Platform is a Business Model, Not a Technology

Many software companies have been infected by the platform bug. They market their software as a platform. They have built a platform. Their software comes with tiered architecture, an API, and perhaps even some developer tools. But do they really have a platform?

Well, to have a platform, someone has to “stand” on it. What that really means is there have to be others who have built applications on your platform. If the only applications available on your platform come from you, the world couldn’t care less about your platform. There have to be companies out there that decided to build their applications on your platform and not on someone else’s.

That last point is critical. The application developers are effectively asked to place a bet on your platform. That’s particularly important for commercial application vendors as their application will require your platform to run. That represents a huge commercial risk. The application vendors can usually afford to build their software only for one or two platforms. Supporting more than that becomes very cost prohibitive. So why would the application vendors select your platform over some other one?

This effectively becomes a business decision based on the market presence of the platform. The market presence is critical in determining the total addressable market for the application. It’s only one factor, because your application actually only targets a fraction of that potential target market - there are other factors involved based on the type of the problem the application solves. It is very rare, that customers would adopt a certain platform because of a particular application. They may adopt a platform because of a perceived abundance of applications but rarely because of one application.

Let’s take the mobile devices as an example. If you want to build a mobile application, you need to decide on which operating system platform your application will run. Considering the market presence, your decision is relatively easy - you need to support Android and iOS and then your application will support well over 95% of all mobile devices. Adding a third platform to support - perhaps Windows or Blackberry - makes commercially little sense. It’s a huge development cost for a marginal increase of potential customers.

While the market presence is key for an application vendor to support your platform, the features are not. No matter how rich your API is, how easy your development tools are to use, or how well you ensure security, scalability, reliability, etc., application vendors won’t support your platform if you don’t have a market presence that represents an attractive enough target market. Sure, all those features are important but, commercially, the market potential will always beat features.

There has been a long debate about Enterprise Content Management (ECM) as a platform. All the key vendors provide technically a platform. They have the right architecture, the API, and the developer tools. But let’s take a look at the market from the application software vendor point of view. The market is very fragmented with many players and none of them has more than 15% of market share. If you can only afford to support 1-2 platforms, which ones to you choose? IBM? OpenText? EMC? Box? SharePoint? Picking any one of those two will give you no more than 25% of the market as a potential target audience. Would you as an application vendor bet your business on any one of those platforms?

No. What you do is you build your application in a manner that is agnostic to all those ECM systems and you provide integrations to any one of those ECM repositories. That way, you only need to support one code base while potentially targeting a significant percentage of the ECM market. You have mitigated your commercial risk by not making your application stand on any one platform - there is no business dependency for the application. Your approach, however, makes all those ECM systems just information sources, not platforms.

“Wait a minute”, you might say, “how about the applications that are built by customers rather than commercial vendors?”. True, those applications do make your platform a true platform, even if most of the customer development falls more into the category of customizations rather than applications. But as that line is very blurry, let’s not split hairs. The question to ask is what makes customers who intend to build their own applications choose your platform? And the answer is, yet again, not so much about the features and technology and much more about the skillset availability, which is a function of market presence.   

To be a platform, any system has to devise a business model that compels application developers to bet their applications on a platform’s success. How do you attract developers to build their applications on your platform? How do you make it commercially attractive for them? Without resolving this fundamental issue, all the features and APIs won’t make any difference.

Because a platform is a business model, not a technology.  

Are We Teaching Obsolete Skills?

This blog post is about education yet it has to do with technology in many ways. The issue at hand is the current educational system and the wrong focus we place on teaching obsolete skills.

Indeed, most of our education is wasted on learning the hard skills like calculus and memorizing the formulas for amino acids. Sure those skills are probably critical to those of us who go on to become mathematicians or chemical scientists but that’s only a very few of us. On the other hand, all of us need almost daily more of the soft skills such as effective communication, public speaking, negotiation and leadership. With a few exceptions, these skills are not taught today on any level of education.

Every engineer needs to know how to use one of these, right?

