enterprise irregulars

  • June 14, 2016
  • indexMicrosoft’s acquisition of LinkedIn for more than $26 billion raised a lot of eyebrows for good reason. True, the acquired company is valuable and generating revenue but like most of the social networking space, it is far from healthy and one wonders if Microsoft could have gotten a better deal.

    According to a colleague at the Enterprise Irregulars, Ross Mayfield, Ellen Levy reported that the deal can boast a number of superlatives if you look at it right, among them,

    • The largest sale of a consumer Internet company in history;
    • The largest sale of an enterprise software/cloud company in history;
    • The third largest sale of a technology company since 2001; and
    • The largest acquisition ever made by Microsoft.

    With those attributes you might expect that LinkedIn is in a really hot sector and everybody wants to get it at any price. It looks like a regular feeding frenzy. Well, hold on big guy, here are some other numbers to consider.

    Facebook announced revenue in Q1 2016 at $5.2 billion and profit of $1.51 billion tripling its year over year comparison according to a BBC News article that you can read here. Good for them.

    But now consider Twitter, which according to CNN Money has lost a cool $2 billion since 2011. I wonder if this can be construed as an illegal campaign contribution to The Donald. At any rate, Twitter has never turned a profit. Yikes!

    Then there’s LinkedIn. According to a Reuters article from February 4 of this year that you can find here, “LinkedIn Corp forecast first-quarter revenue and profit below Wall Street estimates as growth slows in its ads business and its hiring services face pressure outside North America, dragging its shares down 28 percent after the bell.”

    The article goes on to say that, “Online ad revenue growth slowed to 20 percent in the fourth quarter from 56 percent a year earlier as automated ads offered by Alphabet Inc’s Google make its traditional ad displays less attractive to advertisers.” Finally there was this, “Its revenue forecast of about $820 million also missed analysts’ expectations of $866.9 million by a wide margin.”

    Suddenly it looks like social media has become a winner take all market accentuated by Metcalf’s Law which states that the value of a network is directly proportional to the number of nodes i.e. users in this case. Why use anything but the biggest network unless it’s specialized as LinkedIn is because of its sales and HR focus.

    This is happening despite the high acceptance of social media in everyday life, just ask The Donald. Social has rapidly become the thing everybody loves to use and no one wants to pay for. The advertising business model that most companies rely on doesn’t help.

    Advertising has its limitations. There is a huge pool of money available for online ads but huge is not infinite. Just as there is lots of music available, people only want to pay for hits. If you combine Metcalf’s Law, which tends to limit the number of viable networks in this space and add in the reality of the fickle consumer you have an instant recipe for a declining market, which is what we see.

    Don’t worry, social media is too important to go away. It’s so important that it has commoditized its market into a virtual singularity. That’s the bad news too. The social market looks like it can support 2 styles; say Facebook’s and Twitter’s. There might be additional vendors in the space for a long time especially if larger companies buy them and they function as loss leaders. That’s ultimately the vision I see for any social company not named Twitter or Facebook.

    Published: 2 years ago


    Well, this is fun.  You might recall I wrote a short piece on how difficult it is to upgrade Apple’s operating system to the newest release, Mountain Lion.  I ran into trouble and quit after I’d discovered other people with issues.  I wrote a post, “First Mammal to Lay an Egg: Mountain Lion by Apple.”  I love Apple products but took issue with this upgrade.

    It seems that Apple has not produced an installation disk for Mountain Lion.  You can buy the upgrade on line and download it.  Unfortunately, it’s a big download and it takes time.  Worse, some people reported that the download quit and had to be restarted and that there were other issues like the speed of their particular internet connection, that affected total time to do the download and upgrade.

    So, the post drew some comment, which is not unusual but what is interesting is the differing customer orientation philosophies expressed by me and my reader.  I share the exchange with you below because 1) it’s public and 2) it neatly summarizes a lot that we’ve been debating in CRM circles for many years.  FYI, the debate is happening at  the Enterprise Irregulars site where the piece was cross posted.  You can also read the post at that link and you should and also pay attention to the references I included.

    What do you think?  Here it is in full (so far).

