists or inventive engineers, are often nonconformists and rebels. Indeed, invention itself can be perceived as an act of rebellion against the status quo.”
Which brings us to Richard Florida

IBM Goes a Blogging

From AdAge:
IBM SEES BLOGGING AS MARKETING’S NEXT BIG THING
Company’s ‘Blogger in Chief’ Encourages Employees to Publish to Outside World
Far from viewing workday blogging as bad thing, IBM sees it as the next big thing for marketing.
Eyeing blogging’s potential as a way to influence potential employees and business partners, IBM began formally offering blogging tools to its workers six months ago. The tools came complete with a list of a dozen guidelines assembled, in true new-media fashion, by contribution to an internal “wiki” (an open-source encyclopedia) over a 10-day period.
IBM’s ‘blogger in chief’ “Other companies have fired people for blogging, but IBM is encouraging it,” said Christopher Barger, Big Blue’s unofficial “blogger in chief.”
The list offers simple, almost common-sense pointers, such as follow the IBM business code of conduct; respect copyright laws; and don’t reveal proprietary information. The company now has 15,000 registrants on its internal blog, with more than 2,200 of those employees maintaining external blogs. Wikis and RSS feeds are used internally for collaboration and automated information feeds.
Its embrace of digital marketing also extends to podcasting, with the company creating podcasts around cultural tech themes such as the home of the future, the car of the future and the store of the future.
Bonding technique “Marketers should look at blogs as a real-time cheat sheet on how to be relevant with customers,” said Intelliseek’s chief marketing officer, Pete Blackshaw. “The name of the game is to be as conversational as possible vs. being static. … It’s a bonding technique with your consumer.”
It’s also an established technique among tech companies such as Microsoft and Sun Microsystems that also have extensive employee blogging and emerging media programs. Microsoft blogger Robert Scoble (known also by his blog’s name, Scobleizer) and developer network Channel9 have gone a long way in helping reverse the company’s so-called evil empire reputation.
In some respects, employee blogging is reminiscent of traditional employee testimonial advertising — after all, if pilots and flight attendants can extol the virtues of Southwest Airlines in ads, why shouldn’t IBM’s own experts open blog discussions with consumers?
“What [Vice Chairman] Bob Lutz is doing with the General Motors blog [fastlane/gmblogs.com] is not much different than what Lee Iacocca did in the ’80s,” Mr. Blackshaw said. “It’s all about being genuine and relevant and conversational with consumers.”
The problem, however, can sometimes be the tenor of the conversation and whether employees running amok on the Internet fits with a well-crafted, traditional marketing strategy.
“If employees are given appropriate guidelines, it can certainly be right on strategy,” said Jonathan Paisner, brand director at CoreBrand. “The broadcast model of a centralized voice saying this is our one voice out to the world isn’t realistic anymore.”
Different for tech companies
Experts caution that tech companies should be viewed differently than other companies when it comes to new media in that they likely have uncommonly large number of purveyors, experts and leading-edge adopters who are more comfortable with these technologies. That comfort goes a long way in personalizing brands and creating one-to-one relationships with customers. While IBM says it does not want to use new media as traditional sales and marketing tools, it has succeeded in opening discussions in health care and video gaming with “outsiders,” which in turn could lead to new business relationships.
“This is a way to get our expertise out there, not by shoving it down people’s throats, but by just starting conversations,” Mr. Barger said. “It expands our reputation, perceptions and reach of IBM, at the same time expanding the number of people we can learn from.”

10 Rules for Neo-Dotcoms

A while back Tom Foremski wrote about the rise of the New Rules Enterprise:
“There is a new kind of dotcom company that will emerge during Internet 2.0—this current and very distinct emerging phase of the Internet. I’m not sure what to call the new dotcom but I know what it is. It is a company that plays by the emerging new rules of the economy. New-rules companies will decimate established companies in many/most sectors but at varying rates.”
Here are Foremski’s 10 rules for the New Rules Enterprise
The first rule of the New Rules enterprise is that it is new, brand spanking new.
The second rule is it is staffed by a small group of executives that know the most efficient business processes for what the venture will produce.
The third rule is to stick as much open source/industry platform software and hardware onto the business processes as you can, creating a highly automated highly-efficient business venture with virtually free IT.
The fourth rule is to use as much web services IT as possible.
The fifth rule is you do not use venture capital–you and four others throw your credit cards into a bowl and work free for six-months to create the nucleus of the venture. It’s an atomic ventures world. It’s the $40k startup. When IT, and other infrastructure costs are so cheap and available to everyone then knowledge capital becomes the competitive differentiator—who is on your team.
The sixth rule is don’t put anybody on the payroll unless you absolutely have to.
The seventh rule is the venture does not go public, it stays private. It will have private investors/owners and those investors would be paid in dividends. By staying private newrules enterprises are a blackbox corporation. Competitors cannot peek inside because it is private and thus cannot benchmark their business model against it.
The eighth rule of the newrules enterprise is that there will be a lot of intellectual property that is not patented but is kept secret.
The ninth rule is don’t put anybody on the payroll unless you absolutely have to.
The tenth rule, and the most important, is that the newrules enterprise uses blogging techniques and technologies to market research/help produce and sell products and services that near-perfectly match the needs of their customer communities.

Guy Kawasaki: “Don’t worry, be crappy”

Guy Kawasaki says he’s “living proof that if you do one thing right in your career, you can coast on your reputation for 20 years.”
Don’t believe it. This is a man of action, and shares his philosophy in this Always-On article:
“I think the world is essentially divided into two groups: the prototypers, the people who build stuff, and the typers, the people who think the key to entrepreneurship and innovation is Microsoft Office. If you think that the key to innovation and entrepreneurship is Microsoft Office, something is wrong with you. If you’re thinking, “I have to write a business plan with Word; I need to create a pitch with PowerPoint; I need to build a 30-page financial model with Excel,” you’re on the wrong track. The key to all of this is to prototype, not type.”
Also:
“I look at that computer now and say, ‘My God, there are elements of crap in it that really embarrass me.’ It was a revolutionary product, don’t get me wrong, but we charged $2,500 for a computer that had 128K of RAM, and we were proud of that. We thought this was an ocean of RAM. And there was no software, no hard disk—which was OK because if you don’t have software, there’s nothing to copy to the hard drive. No color, no fast printing, no fast networking. What crap. But it was revolutionary crap. Don’t worry, be crappy. Ship it then test it. Don’t wait for the perfect world where chips are cheap enough and fast enough: Ship it; get your product out there.”

