Why is Groupon the darling of the online world right now? What on earth made Google offer them a billion dollar deal? What on earth made the Groupon board reject the deal? Surely they must want to get out quick from a business that's got a very limited lifespan.
It's got a limited lifespan because it's got too high a cost base, it's clients (those providing the deals) will get tired of providing such heavily discounted items and Google will write the same functionality into their search engine with Groupon-like deals showing up in the same line as search results.
Groupon survives on getting cut-price deals for its customers and taking an additional, but not insignificant cut from the price customers pay for the deal. So, should a successful business use Groupon as a way to drive up customers? Not unless they were mad. Say there's a restaurant that is busy most days. A Groupon sales rep pops in and suggests they run an offer, say 50% off a meal for two. Groupon takes a cut too so the restaurant gets say 40% of the actual normal cover price. The offers can be taken up over an agreed period of time, 6 months isn't uncommon. So the successful restaurant that has no problems getting customers is going to have a load of customers through its doors in the next 6 months for whom they're only going to get 40% of the normal cover price. A great deal for the customer, not so great a deal for the restaurant, it's not even going to boost their trade over a short period of time that might normally be quiet, it's not that predictable. Resturant owners are fully aware of the many and far less expensive ways of getting additional footfall through the front door. 60% of the cover price is a huge slice of margin to give up and to take up such an offer would surely smack of desperation. Only a restaurant in deep trouble, desperate to get people through their doors would consider a Groupon offer as a good deal.
It's obviously a great deal for the people buying Groupon vouchers and it's obviously a great deal for Groupon, but for Groupon's clients - those actually providing the deal - it can't be that great. This is not a symbiotic relationship, it's almost completely parasitic for the clients.
I cannot understand why Andrew Mason turned down the billion dollar offer from Google. As I said at the beginning this is a business model that will be absorbed in to a search engine with group-based offers appearing alongside search results. It's not going to take Google engineers very long to replicate the service and kill off the Groupon website by putting the offers in the search results and it's not going to take very long before Groupon's clients see how much of a waste of time and margin Groupon is. And so with a dwindling client list, a ripped off business model and customers drawn away to Google's equivalent before they even hit a website like Groupon Andrew Mason will have gone from zero to hero to zero again in a very short timescale and spend the rest of his life wishing he'd taken Google's 3o pieces of silver.
Of course I could be wrong, anyone think I am?
Thursday, 3 March 2011
Monday, 7 February 2011
Product Support Rant! :)
Many years ago, I had an old car. It had 120,000 miles on the clock, but it still ran and did exactly what I needed out of a car. Twice a year, I'd get it serviced. I'd hand over some dosh and it'd work just fine for another 6 months. Whenever I turned up at my garage holding bits of the car in my hands asking for help I got help. They never, ever told me they couldn't help because the car was too old and wasn't supported anymore.
Currently, I have some network appliances in one of my Data Centres. The kit was purchased in 2007. Apparently it's end of life, not supported. So, I've been told I need to replace these perfectly good units with some new units so I'm supported. The old units have never failed, have never gone wrong and we've never asked for support. The manufacturer has been getting money for old rope for the support contract. Now I need to spend a load of capex to deliver absolutely no benefit to my business whatsoever. I fundamentally object to these tactics of revenue generation and it can be nothing more than that. Today the appliances are working fine and are supported and do the job. Tomorrow apparently they're out of date, a security risk and shouldn't be in our network. What the hell?? Who decided that?!
Why isn't the IT industry be like the manufacturing industry? The thousands of Windows XP desktop machines on my network run just fine, but Microsoft is telling me that soon they'll be no longer supported. Why? It's because they've decided, nothing more than that. To get support, I must spend money and upgrade to Windows 7. There's little to no business benefit from doing so, but I'm being forced to change.
So, here's my idea: Why not enable third parties to support these products from the official EOL? How about just like in the replica and pattern-parts business for the car industry, IT hardware and software manufacturers allow 3rd parties to continue to support products with their own security patches, OS upgrades, hardware support, etc. The car industry seems to survive with all these other 3rd party industries around them supplying non-original parts for those of us with dodgy old motors so why not the IT industry? Or one better, why not just make it all open source? Keen volunteers keep Linux up to date, why not enable the same to happen for Windows XP, or the firmware of an old Cisco box?
Then perhaps I'll have an opportunity to make the upgrade decision at a time convenient to me when I can provide a business case to the board that makes sense rather than the lame "Er, well, X company have told us we have to because they don't support Y product any more". Please, it's embarrassing for me and you. Stop it, now. Get creative, do something about it before someone else does.
