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Falling in Love with Stockholm All Over Again

25 Nov

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Last week I spent two and a half days in Stockholm, doing interviews and meeting various public officials and private businesses with the aim of updating the White Paper we published in 2013 entitled Stockholm’s Stokab: A Blueprint for Ubiquitous Connectivity. When we published this back then, Smart City issues were just beginning to emerge, and while we did cover a number of broadband enabled initiatives by the City in the report, it simply wasn’t a major focus. One of my goals with these meetings was to assess how that situation had changed in the last few years.

I still need to digest a lot of the information I gathered, and I need to do some follow-up interviews as well, but one thing came across loud and clear in each and every one of these interviews: the Stockholmers get it. The City has recently rewritten its strategic vision document to include ICT in every aspect of its missions, and no matter who you meet in the City government, they understand this at the core of whatever it is they are responsable for.

Actual implementations are still limited when it comes to Smart City applications, but there are a number of pilot programs in place, some of them financed in part by the European Union to design and build (or retrofit) entire districts of the City with “smart” in mind. I was going there believing that despite its infrastructure assets, Stockholm was going to be managed just like every other city out there: with no central governance on ICT related projects.

The more I look into this stuff and the more I’m convinced that the Smart City killer is fragmentation of vision, resources and implementation. Stockholm doesn’t have everything right, they don’t even have everything in place, but they get it, and that vision is shared across the whole city administration and even amongst the population, entrepreneurs and social workers. They are paving the way to do it right. That in itself is impressive. And it’s working already: there are 150k newcomers to Stockholm every year that the city has to accomodate. You don’t get to deal with that kind of expansion without either creating a big urban mess (that’s what I see here in China) or being very very smart.

I have some work to do still to clearly articulate how they’re doing it right, and that will be published in the white paper revision in a couple of months.

But I just wanted to say that I’m falling in love with Stockholm all over again…

Who steals from whom?

16 Jul

I have already (in passing) expressed how appalled I was at how our patent system (and more generally creator rights legal processes) has gone completely mad. The hilarious Manu Cornet published this drawing yesterday which riffs on the perception of who sues whom on patent rights…

© Manu Cornet from Bonkersworld

The revolution is not where you might think…

13 Jan

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The French media have been abuzz since Tuesday following the press conference by Iliad's Xavier Niel on the launch of Free's Mobile offering. Mobile may not be the core topic for this blog but since I talked a lot about Free in the past and certain aspects of their business model and since I will soon be writing about their fiber fiasco, it made sense to lay the groundwork for a broader reflexion on disruptive business models while it's hot.

I won't go in any great detail on the announcement itself and Free's offers, you can find context about it in English easily if you google it up. Om Malik has a general context article (he met with Niel before the release, so it's not specific, but it's a good primer) and The Guardian has an article that describes in broad terms the offering they have launched.

What interests me is the answer to two questions, essentially:

  • how much is Iliad moving outside of its proven model with this launch?
  • how much of a revolution is this really?

The first question might sound odd, but in my opinion it's really important for two reasons. First because Iliad has made its mark in France and beyond with a very specific and counter-intuitive model that has proven it works. Second because they have shown in the past, especially with their FTTH initiative that they can fail when they move too far out of their model.

The second question is a broader reflection on the French market and how much disruption this launch is likely to generate.

A partial extension of the Free model

If I had to summarize in three bullet points the specifics of Free's offerings so far and why they were successful, I would say this:

  • simple offers with few options to maximise legibility for customers
  • aggressive prices that appeal to people on a budget or casual users
  • rich bundles with innovative services that appeal to geeks and push new usages amongst the general population

With these new offers, Iliad checks the first two marks, but completely misses out on the third, which raises an interesting question: is price sufficient to sustain the model?

I'm not convinced it is.

No doubt that Free will attract customers who are price sensitive, but if they only attract such customers, they won't get the market share they hope for (Niel mentioned a 25% market share goal, though didn't say what the business model breakeven was) and they will have attracted low-profitability customers which ultimately might not be such a bad deal for the other players in the market.

The real make-or-break question is, without any innovation in their offering, without any specific services or usage, will they attract the kinds of customers who are currently paying upwards of 50€/m to the other operators?

Of course right now everybody is up in arms, Orange, SFR and Bouygues have slashed severly in the prices of their "cheapo" brands (thus confirming the not so subliminal message Free is pushing that they were "screwing their customers" until now) and it looks like 50% of the market will subscribe to Free. When the hulubaloo dies down, many customers are just going to do what most customers always do: stay where they are because the hassle of change is just too much to deal with.

Without a cool/geeky element to the offer, Free is effectively missing out on what made their success in DSL: low price combined with innovative service components.

Fans of the offer are saying that these things will come, and maybe they will but I wonder if Free hasn't missed the best possible window to introduce disruptive usage into the mix (and by the way, in case anyone wonders, things that could have made a difference: femtocells in every box, fully integrated ott apps, 4G/LTE, 3 screen approach, etc.)

A revolution in perception, maybe

Iliad entering the market was presented as a revolution by the company itself and most of the press, but is it really? It's unlikely to be a revolution in usage unless one thinks that 3GB of data in a 20€/m plan will boost mobile data usage exponentially (both in volume and adoption). I doubt that somehow, but you never know.

