Category Archives: Marketing

The Largest Computer Hardware Business on the Planet

Mr. Hurd will bring his expertise running the largest computer hardware  business on the planet to Oracle, where he may be able to revive the fortunes of Sun’s products at H.P.’s expense.

Who do you think wrote that statement? It sure sounds like a press release from Oracle. But it comes from the pen of Ashlee Vance at the New York Times. Does Ashlee even read what he copies and pastes?

http://www.nytimes.com/2010/09/07/technology/07oracle.html?_r=1&hpw

Why the Department of Defense Failed to Secure Our Computers

Every day, new viruses emerge that compromise the security of millions of computers – both personal and corporate. As government agencies increasingly rely upon commercial software for Top Secret computer systems, they found themselves facing a difficult dilemma: continue using their 80’s era software or upgrade to the latest commercial systems, while exposing themselves to the security vulnerabilities that plague everyday users.

From 1999-2001, Robert Meushaw, the director of the NSA’s Information Assurance Reserach Laboratory (NIARL), and his team worked on a solution that coul dgive hte best of both worlds. The system he developed, codenamed NetTop, uses a “sandbox” technique whereby inherently insecure software (such as Microsoft Windows and MS Office) is granted access to a limited portion of the computer. Even if one of the insecure applications was infected with a virus, it is unable to spread beyond the specific machine.

Unfortunately, the results were disappointing. Two crucial missteps ultimately led to its slow adoption within government agencies and by the general public.

The first problem was that NetTop compromised security for functionality. By being neither 100% secure, nor 100% functional, security experts were unsatisfied, and users were frustrated.

The second problem was around cost. Each “virtual” system required its own licenses. Thus, Top Secret computers that accessed six separate networks would require 6 licenses for Microsoft Windows on a single computer! Furthermore, the virtualization component was developed by a for-profit startup named VMWare (now publicly traded NYSE: VMW). As VMWare grew larger and more successful, Microsoft started to tamp down the competition by restricting its licensing terms to make virtualization even less cost-effective.

The end result has been another expensive government project with limited application and a dim future.

Three Things Every Business Should Do in a Recession

Change begets opportunity. Given the current economic situation, here are three things that every company should do:

Renegotiate vendor contracts. This is not to say that you should squeeze all profit out of your vendors. Business relations should always be mutually beneficial. However, contracts that were negotiated a few years ago when things looked rosy should be carefully reevaluated. For example, one small business was able to renegotiate their contract with Verizon Business and cut their bill in half.

Foster employee loyalty. Employees are more likely to stay at their jobs now, if they feel the jobs are secure. The good news is it’s easier to retain employees. But don’t be lulled by this. Unhappy employees being forced to work harder and longer hours will not stick around once the economy turns. Now that employee’s expectations are lower, do small things to increase job satisfaction and make people feel appreciated.

Do more for your customers. Much advice centers on how to maintain price discipline and avoid doing work at (or below) cost. There’s a different opportunity, however. Given that your customers are likely facing a new environment, they may be open to help in new, adjacent areas. For example, a company that downsized may now be shortstaffed in certain areas and happy to have a vendor provide managed services. Look for these areas, and propose solutions for your customers’ problems.

AnythingResearch.com – Industry Analytics and Research

AnythingResearch.com has released 2009 research reports on over a thousand industries providing instantaneous access to market size, typical financials (e.g., income statement, balance sheet), salary benchmarks, etc etc.

The goal is to shed light on  small businesses in “main street” industries by providing accurate and detailed statistics.

http://www.AnythingResearch.com

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This Sign Has Sharp Edges

This sometimes happens in powerpoint, too….

Is it Tightwad Bank, or Peculiar?

The Washington Post highlights the latest entrant in the financial services industry. Tightwad Bank is a legit FDIC insured operation named after its hometown of Tightwad, MO. Current deposits are in the $1M range, and co-owners Donald Higdon and Jeff McCalmon plan on additional revenue through an internet site, and also selling hats, t-shirts and other memorabilia to curious tourists.

Opportunities about in this area of rural Missouri (just 90 miles from Kansas City) – where nearby towns are named Peculiar, Racket, Blackjack, Wisdom , and Fair Play.

The Art of the Presentation

My presentations are bad. Very bad.