Currently, I have some network appliances in one of my Data Centres. The kit was purchased in 2007. Apparently it's end of life, not supported. So, I've been told I need to replace these perfectly good units with some new units so I'm supported. The old units have never failed, have never gone wrong and we've never asked for support. The manufacturer has been getting money for old rope for the support contract. Now I need to spend a load of capex to deliver absolutely no benefit to my business whatsoever. I fundamentally object to these tactics of revenue generation and it can be nothing more than that. Today the appliances are working fine and are supported and do the job. Tomorrow apparently they're out of date, a security risk and shouldn't be in our network. What the hell?? Who decided that?!
Why isn't the IT industry be like the manufacturing industry? The thousands of Windows XP desktop machines on my network run just fine, but Microsoft is telling me that soon they'll be no longer supported. Why? It's because they've decided, nothing more than that. To get support, I must spend money and upgrade to Windows 7. There's little to no business benefit from doing so, but I'm being forced to change.
So, here's my idea: Why not enable third parties to support these products from the official EOL? How about just like in the replica and pattern-parts business for the car industry, IT hardware and software manufacturers allow 3rd parties to continue to support products with their own security patches, OS upgrades, hardware support, etc. The car industry seems to survive with all these other 3rd party industries around them supplying non-original parts for those of us with dodgy old motors so why not the IT industry? Or one better, why not just make it all open source? Keen volunteers keep Linux up to date, why not enable the same to happen for Windows XP, or the firmware of an old Cisco box?
Then perhaps I'll have an opportunity to make the upgrade decision at a time convenient to me when I can provide a business case to the board that makes sense rather than the lame "Er, well, X company have told us we have to because they don't support Y product any more". Please, it's embarrassing for me and you. Stop it, now. Get creative, do something about it before someone else does.
Friday, 28 January 2011
The End is never The End
So, my company has announced a complete end-to-end restructure which will result in a large number of job-losses, particularly in central services such as IT that are being merged from their multiple existences in to one. It all makes perfect sense, actually I'm a little surprised it's taken this long to happen but there we go, one of those things.
Why would any company want more than one department doing the same thing for a sub-set of the whole company? It would appear careless to end up in a situation where there are multiple departments doing similar things, but when you consider that my company is made up of a number of seperate companies that have all been acquired and brought together in a very short space of time, it is perhaps less surprising. What may be surprising to some though is that even with all this internal duplication, we still made a decent profit!
Anyway, now that a lot of consolidation has happened with the technology, it is a convenient moment for departments and companies to be merged together in to one company, one set of departments and one culture. Out of all this, by far the culture is going to be the hardest to change, particularly when one part of the company is dominant and has an entrenched culture that does not fit in with the proposed new culture. Sadly, in my opinion, unless it does change the new culture will fail as well and it will cause significant issues for the future of the company.
We will see. What I do know is that it's highly unlikely I'll be inside helping, I think I'll be outside watching. That's because I think I'm going to move on and find something else to do somewhere else. Sometimes it's good to get a prod that enforces a review and a change in direction. I'm hoping I'll have a bit of padding that will help me be a bit more adventurous than I might otherwise be. 2011 is going to be an incredibly interesting year. Watch this space! :)
Why would any company want more than one department doing the same thing for a sub-set of the whole company? It would appear careless to end up in a situation where there are multiple departments doing similar things, but when you consider that my company is made up of a number of seperate companies that have all been acquired and brought together in a very short space of time, it is perhaps less surprising. What may be surprising to some though is that even with all this internal duplication, we still made a decent profit!
Anyway, now that a lot of consolidation has happened with the technology, it is a convenient moment for departments and companies to be merged together in to one company, one set of departments and one culture. Out of all this, by far the culture is going to be the hardest to change, particularly when one part of the company is dominant and has an entrenched culture that does not fit in with the proposed new culture. Sadly, in my opinion, unless it does change the new culture will fail as well and it will cause significant issues for the future of the company.
We will see. What I do know is that it's highly unlikely I'll be inside helping, I think I'll be outside watching. That's because I think I'm going to move on and find something else to do somewhere else. Sometimes it's good to get a prod that enforces a review and a change in direction. I'm hoping I'll have a bit of padding that will help me be a bit more adventurous than I might otherwise be. 2011 is going to be an incredibly interesting year. Watch this space! :)
Thursday, 20 January 2011
Predictions and Broadband
Are predictions in the IT sector ever worth it? I was at an event the other day where a number of predictions offered. A lot of research had gone in to these and they were all good, nothing extraordinary, nothing too far fetched. However, I was surprised by an omission that I believe is staring us in the face.
