What is “cloud-unnative”? It sounds like a tongue-in-cheek term promoting architectures that do not fit into the cloud, but it is not. Actually, I have spent much of my career helping companies get their architectures into forms that distinctly are cloud-native, much of it long before the term “cloud-native” existed. Many cases make perfect sense not to go into the cloud. The design principles, however, can be enormously helpful towards operating more efficiently and reliably, within or outside the cloud.

Is the cost of cloud a “trillion dollar paradox”? Legendary venture capital firm Andreesen Horowitz thinks so, based on their blog post from late May. The above article has been making the rounds for several months, causing a lot of teeth-gnashing and lining up of parties on either side. Is it evident that cloud puts “pressure … on margins (that) can start to outweigh the benefits, as a company scales and growth slows”?

Every pundit under the sun has their theories about how the “world will change” post-Corona. Personally, I have never liked airy pronouncements about how “NOW it is different.” I prefer more measured responses, like Ben Thompson of Stratchery, who has said in his articles that the responses to Corona would accelerate existing trends. I do, however, think that one trend will reverse direction, and that has a major impact on markets: supply chains.

Inception When the cloud-native world really got under way, especially the open-source part of it, much of what we used to do (and, likely, most companies still do) in custom and proprietary ways became standardized: defining workloads defining storage defining dependencies defining policies defining placement defining replicas load balancing rollout strategies packaging status many other things The tool to do this, of course, began with docker, which addressed, primarily the packaging and workloads part, but grew to Kubernetes as a basis for the rest of it.

Thoughts on KubeCon North America 2019 In late November, I spent several days at KubeCon/CloudNativeCon, for the fourth or fifth time. It certainly has grown over the years; San Diego’s conference was oversubscribed at 12,000 attendees. In the somewhat snarky words of a friend from the Linux Foundation, “this feels a lot like the OpenStack conference at its peak.” I am hopeful that it doesn’t go down the same path.

Yesterday, I had the privilege of one of my many discussions on technology direction with Josh Mahowald. Our conversation turned towards why it is that so many interesting and enabling pieces of software have been built on top of Kubernetes. As Josh put it, there is an explosion of higher-level services and tooling. This will be the first in a series of posts examining what Kubernetes really is (ok, an API), where it fits in the history of technology, and why it has enabled this kind of “explosion”.

Why do I need both GitHub/GitLab/Bitbucket and JIRA/PivotalTracker/etc.? Over the last several years, while working with companies that regularly deliver software, I have seen three basic patterns in use: Git-All-In: These companies, normally founded by engineers, run all-in on git platforms like GitHub/GitLab/BitBucket. The Issues tracker and Pull Requests/Merge Requests (I will stick with “PR”, but no offense to GitLab) are the primary tool they use to track activity. As they grow some, they use the various “project”, “kanban” and other organizational features added to these platforms, but the primary method for interacting with daily work and knowing their state is the Git-based platform.

How do you run a great conference? I spent the first three days of this week, Monday March 4th through Wednesday March 6th, attending and speaking at QCon London. In my case, I spoke about LinuxKit, a toolkit for composing lightweight, minimal and optimized runnable operating system images. Those who know my focus on technology operations might wonder why I gave a talk on so deeply a technical subject as composing operating system images.

Serverless? Containers? Who will win??? In the week of aws reInvent, when 45,000 or so people are descending on Las Vegas, and two weeks before the big cloud-native conference in Seattle, the question of “which is the future, serverless or containers?” seems to be the “debate du jour”. For example, take last week’s debate: I am going to posit a different position, one which, in the true spirit of compromise, leaves everyone equally unhappy:

A few weeks back, I wrote an article on my observations on KubeCon/CloudNativeCon. A number of people asked that I follow up with similar observations about DockerCon. Last week, I had the unexpected pleasure of attending DockerCon in San Francisco. I say unexpected not because I did not expect to attend, but because I did not expect it to be so pleasurable. Indeed, I fully intended to cancel my ticket, until I was asked by several colleagues to attend with them.

What is Kubernetes? According to the home page: Kubernetes is an open-source system for automating deployment, scaling, and management of containerized applications. On that basis, Kubernetes has matured and evolved, becoming not just “an open-source system”, but the system for orchestrating containerized applications. By extension, it is the system for orchestrating any dynamic, self-healing, rapid deployment application. In October 2017, Docker threw in the towel on Docker Swarm and made Kubernetes its default (and apparently soon only) orchestration system.

Two weeks ago, I attended KubeCon/CloudNativeCon EU 2018 in Copenhagen. The sheer size of the conference was astounding. Over 4,000 people attended.. In addition to the sheer size, the professionalism of both the conference itself - audiovisual, presentation, organization and administration - and the sponsor booths was very impressive. I have always enjoyed Linux Foundation events, very warm and friendly, but a little, as they say in Yiddish, “heimish”. They contrasted with the professionally run conferences you could attend put on by other organizations.

Yesterday, I worked with a colleague to determine costing for their newly deployed kubernetes cluster on AWS (Walmart must not be a customer...). The math was mostly straightforward: Get cost of instance by size, multiply by number of instances and 720 hours per month; Add EBS block storage; Add ELBs; Add data traffic out; Add S3 storage. Repeat for each environment, and you have your answer. By far, the biggest cost line item is the first: instances.

Earlier today, I had the pleasure of speaking with Stuart Hasking, a colleague from my financial services IT days, and currently a strategic consultant at TESM. We were discussing the challenges in making changes in a technology environment, when he shared a great line that summarizes the issue perfectly: "It's about the carbon, not the silicon." Most people view technology - deploying servers, designing networks, writing software - and especially complex large-scale distributed technology, as hard.

In the technology world, selling new products is hard. Selling to enterprises is even harder. Small companies were (relatively) easy. They took a little bit of handholding to get your SaaS/software/hardware configured "just right" for them, but most of what they wanted pretty much fit into the offering anyways; it was "on the truck." As you expand up-market into larger customers, customization demands increase. They need: Integration with their (unique) login system Special compliance controls Unique flows and processes Added manual approval steps etc.

Yesterday, I published an article asking, "Did Docker Declare War on RedHat and CoreOS?" I received several responses pointing out market-related developments. A number of people said they know that Docker did not intend to "declare war" on CoreOS and RedHat. Docker simply was developing its tools that they needed anyways and advanced their market. With the change in CEOs this week at Docker, highly unlikely they would start a war immediately before changing.

Yesterday, at DockerCon, Docker Inc announced open-sourcing its LinuxKit toolkit to build Linux operating system images. LinuxKit (the platform that has been rumoured as Moby for over a year) provides a relatively easy-to-use toolkit for building immutable operating system distributions. Normally, an operating system is a platform that you change on a regular basis. Sure, the core itself - the kernel and modules and basic tools - are changed only when you upgrade or patch your operating system.

I find it interesting when the same conversation happens with two different people in the span of just a few days. In the past week, I had almost the exact same conversation twice, with two different people at two different companies, about culture and acquisitions. In both cases, they had initiated the topic of conversation. The following is a common pattern: Company Small is founded to bring a product to the market.

As every successful CEO (and VP) will tell you, recruiting great people is their top priority. Sure, they need revenue, and deliverables, and to manage funds, and a million other things. But great people are how you get these things done. In a competitive market, firms look for original ways to find and hire great people. Engineers, in particular, are in very high demand, and firms look not only for new ways to find them, but also exciting ways to appeal to them.

In my world of technology operations, two major themes recur again and again (redundantly): Incentives Litmus Tests I have written about incentives extensively on this blog. In short, as the saying goes, "you get what you measure." Don't expect extra customer handholding if you measure your support team by time spent on issues or minimizing average ticket time. Sure, you need to operate cost-effectively, but the key word is "

A few weeks ago, Amazon Web Services held its annual AWS re:Invent conference. Unsurprisingly, they announced, yet again, a slew of new services, all meant to ease adoption and management of technology services. Yet, something felt a little amiss: https://twitter.com/avideitcher/status/804418718994407424 Not only are SaaS firms getting nervous, but plenty of large firms, as well. As Benoit Hudzia pointed out, many on-premise software giants, including Oracle/PeopleSoft and SAP, should be getting nervous (but perhaps are not):

A few weeks ago, I had the pleasure of meeting Pini Reznik, CTO of container consulting firm Container Solutions, in Berlin. It may appear strange that an independent consultant who spends a lot of time helping companies with development and infrastructure strategies, much of which over the last several years has involved containers, would tout another consulting firm's services. There is, however, plenty of work to do for all of us, and I am grateful for the thoughts and ideas they shared.

As readers know, I have been thinking a lot about serverless lately (along with all other forms of technology deployment and management, since it is what I do professionally). Recently, I came at it from another angle: network latency. Two weeks ago, I presented at LinuxCon/ConainerCon Berlin on "Networking (Containers) in Ultra-Low-Latency Environments," slides here. I won't go into the details - feel free to look at the slides and data, explore the code repo, reproduce the tests yourself, and contact me for help if you need to apply it to your circumstances - but I do want to highlight one of the most important takeaways.

Last week in LinuxCon/ContainerCon Berlin, I attended a presentation by Luca Bruno of CoreOS, where he described how kubernetes, the most popular container orchestration and scheduling service, and rkt integrate. As part of the presentation, Luca delved into the rkt architecture. For those unaware - there are many, which is a major part of the problem - rkt (pronounced "rocket", as in this) is CoreOS's container management implementation. Nowadays, almost everyone who thinks containers, thinks "

Last week, I had the pleasure of attending LinuxCon/ContainerCon Europe 2016 in Berlin. Besides visiting a fascinating historical capital - there is great irony, and victory, in seeing "Ben-Gurion-Strasse" - or "Ben Gurion Street" - named after the founding Prime Minister of Israel in the erstwhile capital of the Third Reich. And while I had many a hesitation about visiting, the amount of awareness, monuments and memorials to the activities of the regime in the 1930s and 1940s was impressive.

Containers, the management and packaging technology for applications, are useful for many reasons: Packaging is simpler and self-contained Underlying operating system distribution becomes irrelevant Performance, therefore density, and therefore cost, is much better when working without a hypervisor layer To my mind, though, one of the most important elements in any technology is how it affects culture and incentives. For example, MVC development frameworks are helpful for many reasons, but the most important is that it encourages (and sometimes forces) a cleaner way of thinking about and building software.

It has become commonplace to forecast that Uber, Lyft and other ridesharing services are a strategic threat to car manufacturers. After all, if "everyone" uses Uber, why would they bother owning cars? The problem with that argument is that it assumes that "everyone" lives where Uber and Lyft are headquartered: in a dense urban area with very little parking, going to other places nearby where there is lots of traffic and very little parking.

Today, I had a very interesting discussion with Rich Miller, a consulting colleague who has been around the block more than a few times. One of the interesting points he raised is that Amazon's AWS pricing doesn't quite work for enterprises. Let's explore how it is a problem and why it is so. At first blush, Amazon's pricing is intuitive: use an hour of an m4.xlarge, pay $0.239; use 2 hours, pay $0.

Architecture determines capabilities. This is not new. Anyone who has planned and architected a new product, or has tried to retrofit capabilities for which a platform has not been architected, knows it first-hand. Yet, time and again, I come across products that have not been planned, and therefore architected, around reasonably expected capabilities. Sometimes I see these as a user. Last week, a client wanted to give me access to their Dropox Team account, so we could share information.

A lot of ink has been spilled (if that term still can be used in the digital age), on the coming driverless "revolution." Yet a much simpler "evolution" is long overdue for automative technology: the inside. Anyone who has replaced any component on a car - dashboard, door panel, side-view mirror, radio, engine part, or any component at all - is familiar with the swamp of wiring that snakes its way behind every panel on the car.

Serverless. Framework-as-a-Service. Function-as-a-Service. Lambda. Compute Functions. Whatever you call it, serverless is, to some degree, a natural evolution of application management. In the 90s, we had our own server rooms, managed our own servers and power and cooling and security, and deployed our software to them. In the 2000s, we used colocation providers like Equinix (many still do) to deploy our servers in our own cages or, at best, managed server providers like Rackspace.

What is the basic unit of application deployment? Two related trends have changed the answer to this question: DevOps Containers For many years, the tasks between engineer and operator were cleanly, if painfully, split: Engineer builds and delivers a package of files to deploy and run Operator deploys and runs those files in a production operating environment In the early years, the package of files consisted of a directory with a ream of paper and instructions.

How do you know when your workers really love their jobs? Of course, not all will, and plenty will leave over time no matter how great a working environment, but how do you know when workers really enjoy working for you? A few weeks ago, I had the pleasure of visiting the Hallertau Brewery, just north of Auckland, New Zealand, on a Saturday night. It is in New Zealand wine country, a rural area, so they close at 10:00pm on a Saturday night.

For a long time, I have felt that SSL/TLS - the protocol that secures your communications with Web sites, mail servers and most everything across the Internet - is broken. It is broken to the point that it is fundamentally insecure, except for the most technically-aware and security-alert individuals, who also have the time to check the certificate for each and every Web site. SSL is supposed to provide three guarantees:

For the last few weeks, I have been trying to unravel the connection between the value of talent and open-source. Inevitably, some products have a high level of importance but few people who truly understand it. This creates high demand with low supply, increasing the value of those people. But that isn't special to open-source; it is true for any product with high demand + low supply. These just happen to be open-source.

Why do customers agree to open-source work I do? In the past, we have discussed the benefits of open-sourcing your own software: Reputation Recruiting Contributions Recently, I had the pleasure of walking half an hour from a Tokyo train station with Matthew Garrett, who does some impressive work on core operating systems (pun intended; Mathew works at CoreOS). One of the thing I asked him is why a company open-sources its entire stack?

Earlier this week, a really smart architect and I were evaluating various methods for managing software code changes, bug fixes, releases and major features. We both were in agreement with the primary direction, a popular one in nimble companies. Have a primary "trunk" or "master" branch; Any commits to "master" automatically get built and tested and ready for production (and possibly deployed); Any changes occur on "feature branches", temporary parallels streams of development that eventually - hopefully sooner rather than later - merge into "

On this day, 240 years ago, the visionary gentlemen of the 13 colonies pledged their fortunes and their very lives to the cause of liberty. Given the incredible forces arrayed against them - the British Navy was the dominant sea force of the time, and the British Army dwarfed the ragtag militia forces which combined to make the Continental Army - their audacity and vision were unbelievable. Those 56 delegates to the Continental Congress were the co-founders of the greatest and riskiest startup of all time, one in which the battles were drawn not with marketing, product and engineering but with artillery and infantry and navies, in which loss meant not bankruptcy and "

Can robots replace burger-flippers? How about lawyers? Tools have been around for thousands of years, making a human job faster and easier; try banging a nail in without a hammer. Machines, complex combinations of parts that are either human-operated or human-started, have existed for far less than that. With a Gutenberg press, you can print hundreds of copies of printing with just 1-2 people operating the machine. A washing machine will wash your clothes after you just press the right buttons.

Sometimes I am amazed by open source software... even as I contribute to it. The largest repository of public open-source projects, GitHub, has over 35MM repositories in it. Granted, some large percentage of those are private, and therefore closed-source, but even if only half of those are public, and by all accounts it is much more heavily weighted towards open, the numbers are in the tens of millions. Add in other source hosting locations like BitBucket and sourceforge, as well as privately hosted sites like GNU Labs' git.

It seems every day there is another article about how "vulnerable" the Internet of Things (IoT) is. Here are two choice excerpts from the last year: "Hackers Remotely Kill a Jeep on the Highway," Wired, 21st July 2015 "Security Researcher Claims to have Hacked into Flight via Entertainment System," CNN, 19th May 2015 While these are major life-threatening issues - one cannot compare a malicious actor disabling your iPhone while you are on it with someone talking control of your car going 110 kmh down the highway, let alone a plane flying at 35,000 feet and 600 mph!

I loved the Tesla shareholders meeting, for the same reason I love it when VCs write posts about "all the investments we passed on and regretted later." Bessemer Venture Partners even has a page dedicated to its "Anti-Portfolio." Fortune magazine called the Tesla meeting, "Elon Musk Confessions: All the Stupid Things Tesla Has Done." In the meeting, Musk catalogued many "stupid" mistakes (his words), although at the time they probably appeared smart, if slightly crazy (a characteristic required by every entrepreneur).

From the Cambridge Dictionary of English: iota (n.) - an extremely small amount From the Wikipedia: Internet of Things (IoT) - the network of physical objects—devices, vehicles, buildings and other items—embedded with electronics, software, sensors, and network connectivity that enables these objects to collect and exchange data. As electronics get smaller and smaller, not just wearables like an Apple Watch, but even tiny full computers like the Raspberry Pi, the "

After more than twenty years working in many companies, many of them as a consultant often dramatically improving operations, I have received a blessing and a curse: Blessing: I see improvements and benefits potential almost everywhere. Curse: I see improvements and benefits missed almost everywhere. The other day, I spent six and half hours in a hospital emergency room (ER) with a family member. Fortunately, everything is fine, and they are healthy.

Over the last few month, I was reminded - twice, painfully each time - about the impacts of good vs. bad software design choices, especially the impact those choices can have downstream. Ironically, it is not only - or even mainly - the creators and primary users of the software who are impacted, but others unforeseen at design time. Installing an Operating System Anyone who has installed an operating system on their laptop or server - or even smartphone - is familiar with a series of questions, choices and answers, as they configure the operating system.

One of the most popular recent television shows is CBS's "The Big Bang Theory," broadcast on Thursday evenings. In addition, the most recent 5 shows are available online on cbs.com. As with the live CBS broadcast, commercials are interspersed in the show - based on what I can tell at the same places as when broadcast in its normal slot. For decades, the entire broadcast television (and radio) business was based on advertising.

Is hard return on investment all there is? In exploring business (and tech) projects, we have a tendency to think about the immediate, quantifiable ROI. Yet, there are times when the soft costs or other benefits outweigh any measurable ROI, and sometimes are even worth a negative ROI... in the short term. This was highlighted to me again yesterday. A colleague of mine is heading up a project to move tens of thousands of VMs from on-premise to the public cloud.

For the last year or so, my various news feeds have been filled with dire warnings about the "Rise of the Robots." Apparently, the advances in robotics - hardware and software - are now beyond relatively simple home vacuums, and are poised to become the new drivers and waiters, gardeners and barbers. Simon Wardley has argued that they even could replace higher-intellect roles, such as CEOs. Many are worried that this is an economic disaster in the making, as millions of blue-collar and possibly white-collar jobs could be at risk.

What do Docker containers have to do with Web browsers? Everything. Web browsers provide easy access to the digitized collective knowledge of the human race, political rants, serious applications and even silly kittens. However, it is important to understand why browsers became so popular, and such a success. Prior to browsers, networked applications existed. Mostly, they were client-server two-tier applications, but they were quite popular in business, and many home personal computer users had such applications.

For most of us - pretty much all of us - the way we use our operating system (OS) on our laptop is not that different from how we use it on our mobile or a system administrator uses it on a server: The operating system is installed to the local disk. Changes / upgrades are performed by installing files to the same disk and then rebooting. Software is installed and/or upgraded by installing files to the same disk.

In the last article on serverless, I referenced the old ad in the New York City subways for a trade school. Their tagline was similar to, "technicians will always be needed, because things always will break." We technologists are familiar - intimately - with fixing broken things. Sometimes, it is our own software, devices or infrastructure; other times, it is someone else's. Either we have become responsible for it, or we need it to work under certain circumstances where it simply fails.

The New York City Subway used to have ads above the seats for some trade school. The general thrust was, technicians always will be in need, because things always will break. What happens when employers no longer need to manage things that break? Ever since we have had IT, we have had servers. Ever since we have had servers, we have had systems administrators, or SysAdmins. I actually started my career as a sysadmin, recruited out of engineering school to run systems for CS First Boston.

One of the hot words over the last few years has been "Bimodal IT". I won't go into a complete definition - let's leave the people who make much money off of the idea to explain it. The short form is that some technology activities are more traditional, sequential and driven by a focus on safety, while others are more innovative, agile and driven by a focus on new risks.

A few days ago, I had a conversation with a friend of mine who told me something shocking: a particular cloud company's gross margins on cloud products are below -40%. That is not a typo, it is minus 40% or worse. Essentially, the company is doing one of: burning investor money; running down their own cash reserves; borrowing from banks or the market; or subsidizing from other business lines. Whatever the method they are using to stay afloat, they are burning quite a hole.

The great strength of technologists is that we innovate constantly, always looking for a better world. The great weakness is that we sometimes fall in love with the solution, the technology itself, without regards to its applicable value in the real world. How do we determine if a given solution really has a chance of being adopted? The two biggest determinants of a solution are usefulness and usability. Usefulness "

I used to hate taking long day flights. If I had to spend 12 hours in the air from New York to Tokyo, or Zurich to Bangkok, or Tel Aviv to Newark, I preferred overnight flights. Even since the advent of on-demand entertainment, personal video screens and portable devices like the iPad, those flights just seemed to last forever. So most of the time I would fly overnight. However, the timing didn't always work out, and overnight flights tend to be significantly more expensive than all-day flights, often much greater than 50% more.

Where will VMWare be in 5 years? For many years, VMWare was practically synonymous with virtualization. It provided multiple virtual servers on a single physical server, with a great feature set, good (for its time) management interface, and enterprise customer support. Lately, VMWare has been under threat, primarily due to 2 factors: Public Cloud: When deploying to the public cloud, customers don't just wash their hands of managing compute hardware, storage and network.

In the cellar of Westminster Abbey in London, lies a lovely little café called the Cellarium, with all of the architectural design and feel of the Abbey. Of course, as it is in the heart of London, it has good tea as well. Earlier this week I was privileged to have a fascinating and wide-ranging discussion with Adrian Colyer, which led to 2 provocative questions: Will Microsoft open-source Windows?

Yesterday, Vala Afshar tweeted out the following https://twitter.com/ValaAfshar/status/706678404884652032 ... to which Paul Graham of YCombinator fame responded: https://twitter.com/paulg/status/706710881652965376 I beg to disagree with Paul, but not how you would expect. One of the valuable intellectual behaviours one learns from studying Talmud is to analyze a situation from all directions, teasing out all potential logical explanations, no matter how strange or absurd they appear at first. If all of the following is true:

I love tech. Despite an MBA and a decade of consulting and running a start-up or two, deep down, I always will be an engineer. One of the most important lessons I learned as a young engineer 20 years ago at Morgan Stanley - courtesy of Guy Chiarello - is that the technology is only the means, not the end. Understand the finances, the market, even the politics if you want to do something with technology, even just inside a company, let alone outside.

This morning, I paid a visit to the American Citizen Services department of a US Embassy, for passport-related services. Anyone who has been there knows that this is not exactly an efficient experience. You need to make a reservation online in advance The security makes TSA look like a luxury hotel: no bags, no backpacks, no phones, no earphones, no Kindles, no food, no drink. You only are allowed your documents, wallet, keys and printed material.

There is an old (obviously) English saying, warning people not to be "penny-wise and pound foolish." As the main British currency is the pound, 1/100 of which is a penny, someone who is penny-wise and pound-foolish is someone who refuses to invest a small amount now, leading to a much greater cost later. No matter how often I come across companies being penny-wise and pound-foolish, I never cease to be surprised by it.

When at the Container Summit, I heard a great (if somewhat perverse) line from Jacob Groundwater of New Relic. I liked it so much, I tweeted it out immediately: If you want people to drive slower, don't give them an airbag; put a spike in their steering wheel! While a rather morbid image, Jacob hit on a core truth: if you make dangerous activities safer, people will do more dangerous things.

Yesterday, I had the pleasure of attending Container Summit NYC, arranged by the great folks at Joyent. The first speaker, Dave Bartoletti of Forrester, gave a broad overview of cloud computing - private and public - and container adoption. One of his themes was the methods by which companies adopt new technologies, particularly cloud and containers, and the benefits they gain. New technologies enable new ways of operating. While some technologies simply make it easier or cheaper to operate in the same way as before, most enable new methods, new processes, new ideas that previously were difficult or impossible.

Are ad blockers good or bad? Does it depend for whom? Advertisers and content Web site owners are up in arms over ad-blockers. A report from August 2015 suggested that the industry lost $22 BN in revenue in 2015 due to ad-blockers. Yesterday I visited a news site on my phone - I believe it was Forbes - and it refused to show me the page until I turned off the ad-blocker.

A few weeks ago, a colleague showed me a technology that was fascinating in and of itself, but the strategic ramifications are even greater. For those of you who are technically inclined, look at these links: https://hub.docker.com/r/microsoft/dotnet/ https://hub.docker.com/r/microsoft/aspnet/ https://github.com/aspnet/home These are, respectively, the Linux docker images for running Microsoft .Net and ASP.Net apps, and the open-source repository. This is quite cool technically. After all, apps compiled for platform A, especially tightly closed platforms like Microsoft, usually aren't meant to run on platform B!

I have been pondering this article for quite some time, then came across a great similar quote from Bryan Cantrill: "Don't just reboot it, goddamn it! Debug it!" Since Bryan always is a great speaker, watch it here. Time and time and time again, I come across companies and people with systems that are misbehaving. Time and time and time again, people suggest "why don't we just restart/reboot it?" What these people really are suggesting is, "

At the risk of kicking someone when they are down, let's look at... GoPro. GoPro recently reported slower than anticipated sales, laid off 7% of their staff, and had their stock hammered (down 14.5% in a day). BusinessInsider did a straightforward if nice job showing their absolute revenue and relative year-over-year growth for the last 5 years. While total sales numbers are nice, the growth numbers aren't pretty.  

Earlier this week, I had breakfast with a colleague of mine from Rancher. Rancher is a great "orchestrator" for Docker containers. I have recommended and used them in production environments. Containers - one of the hottest technologies in the last year - is a much more efficient form of virtualization than traditional "hardware" virtualization (think VMWare or Xen), while providing a superior application distribution model. The challenge is that while the native Docker tools are pretty good for managing individual servers with containers, managing more than a few containers, let alone across more than a few servers, becomes impossibly complex.

Since the dawn of software, more or less, companies wrote their software in a process that went something like this: Product defines the specifications. Architecture designs it. Engineering/R&D builds it. Quality Assurance (QA) tests it. If it passes, it is scheduled for release; if not, goto #3. The jobs of QA teams historically have been procedure-oriented. Whereas engineers tend to be more creative and inventive, QA teams provide the process and constraints (remember the term "

Poor founders and CEOs; we really should have some sympathy for them. The sheer amount of information they need to know is mind-boggling. Everyone starts out with one area of expertise. For most startup founders, it is technology; for some, it is product or marketing. You quickly need to learn sales, and technology, and marketing. Then comes HR - since you need people to grow - and finance becomes important very quickly.

Yesterday, we looked at how the market values Yahoo, and tried to understand why a company with $6.3BN in net assets, and another $31BN in a fairly liquid equity investment is valued only at... $31BN! Interestingly, Daniel Morris pointed out an article in CNBC from September which argued that the issue is taxes. Essentially, Yahoo's investment is encumbered by a potential tax bill. If an when they liquidate it, the tax bill will be enough to wipe out the rest of Yahoo's assets.

According to several articles I have seen today, notably this Wall Street Journal report, Yahoo's Board of Directors are considering a sale of Yahoo's core Internet business. For quite some time, Yahoo has been a troubled company. To many people, it doesn't matter. But to those of us who enjoyed it as one of the first major Internet search sites, it is very sad to see. Marissa Mayer was brought on board to fix the company.

What does selling clothes to Macy's have to do with selling software, and cloud services, to enterprises? Everything. Earlier today, I was speaking with my brother-in-law, entrepreneur and consultant Kevin Pearl. Before starting a firm to improve capture of billing time for attorneys, accountants and consultants; before serving as a turnaround consultant; before building a firm that sold software to manage venture capital portfolios; Kevin ran a firm that sold clothing to large well-known clothing retailers.