And here’s why:

  1. I like to improvise.
  2. I don’t stick to a clear, simple story.
  3. I get bogged down by details. When I know too much about something, it’s hard to stay at the 30,000 foot overview
  4. I’m bad at telling jokes or anecdotes.

Any one of those four flaws could turn a great presentation into a dud. Sadly, all four together becomes the perfect storm of tedium.

What can be done to improve? Here are some tips I’ve picked up from working with one of the best professional speakers in the country:

    • Practice always. Every conversation – even with a friend or ordering a hamburger – is a presentation. Live the role.
    • Develop a repertoire of anecdotes that can be pulled out as appropriate.
    • Tailor the material to the audience – understand and focus on their interests

      Finally,

      • More often than not, visuals are distracting

      Note the supporting materials for Bill Gates vs. Steve Jobs (courtesy of Presentation Zen). See if you can spot the difference.

      Steve Jobs Presentation

      Steve Jobs

      Bill Gates Presentation

      Bill Gates

      Which audience would you prefer to be in?

      Massively Multiplayer Online Game (MMOG) Hosting Market Opportunity Analysis

      MARKET OPPORTUNITY

      The MMOG market is expected to double in the next five years. MMOGs differ from typical computer games because they are perpetual virtual worlds, meaning that users can continue to play forever building on previous play. New players are constantly starting to play these game and continue playing them, creating a snowballing user base.

      Traditional game developers are beginning to discover a new sources of revenue from MMOGs. The developers typically offer a free version or trial period to attract users, and then a subscription-based version (typically $10-$20/month) to keep the on going revenue stream. In the future, MMOGs are likely to generate additional revenue through advertising and non-traditional revenue sources such as virtual sale items.

      Overall, DFC Intelligence estimates the market will double by 2012, reaching $13B worldwide. Half the revenue will come from East Asia, 25% from North America, and the remainder from Europe and Japan.

      MAJOR GAME OPERATORS

      The 15 largest MMO Games are as follows:

      MMOG List

      Of these fifteen MMOGs, the fastest growing (based on 2006-2007 subscribers) are:

      • World of Warcraft
      • Second Life
      • Guild Wars
      • Dofus
      • Runescape

      Additionally, the following venture-backed MMOG developers are likely to launch in the next 1-2 years:

      • Real Time Worlds will be launching “APB” in 2008
      • Red 5 Studios is developing an as-yet unnamed MMOG
      • Areae is developing an as-yet unnamed MMOG

      MMOG HOSTING and IT REQUIREMENTS

      Leading MMOG Hosting companies:

      • AT&T
      • Online Game Services (OGSi)
      • Hypernia
      • Valve Software

      Additional hosting companies used by MMOGs:

      • APIServers (www.apiservers.com)
      • Go Daddy (www.godaddy.com)
      • JHServers (www.jhservers.com)
      • ServePath (www.servepath.com)

      Most game developers do not have the capabilities to host games themselves. Rather, they rely on outsourced MMOG hosting services. Even the largest MMOG developers such as Blizzard, Activision and Electronic Arts use third party MMOG hosting services.

      Whether an MMOG game developer is hosting a game in-house or outsourcing it to a hosting company, the following three issues are most important in selecting IT vendors:

      1. Price – minimize price of both hardware and bandwidth. A rough estimate for hosting prices for 100k subs requires 30 servers plus bandwidth and costs $50k/month. (Note this includes ammortized hardware costs, bandwidth, and managed services)
      2. System stability and scalability – ensure data isn’t lost or corrupted and system can scale to handle growing subscriber base.
      3. Bandwidth and latency – maximize uptime at all hours of the day, since most MMOGs are highly international and cross all time zones. Provide sufficient bandwidth for peak usage. Minimize latency by using NOCs collocated near major POPs and with localization in areas with large numbers of gamers.

      The largest IT vendors for the MMOG market are IBM, HP, and Dell.

      ENTERING THE MMOG MARKET

      A vendor seeking to serve the emerging MMOG market should take the following approaches:

      1) Target both large MMOG developers that do their own hosting and also outsourced MMOG hosting companies. To avoid competing on price, focus on system stability, scalability, and management tools that can support the MMOG environment.

      2) Focus on the development stage. Historically, MMOGs could be hosted on any vendor’s hardware, but as developers seek to increase system stability they are increasingly becoming platform dependent. This means that if an MMOG developer uses a specific vendor’s hardware for development and testing, they are likely to request the same vendor’s hardware for hosting.

