Facebook's Intention: To Own Your Identity Information

Yesterday I took a shot at figuring out what Microsoft, Apple, and Google's intentions were.  Now let's try Facebook.

This week Facebook announced that it wanted to extend its "Like" feature to all web sites on the internet.  The way I understand this, Facebook will track what web sites you go to and whether you click the Like button associated with that site.  

Sounds pretty cool when Facebook defends the idea as being something we would all want.  When you arrive at a web site, wouldn't you like to know which of your friends had been there?  Wouldn't it be even cooler if you could see whether they liked it there?  In the context of the New York Times it could be harmless, unless you are one of those people that obsesses about the obits.  In the context of Amazon or Netflix -- well OK.  In the context of the bank, travel, healthcare, government, political, legal... now that is scary.

How would it work?  I gather that if you have Facebook open on your machine it knows where you go on the web and loads that information into a database at Facebook.

Therefore Facebook's intention is to be the keeper of your identity as reconstructed through the profile information you fill out at Facebook, your association with friends and groups, and now your activity on the web.

There is really no reason to discuss why Facebook would want to do this -- identity information is the single most valuable thing on the Internet.

Brand Promise vs. Intention

The actions a company takes make more sense when considered in the context of its intentions.  A few weeks back I posted some thoughts on the brand promise.  This week is an interesting week to think about intention.  

Many years ago Steve Ballmer said he wanted to get a small(ish) payment from every computer user every year instead of selling packaged software.  This it seems has largely been forgotten by the press -- and frankly I cannot even remember what year it was when he said it.  I am quite sure it was long before the popularization of the cloud.  Maybe 10 years ago?  

Either way, I think this is still Microsoft's intention.  Microsoft wants to have a pretty good solution for just about any computing need and would be perfectly happy if everyone purchased subscriptions to gain access to everything Microsoft makes.  I think of Microsoft as the tool superstore of computing, and their desired business model is to have everyone pay for access to the superstore and then be able to use anything.

Google's intention is to get in between us and the information we want.  They realized early on that in order to do this they would need to know a great deal about us.  Smart guys that they are, they anticipated that we would be very nervous about anyone that knew too much about us, so they developed the motto "Don't be evil" to encourage themselves to behave well and to put us at ease.  I think of Google as the toll booth on the highway.  Right now the tolls are being paid by advertisers, and there are other highways, but Google's desire is to have a toll booth on every highway.

Apple's intention is to be the maker of shiny objects.  Steve Jobs knows that the desire for the latest and greatest shiny object is nearly insatiable and he has set out to be the guy that defines and delivers them.  When people say that his creations don't do everything, he says -- the things that my devices don't do, don't need to be done.  I think of Apple as Mr. Magorium's Wonder Emporium.  The stuff is just so amazing we don't even care what it costs or what it does not do.

So Facebook.  It does appear that Facebook has a highly targeted desire to be the single point of identity management on the web.  The question is -- what is their intention?

Facebook's Social Grab

It has been described as Ambition by Robert Scoble, an "impressive feat of innovating at scale" by Albert Wenger, and Dave Winer described it as Zuckerberg's megalomania.  The word scary seems to have increased in usage worldwide just because of Facebook!  The outcry against Facebook wanting to own our identities has been quite the chorus this week.

So on the one hand we think -- everyone is outraged so this will never work.  But on the other hand we are back doing what we do and not changing our behavior.  Just like Wall Street -- we don't trust those guys but we keep giving them our money.  It is a similar psychology.  We know the stock market is set up to benefit the insiders, but everyone thinks they are going to be the one person that defies the odds.  We know that Facebook is making an intentional and targeted and well executed attempt at owning our identities, but all we can think about is getting some of that traffic.

Many people are pulling the fire alarms and no one is leaving the building!  If you think I am overstating this, consider for a minute the idea of unwinding/shutting down your Facebook account.  We are all thinking we will each be the one person that can get out before the crash.  400 million users -- let's just get a little of that traffic before we get out.

So before we just go back to what we were doing and stand by while Facebook gains even more momentum -- let's remember this is not an Open Social Graph -- it is Facebook's Social Grab.

Tallying the Impact to the Channel

The announcements in the last few days by Facebook and Twitter are very real reminders of the pace at which things are changing in our industry.