Steve Denning has a great short article in Forbes, referencing Peggy Noonan on what Steve Jobs had to say about why big companies fail. The article is worth reading - actually, the entire Isaacson biography of Jobs is a great read - but here is the money quote: The company does a great job, innovates and becomes a monopoly or close to it in some field, and then the quality of the product becomes less important.

In the last week, I have had several discussions with some really smart technologists, partially focused on what makes technology companies nimble and fast and, therefore, great. In the last article, we discussed hiring 10x people, and especially the way many great employees compound together to create up to 2 orders of magnitude faster companies. However, hiring really smart employees is necessary, but it is not sufficient. What these employees need is independence.

It has long been known, at least among experienced technologists, that the best people are worth ten times the "just" really good ones. I rarely see numbers to support this contention - which is somewhat surprising for someone as data-hungry and -driven as I - but I have known it since my earliest days in the technology business. The best people are the best because they absorb more, see more, are more creative, and can put these together to grasp the future and deliver results in a way that most others simply cannot.

In a world full of email, then SMS, then Twitter-based abbreviations for everything - ttyl, afaik, iirc, rtfm - do good, clean, clear writing skills still matter? Yes. Unquestionably, and without a second's hesitation, writing certainly matters, not solely for the pedantic nitpickers. Good writing skills greatly affect your business success. Secret of Success I once asked a very successful executive what he thought was the single most important factor in his success.

I have no idea why it surprises everyone. Every time some technology goes through the "hype cycle", or the sector as a whole goes through a "we're not in a bubble" bubble, inevitably, when the hype dies down or the bubble bursts, people suddenly "discover" business fundamentals. Often, it is not the people discussing it who discover it. Rather, they are the ones reminding everyone that the fundamentals count.

What are the three biggest impediments, or roadblocks, to fast product cycles, especially in the cloud? Incomplete Testing. If you are not 100% confident that your testing covers every known use case, you will be fearful of releasing. Actually, fear of the risk of deployment often is the "canary in the coal mine" sign that your testing is incomplete. The other sign is infrequent releases, defined in the Internet era as less frequently than every few days.

A few weeks ago, "Lies, Damned Lies and Performance Tests," gave us a great example of how even a good performance test can be ruined through a few (seemingly) small mistakes. Today, let's revisit performance tests with an example of performance tests that I constructed on behalf of a client, as an example of how to do them correctly. Even good performance tests suffer from a paradox. On the one hand, you really want to understand how the product will perform in the real world, with all of its environmental conditions.

If you want to change technology that requires a change in process or, more seriously, culture, then you need to change the culture first. Get your people on board and then make the changes. Right? Perhaps not. Or at least not always. If your culture is flexible and open, people collaborate across groups and you are staying competitive, then, yes, change some of the culture to new ways of working, then adopt new technology that requires the different mindset.

Mark Twain attributed the phrase "Lies, Damned Lies and Statistics" to British Prime Minister Benjamin Disraeli, which suits the Prime Minister's known wit, although its provenance has been questioned. If Twain or Disraeli had lived in the days of computers and software, he probably would have coined the phrase as "Lies, Damned Lies and Performance Tests." Perhaps Twain's great novel of Americans touring the desolate Holy Land of the late 19th century might have been called, "

In a previous article, we invented "Conway's Corollary" - how design determines scale. Today, we will look at another case from the hottest technology of the last year: containers. When designing software - any piece of software - the most important criterion is not, "what features does it have," or "how well is it documented," although those are very important. It is not even, "how sexy is the user interface,"

When I went to business school, I worked closely with an incredibly smart woman with whom I shared a very similar method of thinking and mindset. When we would find the same responses to the same questions in the same manner, inevitably I would quote, "great minds think alike." She taught me that there is a corollary: "...but fools rarely differ." The great challenge in life often isn't to agree with someone, no matter how smart; it is to determine if you are both great minds thinking alike, or both fools who are not differing.

No, this is not about "White Hats" - security hackers who try to break into systems in order to strengthen them, as opposed to "Black Hats" - but really about what we can learn from white rats. In the last few weeks, I have helped solve a number of vexing problems on behalf of customers, both in technology and process. Each time I am asked how I do it, and each time the answer is the same.

With due respect to Manfred Mann's Earth Band, I just came across a great example of a business so blinded by their stale model that they cannot respond rationally to competitive threats: textbooks. Anyone involved in education, from students to professors to parents, knows that textbooks are exorbitant. There are several reasons for these prices: Market size: It is easier to sell 100MM Harry Potter hardcovers for $20 than a chemistry book that sells 20,000 copies.

Anyone who does Web-scale or information technology over the past two years knows containers. The primary reason is the success of docker in making not-so-new containers easy to build, deploy, manage and use. Personally, I think Docker containers are great. They provide a far more efficient level of isolation than VM virtualization, without sacrificing manageability. Docker itself, however, is a young company, and every now and then young companies, whose products are moving very quickly, make silly mistakes.

There is an old joke about a rabbi who goes golfing on Yom Kippur, although I am sure there are variants about an imam in ramadan or priest during Lent. It is such a beautiful day, and the rabbi never gets a chance on the links, so he skips synagogue and heads out. On the first hole, he swings... hole in one! He cannot believe it! He moves on to the second.

There is a famous saying, known as Conway's Law, which states that: organizations which design systems ... are constrained to produce designs which are copies of the communication structures of these organizations It means that when your organization builds a system, its structure will reflect the organization that created it. If you have 3 teams - database administrators, system administrators and Web developers - then your system architecture will have 3 distinct components: databases, servers and Web UI.

Many years ago, I had a manager from whom I learned one good thing: the principle of least surprise. Your systems - technology, processes, cars, postal service, whatever - should surprise your user as little as possible. In a car, it is a matter of safety and regulation. The right pedal increases acceleration, the left one slows and stops the car. If you reversed it, you could cause serious injury (not to mention destroy your market share).

Is your user management an afterthought? For most companies building technology systems, how to manage users - the process of creating, managing, grouping and linking accounts - is bolted on later. After all, you fully expect your users to spend the bulk of their time using your service, not logging in to or managing your service! So you use some reasonably standard user management library, and when you have to worry about groups and organizations, you sort of bolt it on.

The Prisoner's Dilemma is a famous model in game theory. I am far from an expert in game theory - although I did have the pleasure of meeting Prof. Israel Aumann, nobel laureate in economics and world game theory expert - but I can grasp, and sometimes explain, some of the basics. The Prisoner's Dilemma describes a situation wherein if everyone cooperated, they would have the best outcome. However, because they are prisoners and cannot coordinate with others, they make independently rational decisions.

Infrastructure-as-a-Service, cloud servers, whatever you call them, have been around for years. Amazon is the clear leader in the pack (and, according to Simon Wardley, is likely to remain so for a long time), with others like Rackspace, Google Compute Engine, and Azure picking up much of the rest (fortunately for them, the market is plenty big enough). Digital Ocean, a company I mostly ignored for a while, takes kudos for speed and simplicity, and rapidly have become my go-to option for quick servers.

In earlier articles, we discussed How to Outsource and When to Outsource. Today, we turn to when not to Outsource. At first blush, we expect not to outsource when our candidate does not meet at least one of the criteria for outsourcing listed in When to Outsource. Better Results: Your outsourcers can get you better results, improving any one or more of quality + time-to-deliver + cost without negatively impacting the others.

Although the title for this article might imply suggestions for Proctor & Gamble's IT department, instead we will address how badly code can "smell" and how and when to prevent it. In business as in software, the concept of a "smell test" is a base instinct for if something is a bad idea or implementation: if something smells bad, it probably is. One of my favourite technology bloggers, Adrian Colyer, wrote a recent article about a fascinating analysis of open-source projects, primarily Apache, Eclipse and Android.

What do Heinz Ketchup, QR codes and adult Web sites have in common? Apparently, everything. QR codes are those two-dimensional barcodes you often see on ads or consumer products. Just like regular barcodes encode numeric information, QR codes encode full text. They often are used to reference Web addresses, or URLs. For example, the following QR code, when scanned with a mobile phone app, will link to this site:

Friday I had lunch with a friend who does marketing for a pharmaceutical company. He described to me the process by which he manages major ads. "Ads are very expensive," says he. "First you have to develop the concept, which can be $10,000 or more. Then the production costs for the real ad are $100,000 or more. Finally, the actual costs to air the commercials easily can run $500,000."

When does a personal technology - a computer, a smartphone, a watch - "grow up"? There is a slow but continuous process I have observed with every new personal computing technology. Stage 1 - Child: The new technology provides unprecedented flexibility. It allows you to do just a few new things, but its real appeal is allowing you to do old things on the go. It does so by being a mobile accessory to, or child of, existing "

For many years, business was assumed to be "staid" or "proper". Certain dress and behaviour was appropriate for outside the office, and never to be seen inside. While the distinction between professional and unprofessional behaviour (thankfully) still exists, businesses have begun to open up to the distinction between "inappropriate" and "just plain fun." Those businesses that do embrace their humourous and playful sides have begun to realize significant customer loyalty and even pricing benefits.

Yesterday, I had an enjoyable late evening conversation with a colleague of mine, a first-class information security and compliance consultant. We have collaborated on several projects in the past, and it always is a pleasure working with him (contact if you need one). One of the issues we discussed is why so many companies feel their infrastructure costs - both data centre and cloud - are too high. Of course, "

Pricing is one of the most important - and mysterious - parts of a business. Price too high, and you lose customers; price too low, and you leave lots of profit on the table. An entire price consulting industry exists, with great leaders like Patrick Campbell of Pricing Intelligently. One important rule of thumb is that input costs should almost never determine the price of a product. What your costs do is have two effects:

As Ecclesiastes said, "there is nothing new under the sun." Last week, we explored how much of the innovation in the tech business is just retooling existing processes, while much innovation exists in the technology itself, which enables those businesses. It turns out, even in technology itself, sometimes the newest and most innovative item really is nothing new under the Sun (capitalization intended). Back in the late 1990s and early 2000s, before the growth of Linux, commodity servers and Google, we used to buy a lot of very expensive computer hardware.

I have always loved the contrast between companies that are quick and light, focused on doing the right thing, and are nimble in execution and change on the one hand, and those that must plan everything down to the minutest detail before beginning, execute on their plans precisely... and are thrown off balance by change. In my Wall Street days, I worked for two such companies. Both could be defined by "

Following on our review of Mary Meeker's Internet Trends report, today we will look at the "Re-Imagining" section. On slides 28-44, the report looks at business processes and how they have changed over the last several decades. Here are some salient examples: Document signing - ink-and-paper to DocuSign Physical payments - cash registers to Square Benefits - paper files and brokers to Zenefits As exciting as the enterprise space is, not one process is new.

This week, Mary Meeker of KPCB has released her "Internet Trends" report. I look forward to the release of this report. While I rarely can sit through a nearly-200-slide presentation, the insights in here always are thought-provoking and make it worth my while. I remember Meeker back in my Morgan Stanley days - unfortunately, I never had the privilege of working directly with her. If you have anything to do with the technology business, read it.

In earlier articles, especially here, we have discussed why great product management is crucial to a company's success. It is the role that is responsible for a product as a whole, the only one that aligns what the product should do, what features it has, where to offer it, at what price points for which packages. Yet many companies seem to do just fine for an extended period of time without product management, especially in the technology sector.

For a very long time, corporations treated their corporate networks as safe protected environments. The data and applications inside that network are: confidential and must be kept safe from unauthorized access (protect from loss), and crucial to business processes and must be kept accessible to employees (protect from denial of service). Over time, however, two trends have challenged these assumptions. First, more and more business-critical data has migrated to the Internet.

I have been impressed with Heroku for a long time. Their simple to use platform-as-a-service (PaaS) has made it incredibly easy for software developers to deploy applications lightly and cheaply, and then easily scale them up to production scale. As an aside, the very design encourages them to develop their software in a well-architected fashion; see "The 12-Factor App." Just as Amazon Web Services infrastructure-as-a-service (IaaS) EC2 abstracts away hardware, so a PaaS abstracts away the operating system, allowing software managers to focus on software.

One of the hardest challenges in business is knowing when to use an interim solution and when to start over from scratch. From a pure financial perspective, interim solutions almost always win out. I see this regularly in the software industry. The progress looks something like this: You (i.e. your company) write a piece of software. It is successful and useful and sells and grows. Over time, you add more and more features and capabilities, leading to a more useful but more complex product.

Great technology companies have been built on advertising: Google, Facebook, Yahoo (in the old days), not to mention many a magazine, newspaper and television network. I have always loved the operational side of ad networks. They require building and managing a systems whose data throughput and reliability requirements rival a financial pricing and trading system. I have managed several of those, and the parallels are quite strong. What truly interests me in advertising, though, is the brilliance of great creativity.

Knowing how to outsource a process is challenging enough, and requires serious operational management and help, but does not involve making strategic decisions. Conversely, knowing when to outsource is far more challenging, as it involves making decisions with imperfect information about the future. Caveat: Use this as a starting point, a framework, but do not use it as your sole decision-making process. Get serious help; we are here. The Why There are only two reasons why you should outsource something.

One of the most important rules of successful longtime business owners, right after "Cash is King", is "Pay Yourself First." After all, you do not know what the business will be like in a year or two or ten, so don't shortchange yourself. Of course, you need to invest in your business's growth as well, but don't live in poverty because every penny of profit is plowed back into the business.

For almost all of computing history, we have interacted with computing devices via keyboard for input and printer, then screen, for output. Computers are logical devices, and require clean, defined logical statements to interact. Thus, we use precise text. Human interactions, on the other hand, are less precise but much richer. We interact via touch, sound and sight - both the precise written word and visual pictures. For most of human history, the overwhelming majority of people, upwards of 99%, were illiterate.

Over the last week, I have had several discussions about the challenges to successful outsourcing. One person was dealing with manufacturing products in China; another was managing outsourced server maintenance and operations; yet a third had a financial technology management service provider. In all the cases, the question was the same: how do you know when it is good to outsource, and how do you make it succeed? Successfully outsourcing anything is far beyond the scope of a single article.

Normally, I dislike the phrase "soundbite". It implies a shallow, bite-sized saying that misses all of the depth, nuance and complexity that exists in the real world. Nonetheless, soundbites are successful precisely because they can convey - for better or for worse - a key idea in a short, memorable and often inspiring phrase. Earlier this week, Josh Bernoff, in his bluntly named blog, gave the "Parable of Ray's Helicopter Company"

In business, there are two benefits that accumulate to large or diversified companies: Economies of Scale Economies of Scope Economies of Scale are the benefits of from doing more of the same. If you make 10MM laptops a year, your cost per computer will be cheaper than if you make 100,000 laptops per year. These benefits come from a number of sources: Purchasing Power: Since you are buying components for 100x as many LCD screens, you can negotiate better prices.

TrueCrypt was a great open-source encryption program. It created files that, when opened by the program, looked to your computer like an additional drive. Any files placed in that drive would be encrypted and protected from prying eyes. Why would you do it? To keep files protected on your computer. To send files securely from one person to another. To protect files that you might store in the cloud, for example, on Dropbox.

Which do you hire, developers or engineers? Nowadays, the most popular programming language is JavaScript, or, by its correct name, ECMAScript. Since "Eck-Ma-Script" is not a great marketing name except, perhaps, for a language for Ghostbusters EctoPlasm, it is not surprising that everyone still calls it JavaScript or just "JS". Whether this is a good thing or not, and whether JavaScript is the worst or best language invented, is not a topic I am too interested in.

I often notice the incredible value of great product management. Unfortunately, it is something many experienced people do not get, simply because it is the one area of a business, and especially a startup, that cuts across the company. Every other group has a clear line of responsibility: Engineering builds the product. Marketing defines who will buy it and drives awareness. Sales sells it. Customer support supports it. Finance manages the cash, P&L and balance sheet.

Sometimes, you build marketing collateral for a market that is completely unexpected. And while on the way, it teaches you, once again, why Steve Blank, Eric Ries and Co. are right: everything you rationalize and think about is only an opinion about the way the market will react to it; facts exist only in the real world. I have a friend who is a very experienced technology consultant, Reuven Lerner.

Last week, Flipkart, India's largest e-commerce firm, and its fashion subsidiary Myntra, announced that they shuttered their mobile Web sites. According to the article, which has a good analysis on zdnet, their desktop Web site is still active, but they are considering shutting that down as well. Indeed, if you go to flipkart.com or myntra.com from a desktop browser, the site works just fine. Change your User-Agent to iOS or Android, and you get a link to their platform-specific mobile app.

Yesterday, I read an article which claimed that 30% of people have never backed up, while the overwhelming majority are way behind on backups. In the early 1990s, about a year into my very first job out of college at a large global financial, I ran the server backups. Yes, in retrospect, I wonder what they were thinking giving that level of responsibility to the inexperienced kid I was. Either way, it was a great learning experience.

When do you buy? When do you build? This question of "buy vs. build" is at the heart of many a debate in companies, not only inside engineering teams, but between engineering, product management and executives. Fact #1: Engineering is Hard Engineering is very hard. Despite the enormous advances over the years, and the number of system tools and development frameworks and languages, every one of which is touted as a "

This morning, Adrian Colyer posted his morning paper on a "functional programming." Most readers of this blog are not deep into different programming paradigms, so I will give a very short layman's overview here. For those who are comfortable, jump ahead a few paragraphs. (For the real experts, please do not nitpick on the details; the point is only to give an overview, not to debate the fine points.)

Once in a while, we come across a perfect example of how everyday technology can improve our understanding. It is not radical new technology, like nanoparticles fighting cancer, but great usage of tools that are widely available. Understanding Math I earned my Bachelor of Science in Electrical Engineering many years ago. While I did well at my alma mater, like most people, I struggled with visualizing complex mathematical principles. Sine waves are easy to draw and see, but start doing more complex forms, then head into Fourier Transforms, and even the smartest get lost.

There is a belief in startup-land that you have to be younger than ___ to successfully innovate. To some extent, that is driven by the youth of the founders of a few highly successful companies like Facebook and Twitter, magnified by the adoring media coverage they get. And yet, even when I was back in my 20s and 30s, there was a nagging presence in my head that said, "

Passwords are insecure and annoying. I get that, I have written about it, and I experience it. So lots of companies and organizations are working on replacing passwords with something that is both more secure and more convenient. For example, Twitter's Digits service. Other approaches, like 1Password's password manager, make passwords easier to manage and auto-generate, so they simultaneously can be more secure and more convenient. Then there are "

Late last night, Hunter Walk, of HomeBrew Seed Stage VC, tweeted out the following: This shouldn't be too surprising; people and businesses buy the machine once, but the K-Cup refills are bought over and over again. This is why Keurig has been so intent on keeping machine users buying their coffee, by any means necessary. A year ago, I wrote how I found a mention in their annual report about digital rights management (DRM) to force Keurig machines to accept only "

Two months ago, I posted an article about a United Airlines series of failures that, if not so painful for their paying customers - and their employees too - would be laughable. Yesterday, I had the pleasure of reading an interview with the legendary Gordon Bethune, who turned around Continental Airlines in a single year, from a loss of $600MM in FY1994 to a profit of $225MM in FY1995.

Two weeks ago, we argued that, in the face of competition (and there is always competition), "Premium Pricing Just Doesn't Last." At the same time, there always will be premium priced products - Tesla and BMW, Apple Watch Edition, Oracle - but the question is how long these can maintain significant market share? A smart commenter, amelius, raised a fascinating point. Amelius compares premium pricing for substitutable products to restrictive licensing for software.

About five months ago, I looked into the "Not-So-Simple SIM Card." In short, I called for the abolition of the SIM-to-carrier-to-number tie. For those who never change carriers or travel, this doesn't matter much. You get your phone, you go to your carrier store - or a local retailer like RadioShack (RIP) or BestBuy - sign some paperwork, get a card, insert it into your phone... and never worry about it again.

After our article last week discussing the economics of moving into AWS vs. do-it-yourself (DIY), Jim Stogdill wrote an excellent follow-up about when enterprises aren't moving into the public cloud; Simon Wardley - whose strategic situational awareness mapping is in a category by itself and should be required reading for anyone responsible for strategy - continued with his input. In Jim's words, private clouds are like SUVs; they rarely make sense economically, but sometimes you buy them anyways because:

In one of our earlier discussions about cloud, an astute reader pointed out that one "downside" of public cloud, especially one like AWS, is that they make very few guarantees about your instances. While the system as a whole has service level agreements (SLAs), your particular instance does not. To quote: "If your instances go down you're going to have to deal with it" The underlying assumption, of course, is that you have better control over the level of availability of your particular instances and their underlying hardware, especially scheduled maintenance, when you control the entire environment rather than leaving it to a cloud provider like Amazon or Rackspace.

Do you have SLAs with your customers? Dirty little secret: they don't matter. All that matters is customer expectation in real time. You are running a service. You know that your enterprise customers are highly sensitive to availability, since they use your service to help them make money. Perhaps they even use you as part of their customer-facing platform. Nonetheless, you know you cannot provide 100% availability, even discounting planned maintenance.

Yesterday's article on the short life span of premium (and especially ultra-premium) pricing led to a robust discussion on Hacker News. In the article, I used Amazon Web Services (AWS) as an example of a company that actively tries to cannibalize itself. A smart commenter pointed out that AWS pricing, while falling continually, has nonetheless fallen more slowly than Moore's Law, according to which equivalently-priced capability should double roughly every 18 (or 24) months.

If there is one truism in the technology market, it is that premium pricing just doesn't last. If you are first to succeed in a new market - which is distinct from first to a market - then you often have a premium price product because you are the "first" and often the "best". The problem is that it just doesn't last. No matter how good your IP (Intellectual Property, like patents, not Internet Protocol), eventually competitors catch up with "

It is oft-stated that most people really do not get statistics. Just say that word, "statistics," and most people's eyes glaze over. Confession from this engineer and MBA: I did horrifically in my undergrad stats course. (Fortunately, I did better in my MBA course, thanks to a big dose of good teaching from Bob Winkler, and a small dose of being a decade more mature). What does all of this have to do with Coca-Cola?

The browser is the single most ubiquitous piece of software on the planet. Nearly every computing device has at least one one. Because of its ubiquity, and its use across multiple applications from open (Google "how much does a banana weigh") to private (browser-based email) to secure (office applications or banking), it is also a source of many risks. This article will dig a little deeper into issues of browser security and privacy.

For years, people I have known in the VC business, as well as entrepreneurs who have been funded by VCs, have discussed the 7-2-1 rule. For every 10 investments a VC fund makes: 7 will fail - "dogs" 2 will hang around, perhaps returning the initial investment - "zombies" 1 will be a great success - "superstar" This formula is why VCs are willing to take such risks; they expect many companies in their portfolio to fail.

What do you do when you want to move towards more rapid deployment, perhaps as close as possible to continuous delivery, but the culture and incentives push against it? This is the exact issue I have had at several clients over the years. When brought in to improve their operational performance, I found that, with all of them, a major issue was instability due to deployments. The flow looked something like this:

How did Lenovo do something so inane as fundamentally breaking their customers' laptop security by installing Superfish? What is Superfish, and what is wrong with it? I have often asked clients to consider, "what business are you in?" The right answer is not, "to make profits", or "shareholder return", because those are bland, meaningless statements. Every business wants to make profits and return value to their shareholders. Peter Drucker said, "

What does a great daily paper by a smart thinker have to teach about good product management? About a week ago, I came across Adrian Colyer's great "Morning Paper". I have no idea how I missed this before. The "Morning Paper" takes a look at some trend, research or paper in technology and investigates its impact on technology development and, of course, by extension, business. The Paper is not for the faint of heart or those without pretty deep technical background, at least from the editions that I have seen.

You are reading this blog on WordPress. It is not a secret; any technologist with experience managing WordPress can look at the page and see that it is run by WordPress. How does WordPress show you this page? Here is what WordPress does, simplified: Look at the requested address, showing right now in your browser's address bar. Translate that address into a specific article. Retrieve the text for that article from the database.

"We made a small change and it brought down our customers for 4 hours." - colleague "Network issues caused outage" - GoDaddy "A configuration error... caused days of downtime." - Amazon "Facebook was down... for 2.5 hours." - Facebook Every one of us has seen human errors cause significant, revenue-affecting, downtime. Our stability instinct always is to tighten up change control to try and prevent a recurrence. In a cloud environment, though, our agility instinct is to be as nimble and loose as possible.

The Internet has been abuzz for the last week about a hitherto little-known clause in Samsung's "Smart TV" privacy policy. The news was most prominently covered in the Daily Beast, here. The Daily Beast includes a link to the entire privacy policy, but the important element is: Please be aware that if your spoken words include personal or other sensitive information, that information will be among the data captured and transmitted to a third party.

What would you call a global, enormous, Fortune 500 company that 95 out of 100 of its employees strongly recommend it as a place to work? Sure, an exciting new startup, but an old-school 70-year old company? What if that company was IBM? In a great article by a former IBM manager, he explains how they used to have: Merciless manager reviews Managers much younger than their employees who took severe criticism from those employees.

How you do deployment is very important, and the technologies you use can have a direct and immediate impact on your bottom line. It also can make your employees happier, which leads to better productivity and lower turnover. But how does deployment technology directly affect your bottom line? Let's look at one. Docker is a "hot new" technology for software deployment. If you are running a cloud or IT business, you might be wondering, "

Early in my career, when I did technology for a very large financial firm, we started with dedicated servers for each business process. It was an easy way to track costs, manage risks and allow each business unit to maintain control. Unfortunately, it was also an exorbitant way to maintain control. As servers became more powerful and disk cheaper, processes utilized less and less of their capacity. Even more than the costs of the infrastructure itself, the costs of the staff to deploy, maintain and support each piece of infrastructure could kill profitability.

Continuing our series on cloud services, especially our most recent one, "How to Do True Cloud", we now turn to the technology that enables true cloud services. This article will go more in depth than the previous ones; after all, we are discussing technology services. However, it will not go so deep as to lose the business-side executives. Indeed, any great executive in technology needs to hold to two principles simultaneously:

Now that we understand what the cloud is, the types of cloud services, the difference between true cloud and hosting, why true cloud matters greatly, and how it makes you nimble, the inevitable question is, how do we get there? Or, to use our question from our last article, how do we get to say, "YES", to the customer who offers us $500,000 - or $5MM - if we are ready to run tomorrow?

In our most recent article, we explored why "true cloud" really matters: it has a significant impact on: Your gross margins Your speed As a company providing technology services, as opposed to products like software, you cannot get cloud-scale gross margins and speed - and therefore valuations - unless you are operating as a true cloud. Today, we will look at a different set of advantages to running your service as a true cloud: how nimble you can be.

In our previous articles, we discussed what cloud is, the types of cloud services, and the difference between true cloud and "market cloud", or hosting. The big question is, so what? You are a software provider offering a cloud solution. Does it really matter if it is "true cloud", or just hosted? Isn't it just a difference in architectural design, a matter for your engineers but not your customers or your bottom line?

Having looked at the definition (and misapplication) of cloud, its key characteristics, and the various categories of cloud services, or fill-in-the-blank-as-a-service (*aaS), we now turn our attention to the important difference between true cloud services and hosting services that are marketed as cloud. This is crucially important to vendors and customers! While it may seem, at first glance, as nitpicking, these are very important differences. They will impact a vendor's short-term and long-term profitability, viability and responsiveness, and a customer's ability to rely on a vendor.

