The iPad is the PC of the future

In the wake of yesterday's iPad announcement I wanted to bring some history to bare. When the iPhone was released the experts spoke, "the iPhone will not substantially alter the fundamental structure and challenges of the mobile industry" Charles Golvin, Forrester Research January 11, 2007. The iPhone was not a viable Enterprise device. It seems funny now, but many didn't see it's difference.

At the time I'd commented, "The iPhone UI brings the dream of the interface in the Minority Report from 2002 to life where Tom Cruise pointed, pushed and dragged information around a massive screen. An environment has been created that allows you to flick, pinch and drag your way through massive amount of information. The way this resonates to me is that it's fundamentally more human in nature. ...Suffice it to say, the iPhones interface has gotten so many layers of interface paradigm out of the way and simply allow you to touch your information, which is fantastic."

With that backdrop it's funny to see Mr. Golvin say, “I think this will appeal to the Apple acolytes, but this is essentially just a really big iPod Touch”. The iPad is the PC of the future, period. When we look at how technology is used in our homes, this modality exactly what we really need. How many of us like sitting at desks more then couches? How many like power cables? We clearly see the slippery slope with the death of the desktop PC. The only unit showing growth in that category is the iMac with it's heavy entertainment leanings, and media hub functionality. Everything else is about mobility, it's about freedom. In the past we needed to make large compromises for this freedom with slow connections, crappy UI's or limited functionality. This dilemma is over.

The iPad is not "just a really big iPod", it is the most personal of computers we've ever seen. Between the UI advancements of the iPhone, the developer community that's surged under it, and it's form factor, the iPad will change commuting in our homes and in our workplaces for the next decade.

It's said and posted, and I hope history will not leave this wrong for someone to rub my nose in ;)

Small is beautiful

A few weeks ago I got a call from an aspiring entrepreneur that had a, "great idea!" His idea was for an iPhone game that, "would be huge!". Sensing my disbelief, he comforted me with, "I've been playing games for 30 years." This was of limited comfort. He was a first time entrepreneur with a BIG idea. Not big as in Google/Microsoft, but costly and complex to execute. The smallest starting point possible would be a $250,000 experiment. Probing about his experience or partners it became very obvious that he had a ton of energy and enthusiasm, and a huge blind spot on the mechanics of execution. While blind spots aren't good, the big problem was that he was unaware of it. Given that I never want to discourage virgin entrepreneurs, I tried a different line of discussion.

Asking about the market, the complexity of the game, distribution, etc. he started to get a sense of what he might not know about pulling this off. I suggested that he might shrink his idea to the smallest possible footprint so he could begin to understand these issues in a less costly way. He told me that he'd already been through this exercise and that the $250K was the less costly way! After the requisite, "that much money is going to be hard for a first timer to raise with no prototype, proof of market, applicable experience, etc." we hung up. These discussions are very frequent with first timers. They have a dream of what's possible and want to make it happen. It is the reason to love them, but it's also at the core of the failure statistics of startups. They don't know what they don't know.

A week or so later I got a call back. I could barely make out the words, but our first timer was very excited. As he calmed down he told me how he finally settled down and worked on making his plan smaller. His requirements went from 3D graphics to 2D, and 8 levels of game play to three. I asked if this would still let people try his unique ideas, and was meet with an emphatic YES. And the greatest thing was that it would cost him less than $15K, a number he would do himself!

By making it smaller, he made it possible. Subtle insights that mitigate the risk of a first timer come through execution. By doing something small you can be doing something. Rather then dreaming about a crystal castle, you can be cutting your teeth on a brick one. And I have read E.F. Schumacher.

The opiate of the entrepreneur!

Last week I had the privilege of speaking at the Connecticut Innovations Annual Technology Celebration. It was an amazing turnout of over 600 to celebrate CI's 20th anniversary. I was on a panel talking to college students about being an entrepreneur. The question came up of, "Why do you do it?" While it seems like a reasonable question given the poor odds, the fact that everything is a variable and you typically risk much of what you've accomplished up to that point, but it just doesn't seem like a reasonable question to me.

That which makes us, humans, the unique animal is seen in the things we create. The only better then the creation of each of us are those things that people create together, and one of the greatest forms of these creations is the company.

In these times of economic challenge and corporate excess, it's very easy to loose sight of this. The company, teams of men and women organized for the purpose of building and selling things, captures so much of what it means to be human. Creating companies is the ultim

ate creative activity. This group of like minded people are united by their ability to see a different future, a better one. They see how to do it, and infect others to see it with them. In the picture above is this group (a few folks are missing) for Continuity Engine.

Continuity Engine sees a better world for regulated smaller businesses. We are building tools to take the majority of work our of the compliance process. We thing that smaller businesses have significant advantages in servicing their clients, but material challenges caused by that same scale. Continuity Engine is using a series of trends for the purpose of eliminating this disadvantage. With the power of Software as a Service, open source licensing and social networking we think we can change this little corner of our world!

As a delusional college student I really wanted to change the world. As a schooled Marxist I thought that doing this would be accomplished in a very different way, but I'm happy to say that I've been given the privilege to do just that. Every entrepreneur is in the business of changing the world in their own way, big or small. Through innovation they let segments of the market solve problems better, save money or in some other way make their situations better.

Through Perimeter eSecurity I've meet dozens of entrepreneurs, in the ensuing time I've meet dozens more. In working with Connecticut Innovations with the CTech accelerator and Yale with the Yale Entrepreneurial institute I'm meeting hundreds of young entrepreneurs and it is intoxicating. The amalgam of optimism, creativity and the galvanized will of the entrepreneur is the source of most of humanities energy. It is something to behold in mass and something we need to make sure to nurture.