Seismic Shifts in U.S. Media and Advertising Industries: A Report

“Fundamental Shifts in the U.S. Media and Advertising Industries” – a report from the New Politics Institute.
Findings include:
• Extensive audience migration across and within media formats is driving major shifts in advertising spending, benefiting formats with targeting ability
• Advertisers are shifting ad dollars to digital media slower than they should given the cost and effectiveness of digital media
• The most innovative advertisers will utilize sophisticated direct marketing techniques (e.g., segmentation, targeting, etc.) and will adjust the digital marketing vehicle mix for each customer category
• Effectively creating “at scale” digital campaigns and integrating them into traditional marketing requires direct marketing skills that traditional marketers, particularly brand marketers, often lack
• Commercial advertisers are rapidly shifting dollars to internet advertising, in particular internet video, and are aggressively experimenting with new formats such as wireless and videogame advertising
Download here.

Japanese Kids Display Primate Behavior

Nobuo Masataka, a professor at the Kyoto University Primate Research Institute and author of the monster best seller “Keitai wo Motta Saru (Monkeys With Mobile Phones),” argues that the proliferation of mobile phones has got young Japanese making monkeys of themselves, aping the behavior patterns of chimpanzees.
The primate specialist says the actions of the dearuki-zoku closely resemble behavior patterns in chimpanzees, which tend to travel in groups, walking around for a long time without going to any specific place, then eating and disposing of their wastes in the same place before bedding down on piles of grass whenever and wherever the inclination takes them.
Read all about it!

A Checklist for Unlocking Corporate Knowledge

From a report and survey by the Economist Intelligence Unit, sponsored by Tata Consulting Services:
1. Business needs—and the kinds of knowledge required to fulfil them—have to be identified first before tools and processes are implemented. Many initiatives have failed where technology has dictated knowledge management (KM).
2. Successful KM is about shifting culture and behaviour—technology is an important element, but is subsidiary.
3. A basic mechanism in large organisations is also one of the most effective: keeping tabs on who knows what—and how to get in touch with them.
4. Though improving, KM tools are often too complicated: they have to be delivered in a way executives and staff want to use them, and to adapt to the areas/depth of knowledge needed by the individual.
5. Markets, customers, technology and competition are continually changing; knowledge gets stale fast. Is the KM framework able to handle change?
6. Can the organisation track whether kowledge is being acted on, and what value is gained from it? Even where knowledge flows quite efficiently round an organisation, companies can often do more to ensure information is acted on.
7. Is there a means to learn from experience — good and bad — and share that learning when a similar situation occurs? A vast amount of resource is wasted in corporations just by unwittingly repeating the same mistakes, or failing to repeat useful discoveries.
8. Who leads KM? Many large organisations now have a dedicated head of KM, or at least a high-ranking sponsor, to ensure the right collaborative environment.
9. Bulletin boards and web logs have begun to prove their worth to a range of organisations: they supply an instant exchange of learning or can be used by executives to communicate and keep their ear to the ground.
10. You can only get people to volunteer knowledge—you can’t force it. However, firms that provide forums, tools and opportunities for informal networking can encourage employees actively to share knowledge.
Full report here>>

