Salesforce Identifies Key Software Eras

Most observers of the computing business are familiar with the "eras" of computing architecture, including mainframe, mini, PC and client-server periods. There is universal agreement we are heading for the next era, though there is not agreement on what to call it. Salesforce argues there are "lead application" eras as well.


In recent years, we arguably have seen the dominance of web apps, and now we are seeing mobile apps at the fore. The next app cycle will be built on social apps, Salesforce believes.

Is There a Tablet "Killer App?"

It’s unusual for a hit computer not to have a killer app driving demand, says David Needle at TabTimes. The Apple II didn’t kickstart the personal computer revolution till VisiCalc, the first electronic spreadsheet, came along. Likewise, Lotus 1-2-3 was the killer app for the IBM PC.

Email unquestionably made BlackBerry smart phones a staple of business and easy-to-use mobile browsing helped the iPhone essentially create a new industry.

One could even argue that another type of killer app vaulted the iPhone's success even higher, the App Store, the wildly popular online storefront for acquiring mobile apps.

So what’s the killer app that’s driving millions of iPad sales? That is a hard question to answer. It might be easier to say the killer app for an e-reader is “reading.”

But we might be missing the point here. Maybe it is not the “app” but the “use mode” or “killer feature” that is important.

Some of us are fond of noting that “the killer app” for any tablet device is “content consumption.” But maybe that’s more properly a “killer use case” than a “killer app.”

What was the “killer feature” or “killer use case” for mobile phones? It was the ability to talk, wherever you were. What is the killer feature or use case for a smart phone? It might be the ability to use the web, or apps, where you are.

The point is that, for any mobile device, the notion of “killer app” might be misplaced. It might be that it is the use case that provides the value, not a new app.

Some might well argue that entertainment video will emerge as the killer app for tablet devices. Others might say, more broadly, that it is content consumption which uniquely defines a tablet experience, and makes the device different from a PC.

We have had “mobile” PCs for some time. We now have ultra-mobile PCs called smart phones. Tablets are “mobile” devices, but tend to be used when people are stationary--sitting on a couch, for example.

Where we traditionally have defined television viewing as a “lean back” experience, and use of a PC as a “lean forward” experience, tablets are a bit of a blend. They are used in a lean back setting (couch, frequently), but with high interaction, as frequently is true of a PC experience. Again, it is the use case, not the apps, which possibly are key.

Content Marketing Has Value Elsewhere in an Enterprise

Most business-to-business marketers likely would agree that the primary purpose for content marketing, and hence content curation, is its role in stimulating revenue. Like all other marketing activities, content curation aims to build a sales funnel, directly or indirectly.


What tends not to be considered is whether content curation also has value for other parts of the enterprise, typically taking the form of enhanced organizational efficiency. 


Sensei Marketing argues, for example, that content curation improves collaboration between content creators (thought leaders, executive, product development, R&D, marketing) and content consumers that include not only potential customers, but also organization service, support, sales, and product development staffs. One might also argue, in that vein, that content curation also supports channel partners, not only prospects and customers.


Granted, the impact will be hard to measure, at a time when virtually all marketing executives want better analytics and measures of effectiveness. 


But here's the argument, in outline. Sales staffs can use curated content as a convenient source of  "proof points," rather than spending lots of time looking for such material on their own. 


Curated content can be a time saver for executives, allowing them to quickly stay up on important market and industry trends. 


Product development staffs can use content curation to gain new or timely insights into customer and market needs, while also benefiting from market feedback.


Curated content also can be used by external sales partners in much the same way that direct sales personnel can use the filtered content. In some cases that will consist of information on customer needs and context, in other cases provide training on product or service attributes and value. 


Content curation has value for B2B firms aside from its primary purpose of driving organizational revenue, Sensei Marketing argues. 

