Monday, July 31, 2006

Scratching The Knowledge Economy Rhetoric

The Knowledge Economy has the ring of the perfect rhetoric. Knowledge and Economy come together nicely - both words individually bringing adequate gravitas and combining to create a suitably impressive catchphrase. At the same time, as with any good rhetoric, its hard to pin it down to what it really means.

However, the FT reports today in passing that the EU budget recently cut R&D spending increases in order to maintain farm subsidies. This is probably one example out of a hundred that point to the "Knowledge Economy" rhetoric being just that - a rhetoric. Under other impressive sounding catchphrases - such as the "Lisbon Agenda", attention is drawn away from the fact that if anything there is an Economy of investment in Knowledge building.

My personal anecdote is that I can get someone to come home and help set up my new laptop, load some software and set up a firewall, for about 70% of the cost of getting an electrician to come in and fix a single loose wire in a faulty oven. Does that sound like a knowledge economy?

One of the challenges in the UK of course is that geeks aren't "cool". This isn't a trivial point. In a social hierarchy, geeks command less respect and position than wannabe big brother contestants. Compare that with either the US, where the Brins, Pages, Yangs, Jobs and even the Bill Joys and Ray Ozzies are right up there. Or in India where from Nilekani (Infy) right down to the entry level programmer - the geek is revered. And this isn't just lip service. Average salaries for technology professionals is likely to be comparatively much higher (than other professions) in India or in the US compared to Europe. And furthermore, your attractiveness to the opposite sex (your "mating potential") is also likely to be enhanced - again I stress this is not a trivialization - it sits at the core of the ability to attract more people into the profession in the long run and giving it a real impetus.

And so the question is, when you scratch the surface of the knowledge economy rhetoric, do you see a think veneer over what remains an old world, traditional, orthodoxy? Or would you find a truly vibrant environment where knowledge and investments into knowledge are recognized and rewarded boldly?

Friday, July 28, 2006

Whither, the Converged Consumer?

At Home? Or At Risk?

In all the debates, events and industryspeak, one hears the obligatory references to the “Consumer” and there’s usually a sharp split on opinions regarding the consumer. But many questions remain unanswered and you get the feeling that the Converged Consumer is an unknown animal.

This is not without reason – as true convergence is just starting to break around us. As we’ve noted before, there will be 4 services launched in the UK before the end of the year which will offer voice, television and data (BT, Sky, Homechoice, NTL/Virgin). The last of these will be a quad play with Mobile thrown in. Although many argue that the line between fixed and mobile telephony is about to blur anyway.

Bottom line, the converged consumer is a beast we will get to see and understand only starting now. Although Homechoice has been around for a while, it’s market presence has been marginal and there has not been a choice situation yet. For the majority of households consuming Sky Television and BT Broadband (this should be some 8 million homes) the time has come to choose Broadband from Sky or TV from BT, or junk them both in favour of NTL or Homechoice.

The Broadband space alone gives us a good idea of the kind of tough competition we can expect.
According to the FT, in 2003, just 6 per cent of the UK's 25m households had high-speed internet access. The figure was 26 per cent in 2005 and 39 per cent in the first Q1, 2006. According to some analysts, 70 % of households will have broadband by 2010. And it’s not just the number of connections, by the end of this year it is estimated that an 8 Mbps connection will cost about the same to a UK consumer as a dial-up connection did three years ago. Services as fast as 100 Megabits per second have been trialled in the UK, and there is limited availability in some parts of 24 Mbps packages. (all data from the FT, from articles published on July)

I believe that permanent connectivity and broadband access can be significantly lifestyle changing. You suddenly start becoming more web reliant, more specifically Google reliant. On a typical work day, my morning starts with 2 hours of reading – sitting up in bed, while sipping my coffee, I read the relevant sections of the FT, the Wall Street Journal, the Guardian, The BBC Website, the Economist and a host of other emailed news updates. The thing is, I do all of this on my laptop, making notes as I go and bookmarking, scribbling, or referencing. All of which I do online or on my laptop. Going anywhere means a search on a mapping website and looking for things to do involves a search on the TimeOut website, or the SouthBank or specific venues – Regents Park, the Roundhouse or the Royal Albert Hall. The need to remember goes down drastically when all the information is at hand. No matter how esoteric, it will be found in Wikipedia or or on some remote website Google will find. I find myself getting irritated when Google can’t find some information or the website of a company I’m looking for.

People speak often about the dual screen experience or indeed the multi screen experience, with children or young adults using the 2, 3 or even 4 out of laptop, a gaming console, a mobile phone, and the TV simultaneously. This may get simplified with IPTV which is one way of bringing these experiences on to a single screen. The thinking is similar for the Microsoft-Nortel announcement for creating a unified messaging interface. This means that your emails, instant messages, voice mails and any other forms of communication will all come to a single mailbox which can be accessed through outlook on your PC, or on your mobile phone or soon, on your IP enabled TV. Of course there is the question of user adoption – which typically lags technology capability. But some of these are very compelling ideas so the only question is when and not if.