In an effort to take a step back and evaluate the impact of these and other shifts to the technology channel marketing industry, we are assembling a group to do a SWOT analysis on the Channel.  

We are going to kick this off at the Baptie Channel Focus event next week in San Diego.  You can participate even if you are not going to be at the event.  Here is what you need to know:

•  Follow us on Twitter:  You will be able to see all of the contributions and you can contribute your thoughts -- just put @CSG_Channels in your tweet and we will take care of the rest, or
• Email us at swot@csgchannels.com.  We will turn your contribution into a tweet -- so others can see it.

We will take everyone's contributions and craft a SWOT Analysis of the Channel that will be shared with the industry.   We will not be completely relying on the wisdom of the crowd in this effort however.  We will be assembling an advisory group that will steer the effort.  In the event you would like to participate as an advisor to this project, please send us an email at swot@csgchannels.com or contact me directly.

Here is the link to the announcement about this project on our web site.

Reports of the death of email...

It is hard to believe but the fax machine that runs over a telephone network has been around for about 50 years.  We still have them in our offices.  In 1996 I was president of a Rotary club in Seattle with a membership of mostly downtown professionals (architects, lawyers, CPAs...) and we distributed our weekly newsletter by fax because only 30% of our members had email addresses.  

Soon after that however, email took off and within a year or two everyone I wanted to reach by email had an address.  Spam was not really a problem yet. It was the golden age of email.  Not only that but we were the email welcoming committee because we wanted more people to do business by email -- so we all promoted it all of the time.

With email on the scene no one defended the fax machine.  The paper rolled up, you had to be there, your document was exposed to anyone that happened by... there was a lot to hate about faxes.  Of course when you needed a signature by 5 pm and it was 4:45 pm -- everybody was glad the fax machines were there.  In fact, all of the real work still came in over the fax machine.  When a fax arrived on my desk -- I paid attention.

The list of technologies that have threatened to do to email what email did to fax is long.  Most recently we have Linked In, Facebook, and Twitter.  And each time the welcoming committee moves to the newest and greatest thing and we all heap scorn on the last thing.

True there is plenty to hate about email.  All of the newsletters (most of which I somehow signed up for), the spam that my IT guys block, the rest of the spam that the junk mail filter traps, the cc's of stuff I will never read, the notifications of changes to online things, the phishing attempts and on and on.  

Twitter on the other hand is just as great as email when it was new.  There is not much spam, everyone is positive about using it, and the welcoming committee could make a Republican feel comfortable in San Francisco.  Mostly however, we all love Twitter because no one expects us to read anything there!  Glance at the stream if you want, but there is no social contract forcing you to read anything or respond.  

The email camp is pretty lonely by comparison.  No housewarming gifts and piles of useless junk and also things that people actually expect me to read and think about.  I don't think anything is even close to displacing email as the medium of real work for a very long time.

Is your KPI an RBI or an OBP?

Some marketing departments are just glad to be able to say that they measure something.  The winners are measuring the right things. Everyone has their Key Performance Indicators (KPIs) and some of the measurements are based more on tradition than on relevant facts.

Over the last 10 years baseball has been turned up side down as traditional measures like Runs Batted In (RBI) have been supplanted by On Base Percentage (OBP).  The teams that figured out how to make their measurements more accurate won -- and the same thing is happening in technology marketing right now.  

Why is the OBP better than the RBI?

•  The OBP takes walks into consideration (after all, no matter how a batter got on base, he is on base)
• The OBP works no matter where you are in the line up (someone else has to be on base for you to get an RBI).

 Why doesn't the RBI go away?

•  Because everyone wants to compare to last year
• Because the competition is doing it
• Players are working to improve their RBI number

How many of your measures are quaint and traditional like the RBI?

