Sunday, September 30, 2012

The Family Album of the Facebook Generation

When I was a kid, my parents had a small camera and, like most parents, they took many pictures of their offspring. As a result, there are a couple of family albums and a shoebox full of family pictures somewhere in the basement. Among those pictures are a couple hundred photographs of me.

Now, fast forward to the present time. I have literally thousands of pictures of my children. Those pictures are easily shared with other family members on flash drives and via Dropbox and often uploaded to Facebook or Flickr. When our children are grown, they will live in a world where their lives are well documented in pictures. Really well.

Yep, I have thousands of pictures of my kids...and those pics last forever!
What’s more, all those pictures will be fairly broadly distributed - our kids will have limited control over where their pictures are used. The pictures will be in many hands - many people will have a copy. Being camera shy just won’t fly.

This development is the result of two major events. First, the advent of digital photography has made taking pictures significantly less expensive - almost free. They are not entirely free as we are paying for the storage and often for the transmission cost. But compared to what pictures used to cost, they are pretty much free today. Back in the days of negatives and prints, each picture had an explicit price. A roll of 35mm film used to cost about $8 and the development plus those 36 prints would cost about $12 - that means each picture came to approximately $0.50. That made even the most avid photographer quite selective about when to squeeze the trigger!

The second event was the convergence of cameras and mobile phones. For years now, most mobile phones and smartphones include a camera and since pretty much everybody has a mobile phone today, everybody is a photographer. There are over 6 billion mobile phones out there and a significant portion of them have a built-in camera (at least 50%). On top of that, millions of digital cameras from the point-and-shoot to the fancy digital SLR cameras are sold every year. In the days of film cameras, there were only very few photographers among any group of people: weddings, group travel, or sports events. Today, everybody is taking pictures at all times. Some events in front of large audiences (i.e. concerts) have been completely transformed by the constant flashes from thousands of cameras.

All of the sudden, photography is free and ubiquitous and the result is predictable. Our lives are being documented like never before. Approximately 250 million pictures are being uploaded onto Facebook every day which is almost 25% of all pictures taken worldwide. In 2011, an estimated 375 billion pictures were taken in the world. That’s over 52 pictures for every single human being each year - at least one picture each week. Given the likelihood that the picture taking is concentrated into a smaller percentage of the world population, the likely number of pictures is much higher. Every one of the 950 million Facebook users uploads almost 100 pictures per year. That’s right, “uploads”, not “takes”. I’m guessing that if one out of every 10 pictures taken ends up on Facebook, the average Facebook user might be taking about 1,000 pictures a year. That’s 18,000 pictures before a child has a chance to hide in college from the parental picture taking.

That’s a pretty big shoe box. Our lives are documented way more than any generation before. And, we need to learn to live with it.

Tuesday, September 18, 2012

Darwin Meets the Innovator's Dilemma - in the Cloud

In his book Dealing with Darwin, Geoffrey Moore - the one of the Crossing the Chasm fame - has explained the difference between the complex systems and volume operations. According to this concept, technology vendors fall into one of two categories. The complex systems vendors focus on a relatively small number of high-value, high-touch transactions that are delivered in the form of sophisticated, customized solutions, usually integrated with other systems.
Geoffrey Moore's model for Complex Systems vs Volume Operations
The volume operators are doing exactly the opposite. They deliver relatively simple, inexpensive solutions through low-touch transactions - no direct sales force but resellers, retailers or online sales. These solutions come with no customization, no integration with other systems, and a limited feature set - one size fits all. While there are many scenarios in between (i.e. small business offerings), Geoffrey Moore suggests the the more a vendor is focused on one or the other extreme, the more effective the business model. IBM and Oracle are examples of complex system vendors while Apple and Google are volume operators.

The most important point that Moore makes is that vendor business models become so optimized for one or the other business architecture that crossing from one side to the other is impossible. Having started on one side of the model, the vendor’s business model, business processes, and key performance metrics are completely hard-wired towards the particular model that makes switching practically impossible.

Geoffrey Moore at an AIIM project
Now, let’s mesh the Moore model with another one - the Innovator’s Dilemma by Clayton Christensen. Professor Christensen suggests that disruptive innovations will always be attacking the incumbents from the bottom up - by providing low-end solutions for the less demanding customers and thus flying under the radar of the incumbent market leaders - until they gain the critical mass and sufficient functionality to challenge the incumbents.

Clayton Christensen's Innovator's Dilemma model 
OK, time to put the two models to work - in enterprise software. The established vendors including IBM, Microsoft, and Oracle are supposedly being challenged by the disruptors coming from the lower end of capabilities - just like the Innovator’s Dilemma predicted. Those disruptors are companies such as Salesforce, Google, Dropbox and others. They all have one thing in common - they are cloud based. But how do they do it when we look through the Geoffrey Moore lense?