It’s ironic, if you ask me. We get all this education to be able to live more prosperous lives yet prosperity rarely comes from spelling or algebra. Prosperity usually comes from the ability to sell yourself, negotiate a decent salary and communicate well about what you have accomplished. Sure, you need to know some spelling and algebra to avoid looking like an idiot but we should accept the fact that most of us work in front of a computer all day long. That computer provides plenty of assistance for spelling and multiplication. However, the computer can’t take over conflict resolution, problem analysis or financial planning. Yet we all need those skills every day!

By the way, how is our current education doing at teaching us to use that computer? Well, not that great. In fact, most knowledge workers are expected to learn those skills along the way while doing homework. The results are knowledge workers with no concept of data structure, drowning in information overflow, and in general, suffering from some degree of technophobia. Today, the basics of PowerPoint design are much more marketable skills than calculus.

I watch my children learning their spelling and multiplication everyday - years of hard training that should be reduced by half. Technology is changing the learning needs and yet our learning system is adapting way too slowly. Nobody is teaching how to use an abacus or a slide rule anymore even though those skills were considered essential some 50 years ago. Yet our kids spend years learning to write in cursive which nobody uses anymore.

Russian abacus.

There is a difference in education between the continents today. Europe and particularly Asia are putting even more emphasis on the hard skills, producing brilliant engineers who struggle to land a job. America is at least a small step ahead in teaching the soft skills. In general, Americans appear to be much more at ease at public speaking than their European or Asian counterparts. Guess what, the US educational system teaches this soft skill from kindergarten starting with “show-and-tell” - something that European kids rarely do.

As much as America’s worried about losing its edge on the international scene, at least its educational system is a little more relevant. No wonder that American universities are always among some of the most prestigious in the world. Clearly, teaching soft skills is not just an American challenge and other countries might face it even more.

My point is that we are teaching skills today, that were relevant back in the 1950s. Or, back in the 1850s. Our education system has to keep up with the technical innovation of the present time. In fact, to be truly effective, we should be teaching a curriculum now that will be relevant when our kids actually enter the workforce. Today, they start their first jobs with academic skills that are irrelevant to actually do that job!

Images: Wikipedia Creative Commons and public domain.

Can Machines Replace Humans?

I have recently read a great book by Erik Brynjolfsson and Andrew McAfee called Race Against The Machine: How the Digital Revolution is Accelerating Innovation, Driving Productivity, and Irreversibly Transforming Employment and the Economy. Professor McAfee is of course the one and the same who coined the term Enterprise 2.0 a couple of years ago and who worked with us at AIIM on the business-use cases for social software last year. I was thrilled to be a part of that project.

Andrew McAfee and I during the AIIM project last year.

In the book, the authors argue that we have now reached the point where technology is getting so advanced today that it is possible to automate tasks and jobs previously thought only humans could do. The chess-playing supercomputers beating Gary Kasparov were just the beginning. Now, we have computers driving cars and winning on Jeopardy, and we are only starting. The speed of innovation is growing exponentially and we are into the large growth numbers!

The repercussions of this hypothesis are far reaching. We are at the beginning of an incredible technology cycle. Do you think SoLoMo is cool? Do you get excited by the Cloud and Big Data? Consumarization? Gamification? Just buckle up! Another wave of incredible innovation is bearing upon us - innovations that will be able to replace, improve and automate many of our daily life activities. Tasks previously thought of as forever relegated to only humans will be taken over by machines. Is the Babelfish finally going to be released by Apple?

I can think of many incredible possibilities: image and video recognition, automated decision making, adaptive process flows, contextual experience, home automation, continuous authentication, and yes, real-time translation... there are so many things we could do! They are all possible in theory today but are just too impractical given the technology constraints. However, the technology - hardware and software - is improving at an exponential pace and constraints such as performance limitations or the overwhelming data volume will soon be no longer considered obstacles.

The consequences will likely be profound. Just like the bank tellers and stock brokers of the past, many jobs will be eliminated as a result of innovation. Brynjolfsson and McAfee went as far in their book as to suggest a blueprint for transforming society in order to accommodate for the massive shifts in the workforce. I really wish our politicians read the book.

With all the changes, I believe that technology ultimately creates opportunities. The sudden shifts may feel disruptive to the established order but we all know that only the most adaptive species survive in the long term, We need to embrace the technology. We need to harness its power. And, we need to adapt.

Why Has The Internet Failed Us Here?

