"Cloud" is the Missing Ingredient for a "Third Device" iPad Strategy

Apple pitched the iPad at launch as a third device that consumers would use alongside the PC and the phone. While the iPad has genuinely innovative software and hardware, Apple has done little new to make the device easy to use in tandem with existing devices, beyond what is already in the iPhone. Consumers must sync the iPad using a cable with PC/Mac iTunes to transfer music or videos; while photos and podcasts are easiest if loaded the same way.

Apple has left too much in the hands of consumers to transfer and manage manually. For example, if a consumer wishes their video viewing position to be remembered across their devices, then they must sync first the iPad with iTunes, followed by syncing their iPhone or iPod. Contrast that with Amazon's Kindle: Whispersync maintains a person's reading position automatically between Kindle apps on PC or iPhone and Kindle eReaders.

The same issue hits multiple areas on iPad from games' scores and progress, the reading position on Apple's own eBooks, and the preferences of Apps downloaded from Apple's App Store, email, calendar and contacts.

There are workarounds for some of the above from app developers. Games built with the Plus+ network essentially have their own cloud service built in. Consumers may sync Calendar/email/contacts with a cloud by using a specific provider such as Google apps, a corporate account with Exchange, or Apple's own MobileMe. Other apps have their own app specific cloud abilities like Evernote or the iPhone/iPad Kindle app.

For iPad to really fly, preferences, usernames, passwords, and content should transfer automatically across the different devices that Apple intends consumers to use together: PC, phone, and iPad. Apple should use a consumer cloud to do it. Consumers should not have to think, all of this should just work. Tethered sync is a twentieth century product feature.

If Apple does not extend its consumer cloud services, iPad will rely on a patchwork of cloud services to deliver the third device experience. But, as a consumer cloud is essentially software, Apple could easily fix all of these things mid-life for existing iPad owners. iPad is after all very much a version 1.0 .

Every time I think of the iPad as "the third device," the image of Orson Welles from the film the Third Man appears in my head:

"You know what the fellow said – in Italy, for thirty years under the Borgias, they had warfare, terror, murder and bloodshed, but they produced Michelangelo, Leonardo da Vinci and the Renaissance. In Switzerland, they had brotherly love, they had five hundred years of democracy and peace – and what did that produce? The cuckoo clock."

iPad is no cuckoo clock, but it's not, yet, a Michelangelo either.

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Why Michael Jackson is Worth More Dead than he Was Alive

The estate of Michael Jackson have reportedly signed a deal worth at least $250 million with Sony Music.  It might seem like a lot of money (heck, it is a lot of money) but this isn’t the crazy gamble on yesteryear that it might at first appear:

 

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Three Key Questions for Record Labels in the Digital Age

News reports today suggest that Warner Music may be planning for buying some or all of EMI in a post-bankruptcy fire sale.  As a Brit I’d be particularly sad to see EMI meet such a disappointing end, but there is an unnerving sense of inevitability with current events.  I’m not a financial analyst and I’m not going to attempt to comment on the likelihood of Terra Firma meeting its debt obligations.  But what I do think is interesting and relevant from a strategic perspective are the questions EMI’s predicament raises about the role of record labels in the digital age.
 

In fact there are three key questions record labels need to ask themselves:

  1. Are they relevant and necessary anymore?
  2. Are they innovating enough?
  3. What role should they play?

Here's my take on what the answers should look like...

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My blog: The End of the Road or a Change of Lanes?

In three days, it will be the two year anniversary of my first blog post on Experience: The Blog.  Originally intended to be an exploration of experiential marketing strategies, my interest and focus quickly turned to social media and how the growth of the peer-to-peer groundswell creates challenges and opportunities for marketers.  It is apt to recall how my blog started as one thing and became another, because change is in the air again.  I'd like to reflect on that change, put it into context and invite you to join me as I shift my blog publishing to a new address.

A month ago, news broke that Forrester would be altering its blog policies and analysts would shift their industry-related blogging into a new, common platform on Forrester.com.  I posted at the time that I believed aggregating Forrester's thought leadership in one place made sense and that I was eager to continue blogging, sharing news and building my reputation within the new Forrester blog. 

