Steve Jobs

Steve Jobs was the prototypical example of failure leading to success. Steve Jobs was always an experimenter and a doer. Although some of Apple’s products, such as the Newton, Power Mac G4 Cube, Next computers  the Lisa, and Apple TV, were considered  failures, he bounced back numerous times and introduced dazzlingly exceptional products that have and still are dominating the market. He was a superb example  of an experimenter who sometimes failed in the marketplace, but learned from his mistakes and achieved subsequent success. This is the hallmark of the serial entrepreneur. He realized that technology does not just die out or become obsolete, it just becomes part and parcel of a new technology. His  entrepreneurial mojo will be difficult to replace.

{Adaptated from book}


Cloud Computing and Variable Costs

Any discussion of cloud computing will certainly be accompanied with thrashing and gnawing of teeth.  This past August I was teaching a course on technology development in Bangalore and Chennai to managers and systems developers working for a variety of high-profile IT service providers.  There were significant areas of agreement; but there were some topics, which appeared to be splitting hairs, where the discussion was very intense. This is not surprising because the drama is in the details when it comes to market positioning and high-tech one-upmanship.  There is very little agreement on how to define cloud computing.

One of the benefits of cloud computing is that it should permit organizations to add and subtract computing resources according to need.  This means that the computing resources are scalable as workload increases.  This includes the ability to add more data storage and more computing power for web servers, database servers and applications servers for the human resource system, the CRM system, the financial and accounting systems and the inventory management systems.   You can even develop  applications in the cloud  using products such as Force from,  Google Cloud and Amazon Web Services. Google Docs is an online cloud application for creating word-processing documents, spreadsheets, and presentations. All of the browser-based applications of email are part of cloud computing. This Blog was created in the cloud.

Cloud computing permits companies to increase capacity by turning to the cloud, rather than by investing in additional capacity. Cloud computing simplifies management’s agenda because capacity planning is easier. In environments characterized by fluctuating demand risk is reduced because the breakeven point is lower. In an ideal cloud computing environment, the IT resources are scalable and the costs are variable and perhaps traceable to a particular product or service.

Cloud computing has the potential to be a major technological advance, but until we see the ideas and applications maturing it will still be approaching the top of the “inflated expectations” curve of the Gartner Hype Cycle with a  partly cloudy future.

Here are a couple of YouTube videos that explain cloud Computing,

Cloud gold

Cloudy Tonight and Tomorrow

Product Differentiation: Nokia versus Apple iPhone

Product Differentiation and Cell Phones

The most important activity in the history of human kind has been in the area of communications (see Figure 1). The desire to communicate has been the driving force behind many advances in modern technology; driving a variety of  substitute and complimentary products and services.  The wireless phone is the current battle ground for the universal communication device that will be used for talking, texting and tagging friends and colleagues, scheduling, listening to music, reading eBooks, and in location assistance. Nokia sells nearly 40% of all phones and Apple sells less than 1%[1]. Apple and Nokia’s strategies are distinctly different. Apple has gone after the cream and focused on the high-end and competes primarily in the Smartphone arena and is also beginning to compete with the $300 to $500 net-book laptops. Smartphone’s have applications such as scheduling, location assistance, email, and internet access.

Nokia is interested in the high-end Smartphone market, but they are also selling to the price-sensitive demographic and have an even bigger target in their sight. They want to become the biggest entertainment media network in the world[2]. They are going to accomplish this through R&D with 10 labs throughout the world and by pursuing a comprehensive differentiation strategy with phone prices ranging from $10 to $700 (see Figure 2). Nokia offers devices to satisfy every budget and they are trying to make their products and services indispensable. They currently roll-out around one million cell phones per day and have 1.1 billion users. They sell mobile devices to the hundreds of millions of price-sensitive cell phone users in India that cannot afford a data plan. For $1.30 per month rural users in India can receive information on weather, agriculture, education, and Bollywood.  But they are also going after the high-end market high bandwidth market and have developed Ovi, an iTunes type platform with a variety of downloadable Smartphone applications.

Apple has been making steady gains in the smartphone business. They have about 8% of the market and Nokia has about 43% of the market. Apple has been willing to offer a down-scaled version of the Ipod to the price sensitive masses with the Nano and Shuffle. I suspect that iPhone technology will also be adapted to the price-sensitive tail of the demand curve.

[1] Jill Greenberg,  “iPhone Envy? You must be jÖking”, Fast Company, September 2009.

[2] ibid