May 24, 2010

Landscaping - One Year Later

About a year ago, I was invited by to moderate a dialogue within the INmobile community focused on the mobility space, wondering "who eats who?," and including a parallel conversation pondering the nebulous space between fixed and mobile, what I deemed "nomadic," specifically in the context of netbooks. I was recently asked to update my viewpoint and, since INMobile is closed to non-members, my update (slightly tweaked) is copied below (and, notably, blends in multiple musings from other recent blog posts).

What a difference a year makes...

Let's re-set the stage. Imagine a consumer electronics continuum - a simple line stretching from "mobile" at one end, through "nomadic" in the middle, ending at "fixed" at the far end. In the mobile bubble, you find cellphones, single-purpose devices like music players, digital cameras, gaming units, etc. - all meant for on-the-go, mostly-everywhere use, some connected to a network, others connectible, some requiring an intermediary (e.g. a PC) to connect. In the nomadic bubble, up until about a year ago, you'd find laptops, e-Readers, GPS devices, portable video players and the like. Portable, yes, but designed for a more nomadic experience - sort of "fixed on the go," most capable of a network - wired or wireless - connectivity. In the fixed bubble, you'll find TVs - big ones these days - desktop computers, gaming consoles, DVRs, even component stereo systems for true audiophiles (maybe even a turntable).

Now, overlay across that continuum both a component layer (chip-sets, cables, routers, and the like) and a software layer (OS's designed, until recently, to support individual classes of devices in individual bubbles, bolstering the unique nature of each individual bubble). Now further imagine a brilliantly-colored rainbow stretching behind the continuum, representing the richness and vast depth of multimedia content - music, video, Internet, etc. And, yet further, imagine a vast grid behind your continuum and rainbow, representing the various flavors of connectivity, from copper to coax to fiber to 4G - the world of access. And, finally, imagine the whole mix floating in a sometimes-stormy, sometimes-calm cloud-like mass - the Internet.

This is the world we live in. Or lived in. A year ago. Today, convergence is taking place in some areas, collision in others, chaos in yet others.

Most interesting to watch over the last year has been the bulging and overlapping of the mobile and nomadic bubbles. Apple's iPhone burst free of the mobile bubble two years ago in a bold foray towards nomadic with the world's first true mobile computer. Google's Android is capitalizing and mainstreaming this momentum, with HTC, and to a lesser extent Motorola (which has bet the farm on Android), and a host of others deploying or planning to deploy that mobile computer OS in true numbers. Meanwhile, in the wake of Apple's iPhone introduction, we witnessed the nomadic bubble push its edge towards the mobile bubble, with last summer's much-hyped netbook revolution. A short-lived revolution to be sure - the advent of the iPad and the multitude of clones to follow have very likely set the stage for a exit for the netbook players.

Some CE venders span the continuum from a hardware perspective, e.g. Samsung and LG, which deliver phones, smartphones, laptops and TVs. HP's acquisition of Palm strengthens their potential in this context, but that's a story yet to be written, and I wouldn't assume (nor, however, entirely rule out) a happy ending. Yet others - Apple and Google - have grander aspirations. Apple has had phenomenal success in tapping the content rainbow to bolster its hardware and software solutions, has also built an entirely new industry around mobile applications, and has even made a not-yet-successful foray into bridging further into the fixed realm with Apple TV. Google, leveraging it's Internet roots, has delivered a world-class mobile OS married to its online solutions, is also fiddling with breaking through to the home big screen with Google TV, and, yet one step further, is now deploying high-speed broadband in select markets to get into the access game (and I' hazard a guess that a Google wireless MVNO is a not-too-distant prospect). One-time global wireless leader Nokia is also attempting to break out of the mobile bubble with its Ovi-based content and application solutions, but is trailing, and not terribly closely, and has some critical decisions to make about its aging Symbian OS. And then there's Microsoft, the ultimate wild card...

I guess what I'm getting to here is, well, the end of the wireless industry as we once knew it. While that may sound overly-provocative, please understand that I'm not saying that wireless broadband isn't key to our digital future, rather, that wireless-enabled devices are merely additional nodes on the Internet. Mobile phones, smart phones, mobile computers, laptops, netbooks, tablets, e-readers, digital cameras, e-meters, etc., etc., are all just nodes on the net. The industry is broadband, connected devices, and multimedia content and services - wireless is just one flavor of access. The cloud is absorbing the bubbles.

