June 19th, 2009

Equity in the cellular world

Posted by Brian Sommer @ 1:47 pm

Categories: Uncategorized

Tags: Phone, T-Mobile, Equity, Carrier, Feds, Telecom & Utilities, Brian Sommer

Vinnie over at Deal Architect and others are venting at the cellular telcos. The issues du jour are:

- high cost of international roaming
- locked SIM cards
- the cost to upgrade
- inability to buy unlocked phones like the iPhone
- etc.

I’ve got three phones off contract with T-Mobile. One other phone has already been moved off its old carrier and T-Mobile might get the boot soon. My list of issues with T-Mobile includes:

- T-Mobile’s unwillingness to cut me a price break when they aren’t recovering the cost of a subsidized phones from my ancient devices. I actually purchased replacement phones for two of these old T-Mobile phones awhile ago.
- T-Mobile’s unwillingness to carry any of the mid-to-high end Nokia phones
- T-Mobile’s unwillingness to carry the iPhone (I know they do in Europe but not in the US due to the deal they cut with AT&T)

I stopped at the Nokia store on Michigan Avenue here in Chicago yesterday. They’ve got some great phones that will work on the T-Mobile network. What I have trouble with is that I will pay full retail for a phone and yet T-Mobile will give me no credit against my bill for bringing my own phone to the party. However, if I wanted some other phone that T-Mobile is subsidizing, then I can get it for free or a nominal fee with, again, no difference in rates. That’s just not equitable.

T-Mobile even hired a market research firm to survey me to find out why I’m likely to abandon them. I’ve told their CSRs and their ‘customer retention’ professionals why I’ll bolt but these folks can’t change policy. They can only tell me that their carrier doesn’t offer the phones I want (e.g., Nokia E90 or E71, or, Apple iPhone) and will not change their pricing to accommodate those of us who want to bring our phones to a carrier. Sure, we have phone number portability but not phone or carrier portability.

Apple is a mixed bag for me, too. I’m still unimpressed that they have an exclusive deal with Apple. That deal is an expensive one for iPhone users and is the single biggest reason I won’t switch to AT&T. A more consumer friendly approach by Apple would have been to make the unit available at every carrier and let the competitive forces between carriers drive lower costs for all cell phone users. That didn’t happen and consumers are paying for it.

When Vinnie, et.al., complain about the cost of roaming, etc., the real issue is often much larger and distinct. The focus of our concerns should be directed at the overly cozy relationship between some of the carriers and some of the equipment providers. Another focus of concern should be the absent or silent action of regulators at the state and federal level to condone these business practices. The cellular market is not truly competitive and is not consumer-friendly. If you don’t believe me, go back and re-read your voluminous 2-year customer agreement with your carrier.

Until the market changes, get used to getting burned Vinnie. As for me, I’m bringing a big jar of Vaseline to the next cell store I enter.

*****
Talk about timing

As I am putting the last touches on this, what do I read? The Feds are getting interested in the exclusive deals being struck between carriers and cell phone manufacturers.

Let’s hope something comes of this.

September 23rd, 2008

Marketing 101 for Tech Vendors

Posted by Brian Sommer @ 9:50 am

Categories: Uncategorized

Tags: Analyst, Corporate Communications, Marketing Research, Marketing, Brian Sommer

(Satire)

For those of you who work for a technology firm, particularly you Marketing types, you will no doubt want to hold an “Analyst Day” to wow, dazzle and impress some influential types - like IT Research Analysts and the Enterprise Irregulars (disclosure - I’m an EI member). Do it right and you’ll get IT Research firms, bloggers and traditional media types to dedicate a lot of coverage (and hopefully a lot of positive buzz) towards your product lines. Do it wrong and you’ll get someone like me writing snarky things about it. Things like:

How NOT to Conduct an Analyst Day

When you plan one of these extravaganzas, you want to remember that:

- Analysts can be bought – Marketers think that if you give analysts enough freebies (e.g., USB sticks, notebook tablets, etc.) and hold the event in a cool place, then analysts will gladly write good things no matter how much your product resembles vaporware or how many users are suing you. Sure, everyone loves a nice locale but my opinion can’t be bought for a $2 trinket.