Cloud seems to be the biggest buzzword in the last few years. Every technology provider, every services provider, if they aren't natively "in the cloud", they are providing a version of their offering "in the cloud." Although the term "cloud" seems pretty clear to marketers - personally, I am convinced many believe it means, "we can charge more for this if we slap the word 'Cloud' on it" - the majority of people with whom I speak, from engineers and support staff through executives, CEOs and especially customers, do not have a real understanding of what the cloud is, and why it matters.

What does "mind the gap" - familiar to anyone who has ridden the London Underground, a.k.a. "the Tube", have to do with coffee and power? It turns out, quite a bit. Starbucks' largest metropolitan deployment outside the US - and the largest in Europe by far - is in London, with ~250 stores. Starbucks has become a very familiar English site, indeed. On the technology front, Starbucks has always been an early adopter and even a driver of new technologies:

In response to the Sony hack, in which not only valuable intellectual property, such as movies, was stolen, but also (previously) confidential emails, a number of experts have recommended increasing the usage of email retention policies. They go something like this: Email is confidential People put things in corporate email that they do not want seen outside the company Companies get hacked Therefore, we should limit the damage by forcibly deleting all emails older than some time period, say, 30 days The Wall Street Journal also had an article discussing the debate about email retention policies.

"The purpose of a business is to create and keep a customer." - Peter Drucker No matter how many times we say it, we forget it. We get caught up in operations, or competition, or marketshare, or share price. Yet a business, like a life, has a purpose: to create and keep a customer. I might add, "to keep that customer profitably satisfied." Earlier this month, a very well known Apple developer, one of the "

Years ago, a young man, let's call him D, with whom I had once gone to summer camp followed his dream and opened a meat restaurant. They had great big burgers, flaming wings, fresh onion rings and fries, a meat-lovers dream. Not only did I enjoy going there, but when a group of friends helped me move apartments before I got married, I took them there for a "thank-you" dinner.

Free Wi-Fi is coming! Well, perhaps not everywhere, but at every Hyatt hotel. I just received an email from Hyatt that they will offer free Wi-Fi for all guests in all rooms and lobbies worldwide, beginning 14 February 2015, just a month away. How did Hyatt come to that decision? Why wasn't it free before? What does it mean for their profits? Most important of all, what lessons can be learned for our businesses?

It has happened again. Another horror story of an airline leaving customers in miserable conditions for hours on the tarmac. This time, however, it happened multiple times over a 28 (!!) hour period. According to the Jerusalem Post article, United Airlines Flight 84 from Newark to Tel Aviv in June: was delayed without explanation multiple times when explanations were given, they were patently false required the police to come on board to remove the pilot from the cockpit gave minimal food vouchers ($21 per person) for a day+ delay gave passengers vouchers for a hotel that was half an hour away from the terminal didn't bother to arrange rooms at the hotel for the passengers The list goes on.

Today, we present the second guest post in the series by Ted Lloyd, editor of OnlineCISO. Yesterday, we explored why security spending need not be a bottomless pit, and how yesterday's tools, such as antivirus, can be evaluated using familiar risk management methodologies. Where then, should a business reinvest the funds previously allocated to antivirus solutions? Another analogy to the physical world can help to answer this question. Malware and variants are similar to microbiology in our physical world.

Today, we are honoured with the first of two guest posts in a series by Ted Lloyd, editor of OnlineCISO. Cybercrime has emerged as a multi-billion dollar business and spawned another mufti-billion dollar business to combat it. As 2014 closed, Gartner estimates that global spending on information security will top $71 billion representing a nearly 8% increase in spending over 2013. The trend and trajectory are expected to remain steady for 2015 as well.

A year and a half ago, I wrote how Starbucks, early adopter and therefore, through its ubiquitous locations and preferred venue for professionals to work, a driver of adoption of WiFi, was driving adoption of "wireless" charging. Unfortunately, unlike WiFi, it wasn't truly wireless, "anywhere within a reasonable range" charging, but rather more like "plugless" or "contactless" charging, using PowerMatters Aliance (PMA) mats built into their tables. Put your phone on the table and it charges.

I expect this topic to get me a lot of flak. After all, everyone likes dumping on the airlines, including me. But hear me out. I fly a lot of miles every year, mostly in coach, sometimes in business. Most of the time, the journey is tiring and uneventful, sometimes it is annoying, and sometimes downright offensive. I regularly hear and read stories about the decline of comfort, service and value in air travel over the last 30 years.

It has been almost five years since I last addressed appliances. Yes, those drab, dreary every day appliances that solve everyday and boring problems, like washing your clothes or dishes. While they now all have fancy LED screens and digital controls and stainless steel surfaces, at heart, the job is unchanged. Unfortunately, most investment capital goes into "sexy" and exciting new ideas that can spread quickly at low cost, like games or social networks or online services.

Apple's philosophy for technology is, "just make it work." I had one of the early pre-iPod mp3 players. It was a great piece, lots of battery life, played every format out there at the time... and within a year I had replaced it with an iPod. Transferring music to this player and managing it was just an enormous headache. With iTunes and iPod, it "just worked". Fast forward to the year 2014.

I always get a kick when a long-storied company which is in decline tries to hook onto the latest, hottest market, thinking, "we will get into this market, and with our amazing brand, we will knock it out of the park!" This is the business equivalent of a Hail Mary pass... while throwing it off to the sides and into the stands, rather than down the field towards the goal line.

Bitcoin - and its focused leveragors and imitators like Ripple - have gained a lot of press and traction. The question that I keep coming back to is, what are they good for? I do not mean this in a cynical sense, but in a literal, "what is the best use case" sense? The answers I keep coming back to are two, and only two: Person to person payments International transfers I am, for now, ignoring the "

Probably the biggest story of the last few weeks has been the hack of Sony Pictures by North Korea (or the Democratic People's Republic of Korea / DPRK, naming convention courtesy of George Orwell). While hacks happen all of the time, this one is particularly notable for several reasons: It was directed by a state actor. The US Government officially responded and "named and shamed" the state actor, thus forcing itself to respond.

Safes. They are big, heavy, and make us feel, well, "safe" about our valuables stored inside. Historically, safes were controlled by a series of complex gears that only the correct series, or "combination", of dials would open. I loved the illustrations for gears and other mechanical devices in David Macaulay's "New Way Things Work". Digital safes, whether the professional variety of the home variety, were created largely for convenience. They are faster to open, easier to share (and change) codes, and required less physical space for all of the gears.

According to a New York Times article, the major JPMorgan Chase (JPMC) breach was due to a single entry point: a single server in its vast array of servers, one that either has access to confidential data or acts as a gateway to the internal systems, was not fully patched. Does one patch really matter? It depends on what that patch is. A "patch" probably is not the right word for this.

A friend of mine, an extremely talented pulmonary specialist, recently moved to Israel. Like many other expats who like living in one place but working in another, he is commuting. Unlike many others, he is telecommuting.... 6-9,000 miles. Through an interesting arrangement, my friend is working for a company that provides remote Intensive Care Unit (ICU) oversight during the night shift in US hospitals. My friend does a long shift during relatively normal working hours - for him - watching many monitors in his home office, as well as having voice conversations via phone and Skype with health staff in the ICU.

The Internet has been abuzz with the discovery by Dani Grant, a writer at BuzzFeed, that she had found an easy way to explore - and print, and use - lots of boarding passes from Delta, even those for other people and other airlines. When you ask for your mobile boarding pass, Delta sends you a URL to click and view your boarding pass QR code as well as all of the "

Most products and online services today revolve around four basic actions a user does with valuable data: create read update delete For example, if you are managing a customer in Salesforce.com, you are likely to create a new customer record, read it before the next time you call, update it with details of the call, or delete it if it is no longer relevant. In true techie fashion, these have become known by their acronym as CRUD activities.

Message to Keurig: never fight your customers. Where did this come from? You, Mr. or Ms. Entrepreneur, have worked hard, built up a successful business, maybe even sold it out to a larger firm because they saw how much it could be worth with their capital and market strength. Whatever stage of your business, there are 2 prime rules for continued success and growth. Cash is King - but we all knew that.

In yesterday's article, we discussed what product management is, and why it matters so much to companies. It also is important to early stage companies, who, at least in theory, cannot afford either the extra head count or the founder's time. Actually, seeing how crucial product management is to getting product-market fit - as Steve Blank would say, that is the very essence of a startup - it probably is more important for early stage firms, since they have little to no wiggle room.

This article is not a list of companies that have great products or product management, enlightening as it might be. It also is not a list of companies with terrible product management, although I could compose a very long such list, and the stories would be very entertaining! Instead, this is a discussion of why product management matters, and how you get great product managers. The genesis of this article is a number of conversations and interactions I have had with companies over the last year or so, several of which have had great product management, while others have been sorely lacking in the field.

A few months back, I looked at the growing tide of making movies on mobile phones. I was referring not only to the typical home videos that we used to capture on a large home video camera, now on our portable phones, but semi-professional and even professional films on your iPhone or Android. Specifically, I was concerned with what this trend means for high-end camera makers. This week, I saw a short - all of 1:22 - fantasy film called DragonBorne, which was done entirely on an iPhone 6.

The productive actions we take as humans in society have not changed in many thousands of years, among them: Communicate Write Draw Calculate How we do these actions has changed, from stone tablets and steles to papyrus to parchment to paper to notepads to computers to smartphones. In the computer era, the write/draw/calculate - which often form the basis for many other activities - have been dominated by what has been called "

Barely a decade ago, I lived in New York and would cross the George Washington Bridge to buy gas at prices below $1 / gallon. Then it crossed $2 / gallon and it seemed absurd! Before long, gas prices around or even above $4/gallon became the new normal. Nowadays, prices have dropped well below that - in many states it is below $3 / gallon - and the question of "

No, today's article is not an appeal to raise funds via GoFundMe for poor vampires. It is about the natural but detrimental users of your service. StackOverflow - and its parent network, StackExchange - have been wildly successful in encouraging people to ask and answer questions about everything. The original site, StackOverflow, is about software engineering. This shouldn't be too surprising since it was founded by Jeff Atwood, of "

Is a superstar technologist worth 10-100x a regular engineer? Today, one of my favourite bloggers and technology strategists, Simon Wardley, discussed this issue. Ironically, today, Michael Eisenberg of Aleph VC discussed what those engineers should focus on (hint: avoid adtech). Simon's main thrust was about knowing the right thing to do; after all, that is his specialty. He focused on his time at Fotango and then Canonical (company behind Ubuntu), how they hired every superstar Perl developer they could get their hands on.

Financial trading houses are always looking for a market advantage, no matter how small. It shouldn't surprise us; when you are dealing in markets that move billions of dollars in short time frames, a few milliseconds of advantage can make all of the difference. Because trading firms are incredibly sensitive to any advantage - or more correctly to feeling left behind (it is all about the feeling, isn't it?), many trading centres and exchanges have very strict rules about what they will provide.

Last week, I was having lunch with an old friend. We worked together many years ago building some pretty cool technology at a very large financial services firm. Each of us has over 20 years in the technology industry. He has continued to manage infrastructure, and is doing some pretty impressive advanced infrastructure management. Both of us have seen the big company and the startup, and both of us have experience a broad range of technologies - consumer and business and enterprise; infrastructure and applications; hardware and software - and we both truly love technology and the changes it brings to society.

A short while ago, I was looking at buying an iPod for one of my kids. It was a pretty straightforward transaction. My kid likes music, while an iPod is great for carrying lots of music around and listening to it, especially on road trips. As parents, we encourage our kids to listen to music, preferably a broad and diverse selection. But I didn't. And the reason is smartphones.

In the previous article, I examined Microsoft's announcement that it will open-source .NET, its impact on customers, and its more important impact on Microsoft's business lines. In sum, I believe that Nadella may be trying to change the culture at Microsoft from one in which they depend on customers being forced to stick with its Windows line to one wherein Microsoft is driven by market forces to develop products and services that customers actively want to buy.

Yesterday, Satya Nadella, Microsoft's CEO, announced that they will release the core of .NET, the Microsoft application development platform, as open-source. In addition, .NET will be ported to run on additional platforms, primarily Mac OS X and Linux. For Microsoft, the ultimate closed-source and proprietary stack company, this is an earth-shattering move. Developers have long had a choice of platforms on which to write applications. Java and its variants, Ruby on Rails, Node, Python, PHP, lately Go and Dart, the list goes on and on.

The Web is a tool. Like all tools (including swords), it comes with two edges. While in the short term it appears to give advantages in one direction, over time it can surprise you and cut both ways. Plagiarism When my wife, the rather brilliant Dr. Deborah Deitcher, PhD, was first teaching college students at Manhattan College (which is not in Manhattan, but in Riverdale), she warned the students very clearly that she understood the Web as well as they did, understood the temptations to plagiarize, explained what plagiarism was and what it was not - lack of knowledge was not going to be an excuse - and how it would not be tolerated.

Managing change is a process, something between a science and an art, taught in all respectable business schools and management courses. There really are 2 reasons for teaching it: Management: If you are managing a team, a division or a company, you need to understand the emotional and psychological blocks to change, and what it will take to get employees and partners to support change. Marketing: If you are responsible for marketing a product to consumers, or creating an entirely new product, you need to have a solid understanding of what inertia keeps customers in place and what it will take to change them.

Today, I want to look at 2 short video clips. The Lost Interview   This is a famous interview with Steve Jobs, believed lost for many years; if you want more information, imdb info is here. The interview itself is a long but great watch for anyone interested in the history of innovation and the tech markets. However, there is a short 2-minute clip on YouTube on innovation; if you have time for nothing else, watch this.

Last week, I looked at one very small but important aspect of customer relationships - the human face - in the era of online communications, specifically chat, and how and when you market it. The Chief Marketing Officer of LiveChat, Szymon Klimczak, was kind enough to respond, as well as direct me to a few interesting metrics reports that LiveChat releases every year or two, especially the "Customer Happiness Report.

In a previous article, I discussed how small changes can make a big difference when engaging with customers. Specifically, the addition of agent pictures to LiveChat can create a closer emotional connection between the customer and the agent, leading to higher customer satisfaction and/or increased sales. Sounds like this was a low-cost investment for LiveChat with potentially a high return. So... why don't they tout it? I spent some time going through LiveChat's Web site.

One of the challenges customer support and sales agents face is the balance between efficiency and humanity. The more efficient methods of communication often are very impersonal, while the personal ones are expensive and inefficient. On the one hand, a business wants to provide its services as efficiently as possible. This usually boils down to 2 key elements: Cost: Having an agent at the customer's home or office is very expensive.

I used to love BusinessInsider, the Internet (and to a lesser extent general business) news site run by Henry Blodget. I am also impressed with how Blodget has reinvented his life. In 2003, he was charged with securities fraud by the infamous Client 9, a.k.a. then-New York State Attorney General Eliot Spitzer. Blodget settled for 2+2 ($2MM fine, $2MM disgorgment of "ill-gotten proceeds") and a lifetime ban from the securities industry.

Evernote and its competitors have been quite successful at helping users keep track of information. A major use case is Web pages. You find a Web page you like, but want to keep later for reference. Perhaps it is a reference manual to your car; maybe it is an API for the development language you are working on; it might be 5 interesting articles on educational theory. Whatever it is, you have a need to hold on to certain Web pages and their context for some period of time beyond the next 1-2 hours.

Today, BusinessInsider - about whom I should write more, as their "Top Stories" have become more sales promotion and less news, and thus I look forward to receiving their updates less than I used to, but that is for another day - published a piece by Alyson Shontell about the future of mobile apps. In short, they see mobile apps migrating towards the Web, with native apps more like bookmarks or small content holders.

I have made my share of embarrassing faux-pas, saying the wrong thing, pronouncing a word the wrong way. But when I put something in writing, I try very hard not to make silly mistakes. That includes knowing my subject well. Here is a quote from a recent BusinessInsider article on how hackers work. In case it get taken down, it is reproduced here: One way people make themselves vulnerable is by having a weak password.

The SIM card in almost all of our phones is a tiny smartcard, a computer, that enables your mobile device to connect somewhat securely with a wireless carrier. In the old days of mobile, there were 2 major competing technologies - GSM and CDMA. Most of the rest of the world went GSM; the USA went mostly CDMA. Unlike GSM, which had a SIM card, and thus could have (unlocked) phones switch carriers simply by switching cards, Americans bought their phones from carriers, and closely affiliated the phone with the carrier.

I drive a several-year-old car that came with no bluetooth integration. When we bought it, it mattered, but only a bit. Since then, all of our audio and video have become digital, and we have multiple bluetooth-capable mobiles with us on a regular basis. Bluetooth has come to matter much more. Unfortunately, the design of our dashboard, like many cars in the last ten years, makes replacing the radio extremely complicated.

Messenger apps have been all the rage in the last few years. iMessage and WhatsApp and Google Chat and Kik and Skype so on. This has been distinct from real-time or synchronous conversation, which started with the phone, and moved to more modern options, some of which are closely related to messaging, such as FaceTime, Skype, Google Hangouts, etc. Now, apparently, "Skyperosoft" is looking for its next big growth area, and wants into the multimedia messaging game.

If your business gets killed, don't blame the competition; it's you. If your industry is upended, don't blame the competition; it's you. Back in the late 90s, partners and I founded 2 start-ups. The first - electronic transcripts in the Web's early days - died in its cradle, when the big gorilla in the industry indicated it was going in that direction. In retrospect, letting our startup go was a mistake.

In the USA, when someone needs a medical device - wheelchair, crutches, etc. - one buys them from the local drugstore or supplier via insurance. Many of these can even be found on Amazon. With one-day delivery and Amazon Prime, it often pays to order from them rather than buy at the local supplier. When you are done with it, you sell it. Even though they don't market this are too heavily, eBay has 32,000+ active listings for wheelchairs alone!

Over the weekend, I had a lovely dinner with a friend of mine, an excellent general practitioner / primary care physician, who works in a medical system built mostly upon HMOs. While there is non-HMO practice, it is mostly reserved for specialists and people who cater to the wealthy, like the rapidly-growing field of concierge medicine. In this particular structure, the HMOs all have a mix of employee doctors and private practice doctors.

Last week, we looked at PepsiCo and its channel strategy for Pepsi True. A third possibility did occur to me - unsurprisingly, since I spend the bulk of my time in the technology world - that PepsiCo envied SaaS. Let's look at 2 companies, PepsiCo and Salesforce (numbers as of this writing): PEP: Market cap of $139BN, revenues of $66BN, operating profit of $6.7BN, revenue multiple of 2.1, P/E of 20.

"If you build it, they will come." - Field of Dreams Other than in films, the "Field of Dreams" philosophy is a really bad way to build a business. After all, it isn't just about the product. It may not even be primarily about the product. It is about the entire package - the product, packaging, price, placement, promotion, channels - that we call "strategic marketing", combined with the ability to execute - operations, product development, etc.

For most of the history of mankind, we have built specialized machines to do work: plows to attach to oxen, hoes to till the field, screwdrivers to turn screws, eye examination appartuses (I have no idea what they are actually called) for optometrists to, well, examine our eyes. Over time, as these machines have become more sophisticated, we have found that they could work better if some of the manual tasks were performed by computer.

The other day, my wife forwarded me an article arguing that toy companies need more women at the top. Simply, toy companies have stagnated and reflect the mindsets of those who run them. It is hard to argue this isn't true... about any company. Companies always reflect some combination of the personalities of those who founded them and those who run them. When a founder runs a company for a long time, the cultural assumptions tend to be dominant.

Over time, all technologies migrate towards standardization. Sometimes this can be a boon for the first-to-market or owner of the standard that "wins"; most of the time, it forces them to find new grounds to differentiate and compete as suddenly everyone is using the same technology interfaces that they are. As shown brilliantly by Simon Wardley's mapping, all services start out as highly customized, and eventually move to standardized commodities.

So we have yet another attempt to succeed at mobile payments, courtesy of Apple Pay. However, Apple has a very long history of taking inventions and putting them together in just the right way that they finally are usable, and take off. As Tim Cook said on Tuesday, "every other attempt looked at it from the perspective of the business model, rather than the user experience." Given the many high-profile security breaches over the last several years, I would like to take a look at the security implications.

Apple, arguably, had its most important launch event in years yesterday. Beyond putting its smartphones back in play with the iPhone 6 and 6 Plus, competing on specs with LG and Samsung, not to mention Motorola (Motorola? When did they come back from the dead?), it launched in 2 new categories: Apple Pay - mobile payments, for which a follow-up article will be launched this week Apple Watch - a more convenient extension to your phone on your wrist Apple Pay has enormous potential, but depends entirely upon Apple's iPhone business.

As I mentioned in an earlier post, I had a poor experience attempting to pay Facebook for services I agreed to purchase. It wasn't the acquiring process that was messed up... it was the actual payment. This is the absolute worst place to make things fall apart - when you want a customer's money. I did, however, discover one other serious mistake on Facebook's part: sloppy pricing. Let's go back to my sample advertising campaign.

If there is one rule that is more important than any other in business, it is this: make it easy for your customers to pay. Sure, "cash is king," and "know your numbers," and "the customer comes first," and all of that. But all of those are just ways to get people to become and remain your customer, or to keep your business afloat. Much as the purpose of their being your customer is to service them, to deliver great value, if you are in business, then all of that is to get paid.

I love technology. I had an Apple II as a kid, did engineering projects in high school, and have worked in and out of the tech sector for years. But as cool as the technology is, it is the impact on a business, and organization, a society that matters. This is a lesson many engineers forget, focusing on the solution rather than the problem, but it is the reason any of these advances have value.

A few weeks back, Fred Wilson wrote about his investment in Figure1, a social site for doctors to share radiology images - X-rays, MRIs, CTs. The hypothesis behind Figure1 is that doctors can share images "en masse" across the network, leveraging the knowledge of many doctors to analyze, and benefitting every doctor who submits an image for others to read, or can compare existing images to the one that s/he is looking at this very moment.

Over the course of my travels, I had several interesting connections with beer. First of all, I saw several interesting micro-breweries in the Rockies and in Vancouver. More interestingly, at breakfast in the Vancouver hotel, I saw a man wearing a "Yuengling Ice Cream" hat. Yuengling Ice Cream? Isn't Yuengling beer? Apparently, it is both. During Prohibition in the 1920s, when manufacture of most alcohol was banned, the Yuengling family turned to running a dairy to support the family.

In Seattle, south of downtown, is the National Park Service Klondike Gold Rush Museum. It is 2 floors of fascinating exhibits on the history of the 1897-1898 Klondike, Alaska, gold rush. Like most parks, they have Junior Ranger booklets and badges, and even participatory activities; my kids "panned for gold". What struck me most about the entire exhibit - businessperson that I am - were the numbers on a plaque hung near the door.

With respects to JRR Tolkien, whose writing I greatly enjoy (Peter Jackson's movies somewhat less), I have been thinking about the changes in the infrastructure of transportation technology since a visit to the San Francisco Cable Car Museum a few weeks ago. I recommend it for a great short visit. It has history of the cable cars and the 1906 Great San Francisco Earthquake & Fire, lots of historical pieces, and the mechanism that actually drives today's remaining cable car lines.

A few weeks back, I took the family on a big vacation. Normally, that means hefty airfares - upwards of 18,000 miles covered can cost a pretty penny - especially for a large family. However, since I am a regular traveler, I did every single ticket on airmiles, and paid only the taxes required. As my readers know, most of my miles are on United, which opens up the Star Alliance network for tickets - Air Canada, Lufthansa, Swiss, Brussels, Singapore, ANA, etc.

After a short hiatus, I am back to my regular publishing cycle. I took a few weeks of much-needed and long-overdue vacation time, making my way through the Canadian Rockies out to Kamloops and Vancouver, then down to Seattle and San Francisco. I look forward to your readership and comments again. To get us started, a few lessons from vacation (or "holiday", for our British colleagues): Take a break.

Apparently, Apple has decided to partner with IBM in selling to the enterprise, as reported by CNBC and the Verge. Apple is open to new distribution channels, i.e. IBM, to expand sales of its iOS devices into the enterprise. There are a number of striking elements and open questions about this partnership. Jobs vs. Cook It is highly unlikely this partnership ever would have taken place under Steve Jobs. Referencing Ben Horowitz who was paraphrasing the Godfather, an Apple employee was quoted only last week in the WSJ as saying that Jobs was a wartime CEO, while Cook is a peacetime CEO.

I always find it interesting when I visit Europe and find Europeans fulminating over the American penchant for "excessive greed" by sellers and consumerism by buyers. This past week, I had the ironic experience of overhearing precisely such a conversation... in the business lounge in Zurich Airport, where Internet access is terribly slow, and only available for one hour, even for business travelers and paying lounge visitors. After that, whoever you are, you must pay, 6.

Last week, I had a lovely "prix fixe" dinner with my wife at a very good steak restaurant for 50% off, courtesy of Groupon. The Groupon was definitely valid when I noticed it, but the terms and conditions required that you check with the restaurant for a particular date, just to make sure it was available and open. I called, spoke with the hostess. "Sure, it is valid, and tonight is fine, but we stopped selling that groupon a month ago.

Over coffee this week, I was discussing technology, startups, markets and business models. One of the topics that came up is Nest, the smart thermostat company that Google bought in January of this year for just over $3BN. At first blush, it seems a strange match. Google is not a hardware company by any stretch, nor does it sell almost anything that masses of consumers buy at retail outlets, with warranties, return policies, and all of the headaches.

Two interesting events came to light in the last week for me. First, I am working on getting a company towards compliance with the Payment Card Industry Data Security Standards (PCI-DSS or just PCI). These are the standards that govern the technology and processes you use to protect data when you handle credit or debit card transactions. An auditor checks your questionnaire or audits your systems and people, "recommends" changes if necessary, and then issues a PCI certification, which must be renewed each year.

Between the terrible events of 11 September 2001 and the financial crisis of 2008, US - and eventually global - housing prices rose to absurdly high levels. It is interesting how quickly people become used to high prices as "natural;" when I was selling property in 2009 in a bad market, just about everyone advised me to wait it out until prices returned to "their natural levels." For some reason, housing prices of 50% higher than their long-term average against income are considered more "

For those who missed the news, Oracle is making its biggest acquisition since it picked up Sun Microsystems - and one wonders what it has done with the chip/server/OS manufacturer since - in 2009 for $7.4BN. Oracle is acquiring Micros Systems for $5.3BN. Micros? Who is that? Unlike the acquiring company, Oracle, whose name is well-known in general markets both as a tech icon and due to its very public founder/CEO Larry Ellison, and last acquisition Sun Microsystems, yet another tech icon and whose CEO also spoke with, shall we say, some flair, Micros is almost completely unknown by the general public.

Personally, I am not a big Microsoft services user. I use Google Apps (email and online collaboration), iCloud (Apple), Dropbox (documents) and WordPress (blogging), and while I do use Microsoft software when relevant - Word, PowerPoint, Excel - and am grateful for the near-ubiquitous Exchange protocol, I do not use their cloud services very much. But many millions of people - and businesses - do. So when Microsoft has an extended outage of 12 hours for the single most important service available for any business or person nowadays - email - as they did earlier this week, the level of trust they will receive for the future depends on their level of openness.

I definitely will not be the first oracle to see a rocky future for Oracle, nor will I be the last. But the last quarter's results, released on Thursday, are particularly troubling. In short: Oracle's enterprise on-premise software business - Oracle's core - is simply flat. It did $3.769MM in revenue in 4Q2013... and $3.769MM in revenue in 4Q2014. It hasn't budged. Sure, its expenses for those sectors may have gone down slightly, but for all intents and purpose, it is no longer a growth engine.

Does a good technology architecture matter for a technology firm? Perhaps the better question is, when does it matter? The technologies that have developed as a direct result of the IT developments of the 90s and the Web developments of 2000s - scaling out instead of up, commodity hardware, loose coupling, statelessness, noSQL, map-reduce, etc. - have all had a huge impact on what it costs and how long it takes to build, deliver and maintain software and services.

