Wednesday, September 30, 2009

Twitter is Woodstock. Facebook is a Garden Party

Twitter and Facebook are fundamentally different. Facebook is an invitation-only garden party for your friends in your own backyard(garden). Just like Ricky Nelson song "Garden Party". "I went to a garden party to reminisce with my old friends. A chance to share old memories and play our songs again. When I got to the garden party, they all knew my name...." 

Twitter on the other hand is a Woodstock-like festival experience for anyone who shows up at Yasgur's Farm. Like Joni Mitchell sang later.. 

"I came upon a child of god, He was walking along the road And I asked him, where are you going, And this he told me Im going on down to yasgurs farm, Im going to join in a rock n roll band, Im going to camp out on the land, Im going to try an get my soul free, We are stardust, We are golden, and we've got to get ourselves back to the garden"

Joni wrote this because she regretted canceling her appearance at Woodstock. Her agent put her on the Dick Cavett show instead. Yikes, talk about wrong place at the right time! Twitter is like Woodstock in another way; the Twitter promoters (Twitter founders), just like Woodstock, decided to cut the fences down before the day of the concert (Public posting of comments) and spend the money building the stage instead. The human experience of being on FB versus Twitter is also very different. 

With Facebook, conversation is easy because you know everyone at your garden (FB Wall). With Twitter your party doesn't get going until all the Woodstock fence-jumpers have decided you and your tent in the field are worth hanging around and partying with. Which involves getting down and dirty dancing in the mud. ;-)  With Twitter you have to "let go" and mingle with your inhibitions left behind. Just like Woodstock.

So what kind of party do you like? Muddy psychedelic Woodstock? Or civilized and private Garden Party?

Me? I tend to go to most parties I'm invited to. But I really have fun at the ones where I'm a "crasher" . :-)

Monday, September 14, 2009

Avaya/Nortel - Traditional Enterprise Telecom Market Moving Toward Disruption

It was announced this morning that Avaya(TPG/SL) has won the stalking horse auction for Nortel's Enterprise division. Avaya made this move mainly for the channel expansion and market-share growth. They will now look to aggressively churn the Nortel base into buying Avaya solutions.
As economy recovers and large enterprise starts buying capital equipment again it’s very feasible that Avaya could easily gross an extra $900M in the course of 12 to 18 months as a result of the acquisition of the Nortel base and Nortel VAR channel partners. This is what smart private equity buyers do. The attempts by Gores Group (Seimens Enterprise Telecom Division owners) to acquire Nortel mean they saw the exact same value prop as TPG/SL.
The $15M set aside as a “retention” fund for Nortel employees likely is really more a “severance” fund. This is a “spoonful of sugar” to be used in softening the blow for Non-US workers who all have severance requirements built into employment contracts via unions and/or non-US govt regs. US-based Nortel workers are going to have a very rough go of it. It’s mostly a non-impact for Avaya workers or a slight positive.
Also in a more strategic sense this suddenly makes Avaya a lot more attractive in relation to a future liquidity event for TPG/SL. Whether they decide to IPO and relaunch Avaya as a public company or sell it, it’s now a more attractive property. Selling it now may be somewhat more complicated because if it was sold to Cisco or another major telecom player now you truly would have a non-competitive market situation from US FTC/DOJ perspective. So the ideal private sale for TPG/SL would be to Microsoft. That would give at least a duopoly of Cisco versus Microsoft in the Enterprise Telecom market. Another possibility would be a sale to a major telecom carrrier like Verizon; notice VZ complained to DOJ about Nortel/Avaya merger.
In a much broader scope, the Enterprise Telecom/UC market is being set up for a disruption by solutions like Google Voice/Wave. Eventually the future version of traditional “Hosted Telecom” that the RBOC carriers deliver(ed) is going to be replaced by something I call “Cloud Telecom”; or more appropriately “Cloud Collaboration”. F500 companies are going away form big corporate campuses with thousands of people at one site toward a very distributed employee model. Employees more and more are scattered around in small offices domestically and overseas and also lots of people working from home/virtually. So big iron CPE boxes at corporate sites become less and less relevant. Instead all that is needed is for an employee to be able to reach those corporate resources at a network connected datacenter via SSL VPN over broadband. So why not then just outsource the datacenter instead of using inhouse datacenter and IT?
That is where an offer like Google Voice, enhanced with perhaps an Avaya CMS call center supporting virtual agents, becomes very attractive on a variable cost (subscription) basis.
This will disrupt both traditional hosted voice AND customer premise telecom businesses as they currently exist. Even very large multisite companies will be able to go fully to Cloud Collaboration, even in the call center. In call center the traditional equipment will hang on for a long time but now in a hosted/subscription model versus as a capital purchase for the enterprise.
However, It’s going to take about 5 years to 7 years for this disruption to happen and before it becomes clear this is coming, TPG/SL will sell Avaya or relaunch Avaya as a public company and get their money back.

Friday, September 04, 2009

The "Blue Ocean Collaboration" Replacement for Distributed Personal Computing

The period from (1985-2010) is/was a technology/market era that was focused almost exclusively on the mechanics of enabling "Independent Personal Computing(IPC)". The goal was all about faster processors, bigger disks and more RAM to run ever more complex locally deployed PC applications.

That era is coming to an end. 

We now are transitioning from that IPC focus into an technology/market era that will be focused almost exclusively on maximizing the productivity of what I call "Interpersonal Realtime Collaborations" (IRC). IRC is a hybrid value proposition that results from merging the value proposition of communications technology with the value proposition of computing technology. This IRC value proposition will be important in the professional marketplaces as well as the consumer marketplace. 

The reason for this is, 'computing power' is now becoming both ubiquitous and inexpensive, (true both for distributed as well as Cloud-based computing). With computing power reduced to a commodity it can no longer be the primary/exclusive value focus for computing technology companies who want to build and market premium-priced technology products, software, services. 

A similar disruptive process is happening to traditional voice/video/text communication solutions as standalone "Customer Premise" solutions. They also are commoditizing rapidly and traditional communications companies like Avaya, Cisco, Nortel, Mitel, Shoretel, Ericcson, Seimens, NEC, etc. are seeing that erosion in profitability. 

However, the seamless combination of communication technology and computing technology delivered over ubiquitous broadband pipes, that delivers a premium IRC experience, is currently not available widely. But it is something people are starting to demand. Those companies who provide it first will be able to take the initial high margins in this new market. Google is about to launch a big initiative in this area with the Google Chrome OS running on lightweight "netbook" devices.

So what does this mean? The companies (PC manufacturers, Telecom equipment manufacturers, Software companies and others) that refocus most effectively on enabling IRC vs IPC will win the profitability and the marketshare battles. They will win because the best IRC solutions will have the highest customer demand and therefore deliver the highest margins on sales of everything that supports the IRC experience. With realtime communication being elevated in this new era to be a much more critical value proposition the visionary companies have opportunity to to be significant players/leaders in this new IRC marketplace. 

This "IRC marketplace" is an attractive and exciting Blue Ocean into which manufacturers must willing dive head first.