- Analysts aren’t bright – Think we can’t calculate your revenue/customer; revenue/channel partner; or, customers/channel partner, you’re wrong. Think we will forget that your latest dozen innovations were from acquired companies? Think we won’t notice that your entire management team has gone on to ‘pursue other options’ since the last briefing? We notice all these things and more.

- Analysts like cheesy stunts – My favorite of these was a request for analysts to complete a survey at the end of the day where the correct answers were already telegraphed for the attendees. Wow, if that’s the kind of cutting edge, relevant research this firm does for its product development planning, no wonder they’re in trouble.

- Analysts like really bad videos - Apparently a lot of Marketing types think they are the next Hollywood mega-producer. They spend a small fortune developing a one-time use bad piece of video that is supposed to highlight product capabilities in a humorous way. Guess what? It’s rarely humorous and it hurts to watch it. The only thing worse than this video is the reel of customer clips where client execs badly struggle to read your pre-scripted ‘ad-lib’ comments. Groan…. Hire my 14-year old and let him shoot some video of his friends trying to use your software. Now that would be funny!

- Your facts take on more credibility when they come from someone who graduated magna cum laude from cheerleader camp - Sure, any one can tell a story but you don’t need someone who’s clearly drank too much of the corporate Kool-Aid giving your pitch. Over zealous pitchmen are unintentionally obnoxious and impossible to believe. Every thing coming out of their mouth is over the top, hyperbole-ridden, oral spam. Dial down the hype and the use of statements like “We are the market leader” and shows us the audited details that prove that comment.

When an Analyst day feels like a church revival, it’s over the top and lost its effectiveness. When you ask Analysts to hold hands and sing the spiritual hymn “How Great Thou Are” as a tribute to the vendor sponsoring the event, you’ve lost your mind. It’s at this moment that every blogger, analyst, etc. is looking online for the next flight out of town.

Analysts are hip to other vendor tricks like:
- Creating an all new market segment that no one tracks or calculates and declare yourself as the holder of over 60% market share
- Making a minor technical enhancement seem like a major product upgrade

When constructing a great Analyst day, Marketers know that they’ll need many other people to help turn this into an absolutely dismal day. What should Marketing do?

- Get the dullest channel partners in the world as speakers or panelists. Make sure the channel partner sends someone so boring that even your worst employee shines when standing next to them. Bonus points if you can get all of your panelists to speak in monotone!
- Make sure panelists and customers only answer questions that are self-serving to the vendor. These are questions like:
o What are you seeing the market uptake for our products?
o What applications/modules are your customers/users asking for?
o Which modules of ours did you install?
o Which ones will you install later?

Better still, write out their answers for them and hand these to them on index cards prior to taking the stage. Oh, don’t forget to thank them for coming all the way across the world to speak these 16 words.

Lastly, make sure every speaker and every deck has an overused sports metaphor within it. Lately, every vendor wants to connect their quest for market dominance with the Olympics but how many vendors really deserve a gold medal? Not many. Let’s back off of the sports metaphors. They’re not original and they don’t always translate. Metaphors using golf, which some may argue isn’t a sport, aren’t always positive either.

Seriously, if you want to hold a great Analyst event, here are some absolute fundamentals:

- Get your televangelist to present. This is someone who speaks to what life after version 99 of your product is going to be like for your users/customers. Too many presenters are too focused on selling current functions and features. Analysts already know what your product’s capabilities and shortcomings are. What they want to know is where you are going.

- Start each day’s efforts with a quick reminder for the audience as to the day’s top 3 messages. If I have to ask you what I’m supposed to take away from the meeting, the day was not organized well.

- Give us a cross-section of your firm. We actually want to talk with your top execs, your customers, your lead developer, a key customer, a key reseller, etc. We want to talk to them all to see if everyone shares the same vision and everyone is focused on the same problems.

September 23rd, 2008

Americans Hate Flying - Consultants Must Really Loathe It

Posted by Brian Sommer @ 9:25 am

Categories: Uncategorized

Tags: Security, Southwest Airlines Co., Beverage, Entertainment, Carrier, Food & Beverage, Advertising & Promotion, Manufacturing, Marketing, Brian Sommer

Can’t We Have a More Civilized Flying World?

c

Several media outlets picked up on a study released by the Travel Industry Association last week that indicated that 41 million Americans are forgoing air travel due to the hassles involved in doing so today.