      In order to assess exactly how a company can enter this market, it is necessary to understand how the company is currently positioned. The Ansoff matrix provides a basic framework to understand what type of entry is needed – based upon a company’s product portfolio and market space.

      Ansoff Matrix

      A go-to-market strategy required for a Market Development play is quite different from those required for a Product Development play, and different still from Diversification.

      One of the immediate next steps to take will be to benchmark your company’s current status along key dimensions. Using a “Points of Differentiation” graph, it is possible to tailor the go-to-market strategy to take advantage of the company’s strengths.

      Points of Differentiation

      In the example above, a company may be strong in performance, reliability, average in scalability, reputation, service and price, and weak in value-added services. After analyzing other vendors using a similar framework, a company with these particular points of differentiation might choose to focus on midsized MMOGs with 100k-200k subscribers.
      SOURCES

      MMOG Data
      http://mmogdata.voig.com

      DFC Intelligence – Online Game Market Forecast
      http://www.dfcint.com/game_article/may07article.html

      IGDA (International Game Developers Association) – Hardware and Hosting
      http://www.igda.org/online/quarterly/1_3/persistenthw.php

      GigaOM Top 10 Most Popular MMOs
      http://gigaom.com/2007/06/13/top-ten-most-popular-mmos

      MMORPG Developer’s Forum
      http://mmorpgmaker.vault.ign.com/phpBB2/index.php

      FURTHER READING

      IDC – ASEAN Online Gaming 2007 – 2011 Forecast and Analysis
      http://www.idc.com/getdoc.jsp?containerId=AP3221S4P

      IDC – China Gaming 2007-2011 Forecast and Analysis
      http://www.idc.com/getdoc.jsp?containerId=CN656102P

      IDC – India Online Gaming 2007–2011 Forecast and Analysis
      http://www.idc.com/getdoc.jsp?containerId=AP3221SSP

      Current trends on Security Software M&A Activity

      I was recently asked to comment on the state of the Security Software industry. Here is how I responded:

      Companies such as Symantec and McAfee are experiencing increased pressure from Microsoft, which has beefed up the built-in security capabilities in Vista. In an effort to counter this competition, the larger firms have made numerous acquisitions that will help differentiate their product portfolio and maintain product superiority. Acquisitions typically focus on two areas:

      1. Acquisitions with next-generation feature/functionality that can be incorporated into the core product suite
      2. Acquisitions that target a niche or highly specialized market that will remain impervious to any mass-market product that Microsoft introduces

      As Symantec and McAfee reevaluate their portfolios over the next year, they are likely to continue acquisitions at a slower rate, as management fills gaps in the portfolio and focuses on integrating previously made acquisitions.

      Whether consolidation in the industry is good or bad depends on who you are.

      • Consolidation reflects a defensive posture against Microsoft; however, it will not alter Microsoft’s slow entry into the market (nor will it alter Microsoft’s ineptness at developing secure products)
      • Symantec and McAfee will become larger and more stable, in a better position to hold off Microsoft
      • VC-backed startups will find it more difficult to scale organically to the size needed to generate 10x returns for their investors
      • Bootstrapped startups will continue to be able to find niche segments that are under the radar of the incumbents (even during and after this period of consolidation)
      • Customers will see fewer, more stable products and services with consistent levels of quality…for a price

      Earth Cancer and Global Warming

      Weather is complicated. Many scientists (plus Al Gore) strongly believe that Global Warming is already wreaking havoc on weather patterns.

      The havoc, they say, may take many forms: warm winters, wildfires, hurricanes, flooding, cold summers, cold winters, and the list goes on….

      Sadly, these scientists made a critical error. A marketing error. They called this havoc “Global Warming.” For the average Joe, a cold winter does not feel like global warming. A rainy summer doesn’t feel like global warming. A severe hurricane does not feel like global warming. As the theory became more intricate, the story got confusing – and the message got lost.

      If only the scientists had called it Earth Cancer, or Extreme Weather Mutation, the news every night would focus on the issue. “This is the third coldest April 17th since 1991,” a weatherman would report with grave concern. “This is the second rainiest April 18th since 1989,” might be the following day’s breaking news. From a statistical standpoint, anomalies can be found everywhere – yet they would all be attributed to Earth Cancer – since the name would seem consistent with any weather anomaly.