Salesforce is a cloud based disruptor that has initially targeted the sales force automation (SFA) market and later the customer relationship management (CRM) market with a cloud based solution. Salesforce has clearly started as a complex system from day one and they have continued evolving in that direction. Their initial customer base were mostly smaller companies and departments but they continued focusing on complex systems - evolving towards more valuable and more complex deployments. Salesforce never had to shift from one side to another on the Geoffrey Moore model. Today, a typical Salesforce deployment involves integration to marketing automation and enterprise resource planning systems.

Microsoft started as a complex systems vendor with enterprise on-premise offerings such as Exchange and SharePoint (note: I’m discussing the enterprise software here, not their Xbox business). To take on the cloud challenge seriously, Microsoft created Office 365 - a cloud based offering that is clearly going in the direction of volume operations on the Moore model. That actually explains why Microsoft uses different branding for the cloud based solution and why they are not particularly worried about the integration between Office 365 and the on-premise offerings. While Microsoft shouldn’t be able to switch from the complex systems model to a volume operations model, they are applying their considerable financial resources to power through those challenges, ignoring the business model altogether.

Clayton Christensen during his visit in Waterloo, ON
Google and Dropbox started as cloud-based offerings focused purely on volume operations - on the consumers. The consumer focus and free price helped them to grow their user base quickly, often infiltrating the enterprise. But the offerings have been clearly designed as consumer software aiming to attract as many eyeballs as possible at the least possible cost. That means basic feature set, no customizations, no integrations, no direct sales force - simply one size fits all service.

While vendors such as Google, Dropbox - and also Apple, Amazon, Evernote, etc. - have a good formula to drive user adoption and even penetrate the enterprise, their business model has been designed to cater to the consumer and not to the enterprise. Enterprises need, I repeat “need” customization and integration with other systems. Just think of managing user lists and groups. Sharing content on Dropbox with your friends might be easy, sharing something with all the employees in Sales or Marketing in your company is much less trivial. You can’t manage all the user groups by hand and thus you need to integrate with other existing systems - i.e. directory services and HR Management system. Enterprise software can do that. Consumer software can’t.  

The consumer vendors might be penetrating the enterprise but today, they don’t have any enterprise offerings.

PS: This post has been inspired by a spirited discussion during the last AIIM Board meeting. I love these conversations with my fellow Board members!

Tuesday, September 11, 2012

Your Digital Shadow Won't Matter That Much

The 2012 US presidential elections are in full swing and the campaigns on both sides are doing the best they can to attract voters. Well, their best and sometimes not so best mud-slinging is today an integral part of the presidential show. Those constant questions about who’s done what at some point in their lives as both sides hope that they can dig out something bad. Something that will swing those undecided voters who seem to be making up their mind based on what they hear in a late night commercial sponsored by a presidential candidate.

But don’t despair, it won’t always stay like this. The time is coming, where the digging won’t be necessary any longer. Thanks to the Internet, our lives are becoming more and more transparent. Increasingly, the information about our work, hobbies, networks, likes and dislikes is being documented. You want to know what I’m doing for living? Well, just Google my name and see what comes up. Are you the member of a club? Do you compete on weekends? Are you associated with people in a particular organization? Have you taken part in a fundraiser? All of that is out there. For posterity.

Lot of information is out there about all of us
Today, it is still a novelty as we are discovering all these information sources - LinkedIn, Twitter, SlideShare, YouTube, Flickr, and other social media tell a lot about us and not just to our friends. Our property records were always public but now they are increasingly available - just check out Zillow. If you want to see how well Will Ferrell did in the 2003 Boston Marathon or how your neighbor did in last week’s race, just check out It’s all there, online. Together with your employment history, info about your friends, your education, your phone number and so much more. All of us have a digital shadow that is already available today. And we are barely getting started.
Not to pick on Mr. Gates - do you know the value of his house?
I believe, that all this transparency will eventually lead to a profound change in our attitude. Simply said, we won’t care as much. I don’t mean that we won’t care about what people do. Sure, it will always be interesting finding out about our friends’ recent travel or about some unexpected hobbies of a celebrity. And we might even care about what the politicians have done in the past. But we won’t care about finding out. Right now, it is still a novelty finding something out about somebody - a friend, a colleague or a presidential candidate. Finding out something is surprising and thus fascinating. But that novelty will wear off.

Pretty soon, our life story will be just a mouse click away. Everybody’s past will be well documented. The story will be right in front of us if we chose so. We might walk around with  “Google goggles” that will be applying augmented reality techniques to overlay the information about everything and everyone we look at. We will be used to it and it won’t matter by far as much. All this info will have about the same value as which town you live in today. Sure, that’s interesting for the first 5 seconds after you meet someone but 10 seconds later, it doesn’t matter anymore. Everybody lives somewhere and most of the time, it is not worth writing articles about. Even if it is a presidential candidate.

Your digital shadow won’t matter that much - because everybody will have one.