So what does all of this mean for the key players in what was a "wireless" industry? Some potential implications:

- From the mainstream, volume-oriented CE manufacturing side, HTC, Samsung and LG are best positioned to continue to succeed. Motorola, which does not manufacture its own devices nor develop its on OS, has effectively become a sales and marketing organization.

- From the mobile device OS perspective, Google's Android has the best shot at near-term dominance and a clear chance at becoming a truly global de facto standard (and not just in mobile devices). The other contenders, the Nokia-Intel MeeGo and the LiMo Foundation's open mobile Linux, will need to accelerate at dramatic rates if they are to stay in the game (Nokia needs to stop re-organizing and re-discover its history of innovation and execution). As long as the Apple ecosystem remains closed to other venders, scalability to Android levels is unlikely, all-the-more so if multitasking and Flash are not enabled in its devices (both forgivable in my opinion in terms of the iPhone, but not at all forgivable on the iPad).

- That said, Apple will continue to maintain its innovative edge, and should be expected to disrupt the market again, setting new trends, new directions and a new pace for others to follow. Indeed, while Apple will no doubt continue to successfully evolve its business model leveraging its strong position vis a vis content delivery, where I'd really like to see their next innovation would be in yet further simplifying the user experience (and here's where I borrow from my most recent post). Take QWERTY for instance. While those of my generation and the one or two that have followed might still have an affinity for this user interface, it's dated, and, frankly, not terribly efficient. What will we be using in 10 years? Touch is all the rage today, and will remain a key element of the UI experience. Voice activation will also become more and more common, but has it's downsides in terms of use in public places (privacy, ambient noise, etc.). Gesturing certainly has promise, as does facial recognition and/or expression reading, as well as virtualization. I would not be surprised if over the next decade Apple's innovation makes QWERTY and old-school telephony keypad UI's the exception, not the rule.

- Network operators - fixed and wireless - will continue their battles of the bundles, but from a consumer solutions perspective, there's is increasingly a utility business, like it or not. We will see more and more mergers as this field winnows down to two or three at best. (Side note: The real value growth for operators is in the enterprise space - providing SMEs and MNCs alike high-value, end-to-end communications and hosted and/or cloud-based enterprise services).

- The major content players will continue to struggle, just as operators will, to evolve their business models so that players like Apple and Google cannot continue to suck the value out of them.

It's a brave new world...

May 10, 2010

Restrooms and mainframes...

In a recent chat with one of the architects of the early Internet (who remains quite active as a leader in its evolution), we touched on the inherent chaos embedded in the process of technological evolution.

I introduced the concept by remarking on the curiosity of today's public restroom experience. You can pretty much count on an automatic flush. Whether or not to wave your hands under a tap or manually turn knobs to wash your hands is less certain. Soap almost always requires a pump or two, but I've experienced the wave in that case as well. As for paper towels, it's 50/50 whether they'll dispense themselves at your waved command or whether you'll need to pull and tear. Air driers, however, seem almost universally automatic these days. In any event, in most cases, what you end up with is a mixed experience, waving at some things and turning or pulling at others, sometimes appearing a bit foolish in the process. Bottom line: Evolution takes place at different paces, even in a public restroom.

Beyond generating an initial chuckle, my observation prompted my friend to pose a question he says he regularly asks: Imagine yourself going back in time 50 years and how you would experience the world around you, and how your experiences would be perceived by others. He suggested, among other things, that we'd all end up with broken noses. People would ask, "why did you walk straight into that door?" "Because where I come from, doors open automatically." People would wonder (perhaps not aloud) "why didn't he flush?" "Because where I come from, toilets flush automatically." And so on, and so forth... Then my friend suggested: Imagine yourself 50 years in the future, returning to our age. What things would you expect to experience that we've not today yet fathomed? Cool exercise. Indeed, a potentially endless exercise. You could drown in the imagining...

...So, I'm not gonna go there. Yet. Instead, let's focus on the more near-term, as we ended up doing in my recent chat, and, first, in the context of a topic I regularly blather about.

For starters, know it or not, the wireless industry is dead.

