The Unfolding Mirror

Missed Christmas deliveries: perfect storm, poor planning, or channel conflict?

2013-12-26T16:05:00.001-08:00

The web is abuzz with the news of angry last minute holiday shoppers who did not received their packages in time for Christmas. Who is to blame?
UPS and FedEx? It is hard to pin the blame wholly on the carriers, especially given the fact that UPS starts its holiday planning nearly a year in advance, as Marty Lariviere (Kellogg, Professor in Managerial Economics and Decision Sciences) writes in The Operations Room blog.
Is it the retailers who essentially encourage the shoppers to wait till the last minute by conditioning the users to wait for last minute deals and guaranteeing on-time delivery, or is it the shoppers who actually leave no room for error, and wait till the last minute?
Or was this a perfect storm of all of the above plus some bad weather - as SFGate reports?

While all of the above may have had a hand, undoubtedly the unexpected magnitude of the growth of online sales prepared the perfect underlying condition to begin with. To see the magnitude of the potential shock to the system consider this: Seattle times reports that at the start of the 2013 holiday season, Marshal Cohen, the chief industry analyst at the research firm the NPD group "expected online shopping to account for 33 to 34 percent of total holiday sales, up from 26 percent in 2012. Now [12/20/13], Cohen believes online sales will account for closer to 40 percent." That is a whopping 14 points increase in the volume of online retail, hence shipments. In other words instead of an increase of 7-8 points on a base of 26 points (~28% relatively), UPS and FedEx were faced with an increase of 14 points (or ~54%). This is not even taking into account the growth of the entire retail pie. If UPS and FedEx had planned for a 28% relative increase and its associated last minute surge, any last minute glitch could wipe out their contingency capacity - and it did.

So what is the solution? Anthony Gallo, an analyst at Wells Fargo & Co write that UPS and FedEx "may need to increase investments to handle such volume surges.” But to what level? Consider that to meet the demands of next year's holiday season while remaining profitable carriers will need to perfectly plan for a number of factors:

rapid and very hard-to-read growth of online sales,
conditioning of consumers to become last minute shoppers
growth of the overall base of retail in an economy coming out of a recession, and
last minute weather condition

The first two bullets above underline an important fact: perhaps the biggest problem for carriers is that the players on the two ends of their pipe do not play by the same economic rules that the carriers need to play by.

Is this a case of channel conflict? Perhaps. Amazon, the biggest online retailer, is still in land-grab mode, fully intending to extend its empire with little or no regard for short term profits. So it has no incentive to turn away last minute shoppers. Doing so would send the shoppers right back to brick-and-mortar shops. Consumers, on the other hand, also expect last minute deals and on-time delivery without increased shipping charges. They expect 2- day delivery to cost the same: whether it's two days before Christmas eve or the middle of June.

It will be interesting to see how various actors in this channel will work to meet the challenge of the next holiday season. Will they find the right formula that meets the needs of the online retail players and their expansion plans while enabling carriers to profitably meet the delivery guarantees?

We have a year to watch.

Enterprise Social Collaboration, a strategic business undertaking or an IT plumbing project?

2012-12-17T00:40:00.001-08:00

Enterprise Social Collaboration promises a new world of collaboration, innovation, and streamlined business operations. Given the maturity stage of the industry, companies are still grappling with the question of how best to approach Enterprise Social Collaboration. Perhaps the most important question that companies must deal with, is whether Enterprise Social Collaboration is an IT plumbing project or is it a strategic capability that will separate them from the pack. Once a company answers this question, it can proceed on determining how best to approach the implementation questions.

Enterprise Social Collaboration
a 30 second primer!
The rate of growth of consumer Social Media sites (e.g. Facebook, Twitter) has been phenomenal. People now use Facebook and Twitter for all kinds of purposes, from the mundane to no less audacious than rising up against brutal dictators and successfully pulling off revolutions. It is then no surprise that companies are trying to replicate the same level of success in connecting employees together, and have them exchange ideas, innovate, and collaborate more effectively. Newsgator, Yammer, Jive, Chatter, WebEx Social, and IBM Connections are some of the better known Enterprise Social Media tools that try to meet this need.