PayPal Here" Allows Merchants to Use Dongle, or Just a Smart Phone

PayPal's new "Here" system, that uses a new dongle to allow swiping of credit cards, and turns a smart phone into a point of sale terminal, uses software from card.io. 

Just to confuse you, though, card.io also launched its own consumer app earlier in 2012,  allowing merchants to accept purchases using a smart phone's own camera. 

The deal with PayPal seems to allow merchants to accept credit cards without readers or extra hardware, even though most of the attention is being paid to the new dongle method.

“Merchants can immediately begin accepting credit cards with nothing but a phone," card.io says. For the moment, consumer and retailer payment experience probably suggests adoption will be easier using the dongle. People are used to swiping their credit cards. 

But card.io expressly was designed to use only the camera and resident software on smart phone. One suspects the idea here is to support merchants with a dongle now, because it is culturally familiar, but allow for an easy migration to a "smart phone only" approach later. 

Google to Sell a Nexus Tablet?

It was probably inevitable, but Google is rumored to be preparing a new "Nexus" tablet, using a seven-inch form factor, for release mid-year, with a formal announcement coming potentially as early as May 2012.


The device would sell for as little as $149 in a Wi-Fi-only version. At that price point, Google would seem to be aiming directly at the Kindle Fire, which has been selling in volumes that make the Kindle Fire the first non-iPad device to get traction. 


Some will argue the device will debut with a content ecosystem less well developed. So the issue might be "why" users buy the device. People buying the Kindle Fire arguably have been doing so for access to Amazon's rather rich content offerings. 


On the other hand, some users will note that the Kindle Fire has been designed as a convenient gateway to Amazon content, but arguably does not work as well as a general-purpose tablet for web content. 

U.S. Tablet Owners Don't Like Paying for News Italians Don't Mind

Tablet owners aren’t opposed to paying for the media they really want, Nielsen says, after surveying tablet owners in the United States, United Kingdom, Germany and Italy.

The big exception, though, is "news," in the U.S. market, though most U.S. tablet owners have paid for downloaded music (62 percent) and books (58 percent) for usage on their device. Approximately half have paid for movies (51 percent).

News is the top content category among the European tablet owners surveyed: 44 percent of tablet owners in Italy, 19 percent of tablet owners in the United Kingdom and 15 percent of tablet owners in Germany say they have paid for tablet news content.

Apple's Enterprise Strategy: Win With Consumers

Some 21 percent of surveyed enterprise information workers are using one or more Apple products for work, Forrester Research says. Considering Apple doesn't really go out of its way to design or sell products to enterprises, that's significant. But Apple now has market momentum on its side, plus a growing acceptance of "bring your own device" support on the part of enterprises. 


Although the number-one place where consumers use tablets is in the living room, 37 percent of U.S. tablet owners take them to work as well. In a recent Forrester Research survey of 9,912 technology end users at SMBs and enterprises in 17 countries, Forrester found that workers in Brazil, Russia, India, China and Mexico actually led demand for wanting to use a tablet for work, and being willing to share the cost of the device with their employers.

Almost half of enterprises (1000 employees or more) are issuing Macs to at least some employees and they plan a 52 percent increase in the number of Macs they issue in 2012, according to Forrester Research managers and executives are more than twice as likely to use Apple products, suggesting an adoption pattern where the ability to use the device is something of a “perquisite,” much as at one time the ability to use a BlackBerry was a perquisite for enterprise executives. 


 But younger information workers (IT staffs for example) are twice as likely to use Apple products as older ones. Higher income workers are more likely to use Apple products as well, but there is a “younger worker” issue here. Most of the sample of 10,000 global information workers earns less than $50,000 a year, but the adoption rate of Apple products is almost 17 percent even in the bottom quartile of workers who make less than $12,000 per year.



Keep in mind, also, that the survey was global in scope, and Information workers in countries outside North America and Europe were more likely to use Apple products for work. Annual salaries also might tend to be lower in non-European and North American settings.




source: Forrester Research



Where click through rates are concerned, screen size matters. Simply put, larger screens tend to get higher click through rates, and some devices tend to have higher engagement than others. Smart phone screens tend to get click throughs at about a two-percent to four-percent rate.