While not everybody will jump into an immersive, lean-forward experience, and turn into “Armchair Athletes” as a well known consulting firm calls them, there will be a dispersion of consuming habits – a distribution covering leaders, and laggards and businesses will have to live with a “portfolio” of digital consumers who will need different types of offerings and solutions depending on where they fall in the adoption curve.

The fun as they say is just beginning.

More on this to follow. The Intellect Convergence Conversation in August will be about the Converged Consumer, and that should throw up some interesting perspectives as well.

Thursday, July 27, 2006

More on Non-Linear Storytelling

Keeping to the same theme as yesterday's update, there is a story in the Wall Street Journal which talks about Lean Forward Media which provides a capability to create DVD's which can have decision points in the story i.e. the user gets to decide from a list of options what a person in the story should/ should not do. This leads to a different outcome of the story for each choice made. The DVD therefore ships with a large number of storylines (easier with Animation!) and the user gets to participate in the story telling.

I see this world coming closer and closer to reality based multiplayer online games, which evolve a narrative of their own. An example of this is Perplexcity - which has its players and its storyline. At some point even during a dvd you may be asked to solve a puzzle else the story doesn't go forward, or perhaps play a game.

There already many games which are more biased in favour of roleplay over winning and losing. This line will continue to blur. In the absence of ad-breaks or more importantly in the world of time-shifting and ad-skipping, these decision points may be the place for advertising - but ham handed efforts will kill both the experience and the idea, for others.

Wednesday, July 26, 2006

The Future of Entertainment?

Today I had the privilege of being asked to think about things 6 years ahead. Thats pretty good going for somebody who has to scratch his head when asked about weekend plans on Friday evening. But as a part of a group helping create a Technology Vision for the 2012 Olympic games, it did jog the grey matter a bit. (and thats not just the hair pulling).

2012 is a long time away and a lot can happen in that time. But there are exciting changes afoot right now which could play themselves out interestingly over the next few years. Michella Ledwidge's Modfilms, featured currently in the Creative Commons website this week is one such company working on an exciting frontier - Remixable film content. Platforms which could allow us to share and remix film easily, blurring completely the lines between story telling, listening and participating.

Another area that got me thinking the more obvious one about Networked Digital Outdoor media. Where content/ advertising can be displayed and centrally managed, intelligently adapted and perhaps even occasionally personalized. (an ad in which Beckham winks at you if the display recognizes a brand you're wearing as you walk past?).

Outdoor advertising has seen a bit of a lift in recent times with summer, the world cup and the growing need for clutter cutting which is getting impossible to do inside the house. This article (subscription reqd) says that Outdoor advertising in the US crossed $6 bn this year and is growing at 8% and is expected to reach $10bn in 2010. (The maths clearly doesn't add up, but hey it makes a good story!) - the fact is with the clutter and confusion on Television, it may be a good time to get digital and creative in an outdoorsy way, especially while summer lasts. Digital displays cost 10X of traditional ones, but the payoff may be greater still. There is the added novelty value of bluetoothing information to user's mobiles and allowing people to actually interact with a hoarding.

Tuesday, July 25, 2006

Do you have a Mobility Strategy?

Face it. Your customers are spending more and more time out of the house, away from the devices you love to reach them on. May be they're wandering after a glass of wine too many. Wondering where to find a cab home. May be they're hot and bothered after picking up the kids from school and trying to fit in a grocery shopping trip. Or perhaps, they're rushing from work to a party via the gym. Whatever it is, it seems like your only chance of getting a message across to this set of incessantly mobile consumer is on the one device they carry around - the mobile phones.

So do you have a strategy in place? Are you reaching them through a WAP site - through "off portal" content? Are you allowing them to transact? Change settings? Are you thinking in a more broad way about the whole mobile lifestyle and crafting a strategy around it - something that might actually benefit the consumer?

For sure, the mobile consumer is here to stay. The question is, can you reach her?

Monday, July 24, 2006

Rights Management - The Light at the End of the Tunnel is the Headlight of an Oncoming Train

At our monthly Convergence Conversations last Wednesday, the topic was Content Rights. Which is an oxymoron to start with because if there's one thing most people are not, its content. For record labels and film & tv distribution, the summer of discontent includes the frustration of not being able to shut down all the illegal file sharing (an exercise akin to catching raindrops to keep the ground dry); the direction of businesses like the BBC to make a whole lot of content available free; and the inability of technologies to keep the hackers at bay, just to name a few.