Every business tries very hard to find ways to serve the same number of customers at the same level of quality for the same (or lower) cost. After all, if I can sell you a book for $10, and my marginal cost is $6, or I can find a way to sell you the exact same book with the exact same shipping policies and the exact same experience for $5, well, my profit just went up.

Just under a year ago, I wrote how Starbucks and Apple drove adoption of WiFi. I also wrote that Starbucks was considering adopting, in its coffee shops, one of the competing wireless inductive charging standards, PMA, and not alternatives like Qi. This is reminiscent of the old Beta vs. VHS wars in the 80s, and Blu-Ray vs. HD a few years ago. In the end, someone with enough weight and enough network impact selects one, and it locks it in.

In Mary Meeker's just released 2014 "Internet Trends" report, there is a very interesting trend which I do not recall seeing in her previous reports. From 2005-2014, over a period of 10 years - a decade of significant growth of manufacturing offshore outsourcing, although there is a small shift back towards domestic with the improvements in robotics - one major element's manufacture, perhaps the most important one, is now almost completely domestic: mobile operating system.

Generally, commercials are, well, boring. They interrupt the entertainment we really came to watch. Sure, some percentage of ads are good, actually are worth watching, but they generally are expensive and represent a small percentage of ads. If you are lucky, you are personally friendly with an advertising creative genius like my friend Ari Merkin, and regularly get to see truly brilliant advertisements, like Elf Yourself, Ikea Lamp, Chrismahanukwanzakah, and on and on.

Two reports came out this week that reflect the poor (and weakening) state of security in technology. The first report is the 2014 edition of Mary Meeker's annual KPCB "Internet Trends" report, which I always recommend reading. On slide 18, she states that, "+95% of networks... compromised in some way," and "vulnerable systems on the Internet are compromised within 15 minutes." The same automation software that enables vacuums to move around the house, Google Maps / Waze to find alternate routes, and Chef to maintain consistent server state, let alone Google to scan and index the Internet, enables criminals to find and probe your deployment within less than an hour of it being deployed, even before anyone knows about it.

I had an interesting experience yesterday. Simon Wardley, whom I have mentioned before as one of the best technology strategists I have read and spoken with, tweeted the following about cloud services: Red Hat, Rackspace, HP and many many others are simply being outplayed. They all have great engineers and hopeless generals. — swardley (@swardley) May 28, 2014 I responded by asking for another write-up from Simon - I never tire of reading his analyses of technology in general and cloud in particular - but also responded that I was just now in the process of looking for a cloud offering to host a small mission-critical Web service, and agreed, once again, first-hand, with his thoughts.

TrueCrypt is gone. For a good number of years, TrueCrypt was the de facto cross-platform volume/file encryption standard. Sure, each platform (Windows, Mac) eventually developed their own encrypted volume option, but it largely depended on trusting the encryption and security of the platform developer. As anyone steeped in the world of encryption and security knows, and Bruce Schneier did enormous amounts to popularize, the only encryption you can trust is open source.

Is Anti-Virus Alive or Dead? That depends on who you ask. Certainly anti-virus makers continue to make plenty of money. Symantec, the largest anti-virus maker, earned $2,109 MM in consumer revenue, with nearly 50% operating margin in that segment. $1BN in profit is valuable in anyone's book. So why is Symantec, of everyone, trashing anti-virus? In a recent WSJ article, Symantec's SVP for Information Security said, "anti-virus is dead... we don't think of antivirus as a moneymaker in any way.

Yesterday, I discussed how digital cameras, and especially those embedded in ubiquitous everyday devices like iPhone or Android, are slowly getting good enough to constitute a real threat to high-end camera makers (the consumer maker market has already been decimated), with the Bentley commercial as exhibit A. This morning, upon opening Facebook, I saw the first "Suggested Post" that I actually opened: an ad for the "Optrix PhotoProX". The PhotoProX, or PPX, is a package of high-quality add-on lenses for the iPhone that provide macro, fisheye, low-profile and telephoto, as well as a drop-proof and water-proof case that, of course, works with the lenses.

Clayton Christensen, father of innovation theory, has described disruption as the result of an innovative product or service that is just good enough for an underserved or unserved market. The incumbents, with a business model and profit margins that prefer to pull out of that dragging end of the market anyways, pull back, focusing on ever higher end customers and margins. Over time, the "just good enough" product gets better and better, pushing the incumbents into higher margins in smaller markets, until there is nothing left and they keel over.

Last week, I walked into Selfridges, the large department store on Oxford St in London. While I was after the Food Hall on the ground floor (conveniently, it has a kosher food stand) and the Starbucks on the 4th (whose WiFi did not work), in order to get through to them I needed to walk the primary sales area by the main entrance: cosmetics. Stores are very very careful in allocating floor space.

I recently had a conversation with the CEO of a company going through significant change. We discussed certain alternatives - some dramatic - to their business model. During our conversation, we focused on what it is that would make this company so much better, rather than "just another one." He pointed out certain key operational and back-office processes we could implement - many of which were already underway - that would make the newer competitor faster, nimbler, more modern.

There is an old saying that when the tool you have is a hammer, everything looks like a nail. In modern terms, if the tool you have is a bookstore, everything looks like it needs more books. Barnes & Noble has been struggling for some time, and has even put itself on the block for sale. It has been hurt by a potent combination of: reduced book sales overall; shift to online purchases (Amazon started out selling just books); failure of its e-Book platform, the Nook.

Readers of these columns know that I have low tolerance for 2 things: sheer stupidity in business and condescension towards your customers. It is for that reason that, despite the shortcomings of most airlines, I stopped flying El Al with any regularity four years ago, and have rarely looked back. These past two weeks, I had yet two more lessons in why I made that decision. The Minor A week ago, I was on El Al's flight from Rome to Tel Aviv.

Back in 2001, e-commerce was a really big word; in 2014 it is really big money. The problem in 2001 was, how were all of these retailers going to get online? Few of them had any real expertise in selling online. Both the market and the technology were new and challenging, yet none could afford to ignore it, or even wait too long. Target appeared to have the fast and easy solution.

A decade ago, it would have been hard to imagine. In 2014, it is hard to imagine not. A CEO, serving in his post for a successful 6 years and as a company loyalist for 35 years, has been forced out due to a data security breach. At the same time, data security analysts have become kingmakers and kingbreakers. Gregg Steinhafel, CEO of Target, who oversaw a 14% increase in revenue in the last 5 years and a 17% increase in profit, has been forced out because of the massive data breach that occurred a few months back.

ReCAPTCHA is one of those parts of the Internet that we love and hate at the same time. A Captcha is a distorted letter/word/number picture that we need to fill in when we first sign up for a service; ReCAPTCHA is Google's version, developed by several computer scientists and acquired by Google in September 2009. It looks something like this: We hate it because it gets in the way of our doing what we want to on the Web.

HR departments, hiring managers, college admissions officers... all of them spend inordinate amounts of time looking for better and more effective ways of determining if a candidate will be a good fit for the job. In essence, the problems usually boil down to two: Will they successfully do the job? Will the fit in with the people? Number two, in many ways, is the hardest, because it cannot be measured.

The Internet is agog with the discovery of the critical bug in OpenSSL's heartbeat, nicknamed "Heartbleed." Bruce Schneier called it "catastrophic... On the scale of 1 to 10, this is an 11." What is heartbleed? I will leave it to other sites to explain; just Google it. Suffice it to say that it can accidentally expose in-system memory of SSL-secured servers. In that memory could be garbage, or it might be a user's password, bank transaction info, or even the private key of the site (which would allow any site to spoof it).

I - along with just about everyone else involved in business or technology - have written about BetterPlace before, although I have done so entirely from the outside. I have had no privileged inside look or access, and have had no time as a consultant - and not a professional reporter - to go and interview people involved. FastCompany, however, pays its people to do exactly that. To their credit, they have written a fascinating in-depth look at the rise and fall of BetterPlace, and how it managed to squander nearly $1BN in investment capital with, essentially, nothing to show for it.

I have written about my issues with tipping before, nearly a year ago. This week, the New Republic is taking a different approach on the issue: how to game the system (for the tippee, if such a word exists, not the tipper). Apparently, blondes get higher tips than brunettes, drawing a smiley face on the bill (for women only), crouching next to the table, among other things, all helps get bigger tips.

It is surprising, amazing, I cannot believe it! Gaming and now ad platform company WildTangent commissioned a survey from IHS Technology, and discovered that 71% of gamers prefer free games with ads over paid games. Next dairy companies will discover that users prefer milk, and Apple will discover that users prefer iPhones. Even without the vaunted expertise of IHS, I think any of us could have predicted that users prefer free games with ads over paid ones, provided the number of ads is unobtrusive relative to the cost of the paid games.

When companies bring new products and services to market, they are addressing some unmet need. It might be an unserved or underserved market; it might be significantly lower costs - and therefore price to customer at the same margins - for a similar product; it might be a lighter and simpler product for a lower price; it might be one of myriad different ways that your company wants to differentiate itself.

It is a truism that engineers see the world rationally... too rationally. Everything has one or more defined answers, all you need is to find the right set of solutions. Because of that rationalist (using the term loosely) view, many engineers who have succeeded at product engineering, building the product, have failed at product development, designing and successfully marketing the product. The problem with product development, and especially new product development, is that you never really know if your market is ready for your solution, and even if they are ready, if they will accept the product/solution, if they will like and adopt the design, if they can and will pay a profitable price, if the packaging and channels are right.

I love some of the old technology deployment phrases. According to legend, most of these - eat your own lunch, boil the ocean, etc. - came out of the heyday of IBM. As an example, I know of one company that moved from customer support software to customer support software as a service (SaaS)... and their first customer was their own customer support department. While I like some things about how this company and runs its SaaS business and disagree with others, their willingness to take the plunge themselves has two benefits:

Are physical (a.k.a. brick-and-mortar) stores dead? Or are they the future? On the one hand, the total dollar amount of e-commerce far outpaces physical retail growth. In the 4th quarter of 2013, total US retail sales were $1,148 BN, up 3.8% from the year before, while e-commerce sales were $69 BN, up 16.0% from the year before. Sure, as a percentage of total sales, e-commerce was only 6.0% of total sales, but the shift is dramatic, from 5.

There was an extended article in the New Republic recently on the rampant "ageism" in Silicon Valley. In some ways, it isn't surprising. Start-ups can be brutal on a family, so having less (or no) family to worry about makes it somewhat easier. Ironically, the culprits in the article don't view those in their 60s or 70s as being discriminated against, but rather those in their 30s and 40s, those with real hardcore experience.

Goldman Sachs estimates that Bitcoin could bring potential savings of $167.5BN per year in regular transactions, ignoring the much higher savings in remittances. Where did it get that number? And how will payment firms - Visa, MasterCard, AmEx - respond? GS's number is straightforward. Look at the following graph: If retail and ecommerce together are just under $11TN in 2013, typical processing fees are 2.5%-2.9%, and typical Bitcoin processing fees are 1.

A few days ago, I made a family affair, about 150 people, in a local neighbourhood hall. We rented the hall, photographer, music and caterer separately. The hall is part of a larger institution, so there is a manager who handles all of the day-to-day functions, like opening and closing, and managing cleanup. When the caterer was ready to start setting up at about 4:00pm, we met the manager and caterer at the hall.

I guess it was inevitable: 3D-printed cars, courtesy of Local Motors, who has announced that they will begin selling them in September 2014. Personally, I think the idea that you can 3D-print a car to be fascinating. The list of things that can be built using 3D-printing keeps on growing; I await the day when we hear that the US Navy will launch the USS Printed, a 3D-printed nuclear-powered aircraft carrier!

For almost 20 years, an extensive onboard entertainment system has been a minimum requirement for any long-haul flight. Anyone who has flown an old airplane internationally knows the level of discontent with the airline, and the many passenger promises never to fly them again. As a result, airlines have spent millions of dollars per airplane - every few years - revamping those in-seat video screens to add higher resolution, touch screens, more movie capabilities, more games.

What is the value of a wedding dress? In most stores, it is several thousand dollars. H&M, the global Swedish retailer, on the other hand, says it should be worth $99. Clearly H&M is using a lower quality fabric, since the article cited above quotes fabric cost of $500, and we can be fairly certain H&M is not selling the dresses at negative 80% gross margins. It is also using mass manufacturing - which doesn't necessarily mean lower quality; when is the last time bought bespoke jeans or T shirts?

It is accepted common sense that sometimes, if you just can talk face-to-face, you can resolve everything. I have believed that at times, and have successfully used it... when the issues are a question of common language and understanding, not fundamental. For example, one time when I negotiated a contract, the messenger got in the way; I sat directly with the principal on the opposite side and resolved all of the open questions.

Every day, every one of us performs myriad instances of sales. We sell ourselves as a potential employee, a proposal for a new initiative, a co-worker on a new software architecture, a board on new investments, and, for a small percentage of us, a potential customer on whatever product we, as titled salespeople, are selling. When we sell, we expect our customers to be rational and self-interested. Dan Ariely may have done a pretty good job questioning that assumption, but we still expect it to be true.

Question: What do iTunes, coffee and HP have to do with each other? Answer: digital restrictions, digital rights management or DRM. DRM is the attempt to control distribution of digital media - files, applications, music and movies. Apple's iTunes DRM was famously called FairPlay (which led many of its workarounds to be called, "PlayFair!"). While Apple removed it from music in early 2009, they continue to use it on movies.

Whole Foods, home of organic food, gluten-free bread, vitamins... and the angry customer? Nils Parker says that Whole Foods seems to attract the angriest customer segment. Of course, I enjoyed the story because (spoiler warning) the jerk got a nice zinger right back at him. But more important is that Parker appears to be doing, probably unintentionally, what every good marketing exec should do: build and understand their customer personality (the cool words nowadays are "

The infamous bank robber Willie Sutton is rumoured to have said, when asked why he robs banks, "because that's where the money is." This is, apparently, an urban legend, according to snopes. Either way, the legend endures for 3 reasons: It is a great quote; after all, that is where the money is (or used to be). It is a great retort; they weren't asking him why he robs banks, as opposed to post offices, but why he robs at all (as opposed to, say, becomes a banker or a lawyer).

Without much fanfare, Boeing - one of the world's two largest aircraft manufacturers and one of the world's largest defense contractors - released a Web page of its new smartphone, Boeing Black. Based on a variant of Android (it helps to modify something that is already open-source and has a permissible Apache license), the phone is intended to be a secure usage and communications tool for government and military personnel.

Mobile carriers just received another blow in their attempt to be "more than just carriers." The overwhelming majority of people in the developed world nowadays - and many in the developing world - carry mobile phones, many of them smartphones. Since payment cards are nothing more or less than data holders and, with chip-based-cards, small computers, there is no reason payment cannot be stored, managed and paid using a mobile phone.

A short while ago, when reviewing a company's operations, I suggested their testing was deficient. Specifically, they had some decent unit testing, but very weak integration testing. In simplest terms: Unit testing checks if small, individual components function as expected Integration testing checks if larger systems, or the system as a whole, function as expected Testing is the only way you can have confidence that what worked before works now, and that what you put in new works as expected.

Among the many perspectives discussed surrounding Facebook's $19BN acquisition of WhatsApp, one that I have not seen is the problem of user definition, which differ significantly from Facebook to WhatsApp. In order for a messaging system - Facebook Messenger, WhatsApp, iMessage, BBM, email, or carrier-based SMS - to send you a message, it needs to identify you. It needs to know, in the immortal words of The Who, "Who Are You?

Just about everyone is writing about the $19BN purchase of WhatsApp by Facebook. Here are several key analyses: The price is ~11% of Facebook's $173.54BN market cap. Since Facebook is not buying it just for current value, Facebook sees WhatsApp as, essentially, equal in value to Facebook in the long-term. This is an enormous risk. Risks like this are usually approved by shareholders, and if they go bad, the CEO is gone.

Last week, I had the distinct "pleasure" of visiting the local emergency room. I managed to severely twist my leg at the end of a hockey game. My friend the orthopedist, who was with me, took a look and sent me off to get X-rays. Turns out, it was broken, and it will be many weeks before I start running or playing hockey again. The interesting business part is the structure of reimbursement and incentives.

Brian Krebs, the cybersecurity blogger who first broke the Target attack, has reported that the hackers who infected Target's Point-of-Sales (POS) systems, did so via their Heating/Ventilation/Air-Conditioning (HVAC) servicing company. Unlike a simple home, large-scale office facilities have complex HVAC systems. On the one hand, they want the optimal temperature, humidity and airflow in their facilities. On the other hand, they are acutely aware of the cost; it costs a lot more to air condition a big-box store than your local townhouse!

This article has been in formulation for a long time, and is the result of my own experiences in many places: corporate IT, software startups, services (cloud) startups, consulting, and many other places. It includes the input of many people whom I respect - although many disagree with some of my conclusions - including consultants, executives, founders and venture capitalists. How should you organize your technology team? This is a difficult question to answer, yet critical to your ability to succeed.

As a regular business traveler - and therefore one who regularly pays roaming fees or swaps SIM cards on my iPhone - I am attuned to the shifts in the mobile telecom market. One of the issues that has come to occupy my attention recently is the lack of multi-SIM cards. Although we call them "SIM cards", the physical card we stick in our phone is actually called a Universal Integrated Circuit Card, or UICC; it is, essentially, a very small computer, just like your laptop or iPhone.

ESPN has been slowly and (somewhat) quietly investing in live Internet streaming of its sports events. Recently, that quiet broke with a series of interviews, notably in the WSJ this week. As the interviews highlight, and I find impressive, ESPN from an operational perspective treats its "WatchESPN" Internet app as on par, or nearly so, with its pay TV subscribers. The HQ control room in Bristol, CT, has parallel video feeds and trackers, and a specialized app for Damon Phillips, the head of WatchESPN, to manage the usage tally.

Traditional software development looks something like this: Product management defines the product specifications, gives it to technical leadership Technical leadership / architecture defines the technical specifications, gives it to the engineers Software engineering builds the product, gives it to quality assurance (QA) QA tests the product, sends it back to engineering to fix any failures, when passed gives it to operations Operations deploys the product, and maintains it in production While this process varies somewhat in steps 1-2-3 for agile development, creating more of a feedback loop, the essentials of steps 3-4-5 remain the same.

A religion, a state and an operating system walk into a bar... A few weeks back, Charlie Stross wrote a great pieceexplaining the relationship between operating systems and religion. Just like religion, operating systems sprang from one "true" source, which then split, diversified, sometimes peacefully, sometimes more violently - fortunately, in the world of operating systems, violence means the silent treatment or perhaps a little economic warfare, and nothing like the Eighty Years War, the Hundred Years War, or the Spanish Armada - but continues to split as each church views its specific focus on the truth as the One True Way, and all others as heresy.

Right at the start of the Web 2.0 phenomenon, I heard Esther Dyson speak at a conference in New York. If I recally correctly, she was the keynote speaker. Besides her technology investments, she sat on the Board of one of the largest advertising companies. The company was concerned, justifiably, about the rapid growth of online media and advertising, and had neither the relationships nor the experience, let alone the critical culture, to build into that market.

I love incentives. They can explain strange behaviours and can help motivate people (inside and outside organizations). Incentives are all about Target's latest behaviour. After the last breach in which at least 40MM credit cards were stolen, Target's CEO is now in favour of a chip-on-card system. This is unsurprising; after all, merchants often get held responsible for fraudulent charges - and chargebacks that are validated often come with a hefty fixed fee for the merchant per chargeback - and Target is especially vulnerable after having been responsible for its breach.

What does Oracle have to do - or not - with easyJet? Last week, I flew my first easyJet flight, Tel Aviv (TLV) to London Luton (LTN). Overall, the experience was positive. Purchasing online was easy, no games with return flights or Saturday night stays, the flight crew was pleasant and simple and no complaints about what is included (nothing). I have always loved transparent pricing. The boarding process in Tel Aviv was a nightmare, but that was mainly because the main terminal has no more check-in space, which meant checking in at the old terminal and then a bus to the new one, which itself turned a half hour check in process to more than two hours.

HBO's fantasy series "Game of Thrones" has won numerous awards, including 8 Emmy Awards (full list on Wikipedia). Yet, according to HBO parent Time Warner CEO Jeff Bewkes, the fact that Game of Thrones is also the single most pirated TV show in the world is "better than an Emmy." I have written before, based on research done by my Duke professor, that adding digital rights management - the annoying technology that protects music and movies from copying - reduces not only piracy but also actual sales for a net loss.

In a period of just 3 months, the two top media technology writers - maybe the top two - have left their employers. In October 2013, David Pogue left the NYTimes to work at Yahoo. Then, at the end of December 2013, Walt Mossberg left the WSJ to start an independent company called Re/Code. Despite the decimation of old-line newspapers in the last decade, both the NYTimes, having gone through its crisis and effective purchase by Carlos Slim, and the WSJ appear to be holding it together reasonably well in the digital age.

Fortunately for all, despite the rhyming title, this post does not announce my entry into a new career in poetry. About a month ago, a customer complaining about mobile service ended up drawing T-Mobile and AT&T into a public war over his account; even T-Mobile CEO John Legere stepped into the fray. How the world has changed. Twenty years ago, this was impossible. You could walk into the store and complain, send a fax, or write a strongly-worded letter.

Here's a conundrum: What does it mean when a company advertises for customers... in a place where almost none of its customers exist? Better yet, what if that location is particularly expensive? A friend of mine recently told me that he was diagnosed years ago with hypothyroidism. He took the medication Synthroid for several years. One day, he was reading the New York Times Sports section, and saw an as for a law firm that had a class action lawsuit against Abbott Laboratories, the manufacturer of Synthroid.

In my last article, I looked at how the attempt to increase profits motivates people. Sometimes it leads to the wrong behaviour, but most of the time, especially in a competitive environment where customers have real choices, it leads to the right behaviour. This is the reason why I so rarely have worked with non-profits; they so often have a strong disincentive to improve. Jeffrey L. Minch, a longtime entrepreneur, CEO, and professional executive coach, pointed out in an extremely insightful comment:

It is finally happening. American universities and colleges, long an upward funnel of spending, are cutting back. The WSJ reports in its Boxing Day edition that many institutions, facing the inability to raise prices any more - well, they could, but would lose many students - and the decline in state funding, have decide they actually have to make choices. The reason they operated this way was simple: marketing.

With due respect to Billy Joel, this article is not about music, but about buying music - or anything else - without getting your credit card information stolen. Over a period of more than two weeks, data thieves stole more than 40 million credit and debit cards from Target stores. Unlike most well-publicized cyberthefts of cards, the thieves apparently did not break into the back-end IT systems and databases of the company and take a big dump of the cards.

For years - since the dawn of the American mobile industry - carriers have sold subsidized phones in exchange for multiyear contracts. Instead of paying $500 for a phone, you pay $100 or $200, and commit to staying on their network 2 years. Now, out comes Randall Stephenson, AT&T CEO, and whines, "we cannot afford to subsidize those phones anymore!" Is it possible? Could AT&T be losing money (or at least potential profit) by subsidizing phones?

Why do companies that are good at getting feedback often fail at actually improving? Yesterday, Harvard Business Review published a great article by Rob Markey, where he pointed out five top reasons why companies fail to make good use of the data. The article is short and a good read. Their very first listed reason is a classic scientific method mistake: discover what, ignore why. Here's the problem. If you put in effort to find out how your company is doing, what the customer satisfaction or market acquisition or return customer metrics are, but don't dig deep enough to find why they are that way, you are only halfway there, and arguably worse off.

So it happened again. A company underinvested in technology, the numbers looked great for years, and then it came back and bit them in the rear.... hard! RBS (Royal Bank of Scotland), the British bank, had a major failure that left customers unable to access accounts and withdraw cash, and this was less than 18 months after their last such glitch. Unlike most cases, the (newly installed) CEO of RBS, Ross McEwan, came out and openly apologized.

Last week, HP announced its fourth-quarter results. Apparently, they were better than expected, but revenue still fell. It says a lot that a company can have falling revenue, and still beat expectations. What does it say about HP when analysts expect revenue to fall even worse than it did?? I particularly liked a quote in Australia's "The Age" on the HP results. "HP, one of the oldest companies in Silicon Valley, was blindsided by advances like smartphones, tablets and cloud computing, all of which have hammered its core businesses.

For a long time, all but the most security-obsessive companies trusted their telecommunications carriers. If you have two data centres, say, one in New York and another in California, you likely need significant reliable connectivity between the two to transfer data, administrative maintenance, backups and other purposes. While minor traffic can go over the Internet, protected by a Virtual Private Network (VPN), for reliable connections you use a dedicated backhaul link, perhaps an older carrier-provided T1 or MPLS.

While there are hundreds of millions of apps that extend the software capabilities of smartphones using whatever hardware already comes shipped with your iPhone or Android, there are thousands more that extend the hardware capabilities of the phone by shipping physical hardware. These hardware extenders provide physical functionality that does not ship on the device, and connect to the phone, usually via Bluetooth, the same way your modern car's audio system (or Apple TV) extends your phone by providing a large microphone and speakers.

Do entrepreneurs like risk? Are they native risk takers? Popular media says they are; after all, who else is crazy enough to abandon a high-paying job in finance, in consulting, or even in another well-funded startup to go out on their own, especially with an unproven idea? An alternative view says that they are actually risk-averse, but it depends what kind of risk. Entrepreneurs balance the risks of doing a startup with the risks of missing the quickly-passing opportunity.

In previous posts, most recently earlier this week, I discussed the benefits of testing and how admitting you have a problem is the first step, the first success, on the road to victory. Anyone who has managed engineers knows that they hate doing three things more than any others: Wasting time Writing documentation Testing Despite growing evidence that creating automated tests first and only then writing code to implement your business need (test-driven-development or TDD) is very successful and leads to faster, more stable and more reliable releases - which means more revenue for the company and, from the engineers' perspective, fewer nights of emergency bug fixes - engineers instinctively hate writing tests first (well, after too), and will take any opportunity to "

I had the pleasure of having coffee one morning this week - straight off the plane - with a colleague who recently took over all technology at a fast-moving startup. This very smart technology leader is after two very big, but related, changes: Continuous Deployment: He wants lots and lots of small changes, as often as they can handle (and perhaps a little more than that). Aren't deployments risky?

What happened to Apple? Everyone either loves them and talks of their inevitable ongoing success, or loves to hate them, and talk of their impending implosion. Earlier this month, well-known Harvard professor Larry Lessig wrote an extensive article listing his travails with upgrading OS X, iOS and iWork all in the same week. Of course, upgrading everything at once is probably a bad idea, but Lessig admits it openly.

I had coffee recently with a colleague who is looking to get into a certain market. While speaking with him, I was reminded of the irony of the job hunt, especially at senior levels. To succeed at senior roles, especially in the tech sector, you need to be skilled in multiple areas: technology, finance, marketing, product, even sales. Even a mid-level engineering manager needs to know how to code, manage people (HR), handle budgets (including oddities like capitalizing vs expensing major software investments, depreciation schedules, and WACC), interface with marketing, support sales.

A few weeks ago, Adobe announced that hackers had broken into their database and stolen 3MM passwords and other customer identifiable data. Then reports surfaced that it was 10MM. Then 38MM. Latest reports say it may be as high as 150MM. That would be one of the largest data thefts ever, by number of customers compromised, certainly in excess of the 45MM in the infamous TJ Maxx / TJX case from six years ago.

Last week, Jonathan Baskin, a former executive at Blockbuster and now a brand consultant, wrote a fascinating insight in Forbes into the setting for the demise of his former employer. Baskin argues that Blockbuster and its executives early on failed to recognize that its primary value was not as they believed, convenience, "get a movie right in your neighbourhood!" Logically, if physical reach is your key value-add, then a strategy mixing new store expansion and existing store acquisition makes perfect sense.

