Disruption in IT – is it really as disruptive as we think?

I have spent my IT career doing the odd stuff, working on projects that were considered strange and not mainstream and working for companies that have been working in “new” areas.  It has been fun and I have enjoyed being part of “innovation teams” and helping to develop “disruptive” business ideas.  And mostly this “strange” stuff has been successful and delivered value to customers, employees and investors.

Part of this means that I have accepted as given books by people like Michael Porter (1985, “Competitive Advantage”) and Clayton Christensen (1997, “The Innovator’s Dilemma”).  They fit into my world view and so why would I question the quality of their underlying research or the logic in their analysis?

competitive-advantage-michael-e-porter-parcial-1-728     Innovators Dilemma

So it was with interest that I read an article on the BBC web site (http://www.bbc.com/news/technology-27999589) that discussed two companies who are at the forefront of a) financing this disruptive world (Indiegogo) and b) delivering disruptive services (Uber).

It was only on second reading that I clicked on a link http://www.newyorker.com/magazine/2014/06/23/the-disruption-machine near the top of the article in the paragraph:

The-new-yorker-logo

The whole theory behind disruptive innovation – cheaper, sometimes lower-quality technologies which come along and destroy the business models of established industries – is a subject of ferocious academic debate at the moment, after an article in the New Yorker questioned the concept.

I am still sold on the basic notion of disruptive change and fall back on my comfort blanket of the works of Thomas Kuhn from the early 1960’s on Paradigm Shifts (1962, The Structure of Scientific Revolutions).

HOWEVER reading this article has made me question whether the path of disruption is as predictable as Mr Christensen would have us believe.   Once disrupted by the new comers is the fate of the incumbents set.  Without doubt IBM were “disrupted” by Microsoft in the 1980’s and yet IBM are still in business.  Today Microsoft are themselves being disrupted by Salesforce, Amazon and many others.  Have Microsoft been able to learn from history?  Have they been quick enough to react to the changes, but not so quick that they bet the business on something un-proven?  The next few years will be very interesting and as I noted in a previous article the shift from being positioned as a 90% market defender to a 14% market challenger may be just what is needed. 

(I am sure that Karl Popper would argue that “The Innovators Dilemma” is not good science as it would fail his empirical falsification test i.e. too easy to find examples of the “theory” breaking down and failing.)

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Oh Cortana, how you surprise me in positive ways

cortana

Quick background

So I’m a geek and I enrolled in the Windows Phone dev preview program so I could get Windows Phone 8.1 onto my Lumia 925 asap. I have been really pleased with many of the updates e.g. action centre, shape writing and photo as tile background. But one thing missing was Cortana. I briefly changed my settings to make my phone “US” but too many little hassles so I changed back to Australia. Overall though happy days.

Then this week along came Windows 8.1 update 1 and things improved again (Telstra are still “testing” 8.1 before rollout to existing phones down in Australia!!!!). Loving the new “folders” capability, significant improvement over the previous Nokia App folder capability. AND Cortana appeared in Alpha form even with my Australian locale.

The point of this post – how did Cortana surprise me?

I have not had time to play with Cortana and see what it can do so I was surprised and pretty impressed when….

  • I have a 3pm meeting today with the default 15 min alarm set
  • I am away from the office and to be honest had forgotten about the meeting. The 15 min alarm would have been too late to get me there in time (how many times have I been sitting in my seat on the plane when my phone alarm tells me my flight to XYZ leaves in 15 mins)
  • At 1pm my phone alerts me to a message and I open it
  • And there is Cortana reminding me that I have a meeting, but not with the default 15min warning. I am being told that with the current traffic conditions it will take 1hr 15mins to get to the meeting. I am supplied with a map showing directions from my current location to the meeting

I mean seriously how cool is that. A genuine digital assistant that I had not programmed to do something it just happened. I am actually excited (sad, I know) to see what other reminders are given and what other surprises Cortana will provide Smile

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How will the 14% Challenger mindset shape Microsoft’s FY15?