Larger tablet screens such as those sported by the Apple iPad or Samsung Galazy get CTRs of about nine percent. The results are generally similar across device brands.

Sometimes, Not Matching Competitor Offers is the Wise Strategy

France Telecom says it will not match the low-cost mobile offers recently launched by Iliad because such aggressive pricing would be bad for network quality and innovation in the long-run, says France Telecom CEO Stephane Richard. That Orange won't compete on price might strike you as unwise.

Goldman Sachs, for example, forecasts that Iliad's market entry will cause France Telecom to lose a third of its operating profits in its domestic market by 2015.

But there are ample precedents for France Telecom to do so. Beyond higher marketing costs as competition escalates, sometimes all an incumbent can do is harvest a business. That, in fact, was AT&T’s strategy when it was a dominant long distance provider facing growing competition from a growing number of competitors, and as prices for its product continually declined.

A similar strategy has been taken by incumbent telephone companies in the face of growing competition from VoIP providers. You might argue that telcos should have jumped into VoIP aggressively, matching competitor lower prices.

They generally haven’t done that. The reason is that incumbents lose more than they gain by matching lower prices, even when everyone would agree lost market share is the inevitable result.

For an incumbent telco, matching lower competitor prices implies lower retail prices across the board, for the entire customer base, not just for the consumers buying the VoIP service. A rational telco executive would do better to preserve gross revenue and profit margin on a gradually-shrinking base of customers, rather than adopt across the board lower prices in an effort to slow the market share losses.

"The real risk is that all the operators become 'low-cost', meaning less investment, fewer services and jobs," said Richard.

Iliad, which markets its services under the name Free, touched off a price war on January 10, 2012  with an offer of unlimited calls to France and most of Europe and the United States, unlimited texts, and 3 gigabytes of mobile data for 19.99 euros ($25.83) per month, without a contract.

France Telecom and Vivendi reacted by cutting some mobile prices but only on the offers sold without phone subsidies and contracts.

Some analysts predict that France Telecom, Vivendi and Bouygues will all become structurally less profitable as Iliad takes market share in the coming years.

But that has happened before, in the telecom business. Firms as large as AT&T was, or MCI, watched profits gradually decline, to the point that both were purchased by other providers in the market.

Right now, local telcos are essentially harvesting their legacy voice business, essentially “allowing” VoIP competitors to take market share. That is a rational strategy, especially in the consumer segment of the business.

The point is that there are times when an incumbent simply cannot match prices, and has to prepare to lose market share. That might be a bigger issue for lots of mobile service providers, soon.

There is growing evidence that the high-margin mobile text messaging market is past its peak.

Danish SMS traffic, for example, decreased by over 20 percent in the first six months of 2011, according to Strand Consult, and the trend will continue in 2012.

Text messaging revenue is not declining in all markets, but is slowing in most developed markets. The most-recent data from the CTIA suggests slowing growth in the U.S. text messaging market of about nine percent.

In the Danish market,  three out of four mobile operators have been experiencing a steady decrease in their test messaging (short message service, or SMS) traffic month after month.

From 2010 to 2011, TDC experienced an SMS traffic drop of 17 percent, Telia lost 18 percent and Telenor 26 percent, while the fourth operator 3 was the only operator that had growth in their SMS traffic.

That 3 saw text messaging growth is largely attributable to the fact that 3 is gaining customers and share in the market. SMS traffic on the 3 network grew by 29 percent.

But, overall, the number of Danish SMS messages fell during the first half of 2010 to 6.4 billion and to 6.2 billion during the first half of  2011. That is a drop of about seven percent from 2010 to 2011.

Facebook messaging is the reason for the drop, Strand Consult argues..