The reaction was swift and emotional.  Hundreds of tweets and blog posts weighed in on the topic; a few supported the new blogging policies, but most did not.  One person tweeted I was "licking the boots of (my) corporate paymasters," and a friend sent heartfelt condolences at the loss of my blog.  I ignored the tweet and assured my friend that I was not progressing through any of the stages of grief (unless bemusement was one of those stages.)

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Staying nimble in the age of the global matrix

We've seen it happen a thousand times before: a marketer gets excited about an emerging field like customer analytics or social media marketing, develops a sensible plan of action, and then runs face-first into reality, which looks something like this:

  • "HQ has already signed off on my budgets for this year; this will have to wait until next"
  • "Maybe if I can get Peter, Paul and Mary to agree to this at the regional marketing love-in, we can work together to convince global to consider it in the future"
  • "I heard the trial in North America is going well; but by the time the roll-out progresses through Europe, Asia, Latin America and Africa, a year will pass"
  • "Stuff it; let's just do our own thing; HQ can worry about process and efficiency later"

In other words, adaptive brand marketing is hard for any company — but especially for multinational enterprises. But the world does wait for your next global conference call. Customers keep buying and talking and changing their behaviour, as do your competitors. MNCs have no choice other than to stay nimble in the age of the global matrix, which is the topic I'll speak about at Forrester's Marketing Forum 2010 in Los Angeles in April. See you there.

Mobile Coupons - What about them?

This is probably one of the top 10 inquiries I get from clients. Should I have a mobile coupon offering? If so, what form of mobile technology should I use? Our new report, "Mobile Coupons: Gold Rush or Fool's Gold?" addresses this question in more detail. This question was especially important in 2009 with the poor economy as consumers sought savings and deals.

Do consumers use mobile coupons today? A few do. Our surveys show that a few percent have at least trialed mobile coupons. There have been some usability issues - how to opt in to programs, download a coupon application, breadth of offers available - as well as demand. Heavy users of mobile coupons are not necessarily heavy users of mobile data services. My grandmother cuts more coupons than anyone else I know. She has a prepaid 100 minute per month voice plan. Will she ever use mobile coupons? Probably not. She turns 90 this summer. A lot could change in 10 years, but until her arthritis is so bad that she can use scissors, I think she'll still be clipping coupons from the newspaper. I see more opportunities in luring young mobile-savvy cell phone users into opting in for programs.

That said, I'm optimistic. The main reason ... every grocery store and many retailers that I know are using mobile coupons. Target launched a few weeks ago. Target takes providing an amazing guest experience very seriously. When you ask, "are mobile coupons ready for primetime?" Target adopting and rolling them out is a clear "yes" for a leading US brand. Safeway. Best Buy. Krogers. JC Penney. These are just a handful of the companies rolling out mobile coupons. With their marketing power and ability to drive awareness and motivate adoption, I expect we'll see a significant jump in adoption and usage this year.

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It's time to evaluate your use of customer data

The online space is moving swiftly toward audience targeting, where demographic, behavioral and contextual data are aggregated to create a better picture of a target audience. While the offline world has already established relatively structured data trading processes, online marketing is just beginning to really trade in this valuable currency. In fact, one of the companies I moderated a panel for, eXelate, is about to announce a partnership with Nielsen, which would make Nielsen's panel data available for purchase and use on display targeting campaigns.
While it is true, as Emily Steele notes in the Wall Street Journal, that Congress and consumer advocacy groups are concerned about so much data being aggregated for online marketing use - which could cause improper use of consumer data for targeting purposes - it is also true that both marketers and consumers can benefit from this use if it's done right. Using consumer behavior data is not new, but what is new is how easy it is to aggregate data and get a clearer picture of what a customer wants. For interactive marketers, this presents both opportunities (giving customers better deals on things they like to buy) and risks (targeting with data that should remain private.)
Navigating this terrain can be difficult for marketers who want to create a good customer experience but don't want to cross the line into murky territory. To help determine how to maximize your use of customer data, join us for our panel. We will have some of the leading players in the data space on a panel at the Marketing Forum on April 22 to discuss how data plays a role in the interactive media buying process. To learn more click here.

Never believe a single data point when forecasting

We often receive questions such as “researcher X’s forecast is much higher/lower.”  I always take these remarks seriously – there are many elements an analyst has to take into account in forecasting and  I’ve learned over time that the content of these conversations drives the value of the forecast (for both parties).

Recently I had a discussion with a client who was skeptical of our growth projection for digital music subscriptions in our recent Music forecast.  We discussed that a key input to our estimate are discussions with companies providing these services and understanding their growth outlook.  But these discussions are expectedly biased, that’s why we routinely challenge providers to defend their expectations but we also look for corroborating data to indicate direction and scale of change. Similarly, if survey respondents happen to love a product idea, it has potential but there’s no certainty that consumers will eventually spend money on that product.  What we look for is a solid pattern of evidence supporting a growth hypothesis along with a paucity of evidence supporting the alternative (decline).

As part of the forecast process, we as analysts debate various hypotheses and I shared the content of those discussions with this client, which helped him understand that our growth expectation for digital subscription is supported by evidence beyond the confidence of subscription providers.

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Customer Experience Management In Europe

In preparation for my speeches in London and Stockholm, I examined the responses from our Q4 2009 customer experience survey of executives which was the basis for my research on North American companies called The State Of Customer Experience, 2010.

It turned out that there were 53 responses from Western European firms with annual income of at least $150 million. While this was not a large enough sample size for me to publish in a research report, it was certainly interesting enough for me to present during my speeches. So I thought I’d share some of the data here.

First of all, there’s definitely a lot of interest in customer experience in Europe. Forty-seven of the respondents said that customer experience was either critical or very important to their firm’s 2010 strategy and, as you can see below, three-quarters of the respondents said that there company is trying to differentiate itself with customer experience. 

Only 6% of the respondents said that they had a very disciplined approach to customer experience management. Here’s what they identified as major obstacles for improving customer experience:

  • Lack of a clear customer experience strategy (53%)
  • Lack of customer experience management processes (53%)
  • Lack of cooperation across organizations (43%)
  • Lack of budget (26%)
  • Lack of understanding about customers (40%)
  • Lack of urgency (21%)
  • Lack of executive involvement (17%)


Here are some customer experience activities that are underway:

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Adapting to Cloud: The Channel Models They Are a-Changin’

NetSuite, a leading SaaS ERP/CRM provider, recently announced that it is revamping its channel partner comp model: 100% on Y1 subscription revenue, and 10% thereafter. VARs have been remiss in taking up the SaaS torch, largely because most SaaS vendors haven’t provided a financial model conducive to VARs’ cash flow requirements. Per the on-premise license model, channel partners make a big portion of their nut on initial product margin, i.e., up front. But vendor SaaS economics minimize up-front remuneration and spread revenue out over a long period of time. Though it sacrifices year-one revenue, NetSuite’s 100/10 model more closely mirrors VARs’ accounting practices. 

NetSuite’s model will be the first of many SaaS channel model “experiments” that will ultimately be a shot in the arm for the SMB market in particular. Contrary to popular belief, SMBs have been slow on the uptake of SaaS (application hosting outpaces SaaS adoption by SMBs by a factor of 3-4x) ... Business applications; deployed via on-premise, SaaS, or application hosting

 ... due to the fact that VARs, in ownership of the customer trust asset, haven’t been pushing SaaS. But the financial barriers to channel partners’ SaaS advocacy are being broken down. 

Now that the path for VARs to play in the cloud is being forged, and their play along with software vendors, aggregators, and ISPs being validated, distributors and DMRs, long wedded to on-premise license models, are going to have to figure out their place in the new cloud channel order. 

What do you think? Is this one of many experiments? What is the role for distributors and DMRs in cloud computing?