The Leaked Ray Ozzie Memo

To: Executive Staff and direct reports
From: Ray Ozzie
Date: October 28, 2005
Subject: The Internet Services Disruption
It is an exciting time, as we’re at the beginning of the biggest product cycle in the company’s history. In a week we ship new versions of Visual Studio, SQL Server and BizTalk Server. Later this month we ship Xbox 360. Next year we have a double barreled release of our two largest products with Windows Vista and Office “12”. It’s a great time for customers, our partners, and for those at Microsoft who have put so much of themselves into these products.
But we bring these innovations to market at a time of great turbulence and potential change in the industry. This isn’t the first time of such great change: we’ve needed to reflect upon our core strategy and direction just about every five years. Such changes are inevitable because of the progressive and dramatic evolution of computing and communications technology, because of resultant changes in how our customers use and apply that technology, and because of the continuous emergence of competitors with new approaches and perspectives.
In 1990, there was actually a question about whether the graphical user interface had merit. Apple amongst others valiantly tried to convince the market of the GUI’s broad benefits, but the non-GUI Lotus 1-2-3 and WordPerfect had significant momentum. But Microsoft recognized the GUI’s transformative potential, and committed the organization to pursuit of the dream – through investment in applications, platform and tools – based on a belief that the GUI would dramatically expand and democratize computing.
When we reflected upon our dreams just five years later in 1995, the impetus for our new center of gravity came from the then-nascent web. With a clear view upon the challenges and opportunities it presented, the entire company pivoted to focus on the internet to pursue that ‘fully connected’ dream with support for internet standards throughout our product line: a web browser, server and development tools, and a service in MSN that was transformed into a web portal. Many things we developed in that era continue to fuel the growth of today’s internet: the technologies of AJAX – DHTML and XMLHTTP – were created in 1998 and used in products such as OWA.
In 2000, in the waning days of the dot com bubble, we yet again reflected on our strategy and refined our direction. After taking a more deliberative look at the internet and its implications for software, we came to the conclusion that the internet would go beyond browsing and should support programmability on a global scale. We observed that certain aspects of our most fundamental platform – the tools and services that developers use when building their software – would not likely satisfy the emerging security and interoperability requirements of the internet. So we embarked upon .NET, a transformative new generation of the platform and tools built around managed code, the XML format and web services programming model. At the time, it was a risky bet to build natively around XML, but this bet paid off handsomely and .NET has become the most popular development environment in the world.
It is now 2005, and the environment has changed yet again – this time around services. Computing and communications technologies have dramatically and progressively improved to enable the viability of a services-based model. The ubiquity of broadband and wireless networking has changed the nature of how people interact, and they’re increasingly drawn toward the simplicity of services and service-enabled software that ‘just works’. Businesses are increasingly considering what services-based economics of scale might do to help them reduce infrastructure costs or deploy solutions as-needed and on subscription basis.
Most challenging and promising to our business, though, is that a new business model has emerged in the form of advertising-supported services and software. This model has the potential to fundamentally impact how we and other developers build, deliver, and monetize innovations. No one yet knows what kind of software and in which markets this model will be embraced, and there is tremendous revenue potential in those where it ultimately is.
Just as in the past, we must reflect upon what’s going on around us, and reflect upon our strengths, weaknesses and industry leadership responsibilities, and respond. As much as ever, it’s clear that if we fail to do so, our business as we know it is at risk. We must respond quickly and decisively.
The Landscape
Since 1995, inexpensive computing and communications technologies have advanced at a rapid rate that even exceeded our expectations. It’s so very difficult now for us to imagine a world without the PC, the web and the cell phone. In the US, there are more than 100MM broadband users, 190MM mobile phone subscribers, and WiFi networks blanket the urban landscape. This pattern is mirrored in much of the developed world. Computing has become linked to the communications network; when a PC is purchased, it’s assumed that the PC will have high-speed internet connectivity. At work, at home, in a hotel, at school or in a coffee shop, the networked laptop has become our ‘virtual office’ where we file our information and interact with others. The broad accessibility and rapid pace of innovation in hardware, networks, software and services has catalyzed a virtuous cycle whose pace isn’t slowing. There has never been a more exciting time to be a developer or a user of technology.
Our products have embraced the internet in many amazing ways. We’ve transformed the desktop into a rich platform for interactive internet browsing, media and communications-centric applications. We’ve transformed Windows into best-of-breed infrastructure for internet applications and services. We’ve created, in .NET, the most popular development platform in the world. We’ve got amazing products in Office and our other IW offerings, having fully embraced standards such as XML, HTML, RSS and SIP. Our MSN team has demonstrated great innovation and has held its own in a highly competitive and rapidly changing environment – particularly with Spaces and in growing a base of 180M active Messenger users worldwide. The Xbox team has also built a huge user community and has demonstrated that internet-based “Live” interaction is a high-value, strong differentiator.
But for all our great progress, our efforts have not always led to the degree that perhaps they could have. We should’ve been leaders with all our web properties in harnessing the potential of AJAX, following our pioneering work in OWA. We knew search would be important, but through Google’s focus they’ve gained a tremendously strong position. RSS is the internet’s answer to the notification scenarios we’ve discussed and worked on for some time, and is filling a role as ‘the UNIX pipe of the internet’ as people use it to connect data and systems in unanticipated ways. For all its tremendous innovation and its embracing of HTML and XML, Office is not yet the source of key web data formats – surely not to the level of PDF. While we’ve led with great capabilities in Messenger & Communicator, it was Skype, not us, who made VoIP broadly popular and created a new category. We have long understood the importance of mobile messaging scenarios and have made significant investment in device software, yet only now are we surpassing the Blackberry.
And while we continue to make good progress on these many fronts, a set of very strong and determined competitors is laser-focused on internet services and service-enabled software. Google is obviously the most visible here, although given the hype level it is difficult to ascertain which of their myriad initiatives are simply adjuncts intended to drive scale for their advertising business, or which might ultimately grow to substantively challenge our offerings. Although Yahoo also has significant communications assets that combine software and services, they are more of a media company and – with the notable exception of their advertising platform – they seem to be utilizing their platform capabilities largely as an internal asset. The same is true of Apple, which has done an enviable job integrating hardware, software and services into a seamless experience with dotMac, iPod and iTunes, but seems less focused on enabling developers to build substantial products and businesses.
Even beyond our large competitors, tremendous software-and-services activity is occurring within startups and at the grassroots level. Only a few years ago I’d have pointed to the Weblog and the Wiki as significant emerging trends; by now they’re mainstream and have moved into the enterprise. Flickr and others have done innovative work around community sharing and tagging based on simple data formats and metadata. GoToMyPC and GoToMeeting are very popular low-end solutions to remote PC access and online meetings. A number of startups have built interesting solutions for cross-device file and remote media access. VoIP seems on the verge of exploding – not just in Skype, but also as indicated by things such as the Asterisk soft-PBX. Innovations abound from small developers – from RAD frameworks to lightweight project management services and solutions.
Many startups treat the ‘raw’ internet as their platform. At the grassroots level, such projects actively use standards such as vCards and iCal for sharing contacts and calendars. Most all use RSS in one way or another for data sharing. Remixing and mashing of multiple web applications using XML, REST and WS is common; interesting mash-ups range from combining maps with apartment listings, to others that place RSS feeds on top of systems and data not originally intended for remixing. Developers needing tools and libraries to do their work just search the internet, download, develop & integrate, deploy, refine. Speed, simplicity and loose coupling are paramount.
And the work of these startups could be improved with a ‘services platform’. Ironically, the same things that enable and catalyze rapid innovation can also be constraints to their success. Many hard problems are often ignored – the most significant of which is achieving scale. Some scale issues are technological and result from the fact that they are generally built on application server platforms rather than high-scale service platforms. But new services also need to build user communities from scratch – generally by word of mouth. Many fund their sites using syndicated ads, but have a difficult time transforming their services into higher levels of commerce. Some seek to incorporate client software into their user experience, but then need to reinvent software deployment, update, communications and synchronization mechanisms. User identity and cross-service interoperability mechanisms are still needlessly fragmented. Intuitively there seems to be a platform opportunity in providing such capabilities to developers in a form that retains the speed, simplicity and loose coupling that is so very important for rapid innovation.