For users, there is immense ague at not being able to play purchased content across devices, the high complexity involved with buying new devices in the data deluge in terms of specifications. Then there is the paucity of service which still plagues the industry.

In all of this, the one interesting point our discussion threw up was that "The Rights Management Problem is not solvable under the current framework". The existing approach, which tackles the problem by going geographically, channel and medium wise and then uses a number of distinct and often complex structure of rights, is (a) outdated (b) too complex and (c) technically and structurally infeasible. Nobody argued that rights should not be protected, simply that it can't be done in the current approach.

As if to support this argument, Yahoo and Sony have just announced the DRM free release of Jessica Simpson's single "A Public Affair". According to Yahoo... "DRM doesn't add any value for the artist, label or consumer"!+and+Sony+release+digital+single+without+DRM.html (may need subscription)

Bad news for Tech vendors, good news for consumers. For the rest of the industry it's time to think.

Saturday, July 22, 2006

Walmart does UGC

this article (may require password) - shows how businesses are jumping into the UGC arena to ensure that they (a) get a foot in the door (b) use it to involve people more in the brand (c) hopefully lower content production costs if a bulk of the content comes in from audiences for some of these ads. It talks about WalMart asking users to submit videos from users, which can be used in WalMart advertising.

Sainsbury's also insists that they're doing user generated content (see this NMA article) but it's hard to understand how this is different from good old discussion forums and message boards?

Is user generated content actually different? I suppose for it to be seriously considered "content" it needs to be something which attracts a sizeable audience and is distinct from user forums for Sainsbury's products and services. i.e. People should be coming to see the content itself, and distinct from shopping at Sainsburys. Tom Sawyer has been cited as one of the earliest examples of user generated content.

So you first need to get "content" right before doing user generated content. Measurement or reports of such content seems to be harder to come by, so the jury, as they say, is out on this.

Friday, July 21, 2006

User Generated Content

User Generated Content (UGC) – has caught the world by storm – not unlike “portals” some time ago. It seems everybody needs one. I’ve chaired an Intellect Convergence Conversation on the subject and also been to a couple more – notably the one organized by Mint Digital, in London recently.

I still ask the lingering question – is it too late to be thinking about User Generated Content? And the answer is probably yes, if you’re looking to make a quick buck on the 15-24 age group audience. About 30 businesses are ahead of you in the queue – notably MySpace (Now News Corp, looking to recover about 600 million dollars), YouTube, MTV, BBC and Flextech (Trouble) and many more.

Is there any point thinking about it then? Yes, resoundingly yes. And here are some of the things worth thinking about:

a) how do we get adults to participate in UGC activities? What motivates adults? How do we reward them?
b) How do we slice and dice the undifferentiated markets into specialized communities? This may be the key to a) above. For example, a focused community of property professionals?
c) The Enterprise Market – UGC may well be the next layer on Enterprise Knowledge Management systems – say engineers from Automotive Testing & Service businesses sharing info on specific types of problems/ faults and their resolution. How to enable this?
d) How do brands deal with this? How do they get the same kind of feverish participation which YouTube and Google Video enjoy? How should brands react to users spending more and more time on YouTube, or its equivalents? Should you advertise on YouTube or build your own UGC concept?

Television companies believe they have the lead in this – because they can bring TV audiences and 15 seconds of “real fame” for their users. Internet companies believe TV has had its day. Clearly Television has the benefit of existing audiences and a mature and accepted channel. But it is hampered by the excessive rights issues around Broadcast, and also the more stringent regulations/ dos and don'ts on TV. And as somebody rightly suggested, the moderation of the same can become significantly large activities. here's the Wikipedia link on the matter I liked this contra-view on UGC by Powazec mobile blogging Mint Digital's new tool for creating UGC sites.

More to come....

Sunday, July 02, 2006


The well known article “IT Doesn’t Matter” by Professor Nicholas Carr in the HBR, 2004, apart from being one of the most misquoted articles in recent times, has been a crutch for some business leaders to turn their backs on Information Technology. While some of the arguments are absolutely valid, I believe the conclusions people take away from the article are erroneous and dangerous and Professor Carr has probably been a bit naughty in leaving some of this clarification out of the piece.

There are broadly 3 key reasons why the Carr line of logic needs to be reviewed carefully.

First, he takes a particularly homogeneous view of IT. IT is not a tool, it’s a function of business. Calling IT non-strategic is like calling the finance or marketing functions non-strategic. Of course there are many bits of the financial side of a business which are prosaic and commodity oriented, such as everyday accounting. But equally, there are aspects such as investment or long term financing options which a business would not dream of calling commoditized, or non-strategic. The same is true of IT as a function.

Second, whenever he talks about IT, he refers to the “Technology” and not the “Information” part of IT. And while he is right that many parts of Technology, especially hardware are getting “commoditized”, this is definitely not true of all of Information technology.

