Saturday, October 8, 2011
I am of the mind that a great leader is greatest when they are able to leave a company and have it flourish in his or her absence. I believe that true leadership is about defining a company’s mission and goals, and building a foundation for ongoing success. Now yes, it is true that a bad leader taking over after a good leader may in fact succeed in tearing the company down in a short span of time, but this is usually, again in my mind, not accidental.
This idea however, is challenged for me in the case of Steve Jobs and Apple Inc., and the short of it is that I am not convinced of Apple’s future without Jobs. I hope I am wrong – I REALLY hope I am wrong, and this statement is not an opinion of his leadership style. In fact, I admit not to be completely aware of his true leadership style –the fictional portrayal in Pirates of Silicon Valley is really the only view I’ve had at all and did I stress – the fictional portrayal.
My concern for Apple Inc. is due to the extraordinary voice Jobs had in the design of Apple products. Bill Gates, in his over two decades at Microsoft, only had his name attached to nine patents. The co-founders of Google, Larry Page and Sergey Brin, just over a dozen. Contrast that with Steve Jobs and 313 Apple patents, most all of which are directly linked with design. Now, to make sure this is clear, Apple could not have just placed his name on these patents – if they had, the patents would have been canceled. His name on the patents means he had a part in the development and invention. Out of the 313, his name is listed first on 33 of them, signaling that he was most likely the lead inventor.
I ask you all this: With Jobs having such a concrete say in the design and function of Apple products, who will take his place in that arena and if there is nobody – what really will be Apple Inc.’s future?
[Source for patent numbers: Miguel Helft and Shan Carter, "A Chief Executive's Attention to Detail, Noted in 313 Patents," www.nytimes.com, August 25, 2011. http://www.nytimes.com/2011/08/26/technology/apple-patents-show-steve-jobss-attention-to-design.html]
Rated as the top most valuable global brands, both Apple and Microsoft have greatly influenced the world as it is today and reaped the benefits of network effects. Although it seems Apple TV may not pose a serious threat yet, both Apple TV and the second entrant, Google TV, can quickly become major competitors of the traditional media companies. Apple seems to continue its business strategy, of “providing products with superior ease-of-use, seamless integration, and innovative industrial design,” through Apple TV. This strategy of a one-stop shop is evident in not only Apple TV but also Google TV. Furthermore, Microsoft’s strategy of “writing the software with partners building the software” has been adopted by Google with Google TV. But are Google’s hardware partners, such as Sony or Logitech, disappointed by the less than anticipated sales of Google TV because Google moved too quickly without properly building the ecosystem[e1] ? Or will both Google TV and Apple TV be faced with a bigger challenge (of accessing content), as digital media content producers have seen the music industry suffer from the razor-and-blades model created by Apple with the iPod?
In addition to the channel and hardware layers, the content layer still remains very important. But how much value will continue to be generated and kept here? For example, with streaming from companies such as ABC, NBC or CBS, there is less of a need to purchase content from iTunes. And despite Netflix having a superior high-speed connection, the older content may not be preferred to the latest content available online from ABC, NBC or CBS. With Google TV entering, with the Microsoft strategy, allowing for various devices, experiences, operations, and even content, more of the value can be stripped from the content layer, where ad revenues make up a significant portion of total revenues.
It will be interesting to see how Microsoft’s “3 screens and a cloud” concept plays out: mobile, computing, and… the Xbox? Microsoft intentionally decided to go with an untraditional strategy of building its own Xbox, mainly due it being a niche device, unlike with other large volume devices, such as phones. As Microsoft CEO, Steve Ballmer, said not to expect a Microsoft branded phone[e2] because “we don’t want to cross the chasm in the short run and lose the war in the long run and that’s why we think the software play is the right play for us for high volume, even though some of the guys in the market today with vertically oriented solutions may do just fine.” So despite the increasing capabilities of the Xbox, will Microsoft choose not to open it as a one-stop shop digital media device? And will Balmer’s leader influence the strategies of digital media players, by encouraging them to stay within their niche markets or areas of expertise?
Friday, October 7, 2011
Gaming might be the second canary in the brick & mortar coal mine -- after music. Soon we will see digital distribution overtaking retail in many other areas as well: movies, books, and online shopping in general seem ripe to have their digital distributions overtake the analog counterparts.
Some key lessons that could be derived from Microsoft are about the impact of the Office suite of products. Microsoft didn’t invent the business software industry, but they became the leading player by bundling their products and creating lock-in with their customers. Today, Office remains the dominant choice for word processing, spreadsheets, presentations, and other applications. As the products are updated every few years, all companies feel pressured by the market to keep up with the updates or risk feeling left behind. If any of us were to join a company now and see that they were using Office 2003, we would probably see that as a serious red flag. Even Macbooks, for all their usability advantages, are still dependent on a product from Microsoft, their great rival, to compete in business and academia.