If the average American is fed up, I and other consultants must really be fried.

Recently, Southwest Airlines has run advertising mocking the penny-ante actions of competitors who are nickel and diming flyers to death. I think they’ve done a great job of identifying where a lot of the frustration is coming from. Just look at their home page.

I’ve got almost 3 million miles on American Airlines and I really appreciate any little extras they throw my way as I know how bad things have gotten on other carriers. These days, I fly either American or Southwest unless I have no other choice. I really appreciate those clients who give me enough lead time to book either of these carriers as flying on a carrier with no status is a real downer.

When I fly today, I sense that someone is trying to pick my pocket for the duration of the pre- and post- flight experience. My favorite pet peeves in flying these days include:

- charging flyers for a soft drink - This is criminal. We can’t bring a drink through security and some airports charge usurious rates for food and beverages purchased after security. Why don’t you just take my wallet during check-in and be done with it.
- charging extra to sit a bit more forward in the aircraft - The logic of this apparent but it still feels like the airline is mocking me. It’s like they’re saying “We sucked you in with a competitive fare and now we are going to make your life miserable unless you give us some more money. Pay up or we’re putting you in the tail of the plane right in front of the lavatory in the row whose seats won’t recline”.
- charging for in-flight entertainment - I use the word ‘entertainment’ loosely as most of the junk they air includes infomercials, really old sitcoms I wouldn’t watch before the series was mercifully cancelled or an excerpt from that day’s early morning gabfest show. Worse, they prematurely cut off the show well before the ‘entertainment’ has completed so you don’t get your money’s worth. That material is only slightly better than the crying babies on the planes with absolutely no on-board entertainment.

No discussion of flying of late would be complete without a quick closing comment on flying to my least favorite destination: Orlando. Here’s an airport without a clue how to move people through the TSA security quickly. This is a destination where you absolutely can’t miss your scheduled flight as every flight there is oversold and under-sized. That also means you’ll never get a upgrade or fly standby at an earlier hour. Please software vendors, can you book your user conferences somewhere else? Please!!!

Well, I need to put up my laptop. The person in front of me has just cranked back their seat into my face. I can’t see my laptop anymore as I will need to study the top of their head. Let’s see if they’d like to get acquainted with my knees….

September 21st, 2008

The Disaster Recovery Items Few Consider

Posted by Brian Sommer @ 2:00 pm

Categories: Current Affairs, Uncategorized

Tags: Phone, Disaster, Laptop Computer, CFO, Disaster Recovery, Telecom & Utilities, Notebooks, Data Management, Hardware, Notebooks & Tablets

How Too Much of a Disaster Screws Up the Best Plans

I spent a lot of time one night this week with the CFO of a coastal Texas organization that’s based between Houston and Galveston. That phone interview yielded some surprising observations about disaster recovery and how things might or might not work according to your firm’s disaster recovery plan.

This is definitely a post you’ll want to discuss with your disaster preparedness team.

In no particular order, here are some observations this CFO made:

-Disasters that last for more than 72 hours present some significant issues. For example, suppose your firm needs to contact workers but they do not have electric power at their homes. Their cell phones lose their charge in a day or two. Their modern telephones at home do not work unless they get power from the electric grid. How do you reach employees who cannot be reached?

-How can your workers read your critical email updates if they cannot recharge their laptops? How would they laptops receive your messages if these employees cannot get an active internet connection or find a cell tower that’s operational?

-How does your firm communicate with others if its offices are either non-existent or inaccessible? What do you do if local authorities bar you from accessing your perfectly good facility for days, weeks or months?

-Don’t keep your master phone directory online only. One of the key lessons this CFO shared with me was that a master list of all employees, building engineers, elevator repair personnel, security personnel, window board up services, electric company contacts, etc. was printed out and shared with several key executives. That printed version was invaluable in a business environment most unfriendly to online systems. Knowing who to call for any contingency was a godsend.