Here are some of the traps we see people falling into on measurements: 

1. Better Than Last Year:  We have all done it.  If the numbers are better than last year it must be better right?  Well if you are talking about revenue -- yes.  If you are talking about an intermediate measurement like partner count, attendees at an event, or even satisfaction surveys -- better than last year may not mean the activity is worth doing.  We must take a step back and question the value of the activity before we congratulate ourselves for going in that direction even faster.
2. More Than the Competition: I am as competitive as the next guy and it is easy to think things are worth doing if the competition is doing them.  Just doing what the other guys do is not necessarily the highest value activity for your marketing effort.  So before you jump into the contest make sure the activity maps to your overall plan.
3. Assuming Ownership of the Best Looking Number:  It sure is tempting to take the best looking number you can find and make it the result of whatever campaigns have been running -- particularly when the executive review is looming and the other numbers don't look so good.  Unintended outcomes are great, we would not have Post It notes without them. but if you cannot convince yourself of the correlation and be confident that the outcome could be repeated, don't take credit for the number.

Just like in the majors, we should work to reduce everything to contributions to revenue.  This will reduce the tendency to fall into these traps.

IBM's Path to the Future

Yesterday I proposed that IBM leads the world in delivering technology related services to businesses and therefore we may be able to get a sense for future winners by looking at what IBM is doing. 

Here are a few clues from IBM’s 2009 Annual Report:  

From: Samuel J. Palmisano, CHAIRMAN, PRESIDENT AND CHIEF EXECUTIVE OFFICER

1. Building Analytics Capability:  “… the knowledge of the world, the flow of markets, the pulse of societies — can now be turned into insight through sophisticated mathematical models, also known as analytics. Where once we inferred, now we know. Where once we interpolated and extrapolated, now we can determine. The historical is giving way to the real-time, and even the predictive.  IBM is moving quickly to capitalize on this promise. We have built the industry’s premier analytics practice, with 4,000 consultants, mathematicians and researchers, as well as leading-edge software capabilities — bolstered by key acquisitions such as Cognos and SPSS. Our new Business Analytics and Optimization service line targets the highest-growth opportunities by delivering integrated analytics solutions based on the needs of specific industries.”
2. Changes in the Cloud:  “Thus, the data center is shifting from being a single physical place to something more like the Internet, a diverse set of services fueled by IT.”
3. Customers Want:  “So the questions we are hearing are no longer about whether a smarter planet is a real possibility. Now, there is an enormous hunger to learn how. CEOs, CIOs, governors and mayors are asking questions like: How do I infuse intelligence into a system for which no one enterprise or agency is responsible?”

From the Financials: 2009 total revenue: 

$95 Billion Global Technology Services Group: $37 Billion 

• Strategic Outsourcing Services
• Business Transformation Outsourcing
• Integrated Technology Services
• Maintenance
• Integrated Technology Delivery
• Business Process Delivery   

 Global Business Services Group: $17 Billion

• Consulting and Systems Integration
• Application Management Services

 As I read through the report some recurring themes indicated what IBM thinks will be big in the future: 

1. Cross Platform: No one vendor can solve all problems so there is significant value in being able to work across platoforms
2. New Ideas: Clients will pay for ideas they cannot think of themselves (new processes, new technologies, ideas that span systems or departments)
3. Outside the Company:  Security, compliance, and standards are among the functions that can be done better by outsiders

 So if you want to pick the winners of the future, pick companies that deliver technology related services that tie together different technology manufacturers and add some intelligence along the way.

Later:  IBM beats Wall Street expectations for Q1 performance.

Picking the Winners

I am not smart enough to pick the big winners in advance.  So I don't play the stock market, and at CSG we sell shovels to the gold miners instead of prospecting for gold ourselves.  Sure striking it rich would be a thrill, but the world is littered with hundreds or even thousands of would be Googles.  I was going to say would be Twitters, but they have not made any money yet!

This strategy has provided us with a very interesting vantage point from which to watch the show.  And it is quite a show these days.  I sure am glad I am not a telecom equipment vendor or a distributor -- it is easy to see what is going to happen to them.  It is much easier to pick the descending parts of our industry than the ascending.  Who in tech is going to do well?  

There has been so much talk about services over the past ten years that we have both lost interest, and lost track of the definition of services.  There are hosting services, IT services, software as a services, software + services -- and each time the word services means a different thing.  IBM, Dell, HP, Microsoft, and Oracle all have significant services organizations.  IBM generates more revenues from services than all of Microsoft's revenue.  What is IBM doing when they deliver services to their clients?

