The Next Organization

Modular Data Centers: Benefits and Best Practices

Facebook passed Google in American's time spent on site - September 2010

For the first time, Facebook has surpassed Google and Yahoo in time spent online in US. Facebook's advantage in the number of page views per visit has outweighted its shorter time per visit. However, Facebook will need a stronger monetization platform for its ecosystem to compete with Google.

 
 

McKinsey Technology Trend 2010 - Multi-sided business model

Multisided business models create value through interactions among multiple players rather than traditional one-on-one transactions or information exchanges. In the media industry, advertising is a classic example of how these models work. Newspapers, magazines, and television stations offer content to their audiences while generating a significant portion of their revenues from third parties: advertisers. Other revenue, often through subscriptions, comes directly from consumers. More recently, this advertising-supported model has proliferated on the Internet, underwriting Web content sites, as well as services such as search and e-mail . It is now spreading to new markets, such as enterprise software: Spiceworks offers IT-management applications to 950,000 users at no cost, while it collects advertising from B2B companies that want access to IT professionals.

Technology is propagating new, equally powerful forms of multisided business models. In some information businesses, for example, data gathered from one set of users generate revenue when the business charges a separate set of customers for information services based on that data. Take Sermo, an online community of physicians who join (free of charge) to pose questions to other members, participate in discussion groups, and read medical articles. Third parties such as pharmaceutical companies, health care organizations, financial institutions, and government bodies pay for access to the anonymous interactions and polls of Sermo’s members.

As more people migrate to online activities, network effects can magnify the value of multisided business models. The “freemium” model is a case in point: a group of customers gets free services supported by those who pay a premium for special use. Flickr (online storage of photos), Pandora (online music), and Skype (online communication) not only use this kind of cross-subsidization but also demonstrate the leveraging effect of networks—the greater the number of free users, the more valuable the service becomes for all customers. Pandora harnesses the massive amounts of data from its free users to refine its music recommendations. All Flickr users benefit from a larger photo-posting community, all Skype members from an expanded universe of people with whom to connect.

Other companies find that when their core business is part of a network, valuable data (sometimes called “exhaust data”) are generated as a by-product. MasterCard, for instance, has built an advisory unit based on data the company gathers from its core credit card business: it analyzes consumer purchasing patterns and sells aggregated findings to merchants and others that want a better reading on buying trends. CHEP, a logistics-services provider, captures data on a significant portion of the transportation volume of the fastest-moving consumer goods and is now building a transportation-management business to take advantage of this visibility.

Not all companies, of course, could benefit from multisided models. But for those that can, a good starting point for testing them is to take inventory of all the data in a company’s businesses (including data flowing from customer interactions) and then ask, “Who might find this information valuable?” Another provocative thought: “What would happen if we provided our product or service free of charge?” or—more important, perhaps—“What if a competitor did so?” The responses should provide indications of the opportunities for disruption, as well as of vulnerabilities.

Big shift in emerging market's spending hint growth in transportation, leisure and health

 

The chart shows percentage of total spending of people in Brazil, China, India, Indonesia, Malaysia, and Thailand. In terms of growth as well as percentage of total consumption, transportation & communication is by far the most significant part. Notably, the next top growth areas in terms of percentage are leisure and health. Finally, emerging market people has more to spend on other non-essential needs.
 

Whitehouse's definition for Cloud Computing

Cloud computing is probably one of the most confusing technological and commercial terms. Here is how Vivek Kundra, U.S. White House Chief Information Officer explained the concept: 

 "For those of you not familiar with cloud computing, here is a brief explanation. There was a time when every household, town, or village had its own water well. Today, shared public utilities give us access to clean water by simply turning on the tap. Cloud computing works a lot like our shared public utilities. However, instead of water coming from a tap, users access computing power from a pool of shared resources. Just like the tap in your kitchen, cloud computing services can be turned on or off as needed, and, when the tap isn’t on, not only can the water be used by someone else, but you aren’t paying for resources that you don’t use. Cloud computing is a new model for delivering computing resources – such as networks, servers, storage, or software applications."