-Know who your friends are. This CFO recounted how two sister organizations were seriously impacted by this disaster. One had their offices completely destroyed – totally obliterated. The other had 90+% of their windows blown out. The second structure will be uninhabitable for at least 4-5 months. If your employees need a place to work after a disaster, where will they go? Don’t just assume a disaster will only affect one building. When a natural disaster strikes, it can take out massive amounts of infrastructure across a huge geography. Employees can’t commute to a new work location 100 miles away. Be sure to strike some sort of temporary office space deals with a key customer, supplier, related entity, etc. because you will never find additional office after the disaster strikes.

-Not all disasters are the same. Most disaster recovery plans assume a very isolated outage or problem has occurred (e.g., a localized fire). If your plan doesn’t have a scenario where hundreds or thousands of businesses in a large area around your facility are destroyed, then your plan is flawed and inadequate.

This CFO told me that he learned that:

-Relying on laptop or cellular connections is not much of a solution.
-Access to power after 48 hours is a real problem. He found numerous people sitting in cars in his firm’s parking lot using their car batteries to power laptops while trying to siphon bandwidth off of open wi-fi connections in that building.
-Paying employees during a disaster has some real challenges if your local bank was in the disaster area. He strongly recommended direct deposit as an employment requirement and that businesses use regional or national banks for payroll deposits so that employees can access their monies.
-A backup plan that requires two T-1 lines talking directly to each other is not optimal. While I wanted to learn more on this, we ran out of time.

As the call wound down, this CFO shared a few more observations. Power was such a key commodity that he witnessed lines of people at whatever stores had electricity. These people were bringing their cell phones and laptops just to have the opportunity to plug-in for a few minutes. Even wilder, he reported seeing a man in a folding chair camped out in front of an abandoned gas station. This people went to the shuttered store on the hope that it might still have electricity. It did and this enterprising soul had setup their impromptu office in front of this closed building.

Finally, my Finance friend gave a big thumbs-up to a couple of retailers. Lowes opened a store at 7 am the morning after the eye passed over even though the store had no electricity. This store was fully stocked with approximately 500 portable generators that arrived hours beforehand. I was surprised to hear this as I can’t find clerks anymore who can make change let alone calculate prices without a fully powered POS register. Way to go, Lowes.

March 12th, 2008

Posted by Brian Sommer @ 4:25 pm

Categories: Uncategorized

Tags:

Adieu to Click-Thru

Are Google Ads Worth the Money?

Tacoda, comScore and Starcom

USA

reported some interesting stats about online ads (see a great article “Google: The Hollow Echo of a Click”, BusinessWeek, 3/10/2008):

-          6% of web surfers account for 50+ % of all clicks on banner ads

-          Heavy clickers earn less than $40,000 per year

-          Heavy clickers account for less than 15% of online shopping

Paying for clicks doesn’t pay apparently. As a corollary, let me relate to you what I discovered eons ago doing radio station programming consulting. Radio advertisers want one key demographic group: women 18-34 years old. These people are the most voracious consumers in the

US

. Unless you’re selling a very male oriented product (e.g., aftershave, beer, tickets to sporting events, gentlemen’s clubs), radio stations want the listener that spends, spends, spends. They don’t want poor people. They don’t want young kids or retirees. Those groups either have everything they already need or they don’t have any (or enough) money.

Search driven clicks are kind of generic. Placement of a click through ad on a relevant or related site helps ensure you get the demographic you want, but, the stats above clearly suggest that advertisers are getting a bum deal on their ad spend. 

Advertising should always generate results: sales. If it doesn’t, stop doing it. I suspect that after reading this BusinessWeek piece, that’s what some web advertisers will definitely do unless there are changes in the way web ads are targeted, delivered and their effectiveness measured.

Maybe the EU, who today permitted the Google/DoubleClick deal to proceed, knows something we don’t. Maybe they know online advertising isn’t all baked yet.

January 29th, 2008

How Do I Analyze Thee...