This writing, focusing on Enterprise Social Collaboration from a corporate strategy viewpoint using the "Resources and Capabilities" framework*, argues that in order to remain competitive the modern enterprises need to treat social collaboration as a strategic element of the way they model the future and design their activities. Social collaboration, when done right*, can not only leverage existing resource, it can also surface dissonances in activities that are fundamentally incompatible -so they can be redesigned - and create consonance in other activities where the potential for consonance exists but remains untapped. In short: Enterprise Social Collaboration enables continuous process innovation that results in strategic competitive advantage.

Beyond the obvious - Unlocking Potential Value Through Improved Fit (Consonance): There are obvious reasons why collaboration is important, so obvious they don't need a blog. But there are also not so obvious ones. For example one of the ways in which a firm can ensure its resources and capabilities are not easily transferred is by creating processes where the resources produce more value in collaboration together than the sum of the value they would produce independently. Note that there is a difference between resources that reinforce each other and those that are interdependent. Interdependent resources cannot produce any value independently (obviously they MUST collaborate), while reinforcing resources can produce value independently, but it is only through collaboration that they produce exceptional value for the firm (think of The Avengers or, for the fans of Mad Men, Don and Peggy). So when a firm enables its resources and processes to reinforce each other, the firm meets two goals at once: 1- It generates more value from the same set of resources (gaining competitive advantage), and 2- It makes it harder for those resources to transfer out of the firm -because they should all transfer at the same time to another firm with similar processes (sustaining the competitive advantage).

Collaborative Sales Proposal Process As a concrete example consider a team of sales, engineering, and finance experts who are preparing a sales proposal. While the team is fully capable of putting together a winning proposal, if they collaborate with product management team they may be able to, on the one hand, better match the proposal to the client’s needs, garnering better price or giving fewer concessions, and, on the other hand, provide direct feedback to the product management team to consider in their future plans. In this scenario sales, engineering, and finance are interdependent resource in the sales-proposal activity, while product management is a reinforcing resource for the rest.

But we are already collaborating as best as we can! Are we? Do we even know how well we are collaborating? How about our processes? Can they be improved in any way?
To answer these question let's consider this: Collaboration can be considered simultaneously as a result of and measure of consonance (or fit).

Why does this matter? If the firm can measure the level of collaboration as well the outcomes for each process, it can determine the level of consonance for the given activities, and redesign those with poor fit (dissonance). This in turn results in better collaboration. Continuous measurement identifies other opportunities for improvement, and so on.
But how can an organizations measure collaboration between all activities at all levels of the organization, let alone design them so as reinforcing resources are all engaged for each given activity? For large and distributed enterprises the sheer number of processes and the very dynamic nature of business make this nearly infeasible. Clearly "core processes" must be measured and designed to ensure maximum fit; but is there a more efficient way to design non-core processes?

This is where Enterprise Social Collaboration can help.
Enterprise Social Collaboration as a Magnifier: To see how Enterprise Social Collaboration can help, consider the default mode of collaboration today. For most of us our email inbox is the main collaboration portal. Documents and projects are discussed and moved along through emails, emails, and more emails. All these emails act as opaque traps for enterprise knowledge that keep the work of one team hidden from the rest of the organization.
Now imagine a different style of work in which the interactions for a given work process, whether discussing a file or a project, are conducted in the social layer, and are searchable for immediate as well as future reference.
Let’s go back to our sales proposal example (see sidebar). If a team of sales, engineering and finance experts are working on a proposal in a process that is enhanced by social collaboration tools, their effort will be visible by default (unless this is a secret proposal). Product managers who track customer demand can now tap into live customer-demand data from across the organization, and they may even be able to add value to ongoing proposals by providing responding teams with input on latest products. In addition the proposal process, the dialog, evaluations, and decisions will all be visible for further analysis at a highly granular level at each step of the process.

Continuous Process Innovation Through Enterprise Social Collaboration: This "Visibility" combined with "Granularity" and "Measurability" of Socially Collaborative processes make Enterprise Social Collaboration a powerful tool for detecting areas of poor performance or poor strategic fit (dissonance). Done right*, Social Collaboration combined with proper analytics allows the leadership to systematically identify -and resolve- dissonance and promote consonance by improving processes and aligning goals.
In summary social collaboration is a strategic capability with far-reaching impact on how modern organizations will compete. Winning organizations will recognize this importance and approach it not as yet another IT or Marketing/Communications project, but as a strategic undertaking with highest level sponsorship and involvement.

