Monthly Archives: September 2011

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B2C and B2B

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You Are Who You Build For

Every successful technology vendor knows who their customer is. For Apple, the end user is prioritized at the expense of every other consideration, save possibly form. IBM, on the hand, has traditionally designed and built software for businesses; users are a secondary concern.

The distinction is relevant because the requirements of users and businesses are frequently at cross-purposes; what’s good for users may not be good for employers, and vice versa. And while it’s possible to develop products for individuals within a business context – Microsoft Office is but one example of this – it remains a practice distinct from building products for the average consumer. As Windows Mobile’s history demonstrates.

Product development is inevitably a reflection of its target; the institution is a reflection of all of the above.

While this focus acts to constrain an organization’s addressable market – Apple is famously indifferent to selling to enterprises and IBM divested itself of its only consumer brands in 2005, attempts to service non-core audiences have historically been problematic.

HP, for example, seems to have belatedly come to the same conclusions that IBM did, as it publicly contemplates the separation of its PC business. And Palm’s webOS – a consumer oriented mobile operating system business that HP paid $1.2B to acquire, was orphaned in the same timeframe as HP’s now ex-CEO Leo Apotheker ended the firm’s dalliance with consumer relevance to focus on the business he knew best: business technology.

HP was, in that respect, merely following in Cisco’s footsteps, as the enterprise datacenter and networking supplier spent $590M to acquire Flip – a consumer oriented hardware business – that it retired two years later, having concluded that it lacked the ability to run consumer and enterprise businesses side by side.

Sun, likewise, was an enterprise technology company that sought to realize the perceived synergies between consumer and enterprise businesses; billions of Java handsets will sell tens of thousands of Sun servers, as the theory went. And while its technologies live on as core pieces of today’s mobile consumer experience, with a cleanroom reimplementation of the Java runtime at the heart of Android’s success, the firm itself was acquired at a steep discount by Oracle, having never realized its grand consumer-side ambitions. Because it fundamentally lacked the ability to develop and grow a non-enterprise business.

RIM may be the latest to learn this lesson. As consumer oriented operating systems – Android and iOS – absorb its marketshare, the one time mobile business standard has attempted to become more consumer friendly. While that by itself is challenging, the collateral damage – its core customers – is the real problem.

The practical lesson to be learned here is that it is crucial that vendors understand who their target market is generally, and who they’re targeting within that market specifically. Acquisition or development strategies that target non-adjacent, distinct markets may appear attractive, even accretive to the core business, but the execution is challenging enough that such efforts are rarely successful. Which is why there are no vendors with an equal ability to service consumer and enterprise markets.

While both enterprise and consumer focused businesses have historically produced revenue generating businesses, with capital markets traditionally favoring the outsized revenues that business software and hardware generate, the ongoing consumerization of IT represents something of a wild card.

When enterprises were able to impose their will upon their employees, enterprise vendors enjoyed barriers to entry sufficient to shield them from the likes of Apple. Businesses only bought the products that they wanted, which in turn were the products enterprise vendors built for them. But with “Bring Your Own Device” in full swing and accelerating adoption of consumer products like the iPad in Fortune 500 organizations, it seems clear that the barriers to entry that once protected enterprise oriented vendors are breaking down. The inmates are, more and more often, running the asylum.

Which doesn’t mean enterprise vendors should try – like RIM – to become consumer companies. History tells us that is precisely the wrong lesson to learn.

It does mean, however, that as enterprise vendors compete with their consumer counterparts, they will be at a disadvantage relative to their design, and must make adjustments to philosophies accordingly. Life was easy when you were selling to a business; now you have to sell to each and every one of their employees.

The lesson that statecraft has learned – “in the old world you’d negotiate with governments, in the new one you negotiate with populations” – is one that will become more and more familiar to those who would sell user facing business technology.

Disclosure: HP, IBM and Microsoft are RedMonk customers; Apple and RIM are not.

by-nc-sa

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Related posts:

  1. Who’s Going to Build the App Store for the Enterprise?
  2. You Can’t Fight What You Are
  3. Network Offering: If You Build It, I Will Buy It (And Some Other Folks Might, Too)
  4. Don’t Listen to Your Customers?
  5. The Elephant in Moscone: JavaOne 2009

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Categories: Consumerization.

By sogrady

— September 30, 2011 at 1:34 pm

About

Hi, I’m Stephen O’Grady. I live in Maine, but travel a lot.

