The eWorld Radar

2011 - The Tech Sector Review

In Summary

2011 can be considered a year of transition, but revolution captures it more accurately. The established technology players are showing uncharacteristic vulnerability. The new guard focused on content (Google and Apple) are taking control.

The Cloud is the medium in which the changes are taking place. I would hazard to say that 2011 was the year in which the IT industry visibly commenced its demise. And in parallel what we are seeing are the green shoots of the emerging information and knowledge industries.

The following are a (reverse chronological) sample of the main highlights of 2011.

Ade McCormack

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Oracle wobbles

Software giant Oracle is known for its bullish style and its ability to deliver the figure to justify its posturing. The bullishness continues but the figures have turned south. Its recent quarter on quarter sales growth forecast fell by 5%, which in turn knocked 9% off the share price. Given Oracle’s reputation for market robustness, it is perhaps an indicator that 2012 will be a tough year for the IT industry.

HP downgrade

Ratings agency S&P have dropped technology vendor HP's credit rating by two notches. This will make borrowing more expensive for the company. The rating remains several notches above junk status, which means that HP will still be perceived as a plausible investment option. HP has experienced a lot of uncertainty with having three CEOs in less than a year and just as many strategies. Current CEO Meg Whitman, who was previously CEO at eBay, is perhaps preparing HP for auction.

Cisco surprising itself

It's been a tough year for the network component provider. A drop in market confidence was followed by a significant and expensive overhaul. Cisco 2.0 has now reported its second quarter of exceeding analysts' expectations. CEO John Chambers reported a surprise surge in orders from US corporate, government and telecoms customers. Its shares jumped 4% in after hours trading when it announced its positive order growth news.

Girl power

IBM names its first female chief executive ever. Virginia Rometty will take the helm from Sam Palmisano at the start of next year. Her strengths lie in sales, marketing and strategy, particularly in respect of IT services. She will also be the first IBM CEO to have not run the hardware business. So her profile is perfectly suited to where IBM needs s to go as opposed to where IBM has been.

iTV

It transpires in the authorised biography of the late Steve Jobs that the success formula for Apple was to focus on products and not sales. He claimed that once companies valued sales over product, the product would go downhill. He also indicated that Apple is entering the TV market. So it would appear that Apple is planning to take control of every channel consumers use to access digital content.

HP Jittery

Having just launched a bold strategy that involved discarding the PC/consumer business and acquiring clever BI vendor Autonomy, HP's board have just kicked out CEO Leo Apotheker. In a surprising move, they have replaced him with Meg Whitman, ex CEO of Ebay. They have clearly lost their nerve. Given she is already financially secure, it is difficult to see what will motivate her, other than the challenge associated with having no experience of leading an organisation that does not focus on auctioning.

Tablet latest

Sony is late to the party having just announced its Tablet S offering. This more or less coincides with HP and Sharp's departure from the market. Using the Android platform, it is a viable alternative to Apple's iPad, and Sony does have cachet in the lifestyle branding department. Microsoft is looking to blur the PC -- tablet market place with its forthcoming Windows 8, and thereby keep some control over the market. BlackBerry maker Rim shipped under 50% of it anticipated volume of PlayBook tablets, which contributed to its share price dropping 20%. One can't help but feel that the tablet game is over and it's time to get in line with the dominant player.

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Google exits tablet market

Google will have to pay $500m in settlement over displaying adverts from companies selling unlicensed prescription drugs. The companies are typically based in Canada and selling drugs that are manufactured in India and China and other places where the US Food and Drugs Administration are unable to exert control.

HP Re-Invent(s) itself

Technology giant HP took heed of its own 'Invent' tagline by announcing radical changes. Firstly it intends to spin off its PC and printer business. A good move as this is a relatively low margin business plus it enables HP to exit the consumer market and focus on the enterprise space. Secondly it is to acquire UK (clever) search software company, Autonomy for approximately $10 billion. It's not so obvious what the benefit is here. However given that Autonomy's software is used to help organisations make better decisions, it will now give HP something of interest to talk about when they push into the c-suite.

Hactivity news

Lulz Security has been busy with its forays into the servers of Sony, the US Senate and the CIA. It appears to be a breakaway faction of the Anonymous online activist organisation. They seem to be both having fun whilst highlighting gaping vulnerabilities in their targets. The CIA attack seems to have been triggered by reports that the US will take cyber attacks from foreign countries as a legitimate reason to respond with military force. With this in mind Google has accused China of hacking into the emails of senior US and South Korean officials.

Free the Cloud

Apple is offering a free Cloud service that will dramatically accelerate the update of web services and put pressure on IT functions to deliver Cloud based services to their users. No more synchronisation of files and emails between devices with the iCloud. Apple appears to be demoting the importance of its hardware, which suggests that its core business is more likely to become service and perhaps even digital rights management based.

Chrome Cloud

Google continues to gnaw away at Microsoft's foundations with the announcement of its Chromebook computers. Acer and Samsung are set to sell notebooks running Google's Chrome operating system. The focus will be on web based applications and companies will buy these Chromebooks as a service than as a product. This is a direct attack at the traditional PC model from which Microsoft has greatly benefited. This will be an exercise in marketing rather than engineering prowess because if organisations wanted to go down this Cloud-client route they already have the option to use a Linux based PC. But they haven't, which suggests there is no market yet for Google's offering.