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*Strategy as a view of Resources and Capabilities, a brief overview

A resource based view of the firm, as proposed by C. K. Prahalad and Gary Hamel in1990, focuses on the firms capabilities as the “roots of competitiveness,” source of new products, and the foundation for strategy.
In this view a firm's tangible, intangible, and human resources (assets) combined with its core competencies (capabilities), are the main determinants of the firm's strategy. Furthermore, to establish and sustain a competitive advantage:

Resources and capabilities must be scarce, relevant, durable, and not easily replicated or transferred, and
There must be a high level of strategic fit (or strategic consonance) between resources and activities which comprise the firm's core competency and the organization's strategic positioning.

*Epilogue: What does it mean to do Social Collaboration right? Integrating social collaboration in team processes will take more than just dropping in a social collaboration tool and issuing executive mandates. A detailed discussion of best approaches for introducing social collaboration is beyond the scope of this writing (hopefully a follow-on blog), but suffice it to say that the capability must fit (be integrated with) the team’s processes, technical capabilities, and business goals.

Does Lego (still) have a girl problem?

2012-08-21T01:31:00.000-07:00

There has been a lot of buzz (negative, positive, and indifferent) about Lego's new Lego Friends line. The negative coverage has focused on Lego's emphasis on princess themes and how it exacerbates the boy and girl toy gender separation. For example Lego Friends' dominant colors are pink and purple, and the characters are not fire-fighters, engineers, or space-explorers but instead hair-dressers or riders with ponies.
After following the debate for over a year I have no intention of adding to the brouhaha, but instead will try and review Lego's marketing approach for Lego Friends from a purely commercial perspective, focusing on the in-store experience.

I am going to try and resist getting in the middle of the social discussion and instead stick with a purely marketing viewpoint but couldn't resist throwing in this paragraph.
As an avid Lego player and the father of a boy and a girl I should say that while Lego may not be at the forefront of social change, if Lego Friends are the entry set that get girls (including my daughter) hooked and hopefully lead them to more complex sets (Lego Technic someday?) I am all for it.

So the other day I was at the Lego store with my children, and my 7 year old daughter noticed something odd. Every Lego Store I have been to (and I have seen many of them) has a wall where row after row of loose bricks are on sale displayed in clear plastic buckets. She looked at this wall and said, "Daddy, look they have no pink bricks!"
Check it out, she is right!
Hmmmm! That got me thinking (kids often have a way of seeing the naked truth that amazes me!). So if Lego has bought into the premise that pink is the key to girls' heart, then why no pink or purple bricks? Not even a token bucket or two! As I pondered this, I realized that if you take the premise of "girls want pink" on its face value, then the entire store seems to have been designed to keep girls out. To begin with, before entering the store shoppers are greeted by the massive grey Star Wars destroyer ship in the window. Those entering the store are confronted with row upon row of fighters (characters from different stories) in various battle configurations. All you see is blue, black, yellow, deep red, and occasional green. Not a drop of pink or purple is in sight. Only the most determined shoppers will find their way to the end of the store, where Lego Friends are neatly tucked away (close to the rows of loose bricks at the end of the store behind the counter).
So what gives? Is Lego trying to hide the girly side of Lego from boys? After all if Lego is really trying to get the other half of the market to buy Legos, it should be prepared to dedicate more than a tiny back corner of the store to the effort. Judging from the online sales data on Lego Friends it appears that from the 4 Ps of marketing, Lego has got the Product part right. So what is keeping it from getting the Place part right?
To be fair, Lego has dedicated a virtual place to Lego Friends online (Friends.Lego.com), and it is much harder in the physical world to create a separate space just for Lego Friends. Dividing an existing store is also fraught with risks. Lego has to tread carefully to avoid alienating its core customers. But is this truly all that Lego could do? I think not.