Key Tenets
Today there are three key tenets that are driving fundamental shifts in the landscape – all of which are related in some way to services. It’s key to embrace these tenets within the context of our products and services.
1. The power of the advertising-supported economic model.
Online advertising has emerged as a significant new means by which to directly and indirectly fund the creation and delivery of software and services. In some cases, it may be possible for one to obtain more revenue through the advertising model than through a traditional licensing model. Only in its earliest stages, no one yet knows the limits of what categories of hardware, software and services, in what markets, will ultimately be funded through this model. And no one yet knows how much of the world’s online advertising revenues should or will flow to large software and service providers, medium sized or tail providers, or even users themselves.
2. The effectiveness of a new delivery and adoption model.
A grassroots technology adoption pattern has emerged on the internet largely in parallel to the classic methods of selling software to the enterprise. Products are now discovered through a combination of blogs, search keyword-based advertising, online product marketing and word-of-mouth. It’s now expected that anything discovered can be sampled and experienced through self-service exploration and download. This is true not just for consumer products: even enterprise products now more often than not enter an organization through the internet-based research and trial of a business unit that understands a product’s value.
Limited trial use, ad-monetized or free reduced-function use, subscription-based use, on-line activation, digital license management, automatic update, and other such concepts are now entering the vocabulary of any developer building products that wish to successfully utilize the web as a channel. Products must now embrace a “discover, learn, try, buy, recommend” cycle – sometimes with one of those phases being free, another ad-supported, and yet another being subscription-based. Grassroots adoption requires an end-to-end perspective related to product design. Products must be easily understood by the user upon trial, and useful out-of-the-box with little or no configuration or administrative intervention.
But enabling grassroots adoption is not just a product design issue. Today’s web is fundamentally a self-service environment, and it is critical to design websites and product ‘landing pages’ with sophisticated closed-loop measurement and feedback systems. Even startups use such techniques in conjunction with pay-per-click advertisements. This ensures that the most effective website designs will be selected to attract discovery of products and services, help in research and learning, facilitate download, trial and purchase, and to enable individuals’ self-help and making recommendations to others. Such systems can recognize and take advantage of opportunities to up-sell and cross-sell products to individuals, workgroups and businesses, and also act as a lead generation front-end for our sales force and for our partners.
3. The demand for compelling, integrated user experiences that “just work”.
The PC has morphed into new form factors and new roles, and we increasingly have more than one in our lives – at work, at home, laptops, tablets, even in the living room. Cell phones have become ubiquitous. There are a myriad of handheld devices. Set-top boxes, PVRs and game consoles are changing what and how we watch television. Photos, music and voice communications are all rapidly going digital and being driven by software. Automobiles are on a path to become smart and connected. The emergence of the digital lifestyle that utilizes all these technologies is changing how we learn, play games, watch TV, communicate with friends and family, listen to music and share memories.
But the power of technology also brings with it a cost. For all the success of individual technologies, the array of technology in a person’s life can be daunting. Increasingly, individuals choose products and services that are highly-personalized, focused on the end-to-end experience delivered by that technology. Products must deliver a seamless experience, one in which all the technology in your life ‘just works’ and can work together, on your behalf, under your control. This means designs centered on an intentional fusion of internet-based services with software, and sometimes even hardware, to deliver meaningful experiences and solutions with a level of seamless design and use that couldn’t be achieved without such a holistic approach.
The Opportunities
These three tenets are causing a shift in the software landscape that started with consumers and is progressively working its way toward the enterprise – changing how software is monetized, how software is delivered, and what kind of software is ultimately embraced. With our presence in so many markets serving so many audiences, and with such a broad variety of products and solutions, we are well positioned to deliver seamless experiences to customers, enabled by services and service-enhanced software, including:
SEAMLESS OS – The operating system as it would be designed for today’s multi-PC, multi-device, work anywhere, web-based world. Enabling you to login using any of your service-based or enterprise identities. Deploying software automatically and as appropriate to all your devices, and roaming application data and settings. Permitting seamless access to storage across all your PCs, devices, servers and the web.
SEAMLESS COMMUNICATIONS – Communications and notifications – from voice to typing to shared screen; from PC to service-based agent to phone. Maintaining continuous co-presence with intimate friends and family; improving the coordination amongst individuals who need to work together by reducing latency and adding clarity through shared context.
SEAMLESS PRODUCTIVITY – Enabling you to create, find and organize documents and data among all the desktops, devices, servers and services to which you have access, and with all the others with whom you need to work, through ‘shared space’ products that are internet service-based, enterprise server-based and directly peer-to-peer. Working within and across homes, small businesses, virtual workgroups and enterprises.
SEAMLESS ENTERTAINMENT – Enabling you to create, store, organize, present, consume and interact with media of all kinds; accessing, caching and viewing it anywhere you like regardless of where the media resides. Gaming experiences that bring two or two million people together across PCs, devices and the web.
SEAMLESS MARKETPLACE – Enabling you to research, find, buy and sell whatever you want through a seamlessly integrated purchase, billing & payment & points, advertising & lead generation & sales management system designed to satisfy the needs of both buyers and sellers.
SEAMLESS SOLUTIONS – Enabling workgroups and businesses to rapidly create and customize any of a broad class of template-driven, semi-structured data-based applications and solutions that “just work” and provide instant value – whether using them from the web, from enterprise servers, or from mobile client PCs.
SEAMLESS IT – Enabling enterprises to seamlessly and cost-effectively manage many of the things they’ve classically done within their data centers – e.g. PCs, messaging, content and applications. The management experience might be wholly within the cloud, or with the cloud seamlessly integrating enterprise server assist.
Moving Forward
In order to adapt to the requirements underlying these key tenets, groups must reflect upon their existing plans, and assess their designs in the context of the end-to-end experiences they need deliver in order to understand how services might make a substantive impact. Groups should consider how new delivery and adoption models might impact plans, and whether embracing new advertising-supported revenue models might be market-relevant.
In assessing where we are and where we need to be, some new efforts will surely require incubation. But in many areas we have 80% of the product and technical infrastructure already built – we just need to close the 20% gap. Following are but a few thoughts for each division intended to catalyze a “services-enhanced software” mindset.
Platform Products & Services Division
a. BASE vs. ADDITIVE EXPERIENCES – In MSN, and in Windows Update and software deployed by it, we have quite a bit of experience with methods and practices for getting innovations to market on a rapid cycle. In the form of a newly combined division, we should consider many options as to how we might bring user experience innovations and enhancements to users worldwide. Specifically, we should consider the achievability, desirability, and methods of increasing the tempo for both ‘base’ OS experiences as well as ‘additive’ experiences that might be delivered on a more rapid tempo. In doing so, we would better serve a broad range of highly-influential early adopters.
b. SERVICES PLATFORM – Through years of experience, the MSN team understands the methods and practices of building ‘internet scale’ services. The Platform team understands developers and has deep experience in communications and storage architectures. These teams must work together, benefiting from each others’ strengths, to develop a next generation internet services platform – a platform for both internal and external innovation. A platform with capabilities and an operations infrastructure that takes those services to a scale never yet seen on the internet – to our benefit, and to the benefit of our partners and customers.
c. SERVICE/SERVER SYNERGY – A tension has emerged between our products designed for the enterprise and those for the internet. Exchange/Hotmail, AD/Passport, and Messenger/Communicator are but three examples. All our enterprise clients and servers must interoperate with and complement our internet services. Our functional aspirations are generally “server/service symmetry”, but architectural considerations dictate that different implementations may be required to economically reach internet scale. We must quickly find the best path to achieve seamless user, developer, and administration experiences involving servers and services.