Crowdsourcing for Banking

Now is the time! We've seen open source licensing change the way so many things work and now is the time for it to change banking.

We are a bunch of idealists at Continuity Engine and we're excited to be part of this change. Here is the link to the press release.

The economy and the downfall of Microsoft

Over the last 20 years the key to Microsoft's dominance has been PC manufacturers. Among the hardware folks were Apple with its own software, and every other vendor with Windows. Microsoft had the great advantage of a competitive hardware market with vendors compressing margins and kicking each others heads in to make the total hardware/software package far less expensive. It's been a good run, but the winds of change are blowing.

Given the state of the economy, market and new alternatives the PC market is in a state of flux. The PC market is off 15% or more with the only sector showing strength is the Netbook market. Netbooks have less memory and storage and can be had for around $400. This makes every component decision that much more important in the unit costs. Among the most expensive part in any PC is the operating system license, and this is where the story gets fun.

Netbooks are driving an alternative to Windows called Linux. Linux is freely available to the manufacturers so they can keep the money that they used to send to Microsoft. If keeping much needed profit dollars weren't enough, another incentive is Linux itself. Linux is small and light allowing it to work on lower powered machines well. In a recent review of XP vs. Linux, the XP system couldn't keep up with a two way video conference.

Adding fuel to this fire, the highly profitable server business is under air assault by something called cloud computing. Cloud computing works by running your software on the computers of Amazon, Google or one of the other folks in the business. Amazon was the first to the dance and has more than 400,000 subscribers. Each of these users results in at least one fewer server that HP, Dell, IBM or Sun will sell. Google, as an example, uses their own proprietary computers and don't buy traditional servers. Google runs nearly 1 million servers and turns its spare capacity into new revenue with the cloud offerings. When folks buy these services they get themselves out of a ton of other costs from power, to bandwidth, to managing the stuff. It's a huge win for clients at the expense of the hardware folks.

With these pressures on the hardware folks it's hard to see how the traditional lock step of them with Microsoft holds up. With a shrinking pie for the combined wares of hardware folks and Microsoft, the hardware folks will need to cannibalize Microsoft to insure their own viability. While changes of these magnitudes are typically slow to happen these forces combined with bad economic forecasts will accelerate the markets adoption of these very attractive alternatives. In this world it's hard to see Microsoft dominating the future the way it has the past.

The advantage of great engineering

One of my favorite stories about great engineering is about one of my favorite companies, Honda. A friend of mine who races motorcycles was telling me how he'd been thrashing his Hawk (Hi Dan) for years and he was going to rebuild the engine. Having worked on a number of different brands he found himself shocked at what he found. The Honda had more than 20% fewer parts! Even more to his amazement was the fact that after all of the abuse he had dished out the major moving parts showed NO sign of wear. Honda had used great engineering to decrease the number of parts and then spend the savings on making the parts that were left better. Due to this discipline Honda has an operating margin of 11%. This is higher than anyone in the car business. They engineer costs out, quality in and make money where others loose it. I love it.

Yesterday the news came out from the research house iSuppli that the new Blackberry Storm costs them $202.89 each to build. This compares to the iPhone 3G at $174.33. So while the average retail of the Storm is lower then the iPhone, Apples engineers have made a device that sells at a higher price, is percieved as premium and costs less! I love it! It's outselling the Storm four to one, it's driving post sales revenue through it's AppStore that recently crossed the half a billion downloads and it's less expensive. The profitability can be reinvested into innovation to further their advantage. I really love it!

It's such a wonderful case study of great engineering and great business that I had to gush about it.

IT and Texas Hold'em

IT, meaning information technology, is a funny thing. Over the last number of years many saw it as the source of massive productivity increases and the way to make their businesses more competitive. While this was the case generally, any specific situation could vary to a huge extent.

Traditionally IT projects all worked the same way. Step one was to decide that you wanted to do something, followed by investigation into the rough cost, getting dollars budgeted, putting out an RFP to figure out what solutions might be available, whittling down the alternatives, trialing a couple, selecting the final, getting the hardware that it will run on, piloting it in your company, figuring out how to get it to everyone, and then supporting it. That was one heck of a sentence!

What all of this translates into is that IT projects involve spending the vast majority of the money BEFORE ANY benefit is realized. And the reality is that some work and some don't. At one point there was statistic floating around that up to 70% of all large software deployments were abandoned before completion!

While many in the industry talk about ROI (Return on Investment) the way a manufacturer purchasing a new stamping device would, there really isn't that clear of connection for me. The problem with IT is that the critical factor is US, you and me. Will we like it, use it, etc. It strikes me that with the wild swing is return, and with zero being a reasonable outcome, IT spending is more like Texas Hold em then like typical corporate investments.

If this is indeed the case, then it would have a significant impact on the type of person you'd want in the role. Often IT people are not know for their social or people skills. As such they think about the technically RIGHT way, and not the way that will work based on the tells of the other players.

It is with this position that I offer a radical idea. Turn IT spending into a poker game with the returns directly impacting the CIO and the team, and make sure the CIO is a decent gambler. If he had limited confidence in a given situation and wasn't getting a good read on the other players, he'd lighten the bet. And where there was greater certainty he might go all in. I suspect if one set a model up like this that the ROI would be far better overall, and holiday parties would undoubtedly be improved with these new sensibilities.