In essence, my prediction is that broadband must move to a utility model, customers paying for what they use, pence per Megabit. We pay for electricity, gas and the telephone in that manner, data has to be next, unlimited packages don't have a future. Customers want to download movies, tv, use iPlayer, watch YouTube, listen to internet radio, share pictures, play multiplayer games - it's all taking more and more bandwidth and let's face it the media companies serving up all this fare are highly unlikely to pay for what their customers download or stream. ISPs usually run at 96% to 98% utilisation, why wouldn't they, but now with ever increasing bandwidth requirements, they need to invest in their back-haul and that's very, very expensive. Then there's fibre - more kit, more expense. Someone has to pay and if the companies peddling the content won't pay then the customer has to pay.
ISPs should be making plans to move to a utility based model as soon as possible otherwise we're going to see under investment in the network, mass customer dissastisfaction and a government forever wailing about lack of internet access for all.
I don't understand why people think that delivery of the internet is easy or cheap. It's not, it's massively complex and massively expensive. Just to stand still, continuous investment of many millions of pounds has to be made and ISPs just cannot afford to make the step-change that's needed to deliver the bandwidth that people are buying through all you can eat packages.
Again, all this tells me that ISPs must move to a utility model. At the moment though they're all waiting to see who blinks first because their shareholders and analysts judge them on customer volumes and churn rather than data shifted. Who's going to be the brave one first? Come on, someone.... Please?
In essence, my prediction is that broadband must move to a utility model, customers paying for what they use, pence per Megabit. We pay for electricity, gas and the telephone in that manner, data has to be next, unlimited packages don't have a future. Customers want to download movies, tv, use iPlayer, watch YouTube, listen to internet radio, share pictures, play multiplayer games - it's all taking more and more bandwidth and let's face it the media companies serving up all this fare are highly unlikely to pay for what their customers download or stream. ISPs usually run at 96% to 98% utilisation, why wouldn't they, but now with ever increasing bandwidth requirements, they need to invest in their back-haul and that's very, very expensive. Then there's fibre - more kit, more expense. Someone has to pay and if the companies peddling the content won't pay then the customer has to pay.
ISPs should be making plans to move to a utility based model as soon as possible otherwise we're going to see under investment in the network, mass customer dissastisfaction and a government forever wailing about lack of internet access for all.
I don't understand why people think that delivery of the internet is easy or cheap. It's not, it's massively complex and massively expensive. Just to stand still, continuous investment of many millions of pounds has to be made and ISPs just cannot afford to make the step-change that's needed to deliver the bandwidth that people are buying through all you can eat packages.
Again, all this tells me that ISPs must move to a utility model. At the moment though they're all waiting to see who blinks first because their shareholders and analysts judge them on customer volumes and churn rather than data shifted. Who's going to be the brave one first? Come on, someone.... Please?
Wednesday, 19 January 2011
Is Facebook the new corporate website?
The development of the browser provided easy and simple access to websites for anyone/everyone. Before then, whilst the language (Hypertext) existed it was not easy to provide a user-friendly front end to sites that people would easily and quickly adopt. Once that easy access was provided, the world and his dog very quickly hopped on the band-waggon.
As did corporates. they saw their customers going online and knew they had to follow. Today one of the first things most new companies do is get a domain name and set up a web presence. Shops and services sprung up more or less taking over the DIY personal space website that had existed previously, even the government got online!
Now, post browser, we're seeing the next broad spectrum access tool arriving on the internet: Facebook. Almost half of the world's netizens use Facebook everyday already and it reminds me of how the web was at the beginning: lots of individuals creating their own little websites where they talked about themselves and their hobbies with maintained centralised lists of websites worth visiting. Not quite as interactive as Facebook, but not really very different. Already forward thinking companies are getting in on the act and setting up facebook pages that people can visit, like, link to or friend (a somewhat odd idea friending a corporate entity, but there we go). Right now, it's clunky, it subverts what is meant for the individual to the corporate requirement and it lacks an easy way of enabling someone to create the equivalent of a corporate website within Facebook. Establish this capability within Facebook and corporations will I'm sure move their online presence to Facebook and follow their customers. Why would they not, particularly when you consider the wealth of information on their customers that they'd gain access to, it's a salesman's dream!