d. LIGHTWEIGHT DEVELOPMENT – The rapid growth of application assembly using things such as REST, JavaScript and PHP suggests that many developers gravitate toward very rapid, lightweight ways to create and compose solutions. We have always appreciated the need for lightweight development by power users in the form of products such as Access and SharePoint. We should revisit whether we’re adequately serving the lightweight model of development and solution composition for all classes of development.
e. RESPONSIBLE COMPETITION – We will compete energetically but also responsibly and with recognition of our high legal responsibilities. We will design and license Windows and our internet-based services as separate products, so customers can choose Windows with or without Microsoft’s services. We’ll design and license Windows and our services on terms that provide third parties with the same ability to benefit from the Windows platform that Microsoft’s services enjoy. Our services innovations will include tight integration with the Windows client via documented interfaces, so that competing services can plug into Windows in the same manner as Microsoft’s services. We will compete hard and responsibly in services on the basis of software innovation and price – and on that basis we will offer consumers and businesses the best value in the market.
Business Division
a. CONNECTED OFFICE – How would we extend or re-conceptualize Office modules to fit in this seamless model of connectedness to others, and to other applications? Should PowerPoint directly ‘broadcast to the web’, or let the audience take notes and respond? How should we increase the role of Office Online as the portal for productivity? What should we do to bring Office’s classic COM-based publish-and-subscribe capabilities to a world where RSS and XML have become the de facto publish-and-subscribe mechanisms?
b. TELECOM TRANSFORMATION – How should our investments in RTC evolve to serve not just the enterprise, but also fully embrace the concept of grassroots adoption? How can RTC begin as an individual phenomenon, growing into a small business offering with a level of function that they’d never imagine possible, growing into the enterprise? How should we utilize service-based federation and hosting to ensure a ‘just works’ experience for all users, whether or not an administrator was ever involved?
c. RAPID SOLUTIONS – How can we utilize our extant products and our knowledge of the broad historical adoption of forms-based applications to jump-start an effort that could dramatically surpass offerings from Quickbase to Salesforce.com? How could we build it to scale to hundreds of millions of users at an unimaginably low cost that would change the game? How could we re-shape our client-side software offerings such as Access and Groove, and our server offerings such as SharePoint, to grow and thrive in the presence of such a service? Could these rapid solutions encourage a new ISV ecosystem and business model?
Entertainment & Devices Division
a. CONNECTED ENTERTAINMENT – How can XBox Live benefit from interconnection with other services assets, such as PC-based and mobile-based IM and VoIP? How might both the PC and XBox mutually benefit from a common marketplace? Might PC users act as spectators/participants in XBox games, and vice-versa?
b. GRASSROOTS MOBILE SERVICES – How might the Windows Mobile device experience be transformed by for consumers by connection to a services infrastructure – in particular one enabled by RTC-based unified communications? How might unmediated connection to a rich services infrastructure transform mobile phones into a mass market messaging, media and commerce phenomenon?
c. DEVICE/SERVICE FUSION – What new devices might emerge if we envision hardware/software/service fusion? What new kinds of devices might be enabled by the presence of a service?
What’s Different?
One perspective on this memo might be to say “This is in many ways is pretty close to what we’re already working on. What’s the big deal?” Or “We tried something similar years ago; why will we succeed this time?” These are understandable reactions. Many visions of the future going all the way back to “Information at Your Fingertips” contain elements of what has been laid out here.
That said, I have a number of reasons for optimism that we can deliver well on this vision. First, I know that Bill, Steve and the senior leadership team understand that Microsoft’s execution effectiveness will be improved by eliminating obstacles to developing and shipping products. The recent reorganization into three divisions is a significant step, and the division presidents are committed to changes to improve our agility.
Second, we are just now completing a wave of innovation that has never been seen in this company. 2006 is going to be an amazing year for shipping products, and many across the company will be ready to take on a new mission.
Third, regardless of past aspirations, this is the right time to be focusing on services for two specific reasons: the increasing ubiquity of broadband has made it viable, and the proven economics of the advertising model has made it profitable. It can be argued, for example, whether or not Hailstorm was the ‘right’ undertaking. But regardless, the effort would certainly have benefited from having a known-viable services business model for which to design.
Finally, I believe at this juncture it’s generally very clear to each of us why we need to transform – the competitors, the challenges, and the opportunities. As an outsider, I was repeatedly impressed and awed over the years by how this company’s talent has swarmed to effectively respond to huge business challenges and transitions.
That said, even when we’ve been solidly in pursuit of a common vision, our end-to-end execution of key scenarios has often been uneven – in large part because of the complexity of doing such substantial undertakings. In any large project, the sheer number of moving parts sometimes naturally causes compartmentalization of decisions and execution. Some groups might lose sight of how their piece fits in, or worse, might develop features without a clear understanding of how they’ll be used. In some cases by the time the vision is delivered, the pieces might not quite fit into the originally-envisioned coherent whole. We cannot allow the seams in our organization, or our methods of making decisions, show through in our products, or result in the failure to deliver on key end-to-end experiences.
Complexity kills. It sucks the life out of developers, it makes products difficult to plan, build and test, it introduces security challenges, and it causes end-user and administrator frustration. Moving forward, within all parts of the organization, each of us should ask “What’s different?”, and explore and embrace techniques to reduce complexity.
Some problems are inherently complex; there is surely no silver bullet to reducing complexity in extant systems. But when tackling new problems, I’ve found it useful to dip into a toolbox of simplification approaches and methods. One such tool is the use of extensive end-to-end scenario-based design and implementation. Another is that of utilizing loosely-coupled design of systems by introducing constraints at key junctures – using standards as a tool to force quick agreement on interfaces. Many such tools are not rocket science: for example, by forcing a change in practices to increase the frequency of release cycles, scope and complexity of any given release by necessity is greatly reduced. Another simple tool I’ve used involves attracting developers to use common physical workspaces to naturally catalyze ad hoc face-time between those who need to coordinate, rather than relying solely upon meetings and streams of email and document reviews for such interaction. Embracing change at a local level through such tools can make a real difference – one project at a time.
Next Steps
We’re off to a great start with many initiatives already under way – from efforts occurring now within MSN, to the IW services being launched imminently. We’re in a tremendous position to succeed, but doing so will require your belief, creativity, support, leadership, follower-ship and action.
This memo was intended to get all of us roughly on the same page, and to get you thinking. The next steps are:
1) I am working with the division presidents to assign, by December 15th, “scenario owners” – a role intended to improve our execution of key services-based initiatives through leadership. These leaders will provide an outside-in perspective in mapping out and communicating specific market objectives, while at the same time working with developers and others at the detail level to ensure expedient decision making and continuity. These individuals will be responsible for driving critical decisions such as feature re-prioritization and cuts while appreciating the business tradeoffs and impact of such decisions. They’ll listen. They’ll rapidly effect changes in plans to ensure execution and improve agility, even for scenarios that span divisions. Initial scenarios to be assigned ownership will include the seven seamless experiences described earlier.
2) Beginning in January these individuals will work with me and with product groups to concretely map out scenarios and pragmatically assess changes needed in product and go-to-market plans related to services and service-based scenarios. For some groups this will impact short-term plans; for many others on path to shipping soon, it will factor significantly into planning for future releases.
3) All Business Groups have been asked to develop their plans to embrace this mission and create new service offerings that deliver value to customers and utilize the platform capabilities that we have today and are building for the future. We expect both technical and non-technical communities to be increasingly engaged on the topic of services and service-enhanced software. As we begin planning the next waves of innovation – such as those beyond Vista and Office “12” – we will mobilize execution around those plans.
4) I have created an internal blog that will be used to notify you of further plans as they emerge. There, I’ll point you to libraries of documents that you will find interesting to read, and I’ll be experimenting with ways that you can directly engage in the conversation.
http://blogs/live
These steps are important and necessary, but not sufficient, for us to deliver on our aspirations. The most important step is for each of us to internalize the transformative and disruptive potential of services. We must then focus on the need for agility in execution, and take actions as appropriate where each of us can.
The opportunities to deliver greater value to our customers, to our developer and partner communities, and to our shareholders are significant. I very much look forward to embarking on this journey with all of you.
— Ray