Posted by Brian Sommer @ 12:20 pm

Categories: Uncategorized

Tags:

                            … Let Me Count the Software Tools

The recent acquisitions of Business Objects by SAP and Cognos by IBM (and the earlier deal with Oracle and Hyperion) are sure to leave some users and prospective customers in a confused state. Let’s review:

Oracle has bought several products in the analytics and business intelligence space.  They have acquired Fuego, Plumtree, BEA and Hyperion to name a few.  Some time back, Oracle also acquired technology from IRI. The Hyperion acquisition is even more interesting in that Hyperion had acquired a number of software companies prior to Oracle’s acquisition of Hyperion.  These included: BRIO, Razza, Upstream and the financial software firm MAI.

Cognos had previously acquired Adaytum and Fango.

Business Objects had previously acquired Crystal and FirstLogic.

In addition to all of the above, SAP and Oracle each had their own proprietary products designed to act as data repositories, reporting tools and analytic engines.

Seems anymore these days that a prospective software buyer or market analyst must perform a genealogy search on the parties involved in a software acquisition/merger.  It sometimes makes for fascinating reading to see who beget whom.  And, those are only the relationships that resulted in an exchange of equity.  Some of these deals are fascinating in that both parties may unwittingly be utilizing the same channel partners, systems integrators, resellers, etc.  When these overlaps (as well as those in customer installation bases) are factored in, the relative value of the deal can go south quickly.

I witnessed a confusing interchange between an executive from one of these major vendors and a customer.  All the customer wanted to know was whether their current toolset components would continue to be supported and what products would that vendor emphasize in its future sales efforts.  I tried to take notes but the alphabet soup of product names and initials was causing my poor hand to do a meltdown.  After a while, I realized that even the vendor’s own executives weren’t necessarily in agreement nor fully understood how existing and acquired products would play together.

Some portion of any acquisition can be viewed as opportunistic.  When vendors acquire redundant technology, you can bet it has more to do with the acquisition of customers not of innovation.  In that situation, existing customers can expect a confused short-term window full of promises and contradictions until a revised product strategy can be developed.  But in acquisitions that are of a strategic nature there is little overlapping product and management both firms is quick to talk about the product line synergy benefits that will result from this merger.

These recent deals provide fantastic exit opportunities for investors in the acquired companies.  Furthermore, it provides the acquired companies opportunities to cross sell products into the acquiror’s customer base and vice versa.  Beyond the financially accretive reasons behind the deal (including the elimination of redundant overhead and sales forces), few speak about the benefits to the customers.  In fact, since these last two big deals have been announced, precious little space in the trade press has been dedicated to the effects of these deals on the existing customers.  That’s really a shame when customers don’t warrant much discussion when big vendors do big deals. 

January 28th, 2008

Revenue Recognition

Posted by Brian Sommer @ 9:31 am

Categories: Uncategorized

Tags:

                   Quick Primer on Software’s Hardest Calculations

Be sure to check out this month’s CFO Magazine article "Why VSOE Spells Trouble" (see CFO, January 2008, www.cfo.com). Alix Stuart did a nice job of discussing why revenue recognition issues are the bane of a software company CFO.

If you don’t fully understand the VSOE (vendor specific objective evidence), SOP 97-2, SOP 98-9 or the original SOP 91-1, you really ought to read this piece.  In particular, the article highlights the problems that companies like NEC, EPICOR, Skillsoft, Aspen Technology and others have had in trying to correctly recognize the portions of their contracts that are related to software sales.

At the heart of these matters is an accounting concept known as the matching principle.  This is a basic accounting 301 concept where businesses are not allowed to book or record revenues until they have delivered the requisite product or service.  When companies bundle training, software licenses, maintenance payments and/or hardware into a single contract, the timing of what revenue can be recognized in specific accounting periods becomes very germane.

New accounting treatments regarding revenue recognition in the high-tech space occurred because too many companies were recognizing as current period revenue the sales of products and services that were not to be delivered for months or years in advance.  This had the effect of overstating current period  revenue and earnings and would expose shareholders to painful surprises in future periods.  These new recognition rules sought to reassert the matching principle in this industry.

Saying that companies should utilize the matching principle is simple enough but the implementation of same is fraught with problems.  If you’d like an easy to read but helpful article on the subject please check out this piece in CFO.