Okay, so that was perhaps overly provocative, and it's certainly not to say that's that wireless broadband isn't key to our digital future, rather, that wireless-enabled devices are merely additional nodes on the Internet. Mobile phones, smart phones, mobile computers, laptops, netbooks, tablets, e-readers, digital cameras, e-meters (wirelessly-enabled water, electricity, gas, or whatever meter that used to be or may still be read by a union-protected human being), etc., etc., are all just nodes on the net. The industry is broadband access - wireless is just one flavor.

Now let's think about user interface, looking a bit forward, not fifty years (I'm just not ready), but a few, a decade maybe... Take the qwerty layout for instance. While those of my generation and the one or two that have followed might still have an affinity for this user interface, it's dated, and, frankly, not terribly efficient beyond the fact that we've developed a comfort and familiarity for the experience over the years. What will we be using in 10 years? Touch is all the rage today, and will remain a key element of the UI experience. Voice activation will also become more and more common, but it has it's downsides in terms of use in public places (privacy, ambient noise, etc.). Gesturing will certainly play a role in some limited use cases (remote control, for instance, not of TVs, but of, well, practically anything), as will facial recognition and/or expression reading, as well as virtualization (projected and interactive displays). But will we still be fiddling with devices with old-school telephony keypads or qwerty data input layouts? Some, yes. But I'll hazard a guess that if not in 10 years, then certainly in 20, it may well be the exception, not the rule.

But let's go back to that public restroom scenario. And in a different context, yet another I tend to rant about - regulation- vs. marketplace-driven solutions to ensure competition, commercial success and consumer benefit.

There is certainly a need for baseline sanitary regulations and relevant plumbing and interoperability standards in the public restroom environment. But would it be sensible for a regulator to define the form factor and experience provided by every sink, toilet, spigot, hand drier, etc., or to dictate universal availability of the same? Of course not. And, while regular readers of this blog may now be thinking I'm going to dive into yet another network neutrality/network management discussion, I'll resist that temptation (but you can easily see how easily the parallel could apply), and drill down instead into that interoperability question, and in the context of a different regulatory debate.

IBM has been or is actively being investigated by both U.S. and European authorities. The question at hand: Are IBM's mainframe business and its actions related to that business anti-competitive - are challengers precluded from entering the marketplace? Is this an instance where antitrust or competition authorities should intervene to ensure a fair and open marketplace? Pretty arcane stuff, huh? Curious stuff too. Given that in an ever-evolving marketplace where cloud-based and distributed computing and faster, more efficient, more capable servers are providing new businesses with cost-effective mainframe alternatives and aging mainframe-established businesses with smoother and smoother migration paths to those same alternatives, is it any wonder that IBM's mainframe market share is in the single digits in the overall server marketplace. Indeed, many argue that the mainframe is a dinosaur, well-past retirement age (this, by the way, is not true). So does IBM's mainframe business represent a monopoly?

No. Just as in previous posts I've argued that network operators have the fiduciary right to reap the benefits of the billions they've invested in their networks (not, however, to the extent of precluding competition or consumer choice of devices, services and content), so too does IBM have the right and responsibility to monetize its investments and to continue to compete for market share. And yes, there is an interoperability question that merits attention - IBM's mainframes (anyone's mainframes) are a marriage of hardware and software and to the extent that the software side of the equation is closed there are indeed challenges to companies competing to introduce or desiring to implement migration paths to the alternatives referenced above. But this is not a case of plumbing in a public restroom or basic sanitary mandates governed (if not enforced - have you ever been to the toilet at Penn Station in NYC?) by the appropriate regulatory authorities. The workarounds exist and are being deployed, indeed, IBM itself is competing in the alternative space.

There will come a day, when the pubic restroom experience will be a touch-less one, everything automatic and/or gesture-driven. The technology exists, it just a matter of the evolution taking place, as the marketplace dictates. There may well also come a day when mainframes are a thing of the past (or not) - the technology exists, it's just a matter of the evolution taking place, as the marketplace dictates. It's inevitable. Government intervention simply stymies the process, disadvantages one player, and, quite likely, advantages others. Indeed, to this latter point, it is interesting to note the overlap of membership in The Mainframe Migration Alliance,, and the Computer and Communications Industry Association, the former two which are promoting alternatives, the latter which is leading the charge against IBM in Europe. You see, sometimes governments and regulatory authorities are bent to action with the best of intent, yet at the commercial will of clever competitors seeking to disrupt the momentum of one or another leaders in their competitive space.