    First response (to the post)

    “so, shipping a CD or DVD would be faster? The download happens in the background and doesn’t interrupt whatever you’re doing at the moment. It recovers from disconnects and failures gracefully. This is such a non-issue to any normal mortal. Not to mention downloading is more green, less wasted plastic and paper and shipping charges.

    My reply

    the download has issues as the referenced materials show. Also, I don’t have the time to babysit the process. Many people are having problems with this approach. It might have green and other benefits but it should not be the only way to a solution. Normal mortal?

    Second response

    I don’t know, more people upgraded to mountain lion, on a percentage basis, than people who upgrade windows in any similar timeframe. Must work for most people. Sorry it didn’t float your boat. But I think the analysis on this one is pretty poor.

    My reply

    You have no concept of the individual user and you sound like you are blaming the customer, not a great idea. This is not about how most people fare, the company has a responsibility to all of its customers and in the examples I found, it failed them.

    Third response

    Denis, I am the individual user. And There are 20 mac users in this office (and a few windows users as well) who all updated with nary a complaint. We don’t have a single “IT” employee to help them do installs.

    I believe the data you found does not paint the picture of “most people” but of a few people from a forum. Check the status on mountain lion downloads and you have your # of successful downloads… far outnumbering the number of problem downloads. And of course Apple has a responsibility to those customers – and has better customer service than anyone will get if they’re upgrading Linux or Windows, from their respective hardware providers, I might add. I’d say you need some perspective, sir.

    My reply

    That’s right, discount my findings. You still don’t get it. It’s not the number of successes or failures that count but the way the customer is treated. For Apple to say take it or leave it, given the various skill levels of users and the variety of download speeds they have, is insensitive to the customer.  I really don’t care how many were successful, I care about how the company treats those least able to do the job and the policy Apple put in place is insufficient to give people an alternative. THAT is the ONLY perspective you need if you are in a customer service business.  You don’t get to declare victory and abandon your customers who can’t keep up.

    I’ll be happy to provide more as it becomes available.  I just love this internet thingie.

    October 2, 2012

    But wait, there’s more.

    Elvis writes:

    Denis, you really don’t get it. Maybe you missed this news last year: http://lifehacker.com/5823096/how-to-burn-your-own-lion-install-dvd-or-flash-drive
In other words, Mountain Lion is the second release to not come on a DVD. Not the first. Apple customers are perfectly competent to install it. It works just as well as any other OS update for Mac or Windows (except that it is much bigger than the average update). Not to mention, many macs no longer ship with a DVD drive (obsolete technology for many)…

    And the Apple store turns out to be a fine place to get help for those needing reference in the customer service business. Apple didn’t abandon their customers at all. They still have internet connections, no? It just seems like you’re not very informed about the Apple ecosystem at all. (and your other cross-linked blog post was pretty humorous. recapping the “debate” between you and me on another site? ) (and fwiw, i’m not blaming the customer, i’m blaming you for this terrible bit of research and writeup).

    BTW, don’t know if you noticed… but iTunes downloads don’t come on DVD either… neither do app updates for your iPhone… (heck you can even get app updates via the Mac Appstore as well… ) This internet thing is pretty cool.

    My response

    Oh, Elvis.

    This reminds me of the old joke about the poet, the engineer and the economist stranded on a desert island and down to their last and only can of beans.  They decide to eat it but don’t have a can opener so they begin a feverish discussion about how to open the can without the right tool.

    The poet speaks first.  “Let’s get a rock and bash the can until it opens!” He says.  The others consider it but disagree.  It will damage the can to the point where it’s caved in and they won’t be able to get the contents out.

    “I know!” says the engineer, “We’ll heat the can until it bursts and we’ll collect the beans when they fall.”  He goes off to calculate the scatter pattern and build a fire.  The others demur, won’t that lose a lot of beans?  Won’t it get sand in them?

    Finally, in desperation, the economist speaks.  “Looks, assume you have a can opener…” he says and the other two walk away.

    The economist is the furthest from an answer because he assumes his conclusion.  Actually he assumes the conclusion as part of the solution.  You can do this in economics and even in blogging but when you get to the real world, you have to realize that your assumptions have to be applicable to a concrete solution.

