Category : Strategy

in Amazon, Cloud, Competition, Economics, Google, Microsoft, Networks, Policy, Political Economy, Strategy

Why There’s No Future in Cloud Futures

An inter­est­ing debate took place at last week’s Cloud2020 gath­er­ing regard­ing the via­bil­ity of futures mar­kets for cloud com­put­ing capac­ity. I’m firmly at the skep­ti­cal end of the spec­trum as the title of this post will attest. How­ever, I had not given enough thought as to the rea­sons for my skep­ti­cism. Hav­ing reflected on it a lit­tle I’m more con­vinced than ever that any attempt to cre­ate either pri­mary or sec­ondary mar­kets in cloud com­modi­ties is doomed. In short the lack of fric­tion and a lack of volatil­ity in match­ing cloud com­put­ing sup­ply and demand means there is likely no win­dow for 3rd party mar­ket mak­ers to insert them­selves into this value net­work. Con­tinue Read­ing

in Apple, Cloud, Competition, Economics, Futures, internet, Networks, Platforms, Strategy

The Laws of Platform Economics

The eco­nomic evo­lu­tion of com­put­ing plat­forms appears to be guided by a num­ber of ‘Laws’ that are inde­pen­dent of any spe­cific under­ly­ing tech­nol­ogy. These ‘Laws’ help explain the evo­lu­tion­ary tra­jec­tory of mature plat­forms and can act as a pre­dic­tor for the tra­jec­tory of emerg­ing plat­forms and behav­iors of those that con­trol them.

The first three laws of plat­form eco­nom­ics are: Value always migrates up the stack, Value gets inte­grated over time, Those that con­trol plat­form evo­lu­tion get to define how value is extracted. A def­i­n­i­tion of each of the ‘Laws’ is pro­vided below: Con­tinue Read­ing

in Cloud, Futures, Platforms, Strategy

Cloud Computing: A Short Guide For The Perplexed

Over the last cou­ple of years the term cloud com­put­ing has become become pub­lic rela­tions short­hand for “Look, look, we’re also cool.” The expres­sion is now so overused and is applied so widely that it has become almost mean­ing­less. That’s a prob­lem. Senior busi­ness deci­sion mak­ers have been set a drift in a sea of PR and mar­ket­ing con­fu­sion just at a time when they need to be mak­ing strate­gic tech­nol­ogy choices that may directly impact the future of their firms. I offer this brief guide to cloud com­put­ing in an effort to help cut through the fog cur­rently envelop­ing this impor­tant topic.

Con­tinue Read­ing

in Apple, Cloud, Competition, CompSci, Economics, Futures, Intel, internet, Microsoft, Networks, Oracle, Platforms, Strategy

Economics and Platform Architecture (Part 3)

Part 2 of this series of arti­cles looked at how tran­si­tion­ing from scarcity to an abun­dance of fun­da­men­tal com­put­ing resources enabled the his­toric one-to-one rela­tion­ship between oper­at­ing systems, applications and under­ly­ing hard­ware to be bro­ken. Part 3 will exam­ine how the abil­ity to decou­ple hard­ware and soft­ware evolved into a new strat­egy for man­ag­ing IT sys­tems — sav­ing company’s mil­lions of dol­lars in the process — and laid the foun­da­tion for today’s cloud com­put­ing archi­tec­tures. Con­tinue Read­ing

in Cloud, Competition, CompSci, Economics, Futures, Intel, internet, Microsoft, Networks, Oracle, Platforms, Policy, SAP, Strategy, Uncategorized

Economics and Platform Architecture (Part 1)

The under­ly­ing eco­nom­ics of com­put­ing resources have always had a pro­found impact on devel­op­ment of com­put­ing archi­tec­ture and in-turn the struc­ture of the com­puter indus­try. In this regard the emer­gence of cloud com­put­ing is no dif­fer­ent. Cloud com­put­ing has emerges as the prod­uct of a fun­da­men­tal tran­si­tion in the under­ly­ing eco­nom­ics of com­put­ing resources and — as in the past — this eco­nomic tran­si­tion will drive pro­found changes in the struc­ture of the com­put­ing indus­try. The nature of this change can best be described as a tran­si­tion from the eco­nom­ics of scarcity to the eco­nom­ics of abun­dance. Con­tinue Read­ing

in Competition, Economics, Futures, internet, Microsoft, Networks, Policy, Strategy, Uncategorized

How ‘Do Not Track’ Will Transform Internet Business Models

Imag­ine a world where all inter­net browsers are required to present users with a sim­ple ques­tion: “Do you want your online brows­ing activ­ity tracked, recorded and shared with mar­ket­ing com­pa­nies — Yes or No?”