For one thing, Lego stores still feel like a toy version of entering the construction zone with all the yellow color everywhere which is decidedly the color of earth-moving machinery. Lego bricks come in different colors, how about having multiple colors for those aprons including one or two in pink? Better yet, have at least one guy in a pink or purple apron!
And how about rethinking the entire single-color theme for the floor and the ceiling? Maybe strands of colors running through the yellow back-ground, with each color pointing to a different selection?
How about moving the Friends boxes further up, perhaps in the same mix as mining and City series?
Finally, much more thinking has to go into selecting what goes in the front window. Star Wars models may have been (or still be) bestsellers. But where is Lego headed if it fails yet again to grow its girl audience (this time beyond Lego Friends)? Many other choices exist. For example Harry Potter series are powerful lures for boys as well as girls. How about Harry and Hermione as window displays?
Of course, it'll be interesting to read about the negative effects of using magic to market toys. But that would be a different discussion altogether.

Google’s self-driving Car: The beginning of Google Car OS?

2010-10-15T07:02:00.000-07:00

Google already has a large share of your attention at home, in the office, and on your mobile device when you are on the go. Sure it wants more of your time in those places, so it’s going to give Chrome OS and cloud apps, and what have you. But how about the one space where you spend an hour or two of time each day with nothing to do?

You guessed it: Your car! Google is not there yet! However to do anything in the car, Google has to make sure of two things: 1- That it is safe for you to take your eyes off the road, and 2- That Google is the dominant information system in the car (translation: Google Car OS).

Creating an autonomous driving system meets both of these objectives. It won’t be simple though. It will take years before all technical challenges are resolved and regulatory bodies would allow a Fully-Autonomous car on the road. But stakes are high, so early investment is the key. By creating the autonomous driving system years ahead of everyone else Google establishes itself as the default choice of an Information System OS for car manufacturers or after-market device makers. Recall how Microsoft’s OS monopoly has allowed it to milk the PC software market for decades in a myriad of ways. Now compare the average life expectancy of a PC with that of a Car, and you see how much more valuable of a market that would be!

P.S. The image is KITT, The computer driven car from the "Knight Rider" TV series.

Why are we surprised? Google's moving to the last mile!

2010-03-03T06:58:00.000-08:00

While Google Buzz seems to have overshadowed most of the news about Google, in the long run the news about Google's plans to offer super-high-speed Access to Internet is what deserves most attention.
This is the latest, and by far the clearest, attempt by Google to bypass carrier's transport choke-hold, or, as I said two years ago in a related blog: reach the open seas. U.S. Carrier's are fighting tooth and claw to protect their turf, and they are losing it inch by inch.
Consider the mobile domain. For years carriers dictated the types of mobile phones users could choose from, as well as the most minute details of the hardware and software features that each phone. Carriers considered themselves in full control of the access networks (plumbing), and dreamed of going up-stream to the content! But they did a lousy job of it all by trying to control all resources, build walled gardens (instead of open oases), and pinch every penny that passed through the system.

Fast forward to 2010. Carriers are on fast track to losing their control of applications and content. iPhone's ecosystem is independent of AT&T, and Andriod's independent of Verizon. Other phones (and environments such as Nokia and Blackberry) are already there or getting there. Question of content is settled and behind us. The hottest battle-front is now the last mile (plumbing). Carrier's core business is under attack, and I doubt that they will be able to defend it in the long term (15-25 years?).

Where will the next battle front open? How about mobile payments? This is an area where carriers and banks have successfully stifled all innovation in North America. Will Google partner with PayPal, Amazon, eBay, and a smaller payment system (say Discover) to break the logjam? Let's hope so.

Reliability vs. Availability

2009-06-28T19:22:00.000-07:00

There is huge misunderstanding about Reliability and Availability. I recently came across a multi-million dollar project where the customer was asking for a 99.9% reliability for a web-based "service". I could swear they meant Availability.

I have seen this confusion often enough that I think a bit of explanation could be useful. So in a series of postings I will address the following points:
1- The technical definition of each word in simple terms, and their mathematical calculations using real-world examples.
2- How to configure a system to meet different levels of availability.
3- When should you care about Reliability, and when should you care about availability.
4- If you are drawing-up an RFP or a contract, what are the parameters that should be specified in each case when you ask for (or commit to) a specific level of Reliability or Availability?

This blog, the first in the series, deals with the technical definition of each word, and their mathematical calculation.