So what are Danish operators doing? They are bundling mobile broadband with SMS and MMS packages as part of a smart phone purchase. That means service providers get paid even as the volume of text messages declines.

Finland's largest carrier, Sonera, for example, recorded a 22 percent decline in texting on Christmas Eve in 2011, versus the same night in 2010.

It isn't that people are communicating less. They are just using different methods of communicating. Text Messaging Declines  

Hong Kong also apparently saw a similar decrease on Christmas, dropping 14% from the same day in 2010. Netherlands service provider KPN provided an early warning when it announced significant declines in messaging volume earlier in 2010. KPN text message declines

Dutch telecoms regulator, OPTA, which shows a significant decline in the number of SMS sent in the Netherlands in first half of  2011 compared to the previous six-month period.

The country's largest operator, KPN, has also reported declining year-on-year messaging volumes over the last few quarters due to what it calls "changing customer behavior."

Wireless Intelligence says text messaging volumes are falling in France, Ireland, Spain and Portugal as well.

According to OPTA, the total number of SMS sent in the Netherlands stood at 5.7 billion for the first six months of the year, down 2.5 percent from 5.9 billion in the second half of  2010, even though total text messaging revenue rose slightly (0.6 percent) to EUR378 million during the period.

That should not come as a surprise. The number of over the top and social messaging alternatives has been growing for years. But there is a "network effect" for messaging, as there is for any other communications tool. Until a user is fairly sure that nearly everybody he or she wants to communicate with can be reached by a particular tool, adoption is slower.

But there always is a tipping point, where the expectation changes from "I doubt this person uses this tool" to "there is a good chance they use this tool." Finally, there is the point of ubiquity, when the assumption simply is that "everybody" uses the tool.

Also, the history of text messaging and email are instructive. Though most cannot remember a time when it was so, email and messaging services once upon a time were not federated. In other words, you could not send messages across domains.

History also tells us what happens after federation: usage explodes. With alternative messaging platforms, we still are not in a "full federation" mode, where anybody can send messages to any other user, irrespective of what device, operating system, service provider or application they prefer to use. That day will come, though, and text messaging usage and revenues will suffer.

The.maturing market illustrates a key element of business strategy.

A rational service provider strategy, when confronted by such challenges, might simply be to harvest existing revenue streams, using bundling and other approaches to maintain as much revenue as possible in legacy lines of business, while investing in the next generation of services.

As CenturyLink halted Qwest’s old VoIP business, to emphasize sales of legacy voice services, sometimes the wisest course is not to embrace disruptive services, but “cope with them,” while growing services and revenues in other areas. 

Boku Makes "In Store" Payment Move, Targets Carrier Partners

Boku, which traditionally has supported billing for virtual and digital goods sold to smart phone owners,  is launching a wholesale offering for carriers that will include in-store payments. 


The new service, called Boku Accounts, will allow operators to set up payment accounts for mobile users that will work in physical stores using MasterCard, NFC stickers and NFC-enabled phones. MasterCard is a major partner, allowing the service to be used anywhere MasterCard payments are possible. 


The move shows the increasing blurring of lines between "online payments" and "in store payments," as well as a growing porousness of the distinction between online and offline retail commerce and shopping. 


Telefonica recently has invested $5 million in Boku. 

Keeping Up with DOCSIS 3.0

A guest post by Ariel Caner, Product Marketing Manager, ECI Telecom

The demand for high-bandwidth, next-generation services has gone through the roof in recent years. We now live in a connected world, where consumers expect their voice, data and video needs to be satisfied anywhere at any time.

All this connectivity, however, requires bandwidth. And lots of it. The end users don’t really care (rightly so) about the underlying infrastructure that makes all this bandwidth possible. Whether it’s via copper, fiber or whatever, they just want to know the bandwidth is there when they need it – to stream a high def movie, download that mega PowerPoint file for work or make a Skype call to relatives across the pond.