I helped found RedMonk in 2002, and I was born and raised a Red Sox fan.

My job is to help companies understand developers better, and to help developers, period. There’s more bio stuff here.

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Steven O’Grady gets it right in his post about “You Are Who You Build For”, but the point extends to individuals as well. We are endowed — if you will — with a bent toward individuals and solving individual problems (B2C) or organizations and solving organizational problems. (B2B). No shame in either; the shame lies in trying to be something you’re not.

Uncategorized

When Will the Digital Home Tip? And What Will Tip It?

I’ve been personally quite interested in the “digital home” for decades.  Yes, I’m one of those X.10 geeks.  I put Tut Systems IP-over-POTS cards into my equipment in the ’90’s.  I use Sonos.  All of the above and more.

Professionally, I’ve been wondering what’s holding back the Digital Home?  What I mean is: there are multiple networks in lots of homes today — WiFi for data, service-provider cable or FIOS or whatever for Internet access and video, maybe dedicated audio for home theater et. al.  When will this all be tied together?  When will vendors rush to equip homes with servers, converged networks, NAS/SAN, cloud backup, media servers, and every bit of kit you’d think you’d need for a home.  What’s stopping homes from being like SMBs, in a word?

Well, obviously consumers/households think about capital investments differently from SMBs, but not all that differently, if truth be told.  My guess would be that SMBs are being tipped because of the need for a web presence and the lure of ecommerce.

What will drive households is probably video.  Video is increasingly used where text was before: for news, for communciation, for entertainment, for instruction.  And current video plant in the home is ripe for tipping into something that converges networks and systems.

One bet would be that the first generation of connected TVs somehow causes a massive tipping point in the way households consume video, which will necessitate new networks, new network gear, and new kinds of servers.

What do you think?

Uncategorized

10% Cloud

From talking to a few data center operating execs — tier 1 and otherwise — we get similar numbers: 10% of their business today is cloud business (the rest is colocation and other forms of hosting).

What does this mean?

  1. Early days for cloud.  Lots of upside still for cloud providers, both computing and storage.  Good long-term news for our companies Nirvanix, BlueStripe, and Solidfire,
  2. Early days for cloud.  Bad news for immediate growth in these marketplaces.  20% is the magic number in many markets for when penetration starts to inflect.  Plausible to believe that’s close to the magic number here.  It could be longer than we would like to get from 10% penetration to 20%.

What are you seeing?  What do you think?

CrummyCook, Uncategorized

Seared Scallops with “Bok Choy” and Miso

A classic CrummyOuting.  I searched Epicurious for rice and miso, and found this recipe.

Unfortunately, I bought my supplies at the suburban Giant on my way home from work.  It’s a huge space but contains almost nothing out of the ordinary, just more varieties of the ordinary.

In particular, the recipe called for baby bok choy.  They had adult bok choy, but no babies (maybe worried about cruelty?).  I dithered around in Produce for maybe 10 minutes, hoping for inspiration, and finally setttled on small endives.  Approximately the same shape as the baby bok choy, not far off in flavor, and arguably in the same phylogenetic order as bok choy, (worst case, in the same phylum).

I didn’t get the value of serving the dish with the huge quartered veggie pieces; I would just as soon have cut them up when finished stir-frying them.  But we quibble.  It was basically quick and tasty, and used up rice and miso.

Sorry no picture.  I thought I took a picture of it, but none was to be found in my phone in the morning.

CrummyCook, Uncategorized

Salt Cod

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Well, Deborah (my friend Deborah, not my wife Debbie) shamed me into resuming the blog.  It’s not that I haven’t been cooking some (although less than weekly); it’s not that I’ve been blogging less (more on tech topics, another interest of mine (I don’t use the word “passion” where “interest” is the right word; let’s save passion for love).  It’s just that… well, she was right.  I’ve got to get back on the horse.

Two weeks ago I bought some cod impulsively for a dinner for Debbie, and realized belatedly that we were probably going to do something else that evening.  I looked up ways to cook cod, just to do something with it, and most of the recipes were for salt cod.

How hard can it be to salt cod, I said to myself.  And found the recipe here: basically salt, cod, and time.

IMG_20110918_181334

Here’s how it looked after a week of salting.  Firm, dried out, definitely bacalla-like.  Next job is to try it in something…  Stay tuned.