War Of The Coffees

Funny shirt being sold at Dunkin' Donuts.

"Friends Don't Let Friends Drink Starbucks."

Now that's a Double D frontal attack on Starbucks. 

Let's see what Starbucks hits back with. 

Who would've thought coffee could be so bitter?  ;-) 

(Source Photo: Andy Blumenthal)

War Of The Coffees

Microsoft + Nokia = HP + Palm

Microsoft buying Nokia is a desperate play at mobile computing.

Unfortunately, the purchase doesn't add up  in terms of common business sense. 

Remember, in 2010, when HP bought Palm for $1.2B?

Palm once held 70% of the smartphone market to fall to only 4.9% share at the time that HP bought it and committed to "double down on WebOS."

Now, fast forward to 2013 and Microsoft is buying Nokia for $7.2B, with a mobile software market share of about 4% combined (compared to their prior Windows desktop operating system market share of over 90%) and ZDNet reporting that it was "double down or quit."

When HP bought Palm, it was a hardware maker buying software; now with Microsoft buying Nokia, it is the software maker buying the hardware vendor.

But in both cases, it's the same losing proposition. 

In 2010, at the time that HP bought Palm, Stephen Elop was leaving Microsoft to become CEO of Nokia (and in 2011 Nokia made the deal for a "strategic partnership" with Microsoft).

Now in 2013, when Microsoft is buying Nokia, HP has thrown in the towel and just sold off the remnants of Palm O/S to LG Electronics.

Ballmer is right that Apple and Google do not have a permanent monopoly on mobile computing, but purchasing Nokia is not the answer. 

Microsoft's stock is down more than 5% on the day of the merger announcement...and there is more pain to come from this acquisition and Microsoft's hubris. 

Buy more outdated technology, and you've bought nothing, but change the culture to innovate, design, and integrate, and you've changed your organization's fortunes. ;-)

(Source Photo: Andy Blumenthal)

Microsoft + Nokia = HP + Palm

RIM Is Doomed

Judge David Young of Court TV has a frequent saying that "Denial is not a river in Egypt."

When it comes to Research In Motion (RIM) the maker of the traditional organization mobile Blackberry device, denial now seems on par for their course.

On Tuesday (3 July 2012), the new CEO of RIM, Thorstein Heins was quoted as saying "There's nothing wrong with the company as it exists right now."


Yet since Mr. Heins took over RIM in January, the company's stock is down 50% and is down more than 90% from it's mid-2008 highs.


BlackBerry continues to lose out to stronger competitors like the iPhone and Android. On May 25, Digital trends reported in an article called "Poor BlackBerry" on IDC's 2nd quarter 2012 marketshare numbers for Smartphones with Android at around 60%, iPhone at 23%, and Blackberry at a mere 6%.


Further the new Blackberry 10 has been twice delayed, and RIM announced it's first operating loss in eight years, as it plans to downsize 5,000 employees (or a third of its workforce).


In the self-help industry, it is frequently said that the first step to getting better is to recognize that you have a problem.


In the case of RIM--we are looking at a company that unfortunately is either playing it too cool to be real with their customers and the marketplace, or they are in a deep and dangerous case of utter denial.

Either way, unless RIM takes decisive action soon--and that means first and foremost, coming to terms with their predictment and second, coming out with some major new disruptive technology for the mobile marketplace--they are doomed to the annals of tech history.

(Source Photo: here with attribution to Steve Jurvetson)

RIM Is Doomed

Can Microsoft Stomp Out The iPhone?

So much for letting the best product win. According to the Wall Street Journal, 13-14 March 2010, Microsoft is forcing their employees to “choose” Microsoft phones for personal use and to push those who don’t into hiding.

Is this a joke or a genuine throwback to the Middle Ages?

Apparently this is real: “Last September, at an all-company meeting in a Seattle sports stadium, one hapless employees used his iPhone to snap photos of Microsoft Chief Executive Steve Ballmer. Mr. Ballmer snatched the iPhone out of the employee’s hands, placed it on the ground, and pretended to stomp on it in front of thousands of Microsoft workers.” That sends a pretty clear message!