Third, despite starting with the assumption that much of IT is commoditized and beyond the realm of Strategy, he goes on to provide plenty of scenarios where businesses are getting it wrong. If it’s that commoditized, shouldn’t it be quite easy to use?

A lot of people have used this article to justify arguments on cutting back IT spends or questioning the value of Information Technology and this is why the impact of this piece is more dangerous than it could be.

One of the assertions Prof. Carr makes early in the paper, is that for something to be a source of sustainable competitive advantage, it needs to be a scarce resource and not an abundant one. Hence, he argues given the abundance and proliferation of databases, desktop tools et al, IT now falls into the category of “ubiquitous” and hence it cannot be a source of competitive advantage. However, while he’s right that tools like word processors, spread sheets and corporate networks have become “costs of doing business” this clearly does not represent all of IT. Telecom businesses all over the world are working to build better billing systems & provisioning systems. Retail businesses are looking for improved recommendation engines, data analytics and more responsive supply chain systems. Moreover, you only have to look at any report or a case study on major IT projects to know that successful implementation and risk management are certainly not as ubiquitous as we’d like them to be, and certainly, consistent and strong implementation of major IT systems by itself can offer competitive advantage to businesses. On the question of long term sustainability of such advantage, one may question whether anything offers a “long term, sustainable competitive advantage” or by definition, will competition erode such advantage in the long term.

Prof. Carr also uses the example of the telegraph, railroad and other additions to the “infrastructure of commerce”, as examples which no longer provide competitive advantage. However, in the case of IT, the pace of change is still high, and with new technologies & systems coming to the market, or even innovations which allow improved business performance, there is high return on investment for companies that invest wisely into IT and track innovations and new technologies in the space. What would be the future for a Retail organization that turned it’s back on RFID? Or for a small business that didn’t explore Voice over IP? Can a Bank or a financial institution today ignore the risk management, fraud detection or identity management technologies today? Yes, the race for bigger servers, or fatter network pipes is now a commoditized one. But we’re a long, long way away from commoditized information and decision systems.

In talking about the commoditization effect too, Prof. Carr takes a simplistic view of the race for standards. He asserts that most standards have now been built into the off-the-shelf technologies, that the standards have been built into the (commonly accessible) infrastructure. The reality is that there are many aspects of IT where we are a long way away from real standardization, and to assume that the standards are there, that they have been universally adopted, and in fact built into the product is a huge leap of faith or oversimplification.

He also suggests in the article that the same software, is being used in the same way with similarly reengineered business processes making all business replicable and devoid of differences. This again is an oversimplified view of an SAP world. In reality, such commonality only shifts the benchmark to other parts of the business – such as decision making, knowledge, and forecasting systems which are yet to be replicable across businesses. It’s a fait accompli to suggest that because businesses are buying the same software, IT is no longer of capable of delivering advantage. It is probably accurate to say that companies who implement SAP or large off-the-shelf ERP looking to simply adopt industry practices, are either playing catch up or only achieving parity – not advantage. This is not a liability of IT as a discipline. It’s a failure of specific businesses to understand how to derive competitive advantage through better use of business information.

The consistent use by Prof. Carr of IT only as an Infrastructure resource is probably the article’s biggest shortcoming. Along the way, he makes a few statements which can best be described as ranking with Bill Gates’ apparently mythical assertion that “640k of memory on the desktop should be enough for almost anybody”. Professor Carr says “...And as for IT-spurred industry transformations, most of the ones that are going to happen have likely already happened or are in the process of happening.” And also asserts "...we already have considerably more fiber-optic capacity than we need."

One of Professor Carr’s conclusions is that companies should separate essential investments from “discretionary, unnecessary or even counterproductive” ones. Taken out of context, this is dangerous. While it’s true that large, mature companies which stay off the cutting edge of technology to ensure maturity of products and usage, are doing the right thing, this is markedly different from calling all of Information Technology non-strategic. Despite not being the classic “innovators” or “early adopters” of new technology, Wal Mart, Dell or any other business in a similar space need to continue to treat the “Information” and the systems that deliver such information as strategic and better and more accurate, meaningful information will always be seen as strategic too. The key to this discussion is that IT isn’t about hardware, memory size or off-the-shelf systems any more. IT is about better and better ways to manage information. In this regard, we are a long way away from achieving any kind of commoditization. Innovation and invention are both progressing apace and we are nowhere near the end game. It would be disastrous for companies to not recognize the strategic importance of the “Information” in Information Technology. The race for simply building better “technology” may well be over, in many (though not all) industries.

Professor Carr’s article is a good warning for companies to stop spending blindly on “better technology” but it is a dangerous and potentially destructive mistake to extend this to the task of managing information better for business results.