This is a easy-to-grasp way of defining cloud computing, much better than that of many vendors I met these days.

Building the Next Generation Company: Innovation, Talent, Excellence by John Chambers

While the ongoing world economic crisis has left many business leaders sweating (or worse), John Chambers is rolling up his sleeves in anticipation of an eventual recovery. After every economic challenge, he says, Cisco has come out with dramatic gains in market share. This time won’t be different, if Chambers’ bets pay off.

In the 1990s, he predicted that networks would transform the way the world works, becoming platforms for communications and other IT, and Chambers placed Cisco at the center of that transformation. Today, he envisions a Web 2.0 premised on collaboration and social networking that will similarly transfigure all business life. Since 2001, he’s been positioning Cisco to catch this massive market transition, and indeed, is “betting the company’s future on it.”

In “phase two of the Internet,” says Chambers, “Content will find me; I will not search for it.” Any device, anywhere, will be able to receive any kind of content. We will be dealing with licenses for things like music, rather than worrying about compatibility issues between our digital tools and what’s streaming through them. Web 2.0 will also bring “effective collaboration,” by which Chambers means network-enabled visual tools, which will make “working together for a common goal truly possible.” Expect much faster business processes and revved up productivity, says Chambers.

Based on Cisco’s own experience in the past several years, organizations will completely restructure around these new capabilities. Indeed, he offers up his company as a paradigm of this vision. Once a hierarchical, command and control-based organization, Cisco is now much flatter, a company running “off of social networking groups.” Councils with cross-functional responsibilities suggest and take on many more projects (from emerging markets, to video, and smart grid boards); from one to two major ventures per year, to this year’s 26 launches. The next generation company is “built around the visual.” Cisco employees do non-stop teleconferencing with collaborators around the world. The company hosts 2500 such virtual meetings per week. It also employs Webex, Wikis and blogging to move work along.

With this kind of communication and carefully managed process to match, “operations can be turned on a head,” says Chambers. It’s the recipe for market-dominating speed and scale. Chambers is “loading the pipeline” with projects that assume other companies will want what Cisco has and makes. “If we’re right, we’re developing a huge wave of revenue opportunity.” Perhaps this is one reason why he’s “an optimist on global productivity, global economy and our ability to handle the challenges.”  

Profiling US mobile Internet users and projecting Vietnamese peers (Part 1)

In this post, I synthesize the research data related to US and sometimes worldwide mobile Internet, "wired" Internet and smartphone users, to depict a profile of US mobile Internet users. Using the underlying factors and data about mobile Internet and mobile phone market in Vietnam, the second part of the post will project characteristics of Vietnamese mobile Internet users.

Now, let's start with US mobile Internet user profile:

• Gender: more male than female
• Income: widely distributed (high income is not a differentiating factor)
• Lifestyle: more active people, less heavy internet users
• Content consumed: News and social network
• Phone: Still many "dummy" phone and increasingly smartphones; large and extra large screens; and mainly with iPhoneOS, Android and Symbian OS

Gender: more male than female

According to The Nielsen Company, worldwide mobile Internet users are slightly more likely male than female. The male bias of mobile Internet use is consistent across markets and is most pronounced in European markets. In Brazil, Russia, India and China, as well, males are more likely than females to browse the mobile Internet.

This gender bias, can be explained by:

• (Nielsen) Gender bias of traditional "wired" Internet users
• (My explanation) Higher ratio of public-transported commuting males explains the higher difference in European countries, where public transportation is very popular (my interpretation)
• (My explanation) More mobile Internet contents geared toward male than female, e.g. news, sports, tech, traditionally. Increasing popularity of social networking services like Facebook, Twitter and MySpace, where there are more female than male, probably is the main driver of a 9% higher growth rate (between 2008 - 2009) of female vs. male mobile Internet users.