Here is a radical thought: Microsoft should kill Windows. No, not the cash cow on laptops and desktops, nor the ones that give great views from their Redmond, WA campus. Rather, as Microsoft continually fights and loses to iOS and Android in the mobile space of tablets and smartphones, it should release an operating system that shares nothing with Windows, not even the name. Inside the walls of Microsoft headquarters, this idea is probably heresy.

Yesterday, Benedict Evans pointed out that APIs seem to be suffering death; many well-known services (in the literal, not technical, meaning) are disabling or removing their APIs - Google, Skype, etc. At the same time, many other, younger services, seem to heavily promote their APIs. Facebook is not young, but it has gone through many iterations; Twitter has its API, although it has been known to get into battles with third-party services that use their APIs to compete with Twitter's own interfaces (shades of Apple?

By most accounts, StackExchange has become very successful. It started out as an easy-to-use community for programmers to get together - StackOverflow - and has since expanded to multiple "Exchanges" for everything from systems administration to home Do-It-Yourself jobs. StackOverflow (the biggest site) has close to 2MM users as of last summer. Sites like the various StackExchange live and die by the engagement of their user community. The more often people visit the site and post quality questions and valuable answers, the greater the value of the network.

Like many a regular United Airlines customer - I have put in ~400k miles over the past 2.5 years - I am upset about the massive devaluation of United MileagePlus miles announced this past Friday. For those unaware, United made it somewhat more expensive to fly premium classes (Business and First) on United, and significantly more expensive - in some cases twice as much - if a single leg of an award itinerary is on a non-United plane, i.

The FAA has finally relented, and changed its half-century-old rule banning electronic devices below 10,000 feet. Technically, pacemakers, watches and, well, the in-flight navigation system should have been banned, too, but of course they weren't. For that matter, neither were the seat-back entertainment systems. I was on a United flight last night, and when the system restarted, it was clearly a Linux computer! The problem here wasn't really safety, and everyone knew it.

Finally, Amazon's got iTunes Match, er, Kindle Match, er, MatchBook. Yes, the name "matchbook" works well as a double entendre for matching the book and a "book of matches" that can light (or "kindle") a fire. At the same time, they are clearly treading the well-worn path that Apple set with iTunes Match. Hopefully, it will work a little better from the outset. Unlike iTunes Match, Amazon is not about storing the books you already have on your Kindle from other sources.

Last week, Eugene Wei, a former Amazon employee, posted an excellent article called the "Amazon profitless business model fallacy." Eugene was debunking the prevalent belief that Amazon seems to be highly value despite its not making a serious profit. To my mind, however, Eugene isn't debunking the "profitless business model" fallacy, he is debunking the "pundits actually know what they are talking about" fallacy. There are actually three kinds of profit in business:

About two years ago, I purchased a laptop sleeve with shoulder strap from Brenthaven directly from the Apple store. It fit my needs perfectly - think like a sleeve to fit into an airline carry-on, but with a shoulder strap and extra pockets to carry by itself. Barely a month after I bought it, the buckle that connects the strap to the sleeve came apart. It happens, you get a bad item, and the Apple store immediately replaced it.

I love technology. The amazing work of scientists and engineers has changed the world. But time and again, we are reminded that it is the market, the demand for and usage of technology and its implementations that matter, not the technology itself. SnapChat has been getting a lot of bad press lately, including here. At its core, SnapChat is about the ability to communicate with someone digitally, comfortable that you retain control over the message.

Apparently law firms are getting squeezed on costs. The big name-brand firms in NY or LA cost a lot; the smaller ones more out of the way cost less. As a result, midsize law firms have been growing, nearly doubling their share of litigation work from 22% to 41%, while the largest firms slipped in their percentage of overall billings from 26% to 20%. This is unsurprising. As law firms have continually inched (or "

There is a common pattern I see over and over again in fast-growth companies: Release the minimum product to get some traction. GOOD Get traction and revenue and grow. GOOD Focus on feature functionality to grow quickly, deferring "maintenance work." NOT SO GOOD Product begins to crack under the scale for which it wasn't designed. BAD Scream for help. NECESSARY Every edifice requires basic plumbing work - at the outset and on an ongoing basis.

Yahoo released their newly revamped Yahoo Mail, or Ymail, in the last week. It is good to see Yahoo putting effort into bringing life and energy back to its products like Flickr and Yahoo Mail. The market for mail is fairly close. Gmail is in the lead with 425MM, Hotmail following with 325MM and Yahoo taking a close third at 289MM. How can Yahoo steal market share from the first and second place players?

BusinessInsider, the sometimes good reporting site which has become more dominated by cheesy sales pitches, still has some good in-depth reporting once in a while. Two of their more "veteran" (if one can use that term on such a young site) reporters did an in-depth piece on the history of Twitter, or how it got from there to here. To their credit, the reporters resist the urge to idolize or simplify the process of a successful startup.

Most modern cities are very interested in trapping their tourists: providing them with a pleasant and easygoing experience that encourages them to visit, spend as much of their cash as they can, and send their friends. The process in "trapping the tourists" is no different than any other form of marketing. Structure the correct product, provide the right price, package it in the right fashion, and place it where it will be found by your target.

SnapChat was supposed to be a safe way to share pictures or text for a short (and controlled) time. You take a picture or send a text with your smartphone, set an expiry on it, and only the recipient can see it only for the time you set. After that, it is gone, lost forever. A few months back, some smart engineers proved that snapchat doesn't actually delete the pictures, and you can retrieve them.

I am a big advocate of open-source software. I believe that, along with Amazon Web Services, open-source has been the single greatest enabler of startups in the last decade or more. Amazon made it possible to launch an online startup for pennies on the dollar of what it cost in the 90s; I still remember startups that raised millions just to buy and run their Web servers. Nowadays, you do it for a few hundred dollars per month.

To paraphrase Johnny Carson as the Great Karnak: writing a good blog; growing your business; sacrificial lambs. What do they have in common? Other than sometimes feeling like you need to give blood to get somewhere, they all require consistency. Writing a Blog People write blogs for many reasons. Some feel the need to write; others do it to market a product or service; some to get a message out.

So private companies can, finally, solicit equity investors from the public, in a process known as "general solicitation." Until now, you either had to register as a public company, or do a "private" solicitation only. In some ways, this is the biggest and first real positive change to private capital raising in almost a century, since the major securities laws were enacted in the 1930s. My friend Jon Medved, CEO of OurCrowd, wrote a good summary in his OpEd in yesterday's WSJ, although, for reasons unknown, he credits the SEC with changing the rule, rather than Congress with its JOBS Act, which the SEC fought tooth and nail.

One of my favourite types of successes is when a business finds value in its garbage. One of the most famous cases - taught in almost every business school - is Kingsford Charcoal. Kingsford, the largest charcoal manufacturers in the United States, was founded by Henry Ford an E.G. Kingsford to sell off the waste wood scrap from the Ford Motor Company's plants. Ford noticed that there were a lot of wood scraps being thrown away as post-manufacturing waste.

A colleague of mine forwarded me this fascinating interview with Brian O'Kelley, founding CEO of AppNexus. There are several good gems in there, and as Brian is a fairly outgoing person, the read is enjoyable as well. During one particularly difficult period of raising investment, after 40 rejections, he became depressed from the rejections - common among entrepreneurs - and got fed up with all of the effort in order not to receive a term sheet.

Automation and robotics, in theory, are a wonderful thing. They allow us to replace expensive humans with limited time to spend on the job with machines that can do the same work over and over again, without becoming tired, demanding raises or quitting for greener pastures, all while saving money and time. One of the earliest places we have seen consumer-facing "automation" is the supermarket. I was reminded of this by the article, more of a rant, by Farhad Manjoo on the WSJ on self-checkout.

For several decades now, company after company has outsourced manufacturing to China. Even "patriotic" items, like flags, are often stamped "Made in China." Why do companies send their manufacturing overseas? The main driver, obviously, is labour cost. If the wages of an American manufacturing worker are at least $10-15 per hour, while the Chinese worker costs $1 per hour (minimum wage in expensive Guangzhou Province is ~$1.25/hr), then you can, at first blush, save 90% (!

I normally write about business. Today, the first anniversary on the Hebrew calendar of my father's passing, I would like to write about business lessons from my father, from whom I learned the most valuable lessons of all. I cannot give a true insight into his life, his soul, his joy and happiness in life - even and perhaps especially during difficult times - in a short post. I can share, as I did with my family yesterday evening, some of the key life lessons about how a person should conduct himself.

Two events occurred in the last week that reminded me of the value of ignorance... or, to paraphrase the first step of Alcoholics Anonymous' Twelve-Step Program, admitting you don't know is the first step towards true wisdom. The first was an excellent TED Talk given by Stuart Firestein, Columbia University Professor of Biology (full disclosure: I attended Columbia as an undergraduate), on how answering questions in science actually creates even more questions and unknowns - sort of like chopping the head off of a Hydra, where two more grow in its place - and in many ways true science is the pursuit of ignorance, discovering what we just don't know.

It always amazes me when a company tries to cheat, somehow expecting not to get caught. Yesterday, Ars Technica published a detailed takedown as to how Samsung tried to deceive the performance benchmark tests in its latest Samsung Galaxy Note 3. For the non-technical among the readers, benchmarks in the technical world are exactly what they are in the business world: standards-based tests that allow purchasers to compare multiple items.

In the last 3 months, I had the opportunity to experience warranty service on three different occasions. How the companies managed the repair and replacement process speaks volumes about what they think of me as a customer once they have my money. Nowadays, a large proportion of what people buy has two key characteristics: They are manufactured and supported, and often purchased, far away They are in constant use Distant Manufacture and Support If you buy a book at Barnes & Noble, and it is missing 5 pages, it is fairly easy for B&N to just replace it.

Fast Company has a very interesting interview with Matt Mickiewicz, CEO of engineering recruiting firm Hired. Matt discusses recruiting mistakes common to startups (and even more stablished firms). While other outlets trumpeted the (out of context) soundbite, "don't hire Google engineers," the pearls of wisdom run deeper. Top mistakes: Seeking star companies (Google, Apple, Facebook), rather than star individuals Underpaying (also known as "being cheap") Cloning the founder, the "

A few weeks back, Albert Wenger wrote a short article on the value VCs bring, notably in focusing on the "big picture". Albert's article led to an interesting discussion on the best and worst kinds of VCs, and specifically how important it is for a VC to have real, hands-on, operating experience. My personal view has always been that, while there are rare exceptions, every investor and Board member should have had real-world, hands-on experience before having influence or control at a strategic level over a company.

I have written about the virtues of discrimination - that is, price discrimination - here, here and here. A friend of mine in California reminded me of this when he sent me an article bemoaning coupons. Everyone who has ever bought online has seen "enter coupon code here" on the payment page. The author argues that the very existence of that text and the coupons is a slap in the face to someone willing to pay full price today, and causes many to walk away.

Long suffering BlackBerry has a potential buyer. Coincidentally, or not, the $4.7BN offer comes from Fairfax Holdings, who are already BlackBerry's largest single shareholder, at ~10%. Their offer is for $9 per share, which is a small premium over the latest share price, which is after its 17% plunge due to its announcement that it has an astounding $1BN (!) in unsold devices. Given that BlackBerry is, apparently, collapsing, why would Fairfax throw good money after bad?

Back in undergraduate engineering, Prof. Andy Stevens taught us our first course on digital circuits. In analog, everything is on a continuum: you can measure how many amps are coming through the system with ever more precision, or how many dollars you have allocated to marketing. In digital, everything is binary: 1 or 0, true or false, yes or no. At the end of the intro day, Prof. Stevens said, and I remember this clearly after 20 years, "

About a year and a half ago, Layered Thoughts published a fascinating piece on the differences between different kinds of free. The author goes into the psychological impact of offering a free plan (popular in "freemium" offerings) vs offering a free sample or trial. This article is recommended reading for anyone designing pricing plans, especially for online services. At heart, the issue here is managing the psychology of your potential customer.

Earlier this week, Josh Patrick wrote a great opinion piece in the NY Times, entitled, "It's O.K. to Sell Your Business to the Highest Bidder." Business owners often have a close emotional relationship with their business - their "baby" - and their employees, whom they view like family. In many ways, this is a positive relationship. Caring for your business, your employees and your customers is one of the best ways to get dedication and a stable, growing, going concern.

The "tyranny" of billable hours. Anyone who has ever provided a labour service - lawyers, consultants, designers, contractors - knows the inexorable pressure to find more hours which you can bill to some client somewhere. In multi-person firms it is far worse. Senior partners create minimum billable quotas on junior staff, who then have to run around to find them or lose their job. But there is another side to billable hours, one that I regularly run into as a consultant to companies.

One of the most damaging mindsets in employees - and in people generally - is a sense of entitlement. Just about every culture has some turn of phrase that describes how such a person thinks, feels and acts. In a company, however, it can be toxic. Employees with a sense of entitlement: Are never satisfied Are less productive overall Have significant swings in behaviour Negatively affect the morale of their coworkers What is a "

Every now and then, someone uses statistics in so misleading a way as to qualify as dishonesty. While I have little patience for ignorance masquerading as knowledge, I have even less for self-interest masquerading as virtue. I came across a recent article by Debora Spar, the President of Barnard College. Full disclosure: I did my undergraduate work at Columbia University, and my wife is a Barnard College graduate. While I usually enjoy Spar's writings, even when I disagree, and I respect her willingness to take on controversial issues, her article on "

The purpose of a business, according to guru Peter Drucker, is to "create and serve a customer." Of course, there is one missing word; it really should be, "to profitably create and serve a customer." If the business loses money on every customer, it will not last very long. One of my favourite jokes (unfortunately not always a joke), is the CEO who says, "sure, we are losing on every sale, but we'll make it up in volume!

The title of this article is in quotations, because it is based on an article, of the same name, in the Summer 2013 issue of Barnard magazine. No, this (male) author did not attend Barnard College for Women (but he would have happily attended!), but his wife did, and showed him the "President's Page" article by Barnard President Debora Spar. Spar's article, which unfortunately will not be available online for some time, refers not to the direct financial cost of free, but the social cost that leads to a financial cost.

Well, Apple finally released a lower cost iPhone, the 5C. Barely. Once off-contract, which is how most of the world (and this author) buys them, the price difference is ~$100. On a discussion today, awaldstein said that "Apple may have lost touch with who they are." Actually, I think Apple's troubles may have stemmed from their inability to decide either to break from who they are or stay true to themselves.

Forbes online had an article several weeks ago on the hidden cost of free open-source software (FOSS). The author's key argument is that nothing "free" is ever truly "free", and there are real hidden costs to free software. In his analogy, open-source is like the wood, bricks, nails and hammer to build a house, and commercial (often called "closed-source") software is like paying someone to take the tools and build the house.

The biggest insight this ole' engineer had in his early years is that "technology is cool, but money counts." The coolest technology will never be adopted if it doesn't bring enough significant benefit - either financial or emotional - to enough people. Technology for transportation is very cool, but is subject to the same laws. Its progression, at least in the short to medium range, has been fairly straightforward:

It is said that success has many fathers, but failure is an orphan. While that is meant to refer to who takes credit for successes and failures, I believe in a parallel version: Failure has many causes, but success needs everything to happen just right. Other than the poorly structured English in my phrasing (Winston Churchill would be appalled), there is a truth here that every entrepreneur knows in his or her blood.

Here is an interesting thought: can international borders be a great candidate interviewing tool? Every company says they want to hire only "A" players. Some even mean it (check their culture and willingness to pay for it). But even those truly committed to hiring the best people have a hard time finding and determining if their candidates are the best. Sure, every executive has his/her own network they can leverage to bring in a few great people.

Remember Bill Clinton's great one-liner? "It's the Economy, Stupid!" James Carville supposedly coined it to keep the Clinton campaign focused like a laser on the major issue that would win the election for Clinton against George H.W. Bush. By the way, it worked. I have been thinking a lot about Microsoft lately. For a company whose name once simultaneously inspired legions and terrified equal numbers - who remembers the "

I have been involved in the technology industry for 20 years on a formal level, and informally for many more; I actually got my start programming an old Apple II. Yet, as much as I like technology, its fascinating cool factor and its malleability - ever try to program a chair or a book, or join a toothbrush and ice skate to make something entirely new? - ultimately, technology is about changing the real world.

It always amazes me when an industry that makes a lot of money, out of fear of loss of market share, profit, or, in most cases, simply the unknown, absolutely refuses to change its business model to one that satisfies its customers more. The purpose of a business, any business, is not to enrich management, although that is nice; it isn't to create jobs, which are an important byproduct; it isn't to maximize shareholder return, that too is an effect.

Every business has some customers that are just that much more valuable than the rest. They provide a combination of higher revenues, often at a higher margin, with greater consistency than other customers. Every business wants to isolate the very best of these customers and treat them better: special support, direct access, gifts, dinners, whatever it takes, depending on your industry. The airline industry figured this one out quite a whole ago with its frequent flyer programs.

Two very large companies went through a spate of trouble recently, directly related to executive moves that were, well, "faith-based" (and this coming from a religious guy). In November 2011, Apple Retail wiz Ron Johnson took over JCPenney, where same-store sales had fallen by a few percentage points. The following 3 quarters, same-store sales slid by 18% or more, all the way up to 27% in the quarter ending 27 Oct 2012.

Sometimes, you just want to collaboratively share online editing of a document. Five people in far-away places - or maybe just a block away - want to edit something together. Google Docs is great, but requires a Google account and is somewhat heavy. Hackpad is a good lightweight solution, and very easily embedded inside another Web page or blog. Needless to say, to edit on a hackpad, each person needs an account.

This posting isn't autobiographical; really, it isn't. Thanks to William Mougayar's excellent "Startup Management" weekly curation of articles, I came across this interesting article on customer support vs. sales. They have a simple suggestion. Before you agree to a sale, call the company line and try to get customer support. Will it be as easy to reach someone as it is in sales? If it is, this is a company that values you after they have your money, not just before.

In business, as in most areas of life, it is the perception that often matters more than the actual result. If you can manage the perception, you can win the customer, even if your result is less than perfect. Let's look at two examples: The price of, well, anything: I went to business school. I have consulted to companies and performed, literally, thousands of spreadsheets, including one that entirely modeled the cash flow of a complex premium finance business, to the point that the banker couldn't derive it!

One of the mantras of the lean startup movement - and, as I have written before, of the agile software development movement - is "fail early, fail often." The logic works something like this: you never know for sure, in advance, when and how you will fail, but you know you will make some mistakes, perhaps serious ones, and have some failures, perhaps major ones. Instead of building around getting it all right the first time across all parts, find ways to test, try and succeed or fail in very small ways very often.

At first blush, it sounds crazy. After all, they are in completely different business models. GitHub manages open-source software, via a specific version control system, and makes it money with private versions of those repositories in the cloud. GitHub, in other words, makes its money from small to large enterprises via direct online sales. Google, on the other hand, sells advertising in a multi-party market. It gives its products away for free (mostly), gets a very large number of users, and then sells access to those users to advertisers via AdWords.

Here is a sign that signs work. Log onto any Google Group of which you are a member and have the right to post. Then hit "New Topic". Right below the group name but above the "Subject", you will see a simple paragraph, beginning with Note: and highlighted in yellow. Note: You are posting to an external group using an account that is managed by _________. Please think carefully before posting or replying, the content of these discussions may be publicly visible.

I noted only last week how JetBlue was trying to move upmarket. Essentially, it was envious of the lovely margins that airline industry veterans were getting from those premium paying passengers, and decided to go after them, probably erroneously, in my opinion. Dominic Basulto, in a Washington Post article, applies Clayton Christensen's disruption theory to the airlines, and argues that the airlines are setting themselves up perfectly for disruption. They are constantly trying to move upmarket, focusing (naturally) on the highest-revenue customers, while putting less and less focus on those less-profitable coach class flyers.

Earlier this week, I had the pleasure of speaking with a colleague in Silicon Valley who is a top notch expert in one of the hottest fields, Big Data Analytics. As the name implies, he is an expert at creating and performing analysis on massive data sets. This gentleman spent many years as a high-end technology consultant, and I have no doubt he was well worth it. He used an interesting phrase, the "

Let's say this: there are no magic bullets. They simply do not exist. Nonetheless, your product may eliminate some, even some important, areas of pain from a customer. William Mougayar, an excellent curator and writer from StartupManagement.org, writes how even in the Software-as-a-Service (SaaS) world, enterprise products can be complex to use and, indeed, should take time to fully entrench itself into business processes. Business processes are complex and slow to change; once you are in, it will take a very long time until they become displaced.

Every business wants to lock in its users. Even businesses built around openness, easy-in/easy-out, would far prefer that their users stay inside their services. It is often just a question of how the company goes about attempting to keep users in, and the philosophy that drives it. The mobile experience on Twitter and Facebook is a perfect example of the difference in philosophy. Open Facebook on your mobile app. Find a link to a story you like and click on it.

The other day, I saw some marketing collateral from a small startup trying to sell to very large companies. They had just about every buzzword under the sun, repeated multiple times: "advanced visual tools," "gain insights", "advanced algorithms." Best of all, they had highlighted, "we were recently benchmarked against Big Competition, and we outperformed Big Competition in almost every measure." This is a classic mistake in all sales, and especially in startups founded and run by technologists.

Most business owners have a short-term focus: this year, maybe the next. Even startup founders tend to have a long-term vision, but are very focused on what can grow the business right now. Public companies (with a few rare exceptions, notably Amazon), tend to have even shorter quarterly windows. Even when companies pay for research, it is often biased in favour of driving immediate growth in their own business.

When I worked airline security in the early 1990s, the senior executive who trained us would constantly repeat, "ladies and gentlemen, there is no such thing as half -pregnant! Either you are, or you are not!" In that context, he meant, of course, that either the person was suspicious or was not. If they weren't, they were safe; if they were, then suspect them all the way. Mind you, we were a lot more effective than the current TSA, and treated our customers a lot better along the way.

Here is an interesting statistic. In 1985, right at the forced breakup of AT&T, their revenues were $1.36BN, or $2.47BN in inflation-adjusted 2005 dollars, according to the official government CPI calculator. But in the same 2005, AT&T had revenues in the voice segments alone of $24BN! What happened in that intervening 20 years? Simple. The government forced a breakup of the AT&T monopoly. It shouldn't be too surprising; after all, the monopoly was largely government created and enforced in the first place.

The NYTimes had an insightful article on the downside of Setec Astronomy, or Too Many Secrets. Within the hundreds of thousands of "Secret" documents released by Bradley Manning to WikiLeaks, the number of true secrets was infinitesimal. Why do government officials feel the need to classify everything? As always, look at the incentives. There are three key reasons: Duty: Some people have a true sense of protecting the best interests of the country CYA: No bureaucrat ever was fired for saying "

In an earlier article, we discussed "congestion pricing", or more generally, capturing maximum value using price discrimination. As an aside, I mentioned research being performed by Stanford attempting to use positive motivators (rewards and lotteries) rather than negative motivators (price, i.e. money out of pocket). The motivations behind the research appear to be two: The positive: Quite simply, are there alternate ways to smooth out the flow? The negative: Even if not explicitly mentioned (other than here), pricing means capturing value in a perceived public good, which people tend to instinctively reject.

The other day, I was looking at prices for a simple round trip international flight. Like most people, I searched on online sites like Expedia, known airlines' Web sites, and my travel agent. I also look at the ITA Matrix, a very powerful tool by a company that was bought out by Google in 2010. For those who don't know it, the ITA Matrix is a very powerful flight search engine.

I love it when two businesses take completely opposite approaches to the same strategic problem. It always makes for entertaining reading (and writing). For a long time, network providers have argued that they are about content, phones, payments, everything but the network. AT&T Wireless, Verizon Wireless, Sprint, 3, BT, Deutsche Telecom, Cablevision, Liberty Cable, just about every major carrier has argued that they are "not just dumb pipes" but everything that goes through them, i.

Fair? Does anyone care about fair? Well, outside of politics, yes, people do. But it really has much less to do with fairness per se than self-interest. Let's say you are the CEO of a company. You have 4 division heads. They all work hard and believe they do their jobs well, and it is your job to evaluate them. If you evaluate them incorrectly, say giving a better grade (and therefore bonus and promotion) to one over another, they will view it as unfair.

Simon Wardley, one of the better thinkers in the technology market, whom I have only recently had the pleasure of discovering, has been writing for years on the inevitability of the move to "cloud" on the one hand, and on the other why Amazon Web Services (AWS) has so dominated the Infrastructure-as-a-Service (IaaS) market and how to properly compete against it. He believes - and I agree - that this competition is crucial for the benefit of the market, the customers, and, in the end, the providers as well.

Ironically, that isn't the actual line from one of the greatest films ever produced. It is actually, "Someday, and that day may never come, I'll call upon you to do a service for me." In business, there really are only two kinds of transactions. ACID is not one of them, unless you are either in the SQL database business, or your name is Harvey Dent, which, in one of those strange coincidences, a colleague recently called me, since on side of me is deep engineer, still contributing to projects and open source, and another is deep business consultant, designing strategy and fixing operations.

Congestion pricing is not, despite its name, the cost of Sudafed at your local Walgreens pharamacy or Boots chemist. It is a time-honoured strategy for charging different prices at different times based on "congestion" in the system. If anyone has driven on the Singapore airport toll road, or perhaps Israel's High-Speed-Lane into Tel Aviv, they know that you pay more, often much more, during rush hour, than in off-hours. For example, the Israeli road charges 7 NIS (~$2 USD) for the 13km stretch in off-hours, and up to 75 NIS (~$21 USD) during peak hours.

Advance warning: while this article is about business and the future, it gets a bit technical in nature. Apologies to those without engineering backgrounds. One of the people I have had the pleasure to connect and work with is Chris Williams. Chris, the founder of the now-global JavaScript conferences, has recently become heavily involved in robotics, and, in character for him, is now putting on RobotsConf. Over the last few years, we have seen a trend towards reduced-cost and commoditization of hardware.

It is hard to imagine a world without WiFi. It is, literally, everywhere. In a conversation I had about 2 years ago with first-class VC Fred Wilson, I asked him how he thought the wireless carriers - the beasts everyone loves to hate, the 21st century version of cable companies - would be disrupted. His answer? "WiFi". Eventually WiFi will be nearly everywhere, and one will be able to use mobile devices (he didn't say phones) to make broadband phone calls.

Surprise, surprise. NASA's attempt to "go to the cloud" has led to major security gaps. According to a report on TheVerge, an internal NASA review discovered that of its five major cloud sourcing contracts, not even one came close to meeting NASA's own data security practices and standards. When I was studying for my MBA, we studied the classic Carter Racing case study. The short form: a car racing team has to decide whether or not to race.

In an earlier article, I discussed how one moves markets and sells products that financially make sense from a business perspective: the total lifetime cost (upfront plus operating) of a new product is less than that of the existing product, but is more weighted towards upfront than operating. In the LED example, the cost of the LED bulb was 20 times the cost of the incandescent bulb, but the lifetime operating cost far more than made up for the more expensive purchase price.

LED lights. I like LED lights. Yes, those very cool bulbs that use almost no energy at all, do not heat up, can give lots of different colours, and require almost no changes. LED (and CFL) light manufacturer have struggled for some time to get these wonders of modern technology to be mass consumer products. Yet, like the electric car manufacturers, they cannot seem to convince individual consumers that it is worth it.

An earlier article of mine discussed pricing being related to customer perceived value rather than actual value. No matter how much you believe something should be worth to a customer, it is his or her perception of that value that determines what price you will get for your product or service. Unintentionally, another article on LED lights touched on pricing and perceived customer value, as well as how to change that perception.