Reliability: Reliability is the likelihood that a given component or system will be functioning when needed as measured over a given period of time.
For example let's assume that you have a system with an MTBF (Mean Time Between Failure) of 3 years, or 26,280 hours. You are interested to calculate the likelihood that this system would have no outages during any 1 year observation period. To do this use the following formula:

R = e**(-t/MTBF)
where
R = Reliability
e = 2.71828182845904, the base of the natural logarithm
t = the observation period
MTBF = Mean Time Between Failure of the given system

Using this formula, we find that the answer to the question is 0.7165. In other words chances of a break-down during any 1 year observation period are 1-0.7165=0.2835 (~28%).

Availability: Availability is the percentage of times that a given system will be functioning as required. The measurements that form the basis of calculation for this percentage may be discrete (number of times an engine will start if tried 1000 times) or continuous (the number of hours in a year that a telephone switch will be operational in a given year).
In the converged worlds of IT/Telecom, very commonly the word "Availability" is used to refer to "Steady State Availability" or up-time ratio.
There are two formulas for availability:

First let's consider how an "unscheduled" outage can impact the availability of a system. To do that use this formula to measure availability:
A = 1 - (t_outage/T)
where
t_outage = Duration of unscheduled outage
T = Agreed upon window of time for Availability Measurements

So as an example, let's assume that your contract calls for 99.95% availability in any 1 month period of time, what would two unscheduled outages of 15 minutes each mean?
A = 1 - [(2*15)/(30*24*60)]=> A = 99.93%. You may be in hot water!
To estimate Availability in advance use this formula:
A = MTBF/(MTBF+MTTR)
where
A = Availability
MTBF = Mean Time Between Failure of the given system
MTTR = Mean Time To Repair

Now, let's say you are using the computer system above with an MTBF of 3 years, or 26,280, and a 4 hour MTTR. What kind of Availability can you expect?
Plugging the numbers gives you A = 26,280/(26,280+4) = 99.98%

So, let's ask a question now. Based on the example above, if you are providing a web-based service using the system above (with 3 year MTBF and 4 hours MTTR), it should be safe to commit to 99.98% availability, correct?
No, not necessarily. The calculation above applies only to the full duration of the MTBF (3 years). What it means is that on average, many systems of this type observed over a 3 year period will have an availability of 99.98%.
When promising availability one of the important factors to consider is the "observation period". As an example if your contract calls for 99.98% availability in any given 30 day period, all you need is a single outage lasting 30 minutes, and the availability for that month drops to 99.93% (as shown in the first calculation for Availability after outage).
It may not be, however, practical to ask your customers to measure the availability of the system over a period as long as 3 years, and they may insist on a 1 month observation period anyway. The question to answer is: how can you configure the system to meet this level of availability?
The answer to this question will be the topic of the next blog in this series. In the meanwhile feel free to send me your thoughts and comments.

Tactical moves, strategic consequences: Will you survive the famine to die at the feast?

2009-02-27T09:05:00.000-08:00

Perhaps the best measure of a good entrepreneur is not how well they can forecast the future, but how quickly and effectively, in the face of inevitable surprises, do they recognize the changed realities, and how well they adapt and respond.

For the past 6-9 months all signs have been pointing to a long and painful recession ahead. Most businesses have already responded with drastic cost-cutting measures. That is a painful but necessary step. But when large established businesses take an ax and start chopping, fledgling IP based start-ups need to use a surgical approach.

Having guided a technology start-up through the 2000 bust and 9/11 induced recession, a few observations stand out and may come in handy for those of us trying to salvage our investments through today’s hard times.

First, consider three basic ideas:

Small IP focused start-ups live and die on the strength of their IP. Losing the IP along with the team may turn out to be an irreversible decision. Choose carefully who stays and who goes.
Customers are won hard, and losing them can be very painful particularly in hard times. However, they will not risk sticking with weak suppliers. You need to avoid sending the wrong message.
Market will eventually rebound. If you have not planned for it, you will survive the famine only to die at the feast.