November 30th, 2007

New Enterprise Software? Can It Be?

Posted by Brian Sommer @ 7:10 pm

Categories: Uncategorized

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How Expansive Can We Imagine? 

 

A major theme I have been reinforcing with major enterprise software vendors lately is that they need to quit thinking of systems in an age of constraints.  When many of these firms were first launched, disk storage was expensive and slow. Computer memory was also expensive and slow.  Likewise, processing windows, bandwidth and many other technical limitations constrained the quality and velocity of information in businesses. 

 

Those constraints have continued to melt away.  But vendors still think with a constrained mindset.

Don’t believe me?  PC Magazine (October 2, 2007 — "Storage: From Highway Robbery to Runaway Bargain") has a great graphic showing the phenomenal cost reduction in data storage since 1981.  The bottom line: cost per megabyte has declined from $1000 to .002¢ (see below) 

In a September 10, 2007 Computerworld article ("Everything Must Stay!"), the author and others challenge readers to imagine what opportunities exist should a firm utilize all of the information it has and will collect.  If data is not purged, discarded or otherwise lost, then new opportunities (and by extension, new challenges) may present themselves. 

 

For example, imagine how much richer your business intelligence systems would be if they could detect seasonal trends beyond just the last few years.  What if you could correlate customer spending habits based on weather patterns that go back 10, 15 or maybe 20 years?  It certainly isn’t that the cost of data storage will be the issue but rather it’s the ability of an organization and its software vendors to identify new and greater uses for information. 

 

Taking a different and expansive view of technology would suggest that smart software vendors should look at more than simple transaction data to complete a richer view of knowledge that business decision-makers need and require.  Again, all the old arguments about IT constraints just aren’t valid anymore.

I really am tired of reviewing the same old, tired and predictive functionality in today’s ERP solutions. It’s not new and it’s not advancing the realm of businees (not technical) innovation. I want ERP II and this time it must be business (not accounting transaction) oriented, expansive and rich with data beyond the enterprise. Will vendors ever deliver this?

November 12th, 2007

Briefly - Sun. Nite @ Oracle World

Posted by Brian Sommer @ 8:11 am

Categories: Uncategorized

Tags:

                    Larry’s Opening Address - Oracle World

For those of you who didn’t catch the opening night’s festivities at Oracle World, don’t worry. It turns out that Larry used his time to relive the last 30 years of Oracle. He shared with the audience 7+ photos that included:

• the first office door
• the first office’s crude sign
• a picture of the four founders/early employees
• a picture of the Redwood complex under construction
• a picture of Chuck Phillips when he was in the Air Force Academy
• a picture of Safra Katz in her youth
• a picture of the first documentation manual

What Larry discussed mostly were the very earliest days. He dedicated the event to Bob Miner his old boss and co-founder who died 10 years ago.

As Larry tripped down memory lane, he did acknowledge a number of folks who helped Oracle grow in the past. He did discuss Ray Lane’s contribution and even spoke of the effort he made in recruiting Ray to the fold.

One areas Larry didn’t discuss much was notable. He never mentioned Oracle’s entry into the application space with the intro of ORCL Financials in the late 1980’s. He also didn’t address the quality issues those products had and he didn’t mention Nippon Steel’s role in helping keep the ship afloat in 1991. If you really want to see how close ORCL came to faltering permanently, find an old cover story in BusinessWeek around that timeframe.

On balance, the talks by both Safra and Larry were sentimental not content rich. Enjoyable but not worth catching if you already know something about the firm.

Let’s see what today brings….

August 19th, 2007

I've been bested

Posted by Brian Sommer @ 3:04 pm

Categories: Uncategorized

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               Talk About a Colossal List of Project Failure Reasons

About a week or two ago, I put together some project failure reasons that might be due to a client’s own doing. Well, thanks to fellow Enterprise Irregular, Michael Krigsman, I have seen an impressive top 101 list. What a read: http://www.codesqueeze.com/101-ways-to-know-your-software-project-is-doomed/

I can’t/won’t add to this but it is quite a read!

p.s., Michael’s blog is dedicated to project failures - See:  http://blogs.zdnet.com/projectfailures/?p=352