The Leaked Bill Gates Memo

From: Bill Gates
Sent: Sunday, October 30, 2005 9:56 PM
To: Executive Staff and Direct Reports; Distinguished Engineers
Subject: Internet Software Services
Microsoft has always had to anticipate changes in the software business and seize the opportunity to lead.
Ten years ago this December, I wrote a memo entitled The Internet Tidal Wave which described how the Internet was going to forever change the landscape of computing. Our products could either prepare for the magnitude of what was to come or risk being swept away. We dedicated ourselves to innovating rapidly and lead the way much to the surprise of many industry pundits who questioned our ability to reinvent our approach of delivering software breakthroughs.
Five years ago we focused our strategy on .NET making a huge bet on XML and Web services. We were a leader in driving these standards and building them into our products and again this has been key to our success. Today, over 92% of the Fortune 100 are utilizing .Net and our current wave of products have XML and Web services at their core and are gaining share because of the bold bet we made back in the year 2000.
Today, the opportunity is to utilize the Internet to make software far more powerful by incorporating a services model which will simplify the work that IT departments and developers have to do while providing new capabilities.
In many ways this is not completely new. All the way back in 1998 we had a company meeting where we outlined a vision in which software would become more of a service over time. We’ve been making investments since then — for example, the Watson service we have built into Windows and Office allows us and our partners to understand where our users are running into problems and lets us improve their experience. Our On-line help work gives us constant feedback about what topics are helping our users and which we need to change. Products from MSN like Messenger and Hotmail are updated with new features many times throughout the year, allowing them to deliver innovations rapidly. Our Mappoint service was a pioneer in letting corporations connect up to a web based API on a subscription basis.
However, to lead we need to do far more. The broad and rich foundation of the Internet will unleash a “services wave” of applications and experiences available instantly over the Internet to millions of users. Advertising has emerged as a powerful new means by which to directly and indirectly fund the creation and delivery of software and services along with subscriptions and license fees. Services designed to scale to tens or hundreds of millions will dramatically change the nature and cost of solutions deliverable to enterprises or small businesses.
We will build our strategies around Internet services and we will provide a broad set of service APIs and use them in all of our key applications.
This coming “services wave” will be very disruptive. We have competitors who will seize on these approaches and challenge us – still, the opportunity for us to lead is very clear. More than any other company, we have the vision, assets, experience, and aspirations to deliver experiences and solutions across the entire range of digital workstyle & digital lifestyle scenarios, and to do so at scale, reaching users, developers and businesses across all markets.
But in order to execute on this opportunity, as we’ve done before we must act quickly and decisively. This next generation of the Internet is being shaped by its “grassroots” adoption and popularization model, and the cost-effective “seamless experiences” delivered through the intentional fusion of services, software and sometimes hardware. We must reflect upon what and for whom we are building, how best to deliver new functionality given the Internet services model, what kind of a platform in this new context might enable partners to build great profitable businesses, and how our applications might be reshaped to create service-enabled experiences uniquely compelling to both users and businesses alike.
Steve and I recently expanded Ray Ozzie’s role as CTO to include leading our services strategy across all three divisions. We did this because we believe our services challenges and opportunities will impact most everything we do. Ray has long demonstrated his passion for software, and through his work at Groove he also came to realize the transformative potential for combining software and services. I’ve attached a memo from Ray which I feel sure we will look back on as being as critical as The Internet Tidal Wave memo was when it came out. Ray outlines the great things we and our partners can do using the Internet Services approach.
The next sea change is upon us. We must recognize this change as an opportunity to take our offerings to the next level, compete in a manner commensurate with our industry responsibilities, and utilize our assets and our broad reach to reshape our business for the benefit of the users of our products, our customers, our partners and ourselves.
Bill

If the CEO can’t blog, should they still be CEO?