So how would you plan for this process? Consider the list below as a starting point:

IP Triage:
- Begin by recognizing the company’s core IP: Technology, formula, manufacturing process, marketing knowhow, personal relationships, etc.
- Prioritize and assign $ value to the IP in the short term and the medium term. Guess the $ if you have no other comparative or market intelligence. Don’t worry about the long term unless you are sitting on something real big, or you have the luxury of waiting for it.
- Decide what you can afford to lose forever (e.g. patents that will lose their priority filing date), what you can reinvent, and what you MUST keep.
Customers / Prospects Triage: Ideally you don’t want to lose any customers (if you have any). But when customers sense weakness, they may walk anyway. Decide which customers, or prospects, you must keep, and at what cost?
Here is the shocker: Sometimes you must lose customers to survive!
- You gave away your product or service to this customer thinking you’d get yourself established in the market and get a reference (debatable approach). Is that customer living-up to its promise or is it delaying revenue-generating commitments while draining away resources?
- Have you strayed from your core mission to pursue quick cash? In lean as well as fat times, chasing too many tactical clients means one of the two things: 1- You are not focused on the core strategy, or 2- Your core strategy has to change to reflect the new market you are chasing.
  If you are not careful you could end up with one-off tactical clients sucking more resources than the revenue they are generating.
- Decide which one of your clients will be around long enough to pay their invoices. Unless you are in the business of “investing” in your clients, try to collect more up-front, or in multiple milestones, to at least cover your costs.
Resource Triage: Be realistic in your need for resources at all levels. It is easy to draw-up a list of worker-bees and middle managers to layoff. But look around the executive suite. Are you keeping all the c-level guys around because you really need them? Tales of 10 man “technology shops” with 2 engineers and 3 highly-paid C-level guys are abundant, and almost never happy-ending.
Communicate: Once you have it all figured out, you need to communicate.
- Tell your staff what your plan is for the future of the company. They can be very demoralized after seeing their colleagues, or some of your customers, go out the door.
- Tell the customers you want to keep how you plan to continue to serve them. Customers will learn about the changes in your company anyway. Best to hear it from you first. Go meet the important ones if you must to make sure they stay calm.
- Tell your investors. Keeping your investors informed at all times is a good practice in general anyway. Keep in mind that not all of them are represented on the board. Especially the angle investors who came in early on may need to be reassured.
Remain ready for rebound: Having gone through with it, you now have the core IP, processes, and products you must keep to succeed, and the team to support it. But you are not done yet. You need to remain vigilant during the downturn so you can rebound when ready:
- Maintain discipline and focus on quality: Make sure processes you chose to keep are followed. Don't fall back to garage days unless you planned it. Ad hoc loss of processes or discipline makes it harder to fly again when the market is ready.
- Continue to invent and innovate: Smart brains do not stop working just because there is a recession out there. That applies to you and your competitors. Having focused on your core mission, make sure you maintain your hard-won advantage.

Given the length of this recession so far, and how much longer we all expect it to last, the last point can be the most important one differentiating the winners and losers at the end of this recession. By the time we near the end of this recession, your focused execution during the lean times will have enabled you to hand-pick acquisition targets, attract capital more easily, and most important of all, go after customers stronger than before.

WiMax: Yet another attempt by Google to reach open seas?

2008-05-08T10:20:00.001-07:00

The recent WiMax announcement (Sprint, cable form $14.5 billion Clearwire venture) has everyone talking about Sprint and the future of WiMax. One less noticed aspect of this announcement is Google's role and the possibilities that it opens up for Google (at least later on once WiMax is well-established).
First some background. It is not secret that traditional operators continue to build barriers for open competition on the mobile networks and are trying to move up the information services chain to compete in the apps and services realm.
This has only increased the incentives for innovators who are trying to find a way out of these walled gardens, and Google is no exception. Witness Google's role in FCC auction and forcing the open access clauses.

Google is also heavily pushing to free-up the white-band portion of TV spectrum opening-up next year, and has in the past tried to get into municipal WiFi networks. This foray into WiMax is just another part of a long-term strategy.

But what is that strategy exactly? Clearly one important goal is to break free from the operator's walled gardens, but could it be that a very important side-benefit or even maybe the actual strategic goal of all these attempts is to connect Google's impressive and rapidly expanding back-haul network to the consumer in the last mile.
Google is building and buying all the fiber capacity it can to connect its data and application hosting centers at super-fast speeds. It is also building hosting facilities at unmatched pace so no matter where you are, you are only a couple of hops away from a Google data center.