Back in the 90s, we were promised that the Internet would change everything. It did. Many articles have been written about what our children will never encounter because of the Internet: CD players, copiers, modems, diskettes, plane tickets, encyclopedias, classified ads etc. Yet there are things that should have been made obsolete by now and they are not. Here is where the Internet has failed us:

Checks
In North America, checks (or cheques) are still used everywhere. To pay bills, to pay in a store, or to pay money to a friend. While most banks allow online payments, there are still plenty of utility companies, county tax collectors, and newspapers that only accept checks. And while we all think that European banking is about to go back to the Neanderthal era any day now, most Europeans have not written a check in a decade as online payments and even mobile payments are quite common.

Back in my German days in the 90s, when you needed to send me money, I’d give you my account number and the bank routing number and you’d just do it online via a free instant transfer. That was possible long before the Web by using services such as the French Minitel or the German BTX. Don’t believe that the expensive wire transfers that require a 2 page form with a $35 fee are the same thing. They might be when the Buffetts transfer money to the Gates but most American bank customers have never used a wire transfer. They write checks. Frankly, I am shocked that the banks have left the door wide open for services such as Paypal and Square.

Signatures
“We need the signed original mailed back to us...” - how many more times will I hear this request? Signatures are still required for many transactions, including many credit card purchases. As if the “wet” signature made the transaction somehow magically secure.

While a fax is generally regarded as a legally binding transaction, sending the same signed document via email is usually not acceptable. Why a fax is more legal than an email attachment, I don’t understand. Why a wet signature is considered more secure than any form of electronic authentication is completely beyond me. Any transaction conducted online should be faster, more secure and convenient and yet the Internet has failed to eradicate the paper-based, wet signature dependant transactions used today.

Car dealers
I get it why we need a showroom where I can test drive a car I want to check out. I also know why we - unfortunately - still need a car service center (to replace the tail light bulbs once every 4 years, right?). But why do I need to negotiate with a car salesman who knows that I know the exact invoice price of the car? And please, don’t try that “I have to talk to my manager” routine on me. I want to select, configure and buy my car online and have it delivered to my house. Delivering a washing machine costs $50 which covers the removal of the old one. The $500 you are charging for a vehicle delivery should easily cover your parking the car in my garage and registering it on the way.

Cable TV
Cable and satellite based TV entertainment with preset programming uses a completely obsolete model in the era of on-demand entertainment. Yet, they continue to exist, making viewers pay twice - once for a monthly subscription fee and then again through endlessly annoying commercials. This has to change and I am confident it will. Entertainment delivered on-demand over the Internet is becoming a more and more viable alternative and the ranks of cordcutters are on the rise. Yet still, I would have expected cable to be dead for at least 5 years by now.

Realtors
Buying a house is a ridiculous experience. Pages and pages of meaningless reports, statements and disclosures complemented by mysterious fees for pro-forma inspections and mysterious services like ‘title insurance’. The realtors get up to 6% for ...what exactly? Driving me around to a bunch of lame houses only to make sure I have no choice but to put an offer in for the most expensive one? In the age of Google Earth, Zillow, and Craigslist, who needs a realtor? Both, the seller and the buyer would be better off closing the transaction directly with the title company still acting as the secure clearing house. Yes, the Internet has failed us here.

Borders
The Internet was expected to obliterate country borders. After all, I can access any web site in the world from my iPhone, right? Well, sort of. Web sites providing entertainment content from NBC to Netflix and from Pandora to Amazon are restricting the access to their content from abroad. Even when I pay for a monthly subscription, I am precluded from accessing the content as soon as I cross the border. These are artificial frontiers that have been set up to enforce the country-based content distribution rights - a rather obsolete concept in the age of the Internet. As a frequent traveler, the Internet has failed me big time on this one.

Smart appliances
The smart refrigerator that would automatically re-order milk when I’m running low might indeed not be that useful. But smart appliances would make a lot of sense and yet they are nowhere. Part of the reason why Apple killed off the entire industry of home entertainment devices is the fact that all those amplifiers, decks, equalizers, and tuners were pretty dumb - the manufacturers never considered connecting them to the Internet. How about remotely setting my thermostat to warm up the place before I arrive at home? Makes sense, doesn’t it? I cannot fathom why Honeywell and GE have not thought of that. Today, there are rumors about the perhaps-soon-to-be-announced Apple TV. If it comes, you can bet that it will be a smart, Internet appliance that will change the way we watch TV.