“The PR department must take its hands off the blog in order for it to work properly – no fake blog entries written for the CEO, and no vetting posts before they go live. (If your CEO cannot be trusted, even after being trained in how to blog legally and sensibly, not to drop clangers in the posts he writes, then he should not be blogging.)” – posting at CEO Bloggers Club
Also: “In order to blog well, they also have to be the right CEOs – straight-shooters, engaging and with interesting things to say. Sun Microsystems’ Jonathan Schwartz is a great one, as are Thomas Nelson Publishers’ Michael Hyatt and Five Across CEO Glenn Reid.”
Schwartz isn’t the CEO at Sun, but he does have his own views – published recently in HBR: “If You Want to Lead, Blog.” Says Schwartz:
Many senior executives at Sun, including me, have blogs which can be read by anyone, anywhere in the world. We discuss everything from business strategy to product development to company values. We host open letters from the outside, and we openly respond to them. We talk about our successes. And our mistakes (if you don’t believe me, go to http://blogs.sun.com/roller/page/jonathan?entry=dear_john).
That may seem risky. But I’d argue that it’s riskier not to have a blog. Remember not long ago when CEOs would ask their assistants to print outtheir email for them to read, and then they’d dictate responses to be typewritten and sent via snail mail? Where are those leaders now? (Thelast of my contacts of that breed just retired.) Ten years from now, most of us will communicate directly with our customers, employees and the wider community through blogs. For executives, having a blog is not going to be a matter of choice, any more than using email is today. If you’re not part of the conversation others will speak on your behalf, and I’m not talking about your employees.

So the question is this: if your CEO can’t blog, should she still be CEO? What I’m asking is if your CEO cannot communicate in real time, but needs a PR machine to do her messaging, is she really CEO material?
Now there are CEOs who could blog, but don’t. I’m sure Bill Gates would love to blog, but I suspect his lawyers won’t let him.
Blogging is becoming, in some ways, a test for company transparency. Speaking of which, why aren’t the big boys at Google blogging yet? Bill Gates- you can beat them to this one!

NYT Refuses Sun Ad Bashing Dell

I must say I loved this ad from Sun. It’s actually fairly brilliant because it:
1) states Sun’s case in a humorous way,
2) highlights the different strategies the two companies are allegedly pursuing (innovation=Sun, low-cost=Dell),
3) beats Dell at its own game- price,
4) has an environmental angle,
5) tells us about the best server in the world!
6) trumpets open source messaging via Solaris…
I could go on and on.
Lucky for Sun that the NYT refused to print the ad, giving it even more buzz… All the news that’s fit to print, eh? They can print Judy Miller, but not an ad?
Well, the ad is on Jonathan Schwartz’s blog– which gives it that much more authenticity!
One more thing- will design and innovation rule the future of global competition? Sun thinks so.
I do too.

Video-on-Demand: Here it is, says Forrester

Interesting analysis from Forrester:
“The iPod video player doesn’t matter. Downloading episodes of Lost and Desperate Housewives to computers barely matters. What does matter is the crack in the traditional television business model opened by the Apple/ABC deal to allow consumers on-demand access to current hit TV shows. Unwittingly, Apple is building the proof of concept for the video-on-demand (VOD) business model. Demands by cable operators to put the same deal on the VOD tier, rebellion by network affiliates, and greater availability of niche content will fracture the old business model.”
The story here.

How We Buy: Search!

Yahoo and Compete, Inc., recently announced key findings from a new study which tracked Internet search and transaction activity specifically related to retail apparel Web sites over one year.
The study found that search was used by 20% of the 25 million unique monthly visitors engaging in apparel activity on the sites Compete tracked.
For the study, “Search and the Engaged Customer: An Apparel Study”, Compete analyzed the online shopping behavior of its panel of two million Internet users and conducted a survey of over 400 apparel shoppers who used search, visited one of 49 apparel retailer or manufacturer sites and subsequently purchased apparel offline. The study observed both Web search and sponsored search activity across Yahoo!, Google, Ask Jeeves, MSN, Lycos and Hotbot.
Key findings from the study include:
Search Influences Offline Purchasing. According to the findings, 78% of people who purchased apparel offline after using Internet search reported that search influenced their store visit and purchase. Nearly half (47%) of these buyers have also purchased apparel online and spend 26% more on apparel annually than those who do not use search.
Apparel searchers are highly engaged shoppers. The study found that, over a 60-day shopping period, apparel searchers spent more than 30% more time when visiting retail sites than non-search visitors and were more likely to engage in site activities such as customizing a product image, viewing shipping methods or return policies and submitting an email name. The research also showed that apparel searchers were also more likely to make a purchase (online or offline). Apparel searchers generated an average online conversion rate of 21%, compared with the 18% average conversion rate generated by non-search users.
Consumers use search throughout the buying cycle. Consumers conduct multiple searches and use search throughout their purchase decision, with 21% reporting they use search to find out about new styles and brands, 27% using search to find out about sales and deals and over 50% using search to find a store address, phone number or website.
“It’s clear from these findings that consumers are using search for multiple objectives throughout their apparel shopping process,” said Diane Rinaldo, retail category director, Yahoo! Search Marketing. “Search provides retail marketers a way to reach their customers in a comprehensive manner that allows them to effectively tie together their online and offline sales, enhance brand awareness and increase market share.”
Hmmm. All roads lead to Google. It’s funny, but I’m beginning to feel sorry for Microsoft.