For the service providers, though, it’s an entirely different matter. Their infrastructure is their lifeblood, and it must be capable of supporting the high-bandwidth, next-gen services that consumers want. Or else they risk churn.

In a perfect world, all operators would be able to deploy fiber end-to-end right now. After all, it enables the highest bandwidth possible and is future ready, with the ability to carry forthcoming connectivity technologies. But fiber isn’t ubiquitous just yet. The cost and time involved with deploying fiber access technologies such as GPON and point-to-point fiber access networks have slowed widespread adoption.

As operators grapple with the issue of how and when to make the move to fiber, they are in the tenuous position of having to balance customer demand for bandwidth and new services with their own need for return on investment. For many, what makes the best economic sense now is optimizing the copper infrastructure that’s already in place.  

The cable companies have found their answer in DOCSIS 3.0 (Data Over Cable Service Interface Specification), a technology that enables speeds of 100 Mbps or more over existing HFC (hybrid fiber coaxial) networks. In an HFC network, optical fiber cable and coaxial cable are used in different parts of the infrastructure to carry broadband services. The advantage is that the desirable characteristics of fiber – high bandwidth and low interference – can be brought closer to homes and businesses without disturbing the coax cable that’s already installed in dwellings. These advances have greatly empowered the cablecos, enabling them to offer multiplay bundles that make available services including HDTV, high-speed internet and voice, thereby allowing them to maintain and even grow market share.

But what about the telcos? How can they keep pace with the cablecos and their DOCSIS 3.0?

In recent years, to increase the capacity and reach of their copper networks, the telcos have been utilizing access technologies such as VDSL (very-high-speed DSL) and its successor VDSL2. While VDSL2 can, in theory, deliver speeds up to 100 Mbps, it very often falls short due to something called crosstalk interference. This is a phenomenon whereby DSL lines become sensitive to the electromagnetic ‘noise’ that comes from adjacent copper pairs and, as a result, the signal that is being transmitted through the wire is degraded.

In an effort to solve to solve this limitation and find a way to extend the useful life of copper networks, a group of top DSL researchers formed the iSmart Consortium to conduct research in the field of dynamic spectrum management (DSM). The result of their work is a technology called ‘vectoring,’ or DSM Level 3. Vectoring is a novel VDSL2 technology that works by mitigating crosstalk interference to boost the speed and range of copper networks to near-fiber performance.

The advancements made possible by this innovative technology are impressive. For loop lengths shorter than 1500 meters, copper wire data rates are improved by 100%, to 50 Mbps or more, and the subscriber coverage area for premium services is expanded by 300%. And what’s more, on copper wire thicker than 0.4 mm, data rates can reach 100 Mbps and can further be doubled using bonding techniques.

What this means for the telcos is that they now have a level playing field with the cablecos. Like DOCSIS 3.0, vectoring opens up numerous application possibilities, many of which were previously unattainable with copper-based networks. Now, even the highest-speed broadband services, such as IPTV and telepresense, can be delivered cost effectively over copper, helping to reduce customer churn and increase ARPU.

For those telcos who are not yet ready to migrate to a full fiber network, vectoring is a viable and cost-effective option that’s sure to play an important role in high-speed broadband strategies throughout the next decade. 

Enterprise Tablet Adoption to Grow 48% a Year

Over the next five years, total shipments of tablet computers to enterprises around the world are expected to increase at a compound annual growth rate of 48 percent, with shipments rising from 13.6 million units in 2011 to 96.3 million units in 2016, according to Infinite Research.


In 2011, the Financial Services sector was the leading enterprise market adopter, purchasing 3.37 million tablets. That would not surprise anybody familiar with advanced technology adoption by businesses. The financial sector tends to lead, always.


Enterprise and business tablet adoption is occurring in numerous market verticals such as the Education, Healthcare, Retail, Industrial, Government, Financial Services, Hospitality, Technology, Legal, and Energy sectors, though.