Business pay IBM 50 billion dollars a year for services.  And everyone in tech wants to get into services.  I propose that we could learn a bunch about the future winners by digging into the question -- what are people paying IBM 50 billion dollars a year for?

Stay tuned, in tomorrow's post I will dig through IBM's annual reports.

100 Blog Posts

When I decided to become a blogger this year I had only a general idea of why I was doing it, a hope that what I had to say would be interesting to others, and no idea at all on how it would impact me.

Last week I made my 100th post so this a good time to take a look back and consider the impact.

A few weeks in I concluded that if I was going to do this I should post something every day.  I have gravitated towards this discipline, and it does not seem like a chore.  I like to write and trying not to spend too much time is a much larger focus for me than trying to get motivated to write.

Along the way I did my best to articulate why I write and posted it on the About Me page.  Those reasons are still valid, but I find I write mostly for myself with the hope that others will find my thoughts interesting.  I do not think I am very interesting when I try to write for the audience.

As you can see in the chart, my readership is growing and it looks like I will have somewhere over 600 unique visitors in April.  I did not have any specific expectations on traffic, so I really don't know if these are good numbers or not.  Only a handful of people have posted comments on the site, which is certainly below what I expected.  The chart does not show subscribers, but I am now up to 10 people that subscribe to the RSS feed -- this number also strikes me as low.

After reviewing my work I have to say that there are only a couple of items that really push forward interesting ideas.  

Do We Want China to Fail?  I think we are locked in a very interesting battle with China and I have written often about how we need to remember that China is a competitor that we need to be worried about.  Even so, I do think we will be worse off if China fails in its effort to raise the living standards of its enormous population.  So we need to watch out for ourselves lest China eat our lunch, but at the same time we should not wish for China to fail.

Sales vs. Engineering:  In this post I take a look at a few companies and try to evaluate their thinking between the relative value of R&D spending and Sales and Marketing spending.  If you could hire one more person, would it be an engineer or a salesperson?

How Much to Pay the Guy Driving:  This turns out to be one of my favorite posts because it takes an idea I have been thinking about for a long time and puts it into a context that is relevant in today's debate.  I try to tell myself every day that "there must be a better way" and searching for those improvements is the best part of my job.  

 The Timid Need Not Apply:  I probably had more fun writing this post than any other.  We were getting our minds prepped for a family trip to New York City and watched Man on Wire, the documentary about Philippe Petit's amazing high wire performance between the twin towers in 1974.  The confluence of daring, creativity, and passion seemed so relevant to our business.

I hope my next 100 posts will be more like these few nuggets.  

My Current Thinking About Wall Street

After thinking and reading about this issue for some months now I have settled on the following set of conclusions:

•  The stakes are very high so we can expect the financial sector to continue to attract the smartest, most self assured, and most self centered people.
• Knowing that the participants are motivated almost entirely by personal gain, it is probably not fair to call them corrupt -- until they take positions in government.  Yesterday's action by the SEC vs Goldman Sachs puts an interesting twist on this one.
• The relative size of the finance and insurance industries to the rest of our economy is an important macro measure of economic health.  Finance and insurance certainly must be in the single digits, and 5% would be a good goal.

 Other Reading

Krugman in March 2009

NY Times this week about potential reforms

NY Times today about SEC vs Goldman Sachs

Book Review: The Quants by Scott Patterson

This post really does not qualify as a book review.  My desire to know more about Wall Street is fading and while this is a very good book with both interesting personalities and good historical context - it is covering the same story. 

The whole thing boils down to this quote in the last chapter where Patterson makes an observation about the math geniuses at a fund raiser to benefit the teaching of math:

The quants in attendance somehow didn't think it ironic that their own profession amounted to a massive brain drain of mathematically gifted people who could otherwise find careers in developing more efficient cars, faster computers or better mousetraps, rather than devising clever methods to make money for the already rich.

Here are some other reviews

New York Times

Business Week

Here is an Article in The Wall Street Journal by Scott Patterson with a video interview where he says:

Really the genie is out of the bottle.  You are not going to be able to stop these guys.  I don't care what the Obama administration tries to do, they can crack down on the banks, but they [the quants] will just go outside of the banks.