All change in smartphone market

Nokia's dominance in the mobile phone industry took a significant turn when Taiwanese smartphone maker HTC's market value overtook that of the struggling Finnish giant. Of course the market valuations could easily flip again, but it is significant that a player that didn't exist in 1996 is now threatening Nokia. The mobile power axis has moved eastwards from Scandinavia to the Far East; Sony, LG Electronics and Samsung being other significant players. Nokia remains top in terms of volume, but judging by the devices I saw on show at a recent CIO event in Helsinki, I think it will lose that crown in the foreseeable future.

Cisco shake up

Networking and collaboration specialist Cisco has had to reconsider what its core business is in the light of a loss of analyst confidence. Its shares have fallen 35% in one year despite a 15% upturn on the Nasdaq Composite index. CEO John Chambers stated that it would refocus on its core markets in routers and switching, collaboration, data centre virtualisation and video. The demising of the Flip YouTube friendly video recording device suggests that Cisco is reversing out of the consumer space to focus on the enterprise market.

Zune player RIP

Microsoft has decided to ditch its Zune player and refocus its efforts on a software only strategy in the consumer electronics space. Apple appears to have out branded Microsoft. The word on the street is that Microsoft failed to out innovate its competitors in this space and has thus discovered that emulation is not enough to knock Apple off the perch. The arrival of the iPad2 was most likely the final nail in the coffin this month. Amazing what a few cameras and a choice of protective cover colours can do.

i-hexane

There is 'trouble at mill' again for Apple. Over one hundred workers at a Taiwanese touch screen manufacturer used by Apple have been poisoned by a chemical used to clean the screens. Previously the factory used alcohol for the job but then changed to n-hexane as it evaporated faster and thus sped up production. Apple has taken action on this. Nokia and HTC also use the same supplier. Some time back there was controversy surrounding one of Apple's Chinese manufacturers, where over a dozen workers committed suicide.

LinkedIn to float

Business social networking company LinkedIn has announced its intentions to go public this year. Possibly the recent valuation of Facebook at $50bn might have triggered the founders into thinking about the big pay day. It will be interesting to see whether they change the business model to monetise their 90 million free subscribers. For some people the prospect of rebuilding their 500 plus contacts on another site may just warrant paying a small fee.

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Mistakes versus Failure

Post industrial revolutionary Seth Godin wrote an interesting post recently on the difference between failure and mistakes.

There is something weak about failure and there is something apologetic about a mistake. And that’s perhaps why we tend to feel more comfortable about making a mistake than failing.

But according to Seth mistakes come about as a result of carelessness and easily avoided, whereas failure is taking an initiative to reach a goal which doesn’t work out.  

So we need to make less mistakes and fail more. In fact our tendency to avoid failure is an innovation killer. And our tendency to make mistakes is a good reason to replace us with a computer.

Click here to read Seth’s post.

 Ade McCormack

IT Demystified – Buzzwords - Knowledge Workers

Knowledge worker is not a new term but it is one that is becoming more refined each day.

Traditionally a knowledge worker was someone who used their head and not their hands. So if you had an office job, and latterly used a computer, then you qualified.

In recent years there has been a focus on automating humans out of the loop. Fierce competition from emerging economies is forcing organisations to drive out costs. And humans are costly.

So working at a computer processing information no longer guarantees you a place in the post industrial economy.

So the modern day knowledge worker is more than just an organic extension to a corporate process. They actually deal in what they know (knowledge) rather than what the computer offers (information) knowledge.

The game is to be able to do what computers cannot (yet) do. So the more you are able to apply your knowledge in a creative manner the more likely you are to remain in play.

Ask yourself the question, do people think of you more as a bank clerk (process-oriented) or Salvador Dali (creative). That will give you a clue as to whether you are a knowledge worker or not.

Ade McCormack

Corporate Dyspraxia

Dyspraxia is a motor learning difficulty that can affect planning of movements and co-ordination as a result of brain messages not being accurately transmitted to the body. Clumsy is often a word used to describe this condition.

Some organisations have a strong management team with both a clear vision and a real-time sense of how to respond to events as they arise. However their wisdom does not make it to those responsible for taking action quick enough for it to make a positive impact.

This implies that the corporate nervous system is impaired. This may well be the result of too many layers of management or simply clogged information channels running through the organisation.

Clumsy is rarely fatal, but sometimes it is. Thus the organisation needs to be coordinated from the head to the shop floor so that it can respond swiftly to threats and opportunities rather than tripping over them.

Ade McCormack

 

Chief Herbalist Officer

Organisations work well when the data, information, knowledge and wisdom flow easily to those that need it, when and where it is needed. Blockages in that flow lead to problems. This can lead to poor or sluggish decision making. Or worse can lead to misgovernance.

Organisations tend not to think in terms of flow. The focus tends to be the customer, the supplier, the talent, finance and so on.

In many respects this is like Western medicine. You have a problem. The problem area is identified and the treatment is focused on regaining full functionality in the target area. But often the doctor is only treating the symptom of a more serious underlying cause.

With this in mind, I encourage business leaders to adopt a more Traditional Chinese Medicine (TCM) approach. In TCM the focus is on the energy flows around the body. The focus of the doctor is to identify flow blockages and unblock them.

I would argue that many of the issues organisations face today would be resolved if the data, information, knowledge and wisdom flowed freely. This is the job of the Chief Information (Flow) Officer.

Ade McCormack