With these two at hand, if Google (or someone like them) figures out the last mile problem (wideband or WiMax or something else), what would keep them from developing a few simple building-block type "telephony" apps (they already have presence and the rest), and then offering telephony services to users? This is a network built for the Hulu and you-tube generation streaming video to the TV screen. Voice and even live video (on a small screen) will be lost in all that bandwidth. That is when operators realize how easy it was for their bed-rock revenue stream -bit pipe plumbing- to disappear.
Google may not want to be a Telco, but it sure has the potential to be a Telco back-bone powering thousands of micro-telcos packaging, customizing, and selling services at neighborhood or friends and family level.

But do not hold your breath. It will take many many years for the operators to burn through all their money. In the meanwhile operators will continue to insist that because they deliver the water (bits), they can also deliver meals (apps and services) that are made with that water! In doing so they only increase the incentives and the eventual pay-off for those innovators and investors who figure out how to break through their gardens.

Digg It!

Will search engines read your mind? Now that is a new way to say "I'm feeling lucky!"

2008-04-15T18:11:00.000-07:00

Everyone is talking about personalized search, and how search will evolve in the next 5-10 years. Here are some of the trends to monitor in the next few years:

1- Explicit Personalization: Consumers continue to provide personal information about themselves in social networks, mapping and directions services, event planning services, web-based email, and even online search portals (e.g. iGoogle). We will see more and more efforts in combining information thus available in various online settings to improve the quality of search.

2- Implicit Personalization: More effective data mining and consumer behavior categorization techniques allow service providers to better track, categorize, and even forecast user’s search requests. By analyzing a user’s past behavior the user’s demographics as well as his/her specific preferences can be determined better than ever. This data allows search providers to detect shifts in temporal variations in search patterns of small groups, then apply specific information known about each user, and arrive at a prediction of the range of searches that a user may conduct, and the data they are actually looking for.
Imagine having a set of search results delivered to you each time you visit your favorite search site, without having typed a query! Now imagine seeing what you were looking for among the top ten results 50% of the times! “Search Forecasting” (I just coined the term) may appear outlandish at first, but if best technologies are those that mimic life, then best search engine is the one that mimics a capable executive assistant. The best ones can almost read your mind!

Search Forecasting advances not only impact the web-based searches, they also greatly impact those search modes where real-estate or device limitations pose real challenges. We are of course talking mobile now. It is rather clear how deeply such advances can improve the GUI usage on the mobile device, but let us consider the impact on another oft-ignored area of search: Speech Enabled Search. Currently this area is limited to Speech Enabled Directory Assistance (SEDA) and Business Category search, provided by a few large players only. Search Forecasting allows players to improve accuracy of their systems to much higher levels than possible today, reduce the cost per search, and improve the revenue per call. Such change in economies of service opens the doors to smaller players who will be able to offer Speech Enabled Search not as a stand-alone service, but as a feature of a more focused niche offering.

In the longer term today’s directory assistance (whether paid or free) and business category search will cease to exist as stand-alone services, and will be offered as part of a bigger umbrella of services where DA (or YP/Category Search) will be only one of the many “information services” offerings.

3- Federated Search, Context Sensitive Searches, and Separation of Duties
Another area in providing highly personalized service is advances in Federated Search, and appearance of search as a natural element of any service, no matter how niche. It is often the smaller niche players such as the social networks, trip planning sites, activity planning services, or even local newspaper which have more relevant information about the user’s search context than the big search engines. By combining a niche player’s context data with the “Search Forecasting” techniques, service providers can offer more and more relevant responses for search queries, and players can improve CPM-based advertising from a border-line spam that pushes anything to a very effective and in fact often-welcome suggestion-making business.

4- Going from What to Why: Today all information services focus on the “what”. You type “what keyword” when searching online, and “what business listing or category” when calling Directory Assistance.

Users, however, act just like Hansel and Gretel.
Each search they conduct is one piece in long crumb-trail that is focused around a certain intention or activity, often involving one or more transactions. By focusing only the “what” aspect of the search, service providers lose the bigger context (“why”) and in doing so, not only do they fail in delivering a more relevant set of results for their users, they also lose a fantastic opportunity for increasing revenue opportunities in each search query.

We will start to witness intelligent information services that deliver highly context sensitive “Intent Oriented Search Services” by taking into account a user’s web-based social context and information that it offers when handling a user’s search queries.

This move from “What” to “Why” will start by niche players with explicit knowledge of user’s search context (and we have seen examples of that for a few years now), and will catch like wild-fire when Federated Search and Search Forecasting techniques evolve.

Digg it!