One concept that Patterson captures often in the book is the pursuit of the "Truth" (caps are his) by the Quants.  Clearly some of them thought they actually had come to know the Truth.  Their rebound after the crash is only going to perpetuate their feelings of omnipotence.  Our bailing them out surely didn't help.

Death by Home Video

The iPad has been praised for its handling of video including comparisons of the iPad screen at arms length to a giant TV across the room.  I agree Netflix does look great and you can watch YouTube and TV on the iPad.  

However, like everyone else with an iPad, I had created use cases in my mind prior to purchase that were just fantasies.  The one I was really hoping for was the ability to watch home videos easily.  I am not sure why I was thinking this because the rockiest parts of my relationship with Apple have been over video.  I have never really understood Quicktime, and the codecs are a mystery to me.  In fact, after a full switch over to Apple at home a few years ago, it was video that sent me back to the Windows platform.  The final straw was the leap to iMovie 08 from iMovie 6 where Apple just said -- we are starting over and so are you.  I said forget it.

Do I have a synapse missing that makes it impossible for me to decipher home video in the land of Steve?  Does everyone else do this easily and I just don't get it?  

If I am not alone  -- then home video could be the thing that breaks down a wall of Steve's garden.  It does seem like video is getting bigger and soon may be too big for Apple to force into their little box.

Social Media: a How or a What?

Yesterday I referenced Ric Merrifield's new book Re-Think where he helps companies see the difference between how things are done and what is being done.  Here is one of his early blog posts that will give you an idea for the concept.

Ric uses an example of someone sending a fax.  "What are you doing?" ... "Sending a Fax." (almost sounds like the "Making Copies" SNL bit.  He goes on to explain that people have a natural tendency to think that sending a fax (the how) is the actual value adding work -- when in fact it is just how the work is being done.

The fax is clearly old school now and that makes it a perfect illustration.  In fact, the fax is often used as an example of the value of the network effect -- the first owner of a fax machine could legitimately ask "Now what does this thing do?".

Social media is clearly a network, and it is clearly used for creating, organizing and tracking relationships and communicating broadly or directly with the people in those relationships.  Do these activities qualify as what we are trying to accomplish, or just how we are accomplishing something else?

Separating the How from the What

I heard Ric Merrifield speak today as he is promoting his new book:  Re-Think.  There is no question he is doing relevant work and I have already ordered a copy of the book.

I am most interested in the way he articulates the importance of separating the How from the What.  I see this problem often with clients that get caught up in doing the same old stuff bigger, faster, or cheaper -- all without asking "What are we doing?".

It is an easy trap to fall into and we all have to get better at raising the red flag when we see it happening. 

I am also interested in the heat maps -- more on that later (after I read the book).

Lessons from IBM

I pointed out the other day that IBM's stock outperformed Google's over the past 4 year period.  There are many things we can learn from the granddaddy of all technology companies.  In its 130 year history, IBM has had more "eras" than most tech companies have had years.  In fact, IBM tangled with the Justice Department before Bill Gates was even born.

The one thing that has always impressed me about IBM is how they seem to be playing on an entirely different level than anyone else.  Real companies count on IBM to give them real solutions to real business problems.  Every time I find myself in a conversation with a senior exec at IBM I am reminded that they have managed to continue to operate at this level regardless of the headlines of the day.  

Somehow I just don't see IBM burning R and D budget on a Twitter clone.

Curiously, IBM also does a great job with its ads.  They come up with fun and memorable ways to make the point that they are serious about business.  Here is my favorite one: which is probably 10 years old now but it still resonates.

Moore's Law Gets A Bonus Game

I am not sure how many extra games Moore's law has already used up, but if the latest press release by HP is to be believed - the law that explains the endless growth in the technology industry just hit double bonus and the end is once again beyond our perception.

The funny thing is that if you search for nano technology and chips the results are all HP -- announcing every year or two that the whole world is going to change from their inventions.  I suppose it is possible that these predictions have all come true and the PR machine at HP has just not capitalized on the follow up press.  The alternate truth may be that HP announces all kinds of cool science -- that just cannot find its way into real applications.

This time it is "memristors" and a published article in the journal Nature which outlines the latest advancement by HP scientists.  It is a good thing too because a consensus was building that the we had extracted just about all of the miniaturization and optimization that we could.  Memristors however look to be at least a 10X improvement -- so if this comes to be things will be faster, smaller, lower power, and even cheaper.  

