One noteworthy detail emerged from Microsoft’s quarterly earnings call yesterday: A $900 million write-down for “inventory adjustments” related to the underperformance of Windows RT. This result didn’t come as a surprise because:
Microsoft’s Windows RT strategy has long been puzzling. Launching the Surface RT device before the Windows 8-based Surface Pro offering never made sense – an insufficient number of Modern UI apps made the Surface RT hard to position and sell from the beginning. Samsung recognized the shortcomings of RT early on, exitingthe market a mere three months after RT’s release.
Microsoft still hasn’t convinced developers that Windows RT should be a top priority. Our survey of 2,038 global software developers revealed that developer support for Windows RT trails Windows 7, Windows 8, Apple iOS, Google Android, and even Apple OS X. For example, while 21% of global developers support or plan to support Windows RT, 64% say the same for “Windows 7 and earlier versions.”
On February 22, the Reserve Bank of India (RBI), an institution that supervises and regulates India’s financial sector, announced guidelines allowing corporations to enter the banking sector. Private companies, public-sector groups, and nonbanking financial firms will all be eligible to apply for a banking license. We expect RBI to start issuing new bank licenses by early 2014.
RBI guidelines state that companies receiving a banking license must open at least 25% of their branches in rural areas. Despite this guideline, I believe that new entrants will primarily target the same urban and semi-urban customers that existing banks target. The reason is simple: These are the most profitable customers. This helps explain why 85% of rural bank branches in India belong to public banks; it’s simply not an attractive market for private banks.
What it means for current Indian banking CIOs: Leverage big data to grow your business or prepare to be left behind.
As competition increases, businesses will expect new IT capabilities to understand and respond to customer needs better, faster, and cheaper. Banking CIOs who embrace this change will adopt big data technologies and become true business partners. The ones who don’t will be bypassed by new entrants (when they come to play) using big data approaches and internal data from whatever market they’re currently in to analyze the banking market. These new entrants will likely influence customer preferences, question existing assumptions, and look for ways to disrupt the market. I recommend that current Indian banking CIOs:
Once upon a time, you could trust that your business was insulated from disruptive innovation because only people already in your industry had the skills and the tools to try to change your industry. Thus, McDonald's competed with Burger King, Crest competed with Colgate, and Dell competed with HP. When innovation did arise, it came from companies that had similar economics and were evaluated by Wall Street using the same criteria. That meant that competition, although fierce, stayed within fairly defined boundaries and real surprises were few.
Digital disruption will change that -- or already has, depending on your industry. Under digital disruption, any company of any size can make a play for your business. That's how the Zeo sleep monitor, a $100 device that can monitor your sleep nearly as effectively as a $3,000 sleep lab visit can, potentially disrupts research hospitals, the makers of sleep meds like Ambien and Lunesta, and eventually the insurance companies that have an interested in promoting your health. That's how Amazon is now a major competitor for TV show pilots, using its vastly different economics to justify buying shows that would normally have a narrow set of bidders among broadcast and cable networks. That's how startup software companies are building apps to insert themselves into consumers' lives in ways that bigger companies should have done first by offering menstrual cycle tracking, DIY home improvement cost estimating, and weight loss monitoring.
First off, let me say this: I hope that Steve Jobs' health improves, and that he comes out of whatever challenges he's going through in the best of health. He's an amazing, visionary leader of a dynamic company -- and he's also a person with a family. Let's all wish him well.
While famously a CEO, Steve Jobs is also, it should be known, a product strategist par excellence. He's clearly been involved, in a deep way, in the development of Apple's product ideas, product designs, business models, go-to-market strategies, and responses to competition. These are the job responsibilities of product strategists. In his (and Apple's) case, product strategy has risen to the very top of the organization.
Product strategists of two different flavors are wondering how they might be affected by his resignation as CEO (and concomitant request to become chairman):
Product strategists who compete with Apple. Product strategists at companies like Microsoft, Google, Samsung, HP, Dell, HTC, and similar firms wonder if Steve Jobs' change in role might benefit them. They actually shouldn't wonder: His departure from the CEO spot won't benefit them -- not for a very long time, at least. Apple's product development road map stretches into multiple years ahead and has been shaped both by Jobs and by the organization he built. Jobs' departure won't affect Apple's product portfolio, quality, or competitiveness for a long time -- if ever.
I've written about the World Bank's Doing Business Index in several blogs and reports. One of my favorite graphics from my "Where In The World?" report on market opportunity assessment looks at the BRICs (Brazil, Russia, India, and China) - relative to a selection of other emerging markets - in terms of population and then compares their rankings across three economic and political indicators: Doing Business, Economic Freedom, and eReadiness. The point is that "bigger is not always better" in terms of a potential market to enter.
Saudi Arabia has used the World Bank's Doing Business Index as a critical measure of its 10 x 10 initiative - a program of reforms launched with the objective of being in the top 10 countries for doing business by 2010. They missed the mark in 2010. But with the 2011 new rankings, we can congratulate Saudi Arabia's reformers for making it to 11 x 11.