Aside from being a good moneymaker for Microsoft, Office has transformed what it means to be an office worker. It is almost mandatory that all employees, at least at the managerial level, be skilled in Word, Excel, and Powerpoint. And the fact that Office is so ubiquitous in the business world means that those skills seamlessly transfer from company to the next. A company that spends less time training their employees on new business software applications has more time to devote to developing its primary capabilities.
So I believe there are a couple lessons here. The first is the “IS710” lesson about creating a standard and bundling products. The second lesson is about a dynamic set of tools that represent a kind of jumping-off point for companies and employees. When it’s easy to create documents, spreadsheet, and presentations, the bar is raised as far as what value a company can bring to the market.
Thursday, October 6, 2011
- They prioritize attractive design features. Remember the first iMac with the candied colors?
- They run catchy commercials that people are likely to watch even with DVR technologies that make TV ads less effective.
- They build incredible excitement around product announcements.
Wednesday, October 5, 2011
Today, in 2011 Microsoft and Apple do not compete in the Personal Computer business. From 1985-2000 the two companies competed in personal computing, and Microsoft was the clear winner because of the positive network effects resulting from Microsoft's opening up at the software and hardware layers, while keeping the operating system closed.
A key learning for the players in the Healthcare Digital Technology space is that innovation and control at only one layer is not enough to disrupt the industry. Just as Microsoft needed to collaborate across layers to develop and deploy the Wintel architecture, which became the standard, emerging Electronic Medical Record providers will need to collaborate across the digital capabilities landscape, cloud providers, software providers, device and hardware providers, in order to establish their own standard.
Hospitals and health providers want the ease of interoperability of a single standard without giving up the negogiating power afforded by options. That a standard will emerge for the Healthcare industry presents a paradox. One the one hand, simplicity and ease of interoperability should result from the commoditization of a single digital standard across capability layers. On the other hand, the companies developing the capabilities seek extraordinary profits as their incentive to create the standard. Regulation is sure to be important in the Healthcare industry as it is in the Digital Technology industry.
In the last 10 years, Apple has exploded in growth and has maintained its brand. One could argue this is due to its decision to tightly control not only the operating system but also the hardware, software, and peripherals. This brand strategy was crucial to Apple's development and launch of its iPhone and iPad, which now account for more value than from its computer business. Apple's success came from it seeing itself as a technology company with digital capabilities within a network, not just a computer company.
Thus, the healthcare players that will emerge and disrupt the industry are not likely to be the encumbents, but recent entrants that add new sources of value. In the future, one Electronic Medical Record provider could control access to heath delivery if it acheives critical mass and generates positive network effects by attracting both the medical professionals and the patients. One could imagine a future where you choose your doctor based upon what system they use.This is why US consumers bought iPods instead of Zunes; because Apple tied the access to content through the iTunes platform. It is also analogous to professionals' choice of computer and OS based upon the software and devices they intended to use. (Cubicle employees were assigned IBM-Wintel machines, while artists purchased Macs)
To conclude, there needs to be strong interaction between and across multiple layers of digital capabilities to enable transformation of the Healthcare industry. Innovation at a single layer is insufficient for disruption. Ownership and control across layers is not necessary, partnership may be sufficient for disruption, but it can also lead to commoditizing your capability, making your competence irrelevant.
According to Reuters reports; Microsoft is considering buying Yahoo. But the question is whether that acquisition is a meaningfull one from a network perspective.
At one end Microsoft realizes that "MSN is a critical component of helping Bing win." While on the other hand, its portal space is being currently challenged. Facebook is just absorbing more and more minutes of usage. The time shifting toward mobile is another factor weighing on portals like MSN.
So Should Microsoft buy Yahoo?
- What is the roles of public school in preparing students for college?
- How does the changing U.S. economy and distribution of wealth affect education rates and types of college-level education that are offered?
- How is educational content delivered to students?
- How do students collaborate? How does crowd-sourcing affect education?
- How is student performance measured?
- What products enable content delivery and distribution?
- What are the differences technologically between the high school classroom and the college classroom? How is this transition managed?
Uri Feld - U.S. Department of Education
Josh Hildebrand - Houghton Mifflin Harcourt
Tchad Rogers - University of Phoenix (Wholly owned by the Apollo Group; UoP represents 91% of consolidated revenues of APOL)
Jon Stone - Blackboard
Eric Whitney - Pearson PLC
Tuesday, October 4, 2011
Monday, October 3, 2011
This is an interesting article about the decline of Adobe Flash as a standard web platform for creating and viewing material on the web. The author mentions that Adobe only makes money by selling the developer tools. But with Apple, Google and Microsoft giving away their developer tools and instead making money from their app-stores, Adobe has missed the boat. They failed to adjust their strategy as consumers turned toward apps that run on mobile devices without using web browsers. Adobe will soon release AIR 3, which will allow developers to create richer applications with advanced graphics and 3D capability. However, this doesn’t address their main problem, which is that they’re still missing out on any money made from developers creating AIR apps and selling them. Adobe needs to re-think where they fit in the consumer electronics network of 2011 and beyond.