Way to go HP.

The Story of Angelo

Last night we went to a great Italian restaurant on our last night in New York City.  Angelo was our waiter and he did a great job.  We got to talking with him and found that he is a first generation immigrant, working while going to community college.  His dream is to work at the United Nations as a translator.  Because of our conversation, I now know that you must have mastered five languages in order to apply.  Angelo already has four, so just one to go.  A full third of our immigrants are Hispanic and despite the fact that I believe we are as open minded about race as any nation – I suspect that anti Hispanic sentiment is a significant barrier to our opening up immigration.  The twist to this story – Angelo is from Ecuador.  

Robert Rubin is No Boyscout

Former treasury secretary Robert Rubin had to pick between admitting incompetence or confessing to corruption this week and instead he declared that knowing Citi Group was out on a dangerous ledge was not his job. Since he was paid 100 million dollars to advise Citi on something, and since he was at one time the CEO of Goldman Sachs (who invented the complex instruments that caused the crash), what was his job? 

The only explanation is that Citi was buying inside access to Washington from Rubin - not his wall street expertise.  So this week Robert Rubin was telling the world that his job was to ensure that Citi was not regulated.  So I believe him when he says it was not his job to know what was on the balance sheet -- it was his job to make sure no one in the government knew either.

Here is a piece from November 2007 with some of the details about the things Rubin was not watching.

Here is a piece from October 2008 where the NY Times looks into the work Rubin did with Alan Greenspan to discredit Brooksley Born, who at the time was running the Commodity Futures Trading Commission, and who was advocating greater regulation of derivatives.

We ended up giving Citigroup 45 billion dollars -- so Rubin earned his pay.  He got each citizen of our country to give Citigroup $150 in bail out money.  His next trick?  Maybe his job now is to figure out how not to pay it back!  

Australia's Numbers

Along with all of the coverage of the great recession we have also seen a good deal of coverage of the countries that have escaped relatively unscathed.  The one that keeps catching my eye is Australia.  The 22 million people in Australia have been faring pretty well through these difficult years.  Phil Dobbie has a good piece on Bnet about it.  He cites China as a reason, along with Australian banker sanity.  One other key number is immigration.  Australia is attracting alot of immigration -- 1.3% immigration in the year ending march 2009.  I wrote a post about our immigration numbers the other day -- we currently allow .37% immigration.  Australia's current level of immigration is about the same as we had during our peak immigration year in 1907.  Ever since then we have thought the American experience a little too good to share with very many others.

Australia had enough immigration that their GDP per capita fell slighly during the recession.  So is a country, and by extension its people, better off if it achieves overall growth but at the sacrifice of GDP per capita?  I suspect not if it is sustained trend, but for a few years it probably works.  Here are some other interesting numbers from the CIA Factbook.

Australia GDP per Capita: $38,500 (23rd) -- the US: $46,400 (11th)

Australia Income Distribution:  Rank 110 out of 134 or 23rd best score -- the US: 43 out of 134 or 91st place.

It is not clear to me how to convert the income distribution numbers into a meaningful real world number, but considering how close together the GDP per capita numbers are and how far apart the income distribution numbers are, I would guess there is a pretty good chance that if you take out our hedge fund managers, and put military spending back to a rational level, the average person in Australia is probably better off than the average person in the US. 

One of these days I will have to go and check that place out.

Couldn't Resist

Well I held out for four days, but yesterday the hype won out and I got my iPad.  Maybe it was the combination of being in New York, and going past the amazing 5th Avenue store, or the endless articles and coverage.  That store is open 24 hours a day and is swarming with knowledgeable and efficient staff -- I was in and out in 10 minutes despite the fact that the store was packed.

Daniel Lyons summed it up well in his piece in Newsweek:  "Buy into the World According to Steve, and you're making a Faustian bargain -- you sacrifice freedom for the sake of a lovely device that (mostly) works just the way it's supposed to, eliminating the headaches and confusion that most tech products bring with them."  He goes on to list all of the things the iPad will not do (like flash).

Steve Jobs has done it again and he should get most of the credit -- but the conditions that serve as the backdrop for his success were not created by Steve, but by the rest of the industry.