    I am afraid this is what Elvis has done.  In suggesting that you can make an installation disk or thumb drive, he glosses over the fact that you need to do the download first.  So this isn’t much of a solution.

    True enough, the Apple Store is a fountain of information and first class assistance, if you live near one.  That might not be the case if you live in Vermont or Idaho.  Also, curiously, why would Apple want to clog up its stores with less than happy customers trying to get twenty bucks worth of operating system when the help should be attending to people who want to buy iPhones and MacBooks?

    You see, all the permutations and assumptions quickly bring us back to the can of beans and the lack of a proper tool.  The trio marooned on the island probably ate everything else they had, things that could easily be opened and consumed without tools, saving the can of beans for last because it was the hardest thing to open.  It’s admittedly an outlier situation.  That’s the situation that Apple is in and that Elvis refuses to acknowledge.  But Apple can’t do that, it enters the marketplace offering to sell a product and it has an obligation to make the offering fit for a purpose, in this case installation and use of the OS.

    Elvis likes to talk about how many other successful downloads and installs have occurred for Mountain Lion but that’s like saying our trio on the island ate yesterday or last week.  It doesn’t matter.

    Elvis distorts the discussion to his own ends but this was never about how many other releases didn’t come with a DVD.  They were smaller and could easily be done that way, or perhaps the current download really has the problems that some people have reported.  Why would they make this up?  Other notes:

    “Apple customers are perfectly competent to install it.”

    I beg to differ.  My 80 year old mother in law is a ninja user but doesn’t have a clue about downloads.

    “Not to mention, many macs no longer ship with a DVD drive (obsolete technology for many)…”

    This isn’t about that.  It’s about going to market with a one size fits all solution for a problem with a great deal of variability.  The solution doesn’t address all contingencies as I have noted.  The MacBook Air that I am writing on doesn’t come with a superdrive but I bought one for just this kind of exigency.  See?

    Elvis, I think we both like our Apple gear a lot and most of the time it’s excellent.  I am a fan.  As a pure operational issue though, going to market with this single approach to an upgrade this big is foolish of Apple and I am calling bullpucky on it.  The difference between you and me is that I can see the failing and a better way to get to the goal and I am not afraid to point it out.  You are so dogmatic and wedded to the mistaken belief that Apple is perfect that you can’t see the shortcoming and so attack the messenger.

    By the Way, my writing is published on lots of sites, sometimes without my knowledge or approval.  I have a relationship with the Enterprise Irregulars to cross post.

    Published: 6 years ago


    I am indebted to my friends at the Enterprise Irregulars, for the links in this piece.  The IE’s, if you didn’t know, are a rag tag group of certified smarties who know all kinds of stuff about the greater tech industry and I am flattered that they let me hang out with them.

    The aftermath of the verdict from the patent infringement lawsuit between Apple and Samsung initially generated more heat than light.  But the last few days have made up for the light that failed to emanate from the weekend’s id fest and Armageddon prediction Internet confab.

    Reuters is running an interesting story  about Apple CEO Tim Cook and Larry Page of Google keeping the hotline open — you really need to be a child of the 1960’s to fully appreciate this metaphor.  Suffice it to say that it is the origin of the little red phone.  But also, there was this really interesting post at ZDNet by Jason Perlow about Samsung and Google’s collective need for a new dress.

    I particularly recommend Perlow’s article because, while the idea of product dress might seem weird to some people — especially those who take issue with the look and feel aspects of the Apple suit — it might interest you to know that product dress is a legal term.

    Without giving away Perlow’s point, let’s just make the observation that the classic Coke Bottle, which has nothing to do with how the stuff tastes, is part of Coke’s dress and its IP, as much as its secret recipe.  Only Coke has Coke Bottles, for a good reason.  So go read that article.

    My point here, other than giving a shout out to the IE’s and trying to enlighten others, is that Apple might have, at least momentarily, hit on the only look and feel for mobile devices that will ever be widely accepted.  Tapping, swiping, pinching — things that come natural not only to the members of our Genus but also our Family and, who knows, maybe even our Order — might be so hardwired into our beings that coming up with an alternative might be a waste of time.  Holy $%^& Batman that might mean that Apple could end up owning the mobile UI and someday soon be in a position to make a few pennies on every Samsung or HTC device running Andriod for ever.