There's work to do to enable corporates to have the same rich environment they have on a website, but it can't be that hard to achieve. Give it three years and it's quite likely that the idea of having a website for your company separate from Facebook could well be as out dated and old fashioned as the land-line. What this will mean for Facebook infrastructure and the very structure and intent of the internet itself is another massive question, but there's nothing as fickle as a customer and they really don't care about how it all works as long as it works and it gives them what they want.
I wonder which corporation will be the first to close down their website and convert to a Facebook page?
As did corporates. they saw their customers going online and knew they had to follow. Today one of the first things most new companies do is get a domain name and set up a web presence. Shops and services sprung up more or less taking over the DIY personal space website that had existed previously, even the government got online!
Now, post browser, we're seeing the next broad spectrum access tool arriving on the internet: Facebook. Almost half of the world's netizens use Facebook everyday already and it reminds me of how the web was at the beginning: lots of individuals creating their own little websites where they talked about themselves and their hobbies with maintained centralised lists of websites worth visiting. Not quite as interactive as Facebook, but not really very different. Already forward thinking companies are getting in on the act and setting up facebook pages that people can visit, like, link to or friend (a somewhat odd idea friending a corporate entity, but there we go). Right now, it's clunky, it subverts what is meant for the individual to the corporate requirement and it lacks an easy way of enabling someone to create the equivalent of a corporate website within Facebook. Establish this capability within Facebook and corporations will I'm sure move their online presence to Facebook and follow their customers. Why would they not, particularly when you consider the wealth of information on their customers that they'd gain access to, it's a salesman's dream!
There's work to do to enable corporates to have the same rich environment they have on a website, but it can't be that hard to achieve. Give it three years and it's quite likely that the idea of having a website for your company separate from Facebook could well be as out dated and old fashioned as the land-line. What this will mean for Facebook infrastructure and the very structure and intent of the internet itself is another massive question, but there's nothing as fickle as a customer and they really don't care about how it all works as long as it works and it gives them what they want.
I wonder which corporation will be the first to close down their website and convert to a Facebook page?
Friday, 7 January 2011
Ashes Retained
I could have blogged about how well the England cricket team were doing down in Australia a few weeks ago, but that would have been tempting fate. The fickle finger of fate has seen to it that an English defeat has been snatched from the jaws of certain victory too many times on previous occasions. And oddly, I'm a very superstitious cricket fan, so silence was the best option. Any crowing ahead of the final result would almost certainly have mucked things up for the Andrew Strauss and team.
But now, with a 3-1 victory in the bag, the Ashes retained, nay won again, I can talk about it. What a result, my goodness, I never thought that I'd see such a result in my lifetime, let alone such a turnaround in 5 or so years. Considering it was 2005 when we received a 5-0 drubbing, this is remarkable.
Some would say that it's due to Australia no longer having the side that it did and there's a grain of truth in that. However, even if Warne, McGrath, Lee, Gilchrist, Hayden & Langer had been in the Australian side this time, England would have prevailed. It would have been a closer series, but England would still have the ashes, no doubt. They are now a unit to be feared - ruthless, determined and focused like no other English test side I've ever seen. As a result this was a drubbing, a white-wash. Australia only had opportunities when England failed and that only happened on maybe two days. Those two days lost England a test, but it was the only opportunity Australia had, we allowed them that through our failure, not their expertise and capability.
It's interesting to note that 6 out of 11 England players were there in the 2006/7 5-0 series defeat. Flintoff, Giles, Harmison, Hoggard & Jones are not in the side in 2010/11, but no-one can say that those players weren't world class in 2006/7. So, what is the difference?
This is where I can justify blogging about cricket on a IT management blog. I believe it's down to the leadership and preparation. In 2006/7, we had a leader who was not really a leader (Flintoff), more a lieutenant. The management team was not as cohesive and the individual players were not well managed - take Harmison, widely reported as suffering homesickness and lacking the desire to play overseas, he never really recovered from that first ball of the first innings of the first test. Careful management and leadership would have helped, but I don't believe Flintoff had the characteristics or tools to enable him to provide that support. As a consequence once things were going wrong, there was no recovery mechanism or understanding of how to recover things. So, the series was lost.
The Flowers/Strauss team has shown how important it is to have a cohesive team driving a strategy that's clear and understood by everyone with everyone pushing hard to deliver that strategy. That's not only the on-field team, but also the back-room team, everyone. Everyone knew what had to be done and drove hard at getting there, working together, supporting each other, individuals stepping up to deliver the goods when someone else couldn't.
Ah, enough of the analysis, what a result. What a brilliant, amazing result. Well done, lads! Thank you!!