Google’s Product Development & Management Process Revealed

From Marissa Mayer via Evelyn Rodriguez. Download here>>
Thanks for taking notes, Evelyn!
Some highlights:
Small, Agile Engineering Teams
• 3-person units (like start-ups!)
• Unit is a project – they don’t have departments
• Unit is co-located (sit next to each other) also with PM
• Engineers work on project for 3-4 months, then transition to next project
• Very fluid
• With 180 engineers, they can work on 60 projects – so they can afford to invest
on high-risk, high-return projects as well. (They call high-risk projects “Googlettes”)
• Each project manager works with 9-10 people across units. For example, maybe a category such as “Enterprise Infrastructure”
• The technical lead in each unit of 3 is responsible for technical excellence of project.
• Documentation
– Very sparse, only what is needed in Product Requirements Document
(PRD)
– Eric Schmidt: “Late binding decision-making process”
– Evolves based on feedback
– Includes information on general market size, revenue in PRD but believe that “if you build something users use, there will be a way to make money”
• Large Projects
– Example: Enterprise Product – broken into logical modules, thus 4 units
(of 3 people) = 12 people
• Monetization teams
– Larry Page: “No such thing as a successful failure; if it is useful to people, later we can make revenue from it in a logical way.”
Focus on providing value to user first.
– Then create team to execute the “monetization” of most useful products/services.
• Marissa (speaker) was on team to monetize search
– Created AdWords, etc.
This is very, very interesting. Beeg trouble for moose and squirrel, er, Microsoft!

How it Works: Double Loop Marketing™

I keep getting emails asking me how “Double Loop Marketing” works. Here’s a quick explanation.
Let’s say a company like Texas Instruments wants establish itself as a thought-leader in the RFID marketspace.
In the traditional PR world, they could issue a few press releases, give a few speeches, write a few whitepapers, and then hope the media would cover them.
But what if TI decided on a “Double Loop Marketing™” approach?
What if Texas Instruments brought together its partners, industry thought-leaders, R&D professionals, VC shops, and senior executives in an online thought-leadership-based “double-loop” site to:
– Learn about the latest trends and technologies in RFID
– Define and understand the specific factors that contribute to improving strategy
– Develop recommendations for creating a RFID management discipline within your organization
– Present sample business justifications supporting strategic and learning investments in RFID
– Foster discussion of lessons learned from early adopters
– Disseminate news, events, and thought leadership articles on a monthly basis
– Create a framework for measuring performance and ROI
– Build a worldwide community of interested senior executives and target them w/ e-mail bulletins that include messages from TI and its partners
– Develop industry-specific campaigns promoting the community – including offline events, publications, and more.
– Build a members-only community of practice around the gurus and leading implementors
The site would include blogs as well, from industry experts and TI subject-matter experts.
Of course the cost of something like that is far higher than funding a blog or two, but its impact on the marketspace is far more potent.
By building a thought-leadership hub on RFID, TI establishes itself as “the one to learn from” and as I like to say: moves from “mind share” to “wallet share”
Blogs on the other hand are better suited to the voice of an individual. So if TI doesn’t have the resources to build the “big” site I mention, they can still play by allowing one or more of their subject matter experts to start blogging on the ins-and-outs of RFID.
Of course, great care must be taken to make sure that the expert actually does have something to say, and is not the mouthpiece for a veiled PR initiative. Scoble at Microsoft and Schwartz at Sun come to mind instantly, right?
Not enough? Here’s a slightly longer explanation of Double Loop Marketing.

The Long Tail in Print: Buying Books a Page at a Time

The Amazon “Pages program” would “unbundle” books, by allowing customers to purchase and view the pages they want or need.
Amazon “Upgrade” will give customers the option to purchase a physical book and perpetual online access to the book. [I do like this idea- now I won’t have lug all my books around the world.]
When will this happen? Sometime next year… read about it here.
How does this compare with Google’s “Print Library”?
Here’s what the bloggers are saying:
“Suddenly the reason why publishers and authors are so pissed off at Google becomes a little bit clearer. They think that they’re going to be able to slice and dice their books, selling little pieces of the book as people want them. They’re taking a page from the entertainment industry — and, like that industry, they’re going to discover this plan won’t work very well. They’ve just added friction in the form of additional transaction costs, both mental and monetary to finding information.”
Techdirt
“Ultimately, it’s a very Long Tail idea, isn’t it? Allow people to buy stuff the way they want to, so that you can wring every last cent out of your content, by earning $1 from someone who isn’t willing to spend $10 for the entire book.”
Yellow Handman
“It’s figured out a way to please authors and publishers, spread around the money for everyone, and do the right thing for readers. Google should sit up and take notice.”
Konnecke.com
“It sounds intriguing – especially to folks who conduct research or who cite information. For example, I might want to cite a book in a blog post or an article or something, but not wait for the entire book (or even buy it). But to pay a nominal amount for access to a few pages – well, that might well be worth the cost.”
Walloworld

Google: Revenues from Dead Authors’ Works

I’m kidding, but hey- now you can read Jane Austen and click on Google Ads at the same time!
Here’s the official line: “One of our goals for Google Print is to change that, and today we’ve taken an exciting step toward meeting it: making available a number of public domain books that were never subject to copyright or whose copyright has expired. We can show every page because these books are in the public domain.” more>>
I like it. They thought of it before Bill Gates.
Is this the “democratization of knowledge” Larry Prusak talks about?

Forrester: It’s Still About Content

Forrester’s Chris Charron notes:
“Now that two-thirds of North American households are online, and broadband has reached 72.5 million US households, value has begun to shift from the business of connecting pipelines and selling products to the market for content. Home networks and cheap devices free media content from the shackles of space and time, opening up distribution, and creating the opportunity for new business models. Fasten your seat belts: The content explosion is only beginning.

Charron predicts:
“As video content breaks free from the constraints of space and time, executives should take some lessons from the music industry. Content executives who are looking at the risks and opportunities of online video distribution should take note:
– TV networks, movie studios, and cable and satellite operators will need to jettison the notion that revenue should derive from a single source, and embrace alternative ways of thinking about making money from video.
– To make alternative video distribution profitable, content producers should begin to focus on the small(er) screen and the creation of unique content that consumers will pay for to use on their mobile phones or iPods.
– Internet video — with its ad-supported model — will increase in quantity and improve in quality. Some of the currently free content will make the leap to fee-based offerings as the video iPod and similar devices prove their worth to content owners and consumers.
– Consumers will begin their own video explosion of video podcasts that will let them be seen AND heard, some with hopes of recognition that would mirror the mainstream success of Internet-goofball-turned-MTV-star Andy Milonakis.
– Traditional TV advertisers will be forced to find new ways to market their wares in portable video: Look out for sponsorships, product-placement, and long form showcase-style ads to become more prevalent.”