Obviously this is what Satya Nadella and his executive team at Microsoft are paid the big $s for.  But here are my thoughts and observations:

  • In the good old days IBM sold you the hardware and gave you the software. Microsoft challenged this with the “use any hardware, but pay for our software”.  Now Microsoft seem to be moving to a world of “use any hardware, ideally use Windows (which may be free), but most importantly pay for our services which will be available on all platforms”
  • In this context the focus on productivity makes sense.  This is arguably an area where Microsoft have a clear market lead with Office and the complimentary cloud assets such as Office 365. By getting the previous “waring” product silos to work together they have the ability to really deliver on the previous Microsoft slogan “better together”
  • Satya Nadella made it clear that Microsoft will continue to invest in a “dual use” (work and personal) model.  However we have seen in the recent redundancy announcements that there will be a streamlining of these efforts to support the challenger focus.
  • Microsoft also have an asset that is the envy of all of their major competitors – the Microsoft partner network.  From small business specialists to service providers using SPLA to host services on a global scale.  These partners will enjoy the focus on the core Microsoft they know.  Microsoft would do well to focus on and heavily market the partner ecosystem asset.
  • The challenger mindset means that defending the traditional PC market will no longer be focused exclusively on the 14% itself.  Rather by “challenging” the other 86% Microsoft can extend the overall ecosystem and create the end to end experience.
  • Part of the public “challenger” comments is almost certainly directed at the various “monopoly” commissions around the world – essentially they are saying “back off, the world is different, we are no longer the big bad boys, we are now fighting for our future, so get off our backs”
  • We have seen a major play in this direction with the $0 Windows licensing cost for devices of 9” or less.  It is not too difficult to imagine a very low cost, full blown Windows tablet, being connected to a keyboard, mouse and monitor to replace many ageing desktops.
  • The “Cloud Solution Provider” program was announced at WPC with little hard facts behind the announcement.  BUT WATCH THIS SPACE.  This is Microsoft’s play to pull their huge ecosystem towards the cloud.
  • I also expect to see a major streamlining of Microsoft marketing that more accurately reflects the “One Microsoft” approach with a strong “better together” type message.
  • Microsoft’s true differentiator from their competition is HYBRID.  Nobody else spans on-premise, service provider hosted and full blown public in the way that Microsoft and their partner community do.  Despite the high profile focus on their first party cloud assets (Office 365, Azure, CRM Online etc) I also expect to see a growing push for their wider Hybrid story (however it is a more complicated story to tell so…)
  • Over the past 10 years Microsoft have become increasingly conservative, driven by the need to defend a near monopoly.  However by publically putting on the challenger boxing gloves I am expecting to see some interesting and unexpected behaviour as we progress through FY15.
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WPC 2014 – 14% market share admission is potentially the most significant message

As mentioned in a previous blog post (Microsoft WPC Day 3) there were very few major announcements at Microsoft #WPC14 and nothing with a “WOW” factor. Maybe this is to be expected. Satya Nadella is relatively new in role and whilst he has signposted a major refocus this will take time to land.

HOWEVER it has been a few weeks since WPC and I have had a chance to reflect on the conference. And in this reflection I keep coming back to one area of Kevin Turners keynote that I believe is going to be a massive influence on Microsoft behaviour in the next 12+ months.

Along with his normal bullish view on all things Microsoft and his always appreciated dig at the competition he was very candid about where Microsoft market share now sits.

“The reality is that the world has shifted, and the world’s evolved. We now measure ourselves in the total device space, and in the total device space we have a 14 percent share of devices…

…and this 14% presents a great opportunity for us to embrace that. And in this new world of 14% share, we have to have a new mindset. Because when you’re in a 90+ percent share world, you have a ‘protect and preserve’ mindset. When you have a 14% share, you have to have a ‘challenger’ mindset.”

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Slide Kevin Turners WPC 2014 Keynote

This would appear to be based on the recent Gartner report “Forecast: PCs, Ultramobiles, and Mobile Phones, Worldwide, 2011-2018, 2Q14 Update”. A summary is available here (http://www.gartner.com/newsroom/id/2791017):

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In a world of PCs being the primary computing device Microsoft have essentially had a monopoly and talked about their 90%+ market share. This has been a primary driver for their behaviour. They have needed to defend this market share and within this context many (sometimes frustrating) decisions make sense.

In a world where the proliferation of devices has exploded, there is no fundamentally new or surprising data that points to Microsoft having a reduced market share.  HOWEVER for Microsoft to openly and candidly talk about only 14% market share is a major mental shift.  This position is a completely at odds with Microsoft’s previous raison d’être.