And now for something completely different... (extra credit to those who can place the classic reference). I regularly emphasize the importance of incentives, culture and hiring the right people, however, I cannot recall ever referring to it as HR, since it has certain very specific connotations. Early on in my career, I was advised about how to handle certain questions in a job interview (yes, I actually did hold many "

Emotions are a funny thing. After all, they are, in many ways, what make us human. Love, hate, anger, joy, fear, happiness. Without them, we are nothing but machines. They are what drives us to the heights of achievement and the depths of depravity. In business, as in life, emotions are a great motivator, but a terrible executor. Essentially, emotions are great at driving you to strive for achievement, but while you are getting there, your emotions can cause great damage.

Whatever you're selling, to anyone anywhere, the price you will get is always about what your customer perceives your value to be, not what your value actually is. This is hard enough for most people to get. It is almost impossibly hard for two types of people: Engineers: Yes, I am an engineer too. Engineers look at the world rationally. They solve problems with math, science and algorithms. They are trained to think in terms of trade-offs and problems with a defined set of solutions.

The phrase "the grass is always greener on the other side of the fence" is an old and profound English saying. It means, essentially, that humans in their very nature look around them, see what others have, and desire it in many ways more than what they have. The neighbour's grass, on the other side of the fence, seems to be more lush, greener. Of course, it is usually just an illusion, one created by focusing on that aspect of the grass.

A friend of mine on Twitter posted the following pithy quote yesterday: "Ask a programmer to review 10 lines of code, he'll find 10 issues. Ask him to do 500 lines and he'll say it looks good." As anyone who has worked with developers knows, this is 100% true, quite humourous at times, and frustrating (for those of us who manage such people) at others. Ironically, it is also true for other professions.

In a previous article, I emphasized the importance of the planning process itself, even if you are 100% convinced that the plans you make and execute upon will come to naught, "as soon as you meet the enemy." No, I am not implying that the market and customer are your enemy, although I do recall working in IT back in the early 1990s, where we commonly complained that, "if only we had no users, everything would run perfectly.

The title of this post is a famous quote from General, US President, and President of my alma mater Columbia University, Dwight D. "Ike" Eisenhower, who was emphasizing the well-known dictum that "no battle plan ever survives first contact with the enemy," normally attributed to "Helmuth von Moltke the Elder." Eisenhower was layering an important corollary to Moltke's statement. True, the moment the battle starts, so many unpredictable things happen that the plan goes out the window; nonetheless, the planning process itself is important.

I regularly play ice hockey. Not only do I love the game, but it taught a great lesson this morning on balancing your customers. A new rink opened near me (much better than the 2.5-3 hour drive each way I used to do). The owner took one look at his numbers - $18/person/hr for public skating on a rink that can easily accommodate 35 people gives an expected revenue of $630/hr, vs $275 for rental to hockey or figure skating groups - and said, "

Just about every newspaper and online news source in the developed world has reported on the outing of J.K. Rowling of Harry Potter fame as the author of the new book "The Cuckoo's Calling." Apparently, quite a bit of technology went into the analysis of the book. The WSJ has a pretty good piece on the technology behind it. As a nice benefit, some of the general usage of technology for literary analysis and forensics has come to light.

In an earlier post, I discussed how P&G and Georgia-Pacific are not advertising toilet paper in order to increase consumption (a.k.a. compete with non-consumption). Rather they are combatting each other for market share. Since people (in the developed world, at least), will use the same amount of toilet paper no matter what, based on the number of times they relieve themselves, no amount of advertising will induce someone to buy more toilet paper.

Every now and then, I see an article that is worth reading in its entirety. Mark Suster, wrote one just the other day. He called it, "Why You Need to Ring the Freaking Cash Register." I call it, "Cha-Ching!" I had a friend from B-school who was one of the first sales leaders at RightNow. They had a simple system. Sales were so important - without it, you have no business - that every time a sale was made, no matter how large or small, everyone's desk (cannot recall if it was a box or part of the phones or software on their laptop) went, "

The smart people behind ET3, whom I mentioned in an earlier post, were kind enough to respond quickly via Twitter, which is public, so happy to repeat here. They made several key points: First the late 2013 3-mile long 400mph demo, then the flashy Web site with online reservations, features, etc. The real target market is the executive branch of the Federal government, who needs to line up behind this and drop expensive high-speed-rail (HSR).

I was looking at my Facebook account the other day - normally a waste of time, but a great source of reading material - and came across this picture: [caption id="" align="alignnone" width="350"]Why does toilet paper need a commercial?[/caption] My first reaction, like most, was to laugh. After all, everyone is buying toilet paper. You need to advertise iPads, so people will buy them instead of Kindles, laptops, or nothing at all, but who, in a modern, developed economy, will go without toilet paper?

I love Yahoo. I know, it isn't politically correct to say so in today's Google- and Facebook-centric worlds, but I have always loved that company, from the early days when Dave Filo and Jerry Yang founded it. It has been difficult for me to watch this once-great company struggle to find its place over the years. Don't confuse my love for the company with love for its products or leadership.

Yahoo News reports that a trial Vacuum Maglev Transport System is going to be in trial by the end of 2013. If successful, it might bring cross-continent travel - LA to NY - in 45 minutes, yet be built at a fraction of the cost of a train, let alone an airport. The big savings compared to trains is the much smaller number of tracks required. You still would need rights-of-way, although vastly reduced weight could allow for more elevation, reducing the impact and acreage of those rights-of-way, but overall requirements should be much cheaper.

As of this writing, there are several major mapping providers used on the Web and in mobile apps: Google, Microsoft, MapQuest (owned by AOL) and, of questionable quality, Apple. As of this writing, there are two major search providers: Google and Microsoft Bing. Notice that there is a lot of overlap. Additionally, there are some secondary players in both markets. AOL still thinks of itself as a search engine, sort of, kind of, although its behaviour in that regard has been questionable for years, and has been schizophrenic: is it a search engine?

OK, I'll admit it. I don't usually like exit strategies. I really like people who are building businesses for the long run. I get excited when someone says to me, "I am building this to be a going concern." And truth is, even if you want to exit by IPO or M&A, having a long-term going concern is the best way to get a high valuation. But sometimes, as a consultant, I have a fiduciary responsibility to take the owners' (which includes management, founders and investors) exit strategy into account.

I was chatting online earlier today with a colleague of mine. This colleague has been highly successful over the years in large financial firms, taking on ever larger problems and fixing them, getting accolades and, along with them, promotions. He is a person whom I very much respect, especially his ever-present sense of humour. He had an insightful line during our conversation: "I have discovered that the most important relationships are with your peers - they decide in the end who gets promoted.

Nir Eyal is a brilliant writer who discusses the intersection of technology and psychology. His latest article, published in TechCrunch, discusses why so many "behaviour change" apps - e.g. dieting and exercise - have a quick drop-off rate, i.e. they fail. Quite simply, these apps cause people to feel required to do something as opposed to persuaded. People hate encroachments on their autonomy, even encroachments that they themselves have voluntarily adopted (see Egypt, Morsi, 2013).

In the early days of mobile, a major consideration of every app and platform developer was the limited connectivity. The then-very-popular Java (and continues to be, but has been usurped in startups by Python, Ruby on Rails and even Node), in its version for small devices called Micro, even has special "m0des" called CLDC for Connection Limited Device Configuration, i.e. you should expect to have limited connectivity. Then, with the advent first of GPRS (2G), then EDGE (2.

Rumours of the impending major Microsoft reorganization have been spreading around the Internet for weeks. One Thursday, 11 July, 2013, the reorganization was officially announced (see here, here and here). There has been a lot of analysis, almost like a Biblical word-parsing, but the raw text deserves some credit. Microsoft is (in)famous for its infighting among groups: server team vs desktop, Windows vs Office, Xbox vs Windows Phone, etc.

I have been a business traveler around the world for a good 20 years now. Since I only eat kosher food, I have been restricted in my meal choices, especially when visiting some of the more exotic world locations. There are, however, two constants I have always found: Pringles and Special K. Many of my North American compatriots find it surprising when I point out that the venerable 57-year-old Special K is actually quite different outside the United States and Canada, and, in my opinion, much better.

Steven Sinofsky, the formed head of Windows for Microsoft, had a long blog post yesterday discussing the dynamics of developing for multiple platforms - in his context iOS, Android and some smaller contenders (e.g. Windows Phone) - and how over time it becomes more and more difficult. He contends that initially, platforms tend to be similar, as they are trying to solve very similar problems, and their early, or "

Economics - one word guaranteed to turn off most people. Not for naught is it called the "dismal science." Personally, I love economics, because it teaches me how people behave. As a business person, as an executive, as a consultant, that insight is incredibly valuable. So if economics is dismal, how do I get the learnings across without making people's eyes roll (or head straight for Facebook on their smartphones)?

I love blunders and errors in translation. They make for such great fodder, and are one of the fringe benefits of being multilingual (in addition to being able to do business in multiple countries and cultures). Personally, I think the watering down of second and third language requirements in many schools is a great loss to society and business. One of the classic examples of marketing translation errors is the Dairy Association's hugely successful "

For over 50 years, American girls - and over time, those internationally as well - have grown up playing with Barbies. I have daughters, they play with them too. Just about every girl or woman I have spoken with and asked, has told me they played with Barbie, or at the very least had Barbie in the house. Barbie was first sold in 1959, and is still highly popular. They sold ~300,000 in 1959, and nearly 1BN (!

No, I am not referring to the pro forma apology every politician offers to get him/herself off the hook before running again (see under, Weiner, Anthony). I am referring to honest apologies that are perceived as honest by your customers. On Saturday, Asiana Airlines flight 214, a Boeing 777, crashed on landing in San Francisco International Airport (SFO). It is a tragedy that two appear to have lost their lives and more than 100 were injured.

Over the last few days, I have been thinking much about the founding documents of the United States, the Declaration of Independence and the Constitution. There actually is another document that most people forget about (since it is not binding today in any way), the Articles of Confederation. This was the treaty that bound together the very independent "countries" (States) from shortly after the Declaration until the Constitution was adopted in 1789.

My friend Jake Novak wrote a guest piece on CNBC the other day about the inexorable increase in college tuitions. While I don't want to get into the question of who is to blame - and thus avoid the left-right policy debates, since much of this readership is rather diverse - Jake had one really insightful and initially puzzling point. I quote: "In fact, the Census Bureau found that between 1993 and 2011, the average student loan debt for Americans with a bachelor's degree jumped by more than 82 percent, to $27,547.

Ben Horowitz, partner at Andreessen Horowitz, had a post this week criticizing the new organizational structure at Zynga. The founder, Mark Pincus, is stepping down from his CEO role to the Chief Product Officer role, while Don Mattrick, the former head of the Xbox business for Microsoft (although I believe his remit included gaming for PCs as well), is the new CEO. So far so good, except that Pincus remains the Chairman, so Pincus reports to Mattrick reports to Pincus?

On this July 4th, the American holiday of independence, let all readers around the world give thanks for the events of the late 18th century. While Britain is undoubtedly the grandfather of modern liberty, rooted in its 13th century Magna Carta declaration, and the works of its great liberal thinkers of the Scottish Enlightenment of the 18th century such as Smith, Hume and many others, and they in turn were inspired by the Hebrew Bible, with its declarations of freedom from Egypt, "

Someone recently sent me a disturbing article from May in the Washingtonian about nutrient shortages at hospitals in Washington, DC. According to the article, there are illness of malnutrition there not seen in many developing countries, especially for very early NICU children. I recommend reading the article in its entirety (when do I not?), despite its disturbing nature. The article, besides bringing to questions of social priorities (and hence policies and hence politics), sheds light on shortages.

TechCrunch reports that Outbox, the digitizer of snail mail, just raised a $5MM Series A investment round. When you sign up for Outbox, for $4.99/month, they swing by your house three times a week, pick up all your mail, scan it and send it off to you. If it is a package, they deliver it to your door. It is in early Beta in two cities, but undoubtedly a good part of that $5MM is for expanding coverage.

Entrepreneurship is lonely. That statement, short and hardly sweet, is probably the single most common characteristic I have seen to any type of venture: independent consultant, small business (a.k.a. lifestyle business) founder / owner, startup creator, growing business CEO, and even large company owner. In the last few days alone, I counselled an entrepreneur who mentioned how who mentioned to me how it was full of loneliness. If you are challenged by loneliness, if you must have a high social content for validation and support - which is not a weakness, just a different personality, one very well suited to most high-achieving salespeople I know - then you either need to avoid entrepreneurship, or find ways to manage it.

Behavioural economists are an interesting breed of people. They take classic economics, but add a large element of "human behaviour" study, usually known as psychology. The most famous of these is Dan Ariely, whose bestseller, "Predictably Irrational," is an excellent read, although some of his conclusions violate his premises. Behavioural economics shows that people are not quite as rational as classic economic theories would expect, and sometimes behave in irrational (but usually predictable) ways.

Late last night, Steve Blank tweeted the famous quote from Henry Ford (a notorious anti-Semite and Nazi sympathizer, which does not take away from his market prowess, let alone manufacturing genius), "Failure is simply the opportunity to begin again, this time more intelligently." As I wrote earlier, agile development, in the words of Josh Mahowald, chief architect for cloud of Genesys, is nothing more or less than the opportunity to fail quickly and in small ways, and thus be available to correct, rather than spectacularly and later, when correction is extremely expensive, often impossible.

As I mentioned in an earlier post, I spent a lovely few hours at the swimming pool with my family during their summer opening day event. There were lots of great inflatables with water for the kids: dragons on the water, slides into the water, etc. Since it was the first real time off for the kids, and it was a well-publicized summer opening event, the place was packed. There were easily 2-3x as many people as there normally are, leading to lines for each inflatable (total of about 8) of several minutes at least.

The other day, I took my kids to the local swimming pool / health club. In honour of the first real Friday of summer - all of the high schoolers are finished, the elementary schoolers are just about done - they had a "happening", with inflatables, slides into the water, inflated dragons on the water, slides on the grass with water running down them, lots of fun for the kids.

I spent the last few days fixing up my WordPress blog. Since I host my own site (i.e. I do not use a hosted WordPress providers such as wordpress.com or wpengine.com), making changes like additional Facebook "like" or Twiitter "follow" buttons, or Facebook "share" and Twitter "tweet" links, requires significant effort, even with the relatively robust WordPress plugin system. All of which led me to thinking more deeply about the entire open-source business model.

Reading the early notes for iOS 7 and OS X 10.9 Mavericks, I have come to an interesting conclusion. Apple and Google - two fierce competitors in the all-important mobile operating system space - have diametrically opposed strategies for capturing user interest. Apple - on both iOS 7 and OS X - in their interest to make everything as seamless as possible, is becoming ever more integrated. iOS7/OS X 10.

A few days ago, Esquire magazine ran a short article entitled, "Why Tipping Should Be Outlawed". Besides the highly entertaining clip from "Reservoir Dogs", the author makes several good points as to the downsides of tipping, as well as the history of attempts to ban - by law or social custom - tipping. Read the article for all of her points. The primary issue I have with the article, of course, is that the author does not like the status quo - for the record, neither do I - and recognizes that it does not appear to be changing, so she wishes to use the coercive force of state through law to ban tipping.

This past Friday's Wall Street Journal had a brilliant opinion piece on "Workplace Wellness" programs. Ignore for a moment (or forever, if you prefer) the opinion on whether or not Workplace Wellness programs actually, well, work. My real enjoyment in this piece comes from the absurd statistics pointed out in various Workplace Wellness studies. For the full list, see the article, but some entertaining highlights: US Corporate Wellness participants are "

Business Insider's Alyson Shontell claimed, based on an interview that Fred Wilson (whom I much respect, especially when I disagree), that Twitter almost had what it takes to kill Facebook. In this theory, Facebook is, at its core, "a photo sharing company." This may be true, it may not. Personally, I think Facebook has much more than that. But Twitter will not easily kill Facebook by just adding images, in addition to its native text and Vine video.

Last week, while in California, I had the pleasure of meeting with founders and/or execs from several businesses that are either built on open-source or contribute massively to open-source. While sitting with the last of them, I realized that I had seen several distinct business models for profiting from open-source, and they are worth sharing. Short Introduction (those in the business can skip) What is open-source? Open-source, normally applied to software but can be extended to other items as well, refers to releasing the original source code, the text that creates the program.

Unfortunately, Better Place is everyone's whipping boy today. After all, the company blew through upwards of $800MM (remember Webvan?) and is going through liquidation after it barely got started. While most commentators will focus on the money lost, and especially the massive hubris of the founders and investors (and which wildly successful world-changing startup didn't start with lots of hubris? It takes chutzpah to believe you will change the world!

When I went to business school, our economics professor used the various costs of MBA programs as a great example of fully loaded costs. A full-time MBA degree was about half the cost of an executive MBA. Considering how much harder an executive MBA is - try balancing school, family and the type of workload the kind of driven executives who usually take an executive MBA balance - and the higher cost of an EMBA was surprising; one would expect it to be lower.

Yesterday evening, I visited an old friend, who had a bright nephew, around 19 years old, over. During the discussion, which somehow turned to exchange rates, he asked, "what determines the exchange rate between currency X and currency Y anyways?" It was a great educational moment, always made simpler by real-world examples, which I love. After all, the great insight of economics is that it is not high-level theory that really makes up an economy, but just the sum of billions or trillions of decisions in the real world.

I have been following, and keenly interested in, Bitcoin and other alternative currencies for some time now; apparently I am in good company. Bitcoin has been getting lots of press, both good and bad, especially the wild swings in the conversion rates and the Mt Gox DDoS attack. But an alternative format (for lack of a better term) has been around for a while, called Ripple. The company behind Ripple's protocol and network, OpenCoin, is the one that received the Andreessen Horowitz backing, and is co-founded by one of the founders of Mt Gox, the largest Bitcoin exchange around today.

The Jerusalem Post on Thursday 9 May 2013 had a simple op-ed on affordable housing in Israel. My interest here is not the political side of it - which is most of what the article addresses - but the good use of metrics the author, Ron Diller, uses to lead off on the article. The author takes the average home sale price in Tel Aviv, average family income price, and relates the two.

Last week, I posted a detailed account of my experience trying, as a customer, to help Bauer Hockey improve their products and customer relations. Today, I received a first-class email from Ken Covo, VP of R&D at Bauer Hockey. This was the most forthright, honest and learning contact I have ever received from a company. Not only did Mr. Covo recognize the effort I put into helping them improve their products, for no remuneration at all, but he recognized that the incident showed that the product feedback process is broken, and that they need to change it so they can get, as he put it, a "

In an online discussion on Bitcoin, kidmercury pointed out an error of mine, related to Bitcoin (BTC) and inflation. In the earlier post, I mentioned that all fiat currencies, controlled by central bankers, are subject to inflation for technical reasons (bankers misjudge the amount of currency necessary), and political reasons (bankers know they need fewer dollars or euros, but by printing too much, they inflate the currency, reducing the cost of already outstanding debt to the government).

I love a good metric, one that provides critical insight into how a business is operating in one glance. It is never the whole story, there are always caveats, but the usage of the right metric is incredibly insightful (and, for lax management, "inciteful"). It can also lead to a dramatic change in behaviour. I once proposed a "Deployment Velocity" metric for a cloud company: +1 for every successful deployment, -1 for every deployment that: has deployment issues, does not solve what it is supposed to solve, or break anything that worked before.

Three days after I published my piece on Bitcoin, the WSJ's weekend interview, available here, is with the Chief Scientist of Bitcoin. I have always enjoyed their weekend interviews, even - or perhaps especially - when I disagreed with the interviewee. As a consultant and writer who is not a professional journalist, I do not have the time or access of the WSJ to conduct these interviews, so I am grateful they did.

I play ice hockey. I love it. Of course, hockey is a sport that requires gear; lots and lots of gear. After all, you not only need skates and a stick, but lots of protective equipment, bags to carry the equipment in, tape of various types, and so on. Since I play in multiple locations around the world, and have kids who play, I have quite a lot of hockey gear.

In the last few weeks, I have seen a surge in interest in Bitcoin from multiple sources. There were negative reports, such as those describing possible currency manipulation and the possible failure of one Bitcoin exchange. Then a report in the WSJ described that PayPal may be interested in accepting Bitcoin as an official currency. And yesterday, BusinessInsider reported that Chris Dixon, a top Silicon Valley VC and partner at Andreessen Horowitz, the firm founded by Netscape inventor Marc Andreessen and Ben Horowitz, is "

Slate Magazine had a fascinating article yesterday about how Facebook intends to make money. In the early years of Internet advertising, the assumption by most was that the Internet was better than traditional (print or television or radio) advertising for two key reasons: Impressions: Internet gave you the ability to show it to exactly the right number and kind of people, the ability to target impressions. This is just a more effective form of traditional print/TV/radio advertising, and is paid for in CPM (cost per thousand impressions).

The WSJ had a great article today on the challenges managers have in getting employees to take risks. It profiled a number of companies wherein they had been in survival mode for a long time, and employees had gotten used to being cautious. As one managing director told me at an overseas bank where I worked in the US operations, "the nail that stands out gets hammered." In his case, I believe it was meant to be a rebuke - I am usually the nail that stands out for advocating change and risk - but the mindset of being cautious was clearly there.

I grew up an engineer. You could almost say being an engineer defines me. When I worked as a manager of engineers, and I would go recruit staff, I would tell recruiters - in-house and external - that I wanted "engineers." "Ah, they would say, you want developer," or perhaps "programmers" or even "administrators." "No, I want engineers." They would ask, "what's the difference?" My response was always the same.

Twitter and Facebook both rely, fundamentally, on the same underlying human behaviour: exhibitionism. That might sound a little strange; after all, exhibitionism is usually personified by those oddities we see walking around Times Square in NYC in their underwear, begging the world to look at them. But exhibitionism is part of every human, to a greater or lesser degree. Even the most shy and reticent of individuals gets something of a rush in successfully performing - a presentation, a song, an act, delivering a paper - in a room full of people, and not for naught has the phrase, "

So Palm - or what is left of it, i.e. webOS - has been sold yet again. The number of deals around the creator of the handheld market, and, by extension, the smartphone, just keeps growing. First it was PalmPilot, then Palm Inc, then 3Com, then Handspring, then HP, then LG, and I am sure I missed a few in the middle, and reversed some of the order. Word on the street is that LG did not pay much for webOS; we likely know more early in 2014 when annual reports are filed.

Imagine the following scenario. You are in the middle of your working day, and take a quick break to check in on Facebook or Twitter. Someone posts the following, very common, drivel: "Spent ten minutes waiting for coffee machine at work. #notenoughcaffeine." A small minority of people will have some similar comment or reaction. The overwhelming majority will think, "who cares," ignore it, move on. Now imagine the following. You are in the middle of your working day, and an email, from a friend or colleague (i.

For many years, Yahoo was a poster child for the Internet boom. It was the first successful Internet portal, did a lot of innovative work on the technology front - both server-side and Web browser-side - and hired and gave lots of room to some great people. For example, while Brendan Eich is the father of ECMAScript (the official name for the language known as JavaScript), which enables all of those dynamic applications in your browser, like Gmail and Google Maps, Facebook and Twitter, and many more, the acknowledged guru of JavaScript nowadays is Douglas Crockford, a longtime Yahoo employee.

In a previous post, I discussed how audio/video, because of their 1:1 nature, are more "analog" or perhaps "serial" in nature, and thus highly inefficient compared with text/images, which are n:1 and are thus "digital" or "parallel." David Wenner noted that his app, VocalReference, uses audio, video and text to capture customer references, that it is more effective that way. In his words, the world loves video/audio, accept it. In end, we are both right, the key element is the context.

Cult of Mac, unsurprisingly a Mac-loving Web site, has an article from Feb 5th claiming it is mostly possible to replace your Mac laptop with an iPad, or at least the new iPad 128GB (nicknamed by many the "iPad Pro"). Apple definitely views its future in tablets, and doesn't seem to get too perturbed when Mac sales grow much more slowly than tablets. Most companies try to protect all of its product lines; Apple is famous for being willing to have a product line be cannibalized, as long as it is the one doing the cannibalization.

I had the pleasure of participating in an interesting discussion on the value of text vs audio/video on avc.com yesterday. The gist: non-interactive multimedia (audio/video) are a powerful way to get information to consumers (in the sense that they consume information) over the Internet. They are also incredibly inefficient. The last time I converted my old audio tapes and VHS tapes to digital, it took exactly as long as the tape.

The rumours of an impending deal to take Dell private have finally come to fruition, with a $24.4BN buyout deal. This isn't surprising. Besides the particular challenges Dell faces, ones that are easier to deal with as a private company with longer horizons than placating Wall Street this quarter, the general climate for public companies has become challenging over the last decade. Sarbanes-Oxley, state-level regulation, and a surfeit of lawsuits - companies now get sued for not a drop in share price, adding insult to injury - often make it simply worth being a private company.

I am a citizen of three countries - US, Canada, Israel, although with my travel I should get a United Airlines passport as well - all inherited. It has given me insight into various election methods, not only how one is elected - proportional representation vs ridings/districts, parliamentary vs executive branch, government-financed vs private-financed, etc. - but also in how one actually casts a ballot. In the end, whatever your system (assuming it is open and democratic in nature), each citizen needs to make their selection known.

In a previous post, we discussed why the textbooks market leads to such consumer frustration. Today, we'll look at what changes we expect. The biggest change in the textbook market, at least according to the press, blogosphere, and public opinion, is digital textbooks. But let's be clear. Digital textbooks alone will not solve this problem. Digital textbooks are more interactive, and lighter, and quicker to deliver. But the high costs, high depreciation rate and planned obsolescence in a captive audience are not due to manufacturing costs and shipping times, but due to textbook control policies by publishers.

I saw - and retweeted - the following by Sean Daly: https://twitter.com/seaneveryday/status/288698071871811584 Which said: @seaneveryday: Textbooks are like cars - they immediately start losing value as soon as you buy them. #edchat This is, of course, true. But everything you buy loses value, or depreciates, the moment you buy it. Sure, some things can be returned within 14 or 30 days, but for all intents and purposes, the moment you buy it and use it, it loses value.

Succession planning is a difficult job, for the CEO as much as the Board, especially if it is a public company. The CEO, by definition, is the generalist of the crowd. S/he is brought in because his skills match the top leadership needs of the company at the time. But a really successful CEO is usually defined by his bringing the best specialists with some general knowledge in as his direct reports.

TechCrunch reports that Apple may be interested in buying social navigation (and Israeli startup) Waze. None of this is surprising; if I were advising Waze (which I am not), I would have looked to Apple as a prime suitor. There area few key reasons for this: Apple needs a mapping win. After the debacle of iOS Maps, followed by the wild success of Google Maps for iOS, has their executives fuming, it desperately needs a win in the mobile Maps space.

There are lots of ways to make money, especially on the Web. One of my favourite bloggers, Fred Wilson, recently did a section in his MBA Mondays series on revenue models, and Steve Blank gives a pretty good treatment in his opus, "Startup Owner's Manual." Two of them, in particular, are relevant to Google: Multi-Sided Markets: I like to call this the "three-way model." I give something away for free to you, which draws you to my service, which convinces someone else to pay for access to you.

Wireless carriers have recognized for some time that mobile content consumption is an important additional revenue stream. This predates mobile Internet, as content owners would provide content via SMS, but it has become larger with the advent of mobile data over the last decade. Content providers particularly like the business model. Sure, they use the carriers as distribution channels, but the part they really like is using the carriers as billing mechanisms.

Every now and then, I am amazed by the dumb things companies do. Inevitably, they stem from someone in a headquarters going, "I know what customers need!" They then come up with a great plan to market some new service or offer that is so completely detached from actual customer requirements, that it is bound for failure. Not 5 minutes ago, in my inbox, I received an advertisement from El Al Airlines.