I guess the employee can consider himself lucky that Mr. Ballmer didn’t put him (instead of the iPhone) on the ground underneath his foot or perhaps maybe even just burn him at the stake for heresy against Microsoft.

Further, in 2009, Microsoft “modified its corporate cellphone policy to only reimburse service fees for employees using phones that run on Windows.”

While many workers at Microsoft can evidently be seen with iPhones, others are feeling far from safe and comfortable doing this. According to the article, one employee told of how when he meets with Mr. Ballmer (although infrequently), he does not answer his iPhone no matter who is calling! Another executive that was hired into Microsoft in 2008 told of how he renounced and “placed his personal iPhone into an industrial strength blender and destroyed it.”

Apparently, Mr. Ballmer told executives that his father worked for Ford Motor Co. and so they always drove Ford cars. While that may be a nice preference and we can respect that, certainly we are “big boys and girls” and can let people pick and choose which IT products they select for their own personal use.

While many employees at Microsoft have gone underground with their iPhones, “nearly 10,000 iPhone users were accessing the Microsoft employees email systems last year,” roughly 10% of their global workforce.

My suggestion would be that instead of scaring the employees into personally using only Microsoft-compatible phones, they can learn from their employees who choose the iPhone—which happens to have a dominant market share at 25.1% to Microsoft 15.7%—in terms why they have this preference and use this understanding to update and grow the Microsoft product line accordingly. In fact, why isn’t Microsoft leveraging to the max the extremely talented workforce they have to learn everything they can about the success of the iPhone?

It’s one thing to set architecture standards for corporate use, and it’s quite another to tell employees what to do personally. It seems like there is a definite line being crossed explicitly and implicitly in doing this.

What’s really concerning is that organizations think that forcing their products usage by decree to their employees somehow negates their losing the broader product wars out in the consumer market.

Obviously, IT products don’t win by decree but by the strength of their offering, and as long as Microsoft continues to play medieval, they will continue to go the way of the horse and buggy.

Can Microsoft Stomp Out The iPhone?

Is Free Worth the Price?

In the computer world, free is often the architecture and economic model of choice or is it?

We have various operating systems like Linux, Chrome, Android and more now costing nothing. Information is free on the Internet. Online news at no cost to the reader is causing shock waves in the print news world. There are thousands of free downloads available online for applications, games, music, and more.

What type of business model is free—where is the revenue generation and profit margin?

Yes, we know you can use giveaways to cross sell other things which is what Google does so well making a boat load of money (billions) from its free search engine by selling ads. Others are trying to copy this model but less successfully.

Also, sometimes, companies give product away (or undercharge) in order to undermine their competitive challengers, steal market share, and perhaps even put their rivals out of business.

For example, some have accused Google of providing Google Apps suite for free as a competitive challenge to Microsoft dominant and highly profitable Office Suite in order to shake one of Microsoft’s key product lines and get them off-balance to deflect the other market fighting going on in Search between Google and Microsoft’s new Bing “decision engine.”

So companies have reasons for providing something for free and usually it is not pure altruism, per se.

But from the consumers perspective, free is not always really free and is not worth the trouble.

Fast Company has an interesting article (October 2009) called “The High Cost of Free.”

“The strategy of giving everything away often creates as many hassles as it solves.”

Linux is a free operating system, yet “netbooks running Windows outsell their Linux counterparts by a margin of nine to one.”

“Why? Because free costs too much weighted down with hassles that you’ll happily pay a little to do without.”

For example, when you need technical support, what are the chances you’ll get the answers and help you need on a no-cost product?

That why “customers willingly pay for nominally free products, because they understand that only when money changes hands does the seller become reliably responsive to the buyer.”

And honestly, think about how often--even when you do pay--that trying to get good customer service is more an anomaly than the rule. So what can you really reasonably expect for nothing?

“Some companies have been at the vanguard of making a paying business of “free.” IBM, HP and other tech giants generate significant revenue selling consulting services and support for Linux and other free software to business.”