But now, with a 3-1 victory in the bag, the Ashes retained, nay won again, I can talk about it. What a result, my goodness, I never thought that I'd see such a result in my lifetime, let alone such a turnaround in 5 or so years. Considering it was 2005 when we received a 5-0 drubbing, this is remarkable.
Some would say that it's due to Australia no longer having the side that it did and there's a grain of truth in that. However, even if Warne, McGrath, Lee, Gilchrist, Hayden & Langer had been in the Australian side this time, England would have prevailed. It would have been a closer series, but England would still have the ashes, no doubt. They are now a unit to be feared - ruthless, determined and focused like no other English test side I've ever seen. As a result this was a drubbing, a white-wash. Australia only had opportunities when England failed and that only happened on maybe two days. Those two days lost England a test, but it was the only opportunity Australia had, we allowed them that through our failure, not their expertise and capability.
It's interesting to note that 6 out of 11 England players were there in the 2006/7 5-0 series defeat. Flintoff, Giles, Harmison, Hoggard & Jones are not in the side in 2010/11, but no-one can say that those players weren't world class in 2006/7. So, what is the difference?
This is where I can justify blogging about cricket on a IT management blog. I believe it's down to the leadership and preparation. In 2006/7, we had a leader who was not really a leader (Flintoff), more a lieutenant. The management team was not as cohesive and the individual players were not well managed - take Harmison, widely reported as suffering homesickness and lacking the desire to play overseas, he never really recovered from that first ball of the first innings of the first test. Careful management and leadership would have helped, but I don't believe Flintoff had the characteristics or tools to enable him to provide that support. As a consequence once things were going wrong, there was no recovery mechanism or understanding of how to recover things. So, the series was lost.
The Flowers/Strauss team has shown how important it is to have a cohesive team driving a strategy that's clear and understood by everyone with everyone pushing hard to deliver that strategy. That's not only the on-field team, but also the back-room team, everyone. Everyone knew what had to be done and drove hard at getting there, working together, supporting each other, individuals stepping up to deliver the goods when someone else couldn't.
Ah, enough of the analysis, what a result. What a brilliant, amazing result. Well done, lads! Thank you!!
Friday, 24 December 2010
Media Streaming Grows Up
This is mostly a blog about leadership and management, but I'm also somewhat of a geek and I like my technology. I've been hunting around for a good media streaming device for some time now and it's been a frustrating journey. Some time ago I ripped all my DVDs to ISOs and stored them on a central machine along with all my music and shows with the intention of being able to view or listen to media anywhere in the house.My first foray in to this was with the Netgear MP101 and it did exactly what it was supposed to do (stream music) and we still use it in the kitchen today attached to the Denon mini Hifi. It didn't stream video though, so I moved on to try the Kiss DP1500. The DP1500 was a great idea, but essentially bug-ridden and in the end very limited. It was supposed to play nicely with Windows Media Centre, but whereas WMC would find and play ISOs, the Media Extender piece of the Kiss box wouldn't. Something to do with DRM I think. Anyway, I gave up for a bit on the idea and instead started to think about getting a fully blown HTPC, but the other week I spotted a piece of news, the news was about a piece of kit called a Boxee Box.
Needless to say, the moment I understood what it was and how it operated, I placed my order. £200 is quite a lot, but then when you compare it with the £700 or so I was planning to spend on an HTPC it's actually very cheap and achieves the same end.
Reading reviews and feedback on forums I got worried, there was a lot of negativity around, but I needn't have worried. This device does all I need and a lot more.
It has an HDMI out, so it plugs straight in to my TV, it can play almost any content I throw at it, particularly video. It intelligently sorts your media collection and finds appropriate graphics, it links nicely with on-line services like YouTube and iPlayer, it plays ISOs, it has wireless and wired ethernet, an optical out for audio, USB slots and an SD slot. The interface is clear and is easily readable from my sofa. The remote is wireless rather than infrared and contains a full keyboard on the flipside. There are some downsides, but on the whole in comparison with other streaming devices of a similar price range, I'm very happy with the result. Even better is that the Boxee software is being continually developed and updates are frequent. It makes a change as well to find a development team that actually listen to what's being said on the forums and react quickly to requests or reported bugs.
The final test of any technology like this though is whether my wife wants to use it and does so without shouting for me. I was working from home the other day and the boys were being extra boisterous, but suddenly it all went quiet. Without reading any manuals or having any tuition from me, my wife had negotiated her way to and got playing a movie on the Boxee Box and the boys were happily watching it. That's real success in my book. Also being able to download and watch a missed episode of Lie to Me on the TV rather than gathered round a laptop was also a big tick in the box.
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