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Windows Server Devices Provider – Error 1067

I am running Windows Server Essentials 2012 at home (not updated to R2 yet due to hassle of no in place upgrade – I know always rebuild from clean, but just time and hassle).  With a few exceptions it has just worked and delivered what I needed.  However the other day I started getting warnings about an important service failing to start.  Turned out the the “Windows Server Devices Provider” was failing to start for some reason.  A knock on effect was that the Windows Server 2012 Essentials Dashboard would start take some time trying to work out details about the devices attached to the server environment and then crash.

Did lots of Google searches but could find nothing.  Finally decided I would try a Bing search in case it threw up something.  As if by magic the first result returned using exactly the same query was to the following article which helped me solve the problem.(http://social.microsoft.com/Forums/zh-CN/2dc66e9b-0fa0-4429-b2d0-322f60ab0511/windows-server-devices-provider-service-not-working?forum=whs2011)

In summary the “C:\ProgramData\Microsoft\Windows Server\Data\DevicesInfo.xml” had somehow become corrupted.  The way to solve the problem was to:

  1. Navigate to C:\ProgramData\Microsoft\Windows Server\Data (you may need to change the default view options within Windows Explorer to “Show hidden files…” and unhide “…protected operating system files” – initially I could not see the ProgramData folder)
  2. Locate DevicesInfo.xml and rename to DevicesInfo.xml_old and the .xml.bak to .xml.bak_old
  3. Now restart/start the “Windows Server Devices Provider” service in “services.msc”

Happy days all now working

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Microsoft WPC Day 3 – Vision Keynotes

Although there were no big “wow” announcements, there were things that caught my attention.  Summary below.

Tiffani Bova, VP, Gartner Research.

We live in a world of customer experiences. However too many businesses are still trying sell the underlying product.  She summed this up with a coffee analogy – even though there is free coffee all around the WPC event, people were still waiting and paying at the coffee shop.

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Tony Prophet, Corp VP, Windows Marketing

(Full script can be found here – http://www.microsoft.com/en-us/news/speeches/2014/07-16wpcprophet.aspx)

Devices with screens less than 9” will have a $0 license fee for the various Windows OSs.  One of the big benefits of Android to device manufacturers has been the lack of licensing costs.  This change to Windows licensing should create an explosion in Windows based devices and there is already evidence of this from announcements from Chinese handset manufacturers.

This change also explains the phasing out of the non-Windows phone OSs from Nokia (Nokia X, Asha and S40) – http://www.zdnet.com/microsoft-to-discontinue-nokia-asha-and-s40-feature-phones-7000031731/

He also recognised the feedback for a more rapid update cycle across the various Windows platforms (this has also been reflected across the wider Microsoft software portfolio). However regarding the next version of Windows he was pointed in stating that “we have nothing to announce today”

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Satya Nadella, CEO

(Full script can be found here – http://www.microsoft.com/en-us/news/speeches/2014/07-16wpcnadella.aspx)

There was nothing in his keynote that he has not already said in his various speeches and written messages over the past few weeks.  However a few items that were of interest or more strongly re-enforced were:

A call out to my good friend Dan Scarfe of Dot Net Solutions who was one of 3 partners highlighted during the keynote for their innovative activities – nice Smile

It is clear that one of the key drivers for the new approach that Satya is laying out for Microsoft is that they have gone from a near monopoly position in the devices market when device = PC to where they now have a 14% share in a world where device = PC + tablet + phone etc.

At the heart of his message is that Microsoft will create the best productivity experience across all platforms with everything working seamlessly together.  In the past the Microsoft organisational model based on silos with a “Darwinian” survival model in place has worked against this vision.  There have been various announcements that point at the significant changes that are taking place and they are about changing culture:

He also made a clear statement about the need to invest in business and consumer experiences – “dual use”:

“We’re going to do the best job of being able to enable dual use. This entire notion that somehow I’ll buy my device for consumption and personal use and then I’ll give up that device for work and take another device just doesn’t work”

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Internet of (Your) Things – market size

At a WPC session Microsoft shared some research from IDC about the market size/opportunity in the IoT space.  It’s big…

2014 – USD1.93T

2018 – USD4.93T

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