    Believe it or not, such an outcome would not be unique in the annals of business or manufacturing.  It might have something to do with cross licensing (I know, but don’t confuse it with dressing mentioned above).  That’s when more than one company asserts ownership rights to an invention that each came up with the old fashioned way (you know, R&D?).  But rather than fighting about it for years, the two (or more) companies come to terms, some money and possibly other patents are traded and then it’s back to business.

    The best example of this is the car industry.  Car radios, V-8 engines, automatic transmissions, how heating and air conditioning systems work, how the controls are set up and lots more, all have patents and if all cars look more or less alike in some basic features and functions, it might be because their makers went to the same patent swap meet.  Yes, patents expire so don’t go looking to fund the fifth generation grand kids college even if you have lot of patents.

    So this brings us back to Larry and Tim and the hotline.  May we be informal for a moment and simply refer to each other using first names like they do in the music biz (Elvis, John, Paul, George, and especially Ringo; but also Bono, Sting, Eric and many others)?  So, Larry bought Motorola (early car radio patents, BTW) at least in part for its stable of patents to ward off just the kind of suit that Tim’s company is making famous in the mobile industry (Tim should file a patent! hahaha!).  And Larry, Tim and their minions are keeping the lines of communication open as they say.

    What are the odds that the verdict put the discussions into high gear and that there’s an informal-formal patent swap meet happening out in the Valley between these principals?  Nothing would surprise me but I think that if both sides remain reasonable and use their inside voices and big words, that there will be an announcement in the not too distant future that they’ve struck a deal.

    If so, the deal would create the stack of the decade.  Just as Wintel described a stack of Windows OS and Intel chips that made the personal computer; or as LAMP stands for Linux, Apache, MySQL and PHP for cloud application servers, some standard that combines Mobile/Google/Android/Motorola/Apple might emerge from all this chaos for mobile devices.

    Let’s see, MOGAM? MOGA? GAAMMO? AGAMO? AAM? AA?  Who knows, naming might be the stickiest part of the negotiations that aren’t happening on the hot line at the moment.

    Published: 6 years ago


    As a new feature of our new website we plan to offer interviews with industry thought leaders.  Our first thought leader is Michael Krigsman IT Project Failures Blogger at ZDNet and CEO of Asuret. He’s also a distinguished member of The Enterprise Irregulars, a group of industry savvy commentators.  In the interview Krigsman offers some of his insights into how and why IT projects fail and what can be done about it and it is available on our home page.

     

    Published: 7 years ago


    Bob Warfield does a great job of summarizing “The Eight Flavors of Social” in his post from October 19 .

    While I don’t disagree with Bob on these eight popular forms of social media, I might wish to offer an alternative to it or perhaps something that builds on this foundation.

    To me social media comes in only two fundamental forms, inbound and outbound and like the blood supply to your brain you need both.  If you prefer a different metaphor, recall the mantra from the original “Karate Kid” movie — “wax on, wax off.”  Either way, you’ve gotta have both.

    We’ve done a fabulous job of adopting the outbound side of the social equation and a passable job on the inbound, at least in personal use.  But I think the big thing we aren’t getting fully yet is the power of the inbound for business.

    In your personal life there is an implied quid pro quo with friends — I’ll look at yours because you look at mine.  However, this approach is unreliable because we look when we can or want to or when we are bored.  For business use we need greater assurance that our outbound messages are received, understood and acted on.  In our personal lives the candy at our social sites — the thing that friends come back for — is the intimate detail of our lives.  In business, the candy usually has a string attached because vendors want us to buy things.

    For social to fully transition and make it in business there has to be a way to attract people, which means that if we’re using social as a glorified email marketing tool, and if we’re not getting the results we want, we may wish to reconsider how we do things.  That’s where communities come in.  You can ask any sort of open-ended question in a community and if you follow the threads and apply analytics you might discover the reasons that people are attracted to your business in the first place.  With that you can significantly improve your outbound stream and complete the loop.

     

    Published: 8 years ago