If there's no usage revolution, the only revolutionary aspect left will be the bloodbath. That's extremely likely, even if Free fails to reach it's penetration targets. Within a few days of them announcing their tariffs, competitors had slashed some of their prices in half or more (with, as mentioned above, a likely lasting negative effect in perception) and that's a path that there's no coming back from. It's understandable that they would run around like headless chicken, and it's not like they had no time to anticipate, but it's probably fair to say that they did not expect such price aggressiveness.

Customers are whooping with joy and touting the virtues of competition, as well they should be. But there should be no naiveté about this launch: the blood bath will have impact on the general market value (value destruction) on investment capacity and on employment. There's nothing inherently wrong there, these are all standard free market effects. The issue will arise from the brutal change resulting from a combination of a cartel exploding in the face of a disagreeing competitor and said competitor betting on volume to make up for low margins. The impact will occur in a very short period of time and the industry and some of its employees will inevitably suffer. There was even an ironic (considering their free-market advocacy) short note in today's Challenge (Free va coûter 4 milliards à l'état) arguing that the state would likely loose €4bn in tax revenues as a consequence of the introduction of real competition in the market.

There is however one way in which Iliad's offer could be considered not revolutionary per se but driving a revolution, and that is the perception of hidden costs. Iliad has done its utmost to avoid all the hidden costs that customers tend to hate but could not avoid until now. Consumer advocacy group UFC Que Choisir published a list of all the noteworthy specifics in the terms and conditions, and while there are still a few aspects that might be considered dodgy (especially around roaming in certain countries), by and large the contract is as short, clean and understandable as they come and certainly much cleaner than anything the industry has seen so far.

That's exactly the point that Rudolf van der Berg argues in this article in Les Echos entitled Grâce à la clarté de ses forfaits, Free ouvre en grand les robinets du mobile. Basically by making their offers transparent, they are going to force transparency onto the market and forever change the perception and expectations of customers. 

I'll buy that. That is a true revolution, and will likely happen no matter how well Iliad fares…

Email and beyond

4 Jan

I haven't posted about much unrelated directly to the coverage of this blog in the last few months. Although you might see that as a good thing, I feel like musing on a topic that is in no way directly related to NGAs: email. 

I have long thought that email was badly implemented in businesses, mostly because users were not guided into how it should be used optimally. The consequence is email glut, which leads to information noise and, ultimately, miscommunication. There are other email related issues in organisations, but that one is most likely the biggest. 

I was reminded of this today by a short post on Gareth Spence's Online Scribbles and – just a few minutes later – by a retweet of an article written in August by Techcrunch's MC Siegler entitled Inbox 10000: Some thoughts after a month away from email. Over lunch my mind started churning again.

The backdrop to Gareth's point of view is the recent announcement by ATOS' CEO Thierry Breton of a zero email policy for the company within the year. It's not the first such announcement, but it maybe is the first for such a large organisation (80 000 employees worldwide). As Gareth points out, email is already partly substituted by other tools (he mentions Salesforce Chatter and Rypple, I've used or seriously investigated neither), and Gareth bets that these tools will continue to grow. 

I have no reason to doubt that, but I have reservations as well. The results of Siegler's experiment, when he stopped using email for a month are interesting. Although Siegler makes light of the fact in his article, he couldn't actually ban email completely. He didn't use it much, but he did use it. He estimates though that he received over 10k emails in that month, and just not reading those and not responding to them was hugely liberating. I can totally see that.

Still, I'm not sure banning the tool is the right way to go. Here are a few reasons why:

  • We're clearly not using the tool properly, and have little to know guidance on how to use it well, especially in a work environment. Very few companies actually tell you when you should or shouldn't email, when you should CC or not, etc. All of that contributes hugely to the noise.
  • As sophisticated as our inbox tools are, they are still unbelievably klunky. Gmail is probably the best tool around, but if you want to be a gmail power user and actually set it up to optimise your emailing flow, you have to learn the intricacies of a complex tool and spend a heck of a lot of time setting it up. Something that regular users will never do. One of the comments to Siegler's story had a link to http://zeromail.com/ and that looked interesting and promising. Considering I know nothing about them, I'm reluctant to try it out but intrigued at the same time. 
  • Finally, and most importantly, the email and the internet share a very important feature: they are universal. Emails can be written and read no matter which client(s) you use, who your ISP(s) is/are, which device(s) you're writing from or reading on. How do you replace a universal communication system without the replacement being just as open or universal? To take Gareth's examples, chatter and rypple are dependent on a contract with a software company. Social networking relies on accounts being open with facebook, twitter or others. IM also requires specific (ie non-interoprable) clients and accounts. As a consequence none of them will replace email. None of them can. They will divert some of its traffic for sure, they already are.

So email is here to stay. I'm curious to see what Breton comes up with to replace email. That's the part ATOS has been stangely silent about. My suspiscion is that it won't eliminate email completely (if only for external communications) and will replicate a lot of its failings as well. But maybe I'm too pessimistic. 

My own view is this: if email has to stay, even if it's only for 10s of messages a month, that's one more tool. Why not rethink email instead of trying to add more tools and complexities to the communication processes ?

If that's what www.zeromail.com does and they turn out to be reputable, I'd like to try that first…