The Customisation Revolution

PortalsMag writes:

NetSuite’s recent debut of NetFlex, a customization and integration platform, is a reminder that both the hosted and licensed approaches to e-business are converging around the importance of giving customers more power to change, configure, and control their applications.

NetFlex’s approach is based on what NetSuite calls “Click, not code.” In other words, custom features can be set up via point-and-click interfaces, opening the door to line-of-business users to implement their own changes (e.g. to create a more industry-specific appearance, process, or template). It’s a concept that extends to integration and personalization as well, giving companies the ability to connect their NetSuite applications to other systems of record without having to engage in full-blown enterprise application integration (EAI) projects and deliver specific information based on roles.

Technorati, Bloglines, and The Economics of Feeds

by Umair Haque writes:

…It’s been less than cool for me to watch Technorati’s first-mover advantage eroding over the last few months, culminating in the Bloglines acquisition. I thought Technorati was incredibly cool from the day it launched, and I thought it had a very strong advantage.

Examining why, I think, reveals some pretty important strategic lessons about Web 2.0 (at least for me). It’s a fascinating story, because it’s about two players, (Technorati and Bloglines) with the same capabilities, but very different strategies – which led to very different outcomes. Here are my notes about it (based on some pretty strong assumptions – needless to say, YMMV).

There are three questions that hit me these days when I look at the blog ecosystem. First, why has Technorati stuck with a decayed standard – ‘watchlists’ – vs feeds? Second, why didn’t it extend it’s advantage to first-to-scale by locking in a user base? Third, why does Blogger continue to turn into Windows 98? Leaving number 3 aside, here are some thoughts on the first two.

Technorati, and I think most blog aggregators, have misunderstood the strategic landscape created by the economics of feeds.

Telecom Patricide

Bob Cringely writes that “the greatest threat to the old landline phone company now comes from mobile phones. And ironically, many of those mobile phone companies are owned by the same landline monopoly they appear to be trying to kill.”

It wasn’t supposed to be this way. When mobile phones came to America, they were expensive to buy and use. I remember paying more than $1,000 for a car phone. The analog phone system allowed a maximum of 660 simultaneous users per cell tower, which means the typical $500,000 capital investment had to be amortized over at most a few thousand customers. No wonder airtime was so expensive. It had to be just to make the numbers work.

But eventually something happened. Capital costs fell, as they tend to do for any electronic devices that are produced in large numbers. Competitors appeared, driving down per-minute costs. Digital services and smart antennas allowed an order of magnitude increase in users per cell. And in response to these changes, the number of people using mobile phones exploded. Today, there are 140 million in the U.S. alone, spending an average of $44 per month.

All of which was wonderful news for the landline phone companies right up until the number of phone lines in America started to decrease after a century of growth. Three things led to this decline in total phone lines, which began around 2000: 1) DSL and cable modems led to fewer people ordering second phone lines just for dial-up web surfing, 2) e-mail and file attachments idled so many fax machines that people and businesses started to abandon dedicated fax lines, and 3) young people replaced their hard-wired phones with mobile models that reflected their nomadic lifestyles.

But if you owned a house, you still needed a regular phone line, right? Wrong.

Information Marketplaces

Tech Beat writes:

Imagine a world of search in which every item that’s posted to the Web is immediately scanned and dispatched to people who have expressed an interest in it. This is new arena of search that companies such as PubSub and Technorati are creating. PubSub founder Bob Wyman calls it prospective search, and he predicts it will destablize many entrenched businesses. An example: Monster.com. If you tell PubSub that you’re looking for a Wharton MBA who’s fluent in Mandarin, and such a person posts those details on his or her blog, the search engine makes the match for you–with little need for a job-site intermediary.

Wyman foresees a world in which prospective search engines bring buyers and sellers together. In addition to Monster, this could also challenge eBay. In this free-range world he describes, the extra services that sites offer, from transactions to trustworthiness rankings, become ever more vital.

TECH TALK: When Things Go Wrong: Looking Ahead

The framework of software-as-a-service to SMEs in emerging markets will help us consolidate all our internal projects that we have been working on for the past few years. For long, I have believed that SMEs are the next frontier for technology solutions. What I want Netcore to become is an SME Tech Utility and Information Marketplace provider to help SMEs automate for growth.

Daniel asked: What is a 35-word statement for a customer pain? Understanding the pain point of the market one is seeking to address is critical. Here, I have a rich set of experiences as an SME to fall back upon. I have managed a small business for more than a decade. As a business grows, the old way of managing information (in peoples heads) is not good enough. There is a need for processes to be phased in without overdoing it. The SME pain point is in dealing with business growth. Few are able to make the transition well. We are also going through similar pangs right now.

Structure needs to blend with the informality of the SMEs way of business life. One cannot take ERP applications written for the big companies and simply make them cheaper and lighter for SMEs. This is the sweet spot. Broadband will enable ASPs to make a comeback and allow SMEs to use the applications. [I will discuss ASPs in greater detail in a forthcoming Tech Talk series.]

So, the die is cast. For now, I will be making my own investments into Netcore. At the same time, I have invested in creating an ecosystem of related companies in thin clients, mobile and broadband content, next-generation search and information management, and education. Netcore remains the keystone at the centre of this ecosystem.

I could not have looked at this a year or two earlier because bandwidth was not able to deliver applications to SMEs. Even now, there are plenty of challenges in terms of reliability. But that is changing fast. Look ahead a year and the situation will be very different in terms of both bandwidth reliability and affordability. Considering the lack of legacy and the information silos that exist in most SMEs, net-native software is the only option to break these artificial information barriers and automate their businesses. In this context, Sudarshan asked a pertinent question: Is developing software in India for the Indian market feasible? My answer: Yes, provided the marketing and distribution costs are eliminated. This is where the ASP model comes in.

This is the vision. Within me, I know this is the right idea. But to actually execute on this and make it successful will require us to do hundreds of small things right, with few mistakes. Any seemingly small error can be fatal to a fledgling business. The vision has been in the making for a few years now, but I do now believe that we have the building blocks for what can be a big and transformational business in the years to come. It is still a long journey, and we have just taken our first steps. There will be many twists in the tale, and this entrepreneur will be there to share them with you!

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