These are a few examples of everyday items and activities that I would have expected to be completely changed by the Internet by now. Yet it didn’t happen so far - the Internet has failed us here. There are probably many more examples you can think of - please do share them in the comments below.

On Running, Technology, and Good Causes

I have recently become a runner - what started as a way to get back into shape after some injuries has now developed into a full-on midlife crisis.  Since I am training to run the Ottawa Marathon and raising money for a charity along the way, I wanted to write something about the technology related to running.

Boxing Day 10Miler, Hamilton

First, there are the fancy shoes and clothes which have evolved dramatically in the last years. Yes, that stuff is pretty high-tech and expensive too.  Basically, nobody runs in a t-shirt anymore - you need the latest and greatest dry-fit moisture whisk-away clothes and a pair of running shoes with extra support. That’s not to mention the fuel belts with high-tech nutrition from Gatorade to energy gels and recovery drinks.

But for us tech people, the gadgets are far more interesting. I run with a Garmin Forerunner 210 watch with a GPS receiver that also collects data from my foot chip and heart monitor. The foot pod measures my cadence, speed and distance when running indoors. Combined with the GPS based pace, speed, distance, elevation, and route and with the pulse data from my heart monitor, I am collecting more data on my watch than what Formula 1 cars were capable of just a few decades ago. Just check out the data from my recent race for the level of detail I get.

When training, I also run with my iPhone to listen to something that keeps my mind away from the miles. I usually listen to books from Audible.com which I like better than some peppy music, although that’s a matter of personal preference. I use wireless earphones that connect to the iPhone via a Bluetooth connection. I tried regular ear-buds for a while but the cable was always getting tangled.

The next level of technology is available online. From plentiful training advice, race registration, pace calculators, and training plans, the Web is full of useful info. But what I find particularly motivating is the mutual sharing of training data on social media. Most of the running software such as Endomondo, MapMyRun, NikePlus, and Garmin Connect not only display and analyze the data but also enable sharing it via Facebook and Twitter.

Seeing my Facebook friends post info about their training runs is very motivating - knowing that they will see my own results makes me run harder. I know that the frequent posts might annoy and sometimes even demoralize the non-runners but please forgive us. It’s not like we are tweeting what we’ve had for dinner... Mutual encouragement for sport enthusiasts is a great use of social media!

Finally, the technology managed to transform another aspect of running - fund-raising. Running and other amateur sports have long been connected to fund-raising efforts for various charities. Today, services such as Razoo or Kintera make it very easy to set up a fundraiser for one’s favorite charity and take care of all the payment processing. They even send the donors a receipt for their tax deduction.

I am now in the middle of my training program for the Ottawa Marathon on May 27th. For this occasion, I have set up a fundraiser for the American Heart Association and the Canadian Heart and Stroke Foundation (trying to accommodate either tax jurisdiction for the bulk of my friends). Please check it out and donate to support my cause. Your contribution goes to a great charitable organization that helps fight heart disease. Your donations are the greatest motivation for me as I am getting ready for the big race. And, the technology enthusiast in you will appreciate how technology transformed even this part of our life...

Donate online to Running with Heart at Razoo

Thank you!

The Future Upon Us

All the innovation and converging technology trends will likely have a major impact on what we can do but also on our culture, our behavior, our ways of interacting with each other and with the technology itself. This presentation discusses some of such changes that we need to get ready for.

This a narrated recording of the presentation I have delivered as an OpenTalk on November 17, 2011 at the OpenText Content World in Orlando, FL.

The Future Upon Us - OpenTalk

More PowerPoint presentations from Lubor Ptacek

Waterloo, The High Tech Metropolis

Yes, it is the holiday time and I am spending my days with other things than writing blog posts. But I have played a little with this mash-up, which allowed me to show the concentration of high-tech power in the relatively small town called Waterloo, Ontario. Well, it shows the 25 RIM buildings and then some of the other high-tech companies in town, including the OpenText building - actually, soon to be two buildings:

This mash-up is open, which means that you can add to it or correct it. Feel free to do so.

Cheers!