What per­cent­age of users do you sup­pose would answer “No?” My guess would be greater than 90%. If I’m any­where close to being cor­rect then Microsoft’s con­tro­ver­sial deci­sion to enable ‘Do Not Track’ (DNT) by default in IE10 and Win­dows 8 would seem to be very much inline with con­sumer sen­ti­ment. But adver­tis­ers, Yahoo, and the devel­op­ers of both the Apache web server and Fire­Fox browsers are all decry­ing Microsoft’s decision.

This rel­a­tively arcane debate over a new inter­net stan­dard masks a much more crit­i­cal issue: In the long-term, how viable is the internet’s — adver­tis­ing based — ‘Free’ con­tent model?

Adver­tis­ing rev­enue is the internet’s pre­dom­i­nant busi­ness model. This is of course the core busi­ness model that enabled Google to become the 800 lb. gorilla of the indus­try. But this busi­ness model is based on users accept­ing a ‘Faus­t­ian’ pact where they agree to increas­ingly inva­sive track­ing of their online activ­i­ties in exchange for free content.

There’s only one small prob­lem with the cur­rent sit­u­a­tion. Very few con­sumers have ever read or con­sented to the ‘Con­tract.’ Most of con­sumers have no earthly idea how inva­sive today’s inter­net track­ing tech­nol­ogy is and once they are aware they are not going to like it.

Con­tinue Read­ing

in Apple, ARM, China, Competition, Futures, Intel, Microsoft, Platforms, Policy, Strategy

Microsoft’s Pivot — A Plan to Dominate “Devices and Services”

We are cur­rently wit­ness­ing a major pivot in Microsoft’s core busi­ness model. It is start­ing to become clear that — as Steve Ballmer recently announced — Microsoft is deadly seri­ous about becom­ing a global leader in con­sumer “Devices and Ser­vices.” Suc­cess­ful exe­cu­tion of this strat­egy will require the com­pany to con­trol every­thing from man­u­fac­tur­ing, dis­tri­b­u­tion logis­tics through to retail.

The com­pany appears to be focused on exe­cut­ing a ‘Leader’ strat­egy in the devices busi­ness which would give them even greater con­trol than Apple famously does over the end user expe­ri­ence. In addi­tion the com­pany is likely to repur­pose its online ser­vice invest­ments to add value to this new device-led strat­egy.  A-la Apple, con­sumers will have no choice but to use Microsoft own ser­vices when using a Microsoft mobile device and com­pe­ti­tion author­i­ties will be pow­er­less to pre­vent it.

If cor­rect, this pivot will has pro­found impli­ca­tions for the struc­ture of the com­pany, share­holder value and for the entire mobile tech­nol­ogy indus­try. Con­tinue Read­ing

in Apple, ARM, Competition, Futures, Microsoft, Strategy

Why Microsoft Shareholders Should be Very Concerned

This weeks Partner’s con­fer­ence has once again exposed Microsoft’s com­plete lack of any cred­i­ble con­sumer strat­egy. On the one hand Ballmer claims he’s going to leave no “stone unturned” com­pet­ing with Apple. Yet on the same day he also states that Microsoft’s own Win­dows 8 hard­ware “Sur­face is just a design point.” Note to Steve: Those are two mutu­ally incom­pat­i­ble objectives.

If Ballmer really is seri­ous about com­pet­ing with Apple then Microsoft will need to con­trol its own hard­ware des­tiny — in pcs, tablets and smart­phones — and be com­pletely com­mit­ted to that strat­egy. Unfor­tu­nately that will also require a will­ing­ness to throw the OEM part­ner com­mu­nity under the bus. Pro­tect­ing OEMs while aggres­sively com­pet­ing with Apple are incom­pat­i­ble strate­gies. A text­book case of the Inno­va­tors dilemma.

Share­hold­ers are likely to pay a very high price if Ballmer con­tin­ues to believe the fan­tasy that he can accom­plish both these com­pet­ing objec­tives and still be suc­cess­ful in the con­sumer business.

in Cloud, Competition, Platforms, Strategy

II">Intel’s ARMageddon II

Back in Jan­u­ary of this year I pub­lished an arti­cle about the threat the ARM proces­sor archi­tec­ture would pose to Intel in the high mar­gin — highly prof­itable — mar­ket for server proces­sors. Bloomberg pub­lished a story yes­ter­day indi­cat­ing that HP is prepar­ing to enter the ARM based server busi­ness. I don’t own Intel stock but if I did I’d be sell­ing. ARMaged­don is just over the horizon.