Should Google Build a Chrome Phone?

Legendary technology investor Roger McNamee, of Elevation Partners, talks about Apple's future as a stock, what Google could do with Chrome, and why Twitter and Android are failing. He pulls no punches.

Worth watching

Verizon to Go "LTE-Only" for Smart Phones

Verizon Wireless will not sell any smart phones unless they run on its Long Term Evolution fourth generation network, starting in 2012, the company says. 


That suggests the next version of the Apple iPhone will run on the new LTE network. The LTE-only stance is part of an effort to get more customers loaded onto the LTE network. 


Apparently, only about five percent of Verizon Wireless customers have opted to buy and use smart phones running on the LTE network, so far. 

Cricket Signs with Clearwire for LTE

Cricket Communications will buy wholesale Long Term Evolution capacity from Clearwire. The five-year deal allows Cricket to supplement its own facilities-based LTE network.


Cricket currently plans to deploy LTE across approximately two thirds of its current network footprint over the next two to three years and to cover up to approximately 25 million potential customers with LTE network technology by the end of  2012. 


Clearwire expects to begin its LTE network deployment by the end of March 2012 and to have at 5,000 LTE cellular sites active by the middle of 2013. 


The deal is not unexpected. Few mobile service providers can afford to build everywhere, all at once. That's why roaming agreements exist. Also, right now, Clearwire is the only mobile service provider with a "wholesale-only" focus, making it an ideal partner, in terms of avoiding channel conflict. 


Up to this point, Sprint had been the only other service provider committed to using Clearwire Long Term Evolution facilities. In both cases, the firms are augmenting their own facilities. In some cases the objective is to ensure adequate bandwidth in high-demand markets. 


U.S. service providers have more incentive than most to offer LTE services now. At the end of September 2011, Verizon Wireless had more than 3.1 million LTE subscribers, representing  60 percent of the worldwide total. That is one sign that U.S. mobile service providers are adopting LTE fast.


According toTeleGeography, there were 39 LTE networks live worldwide by mid-November 2011, more than half of which were launched in 2011. According to 4G Americas that number has claimed to nearly 80 in early 2012. 


The number of LTE deployments will rise rapidly over the next two to three years, given that about 170 operators are already running trials, or have expressed interest in LTE.

TeleGeography suggests that there will be more than 400 million LTE mobile subscribers by the end of 2016, up from just nine million at the end of 2011. 

 

Will Banks Become Ad Networks?

Much seems to have changed over the last 12 months in the mobile payments business, one of the trends being the thinking about where the big revenue streams exist. For most in the mobile payments or mobile wallet spaces, the upside now is seen to be advertising and marketing, not transaction fees, though some participants remain focused on that part of the business.

Sopheap Lao, Mobexo CEO, runs a mobile payments company. For retailers, revenue, loyalty, lower collection costs are the value, he says. But “advertising is one of the revenue upsides,” he also says.

Talking about the ways bankers view mobile payments, former Bank of America executive John Thomas says bankers are not sure what the business model is for mobile payments and mobile commerce in general. Bankers are not sure whether mobile servicing, payments or advertising should be the primary focus.

On the other hand, there is a growing sense that marketing services, particularly advertising, represent the upside. It might be a startling notion, but there is a growing sense that, of the opportunities now available, the business with the highest profit margins is advertising.

Think of a bank’s network of online or mobile customers as a media audience. Then think about how a large bank could become an advertising network. That’s the potential opportunity. That isn’t to say the idea is universally welcomed.

Some bankers might resist the notion that the business consists of becoming “a big billboard.” Others might say there is nothing especially outlandish about that business model, especially if existing businesses start to experience severe gross revenue and profit margin issues.

“For a sample $100 in revenue, the return seems highest in advertising and credit operations, less so in rewards programs and lowest for debit operations,” says Thomas. That is one reason bankers Increasingly will be looking at advertising revenues as a growth opportunity.