Also, when you decide to go with free products, you may not be getting everything you bargained for either in the base product or in terms of all the “bells and whistles” compared with what a paid-for-product offers. It’s reminiscent of the popular adages that “you get what you pay for” and “there’s no such thing as a free lunch.”

Sure, occasionally there is a great deal out there—like when we find a treasure at a garage or estate sale or even something that someone else discarded perhaps because they don’t recognize it’s true value—and we need to be on the lookout for those rare finds. But I think we’d all be hard pressed to say that this is the rule rather than the exception. If it were the rule, it would probably throw a huge wrench in the notion of market equilibrium.

And just like everyone savors a bargain, people are of course seriously enticed by the notion of anything that is free. But do you think a healthy dose of skepticism is appropriate at something that is free? Again, another old saying comes to mine, “if it’s too good to be true, it probably is.”

Remember, whoever is providing the “free” product or service, still needs to pay their mortgage and feed their family too, so you may want to ask yourself, how you or someone else is paying the price of “free,” and see if it is really worth it before proceeding.

From the organization’s perspective, we need to look beyond the immediate price tag (free or otherwise discounted) and determine the medium- to long-term costs that include operations and maintenance, upgrades, service support, interoperability with other products and platforms, and even long-term market competition for the products we buy.

So let’s keep our eyes open for a great deal or paradigm shift, but let’s also make sure we are protecting the vital concerns of our users for functionality, reliability, interoperability, and support.

Is Free Worth the Price?

Microsoft, Yahoo, and Enterprise Architecture

Microsoft offers to buy Yahoo for $44 billion—brilliant play or stupid move?

Some say it’s a brilliant move:

According to techcrunch.com, a combined Microsoft/Yahoo would be a technology behemoth and have $65 billion in revenue, $17.6 billion in profit, 90,000 employees, and 32.7% of the U.S. search market share.

Yahoo owns semi-valuable assets like Flickr, a photo sharing site and del.icio.us, a social bookmark site.

Others say it’s a stupid move:

1. Microsoft/Yahoo would still seriously trail Google’s U.S. search market share of 58.4%!
2. Other corporate acquirers, like Oracle, generally profess acquisitions only if it enables a clear #1 market position like it is with data warehouse management, business analytics, human capital management, customer relationship management, and contract lifecycle management.
3. Fortune Magazine, 18 February, 2008, says “Microsoft is paying too dearly for Yahoo.” Fortune asks “What exactly is Microsoft buying here? Technology? Yahoo has been managing a declining asset since Google invented a better way to do search…Technologists? Talent has been fleeing Yahoo Central since Terry Semel got there…a let’s not even talk about the clash of cultures that such a merger will create.”
4. Yahoo has made serious management missteps, such as backing out of a deal to buy Facebook in 2006 at a $1 billion bargain (Facebook was recently valued at $15 billion) and botching the acquisition of YouTube and losing out to Google.

Fortune concludes:

1. “Microsoft is buying an empty bag.”
2. “Yahoo will be Microsoft’s AOL” (comparing a Microsoft/Yahoo acquisition to the failed AOL/Time Warner one).
3. Microsoft should abandon the acquisition, unbundle itself from search, Xbox, and Zune, and instead focus on improving its core competency, the operating system.

From a User-centric Enterprise Architecture perspective, it’s an interesting dilemma: should companies (like Microsoft) diversify their products and services, similar to the way an individual is supposed to responsibly manage their financial investments through broad diversification in order to manage risk and earn a better overall long-run return. Or should companies do what they do best and focus on improving their core offering and be #1 in that field.

Historically, I understand that most mergers and acquisitions fail miserably (like AOL/Time Warner) and only a few really succeed (like HP/Compaq). Yet, companies must diversify in order to mitigate risk and to seek new avenues to grow. As the old saying goes, “don’t put all your eggs in one basket.” The key to successfully diversify is to architect a #1 market share strategy, like Oracle, acquire truly strategic assets like Compaq, and not overpay like with Yahoo and AOL.

Microsoft, Yahoo, and Enterprise Architecture