Mary Meeker is one of the great Internet analysts out there. She was at Morgan Stanley while I worked there (and she probably added a lot more value to the firm than I ever did), so I had the pleasure of hearing her speak a few times. A few years back, she joined Kleiner Perkins as an Investment Partner, where she puts out a once or twice a year report on Internet trends.

A client and friend recently refreshed my knowledge by pointing me back at Joel York's brilliant Software-as-a-Service (SaaS) business financial analysis posts, chaotic-flow.com. Joel comes up with his ten rules for a SaaS business. Although Joel targets SaaS companies, and in general all subscription-based revenue companies, in truth it applies to all companies dealing with growth that comes from extending revenue streams. Several years ago, I had a client (I believe they are highlighted in "

Now that the US elections are over, I am hoping that it is safe to deal with an issue that, to me, is an economics and business one, even if it remains political: the budget deficit. I will avoid the Republican vs. Democrat, where to tax/cut issue, and instead deal with it from a pure numbers perspective. My question is simple: how much money is there to tax if we want to eliminate (or otherwise) attack the deficit.

I had a very interesting discussion with Cam MacRae on AVC about how we incentivize staff, especially executives. One of the key - if not the key - lesson I learned in decision sciences, and apply regularly in business life, is that there is a distinction between good decisions and good outcomes. Good decision: a decision you make, given limited information at the time of the decision, that has the best expectation (defined mathematically or any other way you like) of outcome.

I have been rereading a large number of classics lately - literature, history, philosophy, economics, you name it. Among that list, of course, are Friedrich Hayek and Milton Friedman. In rereading Friedman, I came across a very interesting description. Not so many years ago (a sliver of time in the history of mankind, let alone the unrecorded history), only the truly wealthy could afford things beyond subsistence. Because just about everything was manual labour, you had to be able to afford to pay others to do work that was too much for you to do on your own.

In the first part, we laid down the principles and looked at an example in software development. In this part, we will look at an example in financial management. Like all parts of your business, finance has its processes, workflows and controls. Unlike other teams, finance interacts with every single other part of the organization. A customer support person may have no interaction with an online marketing / social media associate.

I do a lot of work with technology companies and divisions, which makes it ironic how I often weakness in tool selection. Tool selection is generally viewed from either a vendor-relationship perspective determined by the C-level in larger firms, or technical features determined by a niche specialist in smaller firms. Tools are meant to be used by individuals in concert with others, i.e. an organization, which means that tools have a significant impact on organizational workflows.

I am a big believer in simple and clean. One of the great reasons so many cloud services have taken off is that, even if under the covers they are complex to implement, to the user they are simple and clean. One of my favourite such services over the past few years has been FreshBooks. They solve a very real headache for many business owners, especially professional services firms, and do it in a clean and simple way.

You are sitting in a Starbucks. Perhaps it is a business meeting, maybe catching up with an old friend or enjoying a short break with a significant other. You might be alone, working on your laptop or iPad or even reading a book. Suddenly, the person next to you, someone with whom you have never exchanged a single word, asks if you will be there for a few minutes, and would you mind watching their bag, book, or even MacBook Pro, while they use the washroom or get a drink.

I have long believed that most people - even competitors - are eminently reasonable. Most people who take action that offend you, whether personally or commercially, are doing so for the most innocent of reasons. If only made aware of the impact of their actions, they would change them to everyone's benefit. Of course, that isn't always true, unfortunately (my neighbour's parking is a good example), and sometimes you need to take out the brass knuckles.

For a long time, beyond the intrinsic ease of shopping experience, Amazon enjoyed a price advantage over local retailers in most markets. The price advantage came from three sources: Scale: Amazon is simply a very large operation, and so can source goods more cheaply Operations: Amazon is what we used to call a "Web pure-play", and so can maintain less physical space, mainly warehouses, and do so in less-expensive locations than local stores that depend on accessibility to and desirability of local customers Taxes: Under the 1992 US Supreme Court ruling Quill v.

Here is an interesting thought - I don't know how to disrupt the raw labour service sector. What do I mean by that? Every sector of the economy starts off as labour intensive. Eventually, capital replaces labour, or the majority of it, making the services higher quality and lower cost. 100 years ago, all food was picked by hand. Every single apple, every stalk of wheat, every ear of corn, had to be picked by a person, generally one of low wage.

Fred Wilson (partner, Union Square Ventures in NYC) is one of my favourite bloggers at avc.com. He writes pretty much every day, his topics are usually interesting, and the highly active community makes for great discussions. Steve Blank writes at steveblank.com far less frequently but equally interestingly about a more narrow focus - successful startup building. Steve is a real legend in the startup community, the author of the transformational "

I have been trying to understand the mobile carrier business for some time. Perhaps it is because I wanted to disrupt them for at least as long. I do not expect to - mobile carriers, even just data, even an MVNO, is an incredibly capital-intensive business, with very high fixed costs, and therefore not one that a nimble startup guy like me can attack. I can manage those industries, and have advised to such capital-intensive ones, but doing it on my own as a startup requires raising and risking more capital than I am comfortable with on my own.

I believe a number of elements are coming together to make it inevitable that Apple will go after the carriers, first with their own MVNO and then eventually with their own full-fledged carrier. I believe tight government regulation of the carriers is the one reason Apple will be hesitant. First, Apple is now an iPhone company. I love my iPad and my MacBook Air, but the bulk of Apple's revenues and profits now come from iPhones.

As a rule of thumb, it is known that acquirees are disposable. Essentially, if someone bought your firm, you are in a weaker position and are relatively disposable. There are exceptions to this rule, for example, if the company bought the firm specifically for its people, as is often the case in tech (Google and Cisco are both well-known for acquiring for the talent), or if it bought it for an ongoing project.

I have been involved in tech - either the tech industry (sell side) or IT (buy side) for pretty much my entire career. People in tech are, overall, smart, dedicated... and a little obsessive and focused. We work night and day, on crazy deadlines, whether you are developer or administrator, management or staff, marketing or R&D. Part of it is the mindset, and part of it is the expected culture.

I saw a great article today, an interview with Drop.io's founder Sam Lessin and NYTech Meetup's Nate Westheimer. The gist? Non-technical founders will always make "subpar products that fail slowly." The main thrust of the argument is that non-technical founders have vision, and in translating that vision to the implementors, well, something gets "lost in translation." I am an engineer at heart. I consult nowadays, most of the time on technology and business operations, oftentimes also on product strategy.

A colleague of mine recently sent me a great article on Forbes called, "Why Siri Needs an API." While it was an interesting article, it had one great line, which I loved. "During the last five years, APIs have begun to be recognized as one of a company's most enduring assets." API - Application Programming Interface - is the well-defined methods and interfaces that enable other developers and engineers, i.

A lot of ink has been spilled over the last several weeks over the pending health-care requirement that all employers cover contraception at no cost to their employees. I am not interested - as a professional, at any rate - in whether or not the mandate is, per se, good public policy; I am not interested in whether or not contraception is morally good or bad. I am interested in two key elements:

I read a very interesting - and contrarian - article in Reuters today. The article argues that it is possible - and given that those with a vested interest like Trulia and Bankrate hesitatingly agree, it is probably more likely than possible - that home ownership may be emotionally fulfilling, but it is a poor wealth creator, i.e. real estate is not a great investment. The article led to my thinking about all investments, and whether real estate, in this respect, is unique.

The trademark spat between Apple and Proview of China just got really interesting, and, ironically, reminded me of Air Canada. For those not following, Apple claims it bought the worldwide rights to the trademarked term "iPad" several years ago, but Proview claims it did not, at least in China. On that basis, Chinese officials have been seizing iPads from retail outlets in China. Further, as the above article states, Proview is now trying to get Chinese officials to block all exports of iPads.

I read a fascinating article in today's WSJ, available here, about how AOL was the first Facebook, that really understood the value of community. Unfortunately, as they became a public company, a "Taliban" of MBAs came in, focused on short term profit and their own reputations, and killed the real long term value of AOL. In many ways, I can appreciate his perspective. Many companies have been killed by naive MBAs who think the formulae and theories they learned in business school can "

In the last several years, the concept of 3D printing has shown significant promise and even actual execution. 3D printers have existed, at least according to Wikipedia, since the 1980s. However, the combination of reduced cost of printer, increased flexibility, and expanding number of materials which can be shaped using a 3D printer has brought 3D printing closer to the regular end-user. I do not know if 3D printing will ever be a desktop experience.

Finally. RIM's management has stepped aside. After 20 years running Research in Motion, Ltd., from startup to superstar to falling star, Mike Lazaridis and Jim Balsillie have stepped aside as co-CEOs and handed the reins to Thorsten Heins, formerly RIM's co-COO. Of course, Balsillie and Lazaridis will remain active Directors, so one wonders how much maneouvring room Heins will actually have, but it may not matter that much. Heins is set to stay the course, and believes in RIM's strategy.

So Zappos was breached. It happens every day, certainly far more often than we hear about in the news, and, I suspect, more often than is reported to the appropriate law enforcement agencies, primarily the FBI cyber crimes unit (whose exact name escapes me at the moment). I have done a lot of work in the cyber security space, in financial and retail, internal corporate and external facing, including compliance with the card industry's official standard for cyber security, the imaginatively-named PCI-DSS.

Today, in the Harvard Business Review blog, Anne Kreamer discussed the exciting new finding that reading books, general books, even (horror) fiction or literature, stimulates new pathways and is beneficial to your social interaction and, by extension, your usefulness to society and the economy. Thus, one no longer need to feel guilty about reading, whether John Keegan's military history or Clayton Christensen's Innovators Series, whether the Great Gatsby or Harry Potter.

A year ago, I wrote a piece on the tension between HTML5 and Native Apps, especially as it was playing out on mobile devices. The original is here. I found it interesting how the world flocked to the Web to get off of native apps, yet in mobile had flocked to native apps. At least partially, I think that people were actually flocking to the idea of the cloud, rather than the no-distribution (or "

Paul Vixie objected to a response on thehill.com (my response is on page 2 of the comments) to his (and other key Internet engineers') objections to SOPA/PIPA on technical grounds, response by Paul is here. I agree wholeheartedly with Paul on the technical issues - not sure I would publicly try to disagree with Paul on the guts of DNS - but there is a more fundamental issue at stake, specifically the limits of government intrusion vs.

One of my favourite daily reads is Fred Wilson's AVC at avc.com. I don't always agree with him, but Fred has some great insights, raises interesting issues, and every one of his daily posts has 100+ comments. The community Fred has gathered around his writing is phenomenal. I think if he could find some way to monetize it, he could retire from the VC business, although I strongly suspect he enjoys it too much to do so.

A piece on Twitter today made me think of the Second Amendment. Apparently, a Massachusetts DA used a subpoena to get information on some Twitter users, and then made the mistake of asking Twitter not to inform the user. Twitter promptly ignored the request to keep it secret, while still complying with the law by providing the user's info. What does this have to do with the Second Amendment (while steering clear of the politics)?

A few months back, Marc Andreessen posited that Oracle was in really big trouble, it just didn't know it yet (at least not publicly). His experiential reasoning: he invests in lots of companies, and is connected to many many more, and not one of them, without exception, uses Oracle. Everyone uses either MySQL/PostgreSQL (i.e. open source) SQL, or NoSQL Mongo/Couch/etc. Yesterday, Oracle's earnings came out, revenue was basically flat, and the share plunged.

I saw a great article earlier this week, listing large tech company CEOs who are most hated by their employees, based on their approval ratings. The article is available here. My first reaction was, "who cares?" A CEO's job, after all, is to work for the owners, not the employees. If s/he delivers value, who cares what employee approval ratings are? On reflection, though, I realized that my attitude was wrong, beyond my not wanting to work for such a CEO.

Clay Christensen is famous for his disruption theories. Lately, interestingly, he has been bringing examples of some large companies that have been successful at innovating and hence disrupting themselves. One of the key point so this theory is why existing large players find it so difficult to innovate disruptively, and therefore give opportunity for tiny startups to overturn their markets. Essentially, it is in their DNA, and hence organization structure, projects, budgets and even comp plans, to protect their existing markets and squeeze more cash out of them.

ABC reported this week that the French company Atos will be aggressively moving to a "zero email" policy, at least for internal communications. The rationales appear to be: People in the real world are replacing much of their email communications with IM, SMS and platform-specific messaging, like Facebook Only 10% of email messages in the company have value, while an additional 18% are pure spam. I agree that many people are switching from email to platform-specific, IM or mobile communications (roughly including SMS and iMessage in the latter).

Last night, I had the pleasure of speaking with an old friend of mine. He is a fairly experienced executive with M&A, so naturally we discussed the DOJ and FCC attempts to torpedo the AT&T/T-Mobile tie-up, as well as the general difficulty of getting an acquisition done, especially when there are interested lawyers on multiple sides. I have always been a big believer in the power of words. For example, "

Today, IDG posted an article that Steve Jobs was looking at using unlicensed WiFi spectrum to create a direct competitor to mobile carriers. Although the effort failed, many viewed this as another proof that Jobs, as always, needed to control the entire experience. My take is somewhat different. Mobile phones have only really been around for 20+ years, and digital mobile telephony and mobile data for far less than that.

Back in 2004-2005, while doing my MBA at Duke's Fuqua School of Business - which was an excellent experience at a great school - I had the pleasure of studying marketing under Preyas Desai. A few days ago, Duke, together with Rice University, published press releases announcing research by the same Preyas Desai and his colleague Dinah Vernik at Rice. Their conclusion, which is counter-intuitive to the record labels but, ironically, makes perfect sense to many of us, is that removing DRM may actually reduce piracy.

A lot has been written about the impact of cloud computing - on-demand with massive virtualization - on deployment of services and, perhaps more importantly, the reduced cost to market of Web-based businesses, thus spurring significant entrepreneurship. An interesting side impact is the effect on the rate of technology change. New technology platforms, and especially software platforms and frameworks, are developed and released all of the time. Yet, there is usually a relatively slow uptake on these new technologies.

I love straight talking CEOs. Most people have a pretty good BS-meter. When someone - especially their own management and especially executive management - is trying to "spin" something, or hide bad news, or similar secretive activities, people can smell it. Some have better sensors, some worse, but employee morale takes a hit, and in the worst way. Consultants like me are pretty good at ferreting out why employees are unhappy, but it is extremely hard when there is simply a sense that execs are hiding something, but employees cannot clearly articulate it, and often are afraid to mention it even if they can; after all, if management kept it secret, could their even mentioning it get them into trouble?

Henry Blodget (here) put me onto this excellent analysis by Horace Dediu of Asymco of why Apple released the iPhone 4S - despitw what it must have known would be tepid reviews - rather than a completely revamped iPhone 5. The analysis is worth reading in its entirety, both the original and Blodget's short commentary. However, I think two key points are worth considering at the higher level: Apple is a business.

Steve Jobs was a difficult man, as most geniuses are. The (in)famous movie "Pirates of Silicon Valley" captured so much of the complex younger man, his personal life and his interactions with competitors, partners and employees. Yet, he was a great man, a true visionary. He changed our lives, with the first accessible personal computer, with NeXT which led to Mac OS X and the current Mac resurgence, with the iPod and the iPhone and the iPad.

I have been reading Eric Ries' excellent book called "The Lean Startup," highly recommended for anyone in the entrepreneurial business, whether it is a fast-growth tech-startup or just a local laundromat. For that matter, I also recommend it for managers at larger firms, both in terms of managing their own internal innovation and in terms of understanding where their own metrics may fall short. One of the interesting factoids about the MBA degree (of which the author is the proud holder of one from Duke University, an innovative and collaborative environment) is that business schools were originally founded for engineers.

Like most people - well, at least those who really get how startups and disruption work - I am impressed by Reed Hastings (Netflix CEO) willingness to take brutally painful short-term steps for the long-term benefit and viability of his company. He mentions several times in his posting that he worried about one issue more than any other over the last five years: will Netflix be able to make a successful transition from DVD-by-mail to streaming-over-Internet, or will it be too worried about cannibalizing its short-term cash-cow DVD business to successfully launch and grow its streaming business?

I love America. One of my favourite books starts that way, John Keegan's "Fields of Battle: The Wars For North America." One of the things I love about America is the incredible drive for entrepreneurship, the idea that if you have an idea, well, follow it all the way through. You can be innovative in any market, anywhere (assuming government hasn't enforced some monopoly), and if what you have to sell is a better product/market fit, including better customer service (see "

The Atlantic had a funny article - well, funny to me, perhaps not to everyone - that Angry Birds, the game, is "costing" American businesses alone $1.5BN in lost wages and/or productivity per year, on average. The math is very entertaining, and makes some assumptions, which they themselves admit are assumptions. Either way, they come up with the rough $1.5BN lost wages figure. Whether the assumptions are off by 33% up - and the real number is $1BN - or 50% down - and the real number is $2BN - or any other error, the problem here is not technical, i.

We all wish we could wish our wishes into reality - yes, that was intentional - but when a large company starts doing it, short the stock. Apparently, Martin Fichter, the president of HTC America is convinced HTC is about to dominate the market because, well, iPhones are "a little less cool." The story is on geekwire. I am not quite sure how you scientifically measure cool. But this is clearly Fichter wishing iPhone were less cool, so that more people would buy his (obviously cooler, in his not-so-humble opinion) HTC phones.

In a piece of good news, Yahoo finally got rid of Carol Bartz. She had been brought in to turn around the ailing company, one-time icon of the Internet about which it was said (including, supposedly, to the Google founders), "search is over." Unfortunately, the situation never improved, and it seemed clear for many, at least on the outside, that she wasn't going to be the one to save it.

I had an interesting insight a few days ago, one that I have had before. I have always loved the phrase "Nature Abhors a Vacuum". While in the physics term, it normally means that if you have a vacuum, i.e. lack of anything, nearby physical elements will expand to fill it (generally limited to gases and, to some extent, liquids, but this is not a physics lesson and my undergrad engineering was almost 2 decades ago), this phrase has particular application in the psychology, and hence business, realm.

It is about time someone with more heft and readership than I have said it. I recommend everyone read this. http://www.businessinsider.com/how-to-get-rid-of-patent-trolls-for-good-2011-8 Good for Pascal-Emmanuel Gobry! As a quick example: it is pretty clear that a large part of Google's purchase of Motorola Mobility for $12.5BN is for their patent portfolio. Google could easily invent anything relevant to their current and future needs; but you cannot create the legal protection - protection money?

Continuing our previous article, Amazon, with much fanfare, released their html5 offline Kindle app, http://read.amazon.com. It has been heavily reviewed, obviating the need for another extensive review. Suffice it to say that the book addict in me loved the platform (yes, I tested it offline), while the engineer in me loved the design and engineering. It actually took my wife a few moments to realize we were in a Web browser, and not in the Kindle app.

Yesterday, I bought a subscription to the WSJ Tablet Edition.It was ~$18/month, and includes simultaneous access from three devices (any combination of iPad, iPhone, iPod, Android) and Web access. It includes archives for 7 days offline, and access to the US, Europe and Asia editions. Compared to the $28 I was paying for the local copy of the WSJ Europe, it is a bargain, and means I have it whenever I travel.

Steve Blank had a great article today on how Silicon Valley changed the very culture of business, wherein engineers and scientists led the business. One of Steve's main points is how, like in research labs there is no penalty for making mistakes, similarly in the market, these entrepreneurial firms used the same culture to experiment (in Steve's language "pivot" while "searching for a customer"), until eventually finding sustainable business models.

Steve Blank has a very funny story posted on his blog, about when he was raising a round of money for E.piphany from Infinity Capital. He wanted a $10MM valuation, they insisted it was too high and everyone would laugh at them. In the end, they came back with... $9.99MM. The rest of the story - dust, walls and pictures - is quite entertaining, but the interesting lesson is about the difference between $9.

All technology companies have engineers, team leads and managers. Some have good QA, others have good product managers or even program managers. But not everyone has architects, and those who do are not necessarily strong. The question cash-contrained (and who isn't) company executives ask is, "why do I need to spend a *lot* of money to hire a technologist who is not actually writing code?" The answer is often either not to hire an architect, or to take a weaker person and "

The NY Times reported on Thu that when Mark Zuckerberg is ready to make an offer (or seduce someone, meant in the most positive way) to join Facebook, he takes them for a walk in the woods. Some actually find it strange - although given some of Mark's reported early antics, nothing should be strange at Facebook, again, meant in a positive way. I believe that there are only two kinds of people in the world: those that think they are crazy and those that don't know it yet; it is the latter who attack post offices or Wal-Marts (or airports).

I read a great post earlier this week, whose thesis can be summed up as "your startup isn't unique, and it doesn't matter." Adam Ludwin, of RRE Ventures, argued that the success of a startup is not determined by its unique technology or innovation, but rather by the mix of good timing (the market must be ready for it) and good people (solid execution). This is probably the most important post I have seen, for entrepreneurs, in a long time.

I read an interesting article today about what Peter Thiel, one of the best-known early investors, asks any startup founder. He wants to know why employee number 20 will join your company. Employee number 1,000 is easy: company is stable (relatively speaking; ask Dick Fuld), money is relatively plentiful, lots of different career paths. Employee number 5 is also easy: lots of equity at a low valuation, which means huge upside if the company does well (which is the definition of risk).

HP, intrepid acquirer of erstwhile darling of the mobile set Palm, has taken the little bit of value left in Palm, WebOS, and is building its new platform on it. It is important to remember that HP used to be the vendor to go to to get Windows Phones (or WinCE, or Windows Mobile, or whatever branding they stuck on it in an attempt to make it palatable). Windows Phone is basically dead in the water, and HP, which sees the beginning of a death spiral for Nokia, and an advanced one for Blackberry, wants to save its mobile business.

Mark Feldman, the CEO of Ziontours in Jerusalem, wrote an article in today's Jerusalem Post describing the many changes in baggage policies of airlines over the last several years. Since Mark is based in Israel, unsurprisingly he focuses on the policies of major carriers to/from Tel Aviv. Americans and Europeans who have gotten used to being squeezed on baggage charges over the last decade would probably be surprised to hear that most carriers - El Al and all the North American based ones - offer two free bags of up to 50lbs/23kg to Tel Aviv.

I have read many many articles that suggest startup developers should be conscious not to aim for perfection early on - they will get the perfect product that will be irrelevant by the time they finish it - but to pay close attention to architectural choices. What they do today may be one day in one direction or another, but can be millions and months or years of work to change down the road.

According to today's WSJ, Ron Johnson, the head of Apple retail, left to become President (slated to be CEO in a few months) of JCPenney. This is a big loss for Apple, and a gain for Penney. However, Apple is an upscale brand with strong brand equity. Penney, on the other hand, is a low discount retail chain. Before Apple, Johnson was a VP at Target, the mire upscale big box store.

When looking at starting a venture, most entrepreneurs and investors tend to categorize the type of industry and the requirements for success. Commonly used differentiators are retail vs corporate, direct vs indirect sales (eg the Facebook model where the actual users are different than the paying advertisers), capital intensive vs light (eg chip design vs web services), etc. Many investor groups explicitly focus on one or more differentiators, since they know the requirements for success.

Who remembers AOL Keywords? For that matter, who remembers when AOL actually mattered? I thought about them this morning. Steve Rubel, on his blog, referenced a googlesystem posting here, that Google is looking to replace URL's with names in search results. From AOL's, sorry, I meant Google's, perspective, that is not surprising. They (a) want their content to be more relevant to real humans, (b) look to optimize (as a commenter on that link indicated), and (c) prefer that the info you get from Google is not necessarily available elsewhere.

Years ago, my children attended a private Jewish school in New York. As it was a community Jewish school, the school had support programs for children whose parents could not afford the $20k+ tuition. In a conversation with the school director about the structure of the scholarship program, she explained to me that they distinguish between "cash" problems and "cash flow" problems, or what those of us in the business world would call "

Apparently, Jon Kaplan, the founder of the (sold to Cisco and now shuttered) Flip camera, is going into the grilled cheese business. He is starting a chain of fast grilled cheese sandwich businesses, with $20MM+ from Sequoia to boot. I have seen a lot of reporters and bloggers surprised, asking what a guy like Kaplan, a tech founder, is doing in the food business, and what Sequoia is doing funding it.

As a follow-on to yesterday's post, something struck me about Apple's 10K. Apple says that it manages its business by geography. Its operating reports reflect it: Americas, Europe, etc. Yet its Retail business - across all geographies - is a separate segment. That makes a lot of sense from a business sense, and is probably a critical reason for its success. However, what is more impressive is that they managed to get it done.

I had the opportunity to visit Apple's retail store in Tysons Corner, VA, twice yesterday - unfortunately, it was for repairs, not for fun - and will return again today. I was struck by how busy the store was, and, in general, how Apple has succeeded in its retail stores. Just about every company that tries to get into direct retail from wholesale, or from ecommerce to bricks and mortar, flounders.

Square just announced a new app, Card Case, to make payment easier to merchants that you know. Essentially, you keep records of your cards with Square, and then pay participating merchants by sending them payment through your mobile. The merchant, of course, does not have nor need to have a copy of your card. That sounds suspiciously like another "killer app" that was going to "change the world of finance"

Back in the 90s, a Sun engineer, if I recall correctly, wrote a paper arguing that the true test of a system is how it behaves during failure, not during success. The paper's primary focus was tech systems, of course. If there is an error, a user-friendly error message is far more useful than the infamous Microsoft Blue Screen if Death (BSOD), filled with unintelligible hex characters. Last night, I stayed at the Tarrytown House Estate hotel.

Well, in addition to big layoffs, it looks like John Chambers is finally getting rid off Linksys and WebEx, in addition to his recent shuttering of Flip. While I disagreed with the closing of Flip - it should have been sold or spun off - I agree with the mindset: Cisco is an enterprise communications products company. For years, Cisco did almost no consulting, allowing it to focus on the best products, and building up a solid partnership network which engendered fierce loyalty from the same consultants.

Yesterday, Facebook COO Sheryl Sandberg spoke at Barnard's commencement ceremony. The video of the speech is on Barnard's Website, and someone transcribed it here. Besides being an interesting speaker and an executive at one of the key tech companies in the world today, I have a particular interest in this speech. I graduated Columbia shortly after Sandberg graduated One of Sandberg's key points is that her generation, the one that graduated Harvard, and my wife graduated Barnard shortly thereafter.

Yesterday, Google release pivot tables for Google Apps spreadsheets. Any power user of Excel knows about pivot tables, and has used them for years, if not longer. I have seen a large number of articles in the last day mocking Google's making a big deal of pivot tables; after all, Excel has had them for so long, there is nothing innovative about them. I beg to differ. True, there is nothing innovative in the concept, but implementation, especially on a Web scale, is not simple either.

About a week ago, I received an email from Google, which, I imagine, sent the same email to many customers. The Google Apps for Your Domain service used to be free for unlimited accounts in a domain, unless you wanted premium features: better account control, no targeted advertising, etc. As of the near future, unless you are grandfathered in, free Apps accounts will be limited to 10 users, above which you must buy the paid service, $50/year/user.

There is a very old line in business: the easiest customer to get is the one you already have. There are lots of variants on it, such as, "upsell is easier than new-sale," but the principle is still the same: it is much easier to sell to an existing customer than a new customer. In many industries, this can be difficult. As good as IBM's legendary sales staff is, if your customer already has DB2, it is hard to also sell them WebSphere.