Income: high income is not a differentiating factor

Also, according to Nielsen (2008), the US mobile Internet audience is not, as some expect, overly concentrated in high-income households:

• 24% of all mobile Internet users have household incomes of $100,000 or more
• 26% of all mobile Internet users have a household income of under $50,000

This I think is caused mainly by low barrier of entry. US mobile providers' flat-rate mobile data programs with affordable price. These programs often also bundle voice, which make them more attractive even to medium-end phone users.

Lifestyle: more active people, less heavy internet users

Web 2.0 Summit 2007 - High Order Bit Presentation from Morgan Stanley

Web 2.0 Summit is often a very important event to discuss new developments and trends in the area. One of the most interesting sessions of the event this year is the presentation from Mary Meeker of Morgan Stanley. The presentation addresses technology trends in general and is very interesting, except that it cites quite a few Cisco's info (which is a clever company, but still biased, though).

The slides and video however was not included in the official site. I found them so included here.

Why and how companies should be prepared for technology proliferation, even of the one they helped to create

No time in history before, technology is changing at the pace we are experiencing now. As the world is connected, network effect accelerates technology adoption and drives proliferation and commoditization very quickly. Once technology is everywhere, it is no longer a tool, but becomes the state of the environment that organizations operate on. Technology however is becoming embedded in our lives and therefore changes human behaviors. These fundamental shifts demand organizations not only to learn how to use technology, but to adapt to new environment and behaviors. The question therefore is not "how to use the technology", but "what my organization should be" given technology is the environment.

Let's look at a couple of examples to see how the fundamental shifts happen and change the rule of the game.

Just more than 10 years back, when doing commerce on the Internet was still very rare, most companies were trying to learn how to use it. The dotcom bubble motivated massive number of fiber optic cables to be laid, which literary commoditized the bandwidth. Enabling financial services flowering and quickly became readily available with minimal cost. Application vendors also made online transaction a standard part of their offerings, sometimes even free. For companies, the word eCommerce seems to disappear. However, companies had to go through a phase of redefining themselves given that the majority of their suppliers, customers and competitors now have the ability to do business using the net. Making it worst, many customers are getting used to it, thereby changing their purchasing behavior and refuse to do business otherwise.

Let's use government as another case. Governments within about one of two decades years back started to bring more PC into their business. The idea at the beginning was to automate their administrative works. However, as PCs and network are available at most of the citizens and organizations they are dealing with, the purpose of eGovernment changed. It's now how government should operate when parties they are dealing with are using and gradually demanding using PCs and network in their transactions. Peer pressure from governments in the same groups is another force to drive this change. Unfortunately, many didn't understand this and spent their money investing into technology without rethinking the way they organize and work. The disaster of the CP 112 program in Vietnam is one painful example of this.

The third example is different in the sense that it's about the company that created the "technology" itself. Founded in 1994, Monster.com was the first Internet job board. Since then, the company has grown to 75 million resumes on file and covers now 36 countries in the world. The new industry was so successful that it even increased the job changing wave in the United States, according to Stevenson's "The Impact of the Internet on Worker Flows" report. The concept and especially behavior changed leading to implementation of Internet recruiting solution in large companies themselves. More importantly, companies have to pay more attention to recruiting and retaining their talents to survive the new wave.

Tim O'Reilly on Web 2.0

I have been quite busy with my job and family works, so posting was a bit light recently. This is the first comeback with a light version of an excellent session by Tim O'Reilly at SAP TechEd this year.

The video is available here but is quite big, so I also include below a summary courtesy of SAPInfo.

"Invention has to make sense in the world in which it is finished, not in the world it is started," Tim O'Reilly quoted at SAP Tech '07, being held in Las Vegas, Nevada from October 1 - 5. The founder and CEO of O'Reilly Media is convinced that, despite past pitfalls and bloated hype, the Web is the crucible (still) producing the greatest inventions of tomorrow. These inventions often carry the descriptor Web 2.0, a term he coined in 2004 and which has permeated technology copy around the world ever since. And Web 2.0 was the focus of his keynote.

O'Reilly commanded the stage nearly as well as he commanded the subject - and exuberantly ran off his six rules of Web 2.0 to an immersed audience: