After traveling 5,000 miles in three days to speak about digital disruption (I know, it's odd that my physical body has to go somewhere to talk about being more digitally disruptive), I fell asleep on a train yesterday and missed one of the most noteworthy events of the week: Amazon acquired Goodreads.
Full disclosure on this one up front: Amazon published my recent book, Digital Disruption. At the same time, I am a Goodreads member for more than five years; in fact, if you have read any of the most-liked reviews of the Twilight books on Amazon, chances are good you've read mine. That is to say that I am not exactly neutral on this one. But I'll do my best to be objective in answering all the anger being expressed on Twitter and in the trades when I point out that Goodreads was not saving itself for Amazon like some virginal tribute. It has been sitting there, all along, waiting for the right offer to come along. That's how venture capital works, people.
That's not to dismiss altogether the reactions I'm seeing, which range from Amazon wants to own the whole world (and to be fair, maybe it does) to How could Goodreads do this to us. But among all the hurt feelings and handwringing about the fall of publishing and the eventual reign of cohabitating cats and dogs (oh, I do hope you get that reference), I have an important question to ask, one that I am stealing from author Nick Harkaway (@Harkaway) who wrote this on Twitter the morning after:
Today is, apparently, Cyber Monday in the UK. But there's a more interesting story in the UK's eCommerce market. It's about tax.
The debate is about the tax policies of a number of prominent multi-national businesses that operate in the UK, including Amazon, eBay, Google, Starbucks and Vodafone, most of which pay little or no Corporation Tax, which is levied as a percentage of profits. (It's relatively easy and perfectly legal for a subsidiary of a multi-national company to avoid taxes on profits in one country by buying services from a sister company in another country so that it makes no profit in the first country.)
Today, the Public Accounts Committee of the House of Commons published a scathing report on tax avoidance by multi-national companies operating in the UK. As the report puts it about Starbucks, which has made no profits in the UK for 14 of the past 15 years: "We found it difficult to believe that a commercial company with a 31% market share by turnover, with a responsibility to its shareholders and investors to make a decent return, was trading with apparent losses for nearly every year of its operation in the UK." What the committee says about Amazon is, if anything, worse.
What's the relevance to eBusiness? While it's uncomfortable for Google and Starbucks to be in the limelight for the wrong reasons, demand for both information and coffee is (presumably) fairly constant through the year. But for retailers Amazon and eBay, the timing couldn't be worse, because this debate is taking place in the run-up to Christmas, the crucial sales period for all retailers in the UK.
Today, Apple unveiled a new lineup of devices: new iMacs, Mac Mini, a 13-inch Retina MacBook Pro (which, weighing in at only a half-pound more than the Air, is sure to be a best-seller, as its predecessor was), a fourth-generation 9.7-inch iPad (with 4x faster A6X processor, expanded LTE, faster Wi-Fi, Lightning connector, improved cameras, and other refinements), and…ta da!...the long-awaited iPad Mini. As early as October 2011, credible reports from Taiwan surfaced about a 7.85-inch iPad, so it’s no surprise to see this product. And yet, Apple’s execution dazzles. You pick up this device—which weighs only 0.68 pounds—and it feels feather-light, perfectly weight-balanced—and decidedly not made out of plastic, as its competitor devices are.
I want to pause for a moment to comment further about the weight, because my very first impression of the first-generation was “It’s heavy!,” much to the chagrin of Michael Tchao, VP of Product Marketing for iPad. The iPad Mini has a larger screen than competing devices from Barnes & Noble, Amazon, and Google, but it’s somehow lighter than its competitors. Here’s how the weights compare, courtesy of each vendor’s product specs page:
Windows 8 is a make or break product launch for Microsoft. Windows will endure a slow start as traditional PC users delay upgrades, while those eager for Windows tablets jump in. After a slow start in 2013, Windows 8 will take hold in 2014, keeping Microsoft relevant and the master of the PC market, but simply a contender in tablets, and a distant third in smartphones.
Microsoft has long dominated PC units, with something more than 95% sales. The incremental gains of Apple’s Mac products over the last five years haven’t really changed that reality. But the tremendous growth of smartphones, and then tablets, has. If you combine all the unit sales of personal devices, Microsoft’s share of units has shrunk drastically to about 30% in 2012.
It’s hard to absorb the reality of the shift without a picture, so in the report “Windows: The Next Five Years,” we estimated and forecast the unit sales of PCs, smartphones, and tablets from 2008 to 2016 to create a visual. As you can see below in the chart of unit sales, Microsoft has and will continue to grow unit sales of Windows and Windows Phone. But the mobile market grew very fast in the last five years, while Microsoft had tiny share in smartphones and no share in tablets.
If you look at the results by share of all personal devices, below, you can see how big a shift happened over the last five years as smartphone units exploded and the iPad took hold.
Microsoft Windows will power just one-third of personal computing devices sold during 2012. Say what? Over the past five years, the transition to mobile devices has transformed Microsoft’s position from desktop dominance to one of several players vying for share in a new competitive landscape.
And so Microsoft is making some very bold moves to transform Windows: creating a singular touch-native UX for a seamless experience across PCs and mobile devices, building an app store distribution model, and engaging its vast user base to develop core personal cloud services.
You’ll learn about the trends and behaviors shaping a painful, but ultimately successful, five-year migration for the Windows franchise. We will size and forecast the future of Windows’ presence in a device landscape where market share is measured across all computing devices, not just PCs. And we will outline the new personal computing success metrics for OS providers and ecosystems, which look beyond device market share to customer engagement across multiple formats, online services, and content delivery.
Well if you're going to make a dramatic about face from total dismissal of cloud computing, this is a relatively credible way to do it. Following up on its announcement of a serious cloud future at Oracle Open World 2011, the company delivered new cloud services with some credibility at this last week's show. It's a strategy with laser focus on selling to Oracle's own installed base and all guns aimed at Salesforce.com. While the promise from last year was a homegrown cloud strategy, most of this year's execution has been bought. The strategy is essentially to deliver enterprise-class applications and middleware any way you want it - on-premise, hosted and managed or true cloud. A quick look at where they are and how they got here:
With a few discreet press and analyst briefings but no song and dance event (ahem, Foo Fighters), Barnes & Noble has unveiled its new Nook Tablets: the 7-inch Nook HD and the 9-inch HD+. The prices of the devices range from $199 to $299, depending on the size and memory configuration, which makes them competitive with the Kindle Fire and far cheaper than the iPad (although a smaller, cheaper iPad could erode some of the price gap). The devices are lightweight, with high-quality displays and fast performance, outdoing the Kindle Fire on several specs. They now come with a video store, with content for rental or purchase from all of the major studios, filling a major gap in the previous generation of Nooks. The Nook software interface has been completely redesigned. My favorite feature of the devices is the "Profiles" feature--when you launch the device, you see profiles that can be customized for adults or children, down to custom content, browser settings, and store recommendations. This is a long-overdue feature in tablets: Forrester's data shows that 49% of US tablet owners regularly share their tablet with at least one other person.
Walmart and Target, having booted out Amazon’s devices, give B&N exposure to customers in 5,200 retail stores where Amazon devices won’t be displayed.
This week, the New York Times ran a series of articles about data center power use (and abuse) “Power, Pollution and the Internet” (http://nyti.ms/Ojd9BV) and “Data Barns in a Farm Town, Gobbling Power and Flexing Muscle” (http://nyti.ms/RQDb0a). Among the claims made in the articles were that data centers were “only using 6 to 12 % of the energy powering their servers to deliver useful computation. Like a lot of media broadsides, the reality is more complex than the dramatic claims made in these articles. Technically they are correct in claiming that of the electricity going to a server, only a very small fraction is used to perform useful work, but this dramatic claim is not a fair representation of the overall efficiency picture. The Times analysis fails to take into consideration that not all of the power in the data center goes to servers, so the claim of 6% efficiency of the servers is not representative of the real operational efficiency of the complete data center.
On the other hand, while I think the Times chooses drama over even-keeled reporting, the actual picture for even a well-run data center is not as good as its proponents would claim. Consider:
A new data center with a PUE of 1.2 (very efficient), with 83% of the power going to IT workloads.
Then assume that 60% of the remaining power goes to servers (storage and network get the rest), for a net of almost 50% of the power going into servers. If the servers are running at an average utilization of 10%, then only 10% of 50%, or 5% of the power is actually going to real IT processing. Of course, the real "IT number" is the server + plus storage + network, so depending on how you account for them, the IT usage could be as high as 38% (.83*.4 + .05).
Apple's new iPhone 5 is a case study in incremental improvement. Nearly every aspect of the product -- the CPU, display, cameras, radio modem, size, weight, etc. -- are all improved over the iPhone 4S and at the same $199 price point. No doubt, the iPhone 5 and iOS 6 will sell millions of units, preserve Apple's momentum, and hold off the competition, but significant threats are mounting that Apple cannot afford to ignore:
Nokia is delivering Apple-quality innovation. As Nokia demonstrated last week at its Lumia 920 event, Nokia's innovation engine is firing on all cylinders. When the Lumia 920 launches (rumored for November 2), it will outclass the iPhone 5 in key areas such as imaging (PureView imaging, Cinemagraph) and location (Maps, City Lens, Transit) as well as bring wireless charging and NFC into the mainstream. While the breadth of accessories will be nowhere near what the iPhone offers, Nokia gets strong marks for showing Apple how NFC can enhance the accessory experience.
To the surprise of no one, Apple today announced its new iPhone 5. Given that the iPhone 5 is unlikely to solve the European debt crisis or bring peace to the Middle East, it won’t be surprising if we hear a resounding "meh" from Apple's critics, with them dinging the company for a paucity of innovation. Indeed, competitors like HTC and Nokia have already offered some of the features that Apple highlighted today, such as those for imaging. But Apple still outpaces the competition when it comes to the entire package — the new iPhone unites significant improvements in industrial design, imaging, audio, and connectivity, along with the wealth of new capabilities that iOS6 enables. Apple will sell a boatload of iPhones — especially now that both Verizon Wireless and Sprint will have an iPhone (the 8 GB iPhone 4) for consumers' favorite price: free.
But make no mistake, this is not about the iPhone 5 versus the Samsung Galaxy S III or the iPad versus the Kindle Fire HD; this is about customers' attachment to the larger ecosystems that those devices inhabit. Amazon, Apple, Google, and Microsoft all aim to translate customers' investments — of money, information, personalization, and social connections — into a gravitational field of loyalty so powerful that few customers will ever attain escape velocity. This market is still taking shape, but the iPhone 5 will markedly increase Apple's pull, already the strongest out there.