And now, in that context, think again about the network neutrality/network management debate, and the players on both sides... Stay tuned.

May 07, 2010

Let the Broadband Games Begin (Continually)...

Almost one month from the day that a Federal Appeals Court ruled that the FCC exceeded its authority when it sanctioned Comcast in 2008 for deliberately slowing Internet traffic for some users (see my April 6 post), FCC Chairman Genachowski announced in a speech yesterday his intent to propose that the FCC issue a public notice to seek comment on a new legal framework to govern broadband Internet access providers.

Here we go again again...

Genachowski characterized his goal as an effort to "restore the broadly supported status quo consensus that existed" concerning regulation of broadband Internet access providers prior to the Comcast v. FCC decision (Comcast). He further said his approach as consistent with the "bipartisan consensus" that the FCC should adopt a restrained approach to regulating broadband communications, but emphasized that "consumers need basic protection against anticompetitive or otherwise unreasonable conduct by companies providing the broadband access service (e.g., DSL, cable modem, or fiber) to which consumers subscribe for access to the Internet."

Following the speech, applause echoed from Silicon Valley and, of course, gasps of horror and screams of outrage emerged from carriers. Yawn.

Nothing has changed. This debate has been raging for years and will continue to simmer and/or burn endlessly and, frankly, I have to agree to some extent with the carriers who have called it a waste of energy that could otherwise be directed to the acceleration of broadband deployment that the FCC/Administration hopes to drive, including via measures such as announced by Genachowski yesterday.

On the other hand, the FCC announcement and related actions is serving an important purpose - in the absence of clear regulatory authority (depending which side you're on) and in the context of launching yet another round of the debate, the FCC is providing the very "regulatory" spotlight that is demanded to ensure that consumers are not abused. The debate itself has become the process of regulatory oversight...

May 02, 2010

Don't Blame Olli-Pekka for U.S. Mess

An April 30 engadget report on a Reuters piece is making it's way like wildfire across the 'net, titled "Nokia CEO Olli-Pekka Kallasvuo being replaced to soothe frustrated investors?"

The report stresses that there are no hard sources behind the swirling rumors, and I'll leave it to others to debate whether Symbian^3 delays merit a CEO's ouster, but let's be clear on one point - I know the buck's gotta stop somewhere, and ultimately that's the CEO, but don't blame Olli-Pekka for the Nokia mess in the U.S.

Per the engadget report, "OPK pledged to build up Nokia's US presence when he took over, and he's obviously failed to deliver on that promise -- US marketshare has fallen from 20 percent to 7 percent, prompting one analyst quoted in the Reuters piece to wonder if 'Nokia really has the desire to fix the problem.'"

Yeah, Nokia is suffering badly in the U.S. Two successive regional leaders and leadership teams have failed or are in the process of failing to develop and execute a unique strategy for what is a unique marketplace. Rather, in both cases, drawing from legacy Nokia Networks experience, leadership focused less on unique U.S. technology and consumer trends, and more on leveraging one-time relationships and stature (Nokia and personal) with carriers, married to measly drive-slot marketing sops, to drive tweaked variants of global product.

Um, that doesn't seem to be working, at least so far (after all, we keep hearing that the strategy's gonna pay off soon).

So, yeah, I know, that buck-stopping concept is a real one, and blaming regional leadership ultimately means blaming global leadership, which endorsed the regional strategy. But in this case, notwithstanding Olli-Pekka's brief tenure in the U.S. in the '90's which gives him some insight into the uniqueness of the market, Nokia U.S. leadership was specifically and unusually vested with a mandate to rebuild, repair, restore and/or renew Nokia in the U.S., and in whatever fashion necessary dictated by that very market uniqueness that Olli-Pekka recognized demanded on-the-ground expertise. In other words, the Nokia U.S. organization was free from global cookie-cutting - technology, product, business model or otherwise - if it chose to be. With that level of autonomy should come commensurate accountability.

If there's house-cleaning to be done, do it where it needs to be done. Don't axe the remote landlord because the building manager can't keep the place in order. Get a new building manager. Indeed, you might want to think about remodeling in the process (see the conclusion of my March 2 post which touches on this concept).