Way back in early Internet history, as in 1998, someone recommended to me Wendy Goldman Rohm's book, "The Microsoft File." It was a pretty damning indictment of Microsoft and its founder, Bill Gates, and its anti-competitive business practices. In 1998, Google was just being founded, Microsoft was the company to beat (if it was possible), and I ordered the book via Amazon, whence it came via UPS. Nowadays, Google is considered the behemoth, Microsoft, despite all its cash, appears to be a has-been, and I get most of my books digitally to a Kindle or an iPad.

At least one of my theories is (as far as Microsoft is PR is concerned) disproven. I theorized that Microsoft would consider making Skype, with it 600+MM users (for perspective, as big as Facebook), a Windows Mobile exclusive, saying, in essence, "if you are a Skype user, and want to Skype on the go, then you need a Windows Mobile device." From Microsoft's perspective, it would be a (possibly) smart move to drive customers to WM devices, albeit with the risks that (a) Skype may not be a sufficient make-or-break for sufficient to tip the market, and thus could drive many away, and (b) it would open the market to alternative VoIP platforms on iOS and Android, where many possible competitors today simply say, "

Here is something risky: a self-described non-sales-person is going to write about sales. I grant myself a little license, since it is about selling to the exact role I played as a buyer in enterprise IT shops for a decade. There are hundreds, if not thousands, of companies that have failed due to their inability to sell to, or are currently frustrated trying to sell to, enterprise IT shops. I speak not of those with miserable products, or poor financing, or subpar executive teams.

I rarely post about the same company twice in a row, unless it is a part I/part II series. And, unlike many, I have no fundamental issues with Microsoft. Steve Jobs once said that Microsoft "has no style." It may be true, but they sell products that billions of people (and millions of businesses) voluntarily buy; I have no direct issues with them. But, after last week's "kvetch" (no better word) about Google Apps, this week Microsoft reportedly bought Skype for $8.

This week, Microsoft released a new whitepaper (available here) that decries (kvetches?) that the real cost of Google Apps is much more than the $50 per user per year that everyone assumes. It lists various areas where Google Apps is either weaker, or where there are significant costs, specifically around ongoing support and one-time migration costs. In the words of my kids, "Well, Duh!" Microsoft is not trying to convince the individual casual (or even serious) users, to whom such issues as Exchange migration costs are irrelevant.

Two weeks ago, with the removal of Eric Schmidt as CEO of Google and his replacement by Larry Page, Ben Horowitz wrote a fascinating article comparing CEOs to Tom Hagen: there are wartime CEOs and peacetime CEOs; Schmidt was peacetime, but Google is entering the wartime phase in the world of social. By all accounts, Page is obsessed with catching up on social, and has even made it part of every employee's compensation plan.

This short posting is a follow-up to the one last week about Amazon's culture and its outage. Amazon has finally explained what caused the outage last week. The explanation is long and complex, but boils down to an avalanche. One relatively small problem caused a few more, which cascaded into a large issue, similar to a small snowball down the side of a mountain causing an avalanche. I have been there, I know it, it hurts.

I could make many arguments on this, but Jeff Bezos did a great job in his letter to shareholders, published yesterday. Interesting aside for those who run companies that work online. If you look through the list of technologies he has implemented, significantly more than half of them, and likely a lot more than half of Amazon's R&D investment on the innovation side, is in infrastructure, that platforms on which all of the software/Web applications run.

Last week, Amazon's EC2 business suffered a significant outage, which took down a significant portion of hot start-ups and existing businesses alike. While the technical causes of the outage are interesting, and have been dealt with - at least with what information is available - in other places, including http://blog.rightscale.com/2011/04/25/amazon-ec2-outage-summary-and-lessons-learned/ (thanks to Josh Mahowald for the link), I find the crisis management most interesting. Amazon's communication level during this incident was an F, and that is being generous.

For roughly 3,500 years, Jews have eaten unleavened bread - Matza - as the staple of the roughly one week annual Passover holiday. It is a severe religious violation to eat leavened bread, even matza that accidentally rose too much. Unsurprisingly, matza was made by hand for all of those years, carefully watching the clock (or sundial, or other time keeping method). Also unsurprisingly, like any hand crafted item, matza was exceedingly expensive.

The Internet is great. It simplifies a lot of things, makes others cheaper, and often brings win-win situations. Take airlines (if you have the money to actually take them). Before the Internet, you made a reservation with your agent, who had an expensive computer connection to the airline. When you got to the airport, the check-in agents, gate agents and flight crew would go insane trying to balance families, groups that traveled together, safety and weight considerations, frequent flyer priorities, etc.

When Apple first released the iPhone, the only way to get apps on the phone was via the Web browser. It ran on the Web, (or from Apple) or it didn't run on the phone. In July 2008, Apple opened the App Store, allowing certified apps to run on the iPhone. Along the way, it took 30% of the sales price of the app, not a bad deal for everyone: the developer (many of them small) got better coverage, while Apple received a pretty hefty chunk of the sales price as commission.

Years ago, I had the pleasure of having lunch with the late Sanford C Bernstein, the founder of the eponymous company and the creator of the money management industry. He made the argument that capitalism was the perfect system, because it was the only system that viewed people as people were, rather than as they wished they would be. In essence, Sanford argued, capitalism is the only system that said, "

Open-source, as discussed in the previous posting on network equipment, is a fascinating world. Perhaps the best intellectual and business promotion ever written is Eric Raymond's "The Cathedral and the Bazaar." There is no question that open-source has led to an upheaval in the world of business technology, enabled entirely new industries, and benefitted the overwhelming majority of individuals and companies out there, with few tears shed for those commercial vendors that have lost business due to open-source competitors.

If you asked anyone current in the technology world to say the first word that comes to mind when told networks, it is a fair bet that 99% (if not more), will say, "Cisco." For years now, Cisco has dominated the business of network equipment. Despite challenges from Juniper, 3Com, Bay, Nortel and many others - including many no longer with us - as well as from Asia such as Huawei, Cisco remains dominant.

Clean technology, especially energy generation, has generated (pun intended) an enormous amount of interest lately. Using one simple (and admittedly simplistic) metric, VCs invested almost $5BN in green/clean tech in 2009, out of a total of just under $18BN, or over 25%. Given that most VC investments involve uncertainty whether or not a market will adopt new technologies or services, but not whether or not they will work in the first place, while clean/green is often a question as to whether or not it will even work, that is an astounding number.

Ten years ago, two colleagues and I decided to create a start-up to create electronic academic transcripts. For various reasons, mainly involving the movements of the dominant player in academia IT, we decided not to pursue the venture. In the end, the dominant player did not move in that direction, leaving the market wide open. In the years since, several ventures have pursued this market, notably TranscriptCenter and Scrip-Safe. In the last half year, discussions have renewed as to whether we should venture back into the e-Transcript market.

Cloud computing is all the rage, and for very good reason. The economics of everything within cloud computing - Software-as-a-Service, Platform-as-a-Service, Infrastructure-as-a-Service, Storage-as-a-Service, basically anything "XaaS" - are just way too compelling to ignore. Unless you are: so big that you cannot gain any more economies of scale, e.g. GE or JPMChase; dealing with such sensitive data that you must host it on your own, e.g. Bank of America or anyone processing credit card transactions; or dealing with such flows of data in-house and on-location that doing it offsite makes no sense, e.

A few weeks after writing the article on my vision for the future of the mobile carrier industry - let's call it the "pipification" (as in turning into pipes) of mobile, especially with the advent of 4G in the form of LTE and WiMax, and the subsequent conversion of everything into data, including voice, data, SMS - I came across the October 29, 2010, issue of Forbes magazine. Cover story?

White Goods are normally defined as those basic bland appliances we use around our house, usually the large ones: fridge, washer, dryer, dishwasher, oven/stove. This is a fairly staid market, and has been for many years. Whatever little innovation there is normally comes in terms of features added on. Thus, there may be a new "high-value" GE or Amana line, which may include digital temperature controls instead of a knob, or stainless steel instead of white exterior.

Wireless carriers are the company everyone loves to hate. No one denies that they bring an invaluable service. However, their legendarily awful customer service; lock-ins and contracts; early termination fees; obtuse bills; and obscene roaming charges force us all to wish there was a better way. I believe that current trends will create new forms of wireless carriers that are likely to spell the death of the old ones, unless they find the ability to innovate and cannibalize their own market.

Undoubtedly, the hottest - and most critically analyzed - announcement of the last week has been Apple's release of the iPad. I will take a slightly different perspective on it, looking at it from the perspective of the iPod. We will do this from two angles: marketing and long-term strategy First, from the marketing perspective, I believe this device's name is awful. Jokes abound on the Internet within a day of the release - and having spent almost a decade on Wall Street, I suspect it took less time than the fastest trade-processing system for the jokes to hit the trading floors - about whether it is an Internet device or a 21st century sanitary napkin.

Many sectors, especially technologically-driven ones, have undergone at least one if not multiple revolutions in the last half century. Much of the technology-driven ones can be laid at the foot of two major technologies, fiber optics (for long-distance high-speed communications) and the integrated circuit, whose children include just about everything on silicon, and, in its microprocessor variant, follows Moore's Law. Two areas that have, frustratingly, followed evolutionary, and at times very slow evolutionary, paths are transportation and portable-power.

Programming languages are an interesting area of technology. On the one hand, they are the indispensable basis for everything that is done in software, the Internet, embedded devices, essentially everything in technology, and thus are invaluable. Advances in languages - from assembler up to the latest high level languages - are what have made possible the creation of portable devices, Google, Facebook, Microsoft Word, and everything else we do. On the other hand, from a business perspective, they are the arcane "

Business Insider, in its 18 January 2010 edition, referenced an article from September 2009 in the Washington Post by Bo Peabody, the founder of Tripod, arguably the first social networking site, founded way back in 1995. For those who do not (or are too young to) remember, 1995 was the year the Internet really took off. Morgan Stanley (where I had the great pleasure of working in IT at the time) took public a virtually unknown company, called Netscape.

Most businesses - and non-profit and government organizations, for that matter - fiercely protect their turf. In the case of business, it usually means not doing anything that might jeopardize the core income stream. For example, Microsoft has been loathe, at various stages in its history, to move towards the Web, cloud computing, or anything that might put a dent in its core operating system, desktop software and business server businesses.

Last week, Ars Technica had a great in-depth article on ENUM. For those who do not know, ENUM is a standardized method to use Internet technologies to translate your old, staid, telephone number (e.g. +12125551212 or +442076555555) into an Internet device connection. That connection could be simple voice, such as allowing you to use a VoIP connection rather than going through the PSTN (public switched telephone network) that we all love/hate, or even identifying a Skype user ID or email address based on the telephone number.

Ask VCs, most will tell you that Information Security is, well, old. It has been around for a long time, and a lot of money is flowing into newer, hotter areas. While I cannot fault investors for looking for areas that will have the best combination of future follow-on investment, rapid growth and a high-value relatively quick exit, I believe InfoSec is still overlooked. When following information security, I feel like I am listening to the scientist who said, at the turn of the century (right around the time that an obscure patent clerk in Bern was writing obscure papers that might have a minor impact on physics), that "

Everyone appears to have analyzed the Google and China issue to death, both from the China perspective and the Google perspective. One of the best comments I have seen is from Fred Wilson's "A VC" blog, where he focuses on the reported fierce disagreements between Eric Schmidt, the hired gun non-founder CEO, who wanted to continue doing business in China and sweep the issues under the rug, and Sergei Brin, the founder born under Communism, who insisted on pulling out.

This article is a short follow-up to our discussion of the low profitability of Israeli firms. I recently had the pleasure of sitting with the Chairman of a very well-established Israeli firm, not one of those discussed explicitly in the previous article. I raised the issue of Israeli profitability with him. His perception was that Israel, being a small country, is subject to an excess of information. You could almost name it the "

In the prior article, we analyzed the likelihood of Oracle meeting their comment, at their fourth quarter 2008 results conference, of having Sun add $1.5BN in operating profit to their bottom line within one year of closing the acquisition, essentially in fiscal 2009. The conclusion we reached was that it was a highly aggressive target, and unlikely to be reached by half. Nonetheless, if Oracle could get Sun halfway to Oracle's gross margins and fixed costs as a percentage of revenues by 12 months from acquisition, they would get fairly close.

A colleague of mine in Israel, Yishai Boasson, recently wrote an article analyzing the perceived and actual value of a "special promotion." This article, available here, is only in Hebrew. As it is an interesting analysis and an excellent example of the importance of distinguishing between sales and profits, it is worth translating here for the larger English-speaking audience. It is also, in itself, an example of how numbers can trip you up.

As any manager of a (successful) business will tell you, the two most important factors are: Cash - as in "cash is king". You need cash to pay your payables. If you do not have enough cash, you cannot meet basic obligations, let alone invest in expansion. Cash generally comes from sales, particularly from converting receivables to cash. Never confuse the accounts receivable asset with the cash asset. Although there are receivable-based financing options, most of which are quite expensive, you normally cannot pay your bills with a receivable.

No, this article will definitely not be a Bible sermon. However, it will look at the success levels of two fairly well to-do Israeli companies, and try to get a bit of understanding as to why the land of the Jewish Prophets is not as successful as it might be with Israeli Profits. Before we begin, it is important to note that this article will not delve into macroeconomic policy.

In the years 2006-2008, Google earned, respectively, $10.5BN, $16.4BN and $21.1BN in advertising revenues. With net income of $3-4BN each of those three years, it is hardly surprising that "free supported by advertising" became the model of choice for many an aspiring startup, as well as many non-startup businesses. During the latest mini-bubble of venture investing, it was nearly impossible for an online company to get an investor's meeting if your business plan was not based on the presumption that your services would be free and paid for by advertising.

On Tuesday, 2009.06.24, Oracle posted its fiscal fourth quarter results for the period ending 2009.05.31, as well as the "guidance" for future earnings. We won't get into the value of this guidance, and the impact it has on running the business. However, an interesting nugget - perhaps a daydream - was buried in the announcement. Oracle stated that the current guidance does not include expected revenues from its pending acquisition of Sun Microsystems.

The photo-sharing site Flickr, owned by Yahoo, is one of the top online photo-sharing sites. It hosts at least 3BN images, and has over 24MM unique visitors. One of the interesting elements about Flickr is that it tracks the cameras from which each image is uploaded. Thus, it has important insight into the camera market. It is important to note that this is a subset of the camera market - those that use Flickr.

In Part I of this article, we analyzed Ticketmaster's operations, particularly over the last several years. The conclusions we came to were: Ticketmaster appears to be increasing its staff at a rate that is too fast for its growth, and thus causing its gross margins to drop. Ticketmaster is acquiring businesses with a lower gross profit than its own, making inefficient use of its capital. Now, it is entirely possible that both of these are actually acceptable, each for its own reason.

For the last several years, data privacy and security has received a significant amount of press coverage. To be fair, this is for a good reason: most entities - private, non-profit, governmental or otherwise - due an absolutely abysmal job protecting data. In this case, data refers to all types, hardcopy and digital. However, in most cases, it is the digital that is the primary focus. This is for several reasons:

Despite the title of this post, we will not be discussing the current or previous administration's involvement in the financial sector, the federal reserve bank, or any of a myriad of acronyms from TARP to TALF to PIPP. Rather, we will examine the pitfalls of successful initiatives within organizations due to politics. This article could have been titled, snatching defeat from the jaws of victory. I recently had the pleasure of lunching with a colleague, who has a great idea for a way to significantly increase business in his division.

Business Insider had a fascinating short article on the inverse relationship between Craigslist and newspaper classified advertising revenues. The primary image is shown below. It is well-known that the newspaper industry, which exists largely based on advertising revenue, with a supplement from circulation, including newsstand and subscription sales. For example, in 2008, the New York Times Co. earned $910MM in circulation, and nearly double that amount, $1.78BN, from advertising. If one goes back two years, the differential is even more dramatic, with $890MM from circulation and $2.

Last fall (2008), a presentation was given at Harvard Business School, and reposted on SlideShare and TheFunded.com. The primary argument was that the Venture Capital (VC) model is broken, because it does not achieve its primary objectives of "funding growing companies in innovative technology sectors that generate significant shareholder returns." The entire slide show can be seen here. Indeed, many elements of the VC model are broken. Primarily, it has the following shortcomings:

Merriam-Webster's dictionary defines humiltiy as "the quality or state of being humble." Interestingly, it does not require self-effacement, turn the other cheek, or self-flagellation (let alone that wonderful term, defenstration). These are not attributes of being humble, or, by extension, humility. The most famous, and probably earliest recorded, humble person is none other than Moses in the Bible. Whether the Bible is history or fiction for you, the Bible's author clearly states that Moses was more humble than any person on the face of the earth.

Ticket sales agencies, ever protective of their exclusive right to sell (and profit by the sales of) tickets to sporting, cultural and other events, have waged war against "scalpers", i.e. ticket resellers, for years, if not decades. Many states have on the books, either now or at some time in the past, laws against scalping, especially if the resale price is above the ticket's face value. On June 8, 2009, the Wall Street Journal published an article how Ticketmaster is using paperless technology, familiar to many from airline e-tickets to thwart scalpers.

On Saturday, June 13, 2009, the Wall Street Journal reported that Six Flags filed for Chapter 11 bankruptcy protection. According the to the article, Six Flags is yet another victim of the deteriorating economy. I beg to disagree. Just under a year ago, in early August 2009, the same newspaper reported that Six Flags management had a turnaround plan. I argued at the same time that the plan was poorly constructed and ignored too many of the economic realities of the parks and, especially, their patrons.

Over the last two days, a mailing list of which I am a member had an interesting - and sometimes sharp - exchange (pun intended) about whether or not the mass availability and advanced feature sets of Web-based, corporate-focused mail services, like Google Apps for Your Domain, are a threat to, and possibly the end of, internally managed collaboration products like Microsoft Exchange. This article will provide a short analysis of the arguments in both directions and a framework for analyzing when CaaS, or Collaboration-as-a-Service, makes sense .

In my experience, I have come across countless entrepreneurs who are street-smart with a real flair for sales. Yet many of them (I would not go so far as to say most, but I am tempted) regularly run into financial difficulty within their ventures. A question I have been asked time and again, as I have helped these owner/managers fix their businesses, is why so many of these talented people can start a business, actually know how to sell and recognize its importance, yet so very few can operate towards profitability?

According to press reports making their way around mainstream news organizations as well as the blogosphere, IBM is making a play to acquire Sun Microsystems. The initial advantages appear to be straightforward. IBM rules in the East, old-school; Sun is a major player in the West (although their Silicon Valley neighbours, H-P, sell far more hardware, especially since the Compaq acquisition). IBM's strength is mostly in big, heavy, hardware, with proprietary systems around them, including mainframes and its distributed systems (which, for those of us who have worked with them, look and behave suspiciously like repackaged mainframes) and its huge consulting arm IBM Global Services (IGS).

In any business, in any setting, security is about trade-offs. It is about trading the inconvenience of process for the (supposedly) improved security that is necessary. For example, even the President of the United States is undoubtedly annoyed that he cannot go out for a walk without having the Secret Service clear it, but accepts the inconvenience as necessary to protecting his life. On the other end of the spectrum, everyone who has travelled in the United States in the last eight years is painfully aware of the inconvenience of the Transportation Security Administration (TSA) agents performing scans ranging from metal detection to show removal to full-body searches; whether or not this actually improves security is subject to debate.

My colleague, Jonathan Vanasco, has written an excellent piece on web-based business P&L operations & optimization. I have had the honour of contributing feedback to the piece. I strongly recommend reading it here.

Recently, I had the pleasure (take that with a grain of salt) of discussing, with several colleagues, the pros and cons of taking venture capital investment. Everyone seems to have an opinion. I have seen articles published that VCs are the unsung heroes of modern American capitalism. I have seen others that vulture capital would be a better term. Interesting how the world shifts. Until the 1980s or even early 1990s, pretty much no one outside of the business knew what venture capital was, how it worked, or where to get it.

Clearly, the United States (and much of the rest of the world) is in a recession, and has been for some time. Opinions differ greatly as to how long the pain will last - some say weeks, some say months, others years (and some say decades unless we adopt their solutions, whatever they are) - but it is clear that corporate revenues have dropped significantly and the pressure on profitability has increased dramatically.

In the previous article, we laid out the main areas in which the efficiency and effectiveness of operations within a fairly small back-office finance department can impact the bottom-line. In this follow-up article, we will see just how severe the impact can be through a case-study, complete with actual numbers. The Patient The patient, firm X, is a $15MM annual revenue firm, so larger than a start-up, but still on the small side.

Before continuing back-office operations, we will take a short detour into a case study of how not to transition to new media. As we all know, media properties have been suffering greatly, especially broadcast media. Advertising revenue is down, and enormous numbers of viewers have moved to what is termed new or interactive media, i.e. the Internet. Most media firms have been trying, with varying degrees of success, to find ways to make money on the Internet.

As an expert in operations efficiency and effectiveness, I am often asked how much of a difference back-office operations can make to a firm's profitability? After all, sales are what drive any business, and so the front-office should be the primary focus. While I agree wholeheartedly that sales drive a business - one of the best stories I have heard in this regard is of a startup where everyone had a little box on their desk that went "

As a follow-up to the previous discussions, we will analyse a particular merger that was looked at before it occurred - a rare event - and understand how we knew well in advance it was doomed to failure. Background A number of years ago, I was asked to analyze two firms contemplating a merger. Because of confidentiality considerations, I cannot give the locations, names or industries of the firms. The details I can provide are as follows.

In an earlier post we discussed what are the reasons that a firm, at least theoretically, decides to merge with or acquire another firm. These basically fell into two categories, horizontal integration and vertical integration. And yet, we know that a huge number, 70% to 80% or more, depending on who you ask, fail, most miserably. A question that recurs regularly is why these events fail, and, by extension, what can be done to reduce the failure?

In an earlier post, we discussed the justifications, at least theoretically, for a merger or acquisition. Of course, like any financial event, whether buying a company or buying an iPod, the numbers have to make sense. Put in other terms, you have to gain more out of it than you put into it (in business terms, being profitable), otherwise you simply do not do it. In this discussion, we will examine some of the financials behind these events, and how they are justified.

Earlier today, someone posted on a mailing list an attempt to understand why eBay bought Skype in the first place. For those who have forgotten, eBay, the online auction giant, bought Skype, the VOIP/IM newcomer with around 57MM registered users at the time, for $2.6BN in 2005. The poster wanted to understand why they bought Skype, and how they feared Skype upending their business model. This article is a short introduction to the reasoning behind most acquisitions, in an attempt to improve understanding.

It is a well-known truism that companies lose their market share (and their shirts, and sometimes their life), when they are so tied into their big, currently lucrative business model to support the small opportunities that can grow into big ones. In this instance, I am referring to the credit-card companies who missed the boat on micro-payments, got lucky in that no one stepped in fully (or at least successfully), and seem dead set on doing so again.

In the first part of this post, we analyzed what the position of the dominant player (Google) is, where there are opportunities, and what they need to succeed. In this part, we will briefly review the one I interviewed recently, hakia. FYI, hakia is, indeed, spelled lower-case; this is not a typo. Given our list of criteria above for success, how well do hakia meet the requirements? User Requirements.

In the year 2008, there is one 80-pound-gorilla in the corner in the world of search, and its name is Google. FY2007 revenues were $16.6BN with net income of $4BN. In any industry, and especially one as R&D- (and hence expense-) intensive as technology and search, net margins of 24.1% is nothing to laugh it. Microsoft had slightly higher consolidated net margins (29%), while Cisco had only 21%, and both are much more mature businesses, having been around a lot longer than baby Google.

Some time in the near future we will be publishing an article analyzing the search industry. Although it appears to everyone that there is just one big company in this business (hint: $16.6BN in revenue and $4.2BN in net income FY2007), this is an incredibly fast-moving industry. Microsoft recently attempted and failed to spend around $40BN for Yahoo, and Google itself was a nobody a decade ago. As an advance, I recently interviewed Dr.

In Part I of this series, we explored why the music industry is suffering, and what the market, technology and legal forces are that brought it to this point. In Part II, we discussed what the barriers to change are within the music industry, and what might be done to plan for the future. In this final Part III, we will look at some possible models. We begin with a caveat.

In Part I, we explored how the market and world within with the music industry operates has changed, especially in the last decade. Clearly a new business model is necessary, as any turnaround or strategy expert could have predicted as far back as the late 1990s, while one well-attuned to the technology sector could have predicted even earlier. In this section, we will explore what are the barriers preventing the major labels from abandoning its current model and thinking creatively enough to come up with a new model.

The jeremiads are everywhere and have been for several years: the Internet will be the death of the music industry, at least as we know it. The reasons behind this death knell, and what they can do about it, are worth exploring. First, a few facts.  This past week, Sony agreed to buy out Bertelsmann's stake in Sony BMG for $1.2BN, effectively valuing the entire business at $2.4BN. (In a small ironic note, Sony BMG was accused of software piracy by PointDev; those who live in glass houses.

Recently, I had the experience of seeing two related events in the business of amusement parks. First, The Wall Street Journal, one the front page of its Tuesday, August 5, 2008, edition, had an interesting article on the financial troubles of Six Flags and the turnaround plan of its CEO and CFO. The short form is as follows: Six Flags is in trouble. Without going into too much depth, over the last three years, it lost $105MM, $203MM and $234MM, in 2005, 2006 and 2007, respectively.

I recently received a call from a potential client who is considering a sale of their business. The sale had not been initiated by the owner, but rather by several competitors who had approached the owner to purchase their business. In other words, it was a horizontal merger situation. The owner wanted to know when to use an investment banker as opposed to a business/management consultant (i.e. someone like me).

In dealing with e-commerce solutions over the last several weeks intensely (and the last several years in general), I have come to the conclusion that there are four different categories of e-commerce solution providers: gateways, processors, providers and promisers. In understanding these categories, as in all projects where you have a defined goal, it is important to understand what your e-commerce goal is. Most e-commerce occurs where the vendor wants to sell something to the customer.

So having gone through the above (see previous posts), there are basically two choices when it comes to implementing licensing schemes. Sell the upgrade. Many sales systems, even fairly primitive ones, support this. You create a separate SKU for each major release, and possibly for each minor, and a separate license key scheme for each major release (but not minor). The licensing ensures that different minor releases within the major release will allow cross-upgrades (or downgrades).

In the previous post we discussed implementing Option A: Sell the Upgrade. Now we will address Sell the Plan. Sell the Plan has a lot of appeal for ISVs, especially when you start to sell to businesses, non-profits, or any group that budgets. The benefits are: Predictable cash flow. The reality is that most individuals and organizations that have recurring charges simply keep on paying them. This creates more predictable cash flow for your ISV business.

As a follow-on to the previous post about licensing strategies for ISVs, I would like to discuss the nitty-gritty implementation details. It turns out that the open market has not been very kind to mISV firms, and have left with very few options, none of which provides the desired flexibilities. This post will discuss "Sell the Upgrade." A follow-on will discuss "Sell the Plan." So you want to implement sell-the-upgrade.

For the last several months, I have been involved with a particular very small ISV, almost a micro-ISV (mISV), as it prepares for growth. One of the key elements we identified is that its pricing model - unlimited free upgrades - is not exactly conducive to good revenues and profitability. Although it seems obvious, it needs to be stated, and for several reasons. Founders sometimes feel that to charge for upgrades would somehow offend existing customers.

In response to the unending requests I have received for recommended reading, I have posted a permanent page with a list of books that I recommend. Obviously, they vary depending on circumstances, but all of them have jewels of wisdom to impart. The list is short and just beginning, but is expected to grow as I have time to add books. You can always access it from the "Pages" section of the blog's sidebar.

Welcome to Atomic Energy! This is the CEO's blog, with thoughts and insights about everything that affects business, economy, society, policy and, of course, technology. Comments on any blog postings are always appreciated, and Trackbacks and Pingbacks are certainly